Montour v. Hartford Life & Accident Insurance Company
Filed September 14, 2009, amended November 19, 2009
Cite as 08-55803

Insurer's Conflict of Interest must be Considered

Robert Montour was an employee of Conexant Systems, Inc. (Conextant). During his employment, he participated in Conextant’s group long-term disability insurance plan.

Hartford Life and Accident Order Insurance Company (Hartford) was both the administrator and insurer of the plan. The Plan was governed by Employee Retirement Income Security Act (ERISA).

As an administrator, the Plan gave Hartford the authority to interpret its terms and determine eligibility for benefits. The plan also provided that the claimant has the burden of proving initial and ongoing disability.

When Montour took a medical leave, Hartford accepted his application and began paying disability benefits. At that time, he consulted with various doctors like Dr. Samuel Park (Dr. Park) and Dr. Kenneth Kengla (Dr. Kengla).

Dr. Kengla consistently maintained to Hartford that Montour was physically disabled to work. However, when Hartford conducted surveillance, it learned that Montour was able to drive, go to pharmacy or perform other errands.

Further, Hartford hired Dr. Gale Brown (Dr. Brown) to conduct file interview. Dr. Brown found that Montour was capable of working full-time with modest restrictions. This finding was supported by a vocational rehabilitation expert enlisted by Hartford.

Consequently, Hartford terminated Montour’s benefits. Montour appealed enclosing the report made by Gene Bruno. The Bruno report indicated that Montour was “not employable in any setting”. Montour also included the fact that Hartford disregarded Social Security Administration’s (SSA) finding that he was “totally disabled.”

In response, Hartford acquired the services of Dr. Renat Sukhov (Dr. Sukhov) to conduct a second file interview. Dr. Sukhov found that Montour could work in a sedentary job with reasonable restrictions. To counteract the Bruno report, Hartford hired a vocational specialist where it supported its previous finding to terminate Montour’s benefits.

Consequently, Montour and his wife Tina filed a suit against Hartford before the California Superior Court. Hartford successfully moved the case to Central District of California and dismissed the same.

Montour appealed.

The United States Court of Appeals for Ninth Circuit ruled that the court must take into account the fact that Hartford was both the administrator and the insurer of the plan. The court should also consider such conflict of interest.

Moreover, the district court erred in granting summary judgment in favor of Hartford where its conflict of interest improperly motivated its decision to terminate the benefits.