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Erin Rose Ronstadt, SBN 028362

Kevin Koelbel, SBN 016599

OBER & PEKAS, PLLC

3030 N. 3rd Street, Suite 1230

Phoenix AZ 85012

Phone: (602) 277-1745

Fax: (602) 761-4443 

erin@oberpekas.com 

kevin@oberpekas.com

Attorneys for Plaintiff

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA

Lynn M. Pachunka, a married woman, 

Plaintiff,

v.

Hartford Life and Accident Insurance 

Company, a foreign insurer,

Defendant.

Case No. 

COMPLAINT

(Jury Trial Demanded)

For her claims against Defendant Hartford Life and Accident Insurance Company

(“Hartford” or “Defendant”), Plaintiff Lynn M. Pachunka (“Ms. Pachunka”) alleges as 

follows:

PARTIES, VENUE, AND JURISDICTION

1. Ms. Pachunka is a married person. She currently resides in Maricopa County, 

Arizona and has been a resident of Maricopa County at all relevant times.

2. Hartford Life and Accident Insurance Company is wholly-owned by Hartford 

Life, Inc., which is wholly-owned by Hartford Holdings, Inc., which is wholly-owned by 

The Hartford Financial Services Group, Inc.

3. In addition, Hartford – Comprehensive Employee Benefit Service Company 

(CT Corporation) is wholly-owned by Hartford Financial Services, LLC (Delaware Limited 

Liability Company), which is wholly-owned by Hartford Life and Accident Insurance 

Company.

4. The Hartford Financial Services Group, Inc. (known as “The Hartford”; 

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NYSE: HIG) is an insurance and financial services company with total 2013 revenues of 

$26.2 billion and total assets of $298.5 billion. Total revenues for the Group Benefits 

organization in 2013 were $3.8 billion.

5. Hartford was ranked 112th on the 2013 Fortune 500 list. The Hartford, 

headquartered in Connecticut, is among the largest providers of investment products, 

Individual Life, Group Life and Group Disability insurance products, and Property and 

Casualty insurance products in the United States.

6. The Hartford’s Group Benefits organization ranks number five in combined 

fully insured Group Disability and Life sales premiums among United States group carriers 

(LIMRA data 4Q 2013). The relatively large size and underwriting capacity of the 

Company’s business provides it with market opportunities not available to smaller 

competitors.

7. The Hartford provides a portfolio of group insurance products to employers, 

association and affinity groups including short-term disability (“STD”), long-term disability 

(“LTD”), Life, and Accidental Death & Dismemberment (“AD&D”) insurance as well as 

Leave Management services. 

8. Hartford is an insurance company licensed and authorized to do business in 

Arizona. 

9. Hartford has intentionally availed itself of the benefits and protections of 

Arizona. 

10. Hartford operates insurance sales offices in Arizona, including but not limited

to the sale of LTD policies. 

11. The State of Arizona purchased Policy Number GL-395211 (the “Life 

Policy”) from Hartford to provide life insurance benefits to certain employees of the State 

of Arizona, including Ms. Pachunka. 

12. The State of Arizona purchased Policy Number GLT-395211 (the “LTD 

Policy”) from Hartford to provide LTD disability insurance benefits to certain employees of 

the State of Arizona, including Ms. Pachunka.

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13. In exchange for premiums, Hartford fully insures Life and LTD benefits and 

administers claims.

14. The benefits are provided as “government plans” exempt from the Employee 

Retirement Income Security Act of 1974 (“ERISA”) and subject to Arizona law. 

15. Ms. Pachunka was injured as a result of Hartford’s breach of contract and 

bad faith refusal to provide disability benefits under the Life Policy and LTD Policy.

16. Jurisdiction is proper in the United States District Court for the District of 

Arizona pursuant to 28 U.S.C. § 1332.

17. Venue is proper in Arizona under 28 U.S.C. § 1391(b)(2).

18. Ms. Pachunka demands a jury trial on all triable issues.

GENERAL ALLEGATIONS

The Policy Benefits

19. Under the Life Policy, Ms. Pachunka is entitled to a waiver of premiums for 

life insurance benefits if she meets the definition of “Disabled” in the LTD Policy.

20. The LTD Policy defines “Disability or Disabled” as:

You are prevented from performing one or more of the Essential Duties of: 

Your Occupation during the Elimination Period;

Your Occupation, for the 24 month(s) following the Elimination Period, and as 

a result Your Current Monthly Earnings are less than 80% of Your Indexed Pre- disability Earnings; and

after that, Any Occupation

(emphasis added). 

21. The LTD Policy defines the “Elimination Period” as “the longer of the 

number of consecutive days at the beginning of any one period of Disability which must 

elapse before benefits are payable or the expiration of any accumulated sick pay program.”

22. The minimum number of days in the Elimination Period is 180.

23. The LTD Policy defines an “Essential Duty” as 

a duty that: is substantial; not incidental

is fundamental or inherent to the occupation; and

cannot be reasonably omitted or changed.

Your ability to work the number of hours in Your regularly scheduled work week is an Essential Duty. 

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24. The LTD Policy defines “Your Occupation” as “Your Occupation as it is 

recognized in the general workplace. Your Occupation does not mean the specific job You 

are performing for a specific employer or at a specific location.”

25. The LTD Policy defines “Any Occupation” as:

any occupation for which [the insured is] qualified by education, training, or experience, and that has an earnings potential greater than the lesser of:

the product of Your Indexed Pre-disability Earnings and the Benefit Percentage; 

or

the Maximum Monthly Benefit.

26. Under the LTD Policy’s definition of Disability, a claimant is disabled from 

“Any Occupation” if she is prevented from performing one or more of the Essential Duties

of any occupation. 

27. Under the LTD Policy, a covered employee who meets the definition of 

Disabled is entitled to receive LTD benefits until age 65 or until no longer Disabled.

28. The monthly Disability benefit under the LTD Policy is calculated as 66 

2/3% of Monthly Income Loss before the deduction of Other Income Benefits.

29. Other Income Benefits include “85% of the disability benefits under the 

United States Social Security Act.”

30. Although Ms. Pachunka does not concede Hartford’s right to an offset for 

Social Security benefits, the sum of Ms. Pachunka’s benefit payments until age 65 after 

offsets for Other Income Benefits is approximately $200,000.

Ms. Pachunka’s Employment

31. The State of Arizona employed Ms. Pachunka as a Corrections Officer at the 

Perryville prison for approximately eleven years.

32. Ms. Pachunka worked for the State of Arizona as a Corrections Officer until 

her last date of work on July 20, 2013.

33. As a Corrections Officer, Ms. Pachunka was tasked with the following 

responsibilities and duties:

Ø Maintaining order and security

Ø Supervising the activities of the inmates

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Ø Inspecting the inmates, their cells, and shared facilities for contraband and 

other signs of misconduct

Ø Restraining inmates in handcuffs and leg irons

Ø Escorting inmates to/from their cells to various facilities

Ø Responding to disturbances, riots, assaults, and escapes and using reasonable 

force as necessary.

34. Because security had to be provided around the clock 24 hours a day, Ms. 

Pachunka worked long hours throughout the night.

35. Because of the nature of her occupation, Ms. Pachunka would often 

encounter dangerous and unpredictable situations.

36. ‘Corrections Officer’ is a heavy-duty occupation. Ms. Pachunka was required 

to stand and walk for long periods of time. She had to be able to physically respond to 

emergencies and incidents at a moment’s notice and had to be able to walk, run, climb, 

carry, push, and lift heavy objects. She had to have the physical strength to subdue other 

inmates and break up riots.

37. Hartford noted that her job required: “standing, walking, restraining, lifting 

up to adult person weight.”

