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McNeal v. Frontier AG, Inc.

United States District Court, District of Kansas

February 10, 2014

DALE MCNEAL, Plaintiff,
FRONTIER AG, INC. et al. Defendants.


Richard D. Rogers United States District Judge.

Plaintiff has brought an ERISA claim against defendant Union Security Insurance Company (“USI”) alleging the wrongful denial of disability benefits under a policy issued by USI. Plaintiff has also brought a state law breach of contract claim against defendant Frontier Ag, Inc. (“Frontier”), alleging that Frontier promised at the time of plaintiff’s employment but did not provide disability benefits coverage beginning 90 days after the start of employment. This case is before the court upon motions for summary judgment by these defendants. Another defendant, Assurant, Inc., has joined in defendant USI’s motion for summary judgment. All parties agree that Assurant, Inc. may be dismissed from this case. USI’s motion for summary judgment is combined with a motion in limine asking that the court’s review of the issues as to USI be confined to an administrative record.

I. Defendant USI’s motion for summary judgment shall be granted because USI did not wrongfully deny plaintiff’s claim for disability benefits.

A. Factual background

Frontier is an agribusiness cooperative. USI issued a group insurance policy to Frontier which qualifies as an employee welfare benefit plan as defined by ERISA. The policy provides long-term disability benefits to Frontier employees. Eligibility for participation in the policy begins after 180 days of service with the company. Administrative Record (“AR”) at pp. 17, 19. This policy was in effect in September 2009 when plaintiff commenced his employment with Frontier. Plaintiff contends that his employment commenced on September 14, 2009. USI contends that plaintiff’s employment commenced on September 28, 2009 and that September 14, 2009 was when plaintiff was hired. But, this dispute does not appear material to the issues in this case. Plaintiff’s last day worked was September 24, 2010 and his last payroll check was for the period ending September 28, 2010. Plaintiff stopped working for Frontier because of physical disability.

Under the group insurance policy, USI has the discretionary authority to pay and deny claims, determine eligibility for benefits, and interpret policy terms. Plaintiff made a claim under the policy which was denied on the grounds that plaintiff’s alleged disability resulted from a pre-existing condition. Under the terms of the policy:

A “pre-existing condition” means an injury, sickness, pregnancy, symptom or physical finding, or any related injury, sickness pregnancy, symptom or physical finding, for which you:
• consulted with or received advice from a licensed medical or dental practitioner, or
• received medical or dental care, treatment, or services, including taking drugs, medicine, insulin, or similar substances
during the 3 months that end on the day before you became insured under the long term disability insurance policy.

AR at 29. The policy further provides that benefits will not be paid “for any disability resulting, directly or indirectly, from a pre-existing condition . . .” Id.

USI contends that plaintiff became insured under the insurance policy on March 27, 2010. The policy provided that eligibility for participation could not begin until 180 days after the commencement of employment, which, to reiterate, occurred either on September 14, 2009 or on September 28, 2009.

According to USI, plaintiff had a “pre-existing condition” of bilateral leg and back pain for which plaintiff consulted with a licensed medical practitioner or received medical care, treatment or services during the 3-month period that ended on the March 27, 2010. Plaintiff does not deny that he and his doctors have reported that plaintiff suffered severe leg and back pain starting in January 2010 and continuing through October 4, 2010. These symptoms were diagnosed initially as caused by peripheral artery disease. However, treatment for peripheral artery disease did not improve plaintiff’s condition in general. Later, in August 2010, a diagnosis of spinal or lumbar stenosis was made.[1] Apparently this was the primary cause of plaintiff’s leg and back pain. Plaintiff did not receive treatment for spinal stenosis until after the diagnosis was made.

Plaintiff’s claim for benefits was denied by USI initially and finally on the grounds that plaintiff’s disabling condition was a “pre-existing ...

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