UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
December 17, 2008
CYNTHIA WHITE, PLAINTIFF,
VERIZON COMMUNICATIONS, INC.; AND CHAIRPERSON OF THE VEBC, AS PLAN ADMINISTRATOR FOR THE VERIZON LONG-TERM DISABILITY PLAN FOR NEW YORK AND NEW ENGLAND ASSOCIATES, DEFENDANTS.
The opinion of the court was delivered by: Glenn T. Suddaby, United States District Judge
MEMORANDUM-DECISION and ORDER
This action, filed pursuant to the Employee Retirement Income Security Act ("ERISA"), has been removed to this Court from the Supreme Court of New York, pursuant to 28 U.S.C. §§ 1331, 1441, 1446. Generally, in her Complaint, Cynthia White ("Plaintiff") alleges that Defendant Verizon Communications Inc., and the Chairperson of the VEBC ("Defendants"), as plan administrator for the Verizon Long-Term Disability ("LTD") Benefits Plan, arbitrarily, capriciously and unsubstantiated by fact or medical evidence denied Plaintiff LTD benefits to which she was entitled. (See generally Dkt. No. 1 [Plf.'s Compl.].) Currently pending before the Court is Defendants' motion for summary judgment pursuant to Fed. R. Civ. P. 56. (Dkt. No. 24.) Plaintiff has not opposed the motion, despite having asked for and been granted an extension of the deadline by which to do so. (Dkt. No. 25.) For the reasons that follow, the Court grants Defendants' motion for summary judgment.
A. Plaintiff's Complaint
Liberally construed, Plaintiff's Complaint alleges as follows:
1. On or about July 29, 2001, Plaintiff became unable to continue her full-time employment as a call-center operator with Defendant Verizon because of her numerous physical, emotional and psychological disabilities, and began receiving short-term benefits;
2. On or about April 8, 2002, Plaintiff returned to work on a part-time basis, after Defendant Verizon insisted that she do so. Despite her best efforts, Plaintiff was unable to perform the work tasks assigned to her as a result of her impairments, and, consequentially, Plaintiff discontinued working for Defendant Verizon on April 10, 2002. Plaintiff has not worked for Defendant Verizon or any other employer since April 10, 2002;
3. Plaintiff began receiving LTD benefits on August 1, 2002, and was also awarded disability benefits from the Social Security Administration, based on a determination that she was "totally disabled" as of July 29, 2001. During the time Plaintiff was receiving both Short-Term and LTD benefits, she complied with all of Defendants' requests and attended every medical and psychological examination arranged for and demanded by Defendant, all of which confirmed Plaintiff's disability;
4. Defendants terminated Plaintiff's LTD benefits effective November 8, 2003, for failure to provide requested medical documentation and proof of disability, and Plaintiff subsequently appealed;
5. MetLife, claims administrator for the plan, conducted additional reviews of the decision denying LTD benefits, each time concluding that the denial of benefits was proper;
6. Plaintiff appealed to the Verizon Claims Review Committee, exhausting all of her administrative remedies. The Verizon Claims Review Committee found that the decision to terminate Plaintiff's benefits was proper;
7. Defendants' failure to reinstate Plaintiff's LTD benefits is against the weight of the competent medical and documentary information, is unsupportable in fact, and constitutes an arbitrary and capricious action on the part of Defendants;
8. Defendants acted in an arbitrary and capricious manner, breaching their fiduciary duty to the plan and to the Plaintiff; and
9. The LTD Benefits Plan ("Plan") constituted a contract between Verizon and the beneficiaries that Defendants breached by failing to provide Plaintiff with the LTD benefits available under the Plan, which she was entitled to given the medical evidence in her favor.
(Dkt. No. 1.)
Based on these factual allegations, the Court liberally construes Plaintiff's Complaint and its attachments as asserting the following three legal claims against Defendants: (1) a claim that the denial of Plaintiff's LTD benefits was arbitrary and capricious, and unsupported by fact or medical information; (2) a claim that Defendants breached, and grossly disregarded, their fiduciary duty to Plaintiff and the Plan; and (3) a claim that the Plan constitutes a contract between Defendant Verizon and the beneficiaries and intended beneficiaries thereof, which Defendants breached. (Id.)
As a result of these deprivations of her benefits, Plaintiff requests a Court-issued judgment awarding the following relief: (1) a declaration that she has continued to be "disabled" from November 8, 2003, until the present date; (2) the reinstatement of her LTD benefits retroactive to November 8, 2003; and (3) costs and disbursements of this action, including attorneys fees for prosecuting this action, interest owed on the retroactive benefits, and "other and further relief" as the Court may deem "just and proper." (Id.)
