Source: https://www.debofsky.com/Cases/
Timestamp: 2019-04-23 04:16:17+00:00

Document:
DeBofsky, Sherman & Casciari, P.C., recently won a remand from the U.S. Court of Appeals for the Seventh Circuit in Hennen v. Metro. Life Ins. Co., No. 17-3080, __F.3d__, 2018 WL 4376994 (7th Cir. Sept. 14, 2018). Susan Hennen suffered from chronic low back pain radiating into her legs, despite having undergone three back surgeries. She applied for benefits under a group policy of disability insurance issued by MetLife to her employer. MetLife approved Hennen’s disability claim, but only for two years, asserting that Hennen’s claim was subject to a 24-month limitation on benefits for "neuromusculoskeletal and soft tissue disorders." Hennen challenged that decision, submitting her doctors’ findings, along with electromyogram ("EMG") evidence that she suffered from "radiculopathies," which is an exception to the 24-month limitation. MetLife nevertheless affirmed its decision to deny benefits, stating that Hennen had failed to submit "objective" evidence of nerve root pathology, as required under the policy.
MetLife based its decision on the report of a non-examining doctor, Neil McPhee, MD, who opined that Hennen’s EMG was negative for "active" radiculopathy. Yet even Dr. McPhee acknowledged that Hennen should undergo an independent medical exam with repeat EMG testing to more fully evaluate whether she suffered from radiculopathy. MetLife ignored that suggestion and instead affirmed its decision to deny Hennen’s benefits. Hennen filed suit, and the district court ruled in favor of MetLife, determining that MetLife’s decision was not arbitrary and capricious. The U.S. Court of Appeals for the Seventh Circuit reversed, however, finding it was unreasonable and thus arbitrary and capricious for MetLife to ignore the opinions of four doctors who all agreed Hennen suffered from radiculopathy, in favor of the opinion of one doctor, Dr. McPhee, who disagreed, particularly where Dr. McPhee had recommended further testing that MetLife declined to pursue. Rather than award benefits outright, the Seventh Circuit remanded the case to MetLife for further proceedings.
Cathleen Kennedy v. Eli Lilly & Co.
DeBofsky, Sherman & Casciari, along with Bridget O’Ryan and O’Ryan Law Offices won a victory in the U.S. Court of Appeals for the Seventh Circuit on May 18, 2017 in the case of Cathleen Kennedy v. Eli Lilly & Co. The case involved a disability benefit claim brought by Kennedy, a former senior human resources executive for Lilly, who became disabled on account of fibromyalgia. Although her claim for benefits were originally approved, Kennedy challenged the subsequent termination of her benefit claim and won her case in federal court. The U.S. Court of Appeals affirmed the lower court ruling that Lilly’s termination of benefits was arbitrary and capricious. The court’s discussion of fibromyalgia and disability reinforced the disabling nature of that condition; and the court was critical of Lilly’s inadequate consideration of Kennedy’s claim both as to a deficient medical examination and the benefit committee’s failure to offer a reasonable explanation of Kennedy’s employability in the face of unpredictable symptom flares that made working on a regular and continuous basis impossible.
On December 13, 2016, the U.S. Court of Appeals for the Seventh Circuit issued a ruling in the case of Prather v. Sun Life. The case, which involved a claim for accidental death insurance benefits, overturned a lower court ruling denying Lee Ann Prather's claim and ordered Sun Life to pay the full amount of benefits claimed. The court found that Sun Life lacked any evidence supporting its decision and ruled that Jeremy Prather's untimely death constituted an "accident" under the terms of the policy.
On July 27, 2016, the U.S. Court of Appeals for the Seventh Circuit handed down a decision in the case of Berg v. New York Life Ins. Co. reversing an adverse judgment in the district court against DeBofsky, Sherman & Casciari, PC’ client, Eric Berg. The court of appeals found in Berg’s favor on two significant issues: First, the court ruled that a claimant for disability benefits did not have to be under a doctor’s care for the claimed disabling condition as of the date the claim arose. The court found the policy lacked such a temporal requirement and that its terminology was ambiguous on the issue. Second, the court found that if the insured is unemployed when he submits a claim, his "regular job" is the occupation that was last performed, not the so-called occupation of "unemployed person."
This ruling is significant on both issues and will no doubt be cited frequently in future litigation involving disability benefits.
The U.S. Court of Appeals for the Seventh Circuit upheld the Illinois ban on discretionary clauses in health and disability insurance policies against an ERISA preemption challenge.
