This ERISA case, decided in 2014 , is an interesting case regarding the insurance company’s duties as a fiduciary and what damages a Plaintiff may recover when the insurance company wrongfully withholds long term disability payments it should be paying the Plaintiff.
The case had previously been before the Appeals Court which had affirmed the lower court’s finding that the defendant insurance company had acted arbitrarily and capriciously in denying the Plaintiff’s long term disability benefits under ERISA. Upon remand, the lower court ordered the Defendant to disgorge profits flowing from that wrongful denial of benefits, in the form of interest on the benefits that should have been paid to the Plaintiff. This Court examines the lower court’s ruling and determines that it erred in ordering the Defendant to disgorge the money it made from interest while holding the Plaintiff’s long term disability benefits. The Court examines the relevant statutes under ERISA and determines that those statutes are designed to make the Plaintiff whole, not to punish the Defendant for wrongfully denying something to the Plaintiff, or wrongfully gaining something from that denial. The Court finds that the previous finding that the Defendant acted arbitrarily and capriciously and forcing the Defendant to pay all long term disability benefits due and owing to the Plaintiff made the Plaintiff whole. In addition, the Court found that the Plaintiff had also already been awarded his attorneys’ fees for having to bring this suit, and that prejudgment interest may be awarded on remand. There was no showing by the Plaintiff that these awards were not sufficient to make him whole. Therefore, the Court reverses the lower court’s order that the Defendant has to disgorge these monies from interest.
Even though this case seems a trifle unfair to the Plaintiff, it is easy to see how the Court arrived at its decision. By examining the statutes from the perspective of making the Plaintiff whole, and not from the perspective of punishing the Defendant, the Court’s decision is well reasoned and accurate.
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.