Lamb v. Hartford Life and Accident Insurance Company
Filing
37
ORDER granting 28 Motion for Judgment as a Matter of Law; denying 25 Motion for Summary Judgment. Plaintiff is liable for repaying Defendant $7,183.50, and judgment in that amount should be entered in favor of Defendant.Ordered by Judge Hugh Lawson on March 22, 2012. (mbh)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION
RUBEN LAMB,
Plaintiff,
v.
Civil Action No. 5:10-CV-253
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY,
Defendant.
ORDER
This case arises from Defendant Hartford Life and Accident Insurance
Company’s (“Hartford”) denial of Plaintiff Ruben Lamb’s (“Plaintiff”) long-term
disability (“LTD”) benefits. Plaintiff claims that Hartford wrongfully determined that
he did not qualify for LTD benefits in violation of the Employee Retirement
Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”). In response,
Hartford contends that the termination of coverage was appropriate, but even if it
was de novo wrong, the decision was reasonable under the arbitrary and
capricious standard.
Before the Court are Defendant’s Motion for Judgment on the
Administrative Record (Doc. 28) and Plaintiff’s Motion for Summary Judgment
(Doc. 25). For the reasons stated below, Defendant’s Motion is granted and
Plaintiff’s Motion is denied. The Court makes the following Findings of Fact and
Conclusions of Law.
I. FINDINGS OF FACT 1
a. The Policy
The starting point for any judicial review is the policy itself. Effective
January 1, 2006, Hartford issued Group Policy No. GLT-675456 (“Policy”) to
Plaintiff’s employer, Wal-Mart Stores, Inc. (“Wal-Mart”). This Policy was intended
to fund LTD benefits for Wal-Mart employees, and it was sponsored and
maintained by Wal-Mart within the meaning of Section 3(1) of ERISA. See 29
U.S.C. § 1002(1).
The definitions within a policy are of the utmost importance in any ERISA
case, and the present case is no exception. The Policy at issue defines disability
for the first twelve months as the inability to perform the claimant’s “own
occupation.” After the first twelve months of benefits, disability is defined as the
inability to perform “any occupation.” (Administrative Record (“AR”) 000282.2)
“Any occupation” is defined as “any occupation for which You are qualified by
1
When a decision is based on the agreed-upon administrative record,
judicial economy favors using findings of fact and conclusions of law under
Federal Rule of Civil Procedure 52, as opposed to using summary judgment
under Federal Rule of Civil Procedure 56. Adams v. Hartford Life and Acc. Ins.
Co., 694 F. Supp. 2d 1342, 1345 n. 1 (M.D. Ga. 2010) (citing Davis v. Liberty Life
Assurance Co. of Boston, 542 F.3d 1352, 1363 n. 5 (11th Cir. 2008)).
The administrative record serves as the basis for the Findings of Fact and
Conclusions of Law. See Glazer v. Reliance Standard Life Ins. Co., 524 F.3d
1241, 1246 (11th Cir. 2008) (determining that “[w]hen conducting a review of an
ERISA benefits denial under an arbitrary and capricious standard …, the function
of the court is to determine whether there was a reasonable basis for the
decision, based upon the facts as known to the administrator at the time the
decision was made.”).
2
All references to the Administrative Record will be noted without the
preceding zeros. Thus, AR 000282 will be noted simply as AR 282.
2
education, training or experience that has an earnings potential greater than the
lesser of: 1) 50% of Your Pre-disability Earnings; or 2) the Maximum Monthly
Benefit.” (AR 279.) The Policy also contains the following provisions regarding
termination of coverage:
Termination: When will my coverage stop?
Your coverage will end on the earliest of the following:
[T]he date Your Employer terminates Your employment. Your
employment terminates on the date You cease to be a Full-time
Active Associate in an eligible class for any reason, unless
coverage is extended under the Continuation Provisions.3
Coverage while Disabled: Does my insurance continue while I
am Disabled and no longer an Active Associate?
If You are Disabled and You cease to be an Active Associate,
Your Insurance will be continued: during the Elimination Period 4
while You remain Disabled by the same Disability; and after the
Elimination Period for as long as You are entitled to benefits under
the Policy.
(AR 285.)
The Policy expressly provides Hartford with “full discretion and authority to
determine eligibility for benefits and to construe and interpret all terms and
provisions of The Policy.” (AR 293.)
b. Plaintiff’s Employment
3
The “Continuation Provisions” apply only to leaves of absence, layoffs, or
leaves under the Family and Medical Leave Act. (AR 285.)
4
The Elimination Period is defined as “the number of consecutive days at
the beginning of any one period of Total Disability which must elapse before
benefits are payable.” (AR 279.)
3
Plaintiff worked as a truck driver with Wal-Mart for twelve years. The job
description of a truck driver included the following responsibilities:
Properly operate an over the road tractor/trailer unit safely and
efficiently while complying with all Company, local, state, and
federal laws/guidelines. Sitting for extended periods of time, firm
grasping of steering wheel while shifting gears. Repetitive foot
motion to operate brake, clutch, and fuel pedals. Climbing
sufficient to gain entry/exit from tractor cab, deck plate, or trailer
as required. Upper and lower body mobility and strength to climb
into a cabover tractor. Walking to/from equipment locations, such
as distribution center, stores, clubs, vendors. Occasionally
moving/feathering freight inside trailer.
