Jones v. Life Insurance Company of North America et al

Filing 51

ORDER granting in part and denying in part 36 Plaintiff's Motion for Summary Judgment; and granting in part and denying in part Defendant's 37 Motion for Summary Judgment. Signed by Hon. Michael A. Telesca on May 20, 2011. (MK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
________________________________________
CHARLES R. JONES,
Plaintiff,

08-CV-6586
DECISION
and ORDER

v.
LIFE INSURANCE COMPANY OF NORTH
AMERICA, CIGNA GROUP INSURANCE,
AND ELECTRONIC DATA SYSTEMS CORPORATION
Defendants.
________________________________________
INTRODUCTION

Plaintiff, Charles R. Jones (“Plaintiff”), brings this action
pursuant to the Employee Retirement Security Act of 1974, 29 U.S.C.
§§ 1001 et seq. (“ERISA”), seeking long term disability benefits
under an employee benefit plan (the “Plan”) offered by his former
employer, Electronic Data Systems Corporation, and issued by Life
Insurance Company of North America (“LINA”).

Plaintiff alleges

that he is disabled according to the Plan and therefore, he is
entitled to long term disability benefits. He further alleges that
LINA breached a fiduciary duty owed to the him by denying his claim
for

benefits.

Defendants

deny

Plaintiff’s

allegations

and

counterclaim for restitution based on Plaintiff’s receipt of Social
Security Disability benefits, for which it alleges that it is
entitled to offset under the Plan.
Defendant LINA asserts that defendants Electronic Data Systems
Corporation

(“EDS”)

and

Cigna

Group

Page -1-

Insurance

(“Cigna”)

were

improperly named as defendants this case.

LINA attests that Cigna

is not a legal entity and is merely a service mark used by LINA.
See Def. Resp. to Pl. Rule 56.1 Statement(Docket #46), note 1.
Further, the Complaint does not contain any factual allegations
against EDS, as LINA made all decisions regarding Plaintiff’s claim
for benefits, which are ultimately paid by LINA. (Docket #1.)
Plaintiff has neither responded to LINA’s arguments nor sought to
amend his Complaint to include additional factual allegations
against EDS or to contest LINA’s assertion that Cigna is merely a
service mark. Accordingly, EDS and Cigna are hereby dismissed as
defendants in this case, and the Clerk of the Court is hereby
directed to remove Electronic Data Systems Corporation and Cigna
Group Insurance from the caption.
Both Plaintiff and LINA move for summary judgement pursuant to
Rule 56 of the Federal Rules of Civil Procedure (“Rule 56").
Plaintiff argues that he was wrongfully denied benefits under the
plan and that LINA breached a fiduciary duty owed to him pursuant
to ERISA. See Pl. Mem’s of Law (Docket # 36).
decision

to

deny

Plaintiff

benefits

is

LINA argues that its
supported

by

the

administrative record (“AR LINA”) and that, as the insurer, it does
not owe the Plaintiff a fiduciary duty. See Def. Mem’s of Law
(Docket #40, 45). LINA further contends that according to the Plan
and a reimbursement agreement signed by the Plaintiff, Plaintiff is
required

to

reimburse

LINA

for

any

Page -2-

overpayment

of

benefits

resulting from the receipt of other disability benefits, including
Social Security Disability benefits.

Id.

For the reasons set forth below, this Court grants in part and
denies in part both Plaintiff and Defendant LINA’s Motions for
Summary Judgement.

LINA is hereby Ordered to calculate and pay

Plaintiff the benefits due under the contract, retroactive to
October 26, 2006 with interest.
offset by $35, 877.40,
Plaintiff’s

receipt

Such benefits, however, shall be

the amount owed to LINA resulting from

of

Social

Security

Disability

benefits,

pursuant to the Plan and reimbursement agreement.
BACKGROUND
The following facts are taken from the parties’ submissions
pursuant to Local Rule 56.1 and the administrative record submitted
in connection with the instant motion.
36, 39, 46.
Corporation

See AR LINA and Docket #’s

Plaintiff began working for Electronic Data Systems
(“EDS”)

administrator.

on

March

1,

2004

as

a

computer

systems

While employed by EDS, Plaintiff was a participant

in an employee benefit plan, which included long term disability
insurance, issued by LINA to EDS.
Plaintiff began experiencing neck and back pain and his
treating physician, Dr. Nicolas Venci, took him out of work on
April 20, 2004.
and

Dr.

