Hutten v. Reliastar Life Insurance Company
Filing
60
MEMORANDUM Opinion and Order signed by the Honorable Virginia M. Kendall on 3/18/2019. The Court denies both Reliastar Life Insurance Company and Ted Hutten's Motions for Summary Judgment 46 and 47 . See Order for further details. Mailed notice(lk, )
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TED HUTTEN,
Plaintiff,
v.
RELIASTAR LIFE INSURANCE
COMPANY,
Defendant.
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No. 17 C 5318
Judge Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiff Ted Hutten (“Hutten”) brings this suit against Defendant ReliaStar
Life Insurance Company (“ReliaStar”) pursuant to Section 502 of the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), seeking
relief in the form of long-term disability benefits allegedly due under an employee
benefit plan.
(Dkt. 1).
Hutten and ReliaStar filed cross-motions for summary
judgment under Federal Rule of Civil Procedure 56(a). (Dkts. 46, 47). For the reasons
stated within, the Court denies both motions.
BACKGROUND
Both parties submitted statements of material facts in accordance with Local
Rule 56.1(a). (Dkts. 46-2, 48). Local Rule 56.1(b)(3) requires a party opposing a
motion for summary judgment to serve and file “a response to each numbered
paragraph in the moving party’s statement, including, in the case of any
disagreement, specific references to the affidavits, parts of the record, and other
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supporting materials relied upon.” Where an opposing party fails to comply with its
obligations under the Local Rules, the Court must take all facts presented by the
moving party and supported by the record as admitted. Waldridge v. American
Hoechst Corp., 24 F.3d 918, 921-22 (7th Cir. 1994). Here, Hutten has failed to file the
required response to ReliaStar’s statement of facts. Instead, in his response brief to
ReliaStar’s Motion for Summary Judgment, Hutten purports to issue a blanket
admission to any of ReliaStar’s facts that are recitations of medical findings, medical
opinions, and the administrative history of Hutten’s claim. (Dkt. 51, at pg. 3). Then,
Hutten goes on to note his disagreement regarding diagnoses and physical
limitations. Id. The Court assumes that Hutten offered this brief paragraph instead
of the mandated paragraph by paragraph response for the sake of expediency.
However, the interests of convenience do not serve to brush aside clearly articulated
rules. Accordingly, to the extent the statements of fact in ReliaStar’s submission are
appropriately supported, they are deemed admitted.
I. Hutten’s Employment and ReliaStar’s Welfare Benefit Plan
Hutten was employed as a software developer by Cetera Financial Group, Inc.,
(“Cetera”). (Dkt. 53, ¶ 1). His occupation was classified as one with a sedentary
physical demand. Id. at ¶ 33. Through his employment, Hutten was covered by a
disability insurance policy (“the Policy”) issued by ReliaStar. Id. at ¶ 1. The Policy
defines Total Disability as:
During the Elimination Period and the following 24 months, You are
unable to perform with reasonable continuity the Substantial and
Material Acts necessary to pursue Your Usual Occupation and You are
not working in Your Usual Occupation … After 24 months of benefits,
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You are unable to engage with reasonable continuity in any occupation
in which You could reasonably be expected to perform satisfactorily in
light of Your age, education, training, experience, station in life, and
physical and mental capacity.
(Dkt. 46-2, ¶ 5). The Policy contains a “Limitation for Mental Disorder, Alcoholism
or Chemical Dependency” (“the Limitation”) which provides certain restrictions to
long-term coverage: “When Disability is due to Mental Disorder, Alcoholism or
Chemical Dependency, ReliaStar Life limits Monthly Income Benefits to a maximum
of 24 months while You are not Hospital Confined. … This maximum applies to any
and all such Periods of Disability during Your lifetime.” Id. at ¶ 6. Mental Disorder
is defined in the Policy as:
…any Sickness for which both of the following are true: It is listed in the
current edition of the Diagnostic and Statistical Manual of Mental
Health Disorders (or any successor diagnostic manual) published by the
American Psychiatric Association. … Treatment is provided by a
qualified Doctor using psychotherapy, psychotropic drugs, or other
similar methods of treatment.
