Quiat on Claims : New York Disability Insurance Lawyer & Attorney : Michael Quiat : Uscher Quiat Uscher & Russo Law Firm : ERISA, Denied Claims

Too often, because of the case law interpreting ERISA, ERISA claims are denied by courts which are required to defer to claims administrators even though the courts would have found for the claimant on the basis of the evidence. There are a flood of such cases throughout ERISA jurisprudence and such unnatural outcomes are not foreign to those who labor in the ERISA field day in and day out.

So, it was refreshing when a Federal District Court Judge in Alabama recently opted to favor interpreting ERISA with emphasis on plan fiduciaries’ discharging their duties solely in the interest of participants and beneficiaries. The clause containing this clear direction, 29 U.S.C. Sec. 1104 (a)(1)(A), is too often overlooked or denigrated by judges in deciding ERISA claims.

Historically, because of the Supreme Court’s decision in Firestone v. Bruch, 489 U.S. 101 (1989), courts have given deference to the decisions of plan administrators (fiduciaries), while sacrificing the primary objective of ERISA – to give employees’ interests top priority in their deliberations. Insurance companies, who most often act as ERISA plan fiduciaries, have made it a religion to ignore this guiding precept of ERISA. That is why this recent Alabama decision is so noteworthy.

Going back to basics in Howington v. Smurfit-Stone, 856 F. Supp. 2nd 1235 (S.D. AL, 2012), District Court Judge Kristi K. DeBose told a fiduciary that a mistake on an application should be corrected so that a claimant’s application could be fairly considered, rather than being dismissed out of hand because the claimant had made a simple mistake in entering the date when his disability arose.

The plan administrator took the position that because the plan documents allowed correction of such an error only if a prior SSDI court Administrative Law Judge made the correction first, the claimant could not rectify the mistake although it was clear that the date was actually in error. Further compounding the mix was the fact that the time within which claimant might have asked the SSDI judge to revise the record had expired.

But, rather than take the “straitjacket” Bruch view (that an administrator’s discretion must be upheld if there is anything in the record to support it), which has been adopted in an overwhelming line of cases since it was first promulgated in 1989, Judge DeBose went back to the basic language of ERISA citing the fiduciary duty owed by an administrator to a claimant.

The Court held that the administrator’s refusal to determine the correct disability date was arbitrary and capricious and the denial of benefits was sent back to the plan administrator for further consideration of Mr. Howington’s real date of disability.

So, instead of taking the hard Bruch line, as many courts have done to favor administrators, Judge DeBose opted for the more humane “prudent fiduciary” standard.

This makes more sense. After all, the purpose of ERISA, as expressed in the statute, is to help disabled employees – not to provide an unfair, unwarranted windfall to claim fiduciaries, because of a simple, honest mistake on the benefit claim forms.

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Sometimes in writing about ERISA and private disability claims we tend to get into the finer points of insurance claims law and downplay the basics, which are frequently more important in pursuit of such a claim.

The big thing to remember is that insurance companies fight these battles hundreds, if not thousands, of times a day. You have just one shot to get it right.

In this post we are going to try to outline what should be done in the ordinary case when a claim situation arises.

If you think that an injury or illness which prevents you from doing your job may develop into a longer-term disability which might trigger payments under your ERISA or private disability policy, be certain to retain all papers, reports, prescriptions, X-rays, medical and hospital bills involved in the course of that medical incident.

These materials should be maintained for a reasonable period of time if there is a possibility that this injury or illness may recur in future and lead to a claim.

Should you have to file a claim, understand that this is one of the most important parts of the claims procedure. Don’t be lazy or sloppy. The assumption by claimants that they can correct an omission or error on their claim form later, has sunk more disability claims than there are wrecks on the ocean floors of the world.

Your first claim form, if not carefully and properly completed in accord with the terms of your policy, seriously undermines your chances of collecting, even if you have a claim that seems to you indisputable!

