Long Term Disability Attorney Claims Untimely Appeals are Extended by Equitable Tolling

by

G. Dell

Richard MacLennan participated in the long-term disability plan provided as a benefit by his employer, Solomon Smith Barney (SSB). He worked as a senior vice president within the company. When he was terminated in early 2002, he went into a deep depression. In March of 2002, he filed claims for short-term and long-term disability under the plan he had participated in at SSB. The plan was administered by Provident Life and Accident Insurance Company (Provident) and CIGNA Life Insurance Company of New York.

Provident and CIGNA denied his claim for long-term disability on October 4, 2002. The letter advised MacLennan that he had a right to file an appeal to the denial decision within 180 days. April 2, 2003 passed without the disability insurance company receiving an appeal. The following year in November 2004, Provident entered into a regulatory settlement agreement (RSA). One of the obligations of the RSA was to offer individuals like MacLennan who had been denied disability benefits

, the opportunity to have their claims reassessed. MacLennan was notified of the opportunity, and sometime in March 2005, he agreed that he wanted his claim reassessed. Provident confirmed that they had received MacLennan’s opt-in on March 21, 2005.

Provident sent MacLennan a Reassessment Information Form (RIF) on December 16, 2005. The form requested additional information that would allow Provident to make a new determination. The letter that came with the form made it clear that Provident needed to receive the RIF by February 24 2006. If MacLennan needed longer to prepare the RIF, he could also apply for an extension by this date.Disability attorney fails to meet deadline. MacLennan had hired a disability attorney to assist him, who failed to meet the deadline. He hired a new disability attorney, who sent a letter to Provident on March 7, 2006, requesting an extension of time until March 30, 2006. Because the letter had not been sent by February 24, 2006, Provident denied the request for an extension. The disability insurance company replied that the letter had been received 11 days too late. Provident used the untimely filing as a reason to deny MacLennan the privilege of having his claim reassessed under the RSA.Disability attorney files suit on behalf of disability insurance client. The disability insurance attorney sent a letter to Provident on May 26, 2006. The letter appealed Providents denial of long-term disability benefits. Because the letter was received more than three years after the deadline for appealing Provident’s initial denial of MacLennan’s long-term disability benefits, Provident denied the claim because it was untimely. With the assistance of his disability insurance attorney, MacLennan filed suit on August 8, 2007. The basis of his claim under the Employee Retirement Income Security Act (ERISA) was that he qualified for equitable tolling. Upon initial review, the Court found that the evidence presented by his disability insurance attorney suggested that indeed MacLennan have a possible claim. MacLennan’s disability attorney defended his client’s failure to meet Providents deadlines on two fronts. First, he argued that the reasons that MacLennan had missed the deadlines should not be counted against him. He argued that MacLennan had been suffering from incapacitating depression during the time that he should have filed his appeals. This that prevented him from meeting the deadlines set by Provident as well as state statutes of limitations. The disability attorney also argued that during the time of MacLennan’s initial claim, Providents prevailing claims practices would have made it futile for MacLennan to exhaust his administrative remedies at that time. He reasoned that Providents argument that MacLennan didn’t have a case because he had failed to exhaust his administrative remedies should be dismissed by the Court. On the other side, Providents attorneys argued that MacLennan had missed important deadlines. They also pointed to the fact it is an ERISA requirement that administrative remedies be exhausted before an ERISA claim can be brought before the Court.Court considers long-term disability claimants qualifications for equitable tolling. The Court looked at MacLennan’s medical record during its evidentiary hearing. The Court found that between April 2, 2003 and March 21, 2005 MacLennan had spent considerable time incapacitated by his depression. But he had not been incapacitated during the entire time. The medical records showed that his condition began to improve in the last part of 2004. This was demonstrated by the fact that he applied for Social Security benefits toward the end of 2004. Even though he required his disability attorneys assistance to do this, it appeared that he was always able to contact his attorney in a timely manner while the Social Security benefits determination was being processed. If he had this ability, certainly he could have responded to Providents denial of benefits as well. The court found that it could not justify applying equitable tolling.Disability attorney fails to write proper appeal. The Court’s decision was further confirmed when the letter written by MacLennans first disability attorney and sent to Provident on March 21, 2005 was reviewed. The court found