Colvill v. Life Insurance Company of North America et al

Filing 32

ORDER signed by Judge Lynn Adelman on 8/27/18. IT IS ORDERED that Plaintiff's Motion for Summary Judgment on the Standard of Review 19 is DENIED. IT IS FURTHER ORDERED that Defendant's Cross-Motion for Partial Summary Judgment 23 is GRANTED. (cc: all counsel) (jad)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DONALD A. COLVILL,
Plaintiff,
v.

Case No. 17-C-1290

LIFE INSURANCE COMPANY
OF NORTH AMERICA,
Defendant.

DECISION AND ORDER
This is an ERISA case. Plaintiff seeks long-term disability (“LTD”) benefits under
an ERISA-governed employee welfare benefit plan, funded by a policy of LTD insurance
(the “Policy”) issued by defendant Life Insurance Company of North America (“LINA”).
LINA contends that the Plaintiff is not disabled as defined in the Policy and is not
entitled to benefits. Now before me are cross-motions for summary judgment on the
issue of the standard of review that I am to apply in reviewing LINA’s benefits
determination.
When I review a denial of benefits under an ERISA-governed plan, I am to apply
a de novo standard of review unless the plan documents clearly vest the claim
administrator with discretionary authority to determine whether benefits are due.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Raybourne v. Cigna
Life Ins. Co. of New York, 576 F.3d 444, 448 (7th Cir. 2009). If the plan documents
grant the administrator such authority, the standard is more deferential; I consider only
whether the administrator’s determination was “arbitrary and capricious”. Geiger v.
Aetna Life Ins. Co., 845 F.3d 357, 362 (7th Cir. 2017).

The parties to the present case agree that, on the same date that the Policy went
into effect, the plan administrator (i.e., plaintiff’s employer) executed a document known
as the Appointment of Claim Fiduciary Form (“ACF”) which purports to appoint LINA as
the designated fiduciary for review of claims under the Policy. As required under ERISA,
LINA further issued a Summary Plan Description (“SPD”) which contained the following
language:
The [plan administrator] has appointed [LINA] as the named
fiduciary for adjudicating claims for benefits under the Plan,
and for deciding any appeals of denied claims. [LINA] shall
have the authority, in its discretion, to interpret the terms of
the Plan, to decide questions of eligibility for coverage or
benefits under the Plan, and to make any related findings of
fact. All decisions made by [LINA] shall be final and binding
on Participants and Beneficiaries to the full extent permitted
by law.

In addition, the Policy contained an integration clause, which read as follows: “This
Policy, including the endorsements, amendments, and any attached papers constitutes
the entire contract of insurance.”
The issue that I must resolve is whether these documents constitute a proper
grant of discretion to LINA such that I must apply the more deferential standard when
reviewing LINA’s benefits determinations. Defendant’s position is that the ACF is a
legally binding “plan document,” that the SPD effectively communicates the ACF’s grant
of discretion to plan participants, and that taken together these documents are sufficient
to confer discretion on LINA. Plaintiff’s position is, essentially, that the ACF is not a
“plan document” because it is neither incorporated in the underlying policy nor explicitly
referenced in the SPD.

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The Seventh Circuit considered an issue much like this one in Raybourne v.
Cigna Life Insurance Co. of New York, and concluded that the ACF in that case was a
“plan document.” 576 F.3d 444, 448-9 (7th Cir. 2009). The rationale for this conclusion
was as follows. First, the Raybourne ACF contained specific language providing that the
plan administrator must describe its grant of discretion to the fiduciary in the SPD
furnished to participants, and the SPD in turn described the plan’s grant of discretion to
the fiduciary and explained “that the actual provisions of the plan are set forth in the
insurance policy and the claims fiduciary agreement between [the administrator] and
[the fiduciary]. Second, the Raybourne court acknowledged that ERISA plans frequently
comprise multiple legally relevant plan documents. Thus the terms of such plans “often .
. . must be inferred from a series of documents, none clearly labeled as ‘the plan.’” Id. at
448. Finally, several indicia in the Raybourne ACF itself supported the court’s
conclusion that the ACF was a plan document:
And given that the Claim Fiduciary Appointment provides the
name of the plan and plan administrator, is signed by
representatives of the plan and [the fiduciary], and states
that it “shall be effective” from the date of the underlying
insurance policy, it is difficult to see how it could be anything
other than a plan document.
Id. at 449.
Plaintiff argues that the Supreme Court’s decision in CIGNA Corp. v. Amara, 563
U.S. 421 (2011), two years after Raybourne, renders the logic of Raybourne
inapplicable to the present case. In Amara, the Court held that summary documents
(like the SPD in the present case) “provide communication with beneficiaries about the
plan, but that their statements do not themselves constitute the terms of the plan.” Id. at
438. Since Amara, courts have agreed that an insurer or administrator may make a

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summary document part of an ERISA plan, but this must be done explicitly in the policy
or on the face of the summary document itself. See Aschermann v Aetna Life Ins. Co. ,
689 F. 3d 726, 729 (2012) (“There is no reason why an employer cannot make a
summary plan description be part of the plan itself and thus reduce the length of the
paperwork and the potential for disagreement between the summary and the full plan.”).
Plaintiff argues that I should apply Amara’s holding to the ACF in this case, and treat the
ACF as legally binding only if it is explicitly incorporated into the plan.
However, Amara does not alter Raybourne’s conclusion that the ACF in that
case, as opposed to the SPD, was a plan document. Indeed, Raybourne anticipated
the Supreme Court’s Amara holding regarding SPDs, reciting an earlier Seventh Circuit
holding that “a grant of discretion that appears in an SPD but not the underlying plan is
insufficient to warrant deferential review because an SPD—which is meant to be a plain
language version of the underlying plan—may not confer rights that the plan itself does
not.” 576 F.3d at 449. The Seventh Circuit’s recognition in Raybourne of the distinct
natures of the ACF and SPD means that I cannot apply Amara’s SPD holding to the
ACF in the present case. An SPD requires express incorporation because its default
function, as provided by statute, is as a non-plan, purely informational document. An
ACF, on the other hand, may be one of the “series of documents none clearly labeled
as ‘the plan’” from which courts within the Seventh Circuit are accustomed to inferring
the terms of an ERISA plan. Raybourne, 576 F.3d at 448. Express incorporation of the
ACF is not required.