James

After submitting medical records from Dr. Venci
Maxwell,

Plaintiff’s

treating

neurosurgeon,

indicating that Plaintiff was suffering from degenerative disc

Page -3-

disease, which required surgery, and carpal tunnel syndrome, LINA
approved Plaintiff’s claim for short term disability benefits
through

October

25,

2004.

Thereafter,

based

on

additional

documentation regarding his condition, Plaintiff was approved for
an initial period of long term disability insurance coverage
beginning on October 26, 2004. During the initial period under the
Plan, which lasts 24 months, “The Employee is considered Disabled
if, solely because of Injury or Sickness, he or she is: (1) unable
to perform the material duties of his or her Regular Occupation;
and (2)unable to earn 80% or more of his or her Indexed Earnings
from working in his or her Regular Occupation.” (AR LINA at 210,
emphasis added).
Plaintiff underwent an anterior cervical fusion on December 2,
2004.
June

Following the surgery and the estimated recovery period, in
2005,

LINA

medical

director,

Dr.

Scott

Taylor

reviewed

Plaintiff’s claim and determined that the initial period of long
term disability should continue, as the medical records from
Plaintiff’s treating physicians and x-rays indicated that Plaintiff
had not completely healed from the surgery. Accordingly, Plaintiff
continued to receive long term disability benefits. See AR LINA at
71-2.
Plaintiff’s claim was reviewed again in December 2005 by Ann
Conaway, RN.

Ms. Conway found that Plaintiff’s condition had

improved, based on an updated x-ray which showed healing of the

Page -4-

surgical fusion, and a note from a nurse practitioner in Dr.
Maxwell’s

office,

who

reported

that

Plaintiff’s

fusion

was

progressing slowly and that Plaintiff had reported some postsurgical improvements in his condition.

Accordingly, Conaway

concluded that the “available medical evidence did not support
permanent

functional

impairment.”

See

Def.

Local

Rule

56.1

Statement at ¶27.
Conaway made this determination, however, after reviewing
evidence from Dr. Maxwell, opining that Plaintiff was permanently
disabled due to neck and back pain that worsened with physical
activity. See AR LINA 282.

Dr. Maxwell also stated that Plaintiff

was unable to devote more than an hour to any activity and that his
pain was so severe that he could not work.

Dr. Maxwell attributed

the pain to post-surgical nerve scarring, but further surgery was
not an option. Dr. Maxwell also noted the worsening of Plaintiff’s
carpal

tunnel

syndrome.

At

that

time,

Conaway

noted

that

Plaintiff’s pain medications included flexeril and sulindac.
was

also

taking

medication

for

allergies,

hypertension

He
and

depression. Physical therapy was discontinued because it aggravated
Plaintiff’s pain.
Thereafter,

See AR LINA at 49.
LINA

arranged

for

Plaintiff

to

complete

Functional Capacity Assessment (“FCE”) in January 2006.
Morone,

a

physical

therapist

from

Greater

Rochester

a

Daniela
Physical

Therapy, completed the FCE over a two day period. See AR LINA 445-

Page -5-

454.

She stated that Plaintiff was cooperative during the FCE and

“was willing to work to his maximum abilities.” Id. at 452.
Morone

found

that

Plaintiff

was

capable

of

performing

sedentary level work, which requires the ability to “exert up to 10
pounds of force occasionally and/or a negligible amount of force
frequently...[and] involves sitting most of the time, but may
involve walking or standing for brief periods of time.” See AR LINA
453.

Morone stated that Plaintiff needed to restrict overhead

lifting and forward bending, could only sit or stand for 34-66% of
the work day each, and had significant deficits in cervical and
lumbar range of motion, step ladder climbing and crawling.

