Disability plan administrator cannot use theoretical job as basis to deny claim

In an unpublished opinion summarizing a decision of the Sixth Circuit Court of Appeals the court awarded benefits to a Michigan machine operator finding the plan administrator’s decision that the claimant could perform a job, which the court described as “[existing] only in theory,” to be arbitrary and capricious.

Mr. Kennard operated machines for Means Industries, Inc. until 1990 when he inhaled fumes from a chemical spill, severely injuring his lungs and rendering him ultra-sensitive to fumes. As a result, his treating physician imposed a lifelong restriction that he work only in a clean-air environment.

Mr. Kennard was fortunate to have an employer that provided him with a clean-air environment to perform clerical work from March 1992 until 2006. Needless to say, his employer could only do so much; though it warned other employees in Mr. Kennard’s work area against wearing perfume or lighting candles, various fumes would cause Mr. Kennard to suffer shortness of breath requiring him to leave work.

Social Security Administrative Law Judge finds Kennard unable to engage in any substantial gainful activity and there are no jobs in the national economy that he can perform

In 2006 Kennard stopped working and the same year successfully applied for Social Security Disability Benefits. According to the SSA’s decision, medical evidence showed that “even extremely low levels of airborne dusts, mists, fumes, vapors, perfumes, cleaning fluids, etc.” gave Mr. Kennard “severe cough variant asthma and angioedema.” More importantly, a vocational expert testified that, based on Mr. Kennard’s pulmonary restrictions and age, education, and work experience, “there are no jobs in the national economy that he could perform.”

Kennard Seeks Disability Retirement Benefits Under His Employer’s ERISA-Governed Group Insurance Policy

As an eligible employee under his employer sponsored group disability plan Mr. Kennard was entitled to benefits if “he has been totally disabled by bodily injury or disease so as to be prevented from engaging in any occupation or employment for [pay] and which condition constitutes total disability under the federal Social Security Act.”

The disability plan further conditioned benefits on an assessment by physicians chosen by the employer that the disability be permanent.

Plan Administrator denies Mr. Kennard’s Request for Benefits

After having Mr. Kennard examined by two physicians, the Plan Administrator denied Mr. Kennard’s claim concluding, without discussion, that Mr. Kennard was “not permanently disabled within the meaning of the plan”. The denial cited an opinion by one of the hired physicians that:
“Kennard is employable as long as he could be guaranteed that he would be placed in an absolute clean air environment with absolutely no noxious fumes or inhalants, as he is extremely sensitive to this.”

Kennard’s ERISA lawsuit

Mr. Kennard filed a lawsuit in federal court seeking to enforce his rights under the Plan. Although the district court sided with the administrator, the U.S. Court of Appeals for the Sixth Circuit, reviewing the district court’s decision, ultimately awarded Mr. Kennard benefits.

The Court of Appeals rejected the district court’s conclusion that the doctors’ reports support the administrator’s decision that Kennard can “engage in any occupation or employment” explaining that “bare recitations of medical data, without reasoning, cannot produce a logical judgment about a claimant’s work ability.”

As the court further explained:

“A valid denial of benefits premised on Dr. Levinson’s opinion would need to include evidence of the existence of absolute-clean air jobs available to Kennard.”

The court pointed out that the SSA found that there are no jobs in the national economy that Kennard could perform. Although the plan administrator is not required to seek out vocational evidence it does need to ground its decision on a reasoned explanation and in failing to tackle the implicit non-existence of jobs compliant with the strict condition of being “guaranteed that he would be placed in an absolute clean air environment” the plan administrator’s decision was not “the result of a detailed, principled reasoning process and… supported by substantial evidence.”

Finding no evidence in the record to support a denial of benefits, the court awarded benefits to Mr. Kennard.

Why does this decision matter?

This case discussed the standard employed in the sixth circuit when courts review ERISA governed disability plan denials. While the claimant generally faces the high burden of convincing the court to disturb the administrator’s decision by showing that the administrator’s judgment was “arbitrary and capricious” the court explains in this case that a reviewing court nevertheless must ensure that the administrator can offer a reasoned explanation for its judgment that a claimant was not “disabled” within the plan’s terms. The court therefore focused on what the administrator is required to do.

This decision will encourage ERISA plan administrators to offer more reasoned explanations for their decisions. It may also cause administrators to perform more careful vocational analyses when reviewing claims.

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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.

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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.

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Reviews

Bruce R. (Arizona)

Steve Dell has done an exceptional job with my disability application process. The firm is extremely well managed. They have acquired an incredible amount of experience over many years. I recommend them for disability insurance claims without reservation. 