the letter was only a request for information, not an appeal. Because the RSA stated explicitly that it did not put a hold on any deadlines that fell under ERISA oversight, nor would it create an extension to any of those deadlines, the failure to write a proper appeal letter meant the Court could not apply equitable tolling to MacLennan’s case anyway.Disability attorney must demonstrate mental incapacity for over three years. This left only one way for MacLennan’s disability attorney to demonstrate that MacLennan qualified for equitable tolling. He had to demonstrate that MacLennan had been mentally incapacitated by his depression for the full three years that fell between April 2, 2003 and May 28, 2006. The medical record failed to demonstrate full mental incapacitation between April 2, 2003 and March 21, 2005. Obviously, MacLennan’s disability insurance attorney could not demonstrate mental incapacity over an even longer time span. Disability attorneys last hope is to demonstrate futility of using Providents appeals process. Under ERISA, the Court will not reverse a disability insurance companys denial of benefits if the claimant has failed to exhaust his/her administrative appeals. The court will make an exception only if the claimant can prove that making appeals would have been futile. To determine whether MacLennan’s disability insurance attorneys arguments had any merit, the Court asked certain questions to verify Providents claim that it would not have been futile for MacLennan to appeal. 1)Had Provident failed to give MacLennan the information he needed on how to appeal their decision? 2)Had Provident failed to respond to MacLennan’s request that the disability insurance provider review its original decision? 3)Had Provident in some other way Implied that an appeal would have been pointless? The Court could find no evidence that Provident had failed to fulfill its obligations. The initial denial letter provided all the details on how to appeal the disability insurance companys decision. How could MacLennan accuse Provident of failing to respond, when he had never filed an appeal for them to respond to? In order to have a valid claim Providents initial review was inadequate, MacLennan needed to present evidence demonstrating that. Neither he nor his disability insurance attorney could do so. While it was clear that during the time that MacLennan’s claim was processed Provident had made faulty claims decisions, MacLennan could not prove that Provident had used faulty claims practices on his particular file. MacLennan’s evidence was too scanty. Provident had made positive benefit decisions during the time frame covered by the RSA. Without evidence to the contrary, the court had to assume that MacLennan’s case had been handled properly.Disability attorneys state-based claim for breach of the RSA contract is recognized by the Court. This was the one area in which MacLennan’s disability insurance attorney’s arguments were persuasive. He argued that it was inflexible for Provident to refuse to extend his clients deadline for preparing the RIF because he requested the extension 11 days late. The court agreed. If MacLennan had filed an incomplete form, the RSA would have required Provident to secure the necessary missing information. Provident responded that the deadline of December 31, 2006 have required the disability insurance company to maintain strict deadlines. The court asked how an 11-day delay would have impaired Providents ability to meet that deadline, especially when the insurance company asked for and obtained a one-year extension in which to complete their RSA review process. Provident could not provide a reason worthy of the Court’s consideration. Provident tried to convince the Court that it was now impossible for the disability insurance company to reassess MacLennan’s claim. They had already completed the RSA review process and dismantled their reassessment unit. Provident presented the further argument that because MacLennan had failed to exhaust his administrative remedies, his RSA claims were preempted. Provident presented several state cases to support their argument. The Court looked at each state-law claim cited by Provident. Not one was based on an alleged breach of the RSA itself. This meant that Provident did not have case law on its side. The court gave Provident a choice. The disability insurance company could either provide MacLennan with a fresh review of his long term disability claim

, or the insurance company could face MacLennan’s disability attorney in state court for breach of contract, unjust enrichment, breach of covenant of good faith and fair dealing, and CUTPA violation.

While MacLennan’s disability attorney was unsuccessful in bringing MacLennan’s ERISA claims to a positive settlement for his client, it was a victory to have the Court recognize the validity of his state-based claims.

Gregory Dell is a

disability attorney

and managing partner of the disability income division of Attorneys Dell and Schaefer. Mr. Dell shares court cases like these so you can appreciate how important hiring an experienced attorney is. Mr. Dell and his team of lawyers have the experience you need. They have assisted thousands of long-term disability claimants with their claims against every major disability insurance company.

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