New York Life pays disability benefits for 10 years, offers a lump sum buyout and then denies disability claim

After 10 years of receiving disability benefits and a lump sum buyout offer by New York Life, this claimant’s disability benefits were denied. This case is a sad example of the fact that a disability claimant can never assume that their disability benefits will continue to be paid indefinitely. Therese Regan was formerly a lab technician employed by the Pactiv Corporation. By virtue of her employment, the plaintiff was, at all relevant time, a participant in the Pactiv Corporation’s long term disability plan which was administered by New York Life.

The case of Therese Regan vs. New York Life and Pactiv Corporation concerns a former Pactiv Corporation’s Lab Technician who recently, through a disability attorney, filed a lawsuit at the District Court for the Northern District of New York against New York Life for wrongfully denying her claim for disability benefits.

The Claim for Long Term Disability Benefits Against New York Life

On August 16th 2000, the plaintiff sustained an injury due to a fall in her home. As a result of the injuries, the plaintiff was unable to perform the duties required of her occupation. As a result of her disability, the plaintiff filed a claim for disability benefits with New York Life on January 2001. On February 13th, 2001, New York Life approved the plaintiff’s claim for long term disability benefits. On April 2001, the plaintiff’s claim for Social Security Benefits was approved and she received $880 monthly payment for herself and $440 monthly payment on behalf of her dependent children.

On April 9th 2007, New York Life made several overtures to the plaintiff to fully settle her claim for $11,276.00. The plaintiff elected not to accept the offer as New York Life was obligated to increase her monthly disability payment from $139 to $534 when her daughter attained the age of 18 on June 5th 2008. According to the plaintiff, assuming that the plaintiff remained continuously disabled, New York Life would then have to pay her in disability benefits over the life of the plan in excess of $93,000.

According to the lawsuit, consequently, New York Life conducted surveillances on the plaintiff and requested a Functional Capacity Evaluation (FCE) to revaluate her eligibility for continuing disability benefits payments. Although the FCE found that the plaintiff was disabled under the plan, New York Life conducted a peer review of the plaintiff’s records on January 2010 and made a determination that the plaintiff was no longer eligible for continuing disability benefits payments on February 2nd 2010.

On August 2010, the plaintiff filed an ERISA appeal to New York Life’s decision to terminate her claim for long term disability benefits. In the appeal, the plaintiff submitted sworn affidavit from her attending physician that the peer review report contained numerous inaccuracies. Nevertheless, despite all efforts by the plaintiff, New York Life denied her appeal on September 23rd 2010.

Disability Lawyer Sues New York Life for Wrongful Disability Denial

The plaintiff alleged that New York Life actions to deny for claim for long term disability benefits were unreasonable and a breach of its fiduciary duty as it maintained its denial of the plaintiff’s claim without any medical evidence to demonstrate that the plaintiff was not disabled. The plaintiff also alleged that New York Life had relied on patently false information obtained from the peer review report conducted on the plaintiff’s medical file.

Relief Sought By The Plaintiff

Due to the alleged unlawful actions of New York Life, the plaintiff is seeking from the Court the following remedy:

• A de novo review by the Court of New York Life’s decision
• A judgement holding that New York Life must pay to the plaintiff the disability income to which she is entitled to.
• An Award of prejudgement interest
• An order directing New York Life to continue paying long term disability benefits to the plaintiff until she is no longer qualified for the disability benefits
• An award of attorneys’ fees and cost
• An order preventing New York Life from terminating the plaintiff’s long term disability benefits in violation of federal laws and the plaintiff’s long term disability plan.