Why is Abuse Of Discretion important?
Abuse Of Discretion is a term of art in ERISA (long term and short term disability) cases that means that the plan administrator for a long term disability plan or short term disability plan failed to properly weigh all of the evidence when that administrator was deciding whether or not the claim should be approved. In other words, proving Abuse of Discretion on the part of a plan administration is a common reason why many ERISA plaintiffs win their cases.
An Example of Abuse Of Discretion
A great example of Abuse of Discretion comes the case of Chavarria v. Metropolitan Life Insurance Co., No. 13-4712, 2014 U.S. Dist. LEXIS 164898 (E.D. La. Nov. 25, 2014). In that case, Mr. Chavarria worked as a repairman in an automobile repair shop until he was no longer able to work due to an inguinal hernia. Mr. Chavarria did receive short term benefits from MetLife and was even originally approved for long term benefits. Mr. Chavarria’s employer contended that Chavarria only had to lift up to 100 lbs in his previous occupation and Mr. Chavarria stated that he had to lift up to 150 lbs to perform his duties.
Mr. Chavarria applied for Social Security Disability Benefits and was denied those benefits by an Administrative Law Judge who claimed that while Mr. Chavarria could no longer perform the duties at his previous job, he would be able to perform the duties of a different, less physically strenuous occupation. In fact, the Administrative Law Judge determined that Mr. Chavarria could not lift more than 20 lbs, which is far less than than both Mr. Chavarria and his employer contended that he needed to lift in order to perform his prior job duties.
The Plan Administrator from MetLife used the Social Security Disability Benefits denial as a basis to attempt to deny Mr. Chavarria his long term disability benefits. However, the court found that because MetLife failed to look at the basis for the denial and just simply saw the denial, that MetLife was wrong in denying Mr. Chavarria his benefits. Had they looked at the basis for the denial, they would have found that Mr. Chavarria was still incapable of performing the duties of his prior job according to the Administrative Law Judge.
Trying to obtain long term disability benefits or overturn a denial due to Abuse of Discretion of a Plan Administrator is very difficult and we highly advise that you consult with and/or hire an experienced ERISA / long term disability benefits attorney.