In this case, Andrew Scott (“Scott”) was an orthopedic surgeon with a focus in sports medicine. His employer had a long-term disability (LTD) plan through Union Security Insurance Company (“Union”). The LTD plan defined “disability” as follows:
“Disability or disabled means that in a particular month, you satisfy one or more of the three Tests, as described below:
Occupation Test
- During the first 36 months of a period of disability . . . , an injury . . . prevents you from performing at least one of the material duties of your regular occupation; and
- After 36 months of disability, an injury . . . prevents you from performing at least one of the material duties of each gainful occupation for which your education, training, and experience qualifies you.
Earnings Test
You may be considered disabled in any month in which you are actually working, if an injury . . . prevents you from earning more than 80% of your monthly pay in that month in any occupation for which your education, training or experience qualifies you. . . .
. . .
You may still be considered disabled according to the Occupation Test, without regard to your level of current earnings, if you meet the requirements of that Test.
[Third test not applicable here.]. . .Gainful occupation means an occupation in which you could reasonably be expected to earn at least as much as your Schedule Amount [in this case $6,000 per month].”
In October 2012, the Plaintiff had surgery for a shoulder rotator cuff injury. As a result, he stopped working as a surgeon. Union then notified Scott in February 2013 that he was approved for benefits under the plan, which were to begin in April with the possibility of extending to April 2023. This notification also informed Scott that after a 36-month period, the definition of disability would change and another evaluation would be made at that time.
When the time neared for the change of definition, Union began looking into Scott’s potential eligibility to continue receiving benefits. Union’s review included a 2013 evaluation from Scott’s surgeon, which concluded that while Scott could not perform the work of his own occupation, he could perform full-time work with restrictions of light-duty above the waist. Union then performed a transferable skills analysis and a labor market study. The analysis and study determined that Scott was qualified to perform four positions in his geographical area wherein he could earn as much as his Schedule Amount. On September 30, 2015, Scott notified Union of a new job working as a front-line crew member at a Culver’s Restaurant. He stated that he obtained this job to satisfy the Earnings Test.
Union sent a letter to Scott on November 5, 2015, explaining that he needed to meet the Occupation and Earnings Tests in order to continue receipt of benefits. The letter improperly stated that he would need to meet both tests, instead of only one as required by the plan. Union also stated that it would continue to gather information regarding the disability benefits, asking that Scott inform it of any changes in work or medical condition. Later, Scott left the job at Culver’s and began working as a medical office with the FDA. Soon after, he left his job at the FDA to be closer to his family. Union was informed of each of these job changes.
When it was time for Scott’s evaluation related to continuing benefits, an additional vocational services assessment and labor market study again confirmed that there were jobs available for him at a gainful wage. Further, Union verified that Scott was unemployed and updated its medical review based on the 2013 evaluation by his doctor. As a result, Union denied Scott’s benefits. Union alleged that he failed the Occupation Test because he was not prevented from performing the duties of gainful occupations that he was qualified for as a result of his medical condition. Further, he failed the Earnings Test because he was unemployed. Scott appealed and that was also denied. He then filed suit in the instant case.
Scott’s main argument is that he met the Occupation Test, relying on the fact that his medical condition did not change. However, Union’s 2015 analysis cited that there was gainful employment available for Scott. Further, Scott did not explain why his injury prevented him from performing the duties of gainful occupations that Union identified.
Additionally, Scott argued that Union relied on an evaluation that did not actually say that he was limited to light duty above the waist. The court rejected that argument because Scott did not provide any evidence to suggest he had any restrictions beyond the light-duty above the waist. Scott also stated that Union should have insisted on a new medical examination, but the court presented that he never indicated any changes in his condition.
Scott also filed a claim for a breach of fiduciary duty. He alleged that the mistake in the 2015 letter was a material misrepresentation meeting the level of a breach of fiduciary duty. Union countered by stating that the claim for benefits under Section 1132(a)(1)(B) supplied a remedy that would be sufficient. The standard to which Scott must prove the breach is that of detrimental reliance on that material misrepresentation. The court held that Scott did not provide any evidence of his alleged reliance. If anything, the fact that Scott took a job with the FDA and with Culver’s even after receiving the 2015 letter stating that he met the Occupational Test indicated a lack of reliance on the letter.
While Scott attempted an additional claim related to the breach of fiduciary duty, the court held that “the plaintiff has not provided evidence of a breach based on any of the particular violations cited by the plaintiff that would be sufficient to persuade the Court to grant equitable relief here.” Therefore, because of Scott’s lack of evidence and for the additional reasons discussed above, the court ruled in favor of Union and against Scott.
[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: