Buford v. Unum Life Ins. Co. of America

290 F.Supp.2d 92

Carolyn BUFORD, Plaintiff, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.

No. CIV.A. 02-1059 (JDB).

United States District Court, District of Columbia.

October 29, 2003.

COPYRIGHT MATERIAL OMITTED

Laura A. Stefani, Michael J. Kator, Kator, Parks & Wieser, PLLC, Washington, DC, for plaintiff.

James L. Marketos, Mary-Ellen Noone, Berliner, Corcoran & Rowe LLP, Washington, DC, for defendant.

MEMORANDUM OPINION

BATES, District Judge.

Presently before the court in this action seeking to recover benefits pursuant to the provisions of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., are the cross motions for summary judgment filed by plaintiff Carolyn Buford and defendant UNUM Life Insurance Company of America ("UNUM"). For the reasons that follow, the Court will grant defendant's motion and deny plaintiff's motion, and accordingly judgment will be entered in favor of defendant.

BACKGROUND

The following facts are uncontroverted. UNUM is a health insurer. Plaintiff was employed at the Federal National Mortgage Corporation ("Fannie Mae") as a director of auditing, from February 1993 until August 1999. During her time working at Fannie Mae, plaintiff was a participant in the "Choice Flexible Benefit Package" and elected to be covered by a long-term disability benefits plan insured by UNUM (the "Policy"). The Policy constitutes an "employee welfare benefit plan" or "welfare plan" as that term is defined in ERISA, 29 U.S.C. § 1002(1).

The Policy provides for the payment of benefits to plaintiff in the event she becomes "disabled." "Disabled" is defined in the Policy as follows:

You are disabled when UNUM determines that: you are limited from performing the material and substantial duties of your regular occupation due to your sickness or injury; and you have a 20% or more loss in your indexed monthly earnings due to the same sickness or injury.

After 36 months of payments, you are disabled when UNUM determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.

UASP00574.¹ In turn, "regular occupation" is defined in the Policy in the following way:

Regular occupation means the occupation you are routinely performing when your disability begins. UNUM will look at your occupation as it is normally performed in the national economy, instead of how the work tasks are performed for a specific employer or at a specific location.

UASP00593-94. With respect to a mental disability, the Policy limits the payment of benefits to a period of twenty-four months (except under certain circumstances not relevant to the facts of this case). "Disabilities, due to sickness or injury, which are primarily based on self-reported symptoms, and disabilities due to mental illness have a limited pay period up to 24 months." UASP00580.

After plaintiff ceased her work at Fannie Mae, she submitted a disability claim to UNUM for long-term disability benefits under the Plan. Plaintiff claimed neurological (cervical spondylosis, cervical radiculopathy, and myofascial pain syndrome) and mental (anxiety and depression) disabilities. In February 2000, UNUM began making monthly payments on the claim in the approximate amount of $5,761. UNUM continued making payments to plaintiff until November 2000.

On January 2, 2001, UNUM notified plaintiff by letter that it would no longer pay benefits to her because it considered plaintiff no longer to be disabled. Defendant cited a lack of "objective data" supporting plaintiff's continued disability claim as the reason for making this determination. By letter dated January 8, 2001, plaintiff informed defendant that she intended to appeal the decision to discontinue her disability benefits and that she would obtain and forward documentation to support her appeal. On March 9, 2001, defendant informed plaintiff that it had completed its review of her claim and determined that the denial of benefits was appropriate. Defendant concluded that plaintiff's disability did not prevent her from working in the general occupation of auditing.

Plaintiff subsequently sought to submit, and defendant agreed to consider in a review on appeal, further information regarding her claim. Plaintiff submitted such materials on March 27, 2001. On May 24, 2001, defendant notified plaintiff that her appeal was denied and that the denial of her benefits beyond November 20, 2000, was appropriate. Defendant reiterated its conclusion that plaintiff could be gainfully employed as an auditor and that there was a lack of objective evidence to support plaintiff's claims.

On May 31, 2002, Plaintiff filed the present action in this Court against UNUM for violating ERISA by refusing to continue paying her disability benefits. Defendant filed its motion for summary judgment on October 29, 2002, and plaintiff filed her cross motion for summary judgment on the same day. A motions hearing was held on January 7, 2003.

STANDARD OF REVIEW

Summary Judgment

Summary judgment is appropriate when the pleadings and the evidence demonstrate that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment bears the initial responsibility of demonstrating the absence of a genuine dispute of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party may successfully support its motion by "informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. (quoting Fed.R.Civ.P. 56(c)).

In determining whether there exists a genuine issue of material fact sufficient to preclude summary judgment, the court must regard the non-movant's statements as true and accept all evidence and make all inferences in the non-movant's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A non-moving party, however, must establish more than the "mere existence of a scintilla of evidence" in support of its position. Id. at 252, 106 S.Ct. 2505. By pointing to the absence of evidence proffered by the non-moving party, a moving party may succeed on summary judgment. Celotex, 477 U.S. at 322, 106 S.Ct. 2548. "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (internal citations omitted). Summary judgment is appropriate if the non-movant fails to offer "evidence on which the jury could reasonably find for the [non-movant]." Id. at 252, 106 S.Ct. 2505.

Review of UNUM's Termination of Benefits

Plaintiff seeks review of UNUM's decision to terminate her benefits pursuant to § 1132(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B). The Supreme Court has held that "a denial of benefits ... is to be reviewed under a de novo standard unless the benefit plan gives to the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). A more deferential standard of review therefore applies where a plan gives discretionary authority to the administrator. However, the Court in Firestone also noted that "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a `factor in determining whether there is an abuse of discretion.'" Id. at 115, 109 S.Ct. 948 (quoting Restatement (Second) of Trusts § 187, Comment d (1959)).

In determining whether a plan grants discretionary authority to the administrator or fiduciary, the D.C. Circuit has noted that a reviewing court must focus on more than whether the word "discretion" is invoked in the plan language; instead, "[w]hat counts ... is the character of the authority exercised by the administrators under the plan." Block v. Pitney Bowes, Inc., 952 F.2d 1450, 1453-54 (D.C.Cir. 1992). Here the language of the plan at issue provides:

When making a benefit determination under the policy, UNUM has discretionary authority to determine [the insured's] eligibility for benefits and to interpret the terms and provisions of the policy.

(UASP00570). Examining the character of the authority granted to UNUM by the plain language of the Policy, it is clear that the authority includes discretion not only to determine eligibility for benefits but also to construe the terms of the Policy. Plaintiff contends that the fact that the Policy grants UNUM discretionary authority was not adequately conveyed to employees covered by the Policy. Plaintiff argues that there is no explicit declaration that this language results in deferential review by courts; no definition of the term "discretionary authority" or explanation is provided to employees; and the plan language granting UNUM discretionary authority is "buried" in the Certificate Section that is generally used to provide information to the purchasing employer and not to employees.

In Herzberger v. Standard Insurance Co., 205 F.3d 327 (7th Cir.2000), the Seventh Circuit held that a plan that did not give an employee adequate notice of the fact that the plan administrator's discretion authorized it to make judgments largely insulated from judicial review was not entitled to the more deferential standard of review. Herzberger, however, involved a plan whose terms did not explicitly create discretionary authority; instead, the defendant in Herzberger attempted to show that the plan provided for discretion by implication. See, e.g., Feder v. Paul...