Byars v. Coca-Cola Co.

• Citation: 517 F.3d 1256
• Decision Date: 22 February 2008
• Docket Number: No. 06-15708.,06-15708.
• Parties: Lisa Ann BYARS, Plaintiff-Counter Defendant-Appellant, v. THE COCA-COLA COMPANY, The Coca-Cola Long Term Disability Income Plan, et al., Defendants-Appellees, ReliaStar Life Insurance Company, Kemper National Services, Inc., NATLSCO, Inc., Defendants-Counter Claimants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

517 F.3d 1256

Lisa Ann BYARS, Plaintiff-Counter Defendant-Appellant, v. THE COCA-COLA COMPANY, The Coca-Cola Long Term Disability Income Plan, et al., Defendants-Appellees, ReliaStar Life Insurance Company, Kemper National Services, Inc., NATLSCO, Inc., Defendants-Counter Claimants-Appellees.

No. 06-15708.

United States Court of Appeals, Eleventh Circuit.

February 22, 2008.

Pamela Ilene Atkins, Atkins & Ass'n, LLC, Atlanta, GA, for Byars.

Darren A. Shuler, David Tetrick, Jr., Michael W. Johnston, King & Spalding, LLP, Michael A. Coval, Tiffany Delome Downs, Ford & Harrison, Elizabeth Finn

Johnson, The Coca-Cola Co., Atlanta, GA, William Daniel Hittler, Halleland, Lewis, Nillan & Johnson, Minneapolis, MN, for Appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before TJOFLAT, ANDERSON and COX, Circuit Judges.

COX, Circuit Judge:

I. INTRODUCTION

Lisa Ann Byars appeals the district court's judgment denying her "any occupation" long-term disability benefits under an ERISA-governed plan. She also challenges the court's award of "own occupation" benefits falling below 60% of her average compensation, and raises various other issues related to this award. Finally, she challenges the court's denial of her motion for statutory penalties against the Defendants. We vacate in part and affirm in part.

II. BACKGROUND

Byars worked for The Coca-Cola Company ("Coca-Cola") for twenty-three years until she was injured in August 1999 while vacationing out of the country. No longer able to continue her work, she received from Coca-Cola six months of short-term disability payments under a "payroll practice" plan, the terms of which are irrelevant to this case. While she was receiving short-term disability payments, she filed a claim for long-term disability ("LTD") benefits under The Coca-Cola Long Term Disability Income Plan ("the Plan").

A. The Plan

Coca-Cola's Plan is governed by the Employee Retirement Income and Security Act of 1974, 29 U.S.C. § 1001-1461, and designates Coca-Cola as the sponsor and plan administrator. Coca-Cola delegated its powers as plan administrator to The Coca-Cola Company Long Term Disability Income Plan Committee ("Committee"), which is the Plan's named fiduciary. The Committee has "the exclusive responsibility and complete and final discretionary authority to construe the Plan and to decide all questions arising under the Plan...." (R.15-216 at CC426 § 7.2(b)(2).¹) The Committee also has the "exclusive responsibility and the complete and final discretionary authority to determine the eligibility of all Participants to receive benefits and the amount of benefits to which any Participant may be entitled under the Plan...." (R.15-216 at CC426 § 7.2(b)(3).)

The Plan requires the Committee to select one or more Coca-Cola employees to serve as its delegates. The delegates have the "complete discretionary authority and sole responsibility to make all decisions on whether to approve or deny claims for benefits under the Plan and their decisions shall be final and binding on all parties."² (R.15-216 at CC430.) The Plan permits the Committee to retain an administrative services provider with responsibility to "investigate and process claims and appeals of denied claims, forward claim determination recommendations to the delegates for review, and issue payment of claims to participants as directed by the delegates." (R.15-216 at CC430.) ReliaStar Life Insurance Company was the administrative services provider when Byars submitted her claim for LTD benefits.³

Under the Plan, a participant is entitled to LTD benefits if she is "disabled." The Plan contains two definitions of disability. Under the first definition, a participant is disabled if, during the first twenty-four months following the disability date,⁴ "a physical or mental illness or injury continuously disables him from performing his normal duties for his Employer...." (R.15-216 at CC391 § 1.11) (hereinafter the "own occupation" definition). Under the second definition, a participant is disabled if, after the first twenty-four months, a "physical or mental illness or injury continuously disables him from engaging in any occupation for wage or profit, for which he is reasonably qualified by training, education or experience...." (R.15-216 at CC 391 § 1.11) (hereinafter the "any occupation" definition).

