California Disability Insurance Attorneys Battle Discretionary Clauses Daily
In California, Federal Judges are often limited in their ability to reverse a denial of disability insurance benefits if a disability insurance policy is governed by ERISA. A California disability attorney must be very experienced in handling ERISA disability denials to have any chance of convincing a Judge to reverse a disability claim denial. Not every policy is governed by ERISA, but if your policy is then you must be prepared.
The first key question in every ERISA disability denial lawsuit is whether the claimant’s disability insurance policy contains a “discretionary clause.” This clause gives the insurance company the right to interpret the terms of the disability policy and make a final claim decision. If a disability policy does not contain a discretionary clause, then a court is not restricted in their review of a disability denial. But if there is a discretionary clause, then the court is limited in its analysis to an “arbitrary and capricious” review of the claim denial.
A California Court’s Review of a Claim Denial
The Ninth Circuit Court of Appeals, California’s highest federal court, explained “the arbitrary and capricious” standard of review in the case of Abatie v. Alta Health and Life Insurance Company. That case involved a dispute over life insurance benefits, but the same law applies to disability insurance claims. The plaintiff’s husband worked as a doctor for a Santa Barbara clinic from 1971 until November 1992, when he developed non-Hodgkin’s lymphoma and took a leave of absence. He never returned to work and, beginning in 1993, received permanent disability benefits. After his death in 2000, his widow filed a claim for life insurance benefits.
Alta Health and Life Insurance Company denied benefits. In its view, the policy was no longer in force when the plaintiff’s husband died. The case turned on whether the doctor had to continue to pay policy premiums even though he was on disability at the time. Under the language of his policy, his coverage ended when his employment ended unless he became totally disabled and the insurance company granted him what was called a waiver of premium.
Alta Health initially denied coverage because it asserted the doctor had not filed a request for the waiver of premium. However, the doctor had in fact filed the request but the insurance agent had not initially sent it to Alta Health. When the doctor’s widow filed suit, Alta Health added another reason for its denial: the doctor was not entitled to a waiver of premium because he was not totally disabled. It claimed for the first time that the doctor had to pay premiums because his non-Hodgkin’s lymphoma went into partial remission in the two years before his death. In the insurance company’s view, he wasn’t totally disabled and had to pay the premium to keep the policy in force and, in turn, be entitled to life insurance benefits.
The California Court’s Basis For Overruling the Insurance Company Denial
The Ninth Circuit Court of Appeals found that Alta Health had improperly denied coverage. The court’s decision was based on a number of factors including:
- Alta Health had a conflict of interest, as the insurance company was both the claims administrator and the source of funds for paying claims;
- The reasons for Alta Health’s denial of coverage changed over time; and
- Alta Health’s reasons for the denial of coverage were directly contradicted by its own files as well as by the discovery produced in the lawsuit.
Even though the policy contained a discretionary clause and gave Alta Health the right to make some decisions, the Ninth Circuit Court of Appeals determined that the decision to deny coverage could not stand. The court said these “procedural irregularities” showed that the denial of coverage was arbitrary and capricious, which resulted in a victory for the claimant.
Abatie v. Alta Health and Life Insurance Company, 458 F.3d 955 (9th Cir. 2006) (en banc)
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Lincoln Financial
Uses every dirty trick in the book
It’s next to impossible to get $ out of them without a lawyer. They use plenty of intimidation and unfair tactics. They don’t want to pay. And yet, their CEO made 13 m... read more >
Unum
Unum is evil
On 11/3/2021 I got shot by my boyfriend and my spinalcord got hit, paralyzing me from the neck down and accepting Unum benefits was the worst decision I ever made. I sued ... read more >
Lincoln Financial
Every month I get paid on a different date
I will start by saying that my experience is not as horrible as others, like the folks who have valid claims but get nothing from Lincoln. I feel for you and hope to god y... read more >
MetLife
They will do anything to not approve your claim
MetLife’s handling of my short-term disability claim has been incredibly frustrating and stressful. I followed all the necessary steps prior to my surgery, providing the... read more >
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Sedgwick
Don't trust them, they like to play games
They suck the life out of people that need help. They falsely advertise for helping people that they care. Sorry to tell you it's all about money, they do not care for any... read more >
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I am beyond disappointed with NY Life Disability Insurance’s handling of my father’s claim. My father, a 66-year-old man who has suffered two strokes and continues to ... read more >
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This company sucks when it comes to disability claims. They are slow at processing stuff, then they always say they didn't recieve the doctors information. You spend your ... read more >
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Who are Dell Disability Lawyers?
We are disability insurance attorneys that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.
Our attorneys have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement in more than 98% of our cases. Our disability insurance lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.
We offer disability insurance attorney representation nationwide and we welcome you to contact any of our LTD lawyers for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 900 videos and regularly provide tips to help protect your disability benefits.
Who do you help?
Our disability insurance attorneys help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.
Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.
A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.
Do you work in my state?
Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability insurance lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.
What are your fees?
Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.
The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.
In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.
Do I have to come to your office to work with your law firm?
No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via phone, email, fax, or video conferencing sessions. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.
How can I contact you?
When you call us during normal business hours you will immediately speak with a disability insurance attorney. We can be reached at 800-698-9159 or by email. Lawyers and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.