Don (Florida)

I called this firm a few months ago completely disparaged due to a company cutting off disability benefits at a time that nearly caused me to lose everything.

Attorney Alex Palmera and Danielle worked hard to reach an amicable settlement and my case was settled a few months later. This is a good firm and the specific expertise in disability claims saved me countless hours of hassle at a time when an already fragile state existed.

Thank you Mr. Palamara and Danielle.

Sandra B. (Arkansas)

I have nothing but good things to say about how my buyout was handled with my disability claim. The level of professionalism was amazing. All of my questions and concerns were answered either by Danielle L. or Alex P. in such a timely manner and with such care I would recommend them in a heartbeat to anyone needing to approach their provider with buyout options.

They did a fantastic job communicating between the provider and me, always keeping my best interest at heart and always answering my many many questions. They really did take most of the stress out of this whole situation. I would give them a 10 out of 10 for every step of this crazy journey. Thank you so much for helping me through this.

Brenda R. (New York)

I needed assistance with an appeal for a LTD claim that was initially denied. Stephen understood what needed to happen to win the appeal and he did win the appeal for me.

Michael C. (Virginia)

Greg Dell and his assistant Anneli have been extremely responsive and helpful, not only our initial consultations, but in follow-ups 1 and 2 years later with the insurance company to ensure that they comply with their agreements (which they did), as well as a separate and only slightly-related inquiry about our health insurance. I always hear back from them very quickly, which is rare and greatly appreciated.

Jeff P. (Oklahoma)

After a very long and frustrating ordeal to keep my LTD payments coming I decided to seek assistance from and attorney. After much research and asking those in the legal profession Dell & Schaefer seemed to be the top choice. I reached out and Alex Palamara was the attorney assigned to my case. All I can say is the experience was outstanding. Both Alex and his Paralegal, Danielle Lauria were excellent to work with. They were very kind, concerned, understanding of my frustrations and treated me with the utmost respect. Communication was excellent with regular updates and telling me what I could expect in each stage of the process.

Alex was also very straight forward with what to expect and no pie in the sky promises or expectations were made. In the end we won our case and I believe it was solely due to their experience and knowledge of not only the laws but the insurance companies as a whole. I would highly recommend them and am very grateful for the help they afforded to me.

Chad B. (Illinois)

I originally spoke with 3 other long term disability lawyers about my case before contacting Dell and Schaefer. None of those law firms would take it. They said the chances of me winning was not good. After finding Dell and Schaefer online I spoke with one of the attorneys that has since left. He did take my case but later it was picked up by Rachel Alters. Rachel is amazing and a very intelligent attorney. She not only won my case but also was able to get my back pay for 6 months.

I also cannot say enough about Sonia Nogueira. Sonia was always quick to answer any of my questions. I would usually hear back from her within hours of sending her a email. I do not know where I would be if I hadn’t contacted them. My family and I cannot thank them enough. Don’t let an insurance company tell you they are not responsible for paying you. I paid them for 20 years monthly and they looked for any reason they could not to have to pay me when I needed my benefit. Thank you Rachel and Sonia for all you guys do.

Paul L. (New York)

Words can only scratch the surface regarding my experience working with Attorneys Dell & Schaefer. It’s a very emotional experience making the decision to utilize disability insurance. The unknowns were/are scary. From the very first phone call, the support staff was/are very professional and reassuring. I have been working with Attorney Steven Dell for approximately 10 years. He is confident, reassuring, listens to and addresses all my concern, and is extremely dilligent in understanding my specific policies for how they impact me. It is very reassuring that Steven handles and deals with the insurance company on my behalf. Attorney Dell’s team, and specifically Merlin, Attorney Dell’s assistant, is simply fantastic. Her professionalism and attention to detail have made all my communications with the office seamless.

Simply put, my experience with Dell & Schaefer made the emotional rollercoaster experience of my neck surgery seem like a walk in the park.

Thank You, Thank You, Thank You, to both Attorney Steven Dell and to Merlin for how you have helped me over these past 10 years.

Dilligence, Reassurance, Professionalism at every step, Confidence, Results.

With 10 years experience with working with Dell & Schaefer, taking that step to call Attorneys Dell & Schaefer was one of the best professional and personal decisions I have ever made.

You want to know what you can do – the below comment about posting your first name and last name initial on our website. Put up my full name, phone number, and email address. I will gladly speak to anyone about your office and tell them my story and how instrumental Steven and Merlin have been in my life over the past 10 years.

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