This month’s Friday Five covers cases relating to fee shifting in favor of defendants, interpretation of AD&D policy provisions, a strict take on the language required to initiate an administrative appeal, and a reiteration of the deferential nature of the arbitrary and capricious standard of review. This issue also explores the appropriate time period for vocational data.

1. Defendant awarded almost $400,000 in attorney’s fees. The parties disputed the benefit plan’s ability to recoup an overpayment from a dialysis provider. The plan mistakenly paid the in-network rate for services, which resulted in an overpayment of more than $205,000. The plan won summary judgment, and later moved for fees under Section 502(g)(1) of ERISA. The Middle District of Pennsylvania determined that the provider’s refusal to return the overpayment was culpable conduct under the applicable Ursic factors, and that the provider’s conduct otherwise warranted fee shifting. The plan was entitled to recover more than $394,000 in fees. U.S. Renal Care Inc. v. Wellspan Health, No. 14-cv-2257, 2018 WL 3973191 (M.D. Pa. Aug. 20, 2018).
2. Can AD&D benefits extend to an accidental death coupled with evidence of drug use? The insured, who held $75,000 in AD&D coverage, died from “accidental” hypothermia. However, the insured also had cocaine and alcohol in his system at the time of death. The Western District of Pennsylvania determined that the insurer did not abuse its discretion in denying AD&D benefits. The policy required that the “sole” cause of death be accidental. The court determined that the insurer was reasonable to rely upon the deceased’s apparent drug use and decision to swim in a Pennsylvania creek in March as contributing factors. Verba v. Metropolitan Life Insurance Co., No. 17-cv-769, 2018 WL 4005873 (W.D. Pa. Aug. 22, 2018).
3. Indiana federal court reiterates deferential nature of arbitrary and capricious standard of review. The Southern District of Indiana was faced with “substantial evidence on both sides of the disability issue” during its review of the termination of the plaintiff’s LTD benefits. The court noted, however, that because of the applicable arbitrary and capricious standard of review, the record was not sufficient to show the requisite unreasonableness to overturn the termination. Mesker v. Reliance Standard Life Insurance Co., No. 17-cv-85, 2018 WL 3657587 (S.D. Ind. Aug. 2, 2018).
4. Must an insurer use vocational data from the date of termination? The plaintiff initiated litigation following termination of his LTD benefits. The district court granted the insurer’s motion for summary judgment. On appeal, the plaintiff assigned error to the insurer’s use of vocational data from five years after the plaintiff was deemed no longer disabled. The Eleventh Circuit determined that this was not a case of an insurance company “initiating a post-hoc relitigation of [the plaintiff’s] claim based on new evidence.” Instead, the later-obtained data resulted in, at most, harmless error. Lopez v. Standard Insurance Co., No. 17-11012, 2018 WL 3694821 (11th Cir. Aug. 3, 2018).
5. Must an insured specifically and affirmatively request an administrative appeal? Following termination of the plaintiff’s LTD benefits, and on the last date to request an administrative appeal, the plaintiff’s counsel sent a letter to the appeals department of the insurer requesting an extension of time to submit evidence. A federal magistrate judge dismissed the plaintiff’s subsequent lawsuit for failure to exhaust administrative remedies, and the district court affirmed. The court reasoned that counsel’s letter “did not affirmatively state that Plaintiff was requesting review or an appeal of the administrative decision.” Instead, the court determined that the letter, at most, simply suggested a future intention to appeal. Applegate v. Liberty Life Assurance Company of Boston, No. 17-cv-130, 2018 WL 4103557 (M.D. Fla. Aug. 29, 2018).