Standish v. Federal Express Corporation Long-Term Disability Plan et al

Filing 48

-CLERK TO FOLLOW UP- DECISION AND ORDER granting 23 Plaintiff's Motion for Summary Judgment only to the extent that the denial of LTD benefits is reversed, and the matter is remanded to Aetna for further administrative proceedings consistent with this Decision and Order; and denying 27 Defendants' Motion for Summary Judgment. (Clerk to close case.) Signed by Hon. Michael A. Telesca on 11/17/16. (JMC)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

CHARLES STANDISH,
Plaintiff,
DECISION and ORDER
No. 6:15-cv-6226(MAT)

-vsFEDERAL EXPRESS CORPORATION LONG
TERM DISABILITY PLAN and AETNA LIFE
INSURANCE COMPANY,
Defendants.

INTRODUCTION
Represented

by

counsel,

Charles

Standish

(“Plaintiff”

or

“Standish”), a former employee of Federal Express Corporation
(“FedEx”)

brings

the

present

action

against

Federal

Express

Corporation Long Term Disability Plan (“LTD Plan” or “the Plan”)
and

Aetna

Life

Insurance

Company

(“Aetna”)

(collectively,

“Defendants”), pursuant to § 502 of the Employee Retirement Income
Security

Act

of

1974

(“ERISA”),

29

U.S.C.

§

1132(a)(1)(B),

challenging the denial of his claim for long term disability
(“LTD”) benefits.
PROCEDURAL HISTORY
Plaintiff was employed as a DOT/Courier for FedEx, which
required the ability to drive a commercial vehicle and a special
license. As a permanent full-time emplyee of FedEx who had worked
longer than 180 days, Standish was a Covered Employee under the LTD

Plan, and was entitled to a Disability Benefit if he became
Disabled as defined in the LTD Plan.
In 2000, Standish was diagnosed with a thalamic tumor, and was
treated for hydrocephalus with the placement of a shunt. When the
first shunt failed in November 2011, he developed acute obstructive
hydrocephalus

and

underwent

surgery

implanted on November 27, 2011.

to

have

a

second

shunt

The second shunt failed, and an

external drain was placed on December 3, 2011. As a result of the
shunt failures, Plaintiff developed bilateral deep vein thrombosis
(“DVT”)

and

placement

suffered

of

a

vena

one

seizure.

cava

filter

His
on

condition
December

necessitated

17,

2011.

On

December 21, 2011, his surgeon placed a new shunt. Based on these
medical conditions, Plaintiff applied for and received short-term
disability benefits under the Federal Express Short Term Disability
Plan (“STD Plan”) from December 5, 2011, through June 3, 2012.
After Plaintiff exhausted his short-term disability benefits,
he applied for and received long-term disability benefits under the
LTD

Plan

based

on

his

being

found

to

have

an

Occupational

Disability, meaning that his medically-determinable impairments
rendered

him

unable

to

perform

the

duties

of

his

regular

occupation. Plaintiff received Occupational Disability benefits
from June 4, 2012, through June 3, 2014.
Prior

to

the

expiration

of

his

Occupational

Disability

benefits, Plaintiff applied for Total Disability benefits under the

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LTD Plan, which required him to show that he was unable to engage
in any compensable employment for 25 hours per week. By letter
dated December 4, 2013, Aetna notified him that it was reviewing
his claim. On March 24, 2014, Plaintiff’s claim for benefits was
referred to board-certified neurologist Kenneth Root, M.D., for a
peer review of the clinical data in Plaintiff’s file. Dr. Root
concluded that there was “no objective clinical documentation
demonstrating significant neurological functional impairment which
would preclude the claimant from engaging in any employment for a
minimum of

24

hours

per

week.”

(AR

00118-119).

Aetna

denied

Plaintiff’s claim on May 22, 2014, stating, in part, that there
were “insufficient objective findings to support a Total Disability
from any occupation.” (AR 00007).
Standish appealed the denial of his claim for Total Disability
benefits and, between May 23, 2014, and July 3, 2014, he submitted
additional information to Aetna in support of his claim.
On June 12, 2014, Aetna referred Plaintiff’s claim to Steven
Swersie, M.D. for an internal medicine peer review of the clinical
data in

Plaintiff’s

file.

Dr.

Swersie

reviewed

the

file and

conducted peer-to-peer consultations with several of Plaintiff’s
medical

providers.

Dr.

Swersie’s

conclusion

was

favorable

to

Plaintiff: He found that although Plaintiff was neurologically
stable, there did appear to be sufficient objective clinical
evidence

to

support

the

presence

-3-

of

a

functional

impairment

precluding him from engaging in any compensable employment for a
minimum of 25 hours a week for the period from June 4, 2014, to
July 19, 2014. (AR 00123).
Apparently

dissatisfied

with

Dr.

