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United States District Court, S.D. New York

September 1, 2004.

ROSSI THOMAS, Plaintiff,
VERIZON, Defendant.

The opinion of the court was delivered by: RICHARD CASEY, District Judge


Pursuant to the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), pro se Plaintiff, Rossi Thomas, brings this action against her former employer, Verizon ("Defendant"), claiming that her disability benefits under the terms of the ERISA-governed Verizon Sickness and Accident Disability Benefit Plan for New York Associates ("the Plan") were wrongfully terminated. Pretrial discovery has been completed, and Defendant has moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. Defendant argues that Plaintiff's failure to exhaust administrative remedies as provided in the Plan precludes this suit seeking only monetary damages.

The motion was referred to Magistrate Judge Theodore Katz who issued a Report and Recommendation ("Report"), dated May 10, 2004, recommending that Defendant's motion for summary judgment be granted and that this action be dismissed with prejudice. Plaintiff objected under 28 U.S.C. § 636(b)(1)(c) and Federal Rule of Civil Procedure 72. Having considered the Report and objections, this Court adopts the Report. Defendant's motion for summary judgment is GRANTED. I. BACKGROUND

  The background of this action is provided in detail in the Report and therefore is only briefly recounted herein. Plaintiff began her employment with Verizon in February 1999 as an administrative assistant. She held a sedentary position with job duties that required her to sit at her desk, place telephone calls, type, and perform filing tasks.

  Verizon employee benefits are governed by a plan that provides for payment of definite amounts to its employees when they are disabled by accident or sickness. The Plan is administered by the Aetna Life Insurance Company ("Aetna"), which has responsibility for rendering benefit determinations for all disability claims, as well as initially reviewing claims for benefits that the Aetna Plan Administrator has denied. Plaintiff was eligible for Short Term Disability benefits. However, as a beneficiary of the Plan, she is obligated to actively assist the Aetna Plan Administrator by providing medical information pertinent to a disability claim and is required to submit to medical examinations requested by the Plan Administrator. (See Affidavit of Zachary R. Osborne, Esq. [Osborne Aff.], Ex. 3 §§ 6.8, 6.9, 7.1, 7.2.)

  According to Plaintiff, she developed kidney problems, end-stage renal failure, and valvular heart disease in April 2000. She applied for benefits, submitted sufficient documentation as mandated by the Plan, and was initially certified by the Plan Administrator. The Plan also requires recertification to extend benefits. Accordingly, Plaintiff was later regularly recertified at least eight times from July 20, 2000 to March 9, 2001; each recertification lasted approximately one month. After each certification decision, Plaintiff and her Verizon supervisor were provided with written notice, expressly informing Plaintiff that she had received an extension of disability benefits for a specific number of days but that the need for recertification would continually be reassessed. (See, e.g., Osborne Aff., Ex. 6, D00030-D00041.)

  On January 30, 2001, Aetna medical director Dr. Joel Hellman considered all the evidence submitted on Plaintiff's behalf, including the letters of Plaintiff's primary care physician, Dr. Goldberg, and her nephrologist, Dr. Gruber, but found these letters to be conclusory and lacking in objective medical evidence. (See Osborne Aff., Ex. 1 at Event Note 82.) Dr. Hellman also found that Plaintiff's condition had improved to the point where she could perform her administrative functions in a sedentary capacity. In March 2001, after considering Dr. Hellman's review, the Plan Administrator issued a Disability Denial Notice, terminating Plaintiff's eligibility for Short Term Benefits under the Plan. Dr. Paul J. Healy, who replaced Dr. Hellman as Aetna's medical director, reconsidered the denial decision. He concluded that "in the absence of additional objective medical information, there is not a medical basis to support a recommendation that an impairment exists that limits [Plaintiff's] total work capacity." (Osborne Aff., Ex. 2.)

  Upon the request of Plaintiff's union representative, the Plan Administrator scheduled an independent medical examination to resolve Plaintiff's disability status. The examination was to be conducted by a third-party physician who was unaffiliated with Verizon, Aetna, or Plaintiff. An examination was scheduled, but Plaintiff stated in her deposition that she refused to attend the exam and would not consent to an examination by a physician she did not know. (See Osborne Aff., Ex. 7, Deposition of Rossi Thomas at 115:11-17.) Plaintiff's refusal to attend the independent medical examination terminated the review process, and thus, Plaintiff's claim remain denied. Plaintiff never appealed any denial of her benefits to either Aetna or Verizon, despite the mandatory claims procedures set forth in the Plan. (See Osborne Aff., Ex. 3 § 3.3.)

  On August 10, 2001, Plaintiff's employment was terminated because she failed to respond to written requests sent to her by her Verizon supervisor to either return to work or justify her absence. (See Osborne Aff., Ex. 6, D00053.) In January 2002, she filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"). The EEOC declined to issue a right-to-sue letter because the agency determined that it lacked jurisdiction over the allegation of discrimination. (See Osborne Aff., Ex. 13.) Plaintiff then filed the instant action against Verizon, originally alleging that she was denied disability benefits in violation of the Americans with Disabilities Act, but her complaint was later amended to proceed solely under ERISA.


