Mass Mutual, an insurance company that sells long term disability insurance products, recently hired the international law firm of Shutts & Bowen in an effort to prohibit Disability Insurance Attorneys Dell & Schaefer from displaying blank Mass Mutual long term disability insurance claim forms on their website. More specifically, Mass Mutual hired attorney Jeffrey Landau, one of the leading insurance defense attorneys in the United States. Mass Mutual claims that by displaying their logo and claim forms that Attorneys Dell & Schaefer is “conducting an unfair and deceptive trade practice.” The forms are posted by Attorneys Dell & Schaefer in order to inform potential claimants of the requirements necessary to prove disability. Mass Mutual has over 300 billion dollars in assets under management and it is interesting that they are concerned about Attorneys Dell & Schaefer providing access to a set of blank claim forms that must be submitted in order for disability applicant to complete their claim for benefits. Instead of blank claim forms, we could have provided copies of claim forms that were submitted as public records in one of the many lawsuits against Mass Mutual.

I always try to give disability insurance companies the benefit of the doubt that they want to do the right thing for their insured’s, but it is actions like requesting a law firm to remove blank claim forms which reaffirms my belief that insurance companies are committed to making the disability benefit claims process as difficult as possible.

Disability Attorneys Dell & Schaefer do not have the time to dispute Mass Mutual’s request to remove the disability claim forms from their website, therefore we have agreed to remove the forms from our website. Claim forms and information regarding Mass Mutual are available upon request. A copy of the cease and desist letter sent by Mass Mutual’s hired lawyer can be viewed below.

Re: Infringement of MassMutual Intellectual Property

Dear Greg:

We represent Massachusetts Mutual Life Insurance Comapny and its affiliated entities (collectively, “MassMutual”) in connection with the enforcement of its intellectual property rights and pursuit of those who may infringe those rights. Your website, http://www.diattorney.com/, and more particularly the page located at http://www.diattorney.com/mass-mutual/ (collectively, the “Dell Website”) have come to the attention of MassMutual, which has asked us to contact you regarding your unauthorized use and display of MassMutual’s registered marks, proprietary information, and forms that also contain those marks. This includes, but is not limited to, the use of the MassMutual Financial Group logo and MassMutual long term disability claim forms. It also appears that some of these copyrighted and/or trademarked materials may have improperly, and without authorization, been misappropriated from MassMutual’s own website.

We assume you are aware that unauthorized duplication of MassMutual’s proprietary marks and forms violates federal law, including the Lanham Act. Furthermore, while we understand that competition in the marketplace is allowed, this conduct is unfair and deceptive trade practice under Florida law and en example of sanctionable unfair competition. These act violate section 501 et. seq., Florida Statutes and Florida common law. The potential remedies available under Florida law and for infringement actions are significant.

MassMutual is prepared to pursue its civil remedies in this matter. As a plaintiff, we may not only enjoin the unlawful infringement of MassMutual’s marks and proprietary documents, but may also obtain damages for such infringement and unfair competition, including, but not limited to, the defendant’s profits, any damages sustained by the plaintiff, and the cost of the action. In egregious cases, such as where knowing and willful infringement is found, the damages may be multiplied.

However, MassMutual wishes to resolve this matter amicably and without filing suit – but is fully prepared to enforce it’s rights in court if necessary. Accordingly, we demand, on behalf of MassMutual, that you and your law firm immediately:

  1. Take down all infringing content at all websites under your control, including, but not limited to those pages located at http://www.diattorney.com/ and http://www.diattorney.com/mass-mutual/
  2. Cease and recall all advertising and promotional materals bearing MassMutual’s marks and other proprietary forms
  3. Discontinue all use of the text, images, and forms taken from our MassMutual’s website (of from a website of an authorized used of the materials and marks); and
  4. Commit in writing to cease all use of such marks or materials.

We ask you to confirm your agreement and comply with our request by signing and returning a copy of this letter to us by the close of business on October 20, 2010. MassMutual’s course of action in this matter will be determined based upon your degree of cooperation. If we do not hear from you we will be forced to move ahead promptly.

This offer of compromise is without prejudice to any claim for copyright or trademark infringement or unfair competition, or damages that may be asserted on behalf of MassMutual should this matter not be resolved promptly to its satisfaction.

If you have any questions about this, please don’t hesitate to contact me.

