Opinion
Civil Action No. 99-2112 Section "K"(4)
January 31, 2002
ORDER AND REASONS
Before the Court is a Motion for Sununary Judgment (rec. doc. 37) filed by defendant Life Insurance of North America (LINA), the Long Term Disability Insurance carrier for employees of Tenet Healthcare Network, Co.(Tenet). Tenet is the owner and operator of Northshore Medical Hospital (Northshore). Plaintiff was employed by Northshore and covered under its Employee Benefit Plan which offers, among other benefits, short and long term disability benefits, to its employees. Tenet self-insures its short term disability benefits and LINA insures all long term disability benefits claimed against Tenet. By virtue of the Tenet Select Plan terms, CIGNA is listed as the claims administrator for long and short term claims. (Administrative Record, Exhibit B, p. 1).
Tenet's claims are insured by CIGNA Corporation. Both CIGNA Group Insurance and LINA are entities of CIGNA Corporation. Because there is no contrary evidence in the record, throughout this motion, the Court teats CIGNA, as the "claims administrator."
Plaintiff filed suit in state court in St. Tammany Parish on June 1, 1999 for long and short term disability benefits from an accident that occurred at work. Defendant removed the case to federal court asserting that plaintiffs insurance plan was governed by the Employee Retirement Income Security Act (ERISA) of 1974 (rec. doc. 1). Defendant, Tenet, filed a Motion for Summary Judgment (rec. doc. 31) before this Court which was denied in part and granted part October 12, 2001. Defendant, LINA, has now petitioned the Court for Summary Judgment. The motion was set for hearing on January 2, 2002 and was taken on the papers without oral argument. The Court has considered the pleadings, memoranda and relevant law and GRANTS defendants motion for the following reasons.
Court granted defendant's Motion for Summary Judgment to the extent that plaintiff requested damages under La. R.S. 22:657.
BACKGROUND
Plaintiff alleges she was injured at Northshore when she tripped and fell in an elevator while leaving work on August 27, 1996. The night of the accident, plaintiff completed an incident report and left it in the nurse supervisor's office and worked at Northshore for three more days. After the accident, plaintiff, (1) made a workers compensation claim in against Tenet in December 1996 and began collecting those benefits, (2) met with employees in the Northshore human resource department on October 18, 1996 to complete information regarding her disability claims, and (3) claims she met with the same department on "20 other trips" to obtain advice and fill out paperwork for worker's compensation, health insurance, leave of absence and disability income.
Defendant's long term disability policy requires "written proof of loss to be submitted within 90 days of the event giving rise to the disability, or as soon as is reasonably possible if the employee is unable to give notice within 90 days, but in no event can notice be given later than one year following the time notice was otherwise required." (Administrative Record, Exhibit C., p. 21).
Defendant asserts that its first written record of plaintiffs injury was on April 3, 1998 — almost two years after the accident. Following an investigation of notice issues, on January 21, 1999 defendant gave plaintiff an opportunity to show that written proof of loss was in fact timely submitted or explain why it was not. On February 9, 1999, plaintiff responded that she had made her claim with the human resource manager of Tenet on August 28, 1996, but did not include a written claim form. Thereafter, the CIGNA claims administrator contacted a representative of Tenet's benefits department who indicated that Tenet had no record of a short or long term disability claim being filed by plaintiff. With that information, CIGNA denied plaintiffs claim.
Defendant asserts that summary judgement is appropriate because; (1) the Court's review is limited to whether or not the administrator abused its discretion in denying plaintiff's long term benefits because the plan provides that Tenet is provided discretion to resolve all questions concerning eligibility and plaintiff urges this Court to interpret that language to find that CIGNA was also afforded discretionary authority to make benefit determinations, (2) even if the Court does not agree that the Plan grants CIGNA discretionary authority to resolve eligibility claims, an abuse of discretion standard is still appropriate because the Court is reviewing the administrator's factual determinations — not interpreting the plan terms, and (3) should the Court review the matter de novo, evidence in the administrative record clearly indicates that plaintiff failed to comply with LINA's procedure for receipt of benefits.
