In this case, Tommy W. Senegal (“Senegal”) had a long-term disability policy that was administered by Reliance Standard Life Insurance Company (“Reliance”) as a benefit of his employment by Cequel III, LLC (“Cequel”). Senegal worked for Cequel as a field service engineer; his duties were specifically related to supervising cable installation. This installation process involved a number of activities, including using ladders, squeezing into small spaces, writing up paperwork, scheduling jobs, directing employees, and occasionally lifting up to 85 pounds.
On December 14, 2011, Senegal ceased work at Cequel because he was experiencing disability as the result of his neck, back, and knee pain, anxiety, and post-traumatic stress disorder (PTSD). This initial claim was paid by Reliance. An administrative law judge later determined that Senegal had been disabled from December 14, 2011, to May 15, 2013, when the decision was made. The judge noted that Senegal had been suffering from back disorders, osteoarthritis and allied disorders, anxiety disorders, and affective disorders. Additionally, Senegal’s treating doctor, Dr. R. Dale Bernauer, and a social worker, Eddie Windham, LCSW, also found that he was disabled. A vocational expert also opined that there were no suitable jobs in the national economy which Senegal could perform.
Senegal was notified on January 27, 2014, that his long-term disability benefits were to be terminated. The end date of such benefits was to be March 14, 2014. The reason for the termination is because Senegal allegedly did not meet the requirements of the term “totally disabled” as defined by the policy. This meant that for the first twenty-four months during receipt of benefits, the claimant cannot perform the duties of his regular occupation. Beyond the twenty-four months, to be considered “totally disabled” the claimant must be unable to perform the duties of any occupation.
Here, in the termination letter, Reliance claimed that Senegal’s medical records indicated that he was capable of doing sedentary work. A vocational expert also opined that he was capable of performing as a protective signal operator, industrial order clerk, or service dispatcher. In addition, the termination letter indicated that Senegal would not be receiving benefits because of a policy limitation on mental or nervous disorders. The policy stated as follows:
Monthly Benefits for Total Disability caused or contributed to by mental or nervous disorders will not be payable beyond an aggregate lifetime maximum duration of twenty-four (24) months unless the Insured is in a Hospital or Institution at the end of the twenty-four (24) month period. The Monthly Benefit will be payable while so confined, but not beyond the Maximum Duration of Benefits. Mental or Nervous Disorders include depressive and anxiety disorders.
The letter also stated that an SSA determination would be taken into consideration, but that such a determination would not necessarily be binding because there could be varying elements of the evaluation guidelines. Lastly, the letter indicated that Senegal had a right to appeal the decision.
He appealed on July 18, 2014, stating that two vocational experts opined that he was unable to qualify for any jobs that would lead to gainful employment. Each of these experts was retained by Senegal and Reliance, respectively. Reliance then requested that Senegal submit to an independent medical examination (IME). The IME was performed by Dr. Stuart Begnaud on February 11, 2015. Dr. Begnaud identified limitations related to Senegal’s knees but was unable to make a determination regarding his back or neck. Dr. Begnaud then suggested that a functional capacity evaluation (FCE) be performed in order to narrow down any restrictions. On March 30, 2015, Reliance requested that Senegal move forward with the FCE. Senegal retorted by stating that the IME and FCE should have been executed prior to a termination of his benefits.
On April 15, 2015, Reliance denied Senegal’s appeal. Following that, on July 30, 2015, Senegal did have an FCE performed. The FCE examiner opined that Senegal was unable to do competitive sedentary work. Senegal submitted this report to Reliance, asking that they reconsider. Reliance subsequently refused to consider the said report.
On February 8, 2016, Senegal filed the instant suit, alleging that he was entitled to past and future benefits under the policy, as well as attorneys’ fees and court costs. Firstly, Senegal wanted to supplement the record with the FCE. Under the Vega v. Nat’l Life Ins. Servs., Inc. case, the Fifth Circuit court held that “the administrative record consists of relevant information made available to the plan administrator prior to the complainant’s filing of a lawsuit and in a manner that gives the administrator a fair opportunity to consider it.” Further, Vega states that “[i]f the claimant submits additional information to the administrator, however, and requests the administrator to reconsider his decision, that additional information should be treated as part of the administrative record.” Because of the Vega holding, the instant court deemed the FCE part of the administrative record.
Senegal also asked to strike Dr. Begnaud’s report from his record because he felt it was not reasonable for Reliance to have an IME performed after his denial of benefits and while an appeal was pending. The court, however, held that there was not a prohibition preventing an IME from occurring during an appeal. As such, the court stated that Reliance’s IME was not unreasonable and will remain in the administrative record.
Overall, the court decided to remand the case back to Reliance for a reevaluation of Senegal’s claim. Firstly, the court felt that the newfound inclusion of the FCE as part of the record warrants an additional review. Next, the court believed that Reliance failed to include a ground for termination of the benefits in the initial termination letter. As a result, Senegal was unable to defend that same ground in his appeal. This issue would be cured by a remand. Third, the court held that Reliance did not discuss Senegal’s VA or SSA benefits, but that it needed to do so. Lastly, the court held that it is appropriate for Senegal’s claim for damages of underpaid benefits to be raised at the administrative level, which he did not do before. Therefore, the Court remanded this case to Reliance for reconsideration.[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: Senegal v. Reliance