Stevens v. Sun Life and Health Insurance Company (U.S.)
MEMORANDUM OPINION AND ORDER: It is ORDERED: 1. Defendant's 32 Objection to the Recommendation of the Magistrate Judge are OVERRULED. 2. Plaintiff's 33 Objections to the Recommendation of the Magistrate Judge are SUSTAINED to the extent consistent with this Memorandum Opinion. 3. The 31 Recommendation of the Magistrate Judge is ADOPTED as to its conclusion that Defendants motion for summary judgment should be denied, but is REJECTED as to its assessment that Plaintiff did not e xhaust her administrative remedies on her long term disability claims. 4. Defendants 8 motion for summary judgment is DENIED. 5. Defendants 8 motion to dismiss is DENIED as moot. 6. This case is REFERRED back to the Magistrate Judge for further proceedings consistent with this opinion. Signed by Chief Judge William Keith Watkins on 3/7/2017. (Attachments: # 1 Civil Appeals Checklist)(dmn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
SUN LIFE AND HEALTH
INSURANCE COMPANY (U.S.),
) CASE NO. 3:16-CV-76-WKW
MEMORANDUM OPINION AND ORDER
Plaintiff Melissa Stevens brings this action pursuant to the Employment
Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., against
Defendant Sun Life and Health Insurance Company. Defendant filed a motion to
dismiss (Doc. # 8), which the Magistrate Judge converted to a summary judgment
(Doc. # 18.)
The Magistrate Judge has filed a Report and
Recommendation on the motion for summary judgment (Doc. # 31), to which
Plaintiff and Defendant objected. (Doc. # 32; Doc. # 33.) After an independent
and de novo review of those portions of the Recommendation to which objections
have been made, the court agrees with the Magistrate Judge’s conclusion that the
motion for summary judgment should be denied, but for different reasons. See 28
U.S.C. § 636(b).
The Disability Policies
In 2014, Plaintiff worked as a mortgage loan processor at Auburn Bank.
(Doc. # 1 ¶ 4.) In connection with that employment, Plaintiff had long and short
term disability employee benefit plans insured by Defendant. Those plans are
employee welfare benefit plans covered by the provisions of ERISA.
Without citing evidence, Defendant contends that, under 29 U.S.C. §
1002(16),2 Auburn Bank is the plan administrator for the two disability policies
because Auburn Bank is the employer and, therefore, the plan sponsor. (Doc. # 32
at 19.) However, the plan documents state that the policyholder is the “Trustee of
the Financial Institutions Group Insurance Trust,” a trust whose membership and
function is unknown to Plaintiff and the court pending further discovery. (Doc. #
To the extent that a genuine dispute exists regarding any of the material facts, these
facts are set forth in the light most favorable to Plaintiff. Arthur v. Comm’r, Alabama Dep’t of
Corr., 840 F.3d 1268, 1305 n.23 (11th Cir. 2016), cert. denied sub nom. Arthur v. Dunn, No. 16602, 2017 WL 670511 (U.S. Feb. 21, 2017) (noting that, on summary judgment, the evidence
must be viewed in the light most favorable to the nonmoving party).
ERISA, 29 U.S.C. § 1002(16)(A) provides that where, as here, the plan administrator is
not named in the instrument under which the plan is operated, the plan administrator is the plan
sponsor. The plan sponsor is
(i) the employer in the case of an employee benefit plan established or maintained
by a single employer, (ii) the employee organization in the case of a plan
established or maintained by an employee organization, or (iii) in the case of a
plan established or maintained by two or more employers or jointly by one or
more employers and one or more employee organizations, the association,
committee, joint board of trustees, or other similar group of representatives of the
parties who establish or maintain the plan.
29 U.S.C. § 1002(16)(B).
41-1 at 1.) Plaintiff contends that, because Auburn Bank did not establish or
maintain the plan, the plan sponsor – and, therefore, the plan administrator – is the
Trust or some entity other than Auburn Bank. (Doc. # 37 at 46-47.)
In pertinent part, the long term disability3 policy at issue provides:
While a claim is pending or after payments have commenced, we have
the right to have you examined by a Physician or vocational expert of
our choice as often as is reasonably necessary. Approval of [a] claim
for benefits and the continuation of benefits are subject to your
cooperation in submitting to such examination.
Your Rights Under ERISA
Appeal Procedure If you are not satisfied or do not agree with the
reasons for the denial of the claim, you may appeal the decision to the
Claims Fiduciary named below. Should you desire a review of the
claim decision, you or your designated representative must send a
written request to [Defendant] within 180 days of your receipt of the
benefit determination . . . .
[Defendant] is the Claims Fiduciary for all claims and appeals. It will
promptly review the claim and any appeal. You will be notified of a
final decision within 45 days following the Claim Fiduciary’s receipt
of your written request for review. If special circumstances beyond
the Claim Fiduciary’s control require an extension of time for
The facts related in this Section pertain primarily to Plaintiff’s long term disability
benefits claim. Neither party objects to the Magistrate Judge’s conclusion that Plaintiff
exhausted her administrative remedies for her short term disability benefits claim.
processing the appeal, or obtaining more information or conducting an
investigation of the facts, you will be notified in writing of this
additional 45-day extension prior to the termination of the initial 45day period. . . . Should you disagree with your benefit claims decision
following the Plan’s review and your appeal, you may bring a civil
action under Section 502(a) of the Employee Retirement Income
[Defendant], as Claims Fiduciary, shall have the sole and exclusive
discretion and authority to carry out all actions involving claims
procedures explained in the Policy. . . .
[Defendant’s] authority is limited to such insurance policies and we
are not a fiduciary of any other aspect of the Plan, insured or
otherwise. [Defendant is] not the Plan Administrator (as that term is
understood under ERISA) and [Defendant is] not responsible for any
asset or property which belongs to the Plan.
(Doc. # 14-3 at 29, 32-33.)
Plaintiff’s Disability Claims and Administrative Appeal
During 2014, while employed at Auburn Bank and covered by Defendant’s
short and long term disability policies, Plaintiff began having back pain that
interfered with her ability to work. (Doc. # 1 at 12.) Plaintiff filed a short term
disability insurance claim, which Defendant approved upon finding that, as of
September 3, 2014, Plaintiff was unable to perform her regular occupation. (Doc.