Swersie’s

opinion,

on

July 11, 2014, Aetna requested that Dr. Elana Mendelssohn, a boardcertified clinical psychologist and neuropsychologist, conduct
another peer review of Plaintiff’s clinical file. Dr. Mendelssohn,
who was

instructed

by

Aetna

not to

conduct

any

peer-to-peer

consultations with Plaintiff’s medical providers, found that the
file “did not include significant objective clinical documentation
that reveals a functional impairment that would preclude the
claimant from engaging in any compensable employment for a minimum
of 25 hours a week from 6/4/14 to present.” (AR 00145).
On August 4, 2014, Aetna notified Plaintiff that its Appeal
Review Committee (“the Committee”) had voted to uphold the denial
of his claim for Total Disability benefits. The denial letter
acknowledged that Plaintiff had been awarded disability insurance
benefits (“DIB”) by the Social Security Administration (“SSA”) but
distinguished the award on the basis that the criteria used by the
LTD Plan and the SSA were different. (AR 00003).
Plaintiff then timely commenced this action. The parties have
filed competing motions for summary judgment on the administrative
record. Plaintiff seeks judgment in his favor awarding benefits and
does not appear to request, in the alternative, reversal of the

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denial of benefits and remand. Plaintiff’s motion for summary
judgment to the extent he seeks an award of benefits is denied
because there are issues of fact that preclude such an award at
this juncture. Defendants similarly are not entitled to summary
judgment due to procedural violations of ERISA. Therefore, the
Court finds that the appropriate remedy is to reverse the denial of
LTD

benefits

and

to

remand

the

matter

to

Aetna

for

further

administrative proceedings consistent with this opinion.
DISCUSSION
I.

The Appropriate Standard of Review: De Novo or Deferential
A.

General Legal Principles

A plan administrator’s “denial of benefits challenged under
[29 U.S.C.] § 1132(a)(1)(B) is to be reviewed under 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.” Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). However, “[w]here
the plan reserves such discretionary authority, denials are subject
to the more deferential arbitrary and capricious standard, and may
be overturned only if the decision is ‘without reason, unsupported
by substantial evidence or erroneous as a matter of law.’” Kinstler
v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d
Cir. 1999) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442

-5-

(2d Cir. 1995) (citation and internal quotation marks omitted in
Kinstler; other citation omitted).
Here, Plaintiff claims that the deferential arbitrary-andcapricious review standard should not apply because Aetna was not
properly appointed with fiduciary authority under the Plan to
conduct the administrative appeal review of the denial of his
claim. It is necessary at the outset to review in some detail
several provisions of various iterations of the Plan, as well as
the decision-making roles of several entities, namely,
Administrator,

(2)

the

Committee,

(3)

the

Claims

(1) the
Paying

Administrator, and (4) the appeal committee.
B.

Relevant Entities Under the Plan

The Plan designates FedEx as the “Administrator . . . charged
with the administration of the Plan, acting through its Employee
Benefits Department.” Plan, § 1.1(a) (AR 00529). Article 6 states
that “[t]he Administrator is a named fiduciary of the Plan and
shall have the absolute right and power to construe and interpret
the provisions of the Plan and administer it for the best interest
of Employees[,]” Plan, § 6.1 (AR 00585), including the ability “to
construe any ambiguity and interpret any provision of the Plan or
supply any omission or reconcile any inconsistencies in such manner
as

it

deems

“authority

proper.”

shall

“determin[ing]

Id.

include,

eligibility

In
but
for

-6-

addition,
shall
coverage

the

not

Administrator’s
be

under

limited
the

Plan

to”
in

accordance

with

its

terms”

and

“decid[ing]

all

questions

of

eligibility for, and determin[ing] the amount, manner and time of
payment

of,

benefits

under

the

Plan

in

accordance

with

its

interpretation of its terms.” Plan, § 6.1(b), (c) (AR 00585). The
Plan

further

provides

that

“[t]he

determination

of

the

Administrator shall be made in a fair and consistent manner in
accordance with the Plan’s terms and its decision shall be final,
subject

only

to

a

determination

by

a

court

of

competent

jurisdiction that the Administrator’s decision was arbitrary and
capricious.” Plan, § 6.1 (AR 00585).
Notwithstanding the Plan’s appointment of FedEx to serve as
the Administrator, the Plan further provides for the appointment,
by the FedEx Board of Directors, of an entity it refers to as “the
Committee.” The Committee, whose composition is not described by
the Plan, is given the authority “to perform the administrative
duties [under the Plan]” and to assume “general administrative
power” over the Plan and “with such other powers as may be
necessary to perform its duties hereunder,” apart from the specific
functions of claims administration. See Plan, § 6.2. In addition to
vesting the Committee with general administrative power, the Plan
make the Committee “a named fiduciary of the Plan.”
The Plan specifically designates Aetna “or any other entity or
person designated as such by the Company” as the “Claims Paying
Administrator,” Plan, § 1.1(e) (AR 00530), and it provides that

