Davis v. Hartford Life & Accident Insurance Co., 111920 FED6, 19-6091
|Opinion Judge:||CHAD A. READLER, CIRCUIT JUDGE|
|Party Name:||Richard E. Davis, Plaintiff-Appellant, v. Hartford Life & Accident Insurance Company, Defendant-Appellee.|
|Attorney:||Michael D. Grabhorn, Andrew M. Grabhorn, GRABHORN LAW | INSURED RIGHTS®, Louisville, Kentucky, for Appellant. William B. Wahlheim, Jr., John C. Neiman, MAYNARD COOPER & GALE, P.C., Birmingham, Alabama, for Appellee.|
|Judge Panel:||Before: COLE, Chief Judge; DONALD and READLER, Circuit Judges.|
|Case Date:||November 19, 2020|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Appeal from the United States District Court for the Western District of Kentucky at Louisville. No. 3:14-cv-00507-Claria Horn Boom, District Judge.
Michael D. Grabhorn, Andrew M. Grabhorn, GRABHORN LAW | INSURED RIGHTS®, Louisville, Kentucky, for Appellant.
William B. Wahlheim, Jr., John C. Neiman, MAYNARD COOPER & GALE, P.C., Birmingham, Alabama, for Appellee.
Before: COLE, Chief Judge; DONALD and READLER, Circuit Judges.
CHAD A. READLER, CIRCUIT JUDGE
Hartford Life & Accident Insurance Company provided disability benefits to Richard E. Davis under an insurance policy governed by the Employee Retirement Income Security Act of 1974 (ERISA). After Hartford Life determined that Davis no longer qualified as disabled under the policy, it terminated his benefits. Davis filed suit, bringing claims for breach of contract, breach of fiduciary duty, and disgorgement under 29 U.S.C. § 1132(a). The district court resolved all three claims in Hartford Life's favor. We now affirm.
Initial Award Of Long-Term Disability Benefits.
Davis worked for U.S. Bank as a Senior Application Developer. As part of his employment, Davis was insured under a long-term disability policy issued by Hartford Life. U.S. Bank vested Hartford Life with "full discretion and authority to determine eligibility for benefits" under its policy.
Beginning in October 2011, Davis missed work due to chronic back pain, neuropathy, and fatigue caused by multiple myeloma. Davis sought both short- and long-term benefits pursuant to his disability policy. Relying on the opinion of Davis's oncologist, Dr. Reddy, Hartford Life approved Davis's claim for short-term disability benefits through April 17, 2012.
The medical evidence, however, was less certain with respect to Davis's claim for long-term benefits. During visits by Davis between April 2011 and January 2012, Reddy had noted that Davis was in remission and, at times, capable of light-level work. Yet Reddy reported to Hartford Life in March 2012 that, at least until September, Davis could not work and could only sit, stand, and walk up to four hours per day. A Hartford Life nurse, upon reviewing Davis's records, noted that she anticipated Davis could return to work full-time by the end of his short-term disability period. But just as that period was set to expire, Reddy reported that Davis could only sit, stand, or walk for 30 minutes at a time. Unclear why Davis's condition had not improved, Hartford Life obtained notes from Davis's orthopedist, which indicated that Davis continued to report back pain and receive physical therapy. Reviewing Davis's file again, a Hartford nurse agreed that it was reasonable for Davis to finish his latest round of physical therapy before returning to work, and that he should be reevaluated in September.
In June, Hartford Life approved Davis's application for long-term disability benefits, retroactive to April. The approval letter explained that Davis would be considered "disabled" for 24 months if, during that time, he was unable to perform one or more essential job duties. Davis could continue to receive benefits beyond that time if he was unable to perform one or more of the essential duties of "Any Occupation," meaning "an occupation for which [he was] qualified by education, training or experience" and that has comparable "earnings potential."
In September, Reddy reported that Davis's sitting, standing, and walking restrictions were necessary for at least another six months. Reddy's notes, however, indicated that Davis was clinically stable and able to perform "light or sedentary work." In light of this apparent inconsistency, Hartford Life referred Davis's claim to its investigative unit. After surveilling and interviewing Davis, an investigator found "discrepancies between the claimant's reported limitations and what he is observed doing on surveillance." A Hartford Life nurse sent the investigator's report to Davis's treating physicians, requesting their opinions as to whether Davis was physically capable of working an eight-hour day with restrictions. Davis's primary care physician and neurologist both concluded that Davis could work full-time under the described conditions. Reddy disagreed, but would not answer follow-up questions from Hartford Life regarding the other doctors' conflicting opinions.