# 1 at ¶ 13.) On November 28, 2014, Defendant terminated payment of the short
term disability benefits claim on grounds that Auburn Bank would have
accommodated Plaintiff’s disability. (Doc. # 1 at ¶ 16.) On April 8, 2015, Plaintiff
filed a long term disability benefits claim, which Defendant denied. (Doc. # 1 at ¶¶
On November 9, 2015, Plaintiff submitted a timely written appeal of the
denial of her long term disability claim and the termination of her short term
disability claim. In support of her appeal, she supplied several exhibits, including
a DVD of a video statement regarding the effects of her disability on her ability to
work. (Doc. # 14-1 at 22.) On November 11, 2015, Defendant sent a letter to
Plaintiff’s counsel acknowledging receipt of Plaintiff’s appeal letter. (Doc. # 14-1
In a letter dated November 16, 2015, Defendant, acting through claims
administrator Alan Carr, 4 indicated that it was unable to access the contents of the
DVD. Defendant also requested a copy of Plaintiff’s social security file.
Defendant further stated:
For [p]lans governed by ERISA, a 45-day period for the resolution of
an appeal is allowed with one 45-day extension. Such time is,
however, tolled (not counted) when the claimant or his representative
have been advised of information that needs to be provided to us to
proceed with review of the appeal. The time remains tolled until such
information is received.
All letters referenced in this opinion from Defendant to Plaintiff were authored by Alan
Carr, a senior consultant for appeals and resolutions.
Our review of the appeal is currently tolled for the resubmission of
[the DVD] and the [s]ocial [s]ecurity documents. Upon receipt of all
the requested information, we will further review the appeal and will
notify you in writing if [the] second 45-day review period is necessary
to review the additional information that is provided.
(Doc. # 9-1 at 3.)
Enclosed with the November 16, 2015 letter, Defendant provided a copy of
the “Sun Life and Health Insurance Company Disability Claim Procedures and
Guidelines,” (Doc. # 14-1 at 60-61) which provided, in pertinent part:
[Defendant] serves as the Claims Administrator for the Plan
Administrator. . . . [Defendant] possesses discretionary authority to
make claim, eligibility and other administrative determinations
regarding insurance policies under which you are insured, and to
interpret the meaning of their terms and language. [Defendant] shall
have discretion and authority to carry out all actions involving claims
procedures. [Defendant] shall have the sole and exclusive discretion
and power to grant and/or deny any and all claims for benefits, and
construe any and all issues relating to eligibility for benefits. All
findings, decisions, and/or determinations of any type made by
[Defendant] shall not be disturbed unless [Defendant] has acted in an
arbitrary and/or capricious manner. Subject to the requirements of
law, [Defendant] shall be the sole judge of the standard of proof
required in any claim for benefits and/or in any question of eligibility
All decisions of [Defendant] shall be final and binding on all parties.
Whenever a decision on a claim is involved, [Defendant] is given
broad discretionary powers, and [Defendant] shall exercise said
powers in a uniform and nondiscriminatory manner in accordance
with the Plan’s terms. [Defendant] is not the Plan Administrator (as
that term is understood under ERISA) and [Defendant] is not
responsible for any asset or property that belongs to the Plan.
[Defendant] shall notify a claimant of the benefit determination on
review [of an administrative appeal of a claim denial] within 45 days
after receipt of the claimant’s request for review unless [Defendant]
determines that special circumstances require an extension of time for
processing the claim. If [Defendant] determines that an extension of
time for processing is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial 45-day
period. In no event shall such extension exceed a period of 45 days
from the end of the initial period. The extension notice shall indicate
the special circumstances requiring an extension of time and the date
by which [Defendant] expects to render the determination on review.
The period of time within which a benefit determination on review is
required to be made shall begin at the time an appeal is filed in
accordance with these reasonable procedures, without regard to
whether all the information necessary to make a benefit determination
on review accompanies the filing. In the event that a period of time is
extended due to claimant’s failure to submit information necessary to
decide a claim, the period for making the benefit determination on
review shall be tolled from the date on which the notification of the
extension is sent to the claimant until the date on which the claimant
responds to the request for additional information.
(Doc. # 14-1 at 64 (emphasis added).)
Enclosed in a letter to Defendant dated December 8, 2015, Plaintiff’s
counsel provided a replacement DVD and a transcript of the DVD. (Doc. # 14-1 at
By letter dated December 9, 2015, which was apparently mailed prior to
Defendant’s receipt of Plaintiff’s counsel’s December 8 letter, Sun Life inquired as
to the status of the requested materials and reiterated:
Our review of the appeal remains tolled for the resubmission of [the
DVD] and the [s]ocial [s]ecurity documents. Upon receipt of all of
the requested information, we will further review the appeal and will
notify you in writing if [the] second 45-day review period is necessary
to review the additional information that is provided.
(Doc. # 9-2 at 2.)
In a letter dated December 15, 2015, Sun Life acknowledged receipt of the
requested DVD, reiterated its request for a copy of Plaintiff’s social security claim
file, and stated:
At this time, the initial review of the file and appeal has been
completed. In order to assist us in our reconsideration of the claim on
appeal, we have deemed that an Independent Medical Examination
[“IME”] will be required to complete our review. . . . Arrangements
for the [IME] will be made through an independent medical
management firm, Network Medical Reviews, Ltd. (“NMR”) and will
be coordinated through your office.
The review of the appeal remains tolled for the scheduling and
completion of the examination. Your office will be advised in writing
if the second 45-day review period is necessary to review the
additional information that is provided.
(Doc. # 9-3 at 2.)
In a letter dated December 30, 2015, NMR notified Plaintiff’s counsel that
an examination with Dr. Jeffrey K. Eng in Montgomery, Alabama, was scheduled
for January 7, 2016.
NMR advised that Plaintiff should contact Sun Life
concerning any questions or concerns about the appointment. (Doc. # 9-4 at 2.)