(AR 22.) Plaintiff worked until March 20, 2008, when he ceased driving for WalMart and applied for disability benefits. (AR 252-53.)
c. Plaintiff’s Claim for Long-Term Disability Benefits
On June 16, 2008, Wal-Mart advised Hartford that Plaintiff was claiming a
disability due to a staph infection in his right elbow. (AR 272.) On his application
for disability benefits, Plaintiff cited symptoms of “joints aching” and complained
that he was unable to walk or ride for long periods of time. (AR 252-55.) Included
in his application was an attending physician statement (“APS”) completed by
Jonathan Velasquez, M.D., Plaintiff’s internist and primary care physician. (AR
257-58.) In the APS, Dr. Velasquez confirmed that Plaintiff’s primary diagnosis
was septic olecranon bursitis in the right elbow and his secondary diagnosis was
degenerative disc disease of the lumbar spine. (AR 31-32, 257.) Dr. Velasquez
reported that Plaintiff had undergone an open excision of a septic olecranon
bursa on his right elbow on June 5, 2008. (AR 257.) Dr. Velasquez noted that
4
Plaintiff had been referred to William B. Wiley, M.D., an orthopedist, and had also
been referred to a corneal surgeon because of impaired vision in his left eye. (AR
258.)
Dr. Wiley completed a physical examination of Plaintiff on June 23, 2008,
eighteen days after the excision by Dr. Velasquez. (AR 130.) Dr. Wiley noted that
Plaintiff’s “pain and swelling is decreasing. He is feeling better.” Id. Plaintiff was
told to work on his range of motion and to come back to see Dr. Wiley in three
weeks. Id. Three weeks later, on July 14, 2008, Plaintiff returned to Dr. Wiley,
who noted that Plaintiff’s chief complaint was “resolving right elbow pain.” (AR
131.) Plaintiff was ordered to take antibiotics and return in three weeks.
In the meantime, on July 15, 2008, Hartford sent a letter to Plaintiff
informing him that he was approved for LTD benefits under the Policy. (AR 24446.) Hartford notified Plaintiff that he was considered disabled from his “own
occupation,” which qualified Plaintiff for twelve-months of coverage. Hartford
informed Plaintiff that to be eligible for LTD benefits beyond June 20, 2009,
Plaintiff would have to show that he was “totally disabled” within the meaning of
the Policy, which would mean showing that he was precluded from working “any
occupation.” (AR 50.) Absent a showing of “total disability,” Plaintiff’s coverage
period for his disability from his “own occupation” was scheduled to run from
June 20, 2008 until June 19, 2009.5
5
It is worth noting that Plaintiff applied for Social Security disability benefits
in August 2008. (AR 230.) His claim for benefits was denied on November 20,
5
In September 2008, it was determined that Plaintiff had degenerative joint
disease (“DJD”) in his right knee. (AR 133.) In October 2008, Dr. Wiley saw
Plaintiff again, and noted that Plaintiff said he was “doing pretty good … [h]e has
some intermittent pain along the knee and elbow, but doing a lot better.” (AR
137.) Around the same time, Plaintiff told Hartford that while he wanted to return
to work, he was worried about his eye, which had been giving him problems. (AR
25.)
In
August 2008, Plaintiff
visited
Malcolm
ophthalmologist, who diagnosed him with
Moore, Jr.,
M.D.,
an
keratoconus/pellucid marginal
degeneration in his left eye and forme fruste keratoconus in his right eye. (AR
226.) In November 2008, Dr. Moore noted that Plaintiff was unable to wear
contact lenses and was wearing glasses. (AR 225.)
In December 2008, Plaintiff repeated his concerns about his eye to
Hartford, declaring that his knee and back were sore, but were not limiting his
work, and that his eyes were what prevented him from returning to work. (AR 23.)
Dr. Lee completed a Visual Functional Evaluation on April 13, 2009 and found
that Plaintiff’s best corrected vision was 20/20 in both eyes, but that his best
corrected distance vision was still 20/40 in his right eye and 20/80 in his left eye.
(AR 183-84.) Dr. Lee noted that Plaintiff’s ability to drive commercially was
2008. (AR 207.) The Social Security Administration noted that “[a]lthough you
may experience discomfort, the evidence shows you are still able to move about
to use your arms, hands, legs, and back in a satisfactory manner … Your overall
condition does not meet the basic definition of disability as defined by Social
Security.” (AR 207.)
6
restricted because of his visual impairment. Id. This was the only restriction noted
by Dr. Lee at the time.
In a letter to Plaintiff dated December 29, 2008, Hartford informed Plaintiff
that if he was to receive LTD benefits beyond June 20, 2009, he would have to
show that he was disabled from “any occupation,” as it was defined within the
Policy. Several months later, in April 2009, Hartford warned Plaintiff that no new
evidence of disability had been submitted sufficient to show that Plaintiff was
unable to perform “any occupation,” and therefore, on June 20, 2009, Plaintiff
would not meet the definition of “total disability” under the Policy and would not
qualify for additional coverage. (AR 43-46.)
