In Garvey v. Piper Rudnick LLP Long Term Disability Insurance Plan, No. 08 C 1093 (N.D. Illinois 2012), the plaintiff, J. Kevin Garvey (“Garvey”), had applied for long-term disability (“LTD”) benefits from the defendant, the Piper Rudnick LLP Long Term Disability Insurance Plan (the “Plan”). Standard Insurance Company, the Plan’s insurer and claims administrator with discretionary authority to determine entitlement to benefits (“Standard”), denied the application. Garvey then sued the Plan under § 502(a)(1)(B) of ERISA to challenge the denial.
Garvey was a partner in the real estate practice of the law firm, Piper Rudnick LLP (the “Firm”), for many years. On March 1, 2004, he began working part-time and collecting short-term disability benefits from the Firm’s short-term disability plan. Garvey retired one year later, on March 1, 2005. Shortly before retiring, Garvey applied to the Plan for LTD benefits. He claimed to have mental disabilities (stress and anxiety), and physical disabilities (a herniated disc in his back, arthritis in his fingers, and elbow problems), all of which caused him constant pain and anxiety. As stated above, Standard denied the application. The Plan documents provide that you-the participant- are Disabled from your Own Occupation if, as a result of Physical Disease, Injury, Pregnancy or Mental Disorder, you are unable to perform with reasonable continuity the Material Duties of your Own Occupation.
In analyzing the case, the Court noted that Standard’s decision to deny Garvey’s application for the LTD benefits is entitled to a deferential review, since the Plan gives Standard discretionary authority to determine entitlement to benefits. The Court said that, in applying the deferential review, it looks to whether the plan administrator communicated specific reasons for its decision to the claimant, whether the plan administrator afforded the claimant an opportunity for full and fair review, and whether there is an absence of reasoning to support the plan administrator’s decision. In this case, undisputed facts of record show that Garvey received a full and fair review of his LTD benefits claim, and that Standard provided ample and persuasive reasons for its denial. Standard sought the opinions of two consulting physicians regarding Garvey’s psychiatric condition, and both concluded that the medical records did not support Garvey’s submission that he became disabled by stress and anxiety. As for Garvey’s back, elbow, and thumb ailments, Standard consulted three other physicians, each of whom concluded that those physical ailments would not prevent him from working as an attorney so long as he were allowed to change positions throughout the day and not required to frequently lift heavy objects.
The Court noted that Standard may have had a conflict of interest, since it is both the benefits payer and claims decider. However, facts in the record show that this conflict did not materially affect the outcome of the case. Based on the foregoing, the Court concluded that Standard’s denial of Garvey’s claim for LTD benefits was reasonable, and granted summary judgment in favor of the Plan.