By letter to Defendant dated December 31, 2015, Plaintiff’s counsel
indicated that he did not receive Defendant’s December 15, 2015 letter until
December 22, 2015. (Doc. # 9-5 at 2-3.) Plaintiff’s counsel contended that, under
the terms of the policy, Defendant was not entitled to an IME on appeal. Plaintiff’s
counsel stated that, nevertheless, Plaintiff would consider an IME “if it is
performed by a truly ‘neutral’ doctor upon whom we agree and if the entire IME is
videotaped by a witness accompanying [Plaintiff].” (Doc. # 9-5 at 3.) In addition,
Plaintiff’s counsel responded to the request for social security records by stating
that Plaintiff had already provided all social security documents in her possession
and that, if additional documents were needed, Defendant could obtain them from
the social security office because Plaintiff had already provided Defendant a signed
release for her social security records. (Doc. # 9-5 at 3.)
Also on December 31, 2015, Plaintiff’s counsel faxed a letter to NMR
acknowledging the notice of the appointment with Dr. Eng. He further stated the
[W]e would like to try to strike a balance of fairness regarding IMEs
when they are requested by insurance companies. We disagree that
[Defendant] is entitled to an IME but have advised [Defendant] that
we are willing to consent to the same with certain protections in place.
My client has a right to protect herself from unfairness and physical
harm. Accordingly, please verify that Dr. Eng will allow videotaping
of the IME and the presence of a witness to remain in close proximity
of Ms. Stevens.
(Doc. # 9-5 at 4.)
On January 5, 2016, Defendant sent a letter to Plaintiff’s counsel in which
Defendant contended that it was entitled to require Plaintiff to submit to an IME on
appeal. Defendant insisted that the scheduled appointment proceed on January 7,
2016, under the following conditions:
Dr. Eng will agree to accommodate your request to conduct the
examination with a witness as long as that person agrees to simply
observe without speaking to the claimant or interfering in any way
with the examination. However, Dr. Eng will not agree to the
videotaping of the examination. Therefore, we cannot consider your
request to videotape the examination to be reasonable. Finally, we
note that the policy does not place any of these conditions on
[Defendant]’s right to obtain an examination and failure to attend the
examination may result in denial of the appeal.
(Doc. # 9-6 at 3.)
On January 7, 2016, Plaintiff’s counsel faxed Defendant a letter reiterating
his position that, although Plaintiff was not required by the policy to submit to the
IME, she would attend and would insist that the IME be videotaped. (Doc. # 14-1
at 85-86.) When Plaintiff presented later that day for the examination, Dr. Eng
refused to allow videotaping in his office, and the examination was cancelled.5
By letter dated January 13, 2016, NMR notified Plaintiff’s counsel that it
had scheduled a February 5, 2016 IME with Dr. Jack Denver, who would allow for
the exam to be videotaped. (Doc. # 9-7 at 3.) By letter dated January 14, 2016,
Defendant likewise notified Plaintiff that, although it was not required to do so by
the policy, it had scheduled an IME with a physician who would allow for
videotaping of the exam. Defendant further stated:
The review of the appeal remains tolled for our receipt of the IME
Defendant accuses Plaintiff of cancelling the examination; Plaintiff contends that Dr.
Eng refused to proceed. This particular factual dispute does not require resolution at this time.
report. We will advise you in writing if the second 45-day review
period is necessary to review the additional information that is
(Doc. # 9-7 at 2.)
On January 19, 2016, Plaintiff’s counsel sent a letter to Defendant objecting
to the appointment with Dr. Denver. Plaintiff contended that Dr. Denver was
biased and that Plaintiff and Defendant should have chosen a mutually agreeable
physician for the IME. Plaintiff’s counsel also argued that tolling pending the IME
was not permitted, stating:
I am in receipt of a letter from NMR Indicating that an IME has been
scheduled with Dr. Denver on February 2, 2016. This date is well
beyond the time limit allowed for [Defendant’s] decision, which was
due no later than January 17, 2016. Plaintiff’s appeal was submitted
on November 9, 2015. On November 16, 2015, [Defendant] wrote
indicating that they were not able to access the [DVD] that
accompanied the appeal, and tolled the time for its decision until the
requested information was received. We responded to this request for
additional information on December 9, 2015, at which time the period
in which [Defendant] must make a decision on the appeal began
In its letter dated December 15, 2015, [Defendant] purports to be
tolling the time for a decision in order to obtain a third-party
evaluation. This is not permissible under the claim regulations. Any
delay due to a request for third party information is an insufficient
basis to “toll” the time for conducting an appeal and is an improper
delay of the appeal process.
The Regulations do permit an insurer to “toll” an initial claim while
they request and wait for records or information. However, once a
claim has been denied and it has been appealed, an insurer may not
extend the deadlines by claiming that it needs additional information
from third parties. Rather, the time for deciding an appeal may not be
“tolled” unless the insured has failed to submit information to decide a
claim. 29 C.F.R. 2560.503-h(l)(4).
It is of particular note that [Defendant] has not indicated special
circumstances requiring an extension of time in which to decide the
appeal, and no letters from [Defendant] have indicated that such an
extension is being claimed.
. . . . Since you refuse to jointly select an unbiased IME provider, we
cannot agree to do this past the time permitted. The scheduling of the
IME in February, due to Dr. Denver’s scheduling limitations, is not
adequate grounds to prejudice the delay of Plaintiff receiving her
[Defendant] has failed to make a timely decision in this claim and the
claim has been deemed exhausted. Your failure to decide the claim
on a timely basis and your efforts to obtain an IME with a biased
provider well after the date your decision was due are clearly adverse
action[s]. Accordingly, please provide a true and complete copy of
the claim file to-date, . . . as we will be proceeding with litigation.
(Doc. # 9-8 at 2-3.)
By letter dated January 20, 2016, Defendant responded as follows:
This is to acknowledge that [Defendant] received your letter dated
January 19, 2016 arguing that we have failed to make a timely
decision on appeal and raising additional issues regarding the IME
scheduled on February 5, 2016. Please be aware that based on the
review of the letter as well as the timing of previous events in the
claim handling process, we disagree with the arguments that you
As an initial matter, regarding 45-day appeal review period, Sun Life
does not agree that the appeal decision was due January 17, 2016.
