United States: A Claimant's Duty To Cooperate

Many disability policies place a duty on the claimant to cooperate with the insurer that is evaluating the claim. The better-written policies do more and state that benefits are not payable if the claimant does not comply. Some courts have also recognized that the duty to cooperate is a condition precedent to recovery even if not explicitly stated in the policy. But this does not always prevent claimants-or their attorneys-from placing obstacles in the way of the decision maker.

At times, a claimant's failure to cooperate may involve refusing to attend an in-person examination, or independent medical examination (IME). Other times, it may involve refusing to provide an authorization to obtain records. But when the issue is before a court, the question is usually the same: Was the request, as well as the claimant's response, reasonable? And what was reasonable in the past may not be reasonable these days. Court decisions on these topics provide us with guidance on which arguments tend to be persuasive.

Failure to Cooperate with an Independent Medical Examination

In ERISA cases, some courts have been critical of decision makers who rely on peer reviews to evaluate claims instead of an IME. For example, in Calvert v. Firstar Financial, Inc., 409 F.3d 286, 295 (6th Cir. 2005), the court stated that relying on just a peer review "may, in some cases, raise questions about the thoroughness and accuracy of the benefits determination." The importance of IMEs has created an incentive among some claimants to prevent them from occurring.

Many IMEs are conducted during the ERISA administrative appeal from a claim denial. This has led claimants to argue that since the claim has already been denied, there is no right to an IME. While there are a few older decisions that agree, most courts have now rejected this argument. These courts recognize that because a claimant must exhaust the plan's administrative remedies by appealing the denial, the claim is still pending. Because the claim is still pending, there is a right to an IME. Examples of these decisions include Porter v. Provident Life and Accident Ins. Co., No. 05-13632-AA, 2006 U.S. App. Lexis 2635 (11th Cir. Feb. 2, 2006); Montoya v. Reliance Standard Life Ins. Co., No. 14-CV-02740-WHO, 2015 WL 884643, at *6 (N.D. Cal. Mar. 2, 2015); Hart v. Reliance Standard Life Ins. Co., No. 12-CV02434-MSK-MEH, 2013 WL 4781623, at *4 (D. Colo. Sept. 6, 2013); Hall v. United of Omaha Life Ins. Co., 741 F. Supp. 2d 1348 (N.D. Ga. 2010); and Acierno v. First Unum Life Ins. Co., No. 98 CV 3885 SJ, 2002 WL 1208616 (E.D.N.Y. Mar. 31, 2002). Of note, the request for the IME in Porter occurred during the fifth appeal. The court still concluded that the claimant's failure to attend barred the lawsuit.

One argument against IMEs that was previously raised is no longer valid. In many circuits, a claimant did not have a right to review and comment on an IME obtained during an appeal. That changed under the most recent version of the ERISA claim regulations from the U.S. Department of Labor. Now, a claimant must receive and be allowed to comment on any new evidence the plan receives during an appeal, including IME reports.

Some claimants have refused to attend an IME when the doctor has not allowed it to be recorded. Other claimants have insisted that a witness be with them. Courts discussing such requests in other types of litigation have found that this is not reasonable. For example, in Reaves v. Wayne Automatic Fire Sprinklers, Inc., the court recognized that videotaping of an exam can be a distraction. No. 2:11-CV-00049-CEH, 2011 WL 4837253, at *4 (M.D. Fla. Oct. 12, 2011). Courts that have also refused to allow witnesses to attend an IME. See Stefan v. Trinity Trucking, LLC, 275 F.R.D. 248, 249 (N.D. Ohio 2011); Cline v. Firestone Tire & Rubber Co., 118 F.R.D. 588, 589 (S.D. W. Va. 1988); Tomlin v. Holecek, 150 F.R.D. 628, 631-32 (D. Minn. 1993).

For claimants living in remote areas, it may be difficult to find a nearby examining doctor. Is it reasonable to require a claimant to attend an exam that may require a lengthy drive, especially if the claimant alleges an inability to drive? Probably not. But if the company offers to provide transportation, the IME request becomes a lot more reasonable. Since these issues will not be addressed until litigation and the record is then closed in ERISA cases, it is important for the decision maker to document efforts taken to cooperate with and accommodate the claimant. So in the example above, document the offer to have the claimant driven. It may also be reasonable to have the claimant stay in a hotel before the IME. And instead of immediately refusing the request to have the IME recorded, see whether the doctor will agree to it.

If the court agrees that the claimant unreasonably refused to attend an IME, it then has a choice. Should the court enter judgment in favor of the defendant on the benefit claim, or should it remand the claim so that the IME can take place? Many courts have dismissed claims outright based on the failure to cooperate. If a policy states that benefits are not payable if the claimant refuses to attend an IME, a court will usually dismiss the claim with prejudice. But other courts have either stayed the lawsuit or dismissed it without prejudice to allow the IME to proceed.

In Lee v. ING Groep, N.V., Nos. 14-15848, 14-15936, the court upheld the denial of the claim based on the failure to attend an IME. 2016 U.S. App. Lexis 13517 (9th Cir. July 25, 2016). The court explained that "Lee has cited no plan language that allowed him to make such a refusal [to attend the IME]. Given this refusal, regardless of the level of skepticism applied, the decision to terminate benefits was not an abuse of discretion." Other courts have likewise held that a refusal to attend an IME precludes the recovery of benefits. In Acierno v. First Unum Life Ins. Co., No. 98 CV 3885 SJ, the court stated that "[i]t is well-established that an insured's refusal to submit to an independent medical examination, without reasonable excuse, bars the insured from receiving the benefits under the policy contract." 2002 WL 1208616 (E.D.N.Y. Mar. 31, 2002). This was also the result in Porter from the Eleventh Circuit.

