HM Life and Broadspire wrongfully deny disability insurance benefits to a receptionist and 9th Circuit Court of Appeals reverses claim denial

When Barbara Sterio’s disability attorney presented arguments on February 11, 2010 before the Ninth Circuit United States Court of Appeals, he was unsuccessful in convincing the court to review her denial of benefits under the de novo standard of review. But the three judges reviewing Sterio’s claim, found that even though the District Court had been correct in choosing to use the abuse of discretion standard of review, that standard had not been applied correctly. A review of the background behind Sterio’s disability benefits application will demonstrate why the Court of Appeals reversed the decision of the District Court.

Sterio had been a receptionist whose employer offered an employee long-term disability benefit plan administered by HM Life. She had hip replacement surgery in 1975. It was the first of a series of many hip revision operations. In January 2000, she underwent her most recent total hip revision. She then developed postoperative complications after the surgery, including sciatic pain and numbness and weakness in her right leg and foot. Due to these post-operative complications Sterio finally stopped working in December 2000.

Sterio applied for Social Security disability benefits. Social Security determined that she was permanently disabled, and approved her application in January 2002. Then she went on to apply for long-term disability benefits with HM Life, which both insured and administered Sterio’s long-term disability plan.

HM Life hired Broadspire Services, a third party administrator, to process Sterio’s claim. Broadspire ordered six independent reviews of Sterio’s medical records. All six of the physicians concluded that Sterio was not disabled. Broadspire denied her claim, and HM Life denied her appeal because the insurance company had concluded that her objective medical evidence did not support the disability claim.

Sterio’s disability attorney filed suit in District Court. After a bench trial, where the two sides presented arguments before the judge without a jury present, the judge concluded that HM Life had not abused its discretion in the light of “conflicting evidence.” Sterio’s disability attorney appealed this decision.

Disability attorney argues that the wrong standard of review was used.

The three judges sitting on the bench for the 9th Circuit Court of Appeals reviewed the District Court’s choice of application of the standard of review. Sterio’s disability attorney argued that the Court should have applied a de novo standard because HM Life did not have a “plan” document. Instead, the disability insurance company only provided Sterio with an insurance policy. The Court rejected this argument, stating that the insurance policy was the “plan” document.

Sterio’s disability attorney also argued that Broadspire, not HM Life, had initially denied her claim. The Court ruled that because HM Life made the final denial upon appeal, Broadspire’s involvement was insufficient to make a de novo review necessary. This was a minor procedural violation of ERISA that didn’t warrant altering the standard of review.

Court rejects disability attorney’s arguments and upholds abuse of discretion standard.

The three judges sitting on Court of Appeals reached the conclusion that the District Court had correctly concluded that an abuse of discretion standard applied to HM Life’s denial of benefits. The long-term disability plan clearly gave the administrator discretion.

The question that the Court had to ask was this: “Did the District Court judge apply the abuse of discretion standard correctly?” In order to be applied correctly, the judge must pay attention to “the nature, extent and effect on the decision-making process of any conflict of interest that may appear in the record.” There are specific factors that the court must weigh in order to determine whether the insurance company has abused its discretion.

The Court of Appeals had an advantage over the District Court. A decision had been handed down by the Ninth Circuit after the District Court entered judgment. This case, known as Montour v. Hartford Life & Acc. Ins. Co., provided additional guidance in how to apply the abuse and discretion standard. See previous article in which the Montour v. Hartford case is discussed. The Court of Appeals went on to apply this process.

Court of Appeals looks at the medical evidence for disability.

First, the Judges looked at the quantity and quality of the medical evidence supporting Sterio’s disability. HM Life had rejected Sterio’s claim because the disability insurance company stated that there was no objective medical evidence to support her disability. However, the facts demonstrated otherwise.

