Standish v. Fed. Express Corp.
| Decision Date | 17 November 2016 |
| Docket Number | No. 6:15-cv-6226(MAT),6:15-cv-6226(MAT) |
| Parties | CHARLES STANDISH, Plaintiff, v. FEDERAL EXPRESS CORPORATION LONG TERM DISABILITY PLAN and AETNA LIFE INSURANCE COMPANY, Defendants. |
| Court | U.S. District Court — Western District of New York |
Represented by counsel, Charles Standish ("Plaintiff" or "Standish"), a former employee of Federal Express Corporation ("FedEx") brings the present action against Federal Express Corporation Long Term Disability Plan ("LTD Plan" or "the Plan") and Aetna Life Insurance Company ("Aetna") (collectively, "Defendants"), pursuant to § 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), challenging the denial of his claim for long term disability ("LTD") benefits.
Plaintiff was employed as a DOT/Courier for FedEx, which required the ability to drive a commercial vehicle and a special license. As a permanent full-time emplyee of FedEx who had worked longer than 180 days, Standish was a Covered Employee under the LTD Plan, and was entitled to a Disability Benefit if he became Disabled as defined in the LTD Plan.
In 2000, Standish was diagnosed with a thalamic tumor, and was treated for hydrocephalus with the placement of a shunt. When the first shunt failed in November 2011, he developed acute obstructive hydrocephalus and underwent surgery to have a second shunt implanted on November 27, 2011. The second shunt failed, and an external drain was placed on December 3, 2011. As a result of the shunt failures, Plaintiff developed bilateral deep vein thrombosis ("DVT") and suffered one seizure. His condition necessitated placement of a vena cava filter on December 17, 2011. On December 21, 2011, his surgeon placed a new shunt. Based on these medical conditions, Plaintiff applied for and received short-term disability benefits under the Federal Express Short Term Disability Plan ("STD Plan") from December 5, 2011, through June 3, 2012.
After Plaintiff exhausted his short-term disability benefits, he applied for and received long-term disability benefits under the LTD Plan based on his being found to have an Occupational Disability, meaning that his medically-determinable impairments rendered him unable to perform the duties of his regular occupation. Plaintiff received Occupational Disability benefits from June 4, 2012, through June 3, 2014.
Prior to the expiration of his Occupational Disability benefits, Plaintiff applied for Total Disability benefits under theLTD Plan, which required him to show that he was unable to engage in any compensable employment for 25 hours per week. By letter dated December 4, 2013, Aetna notified him that it was reviewing his claim. On March 24, 2014, Plaintiff's claim for benefits was referred to board-certified neurologist Kenneth Root, M.D., for a peer review of the clinical data in Plaintiff's file. Dr. Root concluded that there was "no objective clinical documentation demonstrating significant neurological functional impairment which would preclude the claimant from engaging in any employment for a minimum of 24 hours per week." (AR 00118-119). Aetna denied Plaintiff's claim on May 22, 2014, stating, in part, that there were "insufficient objective findings to support a Total Disability from any occupation." (AR 00007).
Standish appealed the denial of his claim for Total Disability benefits and, between May 23, 2014, and July 3, 2014, he submitted additional information to Aetna in support of his claim.
On June 12, 2014, Aetna referred Plaintiff's claim to Steven Swersie, M.D. for an internal medicine peer review of the clinical data in Plaintiff's file. Dr. Swersie reviewed the file and conducted peer-to-peer consultations with several of Plaintiff's medical providers. Dr. Swersie's conclusion was favorable to Plaintiff: He found that although Plaintiff was neurologically stable, there did appear to be sufficient objective clinical evidence to support the presence of a functional impairmentprecluding him from engaging in any compensable employment for a minimum of 25 hours a week for the period from June 4, 2014, to July 19, 2014. (AR 00123).
Apparently dissatisfied with Dr. Swersie's opinion, on July 11, 2014, Aetna requested that Dr. Elana Mendelssohn, a board-certified clinical psychologist and neuropsychologist, conduct another peer review of Plaintiff's clinical file. Dr. Mendelssohn, who was instructed by Aetna not to conduct any peer-to-peer consultations with Plaintiff's medical providers, found that the file "did not include significant objective clinical documentation that reveals a functional impairment that would preclude the claimant from engaging in any compensable employment for a minimum of 25 hours a week from 6/4/14 to present." (AR 00145).
