The Tort Trial & Insurance Practice Section of the American Bar Association has published an article authored by J.J. Conway, Esq. discussing the history and usage of Social Security Disability Insurance awards in long-term disability insurance cases. The article, published in the Health and Disability Law Committee Newsletter, discusses the interplay between Social Security Disability Insurance Benefits and ERISA long-term disability benefits from both a financial and evidentiary standpoint. The article is entitled, “Tracing the Evidentiary Path of Social Security ‘Other Income’ Offsets in Disability Cases Through Statutes, Case Law, and Regulations.” (Winter 2017). The article is available here, Tracing the Evidentiary Path of Social Security Other Income Offsets in Disability Cases
The Litigation Section of State Bar of Michigan has published an article authored by J.J. Conway, Esq. discussing the importance of developing a theory of the case early in the litigation process. The article, published in the The Litigation Journal, discusses ways that litigators should formulate a theory of the case early in the pretrial process in order to litigate more effectively. The article is entitled, “A Strong Theory of the Case: The Faster It Is Developed, The Better The Results” (Fall 2017). The article is available here, The Litigation Journal (Fall 2017) – A Strong Theory of the Case
J.J. Conway was a featured speaker at the State Bar of Michigan’s Annual Meeting and NEXT lawyer development conference held in the Cobo Convention Center in Detroit, Michigan on Friday, September 29, 2017. Conway made presentation to new attorneys and those interested in self-employment in a presentation entitled, Hanging Out Your Shingle in 2017. Conway has presented similar lectures to the State Bar Annual Meeting’s attendees in Grand Rapids, Lansing, and Detroit at prior annual meetings. He has also written on the topic for various legal publications.
The Michigan Court of Appeals has held that, for the purposes of a claim under the Court of Claims Act, the statute of limitations may begin to run prior to any actual deprivation of financial benefit.
In Bauserman v. Unemployment Insurance Agency, No. 333181 (Mich. Ct. App. Jul. 18, 2017), the Michigan Unemployment Insurance Agency (defendant) appealed a trial court’s decision denying the defendant’s motion for summary disposition. The Court of Appeals held that a violation of the Court of Claims Act did exist, reversing the trial court’s decision.
The dispute centered on the defendant’s use of an automated decision-making system to both “detect and adjudicate suspected instances of employment benefit fraud.” Id. at 1. Once the system ‘detected’ an instance of benefit fraud, it would issue a notice and questionnaire in regards, either to the employee’s home address or an online unemployment portal which was rarely, if ever, accessed by employees. Following the notice, defendant would routinely “intercept” tax refunds, garnish wages and initiate collection activity through a court of law. Id. at 2.
Plaintiffs alleged that the Unemployment Insurance Agency’s use of “an automated decision-making system for the detection and determination of fraud cases, whereby the computer code in the automated decision-making process contains the rules that are used to determine a claimant’s guilt, and those rules change the substantive standard for guilt or are otherwise inconsistent with the requirements of due process.” Id. at 8.
The Court of Claims Act, MCL 600.6431(1), provides, in relevant part, that “[n]o claim may be maintained against the state unless the claimant, within 1 year after such claim has accrued, files in the office of the clerk of the court of claims either a written claim or a written notice of intention to file a claim against the state or any of its departments….” In actions for property damage or personal injuries, the claimant only has “6 months following the happening of the event giving rise to the cause of action” to file a written claim. MCL 600.6431(3).
The court identified the determinative question as “what event gave rise to [the plaintiffs’] cause of action.” Bauserman at 5. The triggering event was either when the defendant issued notices informing the plaintiffs they were disqualified from receiving unemployment benefits or when the defendant actually seized the plaintiffs’ property. Id.
In McCahan v. Brennan, the court held that MCL 600.6431 is to be “understood as a cohesive whole. Subsection (1) sets forth the general rule, for which subsection (2) sets forth additional requirements and which subsection (3) modifies for particular classes of cases that would otherwise fall under the provisions of subsection (1).” 492 Mich. 730, 742 (2012). Thus, while subsection (1) of MCL 600.6431 may provide a longer time frame to file a notice with the Court of Claims, subsection (3) shortens the time period for applicable claims to six months after the plaintiff’s cause of action accrues, or “when the wrong on which they base their claims was done.” Bauserman at 7.
The Bauserman plaintiffs alleged a violation of the Michigan Constitution, Article 1, § 17, which provides that “[n]o person shall be… deprived of life, liberty or property, without due process of law….” Specifically, the plaintiffs alleged that the defendant failed to “follow the minimum due process standards required under federal law with respect to the collection of unemployment debts, including overpayment and penalties.” Id. at 8.
