This month’s Friday Five discusses cases addressing the effect of continuing to receive benefits during the period of alleged disability, reliance on an employer’s records in making a disability determination, the admissibility of expert and lay testimony from a physician in a trial over LTD benefits, the effect of failing to comply with governing claims regulations and whether the risk of COVID-19 can qualify a claimant as disabled.
The Saul Ewing ERISA Litigation Team
- Will a court uphold an insurer’s denial of long-term disability benefits when the insured continued to receive their full salary during the period of alleged disability? Yes. In Zuckerman v. Fort Dearborn Ins. Co., the insured Plaintiff was a high wage earner, making over $9,000/week. The Plaintiff filed a claim under his employer’s long-term benefits disability plan due to the effects of chemotherapy to treat cancer. However, the record established that the Plaintiff’s employer continued to pay him his full wages even when he was not working due to his alleged disability. Defendant denied the Plaintiff’s claim, concluding that he did not qualify as disabled under the plan before the plan terminated. Plaintiff appealed, but Defendant upheld its denial decision. As part of its appeal decision, Defendant noted that the documentation in Plaintiff’s claim file did not establish that Plaintiff missed a full or partial day from work on the dates he received chemotherapy (or any other dates). The court applied an abuse of discretion standard to Defendant’s denial decision. In upholding the denial, the court applied a straightforward reading of the plan and determined that, because Plaintiff continued to receive 100% of his salary, he was not partially or totally disabled. The court explained:
- Is it reasonable for a plan administrator to rely on an employer’s records as part of its obligation to fully investigate a claim before denying benefits absent contrary evidence? Yes. Plaintiff, a general surgeon, was enrolled for coverage under his employer’s group insurance policy. The policy required an insured employee to be in “active employment,” which meant working at least thirty hours per week. Plaintiff underwent surgery for a shoulder injury in January 2020 but then returned to work from January 5-March 14, 2020, logging forty hours of work per week; thus, Plaintiff was “actively employed” under the policy during this period. However, from March 15-May 23, 2020, Plaintiff recorded only about 4.75 hours of work per week, which falls well below the required thirty hours for active-employment status under the policy. Then from May 24-July 18, Plaintiff resumed full-time work, logging around forty hours per week thereby resuming active employment status. On July 30, Plaintiff was placed out of work by his doctor and, three months later, he submitted a claim for long-term disability under the policy.
- Can a court permit an expert to offer lay testimony but preclude that same expert from offering expert testimony that fails to meet the Daubert standard? Yes. Plaintiff filed a claim with Defendant, who issued his long-term disability insurance policy, claiming that he was disabled since December 21, 2019 and was unable to continue practicing dentistry. Initially, Defendant determined that Plaintiff was totally disabled and began paying him benefits; however, Defendant continued to evaluate Plaintiff’s claim and later denied coverage. Plaintiff claimed that he was totally disabled as a result of anxiety. Specifically, Plaintiff argued that “the posture repeatedly assumed by dentists can cause pain which then increases [Plaintiff]’s anxiety symptoms which then cause[ ] his tremors and tics.” Prior to trial, Defendant moved to exclude expert testimony from Dr. Merritt. Plaintiff agreed to the exclusion, in part, but asked the court to permit his expert to testify on two topics: Dr. Merritt’s observation of Plaintiff’s shakiness/motor tics (“Topic 1”), and the ergonomic challenges faced by dentists which has bearing on the symptoms suffered by Plaintiff (“Topic 2”). The court held that Dr. Merritt could testify about his observations of Plaintiff’s shakiness/motor tics, which was based on Dr. Merritt’s personal observations in evaluating Plaintiff. The court held that this testimony was not expert testimony and, as a result, was not prohibited by Daubert. However, the court held that Dr. Merritt could not testify about Topic 2 because Plaintiff failed to establish any of the following three Daubert requirements – that: (1) the expert is qualified to testify on the topic at issue; (2) the methodology used by the expert is sufficiently reliable; and (3) the testimony will assist the trier of fact. Although Plaintiff asserted that Dr. Merritt was board certified in certain medical topics, the court warned that “doctors are not qualified experts on every medical subject merely because they wear white coats,” and found that Plaintiff failed to tie Dr. Merritt’s qualifications to the expertise at issue – dentistry ergonomics. Similarly, the court refused to find Dr. Merritt’s opinions reliable solely based on his conclusions. Finally, the court determined that Dr. Merritt’s opinions would not assist it, as the trier of fact, because there was another expert available to testify as to Plaintiff’s remaining theory of liability. Easter v. Unum Life Ins. Co. of Am., No. 2:23-CV-52-JES-KCD, 2024 WL 3755805 (M.D. Fla. Aug. 12, 2024). ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??
- Will a court find a plan administrator’s denial to be arbitrary and capricious if the determination does not strictly comply with ERISA claims regulations and otherwise fails to provide sufficient explanation for the denial? Yes. Plaintiff is a physician who participated in her employer’s short-term disability (“STD”) and long-term disability (“LTD”) plans. During her employment, Plaintiff was diagnosed with and treated for a variety of medical conditions, including severe postural orthostatic tachycardia syndrome (“POTS”). In June 2022, Plaintiff submitted a claim for STD benefits related to her POTS and went on leave beginning July 1, 2022. On July 27, 2022, the plan administrator denied the STD claim because Plaintiff’s illness fell under the pre-existing condition exclusion in the STD policy. But the administrator then opened an LTD claim – which would not be barred by a pre-existing condition exclusion – but subsequently denied the LTD claim, too, because the administrator determined that Plaintiff did not meet the policy definition of “Totally Disabled.” Plaintiff, through counsel, sent letters requesting her files (which she received) and asked questions about the denials and appeal processes, but she did not appeal either decision.
- Will a court enter judgment in favor of an insured plaintiff who sought long-term disability where the plaintiff’s age and underlying medical impediments placed them at severe risk of COVID infection and their particular work responsibilities and the nature of her employment rendered them disabled? Yes. Plaintiff was a pediatric physician whose last day of work was February 27, 2020. On March 3, 2020, Plaintiff underwent surgery for uterovaginal prolapse and a hysterectomy. Plaintiff’s doctor advised that Plaintiff would be disabled following her surgery until at least May 21, 2020 to recover from the procedure. On March 4, 2020, a state of emergency was declared in California due to the rising number of COVID-19 cases, followed shortly by the national emergency on March 13, 2020 and a statewide “Stay at Home Order,” issued on March 19, 2020.
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