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Marcin v. Reliance Standard Life Insurance Co.

United States District Court, D. Columbia

October 14, 2015

JILL MARCIN, Plaintiff,
v.
RELIANCE STANDARD LIFE INSURANCE COMPANY, et al., Defendants

          For Jill Marcin, Plaintiff: Scott Bertram Elkind, LEAD ATTORNEY, ELKIND & SHEA, Silver Spring, MD USA.

         For Reliance Standard Life Insurance Company, Mitre Corporation Long Term Disability Insurance Program, Defendants: Kathryn Anne Grace, LEAD ATTORNEY, WILSON ELSER MOSKOWITZ EDELMAN & DICKER, LLP, Mclean, VA USA; Joshua Bachrach, PRO HAC VICE, WILSON ELSER MOSKOWTIZ EDELMAN & DICKER, LLP, Philadelphia, PA USA.

         MEMORANDUM OPINION

         AMY BERMAN JACKSON, United States District Judge.

         Since 2010, plaintiff Jill Marcin has been engaged in litigation under the Employee Retirement Income Security Act (" ERISA" ), 29 U.S.C. § 1001, et seq., with defendants Reliance Standard Life Insurance Company (" Reliance" ) and Mitre Corporation Long Term Disability Insurance Program (" Mitre" ). Reliance denied plaintiff's claim for disability benefits under the Mitre plan on two previous occasions, but the Court found in each case that the denial was not adequately justified, and it remanded the matter to the insurer for further consideration. See Marcin v. Reliance Standard Life Ins. Co., 895 F.Supp.2d 105 (D.D.C. 2012); Mem. Op. & Order (Apr. 14, 2015) [Dkt. # 43] (" Mem. Op. & Order" ) at 16.

         On May 29, 2015, Reliance notified the Court of its latest final decision on plaintiff's claims. Defs.' Notice of Final Decision [Dkt. # 44] (" Notice" ). Based on its review of the materials plaintiff had submitted, Reliance concluded for a third time that plaintiff " was capable of performing all of the material duties of her regular occupation on a full time basis" when her coverage under the disability insurance plan ended, and that she was therefore not entitled to benefits. Ex. A to Defs.' Notice of Final Decision [Dkt. # 44-1] (" Final Decision" ) at 8.[1]

         Despite the deferential standard of review that applies in this case, the Court finds that the insurer's decision cannot be sustained. The record in this case does not contain substantial support for the insurer's finding that she was capable of working full-time when she stopped working, and that is the basis upon which it denied her claim for benefits. Accordingly, the Court will enter judgment in favor of the plaintiff. It is important to note, however, that the Court's entry of judgment for plaintiff is not a judicial determination that plaintiff was " totally disabled" at the time she stopped working. Rather, this decision is limited to the finding that Reliance's denial of benefits to plaintiff based on its determination that she was capable of full-time work was not reasonable.

         BACKGROUND

         The Court detailed the factual background of this case in its April 14, 2015 Memorandum Opinion and Order, see Mem. Op. & Order at 1-7, so it will only restate key portions of that summary below. Plaintiff Jill Marcin was diagnosed with serious medical conditions, including portal vein thrombosis and kidney cancer, in November 2005, and she underwent surgery related to her ailments in the fall of 2007. Marcin, 895 F.Supp.2d at 108. Marcin returned to work part-time with the approval of her physicians in early November 2007. Id. at 114. From that time until mid-February 2008, Marcin worked a reduced number of hours, which varied based on the particular week. Id. at 108. She stopped working altogether on February 15, 2008. Id. She filed a written application for disability benefits under the Mitre policy on March 25, 2008, claiming that her last day of work before becoming disabled had been August 19, 2007. Id.

         Reliance denied Marcin's claim for disability benefits on June 11, 2008. Id. at 108-09. It affirmed the denial on September 29, 2009, after considering plaintiff's administrative appeal. Id.