Morone

also noted that during the exam, Plaintiff was limited to sitting
for about 20 minutes during the physical exam and 20 minutes during
the sitting portion of the exam.

Plaintiff’s ability to complete

the tasks lessened towards the end of the exam and he needed to
take stronger pain medication (gabapentin) after the first day and
before the second day of the exam.
Plaintiff’s claim was then reviewed by Ginny Schmidt, a
vocational rehabilitation counselor at LINA. See AR LINA at 44.
Schmidt, without examining the Plaintiff and reviewing only the
FCE, determined

that

Plaintiff

could

carry

up

to

20

pounds;

frequently sit and stand, continuously walk and reach below the
waist;

engage

in

fine

manipulation

and

simple

grasping;

occasionally grasp approximately 95 pounds, push 70 pounds and pull

Page -6-

107 pounds; climb stairs continuously and ladders frequently;
continuously balance, kneel and crouch; and frequently stoop and
crawl.

Accordingly,

she

found

that

Plaintiff

could

perform

sedentary work and ordered a Transferable Skills Analysis (“TSA”).
The TSA, dated April 6, 2006, states that, given Plaintiff’s
skills, education, experience and physical limitations, he can
perform the following four jobs: Maintenance Scheduler, Service
Clerk, Repair-Order Clerk and Maintenance Dispatcher.

See AR LINA

at 429.
Based on the FCE and the TSA, LINA determined that Plaintiff
was ineligible for continued long term disability benefits after
the expiration of the initial 24 month period on October 26, 2006.
After the 24 month period, disability under the Plan is defined as
follows: “After Disability Benefits have been paid for 24 months,
you are Disabled if Injury or Sickness makes you unable to perform
the material duties of any occupation for which you may reasonably
become qualified based on education, training, or experience or
solely due to Injury or Sickness you are unable to earn 60% or more
of your Indexed Covered Earnings.”

Accordingly, because LINA

determined that the Plaintiff was able to perform sedentary work,
he would no longer be disabled after the 24 month period when the
definition
definition.

of

disability
On

May

13,

changed
2006,

to

the

Plaintiff

“any
was

occupation”

sent

a

letter

explaining LINA’s determination and instructing the Plaintiff on

Page -7-

his right to appeal the determination and to submit additional
information.
With the assistance of counsel, Plaintiff appealed LINA’s May
13,

2006.

Then,

on

October

27,

2006,

determination based on the same evidence.

LINA

upheld

their

Plaintiff was advised,

however, that he could submit additional information in support of
his claim. See AR LINA at 249-50. Plaintiff’s attorney submitted a
letter to LINA with additional information on October 27, 2006.1
See AR LINA at 339.
Plaintiff

submitted

additional

medical

records

from

Dr.

Maxwell and Dr. Venci. Dr. Venci completed a Physical Capacity
Evaluation

in

August

2005

indicating

that

Plaintiff

could

occasionally lift 10 pounds, but never lift more than 10 pounds;
that he could never climb, balance, stoop, kneel, crouch, crawl or
reach above shoulder level; he suffered from disabling fatigue due
to medications and trouble sleeping; and he suffered from disabling
severe

pain

which

precluded

required for even simple tasks.

the

attention

and

concentration

Additionally, Dr. Venci’s office

notes from 2004 through 2006 indicate that Plaintiff continued to
experience severe pain, for which Celebrex, Neurontin, Advil,
Flexeril and physical therapy were prescribed.

1

See AR LINA 358-

Plaintiff was apparently under the impression that he had until this date to submit
additional information to LINA before the first appeal determination would be made. However,
LINA permitted Plaintiff until April 25, 2007 to submit additional information for further review.
See AR LINA at 332.
Page -8-

369. Plaintiff also submitted additional information regarding the
progression of his carpal tunnel syndrome, for which surgery was
eventually recommended. See AR LINA 348-9.
Plaintiff also submitted letters from Dr. Maxwell to Dr. Venci
in July and August 2006, indicating that Plaintiff continued to
suffer from back and neck pain radiating to his arms and that he
continued to experience carpal tunnel symptoms bilaterally. Dr.
Maxwell opined that Plaintiff “can not do anything for more than an
hour or two because of neck and bilateral shoulder pain” and that
“his subjective level of pain sounds work precluding.”

