An insurance company that denied benefits to a disabled plant manager in the face of overwhelming evidence of his total disability has been sharply rebuked by the 4th U.S. Circuit Court of Appeals, which unanimously affirmed a federal judge’s ruling reinstating the man’s benefits. 

Fredrick Smith had worked as a plant manager for yarn and fabric maker Charles Craft Inc. of Laurinburg, North Carolina, since the 1970s. In 2013, he became extremely ill.

Reliance Standard Life Insurance Co. approved disability and life insurance benefits, but in 2016, it told Smith to find another job–going against his doctors’ opinions–and withheld his benefits. Smith and his wife sued under Reliance under the Employee Retirement Income Security Act, seeking reinstatement of benefits.

A U.S. District Court judge in North Carolina’s Eastern District granted summary judgment to the Smiths. Reliance appealed, and, in an unpublished June 14 decision, the 4th Circuit ordered Reliance to reinstate Smith’s benefits.

Writing for the panel, Judge J. Harvey Wilkinson III listed a litany of reasons why the insurance company was wrong: Smith had serious coronary artery disease, the same illness that killed his father at the age of 44. He had triple bypass surgery and continued to work part-time. That same year, he applied for full-time disability. Doctors said the problems were work- and stress-related and that he could never return to work.

Reliance approved and then terminated his benefits, citing, among other things, a note from a doctor that Smith could walk up to 40 miles with no difficulty. However, the doctor meant that Smith could walk a total of 40 miles from Christmas, when he received a Fitbit, through April. The doctor made the notes through voice recognition software, and should have said he could only walk up to a half a mile, according to the opinion.

“Our review of the record persuades us, as it did the district court, that Reliance abused its discretion in concluding that Smith could work full-time in a sedentary job,” Wilkinson wrote. “Reliance agrees that Smith is too ill to return to his job at Charles Craft, but maintains that a job with less lifting and stooping than a plant manager would suit him. This view defies belief.”

“At argument, Reliance came close to asserting that Smith needed to prove that he could not perform sedentary work due to a physical limitation on, for example, sitting, typing, or speaking. This is quite a high standard. Such a rule would erase disability eligibility for all but the bedridden. Some serious diseases are debilitating because of their effect on the mind or because they worsen with stress. This is a place for medical judgment, not per se rules.”

Work stress factored into Smith’s health problems, Wilkinson wrote. He had multiple strokes, stents for his heart, kidney disease, a urological stent, hypertension, a triple bypass surgery, diabetes, nerve damage, and other maladies. Every doctor that examined him Smith told Reliance he would never be able to work. 

The ruling notes some of the positive notes from doctors that Reliance cited. For example, Smith’s echocardiogram was acceptable, and his blood sugar and hypertension were under control. But they all were second to the seriousness of Smith’s overall health, Wilkinson wrote. 

“While these indicate some level of improvement, they cannot outweigh the opinions of the doctors who saw him, and the illnesses that remained constant throughout this period,” he wrote.

The opinion calls out Reliance’s citation from some doctors that Smith was “doing well,” saying that those words amounted to no more “boilerplate.”

“These same comments appear when the notes detail the sixteen or more medications,” Wilkinson wrote. 

 “Against a gale of medical opinion and considerable evidence, Reliance sought shelter in opaque statements from medical records.”

Stewart Butler of Anderson, Johnson, Lawrence & Butler in Fayetteville, North Carolina, represented Smith. He called Reliance “ironically named” and said that the company “cherry-picked” from his doctors’ notes

“Freddie Smith is a great guy,” he said. “He is as good of plaintiff as you are going to find. He was a great employee by all accounts. He has really suffered being without these benefits, and hopefully, he will get some money back and move on from it.” 

Joshua Bachrach of Wilson, Elser, Moskowitz, Edelman & Dicker in Philadelphia represented Reliance. He could not be reached for comment.

The 11-page decision is Smith v. Reliance Standard Life Ins. Co.

Follow Bill Cresenzo on Twitter @bcresenzosclw

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