United States District Court, D. Columbia
August 14, 2005.
PAUL COSTANTINO, Plaintiff,
WASHINGTON POST MULTI-OPTION BENEFITS PLAN, Defendant.
The opinion of the court was delivered by: COLLEEN KOTELLY, District Judge
Plaintiff brings suit under the Employee Retirement Income
Security Act of 1974, 29 U.S.C. §§ 1001 et. seq. ("ERISA").
Plaintiff seeks an Order clarifying his rights as a plan
beneficiary to past and future benefits under the terms of an
employee welfare plan. Compl. ¶ 2. Specifically, Plaintiff seeks
an order declaring that: (1) no deference be granted to the
decision of Defendant to terminate benefits; (2) Plaintiff is
entitled to long-term disability payments under his long-term
disability policy; (3) Plaintiff is entitled to payment of past
and future long-term disability benefits; (4) Plaintiff is
entitled to payment of pre- and post-judgment interest; and (5)
Plaintiff is entitled to payment of attorney's fees and costs.
Id. at 4.
Pending before the Court are the parties' cross motions for
summary judgment and supporting documents. After carefully
considering the pleadings, the relevant case law and the entire
record, the Court will grant Defendant's Motion for Summary
Judgment and deny Plaintiff's motion. I: FACTUAL BACKGROUND
The Court begins its discussion of the facts by noting that
this Court strictly adheres to the text of Local Civil Rule 56.1.
As such, in resolving the present summary judgment motions, the
Court "assumes that facts identified by the moving party in its
statement of material facts are admitted, unless such a fact is
controverted in the statement of genuine issues filed in
opposition to the motion." LCvR 56.1. Thus, in most instances the
Court cites to Defendant's Statement of Material Facts As To
Which There is No Genuine Issue ("Def.'s Stmt.") unless such
statement is contradicted by Plaintiff in her Statement of
Genuine Issues ("Pl.'s Stmt.").*fn1 The Court also cites
directly to the record, where appropriate, to provide additional
information not covered in either of the parties' statements.
Having set forth these preliminaries, the Court moves to a
discussion of the material facts not genuinely in dispute.
Plaintiff is a former employee of the Washington Post (the
"Post").*fn2 Pl.'s Stmt. for Pl.'s Mot. ¶ 1. He worked in the Post's mailroom for twenty five years,
beginning at age 16.*fn3 Id. In July 1995, Plaintiff was
injured in a non-work related automobile accident in which he
suffered multiple leg fractures. Id. ¶ 3. Plaintiff stopped
working for the Post in January 2000 and filed an application for
long-term disability benefits under the Washington Post Long-Term
Disability Plan ("LTD Plan"). Def.'s Stmt. for Pl.'s Mot. ¶ 4.
The Post established the LTD Plan on June 1, 1983 to provide
benefits to employees of the Post and its subsidiaries
(collectively referred to as the "Post") who became disabled
during their period of employment. Def.'s Stmt for Def.'s Mot. ¶
1. The LTD Plan is subject to the provisions of ERISA. Id. The
Post provides several employee welfare plans to its employees.
Id. ¶ 2. These welfare benefit plans are summarized in various
summary plan descriptions ("SPDs") that are provided to
participants as required by ERISA. Id. The SPDs typically
describe a benefits program that consists of all the welfare
benefits available to a particular group of employees. Id.
Since 1983, the LTD Plan has been summarized in various SPDs,
including the Multi-Option Benefits Program SPD, effective
January 1, 1999 (the "1999 SPD"). Id.
The 1999 SPD granted the Post, as Plan Administrator,
discretionary authority to determine participants' eligibility
for benefits and interpret provisions for the LTD Plan. Id. ¶
3. The Post delegated this discretionary authority to The
Prudential Insurance Company of America ("Prudential"). Id. ¶ 4.*fn4
On May, 28, 1998, the Post mailed a letter to all mailroom
employees announcing the availability of two new benefit options
including an increased payment option for the Accident and
Sickness Insurance Plan ("A & S Plan") and the LTD Plan. Id. ¶
8. The letter announced a special enrollment period from June 1,
1998 to June 19, 1998, during which eligible employees could
enroll in the two new benefit options. Id. The letter described
the LTD Plan, stating that the "LTD [Plan] enables you to receive
part of your income while you are totally disabled." Id. The
letter also defined "total disability:"
For up to two years, total disability means that you
are wholly and continuously unable to perform the
duties of the job you held when you became disabled.