Court is aware that CIGNA Corporation owns LINA, however, the plan designates CIGNA as the claims administrator — not LINA. Therefore, this Court will refer to CIGNA as the administrator throughout this motion.
Plaintiff, on the other hand, asserts that there are issues of material fact that should be resolved at a trial on the merits and argues that: (1) Tenet used its human resources department to manage all aspects of its employees' benefit plans — which included making and timely filing claims for its employees with LINA, (2) Tenet had forms where employees could file health insurance, disability, sick leave, vacation, and worker's compensation claims and pension plan changes, (3) she visited the Human Resource Department on September 17, 1996 to complete "leave of absence and disability" forms, on October 18, 1996 to fill out more information regarding the long-term disability claim, and on several other occasions for other inquiries and advice, (4) plaintiff assumed that contact with the resource department was sufficient to process her claim because her policy with LINA states that "written notice can be given at our home office in Philadelphia, Pennsylvania or to our agent" and directs its members to "contact your Human Resource Department for the appropriate claim forms and further assistance", and (4) the CIGNA Claims Administrator noted in a February 15, 1999 memo that "[i]t appears that this dint filed for benefits in 8/96."
ANALYSIS
Standard for Motion for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "An issue is material if its resolution could affect the outcome of the action." Daniels v. City of Arlington, Texas, 246 F.3d 500, 502 (5th Cir. 2001).
The moving party bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, 76 F.3d 651, 656 (5th Cir. 1996) (citation omitted). When the moving party has carried its burden under Rule 56(c), its opponent must do more that show there is some possible doubt as to the material facts. Rather, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986); Becky v. Texas State Board of Dental Examiners, 204 F.3d 629, 633 (5th Cir. 2000).
In reviewing the motion, the Court considers the record as a whole, disregarding evidence that the jury is "not required to believe." Thomas v. Great Atlantic and Pacific Tea Company, Inc., 233 F.3d 326, 329 (5th Cir. 2000). Thus, where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita at 588. Finally, the Court notes that substantive law determines materiality of facts and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
With these standards in mind that the Court turns to the merits of the arguments. There are two issues before the Court including: (1) whether this Court should employ an abuse of discretion standard to review CIGNA's determination that plaintiff was not entitled to disability benefits because CIGNA was afforded discretionary authority to make eligibility benefits under the plan or because this Court is asked to review a factual determination under a disability plan — and not to interpret the plan itself, and (2) if the abuse of discretion standard is appropriate, whether CIGNA abused its discretion in determining that plaintiff's claim for long term disability benefits should be denied because plaintiff did not comply with the notice provisions of the plan.
Standard of Review
A denial of benefits challenged under ERISA, is reviewed de novo unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire Rubber Co. v. Burch, 489 U.S. 101 (1989). When the administrator or fiduciary is given discretionary authority to determine benefits or interpret the plan, the standard of review of factual determinations should be one of abuse of discretion. Vega v. National Life Ins. Services, 188 F.3d 287 (5th Cir. 1999). Furthermore, when there is no grant of discretionary authority to the administrator or its fiduciaries, the Supreme Court has determined that the district court should review a claim for benefits "as it would . . . any other contract claim — by looking to the terms of the plan and other manifestations fo the parties' intent." Estate of Bratton v. National Union Fire Insurance Co., 215 F.3d 516, 522 (5th Cir. 2000) citing Bruch, 489 U.S. at 112-113. However, for factual determinations made under ERISA plans, the Fifth Circuit has held that federal courts owe due deference to an administrator's findings and should use an abuse of discretion standard when reviewing them. Bratton at 522 citing Southern Farm Bureau Life Ins. Co v. Moore, 993 F.2d 98 (5th Cir. 1993) and Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991).
