In the case of D. Nielsen Pollock Vs Standard Insurance Company, filed at the District Court for the Southern District Of California, the plaintiff complained that the Standard Insurance Company (Standard Insurance) have breached the Employee Retirement Income And Security Act Of 1974 (ERISA) and suing for the recovery of disability benefits under the terms of an employee benefit plan for which Standard Life is the insurer of benefits under the “DILLINGHAM CONSTRUCTION HOLDINGS INC. GROUP LONG TERM DISABILITY INSURANCE POLICY.”
The Nature of the Complaint Against Standard Insurance Company
The plaintiff was formerly employed as an estimator and Project Manager for the Dillingham Construction Company. By virtue of his employment, the plaintiff is a beneficiary under the DILLINGHAM CONSTRUCTION HOLDINGS INC. GROUP LONG TERM DISABILITY INSURANCE POLICY (The Policy).
In 2002, the plaintiff became involved in an body surfing accident resulting in him suffering a spinal fracture and dislocation at his T3-4 level. Due to these injuries, the plaintiff became a complete paraplegic. Upon becoming a paraplegic, the plaintiff became totally disabled under the terms of the above mentioned Policy. The plaintiff was also determined to be totally disabled from any occupation by the Social Security Administration.
Claim for Long Term Disability Benefits Against Standard Life Insurance Company
In accordance with the terms of the Policy, the plaintiff filed a claim for long term disability benefits with Standard Life. The plaintiff was also determined by Standard Life to be totally disabled and unable to perform all of the essential functions of his own occupation and hence entitled for long term disability benefits under the terms and conditions of the Policy.
A review of the plaintiff’s long term disability benefits was conducted by Standard Life in February 2005. The review concluded that the plaintiff was unable to perform the material duties of any occupation which he has the education, training and experience to perform.
On November 17th 2010, Standard Life informed the plaintiff that it had conducted another review of the plaintiff’s long term disability benefits and decided to cancel the plaintiff’s long term disability benefits retroactive to December 31st 2006. Standard Life also demanded $124,389.45 from the plaintiff on the ground that this represented overpayments of disability benefits. According to Standard Life;
Based on our review, you are no longer disabled, and no longer eligible for LTD benefits.
The plaintiff alleged in the lawsuit that Standard Life’s decision to terminate the plaintiff’s disability benefits was not based on any medical evaluation, reports or opinions. The plaintiff argued that Standard Life had based its determination to deny the plaintiff’s claim for long term disability benefits on some newspaper articles and internet websites and assuming that the plaintiff was earning money as an officer of his family business, the Nielsen Construction CA.
The plaintiff argued that at all times since 2002, he has been paralyzed from the chest down. The plaintiff stated that his physical condition had gotten worse as the 2002 injuries to his spinal cord also caused a mass on plaintiff’s spine (syrinx) resulting in him feeling constant pain.
“Return to Work Incentive”
Nevertheless, Standard Life argued that even if the plaintiff was disabled, he is subjected to the policy’s “Return To Work Incentive” as he had earned income. The “Return To Work Incentive” calls for the reduction of the plaintiff’s disability benefits in proportion to ½ of the payment that the plaintiff received for the work that he had done.
The plaintiff argued that Standard Life had tried to use the Return to Work Incentive to redefine the term “Disability” and is contradictory in nature to the terms of the policy. Despite the plaintiff’s arguments, Standard Life refused to reverse its position to confirm that the plaintiff is not disabled and is subjected to the “return to work incentive.” Standard Life response instead was to recalculate the overpayment amount to $118,971.93 instead and insist that the plaintiff owed Standard Life this amount in overpayment. At the same time, Standard Life refused to make further payments of long term disability benefits to the plaintiff.
The contradictory nature of Standard Life argument stem from the fact that if Standard Life insisted that the plaintiff is subjected to the “return to work incentive”, this would imply that the plaintiff is disabled. However at the same time, Standard Life had insisted that the plaintiff owed $124,389.45 (later recalculated to $118,971.93) in overpayment of disability benefits. This, on the other hand, would imply that the plaintiff is no longer deemed to be disabled.
Exhaustion Of Administrative Remedies And Relief Sought
Having exhausted all administrative remedies in trying to explain to Standard Life why its determination is erroneous, the plaintiff is forced to seek relief through the Court:
- Payment of past disability benefits due to the plaintiff.
- A declaration that the plaintiff is entitled to immediate reinstatement to the POLICY, with all ancillary and future benefits to which he is entitled by virtue of his disability;
- A declaration finding Standard Life’s “return to work incentive” void under applicable California and Federal law, or inapplicable under the circumstances of this case.
- Payment of all costs and attorneys’ fees incurred in pursuing the legal action
- Payment of prejudgment and postjudgment interest as allowed under ERISA.
- An award of other and further relief as the Court deems just and proper.