Alison Gary was a hard-working attorney for the former prestigious law firm of Dickstein & Shapiro. Tragically, the attorney suffered from Ehlers-Danlos Syndrome, a progressive, degenerative connective tissue disorder in which the body suffers from hyper-elasticity. In addition to joints that can easily bend in unnatural positions, people with Ehlers-Danlos Syndrome can suffer from severe digestive problems, muscle spasms, chronic pain, significant voice, skin and cardiac issues, and other disabling symptoms. After it became impossible for Ms. Gary to perform the duties of her occupation as an attorney, she filed a long-term disability claim with Unum Life Insurance Company of America, her employer’s group long-term disability insurance carrier. Unum denied the claim.
Trial Court Sided with Unum
Ms. Gary sued the insurance company under the Employee Retirement Income Security Act (ERISA) of 1974, a federal law governing most long-term disability policies. Gary alleged that Unum had wrongfully denied her application for long-term disability benefits. An Oregon federal court entered summary judgment in favor of Unum. While the court agreed that Ms. Gary was disabled and entitled to benefits, it found in favor of Unum because ERISA, a law that was designed to favor insurance companies, would not allow the court to reverse Unum’s benefit denial unless it was clearly “unreasonable.” Because Unum’s position had some support from the cadre of physicians on its payroll, the court ruled in Unum’s favor.
Decision Reversed on Appeal
Upon appeal, the trial court’s decision was unanimously reversed by the Ninth Circuit Court of Appeals. In reviving Ms. Gary’s lawsuit, the appeals court held that the trial court had failed to apply the appropriate amount of “skepticism” to Unum’s spurious support for its decision to deny Ms. Gary’s claim. The court noted that Unum’s consultants “cherry-picked certain observations” from medical records and that the insurer only hired consultants specializing in orthopedic surgery, family medicine and psychology to assess Ms. Gary’s claim, and not a specialist in Ehlers-Danlos Syndrome, which would have been warranted, given the uniqueness of the disease.
Trial Court Awards Attorneys’ Fees
Upon being reversed and duly chastened, the trial court not only awarded Ms. Gary all of her benefits but also entertained a motion to allow her to recover the attorneys’ fees she had expended in pursuit of her benefits. It is very rare for courts in the United States to award attorneys’ fees to the prevailing party. However, while this power is infrequently exercised, courts can and do award attorneys’ fees under certain circumstances in ERISA litigation where the court finds, among other factors, that the insurance company was culpable or that it exercised bad faith in denying the benefit.
In Ms. Gary’s case, Unum did not deny that it was culpable or that it exercised bad faith in denying her claim. The court awarded her $416,749 dollars in attorneys’ fees in addition to her past-due long-term disability benefits.
If you are considering filing a long-term disability claim or if your claim is being challenged or has been denied, contact us. We handle long-term disability claims on a daily basis and have the experience, knowledge and tenacity to make sure insurance companies keep the promises they made to policyholders like you.