BRENDA K. SANNES, District Judge.
Christina Delprado ("Plaintiff") brings this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. In her Amended Complaint, Plaintiff alleges, inter alia, that Sedgwick Claims Management Services, Inc., United Health Group Incorporated, United Healthcare Services, Inc., United Health Group Long Term Disability Plan, and United Health Group Short Term Disability Plan ("Defendants") violated ERISA by improperly denying her short term disability ("STD") benefits and long term disability ("LTD") benefits under the STD and LTD Plans provided by her employer United Healthcare Services, Inc. (Dkt No. 11). Currently pending before the Court are Defendants' motion for summary judgment (Dkt. No. 89), and Plaintiff's cross-motion for summary and declaratory judgment and to strike certain affidavits in Defendants' motion (Dkt. No. 98). For the reasons set forth below, Plaintiff's motion is granted in part and denied in part, and Defendants' motion is granted in part and denied in part.
Plaintiff commenced this action on March 20, 2012 by filing a Complaint in the Supreme Court of the State of New York, Saratoga County. (Dkt. No 1-2). On April 23, 2012, Defendants removed the case to the Northern District of New York on the basis that the Court has jurisdiction under 28 U.S.C. §§ 1331 and 1332. (Dkt. No 1). On June 18, 2012, Plaintiff filed an Amended Complaint, asserting twelve claims against Defendants under ERISA, the Family and Medical Leave Act of 1993 ("FMLA"), and New York state law. (Dkt No. 11).
On March 20, 2013, the Court dismissed Plaintiff's fourth claim, on Defendants' motion, for failure to state a claim upon which relief could be granted. (Dkt. No. 33). On June 30, 2014, Defendants moved for Summary Judgment against all of Plaintiff's remaining FMLA, employment, and ERISA claims. (Dkt. No. 89). Plaintiff opposed Defendants' motion on her ERISA claims—Counts I, II, III, X, XI, and XII in the Amended Complaint—and cross-moved for summary and declaratory judgment on the same ERISA claims. (Dkt. No. 98). Plaintiff seeks to recover short-term disability (STD) and long-term disability (LTD) benefits, as well as attorneys' fees. (Dkt. No. 98-1, at pp. 4, 33, 49). Plaintiff "requests permission of this Court to withdraw her FMLA and employment claims—Counts V, VI, VII, VIII and IX of the Amended Complaint—or, in the alternative, does not oppose Defendants' motion regarding said counts." (Id., at pp. 12-13).
Plaintiff was hired by Defendant United Healthcare Services, Inc. ("UHS") on March 12, 2007 for the position of Disease Management Case Manager. (Defs. SMF, p. 2, ¶ 1). In this position, Plaintiff worked primarily from home providing disease management support to patients over the phone. (Id., p. 2, ¶ 5). On July 30, 2010, Plaintiff stopped actively working at UHS due to allegedly worsening health issues including severe constant chronic joint pain and excessive fatigue; she requested and was granted medical leave under the FMLA starting on August 2, 2010. (Pl. SMF, ¶¶ 26, 28, 37).
During her employment at UHS, Plaintiff was eligible to file for both STD and LTD benefits under the United Health Group Short-Term and Long-Term Disability Plan (the "Plan"). (Defs. SMF, p. 8, ¶ 2). Under the Plan, Plaintiff was eligible to receive STD benefits in the amount of 60% of her pre-disability earnings in the event she became disabled, after she had been disabled for a waiting period of seven consecutive calendar days through a maximum benefit period of 180 calendar days. (Pl. SMF, ¶ 65). Plaintiff was eligible to receive LTD benefits in the amount of 60% of her pre-disability earnings in the event she became disabled, after she had been disabled for a waiting period of 180 calendar days through a maximum benefit period until she reached the age of 65. (Id., ¶ 246). The Plan also requires claimants to apply for Social Security Disability Income benefits if their physician expects them to be disabled for twelve months or more (BPN 204), and provides that STD and LTD benefits would be reduced by the amount of any Social Security disability benefits they received. (BPN 71, 85, 188, 203).
Defendant United Health Group, Inc. ("UHG") is the sponsor and named plan administrator of the Plan. (Defs. SMF, p. 10, ¶ 11). Defendant Sedgwick Claims Management Services, Inc. ("Sedgwick") is the claims administrator for STD benefits under the Plan, and also for LTD benefits for the first twenty-four months of coverage under the Plan. (Id., ¶¶ 15-16; Pl. Response, ¶¶ 15-16). UHG delegated its authority to determine claims to Sedgwick for STD benefits and for the first twenty-four months of LTD benefits. (Defs. SMF, p. 11, ¶ 20). LTD benefits after twenty-four months of coverage are administered and funded by non-party Standard Insurance Company. (Id., ¶¶ 14, 17).
The Plan provides the delegated fiduciary — in this case Sedgwick — with "the sole and exclusive authority and discretion to interpret the benefit plans' terms and benefits under them, and to make factual and legal decisions about them." (BPN 8, 128).
(Id.). The Plan further states the following conditions must be satisfied before an employee is considered disabled:
(BPN 71, 187). For purposes of determining disability claims, the Plan further defines the following operative terms:
(BPN 97-99, 215-217). The Plan also provides the opportunity to appeal in the event a claim for STD or LTD benefits is denied; the March 2010 version of the Plan provided for one level of appeal, while the January 2011 version provided for two levels of appeal. (BPN 114-116, 232-234). Second level appeals were decided by the UHG Disability Appeals Committee based on a "closed file" review, meaning no new information would be considered. (BPN 234).
On or around August 11, 2010, Plaintiff filed a claim for STD benefits with Sedgwick, stating that as of August 2, 2010 she was disabled due to "immense" joint and muscle pain which made it hard to focus, as well as stiffness and swelling which made it hard to walk and type. (BPN 342-345). Sedgwick assigned claim number B085705482-0001-01 to Plaintiff's claim. (Pl. SMF, ¶ 74). On August 12, 2010, Sedgwick requested an authorization to obtain Plaintiff's medical records, which she returned on August 16, 2010. (BPN 561, 570-571). On August 16, 2010, Sedgwick sent a letter to Plaintiff's primary care doctor's office requesting "objective medical documentation that supports the employee's inability to return to work" in the form of an Attending Physician Statement ("APS") and "Office Treatment Notes for the period of 08/02/2010 through present," with a due date of August 25, 2010. (BPN 566-567).
On August 23, 2010, Plaintiff's primary care doctor Dr. Stephen Fishel reported in the APS that she had diagnoses of "osteoarthritis, fatigue, arthralgias
On August 25, 2010, Sedgwick recorded Dr. Fishel's APS information, and then called Dr. Fishel and Dr. Huyck, leaving voicemail messages to call back or to fax treatment notes relating to Plaintiff immediately, since the "MDD
(BPN 590).
Plaintiff appealed the decision by faxing a letter to Sedgwick on August 29, 2010, which stated: "I am appealing the denial which was filed due to previous request to Dr. Fishel, MD my PCP, by myself and Sedgewick [sic] CMS that doctor's notes from 8/2/2010 through present be faxed to Sedgewick [sic] CMS, however were never received. I have faxed Dr. Fishel and made a 2nd request for these doctor's notes to be faxed immediately." (BPN 585-86).
On August 30, 2010, Sedgwick received records regarding Plaintiff from Dr. Fishel dated August 3, 2010, August 6, 2010, and August 27, 2010. (BPN 628-634). The office note from August 3, 2010 states in relevant part:
(BPN 633). Dr. Fishel's assessment was "719.49 Pain Joint Multiple Sites." He also commented that Plaintiff's "diffuse antralgias" appeared "to be progressing gradually over time," and that it was [n]ot clear whether she has a true connective tissue disorder or just osteoarthritis that's worsening." (BPN 634). Plaintiff returned to see Dr. Fishel on August 6, 2010, complaining of "pain all over," and "[n]o relief with increase in meds." (BPN 631-632). Dr. Fishel's comments included "[d]iffuse arthralgias, fatigue, chronic pain." (BPN 631). Dr. Fishel noted "I'm unsure whether she has a true connective tissue disease or not." (Id.). The note also indicates that Plaintiff agreed to try Prednisone, and Dr. Fishel observed: "We did discuss possibly trying Savella (although I don't think she's typical for fibromyalgia), but she doesn't think she would want to do that." (BPN 631-632).
When Plaintiff saw Dr. Fishel again on August 27, 2010 for "follow up of joint issues," Dr. Fishel commented that Plaintiff "[c]ontinues with diffuse arthralgias and fatigue, etiology uncertain." (BPN 629-630). Plaintiff reported that she "felt so bad [she] was in bed for two days." (BPN 629). Dr. Fishel stated that "[s]ince last visit she has been formally taken out of work by me. Tentative return date estimated at 9/30." (Id.). Dr. Fishel again assessed "719.49 Pain Joint Multiple Sites" and recommended that Plaintiff see another Rheumatologist. (Id.).
On September 7, 2010, Sedgwick received medical records from Plaintiff's Rheumatologist, Dr. Huyck, recording office visits on January 20, 2010, February 2, 2010, and April 1, 2010. (BPN 605-618). According to Dr. Huyck's January 20, 2010 office note, Plaintiff complained of suffering "very severe" diffuse muscle and joint pain over the last several years. (BPN 606). Dr. Huyck assessed "[d]iffuse and somatic pain with mild defuse underlying osteoarthritis and spondylosism" and noted that Plaintiff "may well have predominantly a fibrositic
On September 17, 2010, Sedgwick received additional medical records from Dr. Fishel, documenting visits by Plaintiff on May 20, 2010 and July 19, 2010. (BPN 656-661). Dr. Fishel recorded on May 20, 2010 that Plaintiff "still complains of a lot of joint pain. She does have Lyrica which she will take for pain. She does not take the Lyrica daily because it is too expensive. When she does take it, she feels better." (BPN 657). Dr. Fishel observed that Plaintiff's physical exam was normal and advised her to take Lyrica daily. (BPN 658). On July 19, 2010, Plaintiff presented "with pain and with depression"
On September 21, 2010, Sedgwick also received another APS by Dr. Fishel dated that day, prepared for the Hartford Life Insurance Company, which stated a primary diagnosis for Plaintiff of "arthritis" and a secondary diagnosis of "fatigue." (BPN 674). Dr. Fishel noted Plaintiff's reported symptoms at the time were "fatigue" and "joint pain." (Id.). Dr. Fishel stated that Plaintiff was unable to return to work, and that he expected her situation to last through September 30, 2010. (Id.). He also reported that Plaintiff had been referred to a Rheumatologist for evaluation. (Id.).
