Doe v. Cigna Life Ins. Co. of New York
| Decision Date | 26 January 2004 |
| Docket Number | No. 00-CV-1018S.,00-CV-1018S. |
| Citation | 304 F.Supp.2d 477 |
| Parties | John DOE, Plaintiff, v. CIGNA LIFE INSURANCE CO. OF NEW YORK and Liberty Life Assurance Co. of Boston, Defendants. |
| Court | U.S. District Court — Western District of New York |
Geiger and Rothenberg, LLP, David Rothenberg, of Counsel, Rochester, for Plaintiff.
Bond, Schoeneck & King, LLP, Richard A. Braden, of Counsel, Buffalo, for the Defendant, Liberty Life Assurance Company of Boston.
DECISION & ORDER
In this case, Plaintiff John Doe seeks to recover long-term disability benefits from Defendants Cigna Life Insurance Company of New York ("Cigna") and Liberty Life Assurance Company of Boston ("Liberty") pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"). In addition, Plaintiff claims that he is entitled to equitable relief pursuant to ERISA § 502(a)(3) because Liberty breached its fiduciary duty. Currently before this Court is Liberty's Motion for Summary Judgment.1
The facts of this case, which are undisputed for purposes of the instant motion, may be summarized as follows.2 In July of 1988, Plaintiff began working as an attorney at Harris, Beach, & Wilcox ("Harris Beach"), a law firm located in Rochester, New York, (Liberty's Rule 56 Statement, ¶ 1). Plaintiff was eventually promoted to partner. Id.
Defendant Liberty is an insurance company licensed to do business in the State of New York. (Amended Complaint, ¶ 3). In 1995, Liberty issued a Group Disability Income Policy (the "Policy") to Harris Beach. (Liberty's Rule 56 Statement, ¶ 2). The Policy, which became effective on July 1, 1995, provided long-term disability benefits to certain eligible classes of Harris Beach employees, including partners. Id. at ¶¶ 2-3.
On August 14, 1997, Plaintiff was hospitalized for three weeks after contracting encephalitis and spinal meningitis. (Plaintiff's Memorandum of Law, p. 1). Except for a brief period in September, Plaintiff was absent from work as a result of his illness until December of 1997. (Liberty's Rule 56 Statement, ¶ 16).
On October 31, 1997, Susan Dearstyne, Harris Beach's administrative manager, composed and mailed a letter to Liberty (the "Dearstyne Letter").3 Id. at 17. In her letter, Ms. Dearstyne stated that she wanted to provide Liberty with "preliminary notice of a disability claim which may be made on behalf of one of [Harris Beach's] partners." (Dearstyne Letter, at LL-00048, attached as Exhibit C to Affidavit of Paula McGee). The letter did not identify the partner or describe the nature of his illness, but advised that Ms. Dearstyne would provide Liberty with additional information if the situation progressed. Id.
After returning to work in December of 1997, Plaintiff continued to practice law at Harris Beach until July 31, 1998, when he joined the law firm of Trevett, Lenweaver, & Salzer, P.C. ("Trevett").4 (Liberty's Rule 56 Statement, ¶ 29-30).
On June 22, 2000, Plaintiff submitted a Disability Claim Form to Liberty. Id. at 15. Plaintiff claimed that he was entitled to long-term disability benefits under the terms of the Policy because he had suffered "encephalitis and spinal meningitis resulting in permanent brain damage" while employed at Harris Beach. (Disability Claim Form, at LL-00047, attached as Exhibit C to McGee Affidavit). After reviewing the claim, Liberty determined that Plaintiff had not provided timely notice of his claim as required under the Policy. (Liberty's Rule 56 Statement, ¶ 23). Thereafter, Liberty informed Plaintiff that his claim was denied. (Notice of Rejection of Claim, at LL-00044, attached as Exhibit E to McGee Affidavit).
Plaintiff commenced this action on October 24, 2000, by filing a Summons and Complaint in the New York State Supreme Court, Monroe County. Defendant Liberty removed the case to the United States District Court for the Western District of New York on November 27, 2000.5
On April 26, 2002, Defendant Liberty filed a Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.6 Thereafter, this Court referred this matter to the Honorable Leslie G. Foschio, United States Magistrate Judge, to hear Liberty's summary judgment motion and issue a Report and Recommendation.
Judge Foschio filed a Report and Recommendation on September 11, 2003, recommending that Liberty's motion be granted in all respects. On October 8, 2003, Plaintiff filed Objections to the Report and Recommendation.7 This Court heard oral argument on December 8, 2003, and reserved decision at that time.
Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment is warranted where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A "genuine issue" exists "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Ford v. Reynolds, 316 F.3d 351, 354 (2d Cir.2003). A fact is "material" if it "might affect the outcome of the suit under governing law." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. In a case where the non-moving party bears the ultimate burden of proof at trial, the movant may satisfy its burden by pointing to the absence of evidence supporting an essential element of the non-moving party's claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
When deciding a motion for summary judgment, a court must view the evidence and the inferences drawn from the evidence "in the light most favorable to the party opposing the motion." Adickes v. S.H. Kress and Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). "Only when reasonable minds could not differ as to the import of evidence is summary judgment proper." Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir.1991). The function of the court is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505.
Summary judgment is not appropriate if "there is any evidence in the record that could reasonably support a jury's verdict for the non-moving party." Ford, 316 F.3d at 354. However, the party against whom summary judgment is sought Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir.2002).
Plaintiff asserts two causes of action against Defendant Liberty. First, pursuant to ERISA § 502(a)(1)(B), Plaintiff contends that he is entitled to receive disability benefit payments under the terms of the Policy. Second, Plaintiff alleges that he is entitled to equitable relied under ERISA § 502(a)(3) because Liberty breached its fiduciary duty to him. Liberty argues that it is entitled to summary judgment with respect to both causes of action. This Court will address each cause of action in turn.
Under ERISA § 502(a)(1)(B), a participant or beneficiary of an employee benefit plan may commence a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B).
In an action commenced pursuant to § 502(a)(1)(B), the court reviews a plan administrator's decision to deny benefits "under a de novo standard unless the benefit plan gives the administrator ... discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Muller v. First Unum Life Ins. Co., 341 F.3d 119, 123-24 (2d Cir.2003) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)).
If the benefit plan vested the administrator with discretionary authority, the denial of benefits is subject to a deferential, "arbitrary and capricious" standard of review. Burke v. Kodak Retirement Income Plan, 336 F.3d 103, 109 (2d Cir.2003). Under this standard, the decision to deny benefits "may be overturned only if the decision is `without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir.1999) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir.1995)).
In the present case, the Policy provided that Liberty possessed discretionary authority to construe the terms of the Policy and determine benefit eligibility. (Policy, at LL-00024, attached as Exhibit A to McGee Affidavit). Accordingly, this Court must evaluate Liberty's decision to deny Plaintiff's claim under the arbitrary and capricious standard of review. Therefore, in the context of the instant summary judgment motion, the question presented is whether, viewing the evidence in the light most favorable to Plaintiff, a reasonable trier of fact could conclude that Liberty's decision to deny benefits was arbitrary and capricious.
As discussed supra, Liberty denied Plaintiff's claim because it found that he had failed to file a timely notice of claim. The Policy required Plaintiff to provide written notice of claim "within 30 days of the date of the loss on which the claim is based, if that is possible." (Policy, at LL-00025, attached as Exhibit A to McGee Affidavit). If it was not possible for Plaintiff to provide notice within thirty days of the date of the loss, he was...
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