Judge delivers a sobering message to wine rep’s disability insurer

This article was initially published in the Chicago Daily Law Bulletin on October 19, 2016.

By Mark D. DeBofsky
Mark D. DeBofsky is a name partner of DeBofsky, Sherman & Casciari, PC P.C. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage . He can be reached at [email protected].

The importance of accurate vocational assessments in disability benefit claims cannot be overstated.

A physician's statement listing physical and mental limitations due to medical conditions are only part of the picture - the ultimate question is whether such limitations would affect someone's ability to perform their regular occupation.

That was the lesson taught in Sapp v. Liberty Life Assurance Company of Boston, 2016 WL 5660449 (E.D. Va., Sept. 28, 2016). Because Liberty failed to assess Mark Sapp's ability to perform his regular occupation as a wine salesman for a wholesale distributor, the court reinstated Sapp's benefits.

The court recounted that Sapp's job required him to deliver cases of wine weighing more than 20 pounds apiece, stock store shelves and set up store displays. The job also required him to drive more than 24,000 miles a year.

In 2014, Sapp suffered a back injury while lifting boxes of wine. This required him to undergo surgery. As a result of his injury, Sapp was permanently limited to lifting no more than 10 pounds and was also limited to bending, twisting, stooping or sitting for no more than 45 minutes. Liberty did not dispute those limitations.

Nonetheless, when Sapp submitted his claim for disability benefits to his employer's group insurer, Liberty, it performed a vocational evaluation that classified his occupation as a generic "sales representative."

Using standard vocational references, Liberty found that sales representative jobs are most often performed at the sedentary or light levels of exertional demand, which resulted in Liberty declaring that Sapp could perform his regular occupation within the work restrictions prescribed by his treating doctors.

The court disagreed.

The court pointed out that in rendering an occupational determination, the plan administrator must review "the material duties of the claimant's particular position and [make] an assessment of how those duties align with the position as it is normally performed in the national economy." (citing Elliott v. Metropolitan Life Insurance Co., 473 F.3d 613, 618-19 (6th Cir. 2006), and McDonough v. Aetna Life Insurance Co., 783 F.3d 374, 380 (1st Cir. 2015)).

The court determined that Liberty's vocational evaluation was deficient because it disregarded the physical demands of Sapp's actual occupation.

The court was critical of Liberty's use of a generic occupational description, explaining: "When the physical demands [of Sapp's job] are laid out in detail in a nine-page document ... using this level of breadth constitutes an improperly cursory inquiry into the actual duties of the job."

The court also pointed out that Liberty's own internal claim documentation initially described Sapp's occupation as "heavy" in exertional demands, which was later ignored in the occupational analysis and the claim denial.

The court further faulted Liberty for failing to provide its vocational evaluator with additional job description materials that were provided by Sapp when he appealed the initial denial.

The court thus concluded that Liberty's "failure to address this evidence provides additional support for the notion that its claims evaluation process in this case was neither deliberate nor principled."

The court acknowledged that although the policy allowed Liberty to consider how the insured's occupation is performed in the national economy, and that the insured's exact job and the occupation need not perfectly align, the court determined that Liberty's argument "misses the point" since Liberty "did not examine the physical requirements of Mr. Sapp's job at all."

Hence, the court concluded, "Because it is unreasonable to fail to consider the physical requirements of Mr. Sapp's actual job when making a disability determination, Liberty abused its discretion in denying Mr. Sapp's LTD benefits."

The court also criticized Liberty's use of a vocational evaluator who was not independent - it utilized someone from a Liberty affiliate who "had a Liberty Mutual e-mail address and used a Liberty document header at the top of her report." The court deemed those facts suggestive of a conclusion that Liberty's structural conflict of interest may have played a part in the claim determination.

Finally, the court addressed whether to award benefits outright or remand the matter to Liberty and determined that a benefit award was the proper remedy since there was nothing left to decide.

"The court need not rely on outside evidence to reach this determination because the job description is detailed clearly in the administrative record," the judge explained.

"It is irrelevant whether Liberty would reach its decision on remand by way of a renewed occupational analysis that found the DOT occupation 'Driver/Sales Worker' to be a more appropriate title, or whether it would instead reach that conclusion by appropriately considering the detailed duties contained in the job description.

"Either way, the outcome would be the same. Consequently, because a remand is unnecessary, this court finds that Mr. Sapp is entitled to retroactive long-term disability benefits beginning on the date that his short-term benefits expired."

This is not the first time that Liberty has drawn judicial criticism for failing to assess the insured's actual occupation.

For example, in Kavanay v. Liberty Life Assurance Company of Boston, 914 F.Supp.2d 832 (S.D. Miss. 2012), the court ruled that Liberty arbitrarily determined that John Kavanay could not meet an own occupation definition of disability because insurer selected the DOT classification for an "inside" claim adjuster, while plaintiff was an "outside" claim adjuster.

This case involved a similarly blatant misclassification. A wine salesman who has to drive to stores and stock shelves is obviously performing a more strenuous position than a generic sales representative.

In view of the Supreme Court's admonition in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115 (2008), that Employee Retirement Income Security Act plan administrators are held to fiduciary requirements that necessitate adherence to "higher-than-marketplace quality standards," Liberty's behavior in this case fell well below that mark.