Laake v. The Benefits Committee, Western & Southern Financial Group Company Flexible Benefits Plan et al
Filing
114
MEMORANDUM OPINION AND ORDER signed by Judge William O. Bertelsman on 11/5/2021. IT IS ORDERED THAT: (1) Plaintiff's Motion for Judgment on the Administrative Record (Doc. 95 ), be, and is hereby GRANTED as it relates to Plaintiffs long-term d isability determination. (2) The Court GRANTS Plaintiff statutory penalties under 29 U.S.C. § 1132(c), pursuant to Rule 52(a). (3) Defendants' Motion for Judgment on the Administrative Record (Doc. 94 ), be, and is hereby DENIED. (4) Pl aintiff's Motion for Summary Judgment (Doc. 98 ), be, and is hereby DENIED. (5) Plaintiff's Motion for Attorney Fees (Doc. 31 ) and Supplemental Motion for Attorneys Fees (Doc. 40 ), be, and is hereby GRANTED. (6) Plaintiff's Motion to Strike Errata Sheets (Doc. 101 ), be, and is hereby DENIED AS MOOT. (7) Plaintiff shall file any remaining motions ON OR BEFORE DECEMBER 1, 2021. (eh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
CIVIL ACTION NO.: 1:17-CV-611 (WOB-SKB)
SHERRY LAAKE,
VS.
PLAINTIFF
MEMORANDUM OPINION AND ORDER
THE BENEFITS COMMITTEE,
WESTERN & SOUTHERN FINANCIAL
GROUP COMPANY FLEXIBLE BENEFIS
PLAN, ET AL.
DEFENDANTS
This is a lawsuit filed by Sherry Laake against The Benefits
Committee, Western & Southern (“W&S”) Financial Group Company
Flexible Benefits Plan and W&S Financial Group Company Flexible
Benefits
Plan
(the
“Plan”)
for
disability benefits under ERISA.
improper
denial
of
long-term
(Docs. 1; 54).
Laake alleges that Defendants improperly denied her long-term
disability benefits. Plaintiff initially brought her denial of
benefits claim in federal court in September 2017.
(Doc. 1).
In
February 2019, this Court found the Defendants’ decision to deny
Plaintiff benefits was arbitrary and capricious.
remand,
Defendants
again
denied
Laake
(Doc. 28).
long-term
On
disability
benefits, prompting Laake to reopen this case in February 2020.
(Doc. 41).
After a period of discovery, the parties have now filed CrossMotions for Judgment on the Administrative Record.
1
(Docs. 94;
95).
Plaintiff has also filed a Motion for Summary Judgment (Doc.
98), a Motion to Strike Deposition Errata Sheets (Doc. 101), and
a Motion and Supplemental Motion for Attorney’s Fees and Costs.
(Docs. 31; 40).
these
motions
Having reviewed this matter and concluding that
are
appropriate
for
resolution
without
oral
argument, the Court now issues the following memorandum opinion
and order.
Factual and Procedural Background
A. The Plan Terms
The Plan at issue is an employee welfare benefit plan governed
by ERISA.
(Doc. 28 at 1).
At all times relevant, Plaintiff was
a covered beneficiary under the terms of the Plan.
(Id.).
The
Plan provides for long term disability (“LTD”) benefits, which it
defines as follows:
Long Term Disability or Long Term Disabled shall mean
for the first 24 months after the expiration of Temporary
Disability, the complete and continuous incapacity of
such Covered Employee to perform all of the material
duties of any occupation for which he is or may
reasonably become qualified based on his education,
training, or experience. After the expiration of 24
months of Long Term Disability, Long Term Disability or
Long Term Disabled shall mean the complete and
continuous incapacity of the Covered Employee, to engage
in any and every occupation, business or employment,
including self employment, for wages, compensation or
profit.
(Doc. 78 at 63–64).
The plain terms of the Plan show that for the
first 24 months, W&S will evaluate long term disability benefits
2
using one standard, and then employ a different standard if the
disability extends beyond 24 months.
There are some exceptions to LTD benefits.
The exception
applicable to this case states:
§ 7.6: No benefits shall be paid for any period of Long
Term Disability: (j) where the Long Term Disability
extends beyond 24 months and is caused by a condition or
disorder excluded from the definition of Mental Illness
in Section 2.37. (See Schedule C)[.]
(Id. at 95–96).
exception.
Schedule C lists Chronic Pain Syndrome as an
(Id. at 207–08).
B. Plaintiff’s History Under the Plan
Plaintiff filed for LTD benefits in August 2016, claiming she
was disabled due to rheumatoid arthritis, which caused her severe
pain.
(Doc. 28 at 2).
physicians
asking
about
W&S sent questionnaires to Plaintiff’s
her
condition.
(Id.).
Plaintiff’s
rheumatologist, neurologist, and immunologist all said Plaintiff
met the definition of long-term disabled, and only her neurologist
said Plaintiff could work in sedentary positions in about three to
four months.
(Id. at 3).
At the time, these physicians diagnosed Plaintiff with a
variety of ailments.
Her rheumatologist, Dr. Muntel, diagnosed
her with inflammatory arthritis, chronic foot pain, low back pain,
and chronic pain in general.
(Id.).
Dr. Muntel also noted that
Plaintiff’s pain “frequently seems out of proportion to exam.”
(Id.).
Her neurologist, Dr. Stillwagon, diagnosed Plaintiff with
3
pelvic somatic dysfunction and myofascial muscle pain, chronic
pain, and right low back pain.
(Id.).
Her immunologist, Dr.
Bernstein, diagnosed her with mixed rhinitis, myofascial pain, and
chronic arthritis.
(Id. at 4).
Finally, her orthopedist, Dr.
Eisele, diagnosed her with rheumatoid arthritis, synovitis, and
unspecified synovitis.
(Id.).
Initially, the Benefits Department found that Plaintiff’s
disability was due to chronic pain, and therefore, her disability
payments were limited by § 7.6 of the Plan to only the 24-month
period.
specific
(Id.).
In the denial letter, Defendants did not cite the
exception
that
would
cause
terminate in October of 2018. (Id.).
Plaintiff’s
benefits
to
Chronic pain is not a
limitation under § 7.6 of the Plan.
Plaintiff appealed the decision. W&S referred her case to
Medical Care Management Corporation (“MCMC”), where Dr. Kramer, a
rheumatologist, performed an independent review.
(Id.).
Dr.
Kramer diagnosed her with atypical inflammatory arthritis, not
chronic pain.
(Id. at 5).
sit
pain
without
limitations.
Kramer’s
(Id.).
analysis,
and
However, she found that Plaintiff could
could
therefore
work
under
certain
The Benefits Appeal Committee considered Dr.
along
with
the
documentation
Plaintiff
initially submitted, and found that she was disabled because of
pain.
(Id.).
Thus, her disability benefits would terminate after
24 months, in October 2018.
4
C. Initial District Court Decision
Plaintiff timely brought her denial of benefits claim in
federal court in September 2017.
(Doc. 1).
In February 2019,
this Court reviewed Defendants’ denial of benefits under the
arbitrary and capricious standard.
(Doc. 28 at 5).
This Court made several findings. First, W&S did not cite any
specific provision of the Plan as the basis for its decision.
Because the Plan provision that applied was an exclusion, W&S had
the burden to show it was satisfied.
(Id. at 6).
Second, the
Court also found that there was no evidence that Plaintiff suffered
from Chronic Pain Syndrome. Although physicians had routinely
diagnosed Plaintiff with various forms of chronic pain, none of
them ever used the term Chronic Pain Syndrome.
(Id. at 7).
This
diagnosis required a psychological basis, which no physician ever
found consistent with her symptoms.
