Schnur v. Ctc Communications Corp. Group Disabil.
| Decision Date | 10 October 2008 |
| Docket Number | No. 05 Civ. 3297(RJS).,05 Civ. 3297(RJS). |
| Citation | 621 F.Supp.2d 96 |
| Parties | Susan SCHNUR, Plaintiff, v. CTC COMMUNICATIONS CORP. GROUP DISABILITY PLAN and Continental Casualty Company, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Harry Julius Binder, Binder and Binder, New York, NY, Patrick Henry Busse, Binder & Binder, P.C.(Suffolk), Ronkonkoma, NY, for Schnur, Plaintiff.
Robert Emmet Crotty, Megan Rose Brillault, Kelley Drye & Warren, LLP (NY), New York City, Shannon M. Jandorf, Samantha C. Halem, Marshall Law Group, Wellesley, MA, Mary Louise Marshall, M. Douglas Haywoode, Brooklyn, NY, for CTC Communications Corp. Group Disability Plan, Defendant.
Michael H. Bernstein, John T Seybert, Sedgwick, Detert, Moran & Arnold, LLP, New York City, for Continental Cas. Co.
Plaintiff Susan Schnur brings this action to recover long-term disability benefits under the Employment Retirement Security Income Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Specifically, Plaintiff alleges that she was wrongfully denied benefits by the CTC Communications Corporation Group Disability Plan ("Defendant LTD Plan"), which was funded by her former employer, CTC Communications Corporation ("CTC Corp."), through an insurance policy issued by Defendant Continental Casualty Company ("Continental"). Before the Court is Defendant LTD Plan's motion to dismiss and Continental's motion for summary judgment. For the reasons that follow, Defendant LTD Plan's motion is DENIED and Continental's motion is GRANTED
Plaintiff worked for CTC Corp. as a Technical Service Coordinator between May 2000 and December 2001. (Continental's 56.1 ¶¶ 1, 8.) As a benefit of her employment, Schnur was covered under the terms of Defendant LTD Plan, known as the "CTC Communications Corp. Group Disability Plan." (See id. ¶¶ 2, 4; see also Kelly Aff. ¶ 2.) Defendant LTD Plan was covered by ERISA and fully insured by Continental under policy number SR-83091448. (Continental's 56.1 ¶ 3; Kelly Aff. Ex. A ¶¶ 1-2.)
Although the actual terms of the Defendant LTD Plan are not in the record (see Transcript of June 2, 2008 Oral Argument ("Tr.") at 4), the Summary Plan Description ("SPD") issued by Continental states that the Defendant LTD Plan provides a monthly benefit to employees who become disabled, based on a fixed percentage of the employee's pre-disability compensation. (Kelly Aff. Ex. A at 3, SS 0007.) The SPD names CTC Corp. as the Plan Administrator, but Continental played a significant role in benefits determinations.
The SPD contains two alternative definitions of "disability" or "disabled": the "Occupation Qualifier" and the "Earnings Qualifier." (Pl.'s 56.1 ¶ 26.) Under the "Occupation Qualifier," "`[d]isability' means that during the Elimination Period and the following 24 months, injury or sickness causes physical or mental impairment to such a degree of severity" that the employee is "[c]ontinuously unable to perform the Material and Substantial Duties of [his or her] regular occupation" and "[n]ot working for wages in any occupation for which [the employee is or becomes] qualified by education, training or experience." (Id.) The "Earnings Qualifier" states that an employee is disabled "if an injury or sickness is causing physical or mental impairment to such a degree of severity that [the employee is] unable to earn more than 80% of [his or her] monthly earnings in any occupation for which [he or she is] qualified by education, training, [or] experience." (Id.)
In approximately August 20001, Plaintiff began experiencing symptoms of Lyme disease, fibromyalgia, and chronic fatigue syndrome. (Continental's 56.1 ¶ 7; see also Pl.'s 56.1 ¶ 27.) She alleges that these symptoms and their treatments caused her to become "totally disabled" under the terms of the SPD and "forced" her to stop working at CTC Corp. after December 1, 2001. (Pl.'s 56.1 ¶¶ 27-31.)
On approximately March 11, 2002, Plaintiff submitted a claim form and Attending Physician's statement in accordance with the procedures described in the SPD. (Continental's 56.1 ¶ 9; Second Am. Compl. ¶ 42.) By letter dated July 2, 2002, Continental informed Schnur that her claim for long-term disability benefits was denied, reasoning that "we do not see any evidence in the current medical records to establish that your condition imposes a physical or psychological impairment that would preclude you from engaging in the substantial and material duties of your regular occupation on a sustained basis." (Second Am. Compl. ¶¶ 43-44; see also Continental's 56.1 ¶ 11.)