You must be under the regular care and attendance of
a legally qualified physician. You will not be
considered totally disabled if you engage in any
occupation or perform any work for compensation or
profit. ("own-occupation" standard)
After two years, you are considered totally disabled
if you are unable to engage in any kind of work for
which you are, or reasonably could become, qualified
by your education, training or experience.
("any-occupation" standard) Id.*fn5 Attached to the letter was a form
entitled "Special 1998 Enrollment Form," which
eligible employees could use to select coverage under
the LTD Plan and authorize the Post to deduct the
necessary contributions from their salary for the
Plaintiff testified that he did not remember receiving the
letter, but there is no dispute that he executed the special 1998
enrollment form on June 4, 1998, and elected coverage under the
LTD Plan. Pl.'s Stmt. for Def.'s Mot. ¶ 9. Plaintiff's benefits
coverage was consolidated in the Multi-Option Benefits Program.
Def.'s Stmt. for Def.'s Mot. ¶ 10. The Multi-Option Benefits
Program offered participation in a number of component plans for
certain groups of employees at the Post, including the A & S,
LTD, and Business Travel Accident Plans. Id. The coverages
available were described in the 1999 SPD. Id.
The two-part definition of total disability (the own
occupation-standard followed after two years by the
any-occupation standard) was omitted from the 1999 SPD. Id. ¶
11. According to Section Seven, the section of the 1999 SPD
entitled "Long Term Disability Plan," the LTD Plan "pays benefits
in the form of monthly income payments to covered employees after
a defined period of total disability." (emphasis in original).
1999 SPD at 7-1; Administrative R.("AR") at 63. The bold type
indicates that the term "total disability" should have been
defined in the 1999 SPD's glossary, but it is not there in the
context of the LTD Plan. 1999 SPD at 1, 14-1-6; AR at 12, 93-98.
The two-part definition for total disability does, however appear
in the original LTD Plan document, and since the LTD Plan's
inception in 1983, has been consistently applied to claims for
covered employees of the Post under the LTD Plan. Def.'s Stmt.
for Def.'s Mot. ¶ 11.
The 1999 SPD did include a definition of total disability, but
only for purposes of the Business Travel Accident Plan. Id. ¶
12. In the 1999 SPD, total disability for the Business Travel
Accident Plan was defined under the any-occupation standard.
Id. Plaintiff does not dispute this. According to the 1999 SPD,
medical disability claims used the own-occupation standard. 1999
SPD at 14-5; AR at 97. Plaintiff argues that in the absence of a
definition for total disability in the 1999 SPD, that the
definition of "medical disability" which is included in the SPD
for the A & S Plan and uses the own-occupation standard, applies
to his LTD Plan claim. Pl.'s Stmt. for Def.'s Mot. ¶ 12; 1999 SPD
at 14-5; AR at 97. This is a legal, not factual dispute, and will
be discussed below.
On May 8, 2000, Plaintiff filed a claim for long-term
disability benefits under the LTD Plan. Def.'s Stmt. for Def.'s
Mot. ¶ 13. On July 17, 2000, Prudential denied Plaintiff's claim
because he did not satisfy the own-occupation standard. Id. ¶
14. In this, and all subsequent correspondence regarding
Plaintiff's claim, Prudential recited the LTD Plan's two-part
definition of total disability. Id. Following appeals,
Prudential approved Plaintiff's claim on March 19, 2001,
retroactive to July 17, 2000. Id. ¶ 15. On February 4, 2002,
Prudential notified Plaintiff of the impending change from the
own-occupation to the any-occupation standard which would occur
after two years. Id. ¶ 16.
Prudential then requested that Plaintiff complete forms for
evaluation of his total disability under the any-occupation
standard. Id. Plaintiff signed the forms on February 26, 2002
and returned them to Prudential. Id. In a letter dated May 1,
2002, Prudential notified Plaintiff that his benefits would be
terminated on July 16, 2002 because he did not satisfy the any-occupation standard, applicable after the expiration of the
initial two years. Id. ¶ 17. Plaintiff appealed that decision
in a May 7, 2002 letter. Id. ¶ 18. In that letter, Plaintiff
did not challenge Prudential's application of the any-occupation
standard to his claim. Id. Rather, Plaintiff contested
Prudential's conclusion that he did not satisfy that standard.
