Disability claimants need to be extremely cautious when dealing with Sedgwick Claims Management Service Inc. (Sedgwick). From our law firms’ experience of handling thousands of disability insurance claims, Sedgwick is one of the top three most difficult companies to deal with. Unfortunately, Sedgwick will capitalize on any opportunity to deny a claimant their disability benefits. This case discusses the unreasonable conduct used by Sedgwick to wrongfully deny disability benefits.
Following denial of claims for disability benefits and exhaustion of all administrative remedies, a beneficiary of a disability benefits insurance plan have an option under the Employee Retirement Income Act (ERISA) to file a civil action for judicial review of a claim. The case of Beverly A. Haisley vs. Segdwick Claims Management Service Inc, PNC Financial Services Group, Inc and the PNC Financial Services Group, Inc. Long Term Disability Plan is a good example of how the Court will review a Sedgwick disability claim denial.
The Facts of the Case Against Sedgwick Claims Management Service Filed by a Disability Lawyer
Working as a collection/Recovery team manager for the PNC Financial Services Group, Inc’s, the plaintiff suffered from anxiety and depression following the death of her mother. It was stated that the plaintiff was also suffering from Peripheral Neuropathy around the same time. The plaintiff filed for short term disability benefits and was awarded disability benefits from June 5th 2007 to October 2nd 2007.
Upon the expiry of her short term disability benefits, the plaintiff applied for transition to long term disability benefits on October 11th 2007. The plaintiff was initially approved to receive long term disability benefits by a Sedgwick’s long term disability case worker on November 30th 2007. However, upon the recommendation of a Sedgwick’s supervisor, the approval was later formally suspended on December 20th 2007 due to “a lack of current treatment information on file supportive of continuing total disability.” Despite providing additional information to support her claim, Sedgwick formally denied the plaintiff’s claim for long term disability benefits on February 28th 2008 based on the results of peer reviews conducted by Sedgwick.
The plaintiff appealed through her Pittsburgh Pennsylvania disability attorney Sedgwick’s decision to deny her claim for long term disability benefits on May 7th 2008. Based on the recommendations of two physiatrists engaged by Sedgwick, the plaintiff’s appeal was denied on June 23rd 2008. The plaintiff was also informed that no further information would now be considered and the administrative record of her claim was now closed. On October 16th 2008, the plaintiff filed legal action against Sedgwick alleging violations under the Employee Retirement Income Security Act (ERISA).
Legal Issues before the Pennsylvania District Court
The District Court had to consider several issues before it in this case. First was the issue of who the plaintiff can sue as the both Sedgwick and the PNC Financial Services Group, Inc argued that the Plan should be the proper defendant.
Second, the district court had to consider the argument of Sedgwick that the plaintiff’s claim was time-barred by the terms of the Plan.
The third issue which the District Court had to consider was whether Sedgwick had acted arbitrarily and capriciously in its denial of the plaintiff’s claim for long term disability benefits.
The Plan Administrator as the Proper Defendant
The District Court ruled that the plaintiff was only seeking benefits from the assets of the Plan and the legal claim against Sedgwick was “essentially a claim that is only nominally asserted against the Plan Administrator and is, for all practical purpose s, a claim made against the relevant plan itself.” The Court ruled that the exercise of control over the administration of benefits was the “defining feature” of the proper defendant here.
Timeliness of the Plaintiff’s Claim
Sedgwick had argued that the plaintiff’s claim was time-barred as she did not apply for long term disability benefits within 90 days of when Total Disability began (June 5th 2007) as required by the terms of the Plan. The Court ruled that Sedgwick now could not rely on the 90 days limitation period as it HAD initially approved the plaintiff’s claim for long term disability benefits on November 30th 2007 and hence waiving the defense of untimeliness by failing to assert it as a basis for denying a claim in the first place.
Conduct of Sedgwick as Arbitrary and Capricious
The court ruled that Sedgwick had acted arbitrarily and capriciously during its decision making process due to several factors:
The reversal of Sedgwick’s initial approval for long term disability benefits claim without any additional medical evidence. The inconsistent treatment of the same medical information deemed sufficient for the initial approval but later judged as insufficient weigh heavily in the plaintiff’s favor.
The fact that Sedgwick did not conduct an independent medical examination on the plaintiff but instead relied on a file review of specific impairments or limitations not amendable to considerations by means of a file review. This had risen “”¦questions about the thoroughness and accuracy of the benefit determination.”
The failure by Sedgwick to address the plaintiff’s receipt of Social Security Disability Benefits in its denial of the plaintiff’s claim for long term disability benefits. This had “suggested procedural unreasonableness” given the circumstance that the plaintiff was encouraged to apply for Social Security Disability Benefits in the first place. The Court pointed out the Social Security Administration standard for determining total disability is more stringent that the less demanding standard employed by Sedgwick.
Determining the Appropriate Remedy
Upon concluding that Sedgwick had acted arbitrarily and capriciously, the Court had to determine the appropriate remedy in this case. Here, the Court makes a distinction between the initial denial of benefits to a termination of benefits. To restore the status quo in this case, the Court ruled that the benefits should be reinstated as Sedgwick’s termination of its claim approval was arbitrary and capricious.