Filed: Jan. 05, 2017
Latest Update: Mar. 03, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-2105 STEPHEN WILKINSON, Plaintiff - Appellee, v. SUN LIFE AND HEALTH INSURANCE COMPANY, d/b/a Sun Life Financial, Defendant - Appellant, and DOLAN & TRAYNOR, INC. EMPLOYEE HEALTH AND WELFARE BENEFIT PLAN, Defendant. Appeal from the United States District Court for the Western District of North Carolina, at Statesville. Richard L. Voorhees, District Judge. (5:13-cv-00087-RLV-DCK) Argued: October 27, 2016 Decided: January 5,
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 15-2105 STEPHEN WILKINSON, Plaintiff - Appellee, v. SUN LIFE AND HEALTH INSURANCE COMPANY, d/b/a Sun Life Financial, Defendant - Appellant, and DOLAN & TRAYNOR, INC. EMPLOYEE HEALTH AND WELFARE BENEFIT PLAN, Defendant. Appeal from the United States District Court for the Western District of North Carolina, at Statesville. Richard L. Voorhees, District Judge. (5:13-cv-00087-RLV-DCK) Argued: October 27, 2016 Decided: January 5, 2..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-2105
STEPHEN WILKINSON,
Plaintiff - Appellee,
v.
SUN LIFE AND HEALTH INSURANCE COMPANY, d/b/a Sun Life
Financial,
Defendant - Appellant,
and
DOLAN & TRAYNOR, INC. EMPLOYEE HEALTH AND WELFARE BENEFIT
PLAN,
Defendant.
Appeal from the United States District Court for the Western
District of North Carolina, at Statesville. Richard L.
Voorhees, District Judge. (5:13-cv-00087-RLV-DCK)
Argued: October 27, 2016 Decided: January 5, 2017
Before MOTZ and DIAZ, Circuit Judges, and Gerald Bruce LEE,
United States District Judge for the Eastern District of
Virginia, sitting by designation.
Affirmed by unpublished opinion. Judge Lee wrote the opinion,
in which Judge Motz and Judge Diaz joined.
ARGUED: Joshua Bachrach, WILSON ELSER MOSKOWITZ EDELMAN & DICKER
LLP, Philadelphia, Pennsylvania, for Appellant. Norris Arden
Adams, II, ESSEX & RICHARDS, P.A., Charlotte, North Carolina,
for Appellee. ON BRIEF: Hannah Gray Styron Symonds, WILSON
ELSER MOSKOWITZ EDELMAN & DICKER LLP, Philadelphia,
Pennsylvania, for Appellant. Frank N. Darras, Susan B.
Grabarsky, Phillip S. Bather, DARRASLAW, Ontario, California,
for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
LEE, District Judge:
Stephen Wilkinson (“Wilkinson”) brought this action against
Sun Life and Health Insurance Company (U.S.) (“Sun Life”) to
seek long-term disability benefits pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§
1001 et seq. After approving the benefits claim under a policy
that Sun Life issued to Wilkinson’s former employer, Sun Life
terminated benefits on the grounds that Wilkinson was not an
active full-time employee when the policy took effect.
On cross-motions for summary judgment, the district court
granted judgment in favor of Wilkinson. The key issue presented
is whether the district court erred in holding that Sun Life,
the administrator of an employee welfare benefit plan governed
by ERISA, abused its discretion when it terminated Wilkinson’s
benefits. We hold that Sun Life abused its discretion when it
terminated Wilkinson’s benefits because he provided sufficient
evidence to support his eligibility for coverage, and because
Sun Life’s decision to terminate benefits was not the result of
a principled reasoning process and not supported by substantial
evidence. We therefore affirm the district court’s decision.
3
I.
A.
The facts relevant to this appeal are those probative of
whether Wilkinson worked at least 30 hours per week as an active
employee on May 1, 2004, when the policy at issue took effect.
In 1973, Wilkinson began working as the vice president of
sales, operations, and distribution for Dolan & Traynor, Inc.