In view of these differing opinions, Hartford Life referred Davis's file to a vendor for an independent review. The vendor retained Dr. Wener, an orthopedic surgeon, to study the file and perform an examination. Wener reported that Davis was physically capable of sitting, standing, and walking for one hour at a time, respectively, for up to three hours each per eight-hour workday. In an addendum, Wener indicated that Davis could perform "light duty or sedentary work" within those restrictions for an eight-hour day. Hartford Life sent Wener's report to Reddy, seeking his feedback. Once again, Reddy did not respond.
Termination of Benefits.
Hartford Life developed an Employability Analysis Report based on Davis's work and educational history and his functional capabilities, as determined by Davis's primary care physician, neurologist, and Wener. The report identified five occupations at the "closest" or "good" level (indicating the ease of transferability of his skills) that were suitable for Davis and that met the policy's "Any Occupation" definition. Hartford Life in turn notified Davis in December 2013 that he would no longer qualify as disabled under the policy, meaning he would be ineligible for benefits after April 17, 2014.
Davis appealed the decision. He provided a statement and records from Reddy indicating that Davis had multiple myeloma without remission, fatigue with mild anemia, and chronic pain, and that Davis was capable of sitting, standing, and walking for a total of one hour per day. Reddy's records, however, included a November 2013 note indicating that Davis's multiple myeloma had "been quite stable to date," and that Davis had "not had any increase in pain." And a March 2014 record stated that Davis's "multiple myeloma continues to be stable," his anemia had normalized, and his back pain, though continuing, was being controlled with treatment.
In light of this conflicting information, Hartford Life obtained an additional review of Davis's case primarily through a pain management specialist retained by a vendor. As part of that review, Reddy informed the specialist that he did not object to Davis resuming full-time sedentary or light-level work. The specialist ultimately concluded that "there was no specific medical condition that precluded [Davis] from working at least at the full time sedentary occupational level." He believed that Davis could sit without restriction but should be allowed to stand or walk around for five to ten minutes after sitting for an hour. An internal medicine specialist who also reviewed Davis's records likewise concluded that "[b]ased on the information provided for review, [Davis's] history of multiple myeloma would not require functional limitations."
Hartford Life updated Davis's Employability Analysis Report with these additional opinions. The new report identified five occupations at the "closest" level-including Davis's previous occupations-that aligned with Davis's functional capabilities and the policy's "Any Occupation" definition. Hartford Life then notified Davis that it was upholding its termination decision.
Davis filed suit against Hartford Life, bringing claims for breach of contract to recover benefits under 29 U.S.C. § 1132(a)(1)(B), breach of fiduciary duty under § 1132(a)(3), and disgorgement under §§ 1132(a)(1)(B) and (a)(3). The district court granted Hartford Life's motion for judgment on the pleadings as to Davis's claims for breach of fiduciary duty and disgorgement. Davis v. Hartford Life & Accident Ins. Co., No. 3:14-CV-00507-TBR, 2016 WL 1574151, at *1 (W.D. Ky. Apr. 19, 2016). The district court later granted summary judgment to Hartford Life on the remaining breach of contract claim. Davis v. Hartford Life & Accident Ins. Co., No. 3:14-CV-507-CHB, 2019 WL 4017238, at *10 (W.D. Ky. Aug. 26, 2019).
On appeal, Davis claims that the district court erred in three respects. One, by applying an incorrect legal standard to his contract claim. Two, by upholding his benefits termination. And three, by dismissing his fiduciary duty and disgorgement claims. We take those arguments in turn, reviewing the district court's legal determinations de novo and its factual findings for clear error. Frazier v. Life Ins. Co. of N. Am., 725 F.3d 560, 565-66 (6th Cir. 2013).
Standard Of Review For The Breach Of Contract Claim.
The standard of review in this ERISA setting turns on the circumstances surrounding the benefits determination. Courts review a plan administrator's termination of benefits de novo unless the plan grants the administrator "discretionary authority to determine eligibility for benefits or construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan grants such authority, courts utilize an arbitrary-and-capricious standard, Clemons v. Norton Healthcare Inc. Ret. Plan, 890 F.3d 254, 264 (6th Cir. 2018) (quoting Firestone, 489 U.S. at 111, 115), unless the benefits decision was made by an entity other than the authorized administrator, in which case the standard of review reverts to de novo, Shelby Cnty. Health Care Corp. v. Majestic Star Casino, 581...
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