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October 2010

Finley v. Hartford Life And Accident Insurance Company 1 ? Ninth Circuit Reverses Northern District Court Decision on ERISA Long Term Disability Claim Based on Video Surveillance that Contradicted Plaintiff's Claim

Insurer Prevails Where Video Shows ERISA Plaintiff Performing Activities That Significantly Exceeded Her Self-Reported Limitations And Contradicted Her Pain Complaints

2010 U.S. App. LEXIS 21509

The Ninth Circuit Court of Appeals reversed and remanded the United States District Court's (Hon. C. Wilken) judgment in favor of plaintiff Constance Finley ("Plaintiff"); The district court had rejected the decision of Hartford Life & Accident Insurance Company ("Hartford"), denying Plaintiff's ERISA governed claim for long term disability benefits.

Plaintiff was receiving disability benefits under Boston Financial's Group Long-Term Disability Plan (the "Plan").  She claimed to have constant disabling pain in her arms, hands, shoulders, neck, and mid to upper back, that increased with mild activities such as holding a telephone. 

During the administration of her claim, Hartford had surveillance conducted, which showed Plaintiff vigorously pulling weeds in kneeling and squatting positions, lifting and carrying objects using both arms, raising her arms over her head to carry objects, and using tools to push, pull, and scrape without any apparent difficulty.  The next day, Plaintiff was caught on video leaving her house and walking her dogs with a purse strapped over her shoulder, holding the leashes in her hand.  She drove to a walking trail, walked the dogs for over an hour, and brushed them down before driving home. 

After having Plaintiff's medical history reviewed by multiple doctors, including the doctors' review of the surveillance, Hartford determined she was capable of performing her sedentary work and canceled her disability benefits.  Plaintiff sued Hartford.

The district court found evidence of bias in the reviewing physicians' reliance on the video, certain inferences that the reviewing physicians drew in favor of Hartford, the fact that none of Hartford's physician's physically examined Plaintiff, and because Hartford rendered a biased decision in another case.  The district court held Hartford abused its discretion, and entered judgment in favor of Plaintiff.  Hartford appealed.

The Ninth Circuit Court of Appeals reviewed de novo the district court's decision.  When evaluating the underlying claim decision, the Court of Appeals applied the abuse of discretion standard because the Plan conferred discretionary authority to the Plan administrator.  The Ninth Circuit stated, "The extent to which a conflict of interest appears to have motivated an administrator's decision is one among potentially many relevant factors that must be considered in determining whether an administrator abused its discretion."

The Court of Appeals held the district court erred by allocating controlling weight to the conflict of interest factor, because the evidence did not show the conflict tainted the entire administrative decision making process.  Hartford did not distort the content of the video, or overemphasize its importance when requesting medical reviews.  Hartford's doctors did not mischaracterize Plaintiff's activities, nor rely on the videos to the exclusion of other evidence.  The district court found the doctors relied too heavily on the videos, but the Court of Appeals indicated that Hartford instructed the reviewing physicians not to rely too heavily or too little on the surveillance.  The Court of Appeals held these instructions were an appropriate effort to reduce bias and consider all the evidence in the claim file.
 
The Court of Appeals concluded the district court should have reviewed Hartford's decision with a moderate degree of skepticism.

Hartford did not abuse its discretion when viewing the medical and documentary evidence underlying Hartford's decision with a moderate degree of skepticism.  Plaintiff claimed that her pain was caused by a rheumatological condition called ankylosing spondylitis and the functional limitations imposed by it depend on the degree of pain she experiences with activity.

The Court of Appeals held it was not an abuse of discretion for Hartford to find Plaintiff lacked credibility and therefore discount the value of her self-reported pain and her doctor's evaluations, and give more weight to the video.  There was sufficient objective evidence that Plaintiff's condition did not cause pain rising to a disabling level.  

The videos showed Plaintiff performing vigorous yard work and using her arms in a way that far exceeded her reported abilities.  All of Hartford's physicians found Plaintiff's activities showed an ability to work at a level greater than she admitted.  They also agreed the activities were too strenuous to have resulted from a temporary improvement in her condition.  Further, Plaintiff's physicians did not adequately explain how her activities in the videos were consistent with their conclusions that she could not work. 

The Court of Appeals held that, when considered with Plaintiff's self-reported limitations, the video severely damaged her credibility.  Immediately before she saw the video, she signed a statement attesting that she had been unable to perform even mild physical activity for the previous six months.  After seeing the video, she claimed she was in severe pain while performing the activities but then stated she was able to perform them because she was temporarily feeling better.  She claimed it took her two weeks to recover from the gardening.  However, she walked her dogs for over an hour and brushed them down the next day.

The Court of Appeals held that given Plaintiff's lack of credibility and her doctor's unsupported claims that she could not work, it was reasonable for Hartford to discount her claim that any use of her upper extremities caused disabling pain.  The Court of Appeals concluded that Hartford did not abuse its discretion when it determined she was capable of sedentary work.  The Court of Appeals reversed and remanded and instructed the district court to enter judgment in favor of Hartford. 

1. This is an unpublished opinion.  The citation of unpublished opinions is governed by Federal Rule of Appellate Procedure 32.1, which states in pertinent part that "A court may not prohibit or restrict the citation of federal judicial opinions, order, judgments, or other written dispositions that have been: (i) designated as 'unpublished,' 'not for publication,' 'non-precedential,' 'not precedent,' or the like; and (ii) issued on or after January 1, 2007."

Click here for opinion.

This opinion may be cited as precedent now.  However, the result in this case could change if the decision is modified by the issuing court, or granted review by the United States Supreme Court. 

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com.

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