Id. at ¶ 7. The Policy defines Alcoholism as “a disorder of psychological and/or
physiological dependence or addiction to alcohol which results in functional (physical,
cognitive, mental, affective, social or behavioral) impairment.” Id. at ¶ 8.
II. Hutten’s Disability Claim
Hutten stopped his work for Cetera on August 2, 2013 due to disability relating
to psychosis and intractable epilepsy. (Dkt. 46-2, ¶ 10); (Dkt. 53, ¶ 2). On April 27,
2015, Hutten applied for long-term disability benefits under the Policy due to
psychosis and intractable epilepsy. (Dkt. 46-2, ¶ 10). In support of his long-term
disability claim, Hutten simply relied upon the materials submitted in conjunction
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with his short-term disability claim in 2013.
Id. at ¶ 11.
In 2013, Hutten’s
psychiatrist, Dr. Michael Martin, M.D., certified Hutten’s disability on the basis of
major depressive disorder, severe anxiety, and panic. Id. at ¶ 12. Around that time,
Hutten reported that he drank half a gallon of liquor a day. Id. Between 2013 and
2015, Hutten had significant episodes of alcohol abuse and was incarcerated after his
third DUI. Id. at ¶¶17-18. Through 2015 and into 2016, Hutten had multiple hospital
stays for treatment of depression, anxiety, hallucinations, alcohol intoxication, and
suicidal ideation. Id. at ¶ 20. For treatment purposes, Hutten took a variety of
antipsychotic and antidepressant medications. Id. at ¶ 21.
ReliaStar approved Hutten’s disability benefits on September 4, 2015 due to
depression and alcoholism. Id. at ¶ 27. Additionally, ReliaStar explained that these
benefits were subject to the 24-month Limitation.
Id.
ReliaStar continued its
investigation regarding Hutten’s claim for physical disability based on seizures, but
ultimately denied this claim on June 14, 2016. Id. at ¶¶ 27-33.
III. Hutten’s Appeal of his Physical Disability Claim Denial
One week after the denial of his long-term physical disability claim, Hutten
alleged that he was also limited by back pain that restricted his movement. Id. at ¶
35. To support this new allegation, Hutten supplied medical records regarding a
lumbar surgery in 2011. Id. at ¶ 35. Hutten began seeing a pain management
specialist, Dr. Rajesh Patel, M.D., on June 29, 2016 for his back pain which he
reported was “severe” and “chronic.” Id. at ¶ 36. Hutten underwent an MRI on
August 4, 2016 which showed a diffuse disc bulge, moderate left and moderate to
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severe right foraminal stenosis at L4-L5, and mild central canal stenosis. Id. at ¶ 37.
The impression of the MRI was an advanced degenerative disc disease. Id. Dr. Patel
treated Hutten with injections and Norco, a pain killer. Id. at ¶ 38. As of November
2016, Hutten reported to Dr. Patel that he was stable on the prescribed medication
and did not have any new pain or complaints. Id. at ¶ 39. The medical records appear
to contain conflicting statements from Dr. Patel regarding Hutten’s ability to perform
at his sedentary job. On one form, Patel seems to report that Hutten can engage in a
normal eight-hour day of sedentary activity yet in another form with the same date,
he indicates that Hutten cannot sit for six to eight hours in one day. Id. at ¶¶ 40-41.
Hutten did not formally appeal ReliaStar’s June 14, 2016 denial of his claim
until November 28, 2016. Id. at ¶ 44. His appeal was based on multiple theories of
disability including, dementia, epilepsy, traumatic brain injury, migraines, major
depression with psychosis, and spinal stenosis. Id. Along with his appeal, Hutten
submitted a neuropsychological evaluation from November 7, 2016, which was
performed by Dr. Roy Gilliland, Ph.D. Id. at ¶ 45. Dr. Gilliland’s impression was
“both depression and a nonspecific dementia likely secondary to depression and
seizure disorder.”
Id.
Dr. Gilliland recommended treatment via continued
psychotherapy and psychiatric consultation.
Id.
