This month’s Friday Five covers cases relating to: (1) whether an insurer may seek reimbursement of LTD benefits after a plaintiff obtains a tort settlement, and the scope of discovery on class claims regarding the same; (2) dismissal of LTD claim where the claimant failed to provide insurer with requested medical records during claim review, including records relating to potential pre-existing condition; (3) analysis of the difficulties involved in addressing disabling conditions such as fibromyalgia that are difficult to confirm through objective evidence; (4) analysis of ERISA’s statute of limitations and dismissal of breach of fiduciary duty claims regarding life insurance benefits of an ex-spouse who became ineligible for coverage upon divorce; and (5) analysis of the requirements for a claim for restitution of benefits where an insurer discovers that a claimant failed to disclose working over the course of years while submitting supplemental claims for LTD benefits.

1. Plaintiff entitled to nationwide class discovery in case alleging that insurer improperly sought reimbursement of LTD benefits in light of the plaintiff’s motor vehicle tort settlement. In Wolff, the plaintiff brought purported class action claims under ERISA and Pennsylvania state law alleging that the insurer improperly demanded subrogation in light of the plaintiff’s settlement in a separate tort action. The plaintiff received LTD benefits for a disability resulting from a motor vehicle accident. However, the plaintiff also received a settlement from the other driver in the accident. The plaintiff alleged that the insurer violated the terms of the LTD policy and Pennsylvania law by seeking reimbursement from the plaintiff's settlement. In an earlier opinion, the court dismissed the plaintiff’s state law claims as preempted by ERISA. The plaintiff then sought discovery of a nationwide “list of all persons who were issued policies under the same [LTD] plan that the plaintiff’s policy was based on” as well as “a list of any person who was subrogated against by” the insurer. The insurer argued that any such discovery should be limited to Pennsylvania residents. The court held that the plaintiff was entitled to nationwide discovery because the plaintiff alleged that the insurer “violated both Pennsylvania law and the terms of the policy.” Specifically, the court held that the plaintiff alleged that the insurer violated the Pennsylvania Motor Vehicle Financial Responsibility Law, which falls under ERISA’s “savings clause,” and therefore class discovery of Pennsylvania residents was appropriate. Additionally, the plaintiff’s allegation that the insurer violated the terms of the LTD policy implicated federal common law as well as “any plan participant who was issued this specific policy,” not simply those participants in Pennsylvania. Wolff v. Aetna Life Ins. Co., No. 4:19-CV-01596, 2021 WL 2986370 (M.D. Pa. July 15, 2021).
2. LTD claim dismissed where claimant failed to provide insurer with requested medical records during claim review, including records relating to potential pre-existing condition. In Paramount, the court granted the insurer’s motion for judgment on the pleadings in an action seeking LTD benefits where the plaintiff failed to fulfill his burden of providing necessary medical records for the insurer’s claim review. The plaintiff stopped working after a motor vehicle accident resulting in back and neck issues. The LTD Policy at issue contained a pre-existing conditions clause that precluded benefits for any disability caused by, attributable to, or resulting from a pre-existing condition which “begins in the first 12 months after [the claimant is] continuously insured under the Policy.” The insurer conducted an analysis of the one-year “look back” period contained in the LTD Policy but did not initially uncover evidence of a pre-existing condition. Nonetheless, the insurer denied the claim for LTD benefits. The denial letter indicated that the decision was based on a variety of sources including records of some of the plaintiff’s medical providers. The letter also asserted that the insurer had asked for certain other information, including various medical provider records and the plaintiff’s Social Security Disability award letter, that the plaintiff failed to provide. Therefore, the insurer was “unable to render a decision” on the claim and it was denied. On appeal, the insurer sent a letter to the plaintiff seeking clarification and additional records pertaining to an office visit with the plaintiff’s neurosurgeon. The plaintiff failed to provide that information in addition to other information requested by the insurer. The insurer upheld its denial of the plaintiff’s claim, citing the plaintiff’s failure to provide requested records, including records necessary to determine whether the pre-existing condition exclusion applied. The plaintiff then filed a lawsuit for denial of LTD benefits. Applying the abuse of discretion standard, the court granted the insurer’s motion for judgment on the pleadings and denied the plaintiff’s motion for the same. Among other things, the court held that the medical record contained substantial evidence supporting the insurer’s determination and that the plaintiff repeatedly failed to meet his duty to provide requested records to the insurer. The plaintiff has filed a notice of appeal to the Fourth Circuit. Paramount Shaw v. United Mut. of Omaha Life Ins. Co. of N. Am., No. 6:19-CV-3537-JD, 2021 WL 3131653 (D.S.C. July 23, 2021).