Id. Prudential denied Plaintiff's appeal. Id. Plaintiff
responded to this denial with a letter dated August 3, 2002, in
which he asserted, for the first time, that the any-occupation
standard did not apply to his claim under the LTD Plan because it
was not included in the 1999 SPD. Id.
Following subsequent appeals, Prudential issued its final
decision in an August 20, 2003 letter in which it affirmed that
it had applied, and would apply, the any-occupation standard to
Plaintiff's claim for continuing long-term disability benefits.
Id. ¶ 19. In that letter, Prudential provided ASA No. 39922,
the agreement between the Post and Prudential effective June 1,
1983. Id. Prudential marked with a yellow tab the definition of
disability it was using from the original LTD Plan. Id. That
definition uses the two-part definition of total disability,
meaning that after the initial two-year period of disability (in
Plaintiff's case, this would have begun on July 17, 2000) the
participant must be "unable to engage in any gainful occupation
for which he or she is reasonably suited by training, education,
or experience," in order to receive benefits under the LTD Plan.
Id. (quoting Def.'s Mot. for Summ. J. Ex. D (Moran Aff.) ¶ 6.).
Because the Post had not provided this definition in the plan
documents it had previously provided to Plaintiff, Prudential
extended Plaintiff's benefits through October 2003, an additional
fifteen months beyond the initial twenty-four month period. Id.
Prudential also reiterated to Plaintiff that the any-occupation
standard would be used to evaluate future eligibility benefits
beyond October 2003. Id. In a letter dated November 14, 2003,
Plaintiff, through counsel, informed Prudential that he took the August 20, 2003 letter as a
final denial of his claim and asserted that he was entitled to
long-term disability benefits under the own-occupation standard
until he reached age 65. Id. ¶ 20. In the same letter,
Plaintiff acknowledged that he was not entitled to any additional
long-term disability benefits if the any-occupation standard
applied to his long-term disability claim. Id.
II: LEGAL STANDARD
A party is entitled to summary judgment if the pleadings,
depositions, and affidavits demonstrate that there is no genuine
issue of material fact in dispute and that the moving party is
entitled to judgment as a matter of law. See Fed.R.Civ.P.
56(c); Tao v. Freeh, 27 F.3d 635, 638 (D.C. Cir. 1994). Under
the summary judgment standard, Defendant, as the moving party,
bears the "initial responsibility of informing the district court
of the basis for [its] motion, and identifying those portions of
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits which [it]
believe[s] demonstrate the absence of a genuine issue of material
fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Plaintiff, in response to Defendant's motion, must "go beyond the
pleadings and by [his] own affidavits, or depositions, answers to
interrogatories, and admissions on file, `designate' specific
facts showing that there is a genuine issue for trial." Id. at
324 (internal citations omitted).
Although a court should draw all inferences from the supporting
records submitted by the nonmoving party, the mere existence of a
factual dispute, by itself, is not sufficient to bar summary
judgment. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). To be material, the factual assertion must be capable
of affecting the substantive outcome of the litigation; to be
genuine, the issue must be supported by sufficient admissible
evidence that a reasonable trier-of-fact could find for the nonmoving party.
Laningham v. U.S. Navy, 813 F.2d 1236, 1242-43 (D.C. Cir.
1987); Liberty Lobby, 477 U.S. at 251 (the court must determine
"whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law"). "If the evidence is
merely colorable, or is not sufficiently probative, summary
judgment may be granted." Liberty Lobby, 477 U.S. at 249-50
(internal citations omitted). "Mere allegations or denials in the
adverse party's pleadings are insufficient to defeat an otherwise
proper motion for summary judgment." Williams v. Callaghan,
938 F. Supp. 46, 49 (D.D.C. 1996). The adverse 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). Instead, while the movant bears
the initial responsibility of identifying those portions of the
record that demonstrate the absence of a genuine issue of
material fact, the burden shifts to the non-movant to "come
forward with `specific facts showing that there is a genuine
issue for trial.'" Id. at 587 (citing Fed.R.Civ.P. 56(e))
(emphasis in original).
