Konrad v. Metropolitan Life Insurance Company

Filing 25

ORDER - Based on the following, and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT: Defendant Metropolitan Life Insurance Company's motion for summary judgment 11 is GRANTED. Plaintiff Melodee Konrad's motion for summary judgment 15 is DENIED. The complaint 1 is DISMISSED WITH PREJUDICE AND ON THE MERITS. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Judge Patrick J. Schiltz on 10/09/13. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
MELODEE KONRAD, as Guardian Ad
Litem for Steven J. Konrad,

Case No. 13-CV-0228 (PJS/SER)

Plaintiff,
ORDER
v.
METROPOLITAN LIFE INSURANCE
COMPANY,
Defendant.

Richard J. Nygaard, James S. Ballentine, and James R. Schwebel, SCHWEBEL
GOETZ & SIEBEN, P.A., for plaintiff.
William D. Hittler, NILAN JOHNSON LEWIS P.A., for defendant.
Steven J. Konrad participated in an accidental-death-and-dismemberment insurance plan
sponsored by his employer and established pursuant to the Employee Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Defendant Metropolitan Life Insurance
Company (“MetLife”) insures and administers the plan. Konrad’s wife (in her capacity as
Konrad’s guardian ad litem) brought this action seeking review of MetLife’s decision to deny
Konrad’s claim for benefits under the plan.
This matter is before the Court on the parties’ cross-motions for summary judgment. For
the reasons explained below, MetLife’s motion is granted, Konrad’s motion is denied, and the
complaint is dismissed with prejudice.

I. FACTS
A. Konrad’s Injuries
In March 2010, Konrad was severely injured when the motorcycle that he was riding
collided with a mattress that fell off a vehicle traveling ahead of him on an interstate highway.
Compl. ¶ V.2 [ECF No. 1]. Konrad’s injuries included head trauma, brain hemorrhage,
respiratory failure, hypertension, acute blood loss, and fractures to his left clavicle, right radius,
and hands. See ECF No. 1-6 at 11. Konrad was in a coma for approximately one month after the
accident. Id. at 29.
Fortunately, Konrad has recovered from his injuries to a substantial extent. In a
“Neuropsychological Consultation Report” prepared following an evaluation on February 9,
2011, psychologist David S. Alter noted that Konrad retained average or above-average levels of
neurocognitive functioning in several areas. See ECF No. 14-1 at 26-27. Alter also reported that
Konrad’s condition had improved to the point that his daily routine included such tasks as
making breakfast, playing computer games, and engaging in household chores. Id. at 25. Indeed,
according to Alter, Konrad’s “recovery has been remarkable in some ways given that he very
easily could have died in the accident.” Id. at 30.
Unfortunately, however, Konrad continues to struggle “with significant residual
functional difficulties.” Id. Among other impairments, Konrad “has suffered compromise to his
intellectual abilities, shows markedly reduced speed of information processing and reduced
motor speed, . . . [and] has a hard time focusing his attention under speeded conditions.” Id.
Moreover, according to Alter, “[i]t is likely that the majority of the spontaneous recovery
[Konrad] is likely to experience has already occurred.” Id. at 31. Due to these lingering
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difficulties, Konrad is no longer employed in the same capacity as he was before the motorcycle
accident, and it is unlikely that he will be able to hold a similar job in the future. Id. at 30.
B. The Plan
Konrad was a participant in an employer-sponsored accidental-death-and-dismemberment
insurance plan (the “Plan”) established pursuant to ERISA. The Plan provides for the payment of
lump-sum benefits should participants incur a “Covered Loss” such as loss of life, loss of sight,
loss of hearing, paralysis, or “Brain Damage.” ECF No. 14-3 at 31-32. “Brain Damage” is
defined by the Plan as follows:
Brain Damage means permanent and irreversible physical damage
to the brain causing the complete inability to perform all the
substantial and material functions and activities normal to everyday
life. Such damage must manifest itself within 30 days of the
accidental injury, require a hospitalization of at least 5 days and
persists [sic] for 12 consecutive months after the date of the
accidental injury.
Id. at 34.
The Plan gives MetLife the discretion to interpret the Plan’s provisions and administer
benefits. Specifically, the Plan provides as follows:
In carrying out their respective responsibilities under the Plan, the
Plan administrator and other Plan fiduciaries shall have
discretionary authority to interpret the terms of the Plan and to
determine eligibility for and entitlement to Plan benefits in
accordance with the terms of the Plan. Any interpretation or
determination made pursuant to such discretionary authority shall
be given full force and effect, unless it can be shown that the
interpretation or determination was arbitrary and capricious.
Id. at 60.

