Did LINA wrongfully deny disability payments to claimant with multiple sclerosis? (Part II)

Dalit Waissman took sued Life Insurance Company of North America (LINA) when the company terminated her long-term disability payments in May 2006. In arguments presented before District Judge Jeremy Fogel of the U.S. District Court’s Northern District of California, San Jose Division on January 20, 2010, Waissman’s disability attorney did his best to show that the material in Waissman’s claim’s file demonstrated beyond doubt that Waissman was disabled according to the definitions laid out within her former employer’s long-term disability plan.

Long-term disability plan defines total disability

The long-term disability plan offered by SAP described total disability as the inability to perform all the essential duties of her occupation. If Waissman could earn over 80% of the money she had earned each month before her disability commenced, she would cease to be considered disabled under the plan. The plan did not define what “all the essential duties of her occupation” were.

LINA approves and later terminates long-term disability benefits payout.

In another article, we have discussed the details of Waissman’s case and why she was approved for disability benefits, and why LINA later terminated her benefits. We’ve also looked at the details of her medical history. See CIGNA (LINA) terminates disability payments to woman with multiple sclerosis.

Now, we will look at how the Court reviewed LINA’s wrongful denial of long-term disability benefits.

Court applies ERISA de novo standard to review long-term disability termination.

Both Waissman’s disability attorney and LINA agreed that the proper standard of review was de novo, meaning that the court would simply proceed to evaluate whether the plan administrator had made a correct or incorrect decision. The court would not go on to consider whether the administrator had acted arbitrary or capricious. It would be the court’s prerogative to determine whether Ms. Waissman meets the definition of disability.

Waissman’s disability insurance attorney would have to prove that she was disabled under the definition given by the plan. But if there was an exclusion that the insurance company wanted to use, it was LINA’s obligation to prove that this exception applied to her situation.

Court refuses to take judicial notices of external medical texts.

On occasion, the court has been willing to consider standardized, universally recognized medical texts to define the meaning of medical terms. But a medical texts that Waissman’s attorney asked the court to recognize did not measure up to the standard of reliability of a book such as the American Medical Association’s Diagnostic and Statistical Manual. As a result, the court was unwilling to give judicial notice to medical texts that were not included in the administrative record. Any external medical text would have been considered had it been included during Waissman’s appeal process. The quotes from McAlpine’s Multiple Sclerosis, fourth edition, which had been quoted by Dr. Gershfield in one of his letters to LINA were in the administrative record. The court would consider Dr. Greshfield’s opinion based upon this medical text.

Court looks at evidence supporting MS disability.

Did the administrative record support Waissman’s claim that she was disabled by her multiple sclerosis? The court looked at the notes from Waissman’s attending physicians, Drs. Lock and Gershfield. These neurologists’ notes were far more convincing then the conclusions presented by the physicians that LINA hired. Dr. Graulich had never spoken with either Waissman or her treating neurologists. He based his conclusions on medical records that existed prior to 2006. And his notes conceded that he did not consider the interplay between Waissman’s IC and MS.

Dr. Kundu’s statement that MS is a painless disease was contradicted effectively by Dr. Gershfield. His provision of quotes out of a standard textbook on MS bolstered his argument. LINA did not challenge the authenticity of the quotations or the fact that the textbook was generally accepted in the field as an authority on MS.

Dr. Kundu had suggested that the demands of his half-hour medical evaluation was similar to demands that Waissman would face in her sedentary occupation as a technical writer. The court found that this evaluation was shallow and without merit.

The court also considered the medical evaluation and neuropsychological reports from Dr. Bastien. These evaluations demonstrated that Waissman’s abilities across the board were so impaired that it would be impossible for her not only to work as a writer of technical publications, but unfitted her for almost any other occupation. LINA questioned Dr. Bastien’s credibility, claiming that she was a hired advocate. The court said that if this was true, why had LINA not secured other doctors with the same specialty to perform the same types of test?

Court looks at the terms of the long-term disability benefit plan.

With these matters out-of-the-way, the Court could begin looking at the terms of the plan itself. If there were any ambiguities in the policy terms, they would be construed in favor of Waissman. Otherwise, the court would look at the explicit language of the policy in context.

LINA argued that the phrase “all essential duties” meant “every” essential duty. The court found that it made no sense to even bother with determining whether “all” meant everyone or anyone of the essential duties of Waissman’s job. The administrative record supported either meaning because the administrative record demonstrated that Waissman couldn’t think clearly enough for long enough to perform her duties as a technical writer.

Both sides disputed over what the term occupation meant. Waissman’s disability attorney argued that the occupation meant her position as a senior technical writer at SAP. The defendant argued that it was the general occupation of technical writer.

Once again this argument seemed worthless before the court, because the record established that Waissman’s head pain and debilitating fatigue would have led to frequent absences from work, preventing her from maintaining a normal work load. These symptoms would also have prevented her from concentrating adequately on the work at hand.

LINA went on to argue that Waissman cannot be totally disabled because she could only be considered disabled if she was able to return to work, but was earning less than 80% of her prior earnings in her regular occupation. This argument didn’t convince the Court for the same reason that the Court had already concluded that Waissman would be unable to maintain a normal workload. The Court found that her disability attorney had demonstrated that she was not able to earn 80% of her income in her occupation because she was unable to work at all.

Court orders LINA to reinstate long-term disability benefits.

The evidence in the administrative record supported beyond a shadow of a doubt in the court’s eyes that Waissman’s termination of disability benefits was wrongful. The evidence supplied by her treating physicians, and the tests performed to evaluate her cognitive abilities, outweighed the evidence presented by LINA’s physicians.

The court ordered LINA to reinstate Waissman’s long-term disability benefits. LINA also had to award the disability benefits that were retroactive to May 25, 2006 when it terminated her coverage. The court also stated that it would entertain a motion for an award of reasonable attorney fees and costs.

The right disability attorney makes the difference.

This case demonstrates what happens when a skilled disability attorney has the opportunity to work with a disability claimant during the appeal process in order to build a strong administrative record. One of the deciding factors in this case was the recommendation of Waissman’s disability attorney that she see a physician who specialized in testing neuropsychological conditions. I always advise clients that without the development of a strong administrative record it will be difficult to win once a lawsuit is filed.