-7-

“the administration of claims . . . is the responsibility of the
Administrator and the Claims Paying Administrator to the extent
such duties are delegated to it by the Administrator.” Plan, § 6.2
(AR 00586-587). The Plan describes the procedure for an employee
who is seeking disability benefits to file a claim with the Claims
Paying Administrator, and for the Claims Paying Administrator to
grant or deny the claim. See Plan, § 5.1 (AR 00570-571).
4.
The

The Appeal Committee

Plan

further

provides

that

the

“Administrator

shall

appoint an appeal committee for the purpose of conducting reviews
of denial of benefits and providing the claimant with written
notice of the decision reached by such committee.” Plan, § 5.3(c)
(AR 00577).

Upon its receipt of a notice for a request for a

review, “the appeal committee shall review the claim and shall make
a decision no later than

45 days following the Claims Paying

Administrator’s receipt of a request for review, unless special
circumstances require an extension· of time for processing. (Id.).
C.

Relevant Plan Language
1.

Plan Language Prior to the Second Amendment

The LTD Plan states that
[t]he appeal committee, appointed pursuant to Subsection
(c) [of Section 5.3], shall, subject to the requirements
of the Code and ERISA, be empowered to interpret the
Plan’s provisions in its sole and exclusive discretion in
accordance with its terms with respect to all matters
properly brought before it pursuant to this Section 5.3,
including, but not limited to, matters relating to the
eligibility of a claimant for benefits under the Plan.
-8-

The determination of the appeal committee shall be made
in a fair and consistent manner in accordance with the
Plan’s terms and its decision shall be final, subject
only to a determination by a court of competent
jurisdiction that the committee’s decision was arbitrary
and capricious.
(AR

00579-580).

Section

5.3(c)

in

turn

provides

that

“[t]he

Administrator shall appoint an appeal committee for the purpose of
conducting reviews of denial of benefits and providing the claimant
with written notice of the decision reached by such committee.” (AR
00576).
2.

Language After the Second Amendment

The Plan was amended in January of 2013, by means of a Second
Amendment stating that “the Plan is hereby clarified as follows,
effective

September

1,

2008[.]”

(AR

00502),

to

include

the

following language:
The Claims Paying Administrator shall, subject to the
requirements of the Code and ERISA, be empowered to
interpret the Plan’s provisions in its sole and exclusive
discretion in accordance with its terms with respect to
all matters properly brought before it pursuant to this
Section 5.3, including but not limited to, matters
relating to the eligibility of a claimant for benefits
under the Plan. The determination of the Claims Paying
Administrator shall be made in a fair and consistent
manner in accordance with the Plan’s terms and its
decision shall be final, subject only to a determination
by a court of competent jurisdiction that the
individual’s or committee’s decision was arbitrary and
capricious.
Second Amendment to the Federal Express Corporation Long Term
Disability Plan § 5.3(d) (AR 00502-503) (emphases supplied).

-9-

D.

The Relevant Date for Determining which Version of the
Plan Applies

While the Second Amendment states that it became effective
September 1, 2008 (see AR 00502 (stating that “the Plan is hereby
clarified as follows, effective September 1, 2008. . .”), both
parties assert that the Second Amendment became effective in
January of 2013. (See Dkt #39, p. 3 of 40; Dkt #40, p. 6 of 21).
For purposes of deciding the motions for summary judgment, the
Court will use January 2013 as the effective date of the Second
Amendment.
Plaintiff asserts that the relevant date for determining which
version of the Plan applies is the date his entitlement to LTD
benefits allegedly commenced, i.e., June 4, 2012 (see Dkt #39, p. 4
of 40). This date is prior to the January 2013 effective date of
the Second Amendment (as stated by the parties), meaning that the
Second Amendment would not apply to his claim. Defendants argue
that the relevant date that Aetna made its final decision on
Plaintiff’s claim, i.e., August 4, 2014 (see Dkt #40, pp. 6 & 12 of
21; citations to record omitted). The caselaw consulted by the
Court indicates that the relevant date is the date of the final
disability

determination,

August

4,

2014.

See

Smathers

v.

