This blog offers commentary on litigation pertaining to ERISA disability insurance claim denials.
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Thursday, December 9, 2010
Abuse of discretion
Second Circuit Court of Appeals Refines Abuse of Discretion Standard in Light of Glenn. The Second Circuit had the opportunity to clarify and apply the Glenn standard in a denial of benefits case. In determining that the defendant’s decision was arbitrary and capricious, the Court noted that the insurance company not only operated under an inherent conflict of interest, but also (i) clung unreasonably to a single piece of evidence despite the availability of contrary proof, and (ii) made misrepresentations to the plaintiff in its denial. The Court concluded that the circumstances “collectively lead to the conclusion that First Unum was in fact affected by its conflict of interest” and that First Unum’s denial was arbitrary and capricious. McCauley v. First Unum Life Ins Co., 551 F.3d 136 (2d Cir. 2008).
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