CHRISTINA DELPRADO, Plaintiff,
v.
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.,
UNITED HEALTH GROUP INCORPORATED, UNITED HEALTHCARE SERVICES, INC.,
UNITED HEALTH GROUP LONG TERM DISABILITY PLAN,
UNITED HEALTH GROUP SHORT TERM DISABILITY PLAN, Defendants.
1:12-CV-00673 (BKS/RFT)
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK
April 17, 2015
Appearances:
For Plaintiff Christina Delprado:
Craig Meyerson
Office of Craig Meyerson
Airport Park
17 British American Boulevard
Latham, NY 12110
For Defendants Sedgwick Claims Management Services, Inc.,
United Health Group Incorporated, United Healthcare Services, Inc.,
United Health Group Long Term Disability Plan, and
United Health Group Short Term Disability Plan:
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William J. Anthony
Robert M. Wood
Kristi Rich Winters
Jackson, Lewis P.C. - Albany Office
18 Corporate Woods Boulevard
Albany, NY 12211
Hon. Brenda K. Sannes, United States District Court Judge:
MEMORANDUM-DECISION AND ORDER
Christina Delprado ("Plaintiff") brings this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. In her Amended Complaint, Plaintiff alleges, inter alia, that Sedgwick Claims Management Services, Inc., United Health Group Incorporated, United Healthcare Services, Inc., United Health Group Long Term Disability Plan, and United Health Group Short Term Disability Plan ("Defendants") violated ERISA by improperly denying her short term disability ("STD") benefits and long term disability ("LTD") benefits under the STD and LTD Plans provided by her employer United Healthcare Services, Inc. (Dkt No. 11). Currently pending before the Court are Defendants' motion for summary judgment (Dkt. No. 89), and Plaintiff's cross-motion for summary and declaratory judgment and to strike certain affidavits in Defendants' motion (Dkt. No. 98). For the reasons set forth below, Plaintiff's motion is granted in part and denied in part, and Defendants' motion is granted in part and denied in part.
| I. BACKGROUND | 3 |
| A. Relevant Procedural History | 3 |
| B. Undisputed Material Facts | 4 |
| 1) Plaintiff's Employment | 4 |
| 2) Procedures for Determining Disability Claims | 4 |
| 3) Plaintiff's First STD Claim | 7 |
| a. APS from Dr. Fishel | 8 |
| b. Denial and Appeal | 8 |
| c. Medical Records from Dr. Fishel and Dr. Huyck | 9 |
| d. First Contact with Dr. Dorsey | 12 |
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| e. Dr. Payne's First Report | 12 |
| f. Denial of STD Appeal | 14 |
| 4) Plaintiff's Second STD Claim | 15 |
| a. First Diagnosis of Fibromyalgia | 15 |
| b. Processing the Second STD Claim | 16 |
| c. Sedgwick Notes on Fibromyalgia | 17 |
| d. APS from Dr. Dorsey | 18 |
| e. APS and Office Notes from Dr. Yovanoff | 18 |
| f. Denial of Second STD Claim | 22 |
| 5) Plaintiff's LTD Claim | 23 |
| 6) Plaintiff's Administrative Appeals | 24 |
| a. Medical Records Provided | 24 |
| b. Dr. Payne's Second Report | 26 |
| c. Denial of Appeals | 29 |
| d. Plaintiff's Second Level Appeals | 30 |
| II. APPLICABLE LEGAL STANDARDS | 31 |
| A. Summary Judgment | 31 |
| B. ERISA | 32 |
| C. Standard of Review | 33 |
| 1) Conflict of Interest | 34 |
| 2) Procedural Errors | 35 |
| 3) The Arbitrary and Capricious Standard of Review | 38 |
| D. Scope of Review | 38 |
| 1) Evidence Outside the Administrative Record | 38 |
| 2) Claim Notes | 40 |
| E. Plaintiff's Motion to Strike | 41 |
| 1) Brandhorst Affidavit | 41 |
| 2) Anthony Affirmation | 42 |
| III. ANALYSIS | 43 |
| A. Plaintiff's First STD Claim | 43 |
| 1) Sedgwick's Initial Determination Was Arbitrary and Capricious | 43 |
| 2) Sedgwick's Appeal Decision Was Reasonable | 44 |
| B. Plaintiff's Second STD Claim | 46 |
| 1) Diagnosis of Fibromyalgia | 46 |
| 2) The Initial Denial of Plaintiff's Second STD Claim Was Arbitrary and Capricious | 47 |
| 3) The Denial of Plaintiff's Second STD Claim Appeal Was Arbitrary and Capricious | 50 |
| a. Sedgwick Failed to Give Adequate Notice | 50 |
| b. The Denial Was Based On Erroneous Information | 50 |
| 4) The Final Denial of Plaintiff's Second STD Claim Was Arbitrary and Capricious | 53 |
| a. The Opinions Of Plaintiff's Physicians Were Not Properly Considered | 54 |
| b. Plaintiff's Subjective Symptoms Were Not Properly Considered | 56 |
| c. Plaintiff Was Not Provided Adequate Notice | 58 |
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| C. Plaintiff's LTD Claim Was Denied Unreasonably | 60 |
| D. Sedgwick's ERISA Liability | 61 |
| E. Plaintiff's Request for Declaratory Relief | 62 |
| IV. SUMMMARY | 63 |
| V. THE APPROPRIATE REMEDY | 64 |
| VI. ATTORNEYS' FEES | 66 |
| VII. CONCLUSION | 67 |
I. BACKGROUND
A. Relevant Procedural History
Plaintiff commenced this action on March 20, 2012 by filing a Complaint in the Supreme Court of the State of New York, Saratoga County. (Dkt. No 1-2). On April 23, 2012, Defendants removed the case to the Northern District of New York on the basis that the Court has jurisdiction under 28 U.S.C. §§ 1331 and 1332. (Dkt. No 1). On June 18, 2012, Plaintiff filed an Amended Complaint, asserting twelve claims against Defendants under ERISA, the Family and Medical Leave Act of 1993 ("FMLA"), and New York state law. (Dkt No. 11).
On March 20, 2013, the Court dismissed Plaintiff's fourth claim, on Defendants' motion, for failure to state a claim upon which relief could be granted. (Dkt. No. 33). On June 30, 2014, Defendants moved for Summary Judgment against all of Plaintiff's remaining FMLA, employment, and ERISA claims. (Dkt. No. 89). Plaintiff opposed Defendants' motion on her ERISA claims—Counts I, II, III, X, XI, and XII in the Amended Complaint—and cross-moved for summary and declaratory judgment on the same ERISA claims. (Dkt. No. 98). Plaintiff seeks to recover short-term disability (STD) and long-term disability (LTD) benefits, as well as attorneys' fees. (Dkt. No. 98-1, at pp. 4, 33, 49). Plaintiff "requests permission of this Court to withdraw her FMLA and employment claims--Counts V, VI, VII, VIII and IX of the Amended Complaint—or, in the alternative, does not oppose Defendants' motion regarding said counts."
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(Id., at pp. 12-13).1 Plaintiff further moves to strike all or parts of the Affidavits of Jessica Brandhorst and William J. Anthony, which were submitted by Defendants in support of their motion. (Id., at pp. 13-14).2
B. Undisputed Material Facts3
1) Plaintiff's Employment
Plaintiff was hired by Defendant United Healthcare Services, Inc. ("UHS") on March 12, 2007 for the position of Disease Management Case Manager. (Defs. SMF, p. 2, ¶ 1). In this position, Plaintiff worked primarily from home providing disease management support to patients over the phone. (Id., p. 2, ¶ 5). On July 30, 2010, Plaintiff stopped actively working at UHS due to allegedly worsening health issues including severe constant chronic joint pain and excessive fatigue; she requested and was granted medical leave under the FMLA starting on August 2, 2010. (Pl. SMF, ¶¶ 26, 28, 37).
2) Procedures for Determining Disability Claims
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During her employment at UHS, Plaintiff was eligible to file for both STD and LTD benefits under the United Health Group Short-Term and Long-Term Disability Plan (the "Plan"). (Defs. SMF, p. 8, ¶ 2). Under the Plan, Plaintiff was eligible to receive STD benefits in the amount of 60% of her pre-disability earnings in the event she became disabled, after she had been disabled for a waiting period of seven consecutive calendar days through a maximum benefit period of 180 calendar days. (Pl. SMF, ¶ 65). Plaintiff was eligible to receive LTD benefits in the amount of 60% of her pre-disability earnings in the event she became disabled, after she had been disabled for a waiting period of 180 calendar days through a maximum benefit period until she reached the age of 65. (Id., ¶ 246). The Plan also requires claimants to apply for Social Security Disability Income benefits if their physician expects them to be disabled for twelve months or more (BPN 204), and provides that STD and LTD benefits would be reduced by the amount of any Social Security disability benefits they received. (BPN 71, 85, 188, 203).
Defendant United Health Group, Inc. ("UHG") is the sponsor and named plan administrator of the Plan. (Defs. SMF, p. 10, ¶ 11). Defendant Sedgwick Claims Management Services, Inc. ("Sedgwick") is the claims administrator for STD benefits under the Plan, and also for LTD benefits for the first twenty-four months of coverage under the Plan. (Id., ¶¶ 15-16; Pl. Response, ¶¶ 15-16). UHG delegated its authority to determine claims to Sedgwick for STD benefits and for the first twenty-four months of LTD benefits. (Defs. SMF, p. 11, ¶ 20). LTD benefits after twenty-four months of coverage are administered and funded by non-party Standard Insurance Company. (Id., ¶¶ 14, 17).
The Plan provides the delegated fiduciary - in this case Sedgwick - with "the sole and exclusive authority and discretion to interpret the benefit plans' terms and benefits under them,
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and to make factual and legal decisions about them." (BPN 8, 128).4 The STD portion of the Plan provides the following definition of "disabled": "You are unable to perform with reasonable continuity the Material Duties of your Own Occupation because of a non-work related Medical Condition." (BPN 97, 215). The LTD portion of the Plan provides the following definition of "disabled":
As a result of a Medical Condition, you are unable to perform with reasonable continuity the Material Duties of your Own Occupation (during the LTD Waiting Period and the initial 24 months of LTD Benefits) or Any Occupation (after the initial 24 months of LTD Benefits) and are unable to earn more than a specified percentage of your Predisability Earnings . . . .
(Id.). The Plan further states the following conditions must be satisfied before an employee is considered disabled:
You have been seen face-to-face by a Physician about your Disability within 10 business days of the first day of absence related to the Disability leave of absence; Your...
