Reichard v. United of Omaha Life Ins. Co.

331 F.Supp.3d 435

Giovanna REICHARD, Plaintiff,

v.UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant.

CIVIL ACTION NO. 17-2885

United States District Court, E.D. Pennsylvania.

Filed August 13, 2018

Alan H. Casper, Philadelphia, PA, Robert J. Rosati, Fresno, CA, for Plaintiff.

Bryan M. Shay, Jeffrey M. Brenner, Steven J. Schildt, Post & Schell, PC, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

Smith, J.The Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 – 1461, provides protections for employees participating in their employer's benefits plans. Based upon her diagnoses of Crohn's disease and related gastrointestinal and arthritic conditions, the plaintiff employee received both short-term disability and long-term disability benefits under her employer's respective plans. The claims administrator later terminated her long-term disability benefits after the disability definition under the plan changed from merely requiring an inability to perform her own regular occupation to an inability to perform any gainful occupation. After the claims administrator denied her appeal of the termination of benefits, the plaintiff filed the instant ERISA action against the administrator.

Currently before the court are the parties' cross-motions for summary judgment, as well as the plaintiff's alternative motion pursuant to Federal Rule of Civil Procedure 52, on the issue of whether the termination of long-term disability benefits was arbitrary and capricious. As explained below, the court finds that there are no genuine issues of material fact and that the claims administrator's decision to terminate the plaintiff's long-term disability benefits was not without reason, unsupported by substantial evidence, or erroneous as a matter of law. Accordingly, the court will grant the claims administrator's motion for summary judgment and deny the plaintiff employee's motion for summary judgment, as well as her alternative motion.

I. PROCEDURAL HISTORY

The plaintiff, Giovanna Reichard ("Reichard"), commenced this ERISA action by filing a complaint against the originally-named defendant, Mutual of Omaha Life Insurance Company, on June 27, 2017. Doc. No. 1. Reichard soon filed an amended complaint on July 13, 2017, naming only United of Omaha Life Insurance Company ("United of Omaha") and effectively terminating Mutual of Omaha Life Insurance Company as a defendant. Doc. No. 2. In the amended complaint, Reichard alleges that, pursuant to 29 U.S.C. § 1132(a)(1), United of Omaha's decision to terminate her long-term disability ("LTD") benefits was arbitrary and capricious. Am. Compl. at ¶¶ 1, 27. United of Omaha filed an answer to the amended complaint on August 10, 2018, and the court held an initial pretrial conference with counsel for the parties on October 4, 2017. Doc. Nos. 7, 11.

During discovery, Reichard filed a motion to compel United of Omaha to produce conflict of interest discovery concerning Dr. Thomas Reeder ("Dr. Reeder"), the sole medical reviewer of Reichard's United of Omaha appeal. See Mem. P. & A. Supp. Pl.'s Mot. Compel Disc. at 1–2, Doc. No. 27. Specifically, Reichard sought Dr. Reeder's "batting average"—i.e. the proportion of claims in which Dr. Reeder, as the sole medical reviewer for United of Omaha on appeal, concluded that a claimant had work capacity. See id. ; Def. United of Omaha Life Ins. Co.'s Br. Opp'n Pl.'s Mot. Compel Disc. at 1, Doc. No. 29. United of Omaha filed a response in opposition to the motion to compel on February 9, 2018. Doc. No. 29. Reichard then filed a reply to the response on February 16, 2018. Doc. No. 30. The court heard oral argument and denied the motion to compel on February 20, 2018. Doc. Nos. 31, 32.

After an unsuccessful settlement conference, the parties jointly filed the complete administrative record in this case on April 5, 2018. Doc. Nos. 37, 40. The parties filed cross-motions for summary judgment, accompanied by statements of undisputed material facts and briefs in support of their motions, on May 11, 2018. Doc. Nos. 41, 42. Reichard also alternatively moved for judgment pursuant to Federal Rule of Civil Procedure 52 in her summary judgment motion. Doc. No. 42. The parties then filed responses to the motions on June 1, 2018, and United of Omaha filed a reply to Reichard's response on June 11, 2018. Doc. Nos. 43–46. The court heard oral argument on the cross-motions for summary judgment on June 21, 2018, which are now ripe for disposition.

II. APPLICABLE RECORD¹

Reichard worked as a registered nurse for Coordinated Health from 2010 to 2014. Pl.'s Statement Undisputed Material Facts Supp. Pl.'s Mot. Summ. J. ("Pl.'s Facts") at ¶ 1, Doc. No. 42-1; Def. United of Omaha Life Ins. Co.'s Resp. Opp'n Pl.'s Mot. Summ. J./Mot. J. and Statement Undisputed Material Facts Related Thereto ("Def.'s Resp.") at ¶ 1, Doc. No. 45; Administrative R. ("Admin. R.") at 511.² Coordinated Health maintained a Group Voluntary Long-Term Disability Plan (the "Plan") for its employees. Def. United of Omaha Life Ins. Co.'s Mot. Summ. J. and Statement Undisputed Material Facts Fed. R. Civ. P. 56 ("Def.'s Facts") at ¶¶ 4, 17, Doc. No. 41; Pl.'s Opp'n Def. United of Omaha Life Ins. Co.'s Statement Undisputed Material Facts ("Pl.'s Resp.") at ¶¶ 4, 17, Doc. No. 44; Admin. R. at 173. The Plan included long-term disability ("LTD") benefits provided through an insurance policy issued by United of Omaha (the "Policy"). Def.'s Facts at ¶ 19; Pl.'s Resp. at ¶ 19; Pl.'s Facts at ¶¶ 2–3; Def.'s Resp. at ¶¶ 2–3. Reichard was a participant in the Plan, entitling her to LTD benefits if she met certain criteria. Def.'s Facts at ¶¶ 18–19; Pl's. Resp. at ¶¶ 18–19. Coordinated Health also provided short-term disability ("STD") benefits for its employees under an insurance policy issued by United of Omaha. Def.'s Facts at ¶ 20; Pl.'s Resp. at ¶ 20.

The following factual summary details: (1) the applicable provisions of the Policy; (2) Reichard's applications for STD and LTD benefits; (3) her receipt of benefits and submission of supplementary reports of disability; (4) United of Omaha's medical and vocational examinations and reviews; (5) United of Omaha's termination of Reichard's LTD benefits; (6) her appeal correspondence; (7) Dr. Reeder's medical file review on appeal, including a discussion of Reichard's treatment records dating back to 2014; (8) Dr. Reeder's correspondence with Reichard's doctors; (9) United of Omaha's denial of Reichard's appeal; and (10) her Social Security disability ("SSD") claim.

A. Applicable Provisions Of The Policy

According to the Policy, if a Plan participant becomes "Disabled," United of Omaha agrees to pay a "Monthly Benefit" beginning after an "Elimination Period." Def.'s Facts at ¶ 24; Pl.'s Resp. at ¶ 24; Admin. R. at 188, 200. The amount of the "Monthly Benefit" is the lesser of $5,000 or 60% of monthly earnings. Admin. R. at 178, 180. The "Elimination Period" is the later of 90 calendar days or the end-date of STD benefits. Def.'s Facts at ¶ 25; Pl.'s Resp. at ¶ 25; Admin. R. at 178–79. The term "Disabled" encompasses three separate definitions for "during the Elimination Period," "after the Elimination Period," and "after a Monthly Benefit has been paid for 2 years;" the Policy states that "Disabled" means that

because of an Injury or Sickness, a significant change in Your mental or physical functional capacity has occurred in which:

a) during the Elimination Period, You are prevented from performing at least one of the Material Duties³ of Your Regular Occupation⁴ on a part-time or full-time basis; and

b) after the Elimination Period, You are:

1. prevented from performing at least one of the Material Duties of Your Regular Occupation on a part-time or full-time basis; and

2. unable to generate Current Earnings which exceed 80% of Your Basic Monthly Earnings due to that same Injury or Sickness.

After a Monthly Benefit has been paid for 2 years, ... Disabled mean[s] You are unable to perform all of the Material Duties of any Gainful Occupation.⁵

Disability is determined relative to Your ability or inability to work. It is not determined by the availability of a suitable position with the Policyholder.

Def.'s Facts at ¶ 27; Pl.'s Resp. at ¶ 27; Admin. R. at 198–99 (emphasis in original). Thus, the definition of "Disabled" "after the Elimination Period" adds a requirement of an inability to generate more than 80% of monthly earnings; and more stringent still, the definition of "Disabled" "[a]fter a Monthly Benefit has been paid for 2 years" adds the requirement that the participant cannot perform not just her own Regular Occupation, but "any Gainful Occupation."⁶ Admin. R. at 198-99 (emphasis added).

The Policy provides instructions for filing a claim for disability benefits and entitles a claimant to notice of and reasons supporting a claim denial, "a reasonable opportunity to appeal a claim review decision," and "a full and fair review of the claim review decision."⁷ Pl.'s Facts at ¶ 6; Def.'s Resp. at ¶ 6; Admin. R. at 193–96. Finally, the Policy offers assistance to claimants receiving Monthly Benefits with filing for SSD benefits, including helping them find "appropriate representation." Pl.'s Facts at ¶ 6; Def.'s Resp. at ¶ 6; Admin. R. at 182–83.

B. Reichard's Applications For STD And LTD Benefits

Reichard submitted a STD benefits claim to United of Omaha on April 24, 2014, one day after she contacted her physician to notify him of a "Crohn's attack." Pl.'s Facts at ¶ 7; Def.'s Resp. at ¶ 7; Admin. R. at 116, 146. On the claim form, she listed Crohn's, nausea, depressed appetite, and epigastric pain as illnesses and symptoms; a first treatment date of March 19, 2014; and a disability date of April 24, 2014. Pl.'s Facts at ¶ 7; Def.'s Resp. at ¶ 7; Admin. R. at 116, 146. Dr. Mark Osterman, Reichard's gastroenterologist, submitted an attending physician statement ("APS") dated May 12, 2014, in connection with the STD claim. Admin R. at 119–20. He indicated that...