(“D&T”). J.A. 10, 23. 1 D&T is a closely-held corporation based
in New Jersey that distributes building products and plumbing
specialties. J.A. 10, 23, 1110–15. Wilkinson earned an annual
compensation of $434,300, and at some point prior to his
disability, worked approximately 60 hours per week. J.A. 276,
1315-16. He also owned approximately 22% of D&T’s stock. J.A.
91. Wilkinson has represented that his position at D&T was due
to marrying the daughter of one of D&T’s owners. J.A. 521. In
August 2003, Wilkinson’s wife passed away. J.A. 998. In the
months that followed, Wilkinson began to struggle emotionally
and physically, and he eventually developed a heart condition
known as cardiomyopathy. Id.
At a D&T partner meeting in March 2004, Wilkinson and his
business partners discussed his decline in health, his ongoing
1Citations to the “J.A.” refer to the Joint Appendix filed
by the parties in this appeal.
4
role with the company, and the possibility of him taking leave.
J.A. 372–74. Subsequent to this meeting, Wilkinson wrote an
email to his partners stating that over the preceding seven
months, he typically worked from 9 a.m. to 5 p.m., aside from
six weeks of paid time off. J.A. 373. Wilkinson also wrote, “I
would like to feel better and will continue to try to return to
being more productive working no more than 40 hour weeks. This
all depends on my ability based on my current predicament.”
J.A. 373.
A second partner meeting occurred on April 13, 2004. J.A.
375. The partners discussed how D&T was in the midst of a
critical time and needed all the partners to work diligently.
Id. The next day, Wilkinson summarized the meeting in an email
as follows: “My expressed desire to work 30-40 hours a week does
not cut it with [the partners]. They are putting in extra hours,
evenings/weekends and it is not fair.”
Id.
A third partner meeting occurred on April 21, 2004. J.A.
999. Wilkinson and his partners again discussed the possibility
of Wilkinson taking leave.
Id. According to court filings that
Wilkinson filed in a separate 2007 lawsuit, “Timothy Dolan asked
that [Wilkinson] take the leave now and [D&T] would continue to
pay [his] salary until a written agreement was reached laying
out the terms of [his] leave.”
Id. Wilkinson further claimed,
“[b]ased on [D&T’s] promise to work out an agreement within a
5
few weeks, I began a medical leave for an undetermined period of
time, beginning May 7, 2004.” Id.
On May 5, 2004, D&T’s human resources department sent
Wilkinson a document entitled “Response to Employee Request for
Family or Medical Leave and Employee Acknowledgements of
Obligations” (the “FMLA Form”). J.A. 201-03. The FMLA Form
states, “[w]e are aware that you need this leave beginning on or
about May 10, 2004 . . . .” J.A. 201. The record reflects that
Wilkinson took unpaid FMLA leave from May 7, 2004 until August
2004. J.A. 1466. In July 2004, Wilkinson informed D&T that he
would be unable to return to work. J.A. 376.
B.
Eligible employees of D&T were covered under its Employee
Health and Welfare Benefit Plan. J.A. 7, 22. Prior to May 1,
2004, the plan was insured by a different company, Unum. J.A.
1284-1312. Effective May 1, 2004, Sun Life issued a group
benefits policy (the “Policy”) to D&T to insure eligible
participants and beneficiaries of its plan. J.A. 260, 1352–81.
Sun Life served in the dual role of evaluating benefit claims
and paying approved claims. J.A. 9, 23. Wilkinson submitted a
benefits claim to Sun Life on August 18, 2004, which Sun Life
approved. J.A. 927, 1449-53. Sun Life paid Wilkinson
disability benefits for approximately four years from August
6
2004 until July 2008. J.A. 248. Sun Life also performed
periodic reviews to determine whether Wilkinson remained
eligible for long-term disability benefits. J.A. 262.
In November 2007, Wilkinson filed an employment-related
action in New Jersey state court against D&T, as well as his
business partners Timothy Traynor, Michael Dolan, and Timothy
Dolan (the “New Jersey Lawsuit”). J.A. 81–23. Wilkinson
alleged that he was fraudulently induced into resigning as an
officer of D&T and signing a modification of his buyout
agreement. Id. The parties eventually settled the suit under a
confidential agreement. J.A. 312. At the time, the New Jersey
Lawsuit had nothing to do with Wilkinson’s benefits claim.
