Gregory v. Metropolitan Life Ins. Co., No. 1:08-CV-150.

• Decision Date: 03 June 2009
• Docket Number: No. 1:08-CV-150.
• Citation: 648 F.Supp.2d 591
• Parties: Jennifer GREGORY, Plaintiff v. METROPOLITAN LIFE INSURANCE COMPANY and American Airlines, Inc., c/o American Eagle Inc. and Executive Airlines, Defendants.
• Court: U.S. District Court — District of Vermont

Page 591

648 F.Supp.2d 591

Jennifer GREGORY, Plaintiff v. METROPOLITAN LIFE INSURANCE COMPANY and American Airlines, Inc., c/o American Eagle Inc. and Executive Airlines, Defendants.

No. 1:08-CV-150.

United States District Court, D. Vermont.

June 3, 2009.

COPYRIGHT MATERIAL OMITTED

Arthur P. Anderson, Esq., Anderson & Buran PC, Burlington, VT, for Plaintiff.

William D. Pandolph, Sulloway & Hollis, Concord, NH, for Defendant, Metropolitan Life Insurance Company.

Amy Cashore Mariani, Esq., Edward P. O'Leary, Fitzhugh, Parker & Alvaro LLP, Boston, MA, F. Brian Joslin, Theriault & Joslin, P.C., Montpelier, VT, for Defendant, American Airlines, Inc., and Executive Airlines.

ORDER

J. GARVAN MURTHA, Senior District Judge.

The Magistrate Judge's Report and Recommendation was filed June 3, 2009. (Doc. 90.) After de novo review and over objection, the Report and Recommendation is AFFIRMED, APPROVED and ADOPTED. See 28 U.S.C. § 636(b)(1).

Plaintiff's motion for summary judgment to the extent she seeks an order directly awarding her benefits (Doc. 45) is DENIED. Plaintiffs motion for summary judgment on the issue of plan participation (Doc. 66) is DENIED. American Airlines, Inc. ("American") and Metropolitan Life Insurance Company's ("MetLife") crossmotion for summary judgment (Doc. 49) is DENIED and the matter is REMANDED to the plan administrator for a second-level appeal before the Pension Benefits Administration Committee to determine Plaintiff's eligibility for long-term disability benefits, including whether or not she was a plan participant at the onset of her disability.

In addition, MetLife's motion to dismiss (a) any claim made by Plaintiff against MetLife under ERISA § 502(c)(1)(B) for MetLife's alleged violation of 29 C.F.R. § 2560.503-1(h)(2)(iii), and (b) any state law "insurance bad faith" claim against MetLife (Doc. 57) is GRANTED. Plaintiffs objection to American's submission of evidence outside the administrative record (Doc. 60) is SUSTAINED.

SO ORDERED.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

(Doc. Nos. 45, 49, 57, 60, 66)

JOHN M. CONROY, United States Magistrate Judge.

Plaintiff Jennifer Gregory brings this action against Defendants American Airlines, Inc. ("American") and Metropolitan Life Insurance Co. ("MetLife") to recover disability insurance benefits under the Long Term Disability ("LTD") Plan provided by her former employer, American. The LTD Plan, which is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., is self-funded through contributions of American employees into a trust. The employer, American, is the plan administrator and claims for benefits under the LTD Plan are processed by a third-party claims processor, MetLife.

Pending before the Court are: (1) Plaintiff's Motions for Summary Judgment (Docs. 45 and 66); (2) American's Cross-Motion for Summary Judgment (Doc. 49), which has been joined by MetLife (Doc. 58); (3) MetLife's Motion to Dismiss (a) any claim made by Plaintiff against Met-Life under ERISA § 502(c)(1)(B) for Met-Life's alleged violation of 29 C.F.R. § 2560.503-1(h)(2)(iii) and (b) any state law "insurance bad faith" claim against MetLife (Doc. 57); and (4) Plaintiff's Objection to American's Submission of Evidence Outside the Administrative Record (Doc. 60).

For the reasons stated below, I recommend that the District Court DENY the Plaintiff's Motion for Summary Judgment to the extent it seeks an award of benefits (Doc. 45), DENY the Plaintiff's Motion for Summary Judgment on the issue of plan participation (Doc. 66), DENY American and MetLife's Cross-Motion for Summary Judgment (Doc. 49), and REMAND the matter for a second level appeal before American's Pension Benefits Administration Committee ("PAC"). In addition, I recommend that the Court GRANT Met-Life's Motion to Dismiss Plaintiff's Request for Imposition of Fines under ERISA (Doc. 57) and SUSTAIN the Plaintiff's Objection to American's Submission of Evidence Outside the Administrative Record (Doc. 60).

