Winfrey v. Hartford Life and Accident Insurance Company et al
Filing
38
ORDER granting 31 plaintiff's motion to compel. Signed by Magistrate Judge James P. O'Hara on 10/03/2014. (mb)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
LARRY WINFREY,
Plaintiff,
v.
Case No. 14-1034-EFM
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY, et al.,
Defendants.
ORDER
Defendant Hartford Life and Accident Insurance Company (“Hartford”) denied a
claim for long-term disability benefits (“LTD”) made by the plaintiff, Larry Winfrey.
The benefits were claimed by plaintiff under an Employment Retirement Income Security
Act (“ERISA”) plan provided by defendant Group Long Term Disability Plan for
Employees of Spirit Aerosystems, Inc. (the “Plan”). Plaintiff alleges that Hartford had a
dual-role conflict of interest as both the insurer and administrator of the Plan, “tainting”
its denial of benefits.
Accordingly, plaintiff seeks discovery targeted at Hartford’s
conflict of interest and how it may have impaired his claim denial. This case is before the
undersigned U.S. Magistrate Judge, James P. O’Hara, on plaintiff’s motion to compel
(ECF doc. 31). Specifically, plaintiff moves to compel defendants to produce responsive
documents to plaintiff’s Request for Production No. 9. For the reasons discussed below,
plaintiff’s motion is granted.
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I.
Background
As an employee of Spirit Aerosystems, Inc., plaintiff participated in a LTD plan
which was insured and administered by Hartford. The Plan provides short-term and longterm benefits in compliance with ERISA. Plaintiff became physically disabled from back
pain and neuropathy and went on short-term disability in September 2012. After an
unsuccessful attempt to return to work, plaintiff went on medical leave, which resulted in
his separation from employment in 2013. Plaintiff submitted a claim for LTD in early
2013. Subsequently, Hartford instructed plaintiff to apply for Social Security disability.
The Social Security Administration determined that plaintiff was totally and permanently
disabled, and that his disability had commenced in the fall of 2012. However, Hartford
denied plaintiff’s claim for “own occupation” LTD benefits under the Plan. Plaintiff
contends he qualifies for LTD benefits under the Plan.
On April 24, 2014, plaintiff served his first request for production of documents.1
Defendants served their objections to plaintiff’s requests on May 9, 2014.2 In Request for
Production No. 9, plaintiff asked for “Claim manuals, internal guidelines, rules and
policies for the processing, investigation and determination of LTD claims.” Defendants
responded with several objections, but agreed to produce the table of contents and certain
relevant portions of a “comprehensive manual providing technical reference tools and
1
ECF doc. 18.
2
ECF doc. 23.
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best practices for the administration of LTD claims (‘the BMS Reference Manual’)”3
subject to their objections and subject to the entry of a protective order and
confidentiality agreement.
Subsequently, plaintiff sought two extensions of time to file a motion to compel
with respect to defendants’ responses to his first set of written discovery. The court
granted plaintiff an extension until June 11, 2014, to file discovery-related motions.4 The
parties reached a discovery “compromise” on June 9, 2014.5
With respect to
Interrogatory No. 9, defendants agreed to produce the “Disability Best Practices Memos;
Disability Updates; Claim Submission & Investigation; Definition of Disability; Denials
and Terminations; Legal.”6 Defendants provided these responsive documents on June 13,
2014.
Plaintiff disputes the sufficiency of defendants’ response because unbeknownst to
him, the claim manual is an electronic reference and many sections of it offer little to no
discussion. The scanned printouts of the claim manual direct the reader to a hyperlinked
item called “Claims Excellence.”7 Plaintiff asserts that his counsel thoroughly conferred
3
ECF doc. 32-1 at 2.
4
ECF doc. 28.
5
ECF doc. 32-3.
6
Id.
7
Plaintiff provided the following examples of topics addressed in the claim manual but
discussed on the Claims Excellence website: “Management oversight; Interpreting the
Own Occupation Definition of Disability; Which Occupation is it Anyway?; Claim file
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with defendants’ counsel to settle the issue because the deadline to file motions to compel
had already run when he discovered the “deficient response.”8 But, the parties could not
come to a resolution on this issue.
II.