         On May 28, 2010, plaintiff received a fully favorable decision from the Social Security Administration (" SSA" ), which concluded that, " [b]ased on the application for a period of disability and disability insurance benefits filed on April 14, 2008, the claimant has been disabled under sections 216(i) and 223(d) of the Social Security Act since August 20, 2007." Decision, SSA Office of Disability Adjudication and Review, Pl.'s Ex. Submission [Dkt. # 40] (" SSA Decision" ) at 5. Plaintiff's counsel submitted the SSA's decision to Reliance on June 21, 2010. Marcin2 988.[2] Reliance responded on June 24, 2010, stating that its " internal guidelines only provide[d] for one administrative appeal," and that, " [a]ccording to [its] records, this appeal ha[d] already been provided and [its] decision communicated to [plaintiff] on September 29, 2009." AR2 0201.[3] For that reason, Reliance stated that its " previous determination remain[ed] final" and that it was " unable to further address [plaintiff's] appeal." Id.

         Marcin filed a complaint in this Court on October 26, 2010, Marcin, 895 F.Supp.2d at 112, and both sides moved for summary judgment. Id. at 107. On September 28, 2012, after a comprehensive review of the evidence and arguments presented by both sides, see id. at 114-22, the Court denied defendants' motion and granted plaintiff's motion in part by remanding the matter to Reliance. Id. at 123-24.

         In its opinion remanding the case, the Court stated that " the only question" before it was whether plaintiff " was unable to work when she stopped" in February 2008, and it noted that, for plaintiff to prevail, the record had to show that she became disabled before her coverage under the Mitre plan expired on March 1, 2008. Marcin, 895 F.Supp.2d at 114. The Court undertook a detailed analysis of the record and chronology of events, and it concluded that this was " a very close case." Id. at 122. The Court observed that although plaintiff plainly suffered from severe medical conditions, id. at 114, she had done " little to meet her burden under the policy to demonstrate that she was disabled" during the relevant time period. Id. at 122. At the same time, however, the Court noted that defendants had " failed to point to much evidence to support the finding" that plaintiff was not disabled at the relevant time, " even under a deferential standard of review." Id. " So," the Court stated, " whether the insurer's determination was reasonable on this record depends in large measure on what that determination was and the stated reasons behind it." Id. at 119.

         Ultimately, the Court found that it could not determine whether Reliance's decision to deny benefits to plaintiff was reasonable because it was not clear what the grounds for that decision were. Id. at 122. The Court explained:

While the Court's review of Reliance's decision is highly discretionary, Reliance still must provide enough evidence to support a finding that the decision was reasonable and supported by the record. In order to make that finding, it is essential that the Court understand what the decision was: what did the plan administrator find and what were the grounds for that decision? Based on the record submitted by Reliance, particularly the letter it sent plaintiff denying the claim for benefits, the Court cannot answer those questions. While the discussion of plaintiff's medical condition is not difficult to follow, it is not clear how Reliance plugged those facts into the rubric established under the Policy.

Id. (internal citation omitted). The Court went on to detail several aspects of the decision that were ambiguous. Id. at 122-23. The Court then remanded the case to Reliance with instructions " to reconsider its denial of benefits and to explain specifically how the [disability insurance] Policy applies to the evidence in the record, which section of the Policy is controlling, and whether the decision [to deny plaintiff benefits] is based on findings of Total Disability, Partial Disability, or Residual Disability." Id. at 123.

         Reliance issued a letter to plaintiff reiterating its decision to deny her claim for disability benefits on January 7, 2013. AR2 0202 [Dkt. # 24]. The letter indicated that Reliance's decision was based on the same information it had considered previously -- plaintiff's claim file and the opinions of Reliance's own medical consultants. See AR2 0205. In addition, the denial letter relied on a new report by a vocational specialist, who had been commissioned to look at whether plaintiff was partially disabled based on the medical records. AR2 0205-06.

