Reindl v. Hartford Life and Accident Insurance Company

Filing 8

MEMORANDUM AND ORDER re: 4 MOTION to Dismiss Case filed by Defendant Hartford Life and Accident Insurance Company; motion is GRANTED and plaintiff's complaint is DISMISSED with prejudice. Signed by Honorable Stephen N. Limbaugh, Jr on 3/21/12. (CSG)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
SUSAN REINDL,
Plaintiff,
v.
HARTFORD LIFE AND ACCIDENT
INSURANCE CO.,
Defendant.

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No. 1:11CV167 SNLJ

MEMORANDUM AND ORDER
This matter comes before the Court pursuant to defendant’s Motion to Dismiss, #4. The
motion has been fully briefed and is ripe for disposition. In her complaint, plaintiff seeks
withheld long-term disability benefit payments from defendant with interest, costs, and fees
pursuant to the Employee Retirement Income Security Act’s (“ERISA”) benefit recovery civil
enforcement provision, 29 U.S.C. § 1132(a)(1)(B). Because the parties have submitted
documents outside the pleadings and both parties have had a reasonable opportunity to present all
the material that is pertinent to the motion, the Court will convert defendant’s motion to one for
summary judgment pursuant to Fed. R. Civ. P. 12(d).
I.

Factual Background
The following facts are uncontested except where noted. Plaintiff Susan Reindl worked

as a district manager for RKM, Enterprises, LLC (“RKM”), and was a full-time employee of that
company for thirteen years. Plaintiff’s benefit package provided by RKM included a long-term
disability benefits plan insured by defendant Hartford Life and Accident Insurance Company.

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(“Hartford”). On April 17, 2005, plaintiff stopped working for RKM due to physical
impairments and applied for long-term disability benefits under the Hartford benefits plan. On
July 7, 2005, Hartford approved plaintiff’s application for disability benefits, which benefits were
continued upon reassessment two years later. In 2008, however, Hartford reassessed plaintiff’s
physical condition and decided that she was not totally disabled and able to work a sedentary job.
Consequently, as of November 25, 2008, Hartford terminated plaintiff’s disability benefits.
On or about December 12, 2008, plaintiff’s prior attorney sent a letter to Hartford in
response to the notice of termination of plaintiff’s benefits. Enclosed with the letter was a signed
authorization to release plaintiff’s medical records to her attorney. The letter provided, in
pertinent part, as follows:
I have been retained to assist the above-named individual in her Long
Term Disability (LTD) benefits.
This letter is to request a copy of any and all medical records you may
have in your file on my client. Also, copies of any other documents you might
have regarding my client’s medical condition would be helpful.
I have enclosed a HIPPA signed by my client to enable you to release
copies of these records to me.
We will be reviewing the records and obtaining additional medical
information for my client’s appeal of the decision to terminate her Long Term
Disability (LTD) benefits. . . .
Plf. Exhibit 1, #6-1. Plaintiff asserts that this letter constituted a notice of appeal of Hartford’s
decision to terminate her benefits, but defendant contends that it was merely a request for
information plaintiff wanted in order to consider whether to appeal in the future.
In February 2009, Hartford sent plaintiff’s prior attorney a “voluminous amount of
medical records” in response to her December 12, 2008, letter. On July 6, 2009, plaintiff’s prior
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attorney spoke with a Hartford representative via telephone, who provided her with the address to
send plaintiff’s materials appealing the adverse decision. On or about July 8, 2009, plaintiff’s
attorney sent Hartford a letter stating her disagreement with the adverse decision with
accompanying “additional written comments, documents and information relating to the appeal
of [her] client, Susan Reindl’s, denial of her Long Term Disability benefits beyond November
24, 2008,” and requesting that Hartford “review the statements and documents and notes
contained in her claim file and advise her and myself of your further determinations.” Def.
Exhibit C, #5-3, p. 1. On or about August 6, 2009, Hartford replied to this letter, stating that
plaintiff had been afforded 180 days to appeal the termination of her benefits, that her file had
been closed on May 28, 2009 (180 days from the estimated delivery date of Hartford’s notice of
termination), and that her letter of appeal of July 8, 2009 (received by Hartford on July 14, 2009),
was untimely. Def. Exhibit D, #5-4. Plaintiff’s attorney then replied by letter on August 17,
2009, contending that she was within the six-month appeal deadline because she “entered her
appearance to assist [plaintiff] in this appeal on December 12, 2008,” spoke with the Hartford
representative on July 6, 2009, and sent the medical records, along with a vocational expert
report, to Hartford soon thereafter. Plf. Exhibit 2, #6-2, p. 1.
According to plaintiff’s long-term disability benefits plan, Hartford’s decision to
terminate plaintiff’s disability benefits is administratively appealable by the beneficiary by
“request[ing] a review upon written application within 60 days of the claim denial.” Def. Exhibit
A, #5-1, p. 14. Hartford’s notice of termination of plaintiff’s benefits, dated November 24, 2008,
by contrast, stated that she could appeal the adverse decision by sending a signed, dated, written
letter outlining her position and issues to the Hartford Claim Appeal Unit within 180 days of
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receipt of the notice of termination. Def. Exhibit B, #5-2, p. 6. Under the benefits plan, Hartford
had discretion to determine benefit eligibility and to construe plan terms and provisions. Def.
Exhibit A, #5-1, p. 15. Plaintiff also claims that Hartford had a conflict of interest in denying her
continuation of benefits because it had a financial interest in that decision.
II.