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Plaintiff also attempts to factually distinguish Raybourne, focusing on two main
points: first, that the SPD in Raybourne mentioned the ACF by name, 1 which the SPD in
the present case does not do; and second, that the Raybourne court did not discuss the
integration clause in the insurance policy, which has been material to the decisions of
courts in other circuits. These arguments fail.
With regard to the SPD, Amara teaches that the SPD is a merely a summary
document, the purpose of which is to describe the provisions of the plan in plain
English. An SPD does not determine the enforceable terms of the plan. Therefore,
merely identifying or mentioning the ACF by name in the SPD is not what makes the
ACF a plan document. Rather, what is important under Raybourne is that the SPD
(consistent with its purpose) communicated the substance of the ACF:
But here the discretion described in Cigna's SPD does not
exist in a vacuum; the Cigna SPD refers to the Claim
Fiduciary Appointment and explains the discretion that it
confers. We thus conclude that the Claim Fiduciary
Appointment is a plan document, and accordingly, the
abuse-of-discretion standard of review applies.
Raybourne, 576 F.3d at 449 (emphasis added). The SPD in the present case clearly
explains the discretion conferred upon LINA. 2
Furthermore, other indicia led the Raybourne court to the logical inference that
the ACF in that case was a plan document. Here, as in Raybourne, the indicia that the

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The SPD in Raybourne read in relevant part as follows: “[A]ctual provisions of the Plan are set forth in the
insurance policy and the claims fiduciary agreement between [the plan administrator] and [the insurance company].”
Raybourne, 576 F.3d at 448 (emphasis supplied). That SPD also described the grant of discretion as follows: “The
Plan administrator has delegated to the insurance company the full and complete discretionary authority and
responsibility to decide all questions of eligibility for coverage under the plan.” Id.
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The pertinent language is as follows: “The [plan administrator] has appointed [LINA] as the named fiduciary for
adjudicating claims for benefits under the Plan, and for deciding any appeals of denied claims. [LINA] shall have
the authority, in its discretion, to interpret the terms of the Plan, to decide questions of eligibility for coverage or
benefits under the Plan, and to make any related findings of fact. All decisions made by [LINA] shall be final and
binding on Participants and Beneficiaries to the full extent permitted by law.”

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ACF is a plan document include: (1) the ACF is specifically captioned as a plan
document with the caption “Employee Welfare Benefit Plan Appointment of Claim
Fiduciary”; (2) the ACF names the applicable plan; (3) the ACF is executed “For the
Plan” and the signature block provides in italics that the document “[m]ust be executed
by a person authorized to amend the Plan”; (4) the Policy is specifically crossreferenced in the lower left corner of the ACF document; and (5) the effective date of
the ACF is January 1, 2003, the same date that the policy became effective. Consistent
with the Seventh Circuit’s analysis in Raybourne, these indicia are sufficient to establish
that the ACF in the case at bar is a plan document.
With regard to the Policy’s integration clause: the parties agree that the clause
does not explicitly reference the ACF. The insurance policy in Raybourne contained a
similar integration clause, but the Raybourne court did not consider the integration
clause in reaching its conclusion. Plaintiff argues that had the Raybourne court
considered the clause, it would have concluded that the ACF was not a plan document.
However, it stands to reason that the integration clause was of no import in the
Raybourne court’s decision. The integration clause merely determines the content of the
insurance policy. The insurance policy is not the plan – rather the policy is more
properly understood as a plan document that implements the plan. Larson v. United
Healthcare Ins. Co., 723 F.3d 905, 912 (7th Cir., 2013) (“We sometimes equate the
ERISA ‘plan’ with the insurance policy. More commonly, however, we refer to an
insurance policy as a ‘plan document’ that implements the plan.”)(internal citations
omitted). “That some employers’ plans provide benefits through an insurer does not
make the policy the ‘plan.’” Pa. Chiropractic Assn. v. Independence Hosp. Indem. Plan,

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Inc., 802 F.3d 926, 929 (7th Cir. 2015). Because the insurance policy is neither the plan,
nor the sole and exclusive plan document, the fact that the policy’s integration clause
does not reference the ACF does not preclude the ACF from being a plan document.
I conclude, therefore, that the ACF in the present case is a plan document that
confers discretion on LINA, and that the grant of discretion was properly communicated
in the SPD. LINA’s denial of benefits to the plaintiff will be subject to deferential review.
IT IS ORDERED that Plaintiff’s Motion for Summary Judgment on the Standard
of Review (ECF #19) is DENIED.
IT IS FURTHER ORDERED that Defendant’s Cross-Motion for Partial Summary
Judgment (ECF #23) is GRANTED.
SO ORDERED at Milwaukee, Wisconsin, this 27th day of August, 2018.

s/Lynn Adelman____
LYNN ADELMAN
District Judge

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