Very truly yours,
SHUTTS & BOWEN LLP
Jeffrey M. Landau

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

Ms. Kathleen M. Hackett brought suit in the U.S. District Court of South Dakota’s Western Division against Standard Insurance Company (Standard), alleging that Standard had wrongfully denied her long-term disability benefits claim. In the first round, in 2007, both parties moved for summary judgment. The District Court granted summary judgment to Standard on August 15, 2007. Court held that although Standard operated under a conflict of interest, under Woo, Hackett’s disability attorney had failed to prove that a serious breach of fiduciary duty had occurred.

On appeal against the order of the District Court, the Eighth Circuit Court of Appeals reversed and remanded the matter back to the District Court for its reconsideration of the conflict of interest issue. This was ordered in the light of Glenn v. Metropolitan Life Insurance Company decision.

In remand, Hackett’s disability attorney served a set of interrogatories and request for production of documents upon Standard. The answers Standard gave prompted a second motion to compel discovery.

Standard raised objections on those interrogatories and pointed out that discovery was already closed and the Court on remand was only allowed to consider the administrative records in light of Glenn, a decision that had taken place after the District Court’s first ruling.

Standard Raises Objections to Court Ordering Discovery.

Standard argued that the Eighth Circuit Court did not mentione anywhere in its order to remand that the District Court could allow additional discovery. Therefore, as far as Standard was concerned, the Judge had erred by allowing further discovery.

But in raising these objections, Standard failed to acknowledge the issuance of a Court order setting the deadline to file a rebuttal against the order within 10 days. The Eighth Circuit Court remanded the case which clearly showed that additional discovery had to be considered. After a careful analysis as to whether Glenn made this appropriate, the Court determined that additional discovery should be allowed. This decision was affirmed, and the objection raised by Standard was denied.

Standard then went on to argue that the requested discovery was cumulative and irrelevant to the present conflict. The Court disagreed. Hackett’s attorneys efforts to enquire into Standard’s efforts to assure accurate claims assessment was consistent with the clear language of Glenn.

Prior to Glenn, Hackett’s discovery would have been limited to the business relationship between Standard and Dr. Zivin and Dr. Dickerman. But post Glenn, the main question was whether the Court should allow discovery to extend into the other related areas not requested by Hackett’s ERISA attorney in his interrogatories. After consideration of cited authorities and the logic expressed by both sides for and against discovery, the Court held that the more appropriate step was to allow limited discovery. The Court determined that it should allow Hackett to make inquiry into any incentives paid by Standard for denial of claims. The same thing remained true with respect to relationship between Standard and the outside medical advisors it hired, who might have received incentives to inappropriately deny claims.

ThereforetheCourt held that Hackett’s disability attorney must be allowed to make inquiry into the conflict of interest so the Court could make a reasonable analysis. This objection was also denied. Limited discovery would be allowed.

Standard’s last objection was that the burden of the requested discovery outweighed the potential benefits. The disability insurance company claimed that the cost to produce the requested documents would outweigh the benefits which Hackett’s attorney would gain in presenting the case.

The Court found that this argument was not convincing. Standard had not raised this point when the Court was first considering whether discovery should be allowed. In Howell, the Court had already found that when the discovery requested is relevant to the dispute, expensiveness and burdensome of production of such discovery is not be a proper reason to deny the discovery. I always find it comical when a multi billion dollar insurance company says that it will be a financial burden for them to obtain requested information.

Court Considers Arguments against Interrogatories

The Court had already found that the six questions Hackett’s ERISA attorney asked regarding how Standard shielded decision makers from financial concerns addressed the main reason behind the Glenn decision. Her attorney had limited the scope of his questions from 2000 onward, which fell within a reasonable time scope, considering that Hackett’s first claim occurring in 2002.

Based on Burns v. Imagine Films Entm’t, Inc., the fact that answering these interrogatories would require Standard to “expend considerable time, effort, and expense consulting, reviewing, and analyzing huge volumes of documents and information” was not a sufficient reason for the Court to uphold Standard’s objections. The order to supply answers to these questions was once again affirmed, with stipulation that Standard use the time frame of 2000 through 2006.

The next objection was related to Hackett’s interrogatories 9 to 12. The first round of discovery revealed that Dr. Zivin had reviewed 398 files for the consideration of $115,228 during 2003 to 2005. Dr. Dickerman had reviewed 1,939 files for a fee of $577,00. This suggested to the Court that Standard had paid $289.94 to Dr. Zivin and $297.58 to Dr. Dickerman for each review done by them.

Standard argued that this was not the case. Rather some of the reviews had included multiple reviews of a single claimant’s file. Standard claimed that some reviews only involved comments on a single chart, while others included a claimant’s entire medical history.