In May 2009, Plaintiff returned to Dr. Wiley, complaining of pain in his left
shoulder that he claimed had been present for approximately two months. (AR
139.) It was determined that he had a rotator cuff tear. (AR 141.) Plaintiff was
unsure the cause of the injury. (AR 139.) Surgery was discussed as a possible
treatment. (AR 141.) Plaintiff visited Dr. Wiley twice more in May, complaining of
pain in his right knee and an aching in his low back, as well as continued
problems with his shoulder. (AR 142, 145.) Dr. Wiley completed an APS on May
22, 2009, which stated that Plaintiff’s physical impairment constrained him to no
more than ten minutes standing, no more than 100 yards walking, no more than
thirty minutes of sitting, no more than ten pounds of weight to be lifted or carried,
no reaching or working overhead, no pushing or pulling more than ten pounds of
weight, and no driving an automatic transmission. (AR 152.) Around this time,
7
Plaintiff told a Hartford claims representative that he “cannot pass a physical and
cannot get a job anywhere doing anything.” (AR 11.) Hartford agreed to review
additional information from Plaintiff regarding his disability status after the
anticipated termination of his coverage on June 20, 2009. (AR 9.)
In early June 2008, Hartford sent to requests to Dr. Wiley for clarification of
Plaintiff’s functionality and medical records. (AR 39.) On June 18, 2009, Dr. Wiley
responded to Hartford’s request, stating that Plaintiff was capable of sedentary
work. (AR 127-28.) On June 19, 2009, Dr. Wiley prepared a report after Plaintiff
came in for an office visit. Dr. Wiley stated that Plaintiff’s chief complaints were
left shoulder pain, right knee pain, and low back pain. (AR 90.) Plaintiff was
diagnosed with low back pain with lumbar DJD and radiculopathy, right knee pain
with DJD, and left shoulder pain with a rotator cuff tear. Id. In a section marked
“Plan”, Dr. Wiley stated that “[a]t this point, I feel like [Plaintiff] is capable of doing
full time sedentary work ….” Id.
In June 2009, after Plaintiff’s functionality was established by Dr. Wiley,
Roger K. McNeeley, Plaintiff’s vocational rehabilitation clinical case manager,
completed an employability analysis for Plaintiff. After his analysis, Mr. McNeeley
issued an employability analysis report (“EAR”).6 The report took into
6
This was the second EAR prepared by Mr. McNeeley for Plaintiff. The
first EAR was completed in April 2009, when nine potential occupational matches
were found for Plaintiff. (AR 155-57.) The April 2009 EAR was broader in scope
than the June 2009 EAR, because it included occupations that required some
light activity. Based on Dr. Wiley’s recommendation, the second EAR was limited
8
consideration Plaintiff’s functional capabilities and physical restrictions, as well as
his education, training, and work history. (AR 107-25.) Based on his analysis, Mr.
McNeeley determined that Plaintiff matched with thirty-five occupations. (AR
108.) These thirty-five matches were reviewed in more detail, and some were
eliminated because they were “not prevalent in the national economy, or did not
meet the required earning potential, or require skills not already demonstrated by
[Plaintiff].” (AR 108.) Plaintiff ultimately was matched with five semi-skilled and
unskilled occupations including: Batch Records Clerk; Routing Clerk; Jacket
Preparer; Dispatcher, Maintenance Services, and Automobile Locator. (AR 10709.) Each of these positions was considered to be a “fair” match to Plaintiff’s skill
set. (AR 114.) A “fair” match indicates that the employee would be required to
complete training in tools and/or materials to be prepared for the job. (AR 114.)
Plaintiff’s coverage terminated on June 20, 2009. Plaintiff’s attorney was
advised in a letter that Plaintiff “does not meet the policy definition of ‘Total
Disability’ that became applicable on 06/20/09. Therefore, no LTD benefits are
payable beyond 06/19/09.” (AR 38-41.) Hartford stated that, based on records
from Dr. Lee, Dr. Wiley, and Mr. McNeeley, Plaintiff “was not prevented from
performing the essential duties of Any Occupation. Because of this, he does not
meet the policy definition of Disability as of 06/20/09 and LTD benefits will
terminate on that date.” (AR 40.)
to sedentary jobs. In June 2009, there were five occupational matches found by
Mr. McNeeley for Plaintiff. These are described in more detail above.
9
On July 14, 2009, Dr. Wiley completed another report after an office visit
with Plaintiff and again noted pain in the low back, right knee, and left shoulder.
(AR 91.) On August 24, 2009, another one of Dr. Wiley’s reports noted that
Plaintiff complained of left groin pain and low back pain and said that he could
not stand for a prolonged period of time because of “aching, burning pain.” (AR
92.) Dr. Wiley noted that this pain “wakes him up from sleep at night. It has been
going on for 2-3 months and is steadily getting worse.” (AR 92.) Plaintiff was
diagnosed with having low back pain with lumbar DJD and left hip pain. (AR 93.)