Furthermore, when reviewing an administrator's resolution of factual issues, courts have been cautioned that simply because they may have conducted an investigation differently or in a more expeditious manner, does not mean that the administrator abused her discretion. Kolodzaike v. Occidental Chem. Co., 88 F. Supp.2d 745 (S.D. Texas 2000), citing Vega v. National Life Ins. Servc., Inc., 188 F.3d 287, 297 (5th Cir. 1999) (noting that the reviewing court "need only assure that the administrator's decision fall[s] somewhere on a continuum of reasonableness — even if it is at the low end) and Woosley v. Marion Labs., Inc., 934 F.2d 1452 (10th Cir. 1991) (holding in part that the decision of the administrator need not be the only logical one nor even the best one as long as it is sufficiently supported by facts within her knowledge to counter a claim that the decision was arbitrary or capricious).
Application of Relevant Standards
In this case, Tenet's Income Replacement Plan grants discretionary authority to resolve all questions concerning the eligibility of any employee or dependent to Tenet — not CIGNA or LINA. (Motion for Summary Judgment, Exhibit B, p. 16). However, because CIGNA's decision to deny plaintiffs benefits was based on the factual determination that it was not timely submitted, and did not require any interpretation of plan terms, this Court is required to employ an abuse of discretion standard. Therefore, plaintiff must persuade the Court that CIGNA's decision was arbitrary or capricious. After a careful review of the evidence, applying the abuse of discretion standard, and acknowledging that deference is owed to the administrator's decision, the Court concludes that plaintiff has failed to demonstrate a genuine issues of material fact as to whether the CIGNA administrator abused her discretion when she found plaintiff ineligible to receive benefits based on the untimeliness of her claim.
The clear terms of the plan provide that written proof of loss must be submitted "within 90 days of the event giving rise to the disability, or as soon as is reasonably possible if the employee is unable to give notice within 90 days, but in no event can notice be given later than one year following the time notice was otherwise required." (Motion for Summary Judgement, p. 2). As was noted above, plaintiff claims that she filed her written proof of loss for LTD benefits with the Northshore Human Resources Department on August 27, 1996 in compliance with the plan terms. However, CIGNA has no written proof of her submission until April 3, 1998 — when plaintiffs attorney wrote CIGNA a letter explaining that a claim for benefits had been made. (Administrative Record, Exhibit A, p. 15-16). Thereafter, a CIGNA representative assigned to the case sent plaintiffs attorney a letter dated January 21, 1999 acknowledging receipt of his letter and noting that it was the first notice the company had received regarding her claim. The letter also requested plaintiff's counsel to provide an explanation as to why plaintiff had failed to comply with the notice requirements and to submit proof that a written claim had been timely filed. (Administrative Record, Exhibit A. p. 12-13). Plaintiff's counsel replied on February 9, 1999 and asserted that plaintiff had made a claim with the human resources department, but did not include any proof of the submission of her claim to that department.
Based on plaintiffs insistence that she had filed written proof of loss with the human resource department, a CIGNA representative contacted Tenet on February 26, 1999 and learned that Tenet had no record of either a short or long term disability claim being filed by plaintiff (Administrative Record, Exhibit A, p. 6). Assured at that point that neither CIGNA nor Tenet had received written proof of loss in plaintiffs case within a year of the accident, CIGNA advised plaintiffs counsel that plaintiffs claim for long term disability was denied. (Administrative Record, Exhibit A, p. 1-3).
Plaintiff alleges that the CIGNA's investigation was inadequate, but has offered insufficient evidence to support his contentions. While this Court may conducted the investigation differently, the evidence reveals that CIGNA's ultimate determination was adequately researched and based on sufficient facts. There was no written proof anywhere that plaintiff had timely submitted proof of her loss. Because the law of the Fifth Circuit requires this Court to give due deference to the administrator's factual findings under the plan and plaintiff has not persuaded the Court that there is any issue of material fact as to the reasonableness of the administrator's denial of coverage defendant, LINA's Motion for Summary Judgement is GRANTED.