Lemley v. Metropolitan Life Insurance Company et al
ORDER denying pltf's 12 Motion for Summary Judgment; the decision to deny pltf's claim for long-term disability benefits is upheld, and this case is DISMISSED WITH PREJUDICE; judgment will be entered accordingly. Signed by Judge Susan Webber Wright on 5/31/11. (vjt)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
METROPOLITAN LIFE INSURANCE
COMPANY and AMERICAN
NATIONAL RED CROSS LONGTERM DISABILITY PLAN
NO: 4:10CV01153 SWW
Plaintiff Cynthia Lemley (“Lemley”) brings this action under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., against Metropolitan Life
Insurance Company (“MetLife”) and the American Red Cross Long Term Disability Plan (“LTD
Plan”), a welfare benefit plan governed by ERISA. Lemley seeks reversal of MetLife’s decision
denying her claim for LTD benefits. Now before the Court is Lemley’s motion for summary
judgment (docket entries #12, #13, #14) and Defendants’ response in opposition (docket entries
#17, #18). After careful consideration, and for reasons that follow, MetLife’s decision to deny
Lemley’s claim for LTD benefits will be affirmed, and the motion for summary judgment will be
Lemley began working for the American Red Cross (“Red Cross”) in April 2004.
Lemley’s initial term of employment with the Red Cross ended in 2005 due to budgetary issues,
but the organization rehired her on March 18, 2008. According to Lemley, Red Cross
management rehired her with full knowledge that she was under a doctor’s care for multiple
sclerosis (“MS”) and fatigue.
February 16, 2009 marked Lemley’s last day of work at the Red Cross. By letter dated
February 17, 2009, Dr. Lee Archer stated that Lemley was under his care for MS and was
disabled for severe fatigue. Dr. Archer’s letter concludes: “She has been put on bed rest starting
today, February 17, 2009 through March 13, 2009[,] and at that time will be evaluated and
examined for further recommendations.” (AR, MET-L-0344.) Subsequently, Dr. Archer
determined the Lemley would need to remain off work until June 1, 2009.
On February 25, 2009, Lemley submitted a claim for short-term disability (“STD”)
benefits. (AR-MET-L-0863, 0376.) MetLife, which served as the claims administrator for the
Red Cross STD benefit plan, initially granted Lemley’s claim. Subsequently, MetLife
terminated Lemley’s STD benefits based on a lack of medical documentation showing that she
was unable to perform her job. Lemley appealed, and MetLife eventually reinstated her STD
benefits for the maximum time period available under the STD benefit plan. (AR-MET-L0837.)
In correspondence dated June 20, 2009, Lemley’s attorney indicated that she intended to
pursue a claim for LTD benefits. (AR-MET-L-1182-1183.) MetLife, the claims administrator
for the LTD Plan, provided Lemley claim forms and requested additional medical information.
By letter to Lemley’s attorney dated October 9, 2009, a MetLife Senior LTD claims specialist
notified Lemley that her claim was denied because her disabling condition was considered a preexisting condition under the LTD Plan. (AR-MET-L-0821–0822.)
Lemley appealed, arguing that she was exempt from the pre-existing condition provision
based on her past participation in Red Cross disability plans and because Red Cross management
waived the pre-existing condition provision at the time of her rehire. In support of her appeal,
Lemley submitted an affidavit in which she testified that Candace Casey (“Casey”), the person in
charge of the Red Cross Little Rock office, told her that immediately upon her re-employment,
she would be eligible to participate in the organization’s LTD Plan. (AR-MET-L-0141-0412.)
By letter dated April 23, 2010, MetLife notified Lemley that the original determination
denying her claim was upheld because her disability resulted from a pre-existing condition.
Regarding pre-existing conditions, the LTD Plan provides:
We will not pay benefits for a Disability that results from a Pre-existing Condition,
if You have been Actively at Work for less than 12 consecutive months after the date
Your Disability insurance takes effect under this certificate.