Legal Standard
Pursuant to Federal Rule of Civil Procedure 56(c), a District Court may grant a motion

for summary judgment if all of the information before the Court demonstrates that “there is no
genuine issue as to material fact and the moving party is entitled to judgment as a matter of law.”
Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467 (1962). The burden is on the
moving party. City of Mt. Pleasant, Iowa v. Assoc. of Elec. Co-op., Inc., 838 F.2d 268, 273 (8th
Cir. 1988). After the moving party discharges this burden, the nonmoving party must do more
that show there is some doubt as to the facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986). Instead, the nonmoving party bears the burden of setting forth specific
facts showing that there is sufficient evidence in its favor to allow a jury to return a verdict for in
its favor. Celotex v. Catrett, 477 U.S. 317, 324 (1986); Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 249 (1986). In ruling on a motion for summary judgment, the Court must review the
facts in a light most favorable to the party opposing the motion and give that party the benefit of
any inferences that logically can be drawn from those facts. Buller v. Buechler, 706 F.2d 844,
846 (8th Cir. 1983). The Court is required to resolve all conflicts of evidence in favor of the
non-moving party. Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 210 (8th
Cir. 1976).

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III.

Discussion
A benefit plan participant may, pursuant to ERISA, bring a civil action “to recover

benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan,
or to clarify his rights to future benefits under the terms of the plan.” Angevine v. AnheuserBusch Companies Pension Plan, 646 F.3d 1034, 1037 (8th Cir. 2011) (quoting 29 U.S.C. §
1132(a)(1)(B)) (internal quotations omitted). “Before filing in federal court, however, a claimant
must exhaust the administrative remedies required under the particular ERISA plan.” Id. (citing
Chorosevic v. MetLife Choices, 600 F.3d 934, 941 (8th Cir.2010)). This exhaustion requirement
serves many important purposes, including “giving claims administrators an
opportunity to correct errors, promoting consistent treatment of claims, providing
a non-adversarial dispute resolution process, decreasing the cost and time of
claims resolution, assembling a fact record that will assist the court if judicial
review is necessary, and minimizing the likelihood of frivolous lawsuits.”
Id. (quoting Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770 (8th Cir. 2001)). Courts
excuse a beneficiary from the exhaustion requirement “only when pursuing an administrative
remedy would be futile or there is no administrative remedy to pursue.” Angevine, 646 F.3d at
1037 (quoting Brown v. J.B. Hunt Transp. Serv., Inc., 586 F.3d 1079, 1085 (8th Cir. 2009)).
The Court first turns to the question of the appropriate standard of review. In a case such
as this, where a plan administrator has terminated a claimant’s benefits and then denied an
administrative appeal for untimeliness, and the benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to construe the terms of the plan,
the court employs an abuse of discretion standard. Goewert v. Hartford Life & Acc. Ins. Co., 442
F.Supp.2d 724, 727 (E.D. Mo. 2006); Iliff v. Metropolitan Life Ins. Co., 2012 WL 709234, *4
(E.D. Mo. March 5, 2012), unpublished (quoting Firestone Tire & Rubber Co. v. Bruch, 489
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U.S. 101, 115 (1989)). In Goewert, which involved a similar denial of long-term disability
benefits by this defendant, the Court explained that
although, the Eighth Circuit has said that exhaustion of administrative remedies is
a threshold legal question that should be reviewed de novo, Kinkead v.
Southwestern Bell Corp. Sickness & Accident Disability Benefit Plan, 111 F.3d
67, 67 (8th Cir.1997), this Court is not deciding whether to deny [plaintiff’s]
claim based on a failure to exhaust theory. Rather, the Court is reviewing
Hartford’s denial of benefits for failure to appeal in a timely manner.
442 F.Supp.2d at 727. Because the Hartford plan affords it “discretion to determine benefit
eligibility or construe the terms of the plan, the administrator’s decision is reviewed under a
deferential abuse of discretion standard. Id. (quoting Janssen v. Minneapolis Auto Dealers Ben.
Fund, 477 F.3d 1109, 1113 (8th Cir. 2006)). Here, as in Geowert, plaintiff does not argue for a
less deferential standard, so an abuse of discretion standard shall govern the Court’s evaluation of
Hartford’s denial of her appeal. 442 F.Supp.2d at 728.
Under an abuse of discretion standard, the plan administrator’s decision will not be
disturbed if it is reasonable. “We measure reasonableness by whether substantial evidence exists
to support the decision, meaning more than a scintilla but less than a preponderance.” Wakkinen
v. UNUM Life Ins. Co. of America, 531 F.3d 575, 583 (8th Cir. 2008) (internal quotation
omitted). Only the evidence that was before the plan administrator when the decision was made
will be considered, and the decision will stand if a reasonable person could have–not would
have–reached a similar decision. Id. (citing Phillips-Foster v. Unum Life Ins. Co., 302 F.3d 785,
794 (8th Cir.2002)). Furthermore, the reviewing court cannot substitute its own opinion or
weighing of the evidence for that of the plan administrator. Fletcher-Merrit v. NorAm Energy
Corp., 250 F.3d 1174, 1180 (8th Cir.2001).

