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Ryan v. Prudential Insurance Company of America

September 12, 2006


The opinion of the court was delivered by: David Stewart Cercone United States District Judge

Electronic Filing



Plaintiff, Patricia A. Ryan ("Plaintiff" or "Ryan") filed a two (2) count complaint against Defendants, the Prudential Insurance Company of America ("Prudential"), Medco Health Solutions, Inc. ("Medco"), and Merck-Medco Managed Care, L.L.C. ("Merck-Medco")(collectively "Defendants"), alleging that Defendants unlawfully: (1) denied her claim for short-term disability ("STD") benefits in violation of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B); and (2) retaliated against her because she filed claims for STD benefits and/or terminated her employment with the purpose of interfering with her long-term disability ("LTD") benefits. Defendants have filed motions for summary judgment*fn1 , Plaintiff has responded and the motions are now before the Court.


Ryan began her employment with Medco in August of 1989 in Medco's customer service department. Medco's Concise Statement of Undisputed Material Facts ("Medco's SMF") ¶¶ 1 & 2. From 1994 until June of 2002, Ryan worked in Order Entry which required her to enter certain data into the computer. Medco's SMF ¶¶ 4 & 5. Because of certain medical conditions, Ryan began a leave of absence on June 11, 2002. Medco's SMF ¶ 6. On June 23, 2002, she applied for STD benefits under Medco's Medchoice Short-Term Disability Plan ("Medco's STD Plan"). Medco's SMF ¶ 7.

Ryan's application for STD benefits was submitted to Prudential, the third-party claims administrator appointed pursuant to Section 14 of Medco's STD Plan. Medco's SMF ¶¶ 15 & 16. In Ryan's application for benefits, Martin Duclos, M.D., her primary care physician, diagnosed Ryan with celiac sprue and irritable bowel syndrom. Medco's SMF ¶ 17. Dr. Duclos stated that these conditions resulted in a medical restriction limiting Ryan to no more than one (1) hour of activity without taking a break. Id. According to Dr. Duclos, Ryan's prognosis for her return to work was "good," and the doctor expected her to return to work by August 23, 2002. Medco's SMF ¶ 18.

By letter dated July 2, 2002, Prudential disallowed Plaintiff's claim for STD benefits. Medco's SMF ¶ 22. The letter sated, in pertinent part: " The medical information submitted does not support an impairment that would prevent you from performing the essential functions of your job." Id. Ryan appealed Prudential's decision disallowing her claim, and in support of her appeal submitted two (2) personal statements describing her medical conditions. Medco's SMF ¶ 25. Medco also informed Prudential that Ryan's job duties had changed and that she was now required to stand while working. Medco's SMF ¶ 27. By letter dated October 23, 2002, Prudential denied Plaintiff's appeal of the decision to deny her claim for STD benefits. Medco's SMF ¶ 30. In that same letter, Prudential informed Ryan that she was ineligible for long-term disability ("LTD") benefits, and she was advised of her right to appeal Prudential's ineligibility determination. Medco's SMF ¶ 31. In November of 2002, Ryan appealed the denial of her June 2002 claim for STD benefits to Medco's Benefits Review Committee. Medco's SMF ¶ 33. Medco rejected the final appeal. Medco's SMF ¶ 36. Also in November of 2002, Ryan appealed Prudential's determination that she was ineligible for LTD benefits. Medco's SMF ¶ 35.

In March of 2003, Ryan returned to work on a part-time basis. Medco's SMF ¶ 37. Because of her medical conditions, however, Plaintiff began a second leave of absence on May 12, 2003. Medco's SMF ¶ 38. By letter dated May 27, 2003, Prudential upheld its determination that Ryan was ineligible for LTD benefits, and advised her of her right to file a second appeal within one-hundred eighty (180) days. The letter further advised Ryan that if the second appeal was denied, she would have a right to file suit under ERISA. Medco's SMF ¶ 39. Ryan did not file a second appeal of the determination that she was ineligible for LTD benefits. Medco's SMF ¶ 40.

In June of 2003, Ryan applied for STD benefits relating to her May 2003 leave of absence. Medco's SMF ¶ 41. Dr. Duclos stated in the application that Ryan was diagnosed with sleep apnea, fibromyalgia and irritable bowel syndrome. Id. By letter dated October 14, 2003, Prudential denied Ryan's second claim for STD benefits, contending that she was not eligible because she was not working at least twenty-five (25) hours per week at the time she commenced her leave of absence. Medco's SMF ¶ 42. Ryan did not appeal the decision, and in fact admitted that she was ineligible for benefits at that time. Id.

Because Ryan had exhausted her appeals of the denial of her claims for benefits, Mnedco considered her continuing absence from work to be unauthorized. Medco's SMF ¶ 43. Ryan's return to work date was postponed from July 8, 2003, to October 22, 2003. Medco's SMF ¶ 44; Ryan's Appendix Exhibit 1 at pp. 100 -110; Ryan's Appendix Exhibit 4. By letter dated July 6, 2004, more than eight (8) months after the denial of Ryan's second application for STD benefits, Medco terminated her employment. Medco's SMF ¶ 45.

Medco's STD Plan provides up to twenty-six (26) weeks weeks of benefits to an employee participant who has been totally disabled for five (5) consecutive work days. Affidavit of Andrew Gregg ("Gregg Affidavit") Exhibit A at Section 6. The Plan defines "Total Disability" as:

[S]uch disability due to Injury, Sickness, or Maternity which wholly and continuously disables the Participant from performing the duties of his or her occupation.

Id. at Section 3. The amount of the benefit provided by Medco's STD Plan varies, depending on the participant's length of service, from 100% of regular salary for the full twenty-six (26) weeks, to 100% for the first week, 80% for the next three (3) weeks and 50% thereafter. Id. at Section 7. Payment of benefits to employees under Medco's STD Plan are made entirely from Medco's general assets. Gregg Affidavit ¶ 7, Exhibit A at Section 1. The STD Plan is neither funded nor insured, nor is it secured by any securities such as bonds. Gregg Affidavit ¶ 8. Moreover, the Summary Plan applicable to Medco's STD Plan specifically states: "[t]he [Summary] Plan is an employee welfare benefit plan (except for the Short Term Disability Program which is a payroll practice) administered by the Plan Administrator." See Gregg Affidavit, Exhibit B ...

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