In DuPerry v. Life Insurance Company of North America, No. 10-1089 (4th Cir. 2011), the plaintiff had sued Life Insurance Company of North America (“LINA”) under ERISA for wrongly denying her disability benefits. The district court had awarded the benefits to the plaintiff, and granted judgment in her favor. LINA appealed.
The Plaintiff had worked as a payroll and benefits clerk for Railroad Friction Products Corporation (“RFPC”) until April 7, 2006. While at RFPC, she participated in a group LTD benefits plan administered by LINA and funded by an insurance policy that LINA issued (“the Policy”). The Policy is subject to ERISA. Plaintiff filed a claim for LTD benefits under the Policy, on the grounds that she had become disabled due to rheumatoid arthritis, osteoarthritis, and fibromyalgia.
In analyzing the case, the Court noted that LINA, as plan administer, had decided to reject the plaintiff’s claim under the Policy for LTD benefits. Since the Policy gave LINA discretionary authority to determine benefit claims under the Policy, LINA’s decision to reject the claim is entitled to a deferential review by a court. However, even under a deferential review, LINA’s decision will be overturned if it is not reasonable. The Court found that, considering all of the evidence together, there is no reasonable basis in the record for LINA’s decision to reject the plaintiff’s benefit claim. The evidence showed that the plaintiff was suffering from chronic diseases that are potentially debilitating. She presented substantial evidence from her attending physicians that these diseases prevent her from working. She also presented her own declaration and declarations from her family and her former employer confirming the severity of her symptoms. The only counter evidence was provided in the reports of one of LINA’s own doctors, who had not examined the plaintiff. But these reports did not contain any significant basis supporting a conclusion that the symptoms from the plaintiff’s illness are not sufficiently severe as to prevent her from working. Especially in light of the structural conflict present here, due to LINA’s dual role as insurer and administrator of the Policy, the Court concluded that LINA’s rejection of the plaintiff’s benefit claim was unreasonable and therefore had to be overturned.
Must the plaintiff’s subjective complaints of pain be considered? On this issue, the Court said that, while LINA was not required to simply accept the plaintiff’s subjective complaints of pain without question, it could not simply dismiss these complaints out of hand, especially where -as here-there is objective medical proof of a disease that could cause such pain. The Court concluded, in effect, that LINA’s dismissal of these complaints was additional evidence of the unreasonableness of its decision to reject the plaintiff’s benefit claims.
What then, is the remedy when LINA’s rejection of the plaintiff’s claim for benefits must be overturned? The Court felt that, due to the way LINA had been handling the claim, remanding the case back to LINA, as plan administrator, to make any further determinations, e.g., whether the plaintiff is entitled under the Policy to “any-occupation period” benefits (those available after 24 months of disability benefit payments), would serve no purpose. Therefore, the Court affirmed the district court’s judgment, under which the LTD benefits were awarded to the plaintiff.