Holler v. Life

• Decision Date: 22 November 2010
• Docket Number: Case No. 1:06-cv-764
• Citation: 737 F.Supp.2d 883
• Parties: Kathy D. HOLLER, Plaintiff, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Ohio

737 F.Supp.2d 883

Kathy D. HOLLER, Plaintiff,

v.HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.

Case No. 1:06-cv-764.

United States District Court,

S.D. Ohio,

Western Division.

Aug. 27, 2010.

Order Denying Motion to Alter Judgment Nov. 22, 2010.

Michael A. Roberts, Graydon Head & Ritchey, Cincinnati, OH, for Plaintiff.

Douglas R. Dennis, Ann Elizabeth Georgehead, Frost Brown Todd LLC, Michael A. Roberts, Graydon Head & Ritchey, Cincinnati, OH, Robert Leo Steinmetz, Gwin, Steinmetz, Miller & Baird PLLC, Louisville, KY, for Defendant.

DECISION AND ENTRY: (1) ADOPTING THE REPORT AND RECOMMENDATIONS OF THE UNITED STATES MAGISTRATE JUDGE (Doc. 31); and (2) GRANTING PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS (Doc. 26)

TIMOTHY S. BLACK, District Judge.

This civil action is before the Court upon the Report and Recommendations (Doc. 31) of United States Magistrate Judge Timothy S. Hogan regarding Plaintiff's motion for judgment as a matter of law (Doc. 26) and responsive memoranda (Docs. 27, 29). Subsequently, Defendant filed Objections to the Report and Recommendations (Doc. 34) and Plaintiff filed a memorandum contra (Doc. 36). Also before the Court is the Administrative Record which is comprised of Hartford's Long Term Disability Benefits Plan documents (AR 1-23) and the documents which constitute Plaintiff's claims file (ADM 1-1441). ¹

I. BACKGROUND FACTS

Plaintiff was employed by Flour Daniel Fernald from 1992-2001. In October 1999, Plaintiff applied for long term disability benefits under a group insurance policy issued and administered by Defendant. Plaintiff's claim was based on diagnoses of fibromyalgia, thoracic outlet syndrome, and lower back pain. She was initially approved for an award of benefits under Hartford's Long Term Disability Benefits Plan ("the Hartford Plan") in December 1999. In December 2000, Defendant determined that Plaintiff was no longer disabled under the terms of the Plan and terminated her long term disability benefits. That termination decision was based, in part, on surveillance video showing Plaintiff's activities outside her home prior to going to a work evaluation, outside a shopping mall following the evaluation appointment, and upon Plaintiff's return home. Termination of Plaintiff's benefits became effective on November 30, 2000.

Plaintiff appealed the administrative decision, which was upheld upon administrative review, and subsequently filed a pro se ERISA action for judicial review of Defendant's decision to terminate her benefits ( Holler I ). In October 2005, Judge Watson found that Defendant's decision to terminate Plaintiff's benefits was arbitrary and capricious and entered judgment in Plaintiff's favor. ( See Holler I, Doc. 33). Because Plaintiff's claim was still within the first 36 months, the Court's decision in Holler I only addressed whether Plaintiff was entitled to long term disability benefits under the terms of the Plan as a result of being prevented from performing the essential duties of her own occupation. ( See Holler I, Doc. 51 at 3-5).

Following the Court's decision in Holler I. Defendant calculated the award of benefits due to Plaintiff under the Plan and determined that, based on offsets for Social Security Disability payments Plaintiff received, and a lump sum payment she received from her retirement account. Defendant did not owe her any additional sums. In fact. Defendant determined that Plaintiff had been overpaid and sought reimbursement from her. This conflict spawned the litigation now referred to as Holler II, and resulted in a judgment from this Court that the administrative decision requiring an offset of Plaintiffs pension benefits was not arbitrary or capricious. ( Holler II, Doc. 28).

Under the terms of the Plan, long term disability benefits were awarded to Plaintiff for an initial period of 36 months based on a finding that she was "totally disabled" under the terms of the plan "from performing the essential duties of [her own] occupation." (Doc. 21 at 7). In order to continue receiving benefits after the initial 36 month period. Plaintiff had to be "prevented from performing the essential duties of any occupation for which [she] is qualified by education, training, or experience." (Doc. 21 at 7). By letter dated June 2, 2006. Defendant informed Plaintiff that it had conducted a review of her claim and had determined that she did not meet the definition of disability beyond October 14, 2002 under the "any occupation" standard applicable to her continuing claim. (Doc. 2 at 196-202). Plaintiff appealed the decision to deny her benefits under the "any occupation" Plan provisions. The administrative decision denying benefits was upheld on appeal by letter to Plaintiff dated September 29, 2006.

