Disability Insurance Blog

Federal Appeals Court Sends Clear Message To Disability Insurance Companies


Wednesday, June 9th, 2010

The Appeals Court for the Fifth Circuit has issued a strong pro-claimant decision. What makes this decision significant is that the Court acknowledges that Hartford abused its discretion in denying benefits to the plaintiff and in addition to awarding benefits, will also grant payment of attorney’s fees, making this an even better resolution to the insured’s unfortunate situation.

The claimant, a practicing attorney, suffered from degenerative back disease and mental disorders for more than ten years. These problems interfere with his performance as an attorney, and in 2003, he applied for disability benefits. Hartford granted him a disability based on his mental disability, with two year benefit limit, but denied his claims of a physical disability. This is a common practice with Hartford (and other insurers) and one that Frankel & Newfield have dealt with in litigation. After being on claim for two years on the mental disability, he renewed his claim for his physical disability and was again denied. A long and arduous appeals process followed.

Three allegedly independent experts, all paid by Hartford to render opinions, found that he had not supported his physical limitations with objective medical evidence, despite a multitude of reports, studies, and a Functional Capacity Evaluation that indicated that he was not fit for sedentary work. In addition to ignoring a body of evidence, Hartford also neglected to recognize that the insured had qualified for Social Security Disability benefits.

After several appeals in the ERISA-governed administrative process, a lawsuit was brought in Federal court. The district court came down clearly on the insured’s side, concluding there was an “overwhelming” body of objective medical evidence that he was physically disabled, and that Hartford “deliberately ignored overwhelming objective medical evidence” and saw fit to award him attorney’s fees. The district court also observed that the Hartford was operating under a conflict of interest that could have had some effect on its decision. Hartford appealed, challenging both the conclusion that it had abused its discretion and the award of attorney’s fees.

As attorneys representing plaintiffs in disability insurance cases, we are extremely pleased that the Federal Appeals Court agreed with the district court, and saw no reason to reverse its decisions regarding the granting of benefits to the insured and the award of attorney’s fees. The Federal Appeals Court opinion has made it quite clear: Administrators who review cases do not have the right to arbitrarily discredit reliable evidence, and the district court has every right to award attorney’s fees.

If you are facing a similarly difficult situation with your disability insurance company, call our office today to find out how we may be able to help you.