By September 9, 2009, Plaintiff was in Dr. Wiley’s office again,
complaining of left hip pain. (AR 94.) He was diagnosed as having left hip pain
with DJD andavascular necrosis with some early collapse. Id. Dr. Wiley noted
that “at this point, he is going to need a hip replacement somewhere down the
line, depending on his pain and what is going on.” Id. A visit on September 22,
2009 confirmed necrosis in the left hip, as well as continued pain in the low back,
right knee, and left shoulder. (AR 95.) In his affidavit, dated October 5, 2009,
Plaintiff testified to his physical condition. (AR 101-05.) At that point, his physical
ailments included failing vision; significant pain on a daily basis in his right elbow,
right knee, left shoulder, left hip, and low back; arterial blockages, elevated
cholesterol, and hypertension; and depression based on his medical conditions.
Id.
d. Plaintiff’s Appeal
10
On July 6, 2009, Plaintiff informed Hartford that he wished to appeal
Hartford’s decision to terminate his LTD benefits. (AR 3.) Hartford’s review
process is independent from the initial coverage determinations. (Doc. 28-1, p.
5.) Members of the Hartford Appeals Unit make independent assessments of
claims based on the evidence in the file; they do not have any contact with the
representative who made the initial decision about coverage. Id. There is no
personal benefit to be gained by Appeals representatives based on the number
of claims that are approved or denied. Id.
To conduct the appeal, Hartford requested updated medical records from
Dr. Wiley. (AR 1-2.) Included in the updated records was a September 22, 2009
letter from Dr. Wiley, written after an appointment with Plaintiff. The letter noted
that Plaintiff had:
low back pain with lumbar DJD and right sacroilitis. He also has
left hip avascular necrosis with some arthritis setting in and
collapse of the femoral head. He has right knee DJD and left
shoulder rotator cuff tear. He also has some eye problems as well
and has some heart problems. He is currently unable to work and
I feel at this stage with regards to his avascular necrosis of his hip,
which has just recently diagnosed, it would be extremely difficult
for him to maintain a full time job and it would be highly unlikely
that he could perform even sedentary duties…. [Plaintiff] needs to
have his hip replaced, but this would only solve some of his
problems. He is also going to need a total knee replacement and
left shoulder arthroscopic rotator cuff repair done as well.
(AR 100.)
Hartford Appeals Specialist, Robyn J. Cote, reviewed the evidence
submitted on appeal, including all updated records from Dr. Wiley. Based on her
11
review of the evidence, Cote determined that the June 20, 2009 termination of
benefits should be upheld because, as of June 20, 2009, Plaintiff no longer met
the definition of total disability under the terms of the Policy.
On November 5, 2009, Hartford sent an official letter to Plaintiff, informing
him that his appeal was found to be without merit. The letter indicated that
Hartford was upholding its original determination that Plaintiff was not disabled
from “any occupation” as of June 20, 2009. (AR 35-36.)
II. CONCLUSIONS OF LAW
a. ERISA Analytical Framework
ERISA permits a person denied benefits under an employee benefit plan to
challenge that denial in federal court. 29 U.S.C. § 1132(a)(1)(B); see also Adams
v. Hartford Life and Acc. Ins. Co., 694 F. Supp. 2d 1342, 1352 (M.D. Ga. 2010).
However, ERISA does not provide a standard for reviewing benefits decisions
made by plan administrators or fiduciaries. Blakenship v. Metropolitan Life Ins.
Co., 644 F.3d 1350, 1354 (11th Cir. 2011). Without clear guidance from ERISA,
the Eleventh Circuit developed a multi-step framework to direct courts in
reviewing a plan administrator’s benefits decision. Id. This framework is based on
guidance from the Supreme Court of the United States and their decisions in
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343 (2008), and
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S. Ct. 948 (1989). The
steps are as follows:
12
(1) Apply the de novo standard to determine whether the claim
administrator’s benefits-denial is “wrong” (i.e., the court disagrees
with the administrator’s decision); if it is not, then end the inquiry
and affirm the decision.
(2) If the administrator’s decision is in fact “de novo wrong,” then
determine whether he was vested with discretion in reviewing
claims; if not, end judicial inquiry and reverse the decision.
(3) If the administrator’s decision is “de novo wrong” and he was
vested with discretion in reviewing claims, then determine whether
“reasonable” grounds supported it (hence, review his decision
under the more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and
reverse the administrator’s decision; if reasonable grounds do
exist, then determine if he operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the
decision.
(6) If there is a conflict, the conflict should merely be a factor for
the court to take into account when determining whether an
administrator’s decision was arbitrary and capricious.
Blankenship, 644 F.3d at 1355.
b. Burden of Proof
The burden of proving entitlement to ERISA plan benefits rests on the
claimant. Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1040 (11th
Cir. 1998) (per curiam). This is true “regardless of whether the claim denial was
from the onset of the claimed disability or whether the claim denial was a
termination of benefits that had been paid before the denial.” Hufford v. Harris
Corp., 322 F. Supp. 2d 1345, 1360 (M.D. Fla. 2004). In this case, the burden is
on Plaintiff to show that he was entitled to ERISA benefits under the Policy.
