Prudential’s summary judgment ruling is reversed twice by the 7th Circuit US Court of Appeals

Hugo Diaz, a computer programmer for Bank One, stopped working on January 31, 2002 due to chronic back pain, and underwent a lumbar fusion surgery on February 4, 2002. Mr. Diaz’s job was classified as sedentary and required him to be sitting for 90% of the time. On July 22, 2002, Diaz filed his application for long-term disability and on August 27, 2002 Prudential denied Mr. Diaz’s claim on the basis that his inability to perform his job was not consistent with the medical evidence presented. After filing his initial application and submitting two Appeals of his denial to Prudential, Mr. Diaz received his final denial on April 16, 2003.

Mr. Diaz’s long-term disability policy defined disability during the first 24 months as: “You are disabled when Prudential determines that you are unable to perform the substantial and material duties of your regular occupation due to your sickness or injury; and you have a 20% or more loss in your indexed monthly earnings due to that sickness or injury.

Mr. Diaz filed a lawsuit in the district court on April 22, 2003 and on May 12, 2004 a summary judgment was granted in favor Prudential. The Appellate Court reversed the summary judgment because the district court applied the wrong standard of review. The district court reviewed the case again and granted another summary judgment in favor of Prudential. Finally on August 23, 2007, the Appellate court once again reversed the entry of Summary Judgment for Prudential and ruled that a summary judgment in favor of Prudential can not stand. In reversing Prudential’s summary judgment for the second time, the Appellate Court stated, “The district court failed to consider the difference between a person’s being able to engage in sporadic activities and her being able to work eight hours a day five consecutive days of the week. In doing so, it ignored the dispute of material fact about Mr. Diaz’s capacity to do the latter.” The court also noted that the district court failed to consider the opinions of Mr. Diaz’s personal physician, neurologist, and pain management specialist.

Practice note: This case is very interesting because the Appellate court acknowleged that district court judges can be confused about the manner in which they are suppose to review an insurance companies denial of long-term disability benefits. The court stated, “Some of the confusion in this area may be attributable to the common phrase “de novo review” used in connection with ERISA cases.

In fact, in these cases the district courts are not reviewing anything; they are making an independent decision about the employee’s entitlement to benefits. In the administrative arena, the court normally will be required to defer to the agency’s findings of fact; when de novo consideration is appropriate in an ERISA case, in contrast, the court can and must come to an independent decision on both the legal and factual issues that form the basis of the claim. What happened before the Plan administrator or ERISA fiduciary is irrelevant.”

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Michael F.

Having had several lung surgeries including a wedge resection, lobe removal and pleurodesis as well as MAC lung disease, I was diagnosed with stage vi (end stage) COPD in October 2012. With my lung function at 23% it was becoming very difficult to manage my daily life let alone continue working in my management role at a large healthcare company. After meeting with my primary physician and my pulmonologist, it was agreed that I should stop working and submit a claim for disability. I was 52 at the time. My short term disability plan with Mutual of Omaha paid my claim for 3 months at which time it was converted to my long term disability plan with no issues. I continued to collect my LTD benefit from February 2013 until November 20th 2014 when I received a letter saying I could return to my previous position and there was nothing in my medical records to indicate disability. I was shocked to say the least, as my condition is chronic and progressive and in fact my condition had continued to decline. I didn’t know what to do and knew I did not have the knowledge or experience to appeal their decision. I was very afraid as we depended on this income to pay our bills, that’s why I held the policy for many years, to protect my family. I want to add that I applied for and was approved for Social Security disability benefits shortly after diagnosis.

I immediately started to search for attorneys that handle disability claims and found literally hundreds that handled SSDI claims, but few that handled employer/private policies. I found Dell & Schaefer and filled out their quick online form and almost immediately received a reply from Gregory Dell (yes, an actual person responded!) who let me know that he asked Rachel Alters to call me. I don’t think it was more than a half hour before I received a call from her. I immediately felt a sense of relief as she explained the process and what she would be doing for me.

From that day forward, I have been met with OUTSTANDING customer service from Rachel Alters and Kathleen Bordes. Any time I reached out with questions or concerns they were very responsive and always left me feeling satisfied that I had the best in my corner. The process took many months and a lot of leg work on Rachel and Kathleen’s part. When I was finally sent a draft of the appeal, I completely understood why it takes so long. The level of detail was unbelievable. I actually feel like I better understand my disease after reading it! The appeal was filed timely and my denial was overturned very quickly. When I learned it was overturned, I have to admit I had tears in my eyes. I want to add, that even if the appeal didn’t have the positive outcome that it did, I would feel exactly the same about the exceptional job done on my case. I’m not sure I can ever truly express how grateful I am, and how blessed I feel to have found Dell & Schaefer and especially Rachel and Kathleen!

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