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8th Cir. – No Abuse of Discretion

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  • 8th Cir. – No Abuse of Discretion

    Here’s a new case from the Eighth Circuit, unpublished, entitled David C. Nicholson v. Standard Insurance Company. This is a very brief opinion and straightforward. The court first rules that the Arkansas state law banning discretionary clauses does not apply here because the policy was not amended after the date the ban took effect. Thus, the court reviews the decision under abuse of discretion.

    Nicholson first challenges the district court’s application of the abuse of discretion standard. Nicholson argues that the court should have applied de novo review because the policy is subject to Arkansas Insurance Department Rule 101, which prohibits discretionary clauses in “all disability income policies issued in this State which are issued or renewed on and after March 1, 2013.” See Ark. Admin. Code 054.00.101. The policy was issued on January 1, 2007, and last amended on January 1, 2013. The policy itself states that it “may be renewed for successive renewal periods by the payment of the premium set by [Standard] on each renewal date. The length of each renewal period will be set by [Standard], but will not be less than 12 months.” Neither the policy, nor anything else in the administrative record, signifies that Standard explicitly set a renewal date after March 1, 2013. The district court thus correctly reviewed Standard’s decision for an abuse of discretion.
    The court then concludes that Standard did not abuse its discretion.

    Nicholson contends, alternatively, that the district court erred in granting summary judgment under the abuse of discretion standard. Standard sought the opinion of three doctors, who, after reviewing Nicholson’s medical records, found that there was no objective evidence of a disability. See McGee, 360 F.3d at 925 (“It is not unreasonable for a plan administrator to deny benefits based upon a lack of objective evidence.”); see also Prezioso v. Prudential Ins. Co. of Am., 748 F.3d 797, 806 (8th Cir. 2014) (concluding that an insurance company “did not abuse its discretion by according more weight to the opinions of its own experts”). Finally, although Nicholson claims that his narcotic pain medication prevented him from performing his own occupation, nothing in the administrative record reveals that Nicholson experienced adverse side effects from his medication or that he was barred from performing his own occupation in the national economy because of his narcotic medication. It was thus reasonable for Standard to deny the claim.

    Nicholson also fails to show that Standard acted under a conflict of interest when it asked Dr. Nudell to again review Nicholson’s medical record after it received further correspondence from Nicholson’s employer and Dr. Niba. Nicholson seemingly claims that such correspondence constituted a formal appeal, thereby requiring Standard to seek out the opinion of a different medical consultant. See 29 C.F.R. § 2560.503-1(h)(3)(v). Yet Nicholson did not file a formal appeal until after Standard had reviewed the supplemental materials, at which time Standard sought Dr. Shih’s opinion. Standard thus was in compliance with federal regulations.
    The very brief opinion is attached below.

    Attached Files
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