B. Defendants' Motion
On October 29, 2007, Defendants moved for summary judgment pursuant to Fed. R. Civ. P. 56. (Dkt. No. 24.) Generally, Defendants' motion is premised on the following four arguments: (1) Defendants' decision to terminate Plaintiff's LTD benefits was not arbitrary and capricious, but reasonable and based on substantial evidence in the administrative record; (2) Plaintiff's identification of evidence supporting her disability is insufficient because deference to diagnoses made by Plaintiff's treating physician is not required in the face of contradictory objective data, and because examinations conducted in 2001 and 2002 do not support Plaintiff's claim for LTD benefits beyond November 2003; (3) Plaintiff's attempt to rely on medical evidence created after the denial of Plaintiff's final administrative appeal to support her claim is invalid; and (4) Plaintiff's receipt of Social Security benefits is non-binding on Defendants, and thus does not make their decision arbitrary and capricious. (Dkt. No. 24, Part 3, at 16-25 [Defs.' Memo. of Law].)
II. LEGAL STANDARD ON MOTION FOR SUMMARY JUDGMENT
Under Fed. R. Civ. P. 56, summary judgment is warranted if "the pleadings, the discovery and disclosure materials on file, and any affidavits 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." Fed. R. Civ. P. 56(c). In determining whether a genuine issue of material fact exists, the Court must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). In addition, "[the moving party] bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the . . . [record] which it believes demonstrate[s] the absence of any genuine issue of material fact." Celotex v. Catrett, 477 U.S. 317, 323-24 (1986). However, when the moving party has met this initial responsibility, the nonmoving party must come forward with "specific facts showing a genuine issue [of material fact] for trial." Fed. R. Civ. P. 56(e)(2).*fn1
What this burden-shifting standard means when a plaintiff has failed to respond to a defendant's motion for summary judgment is that "[t]he fact that there has been no [such] response . . . does not . . . [by itself] mean that the motion is to be granted automatically."*fn2
Rather, practically speaking, the Court must (1) determine what material facts, if any, are disputed in the record presented on the defendants' motion, and (2) assure itself that, based on the undisputed material facts, the law indeed warrants judgment for the defendants.*fn3 However, the plaintiff's failure to respond to the defendant's motion for summary judgment lightens the burden on the motion to one that is merely "modest."*fn4
More specifically, where a plaintiff has failed to properly respond*fn5 to a defendant's statement of material facts, contained in its Statement of Material Facts (a/k/a its "Rule 7.1 Statement"), the facts as set forth in that Rule 7.1 Statement will be accepted as true*fn6 to the extent that those facts are supported by the evidence in the record.*fn7 Similarly, where a plaintiff has failed to respond to a defendant's properly filed and facially meritorious memorandum of law (submitted in support of its motion for summary judgment), the plaintiff is deemed to have "consented" to the legal arguments contained in that memorandum of law under Local Rule 7.1(b)(3) of the Local Rules of Practice for this Court.*fn8 Stated another way, where a defendant has properly filed a memorandum of law (in support of a properly filed motion for summary judgment), and the plaintiff has failed to respond to that memorandum of law, the only remaining issue is whether the legal arguments advanced in the defendant's memorandum of law are facially meritorious.*fn9
Finally, implied in the above-stated burden-shifting standard is the fact that, where a non-movant fails to respond to a motion for summary judgment, a district court has no duty to perform an independent review of the record to find proof of a factual dispute.*fn10
After carefully reviewing all of the papers in this action--including Plaintiff's Complaint and Defendants' unopposed Statement of Material Facts--the Court concludes that, at the very least, Defendants' have met their lightened burden of showing facial merit to their argument that no genuine issue of material fact exists with regard to each of Plaintiff's claims. Furthermore, the Court concludes that Defendants' argument would survive even a more detailed scrutiny appropriate for a contested motion for summary judgment. The Court reaches these conclusions for the reasons stated by Defendants in their Memorandum of Law. (Dkt. No. 24, Part 3, at 16-25 [Defs.' Memo. of Law].) In the interest of brevity, the Court will not repeat those reasons in detail but will discuss those reasons with some generality.
A. Plaintiff's Claim of Arbitrary and Capricious Action
As Defendants correctly assert in their motion, the language of the Plan gives Defendants discretionary authority to construe the terms of the Plan and determine whether a claimant is eligible for benefits. (Dkt. No. 23, Administrative Record, at 0052, 0072 [hereinafter "AR"].) "[W]here the ERISA plan confers upon the plan administrator discretionary authority to 'construe the terms of the plan,' the district court should review a decision by the plan administrator under an excess of allowable discretion standard." Frommert v. Conkright, 535 F.3d 111, 119 (2d Cir. 2008) [citation omitted]; see also Nicols v. Prudential Ins. Co. of Am., 406 F.3d 98, 108 (2d Cir. 2005) (noting that the proper standard, when a plan vests the administrator with discretionary authority, is "abuse of discretion."). Under such an abuse-of-discretion standard, an administrator abuses its discretion only when the administrator's actions are arbitrary and capricious. See, e.g., Guglielmi v. Northwestern Mut. Life Ins. Co., 06-CV-3431, 2007 WL 1975480, at *4 (S.D.N.Y. July 6, 2007) [citation omitted]).
Since this abuse-of-discretion standard is a "highly deferential standard of review, an administrator's decision should only be disturbed if it is without reason, unsupported by substantial evidence or erroneous as a matter of law, considering the relevant factors of the decision." Guglielmi, 2007 WL 1975480, at *4 [internal quotation marks and citations omitted]. "Substantial evidence consists of such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the [administrator and] . . . requires more than a scintilla but less than a preponderance." Id. [internal quotation marks and citations omitted]. As a result, "[a]n administrator's decision under this deferential standard may be upheld even when there is evidence in the record . . . that would have supported a contrary finding." Id. [internal quotation marks and citations omitted]. Furthermore, "[a] district court's review under the arbitrary and capricious standard is limited to the administrative record." Id. [internal quotation marks and citations omitted].
Here, Defendants upheld the decision of MetLife, which was the claims administrator of the Plan, to terminate Plaintiff's LTD benefits on November 8, 2003. (See Dkt. No. 1, ¶ 21 [Plf.'s Compl.].) MetLife's decision to terminate was based on two events: (1) the failure of both Plaintiff and her physician to respond to a letter from MetLife written on July 14, 2003, requesting updated information in support of her claim for LTD benefits (AR at 0166-0167); and (2) a follow-up letter written on October 14, 2003, requesting the same information, and warning Plaintiff that failure to provide the requested documentation by October 27, 2003, would result in the denial of her claim for LTD benefits (AR at 0150). Metlife requested this information from Plaintiff after her husband informed a MetLife representative on June 12, 2003, that his wife was capable of baby-sitting. (AR at 0162-0164.)*fn11 A MetLife clinical specialist then interviewed Plaintiff on June 23, 2003, and observed that she displayed no evidence of concentration or memory problems, her speech was normal, and she did not seem depressed, despite her assertions that these symptoms contributed to her inability to work. (Id.)
Under the Plan, as a condition of continued receipt of LTD benefits, the claims administrator reserves the right to request updated medical records. (AR at 0012, 0044.) In addition, the Plan indicates that "[e]ach Covered Person receiving long term disability benefits under the Plan (or claiming eligibility for benefits under the Plan) shall supply medical information and objective medical evidence of the Covered Person's condition and shall be examined by a qualified health care professional selected or approved by the Benefits Administrator at any time requested by the Benefits Administrator." (AR at 0012.)
Certainly, the administrator had not only a right but a reason to request medical information after the occurrence of the June 12 and June 23, 2003, incidents described above.*fn12
In light of the fact that Plaintiff did not respond to the request for medical information after being given more than three months to do so, the Court finds that MetLife did not act improperly in terminating Plaintiff's benefits. Given that MetLife's actions were not arbitrary or capricious, the Court concludes that Defendants' decision to uphold MetLife's decision was not an abuse of discretion, but was (under the circumstances) reasonable,*fn13 and based upon substantial evidence in the administrative record.*fn14
For these reasons, the Court grants Defendants' motion for summary with regard to Plaintiff's claim of arbitrary and capricious action.
B. Plaintiff's Claim of Breach of Fiduciary Duty
Without identifying which part of the ERISA statute is applicable, Plaintiff has alleged that Defendants "breached their fiduciary duty to the Plan and to Plaintiff" by failing "to grant the LTD benefits to which Plaintiff is entitled, notwithstanding the fact that competent medical evidence has indicated that Plaintiff was 'disabled' within the meaning of the Plan." (Dkt. No. 1, ¶ 39 [Plf.'s Compl.].) "As part of their duty, ERISA fiduciaries must inform plan participants and beneficiaries about the nature of their coverage." Williams v. Caterpillar, Inc., 944 F.2d 658 (9th Cir. 1991) [citations omitted]. In addition, a fiduciary must act in accordance with Plan documents and instruments. 29 U.S.C. § 1104(a)(1)(D). Further, ERISA requires that a fiduciary act as a prudent person. 29 U.S.C. § 1104(a)(1)(B). As a result, the standard is objective in that the focus is on the process--not the results--that the fiduciary undergoes in reaching a decision. See, e.g., Katsaros v. Cody, 744 F.2d 270, 279 (2d Cir. 1984); see also James F. Jorden, et al., Handbook on ERISA Litigation § 4.03[A], at 4-74 (3d ed. 2007) [citations omitted].
The Supreme Court has held that 29 U.S.C. § 1132(a)(2)--"the enforcement provision . . . [that] authorizes suits by four classes of party-plaintiffs"--limits relief to "the plan as a whole." Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 n.9 (1985). Thus, the statute does not provide relief for individual participants or beneficiaries under a claim of breach of fiduciary duty. Russell, 473 U.S. at 142-44; see also Jorden, Handbook on ERISA Litigation § 5.04[A], at 5-38 [citations omitted].
Here, it is clear that Defendants acted as prudent persons, because Plaintiff was afforded the right to appeal MetLife's decision to terminate her benefits, and in exercising this right, Defendants considered documentation submitted after the decided termination date, despite the fact that they ultimately reached the same conclusion that Plaintiff's LTD benefits should be terminated. For example, throughout the various levels of appeal review, Defendants hired an independent psychiatrist and an independent physician to evaluate Plaintiff's medical records; they obtained an opinion from a MetLife psychiatric clinical specialist regarding Plaintiff's impairments and use of medication; and they reviewed diagnoses made by Plaintiff's treating physicians. (AR at 0178, 0202-0203, 0514-0515, 0523-0524, 0584-0585.) In addition, there is no indication in the record that Defendants failed to act in accordance with the Plan, or that Defendants failed to inform Plaintiff about the nature of her coverage.
For these reasons, the Court grants Defendants' motion for summary judgment with regard to Plaintiff's claim of breach of fiduciary duty.
C. Plaintiff's Claim of Breach of Contract
"ERISA preempts state law and state law claims that 'relate to' any employee benefit plan as that term is defined therein." Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1275 (6th Cir. 1991) [citations omitted]. "The phrase 'relate to' is given broad meaning such that a state law cause of action is preempted if 'it has connection with or reference to that plan.'" Cromwell, 944 F.2d at 1275-76 [citations omitted].) Given the broad scope of ERISA,*fn15 "only those state laws and state law claims whose effect on employee benefit plans is merely tenuous, remote or peripheral are not preempted." Id. at 1276. Finally, and most importantly with regard to this matter, "[i]t is not the label placed on a state law claim that determines whether it is preempted, but whether in essence such a claim is for the recovery of an ERISA plan benefit." Id. [citations omitted].
"The term 'employee benefit plan' is defined in ERISA as 'an employee welfare benefit plan or an employee pension plan.'" Barnable v. First Fortis Life Ins. Co., 44 F. Supp.2d 196, 201 (E.D.N.Y. 1999) (quoting 29 U.S.C. § 1002). The statute also indicates that "employee welfare benefit plan includes any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, . . . benefits in the event of sickness [or] disability. . . ." 29 U.S.C. § 1002(1). In addition, "[a]n ERISA plan is established when[,] from the surrounding circumstances[,] a reasonable person can ascertain (1) the intended benefits, (2) a class of beneficiaries, (3) the source of financing, and (4) the procedures for receiving benefits." Barnable, 44 F. Supp.2d at 201 [citation omitted].
Here, as in Barnable, "[i]t is clear that the Plan at issue . . . is an 'employee benefit plan' within the meaning of ERISA. The benefits at issue are long term disability benefits and Plaintiff was an employee covered by the plan." Id. In addition, Defendant "is the source of financing and the procedures for receiving benefits are contained in the Plan." Id. The Plan also "does not fall into ERISA's safe harbor provision of 29 C.F.R § 2510.3-1(j)." Id. [citation omitted]. Finally, the "relates to" requirement is satisfied in that Plaintiff's New York State breach-of-contract claim "relates to" an ERISA covered employee benefit plan under Section 502(a)(1)(B) of ERISA, which "authorizes a claimant to commence suit 'to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.'" Id. [citation omitted].
For these reasons, the Court grants Defendants' motion for summary judgment with regard to Plaintiff's claim of breach of contract.
ACCORDINGLY, it is
ORDERED that Defendants' motion for summary judgment (Dkt. No. 24) is GRANTED; and it is further
ORDERED that Plaintiff's Complaint (Dkt. No. 1) is DISMISSED with prejudice; and it is further
ORDERED that the Clerk of the Court shall serve a copy of this Memorandum-Decision and Order upon all the parties.