13
c. Step One: Whether Hartford’s Denial of Plaintiff’s LTD Benefits
Was Wrong
The first step in the Blankenship framework requires the Court to
determine whether Hartford’s denial of Plaintiff’s LTD benefits should be
considered de novo wrong. 644 F.3d at 1355. A decision made by a plan
administrator is “wrong” if, after reviewing the decision from a de novo
perspective, the court disagrees with the administrator’s decision. Glazer v.
Reliance Standard Life Ins. Co., 524 F.3d 1241, 1246 (11th Cir. 2008). The court
must consider whether it would reach the same decision as the administrator,
based on the record that was before the administrator at the time the decision
was made. Id.
In this case, Hartford’s decision was not de novo wrong. As of June 20,
2009, Plaintiff was not considered “totally disabled” from “any occupation” as
defined by the Policy. Dr. Wiley submitted a form to Hartford on June 18, 2009
stating that Plaintiff was capable of performing sedentary work. 7 (AR 127-28.)
Additionally, the next day, after Plaintiff visited Dr. Wiley, Dr. Wiley reported that
Plaintiff’s chief complaints were left shoulder pain, right knee pain, and low back
7
Plaintiff makes an argument that Hartford was “cherry-picking” by relying
on the June 18, 2009 statement from Dr. Wiley that Plaintiff was capable of fulltime sedentary work. Plaintiff argues that by relying on the June 18 statement,
Hartford completely disregarded a statement dated May 22, 2009 in which Dr.
Wiley limited Plaintiff’s sitting to thirty minutes at a time, among other restrictions.
(AR 151-52.) The Court does not see a need to reconcile these two reports, as
they are not conflicting. A person can perform sedentary work and take breaks
every thirty minutes to stand up and stretch. Plaintiff’s “cherry-picking” argument
is found to be without merit.
14
pain. (AR 90.) Based on his physical condition at the time, Dr. Wiley noted that
“[a]t this point, I feel like [Plaintiff] is capable of doing full time sedentary work ….”
Id.
Plaintiff claims that the discovery of his hip problems should have qualified
him for additional LTD benefits under the Policy. However, these hip problems
were not apparent to Plaintiff, Dr. Wiley, or Hartford until well after the date that
Plaintiff’s benefits terminated. August 24, 2009 is the first time that Plaintiff
complained to Dr. Wiley of any type of hip-related issues (AR 92) and September
2009 marked the month when Plaintiff was diagnosed with DJD andavascular
necrosis with some early collapse in his left hip (AR 94). It was not until late
September when Dr. Wiley noted that “[Plaintiff] is currently unable to work and I
feel at this stage with regards to his avascular necrosis of his hip, which has
recently been diagnosed, it would be extremely difficult for him to maintain a full
time job and it would be highly unlikely that he would be able to perform even full
time sedentary duties.” (AR 100.)
Plaintiff argues that the problems with his hip should “relate back.” He
contends that later-in-time medical reports should be considered in context.
When put in context, Plaintiff argues that the medical reports issued by Dr. Wiley
in September demonstrate that his hip problem started before the June 20, 2009
expiration of coverage. Specifically, Plaintiff points to Dr. Wiley’s August 24, 2009
report, in which he states
15
The patient is … complaining of left groin pain and low back pain.
The patient has trouble standing for a prolonged period of time,
has aching, burning pain. He has pain that wakes him up from
sleep at night. It has been going on for 2-3 months and is steadily
getting worse.
(AR 92.) Plaintiff argues that Dr. Wiley’s report effectively demonstrates that the
hip pain began at least two months prior to the date of the report, or around midJune 2009. According to Plaintiff, this report proves that he was disabled on or
before June 20, 2009, and therefore should still be receiving disability benefits.
Plaintiff’s argument is misguided. If courts were to allow symptoms to
“relate back,” the legal floodgates would open and insurance fraud would be
rampant. When Hartford made the decision to terminate Plaintiff’s disability
coverage, the decision was based on the information that was available as of
June 2009. That information clearly established that Plaintiff was not completely
disabled, but was capable of performing full-time sedentary work. Additionally,
during the Hartford internal appellate process, Plaintiff was invited to send
additional information, including all medical records dating from May 22, 2009
until the time of the appeal. (AR 2.) These later records reflect continued pain in
Plaintiff’s low back, right knee, and left shoulder. (AR 91.) However, the fact
remains that Plaintiff did not complain of any hip pain at all until August 2009 –
two months after his insurance coverage expired. (AR 92-93.) Plaintiff visited Dr.
Wiley no less than twelve times within an eighteen-month time span. (See AR 90,
91, 92-93, 94, 95, 130, 131, 133, 137, 139, 142, 145.) During these numerous
visits, Plaintiff’s symptoms included pain in his shoulder, knee, and low back, as
16
well as heart trouble, vision problems, and depression. However, hip pain was
never mentioned in any way until well over a year had passed since Plaintiff first
visited Dr. Wiley.
