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Hadd v. Aetna Life Insurance Co.

United States District Court, D. Kansas

September 30, 2019

TANZA HADD, Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY, Defendant.

          MEMORANDUM AND ORDER

          HOLLY L. TEETER, UNITED STATES DISTRICT JUDGE

         Plaintiff Tanza Hadd brings this action pursuant to the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq., to recover benefits Plaintiff claims are due under the terms of a long-term disability (“LTD”) plan. Plaintiff was a participant in her employer’s LTD plan, which was insured by Defendant Aetna Life Insurance Company. Plaintiff filed a claim for LTD benefits that Defendant denied. She now seeks review of that decision pursuant to 29 U.S.C. § 1132(a)(1)(B). Doc. 1. Plaintiff also filed an amended complaint purporting to seek statutory penalties under 29 U.S.C. § 1132(c)(1)(B), alleging Defendant failed to provide plan documents as required by ERISA. Doc. 36.

         Defendant now moves for summary judgment on both of Plaintiff’s claims. Doc. 44. Plaintiff opposes that motion and also moves to submit certain exhibits in stanter that were omitted from her opposition brief. Doc. 53. As an initial matter, the Court grants Plaintiff’s request to file her belatedly-submitted exhibits in stanter. With respect to Defendant’s request for summary judgment, because the Court finds that the denial of benefits was not arbitrary or capricious, the Court grants summary judgment in Defendant’s favor on Plaintiff’s § 1132(a)(1)(B) claim. The Court likewise grants Defendant’s request for summary judgment on Plaintiff’s § 1132(c)(1)(B) penalty claim, as Plaintiff did not move for leave to amend her complaint to assert that claim as required under the Federal Rules, and, regardless, that claim is not viable against Defendant.

         I. BACKGROUND

         A. Consideration of Plaintiff’s Additional Exhibits

         Before reciting the pertinent facts and addressing the merits of the parties’ arguments, the Court first addresses Plaintiff’s request to file certain exhibits to her summary judgment opposition brief in stanter. Doc. 53. The exhibits Plaintiff moves to submit in stanter include: (1) the curriculum vitae (“CV”) of Dr. Timothy Craven (Doc. 53-1 at 1-4); (2) a compilation of documents from the claim file (which the parties acknowledge is already part of the administrative record before the Court in this case) (Doc. 53-1 at 5-85); and (3) news releases from Defendant (which Plaintiff characterizes as a “stock statement”) regarding Defendant’s acquisition of Coventry Health Care, Inc. (“Coventry”) (Doc. 53-1 at 86-99).

         In cases involving review of a denial of ERISA benefits, the Court’s review is normally “limited to the administrative record, ” i.e., the materials compiled in the course of making the benefits decision. Holcomb v. Unum Life Ins. Co. of Am., 578 F.3d 1187, 1192 (10th Cir. 2009). The party seeking to supplement the record-here, Plaintiff-bears the burden of showing the propriety of doing so. McNeal v. Frontier AG, Inc., 998 F.Supp.2d 1037, 1041 (D. Kan. 2014). Although “it is the unusual case in which the district court should allow supplementation of the record, ” supplementation may be warranted when there is evidence outside the administrative record regarding a conflict-of-interest issue or when there is evidence that a claimant could not have presented in the administrative process. Hall v. UNUM Life Ins. Co. of Am., 300 F.3d 1197, 1203 (10th Cir. 2002); McNeal, 998 F.Supp.2d at 1041.

         For the following reasons, the Court grants Plaintiff’s motion to file in stanter. The parties do not dispute that the documents comprising Plaintiff’s Exhibit 2 are part of the administrative record and were already submitted to the Court; therefore, consideration of Exhibit 2, although duplicative, is within the scope of the Court’s review. And the Court finds that Plaintiff’s Exhibits 1 and 3 are related to Plaintiff’s arguments on the conflict-of-interest issue (see infra Part II.A.1.b), which the Tenth Circuit recognizes may warrant admission of extra-record evidence. See McNeal, 998 F.Supp.2d at 1041. Exhibit 1 is Dr. Craven’s CV, which Plaintiff uses to support her argument that Dr. Craven-the occupational medicine specialist who performed the independent medical review in connection with Defendant’s initial benefits determination-“has been working for and paid by [Defendant] since 2007.” Doc. 50 at 55. And Exhibit 3 consists of news releases that Plaintiff argues “establish[] that [Defendant] purchased Coventry [Health Care, Inc.]” Doc. 53 at 1. This exhibit is relevant to Plaintiff’s argument that Kristen Hamilton-a vocational field case manager from Coventry who performed a vocational assessment of Plaintiff in connection with the benefits determination-was not actually “independent.” Doc. 50 at 55. Finding these documents pertinent to its conflict-of-interest analysis, the Court therefore considers Exhibits 1 and 3-but only as they pertain to that issue.[1]

