Songer v. Reliance Standard Life Ins. Co., 15cv0033.

• Decision Date: 05 May 2015
• Docket Number: No. 15cv0033.,15cv0033.
• Citation: 106 F.Supp.3d 664
• Parties: John SONGER, Plaintiff, v. RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

106 F.Supp.3d 664

John SONGER, Plaintiff,

v.RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant.

No. 15cv0033.

United States District Court, W.D. Pennsylvania.

Signed May 5, 2015.

Mary Chmura Conn, Paul A. Tershel, Tershel & Associates, Washington, PA, for Plaintiff.

Joshua Bachrach, Wilson, Elser, Moskowitz, Edelman & Dicker, Philadelphia, PA, for Defendant.

Memorandum Opinion on "Cross–Motions" for Summary Judgment

ARTHUR J. SCHWAB, District Judge.

I. Introduction

This is an action brought pursuant to 29 U.S.C. § 1132(a)(1)(B) (the Employer Retirement Income Security Act of 1974— hereinafter "ERISA").¹ Plaintiff, John Songer, as a participant and beneficiary of an ERISA governed long-term disability contract/policy issued by Defendant, Reliance Standard Life Insurance Company, seeks to recover benefits due to him and to clarify his rights to future benefits under the terms of the Policy. Pending before this Court is Defendant's Motion for "Partial" Summary Judgment (doc. no. 24), Plaintiff's Response in Opposition (doc. no. 35), Defendant's Reply thereto (doc. no. 47), Plaintiff's Sur–Reply (doc. no. 53), and Defendant's Response to Plaintiff's Sur–Reply (doc. no. 55).² For the reasons that follow, the Court will DENY Defendant's Motion for Summary Judgment, will GRANT Plaintiff's (converted) Motion for Summary Judgment and, thereby, will find in favor of Plaintiff that the decision denying Long Term Disability Benefits was fraught with procedural irregularities thus compelling a finding that the decision was arbitrary and capricious.

II. Procedural Posture

Having exhausted Plaintiff's administrative remedies, this case was filed on January 1, 2015 (doc. no. 1). Defendant filed a Counterclaim seeking Social Security Offset and related interest and attorney's fees in the amount of $23,968.87 (doc. no. 8). On March 13, 2015, the Court conducted an Initial Case Management Conference, wherein a procedure was discussed to first resolve the Social Security Offset issue, and then to proceed to a more complete round of summary judgment briefing by June 1, 2015. When the Court received Defendant's Motion for "Partial" Summary Judgment on March 24, 2015, and the attendant briefing and responses, the Court recognized that the briefing was not limited to the Social Security Offset issue, but instead was a full and in-depth briefing, and addressed all relevant issues in the case. Accordingly, the Court, by text Order of April 14, 2015, sent notice of its intent to convert Defendant's "Partial" Motion for Summary Judgment into a "Complete" Motion for Summary Judgment, and to rule thereon prior to the Mediation of May 18, 2015. The text Order stated:

The Court has reviewed the motion (which Defendant titles as a "partial" motion for summary judgment but which appears to be a complete motion for summary judgment), the response, and accompanying briefs. Upon filing of the reply (due by April 23, 2015 at noon), the Court is prepared to rule on the pending motion for summary judgment regarding both the issue of offset of Social Security and the merits of whether Plaintiff was denied a full and fair review of his Long Term disability claim, prior to the mediation date (which is scheduled to occur on or before May 18, 2015). At this time, the Court finds that no oral argument will be necessary and the Court hereby cancels the argument date of April 27, 2015 at 8:30 a.m.

Doc. No. 45.

The Court then permitted three further rounds of briefing with appendices and affidavits (doc. nos. 47, 53 and 55). In light of the depth and completeness of the briefing on all relevant issues (doc. nos. 24, 35, 47 and 53), by Text Order of May 4, 2015, stated as follows:

ORDER providing notice of Court's intent to convert current ‘partial’ summary judgment, and responsive documents into cross-motions for complete summary judgment. Consistent with the Text Order of 4/14/2015, and the depth and completeness of briefing on all relevant issues (doc. nos. 24, 35, 47 and 53), this Court will convert Plaintiff's responsive documents into a cross-motion, and will rule accordingly. See also doc. no. 45.

Doc. No. 57.

The Court has afforded the parties numerous rounds of briefing—5 to be exact. Pursuant to the April 14, 2015 and May 4, 2015 Text Orders, Defendant's Motion and Plaintiff's Response will be considered as Cross–Motions for Summary Judgment and are the subject of this Memorandum Opinion.

III. Facts³

A. Group Long Term Disability Policy Issued

Defendant issued group long term disability (LTD) policy number LTD 118592 to SSSI, Inc. dba Songer Steel Services, Plaintiff's former employer. SSSI's Disability Plan is an ERISA plan that is not self-funded. Under the terms of the policy, Reliance has complete authority to grant or deny a claim for benefits.