Plaintiff makes a secondary argument that Hartford’s determination was
wrong because the Employability Analysis Report completed by Mr. McNeeley
was inadequate and did not accurately reflect Plaintiff’s job opportunities. Under
the Policy, total disability means that a person cannot perform “any occupation.”
(AR 282.) “Any occupation” is defined as “any occupation for which You are
qualified by education, training or experience that has an earning potential of
greater than the lesser of: (1) 50% of Your Pre-disability Earnings; or (2) the
Maximum Monthly Benefits.” (AR 279.) Plaintiff argues that the definition of “any
occupation” uses the present tense, which implies that the employee must be
able and ready to perform the job right away. He contends that the five
occupations that were considered to be matches for Plaintiff were all “fair”
matches, which meant that he would have to undergo training in tools and
materials before he was able to perform the job. (AR 114.) Under Plaintiff’s
interpretation, this requirement of additional training means that Plaintiff was not
capable of performing these jobs immediately, and thus, the jobs did not fit within
the present tense definition of “any occupation.” Therefore, Plaintiff argues that
the five occupational matches on the EAR should not be considered matches at
all, meaning that Hartford was unable to identify any potential job opportunities
for him and he should continue to receive benefits.
17
This argument is without merit. The definition of “any occupation” includes
the phrase “for which You are qualified by education, training, or experience.”
(AR 279.) The Policy clearly contemplates a situation when a beneficiary would
need to undergo some training to be qualified to perform a new job. Thus, the
requirement of having to complete some training does not disqualify the five
occupations listed on the EAR from being matches for Plaintiff.
Hartford’s decision to terminate Plaintiff’s coverage on June 20, 2009 was
not de novo wrong. It was supported by medical evidence, which revealed no
signs of a hip problem until well after the coverage had expired, and was further
supported by vocational evidence that Plaintiff could perform at least five jobs
that accommodated his physical restrictions, education, and pay requirements.
The Court does not doubt that Plaintiff is experiencing pain in his hip which limits
his ability to perform certain activities. However, this diagnosis was not made
until late September 2009, over three months after Hartford’s coverage expired.
Based on the administrative record available to Hartford in June 2009, the Court
cannot say that Hartford’s decision was de novo wrong.
d. Step Two & Three: Whether Hartford had discretion and
whether the decision made was “reasonable”
Even if Hartford’s decision to terminate benefits was wrong, Hartford would
still prevail in this case. The second step in the Blankenship framework asks
whether the plan administrator had the discretion to review claims. If the
administrator does have discretion, then the third step in the framework asks
18
whether the administrator’s decision, even if de novo wrong, was based on
“reasonable” grounds under the deferential arbitrary and capricious standard.
Blakenship, 644 F.3d at 1355.
In this case, the Policy provides Hartford with “full discretion and authority
to determine eligibility for benefits and to construe and interpret all terms and
provisions of the Policy.” (AR 293.) With explicit authority to make benefits
decisions, Hartford must only show that the decision to terminate Plaintiff’s
coverage was “reasonable,” and Hartford can easily show that its decision was
within reason. The same reasons that support a finding that Hartford was de
novo right also support a finding that the decision was reasonable.
Hartford made an informed and well-founded decision when it determined
that Plaintiff was no longer eligible for benefits in June 2009. Not only did
Hartford fully review the medical records that had been submitted during the
year-long period from June 2008-June 2009, when insurance coverage was
active, but Hartford also asked for any additional records from Dr. Wiley that
reflected Plaintiff’s medical condition after coverage terminated. (AR 2.) Further,
when Plaintiff objected to Hartford’s decision, Hartford put Plaintiff’s claims
through an independent appellate process that confirmed the initial decision.
Plaintiff makes the argument that Hartford’s review of the medical records
was without the advice and opinion of a medical doctor, and therefore, was
unreasonable. However, an insurance company is not required to consult a
doctor to make a decision about a policy’s coverage. See Richey v. Hartford Life
19
& Accident Ins. Co., 608 F. Supp. 2d 1306, 1312 (M.D. Fla. 2009) (“An ERISA
administrator is entitled to rely on the opinion of a qualified consultant who
neither treats nor examines the claimant, but instead reviews the claimant’s
medical records.”).
Based on a thorough review of the records, Hartford terminated coverage
because Plaintiff was not “totally disabled” as of June 20, 2009. His hip pain, first
mentioned in August 2009 and diagnosed in September 2009, arose after June
20, 2009, when Plaintiff’s coverage had ended. Hartford acted in a reasonable
manner, and therefore, the determination that Plaintiff’s coverage terminated on
June 20, 2009 is upheld.
III. Overpayment of Benefits
In its Motion for Judgment on the Administrative Record, Hartford makes a
counterclaim for overpayment of benefits made to Plaintiff. This Motion is based
on language found in the Policy which states that Hartford has
the right to recover from You any amount that We determine to be
an overpayment. You have the obligation to refund to Us any such
amount. Our rights and Your obligations in this regard may also
be set forth in the reimbursement agreement You will be required
to sign when You become eligible for benefits under this Policy.