The Court found that this argument supported Hackett’s attorney’s supposition that discovery into the billings presented to Standard would be useful in proving or disproving a conflict of interest. The Court found that the requested information was relevant to the matter in dispute. The information would help the Court to determine the percentage of time Dr. Zivin and Dr. Dickerman denied claims. And it would help to prove whether or not Standard was engaged in a history of biased claims administration with the help of both physicians. Without this information, Hackett’s disability attorney would not be able to prove a biased claims approval history. Therefore Hackett’s disability attorney was entitled to the discovery, as had been approved by the Court earlier, in order to shore up the evidence required to prove his case. For this reason Standard’s objection to interrogatories 9-12 was denied.

Hackett’s attorney succeeded in securing the Court’s support of his discovery requests, although Standard raised objections to them. Hackett’s disability attorney argued competently against each and every objection. Because Standard still maintains that it made the right decision regarding Hackett’s disability claim, this is a case that will be seen again. It will be interesting to see whether discovery has an impact on the District Court’s decision when it reviews this case again on remand.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

Disability Insurance Attorneys Dell & Schaefer are excited to report that Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a hearing on Tuesday to examine the difficulties workers face in securing benefits they are entitled to from private long-term disability insurance plans. The hearing, entitled “Do Private Long-Term Disability Policies Provide the Protection They Promise?” will take place at 10:00 a.m. on Tuesday, September 28 in Room 215 of the Dirksen Senate Office Building.

At the hearing, Baucus will focus on whether private-sector long-term insurance claims are being unfairly denied or terminated by the companies providing long-term disability insurance covered under the Employee Retirement Income Security Act (ERISA). The hearing will also examine how these private insurance companies have handled workers’ appeals of denials and terminations. Baucus will raise questions about possible improvements that can be made to ensure claimants and beneficiaries of long-term disability insurance plans covered under ERISA are treated fairly.

The hearing can be watched by going to http://finance.senate.gov/hearings/. Any individual or organization wanting to present their views for inclusion in the hearing record should submit a typewritten, single-spaced statement, not exceeding 10 pages in length. Title and date of the hearing, and the full name and address of the individual or organization must appear on the first page of the statement. Statements must be received no later than two weeks following the conclusion of the hearing.

Statements should be mailed (not faxed) to:

Senate Committee on Finance
 Attn. Editorial and Document Section
Rm. SD-219
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

After successfully winning her claim against Liberty Life Assurance Company of Boston (Liberty Life) at both district and appeals court levels, Theresa Willcox’s disability attorney sought compensation for the attorney’s fees charged Willcox to bring her claim before the Courts. When the District Court denied the application, Willcox’s disability attorney appealed the decision.

The primary reason given by the District Court for denying the disability attorney compensation hung on the reality that despite the fact that the Court found Liberty Life had abused its discretion, there had been enough contradictory evidence in the record to clear the disability insurance company of charges it had acted maliciously.

Court finds disability attorney’s fees are excessive.

The Court also found that the fees Willcox’s disability attorney was seeking to collect were “clearly excessive.” The Court noted that Willcox’s disability insurance attorney had engaged in a “pattern of inflammatory and vitriolic arguments.” The District Court concluded that his charges it was Liberty Life’s fault that so much time and resources had gone into the disability lawsuit were unfounded.

Court considers basis for awarding disability attorney fees.

In order to determine whether the District Court had made the correct decision, the Court of Appeals considered whether the District Court had applied the following five factors to reach the decision.

  1. To what degree was Liberty Life guilty of culpability or bad faith?
  2. Was Liberty Life able to pay attorneys’ fees?
  3. Would awarding attorneys’ fees against Liberty Life deter other disability insurance companies acting under similar circumstances?
  4. Was Willcox’s claim seeking to benefit all the participants and beneficiaries of Liberty Life’s ERISA plan or did the claim resolve a significant legal question regarding ERISA itself?
  5. What was the relative merits of Willcox’s position when compared to Liberty Life’s position?

These five factors are known as the Westerhaus factors—named after the 1984 Lawrence v. Westerhaus opinion in which the factors first appeared. The Court has been using these five factors to evaluate when to award attorney fees under ERISA.

The Court of Appeals found that the District Court had applied these five factors properly. While it is unnecessary for all five factors to apply, the Court has generally found more than one factor necessary before it will award attorney fees. In Willcox’s case, only one factor clearly weighed in favor of awarding attorney’s fees—Liberty Life’s ability to pay.

Disability attorney seeks recognition of bad faith on part of disability insurance plan.

