Jones v. ReliaStar Life Insurance Company et al

Filing 28

ORDER denying 23 Motion For a Less Deferential Standard of Review and for Leave to Conduct Discovery; further ordering that this matter is dimissed with prejudice***Civil Case Terminated. Signed by Honorable Jimm Larry Hendren on March 12, 2009. (cap)

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IN THE UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF ARKANSAS T E X A R K A N A DIVISION T H O M A S E. JONES, JR. v. C i v i l No. 07-4090 PLAINTIFF R E L I A S T A R LIFE INSURANCE COMPANY a n d ING EMPLOYEE BENEFITS ORDER Now on this 12th day of March, 2009, DEFENDANTS comes on for c o n s i d e r a t i o n this judicial appeal of an administrative benefits decision under the Employee Retirement Income Security Act ( " E R I S A " ) , as well as plaintiff's Motion For A Less Deferential S t a n d a r d Of Review And For Leave To Conduct Discovery (document #23). The matter is fully briefed, and ripe for decision. 1. O n appeal of a benefits decision under ERISA, the facts A review of the relevant to a r e those contained in the Administrative Record. Record in this case reveals the following facts p l a i n t i f f ' s claim: * F o r many years before May 9, 2001, plaintiff Thomas E. J o n e s , Jr. ("Jones") worked as a Trust Officer at Hibernia Corp. ("Hibernia"). benefits insured under and As of that date he began to receive disability Hibernia's ERISA by plan (the Life "Plan"), which was administered ReliaStar Insurance Company ("ReliaStar"). The ReliaStar disability benefits were predicated primarily on diabetes mellitus and conditions related thereto, p a r t i c u l a r l y peripheral neuropathy and gastroparesis 1. * U n d e r the ReliaStar Group Policy (the "Policy"), monies d e n o m i n a t e d "Other Income" are deducted -- or "offset" -- from a p a r t i c i p a n t ' s disability benefits. Other Income includes income t h e participant is eligible to receive because of "the same or r e l a t e d disability" from government disability programs. This o f f s e t provision does not apply, however, to "disability benefits y o u receive from a past employer, if these benefits have been paid c o n ti n uously to you for more than 2 years before you become e l i g i b l e to receive benefits under the Group Policy." * S i n c e 1971 Jones had received a small monthly disability b e n e f i t from the Veterans Administration ("VA") based on a shell f r a g m e n t wound to the left shoulder with resulting 20% disability. ReliaStar did not offset Jones' VA payment for his left shoulder disab i l ity, which started more than 2 years before he became d i s a b l e d under the Policy. * O n December 27, 2001, the Department of Veterans Affairs n o t i f i e d Jones that it had awarded him benefits for disability related to diabetic nephropathy with hypertension; diabetic g a s t r o p a r e s i s ; diabetes mellitus, Type II; diabetic polyneuropathy, right lower extremity; and diabetic erectile dysfunction, all r e l a t e d to "herbicide" and made retroactive to November 18, 1999. 1 According to Stedman's Medical Dictionary, 28th Ed., gastroparesis is "[w]eakness of gastric peristalsis, which results in delayed emptying of the bowels." -2- * R e l i a S t a r did not learn of this award of VA benefits On April 19, 2005, ReliaStar notified Jones that his u n t i l 2005. V A disability benefit related to diabetes was Other Income under the Policy, and that it would start offsetting the amount i m m e d i a t e l y , although it would not request refund of overpayment f o r the years between 1999 and 2005. * related benefit, J o n e s appealed the decision to offset the VA diabetesdisability but rather benefit, a contending of that the it was not a new continuation shoulder disability b e n e f i t and had, therefore, been paid for more than two years b e f o r e his ReliaStar disability benefits commenced. Jones based h i s position in large part upon the fact that both disability c l a i m s were processed under the same VA file number. 2. T h e standard for judicial review of ReliaStar's decision Denial of ERISA benefits is i s dictated by the terms of the Plan. " r e v i e w e d on a de novo standard unless the benefit plan gives the a d m i n i s t r a t o r or fiduciary discretionary authority to determine e l i g i b i l i t y for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). the administrator has discretionary authority, its If eligibility d e c i s i o n s are reviewed for abuse of that discretion. Groves v. M e t r o p o l i t a n Life Insurance Co., 438 F.3d 872 (8th Cir. 2006). T h e Plan in this case gives defendant ReliaStar discretion to d e t e r m i n e eligibility for benefits. Jones contends, however, that -3- less than full deference should be afforded to ReliaStar's benefits d e c i s i o n because it acted under a conflict of interest and there w a s a serious procedural irregularity which caused a serious breach o f the plan administrator's fiduciary duty to him. D e l u x e Corp., 144 F.3d 1157, 1160 (8th Cir. 1998). R e l i a S t a r concedes that it acted under a conflict of interest, a s it must in light of Metropolitan Life Ins. Co. v. Glenn, --U . S . ---, 128 S.Ct. 2343, 2348 (2008), since it is both the insurer a n d the administrator of the Plan. serious procedural irregularity or It denies, however, that any breach of fiduciary duty See Woo v. occurred. T h e procedural irregularity urged by Jones is the failure of R e l i a S t a r to obtain an independent medical exam ("IME") before d e t e r m i n i n g that the conditions for which it found him disabled w e r e related to the conditions for which the VA found him disabled i n 2001, and not related to those for which the VA found him d i s a b l e d in 1971. The Court finds no basis to consider this it is a procedural that his irregularity. Jones' medical