Hatfield v. Life Insurance Company of North America

Filing 43

MEMORANDUM OPINION & ORDER: 1) Pla's 25 MOTION to Strike portion of the admin record or in the alternative motion for order requiring LINA to supplement the admin record is GRANTED in part and DENIED in part. 2) W/in 14 days, Dft is DIRECTED to supplement the admin record consistent w this Memo Opinion and Order. Signed by Judge Danny C. Reeves on 9/23/2015.(SCD)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
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RANDY HATFIELD,
Plaintiff,
V.
LIFE INSURANCE COMPANY OF
NORTH AMERICA d/b/a CIGNA
GROUP INSURANCE,
Defendant.
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Civil Action No. 5: 14-432-DCR

MEMORANDUM OPINION
AND ORDER

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This action is pending for consideration of Plaintiff Randy Hatfield’s motion to strike
portions of the administrative record filed by Defendant Life Insurance Company of North
America, d/b/a Cigna Group Insurance (“LINA”). [Record No. 25] As explained more fully
below, the motion will be granted, in part, and denied, in part.
As an employee of Toyota Motor Manufacturing Kentucky, Hatfield was insured
under a long-term disability (“LTD”) insurance policy with LINA. [Record No. 1-1, p. 1]
LINA is also the administrator of the LTD plan. Hatfield remained insured under the LTD
coverage when he became disabled in August 2011. Id. at 2. Hatfield made a claim for LTD
benefits with LINA, requesting that the benefits begin in August 2012, after LINA’s twelvemonth elimination period ended. LINA denied the claim on September 19, 2012. [Record
No. 19, pp. 500-02] Hatfield appealed, and by letter dated July 3, 2013, LINA reversed its
denial and approved the claim, effective August 16, 2012. Id. at 490-92. However, in the
same letter, LINA decided Hatfield was not entitled to benefits beyond July 16, 2013. Id. at
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492. Hatfield filed a second appeal, and on March 7, 2014, LINA overturned its decision to
terminate benefits after July 16, 2013.

Id. at 480.

On March 18, 2014, LINA again

terminated Hatfield’s LTD benefits. Id. at 465-67. LINA’s denial informed Hatfield that he
was required to pursue an administrative appeal of the decision before filing a lawsuit and
that he had 180 days to do so. Id.
By letter dated August 26, 2014, Hatfield administratively appealed the March 18,
2014 denial of LTD benefits. Id. at 2936-47. The extent of the review undertaken by LINA
at that time is not clear from the record.
On November 3, 2014, Hatfield filed a Complaint in Harrison Circuit Court, alleging
violations of the Employee Retirement Income Security Act (“ERISA”) and several state law
claims.

[Record No. 1-1, pp. 1-4]

Eventually, LINA reviewed Hatfield’s claim, but

apparently not until after it received service of Summons on November 11, 2014. On March
2, 2015, following removal to this Court, LINA issued a letter to Hatfield denying his August
26, 2014 appeal. [Record No. 25-4]
In the memorandum accompanying his motion to strike, Hatfield observes that 29
C.F.R. § 2560.503-1 requires plan administrators to decide appeals involving disability
benefits within forty-five days of receiving the appeal.

[Record No. 25-1]

Plan

administrators may request an additional forty-five days, as long as the request is made
before the termination of the initial forty-five day period. 29 C.F.R. §§ 2560.503-1(i)(1)(i)
and (i)(3)(i). Because LINA failed to decide Hatfield’s claim within forty-five days and did
not request an extension during that initial period, Hatfield argues that 29 C.F.R. § 2560.5031(l) deems his claim exhausted, entitling him to file suit at the expiration of the forty-five day
period. [Record No. 25-1]
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Hatfield contends that the Court’s review should be limited to the administrative
record that existed at the time he exhausted his administrative remedies. Id. Therefore, he
urges the Court to strike all documents generated after the lawsuit commenced, including Dr.
Karande’s medical review reports and LINA’s March 2, 2015 denial letter. Id. According to
LINA, its failure to process Hatfield’s claim in a timely manner was merely a procedural
error. [Record No. 31] LINA asserts that courts routinely remand similar cases where no
evidence of bad faith is present. Id.
The issue presented by the plaintiff’s pending motion is whether the administrative
record closed once the appeal was deemed exhausted (forty-five days after LINA received
the appeal) or once LINA issued a final decision on March 2, 2015. This is a close case, and
neither side has cited controlling authority based on a factual pattern similar to the one
presented here. In this case, the administrative record contains evidence generated after the
lawsuit was filed because LINA made its decision after the lawsuit was filed but before the
Court had conducted a review. Thus, this case is not like Perry v. Simplicity Engineering,
900 F.2d 963, 967 (6th Cir. 1990), where the Sixth Circuit held that a district court could not
consider evidence that was not available to the plan administrator at the time of his decision.
Neither party in this case is attempting to bolster the record with new evidence. Instead, this
is a case where LINA failed to follow the time frame set out in the regulations but ultimately
reached a decision based, in part, on the records in dispute.
While the Court does not condone LINA’s delay in decision-making, it will not
require any materials be removed from the administrative record at this time. However, the
Court reserves the right to revisit this decision upon submission of the parties’ briefs on the

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merits of the case. Accordingly, the Court will deny, without prejudice, Hatfield’s motion to
strike from the record documents filed after the lawsuit was instituted.
Alternatively, Hatfield asks that LINA be required to produce the complete
administrative record. [Record No. 25] Specifically, Hatfield contends that three letters,
dated February 11, 2015, March 9, 2015, and March 2, 2015, are missing. [Record No. 25-1]
Hatfield also believes that LINA possesses, but has not produced, “claim notes” and “internal
communications and outside communications with Dr. Karande.” Id. In its response, LINA
admits that some of the documents relating to Hatfield’s appeal are missing and agrees to refile the administrative record. Consequently, Hatfield’s motion will be granted, in part, to
require LINA to supplement the administrative record. 
For the foregoing reasons, it is hereby
ORDERED as follows:
1.

Plaintiff Randy Hatfield’s motion to strike portions of the administrative

record, or in the alternative, motion for order requiring LINA to supplement the
administrative record [Record No. 25] is GRANTED, in part, and DENIED, in part.
2.

Within fourteen (14) days, Defendant Life Insurance Company of North

America is DIRECTED to supplement the administrative record consistent with this
Memorandum Opinion and Order.
This 23rd day of September, 2015.

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