The District Court did not find the disability insurance plan culpable or guilty of bad faith. In his appeal of this finding, Willcox’s long-term disability attorney argued that Liberty Life should have been found culpable for its abuse of discretion. By conducting a cursory review of her benefits claim, the disability attorney argued that Liberty Life had acted in bad faith.

The Court of Appeals disagreed. Based on Fletcher-Merrit v. NorAm Energy Corp. and Eisenrich v. Minneapolis Retail Meat Cutters & Food Handlers Pension Plan, Liberty Life could not be held culpable when there was enough evidence to suggest that Liberty Life’s denial was not without some merit.

Willcox’s claim only sought personal benefits, notwithstanding her disability attorney’s claim that her lawsuit was filed to indirectly motivate Liberty Life to conduct more thorough investigations in the future. The Court of Appeals sided with the District Court’s evaluation of this matter as well. Wilcox was not directly seeking to benefit other participants in the disability insurance plan, thus this factor weighed against approving compensation for attorney’s fees.

While her disability attorney argued that awarding disability attorney’s fees would discourage long-term disability insurance plans from performing surface claims review, both Courts felt that it would not have much impact, if any, on other disability insurance plans. Siding with the District Court, the Court of Appeals found that the disability attorney had exacerbated the situation by his handling of the lawsuit.

Court finds disability attorney prolonged ERISA litigation process.

After reviewing all the evidence the Court of Appeals upheld the finding of the District Court that Willcox’s disability attorney had “done more to unreasonably” prolong the ERISA litigation “than any litigating position Liberty Life took.” The Court found that it preferred to deter long-term disability attorneys from clogging the Court system with drawn out ERISA claims.

Willcox’s disability attorney argued that the merits of her case were so strongly on her side, that attorney’s fees should be paid on this one factor alone. The Court of Appeals found otherwise. The merits of Willcox’s position was only slightly stronger than Liberty Life’s, but not enough to tip the scales toward payment of her disability attorney’s fees. Liberty Life had made a decision on evidence that did present some merit.

Court finds that disability attorney is not entitled to recovery of fees.

After considering Willcox’s case carefully, the Court of Appeals reached a conclusion. The District Court had not made a “clear error in judgment” as Willcox’s disability attorney claimed. Rather, because the only factor that weighed clearly for awarding attorney’s fees was Liberty Life’s ability to pay, the Court of Appeals upheld the District Court’s decision.

This case highlights one vital factor that a disability attorney must consider when representing a client in an ERISA claim. The Court felt this disability attorney had caused the whole litigation process to linger in the Courts. The decision to deny attorney’s fees fails to give specific details, but it may be inferred from reading the decision that the disability attorney “unreasonably multiplied” the proceedings in some way. As I have stated in numerous articles, attorney fees are discretionary with the court and it appears that the disability attorney in this case must have pissed off the judge.

It is important that a disability attorney expend time and resources efficiently. The Court is well aware of what is necessary to prepare a proper litigation, yet is also sensitive to things that lawyers may do that are unnecessary and take up more time than needed. If it appears that an attorney is “milking” a claim for everything he/she can get, the Court is less favorable to awarding attorney’s fees, even if it has sided with the claimant, as it did in Willcox’s case.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

Willcox v Liberty Life Assurance Company of Boston (Liberty) is an interesting disability insurance case. Theresa Willcox originally brought her disability claim before the U.S. District Court in Minnesota. When Liberty Life determined that she did not qualify to have her short-term disability benefits extended into long-term disability benefits, she made the usual appeals to the decision. Liberty Life made its final decision in May 2006, which led to her disability attorney filing a law suit pursuant to ERISA § 502, 29 U.S.C. § 1132.

Prior to trial her long-term disability attorney presented the Court with fifteen exhibits, all drawn from publicly available resources. This presented a problem for the Court as ERISA generally does not allow the Court to consider evidence outside the administrative record. Evidence outside the administrative record means any additional information that was not submitted with the ERISA appeal. At the same time, the exhibits contained material designed to help the Court evaluate whether Willcox had been given a fair hearing—anatomical charts, medical dictionary definitions, journal articles. One exhibit was provided to demonstrate the possibility that a conflict of interest existed. It addressed the qualifications of the neurologist Liberty Life hired to evaluate Willcox’s medical files.

The exhibits presented by her disability attorney did not include any medical data or diagnostic test results that weren’t already present in Willcox’s administrative record. He asked the Court to consider this information. Liberty Life argued that the District Court should allow Liberty Life to offer rebuttal exhibits and remand the case back to the disability plan for administrative review if the Court felt that the exhibits should be accepted into evidence. The court granted Liberty’s request and the administrative record was essentially reopened. This is a very rare occurrence in ERISA disability Cases.

