HOEKE v. COMPANION LIFE INSURANCE COMPANY

Filing 30

ORDER granting 23 Motion to Remand. As set forth in greater detail in the attached document, Plaintiff's claim is remanded to the plan administrator to reevaluate Plaintiff's claim according to the proper procedures with respect to the payroll and attendance records requested by Defendant. Signed by Judge Cathy Bissoon on 3/6/2012. (rtt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CONNIE B. HOEKE,

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Plaintiff,
v.
COMPANION LIFE INSURANCE
COMPANY,
Defendant.

Civil Action No. 11-1002
Judge Cathy Bissoon

MEMORANDUM AND ORDER
I.

MEMORANDUM

Pending before the Court is Plaintiff Connie B. Hoeke’s Motion to Remand (Doc. 23).
For the reasons stated herein, the Court will grant Plaintiff’s motion.
BACKGROUND
In this Employee Retirement Income Security Act (“ERISA”) case, Plaintiff Connie B.
Hoeke seeks recovery of long term disability benefits from Defendant Companion Life Insurance
Company. On September 22, 2008, Plaintiff submitted her claim for long term disability
benefits to Defendant. In order to determine Plaintiff’s eligibility for benefits, Defendant, on
February 17, 2009, requested from Plaintiff her payroll records from December 1, 2003, to the
present. CLI0122.1 On March 11, 2009, Defendant again requested payroll records and added a
request for attendance records for the same time period. CLI0093.2 On March 25, 2009,
Defendant denied Plaintiff’s claim due to a lack of information regarding Plaintiff’s payroll and
attendance records. CLI0085-90. In a letter, Defendant explained to Plaintiff:
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Citations with the prefix “CLI” refer to page numbers in the administrative record of
Plaintiff’s long term disability claim, which was filed under seal at Document 28 on the
docket.
According to the March 11, 2009 letter, Defendant requested attendance records from
Plaintiff during a telephone call on March 4, 2009. CLI0093.
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The lack of eligibility information hindered our ability to
determine your eligibility for Long Term Disability coverage,
outlined in the policy. Because of this, your LTD benefits must be
denied.
This determination is based on a lack of sufficient proof of loss
required to enable us to evaluate your eligibility. You may perfect
your claim by providing the necessary information, or, if you
disagree, you may appeal our decision without providing the
information.
If you wish to perfect your claim, please submit the required
information to my attention. We will review the information and
advise you of our decision regarding our claim determination.
The following information, not previously submitted, is necessary
for a determination of your claim. Specifically, you should send
payroll and attendance records from December 1, 2003 to the
present time. That information is necessary to determine your
eligibility under the Policy. If you would like this information
considered, we must receive it as soon as possible. Please send it
to the claim office at the address shown on this letterhead.
If you are unable to or do not wish to provide the requested
information, you may submit and appeal of our decision to the
Appeal Unit.
The Employee Retirement Income Security Act of 1974
(“ERISA”) gives you the right to appeal our decision and receive a
full and fair review. You may appeal our decision even if you do
not have new information to send to us. . . . If you do not agree
with our denial, in whole or in part, and you wish to appeal our
decision, your or your authorized representative must write to us
within one hundred eighty (180) days from the receipt of this letter.
CLI0088.
Plaintiff never sent the requested payroll and attendance records to Defendant, and did
not appeal the denial of her claim. Plaintiff initiated this action on June 20, 2011. See Compl.
(Doc. 1-1).
Plaintiff now seeks remand to the plan administrator so that she may supplement the
administrative record with the previously requested payroll and attendance records. According