Id.
Sun Life sent Wilkinson the first denial letter on July 29,
2008, stating that he no longer qualified for long-term
disability benefits. J.A. 125–29. This denial letter noted
that Sun Life had recently learned of the New Jersey Lawsuit,
and that Sun Life believed Wilkinson may have resigned from D&T
because of disagreements with the partners, rather than medical
reasons. J.A. 128. Regardless, Sun Life justified the first
denial because it “concluded that there was no medical evidence
to continue to support [Wilkinson’s] claimed restrictions and
limitations.”
Id. Importantly, Sun Life’s “assessment of total
disability [was] based on one’s occupation [as a vice president]
in the national economy, not by the job requirements of a
7
particular employer.” J.A. 126. Sun Life claimed that although
D&T described Wilkinson’s “job as heavy duty,” a vice president
in the national economy fits “closer to the light physical
demand level.” Id. In January 2009, Wilkinson challenged the
termination of benefits and provided evidence to rebut Sun
Life’s determination. J.A. 519–640. Wilkinson also challenged
Sun Life’s reliance on what duties a vice president performs in
the national economy, as opposed to what duties he performed at
D&T. See J.A. 521.
Sun Life sent Wilkinson a second denial letter on May 13,
2009. J.A. 61–69. This letter noted that a physician described
Wilkinson’s “cardiac status as causing only slight limitation in
physical activity.” J.A. 63. The letter also stated a
functional capacity evaluation revealed that Wilkinson “had the
capacity to perform his occupation as it is typically performed
in the national economy.” J.A. 63. Nevertheless, Sun Life
expressly stated that it was “not addressing any question of
Disability at this time,” and that it was denying coverage on
different grounds. J.A. 69. Sun Life found Wilkinson
ineligible for coverage under the Policy because, in its view,
two declarations filed in the New Jersey Lawsuit indicated
Wilkinson “was not meeting the requirements of an Active Full-
time Employee at the time coverage became effective . . . on May
1, 2004.” J.A. 68. Thus, five years after Wilkinson left D&T,
8
Sun Life asserted a new theory for why Wilkinson did not qualify
for coverage.
In January 2010, Wilkinson appealed the termination of his
disability benefits a second time. J.A. 346–64. As part of
Wilkinson’s administrative appeal, a physician hired by Sun Life
provided medical findings indicating that “Wilkinson would be
precluded from the duties of his ‘Regular Occupation’ and was
‘Totally Disabled.’” J.A. 45. This finding essentially
foreclosed Sun Life’s denial of benefits based on medical
grounds.
Sun Life sent Wilkinson a third denial letter on July 12,
2010. J.A. 39–50. The sole issue at that point involved
whether Wilkinson was “[p]erforming all the duties of [his] job
on a Full-time Basis and working on a regular work schedule of
at least 30 hours per week” when the Policy took effect. See
id. To prove that he was an active full-time employee,
Wilkinson provided Sun Life with a statement, emails regarding
partnership meetings leading up to his leave of absence, a
declaration from his CPA, applications that Wilkinson submitted
to insurers for other purposes, and Social Security information.
J.A. 44, 50. Sun Life rejected this information because it
believed the evidence did not substantiate whether Wilkinson was
an active full-time employee. See J.A. 45–46, 50. Instead, Sun
Life relied upon two declarations filed in the 2007 New Jersey
9
Lawsuit as evidence of Wilkinson’s ineligibility for coverage.
See J.A. 48–49.
C.
Wilkinson brought this case pursuant to section
502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), to determine
his entitlement to long-term disability benefits under the
Policy. J.A. 7–21. Having exhausted his administrative
remedies, on June 18, 2013, Wilkinson filed suit against Sun
Life in the United States District Court for the Western
District of North Carolina. Id. Sun Life responded with a
Counterclaim seeking repayment of $386,539.37, the amount of
benefits Sun Life paid to Wilkinson prior to terminating
benefits. J.A. 22–29. Wilkinson moved to dismiss Sun Life’s
Counterclaim, and later the parties filed cross-Motions for
Summary Judgment. J.A. 30–35, 204–40.