Furthermore, W&S never asked
any of Plaintiff’s physicians for their professional opinion on
Chronic Pain Syndrome, and W&S’s independent review physician even
discounted the idea that she suffered from Chronic Pain Syndrome.
(Id.).
Third, W&S applied the unable to perform “any and every”
occupation standard when initially determining benefits, and did
not wait until after 24 months had passed.
(Id. at 9).
The Court therefore found that W&S’s decision was arbitrary
and capricious under the terms of the Plan. The Court remanded the
case to allow for W&S to properly evaluate Plaintiff’s claim. (Id.
5
at 10).
The Court also denied Plaintiff’s request for attorney’s
fees (Id. at 12–13), but later granted Plaintiff’s request for
leave to file for attorney’s fees again.
(Doc. 32).
W&S appealed
the decision to the Sixth Circuit, but the case was ultimately
dismissed for lack of subject matter jurisdiction because the
remand and attorney’s fees determinations were not final and
appealable decisions.
Laake v. Benefits Committee, W&S Financial
Group Company Flexible Benefits Plan, et al., 793 F. App’x 413,
415 (6th Cir. 2019).
D. On Remand
Despite the pending appeal before the Sixth Circuit, W&S did
not obtain a stay.
(Doc. 33).
The Court remanded the case on
February 21, 2019 (Doc. 28), yet W&S did not contact Plaintiff
until May 2019 after Plaintiff inquired about the status of her
claim.
(Doc. 76 at 246–53).
When W&S finally responded to
Plaintiff, it asked for: (1) an updated HIPAA release; (2) a list
of Plaintiff’s health care providers since August 2016; and (3)
all additional medical information from October 2016 to October
2018. (Id.). Plaintiff sent Defendants the requested information,
and also included all medical records through February of 2019.
(Id.).
In September 2019, W&S again sent Plaintiff’s file to Dr.
Kramer, the independent medical reviewer.
(Doc. 77 at 437–43).
W&S limited the evidence Dr. Kramer reviewed to only those medical
6
records dated through October of 2018. (Id.). Dr. Kramer’s report
indicated that Plaintiff could sit without restriction, stand for
about an hour per eight-hour workday, and hold negligible weight.
(Id.
at
440–41).
She
also
discussed
Plaintiff’s
frequent
infections while on her pain medication, as well as the likelihood
of decreased functionality when she has flare ups, which occur
every two to three months.
(Id. at 440).
Dr. Kramer ultimately
determined that Plaintiff was not disabled under the terms of the
Plan.
(Id.).
The following individuals then reviewed Plaintiff’s claim
using all evidence Plaintiff submitted and ultimately denied her
benefits: Stephen Hussey, Dr. Keith Clark, Dr. Koester, Susan Reed,
R.N., Lori Ohmer-Mitchell, R.N., Diane Burger, R.N., and Megan
Rachford, R.N.
(Doc. 77 at 445).
W&S then sent Plaintiff a denial
letter on November 14, 2019—almost ten months after the Court
remanded
Plaintiff’s
claim,
well
beyond
the
forty-five-day
deadline set forth by ERISA. 29 CFR § 2560.503-1(f)(3).
(Id. at
445–49).
Following the November 14, 2019 denial, Plaintiff requested
from W&S all “relevant” documents to her claim.
(Id. at 461–62).
Defendants did not respond until February 6, 2020, two days after
Plaintiff reopened this case in federal court.
(Id. at 472). W&S
finally produced the Trust Agreement on September 10, 2020.
96, Danzl Decl. at ¶ 6).
7
(Doc.
E. Reopening of the Case
On February 4, 2020, Plaintiff moved the Court to reopen the
case
(Doc.
41),
to
which
Defendants
objected.
(Doc.
45).
Defendants argued that Plaintiff was required to exhaust her
administrative remedies before moving to reopen the case.
5).
(Id. at
The Court noted that the district court retains jurisdiction
to review a denial of benefits following a remand order, and
because Defendants disregarded the deadlines set forth in ERISA,
Plaintiff was not required to appeal to W&S.
Plaintiff’s Motion to Reopen was granted.
(Doc. 53).
(Id.).
She filed
an Amended Complaint on June 19, 2020. (Doc. 54). In it, she brings
two claims: (1) improper denial of benefits in violation of ERISA
and (2) failure to produce plan documents in violation of ERISA.
(Id.).
The magistrate judge allowed for discovery of material
outside
the
administrative
record
because
defects alleged in Plaintiff’s complaint.
of
the
procedural
(Doc. 65).
Meanwhile, the parties continued with the administrative
process. Plaintiff appealed her denial of benefits and was denied
again on September 1, 2020.
produced
the
administrative
(Docs. 77 at 511–17; 95 at 16).
record
as
part
of
the
W&S
discovery
process. This September 1, 2020 letter was included in the record.
(Id.).
Also included in the record was a review by a second
independent rheumatologist, Dr. Liarski, conducted after this case
was reopened.
(Id. at 503–10).
The denial letter consistently
8
referenced his opinion letter.
(Id. at 511–17).
Following this
latest denial of long term disability benefits, Plaintiff again
requested
on
November
10,
2020,
via
discovery
request,
documentation showing the delegation of authority and that W&S was
complying with its own rules and regulations.
(Doc. 74-2 at 113–
18).
Plaintiff filed her Motion for Attorney’s Fees and Costs on
March 13, 2019, and her Supplemental Motion for Attorney’s Fees on
January 24, 2020.
(Docs. 31; 40).
The Court declined to rule on
these motions until a final decision had been reached. The parties
filed Cross-Motions for Judgment on the Administrative Record on
June 23, 2021.
(Docs. 94; 95). Plaintiff also filed her Motion
for Summary Judgment on July 22, 2021–almost a month after the
dispositive motion deadline. (Doc. 98).
Plaintiff then filed a
Motion to Strike Deposition Errata Sheets on August 2, 2021. (Doc.
101).
In each filing, the opposing party timely filed their
Response, and the moving party filed their Reply.
ANALYSIS
A. LTD Benefits Determination
i. The Administrative Record
As an initial matter, the Court addresses arguments from both
parties about limiting the administrative record.
First, Plaintiff argues that the documents included in the
administrative record that were issued after the case was reopened
9
should be excluded from the Court’s consideration because they are
post-litigation
rationalizations.
(Doc.
95 at 24–26).
This
includes an opinion letter from Dr. Liarski that was issued on
June 16, 2020 and W&S’s undated denial letter of Plaintiff’s appeal
received on September 1, 2020.
(Id.).
The Sixth Circuit has held that a court may consider the
evidence “at the time the final decision was made.” Miller v.
Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991). Because
the Court already determined that the administrative appeal was
unnecessary to reopen the case, it therefore follows that the
“final” decision that the Court is considering is the denial dated
November 14, 2019.
(See Doc. 53).
The Supreme Court has said
that, “the regulations merely state that a claim may be treated as
having been denied after the 60- or 120- day period has elapsed .
. . . This provision thus enables a claimant to bring a civil
action to have the merits of [her] application determined, just as
[she] may bring an action to challenge an outright denial of
benefits.”
Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S.
134, 144 (1985).
Additionally, the Sixth Circuit has written:
[I]t strikes us as problematic to, on one hand, recognize
an administrator’s discretion to interpret a plan by
applying a deferential ‘arbitrary and capricious’
standard of review, yet, on the other hand, allow the
administrator to ‘shore up’ a decision after-the-fact by
testifying as to the ‘true’ basis for the decision after
the matter is in litigation . . . .
10
Univ. Hosp. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 848
n.7 (6th Cir. 2000).
The case here is a straightforward application of these
principles. First, W&S waited over 270 days from the Court’s remand
to issue an initial decision regarding Plaintiff’s claims.