Hutten was also seen by a
neurologist, Dr. Stephens. Dr. Stephens diagnosed Hutten with seizures, headaches,
and dementia and noted he was permanently disabled, but reported no physical
impairment. Id. at ¶ 46.
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Hutten underwent a Functional Capacity Evaluation (“FCE”) on December 12,
2016. Id. at ¶ 49. The parties dispute the ultimate conclusion of the FCE. Hutten
maintains that the FCE indicates “that he had the physical capacity to perform no
more than a four-hour day” (Dkt. 53, ¶ 11) while ReliaStar contends the report
concluded the four-hour limitation was only with respect to light physical work which
isn’t a condition of his sedentary employment. (Dkt. 46-2, ¶ 49).
As part of its investigation in to Hutten’s appeal, ReliaStar had consulting
physician Dr. Stewart Russell, D.O., M.P.H., conduct a review of Hutten’s medical
record. Id. at ¶ 53. Dr. Russell questioned Dr. Stephens’ disability certification for
cardiac impairment when there were no records exhibiting any care for a cardiac
condition. Id. at ¶ 57. He similarly called in to question Dr. Patel’s findings from
Hutten’s MRI on his back. Id. at ¶ 58. Dr. Russell also criticized the FCE report’s
methodology and conclusions.
Id. at ¶ 59.
Finally, Dr. Russell reviewed Dr.
Gilliland’s neuropsychological evaluation of Hutten and concluded that the dementia
diagnosis seemed “unlikely.” Id. at ¶ 60.
Along with Dr. Russell, ReliaStar consulted with Dr. Malcom Spica, Ph.D. Dr.
Spica’s review of the records led him to the conclusion that Hutten’s impairment was
“due to undetermined etiology (possible contributions from Anxiety, Depression,
history of alcohol dependence, and reported seizure disorder)” and that it was “most
consistent with an overall depressive disorder.” Id. at ¶¶ 63-64.
On February 28, 2017, ReliaStar informed Hutten it was affirming the denial
of his physical disability claim. Id. at ¶ 65. ReliaStar justified its decision by stating
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that Hutten did not have a physical condition which precluded him from performing
full-time sedentary work and that any cognitive impairment was likely due to
depression. Id. Since maximum benefits for depression had already been paid to
Hutten, ReliaStar determined Hutten was not eligible for physical impairment
benefits as of July 11, 2016. Id.
IV. Hutten’s Second Appeal
Hutten initiated a second appeal of his benefit denial on April 13, 2017. Id. at
¶ 67. Drs. Russell and Spica reviewed the records submitted with the second appeal
and did not alter their findings from the first appeal. Id. at ¶¶ 72-73. However, after
reviewing supplemental materials from Hutten, Dr. Russell provided an addendum
to his conclusions on May 3, 2017. Id. at ¶ 74. Dr. Russell wrote that he did not
believe Hutten had Alzheimer’s disease and “that [Hutten’s] most likely cause of
dementia is his alcohol-related condition.” Id. at ¶ 74.
On May 17, 2017, ReliaStar sent a letter to Hutten upholding the benefit denial
on the basis that Hutten did not establish he was disabled due to a physical condition
as of July 11, 2016. Id. at ¶ 76.
LEGAL STANDARD
Summary judgment is proper when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to judgment as a matter of law.” Sorensen v. WD-40 Co., 792 F.3d 712, 722 (7th Cir.
2015). In determining whether a genuine issue of fact exists, the Court must take
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the evidence and draw all reasonable inferences in favor of the party opposing the
motion. Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). However, the Court will
“limit its analysis of the facts on summary judgment to evidence that is properly
identified and supported in the parties’ [Local Rule 56.1] statement.” Bordelon v.
Chicago Sch. Reform Bd. of Trustees, 233 F.3d 524, 529 (7th Cir. 2000). Where a
proposed statement of fact is supported by the record and not adequately rebutted,
the Court will accept that statement as true for purposes of summary judgment. An
adequate rebuttal requires a citation to specific support in the record; an
unsubstantiated denial is not adequate. See Anderson, 477 U.S. at 248; Drake v.