[Defendant’s] scheduling of an IME under the terms of the Policy is
within the ERISA review period. Specifically, the appeal review
period did not begin until the proper receipt of [the DVD] on
December 14, 2015. Accordingly, the 45-day period for review has
not expired and will continue until February 7, 2016.
Irrespective, because the IME reviewing doctor will need time to
prepare his evaluation, we are invoking the additional 45-day
extension period for determination of this appeal. This will provide
sufficient time for the IME report to be prepared and for Sun Life to
obtain additional information, if necessary.
Failure to attend the scheduled IME and cooperate fully will result in
a denial of this appeal.
(Doc. # 9-9 at 2-3.)
By letter to Defendant dated February 4, 2016, Plaintiff’s counsel notified
Defendant that Plaintiff considered the appeal exhausted.
Because this claim has been deemed exhausted, we are filing a
lawsuit. We offered to proceed with an IME that was videotaped and
with a witness present, but you insisted on proceeding with the IME
provider that would not do this. That is your fault because you knew
our position prior to this IME. You also used the slowest means of
communication possible in November and December and cannot
claim “tolling” due to this slowness. It also raises very serious fairness
issues because [Defendant], in the past, has refused to consider
additional information after making its final claim decision on appeal.
We have first hand experience on this. Because of this position,
claimants are placed at a disadvantage.
As you should well know, the Claim Procedure Regulation is being
revised to make it explicit[l]y clear to courts that [Defendant], as well
as other insurers, should not be permitted to do this – that is, develop
new information in its final decision and utilize new evidence in a
final decision to refuse an appeal and then quickly close a claim
record, refusing the claimant the opportunity to respond. You also did
not note an extension was required by December 24, 2015. You
cannot take added time or toll time for an IME either. Given the claim
has been deemed exhausted, we are proceeding with litigation.
Because we were agreeable to a joint IME back in early January, and
because your company rejected this in favor of gaining a one-sided
review from an unfair physician long after the timeframes allowed by
the Claim Procedure Regulations, we have no choice but to file suit.
[Defendant’s] own Appeal Procedure provided in the ERISA notice
that accompanies the policy does not provide for tolling of the time.
Pursuant to your own procedure, the time for a decision began to run
on November 9, 2015, and if [Defendant] needed additional time it
was required to send a notice of extension for an additional 45 days
prior to the expiration of the first 45-day period on December 24,
You have rejected our request to send the claim file, which also is
unfair. Please understand that [Plaintiff] will not be at the IME
because suit will be filed prior to the time the IME is scheduled.
Thank you very much.
(Doc. # 14-1 at 99, 101-102.)
On February 5, 2016, Plaintiff filed her complaint in this court. (Doc. # 1.)
Plaintiff seeks review of Defendant’s denial of the long term disability claim and
of Defendant’s termination of short term disability benefits. In addition, Plaintiff
asserts a claim for statutory penalties for wrongful refusal to provide documents in
violation of ERISA and its regulations.
By letter to Plaintiff dated February 12, 2016, Defendant denied the appeal,
This is to respond to your letter dated February 4, 2016 in which you
maintained your client’s refusal to participate in an IME that was
requested by Sun Life and threatened to file litigation, which you have
now done. As I was out of the office on a scheduled vacation when
your letter arrived, this is my first opportunity to respond and to make
a final decision on Ms. Stevens’ appeal.
Based on Ms. Stevens continued refusal to participate in the
reasonably requested and scheduled IME, her appeal is denied. . . .
[Defendant’s] position remains that an IME is appropriate and
permissible under the terms of the policy and that it has been
scheduled within the ERISA review period. . . .
Based on your client’s refusal to attend the requested exam, Sun Life
cannot complete its evaluation of the claim. With [Plaintiff’s] appeal,
you provided additional medical records from a number of
[Plaintiff’s] healthcare providers. Based on the claimed disability and
the additional medical data provided on appeal, an IME is appropriate
to ensure a full and fair review of [Plaintiff’s] appeal as required
Accordingly, the claim must be denied based on your failure to
cooperate and comply with the terms of the Policy. You may appeal
this decision pursuant to the instructions below by agreeing to an
exam. [Defendant] will also consider any other evidence in support of
the claim during the appeal. Additionally, while [Defendant] is not
required to do so under ERISA, it will agree to provide a copy of the
exam report to you prior to the final decision. I hope that you will
agree to an evaluation so the evaluation of the claim can continue.
Finally, I must point out that any further delay in conducting the exam
may result in prejudice to [Defendant].
Right to Appeal
If you disagree with any part of our decision, you may request in
writing a review within 180 days after receiving this notice.
We will review your claim on receipt of the written request for
review, and will notify you of our decision within a reasonable period
of time but not later than 45 days after the request has been received.
If an extension of time is required to process the claim, we will notify
you in writing of the special circumstances requiring the extension
and the date by which we expect to make a determination on review.
The extension cannot exceed a period of 45 days from the end of the
initial review period.
If a period of time is extended because we did not receive information
necessary to decide your claim, the period for making the decision on
review is tolled from the date we send notice of the extension to you
until the date on which you respond to the request for additional
information. You will have 45 days to provide the specified
You may have the right to bring a civil action under the Employee
Retirement Income Security Act of 1974 (ERISA), §502(a) following
an adverse determination on review.
(Doc. # 14-1 at 103-106.)
STANDARD OF REVIEW
To succeed on summary judgment, the movant must demonstrate “that there
is no genuine dispute as to any material fact and that the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[T]he court must view the
evidence and the inferences in the light most favorable to the nonmovant.” JeanBaptiste v. Gutierrez, 627 F.3d 816, 820 (11th Cir. 2010).
The party moving for summary judgment “always bears the initial
responsibility of informing the district court of the basis for the motion.” Celotex
Corp. v. Catrett, 477 U.S. 317 (1986). This responsibility includes identifying the
portions of the record illustrating the absence of a genuine dispute of material fact.
Id. Alternatively, a movant who does not have a trial burden of production can
assert, without citing the record, that the nonmoving party “cannot produce
admissible evidence to support” a material fact. Fed. R. Civ. P. 56(c)(1)(B); see
also Fed. R. Civ. P. 56 advisory committee’s note (“Subdivision (c)(1)(B)
recognizes that a party need not always point to specific record materials. . . . [A]
party who does not have the trial burden of production may rely on a showing that
a party who does have the trial burden cannot produce admissible evidence to carry
its burden as to the fact.”).