I. FACTS

Plaintiff was formerly employed by American Eagle, Inc., a subsidiary of American Airlines, Inc. (collectively referred to herein as "American"), as a commercial airline pilot. During Plaintiff's employment with American, American offered disability plan benefits to its employees under an Optional Short Term Disability ("OSTD") Plan and a Long Term Disability ("LTD") Plan. (Administrative Record "AR" 226-380). Although they share a common summary plan description and only one application for benefits is required, the plans are separate and distinct welfare benefit plans. They are funded separately and described separately to American employees in the employee benefit book. The OSTD is funded through an insurance trust and the LTD Plan is self-funded through employee contributions. MetLife processes claims for both plans. (AR 241, 272). Plaintiff participated in both the OSTD and LTD Plans while employed by American. Although her last day at work for American was on March 9, 2003 (AR 62, 91), Gregory was a plan participant until midnight May 1, 2004. (Doc. 78).

A. Plaintiff's Pregnancy Claim

In March 2003, because her pregnancy prevented her from performing her job duties, Plaintiff applied for benefits under the OSTD Plan. (AR 60). MetLife apparently assigned two claim numbers to this claim, 580303216139 and 580303254653 (referred to herein as "the 580 claim numbers"). Id.

Gregory appealed from an initial denial of benefits. After the initial denial of the claim (AR 60, 62, 72, 88, 89), on July 18, 2003, MetLife approved Plaintiff for OSTD and LTD benefits through November 20, 2003, five weeks after her estimated delivery date (AR 91). In its July 18, 2003 letter approving the claim, MetLife inexplicably made reference not only to the 580 claim numbers referenced in its earlier correspondence, but also to a new claim number, 810307181701 (referred to herein as "the 810 claim number"). (AR 91).

B. Plaintiff's Restless Leg Syndrome Claim

In November 2004, Plaintiff notified MetLife by telephone that she wished to pursue benefits under the LTD Plan because she had developed a condition known as restless leg syndrome ("RLS"). (AR 10-11.)¹ Thereafter, Plaintiff provided MetLife with the forms required to open a claim for benefits under the LTD Plan based on her RLS. (AR 93-132). There appear to be two separate applications for LTD in the administrative record, each alleging a different onset date for the RLS. (AR 96-97, 131-132).

By letter dated June 9, 2005, MetLife informed Plaintiff that her claim for benefits under the OSTD Plan was denied. (AR 138). Although the letter made no mention of Plaintiff's claim for benefits under the LTD Plan, it referenced a new claim number, 330505318886 (referred to herein as "the 330 claim number"), and clearly related in substance to Plaintiff's RLS claim. (AR 138-140). For example, the letter refers to Dr. Salzman's indication that Plaintiff's "diagnosis is restless leg syndrome" (AR 138, ¶ 3), and concludes that, "[o]verall, there is no indication of a sustained impairment due to restless legs [sic] syndrome of a severity to preclude a return to work" (AR 139, ¶ 5). In the June 9, 2005 letter, MetLife advised Plaintiff that she could appeal MetLife's decision by sending a written request for appeal to MetLife Disability within 180 days. (AR 139, ¶ 6).

In response to MetLife's June 9, 2005 letter, Plaintiff sent a letter to MetLife on June 24, 2005. (AR 141). That letter referenced the 580 claim numbers used with respect to Plaintiff's pregnancy claim, as well as a new claim number, 700505318140 (referred to herein as "the 700 claim number"). Id. In the June 24, 2005 letter, Plaintiff questioned why MetLife's June 9, 2005 letter referred to OSTD benefits, when she had exhausted those benefits and was requesting LTD benefits, and stated that Plaintiff had spoken with "too many people" at MetLife for over a year, and had received "a lot of mis-information [sic]." Id. In closing, Plaintiff requested a copy of her "entire claim file." Id. A MetLife representative attempted to contact Plaintiff on June 24, 2005 to address the concerns stated in her letter of that date, but was unable to reach her. (AR 46). MetLife's internal notes of that effort reveal that a MetLife representative sought to explain to Gregory that the reference to the short term benefit plan in the June 24th letter was because Gregory had both short term and long term disability coverage. (AR 46).

The administrative record reveals minimal contact between Gregory and MetLife following the June 24, 2005 letter until October 17, 2006. The record reveals only a telephone call from Gregory to MetLife informing MetLife of the date of her appointment with "Social Security" on November 7, 2005. (AR 16). The reason for this call is explained in a letter dated October 23, 2006 from Gregory to MetLife in which she wrote that "Tyler", presumed to be Tyler Lloyd, a MetLife representative, "told me to apply for Social Security disability" because Gregory's LTD claim "couldn't be processed without that". (AR 160).

From October 17-26, 2006, Plaintiff had a number of telephone conferences with MetLife representatives, and sent several letters to five different MetLife representatives ("Cozetta," "Jamie," "John," "Mr. Opastulu," and "Lee Hausfeld"). (AR 16-21, 143, 147, 151-152, 157-158, 162, 182). Through these communications, Plaintiff requested a status report regarding her LTD claim, attached updated medical records, advised of her new contact information, and advised that she still had not received a copy of her claim file. Id. Of particular note, in a letter dated October 23, 2006, Plaintiff stated that she "wrote in a formal letter of appeal [regarding her RLS claim] on June 24, 2005" because she "DIDN'T WANT ANYTHING CLOSED." (AR 157-158). In the same letter, Plaintiff re-stated that she had received "a lot of misinformation" from...