In this several-part blog series titled The Basics of an ERISA Life, Health and Disability Insurance Claim, we discuss the basics of an ERISA life, health, accidental death and dismemberment and disability claim, from navigating a claim to handling a claim denial and through preparing a case for litigation.  In Part Nine of this series, we discuss insurer reliance on sub rosa surveillance, which can be either the death knell to a claim for benefits or strong proof of disability.  Sub rosa, a Latin phrase literally meaning under the rose, is a surveillance investigation that takes place in secrecy.

Insurers often use such surveillance when investigating the activities of their insureds, especially when they investigate disability claims.  They spend inordinate amounts of money conducting surveillance on benefits claimants.  This often results in insurers paying thousands of dollars for a private investigator to track claimants’ movements and videotape claimants outside of their home.  Whatever activity a disability claimant is engaged in will be observed and recorded, such as gardening, running errands, going for a walk, going to the gym or attending a doctor’s appointment.  Insurers often conduct surveillance when they have their claimants attend an independent medical examination or functional capacity examination, hoping to catch them in activity inconsistent with their claims of disability or their asserted limitations or restrictions concerning activities of daily living.

Typically, insurers will attempt to use surveillance footage to assert that their insureds are capable of working and thus not entitled to disability benefits, often overstating the level of recorded activity or over-relying on it, drawing the conclusion that because of the activities recorded, a disability claimant can work at a full-time job.  While this may seem suspect, insurance companies have the right, and indeed the duty, to thoroughly investigate claims.  In California, an insurer’s failure to reasonably investigate an insurance claim may result in bad-faith liability.  See Egan v. Mutual of Omaha Life Ins. Co., 24 Cal.3d 809, 819 (1979); Guebara v. Allstate Ins. Co., 237 F.3d 987, 996 (9th Cir. 2001).

However, courts have warned insurers against over-reliance on surveillance, particularly where a plaintiff’s reported restrictions are consistent with the video surveillance.  Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 633 (9th Cir. 2009) (“[T]hat Plaintiff could perform sedentary activities in bursts spread out over four days does not indicate that he . . . is capable of sustaining activity in a full-time occupation.”); Bertelsen v. Hartford Life Ins. Co., 1 F.Supp.3d 1060 (E.D. Cal. 2014).  For example, in Lin v. Metropolitan Life Ins. Co., 2016 WL 4373859 (N.D. Cal. Aug. 16, 2016), defendant MetLife suggested that the insured’s ability to travel on a two-week trip to China was inconsistent with his disability.  However, the court disagreed and found that a closer reading of the office note mentioning the trip showed that the plaintiff reported consistent symptoms throughout his trip.  As the court said, “[T]he mere fact that Plaintiff traveled to China does not undermine his claim that his conditions were debilitating.”  Id. at *8; see also Bertelsen, 1.F.Supp.3d at 1073 (“[T]he Court also notes the inordinate amount of weight Defendant placed on the surveillance information.  The Ninth Circuit has admonished district courts to not overly rely on surveillance video, particularly where the restrictions are consistent with the video surveillance.”)

It should be obvious that a videotape showing a few minutes of activity does not most of the time indicate full-time work ability.  In Beaty v. Prudential Insurance Co., 313 F.App’x 46, 49 (9th Cir. 2009), the Ninth Circuit rejected the insurer’s attempt to rely on “unsupportable inferences from a surveillance video and reports which show the plaintiff engaging in a variety of normal day-to-day activities” and criticized the insurer’s failure to explain how activities show “she can perform the duties of her occupation.”  Other courts have likewise ruled that an overstatement of a claimant’s activities in surveillance footage is improper, and they warned that activities observed for a short amount of time do not necessarily translate into full-time work capacity.  For example, in Thivierge v. Hartford Life, 2006 WL 823751, *11 (N.D. Cal. Mar. 28, 2006), the district court held that activities observed “for a couple of hours on five out of six days [that the claimant] was under surveillance does not mean that Plaintiff is able to work an eight-hour[-per-]day job.”