He stated

that work may be possible, but his restrictions would be severe.
See AR LINA at 344.
Plaintiff’s counsel also sent a second appeal letter on April
25, 2007, with additional information including, inter alia, an
updated medical source statement from Dr. Venci and a vocational
analysis report from Victor Alberigi, CRC, CCM, LPC.

In the

medical source statement, dated, February 5, 2007, Dr. Venci states
that the Plaintiff suffered from chronic, moderate to severe pain
due to degenerative disc disease and his prognosis was poor. Dr.
Venci stated that Plaintiff was significantly limited in motion and
was suffering from severe headaches, secondary to the impairment of
the cervical spine and depression.

He stated that Plaintiff was

not a “malingerer” and that his impairments were consistent with
his symptoms and functional limitations.

Page -9-

He stated that Plaintiff

was “incapable of even low stress jobs;” he could

sit or stand for

less than two hours out of an eight hour workday and he could only
sit

for

20

minutes

continuously.
never

carry

syndrome.

or

stand

for

in

heavier.

fingering

and

Plaintiff
handling

also
due

to

had

minutes

significant

carpal

tunnel

Plaintiff needed to take frequent breaks and would

likely miss more than four days of work per month.
stated

15

Plaintiff could rarely carry 10 pounds and could
anything

limitations

continuously

that

Plaintiff’s

condition

had

persisted

Lastly, he
with

these

limitations since its onset in April 2004. See AR LINA 285-290.
Plaintiff also submitted a Vocational Analysis Report from
Victor Alberigi, CRC, CCM, LPC, dated March 27, 2007. Mr. Alberigi
noted that the TSA prepared by Ginny Schmidt for LINA ignored
Plaintiff’s diagnosis of carpal tunnel syndrome, which would make
frequent use of his hands difficult.

He also opined that the TSA

was inconsistent with the medical source statement prepared by Dr.
Venci in 2005 and the reports of Dr. Maxwell, which state that the
Plaintiff was not capable of carrying 20 pounds (Dr. Venci) or
engaging in activity for more than an hour at a time (Dr. Maxwell).
Further, Alberigi points out that during the FCE exam, Plaintiff
was incapable of sitting for more than 20 minutes at a time.
Alberigi also indicated in a separate letter that Plaintiff’s
medications, including Paxil, Celebrex and Neurontin, could limit
his ability to concentrate and cause drowsiness, side effects which

Page -10-

were reported by Plaintiff to his treating physicians on several
occasions. See AR LINA at 267, 291-296,
LINA Associate Medical Director, Dr. John Mendez, reviewed
Plaintiff’s

claim

additional

medical

unchanged

and

found

records,

because there

is

that
the

still

“[b]ased
original

on

the

provided

assessment

no validation

of

remains

less

than

sedentary functionality, as established by the FCE performed back
in 1/06.” See AR LINA at 255. Dr. Mendez cited portions of the
administrative record to support his decision, but he ignored Dr.
Maxwell’s opinion that Plaintiff was unable to work and Dr. Venci’s
physical capacity assessments. Accordingly, LINA determined that
Plaintiff was not disabled under the Plan and upheld the original
decision to deny him benefits. See AR LINA at 246-248.
Plaintiff was awarded Social Security Disability benefits in
September 2007, retroactive to October 2004.

The Notice of Award

states that Plaintiff would receive a lump sum payment of $60,225.50
for amounts due through September 2007. Thereafter, Plaintiff would
receive $1,801.00 per month, less the cost of medical insurance
premiums and other offsets. (Docket #38-9.).

Defendant states that

Plaintiff actually received $41,177.40 from October 26, 2004 to
October 26, 2006, including $5,300 in attorney’s fees, resulting in
an overpayment of benefits by LINA in the amount of $35,877.40.
The Plan contains a provision that any benefits payable under
the Plan will be directly offset by any Social Security Disability

Page -11-

benefits that are received by a claimant for the same period.
Plaintiff also signed a reimbursement agreement dated November 19,
2004, pursuant to which he agreed to reimburse LINA for any Social
Security Disability benefits received in addition to the benefits
received under the Plan. LINA states that according to the Plan and
the reimbursement agreement, it overpaid $35, 877.40 in benefits and
is entitled to reimbursement in that amount.

