Buquoi v. United States Life Insurance Company in the City of New York
Filing
23
ORDER granting in part 10 Plaintiff's Motion for Summary Judgment and finding all other issues moot; remanding this case to Defendant with instructions to reopen the administrative record, obtain and review the SSD records, and make a new determination of the claim, under discretion permitted by the plan; and closing this case. Signed by Judge Billy Roy Wilson on 10/18/2018. (ljb)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
MICHAEL BUQUOI
VS.
PLAINTIFF
4:18-cv-00093 BRW
UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK
DEFENDANT
ORDER
Pending are Plaintiff’s1 and Defendant’s2 Motions for Summary Judgement. Both,
Plaintiff3 and Defendant4 have filed responses to the motions. For the reasons set out below, the
Plaintiff’s Motion is GRANTED in part, rendering all other points moot.
I.
BACKGROUND
Plaintiff was employed by AIG as a property claims adjuster and his job duties involved
field work, traveling, and desk work. Plaintiff stopped working on July 20, 2016 and sought
long-term disability benefits through AIG’s policy insured by Defendant. On December 12,
2016, Defendant started its review to determine Plaintiff’s eligibility for long-term benefits, and
on May 23, 2017, Defendant denied Plaintiff’s benefits.
Plaintiff appealed Defendant’s denial of long-term benefits. On December 12, 2017,
Defendant acknowledged receipt of the appeal and added that if Plaintiff wanted his Social
Security Disability (“SSD”) to be considered during the appeal review, he needed to provide the
documents as soon as possible.
On January 2, 2018, Defendant informed Plaintiff it was considering the appeal and
stated it needed a 45-day extension complete the review. Plaintiff signed the authorization letter
1
Doc. No. 10.
Doc. No. 13.
3
Doc. No. 18.
4
Doc. No. 22.
2
1
on January 8, 2018 and sent it to the Social Security Administration on January 11, 2018.
Plaintiff received Defendant’s denial on January 16, 2018.5
II.
STANDARD OF REVIEW
A denial of an ERISA benefits under a plan is reviewed de novo, “unless the benefit plan
gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or
to construe the terms of the plan.”6 When an ERISA plan grants discretion, courts review a plan
administrator’s decision under an abuse of discretion standard,7 and the decision will be reversed
“only if it is arbitrary and capricious.”8 Ordinarily, when the insurance company “both
determines whether an employee is eligible for benefit and pays benefits out of its own pocket,”
there is a conflict of interest, which should be considered when determining whether there was
an abuse of discretion.9 The limiting circumstances of this case provide that the court may apply
a less deferential standard of review if plaintiff presents evidence demonstrating palpable conflict
of interest or serious procedural irregularity that caused breach of plan administrator’s fiduciary
duty to plaintiff.10 The proper standard of review in this case is de novo.
III.
DISCUSSION
Plaintiff argues: (1) he is entitled to disability benefits because he meets the policy
definition and he submitted the required proof of loss; (2) Defendant’s denial of benefits was
arbitrary and capricious; and (3) the claim should be remanded and Defendant directed to
consider his Social Security records as indicated it initially would.11
Defendant’s denial letter was dated January 9, 2018. Doc. No. 10.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
7
Jessup v. Alcoa, 481 F.3d 1004, 1006 (8th Cir. 2007).
8
Herbert v. SBC Pension Benefit Plan, 354 F.3d 796, 799 (8th Cir. 2004).
9
Metropolitan Life Ins. Co. v. Glenn, 554, U.S. 105, 108 (2008).
10
Shelton v. ContiGroup Cos., 285 F. 3d 640, 642 (8th Cir. 2002) (see also Harden v. American Express Financial
Corp., 384 F.3d 498, 500 (8th Cir. 2004).
11
I’ve addressed only Plaintiff’s third issue because the other arguments, as well as Defendant’s Motion for
Summary Judgment, are moot based on my ruling.
5
6
2
Plaintiff claims that Defendant should have reviewed his SSD award and considered it in
evaluating his claim for long-term benefits. Defendant’s original denial letters provided, “All the
papers contained in your file were viewed as a whole,” and “[w]e reviewed all of the medical
information in your file.”12 During the appeal process, Defendant was aware that Plaintiff had
been granted SSD benefits and requested that Plaintiff provide the SSD records he wanted
Defendant to review.
Plaintiff received Defendant’s request for the SSD records on December 19, 2017, and on
January 8, 2018, he signed the appropriate documents permitting Defendant to review the SSD
records. However, the next day Defendant denied Plaintiff’s appeal – just seven days after it
requested an extension to evaluate the appeal, and, more importantly, before it received the
requested SSD records.
I believe this case is analogous to the issue in Harden v. American Express Financial
Corporation. 13 In Harden, the plaintiff had applied for, and received, Social Security benefits at
the administrator’s request. The administrator, however, never obtained or reviewed the available
Social Security documents in determining whether the plaintiff’s eligibility under its plan. The
court found that, because the administrator made statements that it had reviewed “‘[a]ll available
documentation,’” the plaintiff was justified in believing that the administrator had obtained the
Social Security medical documents.14 Because the administrator did not consider the Social
Security award, and had nevertheless denied the plaintiff’s claim, the “administrative record did
not contain the Social Security records that were the basis of the Social Security Administrator’s
12
Doc. No. 10.
384 F.3d 498 (8th Cir. 2004).
14
Id. at 499.
13
3
grant of benefits to him.”15 All of this after Defendant led Plaintiff to believe the SSD would be
considered.
Likewise, in this case, Plaintiff had to present proof to Defendant that he has applied for
Social Security disability benefits. Defendant required Plaintiff to execute a medical
authorization that would allow it to obtain his Social Security Disability records, which he did.
Defendant was aware of Plaintiff’s favorable SSD award and indicated it would consider it in
evaluating his claim. Likewise, the administrator failed to obtain records concerning the SSD
benefits, while leading Plaintiff to believe that it was considering “all available documentation”
creates procedural irregularities by the administrator.
CONCLUSION
Accordingly, this case is remanded to Defendant with instructions to reopen the
administrative record, obtain and review the SSD records, and make a new determination of the
claim, under discretion permitted by the plan. Based on this finding, all other issues are moot.
This case is closed.
IT IS SO ORDERED this 18th day of October 2018.
/s/ Billy Roy Wilson______________
UNITED STATES DISTRICT JUDGE
15
Id.
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