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Fort Dearborn Life Insurance Company faces disability denial lawsuit from disabled account clerk of Katz Insurance Group diagnosed with PTSD

Recently, a former account clerk of the Katz Insurance Group filed a lawsuit against the Fort Dearborn Life Insurance Company (Fort Dearborn Life) through a disability attorney at the District Court for the District of Maryland. In the case of Tosha Pederson v Fort Dearborn Life Insurance Company, the plaintiff alleged that Fort Dearborn Life had acted arbitrarily and capriciously in its decision to deny the plaintiff’s claim for long term disability (LTD) benefits.

Fort Dearborn Life Claim Denial History

The plaintiff was formerly employed as an account clerk with the Katz Insurance Group. While working with the Katz Insurance Group, she participated in an employee welfare benefit plan issued by Fort Dearborn Life. Fort Dearborn Life was also responsible for administrating the policy and paying out benefits to claimants. Under the plan, the plaintiff is entitled to LTD benefits she fulfilled the definition of total disability under the plan. Under the plan:

Total disability or totally disabled means during the elimination period and the next 24 months you are:

1) Unable to perform each and every duty of your regular occupation on a full time basis because of a disability

  • Caused by sickness or injury
  • That started while you are insured under the policy and

2) After 24 months of benefits have been paid, you will continue to receive payment only if you are unable to perform with reasonable continuity each and every duty of your regular occupation or any other occupation for which you are or become reasonably fitted by training, education, experience, age and physical and mental capacity.”

Due to post traumatic stress disorder, the plaintiff ceased working with the Katz Insurance Group on May 28th 2009. the plaintiff was paid 13 weeks of short term disability benefits between June 17th 2009 and September 16th 2009. Fort Dearborn Life later initiated a review to determine whether the plaintiff was qualified for LTD benefits. On January 20th 2010, the plaintiff was informed by Fort Dearborn Life that her claim for LTD benefits was denied.

On July 26th 2010, the plaintiff filed an ERISA appeal to Fort Dearborn Life’s decision to deny her LTD benefits. The appeal was denied by Fort Dearborn Life on September 28th 2010. Nevertheless, Fort Dearborn Life did determine that the plaintiff was entitled to LTD between August 27th 2009 to August 31st 2009.

A second appeal was filed by the plaintiff on November 19th 2010. Fort Dearborn Life, in response issued its final denial to the plaintiff on December 29th 2010. The denial was based on a conclusion that the medical documentations did not support impairment as of April 20th 2010; the plaintiff was no longer covered under the policy.

The plaintiff argued in the lawsuit that Fort Dearborn Life did not did not conduct a full and fair review of the plaintiff’s claim for LTD and was acting in bad faith without considering the medical evidence that supported the plaintiff’s disability status. As a result of Fort Dearborn Life’s actions, the plaintiff sustained damages to the amount of LTD benefits not paid to her.

Relief sought by the Plaintiff

In the lawsuit, the plaintiff is seeking the following relief through the Court:

  • An order to Fort Dearborn Life to pay the plaintiff all LTD benefits due
  • Granting the plaintiff a monetary judgment against Fort Dearborn Life for all amount due and owning
  • An award of attorney’s fees and Costs
  • Other relief which the plaintiff is entitled to.

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