by Steve Fields | June 10th, 2022
April 11, 2022 – U.S. Court of Appeals – 7th Circuit – 31 F.4th 541
Harlan Ten Pas was a participant in his employer’s Long Term Disability policy issued and insured by Lincoln. Ten Pas’ claim for disability benefits was approved, but there was a dispute over the monthly benefit amount. Lincoln used a monthly benefit amount based on earnings at the time of August 31, 2014, which was the date of his first heart attack and the first of several hospital stays. Ten Pas asserted that the determination date for his monthly earnings and resulting benefit should have been September 1, 2014 or later. Ten Pas received a substantial raise from his employer on September 1, 2014, making the one day difference in the start of the claim resulting in a significantly different benefit amount.
Ten Pas worked briefly and intermittently during the first week of September while in and out of the hospital after the initial heart attack on August 31, 2014. One of Ten Pas’ treating physicians stated that Ten Pas was unable to work as early as August 31, 2014 despite the fact that he did perform some work after that date. Lincoln conducted their own investigation and found the determination date for Ten Pas’ claims to be August 31, 2014, which triggers the lower benefit amount based on the lower monthly earnings. Lincoln found that because of the subsequent hospitalizations, Ten Pas was not able to perform the full duties of his occupation after the heart attack on August 31, 2014, so the determination date for earnings and benefit amounts could not be after that. Ten Pas argued that the policy provisions regarding “actively at work” supported his position; specifically noting that a) he did perform some work after September 1, 2014, and that even if he did not perform the full duties, that b) the “actively at work” provision in the policy supported his position because August 31, 2014 fell on a Sunday, and since he had worked the previous business day, he could not have been disabled until the next business day, September 2, 2014, at the earliest. Lincoln denied the multiple appeals filed by Ten Pas, and Ten Pas filed suit.
Both parties moved for summary judgment, and the district court granted Ten Pas’ motion for summary judgment, finding that his determination date for earnings and the resulting benefit should have been September 1, 2014 at the earliest. Lincoln appealed. The 7th Circuit Court of Appeals found in favor of Lincoln. In doing so, the Court of Appeals highlighted the abuse of discretion standard of review that this claim receives. They found that because Lincoln reasonably identified Ten Pas’ determination date, that their decision could not be overturned. They also found that because the provision regarding “actively at work” was regarding policy and claim eligibility in the first place, those provisions were irrelevant to the issue of the determination date. The Court of Appeals found that the deferential standard of review also applies to Lincoln’s interpretations of their own policy. The end result was Ten Pas’ claim for the higher monthly earnings determination and resulting benefit was denied.
This case highlights the technical and nuanced issues that arise with ERISA disability claims. It also highlights the unlevel playing field of claims subject to abuse of discretion reviews by the Court. It is important to seek help from an experienced ERISA disability attorney as early in your claim process as possible. Some honest, innocent, and inadvertent mistakes in documentation can make or break your case later on. If you are exploring or dealing with an ERISA disability claim, it is never too early to reach out for help.
