Since late 2004, our client, Sumiko Besser has been battling Prudential Insurance Company in an effort to secure her long-term disability benefits. Prudential currently owes her in excess of $900,000 in unpaid long-term disability benefits. Our client became disabled on May 10, 2004, as a result of chronic neck pain caused by multi-level degenerative disk disease. Attorneys Dell & Schaefer submitted two administrative appeals to Prudential and in early 2008 filed a lawsuit in United States District Court of Hawaii. On May 19, 2009, Attorneys Gregory Dell and Leonard Feuer presented our client’s case at trial and we are currently waiting for a verdict from the court.
At the time of filing for disability our client was working in Honolulu for Hilton Vacation International selling timeshares. Our client, a 47 year-old woman was at the prime of her sales professional career when she gave up her job due to chronic neck pain. Her pre-disability income and was in excess of $320,000. The time-share and real estate market was booming in mid 2004 when she was forced to stop working. Our client worked more than 60 hours per a week and was paid pure commission. As an employee benefit our client paid a monthly premium for a long-term disability policy that would pay her 60% of her monthly income each month if she became unable to perform the substantial and material duties of her occupation as a vacation sale professional. Prior to filing for disability, our client had been continuously treating with a Rehabilitation and Medicine doctor in order to help manage her pain. Additionally, she had undergone multiple cervical injections, was taking pain killers daily, missed multiple days from work, and attempted to reduce her hours in order to keep her job. Our client has seen more than 8 different doctors (orthopedics, neurosurgeons, physiatrist, and anesthesiologist) and has been recommended for neck surgery by 3 different doctors. All of these doctors support her inability to work due to chronic neck pain.
Prudential initially denied the claim on January 25, 2005 and relied on a paper review by one of their consulting doctors, who claimed that if she used a phone headset and an ergonomic chair to do her job she would have no problems. This Dr. never examined or spoke with our client. Our research revealed that Prudential paid this doctor more than $130,000 in 2005 and Prudential has a long-standing relationship with this doctor who practices at a medical school next to Prudential’s NJ headquarters. On July 28, 2005 our firm submitted a 65 page single spaced appeal of the denial to Prudential with additional support for our client’s claim. During the review of the first appeal, which was suppose to be completed in 45 days according to ERISA law, Prudential decided they wanted to have a doctor of their choice examine our client. This exam took place, December 16, 2005, which was now more than 1.5 years after our client’s claimed date of disability. We requested to video the exam of our client, as we usually do, and the Dr. hired by Prudential refused. The exam took place, and the doctor found that our client has objective evidence of a cervical degenerative condition; however it should not prevent her from doing any job. The doctor was suppose to determine if her medical condition would prevent her from doing her substantial and material duties as a vacation sales person, but he went as far as to say she had no restrictions preventing her from doing any job. While Prudential would not allow the video of the exam, Prudential hired a private investigation company to follow our client around with a video camera for 7 days. The first two days of disability video surveillance were the day before and the day of the exam with Prudential’s hired doctor. The remaining days were within the following two weeks. Prudential paid $9,439.00 to the video surveillance investigators. Over 7 days, the investigators produced a total of 30 minutes of tape, of which more than 20 minutes was our clients visit to the beach on New Years Eve day with her family.