If the movant meets its burden, the burden shifts to the nonmoving party to
establish—with evidence beyond the pleadings—that a genuine dispute material to
each of its claims for relief exists. Celotex, 477 U.S. at 324. A genuine dispute of
material fact exists when the nonmoving party produces evidence allowing a
reasonable fact finder to return a verdict in its favor. Waddell v. Valley Forge
Dental Assocs., 276 F.3d 1275, 1279 (11th Cir. 2001). On the other hand, “[i]f the
evidence is merely colorable or is not significantly probative, summary judgment
may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249–50 (1986).
“A mere ‘scintilla’ of evidence supporting the [nonmovant’s] position will
not suffice; there must be enough of a showing that the [trier of fact] could
reasonably find for that party,” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir.
1990), and the nonmoving party “must do more than simply show that there is
some metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 586 (1986). Conclusory allegations based on
subjective beliefs are likewise insufficient to create a genuine dispute of material
fact and do not suffice to oppose a motion for summary judgment. Holifield v.
Reno, 115 F.3d 1555, 1564 n.6 (11th Cir. 1997). Hence, when a non-movant fails
to set forth specific facts supported by appropriate evidence sufficient to establish
the existence of an element essential to his case and on which the non-movant will
bear the burden of proof at trial, summary judgment is due to be granted in favor of
the moving party. Celotex Corp., 477 U.S. at 323.
Short Term Disability Benefits
Neither party objects to the Magistrate Judge’s conclusion that Plaintiff
exhausted her administrative remedies for her short term disability benefits claim.
That portion of the Magistrate Judge’s Report is without error and is due to be
Long Term Disability Benefits
Defendant argues that Plaintiff failed to exhaust her administrative remedies
as to the long term disability benefits claim because she failed to attend the IME
and because she filed suit before Defendant issued its letter denying her appeal.
The relevant ERISA regulation provides:
(i) Timing of notification of benefit determination on review—
(1) In general.
(i) Except as provided in paragraph . . . (i)(3) of this section, the plan
administrator shall notify a claimant in accordance with paragraph (j)
of this section of the plan’s benefit determination on review within a
reasonable period of time, but not later than 60 days after receipt of
the claimant’s request for review by the plan, unless the plan
administrator determines that special circumstances (such as the need
to hold a hearing, if the plan’s procedures provide for a hearing)
require an extension of time for processing the claim. If the plan
administrator determines that an extension of time for processing is
required, written notice of the extension shall be furnished to the
claimant prior to the termination of the initial 60–day period. In no
event shall such extension exceed a period of 60 days from the end of
the initial period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which
the plan expects to render the determination on review.
(3) Disability claims.
(i) Except as provided in paragraph (i)(3)(ii) of this section, claims
involving disability benefits (whether the plan provides for one or two
appeals) shall be governed by paragraph (i)(1)(i) of this section,
except that a period of 45 days shall apply instead of 60 days for
purposes of that paragraph.
(4) Calculating time periods. For purposes of paragraph (i) of this
section, the period of time within which a benefit determination on
review is required to be made shall begin at the time an appeal is filed
in accordance with the reasonable procedures of a plan, without
regard to whether all the information necessary to make a benefit
determination on review accompanies the filing. In the event that a
period of time is extended as permitted pursuant to paragraph (i)(1) . .
. or (i)(3) of this section due to a claimant’s failure to submit
information necessary to decide a claim, the period for making the
benefit determination on review shall be tolled from the date on which
the notification of the extension is sent to the claimant until the date
on which the claimant responds to the request for additional
29 C.F.R. §2560.503-1(i).
As applied to this case, the plain language of the regulation6 establishes the
This timetable is consistent not only with ERISA’s regulations, but also with the
language of the applicable plan documents. See Section I. of this Memorandum Opinion (setting
for the applicable language from the policy and the Claim Procedures and Guidelines). Further,
numerous courts have applied the plain language of the regulations in the manner described in
this Memorandum Opinion, and Defendant does not offer any pertinent authority to the contrary.
See, for example, Gay v. Nat’l Rural Elec. Coop. Ass’n Grp. Benefits Program, No. 2:14-CV253, 2014 WL 5475284, at *4 (S.D. Ohio Oct. 29, 2014):
[T]he initial 45–day time period began to run when Plaintiff filed his appeal (or
when Defendant received notice of the same, see § 2560.503–1(i)(1)(i)),
regardless of whether Plaintiff submitted all necessary information at that time.
The next sentence of the regulation – “[i]n the event that a period of time is
extended as permitted pursuant to paragraph (i)(1) ... of this section due to a
claimant’s failure to submit information necessary to decide a claim” – logically
can only refer to the permissible 45–day extension discussed above. As such, the
tolling provision set forth in § 2560.503–1(i)(4) is only relevant if Defendant’s
decision to invoke the 45–day extension was based on the special circumstance
that Plaintiff failed to submit information necessary to decide his claim (and
Defendant detailed that reason, along with a request for additional information, in
its written notification of extension). In that case, the 45–day time period would
be tolled “from the date on which the notification of the extension is sent to the
claimant until the date on which the claimant responds to the request for
additional information.” 29 C .F.R. § 2560.503–1(i)(4).