The U.S. Court of Appeals for the Third Circuit dismissed an appeal from a successful challenge to an ERISA benefit denial based on lack of a final and appealable order.
Halley v. Aetna Life Insurance Co.
The U.S. District Court for the Northern District of Illinois held that Aetna's failure to adequately address whether a claimant was capable of earning a salary comparable to his pre-disability income invalidated its decision to terminate benefits.
Raybourne v. CIGNA Life Ins.Co. of N.Y., 700 F.3d 1076 (7 th Cir. 2012).
In this ruling against CIGNA, the U.S. Court of Appeals upheld a lower court ruling finding that CIGNA had improperly terminated Edward Raybourne's disability benefits. The court ruled that CIGNA failed to take Raybourne's Social Security disability benefit determination into consideration, and that CIGNA was motivated by a financial conflict of interest. Raybourne was also successful in challenging CIGNA's reliance on a so-called independent medical examination. In addition to awarding all benefits due, the court of appeals upheld an award of attorneys' fees to Raybourne's counsel.
Stephan v. Unum Life Ins.Co. of America, 697 F.3d 917 (9 th Cir. 2012).
The U.S. Court of Appeals overturned a lower court ruling that favored UNUM. The court determined that UNUM improperly calculated Mark Stephan's benefits and that it had arbitrarily interpreted the insurance policy in a manner that diminished the benefits due by $10,000/month. The court ruled that Unum's actions were motivated by financial bias and conflict of interest. In addition, the court negated UNUM's claim that communications between its claim adjuster and in-house counsel were shielded from disclosure due to attorney-client privilege.
Holmstrom v. Metropolitan Life Ins.Co., 615 F.3d 758 (7th Cir. 2010).
In Holmstrom, the plaintiff, Lanette Holmstrom, was successful in her appeal against METLIFE (Metropolitan Life Insurance Company) and convinced the court of appeals to overturn a lower court finding in favor of the insurance company and award past-due disability benefits and order the continuation of benefit payments. The ruling was especially significant in recognizing the significance of pain in disability assessment and in criticizing METLIFE for presenting claimant with a "moving target" as to what evidence she should submit.
Diaz v. Prudential Insur.Co. of America, 499 F.3d 640 (7th Cir. 2007) and 422 F.3d 635 (7th Cir. 2005).
This case was heard twice by the court of appeals; and in both rulings, the court overturned a lower court's finding in favor of PRUDENTIAL. In the first ruling, the court held the lower court had improperly deferred to PRUDENTIAL's findings; and in the second ruling, the court determined that PRUDENTIAL improperly refused to consider subjective symptoms such as pain.
Feibusch v. Sun Life, 463 F.3d 880 (9th Cir. 2006).
In this ruling, the court of appeals reversed a judgment entered by a lower court, holding that SUN LIFE's decision was improperly given deference by the trial court. The court of appeals also ruled the trial court improperly interpreted SUN LIFE's insurance policy and ignored generally accepted rules of contract construction.
Ruttenberg v. U.S. Life, 413 F.3d 652 (7th Cir. 2005).
This was a successful appeal to the U.S. Court of Appeals, where the court recognized that U.S. LIFE improperly denied benefits and misconstrued its policy. The ruling is significant for establishing in ERISA cases the applicability of two insurance law principles: contra proferentem (ambiguities in insurance policies are construed against the insurance company and in favor of the insured) and that the court will interpret questionable insurance policy terms in order to meet the "reasonable expectations of the insured."
Herzberger v. Standard Insurance Company, 205 F.3d 327 (7th Cir. 2000).
The Herzberger ruling was a landmark ERISA case that determined what language in an insurance policy is adequate to trigger a deferential standard of court review. The court ruled that STANDARD INSURANCE COMPANY's policy language was inadequate to permit the court to review the claim denial under an arbitrary and capricious standard of review.
Please see our Past Case Notes of the Month section for additional representative cases.
DeBofsky, Sherman & Casciari, PC has also secured numerous lower court rulings that have found that a regulation issued by the Illinois Department of Insurance, 50 Ill.Admin.Code § 2001.3, bars insurance companies from incorporating language in their policies that would trigger an arbitrary and capricious standard of review.
These rulings have prevented insurance companies such as UNITED OF OMAHA LIFE INSURANCE COMPANY (MUTUAL OF OMAHA), RELIANCE STANDARD, and HARTFORD LIFE from gaining an advantage in litigation against its insureds by triggering a judicial standard of review that would favor a denial of benefits.

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