California Federal Court Finds That MetLife Abused Its Discretion And Awards Financial Analyst Long-Term Disability Benefits

Shelia W. and her California disability lawyer prevailed in a lawsuit against MetLife when the United States District Court of the Southern District of California found the insurer to have abused its discretion when it terminated Shelia’ disability benefits under the “own occupation” standard.

With little evidence in the way of exonerating itself from the allegations that it treated Shelia’ disability claim unfairly, MetLife was ordered to pay Shelia her past, present and future disability benefit payments with the possibility of attorney’s fees and court costs being tacked on as well.

A claim in which the evidence of Shelia’ disability status was overwhelming, MetLife attempted to justify its termination of Shelia’ disability payments by deciding Shelia’ claim based on “ambiguous and equivocal medical opinion” along with 90 minutes of video surveillance (more articles on video surveillance for disability claimants). In weighing its decision in the matter, the Southern District Court of California considered “the entire administrative record” of Shelia’ case as well as “the quality and quantity of the medical evidence” which supported a finding that Shelia was disabled. The Court also noted the insurer’s failure to consider the lack of improvement in Watt’s condition as well as MetLife’s “reliance on an ambiguous and equivocal medical opinion to support the denial letter, independent medical review and letter upholding the denial of benefits.” The Court stated that it “viewed MetLife’s decision with slight skepticism due to MetLife’s conflict of interest, MetLife’s failure to credit reliable evidence, and MetLife’s treatment of the surveillance evidence.”

Background of Shelia’ Disability

Shelia ceased working on July 28, 2005, due to disabling conditions and made an application for long term disability benefits. Met Life, as expected, awarded her lupus and fibromyalgia disability benefits. After supplying Shelia with disability benefits for two years, Met Life determined that Shelia was no longer eligible for disability benefits. After failing to convince Met Life that she deserved her disability benefits on appeal, Shelia filed a lawsuit on April 20, 2009. In response, Met Life filed its counterclaim just three months later on June 12, 2009. On April 26, 2011 this case was heard by the United States District Court of the Southern District of California.

Shelia, a 42-year-old financial analyst, was employed by Systems Integration & Management, Inc. at the time of the onset of her disabling condition. Having diagnosed Shelia with lupus and fibromyalgia, Shelia’ internist advised her to stop working on July 28, 2005, reporting that Shelia could “return to any occupation, part-time work as of February 1, 2006 but noted that she did have ‘psychological limitations as well as physical limitations’ that would prevent her from working a stressful full-time job.”

In September 2005, MetLife notified Shelia that her short term disability benefits were about to run out; consequently, she applied for long-term disability benefits and was approved for those by the insurer in October 2005. At that time, the MedLife requested that Shelia apply for Social Security Disability (SSD) and informed her that an award of benefits from SSD might reduce her MetLife benefits and that should the SSD award be retroactive, she would owe MetLife for their overpayment of her benefits.

After using all her short-term disability benefits, Shelia did apply for and was approved to receive her long term MetLife disability benefits on October 25, 2005. In addition, as requested by the insurer, Shelia applied for Social Security Disability benefits to help offset her MetLife plan benefits payments. Again, all was going as expected.

Then on April 25, 2006, MetLife asked for proof of Shelia’ SSD application, and the conflict began. Over the next few months, Shelia was hospitalized on several occasions and under continuous treatment by several other specialists to deal with her ongoing medical issues. During that time, MetLife asked for verification after verification and evaluation after evaluation of Shelia’ condition as the insurer continued to consider terminating her disability benefits. In addition, since her SSD disability application had been approved, MetLife not only threatened to discontinue Shelia’ MetLife disability payments, but began asking Shelia to reimburse them for overages the insurer claimed it may have paid her as a result of consideration of any retroactive SSD benefits she was receiving. (If one is approved for SSDI benefits, must the insurance company pay your LTD claim?)

Opinions Vary in Regard to Shelia’ Disability

Shelia’ physicians were of the opinion that Shelia’ conditions precluded her from finding and holding any gainful employment as she was limited physically, psychologically, and was not getting better. A MetLife reviewing physician reported that in his opinion, Shelia’ problems are “mostly subjective” as her ability to work is her own opinion … and that he thought that “she clearly is capable of daily activities of living. She is functioning reasonably well in her environment … and is capable of the work that is described” by her job description. This reviewer’s opinion was based on Shelia’ medical records and 90 minutes of video surveillance that he watched which captured Shelia running errands and being away from her home for extended periods of time.

In an attempt to challenge MetLife physician’s report, Shelia’ attorney provided the Court with volumes of medical records cataloguing Shelia’ medical treatment and her treating physician’s notes about her condition, while arguing that the video surveillance only captured Shelia when she was able to leave her home to attend to daily activities without considering the amount of time she was unable to accomplish those same errands when she wasn’t feeling well.

Fortunately for Shelia and her attorney, the Court was skeptical of MetLife’s supposedly valid reasons for terminating Shelia’ disability benefits and ruled in Shelia’ favor. In addition to Shelia’ original complaint, the Court also had to consider MetLife’s counterclaim, to retrieve overpayment from Shelia in the amount of $22,189.32 due to her retroactive SSD award. No longer in possession of the SSD award, Shelia told the Court that this would put an added financial burden on Shelia; consequently, the Court ordered that to grant MetLife its counterclaim, “MetLife is entitled to an equitable lien against the retroactive reinstatement of benefits in the amount of $22,189.32.”

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