On September 21, 2010, Sedgwick received a fax from Dr. Susan Dorsey, Plaintiff's new primary care doctor, which stated "Christina Delprado is a patient of our practice. She is being evaluated for a rheumatologic condition and will be out of work through her consultation with rheumatology 10/29/10. Please contact the office if you have any questions regarding this correspondence." (BPN 673).
On September 27, 2010, Sedgwick received an independent report from Dr. Dennis Payne, Jr., a physician board certified in Internal Medicine and Rheumatology, with whom it had consulted regarding Plaintiff's condition. (BPN 651-655). Dr. Payne reported that he had made three unsuccessful attempts to speak with Dr. Fishel by telephone. (BPN 652). There is no indication that Dr. Payne attempted to speak with Dr. Huyck or Dr. Dorsey, and Dr. Payne did not speak with or examine Plaintiff. (See BPN 651-655). Dr. Payne reviewed the following medical records: Progress Notes from Dr. Huyck from 1/20/10-4/01/10, Progress Notes from Dr. Fishel from 8/03/10-9/21/10, Case Notes from the claim log, test results from 1/20/10, and other miscellaneous records. (BPN 652). In his synopsis, Dr. Payne stated:
(BPN 652-653). Dr. Payne concluded, "Based on the medical record data provided for review, the employee is not disabled from her regular unrestricted job from 08/02/10 to the present." (BPN 653). Dr. Payne responded as follows to the Examiner's Question 3, which requested, "What are the clinical findings contained in the medical record and how would these findings impact the employee's ability to function in her regular unrestricted occupation?"
(BPN 653-654). Dr. Payne responded as follows to the Examiner's Question 6, which requested, "What restrictions/limitations, if any, are medically supported for the employee, for any specific time period from 08/02/10 to the present?:"
(BPN 654). Dr. Payne further summarized his conclusion as follows:
(Id.).
On or around October 13, 2010, Sedgwick sent a letter to Plaintiff informing her that the denial of STD benefits had been upheld. (BPN 691-693). The letter explained that an "Appeals Specialist has reviewed the claim, including medical documents from C. Huyck, M.D., and S. Fishel, M.D., dated from January 20, 2010 through September 21, 2010." (BPN 691). The letter further explained that the "file was referred to an independent medical specialist, D. Dennis Payne, M.D., who is Board Certified in Rheumatology, for review." (Id.). The denial letter summarized Dr. Payne's conclusions as follows:
(BPN 691-692). The letter concludes:
On December 21, 2010, Plaintiff filed another claim for STD Plan benefits, this time with a reported diagnosis of fibromyalgia, and a date of disability of August 2, 2010.
Dr. Dorsey's offices notes for Plaintiff from December 7, 2010 and December 15, 2010 record that Plaintiff reported pain and fatigue and refer to an additional possible diagnosis of rheumatoid arthritis; they do not specifically mention fibromyalgia. (BPN 779-781, 786-787).
On December 27, 2010, Sedgwick temporarily closed Plaintiff's second claim on the ground that it was duplicative of the original STD claim. (BPN 399-401). However, after speaking with Plaintiff, Sedgwick re-opened the claim on December 30, 2010, noting: "processing for new [diagnosis] as of 10/28 of Fibromyalgia (previous claim was reviewed for the diagnoses of: osteoarthritis, depression, hypertension, and elevated cholesterol.") (BPN 399). Sedgwick then started its review to "see if medical supports back to 10/28/10," (BPN 398), and sent a blank APS to Dr. James Yovanoff and Dr. Dorsey and requested office notes from "10/15/10 to present." (BPN 397).
On December 30, 2010, the reviewing Nurse Case Manager ("NCM") summarized the status of Plaintiff's Second STD claim. (BPN 393-397). The NCM noted that Plaintiff "originally claimed disability with FDA 8/2/10 because of a flare in chronic pain and fatigue complaints." (BPN 393). The NCM summarized Plaintiff's available medical records and noted that Plaintiff "has a treating history with diagnoses from possible lyme's [sic] disease, rheumatoid arthritis and chronic pain and fatigue complaints." (BPN 394). The NCM noted:
(BPN 395). Regarding Plaintiff's "new diagnosis of fibromyalgia," the NCM commented that "fibromyalgia is nothing more than a chronic pain condition," but it "does require you meet specific criteria." (Id.). The NCM then listed the following diagnostic information from the American College of Rheumatology 1990 Criteria for the Classification of Fibromyalgia:
(BPN 395-396). The NCM noted that "the medical records of Dr. Yovanoff will need to be assessed for that criteria," and "[w]ithout that support there is no new diagnosis." (Id.).
On January 7, 2011, Sedgwick received an APS from Dr. Dorsey regarding Plaintiff's condition.
On January 7, 2011, Sedgwick also received an APS from Dr. Yovanoff. (BPN 830-833). Dr. Yovanoff identified the following diagnoses for Plaintiff: Osteoarthritis of knees, Chronic myofascial
On January 13, 2011, Dr. Yovanoff provided the office notes supporting his APS. (BPN 836-843). Plaintiff first saw Dr. Yovanoff on October 28, 2010, and the note from that date states that Plaintiff "continued to have generalized pain in different muscle groups and joints to the point where the pain was interfering with her ability to concentrate on her job which involves telephone counseling as a registered nurse." (BPN 840). Under "Joint Examination," Dr. Yovanoff stated as follows:
(BPN 841). Dr. Yovanoff's impression was:
(BPN 841-842). Dr. Yovanoff advised Plaintiff that the diagnosis for her condition was "undefined at the present time." (BPN 842).
In the November 30, 2010 note, Dr. Yovanoff recorded that Plaintiff "returns for follow-up of difficult to explain pain." (BPN 839). He noted: "She has no swollen joints at all that can be identified clinically, but she complains of pain bitterly with manipulation of any area. Surprisingly, she really doesn't have soft tissue tender points. There is no edema in the legs." (Id.). Dr. Yovanoff's assessment and plan were as follows:
(Id.). Dr. Yovanoff recorded Plaintiff's December 21, 2010 visit as follows:
(BPN 838).
On January 14, 2011, the Sedgwick NCM recorded the following review of Dr. Yovanoff's notes:
(BPN 379-380). On January 18, 2011, the NCM spoke with Dr. Yovanoff regarding Plaintiff's condition and recorded the following summary:
(BPN 373).
On January 20, 2011, the Sedgwick Examiner recorded the following rationale for denying Plaintiff's second STD claim:
(BPN 378-379). On January 21, 2011, Sedgwick informed Plaintiff of the denial by phone, with the conservation summarized as follows:
(BPN 367-368).
(BPN 880).
On or about April 26, 2011, Sedgwick received Plaintiff's claim for LTD benefits. (BPN 314). Sedgwick assigned claim number B085705482-0001-02 to this claim. (Pl. SMF, ¶ 258). Sedgwick denied Plaintiff's claim the next day, and notified her by letter dated April 27, 2011, which states in relevant part:
(BPN 934-935). The letter defines the LTD Plan waiting period as the "180 calendar day period of time that starts on the first day as of which the Claims Administrator that you are disabled." (BPN 935).
On June 22, 2011, Plaintiff appealed Sedgwick's denial of both her STD claims and her LTD claim by sending a letter via her attorney to Sedgwick, which included certain additional medical records. (BPN 938-976). The letter described the basis for the appeal as follows:
(BPN 938). Sedgwick notified Plaintiff that the she could not appeal the denial of her first STD claim because she had already "completed the allowable appeal under the terms of her Plan," which was decided on October 12, 2010. (BPN 1085).
In her appeal, Plaintiff argued that Sedgwick had failed to consider certain key medical records: (1) the September 13, 2010 office note from Dr. Dorsey, which stated that Plaintiff "has tender points. She seems to definitely has [sic] fibromyalgia" (BPN 774, 949); and (2) the January 20, 2010 office note from Dr. Huyck, which stated that Plaintiff "may well have predominantly a fibrositic syndrome." (BPN 608, 954). Plaintiff also referred Sedgwick to Dr. Fishel's office notes from August 2010, wherein she had reported chronic pain and fatigue. (BPN 957-963).
Plaintiff included several medical records in the appeal that had not been previously submitted to Sedgwick. In an office note dated January 19, 2011, Dr. Dorsey noted that Plaintiff "continues to have tremendous pain in joints and muscles and overwhelming fatigue." (BPN 965-966). Dr. Dorsey also recorded that Plaintiff had "multiple tender points." (Id.). Dr. Dorsey's assessment was:
(Id.).
Plaintiff also submitted a February 3, 2011 report from Dr. Joseph Prezio, who conducted an independent medical examination of Plaintiff on behalf of the Social Security Administration. (BPN 968-971). In the Chief Complaint section of the report, Dr. Prezio wrote in relevant part:
(BPN 969). Dr. Prezio noted the following in his physical exam of Plaintiff:
(BPN 970). Dr. Prezio's diagnosis for Plaintiff was: "1. Fibromyalgia. 2. Hypertension, by history." (BPN 971). He concluded that "[t]he claimant has mild restriction for prolonged standing, walking, squatting, kneeling, heavy lifting or bending because of the fibromyalgia complaints present at this time." (Id.). Finally, the last two records included with Plaintiff's appeal letter were an X-Ray report dated February 5, 2011 noting "soft tissue swelling surrounding the wrist," (BPN 972), and a letter to Plaintiff from the Social Security Administration dated February 18, 2011 awarding Plaintiff Social Security disability benefits "beginning January 2011." (BPN 973-976).