In Zalka v. Unum Life Ins. Co. of America, 65 F. Supp. 2d 1369 (S.D. Fla.1998), the court decided that the claimant failed to exhaust her administrative remedies by filing the lawsuit instead of attending the IME. The claimant asked the court to stay the case, but the court instead entered summary judgment for the defendant. The court explained that "[w]here a plaintiff has failed to exhaust her administrative remedies, summary judgment for the Defendant is proper." But in Hunter v. Met. Life Ins. Co., 251 F. Supp. 2d 107 (D.D.C. 2003), while the court also concluded that the claimant failed to exhaust her administrative remedies by refusing to attend the requested IME, the court dismissal was without prejudice.

A strong argument can be made that if the lawsuit was filed after the time to appeal the denial has run, the dismissal should be with prejudice. While the case did not involve a failure to attend an IME, the Fourth Circuit in Gayle v. United Parcel Service, 401 F.3d 222, 230 (4th Cir. 2005), stated that when there is no longer an opportunity to appeal, a dismissal should be with prejudice. A defendant arguing for outright dismissal may also be able to show that it has been prejudiced by the length of time between when the request for the IME was made and the court's dismissal.

At times, a defendant will arrange for a paper review of the claim records if the claimant has refused to attend an IME. Nothing prevents a decision maker from doing so. But the decision letter should clearly state that the failure to attend the IME is a separate basis for the denial. Claim administrators should also guard against claimants delaying the IME, only to file suit and argue that the time for a decision already ran. That was the case in Hart v. Reliance Standard. There, the request for the IME was made within forty-five days. In response, the claimant objected and then placed conditions on the exam. While the defendant tried to accommodate those requests, the time for a decision ran, and the lawsuit was filed. The court concluded that Ms. Hart was responsible for the delays and did not exhaust her administrative remedies. But instead of dismissing the lawsuit with prejudice, the claim was remanded.

Failure to Produce Records or Authorizations

Sometimes, the refusal to cooperate involves records. In Dorsen v. GE Group Life Assur. Co., No. 1:05-cv-0036-GET, 2006 U.S. Dist. Lexis 16771, at *14 (N.D. Ga. Apr. 5, 2006), an ERISA case, the insured refused to provide requested tax documents. The court held that the "Plaintiff forfeited his right to seek benefits under the plan when he unreasonably refused to cooperate," and his "failure to cooperate alone bars [him] from seeking benefits." And in Camarda v. Pan American World Airways, 956 F. Supp. 299 (E.D.N.Y. 1997), the claimant refused to sign an authorization allowing the defendant to get his Social Security file. This information was needed to calculate benefits payable under the policy. The court upheld the defendant's refusal to pay benefits, based on the failure to provide the authorization.

In Unum Life Ins. Co. v. Am. V. Narut, 363 F. Supp. 2d 1063 (E.D. Wis. 2005), Unum filed a declaratory judgment action, asking the court to issue an order affirming its right to demand the claimant's tax returns. Unum also asked the court to declare that benefits were not payable until the claimant provided his tax returns. The court recognized that this information was needed to determine the claimant's earnings. But the court's decision was mixed. While recognizing Unum's right to request tax information, the court denied the insurer's request for an order directing the claimant to produce his returns.

Again, the language in the policy is important. Does it explicitly require the claimant to provide the requested information? For example, the policy may identify the categories of information that the claimant must provide. If the policy also states that the failure to provide documents is a basis for denying or terminating benefits, this should be stated in any decision letter and argued to the court. Especially in ERISA cases, courts are required to enforce the terms of the plan and policy. But it also important to explain to the court why the information was needed. If the court believes that the defendant was actually prejudiced by the claimant's conduct, it will be more inclined to rule in the insurer's favor.

What Is "Reasonable" Today?

As stated in the title of the S.E. Hinton novel (and the Monkees song), "That Was Then, This Is Now," even after COVID19-related stay-at-home orders end, what may previously have been reasonable may not now be the case. A claimant may be unwilling to go out in public. And depending on the disabling condition and circumstances at the time, that may be reasonable. At the same time, a claims examiner may want to request surveillance under those circumstances. If the claimant is observed in public after refusing to attend an IME, the defendant's argument that the refusal to cooperate was unreasonable is much stronger.

It may also be difficult for claimants to provide records to the disability insurer. The offices of medical providers may be closed. Or it may be difficult for the claimant to mail records. In these cases, additional time may be needed to decide the claim. It is in the interest of both the claimant and the company to come to an agreed schedule, extending the deadlines on both sides.

The ERISA statute refers to a "full and fair review." Courts have called for a "meaningful dialogue" between claimants and decision makers. No matter what phrase is used, courts are looking to whether the actions on both sides were reasonable. Was it reasonable to request an IME or records from the claimant? Was it reasonable for the claimant to refuse the request? In many cases, the language in the policy will determine what is required and therefore reasonable. The policy language may also determine whether a lawsuit should be dismissed with or without prejudice.

To Sum Up

Whether a claimant's failure to cooperate involves refusing to attend an in-person examination, or IME, or refusing to authorize a records release, the question is generally the same: Was the request, as well as the claimant's response, reasonable? And the answer generally will lie in the policy language. But during or after a pandemic, what once was viewed as reasonable may change.

Originally published by DRI: For the Defense | Life, Health and Disability on August 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.