Newsom v. Reliance Std. Life Ins. Co., ERISA and Long Term Disability

This ERISA case, decided in 2022, is a case dealing with the definitions of terms contained within the long term disability policy.

The Plaintiff/Insured had been employed as a software architect for 23 years. He had health problems dating back several years, including chronic fatigue syndrome, fibromyalgia, depression and attention deficit hyperactivity disorder. His health eventually deteriorated to the point that the could no longer work a 40 hour week. The employer reduced his scheduled work week to 32 hours, which it still considered to be full time. However, eventually the Plaintiff went to part time, working less that 30 hours per week. Finally, the Plaintiff became unable to work at all, and made an initial claim for short term disability benefits. In that claim, it was the Plaintiff’s doctor’s opinion that he would eventually be able to return to work in a few months. The Employer indicated that the Plaintiff had only been working part time before he stopped working, and the Defendant initially denied the claim based on the fact that the Plaintiff was not a full time active employee and did not qualify for coverage under the terms of the plan. The Plaintiff appealed this denial contending that the Defendant had incorrectly determined his date of disability under the terms of the plan. The Defendant agreed with this and paid the short term disability benefits at the 26 week maximum period. The Plaintiff also applied for long term disability benefits but the Defendant denied this for the same reasons the short term disability benefits were initially denied. Plaintiff appealed this denial, but the Defendant refused to reverse this decision. The Plaintiff then filed the court action. The district court agreed with the Plaintiff that he should be entitled to the long term disability benefits under the plan. The district court then determined the Plaintiff’s date of disability to be what the Plaintiff alleged that it was under the terms of the plan. The Defendant appealed. The Court found that the district court did not err in determining that the Plaintiff was qualified to receive long term disability benefits because he was a full time employee under the terms of the plan. The Court determined that some of the language of the plan was ambiguous and construed the ambiguity in favor of the Plaintiff. The Court also found that the district court did not err in its determination of the Plaintiff’s disability date based on the terms of the plan. However, the Court did find that the case should be remanded back to the Defendant for determination of the merits claim of the disability award, as opposed to the determination of the plan terms, which had been the subject of this suit. The Court agreed that, under the terms of the plan, this is required. Therefore, the Court remanded the case back to the Defendant to determine if the Plaintiff is entitled to long term disability payments according to the medical opinions of the doctors.

This case is example of the Court clearing the road of the “technical” issues of whether or not long term disability can be awarded, in this case an interpretation of what a full time employee is under the policy, and then allowing the Defendant to determine if the medical proof supports the long term disability award. Presumably, if the Plaintiff disagrees with the Defendant’s determination after consideration of the doctors’ opinions of his disability, he can once again bring the matter to court for a review of the Defendant’s determination.

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.