Sedgwick requested an additional peer review regarding Plaintiff's appeal of the second STD claim, which was conducted once again by Dr. Payne and summarized in a report dated August 3, 2011. (BPN 1030-1033). Dr. Payne did not examine Plaintiff, but based his report on the medical records he received and a conversation with Dr. Yovanoff.
(Id.). Dr. Payne stated that he attempted to call Dr. Dorsey several times, but never received a call back. (BPN 1031). Dr. Payne provided the following "Rheumatology Synopsis:"
(Id.). In response to the Examiner's first question, "Is the employee disabled from her regular unrestricted job as of 10/28/10 through return to work?," Dr. Payne wrote:
(Id.). In response to the Examiner's third question, "What are the clinical findings contained in the medical record and how would these findings impact the employee's ability to function in her regular unrestricted occupation?," Dr. Payne stated:
(BPN 1032). Dr. Payne stated the following in the conclusion to his report:
(Id.).
On August 29, 2011, Sedgwick recorded the following entry in its claim notes regarding Plaintiff's second STD claim:
(BPN 351). On September 6, 2011, Sedgwick further noted:
(BPN 350-351).
The Administrative Record indicates that an employee from Sedgwick telephoned Plaintiff's counsel on September 20, 2011 and left a message that Plaintiff's second STD claim appeal had been denied on the basis that Plaintiff did not have a new condition. (BPN 348-349). Plaintiff's counsel denies receiving any such message. (Pl. SMF Response, ¶ 145). It is undisputed that Sedgwick failed to issue a formal letter regarding its appeal decision on Plaintiff's second STD claim. (Defs. SMF, ¶ 162; Pl. SMF Response, ¶ 162; Defs. Reply, p. 9).
On September 20, 2011, Sedgwick informed Plaintiff through her attorney that her appeal for LTD benefits had been denied. (BPN 1111-1113). The letter states that Plaintiff "was not disabled in excess of the [180 day] waiting period" required by the LTD Plan. (BPN 1111).
In December 2011, Plaintiff requested second level appeals of all three denied claims. (BPN 1120, 1143-1144). The second level appeals were referred to the UHG Disability Appeals Committee, which conducted a closed file review, wherein "only documents received during the initial claim review and first appeal review [were] considered." (BPN 1132, 1154).
UHG employee Becka Erickson summarized Plaintiff's appeals in the following internal email, dated February 16, 2012:
(BPN 1175). On February 20, 2012, Sedgwick sent Plaintiff's counsel a letter rejecting her second level appeal on the second STD benefits claim, stating in relevant part:
(BPN 1165). On the same date, Sedgwick sent Plaintiff's counsel a letter rejecting her second level appeal for LTD benefits, stating in relevant part:
(BPN 1164). On March 13, 2012, Plaintiff commenced this action seeking judicial review of the decisions by Sedgwick and UHG to deny her claims for STD and LTD benefits. (Dkt. No. 1-2).
Under Federal Rule of Civil Procedure 56(a), summary judgment may be granted only if all the submissions taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears the initial burden of demonstrating "the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323. A fact is "material" if it "might affect the outcome of the suit under the governing law," and is genuinely in dispute "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; see also Jeffreys v. City of New York, 426 F.3d 549, 553 (2d Cir. 2005) (citing Anderson). The movant may meet this burden by showing that the nonmoving party has "fail[ed] to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322; see also Selevan v. N.Y. Thruway Auth., 711 F.3d 253, 256 (2d Cir. 2013).
If the moving party meets this burden, the nonmoving party must "set forth specific facts showing a genuine issue for trial." Anderson, 477 U.S. at 248; see also Celotex, 477 U.S. at 323-24. The nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and cannot rely on "mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir.1986) (quoting Quarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985)). Furthermore, "[m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir.1995) (internal quotation marks and citations omitted)). When ruling on a summary judgment motion, "the district court must construe the facts in the light most favorable to the non-moving party and must resolve all ambiguities and draw all reasonable inferences against the movant." Dallas Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003).
"ERISA was enacted to promote the interests of employees and their beneficiaries in employee benefit plans, and to protect contractually defined benefits." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989). Plans must "provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant." 29 U.S.C. § 1133(1). Further, the Plan procedures must "afford a reasonable opportunity for a full and fair review" of adverse claim determinations. 29 U.S.C. § 1133(2). Full and fair review "requires that administrators follow proper procedural protocols in how they review claims, how much weight they assign different types of records, and how they reach decisions." Martucci v. Hartford Life Ins. Co., 863 F.Supp.2d 269, 274 (S.D.N.Y. 2012) (citing Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 86-87 (2d. Cir. 2009)). ERISA also provides a Plan beneficiary with a right to judicial review of a benefits termination. 29 U.S.C. § 1132(a)(1)(B). A claimant bears the burden of proving that she is eligible for disability benefits. Miles v. Principal Life Ins. Co., 720 F.3d 472, 488 (2d Cir. 2013) (citing Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 765 (2d Cir. 2002)).
"ERISA does not set out the appropriate standard of review for actions under §1132(a)(1)(B) challenging benefit eligibility determinations." Firestone Tire & Rubber Co., 489 U.S. at 109. Rather, the Supreme Court has held that a Plan Administrator's decision to deny benefits 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." Id., at 115. When the Plan gives the administrator discretionary authority, judicial review of the adequacy of a claim decision is limited to determining whether the decision was "arbitrary and capricious" or "an abuse of discretion." Id.
Here, the Plan expressly provides for discretionary authority: the Administrator "has the sole and exclusive authority and discretion to interpret the benefit plans' terms and benefits under them, and to make factual and legal decisions about them." (BPN 8, 128). However, Plaintiff argues that de novo review should apply because of: 1) an alleged conflict of interest between the Administrator and Payor of benefits; and 2) alleged procedural errors in the benefits decision and appeal process. (Pl. Br., pp. 20-21).
Plaintiff argues that "[a]n inherent conflict of interest exists between the Defendants since Sedgwick and UHC were both owned either wholly or in part by UHG and UHG self-funded the STD and first 24 months of benefits of the LTD Plans. Thus, monetary savings on denied disability claims financially benefited all." (Pl. Br., p. 20).
A structural conflict of interest exists where the evaluator and payor of benefit claims is the same party. In order to trigger de novo review of an administrator's discretionary decision, however, a Plaintiff alleging a conflict of interest "must show that the administrator was in fact influenced by the conflict of interest." Pulvers v. First UNUM Life Ins. Co., 210 F.3d 89, 92 (2d Cir. 2000) (citing Sullivan v. LTV Aero. & Defense Co., 82 F.3d 1251 (2d Cir. 1996)); see also Jennison v. Hartford Life & Accident Ins. Co., No. 10 Civ. 164, 2011 U.S. Dist. LEXIS 85623, at *20, 2011 WL 3352449, at *7 (N.D.N.Y. Aug. 3, 2011) ("[U]nless there is evidence that the decision was influenced by the conflict of interest, the standard of review remains arbitrary and capricious review.").
Here, Plaintiff argues that Sedgwick had an inherent conflict in evaluating her claims because Sedgwick was in part owned by UHG, the payor of those claims. (Pl. Br., p. 20). The record shows that in 2008, UHG "purchased a minority interest in Fidelity Sedgwick Holdings, Inc., the parent company of Sedgwick CMS." (Dkt. No. 98-5, p. 99). Plaintiff asserts that UHG exercised some control over Sedgwick's administrative decisions because "the STD and LTD Plan's second level appeals are determined by a three member UHG Appeal Committee comprised solely of UHG employees." (Pl. Br., p. 20). Defendants argue that there is no conflict of interest because Sedgwick is a "third-party administrator that is not responsible for payment of the benefit claims it administers." (Defs. Reply, p. 22).
While Plaintiff has made a superficial case for at least a minor conflict of interest, she has not adduced any evidence to show that Sedgwick was in fact influenced by the conflict. Accordingly, the Court will not apply de novo review on this basis. See Rivera v. Hartford Fire Ins. Co., 52 Fed. App'x. 551, 552 (2d Cir. 2002) (finding that District Court correctly declined to apply de novo review where Plaintiff "provided nothing more than conjecture and speculation" to support her allegation of conflict).
Plaintiff further argues that de novo review should apply based on several alleged procedural errors in Sedgwick's decision-making process: 1) Sedgwick issued an untimely decision on Plaintiff's first STD claim; 2) Sedgwick issued an untimely decision on Plaintiff's LTD claim; and 3) Sedgwick failed to issue a written denial letter regarding Plaintiff's first appeal of her second STD claim. (Pl. Br., pp. 19-20).
For Plaintiff's first STD claim, the record demonstrates that the letter denying her appeal was mailed on October 13, 2010 and received by Plaintiff on October 19, 2010. (BPN 322, 702). The Plan required Sedgwick to "notify" Plaintiff of its STD decision within forty-five days after receipt of her appeal. (Dkt. No. 90-2, p. 38). Since Plaintiff filed the appeal on August 29, 2010, Sedgwick had until October 13, 2010 to notify Plaintiff. Therefore, Sedgwick arguably complied with the forty-five day notification requirement, and at worst, was six days late.
As to Sedgwick's decision on Plaintiff's LTD appeal, the record shows that on August 5, 2011, forty-five days after Plaintiff appealed, Sedgwick notified her counsel by letter that a forty-five day extension was necessary to make a decision, as permitted by the Plan. (BPN 1098). On September 20, 2011, forty-five days later, Sedgwick denied Plaintiff's appeal. (BPN 1111-1113).
For Plaintiff's second STD claim, it is undisputed that Sedgwick failed to issue a written denial letter regarding her first appeal. (Defs. SMF, ¶ 162; Pl. SMF Response ¶ 162; Defs. Reply, p. 9). Plaintiff argues that de novo review should apply where the "administrator vested with discretion does not exercise that discretion and fails to issue a decision." (Pl. Br., p. 16) (citing Nichols v. Prudential Ins. Co. of America, 406 F.3d 98, 109 (2d Cir. 2005)). Defendants argue that the oversight stemmed from tangled communications with Plaintiff's counsel, and moreover, that the error did not prejudice Plaintiff because she still received effective notice. (Defs. Reply, pp. 14-15).