  A. Summary Judgment Standard

  Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Summary judgment should only be granted if "the nonmoving party `has failed to make a sufficient showing on an essential element of [its] case with respect to which [it] has the burden of proof.'" Berger v. United States, 87 F.3d 60, 65 (2d Cir. 1996) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). When viewing the evidence, the Court must assess the record in the light most favorable to the nonmovant, resolve all ambiguities and draw all reasonable inferences in its favor. See Delaware & Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990).

  Issues of fact are genuine when a "reasonable jury could return a verdict for the nonmoving party," and such contested facts are material to the outcome of the particular litigation if substantive law at issue so renders them. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper." Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir. 1994). Only when it is apparent that no rational trier of fact "could find in favor of the nonmoving party because the evidence to support its case is so slight" should a court grant summary judgment." Gallo v. Prudential Residential Servs., LP, 22 F.3d 1219, 1223-24 (2d Cir. 1994).

  B. Exhaustion of Administrative Remedies

  Defendant contends that this action must be dismissed because Plaintiff failed to exhaust her administrative remedies in two respects: (1) by failing to submit to an independent medical examination to allow the Plan Administrator to conduct a review of the denial of her claim, and (2) by failing to appeal the denial of her claim pursuant to procedures set forth in the Plan.

  To exhaust ERISA benefits claims, claimants must pursue all administrative remedies provided by their plan, which includes carrier review (in this case, Aetna), in the event benefits are denied. See 29 U.S.C. § 1132(a)(1)(B); Chapman v. Choicecare Long Island Term Disability Plan, 288 F.3d 506, 511 (2d Cir. 2002). The doctrine of exhaustion of administrative remedies rests on the principle that "no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 592 (2d Cir. 1993) (internal quotations omitted).

  In the ERISA context, the Second Circuit has recognized a "firmly established policy favoring exhaustion of administrative remedies in ERISA cases." Id. at 594 (quoting Alfarone v. Bernie Wolff Constr. Corp., 788 F.2d 76, 79 (2d Cir. 1986) (internal quotation marks omitted)); see also De Pace v. Matsushita Elec. Corp. of Am., 257 F. Supp. 2d 543, 558 (E.D.N.Y. 2003) (holding that exhaustion requirement is a jurisdictional prerequisite to a suit for benefits under ERISA); Sanfilippo v. Provident Life & Cas. Ins. Co., 178 F. Supp. 2d 450, 457 (S.D.N.Y. 2002) ("It is well settled that timely exhaustion of [ERISA] plan remedies is a prerequisite to suit in federal court and that, absent appropriate equitable considerations, court action is barred absent such exhaustion."); Midpoint Serv. Provider, Inc. v. Conn. Gen. Life Ins. Co., 152 F. Supp. 2d 306, 310 (S.D.N.Y. 2001) (holding that failure to administratively exhaust ERISA claim is jurisdictional deficiency).

  As the Second Circuit in Kennedy stated:

The primary purposes of the exhaustion requirement are to: (1) uphold Congress' desire that ERISA trustees be responsible for their actions, not the federal courts; (2) provide a sufficiently clear record of administrative action if litigation should ensue; and (3) assure that any judicial review of fiduciary action (or inaction) is made under the arbitrary and capricious standard, not de novo.
989 F.2d at 594 (quoting Denton v. First Nat'l Bank of Waco, 765 F.2d 1295, 1300 (5th Cir. 1985) (internal quotation marks omitted)). Furthermore, exhaustion is "intended to help reduce the number of frivolous lawsuits under ERISA; to promote the consistent treatment of claims for benefits; to provide a nonadversarial method of claims settlement; and to minimize the costs of claims settlement for all concerned." Id. (quoting Amato v. Bernard, 618 F.2d 559, 567 (9th Cir. 1980) (internal quotation marks omitted)).

  Generally, the decision to require exhaustion of remedies where a statutory violation of ERISA is alleged is within the discretion of the district court. See Lindemann v. Mobil Oil Corp., 79 F.3d. 647, 650 (7th Cir. 1996). Courts will waive the exhaustion requirement if the Plaintiff makes a "clear and positive showing" that pursuing available administrative remedies would be futile. See Kennedy, 989 F.2d at 594; see also Jones v. Unum Life Ins. Co. of Am., 223 F.3d 130, 140 (2d Cir. 2000) (holding that absent a clear and positive showing that seeking review by the carrier would be futile, remedy had to be exhausted prior to the institution of litigation). When administrative remedies have not been exhausted and such failure has not been justified by a clear and positive showing of futility, the claim must be dismissed. See Benaim v. HSBC Bank USA, 94 F. Supp. 2d 518, 519 (S.D.N.Y. 2000); see also Davenport v. Harry N. Abrams, Inc., 249 F.3d 130, 133 (2d Cir. 2001) (per curiam) (affirming dismissal for failure to exhaust); Kennedy, 989 F.2d at 595-96 (affirming dismissal of ERISA claim for failure to exhaust); Diagnostic Med. Assocs. M.D., P.C. v. New York City Dist. Council of Carpenters Welfare Fund, No. 01 Civ. 6437 (BSJ), 2004 WL 439512, at **1-2 (S.D.N.Y. Mar. 9, 2004) (dismissing ERISA case for failure to exhaust); Greifenberger v. Hartford Life Ins. Co., No. 03 Civ. 3238 (SAS), 2003 WL 22990093, at **4-5 (S.D.N.Y. Dec. 18, 2003) (same).

