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When is Denial of Disability Benefits Justified? How is the Determination Made?

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Attorney Tom MetierThe Colorado Court of Appeals looked at these challenging questions in Mason v Reliance Standard Life Insurance Company, (Civil Action No. 15-cv-02674-MSK-CBS, March 22, 2017).

LSI Corporation (“LSI”) was Harold Mason’s (“Mason”) employer. Mason did marketing for LSI, as the face of the company, and had to travel and speak on behalf of LSI. LSI provided Mason with long-term disability and life insurance through a policy (“the Policy”).  Mason got sick, and was diagnosed with viral hepatitis and coronary artery disease. Mason’s job required only minimal physical activity, but considerable mental and cognitive abilities. Mason claimed his illnesses precluded him from doing his job. Mason stopped working on July 26, 2012 and applied for benefits under the Policy. This triggered the 364-day Elimination Period. Mason said that he was no longer able to perform his job due to fevers, nausea, diarrhea, fatigue, and inability to concentrate or manage stress.

After the Elimination Period concluded, Reliance determined that Mason had not demonstrated that he had been totally disabled and denied Mason’s claim. Mason appealed the determination, and his records were examined by a doctor, from afar. That doctor agreed that Mason was not totally disabled and denied his claim again. Mason took Reliance to court to appeal the decision again.  That Court reversed and remanded telling Reliance to resolve an ambiguity in the meaning of “total disability” under the Policy and to consider all of the medical evidence pertinent to Mason’s state during the Elimination Period. The Court disagreed with the preliminary findings by Reliance that Mason was not disabled. Inexplicably, Reliance sent the files back to the same doctor to re-review. That doctor did not address the Court’s concerns, and restated his first assessment—that Mason could work and travel. Reliance denied the claim again.

Mason appealed again. Mason argued that Reliance’s denial of benefits after remand was arbitrary and capricious because — Reliance did not follow the Court’s directions on remand and did not consider Mason’s entire medical record or offer explanation of why it selected contradicted medical evidence. The Court agreed with both arguments.

Reliance’s denial of benefits was not supported by substantial evidence or an apparent review of all evidence in the record. Therefore, that denial was arbitrary and capricious. Because of the above reasons, the Court reversed the denial of Mason’s disability claim, and because Reliance already had two chances to get the assessment right, no remand was justified. The Court awarded Mason long-term disability benefits dating back to July of 2013.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide. Tom Metier recently secured the largest personal injury verdict in Colorado.

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