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The Martin Law Group, LLC ERISA Case Lawyers
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A Healthy Pregnancy Causes Debilitating Strokes?

Really? A healthy pregnancy causes or contributes to a debilitating stroke? Ms. Bradshaw was told just that, when her long-term disability claim was denied. See, Bradshaw v Reliance Standard Life Ins. Co, 11th Cir. August 31, 2017. Ms. Bradshaw had a healthy pregnancy and six months along at the time she became covered by a long-term disability insurance policy. She eventually gave birth to a healthy baby girl, but then about nine days later tragically suffered a debilitating stroke.
As she was no longer able to work she filed a claim for long term disability benefits. The claim was denied because there was a pre-existing condition exclusion in place for the first year. If she received treatment for “sickness” during three months prior to the policy becoming effective, and if the sickness caused disability, then her claim was excluded. That three-month time period is called the “look back” time frame. (“Sickness” is defined in this plan to include pregnancy.)
The point of such exclusions is that the insurer should not be responsible to insure someone who has a known serious condition, and then signs up for long term disability knowing the condition may be disabling shortly thereafter. This is much like finding out you have cancer that will take your life, and then rushing out to buy life insurance. We all understand the problem with that. Here, however, Ms. Bradshaw had a healthy pregnancy. She did not receive treatment for high blood pressure, headaches, preeclampsia or stroke at any time during the three months prior to long-term disability coverage.
The insurer however thought differently. It contended that she received treatment for pregnancy during the three month “look back” time frame, and pregnancy contributed to preeclampsia. The preeclampsia then caused the stroke. The insurer hired an OB/GYN doctor to agree with this. Ms. Bradshaw presented all sorts of evidence to show that mere pregnancy was not the cause of her debilitating stroke, but it fell on deaf years. After exhausting all claim remedies, she filed a lawsuit.
Unfortunately, she did not fare any better at first, and the district court agreed with the insurer that pregnancy “contributed to or caused the debilitating stroke”. Ms. Bradshaw filed an appeal to the 11th Circuit Court of Appeals and finally obtained some justice.
The 11th Circuit found this interpretation of the exclusion unreasonable. “Pregnancy is neither a necessary precursor to stroke nor does pregnancy normally develop or progress into stroke. To be sure, preeclampsia is a complication that can occur during pregnancy, but stroke is not a condition typically associated with a healthy pregnancy, like Bradshaw had at the time of the look-back period.” Ms. Bradshaw won and will receive her benefits.
Exclusions can be taken too far. Where do you draw the line with what conditions “contribute to” a disabling condition? Few humans are prefect physical specimens. Even if something is not the cause, if it contributed even .001% to the problem does it meet the exclusion? Thank goodness, the 11th Circuit drew a line and said you can only go so far with exclusions. There has to be a significant contribution, and the specific problem must exist at the relevant time.
ERISA cases are challenging, and can be very unfair. It is helpful to be familiar with the constant changes in the law, the strategies employed by insurers such as this ever-expanding definition of an exclusion, and the work necessary to prevail in the end. Two experienced ERISA litigators handled this case eventually rebuilding the needed justice. That is what it takes! See www.erisacase.com for more.
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Your Insurance Company’s Typos are Your Problem

