Legal Summary: Myers v. Prudential Insurance Company of America

Myers v. Prudential Insurance Company of America
Not Reported in Fed. Supp. (2009)

Our client worked as a division manager at a motor service organization before becoming disabled due to a blood disorder. She applied for and received disability benefits from Prudential Insurance Company of America for over two years. Prudential then terminated its payment of benefits, citing a report from her primary care physician and a statement from her employer that she could still work, writing “job change, modification of duties possible.” No specific modification of duties or job change was mentioned in this report.

Upon this denial, our client’s physician wrote to Prudential, explaining that the recent paperwork he had filed “was limited, not showing the complete physical limitations that [our client] has secondary to her illnesses.” He opined that she was “totally disabled” and “unable to do any kind of work, sedentary, lifting, et cetera.”

Prudential then hired a non-examining, file reviewing physician to review the medical records.  This file-reviewing physician, an employee of a company called MES, wrote that there “is no documentation presented that the claimant has asthma,” and that she did not have “functional impairments.” His opinion did not make any reference whatsoever to our client’s physician’s opinion, which included reports of asthma as well as other ailments.

Two days after requesting the physician from MES to review the records, Prudential took steps to pursue Plaintiff’s Social Security disability claim. Prudential had hired and paid Allsup, an organization that represents people in Social Security disability cases, to pursue our client’s claim with the Social Security Administration. Two days after referring the file to the MES doctor, Allsup sent the Social Security Administration (“SSA”) a letter claiming our client was totally disabled under special rules calls “listings” that mandate a finding of disabled under Social Security’s rules for people who meet certain medical criteria.  In this case, Allsup cited to Listing 3.03B, the listing for people with disabling asthma. Additionally, Allsup cited to the SSA the medical opinion of one of our client’s treating doctors that she had “severe and persistent fatigue that interferes with the ability to complete a full workday or workweek” and that “   .  , there is no question that these additional non-exertional limitations would significantly erode the job base as per SSR 83-14.” (SSR is a Social Security “ruling,” an internal social security rule that in this case dictates that claimants with a certain set of limitations are so precluded from adjusting to other work that they should be deemed disabled under SSA rules.)

After examining records from our client’s physician, and considering the arguments made by Allsup, the Social Security Administration found our client to be disabled. SSA found that our client suffered from “severe impairments” and was “unable to perform any work activity even at the sedentary level.” The SSA awarded benefits.

After winning her social security benefits, our client was hospitalized for 4 days.  Three days after getting out of the hospital, and 13 days after winng Social Security disability benefits with the help of Allsup, the company hired by Prudential, Prudential then issued its second denial letter, upholding its original termination of our client’s long-term disability benefits without providing any analysis of why her treating physician’s conclusions were rejected. Our client filed another appeal, which Prudential then denied.

We brought suit, arguing that (1) our client is disabled; (2) Prudential acted arbitrarily by crediting the opinion of our client’s treating physician in order to deny benefits, but then rejecting that opinion when it was pointed out that the limitations he assessed would actually preclude our client from all work; (3) Prudential’s exclusive reliance upon the non-examining, file reviewing medical consult was inadequate in providing a “reasoned explanation” for its decision to terminate her benefits; (4) Prudential acted arbitrarily by having Allsup, its agent, argue successfully to the Social Security Administration that our client was disabled from any occupation, resulting in a significant financial benefit to Prudential, but then rejecting that same evidence and conclusion of disability on the LTD claim without sufficient explanation.

The court reviewed our case under the arbitrary and capricious standard because “if an administrator is properly granted discretion in the ERISA plan documents, the administrator’s decision is entitled to deference and is subject to an arbitrary and capricious standard of review.” Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 109 S. Ct. 948, 103 L.Ed. 2d 80 (1989).

We argued that Prudential acted arbitrarily and capriciously in denying our client benefits without reviewing all the materials provided. The Court concluded that “there was evidence supporting [our] claim which the insurer did not consider that they “shut their eyes” to this readily available information in terminating benefits while using this evidence to support a Social Security claim on behalf of [our client.]”

The court opined that it gives “less deference [to a plan administrator] if a plan administrator fails to gather or examine relevant evidence.” Caldwell v. Life Insurance Co. of North America, 287 F.3d 1276, 1282 (10th Cir. 2002.) Any application of the arbitrary and capricious standard must consider conflicts of interest held by the decision maker.

Receiving benefits from the SSA does not necessarily mean a claimant is entitled to benefits; however, there are factors to be considered as to whether the plan administrator acted arbitrarily and capriciously. If the plan administrator “(1) encourages the applicant to apply for Social Security disability payments; (2) financially benefits from the applicant’s receipt of Social Security; and then (3) fails to explain why it is taking a position different from the Social Security Administration on the question of disability, the reviewing court should weigh this in favor of a finding that the decision was arbitrary and capricious.” DeLisle, 2009 Fed. Appx. 0082P.

Prudential both encouraged our client to apply for Social Security benefits and benefited from her receipt of benefits (because Prudential’s policy allows it to offset the benefits it pays by any amount of money paid in Social Security disability benefits.). The court also ruled that Prudential failed in explaining “adequately” why its decision was different from that of the Social Security Administration as its medical consultant did not provide a compelling analysis of, or argument against, our client’s treating physician’s findings.

The court found that Prudential acted in an arbitrary and capricious manner in denying benefits because it relied upon the same findings that its agent presented to the SSA when arguing that our client was disabled and unable to work.

Prudential’s medical consultant argued that our client “is not functionally impaired” but did not mention, nor analyze, our client’s physician’s assessment. See Calvert, 409 F. 3d at 297; Kalish, 419 F. 3d at 510-11” This report was considered “at odds with the remainder of the record where [our client’s physician] has repeatedly offered an assessment of disabling limitations and Prudential itself agreed that [our client] was disabled and paid benefits for over five years.”

A court does not automatically hold the opinion of an examining physician over that of a file reviewer or non-examining physician; however, in this case, the court ruled in our favor as Prudential’s file reviewer never physically examined our client, despite the plan allowing him to do so. The file reviewer also did not include an assessment of the opinion of our client’s treating physician or materials used by Prudential in obtaining our client’s Social Security disability benefits. This evidence was either ignored or made unavailable to the reviewer. A “file-reviewer’s opinion may be found inadequate where the file-reviewer ignores or fails to rebut key evidence of disability.” Therefore, the Court concluded that Prudential’s file reviewing physician’s opinion was not more thorough than that of our client’s treating physician.

The Court determined that Prudential acted in an arbitrary and capricious manner in denying our client benefits, ruling in our favor and opining that Prudential’s decision be reversed “with benefits reinstated for so long as Plaintiff remains disabled.” Additionally, the Court ruled for our client to be awarded past due benefits, interest thereon, and reasonable attorney’s fees.