Plaintiff does not base his claim for continued long-term
disability benefits past October 2003 on any definition of total
disability found in the 1999 SPD. Def.'s Stmt. for Def.'s Mot. ¶
21. Instead, Plaintiff argues that a reasonable reading of the
Long Term Disability Plan benefits (Section 7) and the Glossary
of the 1999 SPD entitle him to benefits based on the
own-occupation standard. Pl.'s Stmt. for Def.'s Mot. ¶ 21.
Plaintiff also does not dispute that for resolution of these
cross motions, the question before the Court is which standard
(the any-occupation, or own-occupation standard) applies to his
claim. See Pl.'s Opp'n at 1. If the own-occupation standard applies, Plaintiff argues that he is entitled to the
relief he seeks, but if the any-occupation standard applies,
Plaintiff acknowledges that he is not entitled to relief.
Id.*fn6 The Court finds that the any-occupation standard
does apply and therefore grants Defendant's motion for summary
judgment and denies Plaintiff's motion for summary judgment.
A. Standard of Review under ERISA
In considering the denial of benefits under an employee welfare
benefit plan governed by ERISA, courts generally review the
decisions of plan administrators de novo. Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan
grants the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of
the plan, however, the Court must apply an abuse-of-discretion
standard. Id. ("Consistent with established principles of trust
law, we hold that a denial of benefits challenged under §
1132(a)(1)(B) is to be reviewed under a de novo standard unless
the benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or
to construe the terms of the plan."). Under the abuse of
discretion standard, "[d]ecisions of administrators made for
plans in the latter group . . . are reviewable only for
reasonableness." Block v. Pitney Bowes, Inc., 952 F.2d 1450,
1452 (citing Bruch, 489 U.S. at 115).*fn7
In determining whether an employee welfare benefits plan
confers discretion on a fiduciary, courts in the D.C. Circuit look to the plan documents.
Id. at 1453-54.
There are obviously no magic words required to
trigger the application of one or another standard of
judicial review. . . . It . . . need only appear on
the face of the plan documents that the fiduciary has
been [given] the power to construe disputed or
doubtful terms or to resolve disputes over benefits
eligibility in which case the trustee's
interpretation will not be disturbed if reasonable.
Id. (quoting De Nobel v. Vitro Corp., 885 F.2d 1180
(4th Cir. 1989) (internal quotation marks omitted). To properly
grant discretion under ERISA, the delegation of discretionary
authority must be made by a plan document, it must be express,
and it must be to a named fiduciary or its delegate:
(1) The instrument under which a plan is maintained
may expressly provide for procedures (A) for
allocating fiduciary responsibilities . . . among
named fiduciaries, and (B) for named fiduciaries to
designate persons other than named fiduciaries to
carry out fiduciary responsibilities . . . under the
29 U.S.C. § 1105(c).
In this case, Plaintiff does not dispute that the 1999 SPD
granted the Post, as plan administrator, discretionary authority
to determine a participant's eligibility for benefits and to
interpret provisions of the LTD Plan. Def.'s Stmt. for Def.'s
Mot. ¶ 3. Indeed, a plain reading of the 1999 SPD clearly granted
discretionary authority to the Post. 1999 SPD at 1-1; AR at
12.*fn8 Similarly, the 1983 LTD Plan contemplates delegation as
well.*fn9 While it would therefore appear that the abuse of
discretion standard applies, Plaintiff argues that, in fact, the
abuse of discretion standard does not apply because the 1999 SPD
did not provide express procedures for the Post to delegate its
discretionary authority to Prudential. See Pl.'s Opp'n at 3-6.