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C. MetLife’s Denial of Benefits
On April 18, 2011, Konrad’s wife filed a claim on his behalf to recover benefits under the
“Brain Damage” provision of the Plan. See ECF No. 14-1 at 2-9. Included in Konrad’s
submission was a statement from Dr. John Simon, Konrad’s attending physician, who examined
Konrad on April 8, 2011. Id. at 6-9. Among the questions asked of Dr. Simon in that document
was whether Konrad had suffered injuries “causing the complete inability to perform all the
substantial and material functions and activities normal to everyday life.” Id. at 9. Dr. Simon
checked “No,” and wrote “[n]ot complete loss of function but significant and partial loss of
function.” Id. Konrad’s wife later submitted various other documents to MetLife as part of the
claims process, including the neuropsychological report from Alter described above. Id. at 2332.
In a letter dated August 4, 2011, MetLife notified Konrad that it had denied his claim.
See ECF No. 1-4. MetLife acknowledged that Konrad had suffered “permanent physical damage
to [his] brain, which is not likely to significantly improve in the future.” Id. at 2. MetLife
pointed out, however, that the Plan’s “Brain Damage” provision required not only that the
claimant suffer “permanent and physical damage to the brain,” but also that the claimant be
“completely unable to perform all the substantial and material functions and activities normal to
everyday life.” Id. MetLife explained that, although Konrad did have some limitations as a
result of his injury, he was “apparently able to take care of [his] everyday needs” while at home
alone. Id. MetLife further explained that “[b]ased on you [sic] ability to remain home alone, you
apparently are able to perform your activities of daily living without assistance and you are not
considered to be unable to perform all the substantial and material functions and activities to [sic]
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everyday life.” Id. Accordingly, MetLife found that Konrad’s injuries did not meet the Plan’s
definition of “Brain Damage.”
Soon thereafter, Konrad appealed MetLife’s denial of benefits to the MetLife Group Life
Claim Appeal Committee. In a letter dated September 23, 2011, MetLife informed Konrad that
the appeal had been denied. See ECF No. 1-5. MetLife explained that the “Brain Damage”
provision was intended “for individuals following a traumatic brain injury that are not
functioning at all. For example a profound or deep state of unconsciousness where an individual
is unable to move or respond to their environment.” Id. at 2. According to MetLife, the medical
records provided by the Konrads indicated that Konrad retained “some functionality” and that his
injuries had “not precluded [him] from performing all or even most of the material functions of
normal life.” Id. MetLife therefore upheld the denial of the claim for benefits.
Konrad’s wife, acting as guardian ad litem for her husband, now brings this action
seeking review of MetLife’s denial of benefits.
II. ANALYSIS
A. Summary Judgment
Summary judgment is warranted “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A dispute over a fact is “material” only if its resolution might affect the outcome
of the lawsuit under the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A dispute over a fact is “genuine” only if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Id. “The evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.
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B. Konrad’s Claim of Benefits
1. Standard of Review
As noted, the Plan grants MetLife discretionary authority to interpret the terms of the Plan
and determine eligibility for benefits. ECF No. 14-3 at 60. When an ERISA plan grants such
authority to the plan administrator, courts review the administrator’s eligibility determinations
for abuse of discretion. See Darvell v. Life Ins. Co. of N. Am., 597 F.3d 929, 934 (8th Cir. 2010);
Wakkinen v. UNUM Life Ins. Co. of Am., 531 F.3d 575, 580 (8th Cir. 2008). Under that standard,
an administrator’s decision will be upheld if it was reasonable, and an administrator’s decision
will be deemed reasonable if the decision was supported by substantial evidence. Wrenn v.
Principal Life Ins. Co., 636 F.3d 921, 925 (8th Cir. 2011). Substantial evidence means “more
than a scintilla but less than a preponderance.” Govrik v. Unum Life Ins. Co. of Am., 702
F.3d 1103, 1109 (8th Cir. 2013) (quotation omitted).
MetLife insures and administers the Plan. When the administrator of an ERISA plan is
also the insurer, the administrator has a conflict of interests that must be weighed in determining
whether the administrator abused its discretion in denying a claim. See Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105, 111 (2008). The amount of weight given to the conflict depends on the
circumstances of the particular case. Id. at 117. For example, where an insurer has a history of
biased claims administration, the presence of a conflict may be given substantial weight. Id. But
where the insurer has taken steps to reduce the risk that the conflict will affect eligibility
determinations, the conflict may be given little weight. Id.
Under the abuse-of-discretion standard, the Court must defer to MetLife’s interpretation
of the Plan as long as it is “reasonable,” even if the Court would interpret the language differently
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as an original matter. King v. Hartford Life & Acc. Ins. Co., 414 F.3d 994, 998-99 (8th Cir.
2005) (en banc). To determine whether an administrator’s interpretation is “reasonable,” courts
apply the five-factor test set forth in Finley v. Special Agents Mutual Benefit Association, Inc.,
957 F.2d 617 (8th Cir. 1992). The Finley factors are: (1) whether the administrator’s
interpretation is contrary to the clear language of the plan; (2) whether the interpretation conflicts
with the substantive or procedural requirements of ERISA; (3) whether the interpretation renders
any language in the plan meaningless or internally inconsistent; (4) whether the interpretation is
consistent with the goals of the plan; and (5) whether the administrator has consistently followed
the interpretation. Id. at 621. The Eighth Circuit has directed district courts to examine all five
Finley factors. Lickteig v. Bus. Men’s Assurance Co. of Am., 61 F.3d 579, 584 (8th Cir. 1995).
2. MetLife’s Interpretation of the Plan
The Plan defines “Brain Damage” as “permanent and irreversible physical damage to the
brain causing the complete inability to perform all the substantial and material functions and
activities normal to everyday life.” ECF No. 14-3 at 34. MetLife interprets this provision as
requiring the claimant to show that he is completely unable to perform each and every one (that
is, all) of the “substantial and material functions and activities normal to everyday life.” In other
words, if a claimant is able to perform even one of the “substantial and material functions and
activities normal to everyday life,” then he is not eligible for benefits.
Konrad conceded at the hearing on the parties’ motions for summary judgment that he
can indeed perform some of the “substantial and material functions and activities normal to
everyday life” and thus that he is not eligible for benefits if MetLife’s interpretation is found to