Multi-Tool, Inc./Multi-Plastics, Inc. Employee Health & Welfare
Plan, 298 F.3d 191, 194–95 (3d Cir. 2002) (citing Grosz–Salomon v.
Paul Revere Life Ins. Co., 237 F.3d 1154, 1159 (9th Cir. 2001)). In
Smathers, the plan at issue was amended on February 1, 1998, to
-10-

give discretion to the administrator. This was after the injury
occurred (August 24, 1997), and after the initial claims were made
(prior to January 22, 1998), but before the administrator made its
determination (January 29, 1999). Smathers, 298 F.3d at 195. The
district court relied on the amended plan because it was in effect
when the administrator considered and then denied the plaintiff’s
claim for benefits. Id. The plaintiff argued that he had a vested
right to have his claim reviewed based on the earlier plan, and
therefore, that “right” could not be retroactively denied. Id. The
Third

Circuit

disagreed,

noting

that

along

with

its

sister

circuits, it had “spoken of the retroactive denial of ‘rights’ only
in a narrow factual setting where the occurrence of an accident or
other event resulted in the vesting of coverage or benefits prior
to an amendment affecting the person’s substantive rights under the
plan.” Id. (collecting cases; emphasis supplied). In Smathers, the
amendment to the plan did not alter the coverage under the plan,
the substance of the plaintiff’s benefits, or his entitlement to
them; instead, it simply changed the scope of the administrator’s
discretion and authority.

Id. Because the issue in Smathers

involved was “the administrator’s discretionary authority to make
the benefits determination,” the Third Circuit “conclude[d] that
the better approach [was] to look at the plan in effect on the date
the administrator actually made that determination.” 298 F.3d at
196 (citing Grosz–Salomon v. Paul Revere Life Insurance Co., 237

-11-

F.3d 1154, 1159, 1160-61 (9th Cir. 2001) (“[A]n employee’s rights
under an ERISA welfare benefit plan do not vest unless and until
the employer says they do. Nothing in Reznik’s policy with Paul
Revere assured employees that their rights were vested. On the
contrary, the policy provided that Paul Revere could change the
group policy upon written request from the policyholder and that
the insured’s consent was not needed to make a policy change. That
[Grosz-Salomon]
disability
irrelevant;

became

claim
it

while

does

not

permanently
the

first

entitle

disabled
policy

her

to

was

and
in

invoke

filed
effect
that

her
is

plan’s

provisions in perpetuity. . . . Because no employees’ rights were
vested, Reznik was at liberty to change its long-term disability
plan. It did so in October 1993. Because Grosz–Salomon’s cause of
action accrued several years later, in December 1997[, when Paul
Revere concluded she was not disabled], this court must look to
the revised plan to determine the appropriate standard of review.”)
(citing McGann v. H & H Music Co., 946 F.2d 401, 403, 405 (5th Cir.
1991); Podolan v. Aetna Life Ins. Co., 107 F.3d 17, 1997 WL 51667
(9th Cir. 1997); Blessing v. Deere & Co., 985 F. Supp. 899, 902-03
(S.D. Iowa 1997)). As in Grosz–Salomon, nothing in the Plan assured
employees that their rights were vested; instead, Section 7.1 of
the Plan has, at all relevant times, stated that
[t]he Sponsoring Employers shall have the right at any
time to modify, alter or amend the plan in whole or in
part by an instrument in writing duly executed by
officers of each of the Sponsoring Employers or as
-12-

reflected in the minutes of FedEx Corporation’s board of
directors or any committee thereof or as reflected in the
minutes of the Committee. . . . Such amendment shall be
binding on all persons interested in the Plan.
Federal Express Corporation Long Term Disability Plan, § 7.1 (AR
00589). Furthermore, as in Grosz–Salomon, the insured’s consent was
not needed to make a change or amendment to the Plan.
finds

the

analyses

in

Smathers

and

Grosz-Salomon

This Court
persuasive.

Because neither Standish’s right to disability benefits were not
vested under the Plan, FedEx was at liberty to change the Plan,
which it did in January 2013, by means of the Second Amendment.
Standish’s claim accrued approximately a year and eight months
later, in August 2014. Therefore, following Smathers and GroszSalomon, the Court will rely on the Second Amendment to determine
the appropriate standard of review.
E.
As

The Granting of Discretionary Authority to Aetna
noted

above,

Second

Amendment

to the

Plan

states

in

relevant part that
[t]he Claims Paying Administrator shall, subject to the
requirements of the Code and ERISA, be empowered to
interpret the Plan’s provisions in its sole and exclusive
discretion in accordance with its terms with respect to
all matters properly brought before it pursuant to this
Section 5.3, including but not limited to, matters
relating to the eligibility of a claimant for benefits
under the Plan.
According to Standish, the above-quoted language does not
sufficiently

confer

discretion

on Aetna

-13-

because

“[e]mpowering

someone

is

not

the

same

as

a

clear

‘grant

of

discretion.’”

