Schrom v. Guardian Life Insurance Company of America et al
Filing
17
MEMORANDUM AND ORDER: Guardian shall produce the requested documents reflecting its contract with Trinity by January 15, 2012. Ms. Schrom's application for a protective order precluding her deposition is granted, but her request for Guardian to supply additional information about the manner in which it maintained the documents it already produced is denied. The pretrial order shall be submitted by February 15, 2012 unless any dispositive motion is filed by that date. If such a motion is filed, the pretrial order shall be due thirty days after the motion is decided.( Pretrial Order due by 2/15/2012.) (Signed by Magistrate Judge James C. Francis on 1/5/2012) Copies Mailed By Chambers. (rdz)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
SARAH E. SCHROM,
:
:
Plaintiff,
:
:
- against :
:
GUARDIAN LIFE INSURANCE COMPANY
:
OF AMERICA and LINCOLN MEMORIAL
:
UNIVERSITY-DEBUSK COLLEGE OF
:
OSTEOPATHIC MEDICINE,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
(ECF)
11 Civ. 1680 (BSJ) (JCF)
MEMORANDUM
AND ORDER
This case arises out of the denial of long-term disability
benefits to the plaintiff, Sarah E. Schrom.
Ms. Schrom is seeking
review of the adverse determination of her claim by Guardian Life
Insurance Company of America (“Guardian”), pursuant to Section 502
of the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1132. The plaintiff has moved to compel discovery from Guardian
and for a protective order precluding Guardian from taking her
deposition.
She
also
seeks
an
order
requiring
Guardian
to
reorganize documents it previously produced in response to her
discovery demands.
Background
In the fall of 2007, Ms. Schrom matriculated as a medical
student
at
Lincoln
Memorial
University-Debusk
1
College
of
Osteopathic
Medicine
(“Lincoln”)
in
Harrogate,
Tennessee.
(Complaint (“Compl.”), ¶¶ 8, 9). As a student, she was enrolled in
an insurance program that included long-term disability insurance
for which Lincoln was the plan sponsor and Guardian the insurer and
plan administrator.
(Compl., ¶¶ 6, 8, 9 & Exhs. A, B).
In the spring of 2008, Ms. Schrom took a leave of absence for
medical reasons and applied for disability benefits. (Compl., ¶ 9;
Letter of Andrew Holly dated Dec. 2, 2011 (“Holly 12/2/11 Letter”)
at 2).
Her claim was denied because she had not been a plan
participant long enough to be covered for preexisting conditions
(Holly 12/2/11 Letter at 2), and she was readmitted as a full-time
student in the fall semester of 2008 (Compl., ¶ 9).
During that
semester, Ms. Schrom “experienced increasing musculoskeletal pain
that began to effect her ability to walk, stand, and sit and,
therefore, to attend medical school.” (Compl., ¶ 9). In November,
she stopped attending classes, and on November 25, 2008, the
Assistant Dean of Students sent her a letter stating that, because
of her absence for a period of two weeks, she was being withdrawn
from Lincoln.
(Letter of Jonathan Leo dated Nov. 25, 2008,
attached as Exh. A to Declaration of Andrew Holly dated Dec. 2,
2011 (“Holly Decl.”), attached to Holly 12/2/11 Letter, at GUAR
00194).
On December 9, 2008, Ms. Schrom sent a letter to the
Assistant Dean indicating that she was withdrawing from Lincoln due
2
to health issues.
(Letter of Sarah E. Schrom dated Dec. 9, 2008,
attached as Exh. 5 to Letter of Carla N. McKain dated Dec. 7, 2011
(“McKain 12/7/11 Letter”)).
The plaintiff then submitted to Guardian a claim for long term
disability benefits dated February 16, 2009.
(Group Long Term
Disability Claim, attached as Exh. B to Holly Decl.).
stated
that
her
spondylolisthesis,
disability
back
consisted
pain,
of
rheumatoid
spinal
In it, she
stenosis,
arthritis,
and
fibromyalgia; that she was first treated for her symptoms in 2004;
and that she became unable to work at the end of October or
beginning of November 2008.
(Group Long Term Disability Claim,
attached as Exh. B to Holly Decl.).
2009,
Guardian
requested
an
By letter dated April 7,
“Attending
Physician’s
Statement
completed by the Physician that is certifying your disability from
medical school” as well as “[m]edical records from your date
disability
began
through
[the]
present.”
(Letter
of
Tracy
Hillegass dated April 7, 2008, attached as Exh. A to Holly Decl.,
at GUAR 00372).
In response, Ms. Schrom submitted a form completed by Dr.
Howard S. Dubin, an orthopedist, on May 15, 2009.
(Attending
Physician’s Statement dated May 15, 2009 (“APS”), attached as Exh.
C to Holly Decl., at GUAR 00362-00363).
Dr. Dubin indicated that
the plaintiff complained of neck and back pain and that he had
3
diagnosed her with spondylolisthesis.
(APS).
He had first
evaluated her for this condition on December 8, 2008 and most
recently on May 14, 2009.
(APS).
He concluded that Ms. Schrom was
unable to do “any type of work that involves repetitive walking,
bending, stooping, lifting, crawling, or standing for long period
[sic] of time.”
(APS).
Dr. Dubin also supplied a note indicating
that he had treated the plaintiff on February 5, 2009 when she had
been “thrown off a horse . . . reinjuring her back.”
(Treatment
Note dated Feb. 5, 2009, attached as Exh. C to Holly Decl., at GUAR
00278). He placed he on “off work status” as of that date. (APS).
On June 3, 2009, Guardian sent Ms. Schrom a request for
further information, including “[c]omplete medical records as well
as all test results from your date disability began (11-13-08)
through [the] present.”
(Letter of Dawn Brinker, attached as Exh.
A to Holly Decl., at GUAR 00361).
When Guardian did not receive
additional records, it issued a decision denying Ms. Schrom’s
claim.
In the denial letter, Guardian stated:
We received your claim form advising us that your last
day of medical school was November 13, 2008. On April 7,
2009 and June 3, 2009 we requested that you submit a
fully completed Attending Physician’s Statement from the
physician that advised you to cease medical school due to
your condition as of the last day of your attendance on
November 13, 2008 in order to determine whether you meet
the definition of “disability” under your plan. As of
this date, we have not received the requested
information.
4
(Denial Letter dated August 5, 2009, quoted in Letter of Carla N.
McKain dated March 26, 2010 (“McKain 3/26/10 Letter”), attached as
Exh. 6 to Letter of Carla N. McKain dated Nov. 23, 2011 (“McKain
11/23/11 Letter”), at 3).1
Ms. Schrom appealed this determination.
Letter).
As
part
of
the
appeal,
she
(McKain 3/26/10
submitted
to
Guardian
additional medical records for the period January 2, 2008 through
August 21, 2009.
(McKain 3/26/10 Letter at 3).
On April 16, 2010,
Guardian again requested information showing that the plaintiff was
“actively treating with a physician” prior to November 13, 2008,
and it suspended consideration of her claim pending receipt of such
information. (McKain 11/23/11 Letter at 4). On June 17, 2010, Ms.
Schrom’s attorney submitted additional medical records, and on
September 1, 2010, Guardian denied her appeal.
Letter at 4).2
(McKain 11/23/11
Ms. Schrom then commenced this action.
Guardian contends that the plaintiff has failed to provide
evidence that she was disabled prior to February 5, 2009, by which
time she was no longer covered by the policy since she had been
withdrawn from Lincoln in November 2008.
(Holly 12/2/11 Letter at
1
Neither party has submitted a copy of either the letter
denying Ms. Schrom’s claim or Guardian’s determination on the
appeal of that denial.
2
Again, neither party has proffered copies of the April 16,
2010, June 17, 2010, or September 1, 2010 letters.
5
3).
The plaintiff maintains that she has proffered ample evidence
that she became disabled while still a student at Lincoln and is
therefore eligible for benefits.
(McKain 11/23/11 Letter at 2-4).
Ms. Schrom has now presented several discovery disputes for
resolution.
First, she contends that Guardian has refused to
provide
with
her
requested
documents
relating
to
insurance broker, Trinity Benefits Advisors (“Trinity”).
Lincoln’s
She also
maintains that Guardian produced documents in a jumble, without
organizing them according to her requests or explaining how they
were kept in the ordinary course of business.
Finally, she seeks
a protective order barring Guardian from taking her deposition.
I
will address each issue in turn and provide additional facts as
appropriate.
Discussion
The scope of discovery in an ERISA case is informed by the
standard for reviewing the denial of benefits.
Accordingly, it is
appropriate to begin by identifying the legal framework.
In
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the
Supreme Court established four principles with respect to such
claims: (1) in determining the appropriate standard of review,
courts should be guided by principles of trust law; (2) under trust
law principles, a denial of benefits should be reviewed de novo
unless the plan provides to the contrary; (3) where the plan
6
provides
the
administrator
or
fiduciary
with
discretionary
authority to determine eligibility for benefits, courts must apply
a
deferential
standard
of
review;
and
(4)
if
a
plan
gives
discretion to an administrator or fiduciary who is operating under
a conflict of interest, that conflict is a factor to be weighed in
determining whether there is an abuse of discretion.
Life
Insurance
Co.
v.
Glenn,
554
U.S.
105,
Metropolitan
110-11
(2008).
Following Firestone, courts in the Second Circuit applied the de
novo standard in circumstances where the administrator operated
under a conflict of interest that affected the reasonableness of
its decision.
McCauley v. First Unum Life Insurance Co., 551 F.3d
126, 130-31 (2d Cir. 2008).
In Glenn, the Supreme Court clarified two aspect of its ERISA
jurisprudence.
First, it held that a conflict exists when an
entity is both the plan administrator and the insurer, not only
when the administrator is also the employer.
112-15.
Glenn, 554 U.S. at
Second, the Court determined that when a plan gives
discretion to the administrator, the existence of a conflict does
not sanction application of a de novo standard of review; rather,
courts
must
continue
to
utilize
a
deferential
standard,
but
consider any conflict as one factor in determining whether the
decision denying benefits was arbitrary and capricious.
115-18.
Id. at
After Glenn, the Second Circuit modified its ERISA
7
standards to conform to that decision.
McCauley, 551 F.3d at 132-
33; see VanWright v. First Unum Life Insurance Co., 740 F. Supp. 2d
397, 402 (S.D.N.Y. 2010).
Consistent with this deferential standard, “the presumption is
that review is limited to the record in front of the claims
administrator
unless
the
district
court
finds
good
cause
to
consider additional evidence.” Muller v. First Unum Life Insurance
Co., 341 F.3d 119, 125 (2d Cir. 2003) (internal citation and
quotation marks omitted); accord Cirincione v. Plumbers Local No.
200 Pension Fund, 404 Fed. Appx. 524, 526 (2d Cir. 2010); Daniel v.
Unumprovident Corp., 261 Fed. Appx. 316, 318 (2d Cir. 2008);
Wagner v. Metropolitan Life Insurance Co., No. 08 Civ. 11284, 2011
WL 2638143, at *10 (S.D.N.Y. Feb. 28, 2011); Baird v. Prudential
Insurance Co., No. 09 Civ. 7898, 2010 WL 3743839, at *7 (S.D.N.Y.
Sept. 24, 2010); VanWright, 740 F. Supp. 2d at 402.
Accordingly,
discovery is only permitted where it is reasonably likely that the
requested information will satisfy the good cause requirement. See
McDonnell v. First Unum Life Insurance Co., No. 10 Civ. 8140, 2011
WL 5301588, at *3 (S.D.N.Y. Nov. 3, 2011); Mergel v. Prudential
Life Insurance Co., No. 09 Civ. 39, 2009 WL 2849084, at *2
(S.D.N.Y. Sept. 1, 2009); Kruk v. Metropolitan Life Insurance Co.,
No. 3:07-CV-1533, 2009 WL 1481543, at *3 (D. Conn. May 26, 2009).
However, “‘[t]he good cause standard required to obtain evidence
8
beyond the administrative record [at the discovery stage] is . . .
less stringent than when requesting that the court . . . consider
such evidence in its final determination.’”
McDonnell, 2011 WL
5301588, at *3 (quoting Trussel v. Cigna Life Insurance Co., 552 F.
Supp. 2d 387, 390-91 (S.D.N.Y. 2008); see also Burgio v. Prudential
Life Insurance Co., 253 F.R.D. 219, 229-30 (S.D.N.Y. 2008).
The impact of Glenn on discovery in ERISA cases remains
unclear.
As one court has noted, “[w]hile some courts have found
Glenn did not change the discovery rules surrounding ERISA benefit
cases, other courts have reached the exact opposite conclusion.”
Winterbauer v. Life Insurance Co. of North America, No. 4:07 CV
1026, 2008 WL 4643942, at *5 (E.D. Mo. Oct. 20, 2008) (collecting
cases).
In my view, Glenn dictates more constrained discovery in
one respect and somewhat more expansive discovery in another.
Because it is now clear that a deferential standard of review
applies when a plan accords the claims administrator discretion,
even when the administrator is operating with a conflict, it will
be more difficult in such cases to show good cause for discovery on
the merits of the claim determination itself: “absent serious
procedural deficiencies, discovery into the substantive merits of
a
claim
remains
off
limits.”
Id.;
see
Myers
v.
Prudential
Insurance Co., 581 F. Supp. 2d 904, 913 (E.D. Tenn. 2008).
On the
other hand, by identifying an administrator’s conflict as one
9
factor to be weighed in evaluating whether a denial of benefits is
arbitrary and capricious, Glenn invited discovery relating to any
such conflict, since much of the relevant information would not
have been part of the record.
“[T]he Court [in Glenn] made clear
that not all conflicts are created equal.
Their significance in
any given case depends upon all of the circumstances, including
those suggesting a higher or lower likelihood that the conflict
affected the decision.” Hogan-Cross v. Metropolitan Life Insurance
Co., 568 F. Supp. 2d 410, 415 (S.D.N.Y. 2008).
With these
principles in mind, I will turn to the parties’ specific discovery
disputes.
A. Insurer/Broker Documents
Ms. Schrom has moved to compel the production of documents
concerning the relationship between Guardian and Trinity, the
insurance broker.
(McKain 11/23/11 Letter at 13-15).
Because
Guardian has already produced all communications between these
entities relating to Ms. Schrom’s claim (Letter of Andrew Holly
dated Nov. 8, 2011, attached as Exh. F to Holly Decl., at 2), the
only documents that remain in dispute are the contracts between
Guardian and Trinity for Trinity’s brokerage services.
(Holly
12/2/11 Letter at 4).
Ms. Schrom’s demand for documents relating to Trinity was
triggered by an entry in Guardian’s claim file memorializing a
10
communication between Dawn Brinker, who reviewed the claim on
behalf of Guardian, and Sheila R. Brill, a broker at Trinity.
Ms.
Brinker wrote:
[Ms. Brill] advised me this is a questionable claim, in
that [Ms. Schrom] just “disappeared” -- just stopped
showing up for school. Did not communicate anything to
anyone until she filed claim.
Advised [policyholder]
will not be upset either way if claim is paid or denied,
just want to be sure claim is legit prior to paying.
Advised her I would send an additional letter today
advising [Ms. Schrom] we still need APS from onset
accompanied by all med recs from 11-08 to present.
Advised APS alone will not be acceptable must also have
med recs. Broker agreed [with] out handling.
(Managed Disability Claims Notes, attached as Exh. A to Holly
Decl.,
at
GUAR
00004).
Guardian
characterizes
the
reported
conversation as a legitimate “part of Guardian’s fact-finding
process”
(Holly
12/2/11
Letter
at
susceptible to such an interpretation.
5),
and,
indeed,
it
is
On the other hand, it can
also be read to reflect Trinity’s substantive involvement in the
claims decision process, since Trinity refers to Lincoln’s position
with respect to the merits of the claim.3
“The
ultimate
question
in
[ERISA]
cases
decision in question was arbitrary and capricious.
3
is
whether
the
In making that
In this case, Trinity expressed Lincoln’s position as
neutral: it would not be “upset” whether the claim were approved or
denied. The inference could be drawn, however, that the policy
holder’s position, as relayed by Trinity, is understood to have
some relevance to the claims decision.
11
determination, the existence, nature, extent, and effect of any
conflict of interest are relevant considerations.”
568 F. Supp. 2d at 415.
Hogan-Cross,
The contractual relationship between
Guardian and Trinity is surely relevant to such a conflict in this
case where Guardian consulted with Trinity in connection with its
claims decision.
Accordingly, Ms. Schrom has established good
cause for obtaining the requested information.
B. Deposition of the Plaintiff
Guardian seeks to depose Ms. Schrom in order to explore
“apparent inconsistencies between Ms. Schrom’s allegations of
disability and her medical records.” (Holly 12/2/11 Letter at 8).
Guardian relies in part on representations made by Ms. Schrom in
her application for social security benefits and notes that it did
not have access to that application during the claim procedure.
(Holly 12/2/11 Letter at 8).
Guardian acknowledges that “this
requested deposition would seek evidence outside the administrative
record,”
but
argues
that
“both
the
nature
of
Ms.
Schrom’s
disability and her credibility are relevant topics for examination
in this claim for benefits.”
(Holly 12/2/11 Letter at 8).
Ms. Schrom’s claim hinges largely on the onset date and nature
of
her
disability.
concerning
her
Were
disability
she
seeking
beyond
to
that
introduce
evidence
contained
in
the
administrative record, there might well be good cause for taking
12
her deposition.
evidence
If, for example, she were to proffer new expert
concerning
the
extent
to
which
her
conditions
were
presumptively disabling prior to the onset date identified by her
treating physician, she would open the door to discovery. However,
she has disavowed any such intention, stating that, except for
information relating to any conflict under which Guardian was
operating, she is relying on the administrative record.4
(McKain
11/23/11 Letter at 4).
Under
these
circumstances,
make
warrant
test
the
taking
her
Although Guardian argues that it would be “absurd” to
to
to
to
deposition.
claimant
enough
desire
credibility
a
not
mere
plaintiff’s
allow
is
the
misrepresentations
in
a
disability
benefits application and then preclude the insurer from taking
discovery (Holly 12/2/11 Letter at 8), the abuse of discretion
standard generally limits review to the administrative record.
Muller, 341 F.3d at 125; Wagner, 2011 WL 2638143, at *10.
The only
document outside the record that Guardian specifically identifies
is Ms. Schrom’s application for social security disability benefits
4
To be sure, the plaintiff also argues that the Court should
apply a de novo standard of review which, if appropriate, would
warrant broader discovery.
However, it is clear that even if
Guardian’s denial of her claim were affected by a conflict, the
proper standard of review is still deferential and requires review
based on the record that was before the administrator. See Glenn,
554 U.S. at 115-16; McCauley, 552 F.3d at 132-33.
13
(Holly 12/2/11 Letter at 8); but that application was filed well in
advance of Guardian’s final decision on Ms. Schrom’s claim (Social
Security and New York disability benefits applications, attached as
Exh. E to Holly Decl.) and thus could have been available to the
administrator had it been requested.
Guardian cannot base its
demand for discovery now on its failure to obtain information as
part of its claim investigation process.
See Muller, 341 F.3d at
125 (holding that where party had ample opportunity to develop
record prior to claim determination, no basis for expanding record
in district court); Dabush v. Guardian Life Insurance Co., No.
3:10cv67, 2011 WL 3563137, at *10 (D. Conn. Aug. 15, 2011) (same).
Thus, good cause to take Ms. Schrom’s deposition has not been
shown, and her application for a protective order is granted.
C. Organization of Documents
Finally, Ms. Schrom contends that when Guardian produced
documents in response to her requests, it simply provided 382 pages
in an undifferentiated mass. (McKain 11/23/11 Letter at 14). Rule
34(b)(2)(E)(i) of the Federal Rules of Civil Procedure provides
that “a party must produce documents as they are kept in the usual
course of business or must organize and label them to correspond to
the categories in the request.”
Here, Guardian has provided
declarations
of
attesting
that
one
its
employees
sent
the
plaintiff’s claim file to counsel in the order that it was kept in
14
the regular course of business and that counsel in turn numbered
and produced the documents in the same order.
(Declaration of
Lynne Mack dated Dec. 2, 2011, attached to Holly 12/2/11 Letter, ¶
3; Declaration of Kristin Wynne dated Dec. 2, 2011, attached to
Holly 12/2/11 Letter, ¶ 2; Declaration of Shannon L. Bjorklund
dated Dec. 2, 2011, attached to Holly 12/2/11 Letter, ¶¶ 2-4).
That is sufficient.
Where massive numbers of documents are
involved, it may be necessary for the producing party to provide a
complete explanation of its information management structure if it
wishes to produce those documents in the manner that they are
ordinarily stored.
F.R.D.
331,
336
See Pass & Seymour, Inc. v. Hubble Inc., 255
(N.D.N.Y.
2008)
(more
than
400,000
pages);
CooperVision, Inc. v. Ciba Vision Corp., No. 06 Civ. 149, 2007 WL
2264848, at *4-5 (E.D. Tex. Aug. 6, 2007) (finding Rule 34 violated
by “simply placing [32,000] documents in boxes and making them
available” to opponent). However, where a more manageable universe
of documents is at issue, they may be produced as they are kept in
the
regular
obligations
course
on
the
of
business
producing
without
party.
See
imposing
Rahman
additional
v.
Smith
&
Wollensky Restaurant Group, Inc., No. 06 Civ. 6198, 2009 WL 773344,
at *4 (S.D.N.Y. March 18, 2009).
Any ambiguities can be addressed
informally by counsel, and there is no indication that Ms. Schrom’s
attorney attempted to do so here and was rebuffed.
15
Therefore,
Guardian need not reproduce its documents in a different form or
correlate them to the plaintiff's discovery requests.
Conclusion
Consistent
produce
the
with
the
requested
Trinity by January
determinations
documents
15,
2012.
above,
reflecting
Ms.
Schrom's
Guardian
its
contract
application
protective order precluding her deposition is granted,
shall
with
for
a
but her
request for Guardian to supply additional information about the
manner in which it maintained the documents it
denied.
ready produced is
The pretrial order shall be submitted by February 15, 2012
unless any dispositive motion is filed by that date.
If such a
motion is filed, the pretrial order shall be due thirty days after
the motion is decided.
SO ORDERED.
~
_t_._~~w.._fMJ_\-=l=---V_'-_
AMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
Dated: New York, New York
January 5, 2011
Copies mailed this date:
Carla N. McKain, Esq.
Coughlin & Gerhart, LLP
401 E. State Street, Suite 403
Ithaca, New York 14850
16
Jonathan R. Montcalm, Esq.
Dorsey & Whitney LLP
51 West 52nd Street
New York, New York 10019
Andrew J. Holly, Esq.
Dorsey & Whitney, LLP
50 South Sixth Street, Suite 1500
Minneapolis, MN 55402
George L. Mahoney, Esq.
Malapero & Prisco
295 Madison Avenue
New York, New York 10017
17
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