  • An EMG test confirmed that she had sciatic neuropathy in her right hip after the revision surgery.
  • Two MRI exams revealed that she had excess metal artifacts in her pelvic region.
  • Two x-ray exams confirmed that the bones in her right foot were thinning
  • Numerous entries in her medical record confirmed that she was taking strong pain medication.
  • A functional capacity evaluation (FCE) from her treating physician reported that she was unable to sit, stand or walk for more than one hour a day.
  • Both of her treating physicians concluded that she was permanently disabled. This was backed up by the neurologist who treated her and two orthopedists.

HM Life was unable to explain why this credible medical evidence failed to support her disability.

Court of Appeals looks at Social Security disability determination.

Second, the Judges looked at the Social Security disability determination. While HM Life was not obligated to make the same decision, it did have to explain why the disability insurance company reached an opposite conclusion. In most cases, if an insurance company can point to differences within the policy for how disability is determined that contrast with Social Security’s guidelines, the Court will still find the decision reached by the disability insurance company reasonable.

Instead, it appeared that HM Life had completely disregarded the Social Security disability benefits determination. The disability insurance company failed to explain why it rejected Social Security’s findings that Sterio was totally disabled. The court found that this suggested that HM Life had failed to consider relevant evidence.

Court of Appeals looks at HM Life’s medical evaluations.

Although the Court recognized that HM Life’s plan did not require the disability insurance company to conduct in person medical evaluations, when the amount of evidence supporting Sterio’s claim of disability seemed so convincing, the Judges questioned whether HM Life had been thorough and accurate in reaching their benefit determination. While the file had been reviewed by six doctors, it was not clear that these physicians had all of the relevant information needed to reach a proper conclusion.

None of the six doctors mentioned Social Security’s conclusion of total disability in their reports. This suggested that none of the physicians had seen this information.

Court of Appeals looks at the thoroughness of disability insurance company’s investigation into claim.

The court found evidence that HM Life failed to conduct an adequate investigation. HM Life failed to secure a copy of the Social Security disability file, or to ask Sterio to do so. In addition, HM Life failed to provide instructions on what specific evidence the disability insurance company needed in order to reverse its denial of benefits. The physicians who reviewed her file pointed to specific medical evidence that was lacking to support her claim.

  • The lack of a bone density scan caused one physician to dismiss Sterio’s osteoarthritis diagnosis.
  • The lack of specific examinations, X-rays and evaluations to support the information provided in the functional capacity evaluation caused another physician to discredit her disability.

HM Life failed to tell Sterio that this information was needed to confirm her disability.

Court of Appeals looks at reason for denying long-term disability benefits.

The initial reason HM Life gave Sterio for denying her long-term disability application was her failure to prove that she was disabled after her hip surgeries. In the disability insurance company’s final decision after her appeal, the insurance company added another reason for denying her disability benefits. The insurance company claimed that because she had been hospitalized for two mental breakdowns, and had not been considered disabled because of her hip problems at the time, she was excluded because of the mental health limitation which ended at 24 months.

The Court found this procedural irregularity significant. Adding a new reason for denying benefits, when Sterio had no further appeals available, suggested a serious conflict of interest. Disability insurance companies are notorious for adding new reasons for claim denial at the appeal level. Unfortunately, the administrative record is closed after the final appeal and the claimant is at a significant disadvantage. Fortunately, the Ninth Circuit Court Appeals did not let HM Life get away with their wrongful claim handling tactics.

Court of Appeals concludes that HM Life abused its discretion.

When all of these factors were considered, the Court reached the conclusion that HM life had abused its discretion when it denied Sterio benefits. Unlike the District Court, the judges on the Court Of Appeals did not conclude that there was conflicting evidence. They found the evidence conclusive.

The Court of Appeals looked at the same evidence. Why were the results so different? The Court of Appeals has three judges looking at the evidence. This means that Sterio benefited from the wisdom of three experts in the application of ERISA legal guidelines. She also benefited from the recent Montour v. Hartford ruling that added substance to how an abuse and discretion review should be conducted.