38. Ms. Pachunka’s last date of work was on July 20, 2013.

Ms. Pachunka’s Medical Conditions

39. Ms. Pachunka suffers from pain and fatigue secondary to Fibromyalgia.

40. She meets the American College of Rheumatology’s criteria for Fibromyalgia.

41. She has moderate to severe pain in her upper back, shoulders, elbows, lower 

back, and buttocks, which is exacerbated with standing, walking, movement, or lifting.

42. Ms. Pachunka’s treating providers have prescribed multiple medications for 

her pain, and she also receives trigger point injections for her pain.

43. Ms. Pachunka also has chronic anemia related to malabsorption issues 

secondary to her history of gastric bypass procedure.

44. The anemia causes weakness and fatigue.

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45. She has undergone red blood cell transfusions, intravenous ferumoxytol

treatments, and B12 injections to combat her anemia.

46. Despite treatment for anemia, she has chronically low hemoglobin counts.

47. Ms. Pachunka’s treating physicians have determined that she cannot work due 

to her physical conditions. 

48. The Social Security Administration (“SSA”) has determined that she cannot 

work due to her physical conditions.

49. Ms. Pachunka also suffers from depression secondary to her physical 

conditions.

50. Ms. Pachunka cannot perform the essential duties of her “Own Occupation” 

or “Any Occupation” as defined in the LTD Policy.

Hartford’s Claim Handling

51. Ms. Pachunka applied STD benefits.

52. Ms. Pachunka filed for STD based on her physical complaints of “pain [and] 

fatigue” secondary to Fibromyalgia.

53. Hartford initially approved her STD benefits for Ms. Pachunka’s reported 

symptoms of “pain [and] fatigue” secondary to Fibromyalgia. 

54. However, Hartford terminated STD benefits on October 8, 2013.

55. Ms. Pachunka retained legal counsel in early 2014. 

56. On May 17, 2014, Ms. Pachunka appealed Hartford’s decision to terminate 

her STD benefits and submitted support for her LTD benefits claim under the “Own 

Occupation” definition in the LTD Policy. 

57. As Hartford’s claims manager would aptly state on August 26, 2014, Ms. 

Pachunka’s claim was “unfortunately . . . one mistake on top of another.” 

58. On June 12, 2014, Hartford instructed that it was treating Ms. Pachunka’s 

STD appeal as a “proof of loss” submission; it planned to send the appeal back to the same 

nurse case manager responsible for denying the claim and consider whether the evidence 

changed Hartford’s assessment. Ms. Pachunka’s legal counsel explained this was unfair in 

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violation of the STD Policy and law; not only did Ms. Pachunka already appeal, but also 

would have to restart the entire appeals process over if the nurse case manager did not find 

the new evidence submitted on appeal changed her mind. Hartford said it would try to get 

the appeals division to change its mind. 

59. Ms. Pachunka’s legal counsel had to resubmit the STD appeal on June 26, 

2014 after several phone calls and correspondence, because Hartford misclassified Ms. 

Pachunka’s claim as one for “proof of loss,” thereby rejecting the appeal. 

60. Hartford’s mismanagement and misclassification of the STD claim and appeal 

resulted in undue delay, stress, and serious financial strain to Mr. and Mrs. Pachunka. 

61. In a letter dated August 8, 2014, Hartford again – and frustratingly - refused 

to consider the STD appeal, continuing to construe it as a “proof of loss” submission. 

62. Ms. Pachunka was on the verge of filing a lawsuit in late August 2014. By this 

time, as a result of Hartford’s denial and delay, she and her husband had depleted their 

savings, cashed out stock options, and transferred to Mr. Pachunka’s health insurance, 

which had higher deductibles, all to make ends meet. They were paying their bills, but only 

just, and a large portion of Mr. Pachunka’s income was going to doctors’ bills and 

medication expenses.

63. On August 27, 2014, Hartford finally made a determination on Ms. 

Pachunka’s STD appeal and reinstated benefits. However, it deposited all of the money into 

Ms. Pachunka’s account directly in violation of her legal counsel’s lien on the funds.

64. Hartford took several months to consider and approve Ms. Pachunka’s LTD 

benefits. 

65. On December 11, 2014, Hartford approved Ms. Pachunka’s claim for LTD 

benefits based on her physical impairments and inability to perform her Own Occupation.

66. On December 15, 2014, Harford approved Ms. Pachunka’s Life Insurance 

Waiver of Premium (“LWOP”) claim.

67. Under the LWOP Policy, “Disabled means You are prevented by injury or 

sickness from doing any work for which You are, or could become, qualified by: a) 

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education; b) training; or 3) experience.”

68. On July 23, 2015, Hartford notified Ms. Pachunka that it had initiated a 

review to determine if she will qualify for benefits under the “Any Occupation” definition 

of Disability on and after January 17, 2016.

69. On August 26, 2015, Hartford informed Ms. Pachunka that it needed the 

following documents to evaluate her claim:

Ø Attending Physicians Statement (“APS”) signed and dated by a Physician;

Ø APS (for Mental Health claims);

Ø A copy of Ms. Pachunka’s medical records covering the period of January 1, 

2015 to current from Drs. Gomez, Alfonso, Zak, Ndum, and Dantini, as well 

as Florida Hospital Flagler; and

Ø A copy of Ms. Pachunka’s pharmacy log from any and all pharmacies for the 

period January 1, 2015 to current.

70. In its August 26, 2015 letter, Hartford rejects the APS completed by Mary 

Reynolds, FNP purportedly because it was not dated or completed by a “Physician.”

71. Under the LTD Policy, Mary Reynolds, FNP meets the definition of 

“Physician,” as she is a “legally qualified practitioner of a healing art” who is “licensed to 

practice in the jurisdiction where care is being given” and is “practicing within the scope of 

that license.”

72. On September 24, 2015, Ms. Pachunka requested additional time to supply 

the documentation requested by Hartford in its August 26, 2015 letter. Hartford did not 

respond to Ms. Pachunka’s request.

73. On October 9, 2015, Ms. Pachunka made a partial disclosure of the 

documentation requested by Hartford in its August 26, 2015 letter.

74. On October 26, 2015, Ms. Pachunka disclosed the remaining outstanding 

information requested by Hartford in its August 26, 2015 letter, including an October 22, 

2015 APS form signed by Ms. Reynolds and Dr. Alfonzo.

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75. Ms. Reynolds and Dr. Alfonzo’s October 22, 2015 APS form concluded a 

less than sedentary capacity.

76. On December 16, 2015, Hartford notified Ms. Pachunka that, after further 

review of her claim, she continued to qualify for LWOP benefits and remained Disabled as 

defined by the LWOP Policy.

77. On December 20, 2015, Nurse Case Manager Rowena N. Buckley conducted 

a medical file review and concluded:

R/Ls [restrictions and limitations] seem reasonable given [Ms. Pachunka’s] 

report of widespread and severe pain. She has difficulty concentrating because of her medications and states that because of her physical constraints, 

worsening pain, and side effects of med[ication], she is unable to work as a 

[Corrections Officer] or in any position on a consistent/full-time basis. R/Ls 

are reasonable and supported for part time activities.

78. On January 15, 2016, Hartford advised Ms. Pachunka that it was currently 

reviewing her LTD claim and was unable to determine if she was eligible for benefits on or 

after January 17, 2016 at that time. In this letter, Hartford stated that, 

Benefits will continue to be provided while we continue to investigate Ms. Pachunka’s claim for ongoing benefits. This will allow us time to properly 

evaluate the claim without creating financial hardship. Benefits are being made 

without admitting liability under the terms of the above policy. Should it later be 

determined that Ms. Pachunka is not eligible for benefits, she will not be asked 

to repay the above benefit. If, however, her claim is approved for benefits 

beyond 1/17/16, it is understood that this payment will represent any benefits 

due for the period indicated.

79. In its January 15, 2016, letter, Harford also informed Ms. Pachunka that is 

needed additional clarification of her functionality from her mental health provider, Dr. 

