Campbell v. Hartford Life and Accident Insurance Company
Filing
26
MEMORANDUM OPINION & ORDER: 1) Dft Hartford Life and Accident Insurance Company's decision to deny Pla Dana Campbell's claim for Gary Campbell's supplemental life insurance benefit and rescind coverage is REVERSED; 2) Hartford sh all REMIT Gary Campbell's $190,000.00 supplemental life insurance benefit to Pla Dana Campbell; 3) All other claims for relief or pending motions in this matter are hereby DENIED AS MOOT; and 4) The Court shall enter a separate judgment. Signed by Judge Joseph M. Hood on 06/08/2021. (MDC) cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
DANA CAMPBELL,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
HARTFORD LIFE AND ACCIDENT
COMPANY, d/b/a THE HARTFORD,
Defendant.
**
**
Civil No. 5:18-cv-194-JMH
MEMORANDUM OPIONION
AND ORDER
**
**
**
Plaintiff Dana Campbell brings this action pursuant to the
Employment
Retirement
1132(a)(1)(B),
against
Security
Defendant
Act
(“ERISA”),
Hartford
Life
29
U.S.C.
and
§
Accident
Insurance Company, doing business as The Hartford (“Hartford”).
Mrs. Campbell seeks to recover supplemental benefits under her
spouse Gary Campbell’s group life insurance policy (the “Policy”),
which
Hartford
issued
to
Mrs.
Campbell’s
employer,
AECOM.
Following Mr. Campbell’s death on December 20, 2016, Hartford paid
a $10,000.00 basic life insurance benefit to Mrs. Campbell, Mr.
Campbell’s sole beneficiary, but Hartford denied supplemental
dependent life insurance benefits in the amount of $190,000.00 on
the basis that Mr. Campbell allegedly made a misrepresentation on
his life insurance application. Presently before the Court are
Mrs.
Campbell’s
Memorandum
in
Opposition
to
Administrator’s
Decision [DE 21], Hartford’s Response [DE 24], and Mrs. Campbell’s
Reply [DE 25]. Accordingly, this matter is fully briefed and ripe
for review. Having reviewed the Administrative Record (“AR”) [DE
18-2] and the Parties’ Briefs [DE 21; DE 24; DE 25], and being
otherwise sufficiently advised, the Court will reverse Hartford’s
decision
to
deny
Mrs.
Campbell’s
claim
for
her
husband’s
supplemental life insurance benefit and rescind coverage and order
Hartford to remit the $190,000.00 supplemental life insurance
benefit to Mrs. Campbell.
I. BACKGROUND
A. DECEDENT’S MEDICAL HISTORY AND TREATMENT FOR ALCOHOL USE
Prior to moving from Utah to Kentucky in September 2013, Mr.
Campbell had been sober for four (4) years. [AR 716]. However,
when Mr. Campbell was first living in Kentucky, he was not working
and had an episode of heavy drinking in which he drank six (6)
shots of alcohol per day. Id. at 734. In August 15, 2014, while
seeking treatment for his hypertension, Mr. Campbell reported his
alcohol use to his physician, Dr. Sandra Dionisio, at White House
Clinics. Id.
On March 10, 2015, Mr. Campbell visited Dr. Dionisio again,
and shared more information about his alcohol use. Id. at 716. In
the few weeks that preceded the visit, Mr. Campbell had gotten
“drunk several times” and “really drunk over the weekend.” Id. His
last drink had been two (2) days prior to his March 10, 2015,
2
doctor’s visit. Id. Mr. Campbell had been attending Alcoholics
Anonymous (“AA”) meetings, but he “stopped going when he started
drinking.” Id. Both Mrs. Campbell and Mr. Campbell’s AA sponsor
advised Mr. Campbell to detox, but he “resisted,” fearing “he might
lose his spot in [his] PhD program.” Id. Also, Mr. Campbell
reported that “[h]is wife told him to stop o[r] she wants a
divorce,” and he felt that if that happened “he [would] lose
everything.”
Id.
Mr.
Campbell
requested
that
Dr.
Dionisio
prescribe Mr. Campbell Antabuse, but instead of just prescribing
medication, Dr. Dionisio “[d]iscussed that [she] would rather he
be part of a comprehensive program to help with alcohol dependence”
and stated, “He is planning to attend AA consistently from here
on.”
Id.
at
716-18.
“[u]ncontrolled
due
Finding
to
Mr.
excessive
Campbell’s
alcohol
hypertension
use,”
Dr.
was
Dionisio
diagnosed Mr. Campbell with “Alcohol dependence (303.90)” and
referred him to a psychiatrist. Id. at 718.
On May 9, 2015, Mr. Campbell returned to White House Clinics
and met with Dr. Brad Williams. Id. at 712. Mr. Campbell reported
that “he had a day [the previous] week when he ‘went on a tear’”
and “can control urges to drink for 2-2 we[e]ks and then will try
to have ‘[j]ust a couple of drinks’ but can’t limit it to that.”
Id. At the time of his visit with Dr. Williams, Mr. Campbell was
going to “AA at least a couple of times a week” and “seeing a
counselor every 2 weeks.” Id. Also, Mr. Campbell shared that he
3
was working nights and only drinking during the day. Id. Again,
Mr. Campbell expressed fear that he “‘may lose [his] marriage over
this.’” Id. After relaying Dr. Dionisio’s treatment plan to Dr.
Williams, including Mr. Campbell’s requests that he be prescribed
Antabuse, Mr. Campbell reported that “he has been on the internet
and has learned that there are possibly other meds he could take”
and
mentioned
Topamax.
Id.
Like
Dr.
Dionisio,
Dr.
Williams
diagnosed Mr. Campbell with “Alcohol Dependence (303.90),” but
unlike Dr. Dionisio, Dr. Williams prescribed Mr. Campbell a “low
dose of [T]opamax for 1 month.” Id. at 714. In addition to
prescribing Topamax, Dr. Williams ordered Mr. Campbell to follow
up with Dr. Dionisio in one (1) month and continue going to AA and
seeing a counselor. Id.
