The Western District of Kentucky found Reliance Standard’s termination of a bank manager’s long-term disability claim was wrong. So, the court awarded all unpaid long-term disability benefits.
Jessica Smith’s Disability Claim
Before her disability, Ms. Smith was employed by Old National Bank as a retail center manager. She stopped working in September of 2020, due to a number of medical conditions including fibromyalgia, chronic pain syndrome, chemotherapy induced arthralgia, and breast cancer.
Unable to work, Ms. Smith filed for and was awarded all her short-term disability benefits. Reliance then approved her claim for long-term disability benefits following a medical review completed by its in-house nurse consultant.
A few months after its approval of benefits, Reliance reversed course and terminated Ms. Smith’s benefits. So, Ms. Smith filed a lawsuit against Reliance.
The Court’s Decision
The court ruled for Ms. Smith finding Reliance’s termination of benefits was not correct. Ms. Smith argued to the court that the medical records did not support a sudden termination of benefits – and the court agreed.
Specifically, the court noted that although Reliance is not required to just accept the opinions of Ms. Smith’s doctors – who consistently supported Ms. Smith’s disability – those opinions cannot be just dismissed.
Reliance said Ms. Smith's doctors exaggerated, but the court disagreed. It reminded Reliance that it first accepted these doctors' opinions to approve benefits. The court saw no reason for Reliance to change its mind suddenly.
Basically, the court said Reliance couldn't end Ms. Smith's benefits without showing her condition had improved. It wasn't fair for Reliance to doubt the same doctors and evidence it once trusted to prove Ms. Smith's disability.
Reliance also argued to the court that Ms. Smith did not provide objective evidence of her disability and suggested she should have supported her claim with a functional capacity evaluation. The court disagreed and stated Reliance had every right to examine Ms. Smith—but it chose not to.
The court ultimately found that Reliance made the correct decision when it approved Ms. Smith’s benefits and the wrong decision when it suddenly terminated the benefits. Reliance was ordered to pay Ms. Smith the benefits it owed her.
Disability Insurance Companies Have Lawyers. Shouldn’t You?
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