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Derichs v. AT&T Services, Inc.

United States District Court, D. Kansas

May 9, 2018

AT&T SERVICES, INC., Defendant.


          John W. Lungstrum United States District Judge

         In this case, plaintiff seeks review of the denial of his claim for disability benefits under an employee benefits plan administered by defendant. Plaintiff asserts his claim in this case pursuant to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. In accordance with the parties' agreement that this case may be decided on the basis of the administrative record considered by the plan's claims administrator, the parties have filed cross-motions: a motion for summary judgment by plaintiff (Doc. # 18) and a motion for judgment on the administrative record by defendant (Doc. # 16). As more fully set forth below, the Court concludes that plaintiff's claim for benefits must be remanded for a new determination by the claims administrator, pursuant to the Court's interpretation of the governing provision of the benefits plan. Thus, the Court grants in part plaintiff's motion to that extent, and it denies defendant's motion.

         I. Background

         Plaintiff was a participant in an employee benefit plan administered by defendant. Claims under the plan were administered by Sedgwick Claims Management Services, Inc. (“Sedgwick”), to whom the plan granted discretion to interpret the plan and to determine entitlement to benefits thereunder. Plaintiff ceased working in January 2015, and shortly thereafter he applied for short-term disability benefits under the plan. The claims administration process ran its course, and in December 2015 plaintiff's claim was finally denied. Plaintiff subsequently filed the instant suit under ERISA.

         On March 29, 2018, the Court issued an order in which it noted that the parties, in their briefs relating to the pending motions, disputed the proper interpretation of the plan's definition of “totally disabled, ” although they had not cited any relevant authority on that issue. In light of the limited analysis provided by the parties and because the interpretation of that provision could be dispositive, the Court ordered the parties to submit supplemental briefs on the issue. The Court has now considered the parties' additional arguments.[1]

         II. Analysis

         In denying plaintiff's claim, Sedgwick and defendant determined that plaintiff was not totally disabled under the plan. The plan defined totally disabled in relevant part as follows: “You are considered Totally Disabled when, because of illness or injury, you are unable to perform all of the essential functions of your job . . . .” This definition---“unable to perform all of the essential functions”---could be interpreted in two different ways. First, this language could mean that, to show that she is totally disabled, a claimant must show that she cannot perform any of her job's essential functions, as she would not be disabled if she could perform some (but not “all”) of the essential functions. That is the interpretation espoused by defendant in this case. Second, this language could mean that a claimant is disabled if she cannot perform any particular essential function of her job, as she would then be unable to perform “all” of the essential functions. In this second interpretation, the “un-” of “unable” serves as a negation of the ability to perform all essential functions---if there is one that cannot be performed, then the claimant cannot perform all of those functions. Plaintiff argues in favor of this second interpretation. The Court concludes that this language, on its face, could reasonably be interpreted in either fashion, and it was this ambiguity that caused the Court to order the additional briefing.

         Because this plan gives the administrator discretion to interpret its terms and determine eligibility for benefits, the Court would ordinarily apply a deferential standard of review and uphold a reasonable interpretation made by the administrator. See Conkright v. Frommert, 559 U.S. 506, 512 (2010). In its original briefs on the pending motions, defendant argued that the administrator applied the first alternative interpretation set forth above. In its supplemental briefing, however, defendant has conceded that it is “unclear from the record” which interpretation Sedgwick applied in denying plaintiff's claim. The Court agrees with defendant that although the various claim denials quote the plan's definition of “totally disabled, ” they do not indicate which interpretation was being applied in deciding plaintiff's claim.[2] Defendant argues that its presently-espoused interpretation is reasonable, and that the use of it would not be arbitrary and capricious. Defendant does not argue, however, that the administrator applied a particular interpretation at the time of the denial to which this Court could afford deference. Nor does defendant argue that the administrator should have another opportunity to interpret the plan definition. Accordingly, because there is no interpretation to which it may defer, the Court proceeds to interpret that plan definition, for purposes of this plaintiff's claim, as a matter of law.

