A Federal Court denies motion to exclude a document that would help a Wisconsin woman win her disability lawsuit.
The Life Insurance Company of North America (“LINA”) initially approved Ms. Joleen Lerch’s claim for long-term disability benefits. LINA paid benefits for two years before it terminated such benefits. Thus, Ms. Lerch filed a lawsuit against LINA for her disability benefits.
The Employee Retirement Income Security Act of 1974
Ms. Lerch’s claim for long-term disability benefits was governed by the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that governs most disability claims. Generally, if you are eligible for long term disability benefits through your job, it is likely governed by ERISA.
Discretion in ERISA Cases
Most long-term disability policies contain discretionary language. This means that the insurance company, like LINA here, has full discretion to determine if someone is disabled. Under ERISA, if a plan document includes discretionary language, the court will apply an arbitrary and capricious standard of review. Under this standard the court can rule in your favor only if it finds the insurance company had no reasonable basis to deny benefits. This is a difficult standard to meet.
The Court Refused to Exclude Documentation Containing Discretionary Language
In Ms. Lerch’s case, the long-term disability policy did not contain discretionary language. Instead, a separate plan document, the Appointment of Claim Fiduciary (ACF) form contained discretionary language. This form was produced by LINA after Ms. Lerch filed her lawsuit. Ms. Lerch sought to exclude this form from the record, but was unsuccessful in doing so.
First, Ms. Lerch argued that the review of an ERISA denial is limited to the record that was before the insurance company when it's made its decision. In other words, her position was that LINA could not introduce the ACF form after the filing of her lawsuit. The court disagreed.
Ms. Lerch also argued that the ACF form should be excluded because LINA failed to produce the documents when she first asked for them at the start of the lawsuit. The court disagreed and held that it is not the insurance company’s duty to produce all plan documents. Rather, this responsibility falls on the employer.
Finally, Ms. Lerch argued that under ERISA, LINA is required to produce all documents relevant to her claim for benefits, including the ACF form. The court disagreed and found Ms. Lerch did not establish that the ACF form was relevant to LINA’s decision to deny benefits.
Thus, the court denied Ms. Lerch’s motion to exclude ACF form the record.
Having an Experienced Disability Attorney Matters
Our firm litigated a similar issue in a case called Miller v. PNC. In that case, we were successful in getting the court to hold that a form like the ACF form was not enough to give the insurance company discretion. Because of this finding, we went on to win the case and got our client’s long-term benefits approved.
Disability insurance law is complicated. If your claim for long term disability benefits was denied or being delayed by an insurance company, it is important to get legal help from a lawyer who focuses on disability law.
As a law firm built to focus disability insurance, all our lawyers spend every day working to get our clients disability benefits from insurance companies.
Because federal law applies to most disability insurance claims, we do not have to be located in your state to help.
Dabdoub Law Firm represents clients nationwide with:
- submitting a disability insurance claim;
- appealing a long-term disability denial;
- negotiating a lump-sum settlement; or
- filing a lawsuit against your disability insurance company.
