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May 2017

 

Tenth Circuit LHD Review, January to May, 2017:  A View from the Trial Courts

Matthew Y. Biscan

Satriana & Biscan, LLC

Denver, Colorado

www.sbattys.com

 

A thorough investigation of the plaintiff’s disability claim, which included medical evaluations, third party evaluation, and surveillance, was approved in Stone v. Unum Life Ins. Co. of Am., 2017 U.S. Dist. LEXIS 1419, Case No. 15-CV-0630-CVE-PJC (N.D. Ok. January 5, 2017).  Among other facts, Plaintiff earned both a bachelor of science and a master of science degree after the onset of her disability.  The court rejected plaintiff’s argument that the investigation by the carrier was “too aggressive.”  Rather the court termed the investigation, which included examinations, record review, a background investigation, and surveillance, as thorough and anything but “too aggressive.”  The denial of disability benefits was affirmed as “well within the ‘continuum of reasonableness.’”  The court refused to apply the Texas ban on discretionary clauses (see Tex. Admin. Code §3.1203) retroactively and applied the standard of review called for under ERISA.

Applying Utah law to a governmental disability plan not governed by ERISA, the court in Williams v. Hartford Life & Accident Ins. Co., 2017 U.S. Dist. LEXIS 18144; 2017 WL 519215, Case No. 2:14-CV-304-DN (D. Utah February 8, 2017) determined that the carrier breached its contract in terminating benefits.  In a trial to the court on briefs, the finder of fact concluded that a determination that the plaintiff was not disabled based on record reviews (without the benefit of examination by defense witnesses) and surveillance failed to outweigh the testimony of treating physicians. 

The decision to terminate disability benefits was determined not to be arbitrary and capricious in Johnson v. Life Ins. Co. of N. Am., 2017 U.S. Dist. LEXIS 45643, Case No. 15-cv-0699-WJM-MEH (D. Colo. March 28, 2017).  A case construing both short term and “regular occupation” long term claims, the court did not consider that the carrier’s determination contrary to the conclusion of the Social Security Administration was improper, rejecting plaintiff’s argument that the carrier “failed to reconcile” its determination with the granting of benefits by SSA.  It expressly recognized the right of an ERISA plan to make a determination based on conflicting evidence.  Again the evidence in support of denial of benefits included medical examination and surveillance.  Here the court considered plaintiff’s argument that the Colorado ban on discretionary clauses (C.R.S. §10-3-1116(2)) should be applied.  After an evaluation of Colorado law and particular reference to the precise language of the statute, the court reluctantly refused to apply the ban retroactively, even in the face of renewals of the plan subsequent to the ban’s enactment.  The court also refused to grant plaintiff a remedy for the plan’s failure to timely respond to requests for documents, exercising its discretion where no prejudice was found.

In a review of a decision to terminate residential mental health treatment for a minor, the court granted the carrier’s motion for summary judgment in John B. v. Conn. Gen. Life Ins. Co., 2017 U.S. Dist. LEXIS 51331, Case No. 1:16-CV-00041-BSJ (D. Utah April 3, 2017).  Applying a deferential ERISA standard of review, and recognizing that the plan explicitly provided that treatment covered was “[r]equired to be rendered in the least intensive setting that is appropriate for the delivery of health care,” the court found the termination of residential care not to be arbitrary and capricious.  The plan’s decision was based on record review, peer-to-peer conference with the treating facility, the involvement of an independent psychiatrist, and a plan employed psychiatrist.

Finally, a reasonably concise order granting approval of a class action settlement can be found at Woods v. Std. Ins. Co., 2017 U.S. Dist. LEXIS 70528, Case No. 1:12-cv-01327-KBM/KRS (D.N.M. May 9, 2017).  The court described the case as “vigorously litigated.”  See Woods v. Std. Ins. Co., 771 F.3d 1257 (10th Cir. 2014).

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