On September 1, 2015, the district court published an
opinion granting Wilkinson’s Motion for Summary Judgment and
awarding him benefits under the Policy. Wilkinson v. Sun Life &
Health Ins. Co., 127 F. Supp. 3d 545, 568 (W.D.N.C. 2015). The
district also denied Sun Life’s Motion for Summary Judgment, and
dismissed its Counterclaim as moot.
Id. First, the district
court determined that the ERISA abuse of discretion standard
applied.
Id. at 556–58. Next, under that standard, the
10
district court weighed the relevant factors to determine whether
Sun Life’s denial of benefits was reasonable. Id. at 562–68.
In doing so, the court considered the FMLA Form even though it
was not part of the administrative record.
Id. at 560–62.
Ultimately, the district court found that Wilkinson met his
burden to show that he was covered under the Policy, and that
Sun Life abused its discretion by denying benefits.
Id. at 562.
Sun Life filed this appeal.
II.
As a threshold issue, we first consider the appropriate
judicial standard of review. A participant or beneficiary of a
plan covered under ERISA may bring a civil action to recover
benefits due to him or her under the plan’s terms. See 29
U.S.C. § 1132(a)(1)(B). The scope of judicial review in an
action challenging an administrator’s coverage determination
under section 1132(a)(1)(B) turns on whether the benefit plan
vests the administrator with discretionary authority. Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Helton v.
AT & T Inc.,
709 F.3d 343, 351 (4th Cir. 2013). When a plan
does not vest the administrator with discretionary authority, a
district court reviews the administrator’s coverage
determination de novo.
Helton, 709 F.3d at 351 (citing Williams
v. Metro. Life Ins. Co.,
609 F.3d 622, 629 (4th Cir. 2010)). In
11
contrast, when a plan vests the administrator with discretionary
authority to make eligibility determinations, a district court
reviews the administrator’s decision under the abuse of
discretion standard. See Helton, 709 F.3d at 351.
Here, the district court applied the abuse of discretion
standard because a document attached to and delivered with the
benefits plan contained discretionary language. J.A. 223. The
parties agree that if this document, referred to as the
“Statement of ERISA Rights,” is considered part of the plan,
then the document clearly grants Sun Life discretionary
authority. While Sun Life contends that the abuse of discretion
standard applies, Wilkinson contends that de novo review applies
because the Statement of ERISA Rights was not part of the
benefits plan. We need not reach the issue of whether the
district court appropriately considered the document part of the
plan because the standard of review is not outcome
determinative. Even under the abuse of discretion standard,
which is more favorable to Sun Life, we conclude that the
district court properly granted judgment in Wilkinson’s favor.
Accordingly, we review the district court’s grant of
summary judgment to Wilkinson de novo, applying the same abuse
of discretion standard employed by the district court. See
Harrison v. Wells Fargo Bank, N.A., 773 F.3d 15, 20 (4th Cir.
2014);
Williams, 609 F.3d at 629. Under the abuse of discretion
12
standard, this circuit will uphold the decision of a plan
administrator if the decision is reasonable, even if this court
would have reached a contrary conclusion upon an independent
review. See Fortier v. Principal Life Ins. Co., 66 F.3d 231,
235 (4th Cir. 2012). A decision is reasonable when the decision
“is the result of a deliberate, principled reasoning process,
and is supported by substantial evidence . . . .”
Helton, 709
F.3d at 351 (internal quotation marks and citation omitted). In
evaluating whether a plan administrator abused its discretion,
this circuit has identified the following eight nonexclusive
“Booth factors”:
(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary’s
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
fiduciary’s motives and any conflict of interest it
may have.
Booth v. Wal–Mart Stores, Inc. Assocs. Health and Welfare Plan,
201 F.3d 335, 342–43 (4th Cir. 2000).
III.