(Dkt #25, p. 22). The Court disagrees.
The District of Columbia Circuit Court of Appeal observed in
Block v. Pitney Bowes Inc., 952 F.2d 1450 (D.C. Cir. 1992), that
the Supreme

Court

‘discretionary

in

Firestone

authority’

“surely

hinges

on

did not

incantation

suggest

that

of

word

the

‘discretion’ or any other ‘magic word.’ Rather, the Supreme Court
directed

lower

courts

to

focus

on

the

breadth

of

the

administrators’ power—their ‘authority to determine eligibility for
benefits or to construe the terms of the plan.’” Id. at 1453
(quoting Firestone, 489 U.S. at 115; emphasis supplied); citing
de Nobel v. Vitro Corp., 885 F.2d 1180, 1187 (4th Cir. 1989)). In
de Nobel, for instance, the ERISA-governed retirement plan stated
that “the [c]ommittee shall have such powers as may be necessary to
carry out the provisions of the [p]lan and to perform its duties
hereunder,

including,

foregoing, the power:

without

limiting

the

generality

of

the

(e) To determine all benefits and resolve

all questions pertaining to the administration, interpretation and
application of [p]lan provisions . . . .” de Nobel, 885 F.2d at
1186 (quotation omitted). The beneficiaries argued that this broad
language failed to confer on the committee the “discretion” to
resolve benefits eligibility disputes or to interpret provisions of
the plan because the word “discretion” itself appeared nowhere in
the plan documents. Id. The Fourth Circuit rejected this argument

-14-

as “semantic hairsplitting[,]” id. at 1187, noting that it “need
only appear on the face of the plan documents that the fiduciary
has been ‘given [the] power to construe disputed or doubtful
terms’—or to resolve disputes over benefits eligibility—in which
case

‘the

trustee’s

interpretation

will

not

be

disturbed

if

reasonable.’” Id. (quoting Firestone, 489 U.S. at 115; emphasis and
brackets in original). See also, e.g., Campbell v. Chevron Phillips
Chem. Co., L.P., 587 F. Supp. 2d 773, 788 (E.D. Tex. 2006) (“To
confer discretionary authority, a plan should, at the very least,
convey that the plan administrator is empowered to construe, to
interpret, or to otherwise exercise discretion in determinations of
plan members’ eligibility for benefits.”) (citing, inter alia,
Tolson v. Avondale Indus., Inc., 141 F.3d 604, 607 (5th Cir. 1998)
(ERISA plan conferred discretionary authority where it stated that
the review committee had “sole and exclusive discretion and power
to grant and/or deny any and all claims for benefits, and construe
any and all issues of [p]lan interpretation and/or facts or issues
relating to eligibility for benefits”)). Based on all of this
precedent, the Court easily concludes that the language of Section
5.3, as set forth in the Second Amendment, vests in the Plan’s
fiduciaries “a sufficient measure of discretionary authority to
preclude de novo review of benefits determinations.” de Nobel, 885
F.2d

at

1187

(citing

Boyd

v.

United

Mine

Workers

Health

&

Retirement Funds, 873 F.2d 57, 59 (4th Cir. 1989) (plan provisions

-15-

giving administrators “the power of ‘full and final determination
as to all issues concerning eligibility for benefits’” and the
authority “‘to promulgate rules and regulations to implement [the
p]lan’”

left

“no

question

that

the

[t]rustees

.

.

.

ha[d]

discretionary authority”)). Accordingly, the Court must apply the
deferential

“abuse

of

discretion”

standard

to

the

denial

of

Standish’s claim for LTD benefits. See Firestone, supra.
II.

Alleged Inconsistencies
Objective Findings

in

the

Plan’s

Standard Requiring

The Plan defines the terms “Disabled” and “Disability” as
either an Occupational Disability or a Total Disability;
provided, however, that a Covered Employee shall not be
deemed to be Disabled or under a Disability unless he is,
during the entire period of Disability, under the direct
care and treatment of a Practitioner and such Disability
is substantiated by significant objective findings which
are defined as signs which are noted on a test or medical
exam and which are considered significant anatomical,
physiological or psychological abnormalities which can be
observed apart from the individual’s symptoms. In the
absence of significant objective findings, conflicts with
managers, shifts and/or work place setting will not be
factors supporting Disability under the Plan.
Plan,

§

1.1(e)

(AR

00532-533).

The

Plan,

under

“Proof

Disability,” provides that

[n]o Disability Benefit shall be paid under the Plan
unless and until the Claims Paying Administrator has
received an application for benefits and information
sufficient for the Claims Paying Administrator to
determine pursuant to the terms of the Plan that a
Disability exists. . . . Such information may, as the
Claims Paying Administrator shall determine, consist of
a certification from the Covered Employee’s attending
-16-

of

Practitioner, in the form prescribed by the Claims Paying
Administrator, information in the form of personal
references, narrative reports, pathology reports, x-rays
and any other medical records or other information as may
be required by the Claims Paying Administrator.
Plan, § 5.1 (AR 00570).
Plaintiff

argues

that

the

requirement

of

“significant

objective findings,” Plan, § 1.1(e) in the Plan’s definition of
Disability is a “moving target” that conflicts with the Plan’s
provision regarding Proof of Disability, which does not refer to
“significant objective findings,” Plan, § 5.1, and thus is more
generous to claimants. However, as Defendants argue, the Proof of
Disability sets forth the form of the “information” that can be
submitted to the Claims Paying Administrator in support of a claim
for benefits. Regardless of what form the “information” takes, it
must