(AR, MET-L-0045). The Plan further provides that “a Pre-existing Condition means a Sickness
or accidental injury for which You:
received medical treatment, consultation, care, or services;
took prescription medication or had medications prescribed; or
had symptoms or conditions that would cause a reasonably prudent person to seek
diagnosis, care or treatment;
in the 3 months before Your Insurance under this certificate takes effect.” (AR, MET-L-0045).
According to the foregoing provisions, claims for disability benefits under the LTD Plan
will be denied if (1) the claimant receives medical treatment, consultation, care or services for a
sickness within three months before her insurance takes effect and (2) the claimant has worked
less than 12 consecutive months before submitting a claim for LTD benefits. Here, it is
undisputed that Lemley’s insurance took effect on April 1, 20081 and that she received medical
treatment for MS in February and March 2008, within the three-month period before her
insurance took effect.2 It is also undisputed that Lemley ceased working on February 16, 2009,
less than 12 months after her insurance took effect.
II. Standard of Review
ERISA provides that an employee may bring a civil action to recover benefits due to her
under the terms of an employee welfare benefit plan. See 29 U.S.C. § 1132(a)(1)(B). Although
Congress has not specified the scope of judicial review for claims brought under § 1132, in
Firestone Tire and Rubber Co. v. Bruch, 109 S. Ct. 948 (1989), the Supreme Court held that a
denial of benefits challenged under ERISA is subject to de novo review unless the terms of the
benefit plan give the plan administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan. See Firestone Tire and Rubber Co.
v. Bruch, 109 S. Ct. 948, 956 (1989). When a plan confers such discretionary authority, the
administrator or fiduciary’s decision is given deference and reviewed under an abuse of
The Plan provides: “If you enter an eligible class after January 1, 2008, You will be
eligible for insurance on the first day of the month following the date You enter that class.” (ARMET-L-0030). The Red Cross rehired Lemley on March 18, 2008, and as stated in the October
9, 2008 letter denying her claim for LTD benefits, her effective date of coverage was April 1,
The letter denying Lemley’s claim sets forth information contained in her medical
records, which document that she received an injection of Tysabri on February 25, 2008 at the
University of Arkansas Medical Chemotherapy Infusion Center. (AR, MET-L-0894). Other
records reflect that on March 4, 2008, Lemley visited Dr. Archer for follow-up related to MS
(AR-MET-L-0884), and on March 14, 20008, she saw Dr. Archer “for follow-up of her problems
with multiple sclerosis and recently an intractable migraine headache.” (AR-MET-L-0890,
discretion standard, unless factors exist that mandate application of a less deferential standard.
See Woo v. Deluxe Corp., 144 F.3d 1157, 1060-61 (8th Cir. 1998).
In this case, the LTD Plan gives the claims administrator, MetLife, “discretionary
authority to interpret the terms of the Plan and to determine eligibility for and entitlement to Plan
benefits in accordance with the terms of the Plan.” (AR-MET-L-0062.)
Lemley asserts that
pursuant to Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343, (2008),
MetLife’s dual role as the administrator and payer of benefits should be taken into consideration.
The Court agrees that MetLife’s dual role is one factor to be considered in determining whether
there is an abuse of discretion. See Glenn, 554 U.S. at 115, 128 S. Ct. at 2350 (quoting
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948 (1989) (additional
quotation and citation omitted)).
In evaluating MetLife’s denial of benefits under the abuse-of-discretion standard, the
Court must determine whether the decision was reasonable--that is, supported by substantial
evidence. “Substantial evidence is more than a mere scintilla. It means such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.” Fletcher-Merrit v.
NorAm Energy Corp., 250 F.3d 1174, 1179 (8th Cir.2001)(internal quotations omitted).
