ERISA And Contributing To Impairment

North Richland Hills insurance lawyers who handle ERISA claims need to read the 2015, 5th Circuit Court of Appeals opinion styled, George v. Reliance Standard Life Insurance Company. There are a couple of issues in the case but only the issue in the title above will be discussed here.
George served as an Army helicopter pilot. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired in 1987. After retiring, George began flying helicopters for PHI, Inc. 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. 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. The Policy also contains a relevant limitation provision (the “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 determined that George’s “psychiatric conditions of depression and post traumatic stress disorder (‘PTSD‘) ‘contributed to’ his overall impairment status” since his retirement in 2008. Thus RSL determined that George’s claim for long-term disability benefits was “subject to a Maximum Duration of Benefits of twenty-four (24) months” under the Exclusion Clause. George contended that, “considering only his physical ailments and impairments, the record is clear that he cannot continue his usual occupation or engage in an occupation that pays substantially the same as his usual occupation.” Accordingly, George asserted that “a mental/nervous issue, if any, does not contribute to his disability.” George sought review of RSL’s decision in the district court under 29 U.S.C. § 1132(a)(1)(B).
This court reviews the factual findings of the trial court for clear error and conclusions of law de novo. When an administrator has discretionary authority with respect to the decision at issue, the standard of review should be one of abuse of discretion.
An ERISA claimant bears the burden to show that the administrator abused its discretion. A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial. Similarly, a decision constitutes an abuse of discretion only if it is made without a rational connection between the known facts and the decision or between the found facts and the decision.
RSL did not deny George’s claim because he failed to carry his burden. RSL denied his claim because it determined that there was sufficient evidence in the record to show that he was not Totally Disabled and that, even if he was, a mental disorder contributed to this Total Disability.
George argues that there is no evidence in the record to show that, absent his mental or nervous conditions, he could earn substantially the same amount in another occupation. RSL maintains that it did not abuse its discretion because George failed to show that he was “physically unable to perform the duties of any occupation.” This Court considers whether there is a rational connection between the facts asserted by RSL and its decision that George’s depression and PTSD contributed to his Total Disability.
George concedes that his physical disabilities may allow him to perform some sedentary jobs, and neither party disputes that George is no longer physically capable of working as a helicopter pilot. Thus, the record supports the conclusion that George was physically capable of performing at least some sedentary jobs, while there is no evidence to support the conclusion that he was physically capable of doing anything more. There is evidence in the record, however, that George’s depression and PTSD impaired his ability to hold down a job. Based on this evidence, RSL determined that George’s mental disabilities “‘contributed to’ his overall impairment status,” and that he was thus barred from receiving benefits by the Exclusion Clause.
This court has never considered the meaning of the phrase “caused by or contributed to by” in a similar exclusion clause, but other federal circuit courts have done so. Each of those courts has interpreted the “caused by or contributed to by” language to exclude coverage only when the claimant’s physical disability was insufficient to render him totally disabled. In other words, those courts have asked whether the mental disability is a but-for cause of the total disability. Black’s Law Dictionary 265 (10th ed. 2014) defines “but-for cause” as a “cause without which the event could not have occurred”. This Court agreed with this interpretation of the relevant language.
The record shows that George’s physical disabilities placed a firm ceiling on his vocational prospects. Even if George were completely healed of his mental disabilities, he would still be limited to sedentary jobs. Thus there is no rational connection between the fact that George’s mental disabilities may have impaired his ability to hold down a sedentary job, and the conclusion that his mental disabilities caused or contributed to his Total Disability.
Accordingly, it was held that RSL abused its discretion when it determined that the Exclusion Clause limited George’s right to benefits.