Medoy v. Warnaco Employees' Long Term Disability
| Decision Date | 30 September 2008 |
| Docket Number | No. 97-CV-6612 (RRM)(JMA).,97-CV-6612 (RRM)(JMA). |
| Citation | 581 F.Supp.2d 403 |
| Parties | Russell P. MEDOY, as Administrator of the Estate of Audrey Medoy, Plaintiff, v. WARNACO EMPLOYEES' LONG TERM DISABILITY INSURANCE PLAN and Warnaco, Inc., as Administrator of the Warnaco Employees' Long Term Disability Plan, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
Peter Arnold Walker, Seyfarth Shaw, New York, NY, for Defendants.
Russell P. Medoy ("Plaintiff'), Administrator of the Estate of Audrey Medoy ("Medoy"), commenced this action against the Warnaco Employees' Long Term Disability Insurance Plan (the "Plan") and Warnaco, Inc. ("Warnaco"), as administrator of the Plan (collectively, "Defendants"), challenging the termination of Medoy's long-term disability benefits under Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), codified at 29 U.S.C. § 1132(a)(1)(B). Currently before the Court are Plaintiffs and Defendants' Cross-Motions for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Defendants' Motion is DENIED and Plaintiffs Motion is GRANTED.
The factual background and procedural history of this case have been set forth in prior decisions issued by our predecessor Court (Johnson, J.), see, e.g., Medoy v. Warnaco Employees' Long Term Disability Ins. Plan, No. 97 CV 6612(SJ), 2005 WL 3775953, at *1-3, 2005 U.S. Dist. LEXIS 40631, at *2-8 (E.D.N.Y. Dec. 24, 2005) ("Medoy II"); Medoy v. Warnaco Employees' Long Term Disability Ins. Plan, 43 F.Supp.2d 303, 304-06 (E.D.N.Y. 1999) ("Medoy I"), and will only be summarized for purposes of this Memorandum and Order. The following facts are taken from the parties' affirmations, Local Rule 56.1 statements and the documents attached thereto. Disputes are noted.
Medoy was employed by the White Stag Corporation, later acquired by Warnaco, from August 13, 1979 to February 13, 1983, when she stopped working due to the onset of Crohn's disease. On August 3, 1983, Medoy filed an application for longterm disability benefits with the Plan, which was insured by CIGNA Group Insurance/Life Insurance Company of North America ("CIGNA" or "LINA"). On June 25, 1984, Medoy was granted benefits on a retroactive basis to August 13, 1983.1
In August 1987, Medoy's benefits were terminated as a result of a series of letters exchanged in 1986 and 1987 between CINA and Medoy's treating physician, Dr. Lloyd F. Mayer, M.D. During that period, CIGNA sent Dr. Mayer numerous requests for updates on Medoy's status and prognosis. In approximately January 1986, Dr. Mayer reported to CIGNA that Medoy was "recovering from her 3rd operation (closure of loop ileostomy)"2 and that he expected her to remain totally disabled for "3-6 months." In January 1987, Dr. Mayer provided another update, reporting to CIGNA that Medoy's status was "post subtotal proctocolectomy"3 and that Medoy had been "recently admitted with fevers of 103, severe diarrhea, nausea and vomiting." Nevertheless, Dr. Mayer reported that Medoy was "improving, although she continue[d] to require medications to control her diarrhea and pain." Dr. Mayer added that Medoy was "looking to be re-employed" and he "anticipate[d that] within a short matter of a few months she [would] be fully functional."
The event that triggered the termination of Medoy's benefits was Dr. Mayer's letter to CIGNA dated May 15, 1987, which read:
Dear Ms. Baker:
Thank you for your letter of May 7, 1987 with regard to Audrey Medoy. She is continuing clinicial [sic] improvement and I. fully expect that by September 1, 1987 she will be able to resume work. I would not think that there could be any situation that would occur to prevent her from going back to work at that time. Thank you very much. If there are any other questions, please don't hesitate to call me.
Based on this letter, on August 18, 1987, CIGNA wrote to Medoy and informed her that the company would "process benefits through August 31; 1987, as Dr. Mayer [was] releasing [her] to return to work September 1, 1987." Medoy showed this letter to Dr. Mayer, who then See Defendants' April 7, 2000 Rule 56.1 Statement at ¶¶ 7-8. On or about August 31, 1987, the Plan discontinued benefit payments to Medoy.
Medoy did not appeal the termination of her benefits immediately; however, Judge Johnson excused this omission for statute of limitations purposes because Medoy was not adequately informed of her right to appeal and submit additional evidence of disability. See Medoy II, 2005 WL 3775953, at *7-8, 2005 U.S. Dist. LEXIS 40631, at *24-25. On July 22, 1993, Medoy wrote to Warnaco, through counsel, seeking resumption of her long-term disability benefits and requesting an explanation for their prior termination. Thereafter, Medoy's counsel exchanged numerous letters with Warnaco, through which Medoy (1) delivered to Warnaco copies of Social Security Administration decisions finding Medoy disabled, (2) sought copies of Warnaco's records pertaining to Medoy's claim, and (3) demanded resumption of benefits. Warnaco, for its part, explained that it was unable to locate records pertaining to Medoy, and sought the relevant information from CIGNA.
Although CIGNA searched its storage facilities, it was unable to locate Medoy's records. CIGNA indicated that the Medoy file appeared to have been destroyed, and that its document retention policy called for the maintenance of closed files for a period of five (5) years. CIGNA therefore could not at that time articulate the reason for its termination of Medoy's benefits, although a July 16, 1994 letter from CIGNA to Warnaco stated that CIGNA could "only presume that a denial was written because Ms. Medoy may not have been considered totally disabled at that time under the contract."4
After receiving no response from Warnaco to repeated requests for a resumption of long-term disability benefits, Medoy filed this action on November 12, 1997. In April 1999, Judge Johnson denied Defendants' motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). See Medoy I, 43 F.Supp.2d at 312. On December 19, 2000, Medoy passed away, and Plaintiff, as Administrator of Medoy's Estate, assumed Medoy's place in this litigation. In December 2005, Judge Johnson granted in part and denied in part Defendants' first motion for summary judgment, preserving Plaintiffs claim of wrongful termination of benefits under Section 502 of ERISA and dismissing Plaintiff's remaining claims. Medoy II, 2005 WL 3775953, at *12, 2005 U.S. Dist. LEXIS 40631, at *40. Thereafter, Plaintiff moved for reconsideration of the Court's ruling, which Judge Johnson denied in February 2006. Medoy v. Warnaco Employees' Long Term Disability Ins. Plan, No. 97 CV 6612(SJ), 2006 WL 355137, at *5-6, 2006 U.S. Dist. LEXIS 7635, at *17 (E.D.N.Y. Feb. 14, 2006) ("Medoy III").
Plaintiff and Defendants filed their Cross-Motions for summary judgment on November 16, 2007. The case was reassigned to the undersigned on January 3, 2008.
Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden of showing that no genuine factual dispute exists rests on the party seeking summary judgment. See, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The movant may discharge this burden by demonstrating to the Court that there is an absence of evidence to support the non-moving party's case on an issue on which the non-movant has the burden of proof. See, e.g., Celotex, 477 U.S. at 323, 106 S.Ct. 2548. In evaluating the record to determine whether there is a genuine issue as to any material fact, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
A district court may properly consider a challenge under ERISA to the termination or denial of disability benefits in the context of a summary judgment motion reviewing the administrative record. See, e.g., Suarato v. Bldg. Servs. 32BJ Pension Fund, 554 F.Supp.2d 399, 414-15 (S.D.N.Y.2008) (collecting cases).
Section 502(a) of ERISA, codified at 29 U.S.C. § 1132(a), authorizes a beneficiary of an employment benefit plan to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). As the Supreme Court has explained, "a denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the [plan] administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The parties agree that the Plan in question here did not include such a grant of discretionary authority. As such, the Court agrees with the parties that it must review the termination of Medoy's benefits de novo.
The Second Circuit has explained that the "presumption" to be applied by district courts in ERISA cases "`is that judicial review is limited to the record in front of the claims...
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...the Fund has already revealed its general disposition with respect to Plaintiff's claim. Cf. Medoy v. Warnaco Emps. Long Term Disability Ins. Plan , 581 F. Supp. 2d 403, 412 (E.D.N.Y. 2008) (declining to remand where defendants' unreasonable interpretation of the evidence "tipped their hand......