Gomez.

80. On February 1, 2016, Hartford’s Clinical Case Manager Christie Ivancic, 

LMSW sent questions to Dr. Gomez regarding Ms. Pachunka’s mental/psychiatric 

conditions and limitations. 

81. Ms. Ivancic’s February 1, 2016 letter was not provided to Ms. Pachunka until 

February 16, 2016.

82. Likewise, Hartford did not advise Ms. Pachunka that it was having difficulty 

reaching Dr. Gomez until February 16, 2016.

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83. In a letter dated February 17, 2016, Ms. Pachunka responded to Ms. Ivancic’s 

February 1, 2016 letter to Dr. Gomez expressing concern with Hartford’s attempts to 

contact Dr. Gomez via telephone and its focus on Ms. Pachunka’s mental health versus her 

primary physical medical conditions. 

84. In Ms. Ivancic’s February 1, 2016 letter, she advised Ms. Pachunka that she 

had called Dr. Gomez “multiple times (12/28/15, 1/5/16, 1/15/16, 1/25/16 and 2/1/16)” 

and advised Dr. Gomez that, “[a] verbal response can be made by calling me at the phone 

number below.”

85. At the time of Ms. Ivancic’s telephone contact with Dr. Gomez, neither 

Hartford nor any third parties were authorized to directly communicate with Ms. 

Pachunka’s treating providers by telephone. Ms. Pachunka had expressly limited Hartford’s 

authorization to contacting Ms. Pachunka’s treating providers in writing or by telephone 

conference arranged through her legal counsel. 

86. Hartford was advised on multiple occasions that direct telephonic contact 

with Ms. Pachunka’s treating providers was in violation of the authorization it had on file. 

87. On February 17, 2016, Ms. Pachunka provided Hartford with Dr. Gomez’s 

responses to its February 1, 2016 correspondence. In addition to Dr. Gomez’s assessment 

on Ms. Pachunka’s mental restrictions and limitations, he notes “significant other medical 

problems such as chronic pain” and “decompensation regarding physical health.”

88. On February 18, 2016, Hartford decided that Ms. Pachunka’s disability was 

not physical and as of January 17, 2016, she was not entitled to benefits based on her 

physical condition, but Hartford would continue benefits based on her mental condition 

and apply the 24-month limitation for mental/nervous disorders terminating her benefits 

effective January 16, 2018:

Based on this information, we have concluded that Ms. Pachunka is not 

prevented from performing the essential duties of Any Occupation due to a 

physical condition. However, the medical information in out file supports her Disability due to restrictions as a result of a Mental Illness as of 1/17/16. 

Therefore, Ms. Pachunka’s claim is subject to the Mental Illness and Substance 

Abuse Benefits provision as of 1/17/16. As a result, no benefits will be payable beyond 1/16/18.

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89. In its February 18, 2016 letter, Harford provided appeal rights to Ms. 

Pachunka: 

If you do not agree with our denial, in whole or in part, and you which to appeal our decision, you or your authorized representative must write to us within one 

hundred eighty (180) days from the receipt of this letter. . . .Upon completion of that review, we will advise you of our further determination. 

90. Hartford could not know in February 2016, what Ms. Pachunka’s conditions 

would be in January 2018.

91. In its February 18, 2016 determination, Hartford failed to conduct a whole 

person analysis. 

92. Hartford’s determination was inconsistent with its previous findings that Ms. 

Pachunka was Disabled from a physical standpoint.

93. Hartford ignored its own medical file reviewer findings by Ms. Buckley in 

reaching its determination that Ms. Pachunka was Disabled based on a Mental Illness. 

94. Hartford ignored its LWOP file review conclusions in reaching its 

determination. 

95. Despite referencing the LWOP file and Ms. Pachunka’s request for its 

disclosure, Hartford failed to produce this relevant documentation. 

96. In reaching its determination, Hartford disregarded Ms. Reynolds and Dr. 

Alfonzo’s October 22, 2015 APS findings of a less than sedentary capacity.

97. Hartford further disregarded Dr. Sabahi’s assessment that, “in the absence of 

Ms. Pachunka’s psychological symptoms, the [sic] physical/pain related complaints [are] 

enough to preclude occupational functioning.”

98. Hartford based its decision on cherry-picked information.

99. Hartford selected information from a December 30, 2015 assessment form 

that only assessed Ms. Pachunka’s ability to sit, reach above the shoulder, and 

finger/handle.

100. The December 30, 2015 assessment form Hartford relied on did not assess 

Ms. Pachunka’s ability to stand, walk, lift, etc.

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101. Ms. Pachunka’s functional ability cannot be determined from the December 

30, 2015 assessment form given its limited scope.

102. The December 30, 2015 form only allows a treating provider to select a limit 

4 or more hours of sitting. There was no option for a limit of 3 or less hours of sitting. The 

form is designed to deter an accurate assessment of lower levels of functionality.

103. Hartford relied on a year-old Occupational Medicine Peer Review, which 

poorly documents a telephone call with Ms. Pachunka’s treating provider, Dr. Sabahi.

104. Hartford’s internal notes about that Occupational Medicine Peer Review, 

state that, “it would be reasonable to re-evaluate these restrictions within one year from 

the date of this report.” (emphasis added).

105. In its December 29, 2015 letter to Ms. Reynolds, the Hartford misrepresented

Dr. Sabahi’s current occupation assessment of Ms. Pachunka, instead citing to the outdated 

Occupational Medicine Peer Review that was no longer valid. 

106. Dr. Sabahi assessed that, “[Ms. Pachunka] is preclude[d] [from] occupational 

functioning.”

107. Hartford fabricated treating provider opinions, which were unreflective of 

their true opinions.

108. In its February 18, 2016 determination, Hartford piecemealed restrictions and 

limitations from two separate forms, the August 20, 2015 and December 30, 2015 

assessment forms completed by Ms. Reynolds, using the standing and walking restrictions 

from the August 20, 2015 form and the sitting restrictions from the December 30, 2015 

form.

109. Neither the August 20, 2015 nor December 20, 2015 assessment forms by 

Ms. Reynolds were indicative of full-time work, sedentary or otherwise, by themselves.

110. None of Ms. Pachunka’s treating providers have ever assessed her as being 

able to work on a full time basis.

111. In its February 18, 2016 determination, Hartford gave exorbitant and 

inordinate weight to its file reviewers.

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112. On January 10, 2016, Lisa Screen Housley, CRC, conducted an Employability 

Analysis (“EA”) at the request of Hartford. 

113. Ms. Housley’s EA was solely based on Hartford’s cherry-picked collaboration 

of the two APS forms.

114. On August 16, 2016, Ms. Pachunka timely appealed Hartford’s February 18, 

2016 determination that she was only Disabled from a mental health perspective. She 

argued and presented evidence that she is Disabled from Any Occupation as a result of both

her physical and mental Disabilities – collectively and individually – and therefore should 

not be limited to a 24-month benefit limitation.

115. Hartford’s appeal process requires an appeal specialist to respond to all 

appeals within 90 days. The deadline to respond was November 14, 2016. As set forth 

below, Hartford did not meet it.

116. Ms. Pachunka’s mental Disability does not mean that she is not also Disabled 

from a physical standpoint. In the absence of her mental Disability, Ms. Pachunka would 

continue to meet the definition of Disability based on her physical medical conditions.

117. As part of her appeal submission, Ms. Pachunka submitted updated medical 

evidence further supporting her Disability from a physical standpoint. 

118. Ms. Pachunka submitted August 16, 2016 assessment forms by Dr. Sabahi, 

which concluded that Ms. Pachunka could not work in Any Occupation. 

119. Ms. Pachunka’s treating physicians have consistently assessed that she cannot 

work from a physical standpoint.

120. Ms. Pachunka also underwent a vocational evaluation by Mark Kelman, CRC,

who concluded in his July 28, 2016 report that Ms. Pachunka cannot work in Any 

Occupation. 