See also, e.g., Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604, 613 (2013)
(“The plan has 45 days to resolve that appeal, with one 45–day extension available for ‘special
circumstances (such as the need to hold a hearing).’ §§ 2560.503–1(i)(1)(i), (i)(3)(i). The plan’s
time for resolving an appeal can be tolled again [that is, in addition to tolling that may have
occurred during the initial claim decision] if the participant fails to submit necessary information.
following timetable for administrative review of an adverse benefit determination:
The time for Defendant to decide the administrative appeal began to
run when Plaintiff filed the appeal (or when Defendant received notice of the
appeal), regardless of whether Plaintiff had submitted all information necessary to
§ 2560.503–1(i)(4).”); Holmes v. Colorado Coal. for Homeless Long Term Disability Plan, 762
F.3d 1195, 1206 (10th Cir. 2014) (“[The plan administrator’s] notice to [Plaintiff] prior to the
termination of the initial 45–day period, indicating that ‘special circumstances’ prevented it from
rendering a decision on her first-level review and requesting a complete set of her medical
records, tolled the running of the time for decision. . . . Once [Plaintiff] responded, the time limit
again began to run and, in light of the extension, [the plan administrator] was required to render a
decision . . . within 45 days.”); Wiley v. The Prudential Ins. Co. of Am., -- F. Supp. 3d. --, 2016
WL 4468155, at * 6 (D.D.C. August 24, 2016) (“If [Defendant] had invoked the 45-day ‘special
circumstances’ extension and provided as its reason that Plaintiff had not submitted the
information necessary to decide her appeal, the additional 45-day review period would have been
tolled from the date on which [Defendant] sent the notification of extension to Plaintiff. And the
review period would not have started to run again until ‘the date on which [Plaintiff] respond[ed]
to the request for additional information.’” (citations omitted)); McDowell v. Standard Ins. Co.,
555 F. Supp. 2d 1361 (N.D. Ga. 2008) (detailed opinion using same calculation method and
discussing the reasoning behind the tolling and extension provisions); Tsagari v. Pitney Bowes,
Inc., Long Term Disability Plan, 473 F. Supp. 2d 334, 337-38 (D. Conn. 2007) (same calculation
method); Mindt v. Prudential Ins. Co. of Am., 322 F. Supp. 2d 1150, 1157 (D. Or. 2004)
(applying the same calculation method and stating that the tolling applies only “‘[i]n the event
that a period of time is extended as permitted pursuant to [29 CFR § 2560.503–1](i)(3),’” which
in turn explicitly requires the plan administrator, “‘prior to the commencement of the
extension,’” to “‘notify the claimant in writing of the extension, describing the special
circumstances and the date as of which the benefit determination will be made.’”); LewisBurroughs v. Prudential Ins. Co. of Am., No. 14-CV-1632 KM, 2015 WL 1969299, at *6 (D.N.J.
Apr. 30, 2015) (“Both the Plan and the Regulation . . . impose three pre-conditions on the tolling
of the deadline to decide an appeal: (1) the plan holder must have failed to provide information
‘necessary’ to the resolution of the appeal; (2) before the initial 45–day period expires,
[Defendant] must send the participant written notice that it is claiming the extension; and (3) that
notice must list the ‘necessary’ information that [Defendant] requires from the participant.”);
Fitzgerald v. Long-Term Disability Plan of Packard’s on the Plaza, Inc., No. 11-CV-956
JEC/ACT, 2013 WL 12178732, at *4–6 (D.N.M. Apr. 4, 2013) (discussing and applying the
same calculation method); Spectrum Health, Inc. v. Good Samaritan Employers Assoc., Inc.
Trust Fund, No. 1:08-CV-182, 2008 WL 5216025, at *5 (W.D. Mich. Dec. 11, 2008) (“[T]he
response time is not tolled because the administrator has requested ‘necessary’ information
unless it has also taken an extension because of that request.”).
make a benefit determination on review. 7 § 2560.503-1(i)(4).
From the time the appeal period began running, Defendant had 45
days in which to decide the appeal.
§ 2560.503-1(i)(1)(i), (3)(i).
Defendant’s representations to the contrary, 8 neither the regulations nor the plan
documents provide for intermittent tolling of this initial 45-day period for every
time Defendant requested necessary or other information or documents from
Plaintiff (such as requests for social security records or another copy of the DVD),
or for completion of the IME. Thus, the initial 45-day period expired, at the latest,
by December 26, 2015, which is 45 days from the date of Defendant’s November
11, 2015 letter acknowledging receipt of the appeal.
If Defendant determined that special circumstances necessitated an
extension of time beyond the initial 45-day period, Defendant was required to
provide Plaintiff with written notice of the extension prior to December 26, 2015,
the date of termination of the initial 45-day period. That extension could not
exceed 45 additional days to decide the appeal. In the notice of the extension,
Thus, for example, in its letter denying the appeal, Defendant erred in representing that
“[T]he appeal review period did not begin until the proper receipt of [the DVD] on December 14,
2015.” (Doc. # 14-1 at 96.)
In its correspondence to Plaintiff during the administrative appeal, and in its
representations to the court, Defendant has been thoroughly inconsistent in its calculation
methods for tolling and for the expiration dates of the first and second 45-day periods.
Defendant’s calculations are rife with errors that run contrary to the plain language of the
regulations and relevant plan documents. Rather than attempt to address every single
inconsistency and error in Defendant’s various calculations, the court will simply set forth the
proper method for calculation and, where particularly relevant, mention select calculation errors.
Defendant was required to “indicate the special circumstances requiring an
extension of time and the date by which the plan expects to render the
determination on review.”
§ 2560.503-1(i)(1)(i). Defendant did not provide
Plaintiff written notice of an extension until January 20, 2016, and that notice did
not include an estimate of the date by which the plan expected to render a
determination on review. (Doc. # 9-9 at 2.)
If (1) Defendant provided timely notice of the 45-day extension and
(2) the extension was necessitated by the special circumstance that Plaintiff failed
to submit information necessary to decide the claim, then “the period for making
the benefit determination on review [would] be tolled from the date on which the
notification of the extension” – that is, the notification of the additional 45-day
extension – “is sent to the claimant until the date on which the claimant responds
to the request for additional information.” § 2560.503-1(i)(4). Because Defendant
did not timely and properly invoke an extension, Defendant also did not properly
[9 Contrary to Defendant’s representations, tolling expires when the Plaintiff responds to
the request for information, without regard to whether the response consists of providing or
refusing to provide the information. See Gay v. Nat’l Rural Elec. Coop. Ass’n Grp. Benefits
Program, No. 2:14-CV-253, 2014 WL 5475284, at *4 (S.D. Ohio Oct. 29, 2014) (collecting
cases holding that “a claimant ‘responds’ to a plan administrator’s request for information (so as
to end the tolling period set forth in § 2560.503–1(i)(4)) at the time he or she actually responds to
the request, without regard to whether he or she produces accurate (or any) information at that
time”); accord, 65 Fed. Reg. 70246–01, 70249 n.21 (Nov. 21, 2000) (noting that a similar tolling
provision in § 2560.503-1(f)(3) “ends on the date on which the plan receives the claimant’s
response to the notice, without regard to whether the claimant’s response supplies all of the
information necessary to decide the claim”).]
or timely initiate tolling 10 of an extension.