         In its supplemental briefs, defendant mainly argues that plaintiff was not disabled under either alternative interpretation. In its only argument addressing the proper interpretation of the definition, defendant merely cites two circuit court cases that support its interpretation; notes that a district court disagreed with those two decisions; and urges this Court to follow the two circuit courts. Defendant has not analyzed the reasoning of those courts; nor has defendant offered any reasons why its interpretation should be favored. In his supplemental brief, plaintiff has not analyzed defendant's cases or cited any additional authority. Plaintiff does argue that its interpretation is more reasonable because if an employee is unable to perform any particular function that is essential to her job, then she cannot perform the entire job and may be subject to dismissal---in which case, the employee should be considered disabled.

         The Court agrees the plaintiff's interpretation makes the most sense, for the reasons argued by him. The definition of total disability does not refer to all of the employee's job functions, but instead turns on the performance of the essential functions of that job. Thus, there is no danger that a person will be denied benefits simply because she can perform one trivial job function (such as punching her time card). Similarly, at the other extreme, there is no danger that a person will be considered totally disabled even though she can perform all essential functions but cannot perform some other trivial function. By referencing the essential functions of the job, the standard seeks to determine whether the employee can, for practical purposes, continue to do her job. If any one essential function cannot be performed, the employee's ability to perform the job as a whole is defeated. Thus, plaintiff's interpretation, making an employee disabled if some but not all essential functions can be performed, is more reasonable and is more in keeping with the plan's clear purpose of providing benefits to those who can no longer perform their jobs.

         The Court's interpretation is furthered supported by application of contra proferentem, the rule of construction under which ambiguities are construed against the drafter of the language at issue and thus in favor of the insured. See Miller v. Monumental Life Ins. Co., 502 F.3d 1245, 1253 (10th Cir. 2007) (rule applies in reviewing an ERISA plan de novo).

         Finally, contrary to defendant's statement in its initial supplemental brief, the weight of authority supports the Court's interpretation. Defendant relies on the unpublished case of Crossman v. Media General, Inc., 9 Fed.Appx. 147 (4th Cir. 2001) (unpub. op.), in which “disability” was defined to mean “the inability . . . to perform all of the customary duties of [the] position.” See Id. at 150. The court held that the plan administrator had not abused its discretion in denying a claim because the employee could perform some of his duties, thereby giving the plan language “its plain meaning.” See Id. at 151. This case is distinguishable because the plan definition turned on the performance of “customary” duties, and thus did not focus on the performance of the essential or core functions of the job. In addition, the Court does not agree with the Crossman court that such language is “plain” and not subject to differing interpretations.

         Defendant also relies on Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262 (5th Cir. 2004), in which the policy provided for benefits for one “unable to perform all of the material and substantial duties of his occupation.” See Id. at 270. The court held that the plan fiduciary applied the “legally correct interpretation” requiring the employee to show that she could not perform any of the material and substantial duties. See Id. Again, however, this Court does not agree with the Ellis court that such an interpretation follows from “the plain wording” of the plan, see Id. at 271, given the ambiguous phrasing. Moreover, key to the Ellis court's ruling was the fact that a contrary interpretation would conflate the disability provision with the plan's “partial disability” provision, which applied if the employee was able to perform “one or more, but not all, of the material and substantial duties” of his occupation. See Id. at 271-72. The Court concedes that, if the plan in the present case included a partial disability provision that applied if the employee could perform some but not all of her essential job functions, that fact would support interpreting the total disability definition to require an inability to perform any essential function, in order to avoid making the partial disability provision superfluous. Defendant's plan, however, does not contain any such partial disability provision, [3] and Ellis therefore is not particularly persuasive.

         To its credit, defendant in its supplemental brief also notes the contrary result reached by the court in Elwood v. AT&T Umbrella Benefit Plan No. 1-AT&T DisabilityIncome Program, 2010 WL 3259710 (M.D. Fla. Aug. 16, 2010), aff'd, 427 Fed.Appx. 709 (11th Cir. 2011), which involved the same definition of “total disability” that is at issue in the ...

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