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Janet Solnin v. Sun Life and Health Insurance Company

January 31, 2011


The opinion of the court was delivered by: Hurley, Senior District Judge:



Plaintiff Janet Solnin ("Plaintiff) brings the present action under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001, et. seq. ("ERISA") to recover benefits allegedly due under an employee benefit plan. Defendants Sun Life and Health Insurance Company ("Sun Life"), Genworth Life and Health Insurance Company ("Genworth"), GE Group Life Assurance Company ("GE Group Life"), and Phoenix Life Insurance Company ("Phoenix Life") (collectively, "Defendants") have moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Defendants' motion is DENIED.


The material facts are drawn from the Complaint, the parties' Local Civil Rule 56.1 Statements, and the Court's March 23, 2008 Memorandum and Order issued in a prior, separate action between Plaintiff, GE Group Life, and Phoenix Life (the "Remand Order"),*fn1 and are undisputed unless otherwise noted.

Plaintiff's Injury and Approval for Long Term Disability Benefits Plaintiff was employed as an Assistant Manager by Reliance Federal Savings Bank ("Reliance"). On November 18, 1998, Plaintiff suffered a back injury at work when she crawled underneath a table to fix a computer. On February 13, 1999, she filed a Notice of Claim for Disability Benefits under the disability insurance policy (the "Policy") provided by Reliance; her application was filed on July 26, 1999. By letter dated August 31, 1999, Phoenix Life notified Plaintiff that her claim for long term disability benefits had been approved, and she began receiving such benefits commencing with the period August 4 through August 13, 1999.

The Policy

The Policy was administered by Phoenix Life until April 2000, when GE Group Life acquired the group life and health operation of Phoenix Life and thereafter became the new Administrator. Defendants contend that Phoenix Life is now known as Sun Life & Health Insurance Company (U.S.), although Plaintiff states that Sun Life has not provided "discovery responses sufficient" to confirm that statement, nor has it produced "a controlling document that grants discretionary authority to defendant Sun Life and Health Insurance Company." (Pl.'s Response to Defs.' 56.1 ¶ 2.) It appears from the records produced in connection with this motion that Genworth is now known as Sun Life Financial.*fn2 (AR 279.)*fn3

The Policy is an employee welfare benefit plan governed by ERISA. The Policy defines "Total Disability" and "Totally Disabled" as:

1. During the Elimination Period and the following 24 months, you are unable to perform all the material and substantial duties of your regular occupation.

2. After the Elimination Period and the following 24 months, you are unable to perform the duties of Any Occupation.*fn4

Change in Eligibility for Benefits

By letter dated March 28, 2002, GE Group Life advised Plaintiff that the definition of "Total Disability" applicable to her claim had changed because the 24-month period following the Elimination Period had expired. Plaintiff was notified by letter that additional medical information was required from her and that additional benefits could not be considered until the requested information was received and reviewed.

That same day, GE Group Life received a Supplemental Statement of Disability from Plaintiff and an Attending Physician's Supplemental Statement and medical report from Dr. Thomas M. Mauri, M.D., Plaintiff's treating physician. Thereafter, on April 3, 2002, GE Group Life received additional information from Plaintiff concerning her medical condition, including a one-page report from Plaintiff's physical therapist and a transcript from a Workers' Compensation Board hearing on September 28, 2001. On April 5, 2002, GE Group Life received a one-page report from Plaintiff's physical therapist.

Dr. Hicks' April 2002 Report

GE Group Life then referred Plaintiff's claim to one of its outside medical doctor-consultants, Thomas Hicks, M.D., for a determination regarding Plaintiff's restrictions and limitations. Dr. Hicks' notes indicated that he considered a February 24, 1999 report of Raphael P. Davis, M.D., a neurosurgeon who saw Plaintiff in consultation that day, and that he reviewed an April 26, 2000 report of Robert L. Michaels, M.D., who examined Plaintiff on behalf of her workers' compensation carrier. On April 5, 2002, Dr. Hicks issued a report and noted, in pertinent part:

After reviewing the provided records, it is my opinion that the claimant is not impaired to the point where it would prevent her from working. I believe that she is capable of performing sedentary occupation. Restrictions and limitations that I believe to be appropriate include limited walking, no climbing stairs/ladder, no bending/kneeling/squatting/stooping, no lifting greater than 5 lbs. and sit/stand/walk as tolerated, and no pushing or pulling. (Remand Order at 8.)

The Video Surveillance

In an undated memorandum to the file, Jacque C. Cassella ("Cassella") from GE Group Life noted that his efforts to obtain Plaintiff's physical therapy records were apparently being thwarted by Plaintiff's rescission of her earlier signed authorization to release records.*fn5 He further noted that additional information had been received that cast some doubt on the veracity of Plaintiff's claims.*fn6 Accordingly, Cassella noted that he was going to arrange for video surveillance to determine Plaintiff's functional capabilities.

On April 10, 2002, GE Group Life was informed by Plaintiff's physical therapist's office that Plaintiff had instructed it not to release any records to GE Group Life. By letter dated April 12, 2002, Cassella wrote to Plaintiff noting, inter alia, the difficulties he had encountered in attempting to obtain her physical therapy records. He advised her that if she continued to refuse to provide such records, GE Group Life would make a final determination regarding her eligibility based upon the medical information it had.

In late April 2002, GE Group Life received the reports and video tape of the surveillance of Plaintiff that it had arranged. Over the course of three days (April 15, 17, and 19 of 2002), Plaintiff was videotaped running various errands, including carrying empty trash cans and dragging other trash cans, driving to physical therapy and the supermarket, picking up clothing from the dry cleaning, cleaning the front seat of her car while hunched over for approximately ten to fifteen minutes, using a garden hose, pushing a grocery cart filled with groceries and a plant, placing same into the trunk of her car, carrying the groceries into her house, driving to and entering Bloomingdale's, and returning to her car with a paper bag.

Dr. Hicks' May 2002 Report

On May 9, 2002, Cassella asked Dr. Hicks to review new information obtained since his prior review, which essentially consisted of the video surveillance. On May 9, 2002, Dr. Hicks issued a report, which stated, in pertinent part:

Based on my review of the documentation in the file and my observation of the videotaped physical activities as I described above, there is clear inconsistency between the claimant's self-reported functional level that is documented in the file and the claimant's observed physical activities. Based on the observed physical activities, it is my opinion that the claimant is capable of performing sedentary-light work. (Remand Order at 11.)

GE Group Life's Denial of Long-Term Benefits

By letter dated May 10, 2002, Cassella advised Plaintiff that GE Group Life had determined that she was able to perform "sedentary to light work" and was therefore not eligible for long-term disability benefits beyond August 4, 2001, the date the definition of disability changed to "Any Occupation." The denial letter relates that GE Group Life relied on Dr. Hicks' reports and the video surveillance in making its determination.

On September 6, 2002, Plaintiff formally appealed the denial of continued long-term disability benefits. By letter dated December 17, 2002, GE Group Life stated as follows:

There is no new information in our file that would lead us to change our decision to terminate your long-term disability claim. It remains our opinion that you are able to engage in a sedentary occupation. Under the terms of the Plan, you have exhausted your administrative remedies.


The Prior Action

On September 24, 2002, Plaintiff initiated a separate action before this Court, docket number 03 CV 4857 (the "Prior Action"). Her Complaint asserted three causes of action: breach of contract, declaratory judgment that Plaintiff is totally disabled within the meaning of the Policy, and a violation of ERISA. Defendants moved for summary judgment and the Court dismissed Plaintiff's state law breach of contract claim, finding it to be preempted by ERISA. (Id. at 14.)

With respect to Plaintiff's ERISA claims, the Court found that the Policy and applicable Certificate of Insurance contained "clear language . . . granting Phoenix Life the discretionary authority to determine eligibility for benefits," and therefore "the Court will apply the arbitrary and capricious standard of review to the denial thereof." (Id. at 14, 16-17 (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) ("[A] denial of benefits challenged under ยง 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.")).) As the Court noted, under the arbitrary and capricious standard of review, a decision to deny benefits may be overturned only if it is "'without reason, ...

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