Gruber v. Unum Life Ins. Co. of America, No. CIV.A.WMN-00-42.

• Decision Date: 11 March 2002
• Docket Number: No. CIV.A.WMN-00-42.
• Citation: 195 F.Supp.2d 711
• Parties: Carol GRUBER v. UNUM LIFE INSURANCE COMPANY OF AMERICA
• Court: U.S. District Court — District of Maryland

Page 711

195 F.Supp.2d 711

Carol GRUBER v. UNUM LIFE INSURANCE COMPANY OF AMERICA

No. CIV.A.WMN-00-42.

United States District Court, D. Maryland.

March 11, 2002.

COPYRIGHT MATERIAL OMITTED

Sandra B. Minton, Nead, Karey & Minton, Baltimore, MD, for Plaintiff.

John Snowden Stanley, Jr., Jennifer T. Timian, Semmes Bowen and Semmes PC, Baltimore, MD, for Defendant.

MEMORANDUM

NICKERSON, District Judge.

Before the Court are Defendant's Motion for Summary Judgment (Paper No. 25) and Plaintiff's Motion for Summary Judgment (Paper No. 37). The motions have been fully briefed and are ripe for decision. Upon review of the pleadings and applicable case law, the Court determines that no hearing is necessary (Local Rule 105.6) and that Defendant's motion is granted in part and denied in part, and Plaintiff's motion is granted in part and denied in part.¹

I. BACKGROUND

In August of 1993, Plaintiff was hired as a psychiatric nurse at Union Memorial Hospital. As a hospital employee, Plaintiff enrolled in a disability benefits plan ("the Plan") administered by Defendant. On November 8, 1994, Plaintiff submitted a claim to UNUM, stating that she had not been able to work since October 4, 1994, due to a disability. Def.'s Exh. B.

Early in January, 1995, UNUM notified Plaintiff that her claim had been accepted and that she would receive $2,208.96 per month beginning January 3, 1995. Def.'s Exh. C. The letter also instructed Plaintiff to inform UNUM if she were to receive benefits from the Social Security Administration or Worker's Compensation, as her disability benefits would be reduced by any such amount. Id.

A few days later, Defendant sent Plaintiff another letter, clarifying that her disability had been classified as a "disability due to mental illness," and that as such, Plaintiff's benefits were subject to the Plan's 24-month maximum for monthly benefit payments.² Def.'s Exh. D. The letter included a lengthy quotation of the Plan's 24-month limitation for mental disabilities (as opposed to medical disabilities, which are not subject to the limitation), as well as the exceptions thereto (e.g. confinement in a hospital or institution). Id.

The administrative record submitted by Defendant contains, inter alia, numerous reports from physicians and psychologists who examined Plaintiff and diagnosed her condition. Plaintiff's medical history denotes that she had been diagnosed with lupus many years earlier, and that in 1992 she had suffered a violent attack by a psychiatric patient at another hospital where she had worked as a nurse. In the Physician's Statement submitted with Plaintiff's original claim for benefits in 1994, Plaintiff's psychologist describes Plaintiff's symptoms as including "melancholia, suicide ideation, depression, [and] stress." Admin. Record at 0372. The psychologist also noted Plaintiff's history of lupus, and stated that she had been referred to an internist and rheumatologist. Id. The same psychologist later responded to a UNUM questionnaire, in which he noted that the "causation or precipitating factors" leading to Plaintiff's psychological symptoms were: "history of lupus, aggravated by stress, neck injury, low immunity." Admin. Record at 0233. An April, 1995, report from Plaintiff's rheumatologist diagnosed Plaintiff with lupus, fatigue, and depression. Id. at 0201. A July, 1996 report diagnosed Plaintiff with "lupus, arthralgias, headaches, spine, depression, and fatigue;" a secondary condition of "depression" was also identified. Id. at 0077.

Internal UNUM staff notes and memoranda throughout the administrative record identify Plaintiff's disability only as major depression, depression, or depression and post-traumatic stress disorder. See, e.g., Admin. Record at 0183, 0038, 0029. At no time does UNUM categorize Plaintiff's disability as "medical."

The record also reflects that Plaintiff collected benefits from both the Worker's Compensation Commission (WCC) and the Social Security Administration (SSA). In 1992 and 1993, Plaintiff had collected temporary total disability benefits from WCC for injuries caused by the patient who had attacked her. On March 22, 1996, WCC held a hearing and determined that Plaintiff was also entitled to 140 weeks of "permanent partial" disability payments, retroactive to August 15, 1993, for neck injuries and headaches caused by the same incident. Pl.'s Exh. B. The Social Security Administration also found Plaintiff entitled to benefits as of September 26, 1994. Pl.'s Exh. OO. Plaintiff informed UNUM of both sources of benefits.