Plaintiff supports his argument with citations to numerous
cases, each of which is either distinguishable from the case at
bar or does not support Plaintiff's argument. To begin, Plaintiff
has cited a number of cases addressing whether a plan has granted
discretion to the plan administrator (in this case the Post) or
fiduciary in the first place. See Kirwan v. Marriott Corp.,
10 F.3d 784, 789 (11th Cir. 1994) ("[defendant] may `control and
manage' the Plan, but it must do so in accordance with the terms
of the Plan, and there is no grant of authority to construe these
terms."); Sandy v. Reliance Std. Life Ins. Co., 222 F.3d 1202,
1205 (9th Cir. 2000) ("Here, unlike other plan provisions we have
held conferred discretion, there is no language conferring
authority on [the defendant] to determine eligibility, to
construe the terms of the Plan, or to make final and binding
determinations."); Cathey v. Dow Chem. Co. Med. Care Program,
907 F.2d 554, 559 (5th Cir. 1990) (holding that benefit plan did
not expressly grant discretion because it did not "expressly
confer discretionary authority regarding entitlements upon the
fiduciary."). The Court is puzzled as to why Plaintiff cites
these cases, since he has already conceded that the Post was
granted this discretionary authority by the 1999 SPD. Def.'s
Stmt. for Def.'s Mot. ¶ 3 (uncontested in Pl.'s Stmt. for Def.'s
Mot.) Plaintiff claims that the 1999 SPD and accompanying ASAs
between the Post and Prudential did not provide express
procedures for the Post to delegate its discretionary authority
to Prudential and that therefore the abuse of discretion standard
does not apply. Pl.'s Opp'n at 3-6. Plaintiff's support for this
argument rests on two cases from other Circuits that are clearly
distinguishable from this case. In McKeehan v. Cigna Life Ins.
Co., the Eighth Circuit held that the de novo standard of
review, rather than abuse of discretion, should be applied to a
case involving denial of benefits under a long-term disability
plan. 344 F.3d 789, 791 (8th Cir. 2003). The court noted in
McKeehan that it requires "explicit discretion-granting
language in the policy or in other plan documents to trigger the
ERISA deferential standard of review," and finding no such
language, it applied the de novo standard that Plaintiff seeks
here. Id. at 793. The long-term disability plan at issue in
McKeehan expressly granted "`full and exclusive authority to
control and manage the Plan, to administer claims, and to
interpret the Plan and resolve all questions arising in the
administration, interpretation, and application of the plan.'"
Id. at 792. "The Plan also provided that the sponsor `may
contract with an independent third party to administer the Plan
and process claims under the Plan.'" Id. The court in
McKeehan recognized that this language of the plan, which is
similar to the language in the 1983 LTD Plan and the 1999 SPD,
was "an express grant of discretion that triggered the
deferential abuse-of-discretion standard of review for benefit
decisions by the Plan sponsor." Id.
The Eighth Circuit concluded, however, that while the
plaintiff's claim was under review, the employer underwent a
change of ownership and sought to replace the delegated third
party administrator which allegedly had the discretionary
authority to deny the plaintiff's disability claim. Id. Because
there was no documentation of the agreement between the employer
and the new administrator, the McKeehan court held that even though the
plan conferred discretion on the plan sponsor to delegate, that
new plan administrator had "failed to present evidence that its
contractual agreement with the current Plan sponsor included the
grant of such discretion." Id. at 793. Plaintiff does not
argue, and the record does not indicate, that such change in
ownership has occurred at the Post. The Eighth Circuit's holding
in McKeehan, is therefore not applicable to this case.
In Rodriguez-Abreu v. Chase Manhattan Bank, the First Circuit
applied a de novo standard of review to resolve cross motions
for summary judgment involving a long term disability plan which
provided that "the Named Fiduciaries or their delegates have
discretion in interpreting the meaning of Plan provisions and in
determining questions of fact." 986 F.2d 580, 584 (1st Cir.
1993). The defendant argued that the plan administrator, who was
not a Named Fiduciary, was the delegate of the Named Fiduciary.
Id. The First Circuit found that the defendant had failed to
"point to any plan provisions . . . provid[ing] express
procedures for the delegation of the Fiduciary's discretionary
authority to a delegate" and that there was "no expression of
intent" that the plan administrator act as the delegate of the
Named Fiduciaries. Id.
In contrast to Rodriguez-Abreu, the LTD plan documentation
and the subsequent record in this case clearly allow for
delegation by the Post and show that the Post did delegate
administrative responsibility for the LTD to Prudential. The 1999
SPD states that "[t]he [Post] has delegated administrative
responsibilities for aspects of component benefit plans to
various other parties." 1999 SPD at 1-1; AR at 12. Effective June
1, 1983, the Post and Prudential entered into the 1983 ASA 39922
that had attached as exhibit A the original LTD Plan. See
Def.'s Mot. for Summ. J. Ex. B (McDaniel Aff.) ¶ 6; Def.'s Mot.
for Summ. J. Ex. C (Ewing Aff.) ¶ 4. Under the 1983 ASA, Prudential agreed to process
claims and to make determinations of participants' eligibility
for benefits under the LTD plan. Id. The ASA designated
Prudential as the "`appropriate named fiduciary' of the [LTD]
Plan for the purpose of ?review and decision" under the Post's
LTD plan. Def.'s Mot. for Summ. J. Ex. C (Ewing Aff.), Tab 2
(Exhibit B of ASA 39922) at ASO-G1; AR at 543.
