Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SOLLON v. OHIO CASUALTY INSURANCE COMPANY

October 25, 2005.

WILLIAM D. SOLLON, Plaintiff,
v.
THE OHIO CASUALTY INSURANCE COMPANY and THE HARTFORD LIFE INSURANCE COMPANY, Defendants.



The opinion of the court was delivered by: WILLIAM STANDISH, Senior District Judge

MEMORANDUM

Pending before the Court are Motions for Summary Judgment filed by Ohio Casualty Insurance Company ("Ohio Casualty") and by The Hartford Life Insurance Company ("Hartford.") (See Docket Nos. 41 and 43, respectively.) The Motion by Ohio Casualty is granted in its entirety; the Motion by Hartford is granted in part. This matter is remanded for further consideration in light of the discussion which follows.

I. INTRODUCTION

  A. Factual Background*fn1

  Beginning in July 1974, Plaintiff William D. Sollon was employed by Defendant Ohio Casualty, a property casualty insurance company. As part of its employee benefits plans, Ohio Casualty offered a long term disability ("LTD") plan in which Mr. Sollon voluntarily participated throughout his employment ("the Plan.") Ohio Casualty purchased an insurance policy for payment of LTD benefits for its qualifying employees from Hartford.

  At the time of the events giving rise to this suit, Mr. Sollon worked out of his home near Pittsburgh, Pennsylvania, as a claims representative. In October 1999, his cardiologist, Dr. David Burkey, recommended that due to his severe cardiac impairment, coronary artery disease, and other related conditions, he should quit working and apply for LTD benefits. On October 19, 1999, Mr. Sollon notified Ohio Casualty's home office of this recommendation and, following instructions from his employer, contacted Elizabeth Aumann, the Ohio Casualty Benefits Manager, for information about how to apply for LTD benefits. Ms. Aumann told him that the Plan required him to first apply for Social Security disability benefits and that she would forward an application for LTD benefits. Until those benefits could go into effect, Ohio Casualty placed him on a medical leave of absence. Mr. Sollon subsequently received an application which he returned to Ohio Casualty for review and transmittal to Hartford for processing. Plaintiff later received a letter from Ohio Casualty's benefits office advising him of the status of his LTD and other employee benefits in which it was stated, "Hartford is currently reviewing your claim for LTD benefits. We will notify you of Hartford's decision as soon as possible." (Ohio Casualty Insurance Company's Brief in Support of its Motion for Summary Judgment, Docket No. 42, "Ohio Casualty Brief," Exhibit 1, Declaration of Elizabeth S. Aumann, "Aumann Decl.," Exh. 9.)

  On May 15, 2000, Kimberly J. Polash, a claims examiner with Hartford, advised both the Ohio Casualty employee benefits office and Mr. Sollon that his LTD benefits claim had been approved as of April 20, 2000. The letter to Mr. Sollon also noted that "benefit payments will continue, subject to the terms and limitations of the policy, while you meet the policy definition of Total Disability."*fn2 (Aumann Decl., Exh. 10.) Based on the terms of the Plan, Plaintiff received a monthly benefit equal to two-thirds of his base salary, less the amount he received as disability benefits from the Social Security Administration.

  On September 27, 2000, Ms. Aumann received an e-mail from a colleague which stated, "Have heard rumblings that [Mr.] Sollon, who is on LTD since 10/19/99, has been playing golf at least two times a week at his country club and may also be the country club president. Not sure how this relates to his LTD but thought we might want to check." (Aumann Decl., Exh. 12.) Ms. Aumann wrote to Ms. Polash at Hartford on September 29, 2000, advising her of this rumor, and asking that someone investigate and let Ohio Casualty know what effect, if any, this had on Plaintiff's disability claim. Ohio Casualty contends that at no time did Ms. Aumann offer any conclusions about whether Mr. Sollon's benefits should be terminated, but merely passed the information along to the party who made determinations about eligibility and paid the benefits. (Ohio Casualty Brief at 6.)

  In response to Ms. Aumann's letter, Hartford assigned an investigator to contact Plaintiff's medical doctors regarding his physical condition and began to re-evaluate his claim. The investigation included three days of surveillance in November, 2000, during which time Mr. Sollon was videotaped playing golf. When asked about this by the investigator during a personal interview on February 8, 2001, Mr. Sollon admitted he was the person in the videotape.