Analysis
On August 25, 2014, plaintiff filed his motion to compel defendants to “provide
certain ‘Claims Excellence’ materials referenced in Hartford’s claim manual.”9 Plaintiff
asserts that he seeks these materials because they are relevant and material to the case.
And because it will “shed light on [Hartford’s] reasonable policies and procedures for
making benefit determinations.”10 Plaintiff admits that it would not be proper to allow
him to conduct discovery directed to the factual merits of his claim; however, he insists
that the court should permit limited discovery related to the alleged conflict of interest
and to the policies and procedures used by Hartford to make its decision.11
documentation; Independent Medical Examinations; Functional Capacity Evaluations;
Resolving the Medical Documentation—Assessing a Claimant’s Medical Condition—
Definition of Disability; Our Understanding of the Claimant’s Limitations Differs from
the AP [attending physician]—Resolving the Medical Documentation; Denial termination
letter procedures; Denial/termination checklist; and Denial and appeal correspondence.”
ECF doc. 32 at 3-4.
8
ECF doc. 32 at 4.
9
Id. at 1.
10
Id. at 6.
11
Id. at 8.
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4
Initially, defendants made three primary objections to the disputed discovery
requests. First, defendants objected that Request for Production No. 9 seeks discovery
beyond the administrative record, which is inappropriate in ERISA matters when the
evaluation was limited to whether the claims administrator abused its discretion in
making a factual determination related to the merits of the claim. Second, and more
specifically, defendants objected that although some discovery pertaining to the alleged
conflict of interest might be permissible, because of Hartford’s dual role, the disputed
request was not directed to that limited topic. Finally, defendants objected to producing
the contents of the claims manual because it contains confidential, proprietary material.
Although defendants eventually agreed to produce each of the various sections of the
claims manual that plaintiff had requested, defendants assert their compliance was
contingent upon it resolving all of plaintiff’s issues with Request for Production No. 9.12
On June 22, 2014, plaintiff contacted defendants, seeking additional production.
Specifically, plaintiff asked for a complete copy of “an entire confidential, internal
database.”13 Defendants assert that plaintiff’s basis for his additional request was that the
produced materials contained cross-references to another database.
According to
defendants, this is true of the majority of their internal operating documents. Defendants
argue that plaintiff’s request for these materials is a “direct violation of Plaintiff’s explicit
12
See ECF doc. 34-1.
13
ECF doc. 34 at 3; ECF doc. 34-1.
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discovery agreement, undermining the rationale of encouraging parties … to resolve
discovery disputes …”14 Nonetheless, defendants offered to produce the items if their
compliance would end plaintiff’s discovery requests.15 Plaintiff responded with requests
for additional materials and requirements to which defendants could not agree.
Therefore, plaintiff filed the instant motion.
Defendants assert that plaintiff’s motion should be denied for two reasons: (1) on
the grounds of fundamental fairness per the discovery agreement; and (2) on the merits
because the discovery sought is outside the administrative record and is not probative of
defendants’ alleged conflict of interest.
Fed. R. Civ. P. 26(b)(1) currently provides that generally the scope of discovery is
limited to the parties’ pleaded claims and defenses, but that “[f]or good cause, the court
may order discovery of any matter relevant to the subject matter involved in the action”;
on December 1, 2015, if recently proposed rules amendments go into effect, the latter sort
of discovery no longer will be available. In any event, when a party files a motion to
compel and asks the court to overrule objections, the objecting party must specifically
show in its response to the motion how each discovery request is objectionable.16
Objections initially raised but not supported in response to the motion to compel are
14
ECF doc. 34 at 3.
15
See ECF doc. 32-6 at 2.
16
Sonnino v. Univ. of Kan. Hosp. Auth., 221 F.R.D. 661, 670-71 (D. Kan. 2004).
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deemed abandoned.17 However, if the discovery request appears facially objectionable in
that they are overly broad or seek information that does not appear relevant, the burden is
on the movant to demonstrate how the requests are not objectionable.18 With these
standards in mind, the court addresses defendants’ objections and responses to the
disputed request.
A.
Timeliness
Before addressing the substance of plaintiff’s motion, the court will briefly address
the timing of plaintiff’s motion. Under D. Kan. Rule 37.1, a motion to compel discovery
must be filed within thirty days of the default or service of the response. Here, plaintiff’s
deadline to file a motion to compel ran on June 11, 2014 and plaintiff didn’t file his
motion until August 25, 2014.