It is clear that there has been continuous delegation
throughout the life of the LTD plan. The Post and Prudential
entered into another ASA for the LTD plan in 2004.*fn10
Def.'s Mot. for Summ. J. Ex. B (McDaniel Aff.) ¶ 6; Def.'s Mot.
for Summ. J. Ex. C (Ewing Aff.) ¶ 5. Under that agreement,
Prudential was, again, named
the "appropriate named fiduciary" of the [LTD] Plan
for purposes of denial and/or review of denied claims
under the plan. In exercising its fiduciary
responsibility, Prudential will have discretionary
authority to determine eligibility for benefits
. . .; to determine the amount of benefits for each
claim received; and to construe the terms of the
Def.'s Mot. for Summ. J. Ex. B (McDaniel Aff.) ¶ 7; Def.'s Mot.
for Summ. J. Ex. C (Ewing Aff.) ¶ 5. In their affidavits, Ann
McDaniel, the Posts's Vice President of Human Resources, and
Edith Ewing, Director of Prudential's Group Insurance Contract
division, affirm that the 2004 ASA "accurately reflect[ed] the
Company's understanding of Prudential's responsibilities under
the LTD Plan in its role as the appropriate named fiduciary as of
the time it issued its final decision regarding Paul Costantino's
claim for long-term disability benefits." Def.'s Mot. for Summ. J. Ex. B (McDaniel Aff.) ¶ 7; Def.'s Mot. for Summ. J. Ex.
C (Ewing Aff.) ¶ 5.
The Court finds that based on the 1983 and 2004 LTD Plans and
the 1999 SPD, the content of which is not disputed by Plaintiff,
Prudential had the discretionary authority to determine
eligibility for benefits and interpret provisions of the LTD Plan
when it issued its first denial of Plaintiff's LTD claim (in a
letter dated July 16, 2002) because he did not satisfy the
any-occupation standard. Def.'s Stmt. for Def.'s Mot. ¶ 17.
Because the SPD granted the Post discretionary authority to
determine participants' eligibility for benefits and interpret
provisions of the LTD Plan (which the Post delegated to
Prudential), the Court must apply the abuse of discretion
standard to a review of Prudential's decision to terminate
Plaintiff's benefits under the LTD Plan.
B. Prudential's Decision
Having determined that the abuse of discretion standard
applies, the Court now moves to the question of whether
Prudential abused its discretion when it applied the
any-occupation standard to Plaintiff's LTD claim.*fn11
In applying the abuse of discretion standard, courts in the
D.C. Circuit have followed the four-factor test introduced by Chief Judge Thomas Hogan in
Donovan v. Carlough, 576 F. Supp. 245, 249 (D.D.C. 1983),
aff'd, 753 F.2d 166 (D.C. Cir. 1985); see aslo Germany v.
Operating Eng'rs Trust Fund of Washington, D.C.,
789 F. Supp. 1165, 1167-68 (D.D.C. 1992) (applying the four Carlough
factors); Ret. and Sec. Program for Employees of Nat'l Rural
Coop. Assoc. v. Oglethorpe Power, 712 F. Supp. 226, 227 (D.D.C.
1989) (finding the Carlough factors consistent with the Supreme
Court's holding in Bruch, 489 U.S. 101); Foltz v. U.S. News &
World Report, 663 F. Supp. 1494, 1514 (D.D.C. 1987) (applying
the four Carlough factors). In applying those factors to this
case, the Court must consider whether: (1) Prudential's
interpretation is contrary to the language of the LTD plan; (2)
whether it is consistent with the LTD Plan's purposes; (3)
whether it is consistent with the specific purpose of determining
eligibility for the long-term total disability benefit; and (4)
whether it is consistent with prior interpretations by Prudential
and whether Plaintiff had notice of Prudential's interpretation.