  On September 25, 2001, Ohio Casualty was advised by letter from Hartford that Mr. Sollon's LTD benefits under the Plan had been terminated. The letter stated that Hartford had completed its review of the claim and "determined that the information obtained does not support his claim of total disability from his own occupation." (Aumann Decl., Exh. 16.) Mr. Sollon received a similar letter from Hartford, advising him that his benefits were retroactively terminated as of November 8, 2000, the day he was videotaped paying golf. Although he appealed this decision to Hartford as prescribed in the Plan, after further reviews, the termination was affirmed on January 31, May 28, and July 2, 2002.

  B. Procedural History

  Mr. Sollon filed suit in this Court on September 24, 2002, claiming that the denial of his long term disability benefits by Defendants was a violation of the Employment Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. ("ERISA"), breach of the contract underlying the Plan, and violation of 42 Pa. Con. Stat. Ann. § 8371, the Pennsylvania Bad Faith Insurance Act. In his complaint, Plaintiff sought restoration of his LTD benefits retroactive to September 2001, attorney fees and costs and "other relief that this Court deems appropriate, equitable and just under the circumstances." (Complaint, Count I.)

  Ohio Casualty moved to dismiss pursuant to Fed.R.Civ.Pro. 12(b)(6) on November 15, 2002, arguing that Plaintiff had admitted that Hartford was solely responsible for the decisions regarding his eligibility for benefits, and that the state law claims for breach of contract (Count II) and violation of the Pennsylvania Bad Faith Insurance Act (Count III) were pre-empted by ERISA. (Docket No. 9.) The motion was granted in part by order of Court on March 12, 2003, dismissing Counts II and III with regard to both Defendants. (Docket No. 16.) The parties then conducted almost two years of discovery before Defendants filed the Motions for Summary Judgment now pending.

  C. Jurisdiction and Venue

  The parties agree that this Court has jurisdiction over Plaintiff's ERISA claims pursuant to 29 U.S.C. § 1132(e)(1). Venue is appropriate in this District inasmuch as the Plan is administered and the alleged violations occurred in this district. 29 U.S.C. § 1132(e)(2).

  II. STANDARD FOR SUMMARY JUDGMENT

  A court may grant summary judgment if the party so moving can show, based on "pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, . . . 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." Fed.R.Civ.P. 56(c)); Rossetti v. Busch Entertainment Corp., 87 F. Supp.2d 415 (E.D. Pa. 2000). If a reasonable jury could return a verdict for the non-movant, the dispute is genuine and if, under substantive law, the dispute would affect the outcome of the suit, it is material. A factual dispute between the parties that is both genuine and material will defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

  In considering a motion for summary judgment, the court must view all the evidence in the light most favorable to the non-movant, accept the non-movant's version of the facts as true, and resolve any conflicts in its favor. Rossetti, id., citing Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986), and Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). In short, the movant must show that if the pleadings, depositions and other evidentiary material submitted to date were admissible at trial, the opposing party could not carry its burden of proof based on that evidence and a reasonable jury would thus decide all genuine material disputes in favor of the movant. Celotex Corp. v. Catrett, 477 U.S. 317, 318 (1986).

  Once the moving party has demonstrated that there are no genuine issues of material fact, the burden shifts to the non-moving party to "make a showing sufficient to establish the existence of every element essential to his case, based on the affidavits or by depositions and admissions on file." Celotex, id. at 322-23; Rossetti, id.; Fed.R.Civ.P. 56(e). The evidence to be presented by the non-moving party must be such that a reasonable jury could find in its favor, and it cannot simply reiterate unsupported assertions, conclusory allegations or mere suspicious beliefs. Liberty Lobby, id. at 250-252; Groman v. Township of Manalapan, 47 F.3d 628, 633 (3d Cir. 1995).

  III. LEGAL ANALYSIS

  A. Motion for Summary Judgment by Defendant Ohio Casualty

  1. Arguments Raised by Defendant: Ohio Casualty contends that Plaintiff's only claim against it is breach of fiduciary duty. Defendant argues that although Plaintiff never explicitly states the basis for his claim, it is clear from the tenor of his pleadings that he is seeking to "recover benefits due 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." (Ohio Casualty Brief at 9, citing 29 U.S.C. § 1132(a)(1)(B) ("Section 502(a)(1)(B).")) Because the Third Circuit has held that "Section 502(a)(1)(B) is unavailable in actions for breach of fiduciary duty," Plaintiff fails to state a cause of action against Ohio Casualty, who should therefore be granted summary judgment. (Ohio Casualty Brief, id., citing Haberern v. Kaupp Vascular Surgeons Ltd. Defined Benefit Pension Plan, 24 F.3d 1491, 1501 (3d Cir. 1994), cert. denied, 513 U.S. 1149 (1995).)

