Hunley v. Hartford Life And Accident Ins. Co.

• Decision Date: 26 April 2010
• Docket Number: Case No. 8:08-cv-2008-T-17AEP.
• Citation: 712 F.Supp.2d 1271
• Parties: Deborah HUNLEY, Plaintiff,v.HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Florida

712 F.Supp.2d 1271

Deborah HUNLEY, Plaintiff,v.HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.

Case No. 8:08-cv-2008-T-17AEP.

United States District Court,

M.D. Florida,

Tampa Division.

April 26, 2010.

COPYRIGHT MATERIAL OMITTED

John V. Tucker, Tucker & Ludin, PA, Clearwater, FL, for Plaintiff.

Keersten Heskin Martinez, Fisher, Rushmer, Werrenrath, Dickson, Talley & Dunlap, PA, Orlando, FL, for Defendant.

ORDER ON DEFENDANT'S MOTION FOR FINAL SUMMARY JUDGMENT

ELIZABETH A. KOVACHEVICH, District Judge.

This cause comes before the Court on Defendant's Motion for Final Summary Judgment and Plaintiff's Response thereto (Doc. 21 and 27). For the reasons set forth below, Defendant's Motion for Final Summary Judgment is GRANTED.

PROCEDURAL HISTORY

This action is a claim for relief under the Employee Retirement Income Security Act (hereinafter “ERISA”), 29 U.S.C. § 1001 et. seq. This dispute arises from an employee benefit plan (hereinafter “the Plan”) sponsored by Sara Lee Corporation (hereinafter “Sara Lee”). On October 7, 2008, Plaintiff, Deborah Hunley (hereinafter “Hunley”), filed a Complaint against the Defendant, Hartford Life and Accident Insurance Company (hereinafter “Hartford”), alleging failure and refusal to pay Long-Term Disability (hereinafter “LTD”) benefits under her employee benefit plan. (Dkt. 1). In the Complaint, Hunley contends that she qualifies for LTD benefits, and that Hartford has failed to pay these benefits since May 11, 2007. (Dkt. 1). The Complaint also argues that CNAGLA Group Life Assurance Company (hereinafter “CNAGLA”) is the previous owner of the Plan, and following Hartford's purchase of CNAGLA, there was no amendment to the Plan granting Hartford discretionary authority to administer claims under the Plan. (Dkt. 1). Hunley's Complaint requested this court grant LTD benefits from May 11, 2007 through the filing of this lawsuit. (Dkt. 1).

In response to the Complaint, Hartford filed its Answer and Affirmative Defenses on December 1, 2008. (Dkt. 8). Hartford asserts it had discretionary authority to administer the Plan. (Dkt. 8). Hartford also admits that Hunley was approved for benefits and was paid benefits until May 11, 2007. (Dkt. 8). However, Hartford contends Hunley is not entitled to LTD benefits under the plan because she is not “Disabled” as defined in the plan. (Dkt. 8). Hartford argues that Hunley is able to perform the essential duties of “any occupation” as defined in the Plan, and therefore, she is not entitled to LTD under the Plan. (Dkt. 8).

Hartford then petitioned the Court to Amend its Answer and Affirmative Defenses and for Leave to Assert Counterclaim. (Dkt. 14). The Court granted this motion. (Dkt. 15). In its Amended Answer and Affirmative Defenses, Hartford again renewed its claim that it had discretionary authority to administer the Plan. (Dkt. 16). It also renewed its assertion that Hunley is not disabled as defined in the plan, and she is not entitled to LTD since she is able to perform essential duties of “any occupation” for which she was qualified. (Dkt. 16). Furthermore, Hartford filed a Counterclaim alleging recovery for overpayment of benefits. (Dkt. 16). Hartford argued that Hunley received Social Security benefits while also receiving benefits under her Hartford plan. (Dkt. 16). However, Hunley never responded to Hartford's counterclaim, and this Court entered a default judgment against Hunley on March 25, 2010. (Dkt. 34).

On November 10, 2009, Hartford filed its Motion for Final Summary Judgment. (Dkt. 21). In the motion, Hartford argues that there are no genuine issues of material fact in the Administrative Record, and it is entitled to Summary Judgment as a matter of law because Hunley is not disabled under the Plan since she can perform “any occupation.” (Dkt. 21). In addition, Hartford asserts its determination under the Plan is subject to a deferential arbitrary and capricious standard of review because it had discretionary authority to administer the Plan. (Dkt. 21) Although Hunley's plan was originally with CNAGLA, Hartford contends that it purchased 100% of CNAGLA stock and the purchase included all rights and obligations of CNAGLA policies, including the Hunley policy. (Dkt. 21, Exhibit B). Thus, Hartford argues it acquired discretionary authority to administer the Plan. (Dkt. 21, Exhibit B). Alternatively, Hartford argues that even if this Court were to hold it did not have discretionary authority to administer the Plan, it acted as a “plan fiduciary” and, therefore, the discretionary authority to determine Hunley's benefits under the Plan flowed from its fiduciary capacity. (Dkt. 21). In applying the arbitrary and capricious standard of review, Hartford asserts that there was a reasonable basis for its determination to deny Hunley LTD benefits under the “Occupational Qualifier” definition of the Plan. Hartford asserts that the evidence in the Administrative Record shows Hunley was capable of performing “any occupation” as defined by the Plan because she qualified for several jobs that accommodated her medical restrictions. (Dkt. 21). Hartford also argues that its decision to deny Hunley benefits was not tainted by self-interest since it promptly approved Hunley for benefits under the “Occupational Qualifier” definition of the Plan; it continued to pay benefits until its review was complete; and it granted Hunley's counsel numerous extensions to submit evidence in support of her appeal. (Dkt. 21) Hartford also renewed its motion for judgment on the overpayment of benefits; however, as stated supra, a default judgment was entered on this issue, and therefore, it will not be addressed any further. (Dkt. 34). In sum, Hartford's Motion for Final Summary Judgement requests this court apply the arbitrary and capricious standard of review and affirm Hartford's decision to deny Hunley LTD benefits. (Dkt. 21).

Hunley filed a response to Hartford's Motion for Final Summary Judgment on December 15, 2009. (Dkt. 27). In her Memorandum in Opposition to Defendant's Motion for Final Summary Judgment, Hunley argues that Hartford is not entitled to Final Summary Judgment because Hartford's rejection of her LTD benefits was “wrong” and unreasonable in light of the fact that her medical condition prevents her from performing “any type of work.” (Dkt. 27). Additionally, Hunley contends that Hartford did not have discretionary authority to administer the plan, and therefore, a de novo standard of review applies. (Dkt. 27). Hunley argues that Hartford's purchase of CNAGLA only proves that they were a successor-in-interest of the Plan not that it has express discretionary authority to administer the Plan. (Dkt. 27). Hunley asserts that under a de novo standard Hartford's decision to deny Hunley LTD benefits was “wrong.” (Dkt. 27). Hunley argues that the Administrative Record is replete with evidence showing her medical condition impairs her presently and on a permanent basis. (Dkt. 27). Alternatively, Hunley argues that even if this Court finds Hartford had discretionary authority to determine LTD benefits under the Plan, its decision to deny Hunley LTD benefits was arbitrary and capricious because no reasonable basis existed for denying the decision. (Dkt. 27). Hunley asserts there are several doctors' reports in the Administrative Record showing that her medical condition prevents her from performing “any occupation.” (Dkt. 27). Furthermore, Hunley contends this Court should consider Hartford's conflict of interest as a factor in making its decision. (Dkt. 27). Hunley argues that Hartford's position as a professional insurance company offers it incentive to deny claims and, therefore, presents a conflict of interest. (Dkt. 27). In sum, Hunley requests this Court reverse Hartford's decision to deny LTD benefits under an ERISA de novo standard of review because Hartford's decision was “wrong” since the Administrative Record indicates Hunley is disabled. (Dkt. 27).

STATEMENT OF FACTS

Hunley began working for Sara Lee as a Sales Associate. (Dkt. 21, Exhibit 1, AR-0001-0004). Hunley began in this capacity on June 1, 1990. (Dkt. 21, Exhibit 1, AR-0001). As part of her employment with Sara Lee, Hunley was eligible and participated in a LTD Plan-Group Policy No. SR-83141256. (Dkt. 21). The Plan was originally administered by CNAGLA. (Dkt. 21, Exhibit 2). However, Hartford purchased 100% of the issued and outstanding stock of CNAGLA on November 30, 2003. (Dkt. 21, Exhibit B). According to the terms and conditions of the Stock Purchase Agreement and other related transaction documents, Hartford acquired rights and obligations of policies underwritten by CNAGLA, including Hunley's policy. (Dkt. 21, Exhibit B). The specific language of the Plan states in part:

The plan administrator and other plan fiduciaries have discretionary authority to determine Your eligibility for and entitlement to benefits under the policy. The plan administrator has delegated sole discretionary authority to CNA Group Life Assurance Company to determine Your eligibility for benefits and to interpret the terms and provisions of the plan and any policy issued in connection with it.

(Dkt. 21, Exhibit 2, P-029).

On October 25, 2004, Hunley ceased employment with Sara Lee due to limitations caused by lumbar degenerative disc disease and osteoarthiritis of the hands. (Dkt. 21, Exhibit 1, AR-0001). Hunley began suffering from pain in her lower back around October 19, 2004, due to an unknown cause. (Dkt. 21, Exhibit 1, AR-0349). The osteoarthiritis in her hands was a secondary diagnosis. (Dkt. 21, Exhibit 1, AR-0011). Hunley's position as a Service Associate required frequent standing, walking, bending, reaching, pushing, pulling and driving. (Dkt. 21, Exhibit 1, AR-0013-0014).

Hunley's back and hand condition caused her to file an initial claim for LTD benefits in January of 2005. (Dkt. 21, Exhibit 1, AR-0001-0004). Hunley's doctor, Dr. Raphael Orenstein, submitted a Medical Assessment Tool...