53 at 5).
(Doc.
Aside from this being egregious, Plaintiff was in the
right to consider her claim denied at this point.
473 U.S. at 144.
See Russell,
Hence, she properly moved to reopen this action
in February 2020 and the Court granted the motion in June 2020.
(Doc. 53).
Second, Dr. Liarski’s opinion letter is much more
thorough than Dr. Kramer’s opinion letter, going further in-depth
about his disagreements with Plaintiff’s current treatment plan
and speculating that a different approach would help her pain.
(Doc. 77 at 507).
Dr. Liarski’s analysis also provides a much
more thorough explanation as to why he believes Plaintiff could
perform sedentary work and applied Plaintiff’s conditions to the
Plan terms.
(Id. at 506–07).
Third, W&S’s denial letter received
September 1, 2020 relies heavily on Dr. Liarski’s analysis to
justify denying Plaintiff’s claims and has nearly two more pages
of explanation as to why W&S denied her claim when compared to the
November 2019 letter.
(Compare Doc. 77 at 511–17 with id. at 445–
49).
Courts require insurance companies to explain why they are
denying a claimant benefits.
Moore v. Lafayette, 458 F.3d 416,
11
436 (6th Cir. 2006).
comply with ERISA.
Plans are only required to substantially
Id.
But here, W&S knew it was being sued by
Laake for a second time.
It curated another physician’s opinion
and then used that opinion to craft a carefully worded denial
letter
after
litigation
had
already
commenced
to
ensure
substantial compliance with ERISA. This is very clearly a postlitigation rationalization.
F.3d at 848 n.7.
See Univ. Hosp. of Cleveland, 202
Accordingly, it should not be considered as part
of the administrative record.
Second,
Defendants
argue
the
Court
should
only
consider
Plaintiff’s medical evidence dated through October 2018 as part of
the administrative record.
Defendants explained “[b]ecause the
question [on remand] is whether Ms. Laake met the Plan’s definition
of Long Term Disability as of October 2018, only those records
reflecting Ms. Laake’s condition through October 2018 are relevant
to the inquiry.” (Doc. 77 at 445).
about this limitation.
The Defendants are incorrect
Remands from district courts are to be
treated as an appeal from an adverse benefit determination.
See
Stiers v. AK Steel Benefits Plans Admin. Comm., No. 07-145, 2008
WL 1924252, at *6 (S.D. Ohio Apr. 29, 2008).
On appeal, the
claimant can provide additional evidence of his or her disability.
29
C.F.R.
§
2560.503-(1)(h)(2)(ii)–(iv).
Plaintiff
supplied
additional information of her disability through February of 2019,
when the Court remanded the case.
12
“In an ERISA claim contesting a denial of benefits, the
district court is strictly limited to a consideration of the
information actually considered by the administrator.”
Killian v.
Healthsource
514,
Provident
(6th Cir. 1998).
It
Adm’r,
appears
Inc.,
152
Defendants
F.3d
considered
medical evidence at different points on remand.
522
different
W&S never asked
Plaintiff for medical records dated after October 16, 2018. (Doc.
76 at 246–51).
The Benefits Committee only supplied Dr. Kramer
with medical records through October of 2018.
43).
But
considered
by
all
W&S’s
medical
November 2019 denial.
Therefore,
this
own
admission,
records
the
(Doc. 77 at 437–
Benefits
Plaintiff
Department
submitted
for
the
(Doc. 94-1; Response to Interrog. No. 3).
Court
can
consider
all
the
medical
evidence
Plaintiff submitted.1
ii. Standard of Review
Next, Plaintiff argues for a de novo review of the record.
Specifically, she argues that Defendants impermissibly delegated
discretionary authority under the Plan.
(Doc. 95 at 26–29).
Defendants argue that the Plan allows them to grant discretionary
authority to anyone they deem fit.
(Doc. 99 at 10–13).
Generally, courts review denial of benefit actions de novo
unless the plan in question grants discretionary authority to
1
This is largely immaterial because even the evidence dated before
October 2018 shows Plaintiff was disabled under the terms of the Plan.
13
determine
eligibility
for
benefits
to
the
administrator.
Firestone Tire & Rubber Co. v. Brunch, 489 U.S. 101, 115 (1989).
If such a grant of discretionary authority exists, then courts
review decisions under an arbitrary and capricious standard.
Id.
However, “when the benefits decision ‘is made by a body other than
the one authorized by the procedures set forth in a benefits plan,’
federal courts review the benefits decision de novo.” Shelby Cty.
Health Care Corp. v. Majestic Star Casino, 581 F.3d 355, 365 (6th
Cir. 2009) (quoting Sanford v. Harvard Indus. Inc., 262 F.3d 590,
597 (6th Cir. 2001)).
Plaintiff argues that the Benefits Committee impermissibly
delegated authority to the Benefits Department.
29).
This argument is well-taken.
(Doc. 95 at 26–
Neither party disputes that
the Plan grants discretion to the “Benefits Committee.”
78 at 156).
(Doc.
The Plan states that “all action” by the Benefits
Committee must be taken by a majority vote of a quorum of members
of the Benefits Committee.
these
procedures
were
(Id.).
not
However, Plaintiff argues that
followed.
Specifically,
Plaintiff
points to the individuals listed in attendance at the October 10,
2019 meeting on the disability evaluation for Laake’s claim for
benefits.
(Doc.
95-1,
Resp.
to
Interrog.
3
at
2–3).
In
attendance, there were multiple individuals who voted to deny
Plaintiff’s benefits but who are not actually members of the
Benefits Committee.
(Id.).
14
Defendants respond by arguing that this is accounted for in
the Plan, which grants the Benefits Committee broad discretionary
authority:
To appoint or employ the Benefits Department and any
individuals to assist in the administration of the Plan
. . . and any other agents it deems advisable, including
legal, accounting, and actuarial counsel.
(Doc. 78 at 157).
The
word
“assist”
means:
“To
help,
aid,
succor,
lend
countenance or encouragement to; participate in as an auxiliary.
To contribute effort in the complete accomplishment of an ultimate
purpose intended to be effected by those engaged.”
LAW DICTIONARY (5th ed. 1983) (emphasis added).
to join or be a part of.
Assist, BLACK’S
Assist does not mean
The terms of the Plan allow the Benefits
Committee to receive contributions from anyone it deems fit.
But
it does not permit the Benefits Committee to confer voting rights
to others for the purposes of official actions.
Any individual is
permitted to assist, but assist does not mean that the individual
can become a part of the Benefits Committee.
The group that met on October 10, 2019, was comprised of
individuals
that
had
a
right
to
contribute
to
the
meeting
discussion.
However, nothing in the Plan shows that members not
a part of the Benefits Committee had a right to vote on claims.
Defendants, in their interrogatories, responded that the following
individuals attended the October 10, 2019 meeting where Ms. Laake’s
15
benefits were reviewed and decided: Stephen Hussey, Jr.; Lori
Ohmer-Mitchell, R.N.; Megan Rachford, R.N.; Diane Burger, R.N.;
Susan Reed, R.N.; Dr. Keith Clark, M.D.; Dr. Theresa Koester, M.D.;
Michael Altenau; Patricia Donohoo; Liz Tabeling; John Kasising;
and Tracy Bickers (Doc. 95-1, Resp. to Interrog. 3 at 2–3).
The
Benefits Committee at the time was comprised of Donald Wuebbling,
Stephen Husey, Jr., Linda Lake, Jeffrey Meek, Daniel Harris, and
Dr. Keith Clark.
(Id. at 3).
By Defendants’ own admission, only
two members of the Benefits Committee were in the meeting about
Ms. Laake’s claim.
