Case Story: Our Client v. Life Insurance Company of North America
Our client, an insurance claims adjuster for ACE Insurance, became disabled from a back injury after working for ACE for twenty-one years. Our client had back surgery in May 2002 and filed for benefits under their long term disability plan in October 2002. Id. at 160. On October 23, 2002, Life Insurance Company of America (LINA), ACE’s claims administrator, sent our client a letter saying that LINA needed medical information regarding our client’s functional abilities from their treating neurosurgeon, Dr. Boehm, by December 6, 2002. Id. Despite Dr. Boehm returning LINA’s Physical Abilities Assessment the week after December 6th and Dr. Boehm’s multiple record notes saying that our client was unable to work, LINA denied our client’s application on December 5, 2002. Id.
Our client appealed this denial according to the Plan’s administrative appeals process. Id. at 161. Our client submitted additional records from Dr. Boehm prohibiting them from work and records from Dr. Brown, a physical medicine and rehabilitation specialist, asserting that our client was unable to work in their present condition. Id.
LINA then hired Dr. Graulich, a neurologist, to conduct an independent peer evaluation of our client’s claim file. Id. at 161-62. On two separate occasions, LINA told Dr. Graulich to discuss our client’s condition with their treating physicians, Drs. Boehm and Brown. Id. at 168. Dr. Graulich called Dr. Boehm and Dr. Brown on March 14th and March 17th but submitted his report on March 18th before either doctor had returned his call. Id. at 168.
In addition to failing to follow explicit orders, Dr. Graulich’s report was internally contradictory. He agreed with our client’s treating physicians that it was reasonable to restrict our client to two to three hours of work and thirty minutes of driving per day. Id. at 168-69. However, he then contradicted himself and declared that the medical evidence did not support our client’s disability. Id. at 169. Finally, Dr. Graulich mischaracterized our client’s job as “sedentary” rather than “light-duty”, an error that significantly decreased the abilities our client would need to be able to perform that job. Id. LINA denied our client’s appeal on March 27, 2003, based on Dr. Graulich’s report. Id. The court declared:
In sum, Dr. Graulich failed to interview our client’s treating physicians despite his explicit instructions to do so, misstated the exertional level of our client’s job and contradicted himself as to their ability to engage in full-time work. We thus conclude that LINA acted arbitrarily and capriciously when it relied on Dr. Graulich’s report in denying our client’s first appeal on the basis that the record lacked sufficient evidence to establish disability.
After the Social Security Administration deemed our client to be totally disabled and awarded their benefits, our client filed a second administrative appeal in July of 2004. Id. at 162-63. Our client submitted additional medical records, including the report of Dr. Johnson, an orthopedist hired by the Social Security Administration to examine our clients, that declared that our client would have “difficulty maintaining active employment” and “could not work an 8-hour day or a 40-hour week.” Id. at 163.
In September of 2004, LINA had Dr. Sassoon, a physical medicine and rehabilitation specialist, review our client’s file. Id. The court noted that Dr. Sassoon’s report ignored the opinions of multiple doctors that our client could only work for two to three hours per day and instead focused on portions of the medical records that supported LINA’s position without any explanation for discounting other evidence. Id. at 169. Like Dr. Graulich, LINA’s first independent medical examiner, Dr. Sassoon did not speak with our client’s treating physicians, despite LINA providing him with a list of their names and contact information and directing him to discuss our client’s condition with them. Id. at 169-70. Based on Dr. Sassoon’s report, LINA denied our client’s second appeal on September 28, 2004. Id. at 163. The court asserted:
The failure of the independent-review physicians to comply with LINA’s instructions or to explain why they had disregarded the opinions of the doctors who had in fact treated our client was arbitrary…LINA’s reliance on the reports of Drs. Graulich and Sassoon in denying our client’s two administrative appeals constitutes capricious decision-making.
Id. at 170.
LINA also acted arbitrarily and capriciously when it continued to declare that our client’s claim lacked evidence of their functional limitations even though there were office-visit notes, MRIs, test results, and reports from examining physicians describing their functional limitations. Id. LINA had arbitrarily taken the position that only a Functional Capacity Evaluation would provide sufficient evidence of our client’s functional limitations but had never told our client this. Id.
Finally, the court explained that remanding the claim to the plan administrator is the appropriate remedy when there were issues with the administrator’s decision-making process but that the court could award benefits to the claimant without a remand when the claimant is “clearly entitled” to benefits. Id. at 171 (quoting Elliot v. Metro Life Ins. Co., 473 F.3d 613, 622 (6th Cir. 2006); citing Kalish v. Liberty Mutual/Liberty Life Ass. Co., 419 F.3d 501, 513 (6th Cir. 2005)). The court declared:
Plan administrators should not be given two bites at the proverbial apple where the claimant is clearly entitled to disability benefits. They need to properly and fairly evaluate the claim the first time around; otherwise, they take the risk of not getting a second chance, except in cases where the adequacy of the claimant’s proof is reasonably debatable. That is not the case here.
Id. at 172. Therefore, the court awarded our clients benefits from the date our client originally filed their claim. Id. at 172-73.