Minnesota Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) (“Rule 56 demands
something more specific than the bald assertion of the general truth of a particular
matter, rather it requires affidavits that cite specific concrete facts establishing the
existence of the truth of the matter asserted.”) (internal quotations omitted). Though
ERISA brings with it its own intricacies, the Court’s review on summary judgment
remains unchanged.
“[A]s in any summary judgment, the moving party must
establish in the district court that there is no genuine issue of material fact to be
resolved at trial, and that judgment may be entered as a matter of law. If there is
any doubt as to whether such an issue of fact exists, the summary judgment motion
must fail.” Casey v. Uddeholm Corp., 32 F.3d 1094, 1096 (7th Cir. 1994).
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DISCUSSION
I. Standard of Review and Burden of Proof
De novo review is considered “the norm” in ERISA litigation.
Krolnik v.
Prudential Ins. Co. of America, 570 F.3d 841, 843 (7th Cir. 2009). Analyzing a
coverage dispute under ERISA is no different than the evaluation of a contract claim.
Id. In de novo review, “the court decides on the record made in the litigation. And, if
material evidence conflicts, then there must be a trial.” Id. In conducting this review,
the Court limits its analysis to the administrative record. Id.
As a threshold matter, the parties dispute which of them bears the burden of
proof in determining benefit eligibility. The Policy itself provides that Hutten has
the burden of establishing “due proof of loss,” including “details covering the
occurrence, the character and the extent of the loss for which claim is made.” (Dkt.
46-1). Indeed, it is the default position that the insured seeking to enforce benefits
must carry the burden of proving his entitlement to such benefits by a preponderance
of the evidence. Ruttenberg v. U.S. Life Ins. Co. in city of New York, a subsidiary of
Am. Gen. Corp., 413 F.3d 652, 663 (7th Cir. 2005); see also Daniliauskas v. Reliance
Standard Life Ins. Co., 2018 WL 1336051, at *3 (N.D. Ill. Mar. 14, 2018). Hutten
suggests however that the burden is reversed in cases where the question of coverage
stems from a policy’s exclusion section, the plan provider must satisfy the burden of
showing the insured is not entitled to benefits. See Fuja v. Benefit Trust Life Ins. Co.,
18 F.3d 1405, 1408 (7th Cir. 1994). Therefore, the question becomes whether the
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Policy Limitation, entitled, “Limitation for Mental Disorder, Alcoholism or Chemical
Dependency,” is properly classified as an exclusion under the policy.
The Seventh Circuit has not directly addressed this limitation/exclusion
distinction and in advancing his argument, Hutten exclusively relies on Deal, a
district court case considering a “Benefit Limitation” for disability caused by mental
disorders. Deal v. Prudential Ins. Co. of America, 263 F.Supp.2d 1138 (N.D. Ill. May
23, 2003). There, the court found, without significant discussion, that the mental
disorder limitation was equivalent to policy exclusions for purposes of determining
which party bears the burden. Id. at 1143; see also Okuno v. Reliance Standard Life
Ins. Co., 836 F.3d 600, 609 (6th Cir. 2016) (“Reliance bears the burden to show that
the exclusion on which it based denial of benefits, the Mental and Nervous Disorder
Limitation, applies in this case.”); see e.g., Williams v. Grp. Long Term Disability Ins.,
2009 WL 500626, at *7 (N.D. Ill. Feb. 27, 2008) (“The burden falls on the insurer to
prove the applicability of a policy limitation. … Here Reliance bears the burden to
show that Williams suffers from a condition that is the result of a mental disorder
rather than a physical disorder.”). For its part, ReliaStar counters that “a policy
exclusion eliminates coverage all together” and that the Limitation in play here
“simply defines the scope and terms of coverage for a certain type of claim.” (Dkt. 52,
pg. 13). See e.g., Doe v. Prudential Ins. Co. of Am., 215 F. Supp. 3d 942, 949 (C.D.