B. Byars' Claim

Byars filed her claim for LTD benefits on January 26, 2000, claiming that her disability date was on or around August 20, 1999. (R.9-131 at 24 ¶ 28.) Because she filed her claim within the first twenty-four months following her disability date, the "own occupation" definition applied. ReliaStar denied her claim on April 14, 2000, saying that the medical evidence showed she was still "capable of performing the substantial and material duties of [her] regular occupation" as a Product Consultant. (R.15-216 at CC178.) Byars appealed denial of her claim. ReliaStar upheld its decision on August 30, 2000, again saying that Byars was "not totally disabled from [her] own occupation...." (R.15-216 at CC162.) Then, on January 23, 2001 — only seventeen months after Byars' disability date — the Committee informed her that it was upholding ReliaStar's decision to deny her benefits. (R.15-216 at CC8.) Invoking ERISA jurisdiction, 29 U.S.C. § 1132(e), Byars filed this lawsuit in November 2001.

C. The District Court Proceedings

In her original complaint, Byars asked for a "[d]eclaration of her right to benefits (past, present and future) under the terms of The LTD Plan." (R.1-1 at 56.) She also sought attorney's fees, prejudgment interest, and statutory penalties. In the last of her several amended complaints, Byars elaborated on her request for LTD benefits, contending that she was owed "past due benefits from February 24, 2000 until the present...." (R.9-131 at 50 ¶ 85.)

Nearly five years after Byars filed her original complaint, which had been amended a number of times, the court ruled on the following dispositive motions: it granted in part and denied in part the Coca-Cola Defendants' Motion for Summary Judgment (R.12-193); granted ReliaStar's Motion for Summary Judgment (R.14-198); granted in part and denied in part Byars' Motion for Summary Judgment (R.12-192); and denied Byars' motion for Partial Summary Judgment for Document Withholding Penalties (R.13-195).

The court's first order of business in addressing the summary judgment motions was to establish a standard of review. Relying on Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948 956-57, 103 L.Ed.2d 80 (1989), the court decided that it should review the Committee's decision under an arbitrary and capricious standard because the Plan both designated the Committee as the plan administrator and granted the Committee discretion to make final benefit determinations. The court rejected Byars' argument that ReliaStar was the de facto plan administrator.⁵ (Under Bruch, ReliaStar's decision would be subject to de novo review because ReliaStar was not vested with discretion.)

Having established a standard of review, the court granted in part Byars' motion for summary judgment by reversing the Committee's decision to deny her benefits under the "own occupation" standard. The court first determined that the Committee's denial was de novo wrong because the evidence showed that Byars was unable to perform the essential responsibilities of her own occupation. Then, applying arbitrary and capricious review, the court determined "that the Committee's application of the Plan to [Byars'] disability claim was not made rationally and in good faith." (R.15-221 at 15.) The court based this finding on the Committee's January 23, 2001 denial letter in which it stated that Byars was entitled to benefits only if she satisfied the "any occupation" definition of disability. (R.15-216 at CC8.) Because not more than twenty-four months had passed since Byars' disability date, however, Byars was still subject only to the easier-to-prove "own occupation" definition. The court held that the Committee's use of the wrong definition of disability rendered its decision arbitrary and capricious, thereby entitling Byars to twenty-four months of "own occupation" benefits.

After awarding Byars twenty-four months of benefits, the court turned to the question of whether Byars was entitled to benefits beyond twenty-four months under the "any occupation" standard. It concluded that she was not, saying that "[h]er medical records do not demonstrate that she is physically disabled from engaging in any occupation for which she is qualified."⁶ (R.15-221 at 14.)

Next, the court denied Byars' motion for partial summary judgment in which she sought statutory penalties against the Coca-Cola Defendants and ReliaStar for their alleged failure to disclose documents that she requested after the Committee denied her claim. The court found that Byars failed "to demonstrate ... that the Defendants' failure to provide all these documents was committed in bad faith or that she was prejudiced by this failure." (R.15-221 at 17-18.) Finally, the court denied both Byars' and ReliaStar's motions for attorney's fees.

The court set a ten-day deadline for receiving proposed final judgments. The Coca-Cola Defendants and ReliaStar filed a joint proposed final judgment, in which they calculated that Byars was entitled to $52,423.68 of "own occupation" benefits. They arrived at this number by subtracting from 70% of Byars' average compensation the amount of Social Security Disability ("SSD") benefits that she was receiving. In her proposed final judgment, filed one day late, Byars calculated that she was entitled to $77,772.00 of "own occupation" benefits, reflecting 60% of her average compensation and not offset by SSD benefits. Including prejudgment interest, Byars requested a total of $137,537.41. She also claimed entitlement to reinstatement of other benefits that she alleged ...