(AR 292.) According to the Policy, overpayments can include “retroactive awards
received from sources listed in the Other Income Benefits definition.” Id. The
“Other Income Benefits” definition includes
the amount if any benefit for loss of income provided to You as a
result of the period of Disability for which You are claiming
benefits under the Policy. This includes the amount of disability or
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annuity benefits pursuant to any: … 7) the amount of disability
benefits under the United States Social Security Act, to which You
and Your spouse and/or children may be entitled because of Your
Disability.
(AR 300.)
On June 23, 2008, Plaintiff signed an LTD Payment Options and
Reimbursement Agreement in which he requested that Hartford pay Plaintiff his
monthly LTD benefit with no reduction for any other estimated income benefits
which could be distributed in the future. In doing so, Plaintiff signed a statement
that read: “I understand that [choosing not to reduce the LTD benefit for other
income benefits] may result in an overpayment of my LTD benefits which I will be
required to refund to The Hartford in a lump sum.” (AR 264.)
In January 2010, Plaintiff was deemed by a Social Security Administrative
Law Judge to be disabled as of March 20, 2008. (Doc. 24, p. 13.) Accordingly,
Plaintiff received a retroactive award of Social Security Benefits. Hartford now
claims that, based on the terms of the Policy, it is due an overpayment balance of
$7,183.50 based on Plaintiff’s retroactive award.
Plaintiff makes two arguments for why he should not be held responsible
for the overpayment. First, Plaintiff claims that under ERISA § 502(a), Hartford
has no rightful claim to the LTD benefits paid to Plaintiff from June 19, 2008 until
June 20, 2009 because the money was dissipated at the time Plaintiff received
his Social Security benefits. Second, Plaintiff argues that Hartford cannot recover
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for the overpayment because it does not have a rightful claim to collect Social
Security benefits from Plaintiff. These arguments are addressed below.
a. Recovery of Overpayment under ERISA § 502(a)
Plaintiff argues that ERISA § 502(a) precludes Hartford from being able to
recover any alleged overpayment. Section 502(a) restricts the remedies available
in ERISA actions to equitable relief only, stating:
(a) Persons Empowered to Bring Civil Action. – A civil action may
be brought … (3) by a … fiduciary … to obtain other appropriate
equitable relief … to enforce … the terms of the plan …”
ERISA § 502(a); 29 U.S.C. § 1132(a).
Relying on Sereboff v. Mid Atlantic Medical Services, Inc., 547 U.S. 356
(2006), Plaintiff argues that Hartford is not eligible to recover funds from Plaintiff
because the relief sought is not equitable, and therefore is outside the scope of
ERISA § 502(a). Plaintiff argues that the recovery is not equitable because the
LTD benefit money given to Plaintiff by Hartford has been dissipated and is no
longer identifiable, and therefore, the recovery cannot be in equity. Under
Plaintiff’s theory, Hartford’s claim for the overpayment arose when Social
Security awarded Plaintiff retroactive Social Security Benefits on January 2010.
By that date, nearly a year after Plaintiff’s coverage with Hartford terminated,
Plaintiff contends that all of the LTD benefits given to Plaintiff by Hartford were
dissipated, and therefore, Hartford no longer can assert a valid claim in equity as
to that money. Without an equitable claim, Plaintiff claims that relief is barred by
§ 502(a).
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Plaintiff’s argument on this point is misguided. First, Plaintiff misinterprets
Sereboff. In that case, the fiduciary of a health plan brought suit against plan
beneficiaries under ERISA for an overpayment. Sereboff, 547 U.S. at 359. The
question for the Supreme Court was whether the relief sought by the fiduciary
was equitable and, therefore, within the scope of § 502(a). The Court determined
that the relief was equitable because there were specifically identifiable funds
being held in apart from the general assets of the plan participants. Id. at 365.
However, Sereboff does not stand for the premise that if LTD benefit
money has been spent and is no longer identifiable, the claim to that money is
necessarily void because it is not in equity. To the contrary, the Court stated “no
tracing requirement … applies to equitable liens by agreement or assignment.”
Id. Under Sereboff, when there is an underlying agreement that stipulates to the
recovery of overpayments, the overpayment is recoverable under ERISA.
Solomon v. Metropolitan Life Ins. Co., 628 F. Supp. 2d 519, 533-34 (S.D.N.Y.
2009) (determining that a fiduciary was entitled to recover overpayment because
of underlying agreement, even when specific funds have been spent); Kellner v.
First Unum Life Ins. Co., 589 F. Supp. 2d 291, 312-13 (S.D.N.Y. 2008)
(recognizing that “where the LTD plan includes an applicable offset provision, its
fiduciaries may [ ] recover payments to beneficiaries that are later offset by a
retroactive award of Social Security benefits.”). Courts across the country have
determined that a health plan that provides for recovery of overpayment is
considered an equitable lien by agreement, and thus, strict tracing requirements
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do not apply. See Unum Life Ins. Co. of America v. Harper, 2008 WL 1990338 at
* 2 (M.D. Ga. May 2, 2008); United Air Lines, Inc. Retirement and Welfare Admin.
v. Van Slyck, 2008 WL 2275705 at * 3 (N.D. Ill. Mar. 19, 2008); Bosin v. Liberty
Life Assurance Co. of Boston, 2007 WL 1101187 (W.D. Mich. Apr. 11, 2007)).
