09-04-2016
SSA benefits challenges, Conn lawsuit both moving forward in state, federal courts
Attorney Eric C. Conn’s malpractice insurers explicitly denied coverage to claims filed over a year ago, court documents show — around the same time a judge ordered Conn’s assets be unfrozen based on the assertion by his counsel that he had valid malpractice insurance to cover any possible damages in the case.
Last week the judge also ruled that the litigation filed against him by former clients will proceed as a class action case, and plaintiffs’ attorney Ned Pillersdorf said recent developments at the U.S. District Court level could provide hope to the entire class.
Scott White, Conn’s current counsel in both this civil litigation filed in Floyd County Circuit Court and the pending federal criminal case against him, notified the court last week that he had worked to comply with court orders that he file claims with Conn’s malpractice insurers, actions that Judge Johnny Ray Harris said, “should have been done a year ago.”
White, who has only been Conn’s attorney in this lawsuit since June of this year, wrote in his notice of compliance that he reached out to Conn’s prior attorneys and learned that, in fact, claims had been made over a year ago, and both were very clearly denied.
In one of the attached letters, dated June 29, 2015, Asa P. Gullett with Lawyers’ Mutual Insurance Company informed Conn’s previous attorneys they would deny coverage on the basis that his insurance with them was a “claims made” policy and had expired Oct. 25, 2012. LMIC wrote that they sent several letters informing him that he had not renewed coverage, and by Feb. 20, 2013, they rescinded their quote to reinstate the policy. They received a check over two weeks later, but sent it back with a letter telling him the policy was not renewed.
In the other letter, dated June 15, 2015, Anne Foersch with Crum and Forster, an agent for U.S. Fire Insurance Company, wrote that they too would not cover Conn. In short, their denial is based on the policy having a “prior acts” date of Aug. 15, 2013, meaning that they disavow coverage for claims arising from actions made before that date.
It was on June 25, 2015, 10 days after the first letter was issued and only four days before the second letter, that Judge Harris dissolved a restraining order freezing Conn’s assets.
“That’s the whole reason I unfroze assets, because I thought there was insurance there to pay,” Harris said at the Aug. 19 hearing. He later wrote in the formal order that this “appears now to be the false or misleading representation” by Conn’s previous counsel that malpractice insurance existed.
White wrote that after scrutinizing the policies and rejection letters, he has devised his plan of action for next steps, but could not disclose his strategy on public record, instead offering to share his plans with the court and the plaintiffs privately. He added that the plaintiffs’ third amended complaint contained new language that could help, and has recently filed a new claim with U.S. Fire based on that complaint.
He previously said after an August 19 hearing that litigation would be their recourse should the insurers deny their claims.
The plaintiffs in the case, 1,487 former Conn clients who have been subjected to Social Security Administration hearings to redetermine their eligibility for benefits, have been certified as a class for the purposes of this lawsuit, Pillersdorf announced Thursday. Conn and his attorney recently dropped any objection to the certification.
At a public meeting held Thursday, Pillersdorf updated Conn’s former clients on the position of their case in Floyd Circuit Court, in another lawsuit pending in West Virginia and on the work being done in U.S. District Court.
The U.S. District Court level, Pillersdorf explained, is the last recourse for those who have received unfavorable decisions in their redetermination hearings with administrative law judges and who have also had their appeals rejected by the SSA’s Appeals Council.
In these cases, Pillersdorf said, arguments are being made that the SSA violated its own rules in ordering redeterminations in 2015, when Conn had been suspected of fraud several years prior, and the SSA is statutorily mandated to seek redeterminations “immediately” upon suspected fraud.
This unnecessary delay has “rigged” the hearings, Pillersdorf says, because individuals must travel back in time and present only evidence relevant to the time in question. In these years since, records have been lost and destroyed, doctors have quit practicing, and many individuals have developed new disabilities preventing them from working, but these are of no relevance to the hearings.
Secondly, attorneys in U.S. District Court are arguing that it is fundamentally inequitable for those in redetermination hearings to have no means to challenge a finding of fraud in their cases. As SSA division chief Administrative Appeals Judge Kelly Salzmann affirmed for another lawsuit, evidence presented in these hearings must be relevant to the period in question, but must also be new evidence; the findings of the four doctors suspected of fraud are summarily excluded from the hearings, and no arguments can be made that their findings were possibly legitimate.
“Unchallengeable evidence is something that happens in Iran or Russia. This is the United States, we challenge everything,” Pillersdorf said.
Pillersdorf said one attorney has made the case that Conn himself will have the opportunity to challenge the determination of fraud as his criminal case proceeds, but his clients are not being afforded the same right.
While several cases have made it to the U.S. District Court level before eight different judges, no rulings have made. One ruling is expected to come down as early as next week. A favorable ruling in any one case based on these arguments, Pillersdorf said, may establish a sufficient precedent to apply to other cases, perhaps even all of the estimated 800 who have lost or will lose their cases at lower levels.
Pillersdorf and Appalachian Research and Defense Fund Executive Director Robert Johns were on hand to outline the procedures for those who may be going on to the U.S. District Court level, how to try and proceed without paying the $400 in filing fees, and how to file a waiver when asked to repay what often amounts to more than $100,000 in benefits.
Those with questions on these or other problems can contact AppalReD at, (606) 886-3876.
By Aaron K. Nelson
Appalachian News-Express