Fraley v. Gen. Motors

• Decision Date: 01 June 2020
• Docket Number: 4:16-CV-14465-TGB
• Parties: CHARLES FRALEY, Plaintiff, v. GENERAL MOTORS, LLC, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

CHARLES FRALEY, Plaintiff, v. GENERAL MOTORS, LLC, Defendant.

4:16-CV-14465-TGB

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

June 1, 2020

ORDER DENYING IN PART AND GRANTING IN PART PLAINTIFF'S MOTION FOR LEAVE TO FILE PLAINTIFF'S AMENDED AND SUPPLEMENTAL COMPLAINT

Before the Court is Plaintiff's Motion for Leave to File Amended and Supplemental Complaint. ECF No. 29. For the reasons stated herein, the motion is DENIED IN PART and GRANTED IN PART. Further, the Court will direct Defendant General Motors, LLC to supplement the Administrative Record with those documents to which the parties have stipulated.

I. Background

Plaintiff Charles Fraley was an engineer employed by Defendant General Motors, LLC ("GM") until he developed a disability which prevented him from working. Plaintiff's Original Complaint, ECF No. 1, PageID.2-3. Plaintiff applied for, and was granted, Social Security Disability Insurance benefits ("SSDI"), and Defendant also granted Plaintiff "Sickness and Accident Benefits," ("S&A") along with "Extended Disability Benefits," ("EDB"). ECF No. 1, PageID.3. But Defendant did not approve other benefits to which Plaintiff believed he was entitled, and so Plaintiff filed this lawsuit under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., asserting claims for (1) Life Insurance; (2) Health Care Coverage; (3) Continuation of health insurance coverage under COBRA ("Consolidated Omnibus Budget Reconciliation Act"); and (4) Request for Documents. ECF No. 1, PageID.3-11. Defendants filed an Answer with affirmative defenses on January 27, 2017. ECF No. 4.

On May 31, 2017, Defendant filed the Administrative Record consisting of nearly 1,000 pages including plan documents and administrative records. ECF No. 6. On July 28, 2017, Plaintiff filed a "Motion for Remand to Supplement the Administrative Record," contending that the record was incomplete, and seeking to remand to the administrator to supplement the administrative record. ECF No. 8. To adequately consider this motion, the Court suspended its standard scheduling order that applies to ERISA cases while it considered Plaintiff's motion. ECF Nos. 10, & 11; Sept. 13, 2017 Text Only Order.

After reviewing arguments from both parties (ECF Nos. 8 & 12), the Court denied Plaintiff's request. ECF No. 13. In its Opinion and Order, this Court observed that Plaintiff never raised a claim of "administrator bias" or of "procedural deficiency." ECF No. 13,PageID.1070-1071. The Court further noted that, per the Sixth Circuit, a complainant "cannot 'simply on a hunch' compel [Defendant] to produce documents that either do not exist or were not included in the administrative record in the ordinary course of [Defendant's] business." ECF No. 13, PageID.1070 (quoting Likas v. Life Ins. Co. of North America, 222 Fed. Appx. 481, 485 (6th Cir. 2007) (unpublished case) (internal citations omitted)). The Court found that Plaintiff had failed to present any evidence to suggest that the records they sought existed in this case or were improperly omitted. ECF No. 13, PageID.1072-1073. The Court held that it would be able to review this matter based solely on the existing administrative record. ECF No. 13, PageID.1072.

During a telephonic conference held on January 17, 2018 with counsel for both sides, counsel for Plaintiff requested leave to withdraw as counsel. This motion was granted. ECF No. 14. On February 15, 2018, new counsel for Plaintiff filed notice of appearance, and took over litigation of this case. ECF No. 15.

Subsequently, Plaintiff filed the instant Motion to Amend and Correct the Complaint, alleging that, while this case began as an ERISA action, there were grounds to support adding other claims and new defendants because the Administrative Record, Plaintiff alleged, was fraudulently redacted. ECF No. 29. In the amended complaint, Plaintiff seeks to:

• add Sedgwick Claims Management Services, Inc. ("Sedgwick") and Fidelity & Guaranty Life Insurance Co., Inc. ("Fidelity") as defendants;

• add 11 new claims

• add 20 "John and Jane Doe" defendants;

• request additional statutory relief under the new claims, a host of other sanctions, equitable relief, punitive damages, etc.; and

• reorganize and replead his original claims for health care coverage, COBRA violations, a failure to provide requested documents, and denial of life insurance benefits.