Plaintiff initiated this ERISA action, pursuant to 29 U.S.C. § 1132(a), seeking judicial review of Defendant's decision to deny her benefits under the Plan's "any occupation" provision. Plaintiff points to seven factors which the Court should consider and which support a finding that Defendant abused its discretion in evaluating her claim: (1) Defendant's initial 1999 decision to award Plaintiff benefits under the Plan was based on a finding that she was totally disabled from performing a sedentary occupation; (2) this Court concluded in Holler I that Defendant's decision to disregard its 1999 award was arbitrary and capricious; (3) at Defendant's urging. Plaintiff applied for and was awarded Social Security benefits based on a finding that she was disabled from performing any jobs under the Social Security Act as of April 14, 1999; (4) Defendant has demonstrated contempt for Plaintiff by reporting her to the Ohio Department of Insurance, Fraud Division; (5) there is no difference between Plaintiff's limitations with respect to her own occupation, which was sedentary, and her ability to perform any occupation; (6) there is no evidence of medical improvement to warrant a finding that Plaintiff's ability to perform work-related functions has increased since she was found disabled from her own occupation in Holler I; and (7) Defendant's dual role as both plan funder and claims administrator gives rise to a conflict of interest which must be factored into the Court's review of Plaintiff's claim.

Defendant argues that its decision was not arbitrary and capricious, but was based on independent reviews of the medical evidence provided by Plaintiff, and a review by a vocational counselor, which demonstrated that Plaintiff was able to perform a range of sedentary work and therefore was not disabled from "any occupation" under the terms of the Plan. Defendant maintains that the Court's decision in Holler I does not estop Defendant from reviewing the claim anew under the "any occupation" provisions of the contract. Defendant also claims that while it considered the fact that Plaintiff was awardedsocial security benefits, it was not bound by such a finding to conclude that she was disabled under the "any occupation" terms of the policy. Defendant notes that Plaintiff's "any occupation" claim was reviewed by a claims personnel in a separate and distinct location from those who reviewed her "own occupation" claim in Holler I and that both the initial review and the review on appeal included file reviews by medical experts. Defendant contends that any conflict of interest inherent in its dual role as claims administrator and claims payor is thus mitigated by the independent opinions upon which its reviews relied in rendering their decisions, both on the initial review and the administrative appeal.

II. STANDARD OF REVIEW

The Court reviews de novo a denial of benefits under an ERISA plan "unless the benefit plan gives the plan administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan." University Hosp. v. Emerson Elec. Co., 202 F.3d 839, 845 (6th Cir.2000). If an administrator has such discretionary authority, the Court reviews the denial of benefits under the arbitrary and capricious standard. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989); University Hosp., 202 F.3d at 845.

The arbitrary and capricious standard applies in the present case because the Plan gives Defendant "full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the Group Insurance Policy." (AR 18). "When a plan administrator has discretionary authority to determine benefits, [the Court] will review a decision to deny benefits under 'the highly deferential arbitrary and capricious standard of review.' " Sanford v. Harvard Indus., Inc., 262 F.3d 590, 595 (6th Cir.2001) (quoting Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir.1996)).

Nonetheless, as noted by the Sixth Circuit, merely because the review is deferential does not mean that it is inconsequential. Moon v. Unum Provident Corp., 405 F.3d 373, 379 (6th Cir.2005). The appellate court explained that while a benefits plan may vest discretion in the plan administrator, the federal courts do not sit in review of the administrator's decisions only for the purpose of rubber-stamping those decisions. "The arbitrary-and-capricious ... standard does not require us merely to rubber stamp the administrator's decision." Jones v. Metro. Life Ins. Co., 385 F.3d 654, 661 (6th Cir.2004) (citing McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 172 (6th Cir.2003)). Indeed, "[d]eferential review is not no review, and deference need not be abject." McDonald, 347 F.3d at 172. Our task is to "review the quantity and quality of the medical evidence and the opinions on both sides of the issues." Id.

If the administrative record, as it existed at the time of the administrator's final decision, supports a "reasoned explanation" for the termination of benefits, the decision is not arbitrary or capricious. Id. (citing Williams v. Int'l Paper Co., 227 F.3d 706, 712 (...