B. RELEVANT POLICY PROVISIONS
As an employee of AECOM, Mrs. Campbell was covered under
AECOM’s benefit plan (the “Plan”), which included the Policy
Hartford issued to AECOM, the Policyholder. Under the Policy, in
addition to basic life insurance, Mrs. Campbell could elect to
have both supplemental life insurance and supplemental dependent
life insurance coverage. Id. at 13-16. Mrs. Campbell elected to
have
supplemental
dependent
life
insurance
coverage
for
her
husband, Mr. Campbell, which included a “Guaranteed Issue Amount”
of $10,000.00 and an additional “Maximum Amount” of $190,000.00.
Id. at 839. While the “Guaranteed Issue Amount” did not require
4
evidence of insurability, the additional “Maximum Amount” did,
including the completion of a Personal Health Application. Id. at
839-40. The additional coverage amount was based on the information
provided in the Personal Health Application and was approved on
November 10, 2015. Id. at 847.
The
Personal
Health
Application
asked
several
questions
regarding Mr. Campbell’s medical information, including Question
No. 4, which asked the following:
Within the past 5 years, have you used any controlled
substances, with the exception of those taken as
prescribed by your physician, been diagnosed or treated
for drug or alcohol abuse (excluding support groups), or
been convicted of operating a motor vehicle while under
the influence of drugs or alcohol?
Id. at 839-40. In response to Question No. 4, the Campbells checked
“No.” Id. at 840.
The Policy included an “Incontestability” provision that
started the following:
Except for non-payment of premiums, Your or Your
Dependent's Life Insurance Benefit cannot be contested
after two years from its effective date.
In the absence of fraud, no statement made by You or
Your Spouse relating to Your or Your Spouse's
insurability will be used to contest Your insurance for
which the statement was made after Your insurance has
been in force for two years. In order to be used, the
statement must be in writing and signed by You and Your
Spouse.
No statement made relating to Your Dependents being
insurable will be used to contest their insurance for
which the statement was made after their insurance has
been in force for two years. In order to be used, the
5
statement must be in writing and signed by You or Your
representative.
All statements made by the Policyholder, the Employer or
You or Your Spouse under The Policy will be deemed
representations and not warranties. No statement made to
affect this insurance will be used in any contest unless
it is in writing and a copy of it is given to the person
who made it, or to his or her beneficiary or Your
representative.
Id. at 29. Additionally, the Policy stated, “[Hartford has] full
discretion and authority to determine eligibility for benefits and
to construe and interpret all terms and provisions of The Policy.
This provision applies where the interpretation of The Policy is
governed by the Employee Retirement Income Security Act of 1974,
as amended (ERISA).” Id.
C. DECEDENT’S DEATH AND PLAINTIFF’S LIFE INSURANCE CLAIM
On April 13, 2016, Mr. Campbell was diagnosed with esophageal
cancer. Id. at 468. On April 12, 2016, April 18, 2016, and April
21, 2016, Mr. Campbell’s oncologists noted “prior alcohol abuse”
and that Mr. Campbell had a “[h]istory of alcohol abuse.” Id. at
465,
479,
483.
On
December
20,
2016,
Mr.
Campbell
died
of
esophageal cancer. Id. at 812. Mrs. Campbell submitted a claim for
life insurance benefits under the Policy, and Hartford paid the
non-contestable $10,000.00 basic life insurance benefit to Mrs.
Campbell. Id. at 80, 119-20, 828-35. However, pursuant to the
incontestability
provision
of
the
Policy
and
because
Mr.
Campbell’s death occurred within the two (2) years of the effective
6
date of the supplemental dependent life insurance coverage, before
paying
the
remaining
$190,000.00
under
the
Policy,
Hartford
conducted a review of the Campbells’ answers on the Personal Health
Application and cross-referenced those answers with Mr. Campbell’s
medical records. Id. at 80, 119-20.
Once Hartford received Mr. Campbell’s medical records, its
Claim
Office
referred
the
matter
to
Hartford’s
Medical
Underwriting unit, which determined that had Hartford had access
to Mr. Campbell’s medical records, supplemental dependent life
insurance coverage would not have been approved. Id. at 449.
Specifically, on March 21, 2017, the Medical Underwriter decided
that due to Mr. Campbell’s Alcohol Dependence diagnosis, which the
Medical Underwriter found pertained to Question No. 4 on the
Personal
Health
Application,
Hartford
would
have
declined
coverage. Id. at 65, 449. On April 3, 2017, Hartford’s Claim
Analyst, Cheryl LeFort, wrote Mrs. Campbell to inform her that her
claim for benefits had been denied, coverage had been rescinded,
and
Mrs.
Campbell
had
sixty
(60)
days
to
provide
Hartford
additional information or appeal. Id. at 95-98. Ms. LeFort asserted
that Hartford’s decision was based on the Campbells’ answers on
the Personal Health Application and Mr. Campbell’s medical records
from his May 2015 visit at White House Clinics, which allegedly
indicate Mr. Campbell “was treated for alcohol abuse.” Id.
7
On May 1, 2017, Mrs. Campbell requested a copy of her claim
file, and ten (10) days later, Hartford provided her a copy of the
claim file. Id. at 94. On May 3, 2017, Mrs. Campbell sent Ms.
LeFort a letter of appeal, submitting additional information and
asserting, “On May 1, 2017, Dr. Sandra Dionisio sent a letter
(attached) in which she explained that my deceased husband, Gary
Campbell, ‘never sought treatment for alcohol use.’ Therefore, our
answer to question #4 on Gary’s health history does not contradict
the medical documentation.” Id. at 367 (underlined in original).