We next consider Sun Life’s three primary contentions
concerning whether the district court: (1) improperly considered
13
evidence outside the administrative record; (2) erroneously
shifted the burden to prove coverage eligibility from the
claimant to the plan administrator; and (3) erroneously held
that Sun Life abused its discretion. Each contention is
addressed in turn.
A.
Sun Life contends that the district court improperly
considered evidence outside the administrative record by relying
upon Wilkinson’s FMLA Form as evidence of when he ceased
working.
When a court reviews a coverage determination under the
abuse of discretion standard, generally, consideration of
evidence outside of the administrative record is inappropriate.
Helton, 709 F.3d at 352 (citing Sheppard & Enoch Pratt Hosp. v.
Travelers Ins. Co.,
32 F.3d 120, 125 (4th Cir. 1994)). However,
in Helton, this circuit stated that courts reviewing ERISA cases
should take “a more nuanced approach to consideration of
extrinsic evidence on deferential review, rather than embracing
an absolute
bar.” 709 F.3d at 352. Under Helton, “a district
court may consider evidence outside of the administrative record
on abuse of discretion review in an ERISA case when [1] such
evidence is necessary to adequately assess the Booth factors and
[2] the evidence was known to the plan administrator when it
14
rendered its benefits determination.” Id. at 356. By focusing
on what evidence was known to the plan administrator at the
time, courts within this circuit maintain their ability to
review coverage determinations and prevent administrators from
omitting unfavorable evidence from the administrative record.
See
Helton, 709 F.3d at 353.
On appeal, as in the district court, both prongs of this
two-part test are satisfied. The first prong is met because
evidence of the FMLA Form is necessary to adequately assess at
least three Booth factors. The third Booth factor instructs
courts to assess the “adequacy of the materials considered to
make the decision,” 201 F.3d at 342, and here the FMLA Form is
probative of what Wilkinson told his employer and when, J.A.
201. The fifth Booth factor instructs courts to assess “whether
the decisionmaking process was reasoned and
principled,” 201
F.3d at 342, and here Sun Life’s process consisted of granting
benefits, denying benefits for medical reasons, reversing the
medical determination, and then denying benefits for purportedly
not being an active full-time employee. The eighth Booth factor
instructs courts to assess “any conflict of interest [the
fiduciary] may
have,” 201 F.3d at 343, and here Sun Life’s
motives are at issue because of its dual role of evaluating and
15
paying benefits claims, see Metro. Life Ins. Co. v. Glenn, 554
U.S. 105, 112 (2008). 2
The second prong required to consider an FMLA Form that is
not part of the administrative record is met because Wilkinson’s
request to take FMLA leave was known to Sun Life when it
rendered its benefits determination. First, Sun Life’s May 2009
denial letter acknowledged that it received in 2004 a letter
from Wilkinson indicating that he took FMLA leave. See J.A.
445. Second, the May 2009 denial letter acknowledges Wilkinson
had “assert[ed] that his [FMLA] leave of absence commenced on
May 7, 2004.” J.A. 451. Third, Wilkinson provided to Sun Life
a declaration in January 2010 stating that D&T “prepared a
memorandum confirming” his request to take FMLA leave, J.A. 311,
and Sun Life acknowledged receipt of the declaration in its July
2010 denial letter, J.A. 265.
Because the FMLA Form is necessary to adequately assess the
Booth factors and the evidence was known to Sun Life, the
district court properly considered that evidence. As discussed
2
Applying the Supreme Court’s precedent in Glenn, this
circuit has held that a plan administrator’s conflict of
interest does not change the judicial standard of review, and
instead is viewed as “one factor among the many identified in
Booth for reviewing the reasonableness of a plan administrator's
discretionary decision.” Williams, 609 F.3d at 631.
16
further below, we too will consider such evidence in evaluating
whether Sun Life abused its discretion.
B.
Next Sun Life contends that the district court erroneously
shifted the burden to establish coverage eligibility from the
claimant to the plan administrator.
“ERISA represents a careful balancing between ensuring fair
and prompt enforcement of rights under a plan and the
encouragement of the creation of such plans.” Conkright v.
