Steward v. Prudential Ins. Co. of Am., CIVIL ACTION NO. 3:12-CV-3844-B

GAROLD STEWARD, Plaintiff, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA and PNM RESOURCES, INC., Defendants.

CIVIL ACTION NO. 3:12-CV-3844-B

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

August 19, 2014

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff's Motion to Alter or Amend Judgment (doc. 61), which was filed February 6, 2014. For the reasons stated below, Plaintiff's Motion is DENIED.

I.BACKGROUND

On September 21, 2012, Plaintiff Garold Steward filed the above-captioned case against Defendants The Prudential Insurance Company of America ("Prudential") and PNM Resources, Inc. ("PNMR") pursuant to Section 1132(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA") in response to the denial of his claim for short-term disability benefits. Compl. 4. After filing their respective answers (docs. 7, 14), Prudential and PNMR each filed motions for summary judgment (docs. 30, 27). Plaintiff responded to both motions (docs. 49, 46) and, in turn, filed his own motion for summary judgment (doc. 34). On January 10, 2014, the Court filed its Memorandum Opinion and Order (the "January 10 Order") (doc. 60), in which the Court denied Plaintiff's motion, granted PNMR's motion, and dismissed the case with prejudice without reaching Prudential'smotion.

On February 6, 2014, Plaintiff filed his present Motion, requesting the Court alter or amend the January 10 Order. Doc. 61. Both PNMR and Prudential timely responded (docs. 62, 63), and Plaintiff timely replied (doc. 64). As such, the Motion is now ripe for the Court's review.

II.LEGAL STANDARD

A. Motion to Alter or Amend Judgment

Federal Rule of Civil Procedure 59(e) provides for a court's alteration or amendment of a judgment upon a party's timely motion. A judgment may appropriately be altered or amended under Rule 59(e) to correct a manifest error of law or fact, to account for newly discovered evidence, or to accommodate an intervening change in controlling law. Schiller v. Physicians Res. Grp., Inc., 342 F.3d 563, 567 (5th Cir. 2003). Rule 59(e) motions "should not be used to relitigate prior matters that should have been urged earlier or that simply have been resolved to the movant's dissatisfaction." Sanders v. Bell Helicopter Textron, Inc., No. 4:04-CV-254-Y, 2005 WL 6090228, at *1 (N.D. Tex. Oct. 25, 2005)(citing Templet v. Hydrochem, Inc., 367 F.3d 473, 479 (5th Cir. 2004)). In other words, the Rule 59(e) remedy is extraordinary and should be used sparingly. Templet, 367 F.3d at 479.

III.ANALYSIS

In his present Motion, Plaintiff asks the Court to alter or amend the January 10 Order, which granted Defendant PNMR's motion for summary judgment, denied Plaintiff's motion for summary judgment, and dismissed the case with prejudice without reaching Prudential's motion for summary judgment. Doc. 60. Plaintiff argues that the Court created "[n]umerous issues for appeal," namely:(1) failing to impose "any adverse consequence" on Defendants despite Prudential's violation of 29 C.F.R. § 2560.503-1(i)(3)(i); (2) considering the "expert report" upon which Defendants relied to deny Plaintiff's claim for short-term benefits; (3) applying the abuse of discretion standard of review to Defendants' denial of Plaintiff's claim for short-term benefits; and (4) failing to reach Prudential's motion for summary judgment. Pl.'s Mot. 1-5. Plaintiff insists the Court can and should remedy these alleged errors by altering or amending the January 10 Order and remanding the case to Prudential and PNMR for administrative reconsideration of Plaintiff's short-term and long-term disability benefits claims. Id. at 9. Not surprisingly, both PNMR and Prudential oppose Plaintiff's Motion. They maintain that Plaintiff has failed to satisfy any of the three grounds for amending a judgment under Rule 59(e). PNMR Resp. 3; Prudential Resp. 2. As such, they insist remand is not warranted. Id.

As an initial matter, Plaintiff has failed to adduce any new evidence or intervening controlling precedent. See Schiller, 342 F.3d at 567. In addition, he has not alleged any manifest errors of fact in the January 10 Order. Accordingly, the Court concludes that Plaintiff's Motion is based on a "manifest error law" and will consider his Motion and the Court's January 10 Order accordingly. See id.

