Sollon v. Ohio Cas. Ins. Co.

• Decision Date: 25 October 2005
• Docket Number: No. CA 02-1632.,CA 02-1632.
• Citation: 396 F.Supp.2d 560
• Parties: William D. SOLLON, Plaintiff, v. THE OHIO CASUALTY INSURANCE COMPANY and the Hartford Life Insurance Company, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

396 F.Supp.2d 560

William D. SOLLON, Plaintiff, v.THE OHIO CASUALTY INSURANCE COMPANY and the Hartford Life Insurance Company, Defendants.

No. CA 02-1632.

United States District Court, W.D. Pennsylvania.

October 25, 2005.

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Ronald H. Heck, Pittsburgh, PA, for Plaintiff.

J. Alan Lips, Taft, Rachel S. Zahniser, Taft, Stettinius & Hollister, Cincinnati, OH, Randy K. Hareza, Burns, Sheila M. Burke, Burns, White & Hickton, Pittsburgh, PA, Anthony W. Moses, Pepper Hamilton, Pittsburgh, PA, Brian P. Downey, Pepper, Hamilton & Scheetz, Harrisburg, PA, for Defendants.

MEMORANDUM

STANDISH, District Judge.

Pending before the Court are Motions for Summary Judgment filed by Ohio Casualty Insurance Company("Ohio Casualty") and by The Hartford Life Insurance Company("Hartford.")(SeeDocketNos. 41 and 43, respectively.)The Motion by Ohio Casualty is granted in its entirety; the Motion by Hartford is granted in part.This matter is remanded for further consideration in light of the discussion which follows.

I.INTRODUCTION

A.Factual Background¹

Beginning in July 1974, PlaintiffWilliam D. Sollon was employed by Defendant Ohio Casualty, a property casualty insurance company.As part of its employee benefits plans, Ohio Casualty offered a long term disability ("LTD") plan in which Mr. Sollon voluntarily participated throughout his employment ("the Plan.")Ohio Casualty purchased an insurance policy for payment of LTD benefits for its qualifying employees from Hartford.

At the time of the events giving rise to this suit, Mr. Sollon worked out of his home near Pittsburgh, Pennsylvania, as a claims representative.In October 1999, his cardiologist, Dr. David Burkey, recommended that due to his severe cardiac impairment, coronary artery disease, and other related conditions, he should quit working and apply for LTD benefits.On October 19, 1999, Mr. Sollon notified Ohio Casualty's home office of this recommendation and, following instructions from his employer, contacted Elizabeth Aumann, the Ohio Casualty Benefits Manager, for information about how to apply for LTD benefits.Ms. Aumann told him that the Plan required him to first apply for Social Security disability benefits and that she would forward an application for LTD benefits.Until those benefits could go into effect, Ohio Casualty placed him on a medical leave of absence.Mr. Sollon subsequently received an application which he returned to Ohio Casualty for review and transmittal to Hartford for processing.Plaintiff later received a letter from Ohio Casualty's benefits office advising him of the status of his LTD and other employee benefits in which it was stated, "Hartford is currently reviewing your claim for LTD benefits.We will notify you of Hartford's decision as soon as possible."(Ohio Casualty Insurance Company's Brief in Support of its Motion for Summary Judgment, DocketNo. 42, "Ohio Casualty Brief,"Exhibit 1, Declaration of Elizabeth S. Aumann, "Aumann Decl.,"Exh. 9.)

On May 15, 2000, Kimberly J. Polash, a claims examiner with Hartford, advised both the Ohio Casualty employee benefits office and Mr. Sollon that his LTD benefits claim had been approved as of April 20, 2000.The letter to Mr. Sollon also noted that "benefit payments will continue, subject to the terms and limitations of the policy, while you meet the policy definition of Total Disability."²(AumannDecl., Exh. 10.)Based on the terms of the Plan, Plaintiff received a monthly benefit equal to two-thirds of his base salary, less the amount he received as disability benefits from the Social Security Administration.

On September 27, 2000, Ms. Aumann received an e-mail from a colleague which stated, "Have heard rumblings that [Mr.] Sollon, who is on LTD since 10/19/99, has been playing golf at least two times a week at his country club and may also be the country club president.Not sure how this relates to his LTD but thought we might want to check."(AumannDecl., Exh. 12.)Ms. Aumann wrote to Ms. Polash at Hartford on September 29, 2000, advising her of this rumor, and asking that someone investigate and let Ohio Casualty know what effect, if any, this had on Plaintiff's disability claim.Ohio Casualty contends that at no time did Ms. Aumann offer any conclusions about whether Mr. Sollon's benefits should be terminated, but merely passed the information along to the party who made determinations about eligibility and paid the benefits.(Ohio Casualty Briefat 6.)