This is one of the reasons why it can be worthwhile to make an appeal if the District Court sides with the disability insurance company. The Court of Appeals sent Sterio’s case back to the district level, where the District Court was ordered to determine the amount of retroactive benefits HM Life owed Sterio, as well as authorizing Sterio’s disability insurance attorney to present a bill for his attorney fees. The court was also ordered to determine a reasonable amount of prejudgment interest compensation.


Did you find this helpful?
Unhelpful (0)

Resources to Help You Win Disability Benefits

Disability Benefit Denial Options
Submit a Strong Broadspire Appeal Package

We work with you, your doctors, and other experts to submit a very strong Broadspire appeal.

Learn more

Sue Broadspire

We have filed thousands of disability denial lawsuits in federal Courts nationwide against Broadspire.

Learn more

Protect Your Benefits
Get Your Broadspire Disability Application Approved
We help claimants throughout the entire application process.

Learn more

Prevent a Broadspire Disability Benefit Denial
We manage every aspect of your disability claim following claim approval.

Learn more

Negotiate a Broadspire Lump-Sum Settlement

Our goal is to negotiate the highest possible buyout of your long-term disability policy.

Learn more

Broadspire Reviews
(642)

Policy Holder Rating

0 out of 5
0
Read 0 reviews
0would recommend
5
0%
4
0%
3
0%
2
0%
1
0%
Timely Payments
0.0out of 5
Handling Claim
0.0out of 5
Customer Service
0.0out of 5
Dependable
0.0out of 5
Value
0.0out of 5
Showing 8 of 642 Reviews
Sedgwick

AT&T Was Great and Sedgwick Horrible

Reviewed by From a great job to a complete nightmare on March 20th 2024   Verified Policyholder | March 2024 date of disability
My Physician recommended that I take some time from a toxic environment after several deaths in my family coupled with AT&T trying to run tenured employees out of the door... read more >
New York Life

Keeps claiming they will not approve claim for pre existing conditions but my illness is not preexisting

Reviewed by M.T. on February 15th 2024   Verified Policyholder | May 2023 date of disability
I have been appealing a claim for LTD for 8 months! New York Life keeps claiming they will not approve claim for pre existing conditions but my illness is not preexisting ... read more >
Reliance Standard

Staff Lie

Reviewed by Tanya on February 12th 2024   Verified Policyholder | August 2021 date of disability
I had my disability cut off the day I was scheduled to find out whether I should have surgery. The claims examiner was aware that I had an appointment on that date and sai... read more >
Reply
Sent on February 12th 2024 by Attorney Gregory Dell

I am sorry to hear about your experience. It’s crazy that Reliance Standard would deny your disability benefits when you are suffering so badly that you need surgery.... read more >

Hartford

Former Hartford employee has had life insurance and accidental death policy's revoked for one late premium payment

Reviewed by Becky H. THOMAS on February 12th 2024   Verified Policyholder | February 2024 date of disability
Dislike how they are constantly interrupting the lives of their disabled EE's whom are entitled to benefit which they paid into out of there pay check every pay period onl... read more >
Reply
Sent on February 12th 2024 by Attorney Gregory Dell

Thank you for your review of Hartford and we appreciate you sharing.  It’s sad they don’t take care of their own employees.

Lincoln Financial

Never received benefits my entire leave - or help with them

Reviewed by Anna on December 19th 2023   Verified Policyholder | November 2023 date of disability
I used my short term disability insurance for maternity leave and started the process beforehand knowing when I would be out (scheduled induction.) It took a little over a... read more >
Sun Life

Unscrupulous Tactics

Reviewed by Misseekayy on December 19th 2023   Verified Policyholder | May 2023 date of disability
Sunlife uses unscrupulous tactics in order to prevent payment of claims. They wait until it is close to the 30 day mark and then they ask for another form of information o... read more >
Sedgwick