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be reasonable. But, Konrad argues, MetLife’s interpretation is not reasonable under the five
Finley factors. The Court now turns to those factors.
3. The Finley Factors
a. Contrary to Clear Plan Language
The first Finley factor requires that the Court consider whether MetLife’s interpretation
of the “Brain Damage” provision is contrary to the clear language of the Plan. Konrad argues
that it is. Konrad contends that, under the plain language of the “Brain Damage” provision, a
claimant is eligible for benefits as long as the claimant is completely unable to perform at least
one of “the substantial and material functions and activities normal to everyday life.” If a
claimant cannot perform even one such function or activity, Konrad argues, then the claimant
cannot “perform all the substantial and material functions and activities normal to everyday life.”
The Court finds that the “Brain Damage” provision is ambiguous, and that both MetLife’s
and Konrad’s interpretations are consistent with the language of the Plan. The ambiguity arises
because referring to a person as not being able to perform “all” of a group of functions can mean
one of two things. To illustrate: Suppose that a judge asks her clerk to call the attorneys
scheduled to appear before the judge the next morning to inform the attorneys that the hearing
has been rescheduled. Suppose further that the clerk returns and tells the judge, “I was not able
to reach all of the attorneys.” The judge would probably understand the clerk to mean, “I was
able to reach only some of the attorneys, and therefore I was unable to reach all of the attorneys.”
But the judge could conceivably understand the clerk to mean, “I was unable to reach all — that
is, every single one — of the attorneys.”