In a recent decision, Black v. Hartford Life Ins. Co., 2019 WL 2422481, *9 (D. Or. June 10, 2019), the District Court of Oregon found that the defendant insurer overstated surveillance findings.  The court noted that, of the 16 hours of surveillance, including five hours during which the plaintiff was away from his house, the surveillance company returned less than 16 minutes of footage that was comprised of small clips that frequently lasted less than one minute each.  The court found the video in this case to be “ambiguous at most, and misleading at worst.”  Id.  Further, the court found that the activities depicted “do not show [that the plaintiff] is capable of maintaining work and are not necessarily inconsistent with Plaintiff’s reported limitations.  Plaintiff is recorded riding a bus and running errands.  These errands include getting a haircut, using ATMs, and purchasing food.  Defendant provides no explanation for how these activities might translate to the work environment.”  Id.  Further, the plaintiff’s treating physician reviewed the video and still opined that the plaintiff was disabled.  Id.  The court ultimately found that the surveillance video evinced a level of functioning that was entirely consistent with the plaintiff’s own self-reported limitations, and that the defendant insurer’s “overstatement and over-reliance on this surveillance weighs against Defendant’s decision to terminate benefits.”  Id. at *10; see Montour, 588 F.3d at 633 (“[S]igns of bias” included Hartford’s decision to “overstate . . .and over-rel[y] on surveillance of Plaintiff,” and “[this] bias infiltrated the entire administrative decision-making process, which leads us to accord significant weight to the conflict.”).

It is important to carefully review the surveillance videos to determine exactly what conduct the claimant is doing and compare that to the claimant’s restrictions and limitations.  In another recent decision, Fleming v. Unum Life Ins. Co., 2018 WL 6133859 (C.D. Cal. Nov. 20, 2018), the Central District of California heavily criticized the defendant Unum’s overreliance on surveillance footage.  Id. at *8.  The court in Fleming noted that bending at the waist and leaning into a car did not relate to the claimant’s restrictions and limitations, as her degenerative disc disorder and resulting neck pain are her primary disabling conditions.  Id.  The court added, “The fact that Fleming took out the trash or bent down to place a one-pound cooler in her car does not render her capable of her full-time employment as a litigation attorney.”  Id.; see Vertigan v. Halter, 260 F.3d 1044, 1050 (9th Cir. 2001) (“This court has repeatedly asserted that the mere fact that a plaintiff has carried on certain daily activities . . . does not in any way detract from her credibility to her overall disability.  One does not need to be ‘utterly incapacitated’ in order to be disabled.” (citation omitted)).

The Ninth Circuit is understandably skeptical of insurers’ reliance on brief surveillance footage as alleged proof of a claimant’s capacity to work full time.  See Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 1154, 1162 n.36 (9th Cir. 2001) (affirming the district court’s rejection of video surveillance as alleged proof of work capacity and noting that the footage “did not shed much light on whether she could function full time as a trial attorney”); Fleming, 2018 WL 6133859 at *8.

While surveillance videos can sometimes be fatal to a claim, our firm has found that insurers frequently over-rely on surveillance, making great leaps of logic to conclude that minutes of surveillance means our clients can work at a full-time job.  It is crucial to carefully scrutinize each second of the surveillance videos relied upon by the insurer to deny a claim.  Then, it is necessary to compare the videos and the stated activities to the claimant’s restrictions and limitations, and even have a doctor or treating physician review the surveillance video and provide an opinion.  Claimants should be wary of their actions in public and be mindful that an insurer may have hired a private investigator to surveil their activities.  But courts have pushed back on over-reliance of these surveillance videos, understanding that these videos often depict a cursory and biased snapshot of a claimant’s abilities.  We have significant experience handling cases in which an insurer over-relies on surveillance to deny a claim.  If this has occurred, please contact McKennon Law Group PC for a free consultation so that we may assess your matter.