         On June 28, 2013, plaintiff submitted voluminous materials to Reliance in an attempt to appeal the January 2013 denial of benefits, including another copy of the Social Security Administration's decision awarding plaintiff disability benefits, see Marcin2 at 988-95, and a new report from another vocational specialist. See Marcin2 at 4490-501. On July 24, 2013, Reliance declined to consider plaintiff's appeal, stating again that plaintiff had already received the one appeal to which she was entitled under its internal guidelines. AR2 0208.

         Plaintiff filed a second complaint in this Court on August 28, 2013, challenging the January 2013 denial of disability benefits. Compl. [Dkt. # 1].

         On November 15, 2013, plaintiff filed a " motion to establish claim record and standard of review." Pl.'s Mot. to Establish Claim Record [Dkt. # 12] (" Claim Record Mot." ); Mem. of P. & A. in Supp. of Claim Record Mot. [Dkt. # 12-1] (" Claim Record Mem." ). In that motion, plaintiff asked the Court: (1) to rule that the materials she had submitted with her attempted administrative appeal of Reliance's January 7, 2013 decision were part of the record before the Court; and (2) to alter the standard of review in this case from " abuse of discretion" to de novo in view of what she contended was defendants' record of violations under ERISA. Claim Record Mem. at 24-25. Defendants took the position that because plaintiff was not entitled to appeal the January 2013 denial of benefits, the materials she submitted with her attempted appeal were not part of the record in this case. Defs.' Mem. of P. & A. in Opp. to Claim Record Mot. [Dkt. # 13] at 9-12. Defendants also argued that the standard of review should not change. Id. at 14-15.

         On April 16, 2014, the Court granted plaintiff's motion in part and denied it in part in a ruling from the bench. See Tr. of Status Hr'g (Apr. 16, 2014) (" Status Hr'g Tr." ) at 7. First, the Court held that the materials plaintiff had submitted to Reliance with her appeal would be part of the record in this case. Id. at 6-7. It noted that Reliance itself had expanded the record by relying on a new vocational report in its January 7, 2013 decision, and that plaintiff had submitted additional materials in response to that decision. Id. at 6. The Court also deemed Reliance's refusal to consider plaintiff's appeal to be a denial of the appeal. Id. at 6-7. Finally, the Court found that plaintiff had not shown any bad faith or malfeasance on the part of defendants, and it held that the deferential standard of review would continue to apply. Id. at 5.

         Defendants moved for summary judgment on July 29, 2014. Defs. Reliance Standard Life Ins. Co. & the Mitre Corp. Long Term Disability Ins. Program's Mot. for Summ. J. [Dkt. # 30] (" Defs.' Mot." ); Mem. of P. & A. in Supp. of Defs.' Mot. [Dkt. # 30] (" Defs.' Mem." ). On February 24, 2015, the Court issued an order granting defendants' motion for summary judgment in part, resolving two of the issues presented. Order (Feb. 24, 2015) [Dkt. # 37]. First, after considering plaintiff's argument that her coverage under the Mitre policy ended much later than March 1, 2008, the Court affirmed its previous finding that plaintiff ceased to be covered by the Mitre disability insurance policy on March 1, 2008. Id. at 3-4; see also Marcin, 895 F.Supp.2d at 114. The Court also reiterated its previous finding that defendants' reliance on the opinions of Dr. Dean and Dr. Shipko, medical consultants who conducted a paper review of plaintiff's records, was not unreasonable, arbitrary and capricious, or evidence of bias. Order (Feb. 24, 2015) at 4-5; see also Marcin, 895 F.Supp.2d at 120 n.7. The Court refrained, however, from determining whether defendants' reliance on the new vocational report was reasonable. Order (Feb. 24, 2015) at 5. In addition, the Court did not rule on the ultimate question in this case: whether Reliance's denial of benefits to plaintiff was reasonable.

