Jones v. Metropolitan Life Ins. Co.

• Decision Date: 29 September 2004
• Docket Number: No. 03-1375.,03-1375.
• Citation: 385 F.3d 654
• Parties: Dolores K. JONES, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, General Motors, and General Motors Life and Disability Benefits Program, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 654

385 F.3d 654

Dolores K. JONES, Plaintiff-Appellant, v. METROPOLITAN LIFE INSURANCE COMPANY, General Motors, and General Motors Life and Disability Benefits Program, Defendants-Appellees.

No. 03-1375.

United States Court of Appeals, Sixth Circuit.

Argued: August 13, 2004.

Decided and Filed: September 29, 2004.

Appeal from the United States District Court for the Eastern District of Michigan, George C. Steeh, III, J.

COPYRIGHT MATERIAL OMITTED

Barbara H. Goldman (argued and briefed), Sheldon L. Miller & Assoc., Southfield, MI, for Plaintiff-Appellant.

Timothy K. McConaghy, David M. Davis (briefed), Mark D. Filak (argued), Kay R. Butler (briefed), Hardy, Lewis & Page, Birmingham, MI, for Defendants-Appellees.

Before: MOORE and COLE, Circuit Judges; MARBLEY, District Judge.^*

OPINION

MOORE, Circuit Judge.

This action arose from Defendant-Appellee, Metropolitan Life Insurance Company ("MetLife")'s, denial of Plaintiff-Appellant, Dolores K. Jones ("Jones")'s, claim for benefits under a Personal Accident Insurance ("PAI") policy in an employee benefits plan ("Plan") provided by General Motors ("GM") and governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Jones appeals the district court's judgment granting MetLife's motion for judgment on the administrative record and denying Jones's dispositive motion. Jones first asserts on appeal that the district court should have evaluated under a modified-arbitrary-and-capricious standard the denial of PAI benefits to Jones because MetLife was operating under a conflict of interest, as it was both the insurer and an administrator of the Plan. Jones next asserts on appeal that the district court erred by accepting MetLife's definition of the term "accident," which requires a claimant to demonstrate "unusual activity" or an "external force or event." Jones argues that MetLife's definition is arbitrary and capricious, and that the district court should have applied the federal-common-law definition of accident promulgated by the First Circuit in Wickman v. Northwestern National Insurance Co., 908 F.2d 1077, 1088 (1st Cir.), cert. denied, 498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 586 (1990), which merely requires the claimant to demonstrate that the injury was neither subjectively expected nor objectively foreseeable.

For the following reasons, we REVERSE the district court's judgment granting MetLife's motion for judgment on the administrative record and REMAND this case to the district court with instructions to remand this claim to MetLife for reconsideration of Jones's medical evidence in light of this opinion.

I. BACKGROUND

A. Relevant Plan Provisions

This action arose from MetLife's denial of Jones's claim for PAI benefits under a Plan provided by GM and insured by MetLife. The parties agree as to which provisions of the Plan are relevant to this appeal. First, the parties agree that, through the following provision, GM has expressly reserved and delegated to MetLife discretionary authority to interpret the Plan and to evaluate claims under the Plan:

(b) Administration and Amendment

(1)The Corporation, as the Program Administrator, shall be responsible for the administration of the Program. The Corporation reserves the right to amend, modify, suspend or terminate the Program in whole or in part, at any time by action of its Board of Directors or other committee or individual expressly authorized by the Board to take such action.... The Program Administrator expressly reserves the right to construe, interpret and apply the terms of this Program. In carrying out its responsibilities under the Program, the Carrier also shall have discretionary authority to interpret the terms of the Program and to determine eligibility for and entitlement to Program benefits in accordance with the terms of the Program. Any interpretation or determination made by the Program Administrator or the Carrier, pursuant to such discretionary authority, shall be given full force and effect, unless it can be shown that the interpretation or determination was arbitrary and capricious. The determination of the Corporation or, in the event of an appeal, of the Carrier, shall be final and binding on the Corporation, the insurance company and the Employee or the Employee's designated beneficiary.

Joint Appendix ("J.A.") at 268 (GM Plan). The parties also agree that the above-quoted provision requires that courts give some deference to MetLife's interpretation of the Plan and evaluation of claims under the plan, and therefore, that this court should evaluate MetLife's denial of benefits under some permutation of the arbitrary-and-capricious standard. The parties disagree, however, over whether the denial of benefits should be evaluated under a less deferential, modified-arbitrary-and-capricious standard because MetLife was operating under a conflict of interest, as it was both the insurer and an administrator of the Plan.

Second, the parties agree that Jones's claim for PAI benefits must be determined under the following provision:

(i)Payment of Benefits

If, while insured for Personal Accident Insurance, an Employee, Spouse or Dependent Child sustains accidental bodily injuries, and within one year thereafter shall have suffered loss of life or any other loss set forth in subsection (e), as a direct result of such bodily injuries independently of all other causes, the Carrier shall pay the benefit specified for all such Losses....

...

Only one amount, the largest to which the beneficiary is entitled, will be paid for all losses suffered by one covered individual resulting from one accident.

J.A. at 333 (GM Plan). The Summary Plan Description provides:

If you become totally and permanently disabled as a result of an accidental injury while you are an active employee you will be paid the full benefit amount of any personal accident insurance (PAI) you elected in monthly installments of 2% of that amount less any amount paid for losses previously sustained, provided you submit evidence satisfactory to the insurance company. "Total and permanent disability" under PAI means the total and permanent inability, as caused by an accidental injury, to engage in regular employment or occupation for remuneration or profit, as based on medical evidence satisfactory to the insurance company.

J.A. at 88 (GM Summ. Plan Description). The parties agree that Jones's claim for PAI benefits turns upon the definition of the term "accident," and that the term "accident" is not defined in the Plan or the Summary Plan Description. The parties disagree, however, over whether the definition proffered by MetLife in the course of denying Jones's claim is arbitrary and capricious.

B. Factual Background

Jones worked as an industrial nurse for GM. On February 22, 1999, Jones injured her knee at work. On September 1, 2000, Jones submitted to MetLife a claim form requesting PAI benefits. On that form, Jones described the circumstances leading to her knee injury as follows: "BENDING DOWN AND SQUATTING TO GIVE FIRST AID TO EMPLOYEE — FELT SHARP PAIN IN MY RIGHT KNEE IMMEDIATELY AFTER I STOOD FROM SQUATTING POSITION." J.A. at 60 (claim form). Also on that form, Jones indicated that she became disabled on June 1, 1999, and was certified unable to work on May 31, 2000.¹

On December 5, 2000, MetLife wrote to Jones informing her that her claim for PAI benefits had been denied because Jones's description of her knee injury "does not constitute an accident for purposes of the payment of Total and Permanent Disability Benefits under [Jones's] Personal Accident Insurance" and because Jones's "physician has not indicated that [Jones is] totally and permanently disabled due to [her] injury." J.A. at 65 (MetLife letter 12/5/2000). In its December 5, 2000 letter, MetLife stated that it would "gladly consider any additional information you wish to submit supporting your claim.... The additional information will be re-evaluated and Metropolitan Life will advise you of its findings." J.A. at 66 (MetLife letter 12/5/2000). On December 19 and 26, 2000, Jones sent to MetLife additional documentation supporting her claim, including a doctor's receipts that indicate her diagnosis was "tear knee medial meniscus," her Social Security award letter for disability insurance, a claim form for PAI benefits that her treating physician, Dr. Salamon, had completed in more detail, and a statement from Jones's physician. J.A. at 87 (Jones letter 12/26/2000).

On February 9, 2001, MetLife wrote to Jones again informing her that her claim for PAI benefits had been denied because" `bending down and squatting', is not sudden, unexpected and unforeseen. Therefore, it does not constitute an accident for purposes of the payment of Total and Permanent Disability Benefits under you[r] Personal Accident Insurance." J.A. at 63 (MetLife letter 2/9/2001). In its February 9, 2001 letter, MetLife informed Jones that she could appeal this decision and could include in that appeal "any additional information that [she] wish[ed] to be considered." J.A. at 64 (MetLife letter 2/9/2001).

On April 9, 2001, Jones wrote to MetLife appealing the December 5, 2000 and February 9, 2001 denials of her claim for PAI benefits. In her April 9, 2001 letter, Jones explained that "while in the course of my employment, and in an emergency first aid situation, that while I bent down to a squatting position in order to administer first aid that I hypo extended my knee causing a rip and tear to the medial meniscus"² and stated that Taber's Cyclopedic Medical Dictionary defines "accident injury" as "`[o]ccurring suddenly, unexpectedly, inadvertently; under unforeseen circumstances.'" J.A. at 67 (Jones letter 4/9/2001) (emphasis added). Jones further stated in her April 9, 2001 letter that she felt "that an unexpected tear in the medial meniscus received during the course of performing [her] job clearly constitutes an accident .... [and that] MIOSHA³ deems [...