         B. Administrative Record Factual Findings [2]

         1. Long-Term Disability Plan

         United Parcel Service of America, Inc. (“UPS”) previously employed Plaintiff as an Operations Supervisor/Manager (also known as a “Hub Supervisor”). UPS classified this position as a “heavy” occupation, and the position involved moving packages of up to 150 pounds and working in an environment with dust, dirt, and variable temperatures.

         As a benefit of her employment with UPS, Plaintiff participated in UPS’s employee welfare benefit plan (“Plan”), which was funded, at least in part, by a group insurance policy (“Policy”) issued by Defendant to UPS. The Policy offers LTD coverage, which provides a source of income for employees who become disabled and unable to work due to an illness, injury, or disabling pregnancy-related condition. To determine whether an employee is “disabled” for purposes of receiving LTD benefits, the Policy contains a “test of disability.” The test-i.e., the criteria an employee must meet to show that he or she is disabled-differs based upon the length of time benefits have been paid. From the date of onset of disability until monthly benefits are payable for 24 months, an employee meets the test of disability on any day that he or she: (1) “cannot perform the material duties of [their] own occupation solely because of an illness, injury or disabling pregnancy-related condition”; and (2) [their] earnings are 100% or less of [their] adjusted predisability earnings.” But after the first 24 months of the disability that monthly benefits are payable, an employee meets the test of disability on any day that he or she is “unable to work at any reasonable occupation solely because of an illness, injury or disabling pregnancy-related condition.” In their briefing, the parties refer to the first part of the test as the “Own Occupation” test and the latter part as the “Any Occupation” test, and the Court accordingly adopts this terminology here.

         The Policy defines the term “own occupation” (as used in the Own Occupation test) in pertinent part as the occupation the employee is “routinely performing when [their] period of disability begins.” The term “reasonable occupation” (as used in the Any Occupation test), meanwhile, is defined as “any gainful activity” (1) “[f]or which [an employee is], or may reasonably become, fitted by education, training, or experience”; and (2) [w]hich results in, or can be expected to result in, an income of more than 60% of [their] adjusted predisability earnings.”

         Disability benefits under the Policy end on the date an employee fails to provide proof that he or she meets the test of disability. The Policy grants Defendant “discretionary authority to determine whether and to what extent employees and beneficiaries are entitled to benefits” and to “construe any disputed or doubtful terms” of the Policy.

         2. Plaintiff’s Long-Term Disability Claim

         In April 2013, Plaintiff stopped coming to work at UPS due to Churg-Strauss Syndrome (an autoimmune disorder marked by blood vessel inflammation) and associated symptoms, which included asthma and breathing difficulties. Plaintiff was subsequently approved for LTD benefits on October 7, 2013 under the Policy’s Own Occupation test. Defendant advised Plaintiff that, if her disability should extend to October 7, 2015, pursuant to the Policy Defendant would require reevaluation of her claim. During the initial 24-month period, Defendant periodically reviewed Plaintiff’s medical information. On May 30, 2014, Dr. Danielle Perry (family medicine doctor) noted that Plaintiff should be restricted from being “in any environment which may contribute to lung symptoms including dust, chemicals, [and] fumes, ” but, with those restrictions, Plaintiff had the ability to perform “sedentary work activity.”