121. Mr. Kelman reviewed Ms. Housley’s EA and concluded that, “the jobs 

identified and subsequent wages are not realistic, but are more computer generated.” “[Ms. 

Pachunka] does not have the stamina to do these types of jobs, which is supported by the 

totality of [the] medical evidence; and even if she were able to do these jobs, the median 

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wage does not represent a realistic level of pay.”

122. On August 25, 2016, Hartford acknowledged receipt of Ms. Pachunka’s 

August 16, 2016 appeal and August 22, 2016 supplemental information, and informed her 

that a determination would be forthcoming.

123. Hartford agrees in the LTD Policy and represented to the Arizona 

Department of Administration (“ADOA”) that it would render determination following 

receipt of a request for review of a disability claim no later than 90 days after receipt, 

regardless of whether it denied a claim in whole or in part.

124. On August 29, 2016, Hartford notified Ms. Pachunka that it would not make 

a determination on her appeal, noting that, “[t]he additional proof of loss that you have 

provided negates the need for an appeal review at this time as the claim is still actively 

approved.”

125. On September 21, 2016, Ms. Pachunka responded to Hartford’s failure to 

review her LTD appeal.

126. Ms. Pachunka argued that because the determination denied her rights to 

LTD benefits beyond January 16, 2018, she had a right to appeal that determination, and 

Hartford had a duty to review the appeal.

127. Hartford never responded to Ms. Pachunka’s August 16, 2016 appeal. 

128. In denying Ms. Pachunka’s right to review, Hartford has caused Ms. 

Pachunka irreparable financial harm and breached its contractual obligations to both Ms. 

Pachunka and the ADOA. 

129. In a letter dated November 29, 2016, Hartford asked for Ms. Pachunka to 

complete forms for its “claim records” and to ask about “other income benefits she 

received now or in the future.” It continued to ignore her appeal and the evidence she 

presented along with it. 

130. On December 14, 2016, Hartford had again reviewed Ms. Pachunka’s LWOP 

claim and was “pleased to inform” her of approved ongoing waivers of premium. 

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131. Ms. Pachunka is informed and believes that Hartford has approved her 

LWOP claim based on her Disability from a physical standpoint. 

132. In a letter dated January 9, 2017, Ms. Pachunka responded to Hartford’s 

November 29, 2016 request for forms. She included Dr. Sabahi’s August 16, 2016 

assessment forms that addressed both her physical and mental health conditions, as well as 

updated medical records from Drs. Sabahi, Shaw, Evans and Smith; and explained that Dr. 

Shaw would not complete an assessment form, attaching proof of his refusal based on his 

office policy. She reiterated that she was disabled from a physical standpoint and directed 

Hartford to reference her August 16, 2016 appeal. 

133. In a letter dated January 17, 2017, Hartford responded to the January 9, 2017 

letter and did not express any concern that Dr. Shaw would not complete the form. Instead,

Hartford asked for assistance in obtaining medical records and specifically asked that Dr. 

Sabahi respond to its November 2, 2016 letter sent directly to Dr. Sabahi as to Ms. 

Pachunka’s functionality. 

134. On January 30, 2017, Ms. Pachunka, through legal counsel, provided updated 

medical records and requested Hartford to send her its November 2, 2016 letter to Dr. 

Sabahi. 

135. Ms. Pachunka’s counsel finally received Hartford’s November 2, 2016 letter 

to Dr. Sabahi on January 31, 2017. 

136. On February 7, 2017, Ms. Pachunka’s counsel responded to Hartford’s 

November 2, 2016 letter to Dr. Sabahi via e-mail, explaining several issues: 1) Hartford sent 

the letter to Dr. Sabahi directly and did not notify Ms. Pachunka’s legal counsel when doing 

so; 2) Hartford did not provide the 12/09/14 Occupational Medicine peer review 

conducted by Dr. Akshay Sood, which was purportedly attached to Hartford’s letter for Dr. 

Sabahi but not included in the copy it sent to Ms. Pachunka’s counsel; 3) Ms. Pachunka’s 

counsel sought clarification on Hartford’s confusing and misleading questions to Dr. 

Sabahi, which made no sense and which were drafted to support a termination of benefits if 

answered by Dr. Sabahi the way Hartford suggested; 4) a request as to whether Hartford 

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would pay for Dr. Sabahi’s time in light of the information it was seeking from him; and 5)

Hartford should copy Ms. Pachunka’s legal counsel on all correspondence with Ms. 

Pachunka’s treating providers to avoid situations such as this in the future. 

137. On February 16, 2017, Ms. Pachunka’s legal counsel faxed the February 7, 

2017 email to ensure Hartford received it. 

138. On February 17, 2017, Hartford sent a letter inquiring about the status of Ms. 

Pachunka’s Social Security Disability Insurance (“SSDI”) hearing, specifically whether it had

been scheduled and, if so, when it was scheduled to take place. Hartford further demanded 

that all requested information be returned by March 10, 2017 in order to avoid a delay in 

processing the claim.

139. On February 28, 2017, Ms. Pachunka’s counsel informed Hartford by letter 

that her SSDI hearing had taken place on January 6, 2017, and that a decision had not yet 

been reached.

140. On March 10, 2017, Hartford renewed its January 17, 2017 request for

updated medical information, specifically regarding Ms. Pachunka’s restrictions and 

limitations, even though this information was provided with Ms. Pachunka’s January 9, 2017 

letter. Hartford ignored Ms. Pachunka’s previous request for clarification on the issues 

surrounding Hartford’s November 2, 2016 letter to Dr. Sabahi.

141. On March 17, 2017, Ms. Pachunka responded to Hartford’s March 10, 2017 

letter referring Hartford back to her previous correspondence containing the requested 

medical information, renewing her request for clarification on Hartford’s November 2, 2016 

letter to Dr. Sabahi, and informing Hartford of Ms. Pachunka’s recent award of SSDI

benefits (discussed infra), which further proved Ms. Pachunka’s physical disabilities. 

142. On May 1, 2017, Ms. Pachunka sent a letter as a follow-up to her March 17, 

2017 letter, to which Hartford had failed to respond.

143. On May 4, 2017, Hartford again demanded updated medical information and 

ignored the information previously supplied by Ms. Pachunka in her August 16, 2016 

appeal, as well as in her January 9, January 30, and March 10, 2017 letters. 

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144. Hartford advised Ms. Pachunka that no benefits would be issued beyond May 

31, 2017 until Hartford received the requested information.

145. Hartford told Ms. Pachunka that if the requested information were not 

received by May 31, 2017 it would assume she did not wish to pursue additional benefits 

and would close her claim.

146. Despite having already supplied the requested medical information, Ms. 

Pachunka complied with Hartford’s repeated request for an updated assessment form and 

on June 9, 2017, provided Hartford with a supporting statement from Dr. Sabahi, which 

addressed her restrictions and limitations from a physical standpoint only.

147. On May 31, 2017, Ms. Pachunka provided Hartford with a list of treating 

providers so that it may obtain her updated medical records. Hartford was already in 

possession of Ms. Pachunka’s treating provider information, as well as an authorization to 

obtain this information. Yet, it had failed to do so.

148. On May 31, 2017, Ms. Pachunka reiterated that her treating mental health 

provider, Dr. Shaw, would not complete assessment forms as a matter of office policy; 

therefore, she would not be able to facilitate this request. 

149. Hartford had been informed and provided proof that Dr. Shaw does not 

complete assessment forms on at least two prior occasions. 

150. Hartford’s threat to close Ms. Pachunka’s claim if she did not provide the 

mental APS form, or any APS form for that matter, was unreasonable, as the APS forms are 

not a requirement for Proof of Loss under the Plan.

