LTD Attorney Fees

In Cockrell v. Hartford Life and Accident Insurance Company, 2013 U.S.Dist. Lexis 69017 (W.D.Tenn. May 15, 2013), the Court decided a dispute between the parties concerning LTD attorney fees.  After succeeding on the merits with her LTD claim in District Court, the Plaintiff filed a Motion for Attorney’s Fees.  The defendant insurance company opposed the Motion.  First, the Court noted that as a preliminary matter, the plaintiff must have had “some degree of success on the merits.”  This threshold requirement is satisfied if the plaintiff obtains a remand.  Or, as stated by the court, “had received another shot at benefits by winning a remand.”  After determining the threshold issue, the Court examined the five factor test from Schwartz v. Gregori, 160 F.3d 116, 119 (6th Cir. 1998).  The five factors include:

  1. Culpability or bad faith
  2. Ability to Satisfy Award
  3. Deterrent effect
  4. Common benefit
  5. Merits of the case

After analyzing the five factors, the Court held: “the circumstances of this case favors an attorney’s fee award. . . .”

Next, the Court evaluating the reasonableness of the award.  Plaintiff claimed attorney fees of $23,725, which was supported by Affidavits from the plaintiff’s attorney, and another attorney located in Memphis.  The Court noted that “the lodestar approach is the proper method for calculating the award. When using the lodestar approach, ‘in which the number of hours reasonably expended on litigation is multiplied by a reasonable hourly rate,’ . . . . there is a strong presumption that the lodestar figure represents a reasonable fee.”  The Hartford challenged the figure by arguing that the number of hours litigating the case was unreasonable.  The Court carefully scrutinized the hours spent by plaintiff’s counsel, and reduced the figure to $21,225.00.


The Need for Frequent Medical Treatment can be Disabling

In Neaton v. Hartford, 2013 U.S.App.Lexis 5814 (6th Cir. Mar. 21, 2013), the 6th Circuit found that the Hartford had improperly denied benefits to the Plaintiff.  The Plaintiff’s medical conditions required frequent medical treatment that prohibited him from working on a full time sustained basis.  The Hartford relied upon a non-examining medical doctor hired by the insurer to deny the claim.  The 6th Circuit cited the following cases in evaluating the Hartford’s decision making process:

  • Kalish v. Liberty Mut., 419 F.3d 501 (6th Cir. 2005):  “While it is not per se improper to rely on the opinion of a non-examining medical consultant, whether a doctor has physically examined the claimant is a factor that may be considered in deciding whether a plan administrator acted arbitrarily in giving greater weight to the opinion of its consulting physician.”
  • Smith v. Cont’l Cas. Co., 450 F.3d 253 (6th Cir. 2006): Improper to rely on non-examining medical consultant to determine severity and credibility of pain.

The Court further took issue with the vocational expert opinion relied upon by  the Hartford.  The Court cited Felisky v. Bowen, 35 F.3d 1027 (6th Cir. 1994) for the proposition that “a vocational expert’s opinion that a claimant can perform certain jobs is only substantial evidence to the extent that the vocational expert had a complete, accurate understanding of the claimant’s restrictions and limitations.”  The Court noted that the Hartford’s vocational expert offered opinions were unsupported and conclusory.  The Court took judicial notice per FRE 201 of Bureau of Labor statistics to assess the absenteeism issue.

The 6th Circuit reinstated and awarded retroactive benefits.  The decision is unpublished.


11th Circuit Review of LTD Claims

The 11th Circuit has formulated a multi-step framework for reviewing an ERISA plan administrator’s decision:

  1. De novo review to determine whether the claim administrator’s benefits-denial decision is “wrong”; if it not, the decision will be affirmed.
  2. If the decision is “de novo wrong,” the Court will determine whether the administrator was vested with discretion in reviewing claims; if not, the decision will be reversed.
  3. If the administrator’s decision is “de novo wrong” and the administrator has discretion in reviewing the claim, the Court will determine whether “reasonable” grounds support the decision.
  4. If no reasonable grounds exist, the administrator’s decision will be reversed.  If there are reasonable grounds, the court will examine whether there is a conflict of interest.
  5. If there is no conflict of interest, the decision will be affirmed.
  6. If there is a conflict of interest, the court will consider the conflict of interest as a factor in determining whether the administrator’s decision was arbitrary and capricious.

Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350, 1355 (11th Cir. 2011).

Standard of Review: ERISA LTD Claims

Generally, an ERISA LTD decision will be reviewed de novo unless the plan documents grant the claim fiduciary discretionary authority to construe the policy terms to decide eligibility for benefits.  Marantz v. Permanente Med. Grp., Inc. Long Term Disability Plan, 687 F.3d 320, 327 (7th Cir. 2012).