Sedgwick's failure to issue a written determination letter is a significant procedural error. Under ERISA, Sedgwick must provide written notice setting forth the specific reasons for a denied claim. See 29 U.S.C. § 1133(1). A brief voicemail message, assuming it was received,
Although it is a close question, the Court finds that Plaintiff has not shown sufficient grounds for de novo review. Given the lack of demonstrated prejudice from Sedgwick's failure to issue a formal determination letter, and at most, two minor departures from Plan deadlines, Sedgwick's decisions are entitled to Firestone deference. Despite several errors, Sedgwick still substantially complied with the Plan by exercising its discretion and making decisions at every stage of Plaintiff's claims. Thus, Plaintiff's reliance on Nichols v. Prudential Ins. Co., 406 F.3d 98 (2d Cir. 2005) is misplaced. There, the Plan Administrator failed to exercise its discretion and make a decision. As a result, there could be no review for abuse of discretion and de novo review was necessary. Id. at 109. Courts have generally limited Nichols' application to those cases in which an administrator fails entirely to issue a decision. See Wedge v. Shawmut Design & Constr. Group Long Term Disability Ins. Plan, No. 12 Civ. 5645, 2013 U.S. Dist. LEXIS 129119, at *24, 2013 WL 4860157, at *10 (S.D.N.Y. Sept. 10, 2013) ("It would turn Firestone on its head to conclude that any transgression — however minor or technical, and for whatever reason (including claimant-generated) — from ERISA's requirements resulted in wholesale forfeiture of a plan administrator's discretion."); see also Topalian v. Hartford Life Ins. Co., 945 F.Supp.2d 294, 337 (E.D.N.Y. 2013) ("[T]he weight of authority in the Second Circuit supports the application of arbitrary and capricious review where . . . the plan administrator remains in regular contact with the benefits claimant and issues a decision prior to the commencement of federal litigation.").
Accordingly, the Court reviews the decisions by Sedgwick and UHG to deny Plaintiff's claims for STD and LTD benefits under the arbitrary and capricious standard.
Under this standard of review, an administrator's decision should only be disturbed if it is "without reason, unsupported by substantial evidence or erroneous as a matter of law." Celardo v. GNY Auto. Dealers Health & Welfare Trust, 318 F.3d 142, 146 (2d Cir. 2003) (citing Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995)). In reviewing the administrator's decision deferentially, a district court must consider "whether the decision was based on a consideration of the relevant factors." Miller v. United Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995). Substantial evidence for the administrator's decision consists of "such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the [administrator and] . . . requires more than a scintilla but less than a preponderance." Celardo, 318 F.3d at 146 (citing Miller, 72 F.3d at 1072). The Plaintiff bears the burden of demonstrating that the denial of benefits was arbitrary and capricious. See Sharkey v. Ultramar Energy Ltd., 70 F.3d 226, 230 (2d Cir. 1995). "As applied to a motion for summary judgment, `the arbitrary and capricious standard requires that [the Court] ask whether the aggregate evidence, viewed in the light most favorable to the non-moving party, could support a rational determination that the plan administrator acted arbitrarily in denying the claim for benefits.'" Wedge v. Shawmut Design & Constr. Group Long Term Disability Ins. Plan, 23 F.Supp.3d 320, 333-334 (S.D.N.Y. 2014) (quoting Davis v. Commercial Bank, 275 F.Supp.2d 418, 425 (S.D.N.Y. 2003)).
The Court's review under the arbitrary and capricious standard is ordinarily limited to the Administrative Record. Miller, 72 F.3d at 1071; Zervos v. Verizon N.Y., Inc., 277 F.3d 635, 646 (2d Cir. 2002). However, the Court may within its discretion admit evidence outside the Administrative Record provided there is a showing of good cause. See Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008); Juliano v. Health Maint. Org. of N.J., Inc., 221 F.3d 279, 289 (2d Cir. 2000). Plaintiff argues that there is good cause for admitting evidence outside the Administrative Record for several reasons: 1) the alleged conflict of interest; 2) the alleged procedural errors in the claims determination process; and 3) the alleged incompleteness of the Administrative Record. (Pl. Br., pp. 17-18). While the first two reasons may support a finding of good cause, see Locher v. UNUM Life Ins. Co. of Am., 389 F.3d 288, 295 (2d Cir. 2004), the Court finds them insufficient in this case, for the reasons discussed supra in Part II(C).
Plaintiff alleges that the Administrative Record is incomplete because it is missing certain key documents including:
(Pl. Br., p. 18). An incomplete Administrative Record may constitute good cause for admitting additional evidence. Zervos, 277 F.3d at 646-647; Paese v. Hartford Life & Accident Ins. Co., 449 F.3d 435, 441 (2d Cir. 2006). However, the Court need not consider additional evidence "where a party fails to demonstrate, beyond mere speculation or conjecture, that the `administrative record is inadequate to conduct a proper review of the administrative decision.'" Hotaling v. Teachers Ins. & Annuity Ass'n of Am., 62 F.Supp.2d 731, 738 (N.D.N.Y. 1999) (quoting DeFelice v. Am. Int'l Life Assur. Co. of New York, 112 F.3d 61, 65 (2d Cir. 1997)).
Plaintiff has submitted a number of documents which she alleges should have been included in the Administrative Record or should be used to supplement it. (See Dkt. No. 98-5). However, the Court finds there is not good cause to consider any of these documents. First, the depositions of Plaintiff's doctors are outside the record that would have been available to Sedgwick or UHG, and therefore, have no bearing on the reasonableness of their decisions.
As to additional medical records allegedly sent to Defendants, the Court will not consider these records because there is no evidence that they were made available to Sedgwick or UHS. Plaintiff has submitted two records from Dr. Yovanoff that are not contained in the Administrative Record: an Attending Physician Statement prepared for and sent to Hartford Life Insurance Company on November 4, 2010, and an office note prepared and sent to Hartford on November 15, 2010. (Dkt. No. 98-5, pp. 73, 75). But Plaintiff has adduced no evidence that either document sent to Hartford was also sent to Defendants, and thus these documents have no bearing on the reasonableness of Defendants' decisions. Moreover, the Administrative Record contains several documents regarding Dr. Yovanoff's medical opinions that obviate the need for and probative value of the records sent to Hartford: 1) an APS dated January 7, 2011 (BPN 830-833); 2) an office note dated November 30, 2010 (BPN 838-839); and 3) an office note dated October 28, 2010 (BPN 840-842). Therefore, Plaintiff has not demonstrated that the Administrative Record is inadequate to conduct a proper review of Defendants' decisions. See Hotaling, 62 F. Supp. 2d at 738. Accordingly, the Court will not consider the medical records sent by Dr. Yovanoff to Hartford, or any other documents outside the Administrative Record.
In responding to Defendants' Statement of Undisputed Material Facts, Plaintiff repeatedly objects that the Claim Notes in the Administrative Record are not admissible as evidence of any statement or action made by Sedgwick employees in the claim determination process because those employees have not personally attested to the contents of the Claim Notes. (See, e.g., Pl. SMF Response, ¶ 38). As an initial matter, Plaintiff relies on the Claim Notes in her own motion. (See, e.g., Pl. Br., p 34 (citing BPN 252)). Moreover, there is no dispute that the Claim Notes are part of the Administrative Record, and thus are properly before the Court. Miller, 72 F.3d at 1071; see also King v. CIGNA Corp., No. 06 Civ. 6203, 2008 U.S. Dist. LEXIS 22992, at *13, 2008 WL 795823, at *5 (W.D.N.Y. Mar. 24, 2008) ("[T]he court is charged with reviewing the record before the plan administrator...not to determine whether or not the evidence before the administrator would or would not be admissible at trial.").
Before reviewing Defendants' decisions to deny Plaintiff disability benefits, the Court must decide Plaintiff's motion to strike. First, Plaintiff argues that the Affidavit of Sedgwick employee Jessica Brandhorst should be stricken in its entirety because it was untimely, and Ms. Brandhorst "does not attest to personal knowledge or how she gained knowledge of facts arising prior to July 2012" since she began employment at that time. (Pl. Br., pp. 13-14). As a general rule, the Court will not consider motion papers that are untimely unless good cause is shown. L.R. 7.1(b)(3). Here, Defendants filed the Brandhorst Affidavit two days after the June 30, 2014 deadline for summary judgment briefing. (Dkt. No. 94). Defendants attribute the delay to an additional review of the document by Sedgwick's internal legal office. (Defs. Reply, p. 6). Given the minor delay, the timely filing of the vast majority of Defendants' motion papers, and the lack of prejudice demonstrated by Plaintiff, the Court finds that there is good cause to consider the Brandhorst Affidavit. See LaVigna v. State Farm Mutual Auto. Ins. Co., 736 F.Supp.2d 504, 510 (N.D.N.Y. 2010) (considering reply memorandum law filed one day late under similar circumstances).
Contrary to Plaintiff's argument that Ms. Brandhorst lacks personal knowledge, her affidavit states that: "Through my duties in my current and prior positions with Sedgwick, I have become knowledgeable regarding Sedgwick's claim administration procedures, its electronic systems, as well as the manner in which administrative records are created and maintained before and after litigation." (Dkt. No. 94, ¶ 3). Thus, even if she was not employed at Sedgwick before 2012, Ms. Brandhorst has sufficient personal knowledge from her professional experience to attest to aspects of Sedgwick's claim administration process and electronics systems, and how Plaintiff's claims were stored and retrieved from those systems. Accordingly, Plaintiff's motion to strike is denied.