“be

sufficient

for

the

Claims

Paying

Administrator

to

determine pursuant to the terms of the Plan that a Disability
exists,” which, as stated in Section 1.1(e), must be based on
“significant objective findings.” Admittedly, it is difficult to
conceive of how “personal references,” as an acceptable form of
Proof

of

Disability,

could

be

sufficiently

“significantly

objective” to establish a Disability. While the language of the
Plan in the Proof of Disability section is not a model of clarity,
the Court cannot find that the Proof of Disability provision is
irreconcilably

in

conflict

with

Disability.
-17-

the

Plan’s

definition

of

III. Procedural Violation of ERISA: Inadequacy of the Denial Letter
“ERISA mandates that specific reasons for the denial of
benefits be communicated to the claimant.” Schneider v. Sentry Grp.
Long Term Disability Plan, 422 F.3d 621, 627 (7th Cir. 2005)
(citing 29 U.S.C. § 1133). In addition, the regulations promulgated
pursuant to ERISA and in force at the time the denial letters were
sent,

provide

that

the

notification

of

an

adverse

benefit

determination
shall set forth, in a manner calculated to be understood
by the claimant(I) The specific reason or reasons for the
adverse determination;
(ii) Reference to the specific plan provisions
on which the determination is based;
(iii) A description of any additional material
or information necessary for the claimant to
perfect the claim and an explanation of why
such material or information is necessary;
(iv) A description of the plan’s review
procedures and the time limits applicable to
such procedures . . .
29 C.F.R. § 2560.503-1(g).
Plaintiff argues that Aetna’s initial denial letter, issued on
May 22, 2014 (AR 00006-8), was not legally sufficient because it
did not

contain

a

description of

the

additional

material

or

information that Aetna deemed necessary to perfect his disability
claim, and an explanation as to why such material or information
was necessary. Plaintiff in particular points to the report by
peer-review physician Dr. Root indicating what tests

proof would

have been helpful to him (Dr. Root) in evaluating Plaintiff’s claim
-18-

more comprehensively; Plaintiff argues that Aetna should have
included these comments by Dr. Root in the denial letter. The
pertinent portion of Dr. Root’s report (AR 00112-115), reads as
follows:
Based upon the documentation provided, this consulting
neurological reviewer is of the opinion the claimant is
neurologically impaired, but is not quite certain as to
what degree. The recent documentation does not support
objective neurologic functional impairment in the
claimant which would preclude him from engaging in any
compensable employment for a minimum of 25 hours a week.
When Dr. Wensel evaluated the claimant, he did not
perform a detailed mental status evaluation and the
mental status exam performed in the office is limited,
[and was] reported as unremarkable or normal as given.
The memory impairment is self-reported or claims to be a
problem with the history provided by his wife which is
relayed in the records by Dr. Wensel. No other focal or
lateralizing deficits are reported by Dr. Wensel, nor
anytime by Dr. Kingston, the claimant’s neurologist. Dr.
Kingston last saw the claimant 11/20/12, yet continues to
complete Attending Physician Statements and answer
questions regarding the claimant’s status without
apparently knowing his present clinical status. There are
no reports of any recent updated clinical neurological
evaluations, neurologic or neurosurgical testing, and no
reevaluation of the claimant’s neuropsychological status.
This reviewer is left with the conclusion therefore, the
claimant is not totally disabled and is capable of
working any occupation 25 hours per week. This reviewer
would recommend there be a complete reevaluation of the
claimant’s neurologic and neuropsychological condition
for documentation purposes and to be able to hopefully
evaluate the claimant’s complete functional abilities and
capacity.
The opinion above is based on the information available
for review and held to a reasonable degree of clinical
certainty.
(AR

00115)

italicized

(emphases
language

in

supplied).
the

Plaintiff

excerpt
-19-

above

characterizes
as

a

the

“request” for

additional information by Dr. Root that Aetna had a “legal and
fiduciary responsibility to deliver” to Plaintiff. (See Dkt #38,
p. 16 of 31).
Aetna counters that the denial letter in question, dated
May 22,

2014

required

under

(AR
29

00006-8),
C.F.R.

