A federal appeals court in California has ruled against an insurance company and in favor of the plaintiff in a long-term disability (LTD) benefits case.
The 11 judges of the 9th U.S. Circuit Court of Appeals agreed en banc to uphold part of a lower-court ruling in favor of Laura Cyr and against the Reliance Standard Life Insurance Company, a subsidiary of Delphi Financial Group Inc. (NYSE:DFG), Wilmington, Del.
The judges have held that Reliance Standard is a proper defendant in the case, even though it was merely the insurer of an employer's LTD plan and not the administrator of the plan.
The ruling addresses only the question of whether Reliance Standard can be a defendant in the case and not with the merits of the case.
Cyr was a vice president at Channel Technologies Inc. (CTI), Santa Barbara, Calif. After she was terminated in 2000, she immediately filed a claim for long term disability benefits (LTD) from Reliance based on her $85,000 salary with CTI.
A year later Cyr filed a gender discrimination lawsuit against CTI. She claimed that male employees performing work of equal skill, effort, and responsibility made up to double her annual salary. After her salary was retroactively adjusted to $155,000, Reliance was denied an increase in benefit payments based upon her newly adjusted salary figure.
Cyr later filed an action against Reliance in the U.S. District Court for the Central District of California, where the court ruled in her favor.
Reliance appealed the decision, arguing that it was not the plan administrator and could not be the proper defendant for the claim.
