Our client, James Hawthorne was rear ended by a semi-truck owned and operated by a Kentucky based Trucking company. Mr. Hawthorne hired our firm to pursue a claim against the at-fault driver when he was unable to return to work due to a serious neck injury (due to whiplash).
SMDA filed a lawsuit against the trucking company in the Wayne County Circuit Court. Despite being served with the complaint by the local sheriff, the trucking comapny failed to appear in the case and was defaulted. Despite receiving notice of the default, the Trucking company again failed to appear in the case and a default judgment ($942,000) was entered by the Court.
]]> When the trucking company failed to pay the judgment (and later filed bankruptcy) SMDA filed a lawsuit against the trucking companies Insurer based on the language contained in the MCS90 endorsement. Plaintiff was able to obtain a ruling from the court that the Insurer was not entitled to conduct any discovery as Hawthorne's right to recover pursuant to the MCS90 endorsement was due to the Wayne County Default Judgment which could not be collaterally attacked.The Court then granted SMDA's motion for judgment finding that Plaintiff had established every element required by the MCS90 endorsement and entered a judgment for Plaintiff.
SMDA is available to handle any trucking accident cases or assist in any trucking accident claims that may involve the MCS90 endorsement.
]]>My clients are universally surprised to learn that under ERISA the only thing you can sue for are the unpaid LTD benefits. There is no claim for emotional distress, or pain and suffering. There is no claim for bad faith or anything else. The vast majority of Long Term Disability claims are governed by a federal law (ERISA) because they are part of an employer provided benefits package.
I regularly hear tragic tales of financial devastation. Clients are unable to pay their bills, are losing their cars and their homes. Clients are forced to rely on their friends and families and the charity of strangers.
Guess what? The insurance companies could care less. You see, the LTD insurer gets to review your claim and decide if they want to pay or not. If they decide they don't want pay your claim, they simply deny your application and hope you give up. If they approve your claim, then they have to pay and in turn make less money. Every dollar they pay on your claim is a dollar less of profit to line their pockets.
]]> Lost your car? Lost your house? Lost the safety and security for your family? So what, the insurance company got to keep all of the premiums paid for the insurance and never has to pay your claim. Check out how many billions of dollars in profit the insurance companies make. They do it one claim at a time.So you decide you are not going to accept this lying down. You are going to fight the insurance company. You find a good lawyer who knows this area of the law and is willing to take your case on a contingent basis since you have no money to pay otherwise. You go to Court and prove your case and ................ the court orders the insurance company to pay the overdue benefits that it should have been paying for the last two years. To bad your car is gone, to bad your house has been foreclosed, to bad for you there is simply no incentive for the insurer to pay your claim in the first place. To bad the ERISA law rewards the insurer's bad behavior.
As a simple business decision, ERISA encourages the insurer to deny all but the most clear cut claims in order to increase its profits. Think about how many sick and injured people simply accept the Insurer's decision and give up. Just like the angel getting his wings every time a bell rings in "It's a Wonderful Life" the Insurance Company inflates its profits every time a LTD claimant gives up. I wonder if a bell rings in the CEO's office??
]]>What is discovery and why is it important?
]]> Discovery is the process by which, during a lawsuit, each side gets to discover information from the opposing party about the case and the surrounding issues. In every single area of the law (except LTD claims governed by ERISA) discovery is practically unfettered. A party can seek any and all information that may be relevant to the case. What litigants find during discovery, many times can make or break a case. Who ran the red light? Did Defendant know that the basement leaked before they sold the house? Did the Doctor forget to count the number of sponges before he closed the incision? How many times has the insurance company hired the doctor who says the claimant is not disabled?Prior to the MetLife v Glenn decision Courts generally accepted the Long Term Disability Insurance Companies argument that no discovery was needed or allowed in ERISA cases. That appears to have started to changed.