§

contained

all

2560.503-1(g)

of
and

the

information

explained

that

Plaintiff had failed to submit “significant objective findings”
which were needed to substantiate a claim for total disability
under the Plan. Aetna employee, Elizabeth Thompson, STD Claims
Analyst

(“Thompson”),

informed

Plaintiff

in

relevant

part

follows:
I have reviewed your file in full. In addition, to afford
you every consideration, a neurology peer physician
[i.e., Dr. Root] also reviewed all the clinical data. It
has been determined that there are insufficient objective
findings to support a Total Disability from any
occupation. Specifically, on 01/30/2014 Dr. Wensel did
not perform a detailed mental status evaluation and the
mental status examination performed in the office was
limited, being reported as unremarkable or normal. Your
memory impairments were self-reported. Also, no other
focal or lateralizing deficits were reported by Dr.
Wensel. You had an appointment with Dr. Kingston,
Neurology on 11/20/2012, however, there were no detailed
physical
exam
findings
or
any
documentation
of
neurological deficits. There were no neurological
evaluations,
neurosurgical
testing
results
or
documentation of significant neurological abnormalities
to prevent you from engaging in any compensable
occupation for a minimum of twenty five (25) hours a
week. The clinical documentation dated 03/14/14 indicated
improvement, and your functional ability to perform
day-to-day activities including driving. You stated
complaints of memory issues, however, Dr. Long did not
performed any detailed mental status examination. Also,
there is no evidence of any significant findings to
indicate your inability to sit, ambulate, stand, walk or
-20-

as

lift up to 10 pounds occasionally, lf necessary. As a
result of the above review, it has been determined that
there are no significant objective findings to support a
Total Disability that would prevent you from engaging in
any compensable employment for a minimum of twenty-five
hours a week in a sedentary position.
(AR 00007). A comparison of Dr. Root’s report with Aetna’s May 22,
2014, denial letter reveals that Aetna

did not merely state that

there were “insufficient objective findings” in the file, which
would

have

pointed to

been

inadequate

notice,

but

also

“[s]pecifically”

the various deficits in objective medical evidence

found by Dr. Root during his review of the file. However, the Court
finds that the notice letter does not comply with the portion of
the regulation which requires “[a] description of any additional
material or information necessary for the claimant to perfect the
claim and an explanation of why such material or information is
necessary.” 29 C.F.R. § 2650.503-1(g) (emphases supplied). Rather
than

specifically

describing

the

types

of

objective

medical

evidence that Dr. Root found lacking, the letter gives a vague
description as to what “data . . . may assist [Aetna] in [its]
determination,” and provides a non-exclusive list as follows:
physician

exam

reports,

office

notes,

progress

notes,

other

healthcare provider reports, and diagnostic test results, i.e. lab
tests,

radiographic

tests.

(AR

00007).

However,

Plaintiff

reasonably could have concluded that he had such items already in
his file, since he had, for instance, submitted multiple office
notes and progress notes from various healthcare providers. It is
-21-

not sufficient that an attorney perhaps might have divined from
Aetna’s letter the particular types of data Aetna required, and
might have inferred that, as a next step in perfecting his claim,
it was necessary for Plaintiff to ask Dr. Wensel to “perform a
detailed mental status evaluation,” or ask Dr. Kingston to make
“detailed

physical

exam

findings

or

[a]

documentation

of

neurological deficits,” or ask any one of his treating physicians
to perform “neurological evaluations, [or] neurosurgical testing.”
However, the

standard

imposed by

ERISA requires that

a

plan

administrator’s notice letter be “written in a manner calculated to
be understood by the participant[.]” 29 U.S.C. § 1133(1) (emphasis
supplied). The notice letter here was not so written.
“Violation of ERISA and its implementing regulations has been
held to constitute ‘a significant error on a question of law[.]’”
Cook v. N.Y. Times Co. Long-Term Disability Plan, No. 02 CIV.
9154(GEL), 2004 WL 203111, at *6 (S.D.N.Y. Jan. 30, 2004) (quoting
VanderKlok v. Provident Life and Acc. Ins. Co., Inc., 956 F.2d 610,
616 (6th Cir. 1992); Omara v. Local 32B-32-J Health Fund, No. 97
Civ. 7538, 1999 WL 184114, at *4 (E.D.N.Y. Mar. 30, 1999)). Such
violations may “sufficiently taint [the fiduciary’s] denial of
[benefits] so as to warrant a finding that [the denial] was
arbitrary and capricious.” Veilleux v. Atochem N. Am., Inc., 929
F.2d 74, 76 (2d Cir. 1991). Here, the Court finds that the May 22,
2014, denial letter not only was procedurally defective, but it

-22-

points out at least one significant way in which Aetna’s decisionmaking was materially deficient due to the notice violation. As
noted above, Dr. Root pointedly informed Aetna that Plaintiff’s
file lacked various items of important information that he felt
were necessary for him to review, namely, “recent updated clinical
neurological evaluations, neurologic or neurosurgical testing.”
Then, after offering his opinion, Dr. Root

completely undermined

the validity of that opinion by “recommend[ing] a reevaluation of
[Plaintiff]’s neuropsychological status a conclusion and capacity
. . . to be able to hopefully evaluate” Plaintiff’s “complete
functional abilities and capacity.” The only reasonable inference
to be drawn from these statements is that Dr. Root’s opinion does
not,

and

could

not,

represent

an

evaluation

of

Plaintiff’s

“complete functional abilities and capacity,” because he found that
Plaintiff’s

claims

file

was

inadequate

and

incomplete.