Dr. Dionisio’s May 1, 2017, letter states the following:
“I saw Gary on 3/21/2015 where he requested medication
for recurrence of his alcohol use. At that time, he was
referred but never sought treatment for alcohol use. I
think their understanding when queried in the Insurance
form was if he ever sought active treatment which he
actually never did.”
Id. at 369.
On May 16, 2017, Hartford notified Mrs. Campbell by letter
that it had reviewed the additional information Mrs. Campbell had
provided, and the decision to deny the claim would be maintained.
Id. at 91-92. While Hartford acknowledged Dr. Dionisio’s May 1,
2017, letter asserting that based on Dr. Dionisio’s March 21, 2015,
visit with Mr. Campbell, the Campbells answered Question No. 4
accurately,
Hartford
directed
Mrs.
Campbell’s
attention
to
Hartford’s April 3, 2017, letter, which stated that in making its
decision, Hartford relied on medical records from Mr. Campbell’s
8
May 9, 2015, White House Clinics visit with Dr. Williams not Mr.
Campbell’s March 21, 2015, White House Clinics visit with Dr.
Dionisio. Id.
On
October
2,
2017,
Mrs.
Campbell’s
counsel
appealed
Hartford’s decision again, submitting additional information in
the form of affidavits and statements from people who knew Mr.
Campbell “did not personally witness signs or symptoms of alcohol
abuse” and were unaware of a “medical diagnosis or treatment” for
alcohol
abuse.
Id.
at
144-48.
Additionally,
Mrs.
Campbell’s
October 2, 2017, letter argues Alcohol Dependence and Alcohol Abuse
are two separate diagnoses with different diagnostic codes. Id.
The provided diagnostic codes for Alcohol Dependence and Alcohol
Abuse read as follows:
Alcohol Dependence - Diagnostic Code 303.90
A maladaptive pattern of alcohol use, leading to
clinically significant impairment or distress, as
manifested by three (or more) of the following,
occurring at any time in the same 12-month period:
1. Tolerance, as defined by either of the following:
a. A need for markedly increased amounts of alcohol to
achieve Intoxication or desired effect
b. Markedly diminished effect with continued use of the
same amount of alcohol
2. Withdrawal, as manifested by either of the following:
a. The characteristic withdrawal syndrome for alcohol
(refer to Criteria A and B of the criteria sets for
Withdrawal from alcohol)
b. Alcohol (or a closely related drug such as valium) is
used to relieve or avoid withdrawal symptoms
3. Alcohol is often used in larger amounts or over a
longer period than was intended
9
4. There is a persistent desire or unsuccessful efforts
to cut down or control alcohol use
5. A great deal of time is spent in activities necessary
to obtain alcohol, use alcohol, or recover from its
effects
6. Important social, occupational, or recreational
activities are given up or reduced because of alcohol
use
7. Alcohol use is continued despite knowledge of having
a persistent or recurrent physical or psychological
problem that is likely to have been caused or exacerbated
by alcohol (e.g. continued drinking despite recognition
that an ulcer was made worse by alcohol consumption)
Specifiers:
• With Physiological Dependence: evidence of tolerance
or withdrawal (i.e., either Item 1 or 2 is present)
• Without Physiological Dependence: no evidence of
tolerance or withdrawal (i.e., neither Item 1 nor 2 is
present)
Course specifiers
•
•
•
•
•
•
Early Full Remission
Early Partial Remission
Sustained Full Remission
Sustained Partial Remission
On Agonist Therapy
In a Controlled Environment
(Note--a diagnosis of Alcohol Dependence can never be
changed to a diagnosis of Alcohol Abuse. The DSM also
states that “The differentiation of Sustained Full
Remission from recovered (no current Substance Abuse
Disorder) requires consideration of the length of time
since the last period of disturbance, the total duration
of the disturbance, and the need for continued
evaluation.”)
from DSM-IV-TR[.]
The HAMS: Harm Reduction Network, available at:
http://hams.cc/dependence/ (last visited Oct. 2, 2017.)
This is distinguishable from alcohol abuse:
Alcohol Abuse - Diagnostic Code 305.00
10
A. A maladaptive pattern of alcohol use leading to
clinically significant impairment or distress, as
manifested by one (or more) of the following, occurring
within a 12-month period:
(1) recurrent alcohol use resulting in a failure to
fulfill major role obligations at work, school, or home
(e.g., repeated absences or poor work performance
related to alcohol use; alcohol-related absences,
suspensions, or expulsions from school; neglect of
children or household)
(2) recurrent alcohol use in situations in which it is
physically hazardous (e.g., driving an automobile or
operating a machine when impaired by alcohol use)
(3) recurrent alcohol-related legal problems
arrests for alcohol-related disorderly conduct)
(e.g.,
(4) continued alcohol use despite having persistent or
recurrent social or interpersonal problems caused or
exacerbated by the effects of the alcohol (e.g.,
arguments
with
spouse
about
consequences
of
Intoxication, physical fights)
B. The symptoms have never met the criteria for Alcohol
Dependence.
(Note that there are no course specifiers for Alcohol
Abuse. A diagnosis of Alcohol Abuse is for life--it can
never be removed from your medical chart no matter how
much you improve.)
from DSM-IV-TR[.]
The HAMS Harm Reduction Network,
available
http://hams.cc/abuse/ (last visited Oct. 2, 2017).
at:
Id. at 145-47.
On February 1, 2018, Hartford upheld its decision to deny
Mrs. Campbell’s claim for supplemental dependent life insurance
benefits and stated that Hartford’s “claim decision is now final
11
as administrative remedies available under the Policy have been
exhausted.” Id. at 86-88. Subsequently, on February 14, 2018, Mrs.
Campbell filed suit in the Madison Circuit Court, which she later
removed to this Court on March 22, 2018, challenging Hartford’s
denial of her claim for supplemental dependent life insurance
benefits. [DE 1].