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To recover under the “Brain Damage” provision, a claimant must establish that he has a
“complete inability to perform all the substantial and material functions and activities normal to
everyday life.” ECF No. 14-3 at 34. The Court believes that this is most naturally read as
MetLife reads it — that is, if a claimant can perform even one of the relevant functions, then the
claimant is not completely unable to perform all of the relevant functions.1 Konrad’s reading —
if a claimant cannot perform even one of the relevant functions, then the claimant is completely
unable to perform all of the relevant functions — is also consistent with the language of the Plan.
But Konrad’s is not the only plausible reading of the provision, and MetLife’s interpretation is
likewise not contrary to the clear language of the Plan. The first Finley factor therefore weighs in
favor of MetLife.
b. Conflicts with ERISA
The second Finley factor requires that the Court consider whether MetLife’s
interpretation of the “Brain Damage” provision conflicts with the substantive or procedural
requirements of ERISA. Konrad contends that MetLife’s interpretation conflicts with the
requirement that ERISA plans “be written in a manner calculated to be understood by the average
1

The Court reaches this conclusion for three reasons. First, the “Brain Damage”
provision requires that a claimant not only be unable to perform all of the substantial and
material functions and activities normal to everyday life, but completely unable to perform all of
those functions and activities. The use of the modifier “completely” is more consistent with
MetLife’s interpretation than with Konrad’s. Second, a claimant suffering from “Brain Damage”
is eligible to receive 100 percent of the lump-sum benefit under the Plan, whereas claimants
suffering from other serious infirmities (such as loss of hearing and paralysis of both legs)
receive partial benefits. See ECF No. 14-3 at 33. This suggests that the “Brain Damage”
provision was meant to apply only to completely debilitating brain injuries. Third, when
Konrad’s doctor was asked whether Konrad had suffered injuries “causing the complete inability
to perform all the substantial and material functions and activities normal to everyday life,” he
answered “No.” ECF No. 14-1 at 9. In other words, Konrad’s doctor interpreted the critical
language precisely as MetLife does.
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plan participant . . . .” 29 U.S.C. § 1022(a). According to Konrad, MetLife misleads Plan
participants by labeling the provision at issue in this case a “Brain Damage” benefit, when some
claimants who suffer brain injuries will not qualify for the benefit. Instead, says Konrad,
“MetLife should have labeled the benefit vegetative state benefit,” which (in Konrad’s view)
would more accurately describe the benefit. ECF No. 19 at 8.
In essence, Konrad argues that when an ERISA plan labels something as a “Brain
Damage” benefit, a typical participant will reach the conclusion — based solely on the two-word
label — that the plan provides benefits to any participant who sustains any kind of brain damage.
Konrad’s position is not reasonable. An average plan participant will understand that he must
read more than labels — and, in particular, that he must read how a phrase that appears in a label
is defined — before knowing what the plan covers. As long as the plan as a whole — including
the definitions used within the plan — is “written in a manner calculated to be understood by the
average plan participant,” the plan does not conflict with § 1022(a).
Konrad also argues that “MetLife’s reading of its brain damage definition is simply not
apparent to anyone other than the MetLife adjustor who made the decision to deny the claim.”
ECF No. 19 at 8 (emphasis omitted). The Court disagrees. As the Court has already explained,
the Plan’s definition of “Brain Damage” is ambiguous, and the interpretation of that ambiguity by
“the MetLife adjustor who made the decision to deny the claim” is not only consistent with the
language of the provision, but the most natural reading of the provision. By requiring that plans
be “written in a manner calculated to be understood by the average plan participant,” ERISA
does not prohibit the enforcement of reasonable interpretations of ambiguous terms. See, e.g.,
Hankins v. Standard Ins. Co., 677 F.3d 830, 834-37 (8th Cir. 2012) (deferring to claims
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administrator’s interpretation of ambiguous phrase in plan established pursuant to ERISA);
Darvell, 597 F.3d at 935-36 (same).
In short, Konrad has failed to show how the Plan is not “written in a manner calculated to
be understood by the average plan participant,” 29 U.S.C. § 1022(a), or how the Plan otherwise