Second, Plaintiff argues that portions of the Affirmation of defense counsel William J. Anthony should be stricken along with certain exhibits appended thereto (Dkt. Nos. 89-3 to 83-6), for the reason that Mr. Anthony "does not affirm to personal knowledge, and does not offer how he obtained knowledge or came into possession of the documents he attaches as exhibits to his affirmation." (Pl. Br., pp. 14-15). As this Affirmation and the exhibits annexed thereto relate only to Plaintiff's dismissed employment claims against UHS, Plaintiff's motion to strike is denied as moot.
Upon reviewing the Administrative Record, the Court finds that Sedgwick's decision to deny Plaintiff's first STD claim, while initially arbitrary and capricious, was ultimately reasonable on appeal given the lack of evidence showing that Plaintiff had a clear diagnosis to explain her subjective symptoms.
When Plaintiff filed her claim on August 11, 2010, Sedgwick rushed to make a decision, before receiving relevant evidence. Sedgwick informed Plaintiff that it required supporting medical records, requested an APS and office notes from her doctor's office, and specified that these documents were due August 25, 2010.
On August 25, 2010, Sedgwick recorded the APS information, and then called Dr. Fishel and Dr. Huyck, leaving voicemail messages to call back or to fax treatment notes relating to Plaintiff immediately, since the "MDD is 8/25." (BPN 338). On August 27, 2010, without hearing from or receiving notes from either doctor, Sedgwick denied Plaintiff's claim, stating that the "medical information submitted does not demonstrate that you are unable to perform the material duties of your own occupation and/or that you are under the regular and appropriate care of a physician as required." (BPN 590). The only medical information Sedgwick cited in denying the claim was Dr. Fishel's APS from August 23, 2010. (Id.).
Under the Plan, Sedgwick had forty-five days to decide Plaintiff's disability claim, with the option to extend the review period for an additional forty-five days if Plaintiff failed to submit necessary information. (BPN 114-115). When Plaintiff filed her claim on August 11, 2010, Sedgwick set August 25, 2010 as the deadline for the submission of Plaintiff's medical information. Then Sedgwick decided the claim on August 27, 2010, a mere sixteen days after Plaintiff filed the claim, and before the expiration of the forty-five-day review period, despite recognizing, as demonstrated by its own requests, that it lacked necessary medical records from Dr. Fishel and Dr. Huyck. Thus, this decision was not supported by substantial evidence and constitutes an abuse of discretion.
Defendants do not address the propriety of the initial determination, instead arguing that Sedgwick's decision on Plaintiff's appeal, which ultimately denied her application for benefits, was reasonable based on the Administrative Record as a whole. (Defs. Br., p. 23). However, the Court considers initial determinations and appeal decisions under the arbitrary and capricious standard. See Miles, 720 F.3d at 487 (considering the administrator's initial and final decisions).
After Plaintiff appealed the initial determination, Sedgwick received medical records from Dr. Fishel and Dr. Huyck, both of whom expressed uncertainty in diagnosing the cause of Plaintiff's complaints of pain and fatigue. On August 3, 2010, Dr. Fishel examined Plaintiff and noted "[s]he has a longstanding history of chronic pain, mostly neck and in legs...Patient is not sure whether she has been given a formal rheumatologic diagnosis." (BPN 633). Dr. Fishel observed "Not clear whether she has a true connective tissue disorder or just osteoarthritis that's worsening," and his generic assessment was "719.49 Pain Joint Multiple Sites." (BPN 634). On August 6, 2010, he repeated the same assessment and observed that he did not think Plaintiff was "typical for fibromyalgia." (BPN 631). On August 27, 2010, Dr. Fishel again assessed that Plaintiff had joint pain and observed she "[c]ontinues with diffuse arthralgias and fatigue,
Dr. Huyck expressed similar uncertainty in his notes. On January 20, 2010, his impression was "[d]iffuse and somatic pain with mild defuse underlying osteoarthritis and spondylosis. The patient may well have predominantly a fibrositic syndrome." (BPN 608). On February 2, 2010, Dr. Huyck's impression was "[g]eneralized osteoarthritis, rule out possibly early inflammatory arthritis." (BPN 612). On April 1, 2010, Dr. Huyck noted "partial improvement in her generalized discomfort" due to medication and continued weakness," with an impression of "[h]istory of positive ANA and poly arthralgias." (BPN 613-614).
The picture that emerges from the medical records at this juncture is one of doctors struggling to identify the medical condition responsible for Plaintiff's subjective complaints of pain and fatigue. Sedgwick again asked Dr. Payne for an independent report. (BPN 651-655). Dr. Payne reviewed Plaintiff's records from Dr. Huyck and Dr. Fishel,
With no clear diagnosis from Plaintiff's doctors to explain her subjective complaints, Sedgwick reasonably relied on Dr. Payne's report and opinion that Plaintiff was not disabled. See Hobson v. Metro. Life Ins. Co., 574 F.3d 75, 88 (2d Cir. 2009) (The Administrator is "not required to accord the opinions of a claimant's treating physicians `special weight,' especially in light of contrary independent physician reports.") (citing Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003)); see also Tortora v. SBC Commc'ns, Inc., 739 F.Supp.2d 427, 446 (S.D.N.Y. 2010). In the denial letter, Sedgwick repeated Dr. Payne's conclusion that, "the medical information submitted does not demonstrate that [she] was unable to perform the material duties of [her] own occupation." (BPN 691-692). Given the absence of clear documentation of functional impairments and limitations due to a Medically Determinable Impairment, Sedgwick's denial of Plaintiff's first claim for STD benefits was not arbitrary and capricious.
Sedgwick's denial of Plaintiff's second STD claim, however, was arbitrary and capricious because it was not supported by substantial evidence: defendants failed to consider the opinions of Plaintiff's doctors, failed to consider Plaintiff's subjective complaints of disabling pain, and failed to provide adequate notice of information needed for Plaintiff's claim.
Plaintiff first received a tentative diagnosis of fibromyalgia on September 13, 2010, when Dr. Dorsey examined her and concluded "[s]he seems to definitely has [sic] fibromyalgia." (BPN 608, 774).
In its January 20, 2011 letter, Sedgwick stated two reasons for denying Plaintiff's second STD claim: 1) the "medical information submitted does not demonstrate that you are unable to perform the material duties of your own occupation," and 2) "you do not have a new Medical Condition as of 10/28/2010 as you had indicated." (BPN 880). As to the first reason, Sedgwick's claim notes reflect the internal view that Plaintiff failed to submit evidence of a valid fibromyalgia diagnosis, and therefore, her "medical [information] did not substantiate disability." (BPN 1175; see also BPN 380 ("[There is no support for that [fibromyalgia] diagnosis...the medical records continue to substantiate no functional deficit.")). However, Sedgwick's review of Plaintiff's records included only an APS and office notes from Dr. Yovanoff, an X-Ray report, and a telephone conversation with Dr. Yovannoff. (Id.). There is nothing in the record indicating that Sedgwick considered the APS and office notes from Dr. Dorsey, which contained a fibromyalgia diagnosis.
Sedgwick received an APS from Dr. Dorsey on January 7, 2011 listing one diagnosis for Plaintiff: fibromyalgia. (BPN 818). Dr. Dorsey stated that Plaintiff complained of pain and fatigue, and in the "Objective" supportive findings section, stated: "Tender points." (BPN 819). Dr. Dorsey concluded that Plaintiff could not work because of severe pain and fatigue and stated that she "must avoid lifting, bending, sitting, walking." (Id.). Sedgwick also had Dr. Dorsey's office note from September 13, 2010 stating that Plaintiff had pain and fatigue, and moreover, "she has tender points. She seems to definitely has [sic] fibromyalgia." (BPN 774). Thus, Sedgwick was aware that Plaintiff had a fibromyalgia diagnosis, and exam findings of tender points—which were specifically cited by Sedgwick in the claim notes as one of the criteria for diagnosing fibromyalgia.
Nothing in the Administrative Record suggests that Sedgwick considered Dr. Dorsey's APS or notes; it instead focused entirely on Dr. Yovanoff's failure to diagnose fibromyalgia. On January 14, 2011, the NCM reviewed Dr. Yovanoff's medical records and noted "the diagnosis of fibromyalgia is never once mentioned," and therefore, "there is no support for that diagnosis." (BPN 379-380). The NCM asked Dr. Yovanoff if he had diagnosed Plaintiff with fibromyalgia, and he stated no, "[t]he diagnosis is chronic fascial pain syndrome." (BPN 373). The NCM did not mention Dr. Dorsey's APS and notes in her review, and there is no indication that she made any attempt to speak with her on the telephone regarding her opinion, even though she had made a diagnosis of fibromyalgia with supporting tender points findings.
While "ERISA Plan administrators need not give special deference to a claimant's treating physician," they "may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Paese, 449 F.3d at 442 (citing Black & Decker Disability Plan, 538 U.S. at 834). "An administrator may, in exercising its discretion, weigh competing evidence, but it may not...cherry-pick the evidence it prefers while ignoring significant evidence to the contrary." Winkler v. Metro. Life Ins. Co., 170 Fed. App'x. 167, 168 (2d Cir. 2006); see also Ricca v. Prudential Ins. Co. of Am., 747 F.Supp.2d 438, 445 (E.D. Pa. Sept. 30, 2010) ("An administrator may not selectively consider and credit medical opinions without articulating its thought processes for doing so.").
Defendants' current critique of Dr. Dorsey and the accuracy of her diagnosis, Defs. Br. at pp. 35-36, is beside the point; Plaintiff was entitled to, but did not receive, consideration of Dr. Dorsey's fibromyalgia diagnosis with respect to Plaintiff's second STD claim. The Administrative Record reveals no consideration; instead Sedgwick only considered Dr. Yovanoff's opinion and used it as the exclusive basis for the initial decision to deny the claim. Therefore, this decision was arbitrary and capricious because it was not based on relevant factors and substantial evidence.
