Articles Posted in Disability Policies

Attorneys who litigate disability claims need to read this case from the Southern District of Texas, Houston Division. It is styled, Larry Frederick v. American Heritage Life Insurance Company. This case will help an attorney understand some of the burdens put on the insurance company.

In October 2012, Frederick was severely injured in a vehicular accident. One month later, he submitted a claim for benefits under an accident insurance policy he purchased from AHLIC several months earlier. AHLIC initially denied payment under the policy, but later paid the claim after reversal on administrative appeal. Frederick now sues claiming that AHLIC violated the Texas Insurance Code by unreasonably delaying payment of the benefits.

In its answer to Frederick’s first amended complaint, AHLIC raises several affirmative defenses, including a pre-existing condition exclusion in the policy, ratification by Frederick, nonpayment of the policy premium, and failure to prove loss.

This 5th Circuit Court of Appeals opinion is a must read for ERISA attorneys. The case is styled, Burell v. Prudential Insurance. The facts will be given here. The case needs to be read to understand how the Court affirmed the findings of the lower Court in denying benefits to Burell.

In 1985, Burell began working as an entry-level technician for Methodist Healthcare Systems (“MHS”). After 26 years, he ended his career as Director of Biomedical Services for all San Antonio MHS facilities. As an employee of MHS, Burell participated in the company’s insurance plan (“the Plan”), which is provided through HCA Management Services, L.P. Prudential acts as both administrator and insurer of the Plan. In order to qualify for long-term disability benefits, a claimant must meet the following definition of “disabled”: the claimant must (1) be “unable to perform the material and substantial duties of [his or her] regular occupation due to [his or her] sickness or injury “; (2) be “under the regular care of a doctor “; and (3) suffer “a 20% or more loss in [his or her] monthly earnings due to that sickness or injury.”

Burell was diagnosed with multiple sclerosis (“MS”) in 2008. Citing worsening symptoms of MS, in September 2011, Burell went on medical leave and filed for long-term disability benefits with Prudential, claiming that he qualified for benefits under the Plan due to MS, headaches, depression, and anxiety. In January 2012, he stopped working altogether, ending his employment with MHS. In support of his claim, Burell submitted medical records from his treating physicians and a psychiatrist. Prudential hired Heidi Garcia, a registered nurse, and Dr. Alan Neuren, who is board certified in neurology, to review Burell’s claim. Dr. Neuren found that Burell’s diagnosis of MS was unsupported by his medical records. He also found it unlikely that Burell suffered any cognitive impairments, opining that job stress is “likely the source of his complaints as opposed to a neurological disorder.” Garcia focused her review on Burell’s claim of depression and anxiety, ultimately finding that any cognitive symptoms he was experiencing were not sufficient to prevent him from working. Based on their reports and the medical records submitted, Prudential denied Burell’s claim for long-term disability benefits.

Arlington insurance attorneys who handle disability policy claims would want to read this 1978, Beaumont Court of Appeals case. It is styled, Lone Star Life Insurance Company v. Griffin.

Griffin testified that as he was returning to his home from his farm, he passed by his drugstore. As was his custom, he entered the store to see if everything was normal (having been burglarized several times in the past). He smelled smoke which he found to be coming from the rear of his building. He testified that he emptied his fire extinguisher but his efforts were futile; that he was trying to get out of the building when an aerosol can exploded in his face; that he lost consciousness while upon the floor of the store near a door, and regained consciousness later in a hospital in Jasper.

Dr. Lee Popejoy testified as to his treatment of Griffin beginning at about two in the morning following the fire. He told of finding external burns on several parts of Griffin’s body but the most serious injury was to his lungs from the inhalation of smoke and fumes. Griffin was hospitalized for several weeks and testified that he was unable to do any work for several months thereafter.

Arlington lawyers handling insurance disability claims need to know all the places to look to find law helpful to their client. This includes not only the Texas Insurance Code, but also the Texas Administrative Code.

But first, a case helpful to disability case understanding is a 1970, El Paso Court of Appeals case styled, Travelers Insurance Company v. Solomon.

Solomon received a jury verdict in his favor against Travelers for anticipatory breach of an insurance contract. The contract was an accidental disability policy issued by Travelers. Under the policy Travelers agreed to pay the sum of $200.00 per month during the period of any total disability sustained by Soloman which commenced within 30 days after he received accidental injuries. The policy defines ‘total disability’ as meaning an inability of the insured to perform any and every duty pertaining to his occupation during the first 24 months of any period of disability; thereafter, the term is defined to mean complete inability of the insured to engage in any and every occupation or employment for wage or profit.

Dallas insurance lawyers who handle disability policy’s need to be aware of an opinion from the United States District Court, Houston Division. The style of the case is, Fernandez v. Mutual of Omaha Ins. Co. Here is the relevant information.