records make clear R e l i a S t a r disabling conditions were almost entirely related to diabetes. horrible Dr. J. Sidney Smith listed "diabetes mellitus with autonomic peripheral neuropathy" as Jones' principal d i a g n o s i s , with subdiagnoses under that category of gastroparesis, o r t h o s t a t i c hypotension, peripheral neuropathy, and impotence. -4- Upon the retirement of Dr. Smith, Dr. John W. Graham noted, in taking over Jones' care, that Jones had "a long, complicated h i s t o r y involving insulin-dependent diabetes mellitus with multiple c o m p l i c a t i o n s including diabetic gastroparesis, peripheral vascular disease and autonomic neuropathy with orthostatic hypotension, Neither Jones p e r i p h e r a l neuropathy and chronic renal failure." n o r any of his doctors ever suggested that these conditions were r e l a t e d to his shoulder injury. Under these circumstances, there is no basis to fault R e l i a S t a r for not obtaining an IME, and no reason to allow Jones to c o n d u c t discovery. Jones' Motion For A Less Deferential Standard O f Review And For Leave To Conduct Discovery will, therefore, be denied. 3. In the absence of any procedural irregularity, the c o n f l i c t under which ReliaStar admittedly labors does not affect t h e standard of review, and the Court will review the benefits decisions for abuse of discretion. The abuse of discretion s t a n d a r d has been described as follows: I n applying an abuse of discretion standard, we must a f f i r m if a reasonable person could have reached a s i m i l a r decision, given the evidence before him, not that a reasonable person would have reached that decision. A reasonable decision is fact based and supported by s u b s t a n t i a l evidence. We may consider both the quantity a n d quality of evidence before a plan administrator. And we should be hesitant to interfere with the a d m i n i s t r a t i o n of an ERISA plan. G r o v e s v. Metropolitan Life Ins. Co., 438 F.3d 872, 875 (8th Cir. -5- 2006)(internal citations and quotation marks omitted). " S u b s t a n t i a l evidence" is "more than a scintilla but less than a preponderance." Leonard v. Southwestern Bell Corp. Disability I n c o m e Plan, 341 F.3d 696, 701 (8th Cir. 2003). 4. T h e legal issue here presented is whether ReliaStar's d e c i s i o n to offset the VA benefits for diabetes-related disability i s supported by substantial evidence. When the Court analyzes the A d m i n i s t r a t i v e Record in light of the abuse of discretion standard, i t finds that a reasonable person could have reached the decision r e a c h e d by ReliaStar in this case. The ultimate issue separates itself analytically into two subissues: (a) A r e Jones' VA diabetes benefits "disability benefits" t h a t had been "paid continuously" by his past employer for more t h a n two years before ReliaStar found him eligible to receive disability benefits related to diabetes? The answer to this q u e s t i o n is "no." T h e only links Jones can point to between the shoulder-related d i s a b i l i t y and the VA diabetes-related disability are that they are b o t h service-related and they were processed by the VA under the s a m e file number. That is not enough. The benefits for diabetes a n d diabetic-related conditions were different disability benefits f r o m the shoulder benefit, and only began to be paid as of November 1 8 , 1999. By way of illustration, a different situation would have -6- been presented had Jones' shoulder condition worsened and his d i s a b i l i t y benefits related to that injury been increased in 1999. That is not what happened in this case. (b) Are Jones' VA diabetes benefits and his ReliaStar b e n e f i t s received because of "the same or related disability"? The a n s w e r to this question is "yes." T h e r e is a clear medical link between the VA's disability b a s e d on diabetic conditions and ReliaStar's disability based on d i a b e t i c conditions. Both involved the same constellation of conditions related to diabetes, including diabetic nephropathy; d i a b e t i c gastroparesis; and diabetic neuropathy. J o n e s stakes out a position that his ReliaStar disability is b a s e d entirely on gastroparesis, which is not the sole or even the m a i n basis of his VA disability. Even if that were true, it would The offset provision covers and the various diabetic n o t alter the outcome of the case. "the same or related disability," c o n d i t i o n s are all clearly related. medical opinion that Jones' Dr. Smith, who gave as his for disability is his "reason g a s t r o p a r e s i s solely," stated in the same letter that "Mr. Jones does indeed have complications of his diabetes, including g a s t r o p a r e s i s . . . ." In a letter to defendant ING Employee B e n e f i t s (an arm of ReliaStar), Dr. Smith described Jones' diabetic gastroparesis as a "digestive disorder which is an autonomic n e u r o p a t h y of his diabetes mellitus." 5. B e c a u s e Jones' VA diabetes-related disability benefits -7- are for "the same or related disability" as his ReliaStar d i s a b i l i t y benefits, and because the VA diabetes-related benefit h a d not been "paid continuously" to Jones for more than two years b e f o r e he became eligible for the ReliaStar benefit, ReliaStar's d e c i s i o n to offset the VA diabetes-related benefit was not in e r r o r , and the Court concludes that Jones' appeal in this matter s h o u l d be dismissed. I T IS THEREFORE ORDERED that plaintiff's Motion For A Less D e f e r e n t i a l Standard Of Review And For Leave To Conduct Discovery ( d o c u m e n t #23) is denied. I T IS FURTHER ORDERED that this matter is dismissed with prejudice. I T IS SO ORDERED. /s/ Jimm Larry Hendren JIMM LARRY HENDREN U N I T E D STATES DISTRICT JUDGE -8-

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