Nor does Sedgwick's second reason for denying Plaintiff's second STD claim provide a reasonable basis for its decision. Although Sedgwick stated that Plaintiff did not have a new Medical Condition, it did not consider Dr. Dorsey's APS and notes in reaching that conclusion, and thus ignored Plaintiff's fibromyalgia diagnosis. Defendants now argue that Plaintiff should have submitted Dr. Dorsey's September 13, 2010 office note, which stated that Plaintiff "seems to definitively have fibromyalgia," in connection with her first STD claim, and Plaintiff was therefore precluded from making a second STD claim based on fibromyalgia. (Defs. Br., pp. 42-43). But that reason was never articulated by Sedgwick, and any after-the-fact rationale is not relevant to reviewing the Administrator's decision. See Martin v. Hartford Life & Accident Ins. Co., 478 Fed. App'x. 695, 698 (2d Cir. 2012); Curry v. Am. Int'l Group, Inc. Plan No. 502, 579 F.Supp.2d 413, 422 (S.D.N.Y. 2008).
It is undisputed that Sedgwick failed to issue a formal letter regarding its appeal decision, as expressly required by ERISA and the Plan. See 29 U.S.C. § 1133(1) (the Plan shall "provide adequate notice in writing . . . setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant."); BPN 231 ("The Claims Administrator will respond in writing...to all claims, whether the claim is granted or denied). Therefore, Plaintiff was not afforded adequate notice of the reasons for the denial of her appeal. This failure alone renders Sedgwick's decision to deny Plaintiff's appeal arbitrary and capricious. See Hobson, 574 F.3d at 87; see also Dzidzovic v. Bldg. Serv. 32B-J Health Fund, No. 02 Civ. 6140, 2006 U.S. Dist. LEXIS 55546, at *30, 2006 WL 2266501, at *11 (S.D.N.Y. Aug. 7, 2006) (finding Administrator's "failure to provide adequate notice under ERISA, and the consequent failure to afford plaintiff a `full and fair review' of the decision to deny benefits, was arbitrary and capricious as a matter of law.").
Sedgwick's rationale for its decision, which was captured in the claim notes and allegedly communicated to Plaintiff by telephone, also demonstrates that the denial of Plaintiff's appeal was arbitrary and capricious. Plaintiff's attorney initiated the appeal on June 22, 2011, writing that the "basis of this appeal is that Ms. Delprado is diagnosed with fully disabling and debilitating fibromyalgia." (BPN 938). The appeal pointed out that Dr. Dorsey had diagnosed fibromyalgia, and that Sedgwick's "January 20, 2011 denial makes no reference to Dr. Dorsey's records." (BPN 939). The appeal also enclosed an additional office note from Dr. Dorsey repeating the diagnosis, as well as a report from Dr. Prezio diagnosing fibromyalgia after an independent medical examination for the Social Security Administration. (Id.).
In reviewing the appeal, Sedgwick sought to "determine if [employee] satisfies eligibility requirements based on [employee]'s reports of new diagnosis and, if so, if medical supports disability." (BPN 311). Sedgwick obtained another peer review from Dr. Payne, this time based on records including notes and reports from Dr. Dorsey, Dr. Prezio, Dr. Huyck, Dr. Fishel, and Dr. Yovanoff. (BPN 1030). In his synopsis, Dr. Payne wrote that Plaintiff had a "history of fibromyalgia that was initially diagnosed in the fall of 2009." (BPN 1031). Dr. Payne does not state who allegedly diagnosed Plaintiff with fibromyalgia in the fall of 2009. (See id.). As previously noted, there is nothing in the record that supports this assertion; Dr. Payne did not even review any records from 2009 in preparing his report. (BPN 1030). It appears to be a typographical error since Plaintiff's first diagnosis of fibromyalgia was in the fall of 2010.
Sedgwick seized on Dr. Payne's erroneous assertion that Plaintiff had a fibromyalgia diagnosis since the fall of 2009, and rejected Plaintiff's appeal on a technicality—that it was not a new condition—instead of reviewing the merits of her claim.
Thus, having re-opened the claim specifically to consider a fibromyalgia diagnosis, Sedgwick refused to evaluate whether Plaintiff was disabled due to fibromyalgia. Instead, Sedgwick denied the claim based solely upon Dr. Payne's erroneous assertion that "fibromyalgia was initially diagnosed in the fall of 2009." (BPN 1031). Defendants continue to rely on this error, arguing in their brief that since Plaintiff had fibromyalgia since 2009, her medical condition for the second STD claim was the same as her medical condition in the first STD claim where she had already lost her appeal, and therefore, she was not entitled to a "second bite at the apple." (Defs. Br., p. 43).
Plaintiff, however, did not have a fibromyalgia diagnosis when she filed her first STD claim in August 2010; that claim was reviewed for the diagnoses of "osteoarthritis, depression, hypertension and elevated cholesterol." (BPN 399). Because Sedgwick relied on a factual premise that was not supported by substantial evidence to deny Plaintiff's claim, the Court concludes that the denial on appeal was arbitrary and capricious.
Plaintiff's second level appeal was referred to the UHG Disability Appeals Committee, which upheld the denial on February 20, 2012, concluding that the "SPD and the STD claim process were followed and that there is no basis to overturn the previous decisions." (BPN 1165). Defendants argue that the denial was based on an "administrative issue," and "was not determined on the merits of whether or not Plaintiff was functionally disabled." (Defs. Br., p. 44). However, the record shows that the Committee made the decision based on both the merits of Plaintiff's second STD claim, and also the technicality that it was not a new claim:
(BPN 1175) (emphasis added).
As explained supra in Part III(B)(3)(b), the technical violation which barred Plaintiff's claim was based on erroneous information. Therefore, the decision to uphold denial on that basis was also arbitrary and capricious.
On the merits, it appears that the Committee adopted Dr. Payne's conclusion that although Plaintiff did have fibromyalgia, she was not disabled because "there no findings that support any impairment in functionality" that prevented her from doing her job. (BPN 1032). Plaintiff argues that the Committee's reliance on Dr. Payne's report was arbitrary and capricious. (Pl. Br., p. 43). The Court finds that the Committee's decision to ultimately deny Plaintiff benefits for her second STD claim was unreasonable for several reasons.
In making its decision, the Committee had opinions from three different doctors who examined Plaintiff and stated that she was disabled. Dr. Dorsey's APS diagnosed fibromyalgia and stated that she was totally disabled. (BPN 819-820). For the "Objective" supportive findings, which included physical examination results and test results, Dr. Dorsey listed "Tender points." (BPN 819). In response to the question "How does this affect the patient's ability to work?", Dr. Dorsey stated: "Severe Pain. She gets fatigued. Must avoid lifting, bending, sitting, walking." (Id.). Thus, according to Dr. Dorsey, Plaintiff could not perform the sedentary duties of a Case Manager because the pain and fatigue prevented her from even sitting to do her job.
Dr. Yovanoff had also provided an APS stating that Plaintiff was totally disabled. (BPN 832). While Dr. Yovanoff did not diagnose fibromyalgia, he stated unequivocally to Sedgwick's NCM that he "believes the [employee] is disabled because of pain because she states she is disabled." (BPN 373). Dr. Yovanoff further stated that Plaintiff was unable to concentrate due to the pain. (Id.).
The Committee also had the report from Dr. Prezio, who found Plaintiff disabled due to fibromyalgia. (BPN 968-971). Dr. Prezio's physical exam noted trigger points "throughout all the major muscle groups, and "[w]ith each maneuver there is increased pain and sensitivity noted in the muscle groups and in the joints." (BPN 970). He concluded that Plaintiff had "mild restriction for prolonged standing, walking, squatting, kneeling, heavy lifting or bending because of the fibromyalgia complaints present at this time." (BPN 971). The fact that Plaintiff's doctors relied upon her subjective complaints does not undermine their opinions about her functional limitations, as a "patient's report of complaints, or history, is an essential diagnostic tool." Green-Younger v. Barnhart, 335 F.3d 99, 107 (2d. Cir. 2003) (citation omitted).
Administrators may not arbitrarily refuse to credit reliable evidence, including the opinions of treating physicians. Paese, 449 F.3d at 442 (citing Black & Decker Disability Plan, 538 U.S. at 834). Moreover, findings by the Social Security Administration, such as Dr. Prezio's report, may be considered when determining disability under ERISA. Durakovic v. Bldg. Serv. 32 BJ Pension Fund, 609 F.3d 133, 141 (2d Cir. 2010); see also Hobson, 574 F.3d at 92 ("encourage[ing] plan administrators, in denying benefits claims, to explain their reasons for determining that claimants are not disabled where the SSA arrived at the opposite conclusion"). While the opinions of treating physicians and SSA findings are accorded no special weight, they cannot be disregarded completely.
The only evidence contrary to these examining doctors' opinions was Dr. Payne's report. Although Dr. Payne reviewed the records of Dr. Yovanoff, Dr. Dorsey, and Dr. Prezio, all of whom examined Plaintiff and opined that she suffered from debilitating pain and fatigue, there is no indication that he considered their opinions that she was disabled; rather, his report is founded on an alleged absence of evidence. Dr. Payne did not examine Plaintiff, and his analysis of her medical records was incomplete and fundamentally flawed, as discussed supra in Part III(B)(3)(b). Therefore, his report does not constitute substantial evidence for the Committee's decision. See Novick v. Metro. Life Ins. Co., 914 F.Supp.2d 507, 526 (S.D.N.Y. 2012) (finding that Administrator's decision was not based on substantial evidence where it "chose to rely on conclusions reached by Dr. Payne, a doctor who never examined [claimant] and whose opinion was founded on an absence of record evidence, even though [her] treatment physicians who offered opinions as to whether or not she was disabled, concluded that she was in fact disabled."). In the absence of substantial evidence, the Committee's decision to affirm the denial of STD benefits was arbitrary and capricious.
Plaintiff argues that Sedgwick failed to consider her subjective complaints of disabling pain and fatigue throughout the decision and appeal process. (See Pl. Br., pp. 37, 44). While Dr. Payne references these symptoms, there is no evidence that he considered the symptoms in assessing whether she was disabled. Dr. Payne noted exam findings of tender points and "mention of diffuse and chronic pain," but then stated that her physical exam findings were essentially normal, and concluded "there is no evidence in the provided medical information of restrictions or limitations from a rheumatology viewpoint." (BPN 1031-32). Much the same, when Sedgwick initially denied Plaintiff's second STD claim, the denial rationale stated, among other things, that Dr. Yovanoff "stated her subjective complaints of pain is [sic] what is preventing her from performing her sedentary (work at home) duties of a case manager. No objective findings to support what she cannot perform sedentary duties." (BPN 368-369). There is nothing in the record adopted by the Committee that explains why Plaintiff's subjective complaints were rejected.