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The Supreme Court has held that a plan administrator which both evaluates claims for
benefits and pays benefit claims (as Hartford does) is operating under a conflict of interest, but
that the conflict does not change the standard of review applied by the district court.
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 112, 115-16 (2008); Wakkinen, 531 F.3d at
581; see also Hackett v. Standard Ins. Co., 559 F.3d 825, 830 (8th Cir. 2009). Rather, “a conflict
should be weighed as a factor in determining whether there is an abuse of discretion.” Wakkinen,
531 F.3d at 581 (quoting Glenn, 554 U.S. at 115). “The importance of taking [Hartford’s]
conflict of interest into account is illustrated by the ‘combination-of-factors method’ employed
by the Court in Glenn, where the conflict serves ‘as a tiebreaker when the other factors are
closely balanced’ and is ‘more important . . . where circumstances suggest a higher likelihood
that it affected the benefits decision’ and ‘less important . . . where the administrator has taken
active steps to reduce potential bias and to promote accuracy.’” Hackett, 559 F.3d at 830
(quoting Glenn, 554 U.S. at 117; see also Wakkinen, 531 F.3d at 582; Warner v. Unum Life
Insurance Co. of America, 2009 WL 73666, *5 (E.D. Mo. Jan. 8, 2009).
Under this standard, defendant’s motion turns on whether it was reasonable for Hartford
to conclude that the December 12, 2008, letter from plaintiff’s former attorney did not constitute
an appeal of Hartford’s termination of her disability benefits. See Plf. Exhibit 1, #6-1. Since the
undisputed facts indicate that this was the only correspondence between the parties regarding the
termination of plaintiff’s benefits within 180 days of the adverse decision, the reasonableness of
Hartford’s determination regarding this letter is dispositive. While plaintiff’s July 8, 2009, letter
to Hartford clearly asserts plaintiff’s wish to and grounds for appeal, it was not sent within 60
days, or even 180 days; and therefore, it would not have been a timely appeal. Plaintiff naturally
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asserts that the letter from her former attorney of December 12, 2008, constituted a timely notice
of appeal, and she further alleges in her complaint that she exhausted all administrative remedies.
Hartford contends that plaintiff’s 2008 letter did not constitute an appeal because it only
purported to be a request for documentary information in order to consider whether she would
file an appeal in the future. Thus, if the 2008 letter was not an appeal of Hartford’s adverse
decision, plaintiff did not exhaust her administrative remedies, and her claim must be denied.1
As recourse for a termination of benefits, the Hartford plan provides that plaintiff, as a
plan beneficiary, may “request a review upon written application within 60 days of the claim
denial” and affords that she may review “pertinent documents” and “submit issues and
documents in writing” to Hartford in appeal of the termination of her benefits.2 Def. Exhibit B,
#5-1, p. 14. The letter from plaintiff’s prior attorney of December 12, 2008, which plaintiff