This was not enough to form a quorum to vote
as to what action to take on Ms. Laake’s claim.
(Doc. 78 at 156).
Yet Hussey testified in his deposition that “the group” met on
October 10, 2019 and “determined that Ms. Laake was not long-term
disabled.” (Doc. 81, Hussey Dep. at 138:5–8).2
Hussey’s deposition testimony also shows the W&S consistently
blurred the lines between the Benefits Committee and the Benefits
Department.
For example, when asked who at the October 18, 2016
meeting decided to approve the initial 24 months of disability to
Ms. Laake, Hussey answered, “All members of the meeting . . . That
was the determination of the group.” (Id. at 73:6–16).
2
Hussey
Defendants claim that Michael Altenau, Patricia Donohoo, Liz Tabeling,
and Tracy Bickers attended the meeting but did not offer an opinion on
whether Plaintiff’s LTD remand should be granted. (Doc. 95-1, Resp. to
Interrog. 3 at 2–3). Even if this were true, it would not change the
analysis. There were still plenty of individuals who were voting on
Plaintiff’s LTD benefits but who had not been granted authority to do
so by the Plan.
16
also testified in his deposition that the Benefits Department, not
the
Benefits
benefits.
Committee,
decides
a
claimant’s
eligibility
for
(Id. at 31:8–21).
Defendants cite to a case from the Eastern District of
Tennessee to argue that discretionary authority can be delegated
in a plan.
Nelson v. Unum Group Corp., No.: 1:13-cv-58, 2014 WL
3908183, at *8 (E.D. Tenn. Aug. 11, 2014).
The Court agrees with
Defendants that the Plan can delegate authority, but such a
delegation must be unequivocally clear.
Perez v. Aetna Life Ins.
Co., 150 F.3d 550, 555 (6th Cir. 1998). “While ‘magic words’ are
unnecessary to vest discretion in the plan administrator . . .
this circuit has consistently required that a plan contain a clear
grant of discretion to the administrator to determine benefits or
interpret the plan.” Id. (internal quotations omitted).
The word
“assist” does not clearly grant discretion.
Defendants’
Committee
to
argument
delegate
that
the
Plan
authority
is
allows
the
simply
Benefits
unpersuasive.
Individuals who are permitted to “assist” in administration of a
Plan
cannot
hold
the
same
authority
as
those
who
have
been
delegated the authority to administer the Plan. “Administer” and
“assist in administration” are not the same thing.
Accordingly,
the Court agrees with Plaintiff that de novo review is appropriate
because the Court must consider who made the benefit determination
as part of its review.
17
iii. Plaintiff is Disabled Under the Terms of the Plan
a. De Novo Standard
De novo review is a non-deferential standard of review.
This
means that the Court will not defer to W&S’s findings or plan
interpretations.
(6th
Cir.
See Perry v. Simplicity Eng’g, 900 F.2d 963, 966
1990).
The
Court
takes
“a
fresh
look
at
the
administrative record but may not consider new evidence or look
beyond the record that was before the plan administrator.” Wilkins
v. Baptist Healthcare Sys. Inc., 150 F.3d 609, 616 (6th Cir. 1998).
The review is confined to the administrative record as it existed
when W&S issued its final determination upholding the termination
of Plaintiff’s benefits.
373, 378 (6th. Cir. 2005).
Moon v. Unum Provident Corp., 405 F.3d
The Court may consider both quantity
and quality of the evidence that the plan administrator considered
when making its decision.
See Crider v. Highmark Life Ins. Co.,
458 F. Supp. 2d 487, 503 (W.D. Mich. 2006) (citing Smith v. Unum
Life Ins. Co. of Am., 305 F.3d 789, 794 (8th Cir. 2002)).
In its
evaluation, the Court decides whether it agrees with the Plan
administrator’s decision. Perry, 900 F.2d at 966.
b. Meaning of “Proof” Under the Plan
After the initial 24-month period, the Plan defines LTD as,
“the complete and continuous incapacity of the Covered Employee,
to engage in any and every occupation, business or employment,
including self-employment, for wages, compensation or profit.”
18
(Doc. 78 at 63–64). Disability benefits are further limited “where
the Long Term Disability extends beyond 24 months and is caused by
a condition or disorder excluded from the definition of Mental
Illness in Section 2.37.”
(Id. at 96).
In Section 2.37, the Plan
excludes from the definition of “Mental Illness” Chronic Pain
Syndrome.
(Id. at 96; 207).
W&S
may
also
limit
disability
benefits if the claimant “fails or refuses to furnish proof of
Long Term Disability as required by the Benefits Department,
refuses to be examined, or refuses to provide any release required
by the Benefits Department.”
(Id. at 95).
The parties disagree as to what the term “proof” means under
the Plan.
Defendants argue that proof requires that Plaintiff
submit objective medical evidence of her disability. (Doc. 94 at
24–27).
Plaintiff argues that the Plan does not require this
higher threshold of evidence.
(Doc. 100 at 3–5).
The Court is inclined to agree with Plaintiff.
the Plan is the term “proof” defined.
Nowhere in
The Fourth Circuit has
defined proof not to require objective medical evidence, but rather
proof that is “objectively satisfactory.”
Gallagher v. Reliance
Standard Life Ins. Co., 305 F.3d 264, 270 (4th Cir. 2002).
When
proof has not been defined, district courts in the Sixth Circuit
have also considered subjective evidence, including the insured’s
self-reported evidence.
See James v. Liberty Life Assurance Co.
of Boston, 984 F. Supp. 2d 730, 739-40 (W.D. Mich. 2013).
19
But
courts will still give weight to evidence “in accordance with the
supporting medical tests and objective findings that underline the
opinion.”
Crider, 458 F. Supp. 2d at 505.
Accordingly, the Court
should consider any objective evidence Plaintiff has provided but
may also consider self-reported and subjective evidence submitted
by the Plaintiff.
c. Plaintiff’s Chronic Pain Syndrome Diagnosis
Another one of Defendants’ arguments is that Plaintiff has
been diagnosed with Chronic Pain Syndrome, and this in effect
removes her from disability eligibility under the terms of the
Plan.
(Doc. 94 at 16).
Plaintiff argues that she was never
diagnosed with Chronic Pain Syndrome. (Doc. 54 at ¶15). Plaintiff
is mistaken—she was clearly diagnosed with Chronic Pain Syndrome
during a May 2018 visit with Dr. Muntel.
(Doc. 76 at 497).
But
this does not mean that Plaintiff’s claims fail.
The terms of the Plan dictate that to be ineligible for
benefits, the claimant’s Chronic Pain Syndrome “caused” the long
term disability.
(Doc. 78 at 96).
few notable flaws.
Defendants’ argument has a
First, the word “cause” means “[t]o be the
cause or occasion of; to effect as an agent; to bring about; to
bring into existence; to make to induce; to compel.” Cause, BLACK’S
LAW DICTIONARY (5th ed. 1983) (emphasis added).
Plaintiff’s first
time being diagnosed with Chronic Pain Syndrome was in 2018, nearly
two years after W&S had initially awarded her long term disability
20
benefits.
Although the Plan has two different standards of proof
for determining the continuation of disability benefits after 24
months, the Plan does not call for the redetermination of her
disability.
Because Chronic Pain Syndrome was diagnosed after
Plaintiff was already deemed to be disabled, it cannot be said now
that Chronic Pain Syndrome “caused” her disability.
Furthermore,
when Plaintiff was initially awarded disability benefits, Dr.
Muntel specifically disavowed Chronic Pain Syndrome, explaining it
would not explain Plaintiff’s response to prednisone.
154).
(Doc. 76 at
Plaintiff was diagnosed with a plethora of other ailments
that also could have caused her disability.
Second, the evidence of Chronic Pain Syndrome is minimal and
peripheral at best. Dr. Muntel diagnosed Plaintiff with Chronic
Pain Syndrome in May of 2018.
(Id. at 497). However, in the
subsequent visits, Dr. Muntel makes no mention of Chronic Pain
Syndrome again in her patient visit notes.
(See Doc. 76 at 269–
76; 483–89; 498–501; Doc. 77 at 6–13; 14–21). Furthermore, Chronic
Pain Syndrome requires psychological factors to play a part in the
onset of pain.
(Doc. 28 at 6).
In the visit where Dr. Muntel
diagnosed Plaintiff with Chronic Pain Syndrome, there was no
discussion of any mental illness, such as anxiety or depression.
(Doc. 76 at 490–97).
Although the Court itself is not a physician,
the Court notes the lack of discussion from Dr. Muntel about
Plaintiff’s Chronic Pain Syndrome diagnosis.
21
Given the weight of
the evidence showing Plaintiff was diagnosed with a host of other
ailments,
the
Court
does
not
find
Dr.
Muntel’s
diagnosis
dispositive.
d. Plaintiff’s Ability to Perform “Any” Job
The primary question then comes down to whether Plaintiff can
perform sedentary work.
Defendants argue that she can; Plaintiff
argues that she cannot.
After a full review of the administrative
record, the Court concludes that Laake is not able to perform
sedentary job functions.
Regulations define sedentary work as follows:
Sedentary work involves lifting no more than 10 pounds
at a time and occasionally lifting or carrying articles
like docket files, ledgers, and small tools. Although a
sedentary job is defined as one which involves sitting,
a certain amount of walking and standing is often
necessary in carrying out job duties. Jobs are sedentary
if walking and standing are required occasionally, and
other sedentary criteria are met.
20 C.F.R. § 404.1567(a).3
Walking and standing “occasionally” has
been found by the Sixth Circuit to mean up to one-third of the
time.
Creech v. Unum Life Ins. Co. of N. Am., 162 F. App’x 445,
451 n.10 (6th Cir. 2006); see also Wages v. Secretary of Health
and Human Servs., 755 F.2d 495, 498 (6th Cir. 1985) (finding that
“occasionally” meant at least two hours of an eight hour workday).
3
The Court takes judicial notice of this definition. Brooking v. Harford
Life and Acc. Ins. Co., 167 F. App’x 544, 548 (6th Cir. 2006).
22
After reviewing the Administrative Record, the Court notes
there are two competing physician views at play: those of the
treating
physicians
reviewers.
and
those
of
W&S’s
independent
medical
The Supreme Court has held that ERISA does not require
plan administrators to accord special deference to the opinions of
treating physicians.
Black & Decker Disability Plan v. Nord, 538
U.S. 822, 833 (2003).
Still, “a plan administrator may not
arbitrarily disregard reliable medical evidence proffered by a
claimant, including the opinions of a treating physician.”
Evans
v. Unum Provident Corp., 434 F.3d 866, 877 (6th Cir. 2006).
Plaintiff
is
diagnosed
with
seronegative
inflammatory
arthritis, which results in widespread joint pain that can be
sporadic.
(Doc. 77 at 439–40).
Dr. Muntel has noted that
Plaintiff’s condition is marked by unpredictable and cyclical
flare-ups, during which she must go off the medication that helps
manage her pain.
Kramer,
W&S’s
(Id. at 440).
independent
As Dr. Muntel explained to Dr.
physician
reviewer,
Plaintiff
has
recurrent sinus infections and bronchitis every two to three months
while taking Xeljanz, the medication that seems to help Plaintiff’s
pain the most.
off
Xeljanz
(Id. at 439–40).
because
of
these
arthritis is exacerbated.
When Plaintiff is forced to go
infections,
her
inflammatory
(Id.).
Defendants argue that Plaintiff is not limited in her upper
body movement and ability to type.
23
Dr. Kramer declared that
Plaintiff “is not restricted in the use of her hands. She can reach
at any level.”
(Id. at 441).
Defendants primarily point to July
and October 2018 visits with Dr. Muntel where she observed that
Plaintiff had minimal wrist fullness and tenderness with 100% fists
and no obvious hand synovitis or PIP tenderness.
(Id. at 8; 16).
But this cherry-picks Plaintiff’s medical records.
For example,
despite Dr. Muntel observing no PIP tenderness in Plaintiff’s July
2018 visit, she did observe right hand first and second digit
tenderness in a February 2019 visit.
(Id. at 289).
The Court
also notes Plaintiff’s right shoulder bursitis diagnosis.
76 at 464).
(Doc.
She was also diagnosed with cervical spinal stenosis
and degenerative arthropathy of the spinal facet joint in February
2017. (Id. at 441).
Dr. Muntel has also consistently noted that
Plaintiff has pain associated with her elbows when she evaluates
her range of motion. (Id. at 484; 492; 500). She also has observed
fullness in Plaintiff’s wrists which causes her pain.
439; 477; 484; 492).
(Id. at
Given the pain that Plaintiff has in her
upper extremities and the objective evidence of such pain in
Plaintiff’s medical records, Plaintiff is restricted in the use of
her hands.
She cannot reach any level, at least not without pain
and discomfort.
Perhaps
most
compelling
is
Dr.
Kramer’s
finding
that
Plaintiff is limited to walking and standing fifteen minutes at a
time with a maximum ability to do so for up to one hour in an
24
eight-hour workday.
(Doc. 77 at 441).
Sedentary jobs require an
individual to be able to stand and walk for at least two hours of
the eight-hour workday. Wages, 755 F.2d at 498.
Moreover, Dr.
Kramer notes that “this functionality will be reduced even further
during [Plaintiff’s] frequent episodes of disease exacerbation due
to medication discontinuation.”
(Id.).
Meaning, Plaintiff’s
already limited ability to walk and stand is reduced periodically.
On Plaintiff’s best day, she cannot meet the physical requirements
for sedentary work let alone the periodic physical condition she
will be in because she is forced off her management medication.
Also compelling is Dr. Muntel’s evaluation of Plaintiff’s
ability to work as of October 2018.
Dr. Kramer’s notes state that
Dr. Muntel “expressed the claimant would not be able to hold down
a job since she has sinus infections every couple of months causing
discontinuation
of
her
medications
and
exacerbation
arthritis, especially her ankles.” (Id. at 440).
of
the
Dr. Muntel
further commented that Plaintiff “would not be able to work for
several weeks at a time until her arthritis stabilized after
restarting anti-arthritis medication . . . .”
(Id.).
Dr. Muntel
also noted that although Plaintiff’s hip surgery was successful,
the source of the Plaintiff’s pain has always been her ankles.
(Id.). This comment goes on to discredit many of the arguments
made by Defendants that argue Plaintiff’s pain was improved after
a successful hip surgery.
Her hip was not the major source of
25
pain.
So, alleviating some of the pain from her hip did not solve
the problem.
(Id.).
Given the evidence, the Court confidently concludes that
Plaintiff was disabled under the terms of the Plan as of October
of 2018.4
Plaintiff is incapable of performing sedentary work.
She is unable to work any occupation.
Accordingly, Plaintiff is
entitled to reinstatement of benefits and back pay.
Hayden v.
Martin Marietta Materials, Inc. Flexible Benefits Program, 763
F.3d 598, 609 (6th Cir. 2014).
For the above reasons, Plaintiff’s
Motion for Judgment on the Administrative Record is GRANTED, and
Defendants’ Motion for Judgment on the Administrative Record is
DENIED as it relates to disability benefits.
B. Statutory Penalties
Plaintiff’s
Motion
for
Summary
Judgment,
(Doc.
98),
on
Plaintiff’s 29 U.S.C. § 1132(c) claim is untimely and is DENIED.5
However, Defendants move for Judgment on the Administrative Record
on this claim.
(Doc. 94). Under Rule 52, the Court should make
4
The Court also finds that there is sufficient evidence to support a
finding of arbitrary and capricious decision-making as it relates to
Laake’s LTD benefit determination.
5
Plaintiff’s Motion for Summary Judgment was filed July 22, 2021—almost
a full month after the June 23, 2021 dispositive motions deadline. When
a scheduling order is not met, the party that failed to meet the deadline
must show good cause for that failure. Winter Enters., LLC v. West Bend
Mut. Ins. Co., No. 1:17-cv-360, 2019 LEXIS 125841, at *6 (S.D. Ohio July
29, 2019). Plaintiff has not shown good cause for her tardiness, and
thus her Motion for Summary Judgment is denied.
26
findings of fact and render judgment accordingly after the parties
have been fully heard on an issue, even if judgment is in favor of
the non-moving party.
FED. R. CIV. PRO. 52(a).
After review, it
is evident that the Defendants withheld documents from Plaintiff,
and she is entitled to some form of relief.
The
primary
purpose
of
§
1132(c)
is
to
punish
plan
administrators who fail to provide claimants with documents as
required under ERISA.
Bartling v. Fruehauf Corp., 29 F.3d 1062,
1068 (6th Cir. 1994).
ERISA requires:
The administrator shall, upon written request of any
participant or beneficiary, furnish a copy of the latest
updated summary, plan description, and the latest annual
report, any terminal report, the bargaining agreement,
trust agreement, contract, or other instruments under
which the plan is established or operated.
29 U.S.C. § 1024(b)(4).
After thirty days, a plan administrator
who fails to provide the documents related to the request may be
subject to a maximum $110 penalty per day. 29 U.S.C. § 1132(c);
29 C.F.R. 2575.502(c)(1).
i. Duty to Provide Plaintiff with “Relevant” Documents
Plaintiff argues without merit that 29 U.S.C. §§ 1024, 1029,
29 C.F.R. §§ 2560.503-1(h)(2)(iii), and (m)(8) establish a duty
for W&S to provide all documents “relevant” to her claim.
54 at 9; ¶46).
(Doc.
But Defendants cannot be penalized under § 1132(c)
for a violation of § 2560.503-1.
It is worth noting that §
2560.503-1 is a regulation that implements 29 U.S.C. § 1133, not
27
§ 1132.
VanderKlok v. Provident Life and Accident Ins. Co., 956
F.2d 610, 615 (6th Cir. 1992).
the
plan
administrator
do
Therefore, violations of § 1133 by
not
administrator under § 1132(c).
create
liability
on
the
plan
See Cultrona v. Nationwide Life
Ins. Co., 936 F. Supp. 2d 832, 853 (N.D. Ohio 2013).
ii. Duty to Provide Plaintiff with Plan Documents
Defendants nonetheless had a duty to provide Plaintiff with
Plan documents upon written request.
Plaintiff alleges that
Defendants failed to properly do so.
The Sixth Circuit has deliberately limited the scope of
§ 1024(b)(4) to only the class of documents pertaining to how a
plan is operated.
Allinder v. Inter-City Prods. Corp., 152 F.3d
544, 549 (6th Cir. 1998). The “other instruments under which the
plan is established or operated” provision is not meant to be a
broad “catch-all.”
Cultrona, 936 F. Supp. 2d at 853–54 (citing
Allinder, 152 F.3d at 549).
It is worth noting that Plaintiff alleges Defendants failed
to provide documents after four different requests: 2016, 2017,
November 2019, and November 2020. The requests from 2016 and 2017
are barred by the statute of limitations under ERISA, which courts
in this circuit have deemed to be one year.
See Kumar v. Higgins,
91 F. Supp. 2d 1119, 1123 (N.D. Ohio 2000) (citing Meade v. Pension
Appeals & Rev. Comm., 966 F.2d 190 (6th Cir. 1992)).
did
not
allege
statutory
penalties
28
in
her
first
Plaintiff
complaint.
Additionally, another complaint of document withholding comes from
the discovery process in November 2020.
This should have been
addressed in a motion to compel, not at this late stage of
litigation.
Accordingly, the Court only considers the statutory
penalty claim as it relates to the November 2019 request.
Turning to this specific request, the Court finds that on
November 18, 2019, Plaintiff sent the Benefits Committee a letter
asking for all “relevant” documents related to W&S’s denial of
Laake’s disability claims.
(Doc. 77 at 461–63).
The letter
specifically asked for documentation: (1) relied upon in making
the
benefit
determination;
(2)
submitted,
considered,
and
generated during the decision; (3) demonstrating compliance with
the administrative processes; and (4) of statements of policy or
guidance with respect to the plan concerning the denied treatment
option
or
diagnosis.
(Id.).
Defendants
responded
acknowledged the request on November 22, 2019.
to
and
(Id. at 465).
However, W&S did not send the 2019 Summary Plan Description until
February 6, 2020.
(Id. at 472).
Agreement on September 10, 2020.
W&S finally produced the Trust
(Doc. 96, Danzl Decl. at ¶ 6).
Plaintiff is not entitled to the administrative record she
seeks.
See Cultrona, 936 F. Supp. 2d at 854.
However, the request
Plaintiff made clearly shows that she sought documentation that
showed the “currently operative, governing Plan documents,” all of
which are “instruments under which the plan is established or
29
operated”
per
§
1024(b)(4).
Curtiss-Wright
Schoonejongen, 514 U.S. 73, 84 (1995).
this
documentation,
and
Defendants
Corp.
v.
Plaintiff was entitled to
did
not
provide
that
information until February 6, 2020, and September 10, 2020.
iii. Prejudice by Lack of Documentation
A showing of prejudice, although a factor, is not essential
for a party to succeed on a statutory penalty claim.
Gatlin v.
Nat. Healthcare Corp., 16 F. App’x 283, 289 (6th Cir. 2001).
Here,
Plaintiff argues that failure to provide the requested documents
prejudiced her on the grounds that she did not have her doctors
submit relevant evidence.
The Court agrees that the lack of
document production prevented Plaintiff from understanding why her
claim is continually denied.
For example, nothing in the Plan
indicates that she needed objective evidence of her disability.
Yet if the internal policies and procedures governing the review
of
claims
Plaintiff
had
outlined
could
have
objective diagnosis.
been
physically
objective
provided
evidence
as
documentation
a
requirement,
supporting
an
Along the same lines, Plaintiff has never
examined
by
Defendants.
Understanding
the
internal policy as to why that is would also have been helpful in
making arguments to the Appeals Committee.
Essentially, Plaintiff
has been left in the dark as to what W&S would consider the “right”
kind of evidence, all while asking Defendants to explain what
evidence it was considering when making its determination.
30
The
Court
also
notes
providing these documents.
Defendants’
severe
negligence
in
Following Plaintiff’s November 2019
request, W&S waited until February 6, 2020 and September 10, 2020
to finally respond to the request.
(Doc. 77 at 472).
It appears
inexcusable and egregious delays are a frequent issue at W&S as it
relates to Ms. Laake’s claim.
only
provided
the
Plan,
When it finally did respond, W&S
Summary
Plan
Description,
and
a
significantly trimmed-down copy of the administrative record,
without even addressing the other requests Plaintiff had made.
(Id. at 474–75).
After Plaintiff again asked for the documents in
March 2020, Defendants notified Plaintiff that they would be
turning over more documents—something they should have done from
the start.
(Id. at 478).
Then, in the same letter, Mr. Altenau
from W&S tells Plaintiff to “let us know immediately what specific
materials are missing.”
(Id.).
It is beyond the comprehension of
the Court how Plaintiff is supposed to know more than W&S in terms
of what internal policy documents exist and are therefore missing
from production.
Courts have found an award of the maximum statutory amount
of $110 per day in cases where there is evidence of egregious
conduct and prejudice.
See Shephard v. O’Quinn, No.: 3:05-cv-79,
2006 LEXIS 24252, at *10 (E.D. Tenn. Apr. 26, 2006) (awarding the
maximum amount when the defendant’s behavior was “egregious” and
caused plaintiff to lose insurance coverage).
31
The Court, in this
case, has great discretion as to how much in statutory penalties
to award.
Ciaramitaro v. Unim Life Ins. Co. of Am., 628 F. App’x
410, 417 (6th Cir. 2015).
But the factors in this case justify
the maximum statutory penalty of $110 per day.
See also Gatlin,
16 F. App’x at 289–90 (granting $100 per day when defendants’ delay
prevented plaintiff from appealing at the earliest possible time).
As to the actual amount, Plaintiff alleges the delay in the
production of Plan documents, Trust Agreement, and internal Plan
policies and procedures warrant penalties.
no such internal documents exist.
5 at 5).
Defendants argue that
(Doc. 94-1, Resp. to Doc. Req.
Although the Court is dubious that there are no internal
documents outlining how the Benefits Committee should evaluate
claims, absent more evidence, the Court will not award penalties
for
these
missing,
hypothetical
documents.
Accordingly,
the
penalties will be limited to the 50 day delay for the Plan and
Summary Plan Documents and 267 days for the Trust Agreement.
The
award therefore totals $40,370.
C. Motion to Strike Errata Sheets
Plaintiff’s Motion to Strike Errata Sheets is DENIED as moot.6
6
The egregious nature of Defendants’ errata sheets is not lost on this
Court. The Sixth Circuit makes clear that a deponent is only permitted
to correct typographic and transcription errors. Trout v. FirstEnergy
Generation Corp., 339 F. App’x 560, 565–66 (6th Cir. 2009). Yet the
changes Plaintiff complains of blatantly attempts to rewrite witness
testimony made under oath. Plaintiff’s chart identifying the changes
included in her Memorandum to Strike Defendants’ Errata Sheets is hereby
incorporated by reference, (Doc. 101 at 3–11), and the Court makes note
of Defendants’ misconduct.
32
D. Attorney’s Fees and Costs
Plaintiff moves for reasonable attorney’s fees and costs.
Plaintiff filed this in two motions: first, in March 2019 after
the Court’s initial remand (Doc. 31) and second, in a supplemental
motion for appellate attorney’s fees and costs.
(Doc. 40).
first Motion requested relief totaling $49,594.47.
14).
The
(Doc. 31 at
The second Motion requested additional relief totaling
$58,800.
(Doc. 40 at 8).
When courts decide whether to award attorney’s fees, they
apply
a
two-part
test.
First,
courts
consider
whether
the
plaintiff has achieved some degree of success on the merits. Hardt
v. Reliance Standard Life Ins. Co., 130 S. Ct. 2149, 2158 (2010).
Next, in the Sixth Circuit, courts consider the following five
factors: (1) the degree of the opposing party’s culpability or bad
faith; (2) the opposing party’s ability to satisfy an award of
attorney’s fees; (3) the deterrent effect of an award on other
persons
under
requesting
similar
fees
sought
circumstances;
to
confer
a
(4)
whether
common
the
benefit
party
on
all
participants and beneficiaries of an ERISA plan; and (5) the
relative merits of the parties’ positions.
Secretary of Dep’t of
Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985).
The Sixth
Circuit has rejected a presumption that attorney’s fees should
normally
be
awarded
to
the
prevailing
33
plaintiff.
Foltice
v.
Guardsman Prod., Inc., 98 F.3d 933, 936 (6th Cir. 1996).
Each
factor is evaluated in turn.
i. Success on the Merits
ERISA grants the Court broad discretion to award reasonable
attorney’s fees and costs.
29 U.S.C. § 1132(g).
As a threshold
question, the Court must first address whether Plaintiff has
achieved “some degree of success on the merits.” Hardt, 130 S. Ct.
at
2158.
Given
that
the
Court
will
enter
judgment
in
the
Plaintiff’s favor, this clearly satisfies the threshold inquiry of
“some degree of success on the merits.” Id.
ii. Five-Factor Test
Courts in the Sixth Circuit apply a five-factor test to
determine whether to award fees under 29 U.S.C. § 1132(g)(1). King,
775 F. 2d at 669; see also Moon v. Unum Provident Corp., 461 F.3d
639, 642 (6th Cir. 2006)).
No factor is determinative, and the
Court must consider each in its analysis.
Schwartz v. Gregori,
160 F.3d 1116, 1119 (6th Cir. 1998).
a. Degree of Opposing Party’s Culpability
The Sixth Circuit has noted that when a plan administrator
engages in “inadequate review” or “otherwise acts improperly in
denying benefits,” the culpability factor is satisfied.
Cty. Health Care Corp., 581 F.3d at 377.
in inadequate review.
34
Shelby
Here, W&S twice engaged
In
addition
Defendants’
to
the
egregious
procedural
conduct
defects,
throughout
the
the
Court
course
of
notes
this
litigation. First, Defendants waited more than 270 days from remand
to issue Plaintiff a denial.
(Doc. 53 at 5).
Second, the
Defendants’ errata sheet “corrections” were quite egregious and
out-of-bounds.
(See Docs. 81; 82).
Third, the Defendants failed
to respond to Plaintiff’s request for documents until she reopened
this case.
(Doc. 77 at 472). The Court is cognizant of the fact
what W&S has resources to expend defending this claim. Defendants’
conduct throughout this litigation has not gone unnoticed by the
Court, making this factor weigh heavily in favor of Plaintiff.
b. Defendants’ Ability to Pay
This factor clearly weighs in Plaintiff’s favor.
Fortune 500 company.
W&S is a
As of 2019, the company had over $85.3
billion in assets and a net income of over $764.5 million.
Annual
Report,
Western
&
Southern
Financial
Group
2019
(2020),
https://www.westernsouthern.com/-/media/files/wsfg/2019-annualreport.pdf.
Granted, a party’s financial ability to pay a fee
award,
if
even
undisputed,
“should
not
be
dispositive
when
examination of all other relevant factors indicated that fees
should not be awarded.”
Firestone Tire & Rubber Co. v. Neusser,
810 F.2d 550, 557–58 (6th. Cir. 1987).
35
c. Deterrent Effect
The Sixth Circuit has routinely noted that the deterrence
factor involves consideration of the deterrent effect on other
plan administrators.
Foltice, 98 F.3d at 937.
This factor is
more important when the defendants have “the sort of culpability
that warrants punishment in [the claimant’s] case or deterrence in
others.”
Id.
For example, misinterpreting plan documents carries
less culpability than terminating benefits without any supporting
medical evidence.
Gaeth v. Hartford Life Ins. Co., 538 F.3d 524,
532 (6th Cir. 2008).
Here, W&S failed significantly in its fiduciary dealings,
carrying a high degree of culpability. As discussed earlier,
Defendants impermissibly delegated discretionary authority under
the Plan.
They also improperly interpreted the Plan to require
objective
proof
where
it
never
defined
the
term.
The
Administrators also failed to conduct a physical exam of Plaintiff
despite denying her benefits for chronic pain. Even more, W&S kept
Plaintiff waiting 270 days on remand for a decision.
All these
findings are evidence of egregious procedural failings at W&S.
The
payment
of
attorney’s
fees
should
encourage
other
plan
administrators to evaluate internal policies to ensure a more full
and fair review.
Accordingly, this factor also weighs in favor of
the Court awarding attorneys’ fees and costs—although not as
strongly as the first two.
36
d. Common Benefit Sought or Significant Legal Questions Answered
Plaintiff brought this lawsuit for personal benefits, not for
the common benefit of other W&S beneficiaries. Even when a claimant
“arguably obtained a common benefit for all plan participants in
the form of deterring the plan administrator from making similarly
unreasonable decision in the future . . . the deterrent-effect and
common-benefit factors are separate inquires . . . .” Gaeth, 538
F.3d at 533.
This factor weighs against Plaintiff.
Plaintiff did not seek
to obtain a common benefit for all W&S participants.
Plaintiff
has also failed to establish, or even argue, that any other
participant was in the same position as Laake.
Nor did this case
resolve any significant legal questions regarding ERISA.
e. Relative Merits of the Parties’ Positions
As discussed above, the merits of Plaintiff’s case are strong,
and this factor also weighs in favor of granting attorney’s fees.
The record contains both objective and subjective evidence of
Plaintiff’s disability. Additionally, both Plaintiff’s treating
physicians and W&S’s independent reviewers have made findings that
Plaintiff cannot perform sedentary work. Even if the Court were to
apply the less stringent arbitrary and capricious standard, there
are
still
procedural
defects.
Plaintiff
is
also
entitled
to
statutory penalties. Additionally, Plaintiff’s Motion to Strike
Defendants’ Errata Sheets was also strong, as Defendants rewrote
37
deposition testimony in violation of clearly established Sixth
Circuit case law.
Considering the above factors, the Court finds
in favor of an award of attorney’s fees to Plaintiff.
Although
not every factor weighs in favor of Plaintiff, taking the five
factors together, the scale tips in favor of Plaintiff.
iii. Reasonableness of the Hours, Rate, and Costs
Courts review attorney’s fees by asking “whether a reasonable
attorney would have believed the work to be reasonably expended in
pursuit
of
success
at
the
point
in
time
when
the
work
was
performed.” Wooldridge v. Marlene Indus. Corp., 898 F.2d 1169,
1177 (6th Cir. 1990).
“The most useful starting point . . . is
the
reasonably
number
of
hours
expended
multiplied by a reasonable hourly rate.”
461 U.S. 424, 433 (1983).
on
the
litigation
Hensley v. Eckerhart,
It is worth noting that Plaintiff has
only filed a motion for attorney’s fees as it relates to the first
district court appearance of this matter and the subsequent appeal
and remand.
Plaintiff’s attorney has not filed a motion for
attorney’s fees that includes hours worked beyond January 24, 2020.
Plaintiff’s counsel spent approximately 161.7 hours on Plaintiff’s
initial claim and an additional 196 hours on her Sixth Circuit
appeal and remand to W&S. District courts in the Southern District
have found this number of hours to be reasonable.
See Myers v.
Bricklayers & Masons Local 22 Pension Plan, No. 3:13-cv-75, 2014
U.S. Dist. LEXIS 171066, at *13–20 (S.D. Ohio Dec. 10, 2014)
38
(finding that 253.3 hours of work at only the district court level
in an ERISA case was reasonable).
“To arrive at a reasonable hourly rate, courts use as a
guideline the prevailing market rate, defined as the rate the
lawyers of comparable skill and experience can reasonably expect
to command within the venue of the court of record.”
Sundquist, 372 F.3d 784, 791 (6th Cir. 2004).
charges a rate of $300 per hour.
Geier v.
Plaintiff’s counsel
Courts within the Southern
District recognize that ERISA is a niche area of law that requires
a certain skill level to render proper legal services.
Javery v.
Lucent Techs. Inc. Long-Term Disability Plan for Mgmt. or LBA
Emps., No. 2:09-CV-8, 2014 WL 2779427, at *7–8 (S.D. Ohio June 19,
2014). Counsel, Claire W. Bushorn Danzl, has over ten years of
experience practicing ERISA law. (Doc 31-1, Denzl Decl. at 2, ¶3).
Courts have consistently held that this is a reasonable rate.
See
e.g., Palombaro v. Emery Fed. Credit Union, No. 1:15-cv-792, 2018
WL 5312687, at *6 (S.D. Ohio Oct. 25, 2018) (allowing a $350 rate
for an attorney with twelve years of ERISA experience). Counsel’s
rate is entirely reasonable.
Plaintiff also seeks $400 in litigation fees for filing
expenses. This too is reasonable. Courts in this circuit have
awarded similar amounts.
See, e.g., Schumacher v. AK Steel Corp.
Ret. Acc. Pension Plan, 995 F. Supp. 2d 835, 854 (S.D. Ohio 2014)
(awarding $455 filing fee); Disabled Patriots of Am., Inc., 424 F.
39
Supp. 2d 962, 969 (E.D. Mich. 2006) (awarding $500 in other client
costs). The Court is well within its discretion to award Plaintiff
$400 for filing expenses.
Defendants argue that Plaintiff’s time sheets are too vague
and thus the Court should reduce the amount of attorney’s fees
awarded.
The Sixth Circuit has noted that attorneys “have an
obligation to maintain billing time records that are sufficiently
detailed to enable courts to review the reasonableness of the hours
expended on the case.”
Imwalle v. Reliance Med. Prod., Inc., 515
F.3d 531, 552 (6th Cir. 2008).
Time entries cannot contain vague
descriptions such as “research” or “office conference.”
Black v.
Lojac Enter., Inc., No. 96-5654, 1997 WL 377051, at *3 (6th Cir.
1997).
Plaintiff counsel’s time sheets are not vague.
Any time she
meets with Plaintiff, she notes what the meeting was regarding.
(Docs. 31-1;40-1).
She clearly annotated what specifically she
was researching at a given point.
(Id.).
It is true that there
are some entries where she bills time where she “receive[s] and
review[s] email from opposing counsel” without any reference to
what the email is regarding.
only
form
of
vagueness
that
(Doc. 40-1 at 7).
the
Court
finds.
But this is the
Furthermore,
Plaintiff’s counsel only bills for 0.1 or 0.2 hours when she uses
this time entry.
Given that the parties communicated primarily
via email, and Plaintiff’s counsel did not spend an undue amount
40
of time on these emails, the Court is unpersuaded by Defendants’
argument
that
the
time
sheets
are
impermissibly
vague.
Accordingly, the attorney’s fees do not need to be reduced.
CONCLUSION
Therefore, having reviewed this matter, and the Court being
advised,
IT IS ORDERED that:
(1) Plaintiff’s Motion for Judgment on the Administrative
Record (Doc. 95), be, and is hereby GRANTED as it relates
to Plaintiff’s long-term disability determination.
(2) The Court GRANTS Plaintiff statutory penalties under 29
U.S.C. § 1132(c), pursuant to Rule 52(a).
(3) Defendants’ Motion for Judgment on the Administrative
Record (Doc. 94), be, and is hereby DENIED.
(4) Plaintiff’s Motion for Summary Judgment (Doc. 98), be,
and is hereby DENIED.
(5)
Plaintiff’s
Motion
for
Attorney
Fees
(Doc.
31)
and
Supplemental Motion for Attorney’s Fees (Doc. 40), be,
and is hereby GRANTED.
(6) Plaintiff’s Motion to Strike Errata Sheets (Doc. 101),
be, and is hereby DENIED AS MOOT.
(7) Plaintiff shall file any remaining motions ON OR BEFORE
DECEMBER 1, 2021.
41
This 5th day of November 2021.
42
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?