Have you ever heard this: “Do what I mean, not what I say?” Ms. Webb has. Her loved one died of a self-inflicted gunshot wound. A claim for accidental death and optional life insurance benefits was thereafter filed. (The merits of the claim were never discussed, so all the facts were not known.) The claim was denied, and then Ms. Webb, the beneficiary, presented an appeal.
In response, Liberty Life Assurance Co. of Boston refused to pay the claim. It stated “… the appeal process has been exhausted and further review will be conducted by Liberty.” The word “not” was left out of the sentence. So, the claimant waited about 10 months before filing a lawsuit.
Unfortunately, there was a short limitation of action provision in the plan, and that wait was a little too long. At some point before that, an attorney asked for clarification of that letter and whether a decision from that review would be forthcoming. Liberty responded that the letter he was referring to had a typo, and it refused any further reviews.
Ms. Webb filed a lawsuit, but the court dismissed that, enforcing the rather short limitation of action provision. She appealed to the 11th Circuit and won a remand. The 11th Circuit directed the court to conclude whether she reasonably relied on that language in the letter. Without permitting discovery on the issue, the court found that Ms. Webb either knew or should have known that there was a typo in the letter and again dismissed her case. See, Webb v. Liberty life Assurance Company of Boston, 2017 WL 3335755 (N.D. Ga. 2017).
This case again underscores why people need to secure an ERISA attorney during the claim process. While grieving for a loved one, a beneficiary must know the fine print in a plan document, know how to exhaust the claim process, and remain aware of a short limitation of action provision (the lawsuit deadline.) Ms. Webb had that here. ERISA is unfair to individuals. At the first denial of benefits, obtain experienced ERISA counsel to handle these matters. ERISA counsel can docket the limitation of action deadline, and any ambiguities can be clarified. That also gives ample opportunity to fully develop the claim record, so the fight in litigation will be on the merits, and not over a typo! See, www.erisacase.com for more.
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The Top Hat Plan- Risks Ahead
What is a top hat plan? Do I have one? If you are a well-compensated executive in a company, then you might have a top hat plan. Top-hat plans are unfunded plans maintained by an employer primarily to provide deferred compensation for management or highly compensated employees. These plans are not tax qualified, the employer selects the employees covered, and the benefit amount provided. The deferred compensation is not set aside in a trust, and is subject to the claims of creditors as it remains in the company’s coffers. It is not indeed to be a retirement plan, but often is used that way.
Theoretically it is a way for a well-paid employee to spread out income into the future so there is not such a big tax bite in the present. It is possible, in combination with a 401(k), to defer over $60,000 per year. That is the plus side, but there is a downside as you may have detected above. First of all, many of the normal protections of ERISA are not applicable. For example, if the plan administrator refuses or fails to produce top hat plan documents, such as amendments occurring after you left the company, there is no penalty claim that arises. Also, there is an exemption from the typical fiduciary duties, which require administrators to act in the best interests of employees. A final example is that the plan’s unfunded which means if the company begins to suffer financial losses those monies are subject to the claims of creditors which will rank above employees claim to that money.
Accordingly, it is critical for top hat plan participants to remain vigilant as to how the company is faring financially and otherwise, and to stay in contact (and remain on good terms) with those running the company. It can provide a good source of deferred compensation for many years but you have to be mindful of the downside. Below is an example of the dangers from a prior post in February 2017.
Mr. Taylor worked at NCR. He retired to receive a survivor (top hat plan) annuity yearly benefit of about $29,000 for his life and his wife’s life. Without warning to Mr. Taylor, NCR terminated the plan and paid Mr. Taylor a lump sum benefit attendant with a huge tax bite. (The $440,976 was reduced to $254,063. The IRS did not send a thank you note!) The lump sum benefit ($440,966) had also been reduced to present value at discount rates selected by the plan. (Present value is a discount applied to the receipt of money that normally would have been paid in the future over time.) The problem is that the discount rate applied was solely selected by NCR. Mr. Taylor had no say, even though it was is deferred money.
Mr. Taylor sued for benefits, statutory penalties, and attorney’s fees for NCR failing to give him the changes to the plan. The court dismissed all claims after a motion to dismiss was filed. Taylor v. NCR Corp., 2015 WL 5603040 (N.D. Ga. 2015). This case underscores that it is necessary for top hat plan participants to be very vigilant as noted above. There are significant risks. If you see any cause for alarm, you should get counsel from both legal and tax professionals. See www.erisacase.com for more.
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Tequila Made the Gun Go Off?

Many employers offer accidental death and dismemberment insurance, a form of life insurance for employees. If the loss of life or limb is the result of an accident, then a lump sum will be paid. However, one court found that if someone, in the chain of events resulting in loss of life or limb, was drinking alcohol, then there will be no coverage. See, Unum v. Mohedano, 2017 WL 713791 (S.D. Tx. 2017).

