8th Circuit Says Insurance Co. Abused Discretion in Denying Disability Benefits

The Eighth Circuit on Monday upheld a district court judgment that insurance company Kansas City Life Insurance Co. abused its discretion in denying disability benefits to a former employee of an anesthesiology clinic who was using fentanyl at work.

The plaintiff in the Western District of Missouri case alleged that, after being terminated by his employer for failing a drug test and admitting to using “end of day drugs” instead of properly disposing of them, Kansas City Life improperly denied disability benefits, despite his documented narcotic addiction and opioid abuse and statements by physicians detailing the plaintiff’s course of addiction and reasons why disability benefits were warranted, the court explained.

Kansas City Life addressed the plaintiff in its denial, saying, “You were capable of, and would have remained capable of, performing your regular occupation if you had not tested positive to the drug screening. (sic) Your drug use did not preclude your ability to perform your occupational duties. You ceased work because your employment was terminated. As such, you do not meet the (policy’s) definition of disability.”

Both parties in the suit filed cross-motions for summary judgment after they agreed that there were no factual disputes in the case — just a dispute over whether the facts meant that the plaintiff was entitled to disability benefits. The district court sided with the plaintiff.

“In light of the undisputed facts that Bernard was addicted to fentanyl, that he had relapsed in 2015, and that he had regularly used fentanyl at work for the two years preceding his termination, the district court concluded, ‘No reasonable person could find that a nurse anesthetist so addicted to Fentanyl that he injects himself with drugs during the work day while his medical co-workers are nearby is capable of performing the duties of his job,’ ” the court recounted.

The Eighth Circuit reached the same conclusion as the district court, finding that the insurance company’s benefits denial was not supported by substantial evidence that the reason the plaintiff was terminated was solely because he went against his employer’s policy, thus rendering his claim for disability benefits unwarranted. The defendant’s claim that the plaintiff was not actually disabled because he did not make any medical errors while under the influence of fentanyl at work did not sufficiently augment its argument nor justify the benefits denial, the court said.

The plaintiff is represented by Harlan Still & Koch. The defendant is represented by Lathrop GPM.