Six year disability lawsuit against Sun Life: long term disability claimant wins benefits plus interest

The case of Helfman v GE Group Life Assurance Company, et al (to include Sun Life Assurance Company of Canada) has an interesting factual history that played out over 6 years. However, it was a recent Order entered by a Michigan federal judge against Sun Life Insurance Company regarding the right to pre-judgment interest on unpaid benefits that is a victory for disability claimants nationwide.

The Sun Life disability denial and eventual award of benefits

After almost 6 years, Helfman finally obtained payment of long term disability benefits. A brief history of Helfman’s claim shows that Sun Life had terminated his claim for benefits in May of 2005. Following the exhaustion of administrative remedies (appeals), Helfman filed a lawsuit (not our law firm) in June of 2006. At the initial trial level, the District Court determined that the denial of long term disability benefits by Sun Life was not arbitrary and capricious and upheld Sun Life’s decision to terminate Helfman’s benefits. Helfman appealed the District Court’s decision to the Sixth Circuit Court of Appeals. On appeal, the Appellate Court reversed the District Court’s decision to uphold Sun Life’s termination of disability benefits and remanded the case back to Sun Life for further review. It should be noted that by remanding the claim back to Sun Life the Court was not awarding benefits to Helfman. Following the remand and on further review of the claim, Sun Life agreed to pay benefits for the period of October 1, 2005 through April 3, 2009.

Michigan Court awards interest to claimant based upon more than 4 years of unpaid disability benefits

Helfman wanted interest on the money that Sun Life failed to pay him for so many years, but Sun Life disagreed once again. After the award of benefits Helfman filed a motion with the District Court seeking an award of interest on the benefits that were paid by Sun Life following the Appellate Court’s remand. Helfman argued in part that based upon case law the Court’s ability to award interest was not dependent on an entry of a judgment in favor of a Plaintiff. Sun Life argued that the approval of benefits was similar to a negotiated settlement and as such Helfman was not entitled to pre-judgment interest.

The Court agreed with Helfman and exercised its discretion to award pre-judgment interest on the benefits paid to Helfman. In rendering its decision the Court noted, in part, that when a party establishes contractual rights under ERISA, pre-judgment interest may be awarded; and that pre-judgment interest may be awarded in cases that resolve short of a final judgment by the court.

It is important to note though that Helfman had no absolute right to pre-interest judgment under the Sun Life policy or the law. The pre-judgment interest was only awarded at the discretion of the Court.

Attorneys Dell and Schaefer did not handle this case, but we have handled numerous disability cases against Sun Life. We always offer a free consultation and review of your disability insurance claim.

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  • Sun Life got me as well. I was injured in 2008 and was recieving benefits through Sun Life. After a few months I was contacted by phone by Sun Life management saying they knew I was in need of money and were going to make me an offer. Yes I was in need of money. My house was in process of forclosure, I had my wifes van repoed, and yes Sun Life was aware of this. They talked to me on the phone for several weeks, stating that they knew my back injury was something they covered but not my PSTD, depression or anxiety. But they were going to be my friend and offer me a lump sum. Because they did not think I would be able to recieve Long term dissability. Well I did agree to the sum. I recieved a letter from Sun Life stating that the lump sum they were giving me was to dismiss any disputed matter, but they or I was not claiming I was dissabled or I was dissabled. A week later my check came in and a few days after I recieved a letter from my employer. Stating Sun Life was stating I was approved of long term dissability and they were now terminating my employment in order to transist into ong term dissability through Sun Life. As you can see I got took for.

    Greg BatesSep 18, 2014  #1