Vaught v. Hartford

Filing 31

REPORT AND RECOMMENDATIONS re 22 MOTION overturn administrative decision of defendant re 18 Notice (Other),,, filed by Sheila Vaught, 21 MOTION for Judgment as a Matter of Law filed by Hartford Life & Accident Insurance Co mpany: that defendants' motion for judgment on the Administrative Record (Doc. 21) be DENIED; plaintiff's cross motion (Doc. 22) be DENIED; and this matter be REMANDED to Hartford to complete the administrative review process. Objections to R&R due by 8/2/2012. Signed by Magistrate Judge Stephanie K. Bowman on 7/16/12. (jl1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
SHEILA VAUGHT,
Case No. 1:11-cv-227
Plaintiff,
Weber, J.
Bowman, M.J.
v.
THE HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY,
Defendant.
REPORT AND RECOMMENDATION
Plaintiff Sheila Vaught filed a complaint claiming wrongful termination of longterm disability benefits and seeking reinstatement of benefits pursuant to the Employee
Retirement Income Security Act (“ERISA”). See 29 U.S.C. § 1132. This matter is now
before the Court on the parties’ cross-motions for judgment (Docs. 21, 22) and their
responsive memoranda.

(Docs. 24, 25, 28, 29).

The pending motions have been

referred to the undersigned magistrate judge for initial consideration and a report and
recommendation. 28 U.S.C. § 636(b). (Doc. 30).
I. Background
A. Relevant Provisions the Disability Benefits Plan
Plaintiff Sheila Vaught was employed by DaVita Inc., as a registered nurse.
(Doc. 18, Administrative Record (“AR”, at 2). As part of her employment, Plaintiff was a
participant in an employee benefit plan issued by Hartford Life & Accident Insurance
Company (“Hartford”) to policyholder DaVita Inc. The Plan entitles a participant to longterm disability (“LTD”) benefits upon Hartford’s determination that a participant is
disabled. (AR 15). Under the Plan, “Disability or Disabled” is defined as

1.

during the Elimination Period1, you are prevented from performing
one or more of the Essential Duties2 of Your Occupation;

2.

for the 24 months following the Elimination Period, you are
prevented from performing one or more of the Essential Duties of
Your Occupation, and as a result your Current Monthly Earnings
are less than eighty percent of your Index Pre-disability Earnings;

3.

after that, you are prevented from performing one or more of the
Essential Duties of Any Occupation.3

(AR 27).
The Plan gives Hartford “full discretion and authority to determine eligibility for
benefits and to construe and interpret all terms and provision of the Policy. The Plan
further provides that benefit payments will terminate on the date that a participant is no
longer Disabled as defined by the Plan. (AR 16).
Additionally, upon denial of a claim (including termination of benefits), the Plan
provides that a participant can submit an appeal to Hartford for a “full and fair review” of
the claim. (AR 43). The appeal must be filed within 180 days of the date the claim was
denied. The Plan requires Hartford to make a final decision on the appeal within 45
days. The 45 day period may be extended upon notification to the participant that an
extension is necessary due to special circumstances.

1

  The participant must be continuously disabled for a 90-day elimination period to be eligible for

benefit payments. (AR 13).
  “Essential Duty” means a duty that: (1) is substantial, not incidental; (2) is fundamental or
inherent to the occupation; and (3) can not be reasonably omitted or changed. (AR 27).
3
Any Occupation means an occupation for which you are qualified by education, training or
experience, and that has an earnings potential greater than an amount equal to the lesser of the
product of your Indexed Pre-disability Earnings and the Benefit Percentage and the Maximum
Monthly Benefit shown in the Schedule of Insurance. (AR 26).
2

2

B. Plaintiff’s Medical History and Administrative Record
On September 14, 2006, Plaintiff requested short term disability (“STD”) benefits
under the Plan.

(AR 49-50).

Plaintiff advised Hartford that she was experiencing

extreme fatigue, mood swings, trouble sleeping, persistent joint pain and weight loss.
(AR 50). She had been diagnosed with Hepatitis C approximately fifteen years before
and started interferon treatment in February 2006.