Frommert, 559 U.S. 506, 507 (2010) (internal quotation marks and
citation omitted). Plan administrators have a fiduciary duty to
balance “the obligation to guard the assets of the trust from
improper claims, as well as the obligation to pay legitimate
claims.”
Harrison, 773 F.3d at 20 (internal quotation marks and
citation omitted). Further, under ERISA, plan administrators
must set forth “the specific reasons” for denial and must
“afford a reasonable opportunity . . . for a full and fair
review . . . .”
Id. (quoting 29 U.S.C. § 1133).
On the one hand, this circuit has consistently stated, “the
primary responsibility for providing medical evidence to support
a claimant's theory rests with the claimant.” Harrison, 773
F.3d at 24 (citing Berry v. Ciba–Geigy Corp.,
761 F.2d 1003,
1008 (4th Cir. 1985)). Claimants are more familiar with their
17
medical and work history. See Harrison, 773 F.3d at 24.
Additionally, claimants, their physicians, and their employers
are typically better suited to provide the evidence necessary to
support a claim. See
id. This circuit has “recognize[d] that
plan administrators possess limited resources,” and has never
required them “to scour the countryside in search of evidence to
bolster” a claim.
Id. at 22. On the other hand, this circuit
has also stated that “once a plan administrator is on notice
that readily-available evidence exists that might confirm
claimant's theory of disability, it cannot shut its eyes to such
evidence where there is little in the record to suggest the
claim [is] deficient.”
Id. at 24.
Here, the district court stated that in its view, Wilkinson
satisfied his burden of showing that he was covered under the
Policy. Wilkinson, 127 F. Supp. 3d at 562. Then pursuant to
relevant Booth factors, the district court concluded that Sun
Life abused its discretion because its decision-making was not
reasoned and principled and was not supported by substantial
evidence.
Id. at 562–68. We challenge Sun Life’s contention
that the district court’s decision should be construed as
demanding an investigation that “leave[s] no stone unturned.”
Compare
id. at 567, with Appellant’s Br. at 31. The point is
not that Sun Life failed to be an archeologist digging up
evidence underneath a rock; quite the contrary here, Sun Life
18
shut its eyes to evidence in plain sight. For the reasons that
follow, we agree that Wilkinson satisfied his burden to show he
qualified for coverage, and that Sun Life abused its discretion
by denying benefits.
C.
We next turn to the terms of the Policy, the evidence that
Wilkinson provided to establish his entitlement to coverage, and
the evidence that Sun Life relied upon to deny coverage.
The terms of the Policy limit coverage to “ACTIVE FULL-TIME
EMPLOYEES WHO SATISFY THE COVERAGE ELIBILITY REQUIREMENTS.”
J.A. 1354. The Policy further provides: “You are an Active
Full-time Employee actively at work on any day if on that day
you are: . . . [p]erforming all of the duties of your job on a
Full-time Basis and working on a regular work schedule of at
least 30 hours per week . . . .” J.A. 1356.
Sun Life frames Wilkinson’s evidence as relevant to the
time period when he received compensation, not when he actually
worked. Nevertheless, Wilkinson met his burden to provide
sufficient evidence of his eligibility for coverage when the
Policy took effect on May 1, 2004 (i.e., by providing evidence
that he worked at least 30 hours per week). First, the FMLA
Form indicates that D&T expected Wilkinson to take leave
beginning “on or about May 10, 2004.” J.A. 201-03. Second, a
19
Sun Life letter acknowledges: “[D&T] indicated May 7, 2004 as
the last day that Mr. Wilkinson worked and that his work
schedule at the time of the disability was 5 days per week, 8
hours per day.” J.A. 261, 1487. Third, notes dated August 2004
from Wilkinson’s physician lists May 7, 2004 as the “Date
patient-ceased work because of disability.” J.A. 1544. Fourth,
an April 2004 email from Wilkinson to his business partners
“expressed [his] desire to work 30–40 hours a week,” J.A. 352,
which at least implies his business partners wanted him to work
more than 30 hours. Fifth, Wilkinson filed an unrelated
insurance application with Security Mutual listing May 7, 2004
as the “Date [he] stopped work.” J.A. 366. 3
In contrast, Sun Life relies almost entirely upon two court
filings in an unrelated New Jersey Lawsuit to establish that
Wilkinson ceased working prior to May 1, 2004. First, Sun Life
relies upon Wilkinson’s declaration, which states:
At that April 21st meeting, Timothy Dolan asked that I
take the leave now and they would continue to pay my
salary until a written agreement was reached laying
out the terms of my leave. I agreed to take the leave
of absence with Tim Traynor’s agreement that, in a few
weeks, they would have a written agreement prepared
3
We are mindful that five years prior to today, in 2011, a
typical vice president would likely have more electronic records
evidencing his or her work. However in 2004, five years prior
to Sun Life challenging Wilkinson’s full-time status,
expectations on what records might be available are different.
