Plan Administrator Acted Unreasonably in Terminating Disability Benefits.


The U.S. District Court for the District of Delaware grants the plaintiff's motion for summary judgment and denies the defendant's cross-motion, finding that the defendant did not properly consider medical evidence in determining eligibility for long-term disability (LTD) benefits.

The plaintiff is a former vice president/manager of a bank that sponsors an LTD plan that is governed by the Employee Retirement Income Security Act of 1974 (ERISA). The defendant is the administrator and claims-and-appeals fiduciary of the plan.

Starting in January 2008, the defendant began paying the plaintiff monthly LTD benefits after she was unable to return to work following diagnoses of chronic fatigue syndrome and fibromyalgia. She received LTD benefits through mid-July 2010, when the defendant terminated them. The reason for the termination was that the definition for disability under the plan changed and provides an "own occupation" standard for the first 24 months and then an "any gainful occupation for which the person is reasonably qualified" standard after 24 months, both of which are dependent on a person's earning capacity. After exhausting the defendant's administrative process, the plaintiff filed suit.

The court initially granted the plaintiff's first motion for summary judgment but could not conclude whether the plaintiff's physical diagnoses rendered her disabled under the plan and remanded the case back to the defendant to reevaluate. Specifically, the court stated that more information was required about how the plaintiff's physical diagnoses affected her earning capacity.

Following the remand, the defendant hired three independent physician consultants to do a paper review of the plaintiff's medical records. The consultants did not meet with the plaintiff or physically examine her at any time. The defendant concluded that the plaintiff had the ability to work as a manager based on her education, training and experience, considering her capabilities, restrictions and limitations. However, the defendant did not consider how the plaintiff's physical and cognitive limitations relating to her illnesses affected her ability to function or perform...

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