Macleod v. Procter & Gamble Disability Ben. Plan

• Decision Date: 06 November 2006
• Docket Number: No. 3:05CV725 (MRK).,3:05CV725 (MRK).
• Citation: 460 F.Supp.2d 340
• Court: U.S. District Court — District of Connecticut
• Parties: Carl S. MACLEOD, Plaintiff, v. The PROCTER & GAMBLE DISABILITY BENEFIT PLAN, The Proctor & Gamble Co., and P & G-Clairol, Inc., Defendants.

460 F.Supp.2d 340

Carl S. MACLEOD, Plaintiff, v. The PROCTER & GAMBLE DISABILITY BENEFIT PLAN, The Proctor & Gamble Co., and P & G-Clairol, Inc., Defendants.

No. 3:05CV725 (MRK).

United States District Court, D. Connecticut.

November 6, 2006.

Mark C. Durkin, Durkin & Polera, PC, Stamford, CT, for Plaintiff.

Amy L. Van Dyke, Updike, Kelly & Spellacy, P.C., Hartford, CT, Christopher L. Brigham, Updike, Kelly & Spellacy, P.C., New Haven, CT, John J. Myers, Eckert, Seamans, Cherin & Mellott, Pittsburgh, PA, for Defendants.

RULING AND ORDER

KRAVITZ, District Judge.

This is an appeal of a denial of Mr. Macleod's application for disability benefits from the Proctor & Gamble Disability Benefit Plan (the "Plan"), in which he was enrolled when Proctor & Gamble ("P & G") acquired the Clairol facility of Mr. Macleod's then-employer, Bristol Meyers. Pending before the Court are Plaintiff's Motion for Partial Summary Judgment [doc. # 32] and Defendants' Cross-Motion for Summary Judgment [doc. # 35]. For the reasons that follow, Plaintiff's Motion for Partial Summary Judgment [doc. # 32] is GRANTED IN PART and DENIED IN PART, Defendants' Cross-Motion [doc. # 35] is DENIED, and the case is remanded to the Plan Trustees to consider Mr. Macleod's application for disability benefits in conformity with this opinion.

I.

Mr. Macleod was honorably discharged from the U.S. Army on April 30, 2001, after over twenty years of service to the Nation. At the time of his discharge, the military designated him as 70% disabled. See Plaintiff's Memorandum of Law in Support of Motion for Partial Summary Judgment [doc. # 33] Ex. A-6. Mr. Macleod became employed at Bristol Meyers' Clairol facility in March 2001, see Amended Complaint [doc. # 19] ¶ 8, before it was acquired by P & G in October 2001, see id. ¶¶ 5-6. Mr. Macleod claims that when P & G acquired the Clairol facility, he confirmed with several representatives of P & G's human resources department that his prior military service would not disqualify him from coverage under the Plan. See id. ¶ 10. Defendants counter that the individuals with whom Mr. Macleod spoke were not P & G employees. See Defendants' Reply to Plaintiff's Local Rule 56(a)1 Statement [doc. # 39] ¶ 9. In February 2004, Mr. Macleod was diagnosed with chronic solvent encephalopathy ("CSE"). He continued to work for P & G until October 4, 2004, when his medical providers pronounced him totally disabled. See Pl.'s Mem. in Supp. of Mot. for Partial Summ. J. [doc. # 33] at 4-5.

On October 25, 2004, Mr. Macleod applied for disability benefits under the Plan, but his application was denied four days later, on October 29, 2004. See Am. Compl. [doc. # 19] at ¶ 15. The letter from the Trustee-appointed Review Board stated that Mr. Macleod's application was denied because his disability resulted from his military service, and was thus excluded from coverage under Article VI, Section I, of the Plan pursuant to the "military exclusion" adopted by the Trustees in March 2003,¹ which the Review Board characterized as requiring the denial of benefits "in cases where the absence is due to the treatment of illness or injury caused by any military service...." See Pl.'s Mem. in Supp. of Partial Summ. J. [doc. # 33] Ex. A-2.

Mr. Macleod appealed the denial of benefits to the Trustees of the Plan on November 23, 2004, see id. Ex. A. On December 16, 2004, the Trustees denied Mr. Macleod's appeal, see id. Ex. B. In the denial, the Trustees cited the "military exclusion," which the Trustees had adopted to exclude coverage for any injury that occurred as a result of an employee's tenure in the military. See id. According to the Trustees, the exclusion applied "irrespective of course of treatment," "if there is potential disability coverage liability from another entity."² Id.

