Haney v. United of Omaha Life Ins. Co.
| Decision Date | 15 June 2022 |
| Docket Number | Civil Action 21-cv-02566-RMR-KLM |
| Parties | SUSAN HANEY, Plaintiff, v. UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
This matter is before the Court on Defendant's Motion to Dismiss Claim in Part [#25] (the “Motion”). Plaintiff filed a Response [#31] in opposition to the Motion [#25], and Defendant filed a Reply [#32]. The Motion [#25] has been referred to the undersigned for Recommendation pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.LCivR 72. See [#26]. The Court has reviewed the Motion [#25] the Response [#31], the Reply [#32], the entire case file and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court respectfully RECOMMENDS that the Motion [#25] be GRANTED.
Plaintiff alleges the following facts as the basis for her claims.[1] In 1993, Plaintiff obtained her license to practice medicine as a board-certified obstetrician-gynecologist. Am. Compl. [#11] ¶ 7. Plaintiff is the beneficiary of a long-term disability insurance policy (the “Policy”) issued by Defendant for the Women's Clinic of Northern Colorado (the “Clinic”). Id. ¶ 5. She has been a member of the insured class of “all eligible physicians” under the Policy at all times since she enrolled in the plan on July 1, 2014. Id. ¶¶ 5, 8.
Under the Policy, an insured member who is eligible to receive long-term disability benefits receives a monthly disability benefit equal to 60% of her “Basic Monthly Earnings” (the “BME”). Id. ¶ 17. Defendant calculates the BME by using the beneficiary's gross annual income, “includ[ing] commissions, bonuses, and employee contributions to [d]eferred [c]ompensation plans, ” and dividing that amount by twelve. Id. ¶¶ 18-19. Employees make contributions to deferred compensation plans or arrangements under sections of the Internal Revenue Code via salary reduction agreements with the Clinic. Id. ¶ 20.
The Clinic maintains a pension plan, i.e., the PC Cash Balance Plan (the “CBP”), for employees such as Plaintiff. Id. ¶ 13. When the Clinic purchased the Policy, its Executive Director and practice manager, Scott Kenyon (“Kenyon”), confirmed with a representative of Defendant that employee contributions to the CBP would count as employee contributions to a deferred compensation plan for the purposes of calculating income. Id. ¶¶ 10, 12. In 2018, Plaintiff contributed $100, 000 to the CBP, an amount she otherwise would have received as a bonus. Id. ¶ 11.
On September 10, 2019, Plaintiff suffered an episode of transient global amnesia and a substantial increase in migraine symptoms. Id. ¶ 14. Plaintiff experienced retrograde memory loss and was unable to identify the current year during the event. Id. An aneurysm was also later discovered. Id. After the event, Plaintiff was unable to continue working as a physician, due to the risk of recurrent amnesia and the need to avoid sleep deprivation. Id.
Plaintiff submitted a long-term disability claim to Defendant on November 20, 2019. Id. ¶ 15. Defendant approved Plaintiff's claim by mail on February 21, 2020, including an explanation of its calculation of her monthly disability benefit. Id. ¶ 16. In the explanation, Defendant stated that it had calculated Plaintiff's BME as $12, 097.32, relying on her 2018 gross annual salary information. Id. ¶¶ 21, 23. The calculation showed that Defendant had included a 2018 annual bonus of $25, 167.88. Id. ¶ 24. However, it did not include the $100, 000 contribution that Plaintiff made to the CBP in 2018, nor her semi-monthly income of $756.73 paid to her as a part of her gross salary. Id. ¶¶ 25-26.
While Defendant stated that it had fully approved her claim, Plaintiff alleges that Defendant miscalculated her benefit by excluding those two amounts, and thereby partly denied her claim without explanation. Id. ¶¶ 27, 29. Consequently, on March 31, 2020, Plaintiff appealed Defendant's decision, stating that her BME should amount to $21, 944.11. Id. ¶ 29. A representative of Defendant, Stephanie Smith (“Smith”), responded by email on April 1, 2020, notifying Plaintiff that Defendant was declining to recalculate her disability benefit. Id. ¶ 30.
Plaintiff filed a second appeal of Defendant's decision relating to her claim on July 6, 2020. Id. ¶ 33. With this appeal, she included an affidavit from Mr. Kenyon, stating that when the Clinic purchased the Policy, he confirmed that employee contributions to the CBP would be included as a component of the employee's BME for the purposes of calculating monthly disability benefits. Id. Plaintiff also included an affidavit from a Certified Public Accountant (“CPA”) and fraud examiner, Mika Schneider (“Schneider”). Id. ¶ 34. After evaluating the Policy and Plaintiff's salary information, Ms. Schneider concluded that Plaintiff's BME should have included the amount that Defendant had omitted, asserting that the proper BME amount should be $21, 944.11. Id.
