Legal Summary: Williams v. Reliance Standard Life Insurance Company

Williams v. Reliance Standard Life Insurance Company
No. 3:20-CV-4269 (E.D. Tenn. 2021)ย 

Our client worked as a dock supervisor for Old Dominion, which required him to โ€œremain standing and/or walking for a minimum of 8 hours per day, five to seven daysย  per week,โ€ โ€œwalk on non-forgiving surfaces such as concrete, wood, and metal and sometimes on wet and slippery surfaces,โ€ โ€œbend, twist, climb, and move about easily in small spaces,โ€ โ€œliftย  objects weighing in excess of 100 lbs.,โ€ and โ€œload and unload full trailers of freight weighing as much as 50,000 lbs.โ€ (Id. at 361.)

After suffering an injury, he stopped working for Old Dominion. He then applied for and received long-term disability benefits from Reliance Standard Life Insurance. Reliance terminated his benefits after four months, claiming that he did not qualify as disabled for โ€œany occupationโ€ under the policy.

He appealed the termination of his benefits and included an independent medical examination from an orthopedic surgeon, Dr. William E. Kennedy, who opined that he was not capable of full-time sedentary work. (Doc. 14-2, at 209โ€“17.)

Relianceโ€™s long term disability policy defines โ€œTotal Disabilityโ€ to mean that, as a result of injury or sickness: (1) during the Elimination Period and for the first 36 months for which a Monthly Benefit is payable, an Insured cannot perform the material duties of his/her Regular Occupation; (2) After a Monthly Benefit has been paid for 36 months, an insured cannotย  perform the material duties of Any Occupation. The insured is considered Totally Disabled if, due to an Injury or Sickness, he or she is capable of only performing the material duties on a part-time basis or part of the material duties on a full time basis.

Reliance upheld its denial, claiming that our client could perform full-time sedentary work. This conclusion was based on the opinion of a clinical consultant who reviewed his file. After an independent medical examination, Dr. Kennedy concluded that our client could perform โ€œsedentary work only part time.โ€

After we appealed the termination of our clientโ€™s benefits, Reliance retained Dr. Arash Yaghoobian, a third-party vendor, to secure an independent medical review of our clientโ€™s file. Dr. Yaghoobian, agreed with Dr. Kennedy on most diagnoses, but disagreed that our client was capable of only performing part time. However, Dr. Yaghoobian provided only one sentence to explain his conclusion: โ€œI respectfully disagree with part-time recommendation only, as the claimant has no indication to alter work hours.โ€

We argued that Relianceโ€™s denial of long-term disability benefits was arbitrary and capricious because Reliance: (1) had a conflict of interest; (2) unreasonably ignored the opinions of our client’s treating physicians; (3) failed to explain why it credited the file-reviewing doctor, Dr.ย  Yaghoobian, over Dr. Kennedy; and (4) disregarded our clientโ€™s award of social security disability benefits.

Reliance had a conflict of interest due to its position as the administrator and payor of the policy in question. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112โ€“15 (2008). The Sixth Circuit has observed that plan administrators have a clear incentive to contract with individuals who are inclined to find in their favor, and that possible conflict of interest should be considered when determining whether a plan administratorโ€™s decision is arbitrary and capricious. See Calvert v. Firstar Fin., Inc., 409 F.3d 286, 292 (6th Cir. 2005). The court determined that, because Reliance relied on the findings of its file-reviewing retained physician in denying our clientโ€™s benefits, this conflict of interest supported our argument that Reliance acted arbitrarily and capriciously.

In any given disability case on โ€œarbitrary and capriciousโ€ review, the court must determine whether a plan can offer a reasoned explanation, based on the evidence provided, for its judgment that a claimant was not โ€œdisabledโ€ within the planโ€™s terms. Elliott v. Metro. Lifeย  Ins. Co., 473 F.3d 613, 617 (6th Cir. 2006).

The plan administrator must โ€œgive reasons for adopting an alternative opinionโ€ from another physician. Shaw v. AT&T Ben. Umbrella Plan No. 1, 795 F.3d 538, 547 (6th Cir. 2015.) A plan administrator cannot โ€œarbitrarily refuse to credit a claimantโ€™s reliable evidenceโ€ in drawing its conclusion concerning rewarding benefits. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825 (2003)

Reliance did not provide its reasons for crediting Dr. Yaghoobian and adopting his alternative opinion beyond saying that โ€œthere is no medical documentation to supportโ€ Dr. Kennedyโ€™s conclusion. The court found this to support a finding that Relianceโ€™s denial of benefits to our client was arbitrary and capricious.

The court also examined our clientโ€™s Social Security disability benefits. The Sixth Circuit has held that if the plan administrator (1) encourages the applicant to apply for Social Securityย  disability payments; (2) financially benefits from the applicantโ€™s receipt of Social Security and then (3) fails to explain why it is taking a position different from the SSA on the question of disability, the reviewing court should weigh this in favor of a finding that the decision was arbitrary or capricious. Bennett v. Kemper Natโ€™l Servs., Inc., 514 F.3d 547, 554 (6th Cir. 2008) (citing Glenn v. MetLife, 461 F.3d 660, 669 (6th Cir. 2006)).

Reliance encouraged our client to apply for Social Security disability payments and undoubtedly benefited from his qualifying for Social Security disability benefits as it reduced the cost of his long term disability benefit payments from Reliance.

Our client was approved for Social Security benefits, but Reliance still denied his claim. However, Reliance never requested information from Social Security prior to terminating his benefits, so it did not see what was reviewed by the Social Security Administration (SSA), even though our client had authorized Reliance to do so. The court reasoned that Reliance could not possibly explain โ€œwhy it is taking a position different from the SSA on the question of disabilityโ€ if it did not know what the SSA reviewed in reaching its determination of disability. See Calhoun v. Life Ins. Co. of N. Am., 665 Fed. Appโ€™x 485, 493 (6th Cir. 2016) (citing Bennett, 514 F.3d at 533 n.2)

After reviewing these factors, the court ruled that Reliance acted arbitrarily and capriciously in denying our client benefits. The court remanded the matter to Reliance for a โ€œfull and fair reviewโ€ of his claim.