On September 12, 2006,

gastroenterologist Dr. Mark Jonas opined that Plaintiff’s impairments and resulting side
effects would prevent her from working for six weeks, until November 1, 2006. (AR
1139-41). At that time, Dr. Jonas also referred Plaintiff to psychiatrist Dr. Wu and
rheumatologist Dr. Louis Flaspohler.
Plaintiff saw Dr. Wu on October 28, 2006. (AR. 1091-97). Dr. Wu diagnosed
depression secondary to her medical condition and/or medications, placed her on Elavil
and referred her for psychotherapy. (AR 1095-97). Thereafter, Plaintiff consulted with
Dr. Flaspohler, a rheumatologist, on November 1, 2006. (AR. 1075-78). He diagnosed
arthralgias, trochanteric bursitis and osteoarthritis, and suspected cryoglobulinemia.
Hartford approved Plaintiff’s claim for STD benefits from September 13 through
October 24, 2006, and then extended it until October 31, 2006. (AR. 48-49, 1144).
In mid-December 2006, Plaintiff applied for long term disability (“LTD”) benefits.
(AR 143, 1127-28).

During her interview with Hartford, she stated that her knees,

elbows and feet were inflamed, that it was difficult for her to move, and that it was
painful to walk up stairs. (AR 143-44). She submitted Attending Physician Statements

3

from Dr. Wu and from her primary care physician, Dr. Jeffrey Craig. (AR 1081-88,
1100-01).
Dr. Wu listed a primary diagnosis of major depression secondary to medical
illness, and a secondary diagnosis of acute withdrawal from medication. She opined
that Plaintiff was unable to work because of disruptive crying spells, inability to maintain
consistent social composure, poor concentration, anxiety, a slow response rate, low
productivity, unable to complete tasks in a timely manner, fatigue, demoralization,
hopelessness, impaired memory and an impaired thinking process. (AR. 1081, 1083).
Dr. Craig gave a primary diagnosis of chronic active Hepatitis C and secondary
diagnoses of chronic depression, chronic pain and narcotic dependence. He stated that
Vaught could only walk up and down steps twice a day, had joint pain, depression and
short term memory loss, and needed help to stand after squatting.
On January 25, 2007, Hartford reviewed the file and concluded that Plaintiff met
the definition of Disability for her mental condition, but that “[f]unctionality related to the
physical condition is still being investigated.” On January 29, 2007, Hartford advised
Plaintiff that it had approved her claim for LTD benefits effective December 12, 2006
under the Mental Illness provision of the Plan, which limits benefits to a maximum of 24
months. (AR 329-32).
On May 10, 2007, Hartford reviewed Plaintiff’s file to determine whether the
physical portion of her claim was properly supported. Hartford concluded that Plaintiff
was unable to work due to restricted range of movement in her shoulder, proximal
decreased strength, residual carpal tunnel syndrome, arthritis and debilitation

4

secondary to hepatitis C. (AR. 154, 1064-67).

Hartford subsequently adjusted its

system to reflect that Plaintiff’s claim was based upon a physical disability. (AR 155).
Thereafter, Hartford monitored Plaintiff’s condition and continued to pay LTD
benefits, first under the “Own Occupation” provision of the Plan (until December 2008)
and then under the “Any Occupation” provision of the Plan. As required by the Plan,
Plaintiff continued to stay in contact with Hartford about her condition and submitted
reports from her treating doctors throughout 2008 and 2009.
On June 30, 2009, Hartford reviewed Plaintiff’s claim file and referred it for
investigation because “reported limitations appear excessive given the provided
information. The claimant reports ongoing symptomatology but the medical indicates
minimal abnormal findings.” (AR 198, 414). Hartford determined that surveillance was
appropriate and requested 20 hours of surveillance from a third-party vendor. (AR 417).
Surveillance was performed at Plaintiff’s residence on July 11 and 12, 2009. No
activity was observed on July 11.

During the afternoon of July 12, Plaintiff was

observed to walk in the back yard with a long handled, pooper scooper tool in each
hand. She bent over and picked up an object, then walked out of sight. (AR. 756).
Additional surveillance was performed on September 2 and 3, 2009. (AR. 417).
On September 2, Plaintiff was observed driving from her residence to a medical
appointment, where she exited her car and went into the building.

After her

appointment, she drove to a grocery store. Thereafter, she returned to her residence
and was not observed any further that day or the next day.