II. STANDARD OF REVIEW
A. JUDICIAL ESTOPPEL
Before determining which standard of review is applicable,
the Court will address Hartford’s argument that the doctrine of
judicial
estoppel
prevents
Mrs.
Campbell
from
“arguing
the
‘Certificate of Insurance’ with the Administrative Record is the
Plan document for purposes of awarding her benefits, but is not
the Plan document for purposes of granting discretion.” [DE 24, at
9 (citing Hogan v. Life Ins. Co. of North America, 521 F. App’x
410, 415-16 (6th Cir. 2013); Beasley v. Unum Life Ins. Co., No. 13CV-12349, 2015 WL 4966875, at *6 (E.D. Mich. Aug. 20, 2015)
(finding the plaintiff was judicially estopped from “argu[ing]
that Beasley was entitled to benefits under the terms of the
specimen policy in the first instance, but then argu[ing] that
unfavorable terms in the specimen policy do not warrant termination
of benefits in subsequent litigation”))].
“The equitable doctrine of judicial estoppel precludes ‘a
party who successfully assumed one position in a prior legal
12
proceeding
from
assuming
a
contrary
position
in
a
later
proceeding.’” Beasley, 2015 WL 4966875, at *4 (quoting Mirando v.
U.S. Dep't of the Treasury, 766 F.3d 540, 545 (6th Cir. 2014)).
“In order to prevent a party from proverbially ‘trying to have
their cake and eat it too,’ judicial estoppel seeks to preserve
‘the integrity of the courts by preventing a party from abusing
the judicial process through cynical gamesmanship.’” Id. (quoting
Lucier v. City of Ecorse, 601 F. App’x. 372, 377 n. 2 (6th Cir.
2015); Lorillard Tobacco Co. v. Chester, Willcox & Saxbe, 546 F.3d
752, 757 (6th Cir. 2008) (same)). To determine whether the doctrine
of judicial estoppel should be invoked, the Court considers the
following factors:
(i) whether the party's later position is “clearly
inconsistent with its earlier position; (ii) “whether
the party has succeeded in persuading a court to accept
that party's earlier position, so that judicial
acceptance of an inconsistent position in a later
proceeding would create the perception that either the
first or the second court was misled”; and (iii) “whether
the party seeking to assert an inconsistent position
would derive an unfair advantage or impose an unfair
detriment on the opposing party is not estopped.”
Id. (citing Mirando, 766 F.3d at 545; accord Zedner v. United
States, 547 U.S. 489, 504 (2006)). “These factors are merely
considerations and are not alone dispositive.” Id. (citing Pavelka
v. Allstate Property & Cas. Ins. Co., 91 F. Supp. 3d 931, 2015 WL
1221393, at *4 (E.D. Mich. 2015)).
13
In Hogan, the Sixth Circuit Court of Appeals found, “[T]o the
extent Hogan challenges the validity of a non-filed policy, she
should not be able to have her cake and eat it too—either the
policy is valid or it is not. She cannot seek the benefits
contained
in
the
policy
while
rejecting
procedural
language
adverse to her.”
In the present case, unlike the plaintiff in Hogan, Mrs.
Campbell is not challenging the validity of procedural language in
a non-filed policy. While the Group Policy [DE 24-3] referenced in
Hartford’s
Response
[DE
24,
at
9]
is
not
found
in
the
Administrative Record [DE 18-2], Mrs. Campbell is not challenging
the validity of the Group Policy [DE 24-3]. See [DE 25, at 4-5].
Instead, Mrs. Campbell is arguing the booklet-certificate that
contains language granting discretionary authority to Hartford is
a summary document that may not be considered part of the Plan.
See [DE 21; DE 25]. Moreover, Mrs. Campbell is not rejecting the
language granting discretionary authority because it is adverse to
her; she is rejecting the language because it is not part of the
Plan.
In Beasley, during prior litigation, “Plaintiffs took the
position in Beasley I that the terms of the specimen policy
controlled the outcome of the dispute among the parties regarding
Beasley's
entitlement
to
disability
benefits,
albeit
under
a
different provision than the one at issue in the present matter.”
14
Beasley, 2015 WL 4966875, at *5 (citation omitted). The plaintiffs
then asserted “the position that the specimen policy does not
govern Beasley’s present eligibility for disability benefits,”
which the Court, finding the first factor for judicial estoppel
was satisfied, held was “clearly inconsistent with the position
asserted in the prior proceedings.” Id. The second factor for
judicial
estoppel
was
satisfied
because
“the
Court
accepted
Plaintiffs' prior position and relied on the language of the
specimen policy in rendering its decision in favor of Plaintiffs
in the prior litigation.” Id. (citation omitted). Since “the
parties stipulated to the Court's use of the specimen policy in
reaching its decisions on reasonableness and damages. Defendants
continued to provide Beasley with disability benefit payments for
nearly 12 years, in accordance with the Court's earlier opinions.”
Id. Accordingly, the Beasley Court found the third factor for
judicial estoppel was also satisfied because the “Plaintiffs would
gain an unfair advantage, and Defendants would be prejudiced.” Id.
Here, unlike Beasley, the three factors for judicial estoppel
are not present. First, regarding the first factor, Mrs. Campbell’s
position is not “clearly inconsistent” with her earlier position.
Id. at 4. As previously mentioned, arguing the booklet-certificate
is not a Plan document is not analogous to Hogan, and at no time
throughout this litigation has Mrs. Campbell changed her position
that the booklet-certificate is not part of the Plan. Furthermore,
15
Hartford admits, “Hartford issued [the Policy] to AECOM to insure
the life insurance component of component of [the Plan], which is
an ‘employee welfare benefit plan,’ 29 U.S.C. § 1002(1), pursuant
to ERISA. Plaintiff was a participant in the Plan based on her
employment with AECOM.” [DE 1, at 3]. Accordingly, there is no
argument that Mrs. Campbell was covered by the Policy. What is at
issue in this matter is whether the documents Hartford has provided
as either the Policy or the Plan are, indeed, the Policy or Plan
documents or merely a plan summary, as Mrs. Campbell contests.