Lemley asserts four grounds for reversal. First, she urges the Court to reverse MetLife’s
decision under a theory of promissory estoppel. The affidavit that Lemley presented in support
of her administrative appeal states that Red Cross managers knew about her medical problems,
and they informed her that she would be immediately eligible for participation in the STD and
LTD disability plans upon her re-employment. Lemley testifies: “I was led to believe that
based on my prior service with the organization that I would immediately be eligible for the
long-term disability benefits without being subjected to another pre-existing condition waiting
Under Eighth Circuit precedent, “equitable estoppel may not be used to vary or contradict
the language of an ERISA plan or to enlarge the benefits available under the plan.” Regency
Hosp. Co. of Northwest Ark., LLC v. Arkansas Blue Cross Blue Shield, No. 4:08CV04177
GTE, 2009 WL 5174246, *6 (E.D. Ark., Dec. 21, 2009)(citing Algren v. Pirelli Armstrong
Tire Corp., 197 F.3d 915 (8th Cir.1999) and Slice v. Sons of Norway, 34 F.3d 630 (8th Cir.
1994)). Lemley cannot recover on the basis of a representation by Red Cross management that
deviates from the LTD Plan terms unless that representation was a plausible interpretation of an
ambiguous plan provision. Here, the LTD Plan unambiguously precludes disability benefits for
a disability arising from a pre-existing condition, and it provides a clear definition for the term
“ pre-existing condition.”
Even assuming that equitable estoppel applies, Lemley fails to state an actionable claim.
She does not claim that Casey or other Red Cross managers acted with apparent authority when
they represented that the pre-existing condition provision would be waived; nor does she allege
any facts indicating that she reasonably relied on management’s representation. See Antolik v.
Saks, Inc., 463 F.3d 796, 802 (8th Cir.2006)(finding no actionable misrepresentation by the
employer and “no reasonable detrimental reliance by ... employees who continued to work
without confirming exactly what severance benefits were available ....”).
Second, Lemley argues that she was exempt from the pre-existing condition provision
based on her prior participation in a disability plan. The LTD Plan reads in pertinent part as
SPECIAL RULES FOR GROUPS PREVIOUSLY INSURED UNDER A PLAN OF
DISABILITY INCOME INSURANCE
To prevent a loss of insurance because of a change in insurance carriers, the
following rules will apply if this Disability Income Insurance replaces a plan of
group disability income insurance provided to You by the Policyholder:
Prior Plan means the plan of group disability income insurance provided to You by the
Policyholder through another carrier on the date before the Replacement Date.
Replacement Date means the effective date of the Disability Income Insurance under the
Rules for Pre-existing Conditions
In determining whether a Disability is due to a Pre-Existing Condition, We will
credit You for any time You were insured under the Prior Plan. If Your Disability
is due to a Pre-existing condition as described in this certificate, but would not have
been due to a pre-existing condition under the Prior Plan, We will pay a benefit equal
to the lesser of . . . .
(AR-MET-L-0033 (italics added).)
The foregoing “special rule” for pre-existing conditions provides continuity of coverage
for existing plan participants when an employer changes insurance carriers. The record is void
of evidence that Lemley was a plan participant the day before she was rehired or that the Red
Cross changed insurance carriers. The provision simply does not apply to the present
Third, Lemley argues it was arbitrary and capricious for MetLife to grant her claim for STD
benefits and then deny her claim for LTD benefits. The Court finds no authority for the proposition
that a decision to grant benefits under a STD benefits plan requires payment of LTD benefits
available under a separate plan with separate eligibility requirements.
Fourth, Lemley claims that MetLife’s application of the pre-existing conditions provision
amounts to a breach of fiduciary duty because MetLife failed to consider Red Cross
management’s promise that she would be immediately eligible for LTD benefits upon her reemployment. Lemley does not allege that MetLife misled her to believe that the pre-existing
conditions provision did not apply to her, nor does she allege any conduct on MetLife’s part that
constitutes a breach of a fiduciary duty.
In sum, the Court finds that MetLife’s decision to deny Lemley’s claim for LTD benefits is
supported by substantial evidence. Furthermore, the Court finds no evidence that MetLife’s dual
role as an evaluator and payer of benefits influenced its decision to deny benefits.
For the reasons stated, Plaintiff’s motion for summary judgment (docket entry #12) is
DENIED. Consistent with the judgment entered together with this order, the decision to deny
Plaintiff’s claim for long-term disability benefits is upheld, and this case is DISMISSED WITH
IT IS SO ORDERED THIS 31ST DAY OF MAY, 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
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