Hoffman v. Nationwide Mut. Ins. Co. Short-Term Disability Plan

• Decision Date: 22 September 2021
• Docket Number: 2:19-cv-4360
• Parties: LYNNE J. HOFFMAN, Plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY SHORT-TERM DISABILITY PLAN, Defendant.
• Court: U.S. District Court — Southern District of Ohio

LYNNE J. HOFFMAN, Plaintiff,
v.
NATIONWIDE MUTUAL INSURANCE COMPANY SHORT-TERM DISABILITY PLAN, Defendant.

No. 2:19-cv-4360

United States District Court, S.D. Ohio, Eastern Division

September 22, 2021

Chelsey M. Vascura, Magistrate Judge.

OPINION AND ORDER

SARAH D. MORRISON, UNITED STATES DISTRICT JUDGE.

Plaintiff Lynne Hoffman brings this action under Section 502 of the Employee Retirement Income Security Act of 1974 (“ERISA”) [29 U.S.C. § 1132] following a denial of short-term disability (“STD”) benefits from Defendant Nationwide Insurance Companies and Affiliates Plan for Your Time and Disability Income Benefits (the “Plan”).^[1] (See Compl., ECF No. 1.) The Administrative Record was filed under seal. (Admin. R., ECF No. 23.) Both parties moved for judgment thereon. (ECF Nos. 24, 25.) Ms. Hoffman and the Plan have each responded to the other's motion (ECF Nos. 25, 28), and replied in support of their own (ECF Nos. 28, 29). The matter is now ripe for consideration. For the reasons set forth below, Ms. Hoffman's Motion for Judgment on the Administrative Record (ECF No. 24) is GRANTED and the Plan's Motion for Judgment on the Administrative Record (ECF No. 25) is DENIED.

I. BACKGROUND

Ms. Hoffman began working for Nationwide Mutual Insurance Company in January 2015. (Admin. R., PAGEID # 367.) Shortly before, on November 30, 2014, Ms. Hoffman was injured in an automobile accident. (See id., PAGEID # 202.) From that point forward, she was consistently treated for right shoulder pain, ultimately diagnosed as a “near full-thickness tear” and “significant edema, fraying and thinning” of the tendons in her rotator cuff (id., PAGEID # 216) and neurogenic thoracic outlet syndrome^[2] (id., PAGEID # 225-26). Medical records covering 2015- 2018 reflect that Ms. Hoffman sought relief from Botox injections (see, e.g., id., PAGEID # 223-24), massage therapy (id., PAGEID # 205), physical therapy (id.), acupuncture (id., PAGEID # 209), and prescription pain medication (see, e.g., id., PAGEID # 205), all with limited to no success. On April 4, 2017, Ms. Hoffman underwent surgical resection of her first right rib and neurolysis of the brachial plexus, performed by Ying Wei Lum, MD, MPH, at Johns Hopkins. (Id., PAGEID # 230.)

Ms. Hoffman initially showed improvement after surgery, and returned to work in July 2017. (See id., PAGEID # 242.) A week later, she presented to her primary care physician, Brian D'Eramo, DO, with “complete return of pain and inability to maintain function with increased pain medication usage.” (Id.) Ms. Hoffman reiterated her regression to Dr. Lum at her six-month post-operative appointment. (Id., PAGEID # 175-81.) Dr. Lum reported the following results of “TOS exams” performed at that visit:

Patient had presentation of the radial pulse on hyperabduction maneuvers. Patient was unable to perform the elevated arm stress test (EAST) and had pain and fatigue after 60 sec[ond]s on the [right]. Patient had pain on the ipsilateral neck on the upper extremity tension test (Elvey's). No. scalene tenderness on the [right], no [right] pec minor tenderness + right trapezius tenderness

Dr. Lum recommended that Ms. Hoffman receive trigger point injections-but they provided only temporary relief. (See id., PAGEID # 249-50.)

In August 2017, Ms. Hoffman applied for and was awarded STD benefits under the Plan. (Id., PAGEID # 144.) At the time, she held the position of Claims Specialist III-Casualty and Bodily Injury. (Id., PAGEID # 167-70.) A Nationwide Claims Specialist III:

[i]nvestigates, evaluates, negotiates and brings to final resolution complex and catastrophic casualty losses; May investigate, evaluate, negotiate and bring to final resolution Under Insured and Uninsured coverage losses as dictated by local Jurisdiction. May have oversight, control and supervision of attorney represented casualty losses Losses may be handled via telephone; Responsible for disposition of claims in accordance with prescribed authority, claims handling experience and Best Claims[.] May handle attorney represented and litigated files through conclusion. Promptly and effectively handles to conclusion assigned claims with little to no direction and oversight which may include complex and catastrophic casualty losses Promptly and effectively handles to conclusion all assigned claims with little to no direction and oversight . Makes decisions within delegated authority, recommends settlement values in the disposition of serious and sometimes complex claims as outlined in company policies and procedures Adheres to high standards of professional conduct consistent with the delivery of superior service. Handles to conclusion complex and catastrophic casualty losses. Makes decisions within maximum authorization; recommends settlement values in the disposition of serious and sometimes complex claims. Accurately pays claims based on policy provisions, state mandates and/or fee schedules. Opens, closes and adjusts reserves in accordance with company practices designed to ensure reserve adequacy. Recommends Special Reserves where necessary; In accordance with Corporate Reserving Guidelines; Adheres to file conferencing notification and authority procedures. Maintains current knowledge of: court decisions which may impact the claims function; current principles and practices in the claims function; material damage techniques and repair technology innovations; and policy changes and modifications; May be required to maintain knowledge of other functions within assigned discipline. This may require attendance at various seminars or training sessions. Serves as a mentor to less experienced claims associates and assists with training/presentations as assigned by claims management. Creates and analyzes severe incident reports, reinsurance reports and other information to home office, claims management, and underwriting. Partners with SIU and Subrogation to identify fraud and subrogation opportunities. Assists or prepares files for suit, trial, or subrogation. (Property/MD/Casualty). Consults claims staff and defense counsel for discovery processes, suit file/trial strategy as related to case-specific issues. Delivers a positive On-Your-Side customer service experience to all internal, external, current and prospective Nationwide customers.

(Id., PAGEID # 168.) The role is performed in the following working conditions:

Normal office environment. May require ability to sit and use telephone and personal computer for extended periods of time. Must be willing to work irregular hours and to travel with possible overnight requirements. Must be available to work catastrophes (CAT) requiring travel to CAT site with multiple on-site responsibilities and/or for extended periods of time. Extended and/or non-standard hours as required.

(Id., PAGEID # 170.)

Ms. Hoffman's STD benefits were discontinued effective October 2, 2017. (See id., PAGEID # 156.) After her appeals were denied, Ms. Hoffman filed suit against the Plan, alleging that she was wrongly denied Plan benefits to which she is entitled. (Compl.)

A. Relevant Plan/Policy Provisions

The Administrative Record includes the Plan Document. (See Admin. R.) Provisions relevant to the case now before the Court are summarized or excerpted below.

Nationwide Mutual Insurance Company established and maintains the Plan, for the benefit of its eligible employees, to provide long- and short-term disability income benefits and other time-off benefits. (See id., PAGEID # 50.) The Plan is an employee welfare benefit plan subject to ERISA. (Id. See also ERISA § 3(1) [29 U.S.C. § 1102(1)].) The Plan is funded through a voluntary employees' beneficiary association (“VEBA”) titled the Nationwide Mutual Insurance Companies & Associates Health Care Trust. (Id., PAGEID # 108. See also 26 U.S.C. § 501(c)(9).) The VEBA's assets are comprised of participant and employer contributions. (Id., PAGEID # 108.)

Aetna Life Insurance Company (“ALIC”) serves as Claims Administrator for the STD benefits provided under the Plan. (See, e.g., id., PAGEID # 126-28.) In that role, ALIC provides certain administrative services in connection with adjudication and payment of initial claims and first-level appeals for STD benefits. (See id., PAGEID # 59.) Nationwide's Benefits Administrative Committee (“BAC”) handles second-level appeals. (Id.)

The Plan Document provides the following details pertaining to the Plan's application and administration:

ARTICLE I - Definitions

* * *

1.10 - Benefits Administrative Committee

“Benefits Administrative Committee” means the committee established by the Board of Directors of the Plan Sponsor [Nationwide Mutual Insurance Company] . . . . Members of the Benefits Administrative Committee are appointed by the Board of Directors of the Plan Sponsor.

* * *

1.57 - Plan Administrator

“Plan Administrator” means the Benefits Administrative Committee.

* * *

1.65 - STD Disability or STD Disabled

“STD Disability” or “STD Disabled” means a disability or disablement that results from a substantial change in medical or physical condition due to a specific Illness or Injury that prevents an Eligible Associate from working their current position. A Physician must document the specific Illness or Injury.

(Id., PAGEID # 57-65 (all emphasis in original).)

ARTICLE III - Short-Term Disability Income Benefits

* * *

3.05 - Duration of Short-Term Disability Income Benefits

3.05.01 - Continuation of Short-Term Disability Income Benefits

(a) Subject to [certain limitation and exclusions], Short-Term Disability Income Benefits will continue for the maximum coverage period if the STD Disabled Employee continues to meet the following requirements:

(i) is STD Disabled;

(ii) seeks the highest level of

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