If you recently received a disability benefits denial letter from Dearborn National, you may be wondering what to expect now – and whether a lawsuit is the correct next step. Suing Dearborn National to secure your long term disability benefits is often the most viable way to obtain the benefits you deserve, though this process often doesn’t come without some headaches and hiccups. At Dell & Schaefer, we’ve helped thousands of disability claimants successfully sue their long term disability insurance carriers, and have learned a few things along the way. Read on for more about what you can expect when suing Dearborn National under a long term disability insurance policy.

GREG DELL: Hi, I’m Greg Dell with attorneys Dell and Schaffer, here with attorney Alex Palamara. And we’re going to discuss about lawsuits against Dearborn National or another subsidiary, Ford Dearborn, with regard to long-term disability insurance claims. Now I know that, Alex, we filed lawsuits against this company in the past, and what’s interesting about these particular claims, is that they have ERISA-type policies, which means Employer Provided Policies.

But some of them may be ERISA-exempt, because we know that Dearborn National writes the group disability policy for the entire University of Texas system. And since that’s considered a public institution, it’s likely exempt from ERISA, which allows you to bring a public type lawsuit not governed by ERISA. So we’ll talk about lawsuits against them from the ERISA standpoint, and then we’ll discuss what it’s like to be ERISA-exempt and the advantages of that. So let’s first go on to what a person needs to expect in their Dearborn National ERISA-governed lawsuit.

The Handling of the Dearborn National Disability Insurance Lawsuit Will be Different if Your Claim is NOT Governed by ERISA

ALEX PALAMARA: Well, as everybody knows, the Employee Retirement Income security Act, there are laws that are not favorable to the insured. So ERISA laws can be pretty difficult. Not only you have to prove to a judge that you’re disabled, you have to also prove to the judge that the decision by the insurance company is arbitrary and capricious, in most scenarios. And most Ford Dearborn or Dearborn National policies I’ve looked at, there is discretionary clauses in them, which makes it an arbitrary and capricious standard to prove to the judge that somebody is disabled. Makes it a little bit tougher to win.

GREG DELL: And what does that mean, the arbitrary and capricious standard?

ALEX PALAMARA: So in most lawsuits, you have to prove, if you prove that you’re disabled, you win your lawsuit. So like you were talking earlier about a non-ERISA claim, under most of those policies, if you prove that you’re disabled to a judge or a jury, you win your lawsuit. In this scenario where there’s a discretionary clause, in order to prevail, you have to prove to the judge that you are disabled, number one.

And then if you prove that, then you get to the second step, which is proving to the judge that the decision by the insurance company is arbitrary and capricious. Essentially, that the decision they made had no reasoning behind it. It was without reason. Pretty difficult to prove something is arbitrary and capricious, and that’s why the insurance companies win something like 85% of the lawsuits where a judge renders a decision under in an ERISA-governed policy.

GREG DELL: OK. And what is the typical definition that a claimant’s dealing with in a claim denial, when they have to file a lawsuit against Dearborn?

ALEX PALAMARA: It’s a pretty typical disability insurance policy, where the definition of disability changes after a certain time period. For the first two years, typically the person has to be unable to perform the material and substantial duties of their own occupation. Then after two years, it’s a little bit more difficult, and they have to prove that they can’t do any occupation.

Any occupation typically means a sedentary job. They’re supposed to take into account your training, education, experience and your previous earnings. Sometimes they just say you can do a sedentary job, you can now get back to work. We don’t find you disabled. That’s typically how the insurance company denies those claims.

GREG DELL: And in terms of your experience in handling these claims against Dearborn National, how long do these lawsuits usually take?

Significant Advantages of a Disability Insurance Claim that is Not Subject to ERISA

ALEX PALAMARA: From the time of a final denial letter, so you’ve already filed your appeal and the insurance company’s denied it, and now the only avenue left is to file a lawsuit, I mean, Ford Dearborn slash Dearborn National’s not one of the major players, I would say, in these type of disability insurance group policies.

Definitely in Texas, they’re one of the major players. But here or anywhere else across the country, not one of the major players. From the time you file a lawsuit it can take anywhere from a matter of months. If you’re looking for a negotiated resolution, a settlement can take, I mean we’ve filed lawsuits and settled them within 30 days of filing a lawsuit.

It could take up to the day of trial, where the judge, you could file a motion for summary judgment and you could settle 18 months in before a judge renders a decision. The night before the judge renders a decision, you could come to a negotiated resolution. Or to get a ruling from a judge can take 18 months, sometimes 24 months. Anywhere from, I mean, I would say if you file a lawsuit, you probably expect an answer within, or some sort of resolution anywhere between three months and 18 months on the average.

GREG DELL: And in terms of litigating, what should a person expect as a potential outcome? I know you said, a lot of these cases are won by the insurance company. And that’s, that’s ’cause of the standard of review that may be out there. But we have a very good success rate in these cases. But regardless of our success in terms of winning these cases, and I guess winning is a subjective term. Because the idea is to get benefits paid to claimants at the end of the day. So what’s the normal type of way in which these cases end up being resolved once a lawsuit’s filed?

ALEX PALAMARA: Well, 99% of cases that are filed, whether it’s a disability insurance claim, whether it’s a car accident, slip and fall, any type of lawsuit, even the criminal case, 99% of the cases end up in a settlement. In a criminal case, settlement’s a plea bargain. In a disability insurance claim or a personal injury claim, the two sides come to a negotiated resolution, a settlement where it says, we’ll accept this amount of money to make our claim go away. To basically for us to give up our rights to this lawsuit or this ongoing lawsuit, we’ll accept this amount of money.

