Court Orders Metlife to Re-evaluate the Denial of Disability Benefits to Citibank Employee

In Reed v. Citicorp and Metropolitan Life Insurance Company of America, the Third Circuit appellate court did not rule on the merits of plaintiff Frank Reed’s claim that MetLife, Plan Administrator for Citigroup, erred in terminating his long term disability benefits. However, the court did find that the New Jersey District Court erred in granting MetLife’s summary judgment on two major issues raised by Reed. It remanded to the District Court for further proceedings consistent with the unpublished appellate court decision.

The appellate court noted that the procedural history and facts of the case were presented in detail in the district court record it was reviewing, so it would not recite them in the appellate opinion. It did not mention what Reed’s job had been. The only mention of his disabling condition was the phrase, “Reed fell and injured himself on April 9, 2008, at a company-related event. He did not return to work thereafter.”

Reed was initially given salary continuation benefits and then long term disability benefits from the date of his fall until November 3, 2009, when MetLife sent him a letter telling him his disability benefits were being terminated. The reason given was that Reed had not received appropriate medical care and treatment as required by the policy. Reed exhausted his administrative appeals and then filed an ERISA lawsuit in a federal New Jersey District Court. The District Court granted MetLife’s motion for summary judgment on all issues raised by Reed. The appellate court remanded to the district court for further proceedings on two issues.

Evidence of Conflict of Interest Due to MetLife’s Monetary Concerns

Reed alleged that MetLife had a structural conflict of interest based on monetary concerns. This led it to deny his claim in order for MetLife to save money without considering his disability claim on the merits. The district court agreed with MetLife, but the appellate court did not.

The Third Circuit found that Reed pointed to evidence that raised a reasonable inference that MetLife made its “decision based on monetary concerns, rather than the merits of Reed’s claim, after learning that it had been underpaying his claim by approximately $10,000 per month.” Although this was not proof of the conflict, the court found it raised a “reasonable inference that money concerns were a factor.” The appellate court remanded to the district court to reconsider this issue.

MetLife’s Final Letter Terminating Benefits is Unclear as to Why

The November 3, 2009, termination letter indicated benefits were terminated because Reed had not received “appropriate care and treatment” as required by the plan. The January 21, 2011, letter denying Reed’s appeal inferred that benefits were being denied because he no longer met the definition of disability. A final letter dated May 24, 2011, states that independent reviewers determined “the medical information does not support functional impairment to preclude Mr. Reed from performing full-time work beyond November 3, 2009.”

The appellate court held that, on this record, it was impossible to tell why benefits were terminated. If based on the medical information, MetLife needed to clarify what medical information was different from the information it had when it initially awarded benefits and why it was the basis for terminating benefits.

This case was not handled by our law firm, but we believe it can be helpful to those fighting to gain their long term disability benefits but are faced with apparent conflicts of interest with their insurer. For questions about these issues, or any other matter concerning your disability benefits, contact on of our attorneys for a free consultation.

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