MADISON (LN) — A Wisconsin federal judge on Monday ordered Hartford Life and Accident Insurance Company to pay $151,612.50 in attorney fees and $402 in costs to a disabled internal medicine physician whose long-term disability benefits were reinstated after the court held that Hartford had acted arbitrarily and capriciously in cutting them off.
Frances Ryan, an internist, filed a claim for long-term disability benefits in August 2018 after sustaining a fall and suffering a concussion that left her with dizziness, nausea, and difficulties with analysis, decision-making, and concentration — all of which were identified as key components of her job. Hartford initially approved the claim with a benefit start date in June 2018. Under the terms of the policy, Ryan was also required to apply for Social Security Disability benefits, which were approved on July 31, 2019. Mere days later, however, a Hartford claim examiner found it unclear if disability was supported at that time, and on March 18, 2020, Hartford terminated her benefits despite the fact that she continued to qualify as disabled under the Social Security Administration's more stringent definition.
U.S. District Judge William M. Conley had already held at summary judgment that Hartford's termination was arbitrary and capricious on three grounds: the insurer failed to consider the demanding nature of Ryan's occupation as an internist, failed to address the weight owed to her SSA award, and carried a structural conflict of interest as both the entity that determines benefit eligibility and the one that pays out claims. On remand, Hartford reinstated Ryan's benefits and paid backpay, leaving only the fee motion.
Hartford argued Ryan was ineligible for fees because the remand was a purely procedural victory. Conley rejected that argument as baseless, noting Ryan had her benefits restored and received backpay for the payments Hartford erroneously denied her.
On entitlement, Conley applied the Seventh Circuit's five-factor test and held all five factors favored Ryan. He was particularly pointed on Hartford's failure to weigh the SSA award. Hartford's own policy defined disability as being prevented from performing one or more of the essential duties of one's occupation, yet the insurer never compared Ryan's residual cognitive abilities to what a typical internist must do. Conley described that omission as indefensible given the policy's own definition. He also noted it was not the first time Hartford had terminated benefits while failing to give due weight to a contrary SSA determination, citing cases from the Northern District of Illinois and the District of Oregon.
On the fee calculation, the parties did not dispute counsel's hourly rate. Hartford sought to slash the award by arguing Ryan lacked success on the merits, that certain hours were excessive, and that mediation costs and travel mileage were not recoverable under 28 U.S.C. § 1920. Conley rejected most of Hartford's proposed cuts. He allowed the 74 hours counsel spent reviewing the administrative record, noting the initial record ran 2,916 pages and that counsel's review uncovered more than 200 pages of documents Hartford had omitted from its initial production, pushing the final record to 3,142 pages. He also allowed 4.6 hours of roundtrip driving time for counsel to attend an in-person mediation with Ryan, finding that Ryan's medical conditions made extended screen time difficult and that second-guessing counsel's judgment to appear in person was unwarranted.
The one reduction Conley accepted was 12.45 hours of clerical work — downloading files, creating exhibits, and ECF filings — which he excluded from the lodestar entirely, reducing the award by $6,167.50. He also excluded the mediation fee and travel mileage from costs, finding them outside the six categories enumerated by the costs statute and noting Ryan offered no response to Hartford's argument on that point.
Given Hartford's history of terminating benefits without giving due weight to contrary SSA determinations, Conley wrote, the insurer is well aware that an SSA award at least cuts against termination — but still chose to ignore it.