Regarding the second factor, since Mrs. Campbell has not taken
inconsistent positions, she has not “succeeded in persuading a
court to accept that party's earlier position, so that judicial
acceptance of an inconsistent position in a later proceeding would
create the perception that either the first or the second court
was misled.” Beasley, 2015 WL 4966875, at *4. The Court finds the
third factor as equally lacking as the first two factors for
judicial estoppel because Mrs. Campbell is not “seeking to assert
an inconsistent position [that] would derive an unfair advantage
or impose an unfair detriment on the opposing party [if she] is
not estopped.” Id. For the foregoing reasons, the Court disagrees
with Hartford and finds the doctrine of judicial estoppel does not
apply to Mrs. Campbell’s argument.
16
B. WHETHER THE DE NOVO OR ARBITRARY AND CAPRICIOUS STANDARD OF
REVIEW APPLIES
The Parties do not dispute that this action pertains to a
challenge
of
an
administrative
decision
to
deny
supplemental
dependent life insurance benefits under ERISA. In an ERISA action,
the Court reviews “de novo the plan administrator’s denial of ERISA
benefits, unless the benefit plan gives the plan administrator
discretionary authority to determine eligibility for benefits or
to construe the terms of the plan.” Wilkins v. Baptist Healthcare
Sys., Inc., 150 F.3d 609, 613 (6th Cir. 1998) (citing Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). “This de
novo standard of review applies to the factual determinations as
well as to the legal conclusions of the plan administrator.”
Wilkins, 150 F.3d at 613 (citing Rowan v. Unum Life Ins. Co., 119
F.3d 433, 435 (6th Cir. 1997)). “Where a plan ‘expressly grants the
administrator discretionary authority to determine eligibility for
benefits,’ the Court shall ‘review the administrator’s decision to
deny
benefits
using
the
‘highly
deferential
arbitrary
and
capricious standard of review.’’” Swiger v. Continental Cas. Co.,
Civil No. 05-255-ART, 2008 WL 1968346, at *5 (E.D. Ky. May 2, 2008)
(quoting Killian v. Healthsource Provident Adm’rs Inc., 152 F.3d
514, 520 (6th Cir. 1998)).
Here,
the
Parties
disagree
which
standard
of
review
is
applicable in this case. Mrs. Campbell argues the de novo standard
17
of review applies, [DE 21, at 5-6], and Hartford contends the Court
should apply the arbitrary and capricious standard of review, [DE
24, at 7-8]. The Certificate of Insurance [AR 41-62] found in the
section of the Administrative Record titled “Your Benefit Plan”
[AR 1-62] states, “The Plan has designated and named the Insurance
Company as the claims fiduciary for benefits provided under the
Policy. The Plan has granted the Insurance Company full discretion
and authority to determine eligibility for benefits and to construe
and interpret all terms and provisions of the Policy.” [AR 58].
Additionally, the “Proof of Loss” subsection states, “All proof
submitted must be satisfactory to Us[,]” [AR 27], and the “Policy
Interpretation” subsection states, “We have full discretion and
authority to determine eligibility for benefits and to construe
and
interpret
provision
all
applies
terms
where
and
the
provisions
of
interpretation
The
of
Policy.
The
This
Policy
is
governed by the Employee Retirement Income Security Act of 1974,
as amended (ERISA),” [AR 29]. “We” and “Us” are defined as “the
insurance company named on the face page of The Policy.” [AR 31].
However, Mrs. Campbell argues the “Your Benefit Plan” section of
the Administrative Record [AR 1-62], which she refers to as a
“booklet-certificate,” is nothing more than a summary of the Plan,
so
“Hartford
can
point
to
no
such
‘express[]’
grant
of
discretionary authority here because it has not filed the ‘Policy’
or the ‘Plan’ with the Court.” [DE 21, at 9].
18
Pursuant to 29 U.S.C. § 1102(a)(1), “Every employee benefit
plan shall be established and maintained pursuant to a written
instrument.” “[T]here is no requirement . . . that the terms of an
ERISA plan be contained in [a] single document. Nor does the
requirement of 29 U.S.C. § 1102(a)(1), that the terms of an ERISA
plan be contained in a written instrument require that it be a
single document.” Rinard v. Eastern Co., 978 F.2d 265, 268 n. 2
(6th Cir. 1992). The types of documents that are considered part
of the Plan are restricted. Hogan v. Life Ins. Co. of North
America, 521 F. App’x 410, 415 (6th Cir. 2013) (citing Cigna Corp.
v. Amara, 563 U.S. 421, 131 S. Ct. 1866, 1877 (2011)). In Amara,
“[t]he Court concluded ‘that summary documents, important as they
are, provide communication with beneficiaries about the plan, but
that their statements do not themselves constitute the terms of
the plan.’” Id. (quoting 131 S. Ct. at 1878). “[The Sixth Circuit]
has treated group insurance policies as benefit plans . . . .” Id.
(citing Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376,
380–81 (1996); Miller v. Metro. Life Ins. Co., 925 F.2d 979, 983–
84 (6th Cir. 1991)).
Here, the “booklet-certificate” states the following:
We have issued The Policy to the Policyholder. Our name,
the Policyholder’s name and the Policy Number are shown
above. The provisions of The Policy, which are important
to You, are summarized in this certificate consisting of
this form and any additional forms which have been made
a part of this certificate. This certificate replaces
any other certificate We may have given to You earlier
19
under The Policy. The Policy alone is the only contract
under which payment will be made. Any difference between
The Policy and this certificate will be settled
according to the provisions of The Policy on file with
Us at Our home office. The Policy may be inspected at
the office of the Policyholder.
. . .