Plaintiff asserts that good cause exists to allow him to file his motion out of time
because he was not aware of the “discovery deficiency” until after the time to file a
motion to compel expired. Plaintiff insists that his counsel has made a good faith and
reasonable effort to confer on this discovery dispute ever since plaintiff learned of the
“deficiency” in an effort to secure Hartford’s voluntary compliance. Defendants respond
that they are not seeking relief based on plaintiff’s violation of the timing requirements.
17
In re Bank of Amer. Wage & Emp’t Practices Litig., 275 F.R.D. 534, 538 (D. Kan.
2011).
18
Id.
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However, defendants argue that “left unchecked, Plaintiff’s violation of his explicit
agreement regarding discovery substantially undermines the goals of Local Rule 37.2.”19
If a motion to compel is filed after the expiration of the time allowed for its filing,
the proper standard to determine whether it should be allowed out of time is not a
showing of good cause, but rather a showing of excusable neglect.20 The factors used to
determine excusable neglect include: (1) whether the movant acted in good faith; (2) the
reason for the delay, including whether it was within the reasonable control of the
movant; (3) the danger of prejudice to the nonmoving party; and (4) the length of the
delay and its potential impact on judicial proceedings.21
Plaintiff clearly attempted to reconcile the discovery dispute within the thirty-day
window, and he has explained that he didn’t receive the responsive documents until after
the deadline to file motions expired. Even after the deadline ran, plaintiff continued to
confer with defendants to resolve the dispute informally. There appears to be no danger
of prejudice to defendants as they do not oppose the timing of plaintiff’s motion. With
the discovery deadline almost three months away,22 there should be minimal, if any,
impact on the judicial proceedings. Given the foregoing, the court will decide plaintiff’s
19
ECF doc. 34 at 4.
20
Hartford Ins. Co. v. P & H Cattle Co., Inc., No. 05-2001, 2008 WL 5046345, at *2
(D. Kan. Nov. 24, 2008) (citation omitted).
21
Id. (citation omitted).
22
December 31, 2014 (ECF doc. 20).
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motion to compel on its merits. Plaintiff has shown excusable neglect for filing his
motion out of time.
B.
Objections to Request
Under Rule 34(b)(2)(B) of the Federal Rules of Civil Procedure, the party
responding to requests for production must “either state that inspection and related
activities will be permitted … or state an objection to the request, including the reasons.”
The court has substantial discretion to determine the propriety of such requests and the
sufficiency of responses.23 An objection and answer preserves nothing and serves only to
waste the time and resources of both the parties and the court.24 Answering discovery
requests “subject to” objections is “manifestly confusing (at best) and misleading (at
worse), and has no basis at all in the Federal Rules of Civil Procedure.”25 The court
could find “whenever [defendants’] answer accompanies an objection, the objection is
deemed waived and the answer, if responsive, stands.”26 Nonetheless, the court will
address the validity of defendants’ objections.
23
Audiotext Commc’ns Network Inc. v. US Telecom, Inc., No. 94-2395, 1995 WL
625744, at *1 (D. Kan. Oct. 5, 1995).
24
Consumer Electronics Ass’n v. Compras & Buys Magazine, Inc., No. 08-21085,
2008 WL 4327253, at *3 (S.D. Fla. Sept. 18, 2008).
25
Sprint Commc’ns Co., L.P. v. Comcast Cable Commc’ns, LLC, No. 11-2684, 2014
WL 545544, at *2 (D. Kan. Feb. 11, 2014).
26
Id. (citations omitted).
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In response to plaintiff’s motion to compel, defendants object to Request for
Production No. 9 for two reasons: (1) on the grounds of fundamental fairness per the
discovery agreement; and (2) on the merits because the discovery sought is outside the
administrative record and is not probative of defendants’ alleged conflict of interest. As
earlier explained, when ruling upon a motion to compel, the court generally considers
those objections which have been timely asserted and relied upon in response to the
motion. The court generally deems objections initially raised but not relied upon in
response to the motion as abandoned.27 In their response brief, defendants mention that
they originally objected to Request for Production No. 9 as requesting confidential and
proprietary material and attached an affidavit in support.28 However, defendants failed to
re-assert or substantively address this objection in their response to plaintiff’s motion to
compel. Therefore, the court need not address it but will do so briefly.
