It was refreshing to read a recent decision from a Federal Judge in Texas, who rejected efforts by Standard Insurance Company, to take further “bites at the apple.”
The Court, from the Northern District of Texas, denied a motion by Standard Insurance Company to “amend the judgment” – following a ruling that permitting benefits to be paid to the claimant.
The claimant had been on claim since 2016 and had not been paid since after July 2017, when benefits were terminated.
After determining that Standard had waived the argument, the Court effectively chastised Standard for its own conduct (or lack thereof) concerning the issues it had sought to present.
The Court determined that Standard’s conduct constituted a waiver – a “voluntary or intentional relinquishment of a known right.” Rejecting the effort to remand for further consideration
of eligibility for benefits under the own occupation standard, the Court noted several important policy reasons behind its decision.
First, the Court noted that the insurer was “limited before the Court to defending the reasons on which it relied on the administrative level for denial.”
Based upon this, remanding to give the insurer “A second bite at the denial apple would violate that rule.”
The Court also noted that “allowing plan administrators the ability to seriatim deny benefits for different reasons would unduly prolong the benefit process.”
This interesting and refreshing perspective about the “prolonging” of the benefits process is an effort to turn a typical insurer argument on its head.
Insurers often argue that these ERISA disability benefit claims must have a short process, without permitting discovery into the process or the financial conflict of interest.
Here, the Court used the same “legislative intent” argument to not permit the insurer to continue the process endlessly.
The Federal District Judge who issued this refreshing decision is Judge David Godbey, a graduate of Harvard University who has been on the Federal Bench since 2002, when he was appointed by President George W. Bush.
Judge Godbey has other published decisions which have ruled in favor of claimants, but this decision provides a keen articulation of the flaws in the process and the challenges faced by disabled claimants.
It is also interesting to note that earlier in the case, Judge Godbey had denied discovery requests made by Plaintiff seeking to appreciate the contractual and financial arrangements with the hired medical consultants.
Chavez v. Std. Ins. Co., 2020 U.S. Dist. LEXIS 198724 (N.D. Tex. 2020)