conflicts with the substantive or procedural requirements of ERISA. The second Finley factor
thus also weighs in favor of MetLife.
c. Other Plan Language
The third Finley factor requires that the Court consider whether MetLife’s interpretation
renders any language in the Plan meaningless or internally inconsistent. Recall that “Brain
Damage” is defined by the Plan as “permanent and irreversible physical damage to the brain
causing the complete inability to perform all the substantial and material functions and activities
normal to everyday life.” ECF No. 14-3 at 34. Konrad contends that MetLife’s interpretation
renders the “permanent and irreversible physical damage” component of the definition
meaningless, as many claimants (such as Konrad) will suffer permanent and irreversible brain
injuries and yet not qualify for benefits under MetLife’s interpretation.
Konrad’s argument is plainly meritless. Insurance policies commonly require that
multiple conditions be met before benefits are paid. To deny benefits because one of those
conditions has not been met does not render the other conditions “meaningless.” Under the
“Brain Damage” provision, for example, a claimant must meet multiple conditions to be eligible
for benefits. He must show, for example: (1) that he suffered “damage”; (2) that the damage was
“physical”; (3) that the damage was “to the brain”; (4) that the damage is “permanent”; (5) that
the damage is “irreversible”; and (6) that the damage has “caus[ed] the complete inability to
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perform all the substantial and material functions and activities normal to everyday life.” To
deny “Brain Damage” benefits to a claimant who suffered damage to his leg instead of to his
brain would not render any of these criteria “meaningless”; it would simply render some of them
irrelevant to the particular benefits determination.
Under both MetLife’s interpretation and Konrad’s interpretation, a claimant must
establish more than “permanent and irreversible physical damage to the brain” to recover
benefits. MetLife says that the claimant must also establish that he is unable to perform each and
every one of “the substantial and material functions and activities normal to everyday life”;
Konrad says that the claimant must also establish that he is unable to perform at least one of “the
substantial and material functions and activities normal to everyday life.” Under both
interpretations, then, a claimant must establish something more than “permanent and irreversible
physical damage to the brain.” And under neither interpretation is the requirement of “permanent
and irreversible physical damage” rendered meaningless. The third Finley factor thus also
weighs in favor of MetLife.
d. Goals of the Plan
The fourth Finley factor requires that the Court consider whether MetLife’s interpretation
is consistent with the goals of the Plan. Konrad’s argument is simple. “The purpose of the brain
damage benefit in MetLife’s policy is to cover the risk of brain damage.” ECF No. 19 at 5-6
(emphasis omitted). Konrad indisputably has suffered brain damage. “Just as life insurance . . .
[is] designed to insure against the risk of death,” says Konrad, “MetLife’s brain damage benefit is
designed to insure against the risk associated with brain injury or brain damage.” Id. at 6
(emphasis omitted).
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The flaw in Konrad’s argument is obvious. Konrad starts from the premise that the
“Brain Damage” provision is intended to provide benefits to any participant who suffers any
damage to the brain, then complains that, under MetLife’s interpretation, the “Brain Damage”
provision would not meet this goal. But the “Brain Damage” provision is not intended to provide
benefits to any participant who suffers any type of brain damage; that is clear from the face of the
policy. Indeed, even under Konrad’s interpretation of the provision it would not provide benefits
to every single participant who suffered some type of brain damage.
Apart from this argument — an argument that is both circular and wrong — Konrad
offers no other example of how MetLife’s interpretation of the “Brain Damage” provision is
contrary to the goals of the Plan. Accordingly, the fourth Finley factor also weighs in favor of
Metlife.
e. Consistency
The fifth Finley factor requires that the Court consider whether MetLife has consistently
followed its interpretation of the “Brain Damage” provision. Konrad argues that MetLife has
been inconsistent in its representations about the meaning of the “Brain Damage” provision. In
support of that argument, Konrad cites a letter sent by MetLife to Konrad shortly after his claim
had been filed. That letter explains that the Plan
provides a benefit for Brain Damage . . . if the following criteria
are met:
•
•
•

