Nancy Stark v. Reliance Standard Life Insurance

Oklahoma City, Oklahoma insurance law lawyers represented the Plaintiff who sued on behalf of her mother on a wrongful denial of E.R.I.S.A. benefits.



Congress enacted the Employee Retirement Income Security Act ("ERISA”) to protect employee-benefit-plan participants and their beneficiaries by authorizing civil suits for ERISA violations. Here, Defendant Reliance Standard Life Insurance Company terminated Jill Finley's long-term-disability-insurance coverage. Although Defendant later reversed its decision and reinstated Finley's benefits, Plaintiff Nancy Stark, Finley's legal guardian, filed suit against Defendant contending that ERISA entitles Finley to a surcharge for the financial harm Defendant's wrongful disability- benefits termination caused Finley. In her complaint, Plaintiff also alleged that Defendant breached its fiduciary duty to provide internal records for her appeal and that under Finley's insurance policy, it wrongfully deducted the amount she received from social security payments from her monthly disability payments.



In May 2007, thirty-one-year-old Jill Finley suffered a sudden death cardiac arrest resulting in a hypoxic brain injury. At the time, Finley worked as a mortgage underwriter for Provident Funding Associates, LP, but the injury left her totally disabled and unable to work. Provident Funding Associates provided long term disability insurance to its employees through Defendant Reliance Standard Life Insurance, so in June 2007, Finley filed a claim with Defendant for coverage. Finley included in her claim a physician's statement stating that she was "unable to return to work of any kind at this time” because of her brain injury.



Defendant approved Finley's claim in January 2008, stating that she retroactively would receive benefits due from August 2007 to December 2007 and that it would need additional information to support disability benefits beyond December 2007. In the letter approving her claim, Defendant also stated that if she expected her "illness or injury” to prevent her "from performing substantial work activity for a period not less than twelve (12) months, it may be in [her] best interest to apply for Social Security Disability (SSD) benefits.” It continued:



Under certain circumstances, your group policy allows us to deduct an

estimate of the amount of the SSD benefit that you may be eligible to receive

(see the applicable policy for details). As it is questionable whether or not

your particular illness or injury will prevent you from performing substantial

work activity for a period of 12 months, we will not reduce your monthly

benefit by an estimated SSD benefit amount at this time. However, should

further documentation suggest that you[r] illness or injury will prevent you

from performing substantial work activity for a period of 12 months, future

[long term disability] benefits payable by Reliance Standard Life Insurance

Company may be reduced by an estimated SSD benefit amount.



Defendant's internal Claims Department Administrative Procedure Manual states that "[u]nder the typical [long term disability] policy, no insured is required to file a claim for Social Security benefits.” But, it continues, "it is often in their best interest to do so.”

The district court granted Defendant’s Rule 12(b)(6) motion to dismiss for failure to state a claim. Exercising jurisdiction under 28 U.S.C. § 1291.



Affirmed