1.
Confidential, Proprietary Material
A general concern for protecting confidentiality does not equate to privilege.29
Thus, information and documents are not shielded from discovery merely because they
are confidential.30 Defendants have failed to cite any case law to support their original
27
Sonnino, 221 F.R.D. at 670 (citing Cotracom Commodity Trading Co. v. Seaboard
Corp., 189 F.R.D. 655, 664 (D. Kan. 1999)).
28
ECF doc. 34 at 2; ECF doc. 34-2.
29
DIRECTV, Inc. v. Pucinelli, 224 F.R.D. 677, 684-85 (D. Kan. 2004) (citing Sonnino
v. Univ. of Kan. Hosp. Auth., 221 F.R.D. 633, 642 (D. Kan. 2011)).
30
Id.
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confidentiality objection. Any concerns defendants have about the confidentiality of the
requested information can be solved by the enforcement of the current protective order31
or if necessary, by the entry of another protective order. Defendants have failed to meet
their burden and this objection is therefore overruled.
2.
Discovery Agreement
Defendants argue plaintiff’s motion should be denied on grounds of fundamental
fairness because it violates the parties’ out-of-court discovery agreement (the
“Agreement”). Defendants assert that the court should clarify that it expects the parties
to comply with their discovery agreements since the court “has a substantial interest in
encouraging parties to attempt to resolve discovery disputes without Court
involvement.”32 The only authority defendants cite in support of this argument is a
reference to McBride v. Medicalodges, Inc., No. 06-2535-JWL, 2008 WL 2437559, at *2
(D. Kan. June 13, 2008), in which the parties were ordered to produce all documents they
had agreed to produce per the parties’ agreement. Plaintiff asserts that defendants have
violated the Agreement because their responses to Request for Production No. 9 are
deficient. Plaintiff insists that the limited discovery he seeks was agreed to by Hartford
(per the Agreement).
31
See ECF doc. 24.
32
ECF doc. 34 at 4.
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Because both sides have alleged the opposing party is in violation of the
Agreement and defendants’ provided minimal authority in support of their objection, the
fair and most reasonable approach is to decide this motion on the merits. Therefore,
defendants’ objection to plaintiff’s motion as a breach of the parties’ informal discovery
agreement is overruled.
3.
Non-Record Conflict Discovery
Defendants re-assert their objection that the documents sought in Request for
Production No. 9 are beyond the non-record “conflict” discovery permitted by
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008). Plaintiff argues that Hartford
should be ordered to produce the “Claims Excellence material” because it is relevant and
material to his case. Plaintiff asserts that the requested information, which consists of
Hartford policies for handling LTD claims, is relevant and discoverable because it will
shed light on Hartford’s reasonable policies and procedures for making benefit
determinations. In support, defendant cites three ERISA cases, all of which are outside
of the Tenth Circuit,33 but in each case the district court found that the claim manual or
like documents were discoverable.
Plaintiff concludes that he is “entitled to discover
33
See ECF doc. 32 at 7 (citing Zewdu v. Citigroup Long Term Disability Plan, 264
F.R.D. 622, 628 (N.D. Cal. 2010); Cannon v. UNUM Life Ins. Co. of Am., 219 F.R.D.
211, 214 (D. Me. 2004) (“[O]bviously if [Hartford] has internal memoranda or policies
that instruct claim handlers how to apply the [policy] limitation[s], such materials are
relevant to the question of whether [Hartford] acted arbitrarily and capriciously in
connection with its denial of [plaintiff’s] claim.”); Kruk v. Metro. Life Ins. Co., Inc., No.
7-1533, 2009 WL 1481543 (D. Conn. May 26, 2009)).
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other Claims Excellence policies to show that Hartford favored its own finances over fair
and consistent benefit determinations.”34
Defendants argue that conflict discovery is limited to information probative of
conflict, such as vendor compensation and denial rates.