151. In lieu of an APS form, which was an option provided by Hartford, Ms. 

Pachunka provided Hartford with a June 8, 2017 letter from Dr. Sabahi as follows, 

Based on my medical opinion and longstanding treatment of Lynn, she is unable 

to work at this time. She cannot sit comfortably for more than 45 minutes at a 

time for a total of 4 hours in an 8-hour day. She cannot stand or walk more than 20 minutes at a time for a total of 2 hours in an 8-hour day. She would not be able to complete a 40-hour workweek. She cannot bend at the waist, kneel, 

crouch, climb, or balance. She should not lift more than 10 pounds occasionally. Due to the severity of her pain, Lynn would likely be an unreliable employee 

with excessive absenteeism. She is also limited by fatigue and difficulty 

concentrating, which is intensified by her medications. Without medications, 

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Lynn’s pain is intolerable and severely affects her ability to function. Lynn also 

suffers from secondary depression, for which I do not treat her. The above 

referenced limitations are based on her physical conditions only.

152. In its June 21, 2017 letter, Hartford confirmed receipt of Dr. Sabahi’s letter, 

informed it was continuing its year-long review of Ms. Pachunka’s eligibility from a physical 

standpoint and, in the meantime, suspended benefits beyond May 31, 2017, because it did 

not receive an updated mental APS form.

153. Under the LTD Plan, Hartford had no basis to suspend Ms. Pachunka’s LTD 

benefits. 

154. Hartford’s suspension of Ms. Pachunka’s benefits for a form that it knew she 

could not obtain and was not a requirement for Proof of Loss, was done in bad faith.

155. Hartford’s suspension of Ms. Pachunka’s benefits has caused her financial 

harm. 

156. Had Hartford made a timely determination on Ms. Pachunka’s August 16, 

2016 LTD appeal, Ms. Pachunka would not be in this position. 

157. On July 10, 2017, Hartford informed Ms. Pachunka that an Independent 

Medical Examination (“IME”) was needed to determine if Ms. Pachunka meets the 

provisions of the policy from a physical perspective.

158. On July 11, 2017, Ms. Pachunka was provided an Authorization to complete 

and return. She was advised that if she did not provide the signed Authorization by August 

8, 2017, Hartford would consider it to be a refusal to provide Additional Proof of Loss and 

will proceed with a decision based on the information in the file, which “may result in a 

termination of Ms. Pachunka’s benefits.”

159. During this time, Hartford continued to aggressively pursue an overpayment 

from Ms. Pachunka as a result of the SSDI award. 

160. Despite having the ability to do so, Hartford would not allow Ms. Pachunka 

to apply her monthly LTD benefits to the total SSDI overpayment; seemingly, because the 

Hartford planned on terminating her LTD benefits and wanted the overpayment in full 

before initiating its plan.

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161. Hartford failed to negotiate the overpayment in good faith and instead tried 

to use the negotiation process to gain a strategic advantage over Ms. Pachunka. 

162. On July 19, 2017, Hartford confirmed in writing that if Ms. Pachunka remits 

$17,955.00 it would continue to withhold her monthly benefit to be applied to the 

overpayment balance. However, Hartford further added that, “if Ms. Pachunka’s future 

benefits should cease, we would welcome a new discussion to facilitate a reimbursement 

plan revision prior to pursuing other remedies.” 

163. On July 26, 2017, Ms. Pachunka requested clarification as to the 

reimbursement plan, as her benefits were “suspended” at this time.

164. Ms. Pachunka was not provided clarification on the reimbursement plan, but 

was informed that Hartford was waiting on an Authorization to proceed with the long-past 

due determination of her physical Disability. 

165. On July 27, 2017, Hartford was informed that it possessed a December 20, 

2016 Authorization that was valid for two years. Ms. Pachunka inquired as to why this 

Authorization could not be used. 

166. Hartford purported that the partial revocation on the December 20, 2016 

Authorization prohibited a third party examiner to evaluate Ms. Pachunka; and therefore, 

would need a new Authorization. 

167. On information and belief, the new Authorization provided to Ms. Pachunka 

was improper and not intended for Hartford’s purported need. 

168. When compared to the December 20, 2016 Authorization, the new 

Authorization included additional information that it may be used for SSDI, or subrogation 

or reimbursement purposes.

169. This additional language inputted into the Authorization serves no purpose in 

Hartford’s purported need to schedule an IME or in furthering its review of Ms. Pachunka’s 

eligibility for benefits under the LTD Policy.

170. The December 20, 2016 Authorization did not preclude Hartford from 

scheduling an IME.

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171. Notwithstanding her reservations, Ms. Pachunka provided Hartford with a 

new Authorization on August 8, 2017.

172. Because Ms. Pachunka’s LTD benefits continue to be suspended since May 

31, 2017, she has not received LTD payments since that time, despite the overpayment 

being satisfied.

173. On October 10, 2017, Hartford’s claim examiner, Karen Washington, 

contacted Ms. Pachunka’s counsel via telephone and informed Ms. Pachunka that Hartford 

had “been scheduling an IME” and sent a letter that same day advising of the IME date and 

time. 

174. Hartford uses IMEs when: 1) the medical evidence is conflicting; 2) it needs 

to determine SSDI eligibility; or 3) when the definition of disability changes from Own 

Occupation to Any Occupation. Despite none of these circumstances existing, on October 

10, 2017, Ms. Pachunka received a notice of IME scheduled with Brian McCrary, MD.

175. On information and belief, Hartford elected to employ Dr. McCrary for his 

propensity to write reviews supportive of a termination of benefits. 

176. Under the LTD Policy, Ms. Pachunka has a “valid reason for refusal” for not 

providing additional Proof of Loss by participating in the IME. 

177. Ms. Pachunka does not have an obligation to exhaust administrative remedies 

under the LTD Policy and applicable law.

178. On October 20, 2017, Ms. Pachunka’s counsel informed Ms. Washington via 

e-mail that Ms. Pachunka would not be attending the IME and, instead, would be filing a 

lawsuit against Hartford for its breach of contract and insurance bad faith. 

179. The collective evidence supports Ms. Pachunka’s claim for benefits.

Ms. Pachunka’s SSDI Benefits

180. When Hartford expects a claimant will exceed the SSDI elimination period 

and appears to meet the SSA’s Definition of disability, Hartford requires the claimant to 

apply for SSDI benefits.

181. At Hartford’s insistence, Ms. Pachunka applied for SSDI benefits.

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182. On March 8, 2017, the SSA issued a Fully Favorable Decision awarding Ms. 

Pachunka SSDI benefits.

183. The SSA found that Ms. Pachunka’s physical medical conditions limited her 

to a less than sedentary work capacity.

184. On May 1, 2017, Ms. Pachunka notified Hartford of the SSA’s Fully 

Favorable Decision and provided a copy of the Notice of Award to Harford to support her 

August 16, 2016 LTD Appeal.

185. The SSA award of SSDI benefits resulted in an overpayment of benefits to 

Ms. Pachunka.

186. The LTD Policy allows Hartford to collect overpayments at its discretion, 

which includes applying monthly benefits to an overpayment.

187. Because her future benefits are in excess of the overpayment, Ms. Pachunka 

requested that Hartford recoup the overpayment by offsetting future benefits.

188. In her May 1, 2017 letter, Ms. Pachunka requested that Hartford apply her 

monthly LTD benefit to the SSDI overpayment until it is satisfied.

189. Hartford refused that request.

190. Hartford provided its calculations for the SSDI overpayment, concluding that 

the LTD claim was overpaid in the amount of $31,789.40.

191. On May 4, 2017, Hartford informed Ms. Pachunka that it was immediately 

stopping LTD benefits until the overpayment was reimbursed.

192. Attached to the May 4, 2017 letter was a Repayment Agreement for Ms. 

Pachunka to elect her method of repayment.