So what were these medical exhibits about? They included generic anatomical charts, medical dictionary entries, journal articles, and similar material that would help a claims handler or judge understand what the test results in the medical record revealed.

What were the test results that needed to be understood? There were a series of medical exams designed to evaluate the presence of a condition known as L5 radiculopathy. There were also MRIs and CT scans. This condition causes weakness in the leg, impaired sensation, foot drop and pain. It is caused by compression of the nerve that comes from the L5-S1 segment of the spine.

Why would L5 radiculopathy cause Willcox’s disability? Because of the debilitating pain in her lower left leg that did not respond to surgical options, she could no longer work full-time. Her job was sedentary, but the long hours of sitting caused excruciating pain. Because of the involvement of her spine, walking to relieve her pain was not an option. She was no longer able to fulfill her duties as a claims adjuster for Blue Cross Blue Shield.

What precipitated her disability? She was injured in a car accident in March 2003. She tried the chiropractic route first but had to undergo a spinal diskectomy and fusion in November 2004. After this surgery, she began working part-time from home. The pain in her back resolved, but the L5 radiculopathy did not improve.

Court orders review of medical exhibits.

The District Court chose to order Liberty Life to conduct an initial review of the information that Willcox’s disability attorney had presented to the Court. The disability insurance plan was also ordered to consider more than the 15 exhibits. If Willcox presented more information regarding her disability, Liberty was to consider it.

Willcox added medical records from treatments she underwent in 2006 and 2007, two questionnaires filled out by two of her treating physicians and two witness statements regarding her physical limitations (one statement was her own).

Court ordered review of file results in persistent denial of disability benefits.

Liberty Life retained a different neurologist to review her medical records. This physician concluded that despite the restrictions her condition created in her ability to walk, stand or lift objects, there was no reason to conclude that Willcox was barred from a position as sedentary as an insurance claims adjuster. Liberty Life reaffirmed its decision to deny Willcox’s long-term disability claim.

Willcox took her claim before the District Court once again. After reviewing Liberty Life’s disability determination using the abuse of discretion standard of review, this Minnesota District Court determined that Liberty Life had abused its discretion because it failed to evaluate Willcox’s medical record in its entirety and relied entirely on the shallow medical overview of the neurologist it hired. The court revered Liberty’s disability denial.

When Court reverses disability plan’s decision, Liberty Life appeals.

Liberty Life appealed the lower courts reversal of the claim denial. Liberty Life chose to challenge both the District Court order to reopen Willcox’s claim and its conclusion that Liberty Life had abused its discretion.

When Willcox’s disability attorney and Liberty Life argued before the Court of Appeals, both sides were fully agreed that ERISA governed the disability insurance policy. They also agreed that the proper standard for reviewing Liberty Life’s decision was abuse of discretion, a review that is deferential to Liberty Life.

Liberty Life acknowledged that it had invited remand for consideration of the new evidence presented by Willcox’s disability attorney. Yet, Liberty Life was now arguing that the evidence should not have been considered. Willcox’s disability insurance attorney pointed to the significant difference between the exhibits he had presented to the Court for consideration and other cases where the reviewing courts had refused to consider extra material. In Rittenhouse v. UnitedHealth Group Long Term Disability Ins. Plan and Brown v. Seitz Foods, Inc. Disability Benefit Plan, the evidence had been specific to the plaintiff’s symptoms or diagnosis.

Willcox’s disability attorney pointed to the fact that each exhibit served only one purpose—to assist the court in its ability to interpret complex medical evidence. Each exhibit had been culled from medical publications and websites without thought of its effect on litigation. Considering that in Barnhart v. Unum Life Ins. Co. of Am. the Court had itself gone to public medical sources to establish a fair context for a decision and Vega v. Nat’l Life Ins. Servs., Inc. held that generic materials that assist “the district Court in understanding medical terminology or practice related to a claim would be … admissible.”

The Court of Appeals found that the District Court’s decision to remand review of the new evidence to Liberty Life, instead of taking this upon itself, expressed the appropriate deference due to Liberty Life as the plan administrator. For Liberty Life to then complain that the District Court had abused its discretion by remanding consideration back to the disability insurance plan hinted at the capricious and arbitrary manner in which Liberty Life had handled the claim.

The Court of Appeals looked for any evidence that the District Court had used the additional medical evidence Willcox supplied for the remand to reach its conclusion that Liberty Life had abused its discretion, as this would have been problematic. No such evidence appeared in the District Court’s decision. Rather Liberty Life had clearly abused its discretion during its first review.

