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Attorney’s Fees Granted For Sedgwick Arbitrary And Capricious Denial

On Behalf of Disability Insurance Law Group | | Disability Insurance – General Topics

In the case of Corey v. Sedgwick Claims Mgmt. Servs., et al., No. 1:15 CV 1736, 2017 WL 4844008 (N.D. Ohio Oct. 26, 2017), the Sixth Circuit remanded the case to the administrator for a “full and fair review.” In this case, the Plaintiff was an employee for Eaton Corporation. As an employee, he was entitled to participate in the Corporations Disability Plan for U.S. Employees. The plan states that a participant is eligible for short term disability benefits if an illness, whether occupational or non-occupational, prevents them from performing the essential duties required for the job. In addition, the plan states that the participant would need to provide verification from a health care practitioner proving, that due to the disability, they will not be able to perform such duties. The plan requires, for both Short Term and Long Term Disability Plans, that the participants provide objective findings of disability. That is findings that their health practitioners observe through objective means, not the participants own description of the symptoms.

The Plaintiff suffered from cluster headaches and filed for Short Term Disability Benefits which were granted twice. However, the third time, his application was denied. He sent the plans administrator’s notes of varying doctors, verifying that he was unable to work due to his disability. The plans administrators asked an independent physician to review the case who noted that although the Plaintiff did have headaches, he was still capable of doing his job. Subsequently, the plan administrators determined that the Plaintiff was not eligible for Short Term Disabilities Benefits. A month later, Plaintiff requested a Long Term Disability information package from the administrators. They told him he was not eligible for Long Term Disability Benefits because his Short Term Disability Benefits were denied. When the Plaintiff responded “I just want the packet,” the administrator replied that they do not just send out packages and if there is anything he needs to know, he could ask the administrator or look in the hand book.

Initially, the District Court found in favor of the Defendant. The Plaintiff appealed the District Court’s decision to the Sixth Circuit. The Sixth Circuit explained their reasoning for remanding the case as follows: The Defendant’s denial was “arbitrary and capricious” because it did not adequately explain why Plaintiff’s medication and treatment plans failed to satisfy the plan’s requirement for objective finding of disability. On remand, one issue in front of the district court is the Plaintiff’s Motion for Attorney fees. Pursuant to ERISA, 29 U. S. C. § 1132 (g) (1), in an action to recover benefits, “the court in its discretion may allow a reasonable attorney’s fees… to either party.” In determining whether plaintiff is entitled to attorney fees the district court considered five factors. These factors are:

(1) the degree of the opposing party’s culpability or bad faith; (2) the opposing party’s ability to satisfy an award of attorney’s fees; (3) the deterrent effect of an award on other persons under similar circumstances; (4) whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and (5) the relative merits of the parties’ positions.

The district court found that out of the five factors, the only one that did not favor the plaintiff was the fourth factor. However, factors 1, 2, 3, and 5 favored the plaintiff and for that reason the court granted the Plaintiff’s Motion for attorney fees.

If you have recently filed a claim for disability benefits, been denied benefits, or have questions about your disability insurance claim, please contact Disability Insurance Law Group at 954-989-9000 or visit our website for more information and a free consultation.

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