Furthermore, the procedural deficiencies in the May 22, 2014 letter
were not cured by subsequent correspondence from Aetna. See Halpin
v. W.W. Grainger, Inc., 962 F.2d 685, 693 (7th Cir. 1992) (“Nor are
the defects cured by the later correspondence. With respect to this
correspondence, we note that the regulations require that the
denial letter itself contain specific reasons. Even if we assume
that

subsequent

deficiencies
compliance

in

with

letters
a
the

sent

denial

by

letter

regulation,

-23-

an

administrator

and
this

amount
second

to

can

remedy

substantial

letter

is

also

inadequate.”) (internal citation omitted); see also Cook v. N.Y.
Times Co. Long-Term Disability Plan, No. 02 CIV. 9154 (GEL), 2004
WL 203111, at *16 (S.D.N.Y. Jan. 30, 2004) (ERISA’s regulations
“apply equally to all ‘notification[s] of benefit determination on
review’

and

do

not

distinguish

among

levels

of

appeal.

See

29 C.F.R. § 2560.503-1(j). Second, the requirement of a full and
fair review on the first go-round should apply no less simply
because an administrator grants an additional level of appeal: a
second appeal that does nothing to cure the procedural deficiencies
of the first will not constitute substantial compliance merely by
virtue of its existence.”) (brackets in original).
IV.

The Proper Remedy is Remand
For the foregoing reasons, Defendants are not entitled to

summary judgment

affirming the denial of LTD benefits under the

plan.
Plaintiff asserts that he is entitled to judgment in his favor
awarding benefits. Courts have explained, however, that the remedy
for the type of fiduciary failures that have occurred here is “‘not
automatic entry of judgment in favor of the insured—in effect
treating

[the]

defendant’s

noncompliance

as

a

ground

for

default—but rather, an opportunity for the insured to fully and
fairly present his or her claim.’” Cook, 2004 WL 203111, at *19
(quoting George v. First Unum Life Ins. Co., No. 93 Civ. 2916, 1995
WL 231254, at *2 & n. 3 (S.D.N.Y. Apr. 18, 1995)). “The normal

-24-

procedure

for

review

of

ERISA

denials

that

have

been

found

arbitrary and capricious is remand to the fiduciary for a new
eligibility determination.” Cook, 2004 WL 203111, at *19 (citing
Wolfe v. J.C. Penney Co., Inc., 710 F.2d 388, 393 (7th Cir. 1983);
other citations omitted). While the present record contains a fair
amount of evidence in Plaintiff’s favor, it is not uncontroverted.
Absent the Court’s finding of procedural violations, the opinions
by Aetna’s peer-review physicians (excepting Dr. Swersie) likely
would represent evidence sufficient to uphold the determination on
arbitrary and capricious review. The various medical opinions also
present disputed genuine issues of material fact. Cook, 2004 WL
203111, at *19 (citing Omara, 1999 WL 184114, at *4 (“The Court
cannot conclude at this time, based on the record, that Plaintiff
has established his entitlement to benefits as a matter of law.”);
other citation omitted). Therefore, the Court will not enter
judgment in Plaintiff’s favor. Accord, e.g., Cook, 2004 WL 203111,
at *19; George, 1995 WL 231254, at *2 & n. 3 (denying summary
judgment

in

claimant’s

favor

where,

although

administrator

defendant did not comply with the procedures prescribed by ERISA
and

the

regulations,

court

could

not

find

that

denial

of

application was sufficiently arbitrary to warrant awarding benefits
under the terms of the policy).
Accordingly, the case will be remanded to Aetna, the Claims
Paying Administrator, for reconsideration. Aetna shall consider any

-25-

further information Plaintiff submits within a reasonable time
following this Decision and Order. During this review, Aetna is
expected to comply with ERISA’s requirements for full and fair
review in reaching its determination, including the requirement
that it “does not afford deference to the initial adverse benefit
determination.” 29 C.F.R. § 2560.503-1(h). Likewise, if Plaintiff’s
claim is unsuccessful initially, the Appeal Committee is held to
compliance with these same standards in reviewing any claim on
appeal.
CONCLUSION
For the foregoing reasons, Defendants’ Motion for Summary
Judgment is denied. Plaintiff’s Motion for Summary Judgment is
granted only to the extent that the denial of LTD benefits is
reversed,

and

the

matter

is

remanded

to

Aetna

for

further

administrative proceedings consistent with this opinion.
SO ORDERED.
Honorable Michael A. Telesca
HONORABLE MICHAEL A. TELESCA
United States District Judge
DATED:

November 17, 2016
Rochester, New York

-26-