The opinion of the court was delivered by: Judge Vanaskie
This matter is before the Court on the objections of Plaintiff Joseph L. George to the Report and Recommendation of Chief Magistrate Judge Thomas M. Blewitt proposing that judgment be entered in favor of Defendant Life Insurance Company of America ("LINA").*fn1
In support of this recommendation, