Fenwick v. Hartford Life & Accident Ins. Co.

RITA K. FENWICK, Plaintiff-Appellant, v. HARTFORD LIFE & ACCIDENT INSURANCE CO., Defendant-Appellee.

Case No. 20-5595

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

January 12, 2021

NOT RECOMMENDED FOR PUBLICATION

File Name: 21a0025n.06

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY

OPINION

BEFORE: SUHRHEINRICH, McKEAGUE, and READLER, Circuit Judges.

McKEAGUE, Circuit Judge. Hartford Life & Accident Insurance Company (Hartford Life) provided Rita K. Fenwick Long Term Disability (LTD) benefits under a plan governed by the Employee Retirement Income Security Act of 1974 (ERISA). Hartford Life later terminated Fenwick's benefits, and Fenwick brought this suit. Fenwick alleged three claims: breach of contract, breach of fiduciary duty, and disgorgement. The district court granted summary judgment to Hartford Life, holding that Hartford Life permissibly terminated Fenwick's benefits and that the latter two claims were barred as duplicative of the first. Fenwick appeals, and we affirm.

I

Fenwick was a participant in a Hartford Life benefit plan (the Plan) from her previous employment. She worked for the Target Corporation as a "Store Leader." The Plan provides a monthly benefit to participants who become "Disabled." As relevant here, "Disabled" means a participant can't "engage in Any Occupation which will provide an income equal or greater than 128% of the Monthly Benefit." "Any Occupation," in turn, "means any occupation for which [the participant is] qualified, or may reasonably become qualified, by education, training or experience."

The Plan's administrator (before Hartford Life became responsible for the Plan) granted Fenwick LTD benefits under the "Any Occupation" provision in 2007 based on medical issues with Fenwick's back and neck. The previous administrator continued to review Fenwick's case and eventually identified other occupations that Fenwick could do. But the predecessor took no action before Fenwick's claim was transferred to Hartford Life in 2009.

Hartford Life reviewed Fenwick's claim. Fenwick's treating physician told Hartford Life that Fenwick was "unable to do sustained work," but an Independent Medical Exam (IME) concluded she could do "light" work.¹ Consequently, Hartford Life referred the claim for an Employability Analysis Report (EAR), which concluded that Fenwick could do three jobs: "Area Supervisor, Retail Chain," "Office Manager," and "Supervisor, Advertising-Material." Hartford Life concluded that Fenwick was no longer disabled under the terms of the Plan and terminated Fenwick's LTD benefits.

Fenwick appealed. Fenwick provided a new Physical Capacity Evaluation from her treating physician that conflicted with two pre-existing IMEs and a pre-existing FunctionalCapacity Evaluation (FCE), so Hartford Life referred the claim for an independent record review. Hartford Life subsequently obtained a new EAR that took into account the pre-existing medical evidence, the treating physician's PCE, and the independent record review. The new EAR found no jobs Fenwick could do that met the monetary requirement, so Hartford Life reversed its termination decision.

Hartford Life continued to update Fenwick's file over the subsequent years. It obtained new information from the treating physician, a new pain management physician, its Claims Investigation Unit (whose investigation included surveillance), a new ear, nose, and throat doctor, and a treating orthopedist.

With the new information in hand, Hartford Life continued to review the claim. At this point, Hartford Life asked both the treating physician and the treating orthopedist whether Fenwick could work "40 hours per week, primarily seated in nature, with occasional walking and standing . . . [with] the opportunity to change body positions/postures as needed for comfort." The treating physician said Fenwick could but recommended an additional FCE "to assist in this determination." The treating orthopedist agreed without further comment.² Hartford Life received an EAR based on all the new information. Because the new EAR found that Fenwick could be an Office Manager, which met the monetary requirement, Hartford Life terminated the claim.

Fenwick appealed and provided new medical evidence from a number of medical providers. With the new evidence, Hartford Life sought an independent record review. Dr. Jerome Siegel and Dr. James Boscardin both completed a review, each of which included discussions with several of Fenwick's medical providers. Dr. Siegel reported that Fenwick's primary treating physician said Fenwick "should be able to perform at least sedentary to light physical demandwork activities with alternating between sitting and standing." Another treating physician was unable to give Dr. Siegel a reason why Fenwick could not do light or sedentary work and told Dr. Boscardin (after hearing about what the surveillance showed) that sedentary activity was "quite possible."

Dr. Siegel and Dr. Boscardin both concluded that Fenwick could do at least sedentary work. Dr. Siegel wrote that Fenwick "should be physically capable of performing at least sedentary to light physical work activities," and Dr. Siegel agreed that "[t]here is nothing [in the record] that would preclude [Fenwick] from being able to perform at a sedentary level." But the pair's exact restrictions were not identical. Dr. Siegel determined that Fenwick "should be able to sit for up to 4 hours out of an 8 hour day [and] stand for up to 4 hours out of an 8 hour day," while Dr. Boscardin determined she could stand and walk for 30 minutes at a time, for a total of 4 hours each every 8 hours, and could sit for an hour at a time.

Hartford Life upheld the termination of Fenwick's benefits. It based the decision on, among other factors, the treating physicians' opinions, the case manager nurse's opinion, the surveillance, and the independent record reviewers' opinions (including their conversations with the treating physicians).

Fenwick sued Hartford Life for three claims under 29 U.S.C. § 1132: a breach-of-contract claim, a breach-of-fiduciary-duty claim, and a disgorgement claim. The district court granted summary judgment to Hartford Life on the latter two, equitable claims, holding that they were duplicative of the breach-of-contract claim. The district court then granted summary judgment to Hartford Life on the breach-of-contract claim. Fenwick appeals both orders.

II

Fenwick raises three issues on appeal: (1) what standard of review should apply; (2) whether the district court erred in upholding the termination of her benefits; and (3) whether the district court erred in holding her breach-of-fiduciary-duty and disgorgement claims to be duplicative of her breach-of-contract claim. With the aid of our recent decision in Davis v. Hartford Life & Accident Insurance Co., 980 F.3d 541 (6th Cir. 2020), which decided a host of similar and identical issues, we affirm.

A. The arbitrary-and-capricious standard applies.

We review legal questions de novo, including which standard of review applies to a plan administrator's decision, and we review factual findings for clear error. Frazier v. Life Ins. Co. of N. Am., 725 F.3d 560, 565-66 (6th Cir. 2013).

Under ERISA, if a plan administrator can show it has discretionary authority to determine eligibility for benefits, then the arbitrary-and-capricious standard applies; otherwise, the review is de novo. Id. at 566; Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).

Fenwick argues that the Plan assigns discretionary authority to Hartford Life, but that Hartford Life never exercised that authority. Instead, employees of a distinct but related entity,³ Hartford Fire, impermissibly made the decisions. And, she contends, because "a body other than the one authorized" made the decisions, de novo review is required. Shelby Cnty. Health Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 365 (6th Cir. 2009) (quoting Sanford v. Harvard Indus., Inc., 262 F.3d 590, 597 (6th Cir. 2001)).

This argument takes issue with the corporate structure of Hartford Life. Only Hartford Life, through its employees and agents, could make the decisions, but Hartford Life has noemployees. Instead, Hartford Fire employees made the decisions. So, in this context, are the Hartford Fire employees also the agents of Hartford Life?

Yes, we said in Davis. "In instances like this, where decisionmakers who act on behalf of an authorized plan administrator are employed by another entity within the corporate family, the plan administrator is still exercising (and has not delegated) its discretionary authority." Davis, 980 F.3d at 546; accord Griffin v. Hartford Life & Accident Ins. Co., 898 F.3d 371, 378-80 (4th Cir. 2018).

And here the facts are no different than in Davis. First, Hartford Life provided a sworn declaration explaining that every employee of the Hartford Financial Services Group is paid by Hartford Fire for administrative reasons. Second, the decisionmakers here review only Hartford Life policies and have no responsibilities regarding Hartford Fire policies. And third, the Plan and Hartford Life's correspondence all displayed the same logo, and letters to Fenwick and her doctors consistently included "Hartford Life and Accident Insurance Co." in the signature block. Thus, Fenwick's argument that Hartford Life had nothing to do with the decisions made about its policies "does not add up as a factual matter." Davis, 980 F.3d at 546.

The district court correctly applied the arbitrary-and-capricious standard because its finding that Hartford Life exercised its discretionary authority in terminating Fenwick's benefits was not clearly erroneous. See id. at 547.

B. The district court correctly determined that Hartford Life's decision was not arbitrary and capricious.

We review de novo whether Hartford Life's termination of Fenwick's benefits was arbitrary and capricious. See Davis, 980 F.3d at 547. This "extremely...