3. Lack of objective evidence not dispositive for LTD and LWOP claims involving disability due to fibromyalgia. In Boersma, the court granted summary judgment to a claimant seeking LTD benefits and waiver of life insurance premium (“LWOP”) benefits under the de novo standard of review. The plaintiff, who was in her forties, stopped working her sedentary level job due to pain and fatigue attributed to fibromyalgia and rheumatoid arthritis. She applied for LTD benefits, which the insurer began paying under a reservation of rights, while it considered her claim. Ultimately, the insurer denied the claims for LTD and LWOP benefits based largely on unremarkable physical examinations and the lack of objective findings to support the plaintiff being precluded from sedentary functionality. The court held that the insurer’s argument “might be convincing” in relation to the plaintiff’s alleged rheumatoid arthritis. The court acknowledged two factors that “persuasively weigh against a conclusion that” the plaintiff suffered from arthritis, including: (1) the lack of physical manifestations in the form of imaging, testing or limited range of motion, and (2) the fact that her condition did not meaningfully respond to treatment that would be expected to have at least some positive effect. However, the court held that the lack of objective evidence was not dispositive as to the plaintiff’s other purported disabling condition—fibromyalgia—which the court noted is typically not a medical condition that can be confirmed by objective testing. Acknowledging this inherent difficulty, the court recognized that “plan administrators often understandably struggle with benefits cases involving fibromyalgia, a condition that is poorly understood and that, due to its lack of easily testable symptoms, lends itself to claims that depend, to a potentially uncomfortable degree, on the word of the beneficiary.” The court noted that “[a]ll that any beneficiary, administrator, or court can do is approach these situations by applying the applicable plan provisions to the administrative record in light of the best medical understanding available, even if that understanding is evolving and incomplete.” The court also noted that the plaintiff’s subjective reports were a legitimate source of information that could not be disregarded. Finally, the court discussed the balancing of weight to be applied to the treating physicians’ opinions. Specifically, the court “considered both (1) the potential bias that [the plaintiff]’s treating physicians might have based on their relationships to her and (2) those treating physicians’ superior direct experience with [the plaintiff].” In the end, the court held that the plaintiff “documented her disabling condition sufficiently to support her claims.” The insurer has filed a notice of appeal to the Sixth Circuit. Boersma v. Unum Life Ins. Co. of Am., No. 3:19-CV-0649, 2021 WL 2661969 (M.D. Tenn. June 29, 2021). 
4. Claims against plan administrator for breach of fiduciary regarding ex-spouse’s life insurance eligibility were not time-barred, but nonetheless fail. In Staropoli, the court granted summary judgment to the plan administrator on claims for breach of fiduciary duty after the denial of the plaintiff’s claim for life insurance benefits following the death of her ex-husband. The plaintiff had enrolled her former husband in a group life insurance policy. Under the terms of the plan, only current spouses were eligible for coverage. In 2013, the plaintiff and her husband divorced, of which she provided notice to her employer, J.P. Morgan. The former husband passed away in 2018, after which the plaintiff filed a claim for benefits on behalf of her children. MetLife, who had become the issuer and claims administrator for the policy in 2017, denied the claim because the policy stated that ex-spouses were not eligible for coverage. The plaintiff initially sued J.P. Morgan and MetLife for denial of benefits and breach of fiduciary duty, but the court dismissed those claims in an earlier opinion. The plaintiff then filed an amended complaint solely against the plan administrator alleging breach of fiduciary duties. Specifically, she alleged that the plan administrator breached its fiduciary duties through “breach of omission” by: (1) failing to provide notice that her ex-husband was ineligible for coverage when she provided notice of the divorce; (2) failing to inform the plaintiff that she was eligible to “port” or convert his policy after the divorce; and (3) failing to prevent her from “re-enrolling” her ex-husband in 2015. The plaintiff also alleged that the plan administrator made misrepresentations by: (1) withdrawing premiums from her paycheck designated as “SPOUSE SUPP TERM LIFE”; and (2) listing her ex-husband as a covered dependent on the company’s online “Benefits Web Center” that showed that she had a current policy for “Adult Supplemental Life Insurance.” At the outset, the court ruled that the plaintiff’s claims were not barred by ERISA’s