In this case, Fredrick Smith (“Smith”) was employed as a plant manager for Charles Craft, Inc. (“Craft”) reaching back to the 1970’s. Through his job, he held group policies with Reliance Standard Life Insurance Company (“Reliance”). Two of these polices included a long term disability benefits plan and a life insurance policy. If an employee is considered to be totally disabled, each of those policies provide benefits.
In 2013, Smith began to experience a series of health problems including heart issues and strokes. At that time, Reliance paid out disability benefits and waived the life insurance premiums. However, by 2016, Reliance made a determination that Smith was not totally disabled, even though each of his physicians disagreed. Reliance then suggested that Smith find another job. This led Smith and his wife to file suit under ERISA, alleging that they were due a reinstatement of benefits. The lower court ruled in favor of the claimants and Reliance appealed.
The symptoms that Smith had began a number of years prior to the 2016 decision by Reliance. In both 2012 and 2013, Smith had trouble breathing, resulting in a diagnosis of diabetes, hypertension, and high grade stenosis (narrowed blood vessels). In March of 2013, Smith experienced chest pains and was quickly admitted to the hospital. There, the doctors diagnosed him with serious coronary artery disease; Smith’s father died from the same disease when he was 44 years of age.
Because of this, Smith had a triple bypass surgery but continued to work on a part-time basis. Post-surgery, Smith felt numbness in his left hand. At that point, Smith’s doctors suggested that he stop working completely. Craft also agreed with this decision and on one occasion “refrained from contacting him when he might have been able to answer a question due to his experience” because of the fear that he would become stressed and be in a worse condition than before.
By July of 2013, Smith had applied for total disability benefits under both the life insurance and long term disability benefits policies. His physician, Dr. Stewart, assisted in filling out the application, and explained that his medical issues were “work related” and “from stress” which meant he could ”NEVER” return to work again. When the form inquired as to how much weight Smith could lift, Dr. Stewart indicated that he could only perform “sedentary work.” In August, Smith’s application was granted.
Reliance then suggested that Smith apply for Social Security disability benefits as well. A Dr. McGaffagan looked Smith over and made a determination that he was able to receive disability benefits. By receiving these benefits, Reliance had to pay Smith less out of pocket under its own long term disability benefits policy. Smith began to have additional health problems in 2014, and he was soon diagnosed with additional nerve issues, neuropathy, and numbness. A month later, a Dr. Haworth indicated that Smith had stress problems, memory issues, bad balance, dropping of the face, and slurred speech. He also opined that Smith “had a stroke that has affected the entire left upper extremity” and “vascular path retraction along the carotid arteries could pose some risk of further stroke.”
After this, Reliance continued to request information from Smith’s doctors, particularly asking when he would no longer be “continuously totally disabled (unable to work).” In April 2014, a Dr. Husain stated “permanently” as his response. Later, a Dr. Hannan also refused to provide a specific time, instead saying that he was “permanently” disabled. By August 2015, Reliance chose to terminate Smith’s benefits because Smith could allegedly perform sedentary work.
This decision was based on a note from a Dr. DePaola which stated that Smith “walks up to 40 miles without difficulty.” Smith appealed, noting that that amount of mileage was totaled across several months. He also provided letters from Drs. Hanna and Husain which stated that he could not work. Reliance then “determined that [its] original decision should be reversed” and began paying benefits again. In April of 2016, Reliance decided to terminate benefits again.
The decision to terminate benefits was based on information from a Dr. Klang. Dr. Klang explained that his note-taking system was “formatted using voice recognition software and therefore may contain unintended errors.” However, he also stated that Smith “remained active including hunting he is previously going on about 50-1/2 mild tracks but did tend to leave him sore lower extremity so he is Back but he can do 7 a half miles without problem.” He also said Smith could “walk 8 miles without discomfort and hunt without difficulty.”
Smith again appealed, and Reliance forwarded his medical file to a Dr. Weston to review. Dr. Weston explained that Smith’s “prognosis is unclear” but that he was not disabled beyond June of 2016. Soon, Reliance sent another letter denying Smith’s second appeal. The letter itself contained information relating that the Social Security Administration believed Smith was disabled, but that “the SSA may not have the results of Dr. Weston’s review” and if it had, “may reach a similar conclusion.”
Smith again asked for reconsideration of the denial, and submitted information from Dr. Klang explaining that he could only walk about half a mile, and that he was totally disabled. At that point, Smith chose to file the immediate suit. The district court particularly found that Reliance did not consider “a vast number of Fredrick Smith’s records when performing its analysis.”
Here, the court of appeal found that Reliance committed an abuse of discretion in determining that Smith could be employed full-time with sedentary work restrictions. Specifically, every single one of Smith’s doctors stated that he could never work again or was permanently disabled. Reliance relied on vague statements in the medical record that indicated Smith was capable of walking or was doing well. However, the court believed that the medical records and additional evidence provided by Smith and his doctors caused him to be eligible for long term disability benefits. Therefore, the court ruled in favor of Smith and against Reliance, reinstating his benefits.[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]
Here is a PDF copy of the decision: