Tietjen v. UNUM Life Insurance Company Of America
MEMORANDUM OPINION AND ORDER re: 15 FIRST MOTION To Determine Standard of Review, filed by Laurie Tietjen. For the reasons stated above, the Court concludes that Unum has met its burden of establishing that the deferential abuse of discret ion standard of review applies to the denial of Tietjen's claim. Accordingly, Tietjen's motion seeking an order declaring that the appropriate standard of review in this action is de novo is DENIED. Counsel shall promptly confer with resp ect to the next steps in this litigation and, within two weeks of the date of this Memorandum Opinion and Order, shall submit a joint letter detailing their views and whether a conference is necessary. The Clerk of Court is directed to terminate Docket No. 15, and as further set forth herein. (Signed by Judge Jesse M. Furman on 9/26/2017) (ras)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
UNUM LIFE INSURANCE COMPANY OF AMERICA, :
JESSE M. FURMAN, United States District Judge:
Plaintiff Laurie Tietjen, a former employee of Time Warner Inc. (“Time Warner”), brings
suit against Defendant Unum Life Insurance Company of America (“Unum”) under the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.,
alleging that Unum improperly denied her application for long term disability benefits. (Docket
No. 1 (“Compl.”) ¶¶ 1, 5, 24, 52). Now pending is Tietjen’s motion to determine the standard of
review. (Docket No. 15). Tietjen argues that the Court should review Unum’s decision de novo.
By contrast, Unum argues in favor of the more deferential “arbitrary and capricious” standard.
(Docket No. 24 (“Def.’s Opp’n”), at 12). For the reasons that follow, the Court agrees with
Unum and concludes that the arbitrary and capricious standard applies.
Tietjen worked as a Vice President of Strategic Communications and Branding for Time
Warner, where she participated in the company’s long term disability plan (the “Plan”). (Compl.
¶¶ 5, 24). In 2011, Tietjen — who claims to suffer from Lyme disease and other tick-related
ailments — filed a claim for long term disability benefits under the Plan. (Compl. ¶¶ 25, 32).
Unum initially approved her claim, but conducted additional reviews of the medical evidence
and ultimately concluded that her “diagnosis of Lyme disease was not supported and that there
was no physical or organic cause of her reported symptoms.” (Docket No. 23-3, at 3491). Thus,
Unum terminated benefits on February 26, 2015, in a decision rendered by Kristie Landry, Lead
Disability Benefits Specialist. (Compl. ¶¶ 22, 33, 52; Docket No. 17 (“Hess Aff.”), Ex. E
(“Landry Ltr.”)). The decision cited the evaluations of two Independent Medical Examiners, one
of whom was a neuropsychologist. (Docket No. 23-3, at 3491-92).
In August 2015, Tietjen appealed Unum’s decision internally. (Id. at 3560). As part of
the appeal process, Unum obtained additional reviews of the medical evidence from Susan
Grover, a registered nurse, and Dr. Jacqueline Crawford, a neurologist. Both had full access to
all of the prior medical reviews and the Independent Medical Examiner reports in Tietjen’s file,
including reports from an infectious disease specialist, a neurologist, and neuropsychologists
who had previously evaluated Tietjen’s claim. (Docket No. 23-4, at 4458-76, 4480-95). Both
reviewers rejected the possibility that Tietjen’s cognitive impairments or disabilities were caused
by physical issues. (Id. at 4475, 4490). Thereafter, in a decision rendered by Phaen Stone, Lead
Appeals Specialist, Unum denied the appeal. (Hess Aff., Ex. F). Significantly, Stone and
Landry, who rendered the initial decision on Tietjen’s claim, appear to be employees of Unum
Group, an entity separate from Unum. (See Landry Ltr. 2; Hess Aff., Ex. B (“SPD”), at 8;
(Docket No. 16 (“Pl.’s Mem.”), at 7, n.3; Docket No. 25 (“Pl.’s Reply”), at 3).
In reviewing a denial of benefits under ERISA, a court must apply a de novo standard
“unless the benefit plan gives the administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan,” in which case the court must apply
the more deferential abuse of discretion standard. Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 115 (1989); see Chau v. Hartford Life Ins. Co., No. 14-CV-8484 (GHW), 2016 WL
7238956, at *2 (S.D.N.Y. Dec. 13, 2016) (noting that the phrase “arbitrary and capricious” is
“used interchangeably” with the term “abuse of discretion” in this context). In order to trigger
the more deferential standard, a benefit plan must use “clear language” to indicate that the
administrators reserve discretion to interpret and apply the plan. Nichols v. Prudential Ins. Co.
of Am., 406 F.3d 98, 108 (2d Cir. 2005). It is the plan administrator who bears the burden of
proving that the deferential standard of review applies, as “the party claiming deferential review
should prove the predicate that justifies it.” Sharkey v. Ultramar Energy Ltd., 70 F.3d 226, 230
(2d Cir. 1995). Similarly, because “the plan administrator bears the burden of proving that the
arbitrary and capricious standard of review applies . . . needless ambiguity in the wording of the
policy should be resolved against [the insurer].” Kinstler v. First Reliance Standard Life Ins.
Co., 181 F.3d 243, 252 (2d Cir. 1999); see also Ogden Corp. v. Travelers Indem. Co., 681 F.
Supp. 169, 173 (S.D.N.Y. 1988) (“In the field of insurance contract provisions, the general rule
is to construe ambiguities in favor of the insured and against the insurer.”). And finally, even if
there is a grant of discretion in the plan, “[w]here an unauthorized party makes the
determination, a denial of plan benefits is reviewed under the de novo standard.” Sharkey, 70
F.3d at 229.
In this case, there is no dispute that the Plan explicitly granted discretionary authority to
Unum (Pl.’s Mem. 1; Def.’s Opp’n 1), as it states that “[w]hen making a benefit determination
under the policy, Unum has discretionary authority to determine your eligibility for benefits and
to interpret the terms and provisions of the policy.” (Hess Aff., Ex. A (“Policy”), at 13). The
rub is that the determinations here were apparently made by employees of Unum Group, an
entity that is distinct from Unum. Citing that fact, Tietjen contends that the determinations were
made by an unauthorized party and that the Court should therefore apply de novo review. (Pl.’s
Mem. 1). Unum, on the other hand, points to the Additional Summary Plan Description
(“SPD”), which states in relevant part that “[t]he Plan, acting through the Plan Administrator,
delegates to Unum and its affiliate Unum Group discretionary authority to make benefit
determinations under the Plan.” (SPD 8 (emphasis added); see Def.’s Opp’n 2). Significantly,
the SPD further provides that it is part of the Plan, stating, in one instance, that “[i]f this policy
provides benefits under a Plan” subject to ERISA, “the following provisions apply” (SPD 2
(emphasis added)), and, in another, that “[t]he summary plan description and the policy
constitute the Plan. Benefit determinations are controlled exclusively by the policy, your
certificate of coverage and the information contained in this document.” (Id.).
In light of the clear language in the SPD, Unum has the better of the argument. It is true
that, in CIGNA Corp. v. Amara, 563 U.S. 421, 438 (2011), the Supreme Court cautioned that
SPDs, “important as they are, provide communication with beneficiaries about the plan, but that
their statements do not themselves constitute the terms of the plan” for purposes of ERISA.
Even after Amara, however, courts have found that SPDs are enforceable if they are explicitly
incorporated into their plans — even if the incorporating language appears only in the SPDs
themselves. See, e.g., Aschermann v. Aetna Life Ins. Co., 689 F.3d 726, 729 (7th Cir. 2012)
(“There is no reason why an employer cannot make a summary plan description be part of the
plan itself.”); Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131 (10th
Cir. 2011) (“[A]n insurer is not entitled to deferential review merely because it claims the SPD is
integrated into the Plan. Rather, the insurer must demonstrate that the SPD is part of the Plan,
for example, by the SPD clearly stating on its face that it is part of the Plan.”); Wenger v.
Prudential Ins. Co. of Am., No. 12-CV-1896 (KBF), 2013 WL 5441760, at *6 (S.D.N.Y. Sept.
26, 2013) (“An SPD may, however, be incorporated into a plan if done so explicitly.”); Durham
v. Prudential Ins. Co. of Am., 890 F. Supp. 2d 390, 395 (S.D.N.Y. 2012) (citing Eugene for the
proposition that an insurer can demonstrate that an SPD is part of the plan if the SPD itself notes
as much “explicitly”); see also Morgenthaler v. First Unum Life Ins. Co., No. 03-CV-5941
(AKH), 2006 WL 2463656, at *2 (S.D.N.Y. Aug. 22, 2006) (“The precise placement of
discretionary language in a policy is irrelevant.”). That is the case here, as the SPD “clearly
stat[es] on its face that it is part of the Plan.” Eugene, 663 F.3d at 1131. And there is no dispute
that the SPD delegates “discretionary authority” to Unum Group as well as Unum. (SPD 8).
Tietjen’s arguments to the contrary are unpersuasive. First, she contends that the Policy
grants “exclusive discretionary authority” to Unum and thus conflicts with the language in the
SPD. (Pl.’s Mem. 6). If that were the case, the language in the Policy would control and the de
novo standard might well apply on the ground that the determinations here were made by
someone other than Unum. See, e.g., Hamill v. Prudential Ins. Co. of Am., No. 11-CV-1464
(SLT), 2012 WL 6757211, at *3 (E.D.N.Y. Sept. 28, 2012) (“Where there is a conflict between
the language of the plan and the SPD, it is the plan that controls, not the SPD.”). But the Policy
merely states that Unum has “discretionary authority” to determine eligibility “[w]hen making a
benefit determination”; as a matter of logic, that does not preclude a different entity making a
benefit determination, let alone address whether any such entity would have similar discretion
when doing so. (Policy 13 (emphasis added)). Second, Tietjen contends that “[t]his specific
issue was already litigated in this district and decided against Unum” in McDonnell v. First
Unum Life Ins. Co., No. 10-CV-8140 (RPP), 2013 WL 3975941 (S.D.N.Y. Aug. 5, 2013). (Pl.’s
Mem. 1). But, separate and apart from the fact that McDonnell is not binding on this Court, the
facts in that case are distinguishable. Specifically, although the determinations in that case were,
as here, made by employees of Unum Group, a separate entity, “both parties agree[d] that the
benefit plan . . . explicitly granted discretionary authority only to First Unum” and there was no
discussion of any summary plan description. 2013 WL 3975941, at *7 (emphasis added).
As a fallback, Tietjen contends that, even if Unum is otherwise entitled to deference
under the terms of the Plan, the Second Circuit’s decision in Halo v. Yale Health Plan, 819 F.3d
42, 45-46 (2d Cir. 2016), calls for de novo review because Unum failed to comply with ERISA’s
procedural claims regulations in two ways. (Pl.’s Mem. 12-16). First, Tietjen asserts that, by
having a registered nurse and neurologist rather than a neuropsychologist review her claim on
appeal, Unum violated the regulatory requirement that a plan must “consult with a health care
professional who has appropriate training and experience in the field of medicine involved in the
medical judgment.” 29 C.F.R. § 2560.503-1(h)(3)(iii). (See Pl.’s Mem. 12-14). But Tietjen fails
to explain why a registered nurse and board-certified neurologist — the latter of whom certified
that she was, “by training and experience,” capable of assessing neuropsychological evidence, no
less (Docket No. 23-4, at 19) — were unqualified to evaluate whether her cognitive symptoms
were due to a physical condition. And, even more significantly, she fails to cite any legal
authority for that proposition — perhaps because the weight of authority is to the contrary. See,
e.g., Wedge v. Shawmut Design & Const. Grp. Long Term Disability Ins. Plan, 23 F. Supp. 3d
320, 339 (S.D.N.Y. 2014) (concluding that a reviewing nurse had the requisite “training and
experience” to conduct a review of a benefits claim); Schnur v. CTC Commc’ns Corp. Grp.
Disability Plan, No. 05-CV-3297 (RJS), 2010 WL 1253481, at *16 (S.D.N.Y. Mar. 29, 2010)
(noting that “there is no requirement that [the insurer] engage physicians specially trained in the
diagnosis of Lyme disease to examine Plaintiff or her records” and relying instead on two
generalists), aff’d, 413 F. App’x 377 (2d Cir. 2011); see also, e.g., Tortora v. SBC Commc’ns,
Inc., 446 F. App’x 335, 339 (2d Cir. 2011) (relying on the fact that a claim was reviewed by a
neurologist and neuropsychiatrist, rather than a neuropsychologist, to conclude that it was
“neither arbitrary nor capricious” for the insurer to deny benefits); see generally Young v.
Hartford Life & Acc. Ins. Co., No. 09-CV-9811 (RJH), 2011 WL 4430859, at *12 (S.D.N.Y.
Sept. 23, 2011) (noting that “courts have eschewed such a ‘hyper-technical’ reading of” Section
2560.503-1(h)(3)(iii) when it comes to a physician’s specialty), aff’d, 506 F. App’x 27 (2d Cir.
2012). Thus, Tietjen’s argument that her claim was not reviewed by appropriately qualified
medical professionals fails.
Second, Tietjen argues that Unum is not entitled to deferential review because it failed to
follow its own internal policies when it cut off her benefits. (Pl.’s Mem. 15). In particular, she
claims that, by applying the Policy’s twenty-four-month “Self-Reported Symptom” (“SRS”)
limitation to her claim, Unum violated its internal guidelines providing that the limitation
“should not be applied to claims arising from New York-sitused policies.” (Id. (emphasis in
original)). According to Tietjen, this improper application of the SRS limitation was, in turn, a
violation of 29 C.F.R. § 2560.503-1(b)(5), which requires that an insurer provide “administrative
processes and safeguards designed to ensure and to verify that benefit claim determinations are
made in accordance with governing plan documents and that, where appropriate, the plan
provisions are applied consistently with respect to similarly situated claimants.” Significantly,
however, Tiejten does not dispute that Unum had reasonable “administrative processes and
safeguards” in place — which is all that Section 2560.503-1(b)(5) requires. See, e.g., ERISA;
Rules and Regulations for Administration and Enforcement; Claims Procedure, 65 Fed. Reg.
70,246, at 70,252 (Nov. 21, 2000) (stating that Section 2560.503-1(b)(5) “does no more than to
require a plan to formalize, as a part of its claims procedures, the administrative processes that it
must already have established and be using in operating the plan in order to satisfy basic
fiduciary standards of conduct under the Act”); see also, e.g., Daniel F. v. Blue Shield of Cal.,
No. 09-CV-2037 (PJH), 2011 WL 830623, at *10 (N.D. Cal. Mar. 3, 2011) (“At most, [Section
2560.503-1(b)(5)] requires ‘reasonable’ processes, not perfection, and does not create a violation
for actions based on human error.”). Whether Unum complied with its “administrative processes
and safeguards” is a question that goes to the merits, not to what standard of review applies. See,
e.g., Egert v. Conn. Gen. Life Ins., 900 F.2d 1032, 1035, 1038 (7th Cir. 1990) (noting first that
the deferential “arbitrary and capricious” standard of review applied and only then concluding
that the insurer’s internal guideline was an unreasonable interpretation of the plan under the
deferential standard); Daniel F., 2011 WL 830623, at *7, 10 (finding that the plan at issue
provided the insurer with discretionary authority and then analyzing whether the insurer violated
Section 2560.503-1(b)(5) under the “arbitrary and capricious” standard); Smith v. Med. Mut. of
Ohio, Inc., No. 06-CV-941 (EAS), 2008 WL 780613, at *8 (S.D. Ohio Mar. 24, 2008) aff'd sub
nom. Smith v. Health Servs. of Coshocton, 314 F. App'x 848 (6th Cir. 2009) (concluding that an
insurer’s “use of [a] corporate policy in evaluating Plaintiff's claim for benefits was not arbitrary
and capricious” under Section 2560.503-1(b)(5)); cf. Conkright v. Frommert, 559 U.S. 506, 509
(2010) (concluding that “a single honest mistake in plan interpretation” does not “justif[y]
stripping the administrator of deference for subsequent related interpretations of the plan”).
For the reasons stated above, the Court concludes that Unum has met its burden of
establishing that the deferential abuse of discretion standard of review applies to the denial of
Tietjen’s claim. Accordingly, Tietjen’s motion seeking an order declaring that the appropriate
standard of review in this action is de novo is DENIED.
Counsel shall promptly confer with respect to the next steps in this litigation and, within
two weeks of the date of this Memorandum Opinion and Order, shall submit a joint letter
detailing their views and whether a conference is necessary.
The Clerk of Court is directed to terminate Docket No. 15.
Date: September 26, 2017
New York, New York
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