Case Name: Raymond M. Tash, DDS v. Metropolitan Life Insurance Company; Pacific Dental Services, Inc., Employee Benefit Plan
Court: United States District Court Central District of California
Type of Claim: Long Term Disability
Insurance Company: Metropolitan Life “MetLife”
Claimant’s Employer: Pacific Dental Services, Inc.
Claimant’s Occupation / Job Position: Dentist/Doctor of Dentistry
Disabilities: No mention of his specific disabilities/conditions- just said he had multiple injuries.
Definition of Disability:
The Plan defines Disability for LTD purposes for the first two years as: “employee’s inability to perform his ‘own occupation.’”
The Plan allows an employee to receive LTD benefits beyond two years if the employee: “is unable to earn 60% of his prior earnings in “any gainful occupation” that he is qualified to do.”
Specifically, the Plan provides:
“Disabled or Disability means that, due to sickness or as a direct result of accidentally injury . . . You are unable to earn:
- During the Elimination Period and the next 24 months of Sickness or accidental injury, more than 80% of your Predisability Earnings at Your Own Occupation from any employer in Your Local Economy; and
- After such period, more than 60% of your Predisability Earnings from any employer in Your Local Economy at any gainful occupation for which you are reasonably qualified taking into account your training, education and experience.
The Plan also contains a 12-month limitation on benefits for certain medical conditions. This 12-month limitation applied to:
Disability due to Mental or Nervous Disorders or Diseases, Neuromuscular, Musculoskeletal or Soft Tissue Disorder, Chronic Fatigue Syndrome and related conditions.
The most relevant of these conditions is the “Neuromuscular, Musculoskeletal or Soft Tissue Disorder (the “Soft Tissue Limitation”), which is further defined by the Plan as follows:
Neuromuscular, musculoskeletal or soft tissue disorder including, but not limited to, any disease or disorder of the spine or extremities and their surrounding soft tissue; including sprains and strains of joints and adjacent muscles, unless the Disability has objective evidence of:
– Seropositive Arthritis
– Spinal Tumors, malignancy, or Vascalar Malformations
– Traumatic Spinal Cord Necrosis; or
Benefits Paid? Plaintiff was approved for long-term disability benefits on May 31, 20011, and received payment of back benefits as of February 10, 2011 (date the Plan’s elimination period ended). In March 2012, MetLife stopped paying benefits to Plaintiff without providing either notice or explanation.
Procedural history: Plaintiff filed a claim under the Policy on February 24, 2011. MetLife approved Plaintiff’s claim for long-term disability benefits on May 31, 2011. MetLife paid back benefits as of February 10, 2011, but abruptly stopped paying benefits to Plaintiff in March 2012. On April 17, 2012, Plaintiff wrote to MetLife complaining about the lack of benefits in accordance with MetLife’s complete failure to explain the basis for its decision to stop paying Plaintiff benefits. The claim notes contained in MetLife’s file shows that MetLife was reevaluating Plaintiff’s claim in mid-February 2012.
On May 7, 2012, MetLife sent a letter to Plaintiff stating that Plaintiff’s claim was currently under investigation to decipher if the “benefits would continue beyond your [Plaintiff’s] benefit under the plan’s limited disability benefit provision.” Additionally, MetLife stated that it would continue to pay benefits under a reservation of rights pending the results of that investigation.
MetLife issued a denial of Plaintiff’s claim on June 14, 2012, stating that Plaintiff’s condition was within one of the 12-month limited conditions, but failed to state which limiting condition it was in. Plaintiff then sought counsel of Mr. George Kingsley, who submitted an appeal on Plaintiff’s behalf. On December 7, 2012, MetLife upheld its denial of Plaintiff’s claim. Plaintiff responded by filing a lawsuit, which ultimately settled with the following conditions:
- Metlife agreed to pay Plaintiff a certain sum in return for Plaintiff waiving his claim to any further benefits for the remaining 24-month “own occupation” period.