Liberty Life had originally sent Willcox’s file for review by an internist. This physician recommended that a neurologist or specialist in physical medicine review the file. Liberty Life then sent the file to a neurologist who listed all the medical records he reviewed. This neurologist’s report was full of errors. He stated that there was “no objective evidence” of radiculopathy, when in fact there were multiple tests demonstrating the symptoms of radiculopathy. He also stated that a nerve block that had provided relief for 24 hours had provided no relief at all.

Court finds disability insurance plan depended on faulty reports.

Based on this faulty report, Liberty Life had denied Willcox’s application for long-term disability benefits. While Liberty Life had no obligation to give more value to the opinions of physicians who had treated her, it was under obligation to weigh the evidence she provided fairly. The neurologist Liberty Mutual hired failed to do this.

When the District Court remanded Willcox’s case back to the disability insurance plan, Liberty Life had a second opportunity to get it right. The second neurologist had the same materials as the first neurologist, yet also stated that there was no evidence to support her claim. This physician also ignored the tests that supported her claim and only considered the tests that were inconclusive. It would appear that both physicians hired by Liberty Life had failed their fiduciary duty by combing the record for evidence to deny Willcox’s claim. The decision reached by Liberty Mutual could be nothing but arbitrary and capricious and an abuse of discretion when it depended upon these doctor’s opinions.

Liberty Life wasted the premiums paid into its disability insurance pool pursuing this appeal. The Court of Appeals affirmed the decision of the District Court. The District Court had neither abused its discretion by doing as Liberty Life suggested by remanding Willcox’s claim for further administrative review, nor had the Court made an error in concluding that Liberty Life had abused its discretion when it relied on medical reviews that ignored medical evidence or misread findings that confirmed Willcox’s disability.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

California Governor Arnold Schwarzenegger has the opportunity to sign California Assembly Bill 1868 (“AB 1868″) and put an end to unreasonable discretionary clauses contained in ERISA governed long term disability policies. Discretionary clauses provides authority to the insurer to determine eligibility for benefits or coverage, interpret the terms of the policy, or interpret the terms of the contract in a manner inconsistent with state law. In my opinion discretionary clauses tie the hands of courts and allow disability insurance companies to wrongfully deny disability claims. The proposed AB 1868 bill that needs Governor Schwarzenegger’s approval would prohibit any insurance company from issuing any insurance policy in the state of California that contains a discretionary clause.

In the recent case of Morrison v. Standard Insurance Company, the 9th Circuit U.S. Court of Appeals ruled that the California Insurance Commissioner does not need to approve any disability insurance policies that contain discretionary clauses.

The elimination of discretionary clauses in California is a great start, but a bill similar to AB 1868 should be on the books in every state. The discretionary clauses allow disability insurance companies to hide behind the wall of ERISA and its arbitrary and capricious standard of review. The elimination of the discretionary clause will give every claimant who has a denied disability claim the opportunity to have an independent judge review their claim denial.

Disability Attorneys Dell & Schaefer support AB 1868 and urge you to send a message to Governor Schwarzenegger by clicking here. In the “Choose Your Subject” box, please select insurance issues. You can cut and paste the following message to the Governor in order to show your support for AB 1868:

Please support Assembly Bill 1868 which bans discretionary clauses in insurance policies. As a result of the Federal Courts’ interpretation of the ERISA statute, when insurance companies insert language into the policies vesting themselves with discretion to decide claims, the Federal judges who review denials will give substantial deference to the insurer’s decision. This means the judge will not be determining if the claimant is entitled to benefits, but will rather be looking to see if the denial was “arbitrary or capricious,” and will ignore the merits of the claim. The insured essential has no right to their day in court. Any standard of review that ignores the merits of an individual’s claim is inherently unjust. Such a standard leaves an already vulnerable group of individuals less able to obtain the disability benefits they both desperately need and rightfully deserve. It is an exceedingly unfair and unreasonable interpretation of a statute, which does not align with the concepts of fairness and justice.

AB 1868, which bans discretionary clauses in group long-term disability policies, would create an even playing field for insurance claimants and could help dissuade insurance companies from unfairly denying claims. This, in turn, would help many people with disabling conditions rely on disability benefits to pay their bills when they cannot work.

