Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Griffin v. Hartford Life & Accident Insurance Co.

United States District Court, W.D. Virginia, Lynchburg Division

January 25, 2017

Scott Griffin, Plaintiff,
Hartford Life & Accident Insurance Company, Defendant.


          Norman K. Moon, Judge

         This matter is before the Court upon cross motions for summary judgment. (Dkts. 78 & 79). The controversy in this case revolves around Defendant's decision to cease providing Plaintiff with disability benefits under a plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Defendant had provided Plaintiff with Long Term Disability (“LTD”) benefits, as well as a Life Insurance Waiver of Premium (“LWOP”) that exempted him from having to pay his life insurance premium while disabled. Defendant had previously determined that Plaintiff was disabled due primarily to spinal ailments. However, Defendant later decided that Plaintiff was no longer disabled and ceased providing either type of benefit. In accordance with the following reasoning, the Court will hold that Defendant's termination of benefits decision was proper. Thus, Defendant's motion for summary judgment will be granted, while Plaintiff's will be denied.

         I. Statement of Undisputed Facts [1]

         a. The Benefits Plan

         Plaintiff was employed at MedQuist Transcripts, Ltd. (“Medquist”) from 2010 to 2012. (AR 185, 206). Defendant provided policies (the “Policies”) for life insurance and disability benefits that Medquist offered to employees such as Plaintiff under the terms of its employee welfare benefit plan. (See AR 38-61). The Policies vested Defendant with full discretionary authority to interpret their provisions and provide benefits accordingly. (AR 51). The Policies initially contained different definitions of “disabled” under for LTD and LWOP. The LTD policy employed the “own occupation” definition, while the LWOP interpreted disability to mean being prevented from doing “any occupation.” (AR 52; AR 72). Later, the definition for disability under the LTD policy changed to “any occupation” as well. (AR 257). Additionally, the Policies contained several provisions which Defendant claims indicate that the beneficiary had the obligation of establishing his own disability if he wished to receive benefits.[2]

         b. Timeline of Events

         Plaintiff's medical problems forced him to stop working in September of 2011. (AR 1020). These problems included atrial fibrillation (heart), degenerations at the C5-6 and C6-7 vertebrae (neck), carpal tunnel syndrome and tennis elbow (arm), and degenerations at ¶ 3-4, 4-5, and L5-S1 vertebrae (lower back). (AR 197, 532; AR 189-90, 752; AR 125; AR 672). Plaintiff had previously undergone surgery on his lower back vertebrae, but was told no further surgery could be done until the degeneration prevented him from walking. (AR 528). In October of 2011, Plaintiff was granted Short Term Disability (“STD”) benefits under the Policies. (AR 1086, 1092). Plaintiff was terminated from his position at Medquist on April 3, 2012, and was approved for LTD benefits on May 3, 2012, on the basis of his cervical and lumbar issues. (AR 325; AR 203, 710, 859). At the end of May, 2012, Plaintiff underwent surgery with Dr. Matthew Sackett to correct his atrial fibrillation. (AR 196, 532). Plaintiff was approved for LWOP benefits on June 17, 2012. (AR 1035).

         In March 2013, Dr. Jonathan Carmouche performed neck surgery to treat plaintiff's neck and arm pain. (AR 179). The surgery was largely successful, although there were some lingering symptoms. (AR 179). In June 2013, Defendant began to inquire into Plaintiff's disability claim because it was unclear whether his surgeries had resolved his symptoms, and Dr. Carmouche would not perform a Physical Capacity Evaluation (“PCE”) to resolve the question. (AR 178). The investigation was also spurred by the fact that Defendant had noted statements by Plaintiff inconsistent with his disability. (AR 176-77). Namely, Plaintiff had stated that he drove 1.5 hours each way to see Dr. Carmouche and that he continued to aspire to be a musician, even though his condition purportedly prevented him from sitting or playing guitar for prolonged periods of time. (AR 176-77). These inconsistencies were mitigated, however, by the fact that Plaintiff took a rest stop in the middle of the drive and had voice-to-text software to enable him to do songwriting without typing. (AR 176-77).

         Pursuant to this inquiry, Defendant employed Nurse Ruth Weddermann to conduct an internal Medical Case Manager (“MCM”) review of Plaintiff's medical records. (AR 173-75). In July of 2013, Weddermann ultimately recommended updating Plaintiff's records because it was not apparent whether Plaintiff's neck surgery had resolved his medical issues. (AR 175). In response, Defendant sought records from Dr. Carmouche and Dr. Bravo (who had begun treating Plaintiff for tendonitis in his arm) but was ultimately unsuccessful in getting either doctor to definitively opine on Plaintiff's disability or agree to do a PCE. (AR 170; AR 165-69). Dr. Carmouche did, however, provide some evidence that Plaintiff had ongoing medical issues. (See AR 169 (“Rcvd MRs from Dr. Carmouche confirming [Plaintiff's] statements.”); AR 672 (“Severe degeneration at ¶ 3-4, 4-5. Degeneration L5-S1.”)).

         Failing to obtain a definitive statement from his current treating doctors, Defendant utilized another physician, Dr. Teichman, to review Plaintiff's existing medical records and determine whether he was still disabled. (AR 596-600). On February 28, 2014, Dr. Teichman completed his report and concluded that he would have to defer to the treating physicians because there was insufficient information on which he could make his own conclusion. (AR 596-600). Dr. Teichman also noted Dr. Carmouche's statement that “patient reported being unable to sit for more than 10 minutes at a time” and concluded that such a restriction, if it existed, “is not compatible with functionality in a work environment, even at a sedentary level.” (AR 592).

         On March 12, 2014, Defendant changed its definition of disability for LTD from disability preventing a person from working at their “own occupation” to working at “any occupation, ” but informed Plaintiff that he still qualified under the new definition. (AR 257). Plaintiff's claim was later referred to a special investigations unit within Defendant's organization. (AR 138). The investigators conducted surveillance on Plaintiff in March 2014 and conducted an interview with him in May. (AR 133; AR 525). Plaintiff's Social Security Disability claims appeal was also denied in May of 2014. (AR 137). In June and August of 2014, Defendant sent the surveillance video to Plaintiff's treating physicians, and asked whether they were restricting Plaintiff's activities. (AR 129, 131, 245-48). None responded affirmatively, although Dr. Larry McGlothlin did indicate that Plaintiff had some physical limitations and was “very likely to have some disability.” (AR 122, 512, 503; AR 443).

         On September 5, 2014, Defendant informed Plaintiff that he was no longer considered disabled and would cease receiving disability benefits. (AR 227-33). On September 8th, Defendant informed Plaintiff that his LWOP benefits were also being terminated. (AR 1029- 34). Plaintiff appealed the benefits termination on September 30th, but the appeal was denied on November 4, 2014. (AR 441-43; AR 108).

         II. Standard of Review

         a. Summary Judgment

         Federal Rule of Civil Procedure 56(a) provides that a court should grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” “As to materiality . . . [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In order to preclude summary judgment, the dispute about a material fact must be “‘genuine, ' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.; see also JKC Holding Co. v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001). If, however, the evidence of a genuine issue of material fact “is merely colorable or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 250. In considering a motion for summary judgment under Rule 56, a court must view the record as a whole and draw all reasonable inferences in the light most favorable to the nonmoving party. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); Shaw v. Stroud, 13 F.3d 791, 798 (4th Cir. 1994).

         b. Determination of Benefits - Abuse of Discretion vs. De Novo

         The parties contest whether this Court should review Defendant's benefits determination decision under an abuse of discretion or de novo standard. The crux of the disagreement is whether the employees who made the decision as to the termination of benefits were working on behalf of the Defendant, Hartford Life & Accident Insurance Company (“HLAIC”), or whether they were actually agents of Hartford Fire Insurance Company (“HFIC”). Only HLAIC (and its agents) receives abuse of discretion review for its benefits determinations because only HLAIC was delegated full discretionary authority to interpret the Plan.

         Generally, “[p]rinciples of trust law require courts to review a denial of plan benefits under a de novo standard unless the plan provides to the contrary.” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111 (2008) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). However, “[w]here the plan provides to the contrary by granting the administrator or fiduciary discretionary authority to determine eligibility for benefits, [t]rust principles make a deferential standard of review appropriate.” Id. (internal quotation marks and citations omitted) (emphasis in original). The parties here do not contest that HLAIC was granted discretionary authority and that its decision would be subject to the abuse of discretion standard. The issue, however, is whether the termination decision was actually made by HLAIC, because the employees who made the decision were paid by and technically employees of HFIC.

         Several courts have addressed whether decisions made by individuals who are not employees of the entity vested with discretionary authority may still receive deferential review. Plaintiff relies heavily on Anderson v. Unum Life Ins. Co. of Am., 414 F.Supp.2d 1079 (M.D. Ala. 2006), in which the Court held that a de novo review standard applied when the benefits decision had been made by a separate corporate entity from the one vested with discretionary authority, even though both corporations were affiliates.[3] See Anderson, 414 F.Supp.2d at 1100. In Anderson, the corporation vested with discretionary authority assigned benefits determinations to its parent company under a General Services Agreement. Id. at 1098. Crucially, that Agreement stated that the parent corporation “is engaged in an independent business and will perform its obligations under this Agreement as an independent contractor and not as the employee, partner or agent” of the subsidiary. Id. at 1097. Thus, the Anderson court found that the parent company could not have been acting as an agent of the subsidiary primarily because of the express language found in the Agreement. Id. at 1099.

         However, Anderson has been ably differentiated in several cases highly analogous to the instant case. In Campbell v. United of Omaha Life Ins. Co., No. 2:14-CV-00623-JEO, 2015 WL 5818040, at *9 (N.D. Ala. Oct. 6, 2015), appeal dismissed (11th Cir. 15-14942, 15-15206) (Jan. 15, 2016), the Court found that “[t]he facts of Anderson . . . are readily distinguishable” because of the express non-agency language in the Agreement and the fact that employees in Anderson had held themselves out as representatives of the parent company rather than the subsidiary. In Campbell, by contrast, there was no express delegation of decisionmaking, and all communications purported to be on behalf of the corporation vested with discretionary authority. See Campbell, 2015 WL 5818040, at *9. Similarly, the court in Zurndorfer v. Unum Life Ins. Co. of Am., 543 F.Supp.2d 242, 256 (S.D.N.Y. 2008) addressed “whether a corporation named as a fiduciary in a disability plan governed by ERISA may discharge its duties through the actions of authorized agents who are employed by or otherwise affiliated with the fiduciary's parent corporation.” It answered the question in the affirmative, reasoning that a corporation “can only act through its agents, ” and that the employees in the case were acting on behalf of the fiduciary corporation, even though their salaries derived from another. Zurndorfer, 543 F.Supp.2d at 257. Finally, the court in MacDonald v. Anthem Life Ins. Co., No. 8:12-CV-2473-T-17TBM, 2014 WL 4809534, at *13-14 (M.D. Fla. Sept. 26, 2014), acknowledged Anderson while holding that a benefits decision should receive deferential review even when the employees making the decision were paid by a parent company instead of the company given discretionary authority.

         Distilling the holdings of these cases, several principles emerge. The fact that an employee derives their salary from one corporation does not necessarily prevent them from exercising the discretionary authority of another. Thus, the dispositive question becomes whether the employee-decisionmaker was acting as an agent for the company vested with discretionary authority, governed by the normal principles of agency. In determining whether such an agency relationship existed, courts have looked to factors such as the letterhead for correspondences and the entity to which responses were directed. In Anderson, for example, there were overt expressions that the employees were acting as agents of the parent company rather than the subsidiary that would have received deferential review. In Campbell, by contrast, “all of the letters to Campbell and his counsel communicating the status and resolution of his benefits claims were from United of Omaha and written on United of Omaha letterhead with a United of Omaha address.” 2015 WL 5818040 at *9.

         Here, the facts indicate that all relevant employees were paid by HFIC and listed as its employee on their W-2's. (See dkt. 81-1 at 5). However, HFIC is simply a holding company that does no business of its own and pays the salaries of all employees in the “Hartford family.” (See dkt. 80-1 ¶¶ 2, 5, 6). Furthermore, all letters addressed to Plaintiff had the “The Hartford” letterhead, which also appeared directly above “Hartford Life and Accident Insurance Co.” on the first page of the Plan. (AR 1, 38, 219, 227, 257, 323). Most convincingly, the signature block of each employee indicated that the correspondence was on behalf of HLAIC. (AR 222, 233, 259, 324). There was no indication to Plaintiff at the time that the employees were acting on behalf of HFIC, and Plaintiff only later became aware of their affiliation through discovery in this litigation. All of the evidence indicates that the employees evaluating Plaintiff's claim were agents of HLAIC, which was given discretionary authority to interpret the Plan. Thus, the abuse of discretion standard of review will apply.

         “At its immovable core, the abuse of discretion standard requires a reviewing court to show enough deference to a primary decision-maker's judgment that the court does not reverse merely because it would have come to a different result in the first instance.” Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315, 321 (4th Cir. 2008). “To be held reasonable, the administrator's decision must result from a ‘deliberate, principled reasoning process' and be supported by substantial evidence.” Williams v. Metro. Life Ins. Co., 609 F.3d 622, 630 (4th Cir. 2010) (quoting Guthrie v. Nat'l Rural Elec. Coop. Assoc. Long Term Disability Plan, 509 F.3d 644, 651 (4th Cir.2007)). “Substantial evidence consists of less than a preponderance but more than a scintilla of relevant evidence that ‘a reasoning mind would accept as sufficient to support a particular conclusion.'” Whitley v. Hartford Life & Acc. Ins. Co., 262 F. App'x 546, 551 (4th Cir. 2008). The Fourth Circuit has created eight nonexclusive “Booth factors” for a Court to consider in determining whether an entity abused its discretion in ERISA cases such as this:

(1) the language of the plan; (2) the purposes and goals of the plan; (3) the adequacy of the materials considered to make the decision and the degree to which they support it; (4) whether the fiduciary's interpretation was consistent with other provisions in the plan and with earlier interpretations of the plan; (5) whether the decisionmaking process was reasoned and principled; (6) whether the decision was consistent with the procedural and substantive requirements of ERISA; (7) any external standard relevant to the exercise of discretion; and (8) the fiduciary's motives and any conflict of interest it may have.

Williams, 609 F.3d at 630 (quoting Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan, 201 F.3d 335, 342-43 (4th Cir. 2000)). This Court will apply the abuse of discretion standard to Defendant's decision, employing the Booth factors listed above.

         III. Discussion

         In a routine benefits denial case such as this, only these three Booth factors are relevant: (1) whether the decisionmaking process was reasoned and principled, (2) the adequacy of material considered to make a decision and degree to which they support it, and (3) the fiduciary's motives and any conflict of interest it may have. Considering these factors, the Court concludes that no reasonable jury would find that Defendant's decision was an abuse of discretion.

         a. Reasonable Process

         Defendant argues that its decisionmaking process was reasonable because it attempted to obtain information about Plaintiff's condition through a wide variety of means and received input from many, often independent, actors. For example, Defendant attempted to hire a contractor to perform a physical examination on Plaintiff, had Nurse Wedderman complete an MCM, tasked Dr. Teichman with conducting an independent review, conducted surveillance on Plaintiff, interviewed Plaintiff, contacted his physicians at multiple points, and followed the progress of his Social Security Disability benefits appeal. Only after expending substantial time and effort and gathering valuable data over a period of years did Defendant make the decision to terminate Plaintiff's benefits.

         Plaintiff presents four primary arguments against the reasonableness of Defendant's decisionmaking process. First, Plaintiff argues that the denial was inherently arbitrary because Defendant denied benefits even though they had no evidence that Plaintiff's condition had changed from the time they had decided to grant him benefits years earlier. Second, he claims the analysis was flawed because Defendant could have definitively resolved the issue by having him physically examined by a doctor of their choice, but they elected not to. The parties agree that Defendant had a right to force Plaintiff to undergo an examination, and Plaintiff also alleges that such an examination was required and would have been less costly than the alternatives Defendant pursued instead. Third, Defendant asserts that the termination relied on a flawed employment analysis. Specifically, he argues the analysis incorrectly described Plaintiff's physical restrictions and assumed he could work at jobs for which he was not qualified. Fourth, Plaintiff claims Defendant's decision was contrary to the advice of several medical professionals, including Defendant's own reviewer, Dr. Teichman, who recommended that he continue to receive disability benefits. As further described below, however, the Court finds that none of Plaintiff's objections are persuasive.

         i. Change in Disability Status After Several Years

         Plaintiff's first argument - that Defendant arbitrarily changed his disability status - is largely without merit. Defendant's decision was not arbitrary; it was based on various sources of evidence that were gathered over a period of years, and that were discussed by Plaintiff in depth in his filings with this Court. Defendant did not suddenly decide to stop providing benefits in September 2014. Rather, the decision was the culmination of an investigation to determine Plaintiff's disability status that spanned much of the period that Plaintiff received LTD benefits. That Defendant continued to provide Plaintiff with disability benefits for years while it was investigating the merits of his claim demonstrates Defendant's good faith rather than its careless decisionmaking. The fact that Defendant denied benefits despite providing them for several years does not indicate that Defendant made an arbitrary decision. See Hensley v. Int'l Bus. Machines Corp., 123 F. App'x 534, 538 (4th Cir. 2004) (reasoning that “the fact that MetLife initially awarded benefits to Hensley does not mean that its subsequent termination of those benefits was the result of unprincipled reasoning” because “[t]he termination of benefits was based on further investigation and review”).

         Further, Plaintiff is simply factually incorrect that Defendant had no evidence of changes in his condition. Defendant granted Plaintiff's disability benefits when he was seeing several doctors, was considering surgery, and was being restricted in his activities by Dr. McGlothlin. Defendant subsequently denied benefits after Plaintiff had undergone surgery, was no longer regularly seeing his doctors, and was not under any official restrictions on his activities. A changing disability determination in light of changing circumstances is not evidence of an insufficient decisionmaking process.

         ii. Lack of Physical Examination

         Plaintiff correctly notes that Defendant had the right to have him physically examined. (AR 47). By not exercising this right and relying on other sources of evidence instead, Plaintiff argues that Defendant improperly made its decision.

         Plaintiff argues that Defendant's decisionmaking was flawed because it could have afforded to pay for a physical examination with the money they spent on surveillance instead. (Dkt. 87 at 14). However, the law does not impose an obligation on Defendant to gather evidence in the way Plaintiff desires. See Elliott v. Sara Lee Corp., 190 F.3d 601, 609 (4th ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.