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Bernikow v. Xerox Corp. Long-Term Disability Income Plan

September 28, 2007


The opinion of the court was delivered by: Michael A. Telesca United States District Judge



Plaintiff William Bernikow ("plaintiff" and/or "Bernikow") brings this action claiming that he was wrongfully denied long term disability benefits under a group policy issued by defendant Xerox Corporation Long-Term Disability Income Plan ("Xerox LTD Plan"), which insured his employer, Xerox Corporation ("Xerox"). Defendant Xerox LTD Plan moves for summary judgment on grounds that plaintiff failed to exhaust his administrative remedies and is time-barred from exhausting his administrative remedies. Plaintiff cross-moves for summary judgment arguing that plaintiff is not required to exhaust his administrative remedies when an appeal is futile.


Plaintiff was employed by Xerox for approximately 20 years and was a participant in the Xerox LTD Plan.*fn1 Bernikow received long-term disability benefits during a twelve-year period from November 1993 to November 2005.*fn2 However, in late 2005, the Xerox LTD Plan claims administrator*fn3 determined that Bernikow no longer qualified for long-term disability benefits and was notified of that determination by notice dated November 21, 2005. Plaintiff's California counsel, Gary Tysch requested a complete copy of Bernikow's long-term disability benefits claim file and on January 9, 2006, plaintiff received a document, which allegedly constituted a complete copy of his claim file. However, the documents provided by SHPS contained no documents or records generated after July 2004.*fn4 Plaintiff claims that his counsel, Mr. Tysch, sent a letter to SHPS dated March 20, 2006, requesting additional documentation since the last dated document in SHPS' file was a statement of authorization certifying plaintiff's disability from July 1, 2004 through July 31, 2004. Moreover, the same letter stated that Mr. Tysch made a follow up phone call to SHPS and received a return call from Mary Payne at SHPS, advising him that there were no additional documents maintained by SHPS, and that no other documentation would be provided.

The Xerox LTD Plan requires two levels of administrative appeals. The second appeal must be taken within 60 days of the participant being advised that his first appeal has been denied. Bernikow timely appealed from the Xerox LTD Plan administrator's first denial of his benefits in late 2005. However, the claims administrator denied plaintiff's appeal on May 10, 2006 and advised plaintiff that pursuant to the terms of the Xerox LTD Plan, he had 180 days within which to submit a second appeal. A "Supplemental Standard Appeal Decision Letter" dated June 26, 2006 was subsequently sent by the claims administrator advising:

You have the right to appeal this decision in accordance with the procedures required by ... ERISA. If you wish to request reconsideration of your claim, you or your representative must submit a written appeal for reconsideration of the claim to the SHPS Disability Team within 60 days of the denial. The appeal deadline is July 10, 2006. Our initial letter to you at one point mistakenly referenced 180 days. If this reference to 180 days confused you and you require additional time to prepare your appeal, you must advise us of this fact before July 10, 2006. If you so advise us, we will extend your time to file an appeal to August 1, 2006. If you have not appealed by July 10, 2006 or advised us by that date that you need until August 1, 2006 to submit your appeal, you will not be permitted to make a second appeal as the Xerox Disability Plan requires.

See P. Moser Aff., Ex. A., Adm. Rec. 001. The reason given in the supplementary standard appeal decision letter for plaintiff's termination of benefits was based upon an alleged conversation with plaintiff's treating psychiatrist, Dr. Alan Sandler.

Defendant alleges that Dr. Sandler informed one of SHPS' medical directors, Dr. Wolf*fn5 on November 3, 2005 that he had never considered Bernikow to be totally disabled and that he believed that Bernikow, at the very least, was exaggerating his symptoms. Defendant also contends that Dr. Sandler explained that so long as SHPS was "rubber stamping" benefits, Dr. Sandler did not care. Eleven days later SHPS asked Dr. Sandler to confirm in writing the opinion he expressed during his November 3, 2005 telephone call with Dr. Wolf. Dr. Sandler, however, simply scribbled on a form that SHPS should refer to his September 28, 2005 work status form. The form referred to by Dr. Sandler indicates that plaintiff magnified his symptoms and that plaintiff "claimed" to be disabled. Notwithstanding these comments, Dr. Sandler determined that plaintiff was not capable of performing his work and was disabled. Defendant claims that it weighed Dr. Sandler's statements during his phone call with Dr. Wolf against his September 28, 2005 work status form and decided that benefits were no longer payable. Accordingly, SHPS notified plaintiff that his benefits were being terminated. Plaintiff argues that despite the September 28, 2005 work status form, SHPS terminated Bernikow's benefits based on a phone call that plaintiff claims did not occur.

As mentioned above, SHPS acknowledged that it had failed to include printouts of the status report/computer diary regarding plaintiff's claim to plaintiff's California counsel, Gary Tysch. To remedy the oversight, on June 21, 2006, a copy of a 57-page Status Report was e-mailed to Mr. Tysch. Thereafter, SHPS sent the June 26, 2006 "Supplemental Standard Appeal Decision Letter" referred to above, which reminded Bernikow that he was required to make a second administrative appeal. In addition, by letter dated June 27, 2006, plaintiff's counsel was reminded of Bernikow's duty to exhaust his administrative remedies and was informed that plaintiff's failure to do so would be fatal to his case. Plaintiff never filed an administrative appeal from the May 10, 2006 denial or the June 26, 2006 supplemental denial and therefore, plaintiff's time for filing the required second administrative appeal expired.


I. Summary Judgment Standard

Summary judgment may not be granted unless "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." See Fed.R.Civ.P. 56(c). A party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). "[T]he movant must make a prima facie showing that the standard for obtaining summary judgment has been satisfied." See 11 Moore's Federal Practice, § 56.11[1][a] (Matthew Bender 3d ed.) "In moving for summary judgment against a party who will bear the ultimate burden of proof at trial, the movant may satisfy this burden by pointing to an absence of evidence to support an essential element of the nonmoving party's claim." See Gummo v. Village of Depew, 75 F.3d 98, 107 (2d Cir.1996)(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)), cert denied, 517 U.S. 1190 (1996).

The burden then shifts to the non-moving party to demonstrate "specific facts showing that there is a genuine issue for trial." See Fed.R.Civ.P. 56(e); See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). To do this, the non-moving party must present evidence sufficient to support a jury verdict in its favor. See Anderson, 477 U.S. at 249; see also, Fed.R.Civ.P. 56(e)("When a motion for summary judgment is made ... [an] adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial."). Summary judgment is appropriate only where, "after drawing all reasonable ...

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