The employee or dependent sustains an injury as a result of
an accident, and
within 30 days of the accidental injury, brain damage
materializes, and
the employee or dependent is hospitalized for a minimum
of 5 days, and
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•

the brain damage persists for 12 consecutive months after
the date of the injury.

ECF No. 1-6 at 24. Konrad contends that this letter is inconsistent with MetLife’s later
interpretation of the Plan, as the “letter reveals no explanation whatsoever that MetLife would
deny the claim unless Mr. Konrad was a vegetable.” ECF No. 17 at 13.
There is nothing inconsistent between this letter and MetLife’s interpretation of “Brain
Damage.” The Plan’s “Brain Damage” provision consists of two components: (1) a definition of
“Brain Damage,” and (2) a list of necessary conditions that a claimant who has suffered “Brain
Damage” must satisfy in order to recover benefits. The letter essentially addresses the second
component — that is, the letter explains what conditions must be met by a claimant who has
suffered “Brain Damage.” But the letter says nothing about what it means to suffer “Brain
Damage” for purposes of the policy. In short, because the letter does not discuss the meaning of
“Brain Damage,” nothing in the letter conflicts with MetLife’s position as to the meaning of
“Brain Damage.” Accordingly, like the first four Finley factors, the fifth Finley factor also
weighs in favor of MetLife.
f. Other Factors
Konrad argues that, notwithstanding the Finley analysis, the Court should nevertheless
find that MetLife abused its discretion in denying Konrad’s claim.
First, Konrad argues that MetLife abused its discretion by failing to ask Konrad to
undergo an independent medical evaluation. But Konrad’s own physician answered “No” when
asked whether Konrad had suffered injuries “causing the complete inability to perform all the
substantial and material functions and activities normal to everyday life.” ECF No. 14-1 at 9.

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Given that Konrad had the burden of establishing that he was entitled to benefits, and given that
Konrad’s own evidence showed that he was not entitled to benefits, MetLife did not abuse its
discretion by failing to arrange an independent medical evaluation.
Second, Konrad argues that MetLife’s failure to consider an “update letter” written by
Alter on April 9, 2012 constitutes an abuse of discretion. The Court, however, must “consider
only evidence that was before [the] administrator when [the] claim was denied.” Dorholt v.
Hartford Life and Acc. Ins. Co., 244 Fed. Appx. 66, 68 (8th Cir. 2007) (per curiam). Alter
provided his update letter over six months after Konrad’s claim was denied. MetLife could not
have abused its discretion in failing to consider evidence that was not before it when it made the
decision now under review.
C. Conclusion
For the reasons explained above, the Court finds that MetLife’s interpretation of the
“Brain Damage” provision is reasonable. As noted, Konrad concedes that, under MetLife’s
interpretation, he is not entitled to benefits. Accordingly, MetLife’s motion for summary
judgment is granted, and Konrad’s motion for summary judgment is denied.
ORDER
Based on the following, and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1.

Defendant Metropolitan Life Insurance Company’s motion for summary judgment
[ECF No. 11] is GRANTED.

2.

Plaintiff Melodee Konrad’s motion for summary judgment [ECF No. 15] is
DENIED.
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3.

The complaint [ECF No. 1] is DISMISSED WITH PREJUDICE AND ON THE
MERITS.

LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: October 9, 2013

s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge

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