Candido and his brother Bill Mohedano had been out to a karaoke lounge drinking. Afterwards they drove to Candido’s house. His wife Sandra came out of the house with a shotgun. While the facts were disputed, it was clear that she shot and killed Candido in the driveway. She claimed her husband had been abusive in the past, and he was very angry when he came home. She had the shotgun to defend herself, and it accidentally went off. On the other hand, brother Bill said Sandra was the one who was angry, and in a rage shot her husband. Candido’s blood-alcohol content was .217, well over the legal limit of .08 for driving. A jury found Sandra not guilty of murder.

Sandra, and several Mohedano relatives then filed an ADD claim for the death of Candido. Sandra and the family thought there was a chance to win, because Texas bars discretionary clauses in its policies. This meant they only had to prove by a preponderance that the death was an accident. Unum thought differently. Maine was the insurer’s location, from which the policy was sent to Texas. Unum argued Maine law applied. The Court chose to apply Maine law, which did not bar discretionary clauses. So, Unum’s refusal to pay the claim would not be changed by the Court, unless it was arbitrary and capricious.

Unum contended that Candido was angry and intoxicated and his aggressive behavior led to his own death. It claimed policy exclusions of intoxication and crimes of assault and terrorist threats by Candido. The Court agreed, finding “His intoxication appears to have caused, contributed to or resulted in a change in his behavior during which he became violent with his wife. This violence caused her to use a firearm against him to defend herself.”

Most people would find it distasteful for Sandra to benefit from the death of her husband under these facts. However, many might not expect to have no coverage if they have a loss of limb, but because they had been drinking the claim is denied. The slight connection to alcohol “causing or contributing to” the loss will bar the claim - IF the arbitrary and capricious standard applies. At least according to this Court. Mere intoxication could bar most claims.

It is also troubling that a policy delivered to an employer in the State of Texas, with insurance benefits provided to employees in the State of Texas, would be governed by the law of Maine. The ability of Texas to protect its citizens from policies it considers unfair is eviscerated here. Stay tuned … there may be more to come on this. See www.erisacase.com for more.
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Be a Shell Game Buster! (Or how to get the plan documents you need!)

Many people know they have a long-term disability benefit, health benefit, or life insurance benefit, but they don’t know the “rules” or terms for the benefit. There are too many instances in which it is vital to know the “rules,” or plan terms, before you have a claim. Even if you don’t thoroughly read or understand the document, it will be a key document your ERISA attorney will want to see if you have trouble with a claim.

So, who should give you the plan document so that you know the plan terms? ERISA requires the plan administrator to give a plan participant a copy of the plan document. If it does not, a federal judge can assess penalties for each day of delay after 30 days. That seems like that should not be so hard, and so you send a letter to the insurance company. Then you wait and wait and no plan document comes. So now you have a case for penalties, right? Maybe not.

In Brooks v. Ryder System, Inc., 2015 WL 5734704 (S.D. Texas 2015) the plaintiff made a demand for all documents on the claims administrator, Partner Source. However, Partner Source never forwarded the request to the plan administrator. Plan administrator, Ryder System, Inc., said it never received such a request. The court found there was no liability for penalties under 29 U.S.C. §1132(c)(1). (This liability is a statutory penalty that can impose a daily fine on a plan administrator who does not produce a plan document within 30 days of a written request by a participant or beneficiary.)

One would think that Partner Source was acting as the agent of Ryder System, Inc. Nonetheless, in this instance the agent did not cause any liability for the principal. Compare Center v. Humana, 2015 WL 5822656. (There also can be exceptions to the plan administrator rule utilizing the de facto plan administrator doctrine. But that will be saved for another time.) It can be hard to know who is the plan administrator. It seems like a shell game.

So, you called the insurance company, and it told you that it is only a claims administrator and that it does not have an obligation to provide you any plan documents, including the policy for which it is providing coverage. It tells you to contact the plan administrator. So, you call your employer, and your employer tells you that this is something provided by the insurance company and you need to contact it. Ugh! … the run around! So, who is this plan administrator? Some mystery entity? Don’t stay frustrated. You CAN bust this shell game!

First, know that several entities may be involved in any claim. If you know the name of the employer, which is hopefully the plan sponsor, you can first try the Department of Labor website and search Form 5500 filings. (https://www.efast.dol.gov/portal/app/disseminate?execution=e1s1) Once you find the correct plan, the form 5500 should state the name of the plan administrator.

Second, to be safe in case you don’t have the plan correct, or if that search does not yield results, send a WRITTEN request for plan documents to everyone involved: the employer, attn: Plan Administrator; the employer’s HR department, attn: Plan Administrator; the insurance company, attn: Plan Administrator; a parent company that wholly owns or controls the employer, attn: Plan Administrator. In fact, if you think of anyone else that may be involved in the plan administration, send a request to them as well. Bust the shell game!

Third, see www.erisacase.com for more. Credit for the metaphor in this article is given to retired District Court Judge William M. Acker, a brilliant federal jurist who well understood the difficulties participants face in ERISA claims. The metaphor appears in Oliver v. Coca-Cola Co., 397 F. Supp. 2d 1327, 1329–30 (N.D. Ala. 2005). “Which shell is the pea now under?”
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Are You Killing Your ERISA Case?
We all like Social Media. And if you are hurt or sick and can't work, it can be a great way to keep in touch. However if you are receiving a long term disability benefit or a pension disability benefit beware! LinkedIn did help “kill” a recent ERISA case! Most people forget that what you say on social media can be harmful to your case. With ERISA the arbitrary and capricious standard of review is often involved which means a wrong but reasonable decision may leave you without a benefit you are counting on! A social media post may be just what an insurance company or plan administrator needs to justify a claim denial. Even if you have a good explanation!

A California federal judge rejected a former stunt woman's lawsuit regarding a pension disability benefit. The claim was denied in part by pointing to the stunt woman's LinkedIn and IMDb pages. The pages showed her to be working regularly, despite her claim to suffer from disabling depression. Hoffman v. Screen Actors Guild-Producers Pension Plan, (C.D. Cal.2016).

Disability insurers and pension plans recognize social media posts as a tremendous free tool. We usually find them in a claim file on a long-term disability claim or pension disability claim. These postings are used to demonstrate discrepancies with the claimant’s report of her condition. They may provide a key basis to deny the claim. Remember, a wrong but reasonable decision may win the day for the insurer or plan. If that post is not explained during the claim process, a court my refuse any later explanation.

While insurers find value in this type of information, some of the information on many sites such as LinkedIn may be “stale.” Users may not update their profiles very often, or the claimant may have forgotten about an old profile.

There is also unfairness with the inferences or assumptions made by claims administrators. Many claimants have the typical “good day, bad day” roller coaster involved with their condition. Some may be able to work several days out of the month. But no competitive employment market exists to employ such a person on a full-time basis if several random work days will be missed every month.

Social media can be helpful to some individuals who cannot leave their home very often. For example, a claimant with a compromised immune system who is home bound may need the social interaction to avoid depression. However, much care and caution is needed. Anything said may be used against you!

In the case of the disabled stunt woman, the judge ruled her LinkedIn posts were “reasonable evidence” to deny the pension disability claim. Don't let that be you. Remember the Toby Keith song "I Wanna Talk About Me"? With Social Media it may be better that you did talk about dreams, schemes, high school team, and moisturizer cream. For that matter even your nanna in Muncie Indiana! See www.erisacase.com for more on ERISA.

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What’s in Your Disability Plan?

Remember the Capital One commercial – “What’s in Your Wallet?” It is also important to know what is in your disability plan, since it will affect your wallet. Many of us never think we will be unable to work. However, every day we are only one accident away from that. If you have a plan, you need to know what is in it. If you don’t have one, you are risking more than you may realize.