Plaintiff has not

contested LINA’s calculations.
DISCUSSION
A.

Standard of Review
Rule 56(c) of the Federal Rules of Civil Procedure provides

that summary judgment “should be rendered if the pleadings, the
discovery and disclosure materials on file, and any affidavits show
that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.” See Fed. R. Civ.
P. 56(c). When considering a motion for summary judgment, all
genuinely disputed facts must be resolved in favor of the party
against whom summary judgment is sought. See Scott v. Harris, 550
U.S. 372, 381 (2007). If, after considering the evidence in the
light most favorable to the nonmoving party, the court finds that
no rational jury could find in favor of that party, a grant of
summary judgment is appropriate. See Scott, 550 U.S. at 381 (citing
Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574,
586-587).

Page -12-

Pursuant to the Supreme Court’s decision in Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989), a de novo standard
applies to the review of a denial of benefits under the ERISA
statute,

§

1132(a)(1)(B),

“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

its initial papers in support of its Motion for Summary Judgment,
LINA, citing Firestone, states that a de novo standard of review
applies to the instant action, because, it admits, “the [Plan does]
not contain language conferring discretion on LINA.” See Def. Mem.
of Law at 13, Docket #40.

Plaintiff, filing his Motion for Summary

Judgment on the same day, states in his moving papers that the
“arbitrary and capricious” standard of review applies to this case
because LINA “is vested with discretionary authority to interpret
the provisions of the [Plan].” See Pl. Mem. of Law at 9, Docket #36.
Plaintiff does not cite any language from the Plan to support this
contention.

Defendant, in its responding papers, adopts the more

deferential, arbitrary and capricious standard of review, based
solely on the Plaintiff’s moving papers.
The

Second

Circuit

has

held

that

the

more

deferential

arbitrary and capricious standard of review applies only where “the
policy language reserving discretion has been clear.” See Kintsler
v. First Reliance Standard Life Insurance Company, 181 F.3d 243, 251
(2d Cir. 1999). In Kinstler the Court found that language which

Page -13-

requires a claimant to submit “satisfactory” proof of disability was
“insufficient to preclude de novo review.” Id.

Further, “[t]he

party claiming deferential review should prove the predicate that
justifies it.” See Sharkey v. Ultramar Energy Ltd., 70 F.3d 226, 230
(2d Cir. 1995).
The parties do not point to any language that would suggest
that LINA was entitled to make discretionary decisions with respect
to an insured’s eligibility to receive benefits.

The Plan states

that Plaintiff must provide “proof of disability” (AR LINA at 210,
216).

Such language is not sufficient to reserve discretion to

LINA. See Kinstler, 181 F.3d at 251-2.

Further, LINA is required

to “prove the predicate” that justifies this Court’s employment of
the arbitrary and capricious standard of review.

However, after

admitting that the Plan did not reserve it discretion, LINA merely
cites to the Plaintiff’s mistake in applying the lesser standard to
this case, rather than to any language conferring such discretion
in the Plan.

This Court finds that LINA has not met its burden with

respect to this issue and further, that the Plan does not contain
sufficient language to reserve discretion to LINA.

Therefore, this

Court will employ a de novo standard of review.
B. Plaintiff’s Motion for Summary Judgment
Plaintiff moves for summary judgment claiming that he is
entitled to receive long term disability benefits, as he is disabled
under the Plan.

Plaintiff argues that LINA ignored relevant

Page -14-

evidence from his treating physicians, and instead chose to rely on
the FCE and TSA, to the exclusion of other valid medical evidence
in support of his claim for disability.