- Metlife agreed to evaluate whether Plaintiff was entitled to benefits for the “any occupation” period, which began on February 11, 2013.
- The time requirements for claims handling regulations from the Department of Labor were expressly incorporated into the settlement agreement. Met Life was required to decide Plaintiff’s claim “not later than 45 days after receipt of the claim by the plan.”
On August 8, 2014, Plaintiff submitted the documents he would rely on in making his claim under the “any occupation” provision of the Plan. Per the timing guidelines rigidly set out in the settlement agreement, MetLife had until September 22, 2014 to issue a decision regarding Plaintiff’s claim. MetLife failed to meet the deadline, instead issuing a letter on September 24, 2014 that Plaintiff’s file had been submitted for a physician review. However, Plaintiff’s claim file had not been submitted to a reviewing physician until December 12, 2014, after the date the current litigation had begun.
On November 11, 2014, due to the fact that MetLife had still not issued a decision nor had it provided Plaintiff with any explanation for the lack of the decision, Plaintiff again wrote MetLife in a “good faith effort to avoid litigation,” as Plaintiff clearly stated that MetLife’s decision was untimely under ERISA’s guidelines. When MetLife completely failed to respond to Plaintiff’s letter, Plaintiff filed the present lawsuit on December 3, 2014. On December 23, 2014, MetLife provided Plaintiff with a report from a MCN reviewer, Dr. Jon Glass. On February 24, 3016, MetLife issued a denial of Plaintiff’s claim accompanied by an investigative report by Ethos Risk Services, along with several other documents. Plaintiff rejected the report MetLife submitted, and responded with a March 16, 2016 letter by Dr. Shimizu. MetLife responded with a new medical report by Dr. Sims, which Plaintiff again rejected.
Issues: The Court addressed the issue of MetLife’s failure to issue a timely denial letter, and the basis for its refusal to supply Plaintiff with a reason for its action in violation of ERISA. More specifically: “MetLife’s unexplained refusal to issue a denial letter until the eve of trial turned this case from a straightforward issue of whether [Plaintiff] was disabled under the Plain into a tangled accumulation of filings and counter-filings regarding matters that distract the Court from the merits of this case. For instance, the Court came to the trial facing fourteen filings with potential issues that required rulings.”
Holdings: The Court held that given MetLife’s violations of ERISA, MetLife was ordered to pay Plaintiff current on his benefits and pay back benefits, with interest, to Plaintiff for the beginning of the “any occupation” period on February 11, 2013, to the present. The Court stated that in order for a claimant to know what evidence is relevant, the claimant must know the reason the insured denied their claim. The Court cited ERISA which specifically states: “An insurer making an ‘adverse benefit decision’ to provide a written denial identifying the specific reasons for the denial so the insured can address them during the claim appeal process.”
The Court held that MetLife undermined the ERISA process by failing to issue a proper denial and further, by failing to provide notice to the insured as to the issues in dispute. “Requiring that plan administrators provide a participant with specific reasons for denial enables the claimant to prepare adequately for any further administrative review as well as appeal to the federal courts. A contrary rule would allow claimants, who are entitled to sue once a claim has been “deemed denied,” to be “sandbagged” by a rationale the plan administrator adduces only after the suit has commenced.” Harlick v. Blue Shield of Cal., 686 F.3d 699, 720 (9th Cir. 2012).
Summary: The Court ordered MetLife to bring Plaintiff current on his benefits and pay back benefits, with interest, to Plaintiff from the beginning of the “any occupation” period on February 11, 2013, to the present. The Court remanded to MetLife for a determination that complies with ERISA of Plaintiff’s benefits under the “any occupation” provision of the Plan. Additionally, the Court ordered MetLife to continue paying benefits so long as they continue to remain due under the provisions of the Plain, unless and until MetLife issues a denial that is in full compliance with the requirements contained in ERISA. In conclusion, the Court entered judgment in favor of Plaintiff.