On July 10, 2020, Ms. Smith requested that Plaintiff provide a Third Party Authorization to Disclose Personal Information (the “Authorization Form”) that would allow Defendant to share information with Plaintiff's counsel. Id. ¶ 36. Plaintiff delivered the Authorization Form to Defendant on August 3, 2020. Id. ¶ 37. By September 22, 2020, seventy-eight days after Plaintiff had submitted her second appeal, Defendant had not yet responded, although the Policy stated that Defendant would respond no later than forty-five days after its receipt of appeals. Id. ¶ 38. On September 23, 2020, Ms. Smith emailed Plaintiff, stating that, although Defendant received notice of her appeal on July 7, 2020, it would not have been accepted as a proper notice of appeal until August 4, 2020, when the Authorization Form was received. Id. ¶ 39. However, at the time when the Authorization Form was received, Ms. Smith had “missed the fact that there was an appeal previously submitted” on July 6, 2020, leading her to further delay addressing the appeal. Id.
On October 5, 2020, Ms. Smith emailed Plaintiff again, stating that based on the information Plaintiff provided with her most recent appeal, Defendant had found that its original calculation of her monthly benefit was correct. Id. ¶ 42. Attached to this correspondence was a letter from Ms. Smith, dated October 2, 2020, which did not include reference to the affidavits that Plaintiff had provided. Id. ¶¶ 42-43. Ms. Smith's letter further included a statement stipulating that if Plaintiff disagreed with Defendant's decision, she could submit a written appeal within 180 days of receipt of the denial. Id. ¶ 46.
Plaintiff submitted a third appeal of Defendant's decision on October 26, 2020, attaching the same affidavits from Mr. Kenyon and Ms. Schneider. Id. ¶ 47. On November 17, 2020, Defendant notified Plaintiff that it had retained an accountant to perform an independent financial review and sent her the accountant's report. Id. ¶ 48. Defendant advised Plaintiff that she could respond to the report on or before December 2, 2020, and that otherwise it would render its decision based on the information it had in her file. Id. Plaintiff responded on December 2, 2020, stating that the “financial review arbitrarily categorize[d] certain . . . earnings as non-earnings, ” and that it contained non-sequiturs, unreasonably reaching conclusions favorable to Defendant. Id. ¶ 49.
After Plaintiff sent this letter, she and Defendant corresponded several more times. See id. ¶¶ 50-53. Defendant stated that the information Plaintiff provided “[did] not support that the $100, 000 [was] an employee contribution to a deferred compensation plan” under the Policy and requested additional documents for further review. Id. ¶¶ 5051. Based on the additional documents Plaintiff subsequently provided, Defendant's CPA, Judy Bogdanovich (“Bogdanovich”), stated that the CBP appeared to include both employee and employer contributions. Id. ¶¶ 52-53. Ms. Bogdanovich further concluded that the CBP did not allow for voluntary employee contributions and that the $100, 000 could have been an employer contribution. Id. ¶ 53.
On January 27, 2021, Defendant sent a letter to Plaintiff, declining to recalculate her BME and monthly benefit amount. Id. ¶ 54. Further, it stated that “at this time, all administrative rights to appeal have been exhausted” and that it “[would] conduct no further review of the claim.” Id. Plaintiff sent a letter on June 29, 2021, again explaining how Defendant's decision was flawed, and on June 30, 2021, Defendant repeated that it would not conduct a further review of her claim or appeal. Id. ¶ 56.
On September 22, 2021, Plaintiff initiated this action asserting two claims for relief under the Employee Retirement Income Security Act (“ERISA”). See Am. Compl. [#11]; 29 U.S.C. § 1132. In her First Claim for Relief, Plaintiff seeks, pursuant to § 1132(a)(1)(B) of ERISA, to recover benefits she argues are due to her, to enforce her right to a proper calculation of benefits, and to clarify her rights to future benefits under the Policy. See Am. Compl. [#11] ¶¶ 59-70. In her Second Claim for Relief, Plaintiff seeks, in the alternative, (1) injunctive relief, (2) equitable surcharge, (3) equitable estoppel, and (4) other appropriate equitable relief, pursuant to § 1132(a)(3) of ERISA. See id. ¶¶ 72-78. Defendant filed the present Motion [#25] seeking dismissal of Plaintiff's Second Claim for Relief. Defendant argues that, because Plaintiff has not and cannot plead sufficient facts to support her claim for equitable relief under § 1132(a)(3), she has failed to state a claim on which relief can be granted and that, therefore, the claim must be...
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