Claimant’s Failure To Apply For Social Security Disability Should Not Be Considered

Case Name: Rowe v. United of Omaha Life Insurance

Court: U.S. District Court for the Eastern District of Tennessee

Date of Decision: March 17, 2017

Type of Claim: Long Term Disability Insurance Benefits under the Employee Retirement Income Security Act (ERISA)

Insurance Company: United of Omaha Life Insurance

Procedural history: This case was before the District Court on the Report and Recommendation (“R&R”) issued by a United States Magistrate Judge. In the R&R, the Magistrate Judge recommended that plaintiff’s Motion for Judgment on the Record be granted in part, and that defendant’s Motion for Judgment on the Administrative Record be denied. The Defendant filed an objection to the R&R, and plaintiff responded.

Issues: In the R&R, the Magistrate Judge found that defendant’s decision to deny benefits does not withstand the arbitrary and capricious standard of review and recommended that the case be remanded for further consideration. Defendant raises four objections to the R&R. The two most interesting objections were those where the defendant objected to: (1) the application of the arbitrary and capricious standard of review, and (2) the determination that plaintiff’s failure to apply for Social Security benefits is not relevant.

Holdings: (1) “Therefore, while Judge Shirley may not have directly cited to McClain, he cited other Sixth Circuit case law that makes the same point—that arbitrary and capricious review is highly deferential and that an administrator’s decision will be upheld ‘if it is the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.’” The Court continued, “defendant’s argument that Judge Shirley was incorrect to base his decision on the fact that defendant did not clearly articulate in its denials which medical opinions it credited and to what extent is not well taken.” (2) “While a disability determination made by the SSA is relevant, defendant has not cited, and the Court is not aware of, any authority for the proposition that a failure to apply for benefits is similarly relevant. Furthermore, in the R&R, Judge Shirley declined to consider that plaintiff failed to apply for Social Security benefits in part because defendant ‘did not consider plaintiff’s alleged failure to file for social security benefits at the administrative level’.”