Defendants assert that the
documents plaintiff seeks are well beyond those limits. Defendants explain that they
already have provided plaintiff with discovery probative of conflict, including: (1) the
amounts billed to Hartford by two outside vendors for 2010-2013; (2) the percentage of
claims approved for the Plan at issue from 2010-2013; (3) the percentage of claims
denied under the Plan from 2010-2013; and (4) sections of the BMS Reference Manual
regarding independent medical examinations, Social Security disability, Disability Best
Practices Memo, Disability Updates, Claim Submission & Investigation, Definition of
Disability; Denials and Terminations; and Legal. Defendants assert that there is no
evidence of conflict and the documents plaintiff requests would be cumulative and
tantamount to an unauthorized fishing expedition.
In reviewing a plan administrator’s decision, federal courts are limited to the
administrative record.35 Although district courts are prohibited from considering extrarecord materials related to a claimant’s eligibility for benefits, they may consider extra-
34
Id. at 8.
35
Brown v. Hartford Life Ins. Co., 428 Fed. App’x 817, 820 (10th Cir. 2011) (citation
omitted).
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record materials related to an administrator’s dual-role conflict of interest.36 The Tenth
Circuit has held that we must apply Federal Rule of Civil Procedure 26(b) to discovery
requests seeking information related to a dual-role conflict of interest.37
However,
neither a claimant nor an administrator should be allowed to use discovery to engage in
unnecessarily broad discovery that slows the efficient resolution of an ERISA claim.38
Rule 26(b) permits discovery only of “[r]elevant information” and the discovery must
“appear [] reasonably calculated to lead to the discovery of admissible evidence.”39 But,
all discovery is limited by Rule 26(b)(2) which protects against overly burdensome
discovery requests, discovery of cumulative materials, and overly costly discovery
requests.40
The party moving to supplement the record or engage in extra-record
discovery bears the burden of showing its propriety.41
A district court has substantial discretion in handling discovery requests under
Rule 26(b).42 In exercising its discretion, the court may account for several factors that
36
Id. (citation omitted).
37
Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1162 (10th Cir.
2010).
38
Id. at 1162-63.
39
Fed. R. Civ. P. 26(b)(1).
40
Fed. R. Civ. P. 26(b)(2).
41
Murphy, 619 F.3d at 1163.
42
Id. at 1164.
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may militate against broad discovery.43 First, although the court must keep in mind that
ERISA seeks a fair and informed resolution of claims, ERISA also seeks to ensure a
speedy, inexpensive, and efficient resolution of those claims.44 Second, in deciding
whether a discovery request is overly costly or burdensome in light of it benefits, the
court must also consider the necessity of the discovery.45
Hartford serves dual roles under the Plan—it both insures the Plan and administers
it. It thus has a conflict of interest. Case law authorizes some limited discovery because
of the exception to the general rule against discovery in ERISA cases when a conflict of
interest exists by virtue of the dual role of a litigant who both insures and administers the
claims.46 Plaintiff seeks certain “Claims Excellence” material to show that Hartford
favored its own finances over fair and consistent benefit determinations. Defendants
argue the information sought is not probative of conflict and cumulative.
Although it is a close call, the court finds that the discovery sought is relevant. 47
Plaintiff has met his burden to show a conflict exists and the discovery he seeks may
reasonably lead to the discovery of admissible evidence probative of conflict.
Defendants have not argued and the court is not persuaded that producing these materials
43
Id. at 1163.
44
Id.
45
Id.
46
See Glenn, 554 U.S. 105; Murphy, 619 F.3d 1151.
47
See ECF doc. 32-7.
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would be overly burdensome or overly costly for defendants. In fact, defendants admit
that they offered to produce the requested documents at one point but changed their mind
after plaintiff pressed for additional documents. The documents plaintiff requests are
specific and not overly broad. However, plaintiff should keep in mind that the court must
help ensure the speedy and efficient resolution of this ERISA claim.
Defendants’
production of the requested documents should not continue plaintiff’s pattern of
additional requests. The foregoing could tip the scales where the burden of production
may outweigh the necessity of the discovery.
IT IS THEREFORE ORDERED:
1. Plaintiff’s motion to compel (ECF doc. 31) is granted.
All responsive
documents that defendants have been ordered to produce shall be served by October 14,
2014.
2. The parties shall bear their own expenses and attorney fees incurred in
connection with this motion.
Dated October 3, 2014, at Kansas City, Kansas.
s/ James P. O’Hara
James P. O’Hara
U. S. Magistrate Judge
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