ERISA-Fifth Circuit Rules That Plaintiff Is Entitled To Long-Term Disability Benefits

In George v. Reliance Standard Life Insurance Company, No. 14-50368 (5th Cir. 2015), plaintiff Robert George (“George”) appeals from the district court’s final judgment affirming the decision of the ERISA plan administrator in relevant part. After reviewing the case, the Fifth Circuit Court of Appeals (the “Court”) reversed and rendered judgment for George. Further, the Court remanded the case to the district court to determine the amount of benefits to award to George.

In this case, George served as a helicopter pilot in the United States Army. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired from military service in 1987. After retiring, George began flying helicopters for PHI, Inc. (“PHI”). PHI purchased a long-term disability insurance policy (the “Policy”) for George from the defendant, Reliance Standard Life Insurance Co. (“RSL”). George flew for PHI for more than twenty years. But in 2008 he began experiencing severe pain at the site of his amputation, which prevented him from safely wearing his prosthetic limb. As a result, he was no longer able to operate the foot controls of a helicopter, and he was forced to retire from flying. At that time, he was earning $75,495 per year. George filed a claim for long-term disability benefits under the Policy with RSL.

The Policy contains a definition of “Total Disability”, which a claimant must satisfy to be entitled to long-term disability benefits. The Policy also contains a relevant limitation provision (the “Exclusion Clause”). The Exclusion Clause limits benefits to 24 months when mental conditions contribute to the disability. RSL determined that George did not meet the definition of Total Disability, and therefore is not entitled to the benefits claimed. RSL further determined that, even if George was Totally Disabled, the Exclusion Clause would apply to limit George’s long-term disability benefits to 24 months of payment. George brought this suit, challenging RSL’s determinations, under section 502(a)(1)(B) of ERISA.

In reaching its conclusions, the Court noted that, since the Policy gave RSL the appropriate discretion, RSL’s determinations are entitled to a deferential review. However, the Court held that RSL abused its discretion when it determined that George was not Totally Disabled. RSL fails to cite any evidence in the record that supports its conclusion that George’s ability to perform sedentary work, and to work in the alternative occupations, would allow George to obtain substantially the same earnings that he had as a pilot, This negated RSL’s determination that George was not Totally Disabled, as the Policy defines this term. Further, the Court determined that RSL abused its discretion in determining that the Exclusion Clause would apply. There is no evidence in the record that George’s mental conditions impaired his ability to hold down a job. As such, the Court reversed the district court’s decision and awarded the long-term disability benefits