Greenwald v. Liberty Life Assurance Co. of Bos.

• Decision Date: 20 March 2013
• Docket Number: No. 4:12–CV–3034.,4:12–CV–3034.
• Citation: 932 F.Supp.2d 1018
• Court: U.S. District Court — District of Nebraska
• Parties: Todd GREENWALD, Plaintiff, v. LIBERTY LIFE ASSURANCE COMPANY OF BOSTON; Wells Fargo & Company; Wells Fargo & Company Short–Term Disability Plan; Wells Fargo & Company Long–Term Disability Plan, Defendants.

932 F.Supp.2d 1018

Todd GREENWALD, Plaintiff,

v.LIBERTY LIFE ASSURANCE COMPANY OF BOSTON; Wells Fargo & Company; Wells Fargo & Company Short–Term Disability Plan; Wells Fargo & Company Long–Term Disability Plan, Defendants.

No. 4:12–CV–3034.

United States District Court, D. Nebraska.

March 20, 2013.

John L. Spray, Sally A. Rasmussen, Mattson, Ricketts Law Firm, Lincoln, NE, for Plaintiff.

Jill L. Poole, Jackson, Lewis Law Firm, Omaha, NE, Robert M. Wood, Wendy L. Furhang, Jackson, Lewis Law Firm, Greenville, SC, for Defendant.

MEMORANDUM AND ORDER

JOHN M. GERRARD, District Judge.

Plaintiff Todd Greenwald brings this case under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. Greenwald asserts three claims for relief. His first claim is for benefits under the Wells Fargo Short–Term Disability Plan (the “STD Plan” or “the Plan”). Greenwald argues that Wells Fargo and Liberty Life Assurance Company of Boston erroneously denied his claim for STD benefits.¹ Previously, the parties agreed to remand Greenwald's second claim, for benefits under the Wells Fargo Long–Term Disability Plan (the “LTD Plan”), for administrative review. Filing 35. On remand, Liberty Life approved Greenwald's claim for benefits under the LTD Plan, and the parties have since stipulated to dismiss this claim, with prejudice. See filings 60, 81, and 82. Greenwald's third claim seeks statutory penalties under 29 U.S.C. § 1132(c) for Wells Fargo's failure to produce certain plan documents.

The parties have agreed to resolve Greenwald's pending claims as if cross-motions for summary judgment had been filed. See filing 40. Greenwald has also moved to strike (filing 54) portions of an affidavit submitted by defendants (filing 51–1). The Court has considered the pleadings, briefs, administrative record, and the parties' additional evidence (filings 47 and 51). For the reasons discussed below, the Court finds that defendants' decision to deny Greenwald's claim for short-term disability benefits was not supported by substantial evidence, and summary judgment will be entered in favor of Greenwald on his first claim. That claim will be remanded for further administrative proceedings consistent with this opinion. The Court finds, however, that Liberty Life is not a proper defendant to that claim, and Greenwald's first claim will be dismissed as to Liberty Life. The Court further finds that Greenwald is entitled to summary judgment on his claim for statutory penalties. Greenwald has also requested an award of attorney fees under § 1132(g)(1). He may be entitled to such an award, and the Court requests the parties to submit additional briefing on the issue. Finally, Greenwald's motion to strike will be denied as moot.

FACTUAL BACKGROUND

The STD Plan was a self-insured plan covered by ERISA; Wells Fargo was the Plan's sponsor and administrator. Filing 48 at ¶ 3; filing 39–3 at 47, 145, 225. Liberty Life was the claims administrator for the STD Plan. Filing 48 at ¶ 2. Greenwald was a long-time employee of Wells Fargo and participated in the STD Plan. Filing 48 at ¶¶ 1, 7. He was employed as an “ITS Relationship Manager 2.” Filing 39 at 65; filing 39–1 at 148. He was responsible for, among other things, developing and maintaining customer relations for large and complex institutional trust accounts and ensuring that accounts met regulatory and internal banking requirements. Filing 48 at ¶ 5.

Greenwald's position required him to work 8 hours a day and 40 hours a week. Filing 39 at 85. Wells Fargo provided a description of the physical and mental demands of Greenwald's job. Filing 39 at 85. He was required to: “frequently” sit for 3 to 6 hours per day, “occasionally” walk 30 minutes to 3 hours per day, occasionally stand 30 minutes to 3 hours per day, and occasionally drive a car to meet with clients. Filing 39 at 85–86. When Greenwald drove to meet clients, the trips ranged from 110 to 800 miles round-trip. Filing 39–4 at 44. Greenwald's day-to-day duties mostly involved working on a computer, talking on the phone, and attending meetings. Filing 39 at 65.