  Secondly, Ohio Casualty argues that even if the Court were to decide that Plaintiff's claim under Section 502(a)(1)(B) were viable, such a claim would necessarily fail because it is undisputed that Ohio Casualty was merely Plaintiff's employer and the Plan sponsor, not a fiduciary. (Ohio Casualty Brief at 10-13.) Since a claim under Section 502(a)(1)(B) may be brought only against a plan or the plan fiduciary, and Ohio Casualty clearly is not "the Plan," it can only be held liable if it were the fiduciary. Because the only issue herein is the decision to terminate the LTD benefits and Plaintiff admits that Ohio Casualty took no part in that decision, it could not be the fiduciary "with respect to the particular activity at issue." (Id. at 11, quoting Coleman v. Nationwide Life Ins. Co., 969 F.2d 54, 61 (4th Cir. 1992).)

  Finally, Ohio Casualty argues that, contrary to Plaintiff's assertions, it breached no fiduciary duty to him by delegating its administrative responsibilities or by reporting his golfing activity to Hartford. (Ohio Casualty Brief at 13-14.)

  We need not examine the first two arguments in detail because, even if we assume without analysis that Ohio Casualty was a fiduciary*fn3 with regard to the LTD Plan, Plaintiff has failed to identify any duty owed to him as a Plan participant which was breached by Ohio Casualty.

  2. Plaintiff's Arguments: Plaintiff does not disagree with Ohio Casualty's position that his only claim against it is for breach of fiduciary duty. However, he argues that contrary to the assumption that his claim is based on Section 502(a)(1)(B), he is relying instead on Section 502(a)(3)(B),*fn4 a "catchall provision" that provides "a safety net offering appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy." (Plaintiff's Brief in Opposition to Motion for Summary Judgment by Ohio Casualty Insurance Company, Docket No. 51, "Plf.'s Opp. to Ohio Casualty," at 4-5, quoting Varity Corp. v. Howe, 516 U.S. 489, 512 (1996).) We will not analyze herein the delicate interplay of Sections 502(a)(1)(B) and 502(a)(3)(B)*fn5 because Plaintiff fails to establish that any action taken (or not taken) by Ohio Casualty resulted in an injury to him for which he could seek such equitable relief.

  In response to Ohio Casualty's motion, Plaintiff argues first that Defendant breached a fiduciary duty to him as a Plan participant based on information provided

 
in his Employee Benefits Manual . . . where . . . Ohio Casualty . . . informs the employees like Mr. Sollon, that they are fiduciaries and have a fiduciary responsibility towards Mr. Sollon as an employee participant. This breach of fiduciary duty exists from the language of the Employee Benefits Manual and not necessarily under § 502(a)(1)(B) of ERISA. (Plf.'s Opp. to Ohio Casualty at 4-5.)
  The language from the Employee Benefits Manual*fn6 cited by Plaintiff reads in full:
 
You [the participant] also have the right to expect the people who are responsible for the operation of these Plans to act prudently and in the best interest of the Plan participants as a whole. These people are called fiduciaries. It is [Ohio Casualty's] policy that Plan fiduciaries act in the best interest of all Plan participants and that they will continue to do so.
(Plaintiff's Appendix in Support of His Briefs in Opposition to the Defendants' Motions for Summary Judgment, Docket No. 50, "Plf.'s App.," Employee Benefits Manual.)

  Contrary to Plaintiff's position, nothing in this paragraph establishes that Ohio Casualty is the fiduciary for the LTD benefits plan. Rather it simply states that "the people who are responsible for the operation of these Plans" are the fiduciaries. The identity of those "people" is not made clear in this paragraph.

  Alternatively, Plaintiff argues that Ohio Casualty was a fiduciary with regard to the LTD Plan based on two additional statements in the Summary Plan Description. First "The Ohio Casualty Insurance Company administers the [LTD Plan] and acts as liaison with [Hartford] which is responsible for paying benefits under the Plan." Second, Ohio Casualty states that it is the agent for service of process. Plaintiff argues that these two statements confirm Ohio Casualty's role as both administrator and fiduciary. (Plf.'s Opp. to Ohio Casualty at 6-7; Plf.'s App., Summary Plan Description, LTD-13.)