Schnur appealed the benefits decision by letter dated August 23, 2002. (Continental's 56.1 ¶ 12.) Continental denied the appeal in a May 2, 2003 letter stating that it had "concluded there is no evidence that establishes a medical basis to support a condition(s) that would have precluded your client from performing her occupational work activity as of 11/27/01 and continuing." (Second Am. Compl. ¶¶ 50-51; see also Continental's 56.1 ¶ 14.)
Plaintiff also alleges that, on or about May 22, 2003, the Social Security Administration ("SSA") determined that she was "disabled" under the Social Security Act, which defines "disability" as the inability "to engage in any substantial gainful activity." (Second Am. Compl. ¶ 52 (citing 42 U.S.C. § 416(i)); see also Continental's 56.1 ¶ 10.) Schnur's initial monthly SSA benefits were $1,333 per month, and she continues to receive benefits. (Second Am. Compl. ¶ 23.)
On October 11, 2002, CTC Communications Group—along with related debtor entities that included CTC Corp.—filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code.2 (See Continental's 56.1 ¶ 13; see Bernstein Aff. ¶ 7.) Following the bankruptcy proceedings, the resulting "Reorganized CTC," including "Reorganized CTC Corp.," was structured according to a Second Amended Joint Plan of Reorganization ("Reorganization Plan"). (Bernstein Aff. Ex. 6 at Art. V, § A, ¶ 1, at 27.) The Reorganization Plan was confirmed by the Bankruptcy Court on December 15, 2003 pursuant to its "Findings of Fact, Conclusions of Law and Order Confirming Debtors' Second Amended Joint Plan of Reorganization" ("Confirmation Order"). (Continental's 56.1 ¶ 15; see also Bernstein Aff. Ex. 5.)
Pursuant to the Reorganization Plan, "Reorganized CTC Corp." stated that it "intend[ed] to continue (or continue as modified or replaced) the Debtors' existing benefit policies, plans and agreements identified on Exhibit F." (Bernstein Aff. Ex. 6 at Art. V, § D, ¶ 1, at 32.) Exhibit F of the Reorganization Plan states that "[t]he Reorganized Debtors will have the following benefit plans ... in effect following the Effective Date [December 15, 2003] ..." (Id. Ex. 7.) The only long-term disability plan listed in the Exhibit is "Guardian Long-Term Disability, max of taxable $6,000 per month based on base salary." (Id.) A copy of this Guardian Long-Term Disability plan is not before the Court.
The Bankruptcy Court's Confirmation Order states that "[t]he provisions of the Plan and this Confirmation Order shall be ... binding on the Debtors, all holders of Claims and interests ..., and any other person or entity affected thereby ...." (Id. Ex. 5 ¶ 8, at 10.) Further,
[e]xcept as otherwise expressly provided in the Plan, this Confirmation Order, or any agreement entered into in connection with the Plan ... upon the occurrence of the Effective Date, the Debtors shall be discharged and released, effective immediately, from any Claim ..., any "debt" ..., and any Interest ... against the Debtors or the Reorganized Debtors that arose from any ... obligation of the Debtors incurred before the Confirmation date....
On March 28, 2005, Schnur filed the complaint in this action, naming as defendants the "CTC Communications Corp. Group Disability Plan" and "CTC Communications Corp. as Plan Administrator." (See Compl. ¶¶ 6, 14-15.) Schnur filed an Amended Complaint on June 24, 2005, this time naming "CTC Communications Corp. Group Disability Plan" as the sole defendant. (See Am. Compl. ¶¶ 6, 14.) Defendant LTD Plan answered on July 11, 2005.
Schnur filed the Second Amended Complaint on August 8, 2005, adding Continental as an additional defendant. (See Second Am. Compl. ¶¶ 6, 15.) Defendant LTD Plan answered the Amended Complaint on August 30, 2005, asserting as an affirmative defense that "[t]he obligations of the Group Plan (which was in effect during Plaintiffs employment) were discharged in bankruptcy." (LTD Plan Answer at 9.) Continental answered on September 12, 2005. Defendant LTD Plan's motion to dismiss and Continental's motion for summary judgment were both filed on March 31, 2006. On September 4, 2007, the case was reassigned to the undersigned.
The standards for summary judgment are well settled. The moving party bears the burden of showing that he or she is entitled to summary judgment. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir.2005). Pursuant to Rule 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c); Matican v. City of New York, 524 F.3d 151, 154 (2d Cir.2008). "A dispute about a `genuine issue' exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. County of Nassau, 524 F.3d 160,...
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