On March 27, 2014, the United States District Court in Manhattan awarded Mr. Riemer’s client $97,354.80 in attorney fees. The Court awarded all attorney fees requested. In weighing the factors for deciding if attorney fees should be awarded, the Court found that the degree of culpability, deterrence, and the relative merits of the case favor plaintiff.

For a copy of the decision,Download file.

On Sunday, December 15, 2013, attorney Scott M. Riemer volunteered at the Legal Day of the New York City Chapter of the MS Society. The Legal Day is an annual event that permits individuals suffering from Multiple Sclerosis to obtain legal help from a group of volunteer lawyers of various specialties. This year, because of the snow storm, participating individuals received telephone consultations instead of face-to-face meetings. Mr. Riemer has been volunteering for the MS Society Legal Day for over 10 years.

If you would like to participate next year at the Legal Day of the New York City Chapter, click here.

On August 5, 2013, Riemer & Associates won a landmark victory in McDonnell v. First Unum Life Ins. Co., 2013 U.S. Dist. LEXIS 110361 (S.D.N.Y. August 5, 2013).
For a copy, click here: Download file

In McDonnell, the Federal District Court in Manhattan stripped UNUM of its discretionary authority to determine benefit eligibility. Discretionary authority was stripped because the Policy only granted discretionary authority to First UNUM, but the entity that decided McDonnell’s claim was UNUM Group (the parent corporation of First UNUM). The Court held that UNUM Group did not have discretionary authority because UNUM Group was not an agent of First UNUM and First UNUM did not delegate its authority to UNUM Group in a manner that satisfied the delegation requirements of ERISA.

This is a landmark decision because it will affect most, if not all, cases insured by UNUM and several other insurance companies. UNUM has established centralized claim centers to determine the thousands of benefit claims brought by individuals insured by UNUM’s many insuring subsidiaries, such as First UNUM, UNUM Life, Provident, and National Life of Vermont, etc. The employees at these claim centers are employees of UNUM Group, not of the insuring subsidiaries. In an attempt to plug the gap—the fact that employees from a separate corporation were deciding the claims of the insuring subsidiaries—UNUM Group entered into a General Services Agreement (“GSA”) with each of the insuring subsidiaries.

The decision written by Judge Robert P. Patterson meticulously explains why the GSA is not good enough to satisfy the delegation requirements of ERISA. The Court explained that because the GSA states that “UNUM Group is independent…and not [] the agent of First Unum,” the Unum Group employees were not delegated discretionary authority. Thus, First Unum’s own documents demonstrated that the Unum Group employees were not agents acting within the discretionary authority of First Unum. The Court pointed to language from the Plaintiff’s brief:

If UNUM is correct that it could, without satisfying ERISA, merely contract with an ‘agent’ to assume fiduciary duties in its stead, then UNUM could also delegate those duties to the lowest bidder (and the lowest bidder to an even lower bidder) . . . without even obtaining the consent of the Plan Sponsor [here, Morgan Stanley]. Such a system improperly writes §§ 402(a)(2), 402(b)(3), 402(c)(2) and 405(c)(1) out of ERISA.

Judge Patterson also was not amused at UNUM’s attempt to present the GSA as something that it is not—a document that creates an agency relationship between First UNUM and UNUM Group. UNUM argued to the Court that the GSA created an agency relationship even though Section 8 of the GSA specifically indicates UNUM Group is not an agent of First UNUM. The Court criticized UNUM’s argument:

Since First Unum cited Section 7 of the GSA in the declaration it attached in support of its opposition brief, and during oral argument referenced the provisions of the GSA dealing with the relationship between First Unum and Unum Group, it strains credulity that the Defendant was not aware of the content of Sections 8, which appears on the same page of the GSA as Section 7. Given that Section 8 explicitly defines Unum Group employees as independent contractors and not agents of First Unum, Defendant’s agency argument is meritless. (citations omitted).

If UNUM wants to correct this issue in the future, it is caught between a rock and a hard place. UNUM would either have to amend every one of its insuring subsidiary policies by delegating discretion to UNUM Group, or it would have to amend the GSA by removing Section 8. But, Section 8 as presently written served an important function. It preserved the corporate separation between First UNUM and UNUM Group. Without Section 8, First UNUM and UNUM Group would be liable for each other’s actions, thereby defeating the purpose of creating a separate corporation.

The decision in McDonnell paves the way towards limiting the ability of insurers to apply the arbitrary and capricious standard, which functions against the interest of claimants and diminishes their rights in Federal Court.

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On July 24, 2013, Riemer & Associates prevailed in a long-standing dispute over attorneys’ fees in Levitian v. Sun Life and Health Insurance Company (U.S.), 2013 U.S. Dist. LEXIS 105686 (S.D.N.Y. July 24, 2013).

For a copy, click here: Download file

Ultimately, the Court ordered Defendant to pay attorney fees in the amount of $219,192 and prejudgment interest at the rate of 9%. The decision was significant because of the Court’s detailed analysis of the Supreme Court’s decision in Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 130 S.Ct. 2149 (2010) and the five factors specified in Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869 (2d Cir. 1987).

In Hardt, the Supreme Court emphasized that a fee claimant need not demonstrate it is the “prevailing party” to be eligible for an award. Rather, the claimant need only show he achieved “some success on the merits.” Because Levitian prevailed in both the District Court (for a copy, click here: Download file) and the Court of Appeals (for a copy, click here: Download file), there was no question that Levitian was the prevailing party, and thus eligible for a fee award.

To determine whether Levitian should be awarded fees, the Court analyzed the five Chambless factors, which are:

(1) the degree of the offending party’s culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney’s fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties’ positions, and (5) whether the action conferred a common benefit on a group of pension plan participants.

The Court easily found that the balance of the five factors supported the award of attorneys’ fees. This is despite the fact that Sun Life vigorously argued that the five factors weighed against the award of attorneys’ fees.

The Court’s discussion of two of the factors (1 and 2) was the most interesting. With respect to the first factor (the degree of Sun Life’s culpability), Sun Life argued that a finding that its determination was arbitrary and capricious (which both the District Court and Court of Appeals found Sun Life’s determination to be) cannot be enough to satisfy the factor because in almost every case under ERISA, that is the standard that must be satisfied to prevail. If that were the case, Sun Life argued, then attorneys’ fees would be awarded each time that a plaintiff prevails.

The Court rejected this argument. The Court held that in fact the default standard under ERISA is de novo review, not the arbitrary and capricious standard. The arbitrary and capricious standard only applies if the insurer inserted in its policy that it had discretionary authority to determine eligibility for benefits. Given this, the Court held:

The general standard of review for an administrator’s decision is de novo review. Id. Since Sun Life required Levitian to overcome a higher hurdle to prevail on the merits of his claim for disability benefits, it can scarcely argue that his success in doing so should not be considered evidence of Sun Life’s culpability.

With respect to the second factor (the ability of Sun Life to satisfy an award of fees), Sun Life clearly overreached. Sun Life argued that Levitian has not satisfied its burden of establishing the factor. Given that Sun Life is one of the largest insurance companies in the world, the Court was not amused. The Court expressed its displeasure with Sun Life’s argument, stating “[w]hile zealous advocacy is the hallmark of accomplished counsel, Sun Life’s argument verges on the absurd.”
In all, the decision was a big win for the plaintiff, discouraging insurers from arbitrarily denying valid disability claims.

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On January 24, 2013, Scott M. Riemer was a presenter at the 15th National Advanced Forum on Litigating Disability Insurance Claims in New York City. The conference is sponsored by the American Conference Institute. The conference includes speakers who are leading plaintiff and defense lawyers as well as top medical experts. The topic of Mr. Riemer’s discussion was “The Ongoing Discovery Battle: Understanding Its Scope and Limitations and Implementing Meaningful Strategies in Today’s Environment.” Please take a look at ACI’s website for more information, http://www.americanconference.com/2013/789/litigating-disability-insurance-claims

On Sunday, November 11, 2012, Scott M. Riemer volunteered at the Legal Day of the New York City Chapter of the MS Society. The Legal Day provides the opportunity for individuals suffering from Multiple Sclerosis to meet with lawyers of various specialties to discuss legal issues. Mr. Riemer met with individuals pertaining to long term disability claims. Mr. Riemer has been a participant at the MS Society Legal Day for over 10 years.

For more information about the MS Society’s Legal Day, please click here.http://http://www.nationalmssociety.org/chapters/nyn/programsandservices/legal-services/index.aspx

On November 2-4, 2012, The International Lyme and Associated Diseases Society held its annual conference in Boston. Mr. Riemer co-hosted a medical legal seminar on the disability process with two other attorneys. Mr. Riemer addressed the who, what, where, why, when and how of disability claims involving Lyme Disease.

For more information about the conference and ILADS, click here.

On August 28, 2012, the federal court in Manhattan held that de novo is the appropriate standard of judicial review for disability insurance claims denied by Prudential Insurance Company. This ruling is the first of its kind within the Second Circuit. The decision effectively makes it more difficult for Prudential to deny valid disability claims brought by disabled individuals in New York.

In the case, Prudential argued that the language in their “Summary of Plan Description” (SPD) should be used to determine the appropriate standard of review, rather than the plain language of the actual insurance policy. The SPD contains language granting Prudential the right to discretionary authority in determining the eligibility for benefits. Prudential asserted that this language entitled it to the “arbitrary and capricious” standard of review, which is a very high standard giving great deference to Prudential’s determinations. Riemer & Associates, however, convinced the court that de novo was the more appropriate standard of review, allowing the Court to more thoroughly review Prudential’s determination without giving it deference.

The Court’s decision helps level the playing field. Individuals victimized by Prudential’s arbitrary claim denials can now more effectively litigate their claims in New York and Connecticut under a much more appropriate standard of judicial review. Through the Court’s decision, Riemer & Associates is forcing insurance companies to be held more accountable when deciding disability claims.

Click here to view the Court’s decision in full: Download file

For more information explaining how (ERISA) governs the content and distribution of SPD’s, please click http://www.dol.gov/ebsa/newsroom/fserisa.html“>here.

Scott M. Riemer presented at the 14th National Advanced Forum on Litigating Disability Insurance Claims in New York City on January 26, 2012. The conference was sponsored by the American Conference Institute. The conference included speakers who are leading plaintiff and defense lawyers as well as top medical experts. The topic of my discussion was “The Restrictions and Limitations Between the Own Occupation and the Any Occupation Standard.” Please take a look at ACI’s website for more information, http://www.americanconference.com/2012/878/litigating-disability-insurance-claims

Scott M. Riemer was a presenter at the Annual ABA Symposium on Insurance and Employee Benefits in Miami on January 15, 2011. The Symposium was sponsored by the Tort Trial & Insurance Practice Section of the American Bar Association.

Riemer presented on the topic of “Practical Tips to Make Conflict of Interest Discovery Work for You and Tips to Defend Against its Impact; A View from Both Sides of the Bench.”

For more information about the Symposium, click here.