193. On May 4, 2017, consistent with the Repayment Agreement options, Ms. 

Pachunka elected for Hartford to apply her future monthly LTD benefit to the SSDI 

overpayment.

194. Despite the SSA determination, in a separate letter that same day, Hartford 

told Ms. Pachunka it needed an APS from her mental health provider and a Behavioral 

Functional Abilities Form filled out.

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195. Hartford’s demand for immediate repayment of the overpayment on Ms. 

Pachunka’s STD and LTD claims as a result of the SSDI award reveals that Hartford put its 

financial interests ahead of Ms. Pachunka’s interests.

196. In a May 12, 2017 telephone call, Hartford informed Ms. Pachunka that it 

would not allow her to apply her future monthly LTD benefits to the SSDI overpayment. 

197. In a May 24, 2017 telephone call, Ms. Pachunka was informed that in lieu of 

one full lump sum payment, Ms. Pachunka may pay $17,955.21 in a lump sum and the rest 

of the overpayment may come from her future LTD benefits.

198. On information and belief, Ms. Pachunka was offered this alternative 

payment resolution because it would result in a full reimbursement of the overpayment as 

of the date her LTD benefits would be terminated under maximum benefit allowed under 

the Mental Illness limitation. 

199. On or around May 25, 2017, Hartford applied Ms. Pachunka’s May 2017 

LTD benefit as reimbursement to the SSDI overpayment.

200. On information and belief, Hartford has not considered Ms. Pachunka’s 

SSDI award as it relates to her physical disability. 

201. On information and belief, Hartford’s only interest in the SSDI award is the 

financial benefit to Hartford.

202. On August 30, 2017, Hartford acknowledged receipt of Ms. Pachunka’s 

payment toward her SSDI overpayment, but purported that she owed additional funds. 

203. Hartford had failed to credit the attorneys’ fees Ms. Pachunka paid.

204. On September 25, 2017, Ms. Pachunka provided proof that the SSDI 

overpayment was paid in full and requested confirmation from Hartford that it agreed.

205. Hartford confirmed that Ms. Pachunka was not required to repay the $6,000 

SSDI benefits withheld by the SSA and paid to her representative pursuant to an approved 

fee agreement.

206. In a letter dated October 10, 2017, Hartford confirmed that the overpayment 

was paid in full. 

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207. To her financial detriment and without the promise of future LTD benefits, 

on August 22, 2017, Ms. Pachunka was forced to reimburse Hartford the full amount of the 

overpayment due to the stress and uncertainty of the process, as well as the imminent threat 

of further collection efforts from Hartford. 

208. Ms. Pachunka paid over $30,000 to Hartford to reimburse it for the 

overpayment.

209. Despite previous discussions regarding itemization of the overpayment 

amount, Hartford later miscalculated the overpayment amount and attempted to collect 

more money from Ms. Pachunka. 

210. Despite accepting the benefit of the SSA determination that Ms. Pachunka 

has less than sedentary work capacity due to her physical disabilities, Hartford suspended 

LTD payments to Ms. Pachunka and immediately began looking for ways to terminate her 

LTD benefits.

Hartford’s Relationship With The State of Arizona

211. Hartford provides Life, STD, LTD and AD&D insurance to some employees 

of the State of Arizona through the ADOA. 

212. Hartford considers the ADOA to be a prestigious client. 

213. As set forth in extensive documentation on the State of Arizona procurement 

website, Hartford handles thousands of lives for the ADOA, even having an entire team in 

Sacramento and beyond dedicated to the ADOA. 

214. Hartford has a full-time onsite representative at the ADOA, Ms. Patricia 

Cisneros, and a National Account Manager, Courtney Capek, located in Phoenix, AZ. 

215. As of 2014, Ms. Capek was responsible for four Hartford clients, including 

the ADOA. Covered lives in her care ranged from 7,000 to 65,000.

216. Ms. Capek holds Hartford’s Group Benefits Disability Specialist Certification

and is adept at solving account and claims issues for Hartford. 

217. Among its many responsibilities, Hartford must meet or exceed Performance 

Guarantees to the ADOA or else face financial penalties if not met.

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218. The Performance Guarantees were precipitated by the ADOA’s

dissatisfaction with Hartford’s claim handling.

219. In November 2014, the ADOA questioned why it does not offer settlement 

on the State of Arizona LTD Policy, noting that Hartford was requesting permission to 

allow it.

220. The proposed parameters for settlement were:

The claimant’s medical condition reached maximum medical improvement

The disorder should not be terminal or immediately life threatening

All offset issues should be resolved

SSDI should be resolved.

221. Ms. Pachunka is informed and believes that settlement of LTD claims is a 

financial benefit to Hartford because it pays claimants less than to which the claimant would 

otherwise be entitled.

222. In June 2015, at the time Hartford was demanding that Ms. Pachunka apply 

for SSDI benefits, which would result in an overpayment of STD benefits, ADOA called to 

Hartford’s attention that its Benefit Highlight Sheet does not include a comment about 

overpayment recovery.

223. In May 2016, Hartford attributed the dissatisfaction with its claims handling 

on changes to the plan design, rather than Hartford’s performance and did not want to be 

penalized financially for the members’ bad experiences.

COUNT I

(Breach of Contract)

224. All other paragraphs are incorporated by reference. 

225. Hartford entered into a valid and binding contract with the State of Arizona

to provide LTD benefits to Ms. Pachunka until she was no longer disabled or until his 

maximum benefit period under the terms of the Policy. 

226. Ms. Pachunka was an insured participant under the Policy. 

227. Ms. Pachunka reasonably expected that she met the requirements of 

Disability as defined by the LTD Policy, and that she would receive benefits under the LTD 

Policy until she was no longer disabled or until his maximum benefit period.

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228. Despite Ms. Pachunka’s disability coverage, Hartford improperly terminated

her LTD benefits in breach of the Policy. 

229. Hartford breached the contract by failing to furnish Ms. Pachunka with 

adequate written notification of its claims decisions as required by the LTD Policy. This 

includes but is not limited to its repeated failure to “give the specific reason(s) for the denial 

[in whole or in part]; . . . provide a description of any additional information necessary to 

perfect and an explanation of why it is necessary; and provide an explanation of the review 

procedure.” 

230. Hartford breached the contact by depriving Ms. Pachunka of a “full and fair 

review” of her various appeals, particularly with respect to her August 2016 appeal, which 

Hartford ignored entirely. In further breach of the contract, Hartford never responded in 

writing with its final decision on the claim following the 2016 appeal. 

231. Hartford breached the contract by communicating directly with treating 

providers outside of Ms. Pachunka’s legal counsel’s knowledge when the LTD Policy 

explicitly permits for Ms. Pachunka to have legal representation on appeal. 

232. Hartford breached the contract by failing to produce relevant documents for 

Ms. Pachunka’s review as required by the LTD Policy. Hartford expressly withheld relevant 

documents without reasonable explanation as to what relevant documents were being 

withheld and how the LTD Policy allowed for the partial disclosures. 

233. Hartford breached the contract by requiring Ms. Pachunka to apply for SSDI

benefits but then ignoring the SSA’s findings. 

234. Hartford breached the contract by reneging on the reimbursement agreement 

it provided to Ms. Pachunka. 

235. Hartford’s claim handling and decision to terminate benefits was designed to 

benefit Hartford financially to Ms. Pachunka’s detriment.

236. Hartford’s decision to terminate benefits was not supported by substantial 

evidence.

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3030 North 3rd Street

Phoenix, AZ 85012

(602) 277-1745

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237. Hartford terminated Ms. Pachunka’s LTD benefits with the knowledge that it 

had no reasonable basis for doing so. 

238. Ms. Pachunka meets Hartford’s “Any Occupation” definition of disability. 

Hartford breached the contract by failing to consider Ms. Pachunka’s education, training, 

experience, and earnings potential in conducting its “Any Occupation” review. 