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to Plaintiff, she previously was unable to collect the requested information due to the large
amount of information requested and the nature of her alleged disability, severe major depression
and Attention Deficit Hyperactivity Disorder (“ADHD”). Pl.’s Br. 3-4 (Doc. 23).
ANALYSIS
Plaintiff argues that remand to the plan administrator is appropriate because Defendant’s
denial of Plaintiff’s claim was not based upon sufficient evidence, and because Plaintiff’s failure
to provide the requested information was due to her debilitating disability, and not due to
negligent or intentional conduct. See Pl.’s Br. (Doc. 23); Pl.’s Reply (Doc. 29). The Court
agrees that remand is appropriate, although not for the same reasons advanced by Plaintiff.
Remand is appropriate because Defendant failed to provide Plaintiff sufficient time to provide
the requested information, failed to adequately explain to Plaintiff why payroll and attendance
records were necessary to decide her claim, and failed to set forth specific reasons for denying
Plaintiff’s claim.
A. Failure to Provide Sufficient Time to Provide Requested Information and Failure to
Explain Why Requested Information was Needed
Regulations applicable to Defendant’s determination of Plaintiff’s disability claim require
that a plan administrator notify a claimant of an adverse disability claim determination within 45
days of “the time a claim is filed in accordance with the reasonable procedures of a plan, without
regard to whether all the information necessary to make a benefit determination accompanies the
filing.” 29 C.F.R. § 2560.503-1(f)(4) (2008). If the plan administrator determines that an
extension of time to make a claim determination is necessary due to matters beyond the control
of the plan, the time period to make a claim determination may be extended twice for additional
30-day periods upon notice to the claimant. 29 C.F.R. § 2560.503-1(f)(3) (2008). The notice
must “specifically explain the standards on which entitlement to a benefit is based, the
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unresolved issues that prevent a decision on the claim, and the additional information needed to
resolve those issues, and the claimant shall be afforded at least 45 days within which to provide
the specified information.” Id.
Plaintiff submitted her long term disability claim to Defendant on September 22, 2008.
See CLI0087.3 The initial 45-day period to make a claim determination, therefore, expired on
November 6, 2008. Defendant appears to have notified Plaintiff of a 30-day extension in a
January 27, 2009 letter. CLI0200. Defendant did not request payroll or attendance records at
this time. See id. Defendant first requested payroll records from Plaintiff in a February 17, 2009
letter. CLI0122. In a February 24, 2009 letter, Defendant again requested payroll records.
CLI0102. In that February 24 letter, Defendant appears to have notified Plaintiff of another 30day extension of time to make a claim determination. See id. Defendant’s first written request
for attendance records occurred on March 11, 2009. CLI0093. Defendant denied Plaintiff’s
claim on March 25, 2009. CLI0085-90. Defendant, therefore, denied Plaintiff’s claim only 36
days after requesting payroll records and only 14 days after Defendant’s first written request for
attendance records. The evidence of record demonstrates that Defendant did not afford Plaintiff
“at least 45 days within which to provide the specified information” needed to decide her claim.
29 C.F.R. § 2560.503-1(f)(3) (2008).
Defendant also failed to “specifically explain the standards on which entitlement to a
benefit is based.” Id. Defendant sent three letters to Plaintiff requesting payroll and/or
attendance records. CLI0122, CLI0102, CLI0093. These letters explained that the requested
information was needed “to evaluate your claim,” CLI0122, CLI0093, or “to determine your

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Plaintiff’s initial claim form does not appear to be in the administrative record, but Defendant
acknowledged in its claim denial letter that Plaintiff filed her claim on September 22, 2009.
CLI0087.
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eligibility for Long Term Disability Benefits,” CLI0102, but none of the letter explained the
standard being used to evaluate Plaintiff’s claim or determine her eligibility. None of the letters
explained why the payroll and attendance records were necessary to decide Plaintiff’s claim.
Defendant grossly mischaracterizes the record with respect to Defendant’s requests for
Plaintiff’s payroll and attendance records. Defendant asserts:
Because [Plaintiff’s] employer did not provide the required
information, Companion requested payroll and attendance records
from Ms. Hoeke, the owner of Therapeutic Specialists. (CLI0067;
CLI0122; CLI0102; CLI0104.) Over the course of five months,
Ms. Hoeke repeatedly promised to provide this information to
Companion, stating on at least two occasions that she had the
information and would submit it within the week. (CLI0094;
CLI0091-92.) Despite Plaintiff’s promises, she did not submit any
payroll or attendance records.
As a result, Companion denied Plaintiff’s claim for LTD benefits.
(CLI0085-89.) In its denial letter, Companion noted that it had not
received payroll or attendance records, despite the fact that it had
requested the records on at least five (5) separate occasions.
(CLI0088.)
Def.’s Br. 2-3 (Doc. 27).
Defendant’s assertion that it requested payroll and attendance records from Plaintiff
“[b]ecause her employer did not provide the required information,” Def.’s Br. 2 (Doc. 27), is not
supported by the record. Nothing in the record indicates that Defendant requested payroll and
attendance records from Plaintiff’s employer prior to requesting those records from Plaintiff.4
Further, contrary to Defendant’s assertion, Defendant’s letter to Plaintiff denying her claim
suggests that Defendant’s request for payroll and attendance records were prompted by
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Defendant, from October 16, 2008, to December 1, 2008, made five requests to Plaintiff’s
employer for the following information: Plaintiff’s last date worked, percentage of
Plaintiff’s long term disability benefit that is taxable, Plaintiff’s date of hire, effective date of
Plaintiff’s long term disability coverage, and a copy of Plaintiff’s job description. CLI0232,
CLI0238, CLI0240, CLI0241, CLI0242. Plaintiff’s employer provided the requested
information to Defendant on December 15, 2008. CLI0231.
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Defendant’s review of Plaintiff’s medical records, not by anything Plaintiff’s employer did or did
not do. See CLI0087-88.
Defendant further insinuates that, after requesting payroll and attendance records from
Plaintiff, it waited five months before denying Plaintiff’s claim for failing to provide the
requested information. As explained above, Defendant denied Plaintiff’s claim only 36 days
after requesting payroll records and 14 days after requesting attendance records.5
B. Failure to Explain Basis of Claim Determination
Defendant also failed to comply with the applicable statute and regulation regarding
notifications of adverse claim determinations. ERISA § 503, 29 U.S.C. § 1133, provides:
In accordance with regulations of the Secretary, every employee
benefit plan shall—
(1) provide adequate notice in writing to any participant or
beneficiary whose claim for benefits under the plan has been
denied, setting forth the specific reasons for such denial, written in
a manner calculated to be understood by the participant, and

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In referring to “the course of five months,” Defendant apparently is including Plaintiff’s
communications with Defendant after Defendant denied Plaintiff’s claim. Defendant could
not have denied Plaintiff’s claim “[a]s a result” of Plaintiff’s failure to provide the requested
information “[o]ver the course of five months,” because Defendant denied Plaintiff’s claim
only 36 days after first requesting payroll records and only 14 days after first requesting
attendance records. Defendant also makes the misleading assertion that Defendant “had
requested the records on at least five (5) separate occasions.” Def.’s Br. 3 (Doc. 27). What
Defendant appears to characterize as “five (5) separate occasions” are: (1) a February 17,
2009 fax to Plaintiff’s employer requesting payroll records; (2) a separate February 17, 2009
letter to Plaintiff requesting payroll records; (3) a March 4, 2009 telephone call requesting
attendance records; (4) a March 11, 2009 letter following up on the March 4, 2009 request
for attendance records; and (5) the same March 11, 2009 letter, which also requested payroll
records. See CLI0088. Simultaneous communications to both Plaintiff and her employer
requesting the same information are not “separate occasions.” Similarly, requests for two
different types of information in a single letter do not constitute two “separate occasions.”
Regardless of the number of requests made by Defendant, the relevant facts are that
Defendant first requested payroll records on February 17, 2009, first requested attendance
records on March 11, 2009, and rejected Plaintiff’s claim on March 25, 2009.
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(2) 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.
29 U.S.C. § 1133. The regulations accompanying this statute require that a notification of
adverse benefit determination:
shall set forth, in a manner calculated to be understood by the
claimant—
(i) The specific reason or reasons for the adverse
determination;
(ii) Reference to the specific plan provisions on which the
determination is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect the claim and an explanation
of why such material or information is necessary;
(iv) A description of the plan’s review procedures and the time
limits applicable to such procedures, including a statement of the
claimant’s right to bring a civil action under section 502(a) of the
Act following an adverse benefit determination on review;
29 C.F.R. § 2560.503-1(g)(1) (2008).
Defendant’s March 25, 2009 claim denial letter to Plaintiff did not satisfy ERISA’s
requirement to “set[] forth the specific reasons for such denial, written in a manner calculated to
be understood by the participant.” 29 U.S.C. § 1133. The first two and a half pages of
Defendant’s letter provided a lengthy excerpt from Plaintiff’s long term disability policy,
followed by the statement that “[w]e based our decision to deny your claim on policy language.”
CLI0085-87. Nothing in the letter, however, made “[r]eference to the specific plan provisions on
which the determination is based.”6 29 C.F.R. § 2560.503-1(g)(1)(ii). The letter explained that
the requested payroll and attendance “information is necessary for us to complete our
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Defendant in its brief suggests that denial of Plaintiff’s claim was based on the plan provision
requiring “active” employment to be eligible for benefits. Def.’s Br. 2 (Doc. 27).
Significantly, this plan provision is not mentioned in the March 25, 2009 claim denial letter.
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investigation of your claim,” that “[t]he lack of eligibility information hindered our ability to
determine your eligibility for Long Term Disability coverage, outlined in the policy,” and that
“[t]his determination is based on a lack of sufficient proof of loss required to enable us to
evaluate your eligibility.” CLI0088. Those general statements are not “specific reasons” for the
claim denial. The letter further explained that the requested payroll and attendance records were
“necessary for a determination of your claim,” and “necessary to determine your eligibility under
the Policy.” CLI0088. Other than those general statements, the letter did not explain “why such
material or information is necessary.” 29 C.F.R. § 2560.503-1(g)(1)(iii). For those reasons,
Defendant failed to comply with ERISA’s requirement to “set[] forth specific reasons” for a
claim denial. See Miller v. Am. Airlines, Inc., 632 F.3d 837, 852 (3d Cir. 2011) (finding
statement in benefits termination letter that the defendant was “unable to verify” disability was
“a general blanket assessment that [the plaintiff] is ineligible for disability benefits,” and that
such a statement fails to provide “specific reasons” for a denial of benefits).
C. Remand to Plan Administrator
Remand is appropriate here because Defendant failed to give Plaintiff sufficient time to
provide the requested payroll and attendance records, Defendant failed to provide any
explanation for why such records were necessary to determine Plaintiff’s claim, and Defendant
failed to provide specific reasons for denying Plaintiff’s claim. See Syed v. Hercules Inc., 214
F.3d 155, 162 (3d Cir. 2000) (“[T]he remedy for a violation of [ERISA] § 503 is to remand to the
plan administrator so the claimant gets the benefit of a full and fair review.”).
Although Plaintiff did not specifically raise these issues in its motion for remand,
proceeding to the merits of this case also would result in remand. Plaintiff’s long term disability
insurance policy gives Defendant discretionary authority to determine eligibility for benefits.
CLI0039. Reviewing Defendant’s claim determination under ERISA, therefore, would require
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this Court to determine whether Defendant’s decision to deny Plaintiff’s claim was arbitrary and
capricious. Miller, 637 F.3d at 844. Defendant’s failure to afford Plaintiff at least 45 days to
provide requested information, failure to explain why the requested information was needed, and
failure to set forth specific reasons for denying Plaintiff’s claim all indicate that Defendant’s
decision was arbitrary and capricious.7 See id. at 851 (“[A]n administrator’s compliance with
§ 503 in making an adverse benefit determination is probative of whether the decision to deny
benefits was arbitrary and capricious.”). “In a situation where benefits are improperly denied at
the outset, it is appropriate to remand to the administrator for full consideration of whether the
claimant is disabled. To restore the status quo, the claimant would be entitled to have the plan
administrator reevaluate the case using reasonable discretion.” Miller, 632 F.3d at 856-57.
CONCLUSION
For all of the reasons stated above, Plaintiff Connie B. Hoeke’s Motion to Remand (Doc.
23) is granted.
II.

ORDER

For the reasons stated above, the Court hereby ORDERS that Plaintiff Connie B.
Hoeke’s Motion to Remand (Doc. 23) is GRANTED. Plaintiff’s claim is remanded to the plan
administrator to reevaluate Plaintiff’s claim according to the proper procedures with respect to
the payroll and attendance records requested by Defendant.
IT IS SO ORDERED.
s/ Cathy Bissoon
Cathy Bissoon
United States District Judge
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Even if Defendant’s failure to comply with statutory and regulatory requirements did not
render Defendant’s decision arbitrary and capricious, Defendant’s failure to set forth specific
reasons for denying Plaintiff’s claim renders it impossible for this Court to review
Defendant’s decision.
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March 6, 2012
cc (via e-mail):
All counsel of record.

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