The Policy provided Long–Term Disability benefits covered in an amount equal to 60% of Covered Monthly Earnings, with a maximum monthly benefit of $6,000.00. The Policy defines "totally disabled" and "total disability" as:

(1) During the Elimination Period and for the first 24 months for which a Monthly Benefit is payable, an Insured cannot perform the material duties of his/her Regular Occupation:

(2) After a Monthly Benefit has been paid for 24 months, an Insured cannot perform the material duties of Any Occupation. We consider the Insured Totally Disabled if due to an Injury or Sickness he or she is capable of only performing the material duties on a part-time basis or part of the material duties on a Full-time basis.

B. Plaintiff's Application for LTD

Plaintiff, who was employed as Vice President of Sales at SSSI from 2003 to 2011, submitted a claim for disability on January 12, 2012, wherein his "diagnosis" by his treating physician, Dr. Frank Kunkel, M.D., was Post–Laminectomy Syndrome

, Thoracic/Lumbar Radiculitis, and Lumbago. Doc. No. 26–2; AR–0396. Dr. Kunkel did not list any mental diagnosis as part of his diagnosis. Dr. Kunkel indicated in the Physician's statement form of Defendant that Plaintiff had moderate limitations of a mental/nervous nature due to his diagnosis of Post Laminectomy Syndrome. AR0465. In his January 12, 2012 application, Plaintiff listed the following "conditions causing [his] disability": "Spinal Stenosis, Sciatic Nerve, two failed back operations and Diabetes." AR–0456–457. Plaintiff listed as the reason he was "unable to work"—"constant pain, need full rest and want to perform 3rd operation." AR–0456–457. Nowhere on the original disability claim form of January 12, 2012 was depression listed. AR–0387. For reasons unknown, Plaintiff submitted (or was asked to submit) a second undated employee statement, and in it, he changed his previous "reason for leaving" to include "back pain depression." AR–0385. Plaintiff did not, however, change his listed disability to depression.

C. Medical Evidence Received/Reviewed by Defendant

Defendant had received medical evidence from Dr. James Kang, Plaintiff's orthopedic surgeon. Dr. Kang stated that Plaintiff "has developed severe junctional stenosis at L2–3 and L34, with almost complete occlusion of the spinal canal ... his bilateral leg pain ... has incapacitated him over the past month...." AR–0439. It is important to note that there was no evidence which contradicted the opinions and findings of Plaintiff's treating physicians, Drs. Kunkel and Kang.

After a review of the medical records by Defendant's nurse reviewer, Cathy Ricci, RN, concluded that Plaintiff's "primary diagnosis" was Post–Laminectomy Syndrome

of the lumbar region, although her notes also discuss a history of anxiety/depression treating with a number of psychotropic trials following the death of his son in an auto accident. AR–0222–223.

D. Short Term Disability Awarded

On June 21, 2012, Defendant notified Plaintiff that he had been awarded Short Term Disability (STD). AR–0098. Although Defendant did not advise Plaintiff that the STD award was based upon a "psychiatric impairment," instead of his back condition, Defendant contends that he did not only apply for benefits based on his back condition, and in any event, Defendant was not required to tell Plaintiff the basis for the award of benefits.

E. Claims Log Entries

Due to the tragic death of Plaintiff's son and then his wife, Plaintiff became increasingly depressed. This information is noted in Defendant's claim log. The adjuster did an on-line search of the tragic circumstances of Plaintiff's son's death on or about August 15, 2012, and noted as the primary diagnosis "Depression." AR–0286.

On October 4, 2012, through the claims log notes of the nurse reviewer, Defendant acknowledged that the records "would support [Plaintiff] on a major depressive disorder

, due to the death of his son ... this is a more difficult one to determine than most." AR–0252.

F. LTD Awarded–Limited

On November 29, 2012, Defendant sent a letter to Plaintiff stating "it appears that you have met the group policy's definition of Total Disability." In the November 29, 2012 letter, it provided an explanation of the benefits calculation and mentioned a potential offset in the event Plaintiff's application for Social Security benefits was granted. The letter stated that Plaintiff's "claim for Long Term Disability (LTD) benefits has been approved at this time." AR–0321–322. Nowhere in the letter was it stated that Plaintiff's award was based upon mental/nervous disability and that it was limited to 24 months (the two alleged versions of the November 29, 2012 letter are discussed below).

Plaintiff's LTD benefits commenced April 12, 2012, following an elimination period and a time period before April 12, 2012 wherein Plaintiff had been awarded Short Term Disability. In the November 29, 2012 letter, Defendant stated that future benefits are available "provided that [he] remain[s] Totally Disabled as defined by the group policy." AR–0321. Plaintiff contends that he "reasonably believed" that the award was based on his back condition, which was permanent and degenerative, and...