The Middle District of Florida recently was looking in a plan – a FedEx plan. We have previously noted that this plan is one which will rarely ever pay. This proves true again. This plan gives Aetna discretion to make all findings of fact and to make all interpretations of the policy. A court can only disturb that if Aetna’s decision is arbitrary and capricious. An employee, a senior business systems adviser, found out the hard way how illusory this plan really was. One of the onerous terms was proving disability based on an inability to engage in any employment for a minimum of 25 hours a week.

Generally, people think a disability policy covers the income earned during their normal work week and not at a greatly reduced schedule. And certainly, they think they are covering their wage. That is the point of a disability policy – to provide income replacement. In this instance, however, an infralimbic thromboembolism, COPD, emphysema, blood clots, depression, hypertension, hyperlipidemia, obstructive sleep apnea, obesity, and irritable bowel syndrome were not enough to prevent Aetna from finding Ms. Street capable of working 25 hours a week.

Aetna hired Dr. Cosmo to examine the plaintiff, which is often a policy right for the insurance company. The doctor often is someone the insurer regularly uses for this. The doctor found on this one time exam, that Ms. Street could work a sedentary occupation for at least 25 hours a week. This was due in part to the lack of “significant objective findings”. That is another plan term that can be very difficult to overcome for a claimant, since pain and fatigue are very often subjective. Providing “objective proof” of pain or fatigue as defined by that policy may not be possible.

To preserve her function, the plaintiff exercised by swimming. The court said Aetna was correct to take that activity into account, along with other activities she engaged in to preserve her remaining function. If she could do laundry, prepare meals, and take afternoon swims she could work 25 hours per week. The Court ruled for Aetna.

This underscores that everyone needs to take a few minutes to read their policy. Too busy? The perfect time is in a waiting room or during an oil change. If your long term disability policy is worthless find a replacement that covers your needs. Don't find out when it is too late that you are banking on an illusion. See www.erisacase.com for more.
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Why Was My Case Referred to a Different Attorney?

We hear that question often. Many clients did not initially understand why they were referred to our firm. Some try to make up an excuse for their prior attorney with thoughts such as “I guess he doesn’t handle that” or “I guess she is too busy.” You may have wondered the same thing. However, no excuse is necessary, as a case referral may be the best move for your case. Some realities regarding the practice of law make it clear why referrals are good, and often critical for our legal system. Referrals generally are made in the best interests of the client.

Attorneys struggle to be a “jack of all trades” with all areas of the law. The law is more vast than ever. Many areas of the law bear no resemblance to other areas of the law. Yet the law remains a very jealous mistress, as to each area. Frankly, to stay current in all areas of the law is impossible. An attorney would spend all her time reading and never actually practicing law. Attorneys know it takes both knowledge and experience to be good and effective in an area of practice.

If an attorney does not have the knowledge and experience for a client matter, then he truly has the client’s best interests at heart when he refers a client to a lawyer he knows is experienced in the area of law his client needs. After all, if that attorney wants to help the client later with a matter that is within her area of expertise, then she is wise to treat the client well. Every client wants a good result, and attorneys want happy clients.

But what if the attorney invested time in securing the client? What about the time the attorney may have taken to talk to the client and investigate? What if the attorney stays involved? Generally, you will not get charged twice. There is one fee typically. When an attorney refers that matter to another attorney, she may receive a referral fee for doing so under the Alabama Rules of Professional Conduct Rule 1.5(e). That is compensation both for the expense and time involved. For our firm and many firms I am familiar with, referral fees do not increase the fee charged by the attorney resolving the matter. Rather, it is shared compensation for the time of all attorneys.

Referrals encourage specialization of the bar and raise the level of effective and diligent representation for the public. After all, the attorney could go ahead and accept the case and do his best to muddle through it. And maybe the outcome will be proper. But maybe not.

An area of law may have surprises, such as short deadlines. They can be missed rather easily by a lack of familiarity with an area of law. Conflicts of interest also can arise when an attorney tries to handle cases over many areas of the law. It can prejudice a case if an attorney must withdraw rather late in the process. Another attorney may not desire to assume any liability as to the prior attorney’s work.