Lame

Reviewed by Dennis T. on December 11th 2023   Verified Policyholder | March 2022 date of disability
My experience with Sedgwick and personell is as follows: Unhelpful, unprofessional and an overall unpleasant experience.
Unum

Low payments

Reviewed by Dorothy on November 30th 2023   Verified Policyholder | November 2023 date of disability
I was injured at work. I did house keeping in a hospital. I tore just about everything imaginable in my knee. I was let go from my job, because I was no longer able to do ... read more >
Answered Questions by Our Lawyers
(0)
Helpful Videos
(875)
Showing 12 of 875 Videos
Disability Benefit Tips
(330)
Showing 8 of 330 Benefit Tips

Disability Benefit Denial Reason #5 – Your Medical Evidence is Weak

If you're seeking long term disability benefits from an insurance company, you may be concern... Read More >

Disability Benefit Denial Reason #4 - Your Doctor Is Misled By the Disability Company

When you're seeking disability benefits under a long term disability policy, your medical rec... Read More >

Disability Benefit Denial Reason #3 - Video & Social Media Surveillance

One thing many long term disability claimants don't know about (or expect) from the claims re... Read More >

How Do You Fight a Long-Term Disability Denial?

Getting a denial letter from your disability insurance company is one of the ultimate insults... Read More >

Disability Denial Reason #2 - Change of Disability Definition & Vocational Review

One of the top reasons for terminating a claimant's long term disability benefits involves th... Read More >

Disability Denial Reason #1 – Paper Review & IME

At Dell Disability Lawyers, we've seen insurance companies give countless reasons to deny lon... Read More >

How to Apply for Reliance Standard Disability Benefits & Top 5 Reasons for a Claim Denial

At Dell & Schaefer we’ve handled hundreds of long term disability insurance claims against Reliance Standard, and have learned a few thi... Read More >

Applying for Standard Disability Benefits? Top 5 Claim Denial Reasons

At Dell & Schaefer, we've helped hundreds of clients recover long term disability benefit... Read More >
Dell Disability Cases
(375)
Showing 8 of 375 Dell Disability Cases

Seven Surgeries and The Standard Still Denies Long Term Disability Benefits

Our client was employed with the State of Oregon as a Technical Support Representative. She ... Read More >

Sun Life Wrongfully Denies Disability After Paying For 23 Months

We represent a 57 year-old claimant who’s occupation was selling commercial vehicles for ma... Read More >

Transportation Manager with Brain Injury Wins Unum Disability Benefit Appeal

Unum unjustly terminated our client’s long term disability claim after it had approved and... Read More >

Engineer With Depression Wins Prudential LTD Appeal

The claimant is a former Senior Technology Services Engineer for Accolade, Inc. who was force... Read More >

New York Life Approves Disability Benefits for School Teacher With Multiple Sclerosis

Our client, a former elementary school teacher suffering from Multiple Sclerosis, contacted our office after New York Life terminated her clai... Read More >
Disability Lawsuit Stories
(765)
Showing 8 of 765 Lawsuit Stories

Cytec Industries and Broadspire Services discontinue disability insurance benefits for army veteran suffering from PTSD

An Appeals Court recently upheld the decision by Cytec Industries and Broadspire Services to discontinue short-term disability benefits for an... Read More >

Broadspire Services terminate long-term disability benefits after paying for 8 years

A Federal Appellate Court recently upheld the decision by Eaton Corporation and Broadspire Services to discontinue the long-term disability be... Read More >

Disability company ignores evidence of disabling back pain and Federal Court reverses disability benefit denial

Once again we look at one of those cases that prove how important it can be to appeal the decision of a District Court. Suzanne Lee had been a... Read More >

Seven pieces of medical evidence and disability company still denies claim for lack of "objective evidence"

When Suzanne Lee first had to miss work on January 18, 2005 for chronic back pain, she had been a manager at BellSouth for almost 10 years. Sh... Read More >

Disability battle against Verizon and Broadspire long-term disability plan lingers in courts for years

