by Steve Fields | July 25th, 2022
June 15, 2022 – U.S. Court of Appeals – 5th Circuit – Citation Pending
Bunner’s claim for Long Term Disability benefits was denied due to application of the pre-existing condition exclusion found within her policy. These provisions are common in most Long Term Disability policies.
In August 2015, Bunner had a brain tumor, and she suffered from numbness, tingling and pain. She had the tumor removed in September, and the symptoms stopped. She proceeded with chemotherapy and radiation therapy. She had resulting impairments of verbal learning and memory and poor initial encoding of visual information, decline in attention and left-hand dexterity. However, she compensated well and maintained adequate daily functional capacities, including work. The most recent evaluation before her hire date at work was October 5, 2016. She was hired by Situs Group on October 11, 2016. After a few months, she began to re-experience cognitive impairments.
Bunner was told by an employer benefits coordinator at a meeting that she could receive Long Term Disability benefits regardless of pre-existing conditions. An unidentified Dearborn representative was at this same meeting and did not correct or qualify the misrepresentation of the pre-existing condition issue. Upon reviewing the policy, Bunner noticed language contradictory to what she had been told. She asked about this, and she was told that if she enrolled as a new hire, that she would not be subject to the pre-existing condition. This was unfortunately inaccurate.
Bunner went out of work in March 2017, early enough to trigger the pre-existing condition exclusion in both her Short Term Disability and Long Term Disability policies. She was paid her Short Term Disability benefits with an exception made to the pre-existing exclusion. Her Long Term Disability claim was denied. She argued on appeal that her condition was the result of cognitive impairments rather than the treatment for her brain tumor, and she also explained the misrepresentations made to her during the prior benefits meeting.
Dearborn initiated a deadline extension because it was requesting additional records and information. Bunner filed suit before Dearborn finished their review. The district court found that Bunner filed suit prematurely and stayed the litigation until the administrative review was complete. Bunner made arguments that Dearborn had failed to follow timing regulations and requirements, but the district court determined that Dearborn substantially complied with ERISA requirements, which the Court of Appeals upheld.
The Court also found that the plan language of the pre-existing condition exclusion barred Bunner’s claim for Long Term Disability benefits. Bunner argued that ERISA estoppel applied, which requires a (1) material representation, (2) upon which the claimant reasonably and detrimentally relied, (3) under extraordinary circumstances. The court concluded that Bunner failed to meet the third requirement (which is difficult to meet). The Court reasoned that the misrepresentations were made in a single month and by two individuals, and that Bunner was not “vulnerable,” so the situation did not rise to “extraordinary circumstances.” The Court also rejected Bunner’s argument that the district court made errors in limiting discovery.
Bunner’s case highlights the importance of fully understanding your Long Term Disability policy. In almost all situations, the language of the policy will govern your claim, and the Court may likely apply a strict adherence to the policy language, even if it seems unfair. It is vital that you have a full understanding of all applicable provisions in your policy. Our attorneys are here to help you review and understand your policy. We deal with these issues every day, and we are ready to help guide you through your policy and your claim for Long Term Disability benefits.