Without these protections against discretionary clauses, insurance companies who deny valid disability claims have a completely unfair advantage, and thus, will more often than not succeed in denying valid claims. With the protection in AB 1868, insurers will be incentivized to review claims more thoroughly, which will even the playing field somewhat and reduce the need for an employee to resort to the legal system. Here in California, prohibiting discretionary clauses will make the standard of court review for group policies purchased by an employer the same as it already is for individual policies.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

Our law firm was recently contacted by an individual that was receiving long term disability income payments from Prudential. This disability claimant has been on long term disability for approximately 12 months. His disability is the result of a disabling knee condition. His Prudential long term disability policy defines "disability" for the first 24 months as the inability to perform the substantial and material duties of his occupation. After 24 months the definition of disability changes to the inability to perform the material duties of any gainful occupation. Gainful occupation is an occupation that will pay at least 60% of the claimants pre-disability earnings. This is known as the "any occupation" definition.

→ Click to continue reading Beware of unreasonable Prudential Disability Insurance lump sum buyout offer.

The Prudential Insurance Company of America (PRU), one of the world’s largest long term disability insurance companies, recently issued a press release regarding their return to work strategies. In my opinion, when Prudential or any long term disability insurance company discuss “return to work strategy”, this is tantamount to saying how quick can we stop paying a long term disability income claim. It’s no secret that Prudential can make a lot more money if less people are paid long term disability. No employer wants to see their employee miss work due to a disabling condition, but it is is scary when a long term disability company thinks they are qualified to make decisions about when a disabled person can return to work. Unfortunately, many long term disability insurance companies rely on computer programs to tell them how long a person should be out of work based upon a specific medical condition. Prudential and many other long term disability insurance carriers attended a national conference to discuss “effective return to work strategies”.

For more information about the meeting check out dmec.org.

Prudential’s August 26, 2010 Press Release states as follows:

NEWARK, N.J., Aug 26, 2010 (BUSINESS WIRE) — Kimberly Mashburn, vice president of Strategic Partnerships for Prudential’s Group Insurance business, a unit of Prudential discussed the critical role of managers and effective return to work strategies at the annual Disability Management Employer Coalition (DMEC) conference, August 1- 4, 2010 in San Diego, Calif.

Workplace absence can be very expensive. Costs and consequences of absence can include direct costs like disability premiums, benefits paid to disabled employees, continuing employee benefits, and wages to replacement workers. Also, indirect costs like reduced productivity, increased overtime, increased supervisory time, increased stress & pressure, recruitment and training of replacement workers, increased medical costs, and administrative cost all add up. While many disability absences are out of a manager’s control, some may not be.

“Some disability absences are driven by subjective feelings about work, so managers should make sure they are building an environment that breeds commitment,” said Mashburn. During her August 1 workshop, she provided the following actionable steps that managers can take to enhance prompt return to work and boost productivity:

  • Create a positive work environment that employees want to come back to;
  • Prepare for planned absences by discussing how to cover the work with the employee going on leave;
  • Keep personal and professional connections when employees are out of work;
  • Plan for the return to work using all the options available at your company; and
  • Monitor the return to work to help ensure additional absence is mitigated.

“New laws, escalating costs, fewer employees, and health and productivity issues are the challenges of the post-recession economy,” said Joe Wozniak, Certified Professional in Disability Management and Chief Financial Officer of DMEC. “This year’s conference allowed attendees to learn best practices and proven solutions that help employers return workers to productive employment from peers and thought leaders like Prudential.”

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

Certain Underwriters at Lloyd’s London insurance company took almost two years to make a decision regarding a doctor’s disability application for benefits. When he sued, the Court stayed the suit until an arbitration panel could review his claim. This article discusses the how the final disability benefit award was finally settled.

Most people don’t think of cardiologists developing heart conditions. It is far more common than most people realize.

Dr. Zev Lagstein held a disability policy with Certain Underwriters at Lloyd’s, London. The policy required Lloyd’s to pay him $15,000 per month for up to 60 months if he lost his ability to practice medicine due to a disability.

When he developed complications from heart disease, including severe migraine headaches and other neurological problems he applied for benefits. He supported his claim with the opinions of several physicians who concluded after examination that he was permanently disabled from practicing not only as a cardiologist but as a physician.

Months passed without Lloyd’s reaching a decision. Lagstein went back to work against his doctor’s advice, which only complicated matters. Finally after almost two years had passed since he filed his long term disability claim, Lagstein sued. The policy mandated binding arbitration, so Lloyd’s moved that the case be stayed until a three – member arbitration panel issued its decision. A arbitration panel found Lloyd’s in the wrong and awarded Lagstein more than $6 million to cover policy benefits, emotional distress damages and punitive damages. Lloyd’s responded to this decision by filing a motion to vacate the arbitration award.