5

The surveillance

investigator noted that the side of Plaintiff’s car had an advertisement for Genewize.
(AR. 749-55).
Hartford reviewed the September 2 video and concluded that it showed Plaintiff
“walking with a smooth even gait without any assistive devices; standing; entering her
vehicle without any outward difficulty; twisting at the waist while she put a large purse in
the back seat; conversing on a cellular phone while driving; backing up her vehicle;
visiting greater than [an] errand in a single outing.” Hartford also noted that Plaintiff
had “a possible business listed on the side of her vehicle associated to [her] name and
home phone number.”
The final surveillance was conducted on November 2, 2009. Plaintiff was not
observed on that day. However, the investigator located information about Plaintiff’s
Genewize business on the Internet and forwarded it to Hartford. (AR 419, 745-48,
762-61). In her online profile section, Plaintiff stated that she loves to quilt, “use[s]
power tools and do[es] most of the handy work around the house.” (AR 763). After
describing the multiple medical issues that led her to go on long term disability, she
stated that she then was introduced to Genewize: “Things are much better now and
when we talk I will tell you the results of my body since I have been on the product since
February 2009.” (AR 764-65). The investigator also noted that her nursing license was
current. (AR 746, 761).
Hartford scheduled an in-person interview with Plaintiff on January 25, 2010.
(AR. 744). Early in the interview, Plaintiff signed a Continuing Disability Statement
which outlined her mental and physical impairments and resulting functional limitations,

6

daily medication and daily activities.

(AR 684). The Statement also indicated that

Plaintiff would like to go back to school and become a Nurse Educator and would like
Hartford to pay for her schooling. Id.
When asked about returning to work, Plaintiff stated that no accommodations
could allow her to return to work. She could not do any kind of work at the present time
due to her medical conditions. She had not worked for a company, store, person,
business or self-employed business while receiving LTD benefits.

She had not

volunteered to do any work activities and had not received any business income. She
also reported that she had been notified on January 11, 2010 that she was approved for
Social Security Disability benefits. (AR 692-93).
After Plaintiff signed her first statement, Hartford’s investigator told her about
Hartford’s surveillance and investigation, and she dictated and signed a second
Continuing Disability Statement. (AR 694-96). Plaintiff admitted that she had become
an affiliate of a company called Genewize, sold the product to a couple of friends and
family members, and made about $150.00 that she would probably report on her taxes.
After watching the surveillance video, she stated that her activities on the video
represented a normal level of functionality for her. (AR 695-96).
In April 2010, Hartford reviewed this information and concluded that Plaintiff
“appears capable [of] greater activity tha[n] reported.” Plaintiff’s file was then referred to
MCM (medical case management) for review and clarification of her residual functional
abilities. (AR 208). On April 27, 2010, a Hartford nurse reviewed the claim file and

7

identified several inconsistencies between Plaintiff self-reported levels of function and
activity information in the medical records and surveillance video.
Specifically: (1) she claimed not to be working or involved in any business but
admitted that she sold Genewize products and was being paid to babysit her grandchild;
(2) she claimed to be unable to work but reported maintaining two state nursing
licenses, taking continuing education classes and wanting to go back to school to get a
bachelor’s degree and become a nurse educator; (3) she claimed to be fatigued but
attended antique shows on the weekends and used her treadmill; (4) she claimed not to
have full use of her hands but had no observed difficulty handling multiple items and
driving on the surveillance video, and also reported doing sewing; (5) she claimed to
have balance problems but these were not observed; and (6) she was observed to have
a functional range of motion and could drive, walk, stand, lift, bend and reach without
hesitation or the use of assistive devices. (AR 210). The nurse further concluded that
medical records did not support the level of disability claimed by Plaintiff, and found that
Plaintiff “appears to have greater function than previously reported.” (AR 211).
On April 29, 2010, Hartford sent the surveillance records to Dr. Flaspohler, Dr.
Jonas, Dr. Wu and Ms. Christianson, and asked them to comment on Plaintiff’s
maximum level of function. (AR 270-81). Dr. Flaspohler responded that “[t]his was not
evaluated by me” and that “[g]enerally I do not deal with disability.” (AR 546). Ms.
Christianson replied that the requested information was beyond her area of expertise
and that she would defer to Dr. Wu’s judgment. (AR. 476-79). Dr. Wu replied that she
was “not capable of filling these forms out.” (AR 480).