This document serves to meet ERISA requirements and
provides important information about the Plan.
The benefits described in your booklet-certificate
(Booklet) are provided under a group insurance policy
(Policy) issued by the Hartford Life and Accident
Insurance Company (Insurance Company) and are subject to
the Policy’s terms and conditions. The Policy is
incorporated into, and forms a part of, the Plan. The
Plan has designated and named the Insurance Company as
the claims fiduciary for benefits provided under the
Policy. The Plan has granted the Insurance Company full
discretion and authority to determine eligibility for
benefits and to construe and interpret all terms and
provisions of the Policy.
A copy of the Plan is available for your review during
normal working hours in the office of the Plan
Administrator.
[DE 21, at 7 (citing [AR 13, 56])].
According to Amendment to the Group Policy [DE 24-3] attached
to
Hartford’s
Response
[DE
24],
but
not
included
in
the
Administrative Record, the so-called “booklet-certificate” [AR 162] has been incorporated into the Group Policy [DE 24-3] through
an incorporation provision. [DE 24-3, at 10]. Pursuant to 28 U.S.C.
§ 1746, Scott A. Briere, Senior Medical Underwriter at Hartford,
declares Hartford issued the Amendment to the Group Policy [DE 243], and the applicable booklet-certificate for the Plan, which
20
applied to Mrs. Campbell at the time of her claim, was incorporated
into the Group Policy. [DE 24-1]. Additionally, the bookletcertificate states, “‘The Policy is incorporated into, and forms
a part of, the Plan.’” [DE 21, at 7 (citing [AR 56])]. The “bookletcertificate” is incorporated into the Policy, and the Policy is
incorporated into the Plan, so it appears the language granting
Hartford “discretion and authority to determine eligibility for
benefits and to construe and interpret all terms and provisions of
the Policy” is intended to be part of the Plan. [AR 58]; see also
[AR 29, 56]. Moreover, the booklet-certificate also impliedly
grants Hartford discretionary authority by requiring all proof be
“satisfactory” to Hartford by stating, “All proof submitted must
be satisfactory to Us.” See [AR 27]; see also Frazier v. Life Ins.
Co. of N. Am., 725 F.3d 560, 567 (6th Cir. 2013) (“This Court has
found “satisfactory proof,” and similar phrases, sufficiently
clear to grant discretion to administrators and fiduciaries.”)
(citing Perez v. Aetna Life Ins. Co., 150 F.3d 550, 556 (6th Cir.
1998) (en banc); Miller v. Metro. Life Ins. Co., 925 F.2d 979, 983
(6th Cir. 1991)).
However, “[t]he Court’s review of [Hartford’s] administrative
decision must be based only upon the material in the administrative
record, and therefore the Court ‘may not consider new evidence or
look beyond the record that was before the plan administrator.’”
Swiger,
2008
WL
1968346,
at
*6
21
(quoting
Wilkins
v.
Baptist
Healthcare Sys., Inc., 150 F.3d 609, 616 (6th Cir. 1998)). Hartford
correctly
asserts,
“Outside
evidence
is
only
considered
with
regard to procedural challenges to the administrator’s decision.”
[DE 24, at 8 (citing Wilkins, 150 F.3d at 619)].
To support its argument that the Court should apply the
arbitrary
and
capricious
standard
of
review,
Hartford
cites
Temponeras v. United States Life Ins. Co. of America, 185 F. Supp.
3d 1010 (S.D. Ohio 2016) for support, but Temponeras fails to
bolster Hartford’s argument. [DE 24, at 9-10 (citing Temponeras,
185 F. Supp. 3d at 1017-18)]. In Temponeras, a case where “[t]he
group policy itself [was] not in the record, and the Certificate
[of Coverage] [did] not include language granting discretion to
[the insurer], the Southern District of Ohio applied de novo review
“[b]ecause the only language conferring discretionary decisionmaking authority [was] found in an ‘Addendum‘ to [a Summary Plan
Description].” Temponeras, 185 F. Supp. 3d at 1017.
Here, the Amendment to the Group Policy [DE 24-3] is not in
the Administrative Record, and there is no provision within the
Administrative Record that incorporates the booklet-certificate
into the Policy, which forms a part of the Plan. Accordingly,
without the Amendment to the Group Policy [DE 24-3], Hartford’s
underwriting
certificate
Campbell
department
was
had
no
incorporated
contests
Hartford’s
indication
into
Policy.
assertions
22
the
that
that
the
booklet-
Moreover,
the
Mrs.
booklet-
certificate is a Plan document, and in the Declaration [DE 24-1]
provided
by
Hartford,
Senior
Medical
Underwriter
Briere
acknowledges the document in question [AR 1-62] is, in fact, a
“Booklet-Certificate for the Plan,” which is a summary document.
The booklet-certificate even describes itself as a summary of the
Policy. See [DE 21, at 7 (citing [AR 13, 56])(“The provisions of
The Policy, which are important to You, are summarized in this
certificate consisting of this form and any additional forms which
have been made a part of this certificate.”)]. Since the only
language granting Hartford discretionary authority is found in a
summary document, the booklet-certificate, and the Amendment to
the Group Policy [DE 24-3], including its language incorporating
the booklet-certificate into the Policy, and, therefore, the Plan,
was not part of the Administrative Record, the Court will apply
the de novo standard of review.
C. THE DE NOVO STANDARD OF REVIEW
“This de novo standard of review applies to the factual
determinations as well as to the legal conclusions of the plan
administrator.” Wilkins, 150 F.3d at 613 (citing Rowan, 119 F.3d
at 435). “When conducting a de novo review, the district court
must take a ‘fresh look’ at the administrative record but may not
consider new evidence or look beyond the record that was before
the plan administrator.”