         As Plaintiff neared the receipt of 24 months of benefits, Defendant began the process of reevaluating her claim under the Any Occupation test. On February 9, 2015, RN Berlyne Cesar (clinical consulting nurse) performed a review of Plaintiff’s medical information to assess her status. Nurse Cesar noted that Plaintiff underwent nasal surgery in October 2014, after which she did not report any asthma exacerbations, shortness of breath, fatigue, or breathing difficulties. Nurse Cesar also noted that, although Plaintiff was expected to follow up with an orthopedic specialist to address her hip complaints, it did not appear Plaintiff had done so. Nurse Cesar spoke with Plaintiff on April 29, 2015, at which time Plaintiff advised Nurse Cesar that she was treating with a rheumatologist (Dr. Julian Magadan) and a family practitioner (Dr. Perry). Plaintiff also confirmed that she was not treating with an orthopedic specialist for her hips. Nurse Cesar reached out to Dr. Magadan on June 25, 2015. Based on their conversation, Nurse Cesar determined that, due to Plaintiff’s uncontrolled breathing issues, her functionality was “unable to be concluded” and recommended following up after additional medical information was received.

         In assessing Plaintiff’s medical condition and status, Defendant sought an independent medical review, which was performed by Dr. Craven, who is board certified in occupational medicine. Dr. Craven reviewed Plaintiff’s medical records and spoke with her treating physicians, Dr. Perry and Dr. Magadan, on June 29, 2015 and July 1, 2015, respectively. When Dr. Craven spoke to Dr. Perry, Dr. Perry confirmed that Plaintiff could perform sedentary work provided there was no exposure to dust or chemicals. Dr. Magadan similarly explained that Plaintiff would have some limitations from her Churg-Strauss syndrome and some limitations in her ability to engage in prolonged standing and walking. Based on his review and discussions with Drs. Perry and Magadan, Dr. Craven therefore concluded that “[p]ermanent total disability is not supported” and that, although Plaintiff “has limitations of her general level of functioning, ” she “should be able to perform sedentary physical level work.” Dr. Craven certified his independence by affirming that he had no significant relationship with Plaintiff, her treating providers, or her treatment facilities, and no incentive (financial or otherwise) to offer an opinion other than his “honest professional assessment of the information provided for review.”

         On July 15, 2015, Ms. Hamilton-a vocational field case manager from Coventry- performed a vocational assessment and transferrable skills analysis and labor market analysis (“TSA”) to determine if there were appropriate occupations for Plaintiff in light of her functional capacity, education and work experience, wage requirement, and geographic location. Following her review, Ms. Hamilton identified several occupations that matched Plaintiff’s abilities and requirements.

         Following its receipt of Dr. Craven’s report, Defendant sought additional clarification regarding Plaintiff’s bilateral upper extremity limitations and their impact, if any, on her capacity for sedentary employment. On August 10, 2015, Defendant spoke with Plaintiff to obtain an update on her condition. Defendant also reached out to Dr. Craven for additional information, which he provided on August 13, 2015, stating in an addendum to his report that “[i]t is not clear at this time . . . whether [Plaintiff] has an ongoing significant impairment of her upper extremities.”

         In September 2015, while its review was ongoing, Defendant received notice of a June 25, 2015 decision awarding Plaintiff social security disability (“SSDI”) benefits. Defendant received a copy of the SSDI file and the SSDI decision itself. In the SSDI decision, the administrative law judge concluded that-based on Plaintiff’s inability to perform her “past relevant work” and factors such as her advanced age-Plaintiff qualified for SSDI benefits despite possessing the capacity for “the full range of sedentary work.”

         After reviewing the SSDI file, Dr. Craven’s report, and other information in the claim file, Defendant ultimately determined that Plaintiff possessed the functional capacity for sedentary employment (provided she could avoid environmental irritants). On September 28, 2015, Defendant sent a letter to Plaintiff notifying her that, because she had failed to prove a disability under the Policy’s Any Occupation test, it would discontinue benefits effective October 7, 2015. The letter outlined the applicable Policy provisions, including the disability definitions, and also explained Defendant’s rationale for the decision.

         3. Plaintiff’s Appeal

         On February 12, 2016, Plaintiff appealed Defendant’s decision. With her appeal, Plaintiff included progress notes and a letter from Dr. Magadan. Dr. Magadan’s letter, dated February 8, 2016, stated Plaintiff was “totally disabled from performing any reasonable occupation for which she is qualified by education, training, or experience.” The letter did not provide specific restrictions and limitations, stating only that ...


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