Long Term Disability (LTD) claims are not uncommon in the insurance world. Some of these claims are easy to see and understand, such as an amputation. Other LTD claims are less easy to see and understand, such as chronic conditions and conditions that do not show up easily on tests and can be very subjective. It is the other type of LTD claims that end up being denied by insurance companies.
While many denied claims can be contested by hiring an insurance lawyer, many are complicated legal battles. What makes too many of these LTD claims even harder to contest if denied, is when the plan is through a person’s employer and governed by the Employee Retirement Income Security Act (ERISA).
A 2021 opinion from the Southern District of Texas, Houston Division, deals with an LTD claim that is governed by ERISA. The opinion is styled, Mark Calkin v. United States Life Insurance Company In The City Of New York.
The opinion needs to be read to have an understanding of the facts and policy language. What is mentioned here is the way the Courts look at these types of cases.
The parties involved filed cross-motions for summary judgment.
Rule 56 of the Federal Rules of Civil Procedure authorizes summary judgment against a party who fails to make a sufficient showing of the existence of an element essential to the party’s case and on which that party bears the burden at trial. The movant bears the initial burden of informing the district court of the basis for its motion and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Summary judgment is appropriate where the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.
If the movant meets its burden, the burden then shifts to the nonmovant to go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial. To meet this burden, the nonmovant must identify specific evidence in the record and articulate the precise manner in which that evidence supports its claims. It may not satisfy its burden with some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence. Instead, it must set forth specific facts showing the existence of a genuine issue concerning every essential component of its case. Thus, the appropriate inquiry on summary judgment is whether the evidence is so one-sided that one party must prevail as a matter of law.
Further, in a non-jury case, a district court has somewhat greater discretion to consider what weight it will accord the evidence. When deciding a motion for summary judgment prior to a bench trial, the district court has the limited discretion to decide that the same evidence, presented to him or her as a trier of fact in a plenary trial, could not possibly lead to a different result.
The preceding is the standard of review for summary judgment motions. What follows is additional law as it relates to ERISA cases.
Under Supreme Court precedent, courts review the denial of a right to benefits under an ERISA plan de novo, unless the benefit plan contains language granting the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Similarly, absent the inclusion of such a discretionary clause in a benefits plan, a court reviews an administrator’s factual determinations de novo. Where the policy contains a discretionary clause, a district court reviews both legal and factual determinations for abuse of discretion. When reviewed de novo, a plan administrator’s decision to deny benefits is not afforded deference or a presumption of correctness. Rather, a court must independently weigh the facts and opinions in the administrative record to determine whether the claimant has met his burden of showing that he is disabled within the meaning of the policy.
The Court then went on to apply this law and reasoning to the facts of the case. As is too often in the cases governed by ERISA, the Court ruled against the claimant.