Disability insurer erred in denying benefits

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Where the only actual medical evidence in the administrative record concerning plaintiff’s condition are the opinions of his primary care physician and his orthopedic surgeon, both of whom opined that plaintiff was totally disabled, and the plan provided that totally disabled includes an individual that can only “perform[] the material duties on a part-time basis,” plaintiff qualified as totally disabled.

Background

Walter Rupprecht and Reliance Standard Life Insurance Company have filed cross-motions for summary judgment with respect to plaintiff’s claim for long term disability benefits under Reliance’s employee benefits plan subject to the Employee Retirement Income Security Act of 1974.

Exhaustion

Reliance contends that it properly invoked a 45-day extension and plaintiff’s failure to attend the IME amounts to failure to exhaust his administrative remedies and so dismissal, not remand, or any other relief, is appropriate. But Reliance did not provide a decision within the first 45-day review period and did not provide the required notice for an extension. Moreover, the timeline Reliance sets out for the rescheduled IME appears to have anticipated a decision beyond the additional 45-day window set to expire on Dec. 13, 2021.

Based on the administrative record, Reliance has failed to provide the required notice or establish the “special circumstance” that would justify a 45-day extension to decide plaintiff’s appeal and the appeal period accordingly expired on Nov. 4, 2021, without a decision. Thus, plaintiff is deemed to have exhausted his administrative remedies and this action is timely filed.

Standard

Plaintiff contends that a de novo standard applies since Reliance did not exercise its discretion in denying his appeal and it merely declined to issue a decision within the appeal window. Reliance contends that because the plan provides “discretionary authority” to it, an abuse of discretion standard applies.

Whether Reliance’s failure to render a decision in the appeal changes the standard of review from an abuse of discretion to de novo is a question that appears unsettled within the Fourth Circuit. Other circuits that have considered this issue have generally concluded in various fashions that de novo review applies if an appeal decision never issued as opposed to one issued belatedly.

The court concludes that a de novo standard applies to its review of plaintiff’s benefits application. First, Reliance failed to make any benefits decision within the applicable appeals period or otherwise. Second, Reliance’s failure to decide the application within the allotted 45 days and subsequent extension without satisfying the prescribed procedural hurdles did not constitute “minor irregularities’ or “substantial compliance” with the required procedures.

Merits

Reliance’s internal assessment concluded that plaintiff was not totally disabled after the 24-month period because he could perform the material duties of some occupations such as an administrative clerk. That assessment was made by a nurse’s review of plaintiff’s medical file and a vocational consultant’s review of plaintiff’s file. These persons concluded that plaintiff “has at least sedentary work function” which allowed the plaintiff to perform some occupations.

The only actual medical evidence in the administrative record concerning plaintiff’s condition are the opinions of his primary care physician and his orthopedic surgeon, both of whom opined that plaintiff was totally disabled. Based on the medical evidence and the plan’s language that totally disabled includes an individual that can only “perform[] the material duties on a part-time basis,” the administrative record establishes that plaintiff qualified as totally disabled.

Because Reliance “appears to have disregarded, without justification, [plaintiff’s] treating physicians conclusions” the appropriate remedy in this case is to award benefits to plaintiff from May 2020 to the present day, without precluding Reliance from terminating plaintiff’s benefits in the future based on an adequate justification.

Plaintiff’s motion for summary judgment granted. Defendant’s motion for summary judgment denied. 

Rupprecht v. Reliance Standard Life Insurance Company, Case No. 1:21-cv-01260, Aug. 26, 2020. EDVA at Alexandria (Trenga). VLW 022-3-381. 18 pp.