The Court notes that the "application of these factors is not
formulaic . . . and that the weight given to each will vary
according to the context of the case." Germany,
789 F. Supp. at 1168.
1. Prudential's Interpretation is Not Contrary to the Language
of the LTD Plan
"Total disability" appears in bold type in Section 7 of the
1999 SPD that summarizes the LTD plan. 1999 SPD at 7-1; AR at 63.
The bold type indicates that the term is to be defined in the
Glossary. 1999 SPD at 1; AR at 12. However, as noted supra, it
was not defined in the context of the LTD Plan. 1999 SPD at
14-1-6; AR at 93-98. The only definition of "total disability" in
the 1999 SPD can be found under a glossary definition applicable
to the Business Travel Accident Plan, which uses the any-occupation standard.
1999 SPD at 9-1, AR at 74, 98. Plaintiff argues that the SPD
conflicts with the LTD Plan documents, that as a result, the SPD
language should control, and that this means the definition of
total disability should be based on the definition of "medical
disability" for the A&S Plan that Plaintiff believes was the
"closest" definition. Pl.'s Opp'n at 8. As Plaintiff notes,
however, his argument is based on the premise that there is a
conflict between the SPD and the underlying plan documents. Opp'n
at 7. The Court finds that this assumption is wrong. The
definition of total disability for the LTD Plan was not provided
in the 1999 SPD. There is no conflict, but rather an omission.
In the correspondence between Plaintiff and Prudential after
Plaintiff's initial claim and during subsequent appeals
Prudential was clear that the two-part definition for total
disability applied. Significantly, Prudential applied the
two-part definition before Plaintiff had informed Prudential that
he believed he was entitled to long-term disability benefits
under the own-occupation, rather than two-part, standard, which
he did not do until August, 2002. Def.'s Stmt. for Def.'s Mot. ¶
20. Prudential's position is consistent with the LTD Plan as
described in the 1983 ASA, and has been applied consistently to
other claims under the LTD Plan. Def.'s Stmt. for Def.'s Mot. ¶
11. Indeed, the only place in which the definition does not
appear is in the 1999 SPD. But that document contains no other
definition for total disability under the LTD Plan and nothing
suggests that Prudential intended to introduce another definition
for total disability in that document. Plaintiff has not shown
that Prudential's definition is contradicted either by the SPD or
any other LTD Plan documents, only that it was omitted from the
1999 SPD. The Court therefore finds that Prudential's definition
was consistent with the LTD Plan when taken as a whole. 2. Prudential's Interpretation is Consistent With the Purposes
of the LTD Plan
The purpose of the LTD plan is to provide benefits to
participants who "become disabled from an illness or injury
during their period of employment. 1983 LTD Plan at 1; AR at 509.
The A & S Plan (whose definition of medical disability Plaintiff
seeks to apply to his LTD Plan claim) on the other hand is
designed to pay benefits to plan participants who "are unable to
work due to a non work-related temporary medical disability."
1999 SPD at 6-1; AR at 61. If a plan participant becomes injured
or sick to the point that he cannot perform his job, he is
entitled to benefits under the A & S Plan, even if he could still
work elsewhere. A & S Plan benefits are therefore limited to
twenty-six weeks, id., and are based on the own-occupation
standard. 1999 SPD at 6-1, 14-4-5; AR at 61, 96-7.
The Court finds that, when compared with the A & S Plan and its
definition for medical disability, Prudential's interpretation of
total disability is consistent with the goals of the LTD plan.
The two-part total disability definition provides two years of
assistance for plan participants who meet the own-occupation
standard, but then moves to the more rigorous any-occupation
standard. This provides benefits to disabled plan participants
while encouraging them to re-enter the work force after two
years. This is in sharp contrast to the A & S Plan, which applies
only the own-occupation standard because it is designed to help
plan participants deal with temporary medical disabilities and
only provides participants with benefits for half a year. It is
consistent with the goals of these two plans for the LTD Plan to
have a two-part definition for total disability. Without this
definition, disabled plan participants would have no incentive to
learn a new occupation or to use their benefits with the aim of
reentering the work force.