239. Hartford improperly terminated Ms. Pachunka’s LTD benefits in breach of 

the Policy. 

240. The evidence supported Ms. Pachunka’s continuing eligibility. 

241. Despite its obligation under the Policy, Hartford failed to consider all of the 

evidence in support of Ms. Pachunka’s inability to work in Any Occupation, which 

constitutes a breach of contract.

242. Hartford ignored the opinions of Ms. Pachunka’s treating providers and 

relied on manipulated vocational parameters and restrictions to terminate benefits. 

243. Hartford ignored the SSA’s determination that Ms. Pachunka is disabled from 

any gainful employment because of her physical disabilities.

244. Hartford breached the contract by finding Ms. Pachunka was Disabled solely 

from Mental Illness. 

245. Hartford failed to pay Ms. Pachunka her LTD benefits despite being 

obligated to do so under the Policy. 

246. Hartford demanded objective medical evidence and testing to prove 

subjective complaints, which does not exist and which is not required by the LTD Policy.

247. Hartford failed to apply the LTD Policy’s definition of “treatment,” thereby 

breaching the contract. It unjustifiably failed to credit Ms. Pachunka’s subjective complaints, 

including her complaints of pain, fatigue, and medication side effects. It did not consider 

Ms. Pachunka’s attendance for medical visits or Ms. Pachunka’s providers’ observations in 

finding appropriate treatment. It also did not consider her use of medications as treatment. 

248. In violation of the LTD Policy, Hartford failed to send Ms. Pachunka to an 

IME prior to making determinations that impacted coverage. Its effort to send her to an 

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3030 North 3rd Street

Phoenix, AZ 85012

(602) 277-1745

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IME after suspending benefits breached the contract. 

249. Hartford refused to consider Ms. Pachunka’s 2016 appeal in violation of the 

LTD Policy, causing her irreparable harm.

250. Hartford breached the contract by violating the LTD Policy’s Overpayment 

Recovery provision. Hartford sought overpayment in a manner that served its best financial 

interests and not those of Ms. Pachunka, which breached the contract and constituted bad 

faith. It abandoned the LTD Policy to explore manipulative ways for collecting 

overpayment from Ms. Pachunka and minimizing its financial liability. For instance, despite 

Hartford’s ability to recover its overpayment from future benefits under the LTD Policy, 

Hartford unreasonably refused to do so, because it did not plan on paying future benefits. 

It tried to negotiate partial payments with Ms. Pachunka instead, and Ms. Pachunka is 

informed and believes it did this because it did not intend to approve her claim.

251. Ms. Pachunka remains Disabled under the Policy and is entitled to LTD 

benefits.

252. Ms. Pachunka has been damaged as a direct result of Hartford’s failure to pay 

LTD benefits under the Policy. She has suffered financially and has been seriously 

compromised in her ability to provide for herself. 

253. Hartford’s failure to pay benefits was not based on the existence of a genuine 

dispute, is not fairly debatable, and its claims decision lacked a reasonable basis. 

254. Hartford’s denial constitutes anticipatory repudiation of the contract and, 

therefore, Ms. Pachunka is entitled to current receipt of all of her LTD benefits.

COUNT II

(Insurance Bad Faith)

255. All previous paragraphs and headings are incorporated by reference.

256. Hartford breached the duty of good faith and fair dealing by unreasonably 

terminating Ms. Pachunka’s LTD benefits in direct contradiction of the medical evidence.

257. Hartford acted unreasonably in evaluating Ms. Pachunka’s claim, and it 

intentionally terminated her benefits without a reasonable basis. 

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3030 North 3rd Street

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(602) 277-1745

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258. Hartford’s claim handling was designed and implemented to find ways to 

reduce or avoid its liability. 

259. Hartford contacted treating physicians without releases or authorization from 

Ms. Pachunka. In some cases, it presented fraudulent authorization forms.

260. In administering claims, Hartford misrepresents treating provider opinions 

and intentionally uses outdated information in an effort to limit its liability.

261. Even after Ms. Pachunka notified Hartford multiple times of her objection to 

the unauthorized contacts with her treating physicians, Hartford continued to contact them.

262. Hartford administered Ms. Pachunka’s claim with the intent to terminate

benefits.

263. Hartford completed EAs in Ms. Pachunka’s claim in bad faith. 

264. As an institution, Ms. Pachunka is informed and believes Hartford routinely 

secures EAs based on biased information in violation of the Code of Professional Ethics 

for Rehabilitation Counselors and in violation of its duty of good faith and fair dealing. In 

the EA referral process, Hartford fails to provide all relevant evidence and requests analyses 

based solely on biased, inaccurate limitations. Hartford uses these EAs as a basis for 

terminating claims, including but not limited to Ms. Pachunka’s claim. 

265. As an institution, Ms. Pachunka is informed and believes that Hartford uses 

misleading forms in communicating with claimants’ treating providers, and that these forms 

are designed to discourage treating providers from accurately assessing and reporting 

functionality. This practice causes widespread harm to claimants. The forms do not solicit 

adequate information for even determining functionality; for instance, it does not address a 

claimant’s ability to stand, walk, lift, etc. This practice constitutes bad faith. 

266. As an institution, Hartford unreasonably demands proof of loss that it knows 

is untenable for claimants to provide and that is not a requirement of the LTD Policy. In 

doing so, it shifts an impossible burden to claimants, despite the LTD Policy clearly 

allowing Hartford to collect proof of loss by requiring in-person interviews, evaluations, etc. 

But when claimants cannot provide the demanded proof of loss, Hartford improperly 

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3030 North 3rd Street

Phoenix, AZ 85012

(602) 277-1745

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terminates their claims. In Ms. Pachunka’s claim, for example, Dr. Shaw would not

complete a requested form for Hartford; this is because he does not complete forms for any 

of his patients. Despite Ms. Pachunka explaining this fact to Hartford and providing proof 

of Dr. Shaw’s blanketed refusal as part of his practice, Hartford terminated Ms. Pachunka’s 

claim prematurely because she could not force Dr. Shaw to complete the form. However, 

nothing in the LTD Policy requires Proof of Loss in the form of statements from 

physicians. Hartford’s practice to demand Proof of Loss this way is bad faith on an 

institutional level. 

267. Ms. Pachunka is informed and believes that, when claimants fail to furnish 

“proof of loss,” Hartford reports the claim to the State of Arizona differently than if 

Hartford simply had denied the claim on the merits. This difference in reporting allows 

Hartford to continue its contractual relationship with the State of Arizona, avoid penalties, 

and appear to be more fair in claims handling than it is really being. 

268. Hartford’s insistence that an IME was necessary to assess Ms. Pachunka’s 

claim is an admission that its decision to suspend benefits was not fairly investigated. This 

conduct constitutes breach of contract, as well as bad faith. See Cherry v. Dig. Equip. Corp. 

Long-Term Disability Plan, 2006 U.S. Dist. LEXIS 68099, at *21-22 (E.D. Cal. Aug. 10, 2006) 

(“defendants had already denied plaintiff’s benefits before deciding there was a need for an 

IME. Thus, if an IME was genuinely necessary, this calls into question whether there was 

sufficient support for Prudential’s initial decision to deny benefits.”) If an IME was 

necessary for Hartford to make a decision as to whether Ms. Pachunka was disabled from a 

physical perspective, then suspending benefits without an IME is an act of bad faith. 

269. Choosing Dr. Brian McCrary and waiting to collect the overpayment before 

continuing to investigate the claim are also acts of bad faith.

270. Hartford treats being on claim as an adversarial process, failing to treat its 

insureds’ interests with equal regard as it does its own interests. 

271. Hartford single-mindedly pursued offsets, taking an offset for an SSDI

decision it willfully and unjustifiably abandoned. 

