Verschelden v. Hartford Life & Accident Ins. Co., No. 4:19-CV-00167-DGK

• Citation: 484 F.Supp.3d 661
• Decision Date: 04 September 2020
• Docket Number: No. 4:19-CV-00167-DGK
• Parties: Catherine VERSCHELDEN, in her individual capacity and as personal representative to the Estate of Matthew Verschelden, Plaintiff, v. The HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Western District of Missouri

484 F.Supp.3d 661

Catherine VERSCHELDEN, in her individual capacity and as personal representative to the Estate of Matthew Verschelden, Plaintiff,

v.The HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.

No. 4:19-CV-00167-DGK

United States District Court, W.D. Missouri, Western Division.

Signed September 4, 2020

Talia Ravis, Kansas City, MO, for Plaintiff.

Cristin J. Mack, Ogletree, Deakins, Nash, Smoak & Stewart, St. Louis, MO, for Defendant.

ORDER GRANTING SUMMARY JUDGMENT

GREG KAYS, JUDGE

This lawsuit arises from the denial of life-insurance benefits by Defendant The Hartford Life and Accident Insurance Company ("Hartford"). Plaintiff Catherine Verschelden alleges Hartford improperly refused to pay on her deceased husband's life-insurance policy (Doc. 36). Hartford responds that the life-insurance policy had lapsed, and, thus, it was under no obligation to pay (Doc. 32).

Now before the Court are the parties’ cross motions for summary judgment.¹ As detailed below, a deferential abuse-of-discretion standard governs the Court's review and substantial evidence supports Hartford's decision. Therefore, the Court GRANTS Defendant's motion and DENIES Plaintiff's motion.

Background²

The life-insurance policy at issue belongs to Plaintiff's deceased husband, Matthew Verschelden ("Verschelden") and is now before the Court pursuant to 20 U.S.C. § 1132. Verschelden worked for the law firm of Stinson Leonard Street LLP, now Stinson LLP, for over thirty years, and left the firm as a Partner in 2015 due to complications from cancer

. As a firm employee, Verschelden enrolled in Hartford's basic and supplemental group life insurance policies (collectively, "the Policy"), which Hartford both insures and administers. Verschelden was eligible for basic life insurance in the amount of $1,000,000 and supplemental life insurance in the amount of $180,000. The Policy required Verschelden to pay premiums while employed.

The Policy also included a Life Insurance Waiver of Premium provision ("the LWOP provision"). The LWOP provision continues life-insurance coverage without the payment of premiums if the insured meets its definition of "Disabled." The LWOP provision defines "Disabled" as:

Disabled means You are prevented by injury or sickness from performing the material and substantial duties of any occupation for which You are, or could become, qualified by:

1) education;

2) training; or

3) experience.

In addition, You will be considered Disabled if You have been diagnosed with a life expectancy of 12 months or less.

(Doc. 30-1 at 58).³ Furthermore, the Policy states Hartford has the right to "require Proof of Loss that You are Disabled ...." Id. Both the LWOP provision and the Policy are silent as to whether "any occupation" includes part-time work.

In 2003, Verschelden was diagnosed with brain cancer

and underwent treatment. Despite his diagnosis and treatment, Verschelden continued to work. From 2008 until 2014, Verschelden was clinically asymptomatic. However, in 2015, an MRI revealed the presence of bone cancer in his skull. Complications from this cancer forced him to stop working on August 21, 2015, and he never returned to work at the law firm. On August 27, 2015, Verschelden underwent surgery on his brain tumor.

On February 5, 2016, Hartford approved Verschelden's claim for waiver of premiums under the LWOP provision, finding he met the definition of Disabled. Hartford based its decision at least in part on information received from Sarah Taylor, M.D., Verschelden's treating oncologist, who opined that Verschelden was not able to perform sedentary work on a part-time basis from August 22, 2015, to February 22, 2016. Hartford's approval letter reminded Verschelden the waiver would only be effective "while You remain Disabled" and that Hartford would periodically request updated medical information to verify his continued disability (Doc. 30-6 at 21).

Throughout 2016, Verschelden continued to undergo treatment relating to pain, fatigue, numbness, seizures, and post-chemotherapy treatments.⁴ That same year, however, Dr. Taylor observed his condition appeared to be improving. She described Verschelden as capable of carrying on "all pre-disease performance without restriction" and "[c]linically doing well" (Doc. 31-5 at 80, 87; dated March 30, 2017). She also found he could carry out "work of a light or sedentary nature, e.g., light house work, office work." Id.

