Miller v. Monumental Life Ins. Co.

376 F.Supp.2d 1238

Rodney MILLER, Plaintiff, v. MONUMENTAL LIFE INSURANCE COMPANY and Nasra TPA, Inc. and its successor, HCC Administrators, Inc. and/or Gallagher Bassett Services, Inc., Defendants.

No. CIV 04-0970 JB/RHS.

United States District Court, D. New Mexico.

June 30, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James Rawley, Albuquerque, NM, for the Plaintiff.

Bruce S. McDonald, Lucinda R. Siembieda, Law Office of Bruce S. McDonald, Albuquerque, NM, Bernie E. Hauder, Adkerson & Hauder, Dallas, TX, for Defendant Monumental Life Insurance Company.

MEMORANDUM OPINION AND ORDER

BROWNING, District Judge.

THIS MATTER comes before the Court on: (i) the Plaintiff's Motion for Summary Judgment, filed April 29, 2005 (Doc. 27); and (ii) Defendant Monumental Life Insurance Company's Motion for Summary Judgment, filed May 6, 2005 (Doc. 29). The primary issue is whether the Employee Retirement Income Security Act ("ERISA") Plan's policy requirement that a claimant receive a "Social Security Disability Award" includes an award for Supplemental Security Income ("SSI") as well as for Social Security Disability Insured ("SSDI"). Because the Court believes that disability benefits does not include SSI benefits, even when they are based on disability, the Court denies Plaintiff Rodney Miller's motion for summary judgment and grants Monumental's motion.

FACTUAL BACKGROUND

The issue raised by both motions is whether Miller is entitled to Continuous Total Disability Benefits under the Policy. Because the Court, however, does not believe that it needs to decide all issues that Monumental raises to decide both motions, the Court will set forth only the facts and law relevant to the issue whether the phrase "Social Security Disability Award" includes SSI payments. From the pleadings and responses to discovery, it appears that the parties do not dispute the following facts.

1. The Policy.

Monumental issued a Master Group Policy to Aycock Transportation, Inc. in Texas. See Monumental Life Insurance Company Master Policy at 1 (executed June 19, 1996)(hereinafter "Policy"). Monumental subsequently issued to Miller a Certificate of Insurance under the Master Group Policy. The Policy's and the Certificate's terms and conditions are the same.

The Policy requires the Insured Person to receive a "Social Security Disability Award" before he can receive Continuous Total Disability benefits. Policy at 10. Specifically, the Policy provides, in pertinent part, that Monumental will pay Continuous Total Disability benefits when it receives, among other things, proof that the Insured is "Totally Disabled," "the Insured Person has been granted a Social Security Disability Award for such disability," and the Total Disability "resulted solely and directly from Injury." Id. The Policy further provides that such benefit payments will end if, among other things, "the Insured's Social Security Disability Award ceases." Id. The Schedule of Benefits provides that "Continuous Total Disability ... Benefit will be paid as long as the Insured Person continues to receive a Social Security Disability Award or to age 65." Id. at 7.

The Policy states that the weekly benefit allowed under the Continuous Total Disability Benefit is calculated by taking "70% of the Insured Person's Average Weekly Earnings, reduced by his primary Social Security Disability Award; or ... the Maximum Weekly Benefit shown in the Schedule of Benefits, whichever is less." Id. at 10. The Schedule of Benefits provides that benefits are reduced "100% of primary Social Security Disability Award." Id. at 7. At the hearing, the parties agreed that, although it is not in the record, Miller would receive $2,000 monthly if he received the Continuous Total Disability Benefits. See Transcript of Hearing at 3:22 — 4:7; id. at 10:25 — 11:5 (taken June 30, 2005)(hereinafter "Transcript").¹ The parties are also in agreement that, by receiving the $2,000 monthly sum under the Policy, Miller's income would be too great to receive SSI payments, which would be reduced to zero. See id. at 4:20-25; id. at 11:6-9.

The Policy's definition of "Totally Disabled" for purpose of Continuous Total Disability Benefits provides in pertinent part that the Insured Person must have been "granted a Social Security Disability Award." Policy at 5. The Policy also contains the following definition: "Social Security Disability Award: means Social Security disability benefits for which the Insured Person has submitted a claim and been approved for payment by the Social Security Administration." Id.

2. Miller's Award.

Miller is a New Mexico resident. Miller was a contract driver leased to the policy holder, Aycock Transportation, insured with Monumental for disability. See Policy at 1-17; Complaint for ERISA Plan Benefits ¶ 3, at 1 (attached to Notice of Removal, filed August 27, 2004 (Doc. 1))(hereinafter "Complaint"). On September 15, 1997,² and while an Aycock employee, Miller was involved in a motor vehicle accident and became disabled. See Complaint ¶¶ 3, 7, 8, 9, at 2-3; Monumental's Answer ¶ 9, at 2, filed September 3, 2004 (Doc. 6). At the time of this accident, the Policy was in effect and Miller is an insured under the Plan.

Miller received twenty-four months of Temporary Total Disability Benefits from September 1997 to September 1999 at $2,000.00 per month, and certain medical benefits were paid on his behalf under the Policy. See Affidavit of Rodney Miller ¶ 8, at 1 (executed Aril 29, 2005). The requirements for such benefits are different from those for Continuous Total Disability Benefits. See Policy at 5. Miller would not be entitled to SSI benefits until after the expiration of Short Term Disability because of his income.

On December 23, 1998, Miller received a letter from the Plan Administrator that advised, if Miller was to receive Continuous Total Disability Benefits after September 22, 1999, when his Temporary Total Disability ended, he would need to have been granted a Social Security Disability Award. See Letter from Cheryl Arms to Rodney Miller at 2 (dated December 23, 1998). Miller applied for a Social Security Disability Award. The Social Security Administration denied his application because of the lack of all insured status; he had not worked in eighteen quarters in the ten years before the disability onset. See Decision of Social Security Administrative Law Judge at 3 (dated August 28, 2003). The Administrative Law Judge ("ALJ") concluded that Miller "is not entitled to a period of disability and disability insurance benefits because of lack of status." Id. at 2, 3. In so finding, the ALJ noted that Miller, at another hearing, was determined to "not [be] insured for disability insurance benefits[,]" but that the earlier hearing "resulted in a favorable decision with respect to SSI benefits." Id. at 1. According to the ALJ: "An SSI application is an application for all Social Security benefits for which an individual may be entitled." Id. After reviewing Miller's alleged basis for asserting insured status, the ALJ concluded that Miller "has not established that he has sufficient quarters of coverage to confer disability insured status and that ... he is not entitled to a period of disability and disability insurance benefits because of lack of status." Id. at 3.

Miller, however, also applied for a Supplemental Security Income Award and received a Decision that he had satisfied the disability requirements of his claim for "Supplemental Security Income" benefits and "[t]he component of the Social Security Administration responsible for authorizing [SSI] payments will advise the claimant regarding the nondisability requirements for these payments, and if eligible, the amount and the months for which payment will be made." Decision of Social Security Administrative Law Judge at 4 (dated March 30, 2001). The award was for the period beginning December 28, 1999. See id. at 4; Complaint ¶ 11, at 2. Miller has supplemented the record to show that the Social Security Administration has awarded him SSI and, at the hearing on these motions, Monument withdrew its argument pertaining to the proof of SSI benefit receipt. See Transcript at 13:4-14.

After receiving his SSI award, Miller made a claim for Continuous Total Disability Benefits under the Policy. See Complaint ¶ 15, at 2. Miller presented the ALJ's decision to the Plan Administrator — Gallagher Bassett Services, Inc. ("GAB"), successor to NASRA TPA, Inc. — and GAB denied benefits on November 19, 2003. See Letter from Madelynn Collins to Rodney Miller at 1 (dated November 19, 2003). GAB denied the claim on the basis that Miller did not qualify, as the Policy required Miller be granted a "social security disability award" and Miller had been granted a "supplemental security income" award. Id.

The Plan Administrator interpreted the policy language, apparently a matter of first impression, with no guidance except the definition. There is no Summary Plan Description to aid the Court in interpreting the phrase. There are no prior interpretations by the Plan Administrator. Moreover, Miller contends that, because there is no Summary Plan Description ("SPD"). Monumental has violated §§ 1021(a) and 1022(b) of Title 29, ERISA.

On January 9, 2004, Miller, through counsel, asked GAB to reconsider its denial on the basis that SSI was not a social security award as that the Policy used that term. See Letter from James Rawley to Madelynn Collins at 1 (dated January 9, 2004). Collins of GAB denied Miller's request to reconsider, notifying him that he was not eligible for Continuous Total Disability under the Policy. See Letter from Madelynn Collins to James Rawley at 1 (dated February 19, 2004). The sole reason in the record for the Defendants' denial was that his award of SSI was not a "Social Security Disability Award" as the Policy uses that term. See Letter from Madelynn Collins to James Rawley at 1 (dated February 19, 2004);...