On May 2, 2019, the Court held a hearing on Plaintiff's motion to amend the complaint. At that hearing, Plaintiff indicated that he had in his possession numerous documents that should have been included in the Administrative Record (ECF No. 6) provided to the Court by the plan administrator but were not included; namely, "automated letters acknowledging Plaintiff's calls made in the manner proscribed by the plan to get COBRA coverage." ECF No 29, PageID.2443. Counsel for Defendant agreed to review the documents identified by Plaintiff and the Court ordered the parties to meet and confer over whether the Administrative Record could be supplemented to include additional materials. ECF No. 36. In September 2019, the parties filed supplemental briefs regarding the Administrative Record. ECF Nos. 43-44. The Court also held a telephonic conference with the parties regarding the supplemental briefs.

In its brief, Defendant asserted that of the non-duplicative documents that Plaintiff sought to add to the Administrative Record, many are documents related to Plaintiff's approved claims for Sick & Accident Benefits ("S&A"), Extended Disability Benefits ("EDB"), and Total and Permanent Disability benefits ("TPD"). ECF No. 43, PageID.2621. Defendant contends these documents relate to claims in Plaintiff's proposed amended complaint (ECF No. 29-2) rather than claims in Plaintiff's original complaint (ECF No. 1). As these documents were not before the claim administrator at the time of its final decision—because they did not involve denied benefits—Defendant contends they should not be added to the current Administrative Record. ECF No. 43, PageID.2621. Conversely, Plaintiff argues S&A, EDB, and TPD documents are relevant to determining Fraley's eligibility for life insurance (Count I of Plaintiff's original complaint) because the Summary Plan Description ("SPD") provides that Basic Life Insurance will be continued at no cost to Plaintiff while he is totally disabled up to age 65. See Original Complaint, ECF No. 1, PageID.4-5.

GM also identified four documents (dated March 21, 2016, March 31, 2016, July 26, 2017, and January 31, 2018). ECF No. 43, PageID.2622. Because these documents were generated after the claim administrator rendered its decision, they could not have been consideredby the claim administrator, and Defendant contends that therefore they should not be supplemented into the Administrative Record. Id. Finally, Defendant acknowledged a set of non-duplicative documents, consisting of 38 pages, that it agrees may be added to the record "in order to resolve this dispute regarding the Administrative Record." Id.

District courts, when asked to review a Plan Administrator's denial of ERISA benefits, should conduct a review "based solely upon the administrative record." Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 619 (6th Cir. 1998). They generally should not consider "evidence not presented to the plan administrator." Perry v. Simplicity Eng'g, 900 F.2d 963, 966 (6th Cir. 1990). "The only exception to the . . . principle of not receiving new evidence at the district court level arises when consideration of that evidence is necessary to resolve an ERISA claimant's procedural challenge to the administrator's decision, such as an alleged lack of due process afforded by the administrator or alleged bias on its part." Wilkins, 150 F.3d at 618.

Fraley's original complaint does not explicitly allege a lack of due process or administrator bias, but it does allege that GM repeatedly denied Plaintiff's requests for documents related to his COBRA and other ERISA eligibility. ECF No. 1, PageID.9-10. This included "all communications" such as "electronic and paper correspondence," "records of telephone calls made to and from GM Benefits & Services" and "all notations" made by GM representatives concerning these calls. Id.Allegations in Plaintiff's proposed amended complaint with respect to Counts 1 - 4 expand on these allegations by contending that the Plan Administrator failed to consider these communications when determining whether Fraley should be extended the requested ERISA benefits and that GM failed to give him proper notice that he would not receive COBRA coverage. See ECF No. 29-2, PageID.2472. Plaintiff also alleges that GM's Plan Administrator did not respond to his administrative appeal with respect to his request for COBRA coverage. Id. at PageID.2471. See Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991) ("In reviewing a final decision, this court must consider what occurred during the administrative appeals process. The administrative scheme of ERISA requires a participant to exhaust his or her administrative remedies prior to commencing suit in federal court.").

The Court finds these allegations sufficient to support a procedural due process challenge to GM's denial of ERISA, and that accordingly some supplementation of the Administrative Record may be permitted with respect to the 38 pages to which the parties have stipulated. See Jones v. Iron Workers Local 25 Pension Fund, 2014 WL 12775664, at *6 (E.D. Mich. Aug. 15, 2014) ("The following have been found to violate due process [in ERISA cases]: the lack of information of factual basis used to support a denial of benefits; failure to state specific reasons for denial of claim; failure to notify claimant of appeal procedures; and, failure to provide a reasonable opportunity for a full and fair review of decision.").The Court therefore ORDERS Defendant to supplement the Administrative...