ERISA-Sixth Circuit Rules That Plaintiff Is Entiled To Long-Term Disability Benefits, Despite A Determination To The Contrary By the Plan Administrator

In Javery v. Lucent Technologies, Inc. Long Term Disability Plan For Management or LBA Employees, No. 12-3834 (6th Cir. 2014), the plaintiff, Nilratan Javery (“Javery”), was appealing the judgment of the district court in favor of the defendant, Lucent Technologies, Inc. Long Term Disability Plan For Management or LBA Employees (the “Plan”), denying Javery’s claim under ERISA for long-term disability (“LTD”) benefits.

In this case, Javery contends that the Plan wrongfully denied his application for LTD benefits. In support of his claim, Javery submitted opinions and evaluations from several medical doctors and psychiatrists, the majority of whom assert that Javery was unable to perform his job as a result of his physical and mental illnesses. Javery also offered other evidence including his successful application for Social Security disability benefits to show that he was “disabled” as that term is defined in the Plan. The Plan argues that Javery has not established by a preponderance of the evidence that he was “disabled” at the relevant time. Additionally, the Plan contends that Javery should be judicially estopped from pursuing his ERISA claim because he failed to disclose the claim in his Chapter 13 personal bankruptcy action.

In analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) first refused to apply the estoppel defense, since Javery’s failure to disclose the claim in the Bankruptcy action was almost certainly due to carelessness or inadvertent error as opposed to intentional, strategic concealment or impermissible gamesmanship. The Court then considered whether the district court erred in denying Javery’s claim for LTD benefits. In this case, the decision of the plan administrator to deny the claim on the Plan’s behalf is not entitled to deference, since the plan administrator was not given discretionary authority to decide claims. The Court said that, to succeed in his claim for LTD benefits under ERISA, Javery must prove by a preponderance of the evidence that he was “disabled,” as that term is defined in the Plan. The Plan defines the term “disabled” as being “prevented by reason of . . . disability . . . from engaging in [his] occupation or employment at the Company.” Thus, the dispositive inquiry is whether Javery was unable to work for Lucent (his employer) as a software engineer due to his physical condition, his mental condition, or a combination of the two. Here, the Court concluded, after a “careful and comprehensive review of the full administrative record and supplemental administrative record” that Javery proved that he was so disabled.

Based on this finding, the Court overturned the district court’s decision, and remanded the case back to the district court with instructions to enter judgment approving Javery’s claim for the LTD benefits.

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