8

Dr. Jonas returned the completed form to Hartford. He did not, however, provide
a rationale or supporting documentation, and instead wrote “Full letter dictated 5/11/10.”
(AR 522). He did not send that letter to Hartford. (AR 213).
Hartford referred the claim to a vendor for review by an internal medicine
specialist and a psychiatrist. (AR 216, 470-71). The reviews were performed by Dr.
Rakesh Vinayek (Board Certified in Internal Medicine, sub specialty certificate in
Gastroenterology and added expertise in Hepatology) and Dr. Michael Rater (Board
Certified in Psychiatry).
In their reports dated June 14, 2010, both reviewers opined that Plaintiff was
capable of full-time work. Internal Medicine specialist Dr. Vinayek spoke to Plaintiff’s
gastroenterologist, Dr. Jonas, who informed him that “from a GI perspective, [Plaintiff]
has no issues which should prevent her from working. She may have other medical
issues which could impair her functional status but those issues should be addressed by
other specialists.” (AR 463).

After reviewing all of the medical records and the

surveillance evidence, Dr. Vinayek concluded that her Hepatitis C had been stable with
no associated restrictions or limitations. Her fatigue was likely caused by the
medications she was taking. She had some restrictions on lifting due to her underlying
history of cervical spondylosis and rheumatoid arthritis. He opined that she could work
up to a light physical demand level without any restriction on walking, standing, bending
or reaching, and with a restriction of lifting 10 pounds frequently and 20 pounds
occasionally. (AR 464-65).

9

Psychiatrist Dr. Rater attempted to contact Dr. Wu to discuss Plaintiff’s claim. Dr.
Rater was advised to submit his questions to Dr. Wu in writing; which he did, and
received no response. After reviewing the medical records, Dr. Rater concluded that
there were no restrictions from a psychiatric/cognitive function perspective.
Hartford then conducted an employability analysis. (AR. 438-56).

Hartford’s

Rehabilitation Case Manager concluded that based on the identified restrictions,
educational background and experience, Plaintiff could work as an Office Nurse,
First-Aid Attendant, License Clerk, Referral Clerk (Temporary Help Agency) or Routing
Clerk, and the median monthly wages would meet or exceed the required monthly
earnings potential. (AR 438-40).
In a detailed letter dated July 2, 2010, Hartford advised Plaintiff that the evidence
did not support a continued finding of Disability and that no further benefits would be
paid. (AR 260-66). Hartford summarized Plaintiff’s statements and medical records and
described the reviews performed by Hartford and peer reviewers Dr. Vinayek and Dr.
Rater. (AR 262-65). Hartford concluded that “the medical evidence and investigative
information on file no longer supports that you are Disabled as defined by the policy and
the evidence supports that you are capable of performing alternative occupations.”
Hartford further advised Plaintiff of her right to appeal within 180 days, and stated that if
Hartford were to again deny her claim upon appeal, Plaintiff would then have the right to
bring a civil action under ERISA. (AR 265-66).
On December 15, 2010, Plaintiff’s counsel submitted a letter to Hartford formally
appealing Hartford’s denial of her claim for long-term disability benefits. (AR 137-139).

10

The letter asserts that Plaintiff’s counsel is “enclosing a recent report from Dr. Dain,
Wahl, Ms. Vaught’s primary care doctor,” in support of Plaintiff’s claim of continuing
disability. (AR. 138). However, the report was not attached to the letter. Hartford
ultimately received Dr. Wahl’s report on January 28, 2011. (AR 105-06, 23). Hartford
then advised Plaintiff that because the appeal became complete on January 28,
Hartford's 45-day period to make a decision would end March 14, 2011. (AR. 250).
Thereafter, on March 9, 2011, Hartford informed Plaintiff’s counsel that Hartford could
not make a decision during the initial 45-day period because it was still awaiting updated
records from Dr. Jonas and Dr. Flaspohler. (AR. 244). Upon receipt of those records,
Hartford referred the appeal to a third-party vendor for review by another internal
medicine specialist and another psychiatrist. In a March 15, 2011, letter to Plaintiff’s
counsel, Hartford determined that a comprehensive co-morbid medical review was
needed before completing their evaluation. Hartford further represented that it expected
to render its appeal decision by April 24, 2011. (AR. 237).
Plaintiff filed the instant action against Hartford on March 11, 2011, in the
Hamilton County Court of Common Pleas, seeking reinstatement of long term disability
benefits. (Doc. 1, Ex. A). On March 17, 2011, Hartford received notice that Plaintiff had
filed this lawsuit. Hartford immediately notified the third-party vendor to suspend its
medical review of Plaintiff’s file. (AR 236). Thereafter, Hartford removed the case to
this Court on April 18, 2011. (Doc. 1).

This matter is now before the Court on the

parties’ cross motions for judgment on the administrative record. (Docs. 21, 22).

11

II. Analysis
A. Standard of Review and Applicable Law
In adjudicating an ERISA action, the Sixth Circuit has directed the district court to
use the following steps: (1) the district court should conduct a de novo review in
consideration of the action’s merits based solely upon the administrative record; the
district court may consider the parties' arguments concerning the proper analysis of the
evidentiary materials contained in the administrative record, but may not admit or
consider any evidence not presented to the administrator; (2) the district court may
consider evidence outside of the administrative record only if that evidence is offered in
support of a procedural challenge to the administrator's decision and any prehearing
discovery at the district court level should be limited to such procedural challenges; (3)
the summary judgment procedures set forth in Rule 56 are inappropriate for ERISA
actions and thus should not be utilized in their disposition. See Wilkins v. Baptist
Healthcare Sys., 150 F.3d 609, 619-620 (6th Cir. 1998).
Further, pursuant to Marks v. Newcourt Credit Group, Inc., 342 F.3d 444, 457
(6th Cir. 2003), a court must determine whether an ERISA plan gives the administrator
authority to determine eligibility for benefits or to construe the plan’s terms. Id. (citing
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, (1989)). When an ERISA
plan grants the plan administrator discretionary authority to determine benefit eligibility,
as the Plan at issue in this case does, the district court must review the plan
administrator's decision under the arbitrary-or-capricious standard. Id.

12

An outcome is not arbitrary or capricious where the evidence supports a
reasoned explanation for that particular outcome. See Killian v. Healthsource Provident
Administrators, Inc., 152 F.3d 514, 520 (6th Cir. 1998).

Under this standard, the

administrator's decision is to be upheld “if it is the result of a deliberate, principled
reasoning process and if it is supported by substantial evidence." Glenn v. Metropolitan
Life Ins. Co., 461 F.3d 660, 666 (6th Cir. 2006) (quoting Baker v. United Mine Workers
of Am. Health & Ret. Funds, 929 F.2d 1140, 1144 (6th Cir. 1991)), aff'd, 128 S. Ct. 2343
(2008). While arbitrary and capricious review is deferential, it "is no mere formality [,]"
and the court must consider "the quality and quantity of the medical evidence and the
opinions on both sides of the issues." Glenn, 461 F.3d at 666.

Though a plan

administrator may be vested with discretion, the court does not review the
administrator's decision merely to “rubber stamp [the] decision." (Id.). In this case, the
parties agree that this Court’s review is under the arbitrary and capricious standard.
Furthermore, where, as here the Defendant acts as both the Plan Administrator
and Plan Insurer, these dual roles create a conflict of interest which the Court must
consider as a factor when evaluating whether Defendant abused its discretion by
denying the benefits claim. Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 108
(2008). Thus, when there is a conflict of interest, “the reviewing judge should take
account of that circumstance as a factor in determining the ultimate adequacy of the
record's support for the agency's own factual conclusion.” Id. at 119 (citing Universal
Camera Corp. v. NLRB, 340 U.S. 474, 492–97, 71 (1951)).

13

Additionally, when determining if a benefits decision is arbitrary, a court should
give weight to the decision of the Social Security Administration. DeLisle v. Sun Life
Assur. Co. Of Canada, 558 F.3d 440, 445 (6th Cir. 2009). Although not dispositive, a
decision by the SSA is a significant factor to be considered, particularly when, as here,
Defendant: (1) required Plaintiff to apply for Social Security; (2) benefitted financially
from the receipt of Social Security; and (3) did not explain why it reached a different
outcome than the SSA. Combs v. Reliance Standard Life Ins. Co., No. 2:08cv102, 2009
WL 2902943 (S.D. Ohio Sept. 8, 2009) (citing DeLisle at 446, Bennett v. Kemper Nat'l
Servs., 514 F.3d 547, 554 (6th Cir. 2008)).
B. The Parties’ Cross-Motions for Judgment
Hartford’s motion for judgment on the administrative record asserts that its
decision to terminate Plaintiff’s claim for benefits was reasonable and neither arbitrary
or capricious as the administrative record did not support Plaintiff’s claim that she was
disabled. In the alternative, Hartford argues that Plaintiff’s claim should be remanded
back to the Plan Administrator because Plaintiff filed this action before Hartford issued a
decision on her appeal. As such, Hartford asserts that Plaintiff has failed to exhaust her
administrative remedies as provided by ERISA.

Additionally, Hartford moves for

judgment on its counterclaim to recover benefits overpaid to Plaintiff in light of a
retroactive DSSD award.
Plaintiff’s motion for judgment, however, asserts that Hartford’s decision to deny
Plaintiff’s claim for long-term disability benefits was arbitrary and capricious because the
record does not contain sufficient evidence that Plaintiff’s condition improved since

14

Hartford’s initial award of benefits. Further, in determining that Plaintiff was no longer
entitled to long-term disability payments as of July 2010, Plaintiff argues that Hartford
improperly relied on the findings of independent medical reviews, video surveillance of
Plaintiff and the employability analysis report generated in June 2010. Plaintiff also
maintains that Hartford’s decision is unreasonable because of its conflict of interest as
both the Plan Administrator and Plan Insurer, as well as its failure to consider Plaintiff’s
award of Social Security Disability benefits.

With respect to Hartford’s alternative

request to remand, Plaintiff asserts that Hartford “unilaterally delayed ruling on her
appeal for so long that the appeal would be viewed by any reasonable person as having
been constructively denied.” (Doc. 24 at 5). Last, Plaintiff asserts that Hartford has not
shown that it is entitled to judgment on its counterclaim for reimbursement for
overpayment, because the monies Hartford is seeking was not paid to Plaintiff, the
beneficiary, but rather to a third-party, her son.
Upon careful consideration of the administrative record and the arguments of
counsel, the undersigned finds that the Hartford’s administrative review of Plaintiff’s
claim has not been fully exhausted, and therefore, this matter should therefore be
remanded for further proceedings.
B. Remand is appropriate
The Sixth Circuit Court of Appeals recognizes the holding in the vast majority of
circuits and interprets ERISA to require that a claimant exhaust his or her administrative
remedies prior to filing suit in a court of law: “The administrative scheme of ERISA
requires a participant to exhaust his or her administrative remedies prior to commencing

15

suit in federal court.” Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir.
1991). The Court of Appeals based its decision on 29 U.S.C. §1133(2) which states
that “[e]very employee benefit plan shall . . . afford a reasonable opportunity to any
participant whose claim for benefits has been denied for a full and fair review by the
appropriate named fiduciary of the decision denying the claim.” Id.
The rationale underlying the exhaustion requirement is that “review or exhaustion
enables plan fiduciaries to efficiently manage their funds; correct their errors; interpret
plan provisions; and assemble a factual record which will assist a court in reviewing the
fiduciaries' actions.” Ravencraft v. UNUM Life Ins. Co. of Am., 212 F.3d 341, 343 (6th
Cir. 2000)(citations omitted). See also Wilczynski v. Lumberman's Mut. Cas. Co., 93
F.3d 397, 402 (7th Cir. 1996) (exhaustion of administrative remedies enhances the
ability of plan fiduciaries to expertly and efficiently manage their plan by preventing
premature judicial intervention and assists the courts by ensuring that a plaintiff’s claims
have been fully considered by plan fiduciaries). The exhaustion requirement also gives
effect to Congress’ apparent intent, in mandating internal claims procedures, to promote
consistent treatment of claims, to provide a non-adversarial dispute resolution process,
to decrease the cost and time of claims settlement, and to minimize frivolous lawsuits.
Wilczynski, 93 F.3d at 402 (citing Powell v. AT&T Communications, Inc., 938 F.2d 823
(7th Cir. 1991)).
In this case, Plaintiff filed the instant action for wrongful termination of disability
benefits before Hartford issued a decision on her appeal of Hartford’s decision to
terminate benefits. Notably, the record reflects:

16

On December 15, 2010, Plaintiff’s counsel submitted a letter to Hartford formally
appealing Hartford’s denial of her claim for long-term disability benefits indicating that a
report of Dr. Wahl was attached.. (AR 137-139). Hartford received Dr. Wahl’s report in
support of Plaintiff’s claim on January 28, 2011.

(AR. 105-06, 23).

Hartford then

advised Plaintiff that because the appeal became complete on January 28, Hartford's
45-day period to make a decision would end March 14, 2011. (AR. 250).
Thereafter, on March 9, 2011, Hartford informed Plaintiff’s counsel that Hartford
could not make a decision during the initial 45-day period because it was still awaiting
updated records from Dr. Jonas and Dr. Flaspohler. (AR 244). Upon receipt of those
records, Hartford referred the appeal to a third-party vendor for review by another
internal medicine specialist and another psychiatrist. In a March 15, 2011, letter to
Plaintiff’s counsel, Hartford determined that a comprehensive co-morbid medical review
was needed before completing their evaluation. Hartford further represented that it
expected to render its appeal decision by April 24, 2011. (AR. 237). On March 17,
Hartford received notice that Plaintiff had filed this lawsuit and therefore suspended its
medical review of Plaintiff’s file. (AR. 236). Thus, contrary to Plaintiff’s assertion, the
evidence of record fails to establish that Hartford “unilaterally delayed ruling on

17

Plaintiff’s appeal for so long that ..it would be viewed . . .as be[ing] constructively
denied.” Seiser v. UNUM Provident Corp., 135 F. App'x 794, 799 (6th Cir. 2005).4
Based on such facts and circumstances, the undersigned finds that Plaintiff did
not complete the administrative review process and judicial intervention is therefore
improper at this time. See Miller, 925 F.2d at 986. See also Rist v. The Hartford
Financial Svcs. Group, No. 1:05-cv-492, 2008 WL 4444810, at *8 (S.D. Ohio 2008)
(ERISA exhaustion requirement not met where a plaintiff pursues administrative
remedies, but then fails to wait for an administrative determination before filing a
lawsuit).
Accordingly, for the foregoing reasons, the instant case should be remanded to
Hartford to complete the administrative review of Plaintiff’s appeal.

On remand,

Hartford should also be mindful of its conflict of interest as both the Plan Administrator
and Plan Insurer, See Metropolitan Life Insurance Co., 554 U.S. at 108 105, as well as

4

The undersigned recognizes that a party need not exhaust a benefit plan's administrative remedies before
filing an ERISA claim in federal court for individual benefits when “resorting to the plan's administrative
procedure would simply be futile or the remedy inadequate.” Coomer v. Bethesda Hosp., Inc., 370 F .3d
499, 505 ( 6th Cir. 2004)(quoting Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 419 (6th Cir.1998)).
“The standard for adjudging the futility of resorting to the administrative remedies provided by a plan is
whether a clear and positive indication of futility can be made.” Id. “The standard for adjudging the futility
of resorting to the administrative remedies provided by a plan is whether a clear and positive indication of
futility can be made.” Id. Thus, in order to establish a finding of futility, a Plaintiff must show that his or her
claim will certainly be denied on appeal, not merely that he or she doubts an appeal will result in a different
decision. Id. Here, however, Plaintiff does not assert that exhaustion would be futile in this case, nor does
the undersigned find that the administrative remedy would be inadequate.

18

the determination by the Social Security Administration that Plaintiff is disabled. See
Bennett v. Kemper Nat'l Servs., 514 F.3d 547, 554 (6th Cir. 2008).
III. Conclusion and Recommendation
For the reasons explained herein, IT IS RECOMMENDED that:
1. The Defendants’ Motion for Judgment on the Administrative Record (Doc. 21)
be DENIED;
2. The Plaintiff’s Cross-Motion for Judgment on the Administrative Record (Doc.
22) be DENIED; and
3. This matter be REMANDED to Hartford to complete the administrative review
process.
/s Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge

19

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
SHEILA VAUGHT,
Case No. 1:11-cv-227
Plaintiff,
Weber, J.
Bowman, M.J.
v.
THE HARTFORD LIFE & ACCIDENT
INSURANCE COMPANY,
Defendant.
NOTICE
Pursuant to Fed. R. Civ. P. 72(b), any party may serve and file specific,
written objections to this Report and Recommendation (“R&R”) within FOURTEEN
(14) DAYS of the filing date of this R&R. That period may be extended further by
the Court on timely motion by either side for an extension of time. All objections
shall specify the portion(s) of the R&R objected to, and shall be accompanied by a
memorandum of law in support of the objections.

A party shall respond to an

opponent’s objections within FOURTEEN (14) DAYS after being served with a copy
of those objections. Failure to make objections in accordance with this procedure
may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); United
States v. Walters, 638 F.2d 947 (6th Cir. 1981).

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