99% of the cases end up in a settlement, just because if they didn’t, our legal system would collapse. We don’t have enough judges out there to be able to render a decision in every single lawsuit. They kind of dependent settlements, which is why most federal judges require that you go to mediation once you file a lawsuit, which is basically when the two sides get together, see if they can hash out a resolution of this.

The other reason why there’s settlements, is because letting a judge decide, I mean, there’s so much uncertainty. You don’t know. A judge can go either way. So a settlement will give you certainty where there currently is no certainty. So sometimes a settlement is in your best interest. We always take a look at all the facts of the case. We have to weigh the potential outcomes, what the risk is. I mean, we have to figure out what the risk is of you going forward. Or what’s in your best interest.

To negotiate a settlement and get to a certain amount of money. If there’s a certain amount of money there and sometimes it’s in your best interest to accept a settlement. The old adage is, a bird in the hand is worth more than two in the bush, because you know what you’re getting with a settlement. You don’t know what a federal judge is going to do.

GREG DELL: So we mentioned earlier that you have the group policies and that’s going to be in the hands of a federal judge. And now let’s jump gears and talk about the ERISA-exempt claim, which is going to be filed as a breach of contract type claim, not governed by ERISA. What are these significant advantages for that claimant versus the ERISA claimant?

The Time Frame for Resolution of a Disability Insurance  Lawsuit Varies Widely Based on the Facts of Your Case

ALEX PALAMARA: First and foremost, ERISA stinks also, because there’s no jury trials. You have one person rendering a decision on your claim. It’s a federal judge. No matter if they’re appointed by a conservative or a liberal president, most of these people are pretty conservative people. To be a federal judge, typically you can’t have any skeletons in your closet. So they’re pretty conservative people.

They might not be able to see you as a claimant, as a person, as an individual. You kind of want to have a jury trial in this scenario, just so that a jury of your peers who can see themselves in your shoes and taking on a big multibillion dollar corporation who’s basically giving you, saying, no, no, no, no, no, and overlooking all your medical documentation, and you can’t understand why. So a jury trial is more favorable in this scenario.

But the laws governing these claims are way more favorable. Typically, they’re state laws. You don’t have this arbitrary and capricious standard that ERISA does. I don’t want to say they’re easy to win, but they’re somewhat easier to win, because the standard that you have to prove is a little bit easier to prove than an arbitrary and capricious standard. You have to prove that you’re disabled. If you prove that you’re disabled, you win, or you should win.

GREG DELL: I want claimants who are watching this video who are saying, OK, I’m University of Texas employee or a government employee and I’m not covered by ERISA, completely different ballgame in terms of bringing the lawsuit. On the ERISA side, you’re never going to have to do anything. They’re not even going to take your deposition. There’s going to be no interrogatories, no requests for production. You’re basically literally going to have to do nothing, except continue your medical treatment, which you’re going to do anyhow.

On the other side, if we end up filing a private lawsuit, you’re going to be involved in the full-blown litigation. Which means having to do interrogatories, which means answer questions, having to produce tons of different kinds of information, potentially having to give a deposition. Your doctors are going to be deposed, which they can’t be in ERISA. They’re going to possibly depose co-workers, your employer.

In ERISA that’s not going to happen. So some people like the privacy and protection of ERISA, and the fact that there’s no discovery. But in the non-ERISA, you’re really getting your full day in court. You, as a claimant, have the opportunity come in and testify and explain why you can’t work. Your doctors get to come in and testify as to why you can’t work.

So nine out of 10 times, I would take the private non-ERISA claim and be able to have my full day in court and explain my story and have my doctors come in with the evidence, rather than just rely on the papers, which is what the judge has to do. And rely on the decision of a judge, who’s never met you, doesn’t know you, and basically is just limited to what’s called the record.


GREG DELL: So huge differences. Plus, with the ERISA, non-ERISA, you have potential bad faith claim for damages that you can bring. You can possibly get punitive damages if the company acts extremely reckless or shocks the conscience in their claim handling. Very rare, but it’s an opportunity of something that could be out there. Not something that you should bank on. But you just have so many more rights.

And also, those rights create more value. And when you talked about, you still have the similar resolutions, whether it’s a lump sum or you go to verdict and get your past due benefits. But you really are better off if you’re ERISA-exempt. But if you’re not, I mean there’s far more not, far more ERISA-governed policies than there are non-ERISA policies.


GREG DELL: So that seems to be the norm. So with regard your Dearborn National or Ford Dearborn claim for litigation, once your claim’s been denied or you’re feeling that your appeal is going to be denied, really whatever stage you’re at, feel free to give Alex or myself a call. We help claimants all over the country. We’re going to provide you an initial free phone consultation to discuss your claim, which should bring you some comfort right away to know that you’re going to get a lawyer on the phone and we’re going to tell you immediately whether or not we think that we can help you.

If you have a Dearborn National claim and you’re just in a situation where you happen to stumble upon our video, we welcome you to our videos and our YouTube channel. We encourage you to subscribe to our YouTube channel, because we’re regularly offering what we believe are helpful videos in which we talk about how to handle disability claims, how to do an appeal, what to expect in application, all different kinds of videos on medical conditions. And we’d like to share these future videos with you, and for you to get notifications of those. So feel free to give us a call and we welcome the opportunity to work with you in the future.

As you’ve learned, handling a long term disability lawsuit can be a challenge, regardless of whether you’re suing Dearborn National under federal or state law. This is why it’s so important to submit a complete, comprehensive, and well-documented disability claim packet during Dearborn National’s internal review process, as this presents an easier opportunity to secure benefits. Let the experienced attorneys at Dell & Schaefer help you tackle your Dearborn National long term disability appeal – get in touch today to set up your FREE consultation.