Id. at 616 (citing Perry v. Simplicity
Engineering, a Div. of Lukens General Industries, Inc., 900 F.2d
23
963, 966 (6th Cir. 1990); Rowan, 119 F.3d at 437). “When a court
reviews a decision de novo, it simply decides whether or not it
agrees with the decision under review.” Perry, 900 F.2d at 966.
“In the ERISA context, the role of the reviewing federal court is
to determine whether the administrator or fiduciary made a correct
decision, applying a de novo standard.” Id.
III. DISCUSSION
Since the Plan is governed by ERISA, the Court must “apply
federal common law rules of contract interpretation in making [its]
determination.” Perez, 150 F.3d at 556 (citing Pitcher v. Principal
Mut. Life Ins. Co., 93 F.3d 407, 411 (7th Cir. 1996)). “In
developing federal common law rules of contract interpretation,
[the Court takes] direction from both state law and general
contract law principles.” Id. (citing Regents of the Univ. of
Michigan v. Agency Rent–A–Car, 122 F.3d 336, 339 (6th Cir. 1997)).
“The general principles of contract law dictate that [the Court]
interpret the Plan's provisions according to their plain meaning,
in an ordinary and popular sense.” Id. “In applying this plain
meaning analysis, [the Court] ‘must give effect to the unambiguous
terms of an ERISA plan.’” Id. (quoting Lake v. Metropolitan Life
Ins. Co., 73 F.3d 1372, 1379 (6th Cir. 1996)). “‘The rule of contra
proferentum provides that ambiguous contract provisions in ERISAgoverned
insurance
contracts
should
be
construed
against
the
drafting party.’” Clemons v. Norton Healthcare Inc. Retirement
24
Plan, 890 F.3d 254, 265 (6th Cir. 2018) (quoting Perez, at 557
n.7). “Where plan language is ambiguous, extrinsic evidence may be
considered to discern the purpose of the plan as the average
employee would have reasonably understood it.” Lipker v. AK Steel
Corp., 698 F.3d 923, 928 (6th Cir. 2012) (citing Kolkowski v.
Goodrich Corp., 448 F.3d 843, 850 (6th Cir. 2006)). “The Plan is
ambiguous
if
it
is
susceptible
to
multiple
reasonable
interpretations, not just because clever lawyers can disagree over
the meaning of terms.” Clemons, 890 F.3d at 269 (citing Perez, 150
F.3d at 557 n.7).
A. MISREPRESENTATIONS IN THE PERSONAL HEALTH APPLICATION
The Campbells’ alleged misrepresentation arises from them
checking “No” to Question No. 4, which asked, in pertinent part,
if in the past five (5) years Mr. Campbell had “been diagnosed or
treated for drug or alcohol abuse (excluding support groups) . .
. .” [AR 840]. “[A]n insurer is entitled to avoid an insurance
policy if the insurer proves that the insured made a fraudulent or
material
misrepresentation
justifiably
induced
the
in
his
issuance
insurance
of
the
application
policy.”
that
Davies
v.
Centennial Life Ins. Co., 128 F.3d 934, 943 (6th Cir. 1997) (citing
Tingle v. Pacific Mutual Insurance Co., 837 F. Supp. 191 (W.D. La.
1993)), abrogated on other grounds by UNUM Life Insurance Co. v.
Ward, 526 U.S. 358 (1999), and Kentucky Association of Health
Plans, Inc. v. Miller, 538 U.S. 329 (2003). Similarly, Kentucky
25
law
“provides
that
misrepresentations
in
an
insurance
policy
application ‘shall not prevent a recovery under the policy or
contract unless either: (1) Fraudulent; or (2) Material either to
the acceptance of the risk, or to the hazard assumed by the
insurer; or (3) The insurer in good faith would [ ] not have issued
the policy or contract . . . .’” Nationwide Mut. Fire Ins. Co. v.
Nelson, 912 F. Supp. 2d 452, 454 (E.D. Ky. 2012) (quoting Ky. Rev.
Stat. § 304.14-110). “[W]here the policy would not have issued
without the false statement, the statute voids the policy at its
inception—as if the policy never existed.” Id. (citing Progressive
Specialty Ins. Co. v. Rosing, 891 F. Supp. 378, 380 (W.D. Ky.
1995)). Under Kentucky law, an insurer “may void a policy based on
a material representation regardless of the applicant’s intent.”
Id. (citing Cont'l Cas. Co. v. Law Offices of Melbourne Mills,
Jr., PLLC, 676 F.3d 534, 539 (6th Cir. 2012); Upton v. W. Life
Ins. Co., 492 F.2d 148, 149 (6th Cir. 1974); John Hancock Mut.
Life Ins. Co. v. Conway, 240 S.W.2d 644, 646 (Ky. 1951); Ford v.
Commonwealth Life Ins. Co., 252 Ky. 565, 67 S.W.2d 950, 950 (1934);
Sergent v. Auto–Owners Life Ins. Co., No. 2009–CA–001430–MR, 2010
WL 4137448, at *3 (Ky. Ct. App. Oct. 22, 2010); Hornback v. Bankers
Life Ins. Co., 176 S.W.3d 699, 705 (Ky. Ct. App. 2005)).
In the present case, Hartford does not claim Mr. Campbell was
diagnosed with “alcohol abuse.” Instead, Hartford argues that
since ERISA documents must be interpreted “according to their plain
26
meaning in an ordinary and popular sense[,]’” the Campbells should
have checked “Yes” because Mr. Campbell was diagnosed and treated
for “alcohol dependence,” which Hartford posits is another form of
“alcohol abuse.” [DE 24, at 14-15 (quoting Bd. Of Trustees v.
Moore, 800 F.3d 214, 222 (6th Cir. 2015))]. Moreover, Hartford
contends that even though the diagnostic codes for “alcohol abuse”
and “alcohol dependence” are different, they are both categorized
“under Abuse > Alcohol, with subtype ‘dependent’ point to [the
diagnostic
code
for
‘alcohol
dependence’]
and
subtype
‘non-
dependent’ pointing to [the diagnostic code for ‘alcohol abuse’].”