Although the initial 45-day period was due to expire on December 26, 2015,
the court has considered the possibility that, in the absence of timely notice of an
extension, the initial 45-day period was extended beyond that date by Plaintiff’s
consent. Cf. 65 Fed. Reg. 70246–01, 70249 n. 21 (Nov. 21, 2000) (noting, with
regard to a similar tolling provision in § 2560.503-1(f)(3), that “[t]he plan may
only take the extensions described in the regulation . . . and may not further extend
the time for making its decision unless the claimant agrees to a further extension”).
Plaintiff was not required to attend the IME with Dr. Eng because it was scheduled
outside the initial 45-day review period and because the second 45-day period had
been neither invoked nor tolled. 11 However, by letters to Defendant and NMR
Defendant’s notices of “tolling” prior to January 20, 2016, cannot be construed as an
attempt to invoke or toll the 45-day extension because (1) those notices did not comply with the
express regulation and policy requirements for providing notice of a 45-day extension and
initiating the tolling period, and (2) those notices were accompanied by the statement that,
“[u]pon receipt of all the requested information, we will further review the appeal and will notify
you in writing if [the] second 45-day review period is necessary to review the additional
information that is provided.” (Doc. # 9-1 at 3; Doc. # 9-2; Doc. # 9-3; see also Doc. # 9-5
(January 14, 2016 letter from Defendant stating: “The review of the appeal remains tolled for our
receipt of the IME report. We will advise you in writing if the second 45-day review period is
necessary to review the additional information that is provided.”).)
Even if, as Defendant contends, it had the authority to require an IME while the appeal
was pending, the appeal was no longer pending after the expiration of the initial 45-day period.
This is true despite the fact that Defendant notified Plaintiff of the need for the IME prior to the
expiration of the appeal. Cf. Mindt v. Prudential Ins. Co. of Am., 322 F. Supp. 2d 1150, 1157 (D.
Or. 2004) (holding that an employer, whose plan permitted it to require an IME “when the claim
[was] pending” and who failed to schedule the IME sufficiently in advance of the 45-day period
to render a decision within that time frame, had forfeited the right to extend the appeal beyond
the initial 45-day period by failing to provide notice of the 45-day extension).
dated December 31, 2015, Plaintiff consented to the January 7, 2016 IME,12
provided that the IME was performed by a “truly neutral doctor” agreeable to both
parties, and provided she would be allowed to have a witness present to videotape
the IME. (Doc. # 9-5 at 3; Doc. # 9-5 at 4.) By letter dated January 5, 2016,
Defendant rejected Plaintiff’s offer to attend a videotaped IME with Dr. Eng.
(Doc. # 9-6 at 3.) In a letter dated January 7, 2016, Plaintiff rejected Defendant’s
offer that the IME be conducted with a witness present, but without video
recording. (Doc. # 14-1 at 85.) Plaintiff attended the IME on January 7, but Dr.
Eng would not proceed because Plaintiff insisted that her witness be allowed to
make a video recording.
Following the aborted January 7, 2016 IME, Defendant continued to insist
that Plaintiff attend an IME. Defendant unilaterally scheduled an IME on February
2, 2016, with Dr. Denver, who would allow videotaping. (Doc. # 9-7.) By letter
dated January 19, 2016, Plaintiff declined because Dr. Denver was not mutually
acceptable and because the February 5, 2016 examination date was “well beyond
the time limit allowed” for Defendant’s decision. 13 (Doc. # 9-8.) By letter dated
At the time Plaintiff agreed to attend the IME with Dr. Eng, she did so despite her
contention that the policy terms did not require her attendance.
In the January 19, 2016 letter, Plaintiff incorrectly calculated January 17, 2016, as the
deadline for Defendant’s decision. Plaintiff’s error in calculation was due to the misperception
that, as Defendant had earlier represented to Plaintiff, the initial 45-day period was tolled
between the time Defendant requested the DVD and the time Plaintiff provided it. (Doc. # 9-8.)
January 20, 2016, after Plaintiff had clearly indicated that she would not consent to
extend the appeal time further, Defendant denied that the deadline for review had
run and reiterated its insistence that Plaintiff attend the appointment with Dr.
Denver. (Doc. # 14-1 at 95-97.)
Even if Plaintiff could be considered to have consented to extend the initial
45-day period to allow for consideration of the January 6, 2016 IME with Dr. Eng
(so long as a witness would be allowed to record the IME), it cannot reasonably be
inferred from the facts that Plaintiff ever consented to extend the 45-day period
past that date to allow for the videotaped examination by Dr. Denver on February
5, 2016. However, Defendant waited until January 20, 2016, to attempt to invoke
and toll the second 45-day period. (Doc., # 14-1 at 96.) It was not until February
12, 2016 – after Plaintiff again insisted that the appeal deadline had already passed
(Doc. # 14-1 at 99-102)14 and after she filed this lawsuit – that Defendant issued its
letter denying the appeal while continuing to maintain that the time for the decision
on review had not run. (Doc. # 14-1 at 103.)
By letter dated February 4, 2016, Plaintiff argued that the time for appeal had run on
December 24, 2015. This date is 45 days from the date of Plaintiff’s November 9, 2015 appeal
letter, without allowance for intermittent tolling. See § 2560.503-4(i)(4) (providing that “the
period of time within which a benefit determination on review is required to be made shall begin
at the time the appeal is filed in accordance with the terms of the plan” (emphasis added)).
However, § 2560.503-4(i)(1)(i) provides that “the plan administrator . . . shall notify a claimant .
. . of the plan’s benefit determination on review within a reasonable period of time, but not later
than  days after receipt of the claimant’s request for review.” (Emphasis added.) Applying
§ 2560.503-4(i)(1)(i), and assuming Defendant’s November 11, 2015 letter of acknowledgement
was drafted on the date Defendant received the request for review, the initial 45-day period
expired on December 26, 2015.
