Newsom v. Reliance Standard Life Insurance Company

In this ERISA case, decided in 2022, the parties agreed to a trial upon submission of documentary evidence but disagreed upon the issues properly before the district court. In the case, the Plaintiff/Employee claimed that the Defendant had wrongfully denied his short term and long term disability benefits under ERISA.

The Plaintiff was employed as a software architect for Lereta, where he had been employed for 23 years. He had been having health problems since 1999, including chronic fatigue syndrome, fibromyalgia, depression and attention deficit hyperactivity disorder. His health deteriorated to a point where he could no longer work a 40 hour week. The employer tried reducing his hours to 32 hours per week, but he was unable to consistently do that. He was then moved to part time, which he worked for a while until he unable to do even that. He submitted a claim for short term disability benefits, which was denied by the plan administrator because he no longer qualified as a full time employee and thus did not qualify for short term and long term disability benefits coverage. The Plaintiff appealed this denial of short term disability benefits stating that the beginning date of his disability was incorrectly determined and that his schedule as set by the employer did qualify him as full time. Upon review, the claims examiner agreed with the Plaintiff and he was paid his maximum short term disability benefits. However, the examiner continued to deny the Plaintiff’s long term disability benefits, based on the fact that the Plaintiff did not work full time. The Plaintiff appealed the denial of his long term disability benefits but the Defendant affirmed its decision. The Plaintiff then filed suit pursuant to ERISA.

The parties agreed to a trial upon documentary evidence and the district court found for the Plaintiff. In doing so, the district court had to interpret the term “regular work week” to decide if the Plaintiff had worked full time, and it had to decide when the Plaintiff became disabled. The Defendant also argued that, if the court found that the Plaintiff was eligible for long term disability benefits, that it should have remanded the case back to the Defendant for analysis of whether the Plaintiff was disabled.

The Court of Appeals examined the issue of the district court’s determination of what a “regular” work week is, and determined that the district court was correct in its determination.

The Court then examined the district court’s determination of when the disability began, and again determined that the district court was correct. The Court examined whether the district court had made a “clear error” which is the standard of review for these questions, and determined that it had not. The Court notes that the “clear error” standard is a high standard for the Defendant to overcome.

However, on the issue of whether or not the case should have been remanded to the Defendant so that the case administrator could determine disability, the Court found that it should have been. The language of the ERISA long term disability plan that the Plaintiff was under required a determination of whether the Plaintiff was disabled as a result of injury or sickness and this question was not before the district court in the initial hearing.

This case is a prime example of how a court is bound by the issues in front of it. Sometimes, this is very frustrating for the parties, but courts can only determine the issues that the parties, through their counsel, have asked the court to determine. If a court strays outside of those issues, that court’s decision will often be reversed and the case remanded to the proper court or agency to make those decisions.

If you need assistance navigating your claim for short term or long term disability benefits under ERISA, or it is time to sue the insurance company, please do not hesitate to give Cody Allison & Associates, PLLC a call (844) LTD-CODY, (615) 234-6000. or send us an e-mail Cody@codyallison.com.  We provide representation nationwide and have successfully sued all the major insurance companies in many states. Our headquarters are located in Nashville, Tennessee.  We offer a free consultation and would love to speak with you.