Abuse Of Discretion – ERISA

Dallas and Fort Worth lawyers who handle ERISA claims need to read this recent Eastern District of Texas, Sherman Division opinion.  It is styled, Martha Shindoll v. United of Omaha Life Insurance Company.

Shindoll had an ERISA plan through her employer that provided short and long term disability benefits.  In 2005, Shindoll was diagnosed with fibromyalgia and Chronic Fatigue Syndrome (CFS).  She continued working but in 2010, her condition worsened.  In November 2012, her doctor, Kippels, ordered her off work.  In June 2013, Shindoll obtained a Vocational Analysis from a Dr. Hansen, who opined that she was completely disabled.  Shindoll applied for and received short term disability which was denied.  She appealed and submitted to an IME with a Dr. Daniel.  Daniel found she was completely disabled due to medication overdose syndrome.  United approved the short term benefits in October 2013.  The next month, Daniel issued an addendum to his initial analysis, stating Shindoll did not suffer from any cognitive dysfunction or physical functional impairment.

After exhausting short term benefits, Shindoll began receiving long term benefits.  In November 2014, United submitted Shindoll’s file for additional IME testing.  A peer review doctor, Dr. Raff, supplied a psychiatric and psychological peer review report that stated Shindoll did not have an impairing condition.  A second peer review doctor, Dr. Sartin, issued an infectious disease peer review report that found no cause for Shindoll’s symptoms and he disagreed with the diagnosis of any infectious disease.  In December of 2014, United’s doctor, Dr. Reeder, sent a letter to Kippels that set forth a review of Shindoll’s medical records, the IME, and peer reviews.  Reeder concluded that Shindoll suffers from an anxiety disorder and somatoform symptoms but no physical or cognitive impairment.

More records went back and forth from doctors with ultimately the denial of benefits being the conclusion.

Shindoll filed suit and United eventually filed a motion for summary judgment.

United argued that the judgment should be granted because its decision was based on substantial evidence and that it did not abuse its discretion or act arbitrarily and capriciously in its decision.

The review of the denial of benefits under an ERISA plan is based on an abuse of discretion standard, i.e., looking to see if the plan administrator has abused the discretion given to it by the plan.  Under the abuse of discretion standard, if the administrator’s decision is supported by substantial evidence and is not arbitrary and capricious, it must prevail.  Substantial evidence is more that a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.  An arbitrary and capricious decision is one made without a rational connection between the known facts and the decision or between the found facts and the evidence.

This court then reviewed and discussed the evidence in the record, set forth above, and upheld the decision to deny benefits ruling.   The court stated, based on the foregoing, the Court concludes that United did not abuse its discretion or act arbitrarily and capriciously because it relied upon substantial evidence when it denied Shindoll’s claim for long term disability benefits.

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