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Ellis v. Hartford Life and Accident Insurance Co.

January 22, 2009


The opinion of the court was delivered by: Savage, J.


Challenging the denial of her claim for disability benefits, Marie Ellis ("Ellis") brought this action, pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"),*fn1 against Hartford Life and Accident Insurance Co. ("Hartford"), the insurer that funded and administered the disability insurance plan provided by her employer.*fn2 She asserts that Hartford's termination of her long term disability benefits was arbitrary and capricious. In determining whether it was, I shall not apply the heightened standard of review or the sliding scale approach enunciated by the Third Circuit in Pinto v. Reliance Std. Life Ins. Co., 214 F.3d 377 (3d Cir. 2000) because it is no longer viable in light of the Supreme Court's recent decision in Metropolitan Life Insurance Co. v. Glenn, 128 S.Ct. 2343 (2008).

The parties have each moved for summary judgment.*fn3 Ellis contends that Hartford arrived at its determination that she was capable of performing the duties and responsibilities of her regular occupation using a "sloppy and disorganized" process that relied on "slanting [the] interpretation of the medical data." She specifically claims Hartford ignored the diagnoses of the specialists involved in her treatment and misrepresented the opinion of her treating physician.

Hartford, on the other hand, maintains that its decision to deny benefits was not arbitrary and capricious, but based on substantial evidence. It did not question the diagnoses or the resultant limitations. It disagreed with Ellis that those limitations prevent her from working at her regular occupation as a secretary.

After a thorough examination of the administrative record and applying a deferential standard of review, I conclude that Hartford did not act arbitrarily and capriciously when it terminated Ellis's disability benefits after it determined that her medical conditions do not prevent her from performing the duties of her occupation. Therefore, judgment will be entered in favor of Hartford.


Ellis was employed as a "center secretary" until July 8, 2005. HLI0109.*fn4 She ceased working due to pain in her neck and shoulder. Her complaints included "decreased strength in her arms, cramping in both hands, painful range of motion in her neck and lumbar spine, low back pain and left leg pain and tingling, muscle spasm in both hips, [and] ulcerative colitis."

Through her employer, Ellis was covered by a disability policy which is both funded and administered by Hartford. Under the policy, Hartford has "full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the policy." HLI0018; HLI0034.

After initially paying disability benefits, Hartford notified Ellis that it was terminating her benefits because her physical limitations did not prevent her from performing her occupation as a secretary.*fn5 Ellis contends that Hartford's conclusion that she is able to perform all the essential duties of her occupation is based on a flawed review of her records. She alleges that Hartford ignored the opinions of her treating physicians and "cherry picked" the medical record.

ERISA Standard of Review

The denial of benefits under an ERISA qualified plan is reviewed using a deferential standard. Where the plan administrator has discretion to interpret the plan and to decide whether benefits are payable, the exercise of its fiduciary discretion is judged by an arbitrary and capricious standard. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). A court is not free to substitute its judgment for that of the administrator. Abnathya v. Hoffman-LaRoche, Inc., 2 F.3d 40, 41 (3d Cir. 1993). Accordingly, in deference to the plan administrator, the decision will not be reversed unless it was "without reason, unsupported by substantial evidence or erroneous as a matter of law." Id. at 45.

Prior to the Supreme Court's recent decision in Glenn, several circuit courts of appeals, including the Third Circuit, applied a modified arbitrary and capricious standard of review in determining whether a plan administrator abused its discretion in denying benefits, giving less deference to the decision where the administrator served in the dual capacity as evaluator and payor of claims under the plan. See, e.g., Pinto, 214 F.3d at 377. Glenn makes clear that there is no heightened arbitrary and capricious standard of review. Regardless of the existence of a financial conflict, the same deferential standard of review applies. Thus, no longer will a financial conflict instigate a heightened review.

In Glenn, while reaffirming that an administrator serving as both the evaluator and the payor of claims has an inherent conflict of interest, the Supreme Court clarified that this conflict does not alter the standard of review from a deferential one to a de novo review. Glenn, 128 S.Ct. at 2350. Nor does it impose "special burden-of-proof rules or other special procedural or evidentiary rules, focused narrowly upon the evaluator/payor conflict." Id. at 2351. Instead, the conflict is one of several factors relevant in deciding whether the administrator abused its discretion. Id.

Before Glenn, some courts applying the sliding scale approach to a review of the denial of benefits used the administrator's inherent conflict as a prism through which to evaluate the reasonableness of the denial determination. Now, it is established that the conflict of interest is only one of a number of factors that must be considered on a case-by-case basis in determining whether the insurer has abused its discretion in denying benefits. Because the conflict does not impose a heavier burden on the insurer to justify its denial decision, the sliding scale can no longer be used as a tool to modify the standard of review. Nevertheless, the sliding scale remains relevant to measure the significance, if any, of the conflict of interest as a factor in determining whether the decision was a reasonable exercise of discretion. For example, the more financially vested the insurer was in the outcome, the more likely its ...

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