© 2014 by Michael A. McKuin

Attorney at Law

Post Office Box 10577

Palm Desert, CA 92255

(California State Bar No. 103328)


The information provided at this website is intended for educational and promotional purposes only. It is strictly general in nature and under no circumstance should it be considered legal advice.  Every case is unique and a competent, qualified lawyer must be consulted for legal advice regarding any specific case. 


How Insurance Companies Use Common Everyday Activities to Undermine Disability Claims
By: Michael A. McKuin

Revised:  June 2015

The Use of Surveillance vs. the Right of Privacy


Insurance companies and claims administrators frequently arrange video surveillance of claimants. Although it may feel like an invasion of privacy, as long as it’s conducted "reasonably", the courts will allow it.  As cynical as it sounds, I often tell clients, "Forget about your right of privacy.  For all practical purposes, you gave it up when you filed a disability claim."  Of course, that's not true in a strictly "legal" sense (and there are definitely limits on how intrusive an investigation may be). But in a practical sense, it's probably good advice.  Sadly, I've had clients, who wanted to settle their cases, just to get the insurance companies "off their backs".


On the upside, however, I have seldom seen anything of significance uncovered as a result of surveillance.  But because of the darkness of the lighting, the graininess of the video, the ticking time stamp at the bottom of the picture and the unawareness of the "subject", people tend to look suspicious, even if they’re just going about their lives doing everyday activities.


In one case an insurance company had a private investigator park outside my client’s home, starting at 6:20 a.m.  Over the ensuing 8 hours, he shot a total of 9 ½ minutes of video that he obtained by following her car to a department store, following her in and shooting video, while hiding behind clothing racks, while she and her teen-age daughter shopped for underwear.  Absolutely nothing of any importance was observed.  But later on, a report by one of the insurance company's reviewing doctors' stated that it was his opinion, based solely on the videotape, that my client was not disabled because she was "seen standing and walking into the store, with no pain behaviors noted on observation."  What exactly is a "pain behavior"?  Who the hell knows?



Surveillance Reports vs. Surveillance Video


Reports written by private investigators are often based on the investigator’s biased observations.  In once case, the investigator actually put the following remark into his report, "I believe that the claimant is a sketchy guy that lives literally a few doors down from me (or did) in my apartment complex."   This so-called "sketchy guy" was a Supervisor of Technical Support for a major corporation and was a former member of the United States Marine Corps Reserve.  Very often, when you view the actual video, itself, a different picture emerges from what is depicted in the surveillance report.


In one case, the surveillance was only part of a full-blown, intrusive investigation that stretched out for months, while the insurer conducted an endless inquiry into every aspect of my client’s life; conducting multiple surveillances; amassing medical records going as far back into the his past as the insurer could go; gathering tax returns; and prying into his personal information, including an attempt to obtain his personnel file. 


The first round of surveillance went on for days, resulting in a 13 page report.  Six months later, another investigator followed my client around for three more days, giving rise to a 15 page report.  On one occasion, the investigator actually peeked through my client's window to try to observe activity inside his home.  This was all a monumental waste of time, as nothing much was observed. 


However, the insurance company nevertheless denied my client's LTD claim.  The denial was said to have been based primarily on the surveillance reports and a report by a reviewing doctor.  The denial letter stated, "we observed your ability to walk, bend, twist, and reach .  .  . you did not exhibit any obvious signs of neck or low back discomfort."  What exactly is an "obvious sign of neck or back discomfort"?  Once again, who knows? Although certain manifestations of pain can often be observed, pain itself cannot. After I was retained, I obtained and viewed all of the boring videotape, in addition to all of the other information gathered by the insurer.  It was worthless, which I pointed out in my appeal.  The insurer, at that point, backed down and paid the claim.


It should be mentioned that on several occasions, before retaining me, this same client requested copies of the surveillance videotape that had been relied upon to deny his claim.  The insurer refused to produce it, which clearly violated his administrative due process and ERISA procedural due process rights.  This is not an uncommon experience.  Insurers frequently withhold things like raw test data and actual video until after a lawsuit was filed.  (Sometimes, even then, they won’t produce those things without a court order).  This is done so as to avoid any possibility that the claimant might rebut the self-generated evidence that the insurance company seeks to rely upon. 


This practice is contrary to the law.  Jebian v. Hewlett Packard 349 F.3d 1098, 1107 (9th Cir, 2003); D’Emanuele v.Montgomery Ward & Co, Inc., 1987 U.S. Dist. LEXIS 16830 (C.D. CA  1987). ("in order to afford a plan participant whose claim has been denied a reasonable opportunity for full and fair review, the fiduciary must inform the participant of what evidence he relied upon and provide him with an opportunity to examine the evidence and to submit written comments or rebuttal documentary evidence.");    Halpin v. W.W. Grainger, Inc.  962 F.2d 685, 689 (7th Cir. 1992).   Palmer v. Univ. Med. Grp & Std. Ins. Co., 994 F. Supp. 1221, 1240 (D.OR 1998).  also Donato v. Metropolitan Life Ins. Co., 19 F.3d 375 (7th Cir. 1994); Donato v. Metropolitan Life Ins. Co., 19 F.3d 375 (7th Cir. 1994).   Under Donato and Halpin, the plan participant must have all the necessary information at a time when the participant still has a meaningful opportunity for appeal and for full and fair review. 