In Geer v Hartford Life and Accident Co. the Court rejected Hartford's motion for a blanket protective order preventing all discovery. Instead, the Court determined that "discovery should be allowed where a plaintiff has provided sufficient initial facts suggesting a likelihood that probative evidence of bias or procedural deprivation would be developed." The Court found most most persuasive Plaintiff's argument questioning the independence of the file reviewer (doctor) where Plaintiff presented evidence that Hartford had hired the same file reviewer 34 times in the past.
]]>The Court found the fact that Unum "nowhere mentions the SSA's determination that Chronister was disabled" in the denial letter compelling evidence that Unum violated its own claims handling procedures leading to the Court to conclude that Unum abused its discretion and leading the Court to order Unum to pay benefits which were pending for more than a decade.
]]>The Defendant's appealed this decision to the Michigan Supreme Court. The Supreme Court decided that the Court of Appeals got it right and upheld the decision.Justice Robert Young (who is up for re-election in 2010) strongly disagreed.
]]> A review of his dissent is interesting. Justice Young finds it offensive to separate out an economic component of child-rearing because "it devalues the relationship that family members share with one another". instead he would have us return to the days when child-rearing was not viewed as having economic value in our society. In short, Justice Young places such a "high value" on child-rearing that he would adopt a legal rule that awards no compensation for such services.To support his position, Justice Young relies on antiquated views expressed by the court almost 50 years ago when discussing loss of consortium. The simple fact is that the economic value of child-rearing is not hard to quantify because we know precisely how much it would cost to replace the parent who typically provides those necessary services. Obviously, we cannot replace the love the parent provides the child at the same time that he or she performs those services, but we can ensure that the child's basic needs are not ignored.
We can ensure that the child gets to the after-school events and the doctor's office and eats a nutritious meal, but, of course, it costs money to make that happen. Regardless, Justice Young would deny the child any recovery for the economic value of those services because he is afraid that it will undermine the sanctity of the parent-child relationship.
Justice young ignores the fact that in this particular case, the parent-child relationship has ended, because of allegedly botched medical care, and thus, economic damages are likely the only way to ensure that such essential services continue to be provided for the child who has lost a parent.
To that child, Justice Young offers only words about his concerns that such compensation will "devalue" familial relationships. Words, however, will not ensure that a child with no mother, as in this case, is taken to the doctor's office promptly or that the child participates in school activities or sports. By the same token, words in the form of a legal rule awarding compensation for such services will not "devalue" anything -- parents will still love their children -- and when a parent is killed, child care (and the money to pay for such care) will still be required. in the end, the parent-child relationship will be no worse for having such a rule, which simply recognizes what President Obama might call the "real-life" consequences of judicial decisions.
Young's dissent is not totally shocking as he has simply continued a long line of anti-family, pro insurance decisions. Young came to the court having left his job as counsel for insurance giant AAA. By virtue of this decision (and a long list of many others) I will bet that Young guarantees the support (and contributions) from the powerful and monied Insurance and Business lobby.
Referring to the industry's objection to changing its business, Potter said he "worries 'that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape'" insurance reform in a way that is more beneficial to Wall Street than to "average Americans."
This "charm offensive" reminds me of those terrific Allstate commericals where the good looking gentleman says "Your in good hands with Allstate" after some vaguely disturbing scenario is played out in the background. Man, who wouldn't want to be in Allstate's hands. Unfortunately, when it comes time to pay a claim many of my client's feel like Allstate laced up some boxing gloves to cover those "good hands."
ABC news provides details of Mr. Potters testimony here.
]]>There were a number of very interesting and useful sessions dealing with the Supreme Court's Metlife v Glenn decision and how it is impacting cases across the country as well as various other in depth discussions on a number of relevant issues. The last day we had a panel of a half-dozen federal court judges discuss their view's of these cases.
]]>According to the sworn testimony of a representative of State Farm Insurance it appears that the company paid millions of dollars to a consulting firm to analyze and modify its claims handling practices in the mid 90s. According to the recent testimony of former State Farm employee Robert Butler in the case of Armisted v. State Farm (No. 2:07-cv-10259, Hon. Arthur J. Tarnow) in the US District Court in Detroit, State Farm implemented the ACE program. An integral part of this program was to “capture opportunities.” Those “opportunities” happened to include the indemnity payments made to people who were insured by State Farm in Michigan when they were injured in a car accident. State Farm determined that there was the opportunity to capture millions of dollars annually in payments for PIP benefits.
