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Court: LTD insurer improperly used video surveillance evidence

A federal appeals court said on May 3 that an injured claimant’s long-term disability benefits had been wrongfully terminated. An important issue in this case is the use by an insurance company of video surveillance of a claimant going about his daily life. 

Richard Wagner, a man with paraplegia from a motorcycle accident that happened decades ago in his youth, began receiving long-term disability benefits after a leg injury kept him from continuing his employment as a service analyst for a crane company. After 34 months, the disability insurer terminated his benefits, saying he could go back to his job full time.


Federal appeal 

Wagner lost an administrative appeal before the insurer, American United Life Insurance Company, as well as an ERISA lawsuit in an Ohio federal trial court. In an unpublished opinion, the U.S. Court of Appeals for the Sixth Circuit found in Wagner’s favor, holding that the LTD insurer had wrongly terminated his benefits. 

Analysis of the evidence 

The claimant’s work was performed using a wheelchair with a phone and computer. After his leg injury, he said that the pain in his leg prevented further work because the intermittent pain flashes were like “an ice pick in his thigh.” 

The court said that “[e]very professional” involved with Wagner said he should not work. The problem arose with the conclusions of a doctor hired by the claims administrator to review Wagner’s file. 

Improper weighing of surveillance 

Dr. Russell looked at video surveillance that showed the claimant’s activities in snippets of a couple minutes totaling 20 minutes in a two-hour time period. He also considered Wagner’s description of his activities. Based on this, the reviewing doctor found that the claimant could go back to work and “was merely lying.” 

The court said that the short surveillance snippets were “weak evidence of anything beyond those minutes,” especially because Wagner’s pain comes and goes. Living alone and “sporadic activities [say] little about his ability to go to work.” And in its strongest language, the court said, “[h]e need not be bedridden to receive benefits.” 

It wrote that a conclusion based on a paper review that someone is not credible carries “little weight,” because the insurer could have ordered an actual physical exam by a neutral physician. 

In this context, Wagner’s physicians’ opinions that he was still disabled should have been given greater weight. Accordingly, the court ordered that American pay three years of back benefits missed. 

We will continue to provide important news about the use of video and internet surveillance by long-term disability insurers and claims administrators.

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