Melech v. Life Ins. Co. of N. Am.

DIANE G. MELECH, Plaintiff, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, et al., Defendants.

CIVIL ACTION NO.: 10-00573-KD-M

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

August 10, 2015

ORDER

This action is before the Court on Defendants Life Insurance Company of North America, Hertz Corporation, and Hertz Corporation Pension and Welfare Committee's motion for summary judgment, memorandum of law in support, proposed determinations of undisputed facts and conclusions of law, and evidentiary submissions (docs. 196-199), Plaintiff Diane Melech's response in opposition and appendix (docs. 209, 210, 238 (under seal)), and Defendants' reply (doc. 215); and Defendants' motion to strike Plaintiff's exhibits submitted in support of her response, Plaintiff's response to the motion to strike and Defendants' reply (docs. 216, 220, 237). Upon consideration and for the reasons set forth herein Defendants' motion for summary judgment is granted and Defendants' motion to strike is granted.

I. Background

Plaintiff Diane Melech was employed as a Location Manager for Hertz Corporation. She was the beneficiary of an employee welfare benefit plan provided by Hertz. As part of the Plan, Plaintiff was the beneficiary of a disability insurance policy, which was insured and administered by Defendant Life Insurance Company of North America (LINA). Plaintiff applied for long-termdisability under the Plan on basis she could no longer perform her job because of pain in her neck, shoulder, and back, headaches, and numbness in her right arm and hand. In November 2007, LINA denied the application and Plaintiff appealed. At that time, Plaintiff's application for Social Security Disability Income was pending before the Social Security Administration. In February 2008, she was awarded SSDI benefits. Plaintiff notified LINA of the award of benefits. LINA subsequently denied both of Plaintiff's administrative appeals.

In October 2010, Plaintiff filed her complaint for legal and equitable relief for violations of the Employee Retirement Income Security Act (ERISA), pursuant to 29 U.S.C. § 1132(a)(1). Initially, Plaintiff brought Count One for failure to provide plan documents. However, Plaintiff withdrew that claim for relief in her response to the motion for summary judgment. Plaintiff's remaining Count 2 alleged a claim for long-term disability benefits pursuant to 29 U.S.C. § 1132(a)(1(B). Plaintiff alleged that she was disabled under the terms of the Plan. The Court granted the Defendants' motion for summary judgment on basis that the decision to deny Plaintiff's claim for long-term disability benefits was not de novo wrong. The Court also granted judgment in Defendants favor on Plaintiff's argument that the action should be remanded, or benefits awarded, because she did not receive a full and fair review of her claim.

Plaintiff appealed the decision. The Eleventh Circuit Court of Appeals vacated the decision and remanded to this Court with instructions to remand the matter to Defendants, specifically, LINA. The Eleventh Circuit explained as follows:

We are similarly struck by the procedural unfairness created by LINA's approach. We conclude that LINA's treatment of Melech's SSA application is inconsistent with the fundamental requirement that an administrator's decision to deny benefits must be based on a complete administrative record that is the product of a fairclaim-evaluation process. Because LINA's decision to deny benefits here was based on an administrative record that did not contain the information from Melech's SSA file, the proper course of action is to remand Melech's claim to LINA rather than to evaluate the merits of Melech's claim for benefits under the Policy using evidence that LINA did not consider. See Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321, 1330 (11th Cir. 2001) ("[A]s a general rule, remand to the plan fiduciary is the appropriate remedy when the plan administrator has not had an opportunity to consider evidence on an issue.") (citing Jett, 890 F.2d at 1140)).

Therefore, we vacate the District Court's grant of summary judgment in favor of LINA and remand to the District Court with instructions to remand the matter to LINA. In doing so, we do not pre-judge the ultimate outcome. LINA may be able to draw a principled distinction between its own standards for granting disability benefits under the Policy and the SSA's standards for awarding SSDI. All we require of LINA is to decide Melech's claim with the full benefit of the results generated by the SSA process that it helped to set in motion.

(Doc. 172, p. 26-27) (footnote omitted).

On remand, Defendant LINA considered the evidence from Plaintiff's existing file, the SSA file, and the SSA decision as well as additional review by a psychiatrist, orthopedic surgeon, vocational rehabilitation counselor and an appeal specialist. LINA denied Plaintiff's claim. This action was reopened and Plaintiff filed her first amended complaint.

Plaintiff raises four claims in her first amended complaint. In Count I, she claims long-term disability benefits. In Count II, she claims attorney's fees and expenses incurred in the recent claim decision on remand. In Count III, she claims attorney's fees and expenses incurred obtaining the reversal in the Eleventh Circuit. Count IV, wherein Plaintiff claimed failure to provide documents, has been dismissed.

Defendant filed its motion for summary judgment as to Count I, on basis that Plaintiff does not qualify for long-term disability benefits. Plaintiff responds and seeks denial of Defendant's motion and moves the Court to enter summary judgment in her favor.

II. Findings of fact¹

A. The Policy

LINA issued Group Policy VDT-960024 to The Hertz Corporation. The Hertz Corporation is the Plan Sponsor and the Plan Administrator for the Plan. LINA insures the Policy and serves as the claims administrator with responsibility for adjudicating claims for long-term disability benefits made by participants of the Plan (doc. 112-1, p. 2-3, Affidavit of Kellie Downey, Senior Operations Representative at LINA) (doc. 112-2, First Administrative Record).

In relevant part, the Policy states as follows:

The Insurance Company will pay Disability Benefits if an Employee becomes Disabled while covered under this Policy. The Employee must satisfy the Elimination Period, be under the Appropriate Care of a Physician, and meet all other terms and conditions of the policy. He or she must provide the Insurance Company, at his or her own expense, satisfactory proof of Disability beforebenefits will be paid. The Disability Benefit is shown in the Schedule of Benefits.

The Insurance Company will require continued proof of the Employee's Disability for benefits for continue.

(Doc. 112-2, p. 125, Policy) "The Elimination Period is the period of time an Employee must be continuously Disabled before Disability Benefits are payable." (Doc. 112-2, p. 125) The Elimination Period lasts 26 weeks. (Doc. 112-2, p. 101)

The Policy defines "Total Disability" as follows:

Definition of Disability/Disabled

The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is:

1. unable to perform the material duties of his or her Regular Occupation; and

2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation.

(Doc. 112-2, p. 110, 118)

B. Plaintiff's Regular Occupation

The Policy defines "Regular Occupation" as "[t]he occupation the Employee routinely performs at the time the Disability begins. In evaluating the Disability, the Insurance Company will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. It is not work tasks that are performed for a specific employer or at a specific location." (Doc. 112-2, p. 136)

LINA identified Plaintiff as a "Service Manager" as found in The Dictionary of Occupational Titles, 4th ed., Rev. 1991, at listing 185.167-058. (Doc. 197-2, p. 18) The occupation is considered Light Work, which requires as follows:

Exerting up to 20 pounds of force occasionally, and/or up to 10 pounds of force frequently, and/or a negligible amount of force constantly (Constantly: activity or condition exists 2/3 or more of the time) to move objects. Physical demand requirements are in excess of those for Sedentary Work. Even though the weight lifted may be only a negligible amount, a job should be rated Light Work: (1) when it requires walking or standing to a significant degree; or (2) when it requires sitting most of the time but entails pushing and/or pulling of arm or leg controls; and/or (3) when the job requires working at a production rate pace entailing the constant pushing and/or pulling of materials even though the weight of those materials is negligible.

DOT at Appendix C, Part IV, Physical Demands - Strength Rating.

Defendant Hertz describes Plaintiff's occupation as Location Manager. The physical requirements were:

Sitting

4 hours

Walking

8 hours

Climbing

0 hours

Pushing/Pulling

0 hours

Lifting

2 hours

Bending/Twisting

3 hours

Driving

8 hours

(Doc. 112-2, p. 354)

Plaintiff described the "Major Duties" of her job as "Doing reports, handling customers, renting cars, making schedules for employees, safety issues" (doc. 112-2, p. 186). She described the "Minor Duties" of her job as "Moving cars, cleaning & vacuuming cars, preparing cars where necessary; inventory." (Id). She used a computer, copy machine, fax and a vacuum. (Id.)

C. Plaintiff's initial claim

Plaintiff began working for Hertz Corporation on June 3, 1977 and worked full time as a Location Manager. Plaintiff was responsible for managing the service lot and its rental counter. (Doc. 145, p. 5) Her duties required that she be able to sit for four hours, walk for eight hours, stand for eight hours, lift for two hours, bend or twist for thee hours and drive for eight hours. (Doc. 112-2, p. 354) Plaintiff's last day of employment was May 8, 2007. (...