However, it is well established that "the subjective element of pain is an important factor to be considered in determining disability." Connors v. Conn. Gen. Life Ins. Co., 272 F.3d 127, 136 (2d Cir. 2001) (quoting Mimms v. Heckler, 750 F.2d 180, 185 (2d Cir. 1984)). An Administrator "must do more than simply point to the subjective nature of the evidence when denying [a] claim. It must either assign some weight to the evidence or provide a reason for its decision not to do so." Miles, 720 F.3d at 487. "[I]t is arbitrary and capricious to disregard evidence simply because it is subjective." Id. at 486; see also Thurber v. Aetna Life Ins. Co., 712 F.3d 654, 660 (2d Cir. 2013) (noting that the plan administrator must give "sufficient attention to. . . subjective complaints"); Krizek v. Cigna Grp. Ins., 345 F.3d 91, 101-02 (2d Cir. 2003) (noting that it is error to reject subjective evidence simply because it is subjective); Marcus v. Califano, 615 F.2d 23, 27 (2d Cir. 1979) ("[T]he subjective evidence of appellant's pain, based on her own testimony and the medical reports of examining physicians, is more than ample to establish her disability, if believed.").
Subjective evidence is important in evaluating fibromyalgia because its chief symptoms of pain and fatigue are difficult to objectively measure. In Green-Younger, for example, an Administrative Law Judge recognized a plaintiff's fibromyalgia diagnosis, but rejected her disability claim based on the lack of objective evidence of functional limitations. 335 F.3d at 108. After the district court affirmed, the Second Circuit reversed, finding that fibromyalgia eludes objective measurement:
Id., at 108-109; see also Lanoue v. Prudential Ins. Co. of Am., No. 07 Civ. 1756, 2009 U.S. Dist. LEXIS 95086, at *12, 2009 WL 3157545, at *5 (D. Conn. Sept. 25, 2009) (noting that administrator's "insistence on objective evidence of functional deficits unrelated to debilitating pain meant that [administrator] could never determine, on the basis of fibromyalgia alone, that [claimant] was disabled"); Somogy v. Comm'r of Soc. Sec., 366 Fed. App'x. 56, 64 (11th Cir. 2010) ("Given the nature of fibromyalgia, a claimant's subjective complaints of pain are often the only means of determining the severity of a patient's condition and the functional limitations caused thereby.").
The Committee erred in its decision by disregarding Plaintiff's subjective symptoms of disabling pain and fatigue, without providing any reason for that decision. See Miles, 720 F.3d at 486; Thurber, 712 F.3d at 660; Lanoue, 2009 U.S. Dist. LEXIS 95086, at *18, 2009 WL 3157545, at *7. Accordingly, the Committee's ultimate decision to reject Plaintiff's second STD claim on the merits, without addressing her subjective symptoms relating to fibromyalgia, was arbitrary and capricious.
Moreover, even assuming arguendo the Committee reasonably adopted Dr. Payne's opinion that Plaintiff failed to show objective findings of functional impairment, Plaintiff never received specific notice of this requirement at any stage of her case. The Second Circuit has explained ERISA's notice requirements as follows:
Hobson, 574 F.3d at 87. The purpose of the notice requirement is to "provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts." Id. (citing Juliano v. Health Maint. Org. of NJ, 221 F.3d 279, 287 (2d Cir. 2000)). In Hobson, the Court found that the Administrator "acted within its discretion in requiring some objective evidence that [claimant] was disabled from performing in a sedentary capacity," where it had previously been specifically requested. Id. at 88.
In contrast, Plaintiff never received any specific request for evidence of functional impairment. On December 30, 2010, the NCM noted that Plaintiff's available medical records "document subjective complaints of chronic pain and fatigue without any objective findings such as muscle atrophy, muscle spasm, sensory or strength loss, range of motion deficits, abnormal movement or any objective findings to substantiate any functional disability." (BPN 395). But the denial letter on January 20, 2011 simply stated that "the medical information submitted does not demonstrate that you are unable to perform the material duties of your own occupation." (BPN 880). And when Sedgwick advised Plaintiff via telephone on January 21, 2011 that it could not authorize benefits, Plaintiff was only told that the medical records did not support a fibromyalgia diagnosis. (BPN 367-368). Therefore, when she appealed, Plaintiff included those records supporting her fibromyalgia diagnosis. (BPN 938). Since the second level appeal was a closed file review, Plaintiff could not submit any additional medical records.
Without specific notice requesting evidence of functional impairment, Plaintiff had no opportunity to perfect her claim and prepare for administrative review. While Dr. Payne found "no evidence of synovitis, weakness, or atrophy," and stated that there were "no physical findings reported that would support any impairment in functionality" (BPN 1032), and the Committee adopted his conclusions, Sedgwick did not notify Plaintiff that such exam findings were necessary. Accordingly, the Committee's ultimate decision to deny benefits, without providing adequate notice of the evidence required, was unreasonable and constitutes an abuse of discretion. See Novick, 914 F. Supp. 2d at 526 ("if [the Administrator] desired specific testing or analysis as to functional impairment, it should have said so.").
Since the decision that Plaintiff was not disabled under her second STD claim for fibromyalgia was arbitrary and capricious, the decision to deny her contingent LTD claim was also unreasonable. Sedgwick initially denied Plaintiff's LTD claim on the basis that she did not qualify for LTD benefits because she had "not satisfied the waiting period" required by the Plan and defined as the "180 calendar day period of time that starts on the first day as of which the Claims Administrator [determines] that you are disabled." (BPN 934-935). Sedgwick denied Plaintiff's appeal on the same basis that she "was not disabled in excess of the waiting period." (BPN 1111). The Committee's denial of Plaintiff's second level LTD appeal simply stated that there was "no basis to overturn the previous decisions." (BPN 1164). Thus, the decision was predicated on the fact that the Administrator never determined that Plaintiff was disabled for STD benefits, which was a condition precedent for LTD benefits.
The LTD Plan states it "pays benefits only if the Claims Administrator determines that you are Disabled, are receiving the Regular and Appropriate Care of a Physician and have satisfied the LTD Waiting Period." (BPN 79, 196). Plaintiff argues that the LTD Plan does not require a claimant to have a STD claim approved, and therefore, that Defendants also erred in not making a separate assessment of her disability on the merits for the LTD claim. (Pl. Br., p. 46). However, the LTD Plan makes clear that the 180 day LTD Waiting Period is co-extensive with the maximum 180 day STD period of benefits, and that the Claims Administrator must first determine disability in the context of an STD claim. (See BPN 82, 94, 199, 212 (discussing transition from STD to LTD benefits)). The decision to deny Plaintiff's LTD claim based on the waiting period requirement was arbitrary and capricious because Defendants' errors in deciding Plaintiff's underlying STD claim, discussed supra in Part III(B), prevented her from possibly satisfying the condition precedent of being found disabled for 180 days. See Novick v. Metro. Life Ins. Co., 764 F.Supp.2d 653, 665 (S.D.N.Y. 2011) ("It is well-settled law that `a condition precedent may be excused if the party whose performance is predicated on that condition somehow blocks its occurrence.'") (quoting Cross & Cross Properties, Ltd. v. Everett Allied Co., 886 F.2d 497, 501 (2d Cir. 1989)); see also Duarte v. Aetna Life Ins. Co., No. 13 Civ. 0492, 2014 U.S. Dist. LEXIS 59532, at *26, 2014 WL 1672855, at *10 (C.D. Cal. Apr. 24, 2014) (finding error in Administrator's decision to deny LTD benefits based on plaintiff's failure to satisfy waiting period where it improperly decided plaintiff's underlying STD claim).
Although Sedgwick made many of the decisions regarding Plaintiff's claims for benefits, Defendants argue that Sedgwick cannot be liable under ERISA because it is a claims administrator for UHG, and not the Plan Administrator ultimately responsible for the benefits. (Defs. Br., p. 48). Under the Plan, UHG is the named Plan Administrator, and it delegated its authority to determine claims to Sedgwick for STD benefits and for the first twenty-four months of LTD benefits. (Defs. SMF, p. 10, ¶¶ 11, 20). Since Sedgwick is only the claims administrator, this Court previously held that it could not be found liable under 29 U.S.C. § 1132(c)(1)(B) because the Plan designated UHG and not Sedgwick as the Plan Administrator. (Dkt. No. 33, p. 11). For the same reasons, Sedgwick cannot be liable under § 1132(a)(1)(B) because only ERISA plans, plan trustees, and plan administrators may be sued for recovery of benefits. See Chapman v. Choicecare Long Island Disability Plan, 288 F.3d 506, 509 (2d Cir. 2002); Leonelli v. Pennwalt Corp., 887 F.2d 1195, 1199 (2d Cir. 1989) ("In a recovery of benefits claim, only the plan and the administrators and trustees of the plan in their capacity as such may be held liable"); Fredericks v. Hartford Life Ins. Co., 488 F.Supp.2d 210, 212 (N.D.N.Y. 2007).
Plaintiff argues that although Sedgwick is not liable for benefits, "it would be liable as the claims administrator for attorneys' fees, costs and disbursements awarded in this action since it was Sedgwick's decision making and arbitrary choices that resulted in this action." (Pl. Br., p. 50). However, Plaintiff cites no authority for this proposition, and it would be illogical to allow recovery for attorneys' fees against an entity that is not liable for recovery of benefits under ERISA, and therefore, not a proper party. The ERISA statute states: "In any action under this title...by a participant, beneficiary, or fiduciary, the court in its discretion my allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132(g)(1). Since Sedgwick is not a proper party, it cannot be liable for attorneys' fees. Plaintiff also argues that Sedgwick is "subject to declaratory direction by the Court to render decisions under the terms of each Plan with or without remand." (Pl. Br., p. 50). However, the Court will not issue a declaratory judgment, as discussed infra, and UHG is the party responsible for ultimately paying benefits.