Under the circumstances, if an implied mutual agreement to extend the
initial 45-day period ever existed, Defendant failed to invoke the second 45-day
period or toll the running of the second 45-day prior to the expiration of that agreed
extension. Therefore, no tolling and no extension could have come into play, and
Defendant failed to timely decide the appeal.
No deference is due Defendant’s failure to comply with the regulation and
the relevant terms of the plan documents because Defendant has no discretion to
negate, ignore, or otherwise violate the plain requirements of the governing
regulations. However, even under a deferential standard of review, Defendant’s
interpretation 15 of the tolling provision is the very definition of “arbitrary and
Because Defendant failed to issue a decision or provide notice of an
extension within the time limit for the appeal, Plaintiff is deemed to have
exhausted her administrative remedies because Defendant did not render a decision
within the required time limits. 29 C.F.R. § 2560.503-1(l). Plaintiff is “entitled to
pursue any available remedies” in this court “on the basis that the plan has failed to
provide a reasonable claims procedure that would yield a decision on the merits of
the claim.” Id. To the extent that the Recommendation of the Magistrate Judge is
See, supra, note 8 regarding Defendant’s failure to consistently, much less accurately,
interpret the extension and tolling provisions of the regulation and plan documents.
inconsistent with this conclusion, the Recommendation must be overruled.
The Statutory Claim
In Count III of the complaint, Plaintiff seeks to hold Defendant liable under
29 U.S.C. § 1132(c)(1)(B) for statutory penalties for failure to provide various plan
Section 1132(c)(1)(B) imposes statutory penalties on “any
administrator” who fails to provide certain documents to claimants in accordance
with various statutory provisions.
Defendant argues that it is not a “plan
administrator” for purposes of §1132(c)(1)(B) because it has not been designated
as such in the plan documents, and because it is not the plan sponsor. See 29
U.S.C. § 1002(16)(A) (“The term “administrator” means – (i) the person
specifically so designated by the terms of the instrument under which the plan is
operated; (ii) if an administrator is not so designated, the plan sponsor; or (iii) in
the case of a plan for which an administrator is not designated and a plan sponsor
cannot be identified, such other person as the Secretary may by regulation
prescribe.”); 29 U.S.C. § 1002(16)(A) (“The term ‘plan sponsor’ means . . . (i) the
employer in the case of an employee benefit plan established or maintained by a
single employer, . . . or (iii) in the case of a plan established or maintained by two
or more employers or jointly by one or more employers and one or more employee
organizations, the association, committee, joint board of trustees, or other similar
group of representatives of the parties who establish or maintain the plan.”); Lee v.
Burkhart, 991 F.2d 1004, 1010-1011 (2d Cir. 1993) (holding, pursuant to 29
U.S.C. § 1002(16)(A), that unless plan sponsor designates another party to provide
the disclosures mandated by ERISA, the duty to make the disclosure is on the plan
sponsor); Snow v. Boston Mut. Life Ins. Co., 590 F. App’x 832, 835 (11th Cir.
2014) (holding that the employer, not the insurer, was the “administrator” with
responsibility for providing plan documents to the claimant).
With respect to the duty to provide copies of plan documents, the plan
documents do not designate Defendant as plan sponsor or plan administrator. The
policy expressly states that Defendant is “not the plan administrator” for ERISA
purposes and is not responsible for any aspect of the Plan other than claims
administration. (Doc. # 14-3 at 33.) However, Plaintiff argues that Defendant
nevertheless serves as the de facto plan administrator under the reasoning of Rosen
v. TRW., Inc., 979 F.2d 191 (11th Cir. 1992), which held that an employer was
subject to suit as a de facto plan administrator for purposes of ERISA where the
plaintiff alleged that the plan sponsor was the employer’s unincorporated,
unfunded, inactive alter ego, and where the employer in fact controlled the
administration of the plan. Rosen, 979 F.2d at 193-94 (“[W]e hold that if a
company is administrating the plan, then it can be held liable for ERISA violations,
regardless of the provisions of the plan document.”).
The court agrees with the Magistrate Judge’s decision to refrain from ruling
at this time on Defendant’s status as de facto plan administrator. Any such ruling
would be premature. On this record, it is not possible to determine whether the
employer, the plan sponsor,16 Defendant, or some entity other than the plan
sponsor has undertaken or been delegated the duties of a claims administrator for
purposes of ERISA’s document dissemination provisions. Although Rosen may
well be distinguishable, it is impossible to distinguish a case at this stage of
litigation when the critical and potentially distinctive facts are unknown.
Therefore, as to Count III, the Recommendation is due to be adopted, and the
summary judgment motion is due to be denied.
Accordingly, it is ORDERED:
Defendant’s objections (Doc. # 32) to the Recommendation of the
Magistrate Judge are OVERRULED.
Plaintiff’s objections (Doc. # 33) to the Recommendation of the
Magistrate Judge are SUSTAINED to the extent consistent with this Memorandum
Apparently, at the time of filing their objections to the R&R, the parties themselves
were not clear on the identity of the plan administrator or plan sponsor. The plan documents do
not name the plan administrator or plan sponsor. Defendant implied that Plaintiff’s employer
was the plan administrator pursuant to 29 U.S.C. § 1002(16)(B), which provides that the
employer is the plan sponsor and administrator “of an employee benefit plan established or
maintained by a single employer.” (Doc. # 32 at 19.) Plaintiff, however, asserts that recent and
outstanding discovery support the conclusion that her plan is maintained and established not by
her employer, but by a trust of currently unknown membership and function. (Doc. # 37 at 4647.)
The Recommendation of the Magistrate Judge (Doc. # 31) is
ADOPTED as to its conclusion that Defendant’s motion for summary judgment
should be denied, but is REJECTED as to its assessment that Plaintiff did not
exhaust her administrative remedies on her long term disability claims.
Defendant’s motion for summary judgment (Doc. # 8) is DENIED.
Defendant’s motion to dismiss (Doc. # 8) is DENIED as moot.
This case is REFERRED back to the Magistrate Judge for further
proceedings consistent with this opinion.
DONE this 7th day of March, 2017.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE
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