Before moving to a more detailed discussion of the facts underlying this case, the Court will briefly summarize how the parties arrived before the Court. Greenwald has reported experiencing chronic lower back pain for at least the last 12 years. His back problems were the result of several factors, including scoliosis, muscle weakness in his right leg resulting from surgery to remove a tumor, and degenerative disc disease. Since 2005 he has been prescribed strong pain control medications, undergone multiple spinal surgeries, and participated in various forms of physical therapy.

Shortly before Greenwald filed the claim for STD benefits that underlies this case, he applied for and received STD benefits for an unrelated problem with his neck. On January 5, 2011, Greenwald underwent a planned surgery on his neck: a microdiscectomy and fusion ² at the C5–6 level.³ Filing 48 at ¶ 8. Greenwald applied for and received STD benefits from January 12 to January 17. Filing 48 at ¶ 8. Following surgery, he was released by his physician to return to work 4 hours per day from January 18 through January 31. Filing 48 at ¶ 9. Partial STD benefits were also approved for that period of time. Filing 48 at ¶ 9.

On February 1, 2011, Greenwald returned to work full time. Filing 48 at ¶ 10. Soon after returning to work, Greenwald found he could not perform his job duties. He claims that he experienced fatigue and severe pain as a result of problems with his back and right hip, as well as pain and numbness in his right leg. Filing 48 at ¶ 10. He also claims that the pain medications he was taking made it difficult to concentrate. Greenwald left work on February 23, after working a 5–hour day. Filing 48 at ¶ 10. On February 25, Greenwald reapplied for STD benefits. Filing 48 at ¶ 11. On March 28, his claim was denied on its first review by Liberty Life. Filing 39–1 at 109–112. Greenwald appealed, and the denial was affirmed by Liberty Life on May 2, and affirmed again on the final level of review by Wells Fargo on September 8. Filing 39 at 70–74; filing 39–4 at 17–19.

Before discussing Greenwald's medical history, the Court will review the terms of the STD Plan. The Court will then provide a brief chronological summary of the medical records generated up to Greenwald's February 25, 2011, application for STD benefits. It is worth noting, however, that when Greenwald first submitted his claim, he did not include the majority of these records. After the first denial, the medical records and defendants' eligibility determinations follow a more predictable chronological path.

I. The STD Plan

The STD “Plan Document” and “Summary Plan Description” were contained in one “Benefits Book.” ⁴ Filing 39–3 at 1, 9–48, 143–55, 209–226. Chapter 9 of the Benefits Book was entitled “Short–Term Disability Plan” and explained that it, together with “ ‘Chapter 1: An introduction to your benefits' and ‘Appendix B: Legal notifications' ... constitute[d] the Summary Plan Description” for the STD Plan. Filing 39–3 at 12, 145. Chapter 1 explained that the Benefits Book contained summary plan descriptions for various benefit plans, but that these summaries could not “replace or change any provision of the actual plan documents.” Filing 39–3 at 11 (emphasis supplied). And in the case of a conflict between the summary descriptions and “the official plan document,” the official plan document controlled. Filing 39–3 at 11. The Benefits Book also explained how employees could obtain copies of official plan documents. Filing 39–3 at 11. In actual fact, however, there was no separate “official” plan document for the STD Plan. Filing 47 at 4–5; filing 51–1 at ¶ 14.

Appendix B provided that, as plan administrator, Wells Fargo had “full discretionary authority to administer and interpret each plan and may delegate its duties and discretionary authority to certain designated personnel and third parties, including but not limited to the Director of Human Resources and the Director of Compensation and Benefits.” Filing 39–3 at 225.

The STD Plan would have replaced 100% of Greenwald's “covered pay” for up to 26 weeks. Filing 39–3 at 151–52; filing 39–4 at 65. It was designed to provide employees with salary replacement if they had a “medically certified health condition,” which was defined as a disabling injury or illness that

[i]s documented by clinical evidence as provided and certified by an approved care provider. Clinical evidence may include medical records, medical test results, physical therapy notes, mental health records, and prescription records.

[and] Prevents [the claimant] from performing the essential functions of [his] own job as regularly scheduled for longer than the STD waiting period.

Filing 39–3 at 145, 148. A condition was classified as “recurrent” if it “starts again within 30 calendar days after [the claimant has] been released to return to work” and was due to the “same cause or complication resulting from the initial medically certified health condition.” Filing 39–3 at 150. Defendants treated Greenwald's current claim as a recurrent condition. Filing 57 at 10 n. 2. This did not affect his eligibility for benefits, but would have limited the total amount of benefits he could have received. Filing 39–3 at 150.

The STD Plan stated that it was Greenwald's “responsibility to ensure that Liberty receives requested medical proof, which may include medical records, test results, and hospitalization records....” Filing 39–3 at 149. The Plan gave Liberty Life the right to request independent medical examinations, as well as functional, psychological, rehabilitative, and vocational evaluations. Filing 39–3 at 150. Finally, the Plan stated that benefits could end before the maximum payout if, among other reasons, Greenwald failed to provide requested medical records or failed to provide “objective medical proof...