The cross-motions for summary judgment in this disability insurance dispute raise one legal issue: whether the statute of limitations bars the plaintiff’s causes of action. The answer depends on when the limitations periods began to run. If the defendant insurer’s July 27, 2009 letter to the plaintiff insured legally denied the claim, then, as the plaintiff concedes in his brief, all his causes of action are barred. If, as the plaintiff contends, the July 27, 2009 letter did not legally deny the claim, the causes of action alleged did not accrue until the policy terminated when he became 65, and the action is timely filed.

Based on the undisputed facts in the summary-judgment record, the July 27, 2009 letter repeating an earlier letter stating that the plaintiff’s benefits claim was “inactive,” legally denied the claim. The statutory and extracontractual claims had to be brought by July 27, 2011. The breach of contract claim, subject to a three-year contractual-limitations period, had to be brought by July 27, 2012. Fernandez filed this suit on September 30, 2013, well after all limitations periods had expired.

Attorneys who handle disability claims in the Dallas – Fort Worth area need to have an understanding as to how “disability” is defined.

The most commonly used definition used in Texas law is the Worker’s Compensation definition. In the 1944, Texas Supreme Court opinion styled, Texas Employers’ Insurance Association v. Mallard, the Court held that the standard definition of “total incapacity” is that “a person is disqualified from performing the usual tasks of a workman, in such a way as to enable him to procure and retain employment …” This definition has been broadened over the years. Total disability as that term is defined under the Workers’ Compensation Act and as that term was defined for the jury in the workers’ compensation case does not preclude the possibility of rehabilitation. The definition of “total incapacity” given to the jury in the workers’ compensation case stated that it “does not imply absolute inability to perform any kind of labor, but means that one is disabled from performing the usual task of the worker, not merely the usual task of any particular trade or occupation, to such an extent that he cannot get and keep employment requiring the performance of the usual task of a worker.” This has been stated in at least two cases. One was the 1963, Texas Supreme Court case, Texas Employers Insurance Association v. Hawkins. The other is a 1992, Texarkana Court of Appeals case styled, Southwestern Electric Power v. Martin.

The definition of “Total Disability” is a little different. Total disability is a relative matter and depends chiefly on the circumstances of each case and on the nature of the occupation and the capabilities of the person injured. It does not mean absolute physical disability of the insured to transact any kind of business pertaining to his occupation, but exists if he is unable to do any substantial portion of the work connected therewith. This is told to us in the 1961, Texas Supreme Court case styled, Prudential Insurance Company of America v. Tate.

Arlington lawyers need to have understanding of disability insurance policies to properly advise a prospective client.

Regarding the commencement of coverage, disability policies normally require that any claimed disability occur while the policy is in effect or within a specified time after the claimed accident or injury. Here is an example. A policy may provide coverage for an illness or injury that “totally and continuously disables the insured within 30 days of the date of the accident so as to prevent him or her from performing each and every duty pertaining to his or her occupation.”

Most disability insurance policies will distinguish between disabilities caused by illness and those resulting from accidental injury. The Beaumont Court of Appeals issued an opinion in 1978, in the case Lone Star Life Insurance Company v. Griffin, wherein a policy provided that the insurance company would pay the insured $1,000 per month for 60 months for an accidental injury resulting in total disability and that it would pay $1,000 per month for 24 months for total disability resulting from sickness.

Arlington insurance attorneys need to know the issues presented in policies of disability insurance.

Disability income policies typically specify an amount that will be paid in the event of a disability, as that disability is defined in the policy, and a maximum length of time for which such benefits will be paid. An example would be $1,000 a month for 180 months.

Something to be aware of is that the policy holder does not always have to prove that they actually lost the amount of earnings protected. Most the time, the benefits are payable even if the policy holder is unemployed at the time of the disability.

Fort Worth insurance attorneys who handle disability insurance claims need to know about this case. It is styled Occidental Life Insurance Co. v. Duncan. The opinion was issued by the San Antonio Court of Appeals in 1966.

Here is some relevant information.

Duncan was engaged in the selling of labels as an independent contractor on a commission basis. The company he represents manufactures labels and Duncan sells them, generally to canners. He has been in the label selling business for some twenty years. He was in an airplane accident on October 25, 1957, and was rather severely injured, Occidental paid him for total disability from the time of his accident until September, 1963, when it stopped payment. This suit by Duncan followed.

Insureds in Grand Prairie, Arlington, Weatherford, Fort Worth, Mansfield, Dallas, and other places in Texas, who have some form of disability insurance will too often, have to seek the assistance of an experienced Insurance Law Attorney when they make a claim. This is because insurance companies that issue disability policies are reluctant to pay these types of claims.

A case decided in 1978 serves as a good example. This is a Beaumont Court of Appeals case. The style of the case is, Lone Star Life Insurance Company v. Joseph B. Griffin. Here is some background.

Griffin testified that as he was returning to his home from his farm, he passed by his drugstore. As was his custom, he entered the store to see if everything was normal (having been burglarized several times in the past). He smelled smoke which he found to be coming from the rear of his building. He testified that he emptied his fire extinguisher but his efforts were futile; that he was trying to get out of the building when an aerosol can exploded in his face; that he lost consciousness while upon the floor of the store near a door, and regained consciousness later in a hospital.