Further, D&T explained to Sun Life that it did not keep
attendance records for executives such as Wilkinson. J.A. 47.
20
for me and that my health insurance would continue.
. . . Based on their promise to work out an agreement
within a few weeks, I began a medical leave for an
undetermined period of time, beginning May 7, 2004.
J.A. 115, 999 (emphasis added). Second, Sun Life relies upon a
declaration from Wilkinson’s former business partner, which
states:
Wilkinson spent very little time working from August
18, 2003 through May 7, 2004 because of emotional and
physical problems. Despite a drastic reduction in his
attendance and production, D&T voluntarily paid
Wilkinson $451,300 from August 22, 2003 until he
ceased working completely on May 7, 2004.
J.A. 917. 4
In both instances, Sun Life hones in on the first
underlined phrase (which favors its interest in denying
benefits) and completely ignores the second phrase (which favors
Wilkinson). Simply because the first phrase in Wilkinson’s
4 In its Reply Brief and during oral argument, Sun Life
posited a new argument for denying benefits that was not raised
in its denial letters, in the district court, or in its Opening
Brief. Sun Life now argues that because a cardiologist
diagnosed Wilkinson with serious health problems, he was
incapable of “occasionally lift[ing] up to 100 pounds” as part
of his job duties overseeing distribution operations.
Appellant’s Reply at 12 (quoting J.A. 499). This argument is
unpersuasive for two reasons. First, ERISA requires plan
administrators to “provide adequate notice . . . setting forth
the specific reasons” for denial, and Sun Life did not deny
coverage on this basis. See 29 U.S.C. § 1133(1). Second, Sun
Life waived this argument on appeal. See Helton, 709 F.3d at
360 (“[B]ecause [defendant] failed to raise this argument before
the district court, it is waived on appeal.”).
21
declaration indicates someone “asked” Wilkinson to take leave
“now” does not mean that he did in fact take leave that same
day. It is not even clear if “now” means today, tomorrow, or
next week, especially when the second phrase indicates that
Wilkinson “began medical leave . . . beginning May 7, 2004.” In
addition, the first phrase in the other declaration referencing
a “drastic reduction” in work schedule is ambiguous because a
reduction for someone working 60 hours per week, as Wilkinson
did at one point, could be reduced to 40 hours, 30 hours, or 5
hours. Sun Life also conveniently ignores that the second
phrase clearly states Wilkinson “ceased working completely on
May 7, 2004.”
In sum, several Booth factors show that Sun Life abused its
discretion, including: (1) the “language of the plan”; (2) the
“adequacy of the materials considered”; (3) Sun Life’s
“decision-making process”; and (4) the indicators that Sun
Life’s conflict of interest played a role in its review process.
See Booth, 201 F.3d at 342–43. Because Sun Life’s coverage
determination was not reasoned and principled and not supported
by substantial evidence, the Court holds that Sun Life abused
its discretion.
22
IV.
For the foregoing reasons, we affirm the district court’s
decision to grant Wilkinson’s Motion for Summary Judgment, to
deny Sun Life’s Motion for Summary Judgment, and to dismiss as
moot Sun Life’s Counterclaim.
AFFIRMED
23