statute of limitations. As the court explained, “ERISA requires that actions alleging a breach of fiduciary duties be filed before one of two deadlines. The first is six years after the last action which is a part of the alleged breach, or, in the case of a breach by omission, the latest date on which the fiduciary could have cured the breach. . . . The second is three years after the plaintiff gained actual knowledge of the breach.” The court held that the plaintiff’s claims were not time-barred because, although she had received the applicable plan documents, she testified that she did not read them, and therefore she did not have “actual knowledge” of the disclosures in those documents. Nonetheless, the court held that the plaintiff’s claims failed. Specifically, the court explained that “breach of omission” claims are only available where (1) the employer had “actual knowledge” that an employee was confused but failed to provide information to cure the confusion; or (2) the employer fostered a misunderstanding and failed to disclose information needed to correct it. The plaintiff failed to introduce evidence that either circumstance existed. Additionally, the court held that the plaintiff’s misrepresentation allegations failed because neither the withdrawal of premiums for a “spouse” nor the information on the benefits web portal constituted misrepresentations, and any reliance by the plaintiff on those representations was objectively unreasonable. Staropoli v. Metro. Life Ins. Co., No. CV 19-2850, 2021 WL 2939936 (E.D. Pa. July 13, 2021).
5. Claimant failed to disclose fact that he worked as an attorney on various legal matters over several years while receiving LTD benefits, but insurer’s claim for restitution denied because it failed to show reliance on the misrepresentations. In Messing, the court denied an insurer’s counterclaim to recover previously paid benefits on the basis that the claimant allegedly misrepresented his ability to work as a lawyer, but it nonetheless affirmed the insurer’s decision to terminate LTD benefits. The claimant, a former attorney and partner at a law firm, went out of work in 1998 and began receiving LTD benefits due to depression. In 2018, the insurer reviewed the plaintiff’s file and received updated medical records from the plaintiff’s treating physician who diagnosed the plaintiff with “Major Depressive Disorder, recurrent, minimal to mild” and noted that the plaintiff had discontinued his psychotropic medications in 2012, he had been stable since that time, and he could tolerate normal stress. The insurer hired a physician to conduct an independent medical examination, which concluded that the plaintiff’s depression was in remission and he could work as an attorney. The insurer determined that the plaintiff was no longer disabled and terminated benefits. The plaintiff appealed and provided additional documents, and the insurer upheld its decision, after which the plaintiff filed a lawsuit for LTD benefits. The insurer then learned that the plaintiff had performed legal work in thirteen cases between 1999 and 2013 and also represented himself in divorce proceedings in 2001. Despite submitting supplemental claim statements to the insurer over the years, the plaintiff had never disclosed his work in any of those cases. The insurer therefore filed a counterclaim to recover previous benefit payments on the basis that the plaintiff had misrepresented his inability to work as a lawyer. The plaintiff filed a motion for summary judgment seeking dismissal of the counterclaim and filed a separate motion for judgment on the administrative record seeking a declaration that he is entitled to LTD benefits. The court, applying a de novo standard, denied the motion for judgment on the administrative record and concluded that the plaintiff “failed to show by a preponderance of the evidence that he is disabled within the meaning of the policy at issue.” Because that motion was limited to the administrative record, the court did not consider the plaintiff’s work on the thirteen legal cases when addressing that motion. It did, however, consider that information when ruling on the motion for summary judgment on the insurer’s counterclaim. Nonetheless, the court dismissed the counterclaim because the insurer failed to demonstrate that it was induced by or relied on the plaintiff’s misrepresentations. In other words, to succeed on its counterclaim for restitution, the insurer needed to demonstrate that it would not have paid benefits if the plaintiff had disclosed his occasional legal work when filing his supplemental claims. Although the insurer argued that, if it had known about the plaintiff’s lawyering during that period, it would have reviewed the plaintiff’s file, the insurer failed to produce any evidence that it would have resulted in a termination of the plaintiff’s claim. Both parties have appealed to the Sixth Circuit. Messing v. Provident Life & Ins. Co., No. 1:20-CV-351, 2021 WL 2820662 (W.D. Mich. July 7, 2021).