This Court agrees that in cases where there is an underlying agreement,
proceeds need not be strictly traceable to be considered within the realm of
equitable relief. To find differently would be to set a dangerous precedent. If
funds were required to be strictly traceable, a plan participant who received an
LTD benefit award could decline to deduct any amount for other future benefits
and then could spend all money received, knowing that he would not be held
responsible for any overpayment if the funds were dissipated. This result would
be illogical.
Plaintiff was made aware of the fact that he could potentially receive
overpayments, and he chose not to withhold any money from his payments to
protect himself against this very situation. Specifically, he signed an LTD
Payment Options and Reimbursement Agreement in which he requested that
Hartford pay his monthly LTD benefit with no reduction for other income benefits.
His signature was below a sentence that read: “I understand that this may result
in an overpayment of my LTD benefits which I will be required to refund to The
Hartford in a lump sum.” (AR 264.) Plaintiff cannot now skirt around repaying this
overpayment because he spent the money he was awarded by Hartford between
June 2008 and June 2009.
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b. Recovery of Overpayment from Social Security Directly
Plaintiff also claims that Hartford cannot recover the amount of
overpayment by way of taking Plaintiff’s Social Security benefits because it would
be in violation of Social Security’s anti-assignment provision, 42 U.S.C. § 407(a).
Plaintiff’s argument under § 407(a) is misplaced. “[T]he better reasoned opinions
that have addressed this issue hold that § 407(a)’s prohibition is not triggered by
this kind of reimbursement provision because the insurance company ‘seeks the
amount it overpaid [the claimant rather than] any of [the claimant’s] Social
Security benefits.’” Herman v. Metropolitan Life Ins. Co., 2008 WL 5246319 at *2
(M.D. Fla. Dec. 16, 2008) (quoting Mattox v. Life Ins. Co. of N. Am., 536 F. Supp.
2d 1307, 1327 (N.D. Ga. 2008)).
The Court agrees with the opinion in Herman. Hartford is not seeking to
recover Social Security disability benefits through an assignment from Plaintiff;
Hartford is seeking to recover an overpayment from monies that Hartford
previously paid to Plaintiff. Attempting a recovery of overpayment is not the same
as directly assigning Social Security benefits. Thus, § 407(a) is inapplicable to
the case at hand.
IV. Plaintiff’s Motion for Summary Judgment
Plaintiff’s Motion for Summary Judgment (Doc. 26) raises issues almost
identical to the issues raised in the Defendant’s Motion for Judgment on the
Administrative Record. Thus, by deciding the Defendant’s Motion, many of the
issues raised in Plaintiff’s Motion have been resolved. The only argument that
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Plaintiff raised in his Motion that has not been addressed fully is whether
Hartford’s decision to terminate benefits was wrong and unreasonable because
the EAR completed by Mr. McNeeley improperly calculated Plaintiff’s earning
requirement.
Plaintiff argues that the wage calculations provided in the EAR are off-base
and do not properly represent the actual pay that Plaintiff would receive at the
jobs recommended in Mr. McNeeley’s report. The approximation of wages used
for the EAR is compiled using wage data from an Occupational Employment
Statistics (OES) survey. (AR 115.) This survey breaks occupations down into
categories. Plaintiff contends that these categories are overly broad and the
wages vary greatly within these categories, meaning that an adequate
approximation of Plaintiff’s wages in any of the five jobs to which he was
matched is unreliable.
Plaintiff’s argument misses the mark. The issue in this case is not the
reliability of the OES data and the wage approximations used in the EAR. A claim
administrator reviewing benefits eligibility under an “any occupation” standard is
not required to “collect vocational evidence.” Richey, 608 F. Supp. 2d at 1312.
Hartford did not prepare the statistics in the EAR; Hartford only relied on the
information provided in the report reflecting Plaintiff’s potential job matches.
Hartford was not unreasonable in relying on this vocational information in
determining Plaintiff’s disability status. This argument does not influence the
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Court’s opinion that Hartford acted in a right and reasonable manner when it
terminated Plaintiff’s benefits on June 20, 2009.
V. Conclusion
Based on the reasons stated above, the Defendant’s Motion for Judgment
on the Administrative Record is granted and Plaintiff’s Motion for Summary
Judgment is denied. The Court finds that Hartford was not de novo wrong in
terminating Plaintiff’s coverage based on the evidence available in the
administrative record. Even if Hartford was wrong, the decision made was
reasonable, and therefore, is able to withstand scrutiny under the arbitrary and
capricious standard.
Further, the Court finds that Plaintiff is liable for repaying Hartford
$7,183.50 in overpayment. Plaintiff contractually consented to receive a greater
amount of LTD benefits from June 2008 – June 2009, knowing that this could
lead to an overpayment. Plaintiff is responsible for repaying the full amount.
Defendant is awarded judgment in the amount of $7,183.50.
SO ORDERED, this 22nd day of March, 2012.
/s/ Hugh Lawson
HUGH LAWSON, SENIOR JUDGE
ebr
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