Wade v. Life Ins. Co. North America

• Decision Date: 04 February 2003
• Docket Number: No, 02-CV-105.,, 02-CV-105.
• Citation: 245 F.Supp.2d 182
• Parties: Nancy P. WADE, Plaintiff v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant
• Court: U.S. District Court — District of Maine

245 F.Supp.2d 182

Nancy P. WADE, Plaintiff v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant

No, 02-CV-105.

United States District Court, D. Maine.

February 4, 2003.

COPYRIGHT MATERIAL OMITTED

Jon Holder, Holder & Grover, Portland, for Nancy P Wade.

John J. Aromando, Pierce, Atwood, Mark E. Porada, Pierce, Atwood, Portland, for Life Insurance Company of North America.

ORDER

SINGAL, Chief Judge.

Plaintiff brings an action against her long-term disability insurance provider alleging violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461 (1999). Plaintiff seeks to recover the present value of all future benefits under her long-term disability plan. In the alternative, Plaintiff requests the reinstatement of her benefits and a "full and fair" review of the denial of her claim, claiming that "anything less [would] trespass" on her constitutional right to due process. (See Am. Compl. at 7). Presently before the Court is Defendant's Motion for Partial Summary Judgment and Partial Judgment on the Pleadings (Docket # 13).¹ For the reasons discussed below, the Court DENIES Defendant's Motion for Partial Summary Judgment and GRANTS Defendant's Partial Judgment on the Pleadings.

I. STANDARD OF REVIEW

The Court grants a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is genuine for these purposes if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A material fact is one that has "the potential to affect the outcome of the suit under the applicable law." Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir.1993). Facts may be drawn from "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits." Fed. R.Civ.P. 56(c). The Court views the record in the light most favorable to the nonmoving party, drawing all reasonable inferences in that party's favor. McCarthy v. Northwest Airlines, 56 F.3d 313, 315 (1st Cir.1995).

In addition, "[a]fter the pleadings are closed but within such time as not to delay trial, any party may move for judgment on the pleadings." Fed.R.Civ.P. 12(c). "A dismissal on the pleadings is appropriate when the petitioner presents no material issue of fact to be resolved and the moving party is clearly entitled to judgment as a matter of law." Lefebvre v. Commissioner, 830 F.2d 417, 419 (1st Cir.1987) (per curiam). In resolving a motion for judgment on the pleadings, the Court must accept the claimant's material allegations as true, and draw all reasonable inferences in favor of the claimant. Rivera-Gomez v. de Castro, 843 F.2d 631, 635 (1st Cir.1988).

II. BACKGROUND

Plaintiff Nancy Wade ("Wade") was employed by State Farm Insurance Company ("State Farm"). At all relevant times, State Farm provided its employees with various types of insurance coverage pursuant to a group employee welfare benefit plan (the "Plan"). Defendant Life Insurance Company of North America ("LINA") issued a group long-term disability insurance policy to the Plan (the "Policy"). The Policy provided State Farm's employees, including Wade, with certain benefits in the event that they became disabled under the terms of the Policy. Specifically, the Policy provided:

An Employee will be considered Disabled if because of Injury or Sickness, he is unable to perform all the essential duties of his occupation. After Monthly Benefits have been payable for 24 months, an Employee will be considered Disabled only if he cannot actively work in any `substantially gainful occupation' for which he is qualified or may reasonably become qualified by reason of his education, training or experience.

(See Decl. of Counsel in Supp. of Def.'s Mot. at Ex. A (Docket # 15).) The Summary Plan Document ("SPD") issued by the Plan set forth LINA's authority to interpret, construe and apply the terms of the Policy.