Finally, the attorney may recognize that it will take too much time to “get up to speed” on the area of law for the case. Present workloads, and the desire to charge a fair fee may require a referral. One who regularly practices in an area of law can be much more effective, and will not have to charge for time “getting up to speed”.

So, if an attorney refers your case to another firm, it may well be proper to thank your attorney for having your best interests at heart. See www.erisacase.com for more.

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Losing a Big Chunk of Your Retirement under ERISA

After years of service, Mr. Taylor retired from NCR. He was to receive a survivor annuity benefit of about $29,000 per year for both his and his wife’s lives. This retirement was an effective inducement for Mr. Taylor to stick with the company. That benefit can bring much peace of mind for retirement, so maybe the long hours were worth it. However, after about seven (7) years of retirement, NCR decided to terminate the plan, and then paid Taylor a lump sum benefit attendant with a huge tax bite ($440,976 reduced to $254,063). If this was paid over time as it was supposed to be paid, the tax bite would be much lower.

The lump sum benefit was also reduced to present value at present value factor rates selected by the plan. Neither Mr. Taylor nor his wife had any say in this either. And worst of all, he had no idea it was coming! No one sent him a copy of the changes to the plan. The Taylors were furious and understandably so.

Taylor sued for benefits, statutory penalties, and for breach of duty. NCR failed to give him the changes to the plan, and caught him off guard ruining his monthly retirement budget. The court dismissed all claims. It found the plan administrator had the right to amend the plan. Since this was a top hat plan, it was exempt from penalties. Further, the court found the plan can pick any reduction factor it wants when it amends the plan. No input from the Taylors was required, and it didn't matter if it was fair or not. The entire complaint was dismissed. Taylor v. NCR Corp., 2015 WL 5603040 (N.D. Ga. 2015).

Ouch! ERISA can be tough! Check out our website blog at www.erisacase.com for more concerns professionals, managers and employees may have on pension, retirement and long-term disability matters.
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Is it Too Late to Sue on Your LTD Claim?

Many people who are very sick or injured may find their long-term disability claim repeatedly denied. That can be very discouraging. But if they don’t file a lawsuit in a timely manner, all hope will be lost for such claims.

To make it more discouraging, there are far fewer lawyers who regularly represent individuals in this area of law, than in many other areas. The law that governs most of these claims is called ERISA. In fact, it can take months to find a lawyer who specializes in handling ERISA cases. Then the lawyer needs time to obtain the claim record, review it and then prepare a lawsuit. When people are sick or injured, and now discouraged, it can be too hard to summon the energy to find help.

However, most people don't know that hidden in the language of their plan, is very likely a short time limit as to when a lawsuit must be filed. In fact, it can be very difficult to ascertain exactly what that time might be. Determining the time limit to file a lawsuit on a ERISA disability claim is much like trying to hold onto a greased pig!

The unsuspecting problem, is that Plan administrators can contractually set their own time limit for a lawsuit in the plan. A Supreme Court case called Heimeshoff involved an attempt to set an across the board time limit to file suit in ERISA cases. This would make it easier for all to understand. This attempt failed. Courts will enforce the time limit in a plan. If you are too late you will lose, even if you are clearly disabled from working!

On an issue of such importance it seems unfair to have this bar to a lawsuit hidden away in a plan. Even if you think you have found it, you still may have to review several policy provisions, and then determine several external facts. For example, you may have to calculate what date proof of loss was required, (and figure out how that is defined). Then you may need to know when it was actually furnished in case the time is shortened by that. Then you must know the date the claim was last denied. Does the date of the letter denying the claim matter, or is it the date you received the letter? All of this can catch lawyers and claimants off guard! Judge Acker, a federal judge in Birmingham, AL, summed up his thoughts on ERISA in one sentence: ERISA stands for “Every Rotten Idea Since Adam”. Many would agree! See www.erisacase.com for more on this subject and other ERISA matters.
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