Quadrino Schwartz, your resource for Insurance, Class Actions, and Business Law

Firm Thwarts Insurance Defense Tactic

Created to protect pension funds from unscrupulous employers, ERISA is a federal law that has become a favorite strategic weapon in the battle by insurance companies to deny policyholder claims.  Simply invoking ERISA in a lawsuit immediately restricts the evidence the court can review,  eliminates a trial by jury, and forces plaintiffs’ attorneys to settle cases faster than you can say “claim denied.”

That is, until now, Quadrino & Schwartz has won a groundbreaking decision regarding ERISA and its applicability to group disability insurance policies.  For the first time, a Federal judge has ruled that ERISA’s applicability to a case is not an automatic slam-dunk, and that jury should determine whether or not ERISA applies.  In Searles v. First Fortis Life Insurance Company, a team of Quadrino & Schwartz attorneys, led by partners Evan Schwartz and Richard Quadrino, has challenged a long-standing industry practice and won.

“Because of ERISA, it is illegal for employers to dip into their employees’ pension funds or other benefit funds.  That’s good law,” explained Schwartz, a founding partner at Quadrino & Schwartz.  “But the insurance companies discovered that if a long-term disability insurance policy was considered an employee benefit, ERISA could be used to control the litigation and make many lawsuits effectively useless.  We have again turned the tables on insurance companies, and are changing the landscape of how disability insurance cases are being fought and won.”

In cases where ERISA is applied, judges typically must limit their review to the materials gathered by the insurance company, and their decision cannot be made based on any other evidence.  To make matters worse, a jury trial is not permitted.  Most plaintiffs’ attorneys, upon hearing that a case has been deemed to fall under ERISA, will settle the case for a much lower value, rather than trying to fight a tightly controlled Federal proceeding.

“What needs to happen now is an intense inquiry into how ERISA’s applicability is established,” said Richard Quadrino, Esq.  “There are tens of thousands of employees who are invoking this law just as a way of denying their claims.  The decision in Searles v. First Fortis has opened the door.  We are proud of the excellent legal team that brought this case to a successful conclusion.”

Quadrino & Schwartz is located at 666 Old Country Road, Garden City.