The court held that while the plaintiffs claimed “the wrong on which their claims are based took place when defendant intercepted federal and state tax refunds, garnished their wages and forced repayment of unemployment benefits[,]” the alleged wrong actually took place “when defendant issued notices informing plaintiffs of its determination that plaintiffs had engaged in fraudulent conduct, and they were not given the requisite notice and opportunity to be heard.” Id. at 9. Therefore, the “economic deprivation” encountered by the plaintiffs was a secondary result of the original deprivation of due process, and not the proper point to adjudge the applicable statute of limitations. Id. Therefore, it was the notification of the deprivation of unemployment benefits, not the actual seizure of said benefits, which constituted the statutory point of claim accrual.
The Bauserman court cited Frank v. Linkner, a 2017 Sixth Circuit decision, which held in part that a plaintiff’s claims could accrue prior to a plaintiff incurring “calculable financial injury….” 894 NW2d 574 (2017) (Docket No. 151888), slip op at 14.
Following this decision, it is clear that a plaintiff’s pre-suit inquiry into the possible statute of limitations for claims arising against the State of Michigan must not be limited simply to the date the actual harm accrued, but should also account for any conduct preceding the harm which may have actually triggered the statutory cause of action.
In twenty years of handling employee benefit disputes, I have made a few observations of the ways to keep a long-term disability insurance claim in “approved status” or “open” as insurance companies say. A disability claimant’s medical file should include accurate and documented history of disability and should always be up to date. A disability claimant should avoid common pitfalls that can doom an otherwise valid claim.
Employees who file for disability insurance benefits have legitimate and provable claims. Many wait until their medical situations become unbearable before beginning the disability claims process. So why are so many claims denied by disability insurance companies? The reason is simple.
The filing of a long-term disability claim is an adversary process, and given this reality, appearances matter.
The claims departments of long-term disability insurers are populated with adjusters who believe that people seeking disability benefits do not want to work. In some of the most serious medical cases our firm has handled, the insurers have denied the claims for patently absurd reasons, bred of a kind of cynicism rather than objective factual consideration. A claimant seeking disability benefits cannot make the insurance company’s job easier. The interests are adverse. It is best to accept this, not fight it, and to adjust to avoid common claims filing mistakes.
What can a claimant do to make the process smoother?
1.Stop Using Social Media Now. Searching social media sites is the new weapon of choice in disability claims departments. Online searches are replacing surveillance as the preferred form of “gotcha” by the nation’s insurer. Claims files now regularly contain public images downloaded from Facebook or Instagram that are cited as evidence that a disabled claimant is essentially leading a normal life and should be able to work. We have written before about this before in the Summit. (See Long-Term Disability Insurance Update: An Online ‘Friend You May Not ‘Like’.) Often, claimants do not heed the warning. Social media in this context is misleading. Unless a post is time-tagged, it is difficult to determine whether a posted picture of the claimant was taken recently (i.e., while claiming disability benefits) or years earlier. Sometimes insurers do not produce these materials until after a long-term disability appeal is filed, to deny the claimant the opportunity to explain the images or provide some context such as, ‘this photo was actually taken before I became sick.’ We can longer recommend a middle ground, sign off social media until the claim is over.
2. Reasonable Requests for Information Are Reasonable. Many claimants have experienced long delays in payment after they initiated a claim. Once the claim is approved, they are surprised when the insurer then asks for subsequent medical updates. Providing updates every year is likely to be found to be reasonable by a court unless there are some unique circumstances. By contrast, requesting monthly or bimonthly is likely to be found to be excessive.
3. Keep All Doctor Appointments. A doctor’s appointment has a primary and secondary function. The primary function is obviously to address and care for your medical condition. The secondary function is to document (medically) the history of restrictions and limitations. A claimant must be candid and forthcoming with treating doctors about how a condition is affecting one’s life. Having a contemporaneous record of one’s health struggles will greatly assist in both the approval and continuation of a claim.
4. If You Can Work, Work. Many policies provide for partial or rehabilitative disability benefits. This means that if a claimant returns to work on a part-time basis, the insurer will make up the financial difference between the amount of the monthly disability benefit and the pay received from part-time employment.
5. Two Wrongs Don’t Make a Right: Just Because Disability Insurers Lie, Never Stop Telling the Truth. Honesty is at the heart of any successful disability claim. Honesty requires the truthful explanation of what limits a claimant’s ability to work. A claimant need not exaggerate any symptoms, but simply explain why a condition prevents performing the duties of a certain job. For example, a cashier with a serious wrist injury can easily explain how that condition (loss of movement) prevents the regular performance of an essential job duty (counting back change).