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3030 North 3rd Street

Phoenix, AZ 85012

(602) 277-1745

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272. Hartford failed to conduct a “whole person” analysis in an effort to place its 

financial interests ahead of Ms. Pachunka’s. It parsed out Ms. Pachunka’s mental and 

physical disabilities to find she was disabled from solely a mental health perspective. It did 

this against the weight of the evidence and to avoid liability under the LTD Policy, because 

the LTD Policy limits benefits to 24 months for disabilities due to mental health issues. 

273. Hartford has a duty to conduct a fair, thorough, and objective review. 

Instead, it conquered and divided Ms. Pachunka’s diagnoses in an effort to eliminate them 

one by one. Hartford cannot select parts from various treating provider forms to create selfserving, makeshift restrictions and limitations. This is the very definition of “cherry-picking” 

and bad faith.

274. On information and belief, as an institution, Hartford uses “segments” to set 

claims on paths which include predetermined processes to achieve certain outcomes. 

275. On information and belief, Hartford assigns claims to “segments” based on 

what Hartford prospectively determines should be the resolution of the claimant’s disability

before obtaining all of the medical evidence.

276. On information and belief, Hartford’s “segments” are internal claims 

guidelines used by Hartford to manage claims based on Hartford’s anticipated financial 

liability. 

277. On information and belief, Hartford assigns a claim to “segment 1” if it 

deems the claim has low medical or occupational complexity or anticipated the claimant will 

return to work.

278. On information and belief, Hartford assigns a claim to “segment 2” if it 

deems the claimant will return to their own or an alternate occupation.

279. On information and belief, Hartford assigns a claim to “segment 3” if it 

deems the claims has occupational or financial complexities and the outcome is uncertain.

280. On information and belief, the peer reviewers, internal medical reviewers, and 

vocational examiners were financially incentivized to deny Ms. Pachunka’s claim. 

281. Hartford’s conduct was motivated by financial considerations, caused by its 

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3030 North 3rd Street

Phoenix, AZ 85012

(602) 277-1745

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structural conflict of interest as both decision maker and payer of Ms. Pachunka’s LTD 

benefits. Hartford has failed to produce any evidence that it protected Ms. Pachunka from 

its conflict and instead intentionally withheld information that would have otherwise 

revealed the depth of its self-interested conduct. This is also bad faith. 

282. As an institution, Hartford uses claim payment reduction goals and cost 

containment measures as a method of profit-making for the company. In so doing, 

Hartford unfairly and arbitrarily reduces or denies payments on legitimate claims in an 

across-the-board fashion to attain its numerical reduction goals. Hartford’s cost 

containment measures are consistent with and a part of a corporate-wide plan and scheme.

283. On information and belief, Hartford ties employee compensation either 

directly or indirectly to Hartford’s profits.

284. On information and belief, claim liability is a consideration during employee 

evaluations.

285. On information and belief, Hartford advertises the “cost savings” it provides 

in claim handling.

286. On information and belief, emails are sent to claims department employees at 

Hartford setting forth the profitability of Hartford as a whole and separately for the benefit 

departments for the preceding quarter. This email would be followed by another email 

explaining whether the employee would be getting a bonus.

287. On information and belief, the employees understood that their bonuses were 

based on how profitable Hartford was.

288. On information and belief, all employees have access to benefit amounts and 

computations.

289. On information and belief, claim decisions are made by employees with no 

medical training and who, therefore, have no basis on which to make medical judgments or 

choose between competing medical opinions.

290. Throughout the claim, Hartford’s actions demonstrated its efforts to limit 

liability on Ms. Pachunka’s claim, even before it had the medical evidence necessary for a 

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review. For example, it demanded Ms. Pachunka to pursue other income benefits based on 

her disability while trying to find ways to claim her physical condition was not disabling, and 

trying to cast her disability as mental to limit its liability. 

291. Ms. Pachunka is informed and believes that Hartford did not set aside 

adequate reserves to pay her claim, specifically with respect to Disabled Life Reserves 

(“DLR”). 

292. Ms. Pachunka is informed and believes that Hartford did not intend to pay 

her claim beyond a certain date, which is reflected in its reserves calculation. 

293. Hartford placed its financial interests ahead of Ms. Pachunka’s interests, 

failing to act with the decency and humanity required by the duty of good faith and fair 

dealing.

294. On information and belief, Hartford companywide employs IME doctors, 

consultants, and peer reviewers who the Hartford knows will provide biased reports in 

favor of benefit terminations.

295. Hartford either intended to injure Ms. Pachunka or acted to serve its own 

interests, having reason to know and consciously disregarding a substantial risk that its 

conduct might significantly injure Ms. Pachunka.

296. Clear and convincing evidence exists that Hartford acted with an evil mind 

when engaging in aggravated and outrageous conduct. 

297. Hartford willfully decided to act against Ms. Pachunka by terminating her

LTD benefits. The evidence demonstrates that Hartford placed its financial interests ahead 

of Ms. Pachunka’s interests, failing to act with the decency and humanity required of it as an 

insurer. Hartford’s conduct towards Ms. Pachunka was willful, oppressive, malicious, 

deceptive, and was in conscious disregard of Ms. Pachunka’s rights, with the intent to harm 

or injure Ms. Pachunka, such that there should be an assessment of punitive damages 

against Hartford in an amount appropriate to punish and deter it.

298. Hartford’s handling of Ms. Pachunka’s claim was inconsiderate, rude, 

oppressive, outrageous, and in total disregard for her safety, welfare, and well-being.

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299. As a result of Hartford’s wrongful conduct, Ms. Pachunka has suffered 

pecuniary damages under the LTD Policy, including but not limited to past-due and future 

LTD benefits, other damages to be shown at trial, and attorneys’ fees and costs. 

300. As a proximate result of Hartford’s conduct, Ms. Pachunka has also suffered 

and will continue to suffer pain, anxiety, worry, humiliation, and physical and emotional 

distress, all to her general damage in an amount to be shown at trial.

301. Ms. Pachunka relied on Hartford’s promise of coverage to her extreme 

detriment. 

302. Ms. Pachunka subscribed to coverage under the LTD Policy, believing the 

promises Hartford made as to the security such coverage would afford her. She purchased 

coverage years prior to becoming disabled, never thinking she would need the coverage but 

feeling more secure with the knowledge it was there. Indeed, she paid for and was entitled 

to participation in the LTD Policy. 

303. Hartford’s conduct has denied Ms. Pachunka the security and peace of mind 

she thought she possessed as a result of being insured.

304. Through outrageous conduct motivated by its improper financial interests, 

Hartford abandoned the clear terms of the LTD Policy to find Ms. Pachunka no longer 

disabled.

305. For Hartford’s breach of its duty of good faith and fair dealing, Ms. Pachunka

is entitled to future benefits under the LTD Policy.

306. Ms. Pachunka is entitled to recover attorneys’ fees pursuant to A.R.S. § 12-

341.01.

WHEREFORE, Ms. Pachunka respectfully requests that the Court award:

A. All past and future benefits due under the terms of the LTD Policy, 

including immediate receipt of future benefits as a result of Hartford’s 

anticipatory breach;

B. Securement of the Life Policy and the premium waiver under the Life 

Policy;

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C. Compensatory damages for mental, emotional, and physical distress and 

other incidental damages in an amount to be determined at jury trial;

D. Costs of suit incurred by Ms. Pachunka;

E. Attorneys’ fees and costs pursuant to A.R.S. § 12-341.01;

F. Prejudgment interest on benefits and damages at the highest legal rate until 

paid; 

G. An assessment of punitive or exemplary damages in an amount to be 

determined at jury trial and sufficient to punish Defendants and deter 

future wrongful conduct; and 

H. Such further relief as the Court deems just and proper.

Dated this 27th day of October, 2017,

OBER & PEKAS, PLLC

By: s/Erin Rose Ronstadt

Erin Rose Ronstadt 

Kevin Koelbel

Attorneys for Plaintiff

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