The federal regulations also impose a clear duty on ERISA administrators to produce any and all "relevant" data.  29 CFR 2560.503-1(h)(3)(iii) provides "full and fair review" of an adverse benefit determination requires that "a claimant shall be provided, upon request  .  .  . copies of all documents, records, and other information relevant to the claimant's claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to paragraph (m)(8) of this section." Subsection m(8) of that regulation (Definitions) states: "A document, record, or other information shall be considered 'relevant' to a claimant's claim if such document, record, or other information .  .  . (i) Was relied upon in making the benefit determination; (ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination."  So anything "generated" during the course of the insurer’s investigation is "relevant? under the law, and the claimant has an absolute right to obtain it upon request.


Combining Surveillance with Events Arranged by the Insurance Company, which Require "Activity"


It's a bit of a dirty trick, but it is not uncommon for the insurance company to arrange video surveillance of the claimant as he or she travels to and from an Independent Medical Exam (IME), arranged by the insurer.  The insurance company's hope is that its private investigator will observe some kind of "activity" that its reviewing physicians, and claims personnel can construe in a way that will undermine a claim of disability.  


In one such case, involving cognitive deficits, the insurer arranged for three days of surveillance to be done in conjunction with one day of neuropsychological testing that it had also arranged.   In the instructions that were given to the private investigator, the claims representative said, “We would like to know if claimant does any driving.  Would like to get some idea of what kinds, if any, activities claimant does during the day."  Over the entire three day period, only 12 minutes of activity was observed, most of which was associated with going to and from the neuropsyche testing.  The report of this surveillance stated that my client was  "found .  .  .  to be minimally active."  The reason for the neuropsyche testing was understandable.  But since no amount of surveillance could observe the existence of a cognitive deficit, the reason for the surveillance was unclear.


The most egregious use of surveillance I’ve seen was in a case that resulted in a published opinion by the Court.  In Collins v. Liberty Life Assur. Co. of Boston, 988 F.Supp.2d 1105 (C.D. CA  2013), its use was farcical. Liberty ordered multiple days of surveillance, which was conducted over 5 days.  No significant claim-related activity was observed.  So Liberty arranged for an IME and it was kind enough to also arrange transportation to and from the IME for Mr. Collins and his wife.   But, oddly, their ride home didn’t show up until an hour after the exam was over, forcing them to stand out on the street and pace back and forth in front of a building in downtown San Francisco on a winter day, while they waited for the ride to show up.   Since they had no way of knowing exactly when it would arrive, what else were they supposed to do?


During the entire hour that they stood in front of the building, a private investigator was parked across the street, shooting videotape of the two of them as they either stood or paced.  From this observation, the private investigator concluded in his report that Mr. Collins "did not display any restrictions."  In denying his claim, the claims representative  concluded that he was "observed being active". A reviewing doctor looked at the video and stated one of the most preposterous medical opinions I’ve seen.  He concluded:  


              "The accompanying surveillance video conflicts with the portrayal in the medical record of Mr. Collins' as               Mr. Collins portrays himself to be in severe pain with significant limitations in his ability to stand and walk               and stay in one place at any time. He reports significant problems with confusion. He does not appear               confused or with pain behaviors during the video surveillance or the surveillance interview. He maintains                his composure.   There is no cognitive dysfunction or slurring of speech noted. He ambulates well and is               without wincing, clutching, holding or any other pain-behaviors. He is social, as he is with a companion,                   on the phone with another party, and situated comfortably in busy and public places."


In the final appeal denial letter the insurance company representative cited the doctor’s review of the surveillance video, and noted "The surveillance tape shows him able to be in public and sustain activities."  At trial, Liberty’s attorneys argued in their brief that "over 43 minutes of video was obtained of Collins .  .  .  the video shows Collins ambulating, standing, stretching and socializing normally." As ludicrous as all this sounds, it’s exactly what happened, leading Judge Dolly Gee to comment in her opinion:


               "Setting aside the fact that the man claims to be in pain and Liberty allowed him to sit/stand for over forty                minutes, Liberty did not explain exactly what else Collins could have done other than either sit, stand, or                 pace while he waited for his ride to come transport him home. Would it have made more of a difference if               Collins had writhed in pain on the pavement in front of the camera rather than as soon as he returned                   home and could climb into his bed?" 


[988 F.Supp.2d at 1129].  Read the entire opinion:  Collins v. Liberty Life Assurance Co.


However, surveillance is not always a waste of the insurance company's time.  In a case that I had to decline, the insurer first did a personal interview with the claimant.  During that interview, the claimant was observed using braces on his back and knee and a cane for standing and walking.  The field representative noted these things in his report of that interview.  Two weeks later the insurer conducted surveillance and the claimant was observed using no assistive devices and supposedly performing activities in excess of what he said he could do.  He could not explain the reason for this factual discrepancy and that effectively put an end to his LTD claim.




ERISA Disability Lawyer