When Plaintiff submitted a claim for benefits under the Policy, LINA initially determined that Plaintiff was, in fact, "disabled" under the terms of the Policy and awarded her benefits. As Plaintiff approached the twenty-four month period, LINA requested updated medical records and information from Plaintiff and her treating physicians. After reviewing Plaintiffs updated medical records, LINA concluded that Plaintiff no longer satisfied the definition of "disabled" and denied further benefits. Plaintiff thereafter commenced this action.² In her Amended Complaint, Plaintiff alleges that Defendant wrongfully terminated her disability benefits. In addition, Plaintiff alleges that Defendant violated her constitutional right to due process by failing to provide a "full and fair review" of its decision to deny her claim, as mandated by 29 U.S.C. § 1133(2). Accordingly, Plaintiff seeks to recover the present value of all future benefits under her long-term disability plan. In the alternative, Plaintiff requests the reinstatement of her benefits as well as an opportunity to submit her claim to an "independent outside source with no financial interest in the outcome." (See Am. Compl. at 7).

In response, Defendant has moved for partial summary judgment on the standard of review applicable to this case. More specifically, Defendant has requested a ruling that the Court will review the underlying decision to deny Plaintiffs claim for benefits under an arbitrary and capricious standard of review, as opposed to a de novo standard. Additionally, Defendant has moved for partial judgment on the pleadings as to Plaintiffs demands for relief. The Court first discusses Defendant's request for partial summary judgment, and then discusses Defendant's request for partial judgment on the pleadings.

III. DISCUSSION

A. Partial Summary Judgment on Standard of Review

The Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461 (1999), regulates employee welfare benefit plans that provide benefits in the event of sickness, accident, disability or death. 29 U.S.C. § 1002(1); Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Designed to provide consistency in how employers throughout the United States manage their benefit plans, ERISA sets forth six civil enforcement provisions. 29 U.S.C. § 1132(a). The provision at issue in this case, section 1132(a)(1)(B), provides that a beneficiary may bring a federal civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).³

ERISA itself does not set forth a specific standard for reviewing denials of benefits challenged under section 1132(a)(1)(B). However, in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court concluded that "a denial of benefits challenged under § 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, 489 U.S. at 115, 109 S.Ct. 948. The First Circuit has interpreted Firestone to mean that "district courts do not have expansive plenary jurisdiction to decide the merits of a claim anew ... if the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Recupero v. New Eng. Tel. & Tel. Co., 118 F.3d 820, 828 (1st Cir.1997) (internal citations and quotations omitted). Under such circumstances, the court has jurisdiction only to review the out-of-court decision, determine whether it was arbitrary and capricious, and then either affirm the decision or remand the case back to the out-of-court decision-maker for further consideration. Id, at 830-31.

Here, the SPD issued by the Plan provides that "[t]he Plan Administrator and the Life Insurance Company of North America shall have the power to ... construe and interpret the Plan whenever necessary to carry out its intent and purposes and to facilitate its administration." (See Decl. of Counsel in Supp. of Def.'s Mot. at Ex. B (Docket # 15).)⁴ Defendant argues that this language affords it sufficient discretionary authority. As such, Defendant requests that the Court rule that Defendant's decision to deny disability benefits is subject to the deferential arbitrary and capricious standard of review.

The Court, however, lacks the authority under Article II of the United States Constitution to issue such an order. Pursuant to Article III, a federal court's subject matter jurisdiction is limited to cases and controversies. U.S. CONST. art. Ill, § 2; United States Nat'l Bank v. Indep. Ins. Agents of Am., 508 U.S. 439, 446, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993); Rodos v. Michaelson, 527 F.2d 582, 584 (1st Cir.1975). "[A] federal court has neither the power to render advisory opinions nor to decide questions that cannot affect the rights of litigants in the case before them." Preiser v. Newkirk, 422 U.S. 395, 401, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975) (internal citations and quotations omitted). Its judgment must resolve "a real and substantial controversy admitting of specific relief ... as distinguished from an opinion advising what the law would be upon a hypothetical state of facts." Id.

Notwithstanding its argument, Defendant does not ask the Court to apply the appropriate standard in reviewing the termination of Plaintiffs disability benefits. Specifically, Defendant never requests that the Court find it was neither...