  In this case, it is undisputed that Plaintiff has not exhausted the available administrative remedies pursuant to the Plan in two ways: (1) by refusing to attend or reschedule the independent medical examination as required by Section 7 of the Plan, and (2) by failing to exhaust the mandatory claims appeals procedures set forth in the Plan. First, Plaintiff refused to submit to or reschedule the examination, thus thwarting any further review of her claim. Courts have held that such refusal results, in effect, in a failure to exhaust administrative remedies. See Hunter v. Metro. Life Ins. Co., 251 F. Supp.2d 111-12 (D.D.C. 2003) ("This appeal process, however, has not been completed because plaintiff refused to have an independent medical examination. . . . This amounts to a failure to exhaust."); Zalka v. Unum Life Ins. Co. of Am., 65 F. Supp. 2d 1369, 1371 (S.D. Fla. 1998) ("By refusing to submit to the independent medical examination and immediately filing suit, however, Plaintiff precludes Defendant from completing its administrative review of her claim. Plaintiff has thus not exhausted her administrative remedies."); cf. Acierno v. First Unum Life Ins. Co., No. 98 CV 3885 SJ, 2002 WL 1208616, at *2 (E.D.N.Y. Mar. 31, 2002) (dismissing ERISA claim where claimant refused to submit to second independent medical examination by physician chosen by plan administrator; "It is well-established that an insured's refusal to submit to an independent medical examination, without reasonable excuse, bars the insured from receiving the benefits under the policy contract.")

  Additionally, it is further undisputed that Plaintiff never appealed the denial of her benefits to either Aetna or Verizon as stipulated by the mandatory appeal process in the Plan. The Plan requires that an employee whose claim for benefits has been denied must submit a written request for review of the decision. (See Osborne Aff., Ex. 3 § 3.3.1.) Furthermore, if benefits are denied upon initial review and the Plaintiff seeks further review of a denied decision, the employee must appeal and seek review from the Final Appeals Administrator, that is, the Verizon Claims Review Committee. (See Osborne Aff., § 3.3.2.) Plaintiff failed to file an appeal at either level. Instead, Plaintiff contends that she spoke with her union representative and the Associate Director of Labor Relations for Verizon (see Pl.'s Admissions and Denials ¶¶ 4, 45), but those actions are insufficient as neither of these individuals have the authority to render appeal decisions. Nor did Plaintiff's attempts to circumvent the mandatory appeal process by filing with the National Labor Relations Board and the EEOC prove sufficient to appeal the denial of her benefits claim. As the letter from the EEOC states that the EEOC lacks jurisdiction over the claim (Osborne Aff., Ex. 13), Plaintiff's filing with the EEOC was improper and thus failed to act as sufficient appeal for her denied benefits claim. Furthermore, the EEOC's refusal to issue a right-to-sue letter precludes developing a sufficiently clear administrative record (in this case, any record) for ensuing litigation.

  Lastly, not only did the Plaintiff consciously ignore the remedies available to her under the Plan, she has not demonstrated in a "clear and positive" manner that exhausting administrative remedies would be futile. Her refusal to submit to the independent medical examination does not demonstrate futility but merely that Plaintiff harbors a strong preference for her own physician. Because the examination never occurred, the Court cannot draw any conclusions on its adequacy. Moreover, Plaintiff has failed to give any explanation why the administrative appeal process as stipulated in the Plan would be an inadequate and futile remedy. Therefore, the Court will not disregard the requirement that she exhaust administrative remedies.

  C. Plaintiff's Request Unavailable Remedies

  Defendant also argues that Plaintiff's claim fails as a matter of law because the remedies she seeks are unavailable under ERISA. Defendant is correct in its argument that the relief Plaintiff seeks in this action, namely damages for emotional distress and pain and suffering, as well as punitive damages, is unavailable in an ERISA suit. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148 (1985) ("Congress did not provide, and did not intend the judiciary to imply, a cause of action for extra-contractual damages caused by improper or untimely processing of benefit claims."). Instead, the remedies available to Plaintiff are limited to (1) recovery of benefits due under the terms of her plan; (2) enforcement of her rights under the terms of the plan; and (3) clarification of her rights to future benefits under the terms of the plan. See ERISA, 29 U.S.C. § 1132(a)(1)(b). Plaintiff does not seek such remedies. As a result, Plaintiff's claim fails as a matter of law because the remedies she seeks are unavailable under ERISA.


  Because Plaintiff failed to exhaust administrative remedies under the Plan prior to filing suit, Defendant's summary judgment motion is GRANTED. The Clerk of the Court is directed to close the case and remove it from the Court's active docket.



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