The Court first addresses Plaintiff's related arguments that the Court erred by not imposing adverse consequences on Defendants and by using the abuse of discretion standard of review. Plaintiff claims that, by failing to employ a de novo standard, modify "any other applicable standard of review," or impose consequences "by other means," the Court adopted an "unduly deferential standard of review" and allowed Defendants to go "scot-free" despite their failure to timely notify Plaintiff of the denial of his appeal. Pl.'s Mot. 2, 6. Plaintiff argues that the Court's actions were "inconsistent with governing caselaw," namely Henderson v. Paul Revere Life Insurance Co., No.3:11-CV-1992-D, 2013 WL 1875151 (N.D. Tex. May 6, 2013), and Mattson v. Aetna Life Insurance Co., 928 F. Supp. 2d 905 (S.D. Tex. 2013). Id. at 2. Plaintiff is mistaken.

As the Court noted in its January 10 Order and the Fifth Circuit has made clear, "'[w]hen the ERISA plan vests the fiduciary with discretionary authority to determine eligibility for benefits under the plan or to interpret the plan's provisions, our standard of review is abuse of discretion.'" Lafleur v. La. Health Serv. and Indemnity Co., 563 F.3d 148, 158-59 (5th Cir. 2009)(quoting Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 269 (5th Cir. 2004)). In other words,

district courts hearing complaints from disappointed ERISA plan members or their beneficiaries for the administrative denial of benefits are not sitting, as they usually are, as courts of first impression. Rather, they are serving in an appellate role. And, their latitude in that capacity is very narrowly restricted by ERISA and its regulations, as interpreted by the courts of appeals and the Supreme Court, including the oft-repeated admonition to affirm the determination of the plan administrator unless it is "arbitrary" or is not supported by at least "substantial evidence"—even if that determination is not supported by a preponderance.

McCorkle v. Metro. Life Ins. Co., — F.3d —, 2014 WL 3585501, at *3 (5th Cir. July 3, 2014)(emphasis in original). Notably, both of Plaintiff's authorities—Henderson and Mattson—acknowledge and employ the abuse of discretion standard within their decisions. See Henderson, 2013 WL 1875151, at *18 ("Because the court must conduct an abuse of discretion review . . ."); Mattson, 928 F. Supp. 2d at 915 ("If a plan document expressly confers on the plan administrator the authority to determine benefits and construe the plan terms, as Aetna's does, the standard of review is abuse of discretion.").

Prudential's failure to timely notify Plaintiff of its decision to uphold its denial of benefits, although a violation of 29 C.F.R. § 2560.503-1(i)(3)(i), did not mandate that the Court modify thisstandard. Not only did the Court determine that Prudential had substantially complied with the procedural requirements of ERISA, but it acknowledged in a footnote that:

the abuse of discretion standard would be appropriate here even if the Court had found Prudential was not substantially compliant. See Lafleur, 563 F.3d at 159 ("Although [defendant] failed to substantially comply with the procedural requirements of ERISA, these violations were not flagrant, so the de novo standard of review . . . is not implicated. Instead, we face the more ordinary situation in which a plan administrator has exercised discretion, but in doing so has made procedural errors."). After all, the Fifth Circuit denied a specific request to alter its standard of review despite a defendant's non-flagrant procedural failings, see id., and Plaintiff here has cited no binding case law that compels this Court to act differently.

January 10 Order 12 n.6. Once again, Plaintiff has failed to offer any binding authority to support his position that the Court should have abandoned the deferential standard of review, imposed some type of "adverse consequences" on Defendants, or disciplined them by other means. Similarly, Plaintiff has failed to explain how these arguments are different than those which were advanced and rejected on summary judgment. Cf. Sanders, 2005 WL 6090228, at *1 (Rule 59(e) motions "should not be used to relitigate prior matters that should have been urged earlier or that simply have been resolved to the movant's dissatisfaction."). Accordingly, the Court concludes that Plaintiff has failed to demonstrate that its application of the abuse of discretion standard was a manifest error of law.

The Court next considers Plaintiff's argument that it erred by considering the "expert report" on which Defendants relied to deny his claim. Pl.'s Mot. 1. Plaintiff alleges the existence of this report was not timely disclosed or provided to him until after he initiated this lawsuit, and he claims he was therefore never allowed to review or comment upon it or challenge it administratively. Id. at 5-6. Plaintiff argues that, by virtue of Defendants' failure to disclose this report, there was "no meaningful dialogue" regarding his claim, and the purpose of Section 1133 was therefore not fulfilled.Id. at 6. He asks the Court remand the case to Prudential so that he can challenge it on administrative appeal. Id. at 7.

Plaintiff's argument goes towards two separate of issues, neither of which warrants altering or amending the Court's January 10 Order. The first issue is whether the Court erred by considering the report that psychiatrist Dr. James M. Slayton, M.D. completed for Prudential following his independent review of Plaintiff's medical records. See Doc. 29, PNMR App. 32-38. The second issue is whether the Court erred by determining that Prudential substantially complied with the procedural...