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Plaintiff has not alleged that pursuing her administrative remedies under the plan would
have been futile.
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The plan appeal requirement is more restrictive than the notice of termination regarding
the time allowed to appeal (60 days versus 180 days) but less restrictive regarding what must be
filed (a “written application” versus a signed, dated, written letter outlining plaintiff’s position
and issues sent to a specific sub-unit of defendant). Because the Court finds that Hartford’s
interpretation of plaintiff’s 2008 letter was reasonable, and that plaintiff failed to appeal within
180 days, the difference in appeal instructions is not relevant here.
Department of Labor regulations require that disability benefit plans must establish and
maintain appeal procedures that, inter alia, allow claimants to submit written comments and
documents, to receive access to and free copies of the records relevant to the claim, provide for a
de novo review conducted by a named plan fiduciary other than the initial decision maker or
subordinate thereof, and provide claimants at least 180 days following receipt of a notification of
an adverse benefit determination within which to appeal the determination. See 29 C.F.R. §
2560.503-1(h). Although the Hartford plan only provided a 60-day period to appeal a
termination of benefits, the notice of termination stated that plaintiff actually had 180 days to
appeal. Because plaintiff’s July 8, 2009, letter of appeal fell outside the 180-day time period, it
was untimely.
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claims was a notice of appeal to Hartford, informed Hartford of the attorney’s representation with
regard to “her Long Term Disability (LTD) benefits,” and characterized itself as a “request” for
“a copy of any and all medical records” in Hartford’s possession and “any other documents
[Hartford] might have regarding [plaintiff’s] medical condition.” Plf. Exhibit 1, #6-1. The letter
further explains that she and her client will be “reviewing the records and obtaining additional
medical information for [plaintiff’s] appeal of the decision to terminate her Long Term Disability
(LTD) benefits.” Id.
Upon review of the pleadings and accompanying evidence, the Court finds that Hartford’s
determination regarding the 2008 letter was not unreasonable and was supported by substantial
evidence. The letter’s stated purpose is to request records from Hartford, which plaintiff’s
attorney explained were needed in order to conduct a review of Hartford’s decision and obtain
additional medical information for an appeal. Thus, a plain reading of the letter reveals that in
order to appeal the termination of benefits, plaintiff intended to first obtain Hartford’s records, as
requested by the letter, and then obtain additional medical information. See id. Moreover,
plaintiff did not provide any information, argument, or reasoning in the 2008 letter–in
contradistinction to her July 2009 letter–regarding her position, issues, and comments regardingg
the termination of benefits, as called for by Hartford’s notice of termination. Def. Exhibit B, #52, p. 6. It was, therefore, reasonable for Hartford to have interpreted the letter as a request for
records in anticipation of a possible, future appeal and not an appeal itself.3 Although Hartford
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The fact that plaintiff’s attorney spoke with a Hartford representative in July 2009, who
provided her with the address to which to send plaintiff’s expert report and medical records, is
not relevant here because that contact also fell outside the 180-day appeal window, and plaintiff
does not allege that the Hartford representative did anything more than provide an address (such
as state that plaintiff could still file a timely appeal).
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had a conflict of interest in denying plaintiff’s claim, that fact does not outweigh the plain
reading of the 2008 letter and the undisputed facts that plaintiff’s July 2009 appeal letter was
untimely. Therefore, the Court will not disturb Hartford’s decision because it was clearly
supported by substantial evidence. Wakkinen, 531 F.3d at 583.
IV.

Conclusion
Because a genuine issue of material fact does not exist with regard to the reasonableness

of Hartford’s determination that the 2008 letter was not an appeal of the decision to terminate
plaintiff’s long-term disability benefits, or that Hartford’s decision that the July 2009 letter was
an untimely appeal, the Court will grant defendant’s motion.
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to dismiss, #4, is GRANTED and
plaintiff’s complaint is DISMISSED with prejudice.
Dated this 21st day of March, 2012.

__________________________________________
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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