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SOPP v. CNA INSURANCE COMPANY

June 23, 2004.

JOHN R. SOPP, Plaintiff
v.
CNA INSURANCE COMPANY (CONTINENTAL CASUALTY COMPANY) and KRAFT FOODS, INC., Defendants.



The opinion of the court was delivered by: MALACHY MANNION, Magistrate Judge

MEMORANDUM AND ORDER

Before the court are the plaintiff's and defendants' cross-motions for summary judgment filed pursuant to Fed.R.Civ.P. 56(c). (Doc. Nos. 19, 27).

I. PROCEDURAL HISTORY

  On November 20, 2001, the defendant CNA Insurance Company (Continental Casualty Company) (collectively referred to as "CCC"), and Kraft Foods, Inc., ("Kraft"), filed a petition for removal seeking to remove this matter from the Luzerne County Court of Common Pleas. (Doc. No. 1). The plaintiff ("Sopp") had filed a complaint in that court seeking reinstatement of Short Term Disability benefits, and a determination as to his entitlement to Long-Term Disability benefits under the CCC/Kraft Disability Insurance Plan, an employee welfare benefit plan regulated by the Employee Retirement Income Security Act of 1974, ("ERISA"), as amended, 29 U.S.C. ยง 1001-1461. (Doc. No. 1).

  After being granted an extension of time to do so, the plaintiff filed an amended complaint on March 4, 2002. (Doc. No. 7). The defendants filed an answer to the amended complaint on May 5, 2002. The parties consented on July 3, 2002, to proceed before the undersigned United States Magistrate Judge. (Doc. Nos. 11, 12). The defendants filed a motion for summary judgment, a supporting brief with exhibits, and proposed findings of fact, on August 18, 2003. (Doc. Nos. 19, 20, 21). After being granted an extension of time to do so, the plaintiff filed a cross-motion for summary judgment, proposed findings of fact, and a brief in opposition to the defendants' motion for summary judgment, with exhibits, on November 4, 2003. (Doc. Nos. 27, 28). The defendants filed a reply to the plaintiff's cross-motion for summary judgment on November 25, 2003, and a brief in opposition, on December 8, 2003. (Doc. Nos. 34, 37). Because certain clarifications of the record were necessary for resolution of this matter, oral argument was held on May 6, 2004, to address those issues.

  II. FACTUAL BACKGROUND

  The documents submitted by the parties establish that Mr. Sopp was involved in a motor vehicle accident on May 5, 1999, which occurred while he was in the scope of his employment with co-defendant Kraft Foods. He sustained a number of injuries as a result of the motor vehicle accident, mostly to his left upper extremity, which are discussed in more detail below. He applied for and received short term disability benefits through August 31, 1999.

  On September 2, 1999, following receipt of an Independent Medical Examination report, CCC advised Mr. Sopp that he had been released to return to his duties as of August 31, 1999. He was advised that his short term disability benefits would be discontinued as of that date. (Doc. No. 18, defendants' record in support of the motion for summary judgment; CCC 322).*fn1

  The plaintiff filed an appeal of the determination on November 11, 1999. (CCC 145). On July 6, 2000, CCC's Disability Specialist Joanne Laurie wrote to the plaintiff's attorney and advised him that a review had been completed of Mr. Sopp's disability claim, and that it was determined that the medical records, on the whole, did not support a claim for on-going disability benefits. Specifically, Ms. Laurie discussed and described the plaintiff's job duties, and concluded that there was nothing in the plaintiff's medical records which would preclude him from performing the regular duties of his job as a Customer Category Manager. (CCC 138). The plaintiff made several subsequent attempts to again appeal the decision, usually incorporating ongoing treatment records. The plaintiff subsequently filed a complaint in the Luzerne County Court of Common Pleas seeking a determination as to his rights under the Kraft short term and long term disability plans. As noted above, that matter was removed to this court. (Doc. No. 1).

  III. ERISA STANDARD OF REVIEW

  A denial of benefits challenged under Section 1132(a)(1)(B) of ERISA 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. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan vests such discretion in the plan administrator, the decision is to be reviewed under the more deferential arbitrary and capricious standard of review. Id.; See also Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991); Heasley v. Belden & Blake Corp., 2 F.3d 1249, 1256 (3d Cir. 1993).

  The arbitrary and capricious standard is essentially the same as the "abuse of discretion" standard. Abnathya v. Hoffman-La Roche, 2 F.3d 40, 45 (3d Cir. 1993). The scope of review is narrow and the court is not free to substitute its own judgment for that of the plan administrator in determining eligibility for plan benefits. Id. at 45.

  Kraft's Plan explicitly confers this discretion on the plan administrator. The plan provides, in pertinent part:
. . . When making a benefit determination under the policy, We have discretionary authority to determine Your eligibility for benefits and to interpret the terms and provisions of the policy . . .
. . . The plan administrator has complete discretionary authority to determine eligibility for benefits and to construe uncertain plan terms . . .
. . . The Administrator and other Plan fiduciaries have discretionary authority to interpret the terms of the Plan and to determine eligibility for and entitlement to benefits in accordance with the Plan . . .
(Doc. No. 18, Kraft Choice Summary Plan Descriptions, pp. 7, 11, 20) (emphasis in original). Because this language clearly gives the plan administrator discretion over the payment of benefits, the arbitrary and capricious standard of Firestone is applicable in this case.

  Furthermore, under the arbitrary and capricious standard, the district court is to "look to the record as a whole," which "consists of evidence that was before the administrator when he or she made the decision being reviewed." Mitchell v. Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir. 1997) (emphasis added). The relevant administrative record has been defined as including the evidence not only before the administrator at the time of the original decision in the matter, but also any additional records which may have been submitted and reviewed in the process of any administrative appeal. Ernest v. Plan Administrator of the Textron Insured Benefits Plan, 124 F. Supp.2d 884, 893 (M.D.Pa. 2000). Therefore, the relevant administrative record in this matter is limited solely to the period beginning May 5, 1999, the date of the motor vehicle accident, and the date of CCC's final decision relating to the termination of short term ...


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