Lisa Pakovich and her former employer's long-term disability plan had been in and out of court for almost five years when Judge Michael Reagan... Read More >

Broadspire ordered to pay disability insurance benefits but not attorney fees

If Judge Michael J. Reagan is beginning to tire of considering the case between Lisa Pakovich and her former employer's long-term disability p... Read More >

HM Life and Broadspire wrongfully deny disability insurance benefits to a receptionist and 9th Circuit Court of Appeals reverses claim denial

When Barbara Sterio's disability attorney presented arguments on February 11, 2010 before the Ninth Circuit United States Court of Appeals, he... Read More >

Systems support specialist wins disability benefits case against Coca-Cola and Broadspire

Theron Oliver was a Systems Support Specialist working for Coca-Cola, which provided long-term disability benefits to its employees. In Octobe... Read More >

Reviews from Our Clients

Request a Free Consultation

Our Lawyers Respond Same Day

5 Ways We Help Get Your Benefits Paid

Get Your Disability Application Approved

Our goal is to get your application for disability income benefits approved. Applying for disability benefits can be a difficult process and the information you provide is critical. Most disability insurance companies look at your application in hopes of finding a reason to deny your claim. Your disability company will ask you to complete numerous forms, interview you, request lots of information, speak with your doctors and possibly request to have you examined by their "hired gun" doctor.

Through our experience of having helped thousands of disability insurance claimants, our lawyers will guide you through the entire application process and give you the best chance to get your disability claim approved the first time.

Submit A Strong Appeal Package

If your disability insurance benefits have been wrongfully denied, then our lawyers know exactly what it takes to get your disability claim approved. You only get once chance to submit an Appeal, therefore every piece of evidence that will support your disability claim must be included. The goal is to win your disability benefits at the Appeal level, but while preparing your Appeal you must consider how a federal judge will review your disability claim if your benefit denial is upheld.

Preparing a strong disability appeal package is an art that requires you to understand how the courts interpret your disability policy language, ERISA regulations / laws, and how to strategically present evidence in support of your definition of "disability". We encourage you to contact any of our lawyers for a free immediate review of your disability denial.

Sue Your Disability Company

98% of the disability insurance lawsuits filed by our law firm have resulted in either the payment of benefits or a lump-sum settlement agreement. Our disability lawyers have filed ERISA governed and private policy long term disability insurance lawsuits against every major disability insurance company in state and federal courts nationwide and we love fighting for the "little guy" against the multi-billion dollar insurance company giants.

We have recovered hundreds of millions of dollars for our clients and we would like the opportunity to provide you with a free review of your disability benefit denial. There are many complex factors in a disability benefit lawsuit and the legal battle to win long term disability benefits can be fierce.

Prevent A Disability Benefit Denial

Approval of long-term disability is a continuous process as every disability insurance company will evaluate your eligibility for benefits on a monthly basis. You can never let your guard down and assume that your disability company will continue to pay your benefits for as long as you think you need them.

Our law firm offers a reasonable flat fee monthly claim handling service in which we handle every aspect of your long-term disability claim and do whatever it takes to make sure you are paid every month.

Negotiate a Lump-Sum Settlement

Let's discuss if a lump-sum settlement or buyout of your disability insurance claim is both available and makes financial sense for you. Our lawyers have negotiated more than five-hundred million dollars in disability insurance buyouts and we know how to get you a maximum settlement. A disability insurance company is not required to offer a buyout and not every disability company offers them.

Questions About Hiring Us

Who are Dell Disability Lawyers?

We are disability insurance lawyers that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.

In more than 98% of our cases, our lawyers have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement. Our lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.

We welcome you to contact any of our attorneys for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 700 videos and regularly provide tips to help protect your disability benefits.

Who do you help?

Our lawyers help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.

Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.

A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via phone, email, fax, GoToMeeting sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-698-9159 or by email. Lawyers and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.