On August 4, 2014, Aetna notified Plaintiff that its Appeal Review Committee ("the Committee") had voted to uphold the denial of his claim for Total Disability benefits. The denial letter acknowledged that Plaintiff had been awarded disability insurance benefits ("DIB") by the Social Security Administration ("SSA") but distinguished the award on the basis that the criteria used by the LTD Plan and the SSA were different. (AR 00003).
Plaintiff then timely commenced this action. The parties have filed competing motions for summary judgment on the administrative record. Plaintiff seeks judgment in his favor awarding benefits and does not appear to request, in the alternative, reversal of thedenial of benefits and remand. Plaintiff's motion for summary judgment to the extent he seeks an award of benefits is denied because there are issues of fact that preclude such an award at this juncture. Defendants similarly are not entitled to summary judgment due to procedural violations of ERISA. Therefore, the Court finds that the appropriate remedy is to reverse the denial of LTD benefits and to remand the matter to Aetna for further administrative proceedings consistent with this opinion.
A plan administrator's "denial of benefits challenged under [29 U.S.C.] § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the 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 (1989). However, "[w]here the plan reserves such discretionary authority, denials are subject to the more deferential arbitrary and capricious standard, and may be overturned only if the decision is 'without reason, unsupported by substantial evidence or erroneous as a matter of law.'" Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999) (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442(2d Cir. 1995) ().
Here, Plaintiff claims that the deferential arbitrary-and-capricious review standard should not apply because Aetna was not properly appointed with fiduciary authority under the Plan to conduct the administrative appeal review of the denial of his claim. It is necessary at the outset to review in some detail several provisions of various iterations of the Plan, as well as the decision-making roles of several entities, namely, (1) the Administrator, (2) the Committee, (3) the Claims Paying Administrator, and (4) the appeal committee.
The Plan designates FedEx as the "Administrator . . . charged with the administration of the Plan, acting through its Employee Benefits Department." Plan, § 1.1(a) (AR 00529). Article 6 states that "[t]he Administrator is a named fiduciary of the Plan and shall have the absolute right and power to construe and interpret the provisions of the Plan and administer it for the best interest of Employees[,]" Plan, § 6.1 (AR 00585), including the ability "to construe any ambiguity and interpret any provision of the Plan or supply any omission or reconcile any inconsistencies in such manner as it deems proper." Id. In addition, the Administrator's "authority shall include, but shall not be limited to" "determin[ing] eligibility for coverage under the Plan inaccordance with its terms" and "decid[ing] all questions of eligibility for, and determin[ing] the amount, manner and time of payment of, benefits under the Plan in accordance with its interpretation of its terms." Plan, § 6.1(b), (c) (AR 00585). The Plan further provides that "[t]he determination of the Administrator shall be made in a fair and consistent manner in accordance with the Plan's terms and its decision shall be final, subject only to a determination by a court of competent jurisdiction that the Administrator's decision was arbitrary and capricious." Plan, § 6.1 (AR 00585).
Notwithstanding the Plan's appointment of FedEx to serve as the Administrator, the Plan further provides for the appointment, by the FedEx Board of Directors, of an entity it refers to as "the Committee." The Committee, whose composition is not described by the Plan, is given the authority "to perform the administrative duties [under the Plan]" and to assume "general administrative power" over the Plan and "with such other powers as may be necessary to perform its duties hereunder," apart from the specific functions of claims administration. See Plan, § 6.2. In addition to vesting the Committee with general administrative power, the Plan make the Committee "a named fiduciary of the Plan."
The Plan specifically designates Aetna "or any other entity or person designated as such by the Company" as the "Claims Paying Administrator," Plan, § 1.1(e) (AR 00530), and it provides that"the administration of claims . . . is the responsibility of the Administrator and the Claims Paying Administrator to the extent such duties are delegated to it by the Administrator." Plan, § 6.2 (AR 00586-587). The Plan...
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