3. Prudential's Interpretation is Consistent With the Specific
Purpose of Determining Eligibility for the Total Disability
There are two purposes to a long-term disability plan. The
first is to provide benefits to participants who become totally
disabled during their employment. The second is to maintain the
assets of the insurance provider so that funds remain for future
plan participants and claimants. See, e.g., Germany,
789 F. Supp. at 1170 ("The purpose of the plan, obviously, is to provide
health benefits to all present eligible claimants while
preserving the pool of Fund assets for future plan participants
and beneficiaries."). Thus, as this case so clearly illustrates,
an insurance provider must balance the benefits that it pays out
against its job of preserving assets for potential future claims.
Prudential has a dual obligation to provide for plan participants
and beneficiaries under the LTD Plan and to preserve the LTD
Plan's assets for future participants and beneficiaries. The
abuse of discretion standard that the Court applies allows plan
fiduciaries the discretion to "balance competing interests of
present and future claimants while maximizing assets to the
aggregate advantage of all beneficiaries." Oglethorpe Power,
712 F. Supp. at 228 (citing Fink v. Nat'l Sav. and Trust Co.,
772 F.2d 951, 955-56 (D.C. Cir. 1985)).
The Court finds that Prudential's application of the two-part
definition of total disability is consistent with this purpose.
Application of the own-occupation standard that Plaintiff urges
the Court to adopt would undermine the purpose of the LTD Plan by
greatly relaxing the standards under which Prudential disburses
benefits under the LTD Plan. The standard that Plaintiff seeks is
taken from the definition of medical disability under the A & S
Plan, a different benefit plan, with different goals. See supra
§ II.B; 1999 SPD at 6-1; AR at 61. The A & S Plan employs a broader definition because it provides benefits for a
shorter amount of time. Nothing in the record suggests that
Prudential ever intended that definition to apply to the LTD plan
or that Plaintiff's definition applies to anything other than the
medical disabilities covered by the A & S plan. The payments that
Plaintiff seeks based on his broader definition would necessarily
deplete the resources of the fund used to make payments under the
LTD Plan and is not consistent with the dual purpose of the LTD
4. Prudential's Interpretation is Consistent with Prior
Interpretations by Prudential and Plaintiff had Notice of
The May 28, 1998 letter to Plaintiff announcing the
availability of the LTD Plan defined total disability using the
two-part definition. Def.'s Stmt for Def.'s Mot. ¶ 8. Although
Plaintiff does not remember receiving that letter, it is
undisputed that the letter was mailed to Plaintiff, that
Plaintiff signed a "1998 Special Enrollment Form" (which was
attached to the letters mailed to Plaintiff and his mailroom
colleagues), and that Plaintiff completed the enrollment form and
elected coverage under the LTD Plan. The Court therefore
concludes that Plaintiff had notice of Prudential's definition of
Most damaging to Plaintiff's case is that he accepted
Prudential's definition until it became inconvenient for him.
Plaintiff filed his claim on May 8, 2000. Prudential denied
Plaintiff's claim on July 17, 2000, because he did not meet the
own-occupation standard (the initial part of the two-part
standard). In that denial and subsequent communications,
Prudential recited the LTD Plan's two-part definition of total
disability. Def.'s Stmt. for Def.'s Mot. ¶ 14. Plaintiff and
Prudential corresponded on numerous occasions and through
subsequent appeals, and Plaintiff does not dispute that
Prudential consistently reaffirmed the two-part definition of disability. Id. It was not until August 3, 2002 that Plaintiff
claimed he was entitled to long-term disability benefits under
the own-occupation, rather than the two-part, standard. Def.'s
Stmt. for Def.'s Mot. ¶ 18.
Based on the undisputed facts, there is no question that, the
omission of the definition for long term disability in the 1999
SPD notwithstanding, that Plaintiff had notice of the definition
that Prudential applied to his claim. Moreover, Plaintiff does
not contest that the two-part definition appears in the original
LTD Plan document, and has been consistently applied to claims
for covered employees of the Post under the LTD since 1983.
Plaintiff therefore concedes that Prudential's definition is
consistent with prior interpretations of claims under the Post's
After carefully considering the pleadings, the relevant case
law and the entire record, the Court finds that Defendant's
decision to apply the two-part definition of total disability was
not an abuse of discretion. The Court shall grant Defendant's
Motion for Summary Judgment and deny Plaintiff's motion. An
appropriate Order accompanies this Memorandum Opinion.
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