  "Whether a defendant is a plan administrator is a factual question which requires an inquiry into the plan document and the factual circumstances surrounding the administration of the plan." Carducci v. Aetna U.S. Healthcare, 247 F. Supp.2d 596, 609 (D.N.J. 2003), citing Hamilton v. Allen Bradley Co., 244 F.3d 819, 824 (11th Cir. 2001).

  In Vega v. National Life Ins. Servs. Inc., 145 F.3d 673 (5th Cir. 1998), the insurance plan summary identified the employer, not the insurance company, as the plan administrator. Id. at 677 n. 24. Moreover, the agreement between the employer and the insurance company explicitly stated that the insurer was not "deemed to be a `named fiduciary' or `Plan Administrator' as defined by ERISA." The court concluded that despite this language, the insurer "was indisputably the plan administrator and fiduciary with respect to paying insurance claims," based on the fact that claims were sent to the insurer on its own proof of loss forms and it was responsible for paying such claims. Relying on the definition of "administrator" provided in 29 U.S.C. § 1002 (16)(A)(i), the Court concluded the insurer was "the person specifically so designated by the terms of the instrument under which the plan is operated." Vega, id.

  Similarly, in Bollenbacher v. Helena Chem. Co., 934 F.Supp. 1015 (N.D. Ind. 1996), the employer/defendant argued that it was not the administrator of the LTD plan in question since it had no administrative discretion over the plan. Helena's employee benefits personnel described their responsibilities as purely ministerial, such as executing enrollment forms for new employees, paying the monthly premiums to the insurer, sending claims forms to employees "on rare occasions," disseminating information to employees about their benefits, providing the insurer with personnel information about claimants, and transmitting claim forms between the claimant and the insurer. Id. at 1022. The court held that despite the fact that one of Helena's employees had expressed her opinion that Bollenbacher would not be entitled to disability insurance since he was no longer a Helena employee and no doctor had determined that he was disabled, these statements were merely an explanation of the rules determining eligibility for benefits or advice about a plan participant's rights and options under the plan, that is, "only ministerial functions." Id. at 1024, distinguishing Varity Corp. At her deposition, Ms. Aumann was asked how she interpreted the phrase "administers the LTD plan" in the Summary Plan Description. She replied:
What that means is we do such things as deduct contributions from employees' checks for the coverage. We submit the premium payment. . . . In the event an employee becomes disabled, we send the employee the claim forms, send the claims form to Hartford for determination and that type of thing.
(Plf.'s App., Deposition of Elizabeth Aumann at 18.)

  Mr. Sollon attempts to distinguish Vega and Bollenbacher by arguing that in those cases, the employer exercised no discretionary authority over the plans. The examples he provides of discretionary authority exercised by Ohio Casualty are (1) Ms. Aumann's testimony that she "was involved in the preliminary arrangements" concerning Mr. Sollon's application for LTD benefits; (2) seven e-mail memos "of the various personnel of Ohio Casualty indicating their involvement in spreading the information to each other of Mr. Sollon's golfing activities, as well as his decision to take retirement disability," and (3) the letter from Ms. Aumann to Ms. Polash reporting the golfing activities. (Plf.'s Opp. to Ohio Casualty at 7-8.)

  The Court has reviewed the excerpts of Ms. Aumann's deposition provided by Plaintiff and finds no reference to her involvement in "preliminary arrangements" for LTD benefits. Second, we fail to understand how the e-mail memos "spreading information" about Plaintiff's golfing activity reflect any discretionary authority regarding his benefits and find that they are, at most, an attempt to gather accurate information about the situation. With regard to Ms. Aumann's letter to Hartford regarding the golfing activity, the fact that she asked Hartford to investigate rather than directed the insurer to do so, and inquired "what effect, if any" this had on his LTD benefits rather than stating her opinion about the situation, supports a conclusion that Ms. Aumann did not exercise any discretionary authority concerning benefit decisions. Moreover, her deposition testimony reflects the fact that Ohio Casualty's role with regard to the LTD Plan, like that of the employer in Bollenbacher, was simply ministerial.

  "When employers themselves serve as plan administrators they assume fiduciary status only when and to the extent that they function in their capacity as plan administrators." Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1158 (3d Cir. 1990) We find that despite language in the Summary Plan Description stating that Ohio Casualty "administers" the LTD Plan, the facts of this case support the conclusion, discussed in more detail below, that Hartford, not ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.