Carlson v. Reliance Standard Life Insurance Company
REPORT AND RECOMMENDATION: Based on the foregoing, the Magistrate Judge respectfully recommends that: (1) Plaintiff's motion for judgment on the record (DE 44 ) is GRANTED IN PART and DENIED IN PART. Defendant's motion for judgme nt on the record (DE 42 ) be DENIED. Any party has fourteen (14) days from service of the Report and Recommendation in which to file any written objections to it with the District Court. Signed by Magistrate Judge Lanny King on 10/20/17. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(afs)
IN THE UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
CASE NO. 3:15-CV-0200
CHRISTINE A. CARLSON
RELIANCE STANDARD LIFE INSURANCE COMPANY
REPORT AND RECOMMENDATION
Currently pending are cross motions for judgment on the record filed, respectively, by
Defendant Reliance Standard Life Insurance Company (“Defendant” or “Reliance”) and Plaintiff
Christine A. Carlson (“Plaintiff” or “Claimant”). (Docket Entry, hereinafter “DE” Nos. 42 and
44). Plaintiff has filed a response in opposition to Defendant’s motion (DE 49), to which
Defendant has filed a subsequent reply. (DE 50). Defendant has also filed a response in
opposition to Plaintiff’s motion. (DE 47). Both motions have been referred to Magistrate Judge
Lanny King for report and recommendation. (June 22, 2017, Docket Annotation).
For the reasons that follow, the undersigned Magistrate Judge respectfully recommends
that Defendant’s motion (DE 42) be DENIED and that Plaintiff’s motion (DE 44) be GRANTED
IN PART, to the extent that the claim is remanded to the Plan Administrator to perform a review
of the entire Administrative Record including the Supplemental Information.
This matter involves Plaintiff’s claim, as the widow of Barak J. Carlson (the “Decedent”),
who was a participant within the meaning of 29 U.S.C. §1002(7), of a group life insurance plan
(the “Plan”) that was issued by the Defendant.
On December 28, 2010, Decedent applied for a life insurance policy listing the Plaintiff
as the sole beneficiary. (Administrative Record, hereinafter “AR” 79).
The Decedent had a
double-indemnity policy to which Plaintiff was the sole beneficiary through the Plan. The life
insurance was effective on December 28, 2010, in the principal amount of $250,000.00 (the
“Life Provision”) and an accidental death policy (the “Accidental Death Provision”) (together the
“Policy”) provided an additional $250,000.000 in the event of an accidental death. (AR 79-80).
The Life Provision contains a limitation precluding the payment of benefits if the insured dies by
suicide within two years of the effective date of insurance coverage. (AR 484). The Accidental
Death Provision also excluded coverage when a loss is “caused by suicide, or intentionally selfinflicted injuries.” (AR 103).
On October 20, 2012, the Decedent, armed with a shotgun, was turkey hunting with his
brother-in-law, Timothy Cox (“Mr. Cox”). (AR 29). The two men were hunting separately but
in close proximity to each other; the Decedent in a small tent-blind alone and Mr. Cox hunting
nearby. (AR 112). Shortly after 5:00 p.m. Mr. Cox heard a gunshot and attempted to text the
Decedent to determine if he had shot a turkey. (AR 112). A short time later, Mr. Cox having
received no response from Decedent, went to the blind and discovered the body of the Decedent
with a gunshot wound on the left side of his neck. (AR 112).
On the initial investigative report of the Police Department (the “Incident Report”) and
the subsequent report of the Office of the Medical Examiner (“OME”) (the “Initial OME
Report”), the Decedent’s cause of death was listed as suicide. (AR 114-15).
On August 8, 2013, in a letter to Plaintiff, Defendant denied Plaintiff’s claims under the
Policies based on the findings that the OME listed suicide as the cause of Decedent’s death on
the death certificate (the “Claim Denial Letter”). (AR 105).
On October 1, 2013, Plaintiff timely filed an appeal of the denial of benefits (the
“Appeal”). (AR 109). In her Appeal Plaintiff supplied Defendant with a copy of the police
report and investigative report pertaining to the Incident and a copy of the medical examiner’s
report including a toxicology report. Id. Plaintiff also notified Defendant that she was in the
process of undertaking an investigation of the Incident and believed that the Incident was not the
result of suicide, but an accident. Id.
On October 8, 2013, Defendant notified Plaintiff via letter that it was in receipt of her
Appeal (the “Initial Review Notice”) and that Defendant would be conducting a review (the
“Appeal Review”) of the claim file. (AR 46). The Initial Review Notice also informed Plaintiff
that Defendant would notify Plaintiff if Defendant required additional information to make its
appeal determination. Id. The Initial Review Notice also stated that Defendant would “toll the
relevant time frames for reaching an appeal determination from the time of [its] request for
additional information until such time as [it] receive[d] the requested information [from
Plaintiff]” (the “Tolling Notice”). Id.
On October 23, 2013, Defendant sent a letter notifying Plaintiff that Defendant was
granting Plaintiff until November 22, 2013 to supply Defendant with “any additional
information” that Plaintiff wished to be considered in the Appeal Review of the file. (AR 48).
In the October 23, 2013 letter, Defendant granted itself a tolling of the initial 60-day review
period by stating: “the statutory [sic] time frames for reaching an appeal determination will be
tolled until such time as we receive the requested information from you.” Id. The letter,
however, did not request any specific information from Plaintiff. Id.
On November 21, 2013, Plaintiff sent a letter to Defendant requesting additional time to
supply Defendant with the following information: witness statements and a crime scene expert’s
report. (AR 141). On November 22, 2013, Defendant sent another letter stating it was in receipt
of Plaintiff’s November 21, 2013 letter and was granting Plaintiff through December 13, 2013 to
supply any information Plaintiff wished to be considered by Defendant in its Appeal Review.
(AR 49). Defendant again repeated the same tolling language used in its October 23, 2013 letter
and stated that the 21 day additional time for submission was required because “statutory and
internal guidelines set strict deadlines for completion of an appeal review.” (AR 49). Again,
Defendant’s November 22, 2013 letter did not request any specific information from Plaintiff.
On December 13, 2013 counsel for Plaintiff wrote to Defendant and attached a copy of
Detective Johnny Lawrence’s investigation report. (AR 541-42). The December 13, 2013 letter
also notified Defendant that Dr. Zimmerman, the medical examiner from Davidson County who
performed the initial medical evaluation of the Decedent, was reopening the case and reviewing
his findings based on the information contained in Jonny Lawrence’s investigation report. Id. In
addition to the notification that Dr. Zimmerman was in the process of performing a file review
after having reopened the case, Plaintiff listed “additional facts” that Plaintiff wished to be
considered by Defendant in its Appeal Review, indicated that Plaintiff was still investigating the
claim, and that Plaintiff expected her investigation to be complete by mid-January 2014. Id.
On January 14, 2014 Defendant wrote to counsel for Plaintiff providing Plaintiff an
“update regarding your client’s claim” and formally notifying Plaintiff that “this letter serves as
notice of our intention to take beyond 60 days to make a final decision on the appeal.” (AR
0050). Defendant’s letter stated that “[w]e are required to make a decision within 60 days of the
date of the appeal but are allowed an additional 60 days if circumstances do not permit us to
make a decision within the initial 60 day time frame” (the “Extension Notice”). Id. Defendant’s
Extension Notice did not request any additional information from Plaintiff nor did it indicate a
time when it anticipated a decision would be rendered, instead stating “we will be contacting you
in the near future with an update or to inform you if additional information will be required.”
Id. The Extension Notice letter also did not repeat the Tolling Notice language that was found in
its prior notices nor did it otherwise inform Plaintiff that it was properly able to toll the
Extension Period while waiting for Plaintiff to submit any additional documentation.
On January 16, 2014 Defendant notified Plaintiff that it would be submitting the claim
for review by an independent examiner. (AR 0155). On January 25, 2014, Defendant wrote to
counsel for Plaintiff reminding Plaintiff of the “strict deadlines for completion of an appeal
review,” and requested that Plaintiff provide: incident photographs, autopsy photographs, and
any information regarding the testing of the gun. (AR 0159). The January 25, 2014 letter also
notified Plaintiff that it was tolling “the statutory time frames for reaching an appeal
determination” until receipt of the requested information. Id.
On January 27, 2014, Plaintiff provided some of the information requested in the January
25, 2014 letter and provided the autopsy photographs on February 24, 2014. (AR 651-74).
On March 11, 2014, the OME of Davidson County completed his review and amended
his report (the “Amended OME Report”) to change the manner of death from “suicide” to a
finding that “the manner of death in this case could not be determined.” (DE 29, ex. 1).
On March 21, 2014, Defendant notified Plaintiff that its review was complete and the
denial of benefits was being upheld (the “Appeal Denial”). (AR 0775). It is uncontested that
Defendant did not consider the Amended OME Report prior to issuing its Appeal Denial. Id.
On March 31, 2014, the OME certified its Amended OME Report. (DE 29, ex. 1). Also
on March 31, 2014, counsel for Plaintiff was notified of the certification of the Amended OME
Report and obtained a certified copy. (Id. at 3).
Plaintiff timely filed suit against Defendant in the Circuit Court for Davidson County,
Tennessee, which was later removed to this Court on or about February 3, 2015, claiming
(among other claims) that Defendant breached its contract by failing to pay benefits under the
Policy. (DE #1).
On November 3, 2015, Plaintiff filed a Motion to Supplement the Administrative Record
(DE #29) requesting that Plaintiff be allowed to supplement the administrative record to include
the Amended OME Report and to allow Plaintiff additional time to provide relevant witness
statements “necessary to complete a proper investigation and review of this matter.” (DE #29 at
3). Plaintiff’s Motion to Supplement was granted, and Plaintiff supplemented the
Administrative Record with the Amended OME Report and a Final Investigation Report of
Agente, LLC (the “Final Investigation Report”), which included witness statements (DE Nos.
38-1 and 38-2) (together the “Supplemental Information”).
On November 1, 2016, a Magistrate Judge issued a Memorandum of Opinion allowing
Plaintiff to Supplement the Administrative Record with the Supplemental Information, which
was upheld by the District Court. (DE 39).
The core issue in this action is whether Defendant conducted a full and fair review of
Plaintiff’s claim regarding the death of Decedent without considering the Supplemental
Information submitted by Plaintiff. (DE 39 at 2). Pursuant to the Court’s prior order, if the
Defendant violated ERISA procedures when making its Appeal Determination without
considering the Supplemental Information, then the claim should be remanded to the
administrator to consider the supplemental evidence. (Id.)
A. Standard of Review
A participant or beneficiary of an ERISA plan may bring suit in federal district court to
recover benefits allegedly due under the terms of the plan. Univ. Hosps. of Cleveland v. Emerson
Elec. Co., 202 F.3d 839, 845 (6th Cir. 2000) (referencing 29 U.S.C. § 1132(a)(1)(B)). A plan
fiduciary's denial of a claim for ERISA benefits is reviewed de novo "unless the benefit plan
gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or
to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989); see also Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996). If
the plan gives discretion to the administrator or fiduciary, then the benefit denial is reviewed
under an "arbitrary and capricious" standard. Id. Here, Plaintiff conceded the administrator has
discretion in this case and agreed with the Defendant that the arbitrary and capricious standard of
review applies to the instant matter. (DE 45 at 5).
The issue in this case, however, is not whether the language in Defendant’s plan gives it
discretionary authority, but whether Defendant loses any discretion that it may have had because
of its alleged procedural failure to exercise its discretion in accordance with the ERISA statute
and regulations. See Id. (arguing that Defendant procedurally failed to conduct a full and fair
evaluation of the claim); (DE #39 at 2-3) (ordering the undersigned Magistrate Judge to make a
determination as to whether Defendant procedurally failed to provide Plaintiff with a full and fair
review as required under ERISA). As such, this Court must apply the standard of review used by
the courts when determining if the procedure employed by the fiduciary in denying the claim
meets ERISA’s procedural regulations.
ERISA was enacted by Congress to establish procedural safeguards to ensure that
fiduciaries such as Defendant administer benefit plans “solely in the interest of the participants
and beneficiaries.” 29 U.S.C. §§ 1104(a)(1) and 1001(b). Under ERISA, the Secretary of Labor
is given authority by Congress to enact regulations and set deadlines for the administration of
employee benefit claims. 29 U.S.C. §§ 1133 and 1135. Those rules and regulations are codified
in 29 C.F.R. § 2560.503–1, titled “Claims procedure” (the “Procedural Regulations”) stating that
every 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.” 29 U.S.C. §§ 1133 and 1135.
A benefits determination on appeal must be made within a certain time. 29 C.F.R. §
2560.503–1(i)(4). Failure to follow these procedures is governed by 29 C.F.R. §§ 2560.503–1(l),
(1) Failure to establish and follow reasonable claims procedures.
In the case of the failure of a plan to establish or follow claims procedures consistent
with the requirements of this section, a claimant shall be deemed to have exhausted
the administrative remedies available under the plan and shall be entitled to pursue
any available remedies under section 502(a) of the Act on the basis that the plan has
failed to provide a reasonable claims procedure that would yield a decision on the
merits of the claim.
The Department of Labor's notice of final regulation for the most current version of §
2560.503-1(l) was intended “to clarify that the procedural minimums of the regulation are
essential to procedural fairness and that a decision made in the absence of the mandated
procedural protections should not be entitled to any judicial deference.” See ERISA Claims
Procedure, 65 Fed. Reg. 70246 (Nov. 21, 2000).
The Sixth Circuit has determined that a court reviews de novo “the question of whether
the procedure employed by the fiduciary in denying the claim meets the [Procedural Regulations
found in] Section .” Marks v. Newcourt Credit Grp., Inc., 342 F.3d 444, 459 (6th Cir. 2003)
(quoting Kent v. United of Omaha Life Ins. Co., 96 F.3d 803, 806 (6th Cir.1996) (emphasis
added)). In a de novo review, the plan administrators need only substantially comply with
ERISA notice requirements in order to be compliant in the Sixth Circuit. Kent, 96 F.3d at 807–
08. To decide whether there is substantial compliance reviewing courts must consider all
communications between an administrator and plan participant to determine whether the
information provided sufficiently complied with procedural requirements under the
circumstances. Marks, 342 F.3d at 460.
As the Court ordered the undersigned Magistrate Judge to make a determination as to
whether Defendant procedurally provided Plaintiff with a full and fair review as required under
ERISA (DE #39 at 2-3), this Court shall review the claims review procedure utilized by
Defendant de novo.
B. Conclusions of Law
1. Plaintiff Did Not Receive a Full and Fair Review Under 29 C.F.R. § 2560.503–1(h)(2).
In accordance with the regulations, every 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. 29 U.S.C.A. §
1133. A “full and fair review” of an appeal of an adverse benefits determination is mandated by
29 C.F.R. § 2560.503–1(h)(2) after an employee receives an adverse benefit determination.
Courts have explained that a “full and fair review must be construed not only to allow a
plan's trustees to operate claims procedures without the formality or limitations of adversarial
proceedings but also to protect a plan participant from arbitrary or unprincipled decisionmaking.” Weaver v. Phoenix Home Life Mut. Ins. Co., 990 F.2d 154, 157 (4th Cir. 1993). As
such, when alleging that a full and fair review of a claim was not provided, a plaintiff must allege
how such a violation has prejudiced the presentation of her case. Bartling v. Fruehauf, 29 F.3d
1062, 1068 (6th Cir.1994) (explaining that courts may consider whether a plaintiff has been
prejudiced in determining whether penalties for such violations are warranted). Ultimately, a
plaintiff must be in a “worse position” because of a defendant’s procedural violations than it
would have been if defendant had complied with the regulations. Id. at 1067.
a. The Defendant failed to follow procedural requirements as set forth in 29 C.F.R.
§ 2560.503-1(i) and arbitrarily applied deadline and tolling rules.
Plaintiff argues that Defendant did not conduct a full and fair evaluation of her claim as
required by 29 C.F.R. § 2560.503-1(h)(2)(iv) because Defendant “failed to await the [Amended
OME Report]” before closing its case “rapidly,” and issuing a final determination on its own
“arbitrary timeline.” (DE 45 at 5; see also DE 49 at 1). Defendant, on the other hand, argues
that Plaintiff received a “full and fair review” and cites its alleged compliance with ERISA
notice and timing regulations as evidence of its fairness to Plaintiff as well as its consideration of
the additional documentation Plaintiff supplied during its Appeal Review. (DE #47 at 3-4). The
Court agrees with Plaintiff.
To decide whether there is substantial compliance with procedural regulations, a
reviewing court must consider all communications between an administrator and plan participant
to determine whether the information provided sufficiently complied with procedural
requirements under the circumstances. Marks v. Newcourt Credit Grp., Inc., 342 F.3d 444, 460
(6th Cir. 2003). Here, Defendant did not come close to substantially complying with ERISA's
notice, timing, and tolling requirements when considering Plaintiff’s Appeal. In its
correspondence to Plaintiff during the Appeal, and in its representations to the court, Defendant
has been thoroughly inconsistent and incorrect in its calculation methods for tolling and for the
first and second 60-day periods for notice and review set forth in 29 C.F.R. § 2560.503-1(i).
Defendant's calculations of the notice and timing requirements are rife with errors that
run contrary to the plain language of the regulations, as are its arbitrary applications of the tolling
allowance found in § 2560.503- 1(i)(4). Rather than attempt to address every single
inconsistency and error in Defendant's various calculations, the court will simply set forth the
proper method for calculation and, where particularly relevant, mention select calculation errors.
The ERISA claims regulations govern the claims procedures generally including the
timing of appeals and the timing of notification of benefit determination on review (the
“Regulation”). 29 C.F.R. § 2560.503-1. In the instant matter, sections 2560.503-1(i)(1) and (4)
of the Regulation specifically govern both the timing of notifications made by plan
administrators and the information which must be included in those notices. The Sixth Circuit
has stated that one of the purposes of the timing regulations was to protect claimants from
administrators who failed to comply with claimants’ requests for information, see Bartling v.
Fruehauf Corp., 29 F.3d 1062, 1068 (6th Cir. 1994), not to provide plan administrators with a
shield from claimants who wished to supplement their files.
Pursuant to the Regulation, a claimant has 60 days to file an appeal after notification of
an adverse benefit determination. 29 C.F.R. § 2560.503-1(h)(2)(ii). Once an appeal is timely
filed, a plan administrator has no longer than 60 days to make a determination (the “Initial
Review”). Once the Initial Review is complete, the plan administrator must notify the claimant
of the plan’s benefit determination or indicate its intent to extend its review up to an additional
60 days (the “Extension Period”). 29 C.F.R. § 2560.503-(i)(1)(i). The Extension Period can be
tolled under very specific circumstances by 29 C.F.R. § 2560.503-1(h)(4) (the “Tolling
Regulation”), which states:
In the event that a period of time is extended as permitted pursuant to paragraph…due to
a claimant's failure to submit information necessary to decide a claim, the period for
making the benefit determination on review shall be tolled from the date on which the
notification of the extension is sent to the claimant until the date on which the claimant
responds to the request for additional information.
Where, during its Initial Review, the plan administrator determines that an extension of
time is required to process the determination; a written notice of an extension (the “Extension
Notice”) must be furnished to the claimant prior to the termination of the 60-day Initial Review
period. Section 2560.503-(i)(1)(i) (emphasis added). The Extension Notice must state the
special circumstances requiring the extension of time, if any additional information is being
sought from the Plaintiff, and the date by which the plan expects to render the determination on
The Extension Notice is only valid if: 1) The Extension Notice is in writing and sent
within the 60-day Initial Review period; 2) the decision to invoke the Extension Period was
based on plaintiff failing to submit information necessary to decide his claim; 3) Defendant
detailed a specific request for additional information in the Extension Notice; and 4) Defendant
indicated the date by which it expected to render its determination on review upon receipt of the
requested information from a plaintiff. Gay v. Nat'l Rural Elec. Coop. Ass'n Grp. Benefits
Program, No. 2:14-CV-253, 2014 WL 5475284, at *4 (S.D. Ohio Oct. 29, 2014). Courts have
found that where a plan administrator’s extension notice letter does not comply with Subsection
503-1(i)(1)(i)'s requirement that a plan indicate “the date by which [it] expects to render the
determination on review,” it does not qualify as a valid “extension notice” under the regulation.
See e.g. McFarlane v. First Unum Life Ins. Co., No. 16-CV-7806 (RA), 2017 WL 3495394, at *3
(S.D.N.Y. Aug. 15, 2017).
As such, in the case that a Defendant had issued proper notice of the 60-day extension
within the initial 60 day review period, the 60–day Extension Period would be tolled from the
date on which the Extension Notice is sent to the claimant through the date on which the
claimant responds to the request for additional information. See Gay v. Nat'l Rural Elec. Coop.
Ass'n Grp. Benefits Program, No. 2:14-CV-253, 2014 WL 5475284, at *4 (S.D. Ohio Oct. 29,
2014) (emphasis in original) (discussing 29 C .F.R. § 2560.503–1(i)(4)). The Tolling Provision
only applies to the Extension Period and is wholly inapplicable to the 60-day Initial Review. 29
C.F.R. § 2560.503-1(h)(4) (stating “the period for making the benefit determination on review
shall be tolled from the date on which the notification of the extension is sent to the claimant”);
see e.g. Stevens v. Sun Life & Health Ins. Co. (U.S.), No. 3:16-CV-76-WKW, 2017 WL 900005,
at *11 (M.D. Ala. Mar. 7, 2017).
The Regulations are so stringent regarding a plan administrator’s failure to follow the
appeal timing requirements, that based on Defendant’s failure to comply with the initial 60-day
notice requirement alone, pursuant to 2560.503-(l)(1), “a claimant shall be deemed to have
exhausted the administrative remedies available under the plan and shall be entitled to pursue
any available remedies under section 502(a) of the Act on the basis that the plan has failed to
provide a reasonable claims procedure that would yield a decision on the merits of the claim.”
Defendant failed to substantially comply with the Procedural
Defendant argues that it complied with the Procedural Regulations when making its
Appeal Determination and attempts to place the blame on Plaintiff for failing to keep Defendant
updated during its Initial Review. (DE 47 at 3) (stating that “[i]f any blame needs to be ascribed,
it rests squarely on Plaintiff for not communicating with [Defendant]”). It is clear from the
language of the regulations at issue, however, that the responsibility to control the timing of the
Appeal Review process rests squarely with Defendant. Based on several letters sent to Plaintiff
during the Initial Review Period, it is clear that Defendant was arbitrarily and incorrectly
applying the tolling provision found in 29 C.F.R. § 2560.503-1(i)(4), as well as arbitrarily setting
dates for which Plaintiff had to comply with requests for information from Defendant. (AR 46,
48, and 49). Defendant also issued notices for Plaintiff to provide select pieces of information
(gun testing, photographs from the scene and from the coroner) while ignoring other information
Plaintiff indicated she wanted considered during the review process. See Id. Defendant also
issued other non-compliant notices to Plaintiff at random times during the Appeal process.
The only application of the Appeal timing and notice requirements that Defendant
complied with was in its letter dated October 8, 2013, notifying Plaintiff that it had received
Plaintiff’s appeal and informed the Plaintiff that the “clock” started on Plaintiff’s Appeal on
October 1, 2013. (AR 46). Following the October 8, 2013, Initial Review Notice, and despite
the Tolling Provision’s inapplicability to the Initial Review Period, in its October 8, 2013,
October 23, 2013, and November 22, 2013 letters to Plaintiff, (AR 46, 48, and 49), Defendant
notified Plaintiff that it could toll the Initial Review Period while it awaited to receive the
documents it requested from Plaintiff by including language in those letters that indicated it
would be tolling “the statutory [sic] time frames for reaching an appeal determination…until
such time as we receive the requested information from [Plaintiff].” Id.
Defendant’s first improper and arbitrary mis-application of the regulations was in its
October 23, 2013, letter to Plaintiff. (AR 48). The October 23, 2013 letter stated that Defendant
was granting Plaintiff until November 22, 2013 to supply Defendant with “any additional
information that Plaintiff wished to be considered” in Defendant’s Appeal Review of the file and
indicating it would be tolling “the statutory [sic] time frames for reaching an appeal
determination…until such time as we receive the requested information from you.” Id. (AR 48).
The October 23, 2013 letter improperly and arbitrarily tolled the initial 60-day review period
following its request for additional information and did not state why Plaintiff had only until
November 22, 2013 to supply any additional information, nor did it state what information
Defendant wished to review.
On November 21, 2013, Plaintiff, relying on Defendant’s erroneous tolling of the
limitations period, responded to Defendant’s October 23, 2013 letter, requesting additional time
to supply Defendant with witness statements and a crime scene expert’s report. (AR 141).
Defendant’s second improper and arbitrary mis-application of the regulations was in its
November 22, 2013 letter to Plaintiff where Defendant stated it was in receipt of Plaintiff’s
November 21, 2013 letter and was granting Plaintiff an extension through December 13, 2013, to
supply any information Plaintiff wished to be considered by Defendant in its Appeal Review.
(AR 49). Defendant again repeated the same tolling language used in its October 23, 2013 letter,
but added that the 21 day additional time for submission was required because “statutory and
internal guidelines set strict deadlines for completion of an appeal review.” (AR 49). As before,
the November 22, 2013 letter did not state why Plaintiff had only until December 13, 2013 to
supply any additional information, nor did it state what information Defendant wished to review.
On December 13, 2013, the deadline for submission of information set by Defendant,
counsel for Plaintiff wrote to the Defendant requesting that Defendant consider additional
information when performing its review, and attached a copy of Detective Johnny Lawrence’s
initial investigation report as requested (the “Initial Lawrence Report”). (AR 0541-0542). In its
first Paragraph and indicative of its importance, the December 13, 2013 letter notifies Defendant
that the medical examiner from Davidson County, who performed the initial medical evaluation
of the Decedent, was reopening the case (the “OME Reopening”) and reviewing his findings
based on the information contained in Jonny Lawrence’s investigation report. Id. The letter then
stated that “in addition” to the OME Reopening, Plaintiff wanted “additional facts” to be
considered by Defendant in its Appeal Review, indicating that Plaintiff was still investigating the
claim, and that Plaintiff expected its investigation to be complete by mid-January 2014. Id.
It is clear from the December 13, 2013 letter that Plaintiff considered the OME
Reopening to be of utmost importance in the consideration of the claim and wished for that
information to be considered by the Defendant. It is also clear from Plaintiff’s reaction to the
November 21, 2013 letter, that Plaintiff relied on Defendant’s representations both that it could
toll the statute while waiting for information from Plaintiff and that there was a regulatory basis
for Defendant’s deadline for submission of information. There is no evidence in the record,
however, that Defendant ever mentioned the OME Reopening in any of its additional
correspondence with Plaintiff or otherwise requested any additional information regarding the
OME Reopening or requested a copy of any Amended OME Report that may have been issued.
Defendant’s third improper and arbitrary mis-application of the regulations was in its
January 14, 2014 letter to Plaintiff. (AR 50). After allegedly not having heard further from
Plaintiff since the December 13, 2013 letter (DE 45 at 4), Defendant formally notified Plaintiff
that it was extending the Appeal (the “Extension Notice”). (AR 50). Defendant’s Extension
Notice, however, was extremely untimely. Defendant did not give formal, written notice of its
decision to utilize the additional 60-day period allowed by 29 C.F.R. § 2560.503–1(i)(1)(i) until
106 days after Plaintiff filed her Appeal and 46 days after the 60-day requirement.
Defendant’s Extension Notice not only was late, but referenced unidentified regulations
allowing it to take “an additional 60 days if circumstances do not permit us to make a decision
within the initial 60 day time frame” without mention of the Tolling Regulation and not
mentioning how the initial 60 day time frame was applicable 46 days after it had expired. As
previously discussed, the Tolling Regulation exists precisely to give the Defendant additional
time to obtain information from Plaintiff and then continue its review once the information is
received. The Extension Notice also failed to state why the extension was being made, what
information Defendant was waiting for from Plaintiff, or when Defendant anticipated issuing a
decision on the claim as required by Section 2560.503-(i)(1)(i). Instead the Extension Notice
simply stated “we will be contacting you in the near future with an update or to inform you if
additional information will be required,” leaving Plaintiff with no idea what Defendant may or
may not have been considering, if it intended to request any additional information from
Plaintiff, or how long its Appeal Review would take after any missing information was
Defendant failed to substantially comply with Procedural Regulations, only actually
properly applying them in its initial correspondence with Plaintiff following her filing the
Appeal. (AR 109). Defendant utilized the Tolling Regulations twice to improperly extend the
Initial Review Period beyond 60 days, ignored the 60-day requirement to make an initial
determination or extend the review period, and misled Plaintiff in multiple letters to believe that
it was capable of giving the Plaintiff time to collect additional information during its initial
review. Defendant then went on to send a very delinquent and improper Extension Notice,
which wholly failed to comply with the Procedural Regulations by not stating why the extension
was being made, what information Defendant was waiting for from Plaintiff, or when Defendant
Defendant now claims that it issued the Extension Notice because Plaintiff indicated in her December 13, 2013
letter that she anticipated her investigation would be completed mid-January 2014. (DE #47 at 3-4). What
Defendant does not explain, nor did it state in its Extension Notice, is why, after having “waited” for Plaintiff to
submit information and “having heard nothing” from Plaintiff, it needed any additional time. Id. If Defendant
decided to extend the Review Period so that Plaintiff could submit the information she stated she wanted considered
in her December 13, 2017 letter (including information relating to the OME Reopening), why did Defendant not list
that information and use the Tolling Regulation to stop the 60-day Extension Period until Plaintiff was able to obtain
anticipated issuing a decision on the claim. Defendant arbitrarily closed the file without waiting
for or requesting any information about the OME Reopening even though it was on notice that
the OME was taking a second look at the case.2
No deference is due Defendant's failure to comply with the regulation and the relevant
terms of the plan documents because Defendant has no discretion to negate, ignore, or otherwise
violate the plain requirements of the governing regulations. See similarly, Stevens v. Sun Life &
Health Ins. Co. (U.S.), No. 3:16-CV-76-WKW, 2017 WL 900005, at *13 (M.D. Ala. Mar. 7,
2017) (discussing the application of a de novo standard of review to a plan administrator’s
failure to properly apply notice and tolling requirements). However, even under a deferential
arbitrary and capricious standard of review, Defendant's interpretation and application of the
tolling provision in this matter is the very definition of “arbitrary and capricious.” See also, Id.
(stating that a plan administrator’s failure to properly inform a claimant of the statutory
requirements for determination of a claim and tolling of a claim determination along with failing
to properly apply the procedural regulations was the “very definition of arbitrary and capricious”
Plaintiff was harmed by Defendant’s arbitrary and improper use of the
While Defendant did not substantially comply with the regulations, Plaintiff must also
establish Defendant’s procedural violations prejudiced her ability to present her case on review
in order for penalties to be assessed on a non-compliant defendant. Bartling v. Fruehauf, 29
F.3d 1062, 1068 (6th Cir.1994) (explaining that Courts may consider whether a plaintiff has been
Had the Amended OME Report made an affirmative finding that the Decedent had not committed suicide, the
Defendant would have no ground to argue, as it does here, that it did not need to consider those findings. (DE 47).
As this Court is not tasked with determining IF the denial of Plaintiff’s claim was improper, and instead is only to
determine if Defendant procedurally failed to provide Plaintiff with a full and fair review because it did not consider
the Supplemental Information when rendering its decision, the Court need not decide if the information contained in
the Amended OME Report would have changed the outcome of Defendant’s review.
prejudiced in determining whether penalties for such violations are warranted). Here, Plaintiff
has been prejudiced by Defendant’s refusal to toll the Extension Period until Plaintiff could
obtain the Supplemental Information now part of the administrative record.
Defendant argues that the burden fell on the Plaintiff to request additional time for
Defendant to review the Amended OME Report even though Plaintiff had previously notified the
Defendant that the OME Reopening had occurred and even though Defendant had arbitrarily
concluded its Appeal Review without attempting to ascertain if the Amended OME Report was
available. (DE 45 at 4). While this Court would agree that, if the Amended OME Report had
been available prior to Defendant is completing its Appeal Review, Plaintiff should have
supplied it, that is not the case here.
Defendant, being aware of an ongoing investigation into the cause of the Decedent’s
death by the same entity which made an initial finding of “suicide” as the cause of death, and of
Plaintiff’s request to consider the OME Investigation (AR 141), arbitrarily failed to request any
information from Plaintiff regarding that investigation or any resulting reports. While this Court
is not willing to go so far as to agree with Plaintiff that Defendant knew the Amended OME
Report was forthcoming and hastily closed its file (DE 45 at 5), it is clear that Defendant, after
being notified of an ongoing OME Investigation, failed to request information from the Plaintiff
regarding the OME Investigation. The fact that Defendant was well within its rights to toll the
Extension Period via the Tolling Regulation to allow Plaintiff time to obtain additional
information regarding the OME Investigation or to otherwise request an Amended OME Report
when and if one was forthcoming, after Plaintiff had requested the Defendant to consider this
information, is at the very least a significant procedural error.
Instead, Defendant went out of its way to (improperly) toll the Initial Review period to
obtain select information from Plaintiff and to thereafter perform an independent review without
any additional information from the OME Reopening. The fact that Defendant failed to ever
formally request any information regarding the OME Investigation or subsequent Amended
OME Report and instead cherry-picked information it wished to review seems erroneous at best
and purposeful at worst. Again, as the Plaintiff did not have the ability to toll the Extension
Period on its own, Plaintiff was at the mercy of the Defendant to both formally request any
information relating to the OME Investigation, as Plaintiff had requested in its December 13,
2013 letter, and toll the Extension Period until Plaintiff could obtain that information. Defendant
Defendant failed: 1) to substantially comply with the Procedural Regulations; 2)
arbitrarily and capriciously issued notices to Plaintiff setting incorrect and improper deadlines to
supply information; 3) applied the Tolling Provision incorrectly and seemingly randomly; 4)
ignored Plaintiff’s request to consider any evidence arising from the OME Investigation; 5)
resulting in Plaintiff’s claim being reviewed without potentially relevant information that
Defendant knew about and failed to obtain. Therefore, even under a more deferential arbitrary
and capricious standard nevertheless a de novo review, Defendant acted arbitrarily and
capriciously and failed to fully and fairly review Plaintiff’s claim which resulted in the
Supplemental Information being excluded from review.
b. The Defendant arbitrarily decided which information to review.
Pursuant to 29 C.F.R. § 2560.503-1(h)(2)(ii), Plaintiff has the right, during the course of
her administrative appeal, to submit written comments, documents, records, and other
information. (emphasis added). A claimant is afforded such an opportunity if the claims
administrator: (1) does not control the administrative record, meaning the claimant could have
submitted evidence in support of the claim, and (2) clearly informs the participant of his or her
right to submit additional evidence. See Fendler v. CAN Group Life Assur. Co., 247 Fed.Appx.
754, 758 (6th Cir. 2007). If a claimant had the opportunity to submit additional evidence, but
chose not to do so, it is improper for the court to allow supplementation of the administrative
record. Id. Moreover, a claimant's failure to fully explore and exercise her procedural rights
does not undermine the fundamental fairness of an otherwise full and fair administrative review
process. Balmert v. Reliance Standard Life Ins. Co., 601 F.3d 497, 502 (6th Cir. 2010).
Most cases addressing § 2560.503-1(h)(2)(ii) focus on a plaintiff’s request (or lack
thereof) for information from the plan administrator and not cases where the a plaintiff has not
been given time to submit additional information that is not readily available after notifying the
administrator of its existence. While the Sixth Circuit has not addressed the issue of whether a
plan administrator has a duty to wait for, request, or otherwise obtain information that a plaintiff
has made the administrator aware of, or if the plan administrator has a duty to delay its decision
until such information has been obtained, other courts have done so. The Court in Roberts
found that: although claimants bear the burden to submit “the pertinent documents and
information necessary to facilitate a…determination, regulations promulgated by the Secretary of
Labor authorize, if not require, plan administrators working with an apparently deficient
administrative record to inform claimants of the deficiency and to provide them with an
opportunity to resolve the problem by furnishing the missing information.” Roberts v. Anthem
Life Ins. Co., No. CV1600571BROGJSX, 2017 WL 2469354, at *5 (C.D. Cal. June 7, 2017)
(referencing Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 636 (9th Cir. 2009)) (citing
29 C.F.R. § 2560.503–1(f)(3)–(4), (g)(1)(iii)).
In a case analogous to the instant matter, the court in Cheng v. Unum Life Ins. Co. of Am.,
291 F. Supp. 2d 717, 721 (N.D. Ill. 2003), found that an appeal denial that was made before
receiving any further submissions from claimant despite his indication in previous
correspondence to the administrator that he would be submitting additional information upon its
receipt from a third party source was arbitrary and capricious. The Cheng Court explained that
the administrator’s decision on appeal was “premature” given both the length of time the
claimant had on appeal and the fact that he expressed intent to submit additional documentation
regarding the appeal. The Court ultimately found that the claimant in Cheng did not receive a
full and fair review. Id.
If there was any evidence that Defendant requested the Amended OME Report or the
Updated Investigation Report from Plaintiff, and that Plaintiff failed to respond or otherwise
supply the missing information, then a finding that Defendant committed a procedural error by
failing to consider the Amended Report and Updated Investigation Report would not be possible.
See Roberts v. Anthem Life Ins. Co., No. CV1600571BROGJSX, 2017 WL 2469354, at *6 (C.D.
Cal. June 7, 2017). If Defendant had not so vehemently relied on the “strict deadlines for
completion of an appeal review” language it set forth in its final letter requesting information
from Plaintiff before rendering its decision (AR 0159), and if Defendant had ever informed
Plaintiff of a timeframe it anticipated completing its review in the Extension Notice or in its
follow up letters requesting additional information, Plaintiff would have been able to
communicate the expected timeframe for submission of the Supplemental Information or at least
keep Defendant informed of the OME’s ongoing review until completion. Additionally, had
Defendant wished to consider the Supplemental Information, it should have notified Plaintiff in
the Extension Notice that it wished to review any documentation Plaintiff had regarding that
information and toll the Extension Period accordingly.
Instead, Defendant never issued a formal request for either the Amended Report or the
Updated Investigation Report, and argues that it was Plaintiff’s duty to supply Defendant with
information that Defendant never formally requested, in a timeframe that Plaintiff had no means
to calculate. The fact that the OME’s findings directly relate to the reason Plaintiff’s claim was
denied is absolutely relevant to making an informed determination regarding denying the claim.
Simply put, the Defendant does not get to decide which information to review once a request is
made by Plaintiff. Once the Defendant properly tolls the Extension Period, there is no penalty
for it waiting until Plaintiff supplies it with the information Plaintiff wants reviewed.
As previously discussed, in her letter dated December 13, 2013 (AR 49), Plaintiff notified
Defendant that the medical examiner had reopened its case to re-examine its initial cause of
death determination and indicated it wanted that fact (as well as others) considered when
Defendant performed its Appeal Review. Defendant went on to request various pieces of
information, and notified Plaintiff it was tolling the Extension Period, but never again addressed
in writing the OME’s reopening of the case. In its response to Plaintiff’s Motion, Defendant
claims that it was unable to toll the Extension Period because “the period for making the benefit
determination on review shall be tolled from the date on which the notification of the extension
is sent to the claimant,” indicating that because the Defendant did not mention in the Extension
Notice that it wanted additional information regarding the OME Investigation, that it could not
later toll the Extension Period. (DE 47 at 5). However, this is precisely the duty that other
courts have imparted on plan administrators – that they have a duty to inform claimants of any
deficiency and to provide a plaintiff with an opportunity to resolve the problem by furnishing the
missing information. See e.g. Cheng, 291 F. Supp. 2d 717; Roberts v. Anthem Life Ins. Co., No.
CV1600571BROGJSX, 2017 WL 2469354, at *5 (C.D. Cal. June 7, 2017).
According to Defendant, because Defendant never requested a new report from the
Medical Examiner and never said it was extending the deadline until that information was
received, that it was entitled to ignore Plaintiff’s specific request to consider the OME
Reopening. Id. By this logic, a Defendant could chose to ignore any request for consideration
made by Plaintiff, even in light of the clear notification by Plaintiff, prior to the Extension
Notice, of potentially relevant information which goes to the heart of the denial of her claim.
In this case, under a de novo or an arbitrary and capricious standard, the plan
administrator erred when it closed the file without ever making a formal request for any
information related to the OME Investigation or the Amended OME Report.
c. The Defendant may have a duty to investigate.
Plaintiff alleges that Defendant failed to undertake a “full and fair review” of Plaintiff’s
claim for benefits by failing to adequately investigate Plaintiff’s claims and by failing to hold off
on making a decision on Plaintiff’s appeal until the Medical Examiner’s supplemental report was
available, which Plaintiff had requested Defendant consider and which Defendant knew was not
yet available at the time it closed the file and rendered its Appeal Denial. DE 49 at 1. Plaintiff
also contends that Defendant failed to investigate the evidence surrounding Decedent’s death,
and therefore its final determination was arbitrary and capricious.
Plaintiff points to a case from the Middle District of Georgia which states that Plan
administrators owe a duty to investigate "matters essential to the denial of the insured's claim."
Acree v. Hagford Life & Accident Ins. Co., 917 F.Supp.2d 1296, 1302 (M.D. Ga. 2013) (citations
omitted). The Sixth Circuit has previously noted that the key question, when determining if a
plan administrator acted arbitrarily and capriciously in denying a claim, “is what constitutes the
universe of information that [a plan administrator] should have considered.” Killian v.
Healthsource Provident Administrators, Inc., 152 F.3d 514, 521 (6th Cir. 1998). However, the
Sixth Circuit has not yet adopted a strict duty to investigate for Plan administrators: "[W]hile it is
clear that plan administrators owe fiduciary duties to beneficiaries, whether that duty
encompasses a duty to reasonably investigate remains unclear. It is even less clear what the
parameters of such a duty would entail should one exist." McAlister v. Liberty Life Assur. Co. of
Boston, 647 F. App'x 539, 549 (6th Cir. 2016) (citations omitted).
As the case is being recommended to be remanded back to the plan administrator for
failure to provide a full and fair review, including review of the Supplemental Materials, the
Court need not address the issue of whether the plan administrator has a duty to investigate.
d. The presumption against suicide may apply.
Defendant argues that the presumption against suicide does not apply in this case, or that
if it applies, Defendant has presented enough evidence to rebut it. (DE 43 at 8). Plaintiff cites
again to Acree, which notes that the Eleventh Circuit has adopted the federal common law
presumption against suicide, and argues that Defendant failed to apply it when considering the
record without the Supplemental Information. Acree, 917 F.Supp.2d at 1311. While the
presumption against suicide may or may not affect the outcome of the case, the Sixth Circuit has
not spoken as to whether the legal presumption against suicide applies in ERISA cases.
As the case is being recommended to be remanded back to the plan administrator for
failure to provide a full and fair review, including review of the Supplemental Materials, the
Court need not address the issue of whether the presumption against suicide applies in the instant
matter, or if Defendant successfully rebutted any potential presumption.
e. The Defendant failed to give a reasoned explanation for denial.
Plaintiff finally contends that Defendant's final appeal decision was arbitrary and
capricious because Defendant fails to offer a reasoned explanation. DE 45 at 7. Defendant offers
the medical examiner's report and death certificate which both list the cause of death as suicide.
AR 72, 114. Further, Defendant's independent examiner concluded that "the overall
investigation of the scene, including the decedent's position, the position of the gun, and the
range and direction of fire of the gunshot wound are all consistent with a suicide. The shotgun
wound in this case was the result of an intentional act and not an accident." AR 434.
As the case is being recommended to be remanded back to the plan administrator for
failure to provide a full and fair review, including review of the Supplemental Materials which
were not previously reviewed, the Court finds that Defendant could not have provided a reasoned
explanation for its denial that did not address the Supplemental Information.
2. The Case Should Be Remanded Back to the Plan Administrator.
Having found that Defendant failed to provide a full and fair review of Plaintiff's claim,
the Court “may either award benefits to the claimant or remand to the plan administrator.” Elliott
v. Metro. Life Ins. Co., 473 F.3d 613, 621 (6th Cir.2006). Remand is appropriate in a variety of
circumstances, particularly where the plan administrator's decision suffers from a procedural
defect or the administrative record is factually incomplete. For example, where the plan
administrator fails to comply with ERISA's appeal-notice requirements in adjudicating a
participant's claim, the proper remedy is to remand the case to the plan administrator “so that a
‘full and fair review’ can be accomplished.” Shelby Cty. Health Care Corp. v. Majestic Star
Casino, 581 F.3d 355, 373 (6th Cir. 2009) (citing Gagliano v. Reliance Standard Life Ins. Co.,
547 F.3d 230, 240 (4th Cir.2008)).
Where there is an issue “with the integrity of the plan's decision-making process, rather
than that a claimant was denied benefits to which he was clearly entitled,” remand to the plan
administrator is the appropriate remedy. Helfman v. GE Grp. Life Assur. Co., 573 F.3d 383, 396
(6th Cir. 2009) (internal quotations omitted). Courts adopting this position have reasoned that a
procedural violation does not warrant the substantive remedy of awarding benefits. See Shelby,
581 F.3d at 240. Remand also is appropriate where the plan administrator merely “fail[ed] ... to
explain adequately the grounds of [its] decision.” Id. (citing Caldwell v. Life Ins. Co. of N. Am.,
287 F.3d 1276, 1288 (10th Cir. 2002)). In addition to procedural irregularities, an incomplete
factual record provides a basis to remand the case to the plan administrator. E.g., Miller v. United
Welfare Fund, 72 F.3d 1066, 1073–74 (2d Cir.1995) (remanding after determining that “[t]he
present record is incomplete”).
Here, Defendant clearly violated the Procedural Regulations, rendering it difficult to
impossible for Plaintiff to determine when or if certain information would be reviewed and the
amount of time in which it had to submit such information. The procedural errors made by
Defendant resulted in Defendant both failing to consider potentially relevant information of
which it was aware existed and was outside of the control of the Plaintiff to deliver by a date
certain and a premature closure of its file and denial of Plaintiff’s Appeal. Those same
procedural errors also resulted in Plaintiff having to rely on a confusing and unclear and
ultimately improper and arbitrary timeline, controlled entirely by Defendant, where the only
information reviewed by Defendant was the information Defendant decided to request regardless
of whether Plaintiff wished any additional information to be considered. Due to the severe
procedural errors in the management of the Appeal Review committed by Defendant, the Court
finds that Plaintiff was denied a Full and Fair Review as mandated by 29 U.S.C. §§ 1133 and
1135 and 29 C.F.R. § 2560.503–1, and recommends that the claim be remanded to the Plan
Administrator to perform a review of the entire Administrative Record including the
Based on the foregoing, the Magistrate Judge respectfully recommends that:
Plaintiff’s motion for judgment on the record (DE 44) is GRANTED IN PART
and DENIED IN PART. Plaintiff’s Motion is GRANTED to the extent that the case shall be
remanded to the Plan Administrator to perform a review of the entire Administrative Record
including the Supplemental Information. Plaintiff’s Motion is DENIED to the extent that
Plaintiff moved for an award of the full amount of the life insurance policy, including doubleindemnity in the event of an accidental death, with interest and all litigation expenses, including
an award of attorney’s fees.
Defendant’s motion for judgment on the record (DE 42) be DENIED.
Any party has fourteen (14) days from service of the Report and Recommendation in
which to file any written objections to it with the District Court. Any party opposing said
objections shall have fourteen (14) days from service of any objections filed in which to file any
responses to said objections. Failure to file specific objections within fourteen (14) days of
receipt of this Report and Recommendation can constitute a waiver of further appeal of this
Recommendation. Thomas v. Arn, 47 U.S. 140 (1985); Cowherd v. Million, 380 F.3d 909, 912
(6th Cir. 2004) (en banc).
October 19, 2017
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?