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Claimant is Ordered to Pay Attorney Fees to Standard for Failing to Exhaust Her Administrative Remedies

In Spath v. Standard Insurance Company, the plaintiff was injured at work and was initially granted disability benefits. Upon a review of the claimant’s file, Standard changed its mind. On September 17, 2014, Standard sent Spath a letter telling her it had made a mistake and was immediately terminating her benefits. The letter told her she had 180 days to file an appeal and, if she did not, it would close her file.

Spath did not appeal. Instead, after the time for appeal had passed, she filed an ERISA lawsuit alleging Standard had “arbitrarily and capriciously” closed her claim file. The court disagreed and dismissed her lawsuit, finding that, “A participant seeking to recover benefits due under the terms of the plan must exhaust these administrative procedures.” The Missouri federal court also ordered Spath to pay $500 in attorneys’ fees.

Requirement to Exhaust Administrative Remedies

Standard’s September 14, 2014, letter informing Spath it was terminating her disability benefits also told her she had 180 days from the date she received the letter to make a written request for Standard to review its decision. Instead of asking for a review, Spath’s attorney mailed a letter to Standard on November 20, 2014, demanding that Standard reinstate benefits.

Standard replied to the attorney by explaining that the November letter could not be construed as a request for an appeal. Standard also informed Spath’s attorney that certain medical records would be required if Spath wished to pursue an appeal.

Spath filed no request for an appeal, provided no medical records to Standard. Instead, she filed this ERISA lawsuit. It did not take the court long to determine that Spath, who never asked Standard to review its termination of benefits, had failed to exhaust her administrative remedies. The court granted Standard’s motion for summary judgment on the grounds that, “Because she never exhausted her administrative remedies, her ERISA claims are deficient as a matter of law.”

Spath Was Ordered to Pay $500 in Attorneys’ Fees and Costs

Standard requested the plaintiff pay it $1,000 in attorneys’ fees and costs. The court considered a number of factors in determining whether or not to award fees:

Four out of the seven factors weighed in favor of an award of legal fees. Since Spath did not have the ability to pay, the court ordered her to pay $500 instead of the requested $1,000.

This case was not handled by our office, but it may provide guidance to claimants who are tempted to forego administrative review of denial of benefits and to instead, file an ERISA lawsuit. If you need assistance with a similar matter, or any other matter relating to your disability claim, please contact any of our lawyers for a free consultation.

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Questions About Hiring Us

Do you help Standard claimants nationwide?

We represent Standard clients nationwide and we encourage you to contact us for a FREE immediate phone consultation with one of our experienced disability insurance attorneys.

Can you help with a Standard disability insurance policy?

Our disability insurance lawyers help policy holders seeking short or long term disability insurance benefits from Standard. We have helped thousands of disability insurance claimants nationwide with monthly disability benefits. With more than 40 years of disability insurance experience we have helped individuals in almost every occupation and we are familiar with the disability income policies offered by Standard.

How do you help Standard claimants?

Our lawyers help individuals that have either purchased a Standard long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer.

Our experienced lawyers can assist with Standard:

  • ERISA and Non-ERISA Appeals of Disability Benefit Denials
  • ERISA and Non-ERISA Disability Benefit Lawsuits
  • Applying For Short or Long Term Disability Benefits
  • Daily Handling & Management of Your Disability Claim
  • Disability Insurance Lump-Sum Buyout or Settlement Negotiations

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 telephone, e-mail, fax, GoToMeeting.com 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 800-682-8331 or by email. Lawyer 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.

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