Cal. Oct. 5, 2016) (“Having considered the parties’ arguments and the cases, the Court
finds that the mental illness limitation is a limitation and not an exclusion. Plaintiff
therefore has the burden of proof with respect to the mental health limitation.”);
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Seaman v. Mem’l Sloan Kettering Cancer Ctr., 2010 WL 785298, at *10 (S.D.N.Y. Mar.
9, 2010) (“Seaman’s disability is not a condition that is excluded from coverage, as
evidenced by the fact that First Unum did pay 24 months of benefits and readily
acknowledges that those payments were proper.”).
While this open issue certainly presents compelling arguments on both sides,
the Court need not resolve the question at this time. See e.g. Gent v. CUNA Mut. Ins.
Soc'y, 611 F.3d 79, 83 (1st Cir. 2010) (“At least where, as here, the burden of proof is
the preponderance of the evidence standard, how the burden is allocated does not
much matter…”); Watson v. Reliance Standard Life Ins. Co., 2017 WL 5418768, at *9
(N.D. Ill. Nov. 14, 2017). At this stage of the litigation, the Court must simply assess
whether genuine issues of material fact exist and, if not, whether one party is entitled
to judgment as a matter of law.
II. Resolution by Summary Judgment
Throughout his claim and appeals process, Hutten has advocated a variety of
conditions to support his long-term physical disability claim. However, on summary
judgment, he argues that he is entitled to benefits due to his dementia and/or his
back condition. (Dkt. 49). Significant factual disputes remain at this stage such as
whether Hutten has dementia, what the cause of the dementia is, when the dementia
began, does Hutten have a disabling back condition, to what extent does it prevent
him from performing his duties as a software developer, and at what time did the
back condition begin to limit his ability to work. Because of this, the Court finds this
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matter is not amenable to summary judgment and instead the Court must sit as a
finder of fact at a bench trial.
As presented to the Court, the matter is rife with factual disputes. One need
look no further than the voluminous fact section in each party’s brief that present
markedly different accounts of Hutten’s medical history, treatment, and diagnosis.
To support their arguments regarding the above questions, the parties present
several competing medical opinions and dispute multiple factual issues fundamental
to the outcome.
Unsurprisingly, these opinions reach diametrically opposed
conclusions leaving the Court to weigh the credibility of each opinion and
independently evaluate the Hutten’s purported medical conditions and their most
likely causes. The Court is more than capable of conducting such an assessment, but
summary judgment is simply not the proper vehicle to do so. It is not within the
court’s authority to “make credibility determinations, weigh the evidence, or decide
which inferences to draw from the facts” at summery judgment, rather “these are jobs
for a factfinder.” Payne v. Pauley, 337 F.3d 767, 770 (7th Cir. 2003) (citing Anderson,
477 U.S. at 255); see also Uddeholm Corp., 32 F.3d at 1099 (“This language leaves no
question that the district court improperly weighed the evidence in this case in
arriving at its decision to grant summary judgment. … [T]he appropriate proceedings
for such fact-finding is a bench trial and not the disposition of a summary judgment
motion.”); cf. Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999) (en
banc) (“The district judge will be asking a different question as he reads the evidence
[at trial], not whether there is a genuine issue of material fact, but instead whether
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[the plaintiff] is disabled within the terms of the policy. …. [T]rial on the record, even
if it consists of no more than the trial judge rereading what he has already read, and
making findings of fact and conclusions of law instead of a summary judgment
decision, may have real significance.”).
The Federal Rules of Civil Procedure and controlling authority leave little
doubt — “if material evidence conflicts, then there must be a trial.” Krolnik, 570 F.3d
at 843. The parties offer conflicting evidence and it is not permissible at this juncture
for the Court to wade into the waters of a finder of fact. Waldridge, 24 F.3d at 920
(“The court has one task and one task only: to decide, based on the evidence of record,
whether there is any material dispute of fact that requires a trial.”). Accordingly, the
Motions for Summary Judgment must be denied.
CONCLUSION
For the reasons stated within, the parties’ Cross-Motions for Summary
Judgment are denied. (Dkts. 46, 47).
Date: March 18, 2019
____________________________________
Virginia M. Kendall
United States District Judge
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