Disability Claims And ERISA

De Sota insurance lawyers who handle ERISA claims need to read this opinion issued by the United States 5th Circuit Court of Appeals. It is styled, Robert George v. Reliance Standard Life Insurance Company.
Reliance denied George’s claim for benefits for two reasons, one of which will be discussed here.
George served as a helicopter pilot in the United States Army. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired from military service in 1987. After retiring, George began flying helicopters for PHI. PHI purchased a long-term disability insurance policy for George from Reliance (“RSL”). George flew for PHI for more than twenty years. But in 2008 he began experiencing severe pain at the site of his amputation, which prevented him from safely wearing his prosthetic limb. As a result, he was no longer able to operate the foot controls of a helicopter, and he was forced to retire from flying. At that time, he was earning $75,495 per year. George filed a claim for long-term disability benefits with RSL.
The Policy contains two definitions of “Totally Disabled” and “Total Disability,” which apply during different time periods. During “the first 24 months for which a Monthly Benefit is payable,” these terms mean that the insured “cannot perform the material duties of his/her Regular Occupation.” After the first 24 months, these terms mean that the insured “cannot perform the material duties of any occupation which provides substantially the same earning capacity.” The Policy also contains a relevant “Exclusion Clause“. The Exclusion Clause provides that “Monthly Benefits for Total Disability caused by or contributed to by mental or nervous disorders will not be payable beyond an aggregate lifetime maximum duration of twenty-four (24) months.” The Policy defines “Mental or Nervous Disorders” to include “anxiety disorders” and “mental illness.”
RSL denied George’s claim for long-term disability benefits in a series of letters. RSL found that George was “capable of sedentary exertion work with the ability to stand and stretch, with permanent restrictions to standing, lifting, carrying or over head work,” and that George could work as a “Protective-Signal Operator; Crew Scheduler; and Aircraft-Log Clerk.” Because George could fulfill the duties of the alternative occupations, RSL determined that George was not Totally Disabled under the definition of that term that applied after 24 months. As proof of his contention, George attached printouts from the website “SimplyHired.com,” which showed that the average salaries for the positions identified by RSL were $36,000, $40,000, and $28,000 respectively. RSL dismissed George’s evidence because it “could not ascertain if these materials were prepared by vocational experts,” “the Internet papers all stemmed from the same website, versus as deriving from differing sites and being compared and contrasted by an expert,” and George failed to attach “any labor market studies completed to substantiate his argument.”
George sought review of RSL’s decision in the district court under 29 U.S.C. § 1132(a)(1)(B).
When an administrator has discretionary authority with respect to the decision at issue, the standard of review should be one of abuse of discretion.
George does not dispute the administrator’s finding that he could perform sedentary work, or that he could work in the alternative occupations. Instead, George argues that there is no evidence in the record showing that those occupations would provide substantially the same earning capacity that he enjoyed as a helicopter pilot.
RSL rejected George’s claim because:
(1) it determined that he was “capable of sedentary exertion work,”
(2) its vocational expert had determined that George could work as a “Protective-Signal Operator; Crew Scheduler; and Aircraft-Log Clerk,” and (3) it had therefore determined that George was not Totally Disabled under the Policy.
This Court held that RSL abused its discretion when it determined that George was not Totally Disabled. RSL fails to cite any evidence in the record that supports its conclusion that George’s ability to perform sedentary work, and to work in the alternative occupations, would allow George to obtain “substantially the same earning capacity” that he obtained as a pilot.
To the contrary, the record suggests that RSL has attempted to ignore the Policy’s similar income requirement. For example, RSL failed to mention the similar income requirement when it described the nature of its inquiry into George’s claim. RSL stated that “the purpose of its review was to determine if the medical data documents the presence of a physical condition that would limit Mr. George’s ability to perform any occupation for which he is vocationally suited, as is required by the group policy after benefits have been paid for twenty-four (24) months.” RSL’s refusal to consider George’s evidence also suggests that RSL preferred to ignore the similar income requirement.
There is no evidence in the record that shows that George could earn a substantially similar salary in another position. Thus there is no rational connection between the fact that George can do sedentary work, including the alternative occupations, and the conclusion that George could earn a substantially similar salary in any alternative position. Accordingly, the Court held that RSL abused its discretion when it determined that George was not Totally Disabled.