         The Court held a hearing on the remainder of defendants' motion on March 20, 2015. At the hearing, plaintiff's counsel submitted supplemental exhibits containing legal authority that had not been cited in plaintiff's previous pleadings. See Pl.'s Ex. Submission [Dkt. # 40]. In particular, plaintiff argued that it was unreasonable for Reliance to refuse to consider the finding of the Social Security Administration that she had been disabled since August 20, 2007.[4] Id. at 2-4. In light of this belated submission, the Court permitted defendants to file a supplemental submission of their own to address " the question of whether -- assuming the Social Security decision was part of the record before the insurer -- it would have been unreasonable for the insurer to fail to consider it." Min. Order (Mar. 27, 2015). Defendants filed a supplemental pleading on March 31, 2015, arguing that it was not unreasonable for Reliance to " refuse" to consider the Social Security decision. Defs.' Supplemental Submission in Resp. to March 27, 2015 Order [Dkt. # 41] (" Defs.' Supp." ) at 3-4.

         On April 14, 2015, the Court denied defendants' motion for summary judgment and remanded the case to Reliance once again. Mem. Op. & Order at 16. It found first that it was unreasonable for Reliance to refuse to consider the Social Security Administration's determination in connection with its review of plaintiff's claim. Id. at 10-14. Second, the Court found that it was not clear from the decision letter whether Reliance had " focused on the time period that the Court identified as critical in this case," namely the time period between November 2007, when plaintiff returned to work, and March 1, 2008, when plaintiff's plan coverage terminated. Id. at 14, 16. Accordingly, the Court exercised its discretion to remand the case to Reliance once more with the following instructions:

Reliance is directed to reconsider its denial of benefits in light of all of the materials before it, including, in particular, the Social Security Administration's determination and the vocational report plaintiff submitted in response to the report of Kate M. Hulsey, relied upon in the January 2013 decision. The decision on remand should also state clearly whether plaintiff was disabled under the terms of the policy at any time after November 6, 2007, and before March 1, 2008. No new information may be added to the record by the parties, and plaintiff is not entitled to an administrative appeal of Reliance's decision after this remand. Reliance shall notify plaintiff and the Court of its final decision on plaintiff's application for disability benefits on or before May 29, 2015.

Id. at 16.

         On May 29, 2015, Reliance notified the Court that it had reached a final decision to deny plaintiff's claim for benefits. Notice [Dkt. # 44]. That same day, the Court issued a Minute Order permitting plaintiff to " submit a pleading not to exceed 15 pages that sets forth her position on whether defendants' decision can withstand the deferential standard of review that applies in this case, and if not, why not." Min. Order (May 29, 2015). The Court further specified that plaintiff was not to " rely upon or submit any new evidence that is not already in the record," or to " revisit any of the issues the Court has already resolved, including which materials are in the record, the date on which plaintiff's coverage under the Mitre policy ended, the propriety of defendants' reliance on the opinions of Dr. Dean and Dr. Shipko, and the applicable standard of review." Id.

         On June 29, 2015, plaintiff filed a memorandum in response to Reliance's Final Decision. Pl.'s Suppl. Mem. [Dkt. # 45] (" Pl.'s Supp. Mem." ). Defendants responded on July 7, 2015. Defs.' Resp. to Pl.'s Supp. Mem. [Dkt. # 46] (" Defs.' Resp." ).

         STANDARD OF REVIEW

         This matter is before the Court after a second remand, and the Court must now determine whether the insurer's decision should be upheld under the applicable standard. ERISA provides that a participant in, or beneficiary of, a covered plan may sue " to recover benefits due to him under the terms of [the] plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). The Supreme Court has held that courts should apply a de novo standard -- instead of the more deferential arbitrary and capricious standard -- to a benefits determination under ERISA " unless the plan provides to the contrary." Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). A plan " provides to the contrary" when it grants its " administrator or fiduciary discretionary authority to determine eligibility for benefits." Id., quoting Firestone, 489 U.S. at 115. Under those circumstances, " ...


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