Opinion
Civil Action No. 99-4799
March 5, 2001
MEMORANDUM AND ORDER
In this ERISA action for long-term disability benefits, the defendant Reliance Standard Life Insurance Company has filed a motion for summary judgment, arguing that its decision to deny such benefits should be evaluated under an "arbitrary and capricious" standard, and that, in any event, the claim file shows that plaintiff failed to establish a right to continuation of such benefits.
Under the terms of the applicable policy, plaintiff was entitled to receive disability benefits for up to three years, upon proof that she was unable to perform her usual occupation; in order to obtain disability benefits after the expiration of three years, plaintiff needed to prove that she was unable to perform any gainful occupation. Plaintiff was paid benefits for three years, but her benefits were terminated in 1997, based upon the defendant's conclusion that, although still disabled from performing her usual occupation, she was able to perform some types of sedentary work for which she was qualified.
Since the defendant was deciding whether or not to continue payment from its own funds, it was clearly laboring under a conflict of interest, and its decision should therefore receive heightened scrutiny, see, Pinto v. Reliance Standard Life Insurance Company, 214 F.3d 377, 378 (3d. Cir. 2000). In my view, the defendant's claim file, as reflected in the summary judgment record, would permit a rational fact-finder to conclude that the denial decision may very well have been tainted by self-interest, and may have been erroneous. Arguably, the defendant was quite selective in its reading of the medical reports, ignoring some of her physical complaints (chronic pain in the nature of fibromyalgia, and possible glaucoma, for example) and the psychological deficits reflected in the medical record. In addition, there is a not unreasonable basis for belief that the defendant simply ignored, or paid insufficient attention to, the fact that plaintiff had been awarded Social Security disability benefits; defendant is in the seemingly anomalous position of requiring plaintiff to refund some of the disability benefits received from the defendant because offset by Social Security disability benefits, and then failing to give any consideration to the continuation of Social Security benefits as evidence of continued total disability.
The defendant's Motion for Summary Judgment will be denied.
An Order follows.
ORDER
AND NOW, this 5th day of March 2001, upon consideration of defendant's Motion for Summary Judgment, and plaintiff's response IT IS ORDERED:
That the defendant's Motion for Summary Judgment is DENIED.