Accordingly, Plaintiff

argues that Defendant failed to conduct a “full and fair” review of
his

claim

and

that

he

has

presented

sufficient

evidence

of

disability under the Plan.
Defendant argues that the record does not contain sufficient
evidence to support Plaintiff’s claim for disability following the
initial 24 month period, after which the “any occupation” disability
definition applies.
required

to

defer

Further, Defendant argues that it is not
to

the

opinions

of

Plaintiff’s

treating

physicians, and there is evidence in the record that Plaintiff’s
condition had improved following surgery on his back.
After reviewing the record in its entirety, this Court finds
that Plaintiff presented substantial evidence that he was disabled
under the “any occupation” Plan definition of disability, and that
he is entitled to receive long term disability benefits under the
Plan, retroactive to October 26, 2006, the date LINA determined that
he was no longer eligible for benefits.
Defendant correctly argues that ERISA does not require the
insurer to defer to the disability determinations of the insured’s
treating physicians. See Black & Decker Disability Plan v. Nord, 538
U.S. 822, 829-834 (2003). However, the insurer must conduct a “full
and fair review” of disability denials and, in conducting such a

Page -15-

review, “[p]lan administrators, of course, may not arbitrarily
refuse to credit a claimant’s reliable evidence, including the
opinions of a treating physician.” Id. at 834; 29 U.S.C. § 1133(2).
Further, in conducting a full and fair review, “the plan's fiduciary
must consider any and all pertinent information reasonably available
to

him

[and

t]he

decision

must

be

supported

by

substantial

evidence....” See DeVere v. Northrop Grumman Corp., 1999 WL 182670
(E.D.N.Y. 1999), aff’d 201 F.3d 431 (2d Cir. 1999)(citing Crocco v.
Xerox Corp., 956 F.Supp. 129, 139 (D.Conn. 1997)).
Here, both of Plaintiff’s treating physicians, with whom he had
maintained long standing treatment relationships, concluded that
Plaintiff was unable to perform the tasks of even low stress,
sedentary jobs. Dr. Maxwell stated that Plaintiff could not perform
activities for more than an hour at a time, and Dr. Venci stated
that he was incapable of lifting more than 10 pounds or standing or
sitting for more than 20 minutes continuously, and he could only sit
or stand for 2 hours in an 8 hour workday.

Plaintiff also would

need to take frequent breaks and would likely miss more than four
days of work per month. Both physicians and Plaintiff’s consultant,
Alberigi, noted Plaintiff’s worsening carpal tunnel syndrome, which
significantly limited his ability to work with his hands and which
is effectively ignored in all of LINA’s determination letters and
claim documentation.

Page -16-

Plaintiff’s physicians also noted that he is not a “malingerer”
and Plaintiff was reported to be cooperative and worked to the best
of his ability at the FCE examination. However, Plaintiff was still
unable to sit for more than 20 minutes continuously during the FCE,
and it was noted that after activity, and especially on the second
day of the FCE testing, Plaintiff struggled and needed to take
stronger pain medication.
LINA argues that they conducted a full and fair review of
Plaintiff’s claim, however, the record does not indicate that they
considered the totality of the medical evidence submitted by the
Plaintiff.

This Court finds the catch-all statement contained in

LINA’s determination letters (that the evidence they considered
“includes but is not limited to” certain documents) does not support
the

inference that they also considered Plaintiff’s proffered

evidence. Put simply, Plaintiff submitted substantial evidence
regarding his physical limitations, by physicians who treated the
Plaintiff over several years, yet this evidence is not mentioned in
the FCE report, the TSA or the denial letters from LINA.
The record clearly indicates that LINA cherry-picked selective
item of submitted evidence in order to support its decision that the
Plaintiff was not disabled under the Plan.

For example, LINA cites

the treatment note of a nurse practitioner in Dr. Maxwell’s office
stating that the Plaintiff had noticed some improvements following
surgery.

However, LINA does not afford weight to Dr. Maxwell’s

Page -17-

actual treatment notes during the same time frame, which state that,
while

Plaintiff

was

healing

slowly

from

the

surgery,

he

was

experiencing severe, activity-precluding pain, which prevented him
from engaging in activity for more than an hour at a time.

Dr.

Maxwell attributed the pain to post-surgical scarring, and indicated
that further surgery was not an option.

