Charles Buford Arning (“Arning”) was employed full-time by ECMD, Inc. as the President of Arndt & Herman Building Products Division. Aetna Life Insurance Company (“Aetna”) administered a Long Term Disability Executives Plan which was provided to employees of ECMD. The Plan’s language provided that relating to “Long Term Disability Benefit Eligibility: ‘You will be considered disabled while covered under this . . . Plan on the first day that you are disabled as a direct result of a significant change in your physical or mental conditions and you meet all of the following requirements:’ “(1) be covered by the Plan; (2) be under a physician’s regular care; and (3) be disabled by illness or injury” as described by Aetna’s Test of Disability.”
The language of the Test of Disability provides: “You meet the test of disability on any day that: You cannot perform the material duties of your own occupation solely because of an illness, injury, or disabling pregnancy-related condition; . . .” Own occupation means “[t]he occupation you are routinely performing when disability begins, and “is viewed as it is normally performed in the national economy rather than for specific employers.”
On September 15, 2016, Arning was reprimanded for failing to regularly appear during business hours and otherwise for not explaining where he was when he was not in the office. Several days later, Arning received a memo explaining that there were issues with both his division’s performance and his own performance. By January 4, 2016, Arning had been terminated for his lack of performance.
Prior to Arning leaving ECMD, Inc., he had a number of medical procedures between 1973 and 2013, including “inguinal hernia repair, left total hip replacement, right total knee replacement, right rotator cuff repair, right pectoralis tendon repair, and resection of left first rib secondary to a benign tumor, laminectomy of the lumbosacral spine to address left leg pain in 2008, and a laminectomy to address left leg and right hip pain in 2013.” However, none of those operations or procedures were related to work. Later, Arning was also diagnosed with “lumbar degenerative disc disease (primary), inguinal neuralgia (secondary), and peripheral neuropathy (other).” As a result, his medical provider Dr. Hans Hansen allowed him to perform light work, such as “[e]xerting up to 20 pounds of force occasionally and/or up to 10 pounds of force frequently.”
Following Arning’s separation from ECMD, Inc., he filed for long-term disability insurance benefits. On January 8, 2016, Aetna informed Arning that he had not met the ninety-day elimination period, therefore he was not eligible to file for long-term disability benefits. He was later eligible to file for benefits on April 4, and on March 28, Aetna requested an extension of thirty days to review Arning’s application. However, on May 10, 2016, Aetna sent Arning a letter denying his benefits. The letter provided that “[t]here is no support for impairment which would prevent you from performing the material duties of your occupation” with his existing role of President in the national economy. Arning then appealed this denial.
At this point, Aetna asked Dr. Rajesh Kannon to review the file for the appeal. This review included the entire record, as well as any supplemental documentation that Arning had supplied for the appeal. In addition, Aetna performed video surveillance of Arning and noted that he had been able to sit at a ninety-degree angle for a half hour. Arning’s ability to do that was in direct conflict with his treating physician’s notes. Overall, between the surveillance and Dr. Kannon’s opinion, Aetna officially chose to deny Arning’s claim as of June 22, 2017.
Arning filed a lawsuit against Aetna for breach of contract in an effort to obtain his disability benefits. The court had to determine whether there was an abuse of discretion by Aetna. The court stated that “A fiduciary does not abuse its discretion so long as the decision is reasonable,” citing the Booth case. The court then further applied each of the eight Booth elements in its decision-making process.
First, the court had to examine the language of the Plan itself. The language that the court focused on was the fact that “Plaintiff’s disability must be a direct result of a significant change in physical or mental conditions.” In this case, the court determined that Arning did not experience a significant change in his conditions. Particularly, the Court held that Arning’s records indicated a multi-year level of stability relating to his condition.
Second, the court had to determine whether Aetna’s denial furthered the purpose and goals of the Plan. Here, the court opined that Aetna was to give benefits to eligible employees. It then decided that Aetna had supported these purposes and goals by its decision.
Third, the court had to determine whether the materials that Aetna reviewed were sufficient. It decided that a review of the record did support the fact that Arning would be able to perform his job duties full-time.
Fourth, the court needed to be certain that Aetna’s decision was consistent with prior decisions it had made and with other provisions of the Plan. Because Aetna applied the language of the Plan as it was written, the court determined that it had been consistent.
Fifth, the court had to evaluate whether there was a reasonable decision-making process on Aetna’s part. It decided that this element was also met because Aetna’s review was conducted with objective facts and an analysis of same was done by professionals.
Sixth, the court had to determine whether the provisions were consistent with ERISA; the court agreed that they had been – for the same reasons as element four above.
Seventh, the court held that the Plan gave Aetna the ability to decide whether there was a reasonable basis for the denial and that Aetna did not abuse its discretion related to that standard.
Lastly, the court held that there was not a conflict of interest because Arning failed to show that there any conflict affected his benefits decision.
As a result of all of the above, the court ruled in favor of Aetna and against Arning, and dismissed the case.
[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]Here is a copy of the decision in PDF: