Anderson v. Quad/Graphics Inc Group Disability Income Insurance Plan

Filing 35

ORDER signed by Judge J P Stadtmueller on 6/21/10: denying 27 plaintiff's motion to vacate scheduling order and declare this case is subject to de novo review; all dispositive motions due by 8/1/10; no further extensions will be granted. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN
____________________________________________ D E N N IS ANDERSON, P l a i n t if f , v. Q U A D /G R A P H IC S INC. GROUP DISABILITY INCOME INSURANCE PLAN, D e fe n d a n t. ____________________________________________ Case No. 09-CV-425

ORDER
P re s e n tly before the court is a motion to vacate the scheduling order in this c a s e and to declare the standard of review for this action. For the reasons provided in this order, the motion will be denied. The court begins by providing the factual a n d procedural background that precipitated the instant motion. B AC K G R O U N D T h e plaintiff, Dennis Anderson ("Anderson"), is a former employee of Q u a d /G ra p h ic s , Inc. ("Quad/Graphics"), having worked for the company from 1981 u n til 2001. The company provided to its eligible employees, including Anderson, lo n g -te rm disability insurance coverage and benefits through a plan known as the "Q u a d Graphics, Inc. Group Disability Income Insurance Plan" ("Plan). The

S u m m a r y Plan Description ("SPD") that Quad/Graphics provided to Anderson states, in relevant part, that the Plan is administered by the company "through an insurance

c o n tra c t purchased from CNA Group Life Assurance Company."1 Moreover, the S P D provides that "with respect to making benefit decisions, the Plan Administrator h a s delegated sole discretionary authority to Continental Casualty Company to d e te rm in e . . . eligibility for and entitlement to benefits under the Plan and to interpret th e terms and provisions of any insurance policy issued in connection with the Plan." In August of 2001, the plaintiff suffered a stroke. Soon after, Continental Casualty C o m p a n y approved his claim for disability benefits. In November of 2004, Anderson was informed that the Hartford Life and A c c id e n t Insurance Company ("Hartford") had acquired the "CNA Group Benefits," in c lu d in g the insurance contract that helped facilitate the Plan. On August 28, 2008, H a rtfo rd sent a letter to the plaintiff stating that the company was terminating his long te rm disability benefits. The plaintiff administratively appealed the denial of his b e n e fits , but was unsuccessful. As a result, on April 24, 2009, the plaintiff filed a c o m p la in t against the defendant pursuant to the Employment Retirement Income S e c u rity Act (ERISA), 29 U.S.C. § 1001, seeking to recover long-term disability b e n e fits he contends are due to him under the terms of the Plan. (Docket #1). Five months later, on September 24, 2009, the parties submitted a report p u rs u a n t to Fed. R. Civ. P. 26(f) that outlined the proposed discovery plan for the litig a t io n and imposed deadlines regarding: (1) the amendment of pleadings; (2) d is c o ve ry; and (3) the submission of dispositive motions. (Docket #24). On

CNA Group Life Assurance Company was a subsidiary of the Continental Casualty Company.

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S e p te m b e r 30, 2009, this court issued an order setting the followings dates, as p ro p o s e d by the parties, as deadlines in the case: (1) amendment of pleadings by O c to b e r 16, 2009; (2) discovery by December 18, 2009; and (3) dispositive motions b y February 26, 2010. (Docket #25). Moreover, the court's September 30, 2009 o rd e r stated that the "court will not grant more than one amendment of this s c h e d u lin g order . . . and then only if good cause is shown upon motion or stipulation o f the parties filed with the clerk of the court not less than 60 days prior to the e xp ira tio n of any cutoff date sought to be modified." (Docket #25). A month before d is p o s itive motions were due in this case and more than a month after the period for d is c o ve ry had passed, the plaintiff filed a motion for the court to: (1) declare "that th e standard of review in this matter is de novo"; and (2) issue an "order vacating the c u rre n t scheduling order and setting a new scheduling conference so the parties can c o n d u c t compete [sic] discovery for trial on the issues in this case." (Docket #27). W ith the benefit of the parties' briefs, the court is prepared to address both of the is s u e s raised by the plaintiff's motion. D IS C U S S I O N A. D e c la r in g the Standard of Review

T h e plaintiff first asks this court to "declare" that the standard of review in this c a s e is de novo review. Anderson does not indicate in his motion what procedural ve h ic le he is using to have the court "declare" what the standard of review is in this c a s e . The court construes the plaintiff's request as a motion for a partial summary ju d g m e n t, as the plaintiff is asking this court to decide a particular issue of law in -3-

a d va n c e of trial.

See Jacobson v. Countrywide Fin. Corp. Change in Control

S e v e ra n c e Plan, No. CV 09-4971, 2010 U.S. Dist. LEXIS 44260 at *1-2 (C.D. Cal. A p r . 6, 2010) (finding that a "motion for determination of standard of review" in an E R IS A case constituted a motion for partial summary judgment, requiring the parties to submit findings of facts under the court's scheduling order); see generally Minority P o lic e Officers Ass'n of South Bend v. City of South Bend, Ind., 721 F.2d 197, 200 (7 th Cir. 1983) ("The word judgment in the term partial summary judgment is a m is n o m e r . A partial summary judgment is merely an order deciding one or more is s u e s in advance of trial . . ."); Notes of Advisory Committee on Rules, 1946 A m e n d m e n t to Subdivision (d) of Rule 56 ("The partial summary judgment is merely a pretrial adjudication that certain issues shall be deemed established for the trial of th e case") (citing Biggins v. Oltmer Iron W o r k s , 154 F.2d 214, 217 (7th Cir. 1946) a n d Leonard v. Socony-Vacuum Oil Co., 130 F.2d 535, 537 (7th Cir. 1930)). M o re o ve r, a partial summary judgment is a proper method by which a court may d e c la re the standard of judicial review in ERISA litigation. See, e.g., Hancock v. M e tro . Life Ins. Co., 590 F.3d 1141, 1145 (10th Cir. 2009); Williamson v. UNUM Life In s . Co. of Am., 160 F.3d 1247, 1249 (9th Cir. 1998). Given that the plaintiff's m o tio n constitutes a partial summary judgment motion, the court is obliged to deny th e plaintiff's motion without prejudice, as the motion does not comply with the c o u rt's local rules: every motion for summary judgment must contain a statement of "a n y material facts to which all parties have stipulated" and a statement of "proposed

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m a te ria l facts as to which the moving party contends there is no genuine issue." C ivil. L.R. 56(b). Adherence to the local rule is particularly important for the issue in question. T h e plaintiff contends that the court should use a de novo standard of review to s c ru tin iz e the decision to deny Mr. Anderson's long-term disability benefits.2 To d e te rm in e whether the plaintiff is correct, the court will have to determine the a u th o rity that Hartford had to discontinue the plaintiff's benefits. The United States S u p r e m e Court has held that the denial of ERISA benefits is to be reviewed de novo u n le s s the policy gives the plan administrator or fiduciary the authority to determine e lig ib ility for benefits or to construe the terms of the policy and the participants have n o tic e that such power was given. Firestone Tire & Rubber Co. v. Brunch, 489 U.S. 1 0 1 , 115, 109 S. Ct. 948, 103 L. Ed. 2d 80 (1989). Where an administrator or fid u c ia ry is "given discretion to interpret the provisions of the plan, the administrator's d e c is io n s are reviewed using the arbitrary and capricious standard." Wetzler v. Ill. C P A Soc'y & Found. Ret. Income Plan, 586 F.3d 1053, 1057 (7th Cir. 2009). As s u c h , the court will need to be fully apprised of the facts related to the question of w h e th e r Hartford had the discretion to deny Mr. Anderson's benefits. T h e plaintiff's ultimate contention is that the "SPD provides discretion to pay o r deny benefits solely to Continental Casualty Company, not Hartford." (Pl.'s Br.

If the denial of benefits decision by the administrator is not reviewed under the de novo standard of review, the court will use the arbitrary and capricious standard where an administrator's interpretation is given great deference and will not be disturbed if it is based on a reasonable interpretation of the plan's language. Russo v. Health, Welfare & Pension Fund, 984 F.2d 762, 765 (7th Cir. 1993).

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6 ). Without deciding the issue, the court notes that under ERISA case law, a s u c c e s s o r corporation to the administrator of a plan or the fiduciary of the plan "steps in to the shoes" of its predecessor and acquires the obligations and powers conferred b y the plan.3 Teamsters Pension Trust Fund v. Littlejohn, 155 F.3d 206, 208 (3d Cir. 1 9 9 8 ); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 960 (9th Cir. 2 0 0 6 ) ("The life insurance policy under the plan was originally issued by Home Life F in a n c ia l Assurance Company . . . Alta is the successor in interest to Home Life's rig h ts and responsibilities"); Giannone v. Metro. Life Ins. Co., 311 F. Supp. 2d 168 (D . Mass. 2004) ("W h e n MetLife, pursuant to a court-ordered liquidation, acquired a ll of the assets and liabilities of GenAm, it stepped into GenAm's shoes, and in so d o in g acquired all of the powers conferred by the Plan on GenAm, including the d isc re tio n a ry authority to make benefits decisions"); see generally Schnur v. Ctc C o m m u n s . Corp. Group Disability Plan, No. 05-CV-2397, 2010 U.S. Dist. LEXIS 3 1 2 8 2 , at *28 n.3 (S.D.N.Y. Mar. 29, 2010) ("Courts have frequently found that s u c c e s s o rs -in -in te re st succeed to any deference granted to the original administrator b y the terms of the Plan.") Moreover, the overwhelming number of district courts tha t have examined the very question at issue in this case have found that Hartford b e ca m e the "successor in interest" to Continental, acquiring the discretionary powers

The cases of Samaritan Health Ctr. v. Simplicity Health Care Plan, 516 F. Supp. 2d 939 (E.D. Wis. 2007), and Bemi v. MEGTEC Sys., 676 F. Supp. 2d 767 (E.D. Wis. 2009), cited repeatedly by the plaintiff, do not reach the issue of when one party is the successor in interest to an administrator of a plan. Rather, those cases involve determining the appropriate standard of review when a third party, who has no authority whatsoever, renders a final determination regarding the claimant's eligibility for benefits in lieu of the actual administrator.

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c o n fe rre d to Continental under a given plan. See generally Williams v. Hartford Life & Accident Ins. Co., No. C2-08-128, 2009 W L 3127761, at *8 (S.D. Ohio Sept. 25, 2 0 0 9 ) ("[S]everal courts have recognized Hartford's role as successor in interest to th e Continental policies and specifically noted the transfer of assets and liabilities to H a rtfo rd , including the discretionary authority to interpret the terms of Continental's p o lic ie s "); see also Hunley v. Hartford Life & Accident Ins. Co., No. 8:08-cv-2008-T1 7 A E P , 2010 U.S. Dist. LEXIS 40701, at *24 (M.D. Fla. Apr. 26, 2010) ("Because H a r tfo r d purchased all of the rights and obligations of the Plan in the Stock A g re e m e n t, it acquired discretionary authority to administer the plan"); Simonia v. H a rtfo rd Ins. Co., 606 F. Supp. 2d 1091, 1096 (C.D. Cal. 2009) (finding that because H a r tfo r d acquired Continental's policies "in toto" Hartford had the authority to d e te rm in e eligibility for benefits); Stewart v. Continental Casualty Co., No. C V - 0 8 -9 1 9 -R G K (SSx), 2006 U.S. Dist. LEXIS 98342, at *14-15 (C.D. Cal. Dec. 13, 2 0 0 6 ) ("Hartford stepped into the shoes of CNA and assumed the rights and o b lig a tio n s attached to its business . . . when Hartford purchased the insurance c o n tra c t from CNA, discretionary authority transferred from CNA to Hartford.")4 H o w e v e r , all of the courts that ruled on the issue did so at the summary judgment s ta g e of the proceedings where the courts were fully informed regarding Hartford's tra n s a c tio n with Continental. Williams, 2009 W L 3127761, at *8 ("Weidauer . . . is d is tin g u is h a b le . . . the administrative record [in that case] contained no evidence
Many more cases exist making the same conclusion. The court will not cite to them all, as the defendant's brief to the court more than adequately apprised the court of the current case law. (Def's Resp. Br. 20-23).
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th a t either Broadside or Aetna was given a clear grant of discretion because the p a rtie s did not provide proof that all of Kemper's assets and obligations were tra n s ferre d to . . . subsequent corporations.") In fact, the only case this court could find in which a court reviewing the exact is s u e at hand allowed de novo review was in Sullivan v. Cont'l Cas. Co., No. 05-CV4 9 1 , 2006 U.S. Dist. LEXIS 49932 (M.D. Fla. July 21, 2006).5 In that case, Judge C o r rig a n concluded that the "record and pleadings before the Court" in that case w e re "inadequate for defendant to prove that The Hartford indeed assumed the re s p o n s i b ilitie s of Continental Casualty pursuant to any sale of assets," as the d e fe n d a n t in that case relied solely on: (1) an updated notice sent to the plaintiff in fo rm in g him that Hartford was responsible for communicating with plaintiff and p a y in g his claim; and (2) an unidentified handwritten note at the top of plaintiff's c la im . Id. at *36. In Sullivan, the court found that while "Hartford could very well be a successor in interest to Continental Casualty," the defendant failed to make such a showing, emphasizing the need for the parties in this case to properly present the fa c ts propelling the present motion before the court. Given the procedural infirmities w ith the present motion, the parties are afforded an opportunity, if the issue remains

The court notes that the plaintiff did not cite to any cases to counter the defendant's argument. Instead, the plaintiff contended that: (1) the defendant did not have any evidence to support its claim regarding Hartford's acquisition of Continental Casualty Company's policies; and (2) the fact that Continental Casualty Company still exists in some form indicates that Hartford could not be the successor in interest to Continental's powers under the Plan. (Pl's Rep. Br. 4-5). These arguments can all be resolved more easily if the court is provided with evidence that Hartford was or was not given a "clear grant" of discretion to make benefits determinations because of its transaction with Continental.

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in dispute after this order and if the parties wish to file summary judgment motions, t o fully apprise the court of the facts regarding whether Hartford had the d isc re tio n a ry authority to terminate Mr. Anderson's benefits. B. Vacating the Scheduling Order

In addition to the plaintiff's request to have this court declare that this case is s u b je c t to de novo review, the plaintiff is also asking this court to issue an "order va c a tin g the current scheduling order and setting a new scheduling conference so th e parties can conduct compete [sic] discovery for trial on the issues in this case." (D o c k e t #27). However, the plaintiff's motion to expand the dates in which discovery c a n occur was filed on January 26, 2010, more than a month after the deadline for d is c o ve ry set by this court's September 30, 2009 scheduling order passed.6 Fed. R . Civ. P. 6(b)(1)(B) states that the court may retroactively grant a motion to extend th e time for when an act may or must be done by "if the party has failed to act b e c a u s e of excusable neglect." See also Brosted v. Unum Life Ins. Co. of Am., 421 F .3 d 459, 464 (7th Cir. 2005) (holding that a party requesting an extension of time to complete discovery after the deadline is required to show excusable neglect). A c o u rt determines whether a party has failed to act because of "excusable neglect" b y considering the relevant circumstances surrounding the party's omission. Robb v . Norfolk & W. Ry. Co., 122 F.3d 354, 362 (7th Cir. 1997). The Supreme Court, in

Moreover, the court's scheduling order stated that if a party wished to amend the scheduling order that party was required to file a motion sixty days prior to the expiration of any cutoff date. Hence, Mr. Anderson's motion is woefully late by more than three months.