These are but a few suggestions for taking a practical approach a disability claims and minimizing the adversity that exists between claimant and insurance company during the process.
The State Bar of Michigan has published an article authored by J.J. Conway, Esq. discussing the judicially mandated administrative claims process required by ERISA Section 503, 29 U.S.C. 1133. The article, published in the Michigan Bar Journal, discusses ways that claimants may use the pretrial process more effectively. The article is entitled,”The Private Resolution of Employee Benefit Disputes: Section 503 and the Meaning of Evidentiary Materials in ERISA Cases” (Sept. 2016). The article is available here.
J.J. Conway has been named a 2017 SuperLawyer by Thomson Reuters. J.J. has been listed as SuperLawyer or SuperLawyer Rising Star on ten occasions. SuperLawyers is a “rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer-recognition and professional achievement.” The selection process “includes independent research, peer nominations, and peer evaluations.” www.superlawyers.com.
For more information and to view J.J.’s Superlawyer profile, please visit:
J.J. Conway’s SuperLawyer Profile.
J.J. Conway Law is an employee benefits law firm representing clients in the matters involving ERISA, pension, long-term disability insurance, healthcare, life insurance, as well as other benefit matters. Based on Royal Oak, Michigan, the firm represents clients throughout the United States in ERISA and employee benefits matters, including complex benefit class action cases.
J.J. Conway was a featured speaker before the practice management class of the University of Detroit Mercy School of Law on Friday, February 17, 2017. Conway is a 1996 UDM law graduate and was invited along with other self-employed attorneys to discuss the advantages of representing clients by owning one’s own law firm. Conway has previously presented lectures to the State Bar of Michigan’s Practice Management Section and the Institute of Continuing Legal Education (ICLE) and has written on the topic for various legal publications.
The United States District Court for the Eastern District of Michigan has held that an insurer must advise a long-term disability claimant of its internal appeal requirement within the actual plan document in order to establish a failure to exhaust defense.
In Wallace v. Beaumont Healthcare Employee Welfare Benefit Plan, No. 16-cv-10625 (E.D. Mich. January 18, 2017), Reliance-Standard Life Insurance Company moved to dismiss the plaintiff’s complaint on the basis that she failed to exhaust her internal administrative remedies prior to filing suit. The court denied the motion, holding, in part, that Reliance Standard had not included an appeal requirement within the express terms of its disability insurance contract. A statement advising of a right to appeal a denied claim in a letter is insufficient to secure a dismissal, according to the court. The court cited the opinion of another federal court in Montoya v. Reliance Standard Life Ins. Co., No. 14-cv-02740 (N.D. Cal. Mar. 2, 2015) which also found Reliance Standard’s long-term disability form contract lacking any requirement of an internal appeal. The Wallace court held:
Having reviewed the Reliance policy, which Plaintiff attached to her Amended Complaint, this Court finds no discussion of an exhaustion requirement. The only requirement for bringing a legal action set forth in the policy reads: “No legal action may be brought against us to recover on this Policy within sixty (60) days after written proof of loss has been given as required by this Policy.” The policy does not incorporate the terms of any other document. To the contrary, it expressly states that the policy represents “the entire contract.” Nevertheless, even if this Court construed the denial of benefits letter as a plan document, it would hold that the letter did not mandate exhaustion as a prerequisite to bringing suit.
The court’s ruling in Wallace underscores the importance of carefully reviewing a claimant’s long-term disability contract for a disability insurer’s own compliance with ERISA when an exhaustion defense is raised. The court’s ruling also increases access to disabled employees whose claims for disability benefits have been wrongfully denied or terminated.
J.J. Conway has been named a 2017 “Top Lawyer” by dbusiness magazine in its annual Top Lawyers Issue. According to dbusiness magazine, “For our 2017 Top Lawyers peer review survey, we polled 19,000 attorneys in Wayne, Oakland, Macomb, Washtenaw, and Livingston counties. Each attorney was asked to nominate lawyers among 48 legal specialties. More information about the peer reviewing rating process may be found by visiting the magazine’s website, dbusiness.
J.J. Conway Law is an employee benefits law firm representing clients in the matters involving ERISA, pension, long-term disability insurance, healthcare, life insurance, as well as other benefits matters. Based on Royal Oak, Michigan, the firm represents clients throughout the United States in ERISA and employee benefits matters, including complex benefit class action cases.
Everything we do is centered on effectively and promptly resolving our clients’ benefits disputes whether in the courtroom or at the bargaining table. We focus on successfully litigating and resolving employee benefit and contractual disputes involving private contracts of insurance and claims brought under the Employee Retirement Income Security Act of 1974 (“ERISA.”)