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

A recent decision of the 7th Circuit Court of Appeals underscores a couple of issues of interest to ERISA claimants and attorneys:

* You just can’t “wing’ it when your legal right is created by a statute.
* Even a seemingly minor procedural miscue by a claimant can get the claim booted out of court, with prejudice.
 

In Edwards v. Briggs & Stratton,2011 WL 1602061, a claimant was 11 days late in filing her disability appeal with her plan administrator even though there had been ongoing communication between her and the administrator. The administrator rejected her appeal on “lateness” grounds and the Federal District Court and Seventh Circuit agreed, taking the position that the failure to file on time constituted a failure to exhaust administrative remedies and dismissing the case with prejudice.
 

We are all familiar with attorneys advertising their experience in their particular practice area, and why clients need that experience. Some of those claims are valid and some are pure advertising hype. The Edwards case demonstrates that such a claim is valid in ERISA matters.

In Edwards, the court found that Ms. Edwards made several procedural errors which “deep-sixed” her claim. She was late in advising that she intended to appeal, and also in providing certain information required for her claim. Although, it might seem obvious to an ordinary observer that she was appealing a decision of the plan administrator, she did not make her intentions absolutely clear, with this “wiggle” room, the administrator and, ultimately, the court, found that she had not actually appealed within the time frame required by Federal regulations, and, therefore, she had failed to exhaust her administrative remedies. The court dismissed her claim with prejudice.
 

Although the court could have exercised discretion and give her some leeway since she was only 11 days late in providing what the court was looking for, the court withheld its discretion and dismissed her case with prejudice.
 

This case illustrates that ERISA law is one of those areas in which experience is generally a “must”. ERISA disability claims are created by statute. ERISA regulations promulgated by the Department of Labor along with the statute itself, cover thousands of pages in the United States Code and the Code of Federal Regulations.
 

It is a “picky” law which starts off giving the plan administrator deference in decisions. We have to assume that administrators will always give themselves and the plan the benefit of doubt, so a claimant a starts off behind the 8-ball.
 

Add to this the regulatory time limits and other technical requirements which must be met to pursue a claim, and it’s easy to see how those, unfamiliar with the timing and format of claims, can trip over the requirements. And, once they trip, as shown in Edwards, they may be out forever.

Much about ERISA is counterintuitive, so just exercising sound, common sense judgment, will not always win the day for a claimant. We don’t mean to enshrine ERISA claims work in some kind of voodoo mysticism, but we do mean to point out that ERISA practice requires more than a cursory reading of a few sections of the ERISA statute and regulations to become proficient.

If one prosecutes ERISA disability insurance claims, one needs a decent knowledge of other statutes which affect claims, such as HIPPA and COBRA. Experience and a good working knowledge of general insurance law are also a plus. It is not enough to just prove a medical disability in a disability income insurance matter. The claimant must also show that the disability prevents the claimant from performing the duties of his or her usual occupation. Sometimes the policy will require proof that the claimant is unable to perform the duties of almost any occupation.

As the Edwards decision shows, ERISA litigation should not be a hit or miss undertaking, where a claimant or an attorney can read a few cases to “get the feel of it” and then go winging along to a successful conclusion.

What you don’t know about ERISA can kill your claim. Just ask Augusta Edwards.

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A recent decision of a Federal District Court judge in Alabama raises the crucial question of the intent of Congress in passing ERISA and the result of judicial tinkering with ERISA claims. (Edgar v. Disability Reinsurance, 2010 WL 3906651).
 

Federal Judge William M. Acker, Jr., clearly spells out the issue by pointing out that Firestone v. Bruch, 489 U.S. 101 (1989) , seems more intent on preserving the willingness of insurance companies to maintain lower premiums for employers, than to afford stricken employees with the help Congress apparently intended them to have.
 

The issue is important, but the question is: Should the Supreme Court deal with it or should Congress deal with it? Judge Acker points out that the legislation clearly sets forth that a stricken litigant can bring a civil action to recover benefits due under the terms of the plan. Judge Acker differentiates between a “civil action” which he says is mandated by ERISA and a “review” which he claims is mandated many times in ERISA matters by the decision in Firestone.
 

The argument centers on Federal Rule 56 (summary judgment), which Judge Acker believes is not applicable to ERISA litigation when there is a dispute of material facts cited by the opponent of the motion. Why, in such a situation is summary judgment permitted when no judge would think of allowing it in a non-ERISA civil case where there are disputed facts.
 

In support of his thinking, Judge Acker relies heavily on Krolnik v. Prudential, 570 F3rd 841, 7th Cir., 2009, in which the court applied contract law to the ERISA case before it, declaring that Firestone does not change the fact that at base, an ERISA dispute is a dispute over the meaning of the language in an insurance policy, which requires the application of contract law.
 

