After 12 Years of Litigation Jonathan M. Feigenbaum, Esq. Announces Third Successful Appeal of Long Term Disability Claim Against Sun Life

January 31, 2018 Boston, Massachusetts – ERISA attorneys Jonathan M. Feigenbaum, Esq. and Michael D. Grabhorn, Esq. announce a third successful appeal in Gross v. Sun Life Assurance Co. of Canada, __F.3d__, 2018 WL 460203 (1st Cir. Jan. 18, 2018). The case discusses chronic pain, surveillance, prejudgment interest, and attorneys’ fees.

In 2006, Diahann Gross, an optician, filed a claim for long-term disability benefits under an insurance policy issued and administered by the Sun Life Assurance Company of Canada. The insurance policy was a plan asset of her employer’s group long-term-disability ERISA governed plan. Sun Life denied her claim repeatedly even though all her treating physicians, the Social Security Administration, an initially an IME hired by Sun Life found her disabled form all types of employment.

In the most recent appeal, Sun Life challenged the district court’s determination that Gross was totally disabled. Sun Life lost. Gross cross-appealed a decision that had reduced attorney’s fees and awarded pursuant to the ERISA statute. In addition, Gross appealed the district court’s decision to award interest at a federal rate of less than 1% instead of market rate interest or the typical award of interest at the Massachusetts statutory rate of 12% simple interest.

The First Circuit held that Gross was entitled to benefits based on chronic and severe pain denying Sun Life’s appeal. The Court remarked that Sun Life’s doctors failed to evaluate the “surveillance reports in the context of the entire surveillance investigation and the consistent perceptions of examining practitioners that her complaints of pain were genuine.”  The doctors did not explain the contrast between “the more ambitious surveillance activities” and Gross’s numerous days of relative inactivity over the course of nine days of surveillance.

On the issue of prejudgment interest, the First Circuit remanded the case to the district court for reassessment or explanation of its choice of the rate for the award of prejudgment interest.  “[W]hen a district court has concluded that a plaintiff should be awarded prejudgment interest, its task in selecting the rate is to identify, in the particular case, a fair percentage reflecting ‘both the rationale of full compensation and ERISA’s underlying goals.”  On the issue of attorneys’ fees, the court found that the district court abused its discretion in reducing attorney’s fees and ordered the district court to reinstate a percentage of fees that had not been awarded and stated that Gross’ attorneys could file a fee petition for winning again.

“This case illustrates a fundamental problem with the way ERISA cases are litigated. The case bounces back and forth between the Courts and the ERISA fiduciary (often an insurance company) for a long time. Although this is an outlier, too many cases take too long to resolve, and this one is not final,” said Jonathan.