Mr. Butler confirmed during his testimony that State Farm determined that it was settling too many cases. Accordingly, it appears to this writer that State Farm then decided that more claims should be forced into litigation in order for State Farm to “capture” the potential “opportunities.” In Michigan alone State Farm concluded the potential “opportunity” included about $30 million dollars a year in indemnity payments. Mr. Butler confirmed that the ACE program was a nationwide initiative.
The secret internal documents that State Farm was forced to produce in the litigation included a description of tactics to cause delays in paying claims, and hidden agenda tactics including the “surprise”, the “silence”, the “fake out”, the “go for broke”, and also the use of “absent authority tactics” to “pass the buck"- an effective technique to say you have no authority to deal with a claim.
This is another prime example of an insurance company putting the bottom line over the importance of the little people who may be injured and in need of benefits.
]]>This is critically important because up to this point in time Court's were forced to review these cases using the very deferential "arbitrary and capricious" standard of review. In non lawyer speak, the court did not review the evidence to determine if the insurance company made the correct decision. Instead, the court was forced to determine whether there was any reasonable basis for the decision. The practical effect of this limited standard of review was to make it exceedingly difficult for a claimant to win. After all, if the insurance company hires a qualified doctor to review the claim and that doctor says the claimant is not disabled then there is a reasonable basis for the claims decision. (And oh by the way, never mind that we use that same doctor over and over and over and pay him and the reviewing company that he works for hundreds of thousands of dollars a year. they can be fair an impartial. yeah right.)
Now, the courts will review these claims de novo. In other words, the Court will be empowered to determine whether or not the correct decision was made-Whether or not the claimant meets the policies definition of disability. This is really huge.
]]>In finding that Sun-Life's decision was arbitrary and capricious the Court recognized that 5 of the 6 physicians were "under regular contract with Sun Life" and that such physician reviewers may have an incentive to make a finding of not disabled in order to save their employers money and preserve their own consulting arrangements.
The Court also pointed out Sun Life's failure to attach any weight to the fact that plaintiff was awarded SSD benefits. In fact, Sun Life failed to even acknowledge the award in any of the three denial letters.
]]> The Court also recognized the bias injected into the case by Sun Life's employees who simply told the reviewing physicians that the plaintiff had been "terminated for cause" when, in fact, it appears she had been terminated because she was unable to do her job due to her medical condition. (Which is the purpose of having disability insurance!) The Court found that the "bald asserion that she was fired "for cause" gave the medical reviewers incomplete and potentially prejudcial information which suggests "procedural unreasonableness."The Court also took issue with the fact that Sun Life's paid medical reviewers largely agreed with the treating physician's diagnosis but simply discounted the effect they had on her ability to work.
This case presents a good example of the inherent bias faced by many individuals making a claim for long term disability benefits. The insurance company hires the same doctors over and over who almost never find anyone disabled. Even when there is overwhelming evidence in the medical records of a claimant's condition, they simply discount the effect the condition has on the claimant's ability to work. The sad part is that given the current limited review conducted by most court's, many time this is enough to prevent the claimant from getting benefits. Until the ERISA statute is changed, this unbalanced approach is a license for disability insurer's to put profit over people.
]]>In an important decision the Court analyzed the claim under the new standard set forth by the Supreme Court in Metlife v Glenn. The Court cited in detail First Unum's history of deceptive claims handling and abusive tactics in reversing the denial decision.
]]>The attorney for several of the families described the insurance company's efforts to avoid responsibility as shocking. "It's an extraordinary effort by an insurance company to avoid paying on a contract for insurance" Not surprisingly, the insurance company and its legal representative had "no comment."
This is another classic example of the lengths to which an insurer will go to avoid responsibility. Profits over people.
]]>In what turns out to be a desperate campaign strategy, Justice Taylor has been claiming that the Wall Street Journal said the Michigan Supreme Court under his leadership is the best in the nation.
Guess what-this claim is totally false!!!
If you expected better from a sitting Michigan Supreme Court Justice, you would be disappointed. You see, it turns out that the reference to the Michigan Supreme Court was not contained in a Journal editorial. It was not the conclusion of a survey or comparative study of the various state Courts in the US.
Instead, it seems that in October, 2005, Mr. Patrick Wright, who worked for Justice Taylor, wrote an opinion piece in which he voiced his opinion that the Michigan Supreme Court "may be the finest court in the nation." The quote, attributed to the Journal "best in the nation", never appears, not even in Mr. Wright's viewpoint piece. The opinion expressed in the piece is Mr. Wright's, not the opinion or finding of the Wall Street Journal ownership, staff, or editorial board.
The plain meaning of the words used in Mr. Taylor's bio, on the other hand, is that the Wall Street Journal, as a paper, has made a determination that the Michigan Supreme Court is the best in the US. This is patently false. Not only were these words never used, though the Taylor site portrays them as a direct quote, they are obviously only the opinion of the opinion piece's author, a former member of Mr. Taylor' legal staff.
If you think this kind of misrepresentation is wrong, vote to restore fairness by voting for Judge Hathaway for the Michigan Supreme Court on the nonpartisan section of the ballot this November. Remember, you have not cast a vote for the supreme court until you check the box next to Judge Hathaway's name.
]]>Utilizing the the arbitrary and capricious standard of review, the court accepeted the insurer's argument that Dr. Gutti failed to provide persuasive evidence that he was unable to perform other work in the medical field and that he had the skills necessary to work as a medical director or assistant medical director. To make matters worse, the court also ordered Dr. Gutti to repay $74,000 in overpayments as a result of payments he recieved under a different disability policy.
This case illustrates how difficult it can be for claimaints to obtain benefits that are governed by ERISA.
]]>Not in Michigan, Not anymore. Why not? Because Cliff Taylor says so, that’s why.
In the case of Kreiner v. Fischer the court overruled decades of established law in order to make it harder for injured car accident victims to recover. The worst part of the decision is that the court simply fabricated a new rule requiring that the injuries affect the victims “course and trajectory” of their life. Taylor goes so far as to describe the law protecting insurance companies as the “no-fault temple.”
Since this decision, hundreds of cases have been dismissed for not meeting this new standard. I wonder how much money the Insurance Companies have saved? No wonder the Michigan Chamber of Commerce is running TV ads for Taylor.
I have pasted a few excerpts below from Supreme Court Justices Cavanaugh, Weaver and Kelly’s dissent.
By importing the concept of permanency of injury into MCL 500.3135—a concept
that is nowhere referenced in the text of the statute—the majority of four (Chief Justice
Taylor, and Justices Corrigan, Young, and Markman), in Kreiner v Fischer, 471 Mich
109 (2004), actively and judicially legislated a permanency and temporal requirement to
recover noneconomic damages in automobile accident cases. The Kreiner interpretation
of MCL 500.3135 is an unrestrained misuse and abuse of the power of interpretation
masquerading as an exercise in following the Legislature’s intent.
**************************************************
The majority suggests that my approach is sacrilegious to the “no-fault temple”
and is an exercise predicated on “studied ignorance.” Ante at 35. While
admittedly unaware that I was required to worship the no-fault insurance gods,
I believe that my “studied ignorance” is more properly labeled as “judicial
restraint.” If ignorance comes from applying this unambiguous statute as written
and not substituting my own view for that of the Legislature, I must say that
ignorance is bliss. If so-called wisdom comes from rewriting this unambiguous
statute to comport with my own preference on how the statute should be
written and applied, in this instance I must choose “ignorance.” Today’s
decision serves as a chilling reminder that activism comes in all guises,
including so-called textualism.
If you think this kind of judicial activism is wrong, vote to restore fairness by voting for Judge Hathaway for the Michigan Supreme Court on the nonpartisan section of the ballot this November. Remember, you have not cast a vote for the supreme court until you check the box next to Judge Hathaway's name.