Defendants have moved for summary judgment against Plaintiff's claims for declaratory relief (Counts X-XII of the Amended Complaint), arguing that the "DJA Counts are essentially duplicative and superfluous of the direct, coercive claims [for civil enforcement under ERISA] already asserted and extant in this litigation." (Defs. Br., p. 51). Plaintiff did not respond to this argument in her cross-motion for summary judgment, but repeated her request for declaratory judgment. (Pl. Br., p. 4). The Court finds that Plaintiff's case is not suitable for declaratory relief given the more appropriate remedy of direct civil enforcement and recovery of benefits, specifically provided by ERISA and sought in this action.
The gravamina of this case are Plaintiff's ERISA claims to recover STD and LTD benefits under 29 U.S.C. § 1132(1)(B). (See Counts I-III of the Amended Complaint, Dkt. No. 11, ¶¶ 154-162). Since it is necessary for the Court to resolve the rights and obligations of the parties to render a summary judgment decision on Plaintiff's claims to recover benefits, Plaintiff's claims for declaratory judgment are duplicative and superfluous. The basic purpose of declaratory judgment is to resolve the rights and obligations of parties "in cases involving an actual controversy that not reached the stage at which either party may seek a coercive remedy, or in which the party entitled to such a remedy fails to sue for it." United States v. Doherty, 786 F.2d 491, 498 (2d Cir. 1986) (citation omitted). Here, Plaintiff has already sought a coercive remedy, and therefore, her claims for declaratory relief are dismissed as duplicative and moot. See GMC v. Dealmaker, LLC, No. 07 Civ. 141, 2007 U.S. Dist. LEXIS 62383, at *10, 2007 WL 2454208, at *4 (N.D.N.Y. Aug. 23, 2007) (dismissing declaratory judgment claim where claim "seeking a declaration that the Agreement was breached is duplicative of this breach of contract claim.").
The Court finds that there is no issue of fact that Defendants' decision to deny Plaintiff's first STD claim was reasonable based on Plaintiff's unclear diagnosis at the time. However, there is also no issue of fact that Defendants' decision to deny Plaintiff's second STD claim was arbitrary and capricious. After Plaintiff was diagnosed with fibromyalgia and filed her second STD claim, Defendants committed myriad errors in making their decision, including not properly considering her subjective symptoms of pain and fatigue and the opinions of the doctors who examined her that she was disabled, relying on the flawed report of Dr. Payne, failing to issue a formal determination letter regarding her appeal, and failing to provide adequate notice of what information was necessary to show disability due to fibromyalgia.
There is also no issue of fact that Defendants' decision to deny Plaintiff's LTD claim was arbitrary and capricious. Defendants rejected the claim on the basis that she had not satisfied the required waiting period, and therefore, the claim was never considered on the merits. The decision was unreasonable because Defendants' own errors in deciding Plaintiff's underlying second STD claim prevented her from possibly satisfying the condition precedent of being found disabled for 180 days. Accordingly, Plaintiff's medical records were never evaluated to determine whether they documented continued disability after the waiting period, and Plaintiff never had the opportunity to present additional records showing continuing disability.
Plaintiff requests an award of STD and LTD benefits. That relief, however, is not warranted at this time. Second Circuit precedent "makes clear that even where we conclude a plan administrator's finding was arbitrary and capricious, we will typically not substitute our own judgment, but rather will return the claim for reconsideration unless we `conclude that there is no possible evidence that could support a denial of benefits.'" Miles, 720 F.3d at 490 (quoting Miller, 72 F.3d at 1074); see also Novick, 914 F. Supp. 2d at 528 ("It is not the task of the federal district courts [to] function as substitute plan administrators.").
Although the decisions by Defendants to deny Plaintiff's second STD claim and LTD claim were arbitrary and capricious, remand is necessary for Defendants to properly administer the Plan and fairly evaluate these claims based on all the medical records Plaintiff provided and any other relevant evidence. Due in part to Defendants' flawed decision-making process, the existing record does not contain sufficient evidence to properly assess Plaintiff's eligibility for STD and LTD benefits. Thus, the Court cannot conclude that "no new evidence could produce a reasonable conclusion permitting denial of the claim or remand would otherwise be a useless formality." Miller, 72 F.3d at 1071 (internal quotations omitted).
Remand will afford Defendants the opportunity to consider all the relevant evidence under the appropriate standards. Defendants may choose to examine Plaintiff, and Plaintiff may supplement her medical records with any additional evidence relevant to her claims. See Miller, 72 F.3d at 1074 (remanding for reconsideration based on additional evidence presented by both sides); Magee v. Metro. Life Ins. Co., 632 F.Supp.2d 308, 322 (S.D.N.Y. 2009) ("To insure effective review, Magee may supplement his file with any additional evidence and MetLife shall treat Magee's claim as a new claim affording no deference to the initial adverse determination."); Maida v. Life Ins. Co. of N. Am., 949 F.Supp. 1087, 1093 (S.D.N.Y. 1997) (remanding for reconsideration based on examination of claimant and additional evidence).
Defendants are reminded that a benefit determination is a fiduciary act, and they owe plan beneficiaries "a special duty of loyalty." Miles, 720 F.3d at 490 (citing Glenn, 554 U.S. at 111). "This duty requires [the Plan Administrator] to interpret and apply plan terms `solely in the interest of the participants and beneficiaries and . . . for the exclusive purpose of . . . providing benefits to participants and their beneficiaries.'" Id. (quoting 29 U.S.C. § 1104(a)(1)(A)(i). On remand, Defendants "may not adopt an adversarial approach toward [Plaintiff] in the benefits determination." Id. Defendants shall provide a full and fair consideration of Plaintiff's claims.
The Court declines to order the matter stayed and retain jurisdiction during the remand. However, Plaintiff may move to re-open this action for further relief, if it becomes necessary, without having to pay new filing fees. See LeClair v. Liberty Life Assur. Co., No. 12 Civ. 6066, 2013 U.S. Dist. LEXIS 93049, at *11, 2013 WL 3338685, at *4 (W.D.N.Y. July 2, 2013); Rankins v. Long Term Disability Plan for Emps. of the Franklin Ins. Co., 6 F.Supp.2d 988, 992 (C.D. Ill. 1998).
Plaintiff also seeks an award of attorneys' fees under § 29 U.S.C. 1132(g)(1), which grants the Court discretion to award "reasonable attorneys' fees" in ERISA actions. The Supreme Court has held that attorneys' fees in ERISA cases may only be awarded to a beneficiary who has obtained "some degree of success on the merits." Hardt v. Reliance Std. Life Ins. Co., 560 U.S. 242, 245 (2010) (citation omitted). Under Second Circuit precedent, the Court may also consider the following factors:
Donachie v. Liberty Life Assur. Co., 745 F.3d 41, 46 (2d Cir. 2014) (citing Hardt, 560 U.S. at 249 n.1). In this case, even though Plaintiff is not entitled to summary judgment, she has obtained some degree of success on the merits in showing Defendants' decisions on her second STD claim and LTD claim to be arbitrary and capricious and requiring remand. See Winkler v. Metro. Life Ins. Co., No. 03 Civ. 9656, 2006 U.S. Dist. LEXIS 70180, at *12, 2006 WL 2850247, at *3 (S.D.N.Y. Sept. 28, 2006) ("Attorneys' fees in ERISA cases are not granted based on counsel's efforts to obtain disability benefits before a plan administrator, but based on their efforts to vindicate their clients' rights in court."); see also Strope v. Unum Provident Corp., No. 06 Civ. 628, 2010 U.S. Dist. LEXIS 117877, at *6-7, 2010 WL 4451548, at *2 (W.D.N.Y. Nov. 4, 2010) (collecting cases where attorneys' fees were awarded after claimant obtained remand).
The Court finds that all five of the factors identified by the Second Circuit weigh in Plaintiff's favor. Defendants wrongfully denied Plaintiff the opportunity for a full and fair review, forcing her to bring the present lawsuit. The nature of Defendants' arbitrary and capricious conduct, including Sedgwick's refusal to consider Plaintiff's fibromyalgia claim on the erroneous, technical ground that it was not a new diagnosis and then failure to even issue a written appeal decision, weighs in favor of granting Plaintiff's request for attorneys' fees. Considering the cumulative errors of Defendants in processing Plaintiff's claims, the relative merits of the parties' positions are little in doubt. Defendants should be able to satisfy the award, and requiring them to do so may encourage better compliance with ERISA, thus conferring a benefit on future claimants. Therefore, Plaintiff is entitled to an award of attorneys' fees and costs expended in furtherance of her second claim for STD benefits and her claim for LTD benefits up to and including the date of this opinion. See Magee, 632 F. Supp. at 322. In the event the parties cannot agree on reasonable attorneys' fees, Plaintiff shall submit an application to the Court with sufficient documentation to determine the amount of the award.
For convenience, Defendants' Supporting Memorandum of Law (Dkt. No. 89-1) will be referred to as "Defs. Br."; Plaintiff's Memorandum of Law (Dkt. No. 98-1) as "Pl. Br."; Defendants' Reply Memorandum (Dkt. No. 104) as "Defs. Reply"; and Plaintiff's Response to Defendants' Reply (Dkt. No. 107) as "Pl. Response." Unless otherwise noted, all citations to the parties' submissions reference the page numbers generated and marked by the ECF system.
http://www.rheumatology.org/Practice/Clinical/Patients/Diseases_And_Conditions/Antinuclear_Antibodies_(ANA)/ (last visited April 16, 2015). These antibodies target "normal" proteins within the nucleus of a cell and could signal the body to begin attacking itself, which can lead to autoimmune diseases. A positive ANA test means only that the antibodies are present, not necessarily that the disease is present. Id.
