Kantor & Kantor, LLP: District Court Finds AT&T Abused Discretion in Denying Benefits to Policyholder With CFS

Termination Based on Five Illogical Conclusions Lacking Factual Support

Apr 04, 2012, 20:09 ET from Kantor & Kantor, LLP

LOS ANGELES, April 4, 2012 /PRNewswire/ -- Kantor & Kantor, LLP announced today a legal victory in the U.S. District Court for the Northern District of California on behalf of client Judi Peterson, who suffers from Chronic Fatigue Syndrome (CFS), against the AT&T Umbrella Benefit Plan No. 1 ("AT&T"), administered by third-party administrator Sedgwick CMS. In reaching its decision, the District Court ruled that AT&T abused its discretion and wrongfully denied Ms. Peterson long-term disability benefits. The court found AT&T's benefits termination was illogical and without support in inferences that may be drawn from the facts.

In particular, the court determined that AT&T had abused its discretion five specific ways:

  • Although the evidence showed that Ms. Peterson's condition in 2009 had remained unchanged since AT&T's initial finding that she suffered from disabling CFS in 2006, AT&T still terminated her benefits.
  • The fact that there are no objective tests for CFS did not stop AT&T from terminating Ms. Peterson's benefits based, in part, on a lack of objective evidence.
  • AT&T relied on a medical record review and a Transferrable Skills Analysis, neither of which considered her disabling fatigue.
  • Even though AT&T had hired three medical professionals from Insurance Appeals, LTD (aka Network Medical Review or NMR) to conduct paper reviews of Ms. Peterson medical history, those medical professionals either failed to address Ms. Peterson's CFS or made incorrect diagnoses.
  • AT&T failed to engage in a "meaningful dialogue" with Ms. Peterson surrounding its reasons for denying benefits. In other words, AT&T did not follow the law requiring it to ensure that the reasons for the termination of benefits actually had factual support.  

"This decision illustrates that policyholders cannot always rely on an 'unbiased' third-party administrator to make logical and fact-based benefits decisions," said Brent Dorian Brehm, a litigation associate at Kantor & Kantor and the lead trial attorney representing Ms. Peterson. "Denials must be carefully scrutinized, and if the conclusions appear unfair, incorrect, or ridiculous, they probably are."

For more information about Peterson v. AT&T Umbrella Benefit Plan No. 1, C-10-03097 JCS, follow this link: http://www.kantorlaw.net/Cases_Resources/Document_Library.aspx.

About Kantor & Kantor, LLP

Kantor & Kantor is one of the largest law firms in the country exclusively representing plaintiffs who have been denied insurance benefits under life, health, disability and long-term care policies. The firm has extensive experience with the complex appeals process and federal court litigation of ERISA matters, as well as the handling of Insurance Bad Faith matters. For more information, log on to www.kantorlaw.net, call (800) 446-7529, or follow the firm at www.californiainsurancelawyerblog.com.

SOURCE Kantor & Kantor, LLP