The case of Greggory B. Owens v. United of Omaha Life Insurance Company demonstrates what a difference a day makes. All parties agreed that claimant Owens was entitled to long term disability benefits. The sole question in controversy was the date upon which he became disabled.
On July 1, 2013, Owens suffered a debilitating back injury while moving furniture at work. At the time, his annual salary was $83,150.00. Later that same day, the Director of Human Resources told Owings that, effectively immediately, his position had changed and his annual salary would now be $54,995.20. This is a significant event, since a claimant’s disability benefit was based on the salary the day before the last day worked.
On July 2, 2013, Owings briefly used his company’s cell phone, but decided he could no longer work. He filed for long-term disability benefits with United of Omaha, the disability insurer for Owings employer, claiming July 1 as his last day worked.
United argued that the phone call or two he made on July 2 qualified as “work” and therefore, the date upon which he became disabled should be the following day, July 3, not July 1. Owens appealed and, after exhausting his administrative appeals, he filed an ERISA lawsuit.
The U.S. District Court for the District of Kansas agreed with United and Owings appealed. The U.S. Court of Appeals for the Tenth Circuit agreed with Owings and held that United acted arbitrarily and capriciously in determining July 3 as the date of disability when “according to the plain language of the policy” the disability began on July 1, the date on which Owings was injured.
United Erred in its Interpretation of the Policy’s Term “Disability”
According to the policy, a person was disabled if he or she had “the inability to perform at least one of the Material Duties of the insured’s Regular Occupation.” United denied the July 1 date on the grounds that since Owings used the company cell phone on July 2, he performed “a” material duty of his occupation so was not disabled on that date.
The Court found this interpretation “inconsistent with the plain language of the Policy” since the policy only required him to be unable to perform one material duty of his regular occupation. United’s decision that Owings performed “the” material duties of his occupation and worked on that date so was not disabled was “arbitrary and capricious.”
United Erred in its Policy Determination of the Date of Disability
Not easily deterred, United argued that an insured’s date of disability could not be the last day worked, so at a minimum, since Owings worked at least part of the day on July 1, he could not be declared disabled on that date and the earliest date his disability benefits could begin was on July 2. The Court could find no language in the policy to even infer this interpretation.
The Court concluded that, “Under the plain and ordinary meaning of the Policy language, it is clear, based upon the undisputed record before us, Owings became disabled on July 1, 2013, when he sustained a back injury while at work and was thereafter unable to perform one or more of the material duties of his regular occupation.”
This case was not handled by our office, but we believe it can be instructive to those who are in a dispute with their insurer over the date upon which they became disabled. Contact one of our disability attorneys at Dell & Schaefer for help with any issue concerning your disability claim.