“Lyttle V. United Of Omaha Life Insurance Company”

Lyttle v. United of Omaha, 341 F. Supp. 3d 1071 (N.D. Cal. 2018)

In the case of Lyttle v. United of Omaha Life Insurance Company USDC Eastern District of California, Case No.: 17-cv-01361-WHO Matthew Lyttle was a working chemist – a physically demanding and intellectually challenging position (he was required and had a Ph.D. in chemistry).

Even after a diagnosis of terminal cancer, he kept working, despite painful blisters on his hands and feet from medication and narcotic medication for pain, but he took a great deal of time off, finally applying for long-term disability benefits from United of Omaha Life Insurance Company and then for Social Security Disability benefits.

Lyttle’s oncologist supported that Lyttle was totally disabled; Lyttle’s employer explained to United of Omaha that Lyttle’s disability could not be accommodated and his position would not be held open. Nonetheless, United of Omaha denied Lyttle’s claim for long-term disability benefits. Lyttle submitted an appeal – his own and his oncologist’s letters – explaining why he could no longer work.

While the appeal was under consideration, the Social Security Administration granted Lyttle Social Security Disability benefits – but Lyttle didn’t tell United of Omaha. As part of the appeal, United of Omaha required that Lyttle be examined and tested by a neuropsychologist, who reported that Lyttle had a clinically significant degree of psychomotor slowing, that some areas of his short-term memory were “extremely poor” and that his manual dexterity in his dominant hand was “awkward and slow.”

The neuropsychologist concluded that likely due to medication side effects Lyttle was limited in his ability to function effectively in a very demanding, high-level cognitive work that involves analysis, generation of solutions to complex problems, and processing complex information.

Despite the neuropsychologist’s report, United of Omaha denied Lyttle’s appeal and refused to pay long-term disability benefits. Matthew Lyttle’s appeal of the denial of his claim for long-term disability benefits was denied by United of Omaha about a year after he stopped working. He hired me a couple of months later, we filed suit, and then a little more than six months later, Matthew Lyttle died of the cancer which had disabled him.

That did not end the suit; his widow prosecuted it on behalf of his estate and United of Omaha continued to deny that it was obligated to pay long term disability benefits. The judge ruled in favor of Lyttle – but it was a hard-fought case. Matthew Lyttle did not submit all the medical records available or his SSDI award – perhaps because he thought they were not necessary or that United of Omaha would get them.

United of Omaha obtained only very recent, limited records from Lyttle’s oncologist, which records generally, had only brief descriptions of Lyttle’s condition – in part because electronic medical records are not very descriptive and in part likely because after years of treatment, the doctor was only noting limited information.

ERISA “trials” are “paper trials” generally, but not invariably, are limited to the materials presented to the insurer. So, the “administrative record” – the information United of Omaha had – was not comprehensive.

We dealt with that problem by arguing that Lyttle was entitled to long-term disability benefits on the record available, but if not, then the judge should consider additional evidence, not available to United of Omaha (including the SSDI award), under the narrow criteria for considering such additional evidence.

The judged ruled in Lyttle’s favor without the additional evidence, but noted that the additional evidence, if considered, supported his decision. The key issues for the decision demonstrate how United of Omaha did not (and commonly does not) follow policy requirements and how it used what I call “seemingly plausible double-talk” to deny Lyttle’s claim for long-term disability benefits and fight his lawsuit.

The policy that insured Matthew Lyttle provides that he was totally disabled and entitled to long-term disability benefits if he could not perform the material and substantial acts of his usual occupation with reasonable continuity. During the claim process United of Omaha never investigated whether Lyttle could do so.

Instead, United of Omaha generally asked whether the medical records documented change in Lyttle’s condition from when he was working to when he stopped working and argued in the lawsuit that absent such a change in Lyttle’s conditions, Lyttle was not entitled to long-term disability benefits. That sounds like a reasonable argument, but it wasn’t.

United of Omaha only got records for the three months before Lyttle stopped working and about three or four months more after he stopped working. Not much had changed. But, in the three months before Lyttle stopped working, he was away from work about half the time, using vacation and sick leave

In his last year, Lyttle was absent from work 17% of the time. The judge explained that the evidence demonstrated that for Lyttle continuing to work was increasingly more difficult, causing more pain and increased use of narcotic medications, and significant missed work.