In response to Ms. Aumann's letter, Hartford assigned an investigator to contact Plaintiff's medical doctors regarding his physical condition and began to re-evaluate his claim.The investigation included three days of surveillance in November, 2000, during which time Mr. Sollon was videotaped playing golf.When asked about this by the investigator during a personal interview on February 8, 2001, Mr. Sollon admitted he was the person in the videotape.

On September 25, 2001, Ohio Casualty was advised by letter from Hartford that Mr. Sollon's LTD benefits under the Plan had been terminated.The letter stated that Hartford had completed its review of the claim and "determined that the information obtained does not support his claim of total disability from his own occupation."(AumannDecl., Exh. 16.)Mr. Sollon received a similar letter from Hartford, advising him that his benefits were retroactively terminated as of November 8, 2000, the day he was videotaped paying golf.Although he appealed this decision to Hartford as prescribed in the Plan, after further reviews, the termination was affirmed on January 31, May 28, and July 2, 2002.

B.Procedural History

Mr. Sollon filed suit in this Court on September 24, 2002, claiming that the denial of his long term disability benefits by Defendants was a violation of the Employment Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq.("ERISA"), breach of the contract underlying the Plan, and violation of 42 Pa. Con. Stat. Ann. § 8371, the Pennsylvania Bad Faith Insurance Act.In his complaint, Plaintiff sought restoration of his LTD benefits retroactive to September 2001, attorney fees and costs and "other relief that this Court deems appropriate, equitable and just under the circumstances."(Complaint, Count I.)

Ohio Casualty moved to dismiss pursuant to Fed. R. Civ. Pro. 12(b)(6) on November 15, 2002, arguing that Plaintiff had admitted that Hartford was solely responsible for the decisions regarding his eligibility for benefits, and that the state law claims for breach of contract (Count II) and violation of the Pennsylvania Bad Faith Insurance Act (Count III) were pre-empted by ERISA.(DocketNo. 9.)The motion was granted in part by order of Court on March 12, 2003, dismissing Counts II and III with regard to both Defendants.(DocketNo. 16.)The parties then conducted almost two years of discovery before Defendants filed the Motions for Summary Judgment now pending.

C.Jurisdiction and Venue

The parties agree that this Court has jurisdiction over Plaintiff's ERISA claims pursuant to 29 U.S.C. § 1132(e)(1).Venue is appropriate in this District inasmuch as the Plan is administered and the alleged violations occurred in this district.29 U.S.C. § 1132(e)(2).

II.STANDARD FOR SUMMARY JUDGMENT

A court may grant summary judgment if the party so moving can show, based on "pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any,... 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);Rossetti v. Busch Entertainment Corp.,87 F.Supp.2d 415(E.D.Pa.2000).If a reasonable jury could return a verdict for the non-movant, the dispute is genuine and if, under substantive law, the dispute would affect the outcome of the suit, it is material.A factual dispute between the parties that is both genuine and material will defeat a motion for summary judgment.Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986).

In considering a motion for summary judgment, the court must view all the evidence in the light most favorable to the non-movant, accept the non-movant's version of the facts as true, and resolve any conflicts in its favor.Rossetti, id., citingMatsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp.,475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538(1986), andBig Apple BMW, Inc. v. BMW of North America, Inc.,974 F.2d 1358, 1363(3d Cir.1992).In short, the movant must show that if the pleadings, depositions and other evidentiary material submitted to date were admissible at trial, the opposing party could not carry its burden of proof based on that evidence and a reasonable jury would thus decide all genuine material disputes in favor of the movant.Celotex Corp. v. Catrett,477 U.S. 317, 318, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986).

Once the moving party has demonstrated that there are no genuine issues of material fact, the burden shifts to the non-moving party to "make a showing sufficient to establish the existence of every element essential to his case, based on the affidavits or by depositions and admissions on file."Celotex, id. at 322-23, 106 S.Ct. 2548;Rossetti, id.;Fed.R.Civ.P. 56(e).The evidence to be presented by the non-moving party must be such that a reasonable jury could find in its favor, and it cannot simply reiterate unsupported assertions, conclusory allegations or mere suspicious beliefs.Liberty Lobby, id. at 250-252, 106 S.Ct. 2505;Groman v. Township of Manalapan,47 F.3d 628, 633(3d Cir.1995).

III.LEGAL ANALYSIS

A.Motion for Summary Judgment by Defendant Ohio Casualty

1.Arguments Raised by Defendant: Ohio Casualty contends that Plaintiff's only claim against it is breach of fiduciary duty....