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Standard Insurance Company Violates Dentist’s Right To A Full And Fair Review

The “Zall v. Standard Insurance Company” case involves a long-term disability claim filed by Eric S. Zall, a dentist and co-owner of a dental practice, under an insurance policy with Standard Insurance Company. Zall filed this claim in 2013, at the age of 48, because of chronic neck pain and right-handed numbness and weakness resulting from cervical disc herniation and radiculopathy. He received benefits until December 2019, when Standard terminated the benefits based on a plan provision for Other Limited Conditions, which limits payment to 24 months for specified conditions.

Zall contested the denial, arguing that his condition was caused by cervical disc herniation and radiculopathy, which are excluded from the Other Limited Conditions limitation. Standard disagreed and refused to reinstate his LTD benefits.

Zall filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), arguing that Standard’s decision to terminate his benefits was arbitrary and capricious. He raised three main arguments:

  1. Plaintiff’s Argument on Denial of Full and Fair Review:
    • Argument: Zall argued that he was denied a full and fair review of his claim, which ERISA requires. Specifically, he claimed that Standard Insurance Company did not provide him with a copy of a report prepared by Dr. Michelle Alpert, a consulting physician, before deciding to terminate his benefits.
    • Courts’ Findings: The lower District Court rejected Zall’s argument. However, the Seventh Circuit Court of Appeals reversed the District Court and agreed with Zall’s argument. The court found that Standard Insurance violated ERISA’s requirement for a full and fair review. This violation occurred because Zall was not allowed to review and respond to Dr. Alpert’s report before the termination of his benefits. Consequently, the court reversed the initial summary judgment in favor of Standard Insurance and remanded the case.
  2. Plaintiff’s Argument on Medical Evidence:
    • Argument: Zall contended that the medical evidence, particularly concerning his condition of cervical radiculopathy or cervical herniated disc with neurological abnormalities, did not support Standard Insurance’s conclusion to terminate his benefits.
    • Court’s Finding: The Seventh Circuit Court of Appeals did not directly address the merits of this claim in its decision. Instead, the focus remained on the procedural aspects of ERISA and the right to a full and fair review, which was the basis for the court’s decision to reverse the summary judgment.
  3. Plaintiff’s Argument on Waiver of Right to Terminate Benefits:
    • Argument: Zall argued that Standard Insurance had waived its right to terminate his benefits because it had continued to pay him for more than six years.
    • Courts’ Findings: The District Court did not address this argument as it found Zall’s claim “fails regardless.” The court did not uphold this argument. The Court of Appeals found that Zall “abandoned the waiver argument” by focusing on his argument that Standard did not afford him a “full and fair review.”

In sum, the United States District Court for the Western District of Wisconsin disagreed with Zall on all counts, finding that the claims administrator fully and fairly reviewed all evidence and came to a rational conclusion that Dr. Zall’s disabling condition was not one for which long-term disability was available under the policy.

However, upon appeal, the Seventh Circuit Court of Appeals reversed the decision, finding that Standard had violated Zall’s right to a full and fair review by not providing a copy of Dr. Alpert’s report and stating the following:

“We agree with Zall on the procedural issue, reverse summary judgment, and remand for further proceedings. The decisive legal issue here is which version of an amended procedural regulation issued under § 1133 applies to Standard’s internal administrative review of its termination of Zall’s benefits. The plain language of the 2018 amendments to the regulation shows that the amended version applies, and Standard failed to comply with it.”

The court could not say whether Standard acted arbitrarily and capriciously in terminating Zall’s benefit due to the 24-month limit. As such, the case was then remanded to Standard for a full and fair claim review.

Disclaimer: This case was not handled by disability attorney Nick A. Ortiz. The court case is summarized here to give readers a better understanding of how Federal Courts decide long-term disability ERISA claims.

Here is a PDF copy of the United States District Court decision: Zall v. Standard Ins. Co USDC

Here is a PDF copy of the Seventh Circuit Court of Appeals decision: Zall v. Standard Ins. Co USCA