Id. at 16. Hartford explains, “[T]he two diagnoses are distinct
only in the sense that one can ‘abuse’ alcohol with or without
being ‘dependent’ on it.” Id. at 17. However, the Court does not
agree with Hartford’s interpretation.
The closest thing Hartford points to that can be remotely
interpreted as an “alcohol abuse” diagnosis are Mr. Campbell’s
oncologists’ April 12, 2016, April 18, 2016, and April 21, 2016,
notes showing he had “prior alcohol abuse” and a “[h]istory of
alcohol abuse.” [AR 465, 479, 483]. However, “prior alcohol abuse”
and “a history of alcohol abuse” do not necessarily mean Mr.
Campbell was still abusing alcohol or had in the five [5] years
prior to answering Question No. 4. A 2016 diagnosis of past alcohol
abuse does not equate to a diagnosis of alcohol abuse, insofar as
the Campbells’ answer to Question No. 4 is concerned. There is no
27
indication when the alleged alcohol abuse occurred nor a diagnosis
of what would have been at that time “current” alcohol abuse.
Moreover, the oncologists’ notes were made when Mr. Campbell was
diagnosed with cancer and not as part of a diagnosis or treatment
of his issues related to alcohol. Instead, as Hartford states, the
notes
merely
“described
the
medical
history
preceding
his
esophageal issues . . . .” [DE 24, at 17].
Regarding the plain meaning interpretation of Question No. 4,
the Court does not agree with Hartford that the Campbells made a
misrepresentation by checking “No.” The Campbells were asked if
Mr. Campbell had been diagnosed or treated for “alcohol abuse” in
the past five (5) years. He had not. Without even delving into the
technical definitions found in the respective diagnostic codes for
“Alcohol Dependence” and “Alcohol Abuse,” “dependence” and “abuse”
are separate words with separate plain meanings.
Just because a person is dependent on alcohol does not
necessarily mean they abuse it, especially not in the preceding
five (5) years. Even if that were the case, and Mr. Campbell’s
alcohol-related treatments, such as being prescribed Topamax,
could be construed as him being treated for alcohol abuse, his
records show he was being treated for “alcohol dependence.” When
the Campbells answered Question No. 4, to their knowledge, Mr.
Campbell had not been treated for alcohol abuse because that is
what his records showed.
28
When the diagnostic codes are considered, the gap between
alcohol “abuse” and “dependence” widens further because they have
distinct criteria and include the following notes:
(Note--a diagnosis of Alcohol Dependence can never be
changed to a diagnosis of Alcohol Abuse. The DSM also
states that “The differentiation of Sustained Full
Remission from recovered (no current Substance Abuse
Disorder) requires consideration of the length of time
since the last period of disturbance, the total duration
of the disturbance, and the need for continued
evaluation.”)
. . .
B. The symptoms [of alcohol abuse] have never met the
criteria for Alcohol Dependence.
(Note that there are no course specifiers for Alcohol
Abuse. A diagnosis of Alcohol Abuse is for life--it can
never be removed from your medical chart no matter how
much you improve.)
from DSM-IV-TR[.]
The HAMS Harm Reduction Network,
available
http://hams.cc/abuse/ (last visited Oct. 2, 2017).
at:
[AR 145-47]. Based on either the plain meanings or the technical
meanings found in the diagnostic codes, alcohol abuse and alcohol
dependence are not synonymous.
Question No. 4’s exclusion of support groups only adds to the
ambiguity of what information Hartford was seeking and provides
further support to the Campbells’ argument that there was a
distinction between treatment for alcohol abuse and other types of
alcohol-related issues, such as dependence. See [DE 21, at 11-12].
Based on the plain meaning of the language used in Question No. 4,
29
the Campbells are correct that they were “not obligated to disclose
that [Mr. Campbell] attended AA.” Id. The exclusion of such support
groups would reasonably lead an applicant to understand that the
question was targeted only at the diagnosis and treatment of
alcohol abuse. For the foregoing reasons, and since the Campbells
were
under
no
duty
to
disclose
information
that
was
not
specifically requested by Hartford, their failure to check “Yes”
due to Mr. Campbell’s alcohol dependence diagnoses and treatments
was not a misrepresentation because it was true that Mr. Campbell
had not been diagnosed or treated for “alcohol abuse” in the five
(5) years prior to answering Question No. 4. Metropolitan Life
Ins.
Co.
v.
Conger,
474
F.3d
258,
267
(6th
Cir.
2007)
(“[A]pplicants for insurance have no duty to disclose undiagnosed
symptoms or medical history not specifically requested by an
insurance company.”)). Therefore, Hartford’s decision to deny Mrs.
Campbell’s claim for Mr. Campbell’s supplemental life insurance
benefit and rescind coverage must be reversed, and Hartford must
remit
to
Mrs.
Campbell
her
late
husband’s
supplemental
life
insurance benefit in the amount of $190,000.00. To the extent Mrs.
Campbell requests interest, attorney’s fees, and costs, pursuant
to 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(g), [DE 10; DE
12; DE 25], she may file a separate motion, or the Parties may
file a joint motion, specifying the amounts of each request.
Accordingly,
30
IT IS ORDERED as follows:
(1) Defendant Hartford Life and Accident Insurance Company’s
decision
Campbell’s
to
deny
Plaintiff
supplemental
Dana
life
Campbell’s
insurance
claim
benefit
for
and
Gary
rescind
coverage is REVERSED;
(2)
Hartford
shall
REMIT
Gary
Campbell’s
$190,000.00
supplemental life insurance benefit to Plaintiff Dana Campbell;
(3) All other claims for relief or pending motions in this
matter are hereby DENIED AS MOOT; and
(4) The Court shall enter a separate judgment.
This 8th day of June, 2021.
31
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