Case Name: Khalil v. Liberty Life Assurance Company of Boston a/k/a Liberty Mutual Insurance Company
Court: United States District Court for the District of Rhode Island.
Type of Claim: Long Term Disability.
Insurance Company: Liberty Life Assurance Company of Boston a/k/a Liberty Mutual Insurance Company (hereinafter “Liberty Life”).
Claimant’s Employer: Zurich American Insurance Company.
Claimant’s Occupation / Job Position:Finance and insurance executive.
Disabilities: injuries to the upper back, neck, right shoulder, and wrist after an accident.
Definition of Disability: The policy provides coverage if a participant is disabled from performing the material and substantial duties of his “own occupation” for a twenty-four month period and, thereafter, if he is disabled from performing the material and substantial duties of “any occupation” for which he is reasonably fitted by training, education experience, age, and physical and mental capacity.
Benefits Paid? Liberty approved the claimant’s claim for long-term disability benefits under the “own occupation” definition of the policy and for a brief period under the “any occupation” definition.
Other important factors: Liberty periodically commissioned surveillance of the claimant’s functional activities throughout the time benefits were paid, the results of which were captured both in written reports and on video.
Key Physician Opinions: The video surveillance continued and Liberty retained Dr. Gale Brown to review Plaintiff’s claims. Dr. Brown concluded in a written report that, based on the medical records and the videos, Plaintiff’s actual functional abilities were better than he reported to Liberty; that he was capable of sedentary work with some restrictions to accommodate for neck and shoulder pain, if he experienced any.
Issues: Whether Plaintiff is entitled to judgment because Liberty’s decision to deny his LTD benefits was arbitrary and capricious as it was made through the lens of a structural conflict rooted in Liberty’s dual role as plan administrator and benefits payer. Plaintiff argued Liberty adopted an adversarial altitude toward him by putting him under surveillance.
Holdings: The Court held, “The level of activity or the lack thereof that Mr. Khalil reported to Liberty in support of his claim of continued disability was undermined by the video evidence that Liberty collected during the three years of review.” The claimant’s claim was further undermined by the fact that his own treating physicians ultimately opined that he was not disabled. The Court stated, “It does not appear to the Court that Liberty acted in a rash or arbitrary manner in its decision-making in Mr. Khalil’s case. Because the Court cannot say that the evidence in this case was insufficient to support Liberty’s decision to terminate Mr. Khalil’s benefits, it is affirmed and Liberty’s motion for summary judgment is granted.”
Summary: The Court denied Plaintiff’s Motion for Summary Judgment and granted Liberty’s Motion for Summary Judgment: “Liberty’s termination of Mr. Khalil’s LTD benefits was reasonable and not arbitrary or capricious. Its dual role was not an impermissible conflict that affected its decision to terminate his benefits.”
Here is a PDF version of Khalil v. Liberty Life available for download: