In the case of Michael J. Pacquin v. Prudential Insurance Company of America, Plaintiff Pacquin, a Business Development Director for Transistor Devices, Inc. (TDI), was infected with the West Nile Virus in 2003. As a result, he contracted encephalitis and sustained brain damage. This left him with cognitive difficulties that made it impossible for him to continue his employment.
He was covered under a disability insurance policy which provided him benefits for the first 24 months when he was disabled from working in his regular occupation. After that, in order to qualify for benefits, he had to show that he was disabled from working in any occupation for which he was reasonably qualified.
After a brief unsuccessful attempt to return to work, Plaintiff was approved for short term disability benefits. After 24 months, he also qualified for long term disability benefits and collected them for about the next 11months. Prudential conducted periodic evaluations, but it was not until 2015, when Prudential suddenly terminated his benefits, due “in large part to one independent neuropsychological test (NPT).”
After Plaintiff exhausted his administrative remedies, he filed this ERISA lawsuit. The Court found in favor of the Plaintiff and that Prudential had abused its discretion in terminating benefits. The judge ordered Prudential to pay past benefits and shall continue to pay benefits “going forward.”
Prudential had a Conflict of Interest That Weighed Against it,/h2>
In this case, Prudential both “funds the Plan and adjudicates benefits claims.” In such cases, courts weigh the potential conflict of interest as one factor in determining whether or not the insurance company abused its discretion. This Court held that Prudential’s conflict of interest was apparent. It had previously paid long term benefits, and there was no new information that altered the previous decision to pay long term benefits in any “significant way.”
Prudential Abused its Discretion When the Weight of the Evidence Favored the Plaintiff
Prudential argued that its decision was reasonable and supported by substantial evidence. The substantial evidence it relied on was one NPT and two other independent professionals who reviewed Plaintiff’s medical records.
As the Court noted, the evidentiary “scoreboard” in favor of continuing long term disability benefits included the opinions of 16 health care professionals, including 14 medical doctors or neuropsychologists, one of whom was hired by Prudential, one occupational therapist, and one speech-therapists. Those in favor of terminating benefits were three doctors, all of whom were hired by Prudential.
Terminating benefits in 2015 made little sense when, in 2014, a Prudential Claims Manager noted in Plaintiff’s files that his cognitive abilities were not likely to improve and there were no gainful employment options for him. The Court stated that “the only way that Prudential can succeed under the applicable standard of review is if it can show that new, material medical evidence indicates that Mr. Pacquin is no longer disabled under the terms of the Policy. I find that this has not been shown.”
The Court’s final conclusion was that “Prudential’s termination decision, in light of the vastly stronger body of evidence to the contrary, was an abuse of discretion.”
This case was not handled by our office, but we believe it can be instructive for those who have been collecting long term disability benefits for a period of years and then they suddenly receive notice that their benefits are being terminated.