Defendants claim that this so-called "military exclusion" is a permissible clarification of the Trustees' longstanding interpretation of Article VI, Section 1. Article VI, Section I is quoted at length below:

Any Participant who becomes totally disabled shall be paid Total Disability benefits while totally disabled in accordance with the following provisions:

1. This Plan shall not provide benefits if disability is due to illness, accident or injury which occurred while the Participant was performing work for the Company and for which compensation may be payable or is paid under the terms and provisions of a State or Federal worker's compensation law. The Trustees may suspend the payment of any Plan benefits if there is potential coverage of the disabling illness, accident or injury under the terms and provisions of a State or Federal worker's compensation law until there is a final determination of whether there is such coverage. If illness, accident or injury occurs while the Participant is working for pay for some person or organization other than the Company, payment of benefits under this Plan shall be made only at the discretion of the Board of Trustees after their review of the facts of the case. In any event, this Plan shall not pay benefits if there is any purposeful failure to apply for compensation under any State or Federal worker's compensation law in connection with a disability which should be compensable under such law.

Pl.'s Mem. in Supp. of Partial Summ. J. [doc. # 33] Ex. A-4 at 8 (emphasis added). The Trustees contend that Mr. Macleod's CSE "occurred," for the purposes of the Plan, while he worked "for pay for some ... organization other than the Company," specifically the military, and that therefore this Plan provision, and the military exclusion specifically, applies to his application for benefits.

II.

"[A] district court reviews a plan administrator's denial of benefits 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." Gibbs v. CIGNA Corp., 440 F.3d 571, 575 (2d Cir.2006) (internal quotation marks omitted). "Where the plan reserves discretionary authority for the administrator, ... denials are subject to the more deferential arbitrary and capricious standard, and may be overturned only if the decision is without reason, unsupported by substantial evidence or erroneous as a matter of law." Id. (internal quotation marks omitted).

Here, the Plan makes crystal clear that the Trustees retain authority to interpret and apply the Plan. See, e.g., Pl.'s Mem. in Supp. of Mot. for Partial Summ. J. [doc. # 33] Ex. A-4, at 14 ("The Trustees have the discretionary authority to interpret the terms of this Plan and to determine eligibility for and entitlement to Plan benefits in accordance with terms of this Plan."). Thus, to the extent that the parties dispute the meaning or proper application of Plan provisions, the Court applies an arbitrary and capricious standard of review in considering the Trustees' interpretation and application of the Plan. "Nevertheless, where the plan administrator `imposes a standard not required by the Plan's provisions, or interprets the plan in a manner inconsistent with its plain words, ... [its] actions may well be found to be arbitrary and capricious.'" Pulvers v. First UNUM Life Ins. Co., 210 F.3d 89, 93 (2d Cir.2000) (alterations in original). Furthermore, "[u]nambiguous language in an ERISA plan must be interpreted and enforced in accordance with its plain meaning. Language is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement." Gibbs, 440 F.3d at 578-79 (citing Aramony v. United Way Replacement Benefit Plan, 191 F.3d 140, 149 (2d Cir.1999)).

As a threshold matter, Mr. Macleod argues that Article VI, Section I has no application to his case because his injury did not "occur" while he was "working for pay for some person or organization other than the Company," as required by that provision. The Trustees' determination to the contrary, he argues, was arbitrary and capricious. Mr. Macleod points out that he was only 70% disabled at the time he was discharged from the military and that his military disability rating did not include his later-diagnosed condition of CSE, which is the condition that has totally disabled him. To support his claim, Mr. MacLeod cites the following documents in the record: (1) the Rating Decision he received when he left the Army, see Pl.'s Mem. in Supp. of Mot. for Partial Summ. J. [doc. # 33] Ex. A-6, which nowhere mentions CSE or any of its symptoms, and (2) a letter from his treating physician in October 2004, which confirms his diagnosis of CSE, see id. Ex. A-1.

The Trustees rejoin that there is ample evidence for concluding that the root cause of Mr. Macleod's CSE originated during his military service, and that thus the injury itself "occurred" while he was "working for pay for some ... organization other than the Company," namely, the military. The Court agrees. In fact, substantial evidence supporting the Trustees' position is found in the very physician's letter Mr. Macleod included in his benefits application. This letter, from his physician, states in relevant part as follows:

Mr. Macleod has a significant and complicated medical history and .... as a result of his military experience, suffered from chronic balance problems, memory loss, and chronic regional pain syndrome. He underwent extensive medical and radiological evaluations; including several brain/head/body MRI's which [sic] instrumental in providing him the appropriate medical care. In addition, he underwent a lumbar puncture to exclude other potentially treatable causes for residuals of infection that occurred while in the service of our country. In the absence of identifiable infectious etiologies, he was diagnosed with chronic solvent encephalopathy.

Id. (emphasis added). Mr. Macleod's physician not only links three physical ailments not found...