Lake Tahoe Bad Faith Insurance Law Blog

Happy New Year to all.  So off we go into 2012.  Seems that rust and Unum (or Met Life, or CIGNA, or AETNA, or Sun Life etc.) never sleep.  Challenges right out of the gate include many of the usual suspects. 

Pre-existing condition denials, although entirely new medical conditions lead to disability post employment.  How pre-existing condition denials such as the ones on which I am currently working unfold will be reported in 2012.

Lack of objective medical evidence of disability.  It may be a New Year, but long term disability insurers (most specifically in ERISA cases) never tire of this one. There is perhaps some gathering light in the long, dark night of this LTD denial favorite as more federal courts find "lack of objective medical evidence" is simply a decision to ignore the findings of treating doctors and statements of the actual insured person.  Many courts are growing increasingly skeptical of cursory denial of long term disability insurance claims based on captive medical reviewers.  I'll try to report more on this trend based on my own cases throughout this year.

Here's a thought-to-be-extinct basis for denial brought back in 2012 from the past:  You were able to work on the last day of your employment, and your LTD insurance coverage ended on the day you left work, therefore your claim for disability technically begins the day after you stopped working when you were no longer covered under group LTD insurance.  Gotcha.  We'll see if one particular court in Northern California agrees with Sun Life.

Hope for 2012?  Or the end of the world.  I'll go with the positive viewpoint.  I do see increasing skepticism by the courts at the perfunctory and cursory denials of long term disabiity insurance.  I'll keep trying to fertilize this skepticism and see if it grows any real fruit.

2011 saw some growth in the infant long term disability insurer/administrator as fiduciary reasoning.  There were a few plaintiff-insured victories in court based on this theory, which is a complicated legal theory.  I'll try to monitor the progress of this line of reasoning in 2012, and try to boil the hard to understand theory into a plain language paragraph in a blog post.  It's hopeful, but too early to accurately say if the fiduciary theory is going to improve the odds getting denied long term disability insurance claims reversed and reinstated. 

All in all, 2012 should be a year of steady progress in bringing fair and just results back to long term disability insurance claims.

Where's the snow?  Where's winter?  Not at Lake Tahoe.  I'll post some pictures of a very brown winter wonderland later this month.  One bonus is very rare, thick, glass like ice on the lakes at high elevation in the Sierra Nevadas.  Makes for a unique ice fishing experience.  Regards, Randy Noah

"Happy Holidays" and "ERISA governed long term disability insurance benefit claims" go together about as well as oil and water.  But, in the spirit of the Holidays, just a few small packages of hope to note at this time of year.

-   A small trend with appellate courts recognizing that insurance company medical reviews by insurance doctors are not reliable or necessarily reasonable.

-  A trend towards increased settlement, or "buy out" offers, to long term disability insurance benefit recipients that are almost reasonable.  The catch:  You need to have an attorney approve the agreement, and the insurance company will only pay $250 for the attorney review.  An interesting approach by Big Insurance to carve out any meaningful legal assistance to LTD claimants, but if a few people in desperate need of financial relief are helped, long live the trend.

- Appellate courts willingness (again) to state that undercover surveilance films are almost always of no meaningful assistance in determining disability, and over reliance on undercover video is reason to reverse an insurance company denial of benefits.

- Hope for homeowners about to lose their homes.  A government program that seems to be working (maybe).  If you are on unemployment and you cannot make your home payments there is a program administered by the states using federal monies that will make mortgage payments (up to a cap) for the time you are on unemployment benefits.  While this has limited application to long term disability insurance benefit claimants (and so many of you are losing your homes), there may be a few who can take advantage of this program.  Any help for even a few disabled workers is welcomed.

- Bargain value wines continue to improve in quality.  And I've noticed wonderful macro brewery Canadian beers going on sale at outstanding prices.  Just in time for the Holidays and keeping the 99% spirits bright!  Cheers, Randy Noah

A few photos follow to partially illustrate daily life in the long term disability insurance claims practice.

View image   Rusty, the main office security system

View image  The South Lake Tahoe Office can be a bit drafty

View image  Oh crap, gotta find the snow shovel

View image The neighbors can get ornery

View image Fishing break

Increasingly, I get inquiries for assistance with a specific part of a long term disability insurance claim.  People involved in an LTD insurance dispute (usually an ERISA governed claim) want to know if I will assist with completing the application, simply review an application, write an appeal letter only, draft the opening document for the lawsuit (the "Complaint"), review a buyout offer, draft a buyout demand, or review a release.  This concept of limited attorney assistance on a claim, with the goal of reducing overall attorney fees, is gaining in popularity in many aspects of civil claims.  It is known within the legal business as "unbundling" legal services.  It is not how attorneys have traditionally worked on legal matters, since it is difficult to isolate just one aspect of a legal claim or dispute, which is almost always multi-faceted.  Additionally, there are questions as to the attorney's professional liability for giving advice only on one aspect of a case, knowing that advice will impact other aspects of the claim, to which the client will have to respond.  Is the attorney still professionally obligated to assist or advise later to avoid a negative outcome, although only engaged for one very particular part of the claim?  This is not merely an academic question, since courts have found the attorney is in deed liable for the eventual outcome of the client's claim, although only contracted to provide legal services for a small part of the claim.  You begin to see the reason that attorneys (myself included) who primarily work with ERISA long term disability insurance claims are hesitant to take piece meal work.

But to answer the original client inquiry, yes, sometimes I will advise for a set hourly fee on a specific portion of a long term disability insurance dispute.  I do not yet have a "menu" of fees for the portions of an LTD claim set out above, and am not sure if I can develop such a price sheet.  For now I will consider a potential client's request to handle a limited portion of the claim on a case by case basis, and as my time permits.  I recognize that increasingly clients are so financially devastated by the long term disability insurance denials that they have to consider all alternatives to traditional attorney fee models, such as the contingency fee.  Is "unbundling" legal fees the better approach to legal representation?  I'm not sure, but I am sure that obtaining the best result in the most affordable way for people trying to survive extraordinary distress brought on by arbitrary and irresponsible denials of long term disability insurance benefits must remain the ultimate goal.  I'd be happy to respond to your thoughts and comments.  Randy Noah