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Liberty Life Found to Have Abused Its Discretion in ERISA Disability Claim

A Federal Judge in Pennsylvania has reversed a decision by Liberty Life to deny benefits to an ERISA disability insurance claimant, whose claim for benefits was not paid. The Court reached its determination that Liberty Life abused its discretion after evaluating a myriad of factors regarding its claim handling, and found that each of these factors when considered together, compelled a result supporting impairment and the payment of benefits for the claimants Own Occupation benefits.

The Court did remand the claim back to Liberty Life for the consideration of benefits under the Any Occupation standard, determining that the information under consideration during litigation did not support an award of benefits for that period.

The Court evaluated the following significant factors: (1) the selective review and consideration of the claimant's medical support; (2) Liberty Life's structural conflict of interest as claims payor and claim administrator; and (4) Liberty Life's occupational analysis. In this ERISA disability case, the Court was applying the abuse of discretion standard of review.

The Court was troubled that Liberty Life had provided a scant analysis of the claimant's medical support, while providing an in-depth discussion of the medical reviews conducted by its hired doctors, who only performed paper medical reviews. The Court noted that Liberty Life's incomplete and selective treatment of the medical evidence was a factor to consider in its evaluation, weighing in favor of the claimant.

Liberty Life had evaluated the claimant's occupational requirements on the basis of the Dictionary of Occupational Titles ("DOT"), and determined that her work was considered sedentary. Liberty Life failed to account for any consideration of her actual work requirements, which were much more significant and required that she frequently drive, walk up to 5 miles per day, and carry up to 25 pounds up to 6 hours a day. None of these physical demands were considered, where Liberty Life eschewed considering that material, in favor of an analysis which it could utilize to deny the claim, finding only sedentary capacity was required for her Own Occupation, as that term was defined to include the national economy. This was one factor leading the Court to conclude that Liberty Life "placed a heavy emphasis on the facts that most supported a finding that Plaintiff was not disabled while, at the same time, refusing to acknowledge or otherwise reconcile its assessment with information undermined its finding."

The Court determined that even applying the sedentary requirements, Liberty Life failed to properly evaluate the claim, where there was credible medical evidence supporting that the claimant's chronic low back pain with radicular symptoms was exacerbated by prolonged sitting. Thus, regardless of the ultimate occupational requirement conclusion, the glaring failure to properly credit any of the medical support for the claim led the Court to conclude Liberty Life's determination was an abuse of discretion.

The final factor tipping the scales in favor of the claimant was the award of Social Security, which Liberty Life failed to credit, despite the more narrow definition which Social Security applied in determining the claimant was eligible for Social Security. The Court was troubled that Liberty Life gave this determination short shrift and found this to be another factor for consideration.

Branca v. Liberty Life

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