But the Administrator is Not Entitled to Attorney's Fees
Without Bad Faith or Harassment.
Ms. Brenda Motes was once a Human Resource Generalist employed by Arthur Andersen LLP. She was enrolled in the Arthur Andersen LLP Group Long Term Disability Insurance Plan, which was underwritten by Aetna. She worked until she could no longer perform her job on account of "back pain and physical complications, including fibromyalgia," at which time she began receiving long-term disability benefits under the Plan because she was totally disabled, reports the Federal Court in Download Brenda_Mote_v. Aetna Life Ins. Co. (N.D. Ill. Case No. 05C6212, Opinion Filed November 3, 2006).pdf. Ms. Mote received disability benefits for five years and eight months.
Aetna then "reevaluated her claim" and notified Brenda Mote that she was no longer totally disabled or entitled to such benefits under the Plan based on a review of her file including "notes" from physicians, independent medical reports, and other medical records. She appealed, the Plan stood by its initial reevaluation decision, and she filed suit under ERISA to reinstate her disability benefits. The Plan provided the Plan Administrator, Aetna, with discretion to determine benefits due under the Plan and to interpret the Plan's provisions: "That language explicitly spells out Aetna's discretionary authority both to make benefits determinations and to interpret the Plan's language." (Slipsheet Op. at page 7.)
Since the Plan provided the Adminstrator with such discretion, the Federal Court is powerless to review the Administrator's decision to terminate long-term disability benefits in this case unless the record establishes that the decision was "arbitrary and capricious". This means that in a case like this, the Federal Courts do not ask whether the determination was correct. "'Instead, the only question for us is whether the adminstrator's decision was completely unreasonable.'" (Slipsheet Op. at page 9.)
The Federal Judge in this new case could not say that on the record, Aetna's determination regarding Brenda Mote's conditions was completely unreasonable or arbitrary and capricious. Accordingly, the Federal Court granted Aetna's Motion for Summary Judgment on Ms. Mote's ERISA Claim. However, there is a postscript of sorts.
Aetna claimed that its Attorney's Fees should be paid once Aetna defeated the ERISA Claim. This is the legal standard applied by the Federal Court to Aetna's Attorney Fees Claim: "'Was the losing party's position substantially justified and taken in good faith, or was that party simply out to harass its opponent?'" Even though the ERISA Claim "has proved unsuccessful," it is supported here by "reasonable bona fides". Aetna did not claim either Bad Faith or harassment by Brenda Motes. Aetna's Attorney Fees Claim was concisely denied: "In sum, this Court denies the request for an award of attorneys' fees to the Plan."
REMINDER: THE CONTENTS OF THIS BLOG DO NOT MAKE AN ATTORNEY-CLIENT RELATIONSHIP. ALWAYS CONSULT THE CASES AND LAWS OF EACH PARTICULAR JURISDICTION AND AN ATTORNEY IN AND FAMILIAR WITH THE PARTICULAR INSURANCE ISSUE, THE JURISDICTION AND ITS LAWS, WHENEVER YOU TRY TO ADDRESS OR RESOLVE ANY LEGAL QUESTION.
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