He opined that Plaintiff

could not work at that time. He specifically states that Plaintiff’s
pain “markedly exacerbates when he tries to do anything physical,
even simple stuff about the house. He cures himself by changing
position and by lying down. He can’t be faithful to any tasks for
more than an hour because of pain...I think he is stuck on a plateau
of chronic paid that I can not get him off of. It sounds severe
enough that I don’t think he can work. I think he should apply for
permanent disability because of the above pains.” See AR LINA at
282.
LINA utilizes the FCE in making its determination, but fails
to note that even the FCE examiner stated that Plaintiff was unable
to sit for more than 20 minutes at a time during the exam. Further,
Dr. Mendez, reviewing Plaintiff’s claim lists several items of
medical evidence relied upon to make his determination, but does not
list any of the treatment notes from Dr. Maxwell or the physical
capacity assessments from Dr. Venci. Rather, he relied upon the FCE
the TSA and a limited selection of treatment notes from Dr. Venci
which do not specifically discuss Plaintiff’s physical limitations.

Page -18-

While the FCE examiner opined that Plaintiff could perform sedentary
work with restrictions and the TSA found several jobs that Plaintiff
could perform considering those restrictions, LINA was required to
consider all of the evidence of record, the majority of which
consists of reports from Plaintiff’s treating opining that he is
unable

to

work

and

detailing

Plaintiff’s

specific

functional

limitations, which preclude work related activities.
After reviewing the entire record, this Court finds that the
totality of the evidence supports Plaintiff’s claim that he is
disabled from performing “any occupation” under the Plan definition
of disability.

Accordingly, this Court grants Plaintiff’s Motion

for Summary Judgment with respect to his claim for long term
disability benefits under the Plan.
With respect to Plaintiff’s claim for breach of a fiduciary
duty, this Court notes that Plaintiff’s claim is largely duplicative
of his claim for long term disability benefits, and the relief he
seeks is identical, which is the reinstatement of his benefits.
This Court finds that granting further relief for the alleged breach
of a fiduciary duty is not appropriate in this case because this
Court has already determined that Plaintiff is entitled to long term
disability benefits under the Plan. See Devlin v. Empire Blue Cross
and Blue Shield, 274 F.3d 76, 89-90 (2d Cir. 2001)(citing Varity
Corp. v. Howe, 516 U.S. 489, at 515 (1996)). Therefore, Plaintiff’s
claim for breach of a fiduciary duty is denied.

Page -19-

B. LINA’s Motion for Summary Judgment
LINA

moves

for

summary

judgment

on

its

Counterclaim

for

reimbursement under the Plan for Plaintiff’s receipt of Social
Security Disability benefits, pursuant to 20 U.S.C. § 1132(a)(3).
Plaintiff argues that this Court does not have subject matter
jurisdiction to decide this claim pursuant to the Supreme Court’s
decision in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.
204 (2002). In Great-West, the Supreme Court held that claims under
§ 1132(a)(3) are cognizable only to the extent that the claimant
seeks equitable relief. 534 U.S. at 209-210. Accordingly, as claims
for money damages are the “classic form of legal relief,” Plaintiff
argues that this Court cannot grant LINA relief on its Counterclaim.
See Pl. Mem. Of Law in Response to Def. Motion for Summary Judgement
at 10 (citing Great-West 534 U.S. at 210).

Plaintiff also argues,

for essentially the same reason, that LINA has not stated a claim
upon which relief may be granted.
Defendant contends that a later Supreme Court case, Sereboff
v. Mid Atlantic Medical Services, Inc., 547 U.S. 356 (2006),
distinguished Great-West, and supports its claim for reimbursement.
See Def. Reply (Docket #49) at 7-10. Further, it argues that Courts
in this Circuit have held that claims for reimbursement of Social
Security

Disability

benefits

under

similar

circumstances

are

considered equitable claims for restitution, and therefore this
Court has subject matter jurisdiction over LINA’s claim and LINA has

Page -20-

stated a claim upon which relief may be granted. Id.