Judge Acker sets forth the long-standing law of Rule 56 cases:  Only if after all evidence by a non-moving party is considered true, there is still no dispute of a material fact, judgment may be granted to the moving party, if the party is entitled to judgment as a matter of law.

If every other litigant in a Federal District Court is entitled to the benefit of this long-standing interpretation of Rule 56, why aren’t ERISA claimants afforded the same rights? As Judge Acker and Krolnik point out, the issue involves an insurance contract and should be adjudicated according to long-standing insurance law concepts.
 

To do otherwise indicates an attempt by the courts, with Firestone, to “fix” the legislation. This is not its province. If the legislation, as they wrote it, is actually “broken” in the view of Congress, then Congress should fix it.
 

For courts to give insurance companies an extra weapon in their already overloaded arsenal (“arbitrary and capricious”) is not the answer. Such a weapon adds a burden to the already overloaded claims wagon the ERISA claimant has to haul.
 

ERISA indicates clearly that Congress wanted to protect stricken employees. Why did the Supreme Court rebuff this intention by deciding Firestone as it did?

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Where did courts ever come up with the wild idea that medical opinions about a patient from a treating doctor and those from a reviewing doctor, who just looks at reports and test results without seeing the patient, should be given the same weight?  

The responsibility of the physician in each case is worlds apart. Physicians know that seeing the patient (skin pallor, demeanor, eye condition, general appearance) is a major part of diagnosing disease or illness. How can such a personal examination by an experienced doctor be replaced by looking at words on paper?

The Social Security Administration has long ago concluded that it cannot, and has adopted the “Treating Physician” rule. This rule gives more credit to the opinion of a physician who actually treats a patient than it does to a doctor who is paid just to render a medical opinion on the patient. To most people, this would seem a sensible rule.

However, the U.S. Supreme Court in Nord v. Black & Decker, 538 U.S. 822 (2003),has refused to allow the “Treating Physician” rule to used by courts in ERISA cases. Why?

 Sometimes, when the doctor has known the patient for some time, a change in appearance will offer a major clue to whether or not the patient is really ill. And, most importantly, a treating doctor can be held accountable for malpractice while a doctor examining for an insurance company cannot, because the person being examined is not that doctor’s patient.

But the Supreme Court in Nord suggests that a treating doctor may have a friendship or feel sorry for a patient and therefore shade his or her medical opinion toward the patient. However, this ignores the fact that for years insurance companies have been nurturing stables of doctors who never seem to find any claimant disabled, no matter how compelling that claimant’s injury or illness.

Until lately, courts have seemed to be blind to the practice of insurance companies using the same physicians over and over again based on the doctor’s inability to find disability. Many of these “experts” make all or most of their handsome livelihoods from these insurance company exams. Who would you think would be more liable to fudge examination results, the doctor who might feel sorry for a patient or the doctor who derives a major portion or all of his or her income from insurance exams?

To those who think there are doctors who would honestly follow their findings no matter what, we agree. However, such physicians are unlikely to have a stall in the disability insurance barn for long. We live in a world where to understand how things actually work you have to follow the money. When you follow insurance company money and a lot of it is going out because of one doctor’s opinions, you know there are going to be some changes made.

Which brings us back to the original question: Where did courts ever come up with the idea that medical opinions about a patient from a treating doctor and a reviewing doctor, should be given the same weight? And, why is it taking the courts so long to recognize this idea is so out of balance when everyone else involved in the disability insurance industry knows it is flat out wrong?

The obvious answer is that the insurance companies pay millions each year to PR and advertising people to blow smoke in the eyes of legislators and courts to perpetuate what is good for insurance companies, while claimants have no organized campaign to present inequities to the powers that be.

What’s to be done? Not much. Claimants will just have to chip away at the stodgy body of law which has grown since Congress enacted ERISA in 1974.   Appellate courts seem to be starting to get the message of the unfairness of closing their eyes to reality. See MetLife v. Glenn, 128 S. Ct. 2343 (2008)  at Page 2352, where the U.S. Supreme Court finally recognized that there is a conflict of interest when an insurance company, which will have to pay a claim, is given deference by courts to decide whether the claim is going to be paid. It doesn’t take a genius to figure that one out, especially in these times when “More, More, More” is the theme song in business.

Glenn should be a beginning. Notwithstanding Nord, more courts should come to the realization that treating doctors have their medical license to lose if they lie about their findings. On the other hand,  many insurance company doctors lose their meal ticket if they don’t lie about theirs.

If courts do recognize the difference in responsibility, maybe, just maybe, they will generally afford the evidence of treating doctors an edge over insurance doctors, who never even see the claimant.

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