Articles Tagged with Sixth Circuit

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Even when plaintiffs win ERISA disability lawsuits, their attorney’s fees can cut into their awards.  In some ERISA disability cases, however, plaintiffs can recover their attorney’s fees (and costs) under federal law.

What do plaintiffs need to show in order to be awarded their attorney’s fees in an ERISA disability lawsuit?  In Sec’y of Dep’t of Labor v. King (1985), the Court of Appeals for the Sixth Circuit, the circuit which includes federal courts in Tennessee, set out five guidelines for district courts to apply when deciding whether to award attorney’s fees under ERISA. They include:

(1) the degree of the opposing party’s culpability or bad faith;

(2) the opposing party’s ability to satisfy an award of attorney’s fees;

(3) the deterrent effect of an award on other persons under similar circumstances;

(4) whether the party requesting fees sought to confer a common benefit on all  participants and beneficiaries of an ERISA plan or resolve significant legal questions regarding ERISA; and

(5) the relative merits of the parties’ positions.

Sixth Circuit courts regularly use the above guidelines–referred to as the “King Factors”– in evaluating claims for attorney’s fees. For example, in Moon v. Unum Provident Corp. (2006), the Sixth Circuit applied the King Factors in awarding the plaintiff attorney’s fees even though the lower court initially ruled against her claim for long-term disability benefits.  After the Sixth Circuit reversed the district court’s ruling (Moon 1), the case was remanded to the district court to decide whether the plaintiff was entitled to attorney’s fees.

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The definition of “total disability” is among the most important definitions in a disability policy and, consequently, in disability lawsuits.  It is also one of the most confusing.  For example, can you recover disability benefits for total disability if you can still perform some aspects of your job?

In a recently published Sixth Circuit case, Leonor v. Provident Life & Acc. Co., (2015), the court wrestled with an insurance company’s interpretation of its definition of “total disability,” and construed it in favor of the insured.  The Plaintiff, the insured, a practicing dentist who also managed several dental offices, suffered a spinal injury that prevented him from performing dental procedures.  He was still able, however, to manage his dental offices.  In fact, after his injury, he bought more dental offices.  Those investments proved lucrative and the Plaintiff’s overall income actually increased after his injury.

Following his injury, Plaintiff claimed total disability benefits under each of his three disability policies.  Initially, the Defendants, the insurance companies, began paying his disability benefits.  Later, the Defendants stopped paying disability benefits under two of the policies when they discovered that the Plaintiff was able to manage his dental offices.  In denying the Plaintiff’s disability claim, the Defendants pointed to the definition of total disability in his policies:

“’Total disability’ means that because of Injury or Sickness:

You are unable to perform the important duties of Your Occupation….”

(emphasis added)

Defendants maintained that, under the policies, the Plaintiff would have a “total disability” only if he could not perform all of his occupation’s important duties.  The Defendants pointed out that the Plaintiff could still perform the “owner/operator” duties of his occupation, and, therefore, did not have a total disability.

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