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Long Term Disability Insurers love to use surveillance to find a way to terminate benefits. Think about it it from a business perspective. They can hire a private investigator and pay them $500 or a $1000 dollars to follow a claimant around for a few days and maybe save tens or hundreds of thousands of dollars if they can just get something on tape that they can use to terminate the claim. This is the story of one such claim.

SMDA was hired by Mr. S who last worked as a senior programmer for EDS when his significant and progressive back problems stopped him from working. He had been diagnosed with lumbar post laminectomy syndrome with lumbar radiculopathy, lumbar spondylosis with low back pain and lower extremity pain. As a result, he had severe low back pain with aching, shooting, sharp, and throbbing pain with numbness, tingling, burning and stiffness on a daily basis. Objective testing including multiple MRI’s and EMGs have confirmed his significant deficits. The LTD Insurer originally approved his claim and paid his LTD benefits for years.

Despite the overwhelming medical evidence demonstrating his progressive disability, the LTD Insurer hired a private investigator to follow Mr. S around. During the first several days the private investigator saw nothing but the outside of the client’s house. The last day, Ms. S left the house and went to Walmart. The videotape shows Mr. S slowly getting out of his car and walking into the store leaning heavily on both his cane and then the grocery cart. The private investigator followed him into Walmart and up and down several aisles as he surreptitiously videotaped Mr. S. The video shows Mr. S picking up and looking at several items each of which weigh less than 2 pounds, leaning on his shopping cart and going through the check-out.
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Four Michigan Supreme Court Justices (Young, Markman, Kelly and Zahra) issued a decision changing 30 years of No-Fault Insurance law finding that automobile insurance companies no longer need pay No-Fault benefits to a person who is injured while closing their car door.

In Frasier v Allstate, the claimant, Mona Lisa Frasier had put some personal belongings in the passenger side of her car and was in the process of closing her car door when she fell on some ice and was injured. Mona Lisa made a claim with her car insurance company, Allstate to get her medical bills paid. Why? because the the Michigan No-Fault statute says the car insurer has to pay for your medical care if you are hurt as “a direct result of physical contact with equipment permanently mounted on the vehicle[,]” or if the injury occurs “while occupying, entering into, or alighting from the vehicle.”
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Our client last worked as a RN at a local hospital when she developed significant orthopedic problems following hip replacement surgery. She filed a claim for LTD benefits with the insurance company who provided group disability insurance through her employer, Oakwood Hospital. The insurer paid her disability claim for the first 24 months and then terminated her benefits claiming she was capable of working in a sedentary capacity.

After the insurer denied the administrative appeal filed by the firm, SMDA filed suit to compel the disability insurer to reinstate her LTD benefits. On the eve of the date the Court was to consider the party’s briefs the insurance company threw in the towel and voluntarily agreed to reinstate the client’s LTD benefits and pay the attorney fees incurred. This result is a clear lesson that it is critical that the administrative appeal be handled correctly as the administrative record in this case was overwhelmingly favorable to the client. The insurance company realized there was little chance of convincing the Court that it was correct in terminating her benefits.

It has been quite awhile since I last posted a blog. I have not had the time to post because while I was away I tried several cases.

In addition to handling Long Term Disability cases our firm also handles various other types of matters including automobile accident insurance claims.

In December I tried a case for a client who was injured in a 2005 motor vehicle crash. She had neck surgery for a herniated disc but continued to have pain and problems for which she received ongoing treatment. Her Insurance company, which I will not identify, (State Farm) refused to pay for any of her medical care. When a person is injured in a car crash their insurer is responsible for paying their personal injury protection (PIP) benefits, including lifetime medical care.

My client is the nicest person who takes care of an adult child with profound disabilities. The Insurance company did everything it could to try and avoid paying her medical bills going so far as to argue that she could perform physical therapy on herself at home.

I am glad to say that the jury completely rejected the Insurance Companies arguments and decided they should pay every single penny that we sought.
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A federal Court Judge recently ordered a Long Term Disability Insurance Plan to pay all of Plaintiff’s (our client) attorney fees. As a result the claimant got to keep all of his LTD benefits.

In Deloach v The Great Atlantic & Pacific Tea Company LTD plan, the Honorable George Steeh found that the plan and its administrator Connecticut General should never have denied Mr. Deloach’s claim for LTD benefits in the first place. The Court also granted Plaintiff’s motion for attorney fees and ordered Defendant to pay for all but a small portion of the time spent by counsel on the claim. The Court also determined that $325 per hour was a reasonable hourly attorney fee.

This ruling demonstrates an important aspect of ERISA for LTD claimants. Specifically, the amount of benefits at stake in this case were such that without the prospect of Court awarded attorney fees it may have been difficult for the Plaintiff to find counsel willing to take the case.

Another Eastern District of Michigan federal court recently granted my motion for discovery in a long term disability insurance ERISA case without requiring a predicate showing.

This time the Court specifically decided that there was no requirement that a predicate showing be made. Instead, the federal rules generally governing discovery should be applied.

Judge Lawson ruled in Price v Hartford (09-14171):
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Here is a link to the Senate Hearing on Long Term Disability Insurance. Anyone who has a claim or may become disabled should watch this for a brief glimpse into the difficulties associated with obtaining Long Term Disability Benefits.

Senior United States District Court Judge William Acker offered his views on ERISA LTD cases to the Senate. Follow this link to read his views.

The Judge has a number of interesting insights including the overwhelming difficulty faced by most LTD claimaints that is simply built into the system.

As reported by Scott Mulhauser/Erin Shields on the insurancenewsnet.com website.

Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a hearing on Tuesday to examine the difficulties workers face in securing benefits they are entitled to from private long-term disability insurance plans. The hearing, entitled “Do Private Long-Term Disability Policies Provide the Protection They Promise?” will take place at 10:00 a.m. on Tuesday, September 28 in Room 215 of the Dirksen Senate Office Building.

At the hearing, Baucus will focus on whether private-sector long-term insurance claims are being unfairly denied or terminated by the companies providing long-term disability insurance covered under the Employee Retirement Income Security Act (ERISA). The hearing will also examine how these private insurance companies have handled workers’ appeals of denials and terminations. Baucus will raise questions about possible improvements that can be made to ensure claimants and beneficiaries of long-term disability insurance plans covered under ERISA are treated fairly.
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In a recent ERISA Long Term Disability case, the Court granted Plaintiff’s Motion for summary judgment and ordered Defendant to pay all of Plaintiff’s overdue benefits during the “own occupation” period.

In _____________ v The Great Atlantic & Pacific Tea Company LTD Plan, the Honorable George Caram Steeh (E.D. Michigan) confirmed that Defendant had improperly withheld payment of LTD benefits during the Plan’s “own occupation” period despite the fact that Defendant had obtained numerous “paper reviews” by its own physicians. The Court ordered Defendant to pay all of the overdue benefits and ordered Defendant to reconsider its decision under the “any occupation” definition of disability.

This case demonstrates the critical importance of determining the correct standard of review.
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