Laake v. Western & Southern Financial Group Flexible Benefits Plan, No. 22-3182 (6th Cir. 2023)Annotate this Case
The Plan is an employee welfare benefit plan under the Employee Retirement Income Security Act (ERISA). W&S denied Laake’s claim for extended long-term disability (LTD) benefits, indicating that Plan limited LTD benefit to 24 months if the disabling condition is due to any mental, nervous, psychiatric condition or chronic pain.” The Plan refers to “chronic pain syndrome.” No medical doctor had ever diagnosed Laake with “Chronic Pain Syndrome.” Although the Plan fails to define “Chronic Pain Syndrome,” Schedule C—which lists conditions that are excluded from extended LTD benefits—explicitly incorporates the Diagnostic and Statistical Manual of Mental Disorders, which does not specifically include “Chronic Pain Syndrome,” but does detail the symptoms and features of “Pain Disorder.” W&S did not ask Laake’s physicians in its questionnaires about the Mental Illness exclusion or “Chronic Pain Syndrome.” None of her physicians indicated that there was any psychological basis for her pain.
The district court determined that Laake was entitled to benefits, imposed penalties against W&S, and awarded Laake attorney’s fees and costs, 29 U.S.C. 1132(g)(1). The Sixth Circuit affirmed. In denying benefits without any explanation or supporting evidence, W&S acted arbitrarily and capriciously. Because W&S provided notice that implied one basis for its denial of benefits, but in its final decision included an entirely new basis, it failed to substantially comply with ERISA’s notice requirements. The court noted a finding that W&S engaged in particularly “egregious conduct throughout the course of this litigation.”