The Ninth Circuit recently reviewed a district court's denial of plaintiff's long term disability benefits under the abuse of discretion standard. Upon review, the Ninth Circuit held that the district court correctly concluded that the abuse of discretion standard applied, but that the district court did not properly apply the abuse of discretion standard. Relying on its recent decision in Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623 (9th Cir. 2009), the Ninth Circuit found that because HM Life funded and administered the plan, the district court should have considered numerous case-specific factors, including the quality and quantity of the medical evidence, to determine whether there was a conflict of interest and an abuse of discretion.
In its decision, the Ninth Circuit voiced concerns that several procedures and factors were overlooked by HM Life. Relying on Montour, the Ninth Circuit outlined six factors that should have been considered. First, the Ninth Circuit held that HM Life disregarded the quality and quantity of the medical evidence supporting plaintiff's disability claim. Plaintiff claimed that she was disabled due to sciatic pain, restricted mobility, and depression following several hip surgeries. During the appeal process plaintiff provided substantial evidence both from her medical providers and medical records showing that she had undergone MRI exams and x-rays showing metal artifacts in the hip region and bone thinning. There was also evidence that plaintiff was being treated with strong pain medication. The Ninth Circuit held that HM Life failed to credit this reliable medical evidence.
Second, the plaintiff was granted disability from the Social Security Administration ("SSA"). While the Ninth Circuit recognized that HM Life was not bound by the SSA disability determination, it found that the record demonstrated that HM Life had disregarded the determination which raised questions about whether this was deliberative on part of HM Life.
Third, the Ninth Circuit held that when there is a potential conflict of interest, and in light of the substantial medical evidence, HM Life should have arranged an in-person medical evaluation to avoid the appearance of a conflict.
Fourth, the Ninth Circuit found that during the appeal process, HM Life hired six independent physicians to review plaintiff's medical records. All six physicians concluded plaintiff was not disabled. The Ninth Circuit found that despite the fact that six physicians reached the same conclusion it was not evident by the record whether they were provided with all of the pertinent information, including the SSA finding that plaintiff was disabled.
Fifth, the Ninth Circuit found that HM Life did not adequately investigate the claim, and request the necessary medical documents. The Ninth Circuit held that HM Life should have requested that the plaintiff supplement her medical records, or communicate the deficiencies in her records and give her an opportunity to respond.
Finally, HM Life violated ERISA's procedures by providing a new reason for the denial in its final decision thereby not allowing the plaintiff an opportunity to respond.
The Ninth Circuit took all these factors into account and concluded that HM Life's denial of long term disability benefits was contrary to the factual record. The case was remanded to the district court to enter judgment in favor of plaintiff and to determine whether plaintiff was entitled to reasonable attorney fees and prejudgment interest.
This opinion is not final. It may be withdrawn from publication, modified on rehearing, or review may be granted by the U.S. Supreme Court. These events would render the opinion unavailable for use as legal authority.
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