The case of Allison Pfifer v. Sedgwick Claims Management Services, Inc., teaches claimants the importance of complying with the terms of their disability insurance policy. The specific terms at issue here are: 1) the need to support claims with substantial medical evidence; and 2) complying with contractual deadlines established by the insurance policy for short-term disability (STD) benefits and long-term disability (LTD) benefits.
Pfifer was employed by 3M as a “Lead Proposal Writer” when she quit work and applied for disability benefits through 3M’s STD Plan administered by Sedgwick. On May 12, Sedgwick sent Pfifer the necessary forms to be filled out and returned to it by May 27, 2016. The letter included a clause that said the “Failure to meet the eligibility requirements for Short-Term Disability Benefits or failure to timely submit the required forms will result in delay or denial of benefits.”
On May 27, one of Pfifer’s treating physicians left a message with Sedgwick that it would not be able to complete the forms on time, so on May 31, 2016, Sedgwick sent Pfifer a letter telling her that her claim had been denied since there was insufficient information submitted to support her claim that she was unable to perform the duties of her regular and customary occupation.
Pfifer filed an administrative appeal and submitted office notes from her treating physician, Xinmin Tang, along with a radiology report. Dr. Tang also submitted an Attending Provider Statement in which he noted that Pfifer reported severe right knee pain, including the inability to sit without elevating her knee.
Sedgwick sent the medical record for review to Dr. John Evans, a board-certified orthopedist. In addition to his review, he contacted two of Pfifer’s treating physicians. Dr. Evans opined that the limited medical records submitted by Pfifer did not support her claim for STD benefits. He reported that her customary occupation was a “sedentary position and not a demanding job”.
On June 22, 2016, Sedgwick notified Pfifer that the denial of her claim for STD benefits was upheld. It also advised her of her right to file a civil action, but also informed her of the contractual limitations period at which her right to file the action would expire.
On March 16, 2017, Plaintiff filed a claim for LTD benefits claiming, once again, to disability due to her right knee. On April 7, 2017, Sedgwick denied her claim for LTD benefits on the grounds that Pfifer was ineligible for LTD benefits since she did not exhaust her STD benefits as required by the LTD plan.
On October 3, 2017, Pfifer sought to appeal the denial of her LTD benefits. On October 10, 2017, Sedgwick upheld its denial of LTD benefits and informed Pfifer of the contractual limitations period governing her right to file a civil action.
On April 25, 2018, Pfifer filed an ERISA action against Sedgwick claiming Sedgwick erroneously denied her STD and LTD benefits. Sedgwick filed a Motion for Summary Judgment which was granted by the United States District Court for the Southern District of Texas, Houston Division.
Contractual Limitations Periods Govern Pfifer’s Claim for Benefits
Sedgwick argued that Pfifer’s claims for STD and LTD benefits were both time-barred according to the contractual limitations provided for in both the STD and LTD Plans. Pfifer did not disagree, but argued instead that equitable tolling should apply due to Sedgwick’s “procedural unreasonableness.”
The District Court relied on Fifth Circuit precedent which had found a 90-day period for filing a civil action reasonable. The Court concluded the six-month contractual limitations period in this case “reasonable and, thus, enforceable.”
Since Pfifer missed the deadline following the completion of her administrative appeal for STD benefits and the denial of her appeal for LTD benefits, and finding no “extraordinary circumstances” to justify “the application of equitable tolling,” the Court held that her “claims are time-barred.”
Even if Not Time-Barred, Administrator Did Not Abuse Its Discretion in Denying Pfifer’s Claims for Benefits
The Court concluded that If the Administrator’s denial of benefits is based on substantial evidence, “it must remain undisturbed.” The Court also concluded that substantial evidence supported Sedgwick’s denial of the claim.
Dr. Evans reviewed the very limited medical file and spoke with two of Pfifer’s treating physicians. Based on this, the Court concluded that Dr. Evan’s assessment “provided a definitive opinion on plaintiff’s functional capabilities.”
In its conclusion denying Pfifer relief, the Court stated, “Against this background, this Court cannot say that Sedgwick’s decision to deny the plaintiff’s claim for STD benefits was arbitrary or capricious. Nor can it say that Sedgwick’s decision to deny the plaintiff’s claim for LTD benefits was incorrect, as it remains undisputed that the plaintiff failed to exhaust her STD benefits.”
If you have any questions regarding your own claim for either STD or LTD benefits, contact one of our attorneys at Dell & Schaefer for a free consultation.