Many insureds, because they are not warned otherwise, assume that they are providing that their application for benefits to an impartial reviewer and that their feet will not be held to the fire if they make a mistake. WRONG!!!

Many times, especially under ERISA, the very insurance company which will have to pay you benefits has the right to determine whether or not your claim is covered by their policy. (Guess which way these insurance companies lean in deciding this question?). And, to top it off, their decision is given deference by the courts.

Not only that, you can bet your bottom dollar that if your claim is ever reviewed by a court, the errors of what you omitted or misquoted on your original application will be thrown up to the court time and time again.

So, if in making an ERISA claim, you start off by omitting an important document or medical report or if your physician is sloppy in reporting the facts and nature of your disability, you can be certain that error or omission will haunt you throughout the proceeding. Get it right the first time!!!

When you are unable to work, making a claim for income, perhaps for the rest of your life, is not the time to take chances and hope for the best. You get only one bite at this apple. Make sure you put your best teeth forward!

If you have any qualms about your ability to present all aspects of your disability claim in its best and fairest light, get help from an experienced disability claim lawyer.

It is not wise to stand alone in this fight. You and your family have too much to lose.

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For years we have been dying to tell ERISA disability income and other types of insurance claimants that they need a lawyer with solid experience to press insurance claims. We were reluctant to do so, however, because it might look as if we were blowing own horn and overreaching to try to get claims business.

However a recent blog post written by a respected ERISA employer defense attorney points out, http//www.bostonerisalaw.com/archives/benefit-litigation-denial-of-benefit-claims-the-repeat-player-and-saving-money-on-litigation.html, many employers lose a substantial legal advantage in denying employee and other claims, particularly ERISA claims, because they don’t have attorneys who know ERISA insurance claims law.

If what’s good for the goose is good for the gander, this goes even more so for claimants who are represented by attorneys not experienced in disability insurance and ERISA law. To get a fair shake on both sides, you need attorneys on both sides who are intimately familiar with insurance claims law.

The Rosenberg blog’s advice was obviously meant for employers which may have only a few ERISA claims to deal with. Larger employers with more claims would almost certainly have attorneys who are well versed in ERISA claims law. And, it goes without saying that insurance companies that offer policies in the ERISA field would have loads of lawyers who know ERISA law and how to negotiate and defend ERISA claims.

So, why do employee-claimants many times go to their friendly neighborhood lawyer to handle their ERISA claims? Because, they have no idea of the complexity of the ERISA statute and the sometimes convoluted precedents of insurance claims law generally. This is a case of “what you don’t know can hurt you.”

Mr. Rosenberg, who mainly represents employers, talks of the “repeat player” (one who has handled ERISA claims over and over again) and the obvious difference in the knowledge and ability of the “repeat player” in handling an ERISA claim. He says, “…”I routinely see the difference when, on the other side…is a lawyer who regularly represents plan participants in such disputes, as opposed to a general practice lawyer who represents plan participants only occasionally”.

ERISA claimant rights were created solely by Federal statute, 29 U.S.C. § 1001, et. seq. They did not evolve from common law. General principles of common law may not automatically apply under the ERISA statute. So, a lawyer should have a good working knowledge of this specific statute and the case law which it has engendered to effectively represent a claimant.

Further, the law of insurance policy claims, in general, has many twists and turns which are exceptions to the common law. A claimant should consider this fact wisely before selecting an attorney to handle an insurance claim.
 

Just to blow our own horn, now that Mr. Rosenberg has opened the door for us, we specialize in handling complex insurance matters, particularly disability income, ERISA, life and long term care claims and claim denials. We have handled hundreds and hundreds of such claims in our 30 years at the bar and, we really enjoy doing this type of legal work.

To be fair, we are not the only ones who savor this calling. There are others throughout the country who do the same work with the same fervor.

Thanks to Mr. Rosenberg, our conscience is clear in writing this post. The aim is not to blow our horn. The aim is to blow a bugle to alert insurance claimants to consult with experienced legal counsel when fighting an insurance claim, especially one involving ERISA.

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