Pennsylvania Court Awards STD Benefits And $27,000 In Attorneys' Fees To Phlebotomist

A Pennsylvania court recently awarded $27,000 in attorneys’ fees to Ms. G. after she and her disability attorney won a judgment against Life Insurance Company of North America (“LINA”) also known as CIGNA for short-term disability (“STD”) benefits. This case is a good discussion of the analysis a court will go through in order to award attorney fees to a prevailing disability insurance claimant.

Ms. G. worked as a phlebotomist at Quest Diagnostics when she went out of work on April 27, 2010 due to a panic disorder. LINA provided STD coverage for Quest employees. Ms. G. filed a claim with LINA for STD benefits on May 3, 2010, which her treating physician Dr. S. supported with office notes and a behavior health questionnaire claim form.

On May 25, 2010, LINA denied Ms. G’s claim for benefits after they concluded the record did not support her claim. On June 2, Ms. G. appealed LINA’s decision, and her doctors submitted additional information in support of her claim. After again concluding Ms. G’s record lacked sufficient information to support her claim, On August 25, LINA affirmed its previous decision to deny benefits.

Disability Insurance Lawyer Sues Cigna for STD Benefits

On April 22, 2011, Ms. G. and her Pennsylvania disability attorney sued LINA. Contrary to LINA’s opinion, the court found there was sufficient evidence that Ms. G. was disabled under the policy. In view of that, Ms. G. sought attorneys’ fees and costs of litigation.

When reviewing her demand for fees and costs, the court explained that fees may only be “awarded to a claimant who achieves – some degree of success on the merits.'” Furthermore, the court applied a five factor test to determine whether to award attorney’s fees to Ms. G. The five Ursic factors applied by the court are:

1. The offending parties’ culpability or bad faith;
2. The ability of the offending parties to satisfy an award of attorneys’ fees;
3. The deterrent effect of an award of attorneys’ fees against the offending parties;
4. The benefit conferred on members of the pension plan as a whole; and
5. The relative merits of the parties’ position.

In reaching its conclusion, the court explained that Ms. G. clearly achieved “some degree of success on the merits as the lower court granted judgment in her favor. Moreover, all five factors weighed at least slightly in her favor.

First, the court found that LINA ignored numerous statements by Ms. G’s doctors, particularly with regard to restrictions and limitations, even though LINA did not conduct its own independent medical evaluation to justify lesser limitations. Second, LINA’s ability to pay an award of fees was plain to the court. Third, the court recognized that an award of attorneys’ fees may deter plan administrators from wrongfully denying benefits and selectively considering evidence in the medical records. Fourth, other members if LINA’s plan would receive a common benefit if LINA were to be deterred from similar future conduct. Finally, the fifth factor – the relative merits of the parties’ legal positions – also weighed in favor of Ms. G and against LINA.

Having, found that Ms. G. clearly achieved “some degree of success on the merits” and all five factors similarly weighed in her favor, the court granted Ms. G $26,650.00 in attorneys’ fees and $378.92 in costs.