On February 13, 2006 Prudential entered their second denial and relied on the exam by the doctor they hired (paid him $5,000) and their own internal doctor’s report. On August 21, 2006, Attorneys Dell & Schaefer submitted a 100 page single spaced appeal letter to Prudential with additional information. ERISA law requires a policy holder to submit appeals and exhaust administrative remedies before the insured is allowed to file a lawsuit in Federal Court. Additionally, ERISA provides that an insured shall receive a full and fair review at each level of the appeal. The idea is that the Insurance Company will have different people review the claim at each level of the appeal. Unfortunately for our client, when she submitted her final appeal it was denied by the same Prudential Vice-President that made the decision to deny her first appeal submitted on July 28, 2005. Prudential treats large monthly benefits different than other claims and has a policy that any monthly benefit in excess of $10,000 must be approved by a Director or Vice President. The second and final appeal was denied on December 5, 2006 and Prudential relied on the video surveillance of our client at the beach on December 31, 2005 as the basis of their denial. Furthermore Prudential sent the video to the doctor they hired and he said that the video shows that our client could work for only as long as she seems to be functioning on the video. Keep in mind the video was 30 minutes long and our client worked a 60 hour week. Additionally, the video shows our client swimming for a total of 2 minutes and 30 second, and Prudential felt that if she could swim, then she can perform the duties of her 60 hour work week.
Following the second and final appeal denial a lawsuit was filed in Federal Court and Prudential has continued to fight the case every step of the way. Prudential denied our request to take depositions of 8 prudential company representatives and after an extensive motion the Judge granted the request. The depositions were taken and the information obtained was extremely helpful in presenting our client’s case at trial. Some individuals deposed at Prudential were the Vice President of Long-Term Disability, Director of Group Disability and Director of the Appeals Unit. During the pending lawsuit, Prudential challenged the standard of review to be used by the court claiming that the court did not have the discretion to review the entire Administrative Record and make a determination if our client is disabled. Prudential argued that that the disability policy granted them “discretion” and asked the court to apply an arbitrary and capricious standard, which means the court can only reverse the claim denial if the court finds that Prudential acted unreasonable. Our firm filed a motion to clarify the standard of review, which Prudential opposed, and the court agreed with our Client that Prudential does not have discretionary authority and the court must review the entire record De Novo.
Prudential’s counsel has already indicated that they plan to appeal the courts ruling on the standard of review if they loose at trial. Prior to Trial on May 19, extensive Trial and Reply Trial Briefs were filed with the court on behalf of our client. ERISA law is very restrictive and does not provide a claimant with the right to a jury trial, therefore this case will be decided by a Judge only. Prudential filed a motion recently claiming that ERISA does not allow our client to call live Dr. Testimony at trial. In accordance with ERISA, The judge granted Prudential’s motion and said that the medical issues in this case do not rise to the level of complexity which requires additional medical testimony.
If our client wins, Prudential will undoubtedly appeal and the case may go on for another 1.5 years. Currently she is owed disability benefits from November 6, 2004, in excess of $900,000 at a monthly benefit amount of approximately $16,000. Our client has been unable to work since the date of her accident. The attorney fees accrued to date are in excess of $500,000 and more than 1,000 hours of legal time have been spent on this case. The court has the discretion to award attorney fees if our client wins at trial. Our client is entitled to benefits until age 65 if she is disabled under the terms of the disability policy. After 2 years of disability the definition of disability changes to unable to perform any occupation that pays 60% of pre-indexed disability earnings within 12 months of her return to work. As of right now that would mean a job that pays our client $228,000. The total value, of our client’s policy, including benefits to age 65 is approximately 3 million dollars. ERISA does not allow punitive or bad faith damages against prudential if the court finds that they wrongfully denied benefits to our client.
Prudential has nothing to loose by denying our client’s claim, because if they are proved wrong, they end up having to pay what they should have paid 4.5 years ago. Prudential is able to hide behind the protections of ERISA, find a doctor to say our client can work, and then see if a court will make them pay a claim 5 year latter. In the meantime Prudential delays until the Appellate court tells them they must pay. Along the way, Prudential may make a low-ball offer after they have backed the claimant into a financial hole that leaves the claimant without the ability to fight anymore. We believe our client has a great chance of winning this case as the medical evidence is very strong in her favor, but the public should continue to be aware of the unreasonableness of ERISA law and the way in which companies such as Prudential manipulate the system to their advantage. The unreasonable actions of large disability insurance companies were they place their profits before the well being of those that bought disability contracts to protect themselves shall not be tolerated.