Legal Summary: Carty v. Metropolitan Life Insurance Company
Carty v. Metropolitan Life Insurance Company
224 F. Supp. 3d 606 (M.D. Tenn. 2016)
Our client applied for and received long term disability benefits from Metropolitan Life Insurance Company (MetLife) for two years after mental illness rendered him unable to work. However, after these two years, a physician hired by MetLife suggested a full file review of our client’s claim because he was, according to MetLife, meeting infrequently with his psychiatrist. However, our client was under the regular care of another psychiatrist.
MetLife decided our client no longer satisfied the plan’s definition of disabled. He appealed this decision, and was, again, denied benefits. In the second denial letter, MetLife argued that our client violated a provision within the plan that required him to receive “appropriate care and treatment.”
The court found MetLife’s denial letters to be unclear in their explanation as to why it denied our client’s benefits. MetLife was also criticized for its overreliance on two external physician consultants who never examined our client and whose reports did not cover all the potentially disabling symptoms highlighted by his treating physicians. The court ruled in our favor, remanding the case to MetLife.
We also argued that MetLife should pay our client’s attorneys’ fees. Per ERISA standards, the court can “allow a reasonable attorney’s fee and costs of action to either party” when a beneficiary challenges an insurer’s denial of benefits. A court must consider five factors when analyzing if a prevailing party is entitled to attorneys’ fees (Department of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985).) When examining these factors, the court agreed that MetLife was culpable as it failed as a plan administrator, could afford to cover the attorneys’ fees, and could deter other insurers from having similar deficiencies in their decision-making process. Our client was subsequently awarded attorneys’ fees.
In determining whether to award fees, the court analyzed the five factors.
Under the first factor, “Bad faith/culpability” the court noted “MetLife’s processing of Carty’s claim reflects breakdowns on multiple levels, including an initial denial letter that failed the most basic tests of clear, professional communication. A plan administrator who makes such errors is culpable.” Carty v Metlife, 2017 WL 660680, at 3 (M.D. TN, Order Feb 17, 2017).
Under the second factor, the opposing party’s ability to satisfy an award of attorney’s fees, the court found that there was “no dispute” that MetLife could “easily satisfy an award of fees and costs against them.” Concerning the “deterrent effect” factor, MetLife was found to have acted with a “general lack of thoroughness” throughout its evaluation. The court subsequently ruled that it would “serve the benefit system as a whole for such failures [as MetLife’s] to be deterred in all administrators.”
The fourth factor used when considering whether to award fees is “whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA,” to which the court determined we did not present any unique factors. The court then considered the final factor: the relative merit of both parties’ positions, but sided in favor of MetLife as it reasoned that MetLife’s “positions on the issues on which they did not prevail were still reasonably based on the underlying law.”
The court ruled in our favor, concluding that MetLife acted arbitrarily and capriciously in deciding that Carty was no longer disabled and not receiving appropriate care and treatment. The case was remanded to MetLife for reconsideration of our client’s eligibility for continued benefits. Our client was awarded a substantial portion of his attorneys fees.