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P io n e e r Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 3 8 0 , 395, 113 S. Ct. 1489, 123 L. Ed. 2d 74 (1993), provided a list of factors for a c o u rt to consider in evaluating whether "excusable neglect" exists, including "the d a n g e r of prejudice to the [defendant], the length of the delay and its potential impact o n judicial proceedings, the reasons for the delay, including whether it was within the re a s o n a b le control of the movant, and whether the movant acted in good faith." Id. H e re , the court concludes that the plaintiff has not demonstrated that "e xc u s a b le neglect" exists, such that the court can retroactively extend the period of tim e for discovery. The plaintiff argues that more time for discovery is needed: (1) to further the record if the court finds that de novo review is appropriate; and (2) to d e te rm in e whether a conflict of interest exists with regard to Hartford's role in making th e benefits eligibility determination if the court does not find that de novo review a p p lie s . The subject areas that the plaintiff wants to explore in discovery may be va lid areas of legal inquiry, but the plaintiff should have conducted such discovery d u rin g the period allotted by the court.7 Mr. Anderson does not even attempt in his tw o briefs to the court to explain why his belated request was the result of excusable n e g le c t. The closest the plaintiff comes to proffering an argument that excusable n e g le c t exists is his allegation that the "defendant misrepresented that [Hartford] had a c q u ire d Continental Casualty Company," which supposedly lured the plaintiff into b e lie vin g that de novo review was inapplicable. The plaintiff's allegation, of course,

Moreover, if the period for discovery was inadequate, the plaintiff should have moved for an amendment to the scheduling order during the discovery period.

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d o e s not provide reason why the plaintiff's attorney did not explore the question of w h e th e r a conflict of interest exists during the discovery period in this case, as that is s u e is unrelated to the issue of whether Hartford had any authority to make e lig ib ility determinations. Moreover, the plaintiff's attorney's argument is merely an a tt e m p t to cast blame on the defendant's attorney, instead of accepting his own fa ilu re . The record indicates that the defendant's counsel contended to the plaintiff's a tto rn e y at the time of the Rule 26(f) conference that the standard of review in this c a s e would be the "arbitrary and capricious" standard. W h ile the court does not rule o n what the appropriate standard of review is in this order, the defendant's attorney's s ta te m e n ts to his opposing counsel do not appear to be attempts to mislead, as the d e fe n d a n t's attorney's claim regarding the standard of review was well-grounded in th e case law as this court noted earlier in this order. The plaintiff's attorney, instead o f looking at the administrative record, which he had possession of well before the c o m p la in t was filed in this case, and researching the appropriate case law, opted to b lin d ly accept the defendant's assertions on what the standard of review was. The p la in tiff's attorney's own failure to properly investigate the nature of the claim in the c o m p la in t does not constitute a legitimate reason for the delay in filing the motion. T h e lack of a valid excuse for asking for the retroactive extension of time for d is c o ve ry, coupled with the fact that reopening discovery for an indefinite period of tim e would tremendously delay the finality of this litigation, compels this court to deny th e plaintiff's motion in its entirety. Spears v. City of Indianapolis, 74 F.3d 153, 157

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(7 th Cir. 1996) ("A good judge sets deadlines, and the judge has a right to assume tha t deadlines will be honored.") Finally, the court notes that the plaintiff's motion to "vacate the scheduling o rd e r and declare this case subject to de novo review" (Docket #27) was filed before t h e dispositive motion deadline in this case. In the midst of the briefing on the in s ta n t motion, the date that the parties had to file dispositive motions passed. As s u c h , the court sets a new deadline of August 1, 2010, by which the parties can file d is p o s itive motions. No further extensions will be granted. A c c o r d in g ly , IT IS ORDERED that plaintiff's motion to "vacate scheduling order and declare th is case is subject to de novo review" (Docket #27) be and the same is hereby D E N IE D ; IT IS FURTHER ORDERED that all dispositive motions shall be filed on or b e fo re August 1, 2010. No further extensions will be granted. D a te d at Milwaukee, W is c o n s in , this 21st day of June, 2010. BY THE COURT:

J .P . Stadtmueller U .S . District Judge

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