Wilkinson v. Sun Life & Health Ins. Co.

• Citation: 127 F.Supp.3d 545
• Decision Date: 01 September 2015
• Docket Number: Civil No. 5:13CV87–RLV.
• Parties: Stephen WILKINSON, Plaintiff, v. SUN LIFE AND HEALTH INSURANCE COMPANY, dba Sun Life Financial, Defendant.
• Court: United States District Courts. 4th Circuit. Western District of North Carolina

127 F.Supp.3d 545

Stephen WILKINSON, Plaintiff,

v.SUN LIFE AND HEALTH INSURANCE COMPANY, dba Sun Life Financial, Defendant.

Civil No. 5:13CV87–RLV.

United States District Court, W.D. North Carolina, Statesville Division.

Signed Sept. 1, 2015.

Norris Arden Adams, II, Charlotte, NC, for Plaintiff.

Hannah Gray Styron Symonds, Boston, MA, Joshua Bachrach, Wilson Elser Moskowitz Edelman & Dicker, LLP, Philadelphia, PA, for Defendant.

MEMORANDUM & ORDER

RICHARD L. VOORHEES, District Judge.

THIS MATTER is before the Court on Plaintiff Stephen Wilkinson's Motion for Summary Judgment (Doc. 24), as well as Defendant Sun Life and Health Insurance Company's Cross–Motion for Summary Judgment (Doc. 21), pursuant to Rule 56 of the Federal Rules of Civil Procedure. Prior to summary judgment, Plaintiff Wilkinson also filed a Motion to Dismiss Defendant's Counterclaim (Doc. 16).¹

I. PROCEDURAL AND FACTUAL HISTORY

This matter arises out of a dispute over the payment of long term disability benefits under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"). Plaintiff is a former employee of Dolan & Traynor, Inc. ("D & T"), a closely held New Jersey corporation. The named Defendant Sun Life and Health Insurance Company ("Sun Life") is a successor entity of GE Group Life Assurance Company, which issued the underlying employee benefit plan offered by D & T that gives rise to this dispute.²

The facts recited herein are taken from the pleadings and the documentary evidence presented in support of the parties' respective briefs.

a. Wilkinson's Employment with Dolan & Traynor

In 1973, Plaintiff, Stephen Wilkinson ("Wilkinson"), began his employment with D & T, a wholesale marketing distributor of quality building products and plumbing specialties. Wilkinson was a D & T Vice President engaged in sales, operations, and distribution. While employed with D & T, Wilkinson's primary duties included management; sales and training activities (training instruction activities including lifting and carrying up to approximately 100 pounds); the use of power and hand tools at various facilities in the building/ construction industry; 4–6 hours of driving; and air travel 3–4 times per year. Wilkinson worked approximately 60 hours per week and earned an annual salary of $434,300.00.³ Wilkinson was also a stockholder (owning approximately 22%) of D & T, along with three others, Timothy Traynor ("Traynor"), B. Michael Dolan ("M. Dolan"), and Timothy Dolan ("T. Dolan"), who collectively owned the majority of D & T stock.

On August 18, 2003, Wilkinson's wife passed away. In the months following his wife's death, Wilkinson began to struggle emotionally and physically. Wilkinson eventually developed a heart condition known as cardiomyopathy, which also caused him to experience dyspnea and severe fatigue.⁴ As a result, Wilkinson's work productivity declined over a period of approximately seven months following the death of his wife—a fact conceded by Wilkinson.⁵ These issues prompted Wilkinson and the other D & T shareholders to engage in discussions about Wilkinson's ability and willingness to continue in the same role and capacity on a sustained basis.

On March 19, 2004, D & T stockholders T. Dolan, M. Dolan, and Traynor, ("the Partners") called a meeting to discuss Wilkinson's performance in recent months.⁶ In a lengthy email to the Partners dated March 20, 2004, Wilkinson summarized the events of the meeting, beginning by stating that he was caught off guard and did not understand that his future with D & T was the sole reason for the meeting.⁷ According to Wilkinson, he explained that he was "continuing to struggle with [his] physical and mental health." According to Wilkinson, he took two weeks off after the passing of his wife, took a week off in October, as well as a few days around Thanksgiving and Christmas, and then took two weeks off for surgery. Wilkinson represented the following:

I would estimate in the last 7 months about 6 weeks of PTO (it may be more). My hours have typically been 9–5, some days less because of medical problems and doctor appointments. I have also spent time working from home when I have not been in the office, e-mail, voice mail, phone calls. I would estimate that my contributions over these months are about half what they were prior.

Wilkinson went on to state, "I would like to feel better and will continue to try to return to being more productive working no more than 40 hour weeks. This all depends on my ability." Reportedly, topics such as taking a FMLA leave of absence, reducing Wilkinson's compensation to take into account his current health condition and limitations, Wilkinson's insurability, and the possibility of adjusting Wilkinson's buy-out amount were all discussed but tabled for later discussion.⁸

The Partners called another meeting with Wilkinson on April 13, 2004. A follow-up email written to Wilkinson summarized the events of the meeting. The document also contained what appear to be Wilkinson's personal comments and responses to certain subjects. For example, Wilkinson wrote, "Based on our meeting of 3/19 and [my] recap, the partners feel [I] won't/can't be able to perform at a level acceptable to them.... My expressed desire to work 30–40 hours a week does not cut it with them." The Partners wanted Wilkinson to decide if he was "in or out." A third meeting was planned for the following week.

On April 21, 2004, Wilkinson and the partners met again to continue their discussion. (Doc. 22–2 at 30.) At this meeting, they discussed the possibility of Wilkinson taking a leave of absence again. Wilkinson agreed to take a leave of absence, but also wanted assurances that a written separation agreement would be prepared and executed in advance of his leave.

On May 5, 2004, upon Wilkinson's request, D & T sent Wilkinson a document titled "Response to Employee Request for Family or Medical Leave and Employee Acknowledgements of Obligations" ("FMLA request")⁹ . (Doc. 24–1 at 2.) The document stated in part, "In April of 2004, you notified us/we became aware of your need to take a family/medical leave due to a serious health condition that makes you unable to perform the essential functions of your job ... We are aware that you need this leave beginning on or about May 10, 2004." (Id. ) The FMLA request form was signed by both Wilkinson and a representative from D & T's Human Resources Department.

Wilkinson's salary was paid by D & T until May 7, 2004. According to D & T records, Wilkinson's last day of work was May 7, 2004.

Wilkinson was on FMLA leave from May 7, 2004 through August 2004.

On July 14, 2004, Wilkinson advised D & T that he would be unable to return to work. (Doc. 22–1, 21 ¶ 9).

b. Wilkinson's Long Term Disability Benefits Paid by Sun Life

Immediately prior to Wilkinson's application for FMLA leave, D & T changed its provider for certain insurance products offered to its employees, including its provider for long term disability benefits. Effective May 1, 2004, D & T offered and administered the "Dolan and Traynor, Inc., Employee Health and Welfare Benefit Plan," which provided disability benefits to employees pursuant to the terms of a group insurance policy issued by GE Group Life Assurance Company [now Sun Life].

In April 2004, prior to the effective date of the Sun Life group plan, Wilkinson completed an Enrollment Request form and selected to participate in Sun Life's Life Insurance/Accidental Death and Dismemberment (LI/AD & D) and Long Term Disability ("LTD") plans. (Doc. 22–3 at 57–58). Block 14 of Wilkinson's Enrollment Request Form indicated that "Hours worked weekly for this employer" (Excluding Overtime) reflected that Wilkinson was "Active" and working 40 hours. (Doc. 22–1 at 36) (AR0235).

On August 18, 2004, Wilkinson submitted a claim to Sun Life for payment of LTD benefits.¹⁰ (AR0683, 1205–09). Wilkinson's claim under the Sun Life group insurance policy required D & T to confirm Wilkinson's employment status. In doing so, D & T represented in Block 4 of the "Employer Section" of the LTD application that Wilkinson's occupation was "Vice President" and that Wilkinson's "[w]ork schedule at [the] time of disability" was five days per week, eight hours per day. (Doc. 22–3 at 57). Similarly, D & T represented in Block 2 that Wilkinson's "[l]ast day worked" was 05/07/04 and answered "Yes" to indicate that on Wilkinson's last day worked (on May 7, 2004), he completed more than a half day. Id. Wilkinson's application was supported by an Attending Physician's Statement from Mark S. Rosenthal, M.D., dated August 13, 2004, characterizing Wilkinson's cardiomyopathy as "Class 2 (Slight Limitation)." Id. at 58. Dr. Rosenthal likewise represented that the "Date patient ceased work because of disability" was May 7, 2004. Id. Wilkinson began receiving disability benefits shortly after submitting his claim.

Wilkinson was subject to periodic reviews by Sun Life to confirm that he was still eligible for long term disability benefits. Sun Life required Wilkinson to undergo an Independent Medical Examination in January 2005 with Catalino De La Cruz, M.D., a specialist in cardiovascular disease, to evaluate for permanent disability. After investigation, based in part upon Dr. Cruz's opinion that Wilkinson was, in fact, permanently and totally disabled, Sun Life approved Wilkinson's claim on February 25, 2005. (Doc. 22–3, 51–56). In its approval letter, Sun Life explained that Wilkinson's cardiomyopathy was deemed a pre-existing condition. Because Wilkinson had LTD coverage since July 1, 2002 through D & T's previous group policy provider, Unum, immediately prior to the Sun Life policy's effective date, and met the other criteria for prior service credit, coverage was permitted despite the pre-existing condition.¹¹

From August of 2004 until July of 2008, Sun Life paid Wilkinson monthly benefits without interruption. While receiving LTD benefits, Wilkinson was required to provide updated medical...