On July 3, 1996, UNUM wrote Plaintiff, acknowledging her success in obtaining WCC and SSA benefits, and informing her that as a result, her disability claim with UNUM was now overpaid in the amount of $15,480.47.³ Admin. Record at 0087. The letter stated that "[t]he disability policy under which you receive disability benefits provides for a reduction of your monthly benefit by any Social Security disability benefits and Worker's Compensation paid for that same period." Id. The letter does not include the Plan's definition of "other income benefits," which "must be payable as a result of the same disability for which this policy pays a benefit." UNUM Plan documents at L-BEN-3 (Pl.'s Exh. JJ) (emphasis added).

On January 7, 1997, Plaintiff was notified that her disability benefits had been terminated pursuant to the Plan's 24-month maximum for disability benefits. Admin. Record at 0074. The letter stated that Plaintiff could have the decision reviewed if she made a request in writing within 60 days, but that if she failed to do so, "our claims decision will be final." Def.'s Exh. H. Plaintiff concedes that she did not personally initiate the review process with UNUM, but instead immediately took the letter to her attorney. See, Pl.'s Exh. HH. Plaintiff's attorney did not contact UNUM until June 13, 1997. See, Def.'s Exh. I. UNUM denied the request for review. Def.'s Exh. J.

Plaintiff filed this action in the Circuit Court for Baltimore City in December, 1999, and Defendant removed to this Court. The crux of Plaintiff's position is that UNUM wrongfully applied the 24-month limitation for mental disability to her claim, and that UNUM should not have reduced her benefits by the amount of her WCC and SSA awards. Specifically, Plaintiff alleges a violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132 (Count I), breach of contract (Count II), and breach of fiduciary duty (Count III). Defendant has asserted a counterclaim, seeking the amount of benefits that Defendant allegedly overpaid Plaintiff based on her receipt of SSA and WCC benefits. Both parties have moved for summary judgment.

II. SUMMARY JUDGMENT STANDARD

A moving party is entitled to summary judgment only if it can show that there exists no genuine issue as to any material fact, and that it is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Blue Ridge Ins. Co. v. Puig, 64 F.Supp.2d 514 (D.Md.1999) (citing, inter alia, Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

When both parties file motions for summary judgment, the court applies the same standards of review. Taft Broadcasting Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991); ITCO Corp. v. Michelin Tire Corp., 722 F.2d 42, 45 n. 3 (4th Cir.1983) ("The court is not permitted to resolve genuine issues of material facts on a motion for summary judgment—even where ... both parties have filed cross motions for summary judgment") (emphasis omitted), cert. denied, 469 U.S. 1215, 105 S.Ct. 1191, 84 L.Ed.2d 337 (1985). The role of the court is to "rule on each party's motion on an individual and separate basis, determining, in each case, whether a judgment may be entered in accordance with the Rule 56 standard." Towne Mgmt. Corp. v. Hartford Acc. and Indem. Co., 627 F.Supp. 170, 172 (D.Md.1985) (quoting Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 2720 (2d ed.1993)).

III. DISCUSSION

A. Administrative Exhaustion Under ERISA

Although ERISA does not contain an explicit exhaustion requirement, courts have generally required claimants to exhaust the remedies provided by their benefit plans as a prerequisite to filing an ERISA action. See, Makar v. Health Care Corp. of Mid-Atlantic (Carefirst), 872 F.2d 80, 83 (4th Cir.1989). In so finding, courts cite the "firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases." Alfarone v. Bernie Wolff Construction Corp., 788 F.2d 76, 79 (2nd Cir.1986), cert. denied, 479 U.S. 915, 107 S.Ct. 316, 93 L.Ed.2d 289 (1986). Behind this policy is a congressional intent that plan fiduciaries, not federal courts, have primary responsibility for claims processing. See, Kross v. Western Elec. Co., 701 F.2d 1238, 1244 (7th Cir.1983). The federal regulations designed to implement ERISA authorize benefits plans to require participants to appeal denials of claims within a limited time period of no less than 60 days. 29 C.F.R. § 2560.503-1(g)(3).

Plaintiff concedes that she did not appeal the denial of her benefits within 60 days after receiving UNUM's notification. Plaintiff argues that she should not be barred by the administrative exhaustion requirement for three reasons: one, any delay was caused by her attorney and was no fault of her own; two, UNUM's denial letter failed to provide an adequate basis for termination of benefits, and thus the appeals period was never triggered; and three, Plaintiff's failure to appeal should be excused for futility. The Court will address Plaintiff's arguments, seriatim.

Lack of diligence by a party's attorney is not sufficient to justify equitable tolling of a statute of limitations or similar time-sensitive rule. See, Irwin v. Department of Veterans Affairs, 498 U.S. 89, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). Plaintiff's attorney, whose letterhead indicates that he works in a firm with several other lawyers, claims...