United States District Court, N.D. New York
MARYBETH M. DONLICK, Plaintiff,
STANDARD INSURANCE COMPANY, f/k/a StanCorp Financial Group, Inc., Defendant.
OF RONALD R. BENJAMIN RONALD R. BENJAMIN, ESQ. Attorneys for
ATWOOD, LLP BROOKS R. MAGRATTEN, ESQ. MICHELE E. KENNEY, ESQ.
Attorneys for Defendant
MEMORANDUM-DECISION AND ORDER
Frederick J. Scullin Jr. Senior United States District Judge
filed this action on or around May 5, 2016, in New York
Supreme Court, County of Broome, by summons and complaint,
seeking to have Defendant's disability determination
reviewed pursuant to the Employee Retirement Income Security
Act of 1974 ("ERISA"). See 29 U.S.C.
§ 1132(a)(1)(b). Defendant removed the action to this
Court. See Dkt. No. 1. Pending before the Court are
the parties' cross-motions for summary judgment,
see Dkt. Nos. 21, 24, and Plaintiff's motion to
submit evidence outside the administrative record,
see Dkt. No. 24.
Standard Insurance Company administered an employee benefit
plan ("the Plan"), which provided long term
disability ("LTD") benefits. Defendant was
"delegated the full and exclusive authority to control
and manage the Plan, to administer claims, and interpret Plan
provisions, including the right to determine entitlement to
benefits." See Dkt. No. 21-2 at ¶ 1.
Marybeth Donlick formerly worked as a truck driver for
Chesapeake Energy Corporation. See id. at ¶ 9.
On August, 7, 2012, she was injured in a motorcycle accident
that resulted in an amputation below her right knee, left
ankle fracture, and back wounds. See id. at ¶
10. Plaintiff applied for LTD benefits in December 2012 after
sustaining these injuries. See Id. at ¶ 22.
Plaintiff bore the burden of proving that she had an injury
that rendered her unable to perform the "Material
Duties" of her "Own Occupation." See
Id. at ¶ 6. The Plan defines "Material
Duties" as "the essential tasks, functions and
operations, and the skills, abilities, knowledge, training
and experience, generally required by employers from those
engaged in a particular occupation that cannot be reasonably
modified or omitted." See id. at ¶ 8.
Further, the Plan defines "Own Occupation" as
"any employment, business, trade, profession, calling or
vocation that involves Material Duties of the same general
character as the occupation you are regularly performing for
your Employer when Disability begins." See
Administrative Record ("AR") at 831.
January 16, 2013, Defendant approved Plaintiff's claims
for LTD benefits and began paying her $779.80 per month as of
March 4, 2013. See Dkt. No. 21-2 at ¶ 27. The
benefit approval letter explained that Defendant would
periodically confirm Plaintiff's continued disability and
eligibility for benefits and advised her that it was her
responsibility to provide updated medical information.
See Id. at ¶ 28. Importantly, it also explained
the policy's definition of disability would change from
the "own occupation" to the "any
occupation" standard, which would require a review of
her claim. See Id. at ¶ 29. In total, Defendant
paid Plaintiff more than $20, 000 in LTD benefits.
paying LTD benefits for 24 months, Defendant reevaluated
Plaintiff's claim under the "any occupation"
standard. See id. at ¶ 47. Under the Plan,
"Any Occupation" means
any occupation or employment which you are able to perform,
whether due to education, training, or experience which is
available at one or more locations in the national economy
and in which you can be expected to earn at least 60% of your
Indexed Predisability Earnings within twelve months following
your return to work, regardless of whether you are working in
that or any other occupation.
See AR at 831.
determine whether Plaintiff was disabled under the "any
occupation" standard, Defendant ordered a medical
records review from an orthopedic physician and consulted a
vocational expert. Ultimately, Defendant determined that
Plaintiff's LTD benefits would terminate because she did
not satisfy the "Any Occupation" definition of
disability. See id. at ¶ 72. Plaintiff appealed
Defendant's decision and submitted a one-page letter and
a report from a vocational expert opining that she was
unemployable in any occupation. See id. at ¶
appeal, Defendant re-evaluated Plaintiff's file and
consulted an additional orthopedic specialist as well as an
additional vocational expert. The vocational expert
considered the report Plaintiff provided but disagreed with
its conclusions and identified other positions that Plaintiff
could perform. See Id. at ¶ 90. Thereafter, on
March 15, 2016, Defendant sent a letter informing Plaintiff
that it was upholding its determination that she no longer
qualified for benefits. See Id. at ¶ 92.
Plaintiff then filed this action.
Standard of review
must grant summary judgment "if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law."
Fed.R.Civ.P. 56(a). The movant for summary judgment
"always bears the initial responsibility of informing
the district court of the basis for its motion" and
identifying which materials "demonstrate the absence of
a genuine issue of material fact." Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). A fact is
"material" if it "might affect the outcome of
the suit under the governing law" and is genuinely in
dispute "if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). If the movant meets this burden, the nonmoving party
must "'"set forth specific facts showing a
genuine issue for trial."'" Id.
parties agree that "[s]ummary judgment provides an
appropriate mechanism for a court to consider a challenge to
the termination of disability benefits under ERISA."
Alfano v. CIGNA Life Ins. Co. of N.Y., No. 07 Civ.
9661, 2009 WL 222351, *12 (S.D.N.Y. Jan. 30, 2009) (citations
omitted). "In such an action 'the contours guiding
the court's disposition of the summary judgment motion
are necessarily shaped through the application of the
substantive law of ERISA.'" Id. (quoting
Ludwig v. NYNEX Service Co., 838 F.Supp. 769, 780
(S.D.N.Y. 1993)). In that regard, the parties disagree on the
standard governing this Court's review of Defendant's
disability benefits decision under ERISA.
Supreme Court first articulated the standard governing a
court's review of an administrator's interpretation
of an ERISA benefit plan in Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101 (1989). In
Firestone, the Court explained that "a denial
of benefits . . . is to be reviewed under a de novo
standard unless the benefit plan gives the administrator . .
. authority to determine eligibility for benefits or to
construe the terms of the plan." Id. at 115.
"Where such authority is given, the administrator's
interpretation is reviewed for an abuse of discretion."
McCauley v. First Unum Life Ins. Co., 551 F.3d 126,
130 (2d Cir. 2008) (citing [Firestone, 489 U.S.] at
115, 109 S.Ct. 948). Here, there is no dispute that Defendant
has the exclusive authority to determine eligibility and to
construe the terms of the Plan. See Dkt. No. 21-2,
Def.'s Statement of Mat. Facts, at ¶ 1; Dkt. No.
24-1, Pl.'s Counter Statement of Mat. Facts, at ¶ 1.
Plaintiff asserts that Defendant's conflict of interest
requires the Court to conduct a de novo review.
However, following the Supreme Court's decision in
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008),
the Second Circuit made clear that "a plan under which
an administrator both evaluates and pays benefits claims
creates the kind of conflict of interest that courts must
take into account and weigh as a factor in determining
whether there was an abuse of discretion, but does not make
de novo review appropriate." McCauley,
551 F.3d at 133 (citing Glenn, [554 U.S. at 111, ]
128 S.Ct. at 2348). "This is true even where the
plaintiff shows that the conflict of interest affected the
choice of a reasonable interpretation." Id.
(citing Glenn, [554 U.S. at 111, ] 128 S.Ct. at
2348). Thus, rather than change this Court's standard of
review, Defendant's conflict of interest is a factor that
the Court must consider when reviewing Defendant's
arguments to the contrary are unpersuasive. First,
Plaintiff's citation to Waksman is erroneous as
that decision clearly acknowledged that a conflict of
interest alone is insufficient to warrant de novo
review. See Waksman v. IBM Separation Allowance
Plan, 138 F.App'x 370, 371 (2d Cir. 2005) (summary
order) (stating that "[t]he mere fact that the
administrator is employed by a party that could suffer
financially under the administrator's decision is not
enough to lessen the deference due to the administrator"
Plaintiff argues that Defendant failed to comply with DOL
regulations in denying her claim. See Dkt. No. 24-8
at 7. Plaintiff contends that the regulations require a
"meaningful dialogue between the plan administrator and
their beneficiaries." See Dkt. No. 24-6 at 7.
Plaintiff argues that she received a letter from
Defendant's employee Shannon Teed that asked her to
contact her, and she called back but never received a return
call. See Id. Therefore, according to Plaintiff, Ms.
Teed's failure to return her call violated 29 C.F.R.
§ 2560.503-1(f)(2)(iii)(B). This regulation provides
[i]n the case of a post-service claim, the plan administrator
shall notify the claimant, in accordance with paragraph (g)
of this section, of the plan's adverse benefit
determination within a reasonable period of time, but not
later than 30 days after receipt of the claim. This period
may be extended one time by the plan for up to 15 days,
provided that the plan administrator both determines that
such an extension is necessary due to matters beyond the
control of the plan and notifies the claimant, prior to the
expiration of the initial 30-day period, of the circumstances
requiring the extension of time and the date by which the
plan expects to render a decision. If such an extension is
necessary due to a failure of the claimant to submit the
information necessary to decide the claim, the notice of
extension shall specifically describe the required
information, and the claimant shall be afforded at least 45
days from receipt of the notice within which to provide the
29 C.F.R. § 2560.503-1(f)(2)(iii)(B).
Second Circuit has held that "a plan's failure to
comply with the Department of Labor's claims-procedure
regulation, 29 C.F.R. § 2560.503-1, will result in that
claim being reviewed de novo in federal
court[.]" Halo v. Yale Health Plan, Dir. of Benefits
& Records Yale Univ., 819 F.3d 42, 57-58 (2d Cir.
2016). However, as Defendant points out, the only regulation
with which Plaintiff alleges Defendant failed to comply
pertains to Group Health Plans, not disability benefits
plans. Further, it is difficult to understand how
Defendant's alleged failure to return Plaintiff's
phone call violates this, or any other,
Plaintiff argues that the Court should review Defendant's
decision de novo because Defendant erred in
assigning weight to the different types of records that it
reviewed. See Dkt. No. 24-8 at 7 (citing Easter
v. Cayuga Med. Ctr. at Ithaca Prepaid Health Plan, __
F.Supp.3d __, No. 514CV1403, 2016 WL 6820464 (N.D.N.Y. Nov.
15, 2016)). However, like Plaintiff's citation to
Waksman, her citation to Easter provides no
support for her overall contention. Rather, the court in
Easter reviewed the plan's decision de
novo because the plan administrator failed to comply
with DOL regulations. See Easter v. Cayuga Med. Ctr. at
Ithaca Prepaid Health Plan, No. 5:14-CV-1403,
F.Supp.3d, 2016 WL 6820464, *17 (N.D.N.Y. Nov. 15, 2016).
Plaintiff argues that Defendant, or the reviewing physicians,
should have obtained additional medical reports regarding
Plaintiff's difficulty fitting in a prosthesis and should
have ordered an IME. See Dkt. No. 24-8 at 7-8.
However, it was Plaintiff's responsibility to provide the
relevant medical reports. Indeed, Plaintiff notes that
"[a] combination of plaintiff's lack of
communication skills and perhaps her counsel's failure to
properly probe into the actual treatment resulted in none of
the prosthetic records be (sic) made part of the
administrative record." See id. at 8.
on the foregoing, the Court concludes that de novo
review is not appropriate in this case; and, therefore, the
Court will review Defendant's decision under a
deferential standard, meaning that this Court "may not
overturn the administrator's denial of benefits unless
its actions are found to be arbitrary and capricious, meaning
'without reason, unsupported by substantial evidence or
erroneous as a matter of law.'" McCauley,
551 F.3d at 132 (quoting Pagan [v. NYNEX Pension
Plan], 52 F.3d [438, ] 442 [(2d Cir. 1995)]).
Evidence outside ...