ERISA Claimant Must Carry Burden to Establish Total Disability
The Employee Retirement Income Security Act of 1974 (ERISA) allows the plan administrator great discretion to deal with claims. A court will only reverse a decision of a claim administrator if the administrator abused his or her discretion.
In Amy Silverstone v. Reliance Standard Life Insurance Company, Maryland Insurance Commissioner, No. 19-1362, United States Court Of Appeals For The Fourth Circuit (February 26, 2020) Silverstone filed a complaint, pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461 (2012), against Reliance Standard Life Insurance Company (Reliance), alleging that Reliance wrongfully denied her claim for continued long-term disability (LTD) benefits. Silverstone and Reliance both moved for summary judgment.
The district court, after realizing that it was Silverstone’s burden to submit proof of total disability, the court granted Reliance’s motion for summary judgment in Reliance’s favor.
ANALYSIS
Where an ERISA plan grants an administrator discretion to award or reject a benefit, the trial court and appellate court only review the administrator’s decision for abuse of discretion.
Judicial review of an ERISA administrator’s decision for abuse of discretion requires it to determine whether the decision was reasonable, a determination that is informed by the nonexhaustive list of factors set forth in precedent.
Ultimately to be held reasonable, the administrator’s decision must result from a deliberate, principled reasoning process and be supported by substantial evidence. An appellate court will not disturb a plan administrator’s decision if the decision is reasonable, even if it would have come to a contrary conclusion independently.
After reviewing the record and the parties’ arguments, the Fourth Circuit concluded that Reliance did not abuse its discretion in denying Silverstone’s claim for continued Long Term Disability benefits because she failed to carry the burden of proving disability.
The district court’s judgment was affirmed for the reasons stated in its opinion.
ZALMA OPINION
ERISA, although it looks and sounds like insurance, is really a creature of a federal statute. The courts dealing with an ERISA claim deal with it differently than they do with regard to an insurance claim. The ERISA administrator’s decision will always be enforced as long as the court concludes the administrator did not abuse his or her discretion if the decision made was reasonable.
© 2020 – Barry Zalma
This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
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