Hartford wins long-term disability case, court rules that claimant failed to exhaust administrative remedies

It is vital that you hire the right long-term disability firm to represent you. Debra Swanson had to learn this the hard way, as a recent ruling in the Fifth Circuit court of Appeals in the Southern District of Texas demonstrates. How did Swanson’s attorney fail her? Her counsel failed to file a proper appeal.

Swanson’s story begins in January of 2002, when she was approved for long-term disability benefits through her employer’s plan with Hartford Life Insurance Co. (“Hartford”). The following year, on April 4, 2003, Hartford notified Swanson that her benefits would be terminated because she had been cleared to return to full-time work. She had 180 days to appeal this determination.

Swanson sought the assistance of an attorney. Her attorney sent a letter to Hartford on August 25, 2003, informing the insurer that the firm was representing her “in her efforts to reinstate her unlawfully terminated disability and health insurance benefits.” The letter went on to inform Hartford that the letter was notice “of Debra Swanson’s intention to appeal” Hartford’s “decision terminating her benefits.”

The attorney stated that once “we have had adequate time to review and supplement the record, we will notify you in writing to proceed with Debra Swanson’s administrative appeal under the terms of the Plan.” Various documents from the Plan and notice of further deadlines were requested.

While the attorney may have considered this an appeal, neither Hartford nor the Court did. When nothing further was received, Hartford closed the file after the 180-day deadline passed.

This same firm submitted an ERISA appeal with accompanying evidence to Hartford on February 23, 2007, almost four years from the time that Swanson had been notified that her benefits would be terminated, three and a half years after her right to appeal expired. Hartford rejected her appeal on April 21, 2007 stating that the 180 day window to appeal had expired.

Swanson responded by filing suit in the Texas district court. Hartford asserted that she had failed to exhaust her administrative remedies prior to bringing her suit.

The court ruled in Hartford’s favor based on two factors. First, the court ruled that because Swanson’s attorney did not submit evidence to refute Hartford’s claim that Swanson had been approved to return to full-time work, there was no evidence that the August 25 letter was an appeal. Instead, the wording demonstrated to the court that it was merely a letter indicating intent to file an appeal.

Swanson’s attorney argued that Swanson had filed her appeal within 180 days and that Hartford did not issue its decision within 45 days of receiving that appeal. The court found that even if the court could consider the letter an appeal, the statute of limitations would not have extended more than 90 days beyond August 25, 2003. In either case, because Swanson filed suit more than four years later, the case was time-barred.

Swanson lost out, primarily because someone in the firm representing her failed to follow through and make sure that deadlines were met. The failure to file a timely appeal cost her long-term disability insurance benefits.

Don’t find yourself in a similar situation. Hire a disability insurance attorney who pays attention to the details. It could make the difference between securing your rightful long-term disability insurance benefits and losing your rights.

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