Case Number: 2:21-CV-12819
Judge: Terrence George Berg
Court: United States District Court for the Eastern District of Michigan (Wayne County)
Plaintiff's Attorney:
Defendant's Attorney: Joshua Bachrach
Description:
Detroit, Michigan employment law lawyer represented the Plaintiff who sued the Defendant on a wrongful denial of E.R.I.S.A. benefits.
In February 2017, two years into McEachin’s employment as a human resources manager
at Perceptron, Inc., a car accident seriously injured her. She left the job, and within months
submitted a disability claim to Reliance, citing “[r]ecurrent headaches, neck and back pain from”
the car accident. R.9 at 564. In June 2017, Reliance approved her for long-term disability
benefits.
McEachin’s condition worsened when she had another car accident at the end of that
year. As a result of the accidents, McEachin underwent three major spinal surgeries between
2018 and 2021, attended numerous physical therapy sessions, and took injections for migraines
and prescription medications for pain. McEachin’s mental health suffered, too. During the same
period, providers treated her for depression, anxiety, and sleep disruptions. Making matters
considerably worse, McEachin’s son committed suicide in 2019. That generated post-traumatic
stress disorder and grief that took an additional toll.
Under McEachin’s insurance policy, a “Total Disability”—meaning she could not
“perform the material duties” of her job—entitled her to a monthly payment until retirement age.
R.9 at 9, 12, 19. The policy came with a limitation. If a “mental or nervous disorder[]”
“caused . . . or contributed to” the insured’s “Total Disability,” she would be entitled to benefits
for a total of 24 months. R.9 at 23.
For over three years, Reliance paid McEachin long-term disability benefits without issue,
and McEachin periodically submitted updated health information as the policy required. In
October 2020, Reliance ended McEachin’s benefits. McEachin appealed and supplied additional
medical documentation. Based on her updated medical reports, Reliance found that, “from a
physical perspective,” McEachin could not perform her duties at work. R.9 at 510. From a
Nos. 24-1071/1100 McEachin v. Reliance Standard Life Ins. Co. Page 3
mental-health perspective, Reliance noted, McEachin faced no cognizable barriers to working.
The insurance company reinstated her benefits.
In April 2021, Reliance stopped paying McEachin’s benefits again. McEachin appealed.
She submitted documentation from her medical providers, claiming that depression, migraines,
and chronic pain showed she was still totally disabled. Reliance enlisted an independent medical
review, which concluded that McEachin could perform her prior job “from a physical
standpoint.” R.9 at 533, 535–38. In denying benefits, Reliance noted “significant improvement
in migraines” and “significant relief of chronic back/leg pain with physical therapy and
injections.” R.9 at 534.
Reliance acknowledged that McEachin’s “psychiatric” issues still rendered her unable to
work full-time. R.9 at 537. It nonetheless denied McEachin’s appeal because of her insurance
policy’s 24-month limitation on benefits for mental disorders that “cause[d] . . . or contribute[d]
to” her total disability. R.9 at 537. Because McEachin had presented psychiatric symptoms
“since at least May 2017,” the company noted, the policy’s 24-month clock had run. R.9 at 537.
In the absence of a total disability created only by physical impairments, Reliance reasoned that
McEachin had no basis for obtaining additional benefits.
Having exhausted her administrative remedies with Reliance, McEachin filed this lawsuit
against the insurance company under ERISA. Both parties moved for summary judgment. The
magistrate judge recommended denying McEachin’s motion and granting Reliance’s motion.
The district court agreed with Reliance that McEachin lacked a total physical disability as of
April 2021. But it found that McEachin’s mental-health disability entitled her to 24 months of
additional benefits starting in April 2021.
Reliance appealed, and McEachin cross-appeal
* * *
If an ERISA-covered insurance plan gives the administrator discretion in implementing
it, we review the plan administrator’s implementation of the plan for abuse of discretion. Evans
v. UnumProvident Corp., 434 F.3d 866, 875 (6th Cir. 2006). But Michigan law bans the use of
such discretionary clauses in insurance policies. See Mich. Admin. Code R. 500.2202(b). As a
result, we apply fresh review to its decision. Am. Council of Life Insurers v. Ross, 558 F.3d 600,
608 (6th Cir. 2009).
Here’s what the insurance policy says. It offers monthly benefits if a claimant:
(1) is Totally Disabled as the result of a Sickness or Injury covered by this Policy;
(2) is under the regular care of a Physician;
(3) has completed the Elimination Period; and
(4) submits satisfactory proof of Total Disability to us.
R.9 at 19. A “Total Disability” exists when:
[A]s a result of an Injury or Sickness, during the Elimination Period and thereafter
an Insured cannot perform the material duties of his/her Regular Occupation.
R.9 at 12. The policy comes with a limitation for “mental or nervous disorders.” In that setting,
it provides:
Monthly Benefits for Total Disability caused by or contributed to by mental or
nervous disorders will not be payable beyond an aggregate lifetime maximum
duration of twenty-four (24) months unless the Insured is in a Hospital or
Institution at the end of the twenty-four (24) month period. The Monthly Benefit
will be payable while so confined, but not beyond the Maximum Duration of
Benefits.
R.9 at 23. The insurance company bears the burden of showing this exclusion applies. Okuno v.
Reliance Standard Life Ins., 836 F.3d 600, 609 (6th Cir. 2016).
Outcome: Affirmed in part, vacated in part, affirmed in part, and remanded.
Plaintiff's Experts:
Defendant's Experts:
Comments: