The Court Issues a Favorable Decision for Our Client and Agrees with an Important Argument Advanced by the Law Offices of Barbara B. Comerford and Protects the Client’s ERISA Disability Claim Rights
The Law Offices of Barbara B. Comerford recently obtained an important favorable decision in Federal Court, affirming our client’s rights and recognizing the zealous legal action we took to protect them.
Our client was an Exotic Foreign Exchange Options Broker, who has as, among other policies, a Group Long Term Disability Policy with MetLife, which is governed by the Employee Retirement Income Security Act of 1974 (ERISA). After suffering a devastating traumatic brain injury and other problems as a result of a car accident, Mr. Puzzo was forced to give up his fast paced, complex and demanding career. Under the terms of the MetLife policy, Mr. Puzzo is entitled to long term disability benefits so long as he is unable to return to work as an Exotic Foreign Exchange Options Broker, which, as a result of his injuries, he is not.
Despite the medical evidence on record and abundant medical literature demonstrating the permanence of Mr. Puzzo’s injury, MetLife terminated Mr. Puzzo’s LTD benefits in March 2014. On October 22, 2014, our law firm submitted an administrative appeal of MetLife’s denial. ERISA requires that claimants file an administrative appeal (often referred to as “exhaustion of remedies”) prior to suing the insurance company for denying benefits. Per ERISA law, MetLife was required to render a decision no later than 90 days following submission of the appeal. Specifically, the ERISA regulations provide:
the plan administrator shall notify a claimant…of the plan’s benefit determination on review within a reasonable period of time, but not later than  days after receipt of the claimant’s request for review by the plan, unless the plan administrator determines that special circumstances (such as the need to hold a hearing, if the plan’s procedures provide for such a hearing) require an extension of time for processing the claim.” 29 C.F.R. § 2560.503-1(h)(4)(i)(1)(i). (emphasis added)
Further, “If the plan administrator determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial ( day period…The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the plan expects to render the determination on review.” Id. The ERISA regulations mandate a deadline by which a fiduciary must make a decision on an appeal of an adverse benefits determination: “In no event shall such extension exceed a period of  days from the end of the initial period.” Id.
The ERISA regulations also establish that if the claims administrator does not make a determination within the required 90-day time window, a claimant may have immediate access to the courts:
In the case of the failure of a plan to establish or follow claims procedures consistent with the requirements of this section, a claimant shall be deemed to have exhausted the administrative remedies available under the plan and shall be entitled to pursue any available remedies under Section 502(a) of the Act on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim. 29 C.F.R. § 2560.503-1(h)(l). (emphasis added)
In other words, if the insurance company fails to render a decision on the appeal within 90 days, the claimant’s appeal is deemed denied by operation of law, remedies are automatically exhausted, and the claimant may proceed directly to Court without a “yes or no” decision from the insurance company.
MetLife did not render a decision within the first 45 days of receiving the appeal, nor did it notify Mr. Puzzo that it needed additional time to render a decision within that time frame. What it did do, however, was “sandbag” Mr. Puzzo after that time frame with additional requests for information, all the way through June 26, 2015, after this case was already in litigation. On this date, MetLife sent plaintiff four of its consulting physician’s reports and requested a response by July 7, 2015 to the reports. In order to protect the plaintiff’s rights, we quickly summoned rebuttals to these reports and submitted them to MetLife.
In response to the Mr. Puzzo’s lawsuit, MetLife filed a motion to dismiss the case, claiming that Mr. Puzzo had not exhausted his remedies and was therefore not entitled to sue, citing the fact that MetLife had not rendered a decision yet and Mr. Puzzo had submitted documentation (his rebuttals to the last-minute peer reviews) in July of 2015. In the meantime, while its own motion to dismiss was pending, MetLife kept sending Mr. Puzzo letters stating that his claim remained under review—over one year after he submitted his appeal!
The Court was not persuaded by MetLife’s arguments, succinctly stating:
[T]he initial 45-day time period for Defendant’s review provided in the Plan expired on December 15, 2014. During that [initial 45 day] time period, Defendant failed to notify plaintiff that any additional documentation was required to review Plaintiff’s claim under the Plan, or that any extension was necessary due to “special circumstances.” As no documents were requested, no extension request was made, and no final decision was issued by Defendant or before December 15, 2014, Plaintiff is deemed to have exhausted his administrative remedies as of that date. (Emphasis added)
We are pleased that after we laid the details of MetLife’s delay before the Court, the Court recognized the propriety of our actions in protecting Mr. Puzzo’s rights without allowing MetLife to continue delaying this claim. We hope that this ruling will send a message to insurance carriers that they will be held responsible for their violations of the law. After all, the “deemed exhaustion provision” is meant to prevent precisely the type of conduct that occurred in this case, which consisted of repeated, late requests for information. This protection is also key in preventing the insurer from delaying payment for financial reasons, dragging the review of the case past the statute of limitations (the last date on which a plaintiff may file suit), sandbagging the claimant for additional information at the last minute, or allowing an insurer “just a little bit more time” to gather the evidence it feels will justify denying a disabled claimant his or her benefits.
We have over 30 years of experience in fighting for and protecting claimants’ rights under both Group (ERISA) and individual disability insurance policies. Insurance companies will often do anything they can to avoid paying your claim, taking a bet that you will “go away” or give up simply because they deny your claim. Give yourself the best chance for success; hire a disability attorney to assist you at all stages of your disability claim. Call us for a free consultation, as we are here to help.