The motion was heard before the U.S. District Court, District of Nevada. The judge sitting on the bench was shocked by the size of the award and used this as his primary reason for vacating the decision of the arbitration panel. He also vacated the punitive damages the arbitrators entered as being outside its jurisdiction. Lagstein appealed.

The Ninth Circuit Court of Appeals found that the District Court did not have the authority to vacate an arbitration award just because it disagreed with the size of the award. See Collins v. D.R. Horton, Inc. Rather proof that the arbitration panel had exceeded its powers, was necessary. The Court found that § 10 of the Federal Arbitration Act does not sanction judicial review of the merits behind an arbitration award. The District Court had stepped outside the scope the law gives the Court in these matters.

Lloyds argued that the arbitration board had manifestly disregarded the law, yet could produce no evidence to demonstrate this. In Kyocera, the Court had found that an award is completely irrational "only where the arbitration decision fails to draw its essence from the agreement." Lloyd’s claimed the issue was the fact that Lagstein was not disabled because he had returned to work. Thus the panel’s findings were irrational.

The Court of Appeals did not find the arbitration panel’s findings irrational. The majority of the panel had found that Lloyd’s violated the policy’s "referee provision" by hiring a physician of its own choosing while failing to inform him of the import of this action. The majority also found that he was disabled thus Lanstein was entitled to benefits, whether Lloyd’s agreed with these conclusions or not.

The Court of Appeals also found fault with the District Court’s finding vacating the punitive damages which were awarded by the panel after they had issued their initial arbitration award. The panel had requested an extension of an additional 15 days in which to submit its initial award. Both parties agreed. The filing occurred before the deadline with punitive damages set to be determined at a later date. Nothing in Lagstein’s policy expressly withdrew determination of procedural issues from the panel, so the panel was within its rights to set another hearing for determining what punitive damages, if any, would be awarded.

Both rulings by the District Court were vacated and Lloyd was ordered to pay over 6 million dollars to Dr. Lagstein.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.

There seems to be a trend recently in which the Hartford disability insurance company is closely scrutinizing long term disability claims regardless of how long a claimant has been on claim. In the past 7 days I have been contacted by two separate claimants that have been on claim with Hartford for over 20 years and are having issues with Hartford. We usually see problems develop with long term disability claims when a new claims adjuster is assigned to a disability benefit claim. In my opinion, Hartford is one of the most difficult and unreasonable long-term disability insurance companies to deal with. I based my opinions on long-term disability claims my firm has handled and the numerous lawsuits around the country that discuss the conduct of Hartford.

A woman recently contacted me and she asked that I share her experience with Hartford so that other disability claimants can be aware of Hartford’s claim handling tactics. This woman stated the following:

"The Hartford sent us a letter demanding that we sign a bunch of papers allowing them access to ALL doctors previously seen, All bank accounts, several questionnaires or they would cut off all benefits (which they did). I spoke to a paralegal at a local law firm that told me to sign all papers unless I had something to hide. We reluctantly signed the papers (I didn’t feel that they needed our bank account info amongst other info not pertaining to this claim). My wife has been on disability with Hartford for 13 years and she has seen many doctors. Her primary doctor has recently filled out a letter stating that there was no time table for her return to work ( she just had an epidural in her spine last week). The Hartford has just sent us a letter stating that they have basically annoyed several other doctors that my wife has seen recently (she has renal issues also) trying to get them to give information but they are blackmailing us as they did at the beginning by saying you MUST tell your doctors to send them the information within 21 days or we will shut off your benefits. They have continually tried every angle to cut off my wife’s benefits with these harassment techniques. We didn’t want to sign any of these papers but we did. We think we should tell them that we are revoking their right to contact everyone. (My wife also gets social security because of this injury and we fear The Hartford will destroy that also leaving us in ruins). Now the doctors that my wife sees are being tormented which will have an effect on the care my wife receives AND now they are resorting to another type of blackmail as they expect us to do their work contacting these doctors to force them to give in to their demands or they will cut us off. I don’t believe we signed up for that duty. I originally thought that they were going to negotiate a payoff settlement but instead it appears that they are trying the bullying tactic so they can stop paying."

This woman’s experience and frustration with Hartford is consistent with the hundreds of Hartford disability claim emails we receive each year. In this scenario, a claimant should never revoke Hartford’s ability to contact a treating doctor, however Hartford does not have a right to receive whatever information they feel like asking for.

About the author: Gregory Michael Dell is an attorney and managing partner of the disability income division of Attorneys Dell & Schaefer. Mr. Dell and his team of lawyers have assisted thousands of long-term disability claimants with their claims against every major disability insurance company. To request a free legal consultation call 800-411-9085.