Hartford contacted Dr. Taylor on July 13, 2017, for updated information. Dr. Taylor confirmed Verschelden could sit, stand, and walk for three hours at a time each, and that he had no cognitive impairments. She also agreed with her prior assessment that he could "occasionally bend, kneel, crouch and drive, lift up to 10 lbs. occasionally. Reaching/fingering and handling frequently" (Doc. 31-2 at 153–54).

Based in part on these evaluations, on July 24, 2017, Hartford terminated Verschelden's LWOP provision benefits, claiming he no longer met the definition of disabled based on his medical records (Doc. 30-5 at 79). Hartford did not conduct a vocational evaluation prior to terminating these benefits.

Upon termination, Hartford sent a letter to Verschelden informing him of his option to exercise his "Conversion Right" and convert the Policy to an individual plan (Doc. 30-5 at 77–79). Although he called Hartford and received additional information on the Conversion Right, Verschelden did not convert his Policy.

In December 2017, oncologist Benjamin Powers, M.D., diagnosed the return of Verschelden's cancer

and determined that he needed surgery on two new nodules appearing on his brain. At that same appointment, Dr. Powers found Verschelden could never bend at the waist; perform fine or gross manipulation, including fingering, keyboard, grip/grasp, or handle; lift any weight; and could only occasionally drive or reach (Doc. 31-2 at 115, summarizing the assessment of Dr. Powers). Dr. Powers noted he expected Verschelden's restrictions and limitations to be "Permanent." Id.

On January 22, 2018,—the day before his brain surgery—Verschelden appealed Hartford's decision to terminate his LWOP provision benefits. In support of his appeal, he included exhibits containing information from both before and after the termination date. He claimed Hartford's decision was incorrect because he was no longer able to work as a partner at a law firm, nor was he employable on a part-time basis because "there is no evidence that an employer would offer a person like me part-time employment" (Doc. 31-2 at 85–86). He asserted Hartford "cherry-picked information" from two of Dr. Taylor's reports (Doc. 36 at 18), and he stressed that the "possible recurrence" of his cancer

and his scheduled "upcoming surgery ... reaffirm the serious nature of this cancer" (Doc. 31-2 at 87). He also argued that the functionality evaluated—including the ability to sit, stand, and walk—were not relevant to evaluating the impact of brain cancer on his ability to work. He did not argue in his appeal that he lacked the ability to perform the functions which led to his termination.

On January 23, 2018, Verschelden underwent surgery, which confirmed the recurrence of his brain cancer

. He wrote Hartford two weeks later to inform it that (1) his cancer had recurred; (2) surgery and radiation had been ruled out as options; and (3) chemotherapy would only extend his life, not cure his cancer.

On February 14, 2018, Hartford conducted a vocational evaluation, or employability analysis report ("EAR"), considering Verschelden's ability to work on a part-time basis. This EAR was based on Verschelden's "functional capabilities, education, training and work history" as supported by Dr. Taylor's evaluation (Doc. 31-1 at 12). The EAR found that Verschelden had the ability to perform five occupations on a part-time basis.

In April 2018, as part of the appeal, Hartford requested an independent review of Verschelden's file by Michael Snyder, M.D., a non-treating neurologist. The review was limited to Verschelden's functionality as of July 24, 2017, the date of termination, despite Hartford having requested all medical records—both before and after the termination date—that Verschelden cited in his appeal. Dr. Snyder determined Verschelden did not meet the Policy definition of Disabled, but he imposed further limitations, including allowing only part-time work, and various other restrictions not initially contemplated in Verschelden's EAR. Based on Dr. Snyder's restrictions, Hartford requested an addendum to Verschelden's EAR. In this amended EAR, Hartford found that only four of the five identified positions could be performed on a part-time basis within the restricted functionality detailed by Dr. Snyder.

On May 11, 2018, Hartford sent Verschelden a letter denying his appeal, finding that he no longer met the Policy definition of Disabled because he could work on a part-time basis.

Verschelden died on October 6, 2018.

Plaintiff submitted a claim for death benefits with Hartford in December 2018. Hartford denied her claim on the basis that Verschelden's policy had lapsed prior to his death. Plaintiff appealed Hartford's determination, which it again denied in February 2019. Following that denial, Plaintiff filed suit in this Court. This suit is brought by Verschelden's spouse, the named beneficiary on the Plan, on her own behalf and on behalf of Verschelden's estate.

The parties do not dispute that Verschelden stopped making payments under the Policy. Thus, the narrow question before the Court is whether Verschelden was entitled to benefits under the LWOP provision. If so, then Hartford improperly terminated the policy.

Standard

A movant is entitled to summary judgment if she "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those facts "that might affect the outcome of the suit under the governing law," and a genuine dispute over material...