This Court

agrees.
In

Sereboff,

that

Supreme

Court

held

that

a

claim

for

reimbursement based on an ERISA benefit plan provision, which
provided that the insurer would be reimbursed for funds received
from a third party, was equitable in nature because “it sought to
impose a constructive trust or equitable lien on ‘particular funds
or property in the defendants’s possession.’” 547 U.S. at 362
(citing

Great-West,

534

U.S.

at

213).

The

Sereboff

Court

distinguished Great-West because the funds received by the Plaintiff
in Great-West were not actually in her possession, but in a trust
created under California law. Id. at 363.
present

here

or

relevant

to

this

case.

Such facts are not
Further,

contrary

to

Plaintiff’s argument, the Sereboff Court also rejected a requirement
that the funds sought to be recovered be directly traceable to
particular funds in the defendants’ possession, rather than from the
defendant’s general assets. 547 U.S. at 364-5.
District Courts in this Circuit have followed Sereboff in cases
with factual circumstances similar to the instant action (i.e. an
insurance company seeking restitution for overpayment of benefits
due to the receipt of social security disability benefits) and have
found that such claims are cognizable under ERISA. See Aitkins ex
rel Casillas v. Park Place Entertainment Corp., 2008 WL 820040
(E.D.N.Y. March 25, 2008)(citing cases).

Page -21-

This Court finds that

LINA’s claim for reimbursement of funds pursuant to the Plan and the
reimbursement agreement is equitable in nature, that this Court has
jurisdiction to decide the claim, and that, LINA has stated a claim
upon which relief may be granted.
Plaintiff also argues that LINA seeks to “recover the proceeds
from social security benefits, which, he argues, 42 U.S.C. § 407(a)2
expressly prevents.” See Pl. Mem. of Law in Response to Def. Motion
for Summary Judgement at 15.

However, Courts in this Circuit and

others have also rejected this argument. See Solomon v. Metropolitan
Life Ins.Co., 628 F.Supp.2d 519, 534 (S.D.N.Y. 2009)(finding that
§ 407 was not a bar to recovery because the “counterclaim asserts
a property interest in [Defendant’s] own overpayment of benefits
rather than [Plaintiff]’s social security benefits.”). Accordingly,
this Court does not find that

§ 407 is a bar to recovery on LINA’s

Counterclaim.
Plaintiff has not disputed the substantive elements of LINA’s
Counterclaim
reimbursement

for

reimbursement,

under

the

Plan,

i.e.
that

that

it

Plaintiff

is

entitled

received

to

Social

Security Disability benefits, and that the amount of restitution
owed is $35,877.40. This Court finds that LINA’s claim is equitable
in nature and that neither the Supreme Court’s decision in Great2

42 U.S.C. § 407(a) reads, “The right of any person to any future payment under this
subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys
paid or payable or rights existing under this subchapter shall be subject to execution, levy,
attachment, garnishment, or other legal process, or to the operation of any bankruptcy or
insolvency law.”
Page -22-

West nor 29 U.S.C. § 407(a) are a bar to LINA’s claim, and
accordingly, this Court hereby grants LINA’s Motion for Summary
Judgment on its Counterclaim for offset in the amount of $35,877.40.

CONCLUSION
For the reasons set forth above, this Court grants in part and
denies in part Plaintiff and LINA’s Motions for Summary Judgment.
Accordingly, it is hereby
ORDERED, that LINA calculate and pay Plaintiff long term
disability benefits, retroactive to October 26, 2006, with interest;
FURTHER, that Plaintiff’s claim for breach of a fiduciary duty
is hereby dismissed;
FURTHER,

that

the

long

term

disability

benefits

paid

to

Plaintiff pursuant to the Plan shall be offset by $35,877.40;
FURTHER, that Cigna Group Insurance and Electronic Data Systems
Corporation are dismissed from this action and the Clerk of the
Court is Directed to remove Defendants Cigna Group Insurance and
Electronic Data Systems Corporation from the caption.

ALL OF THE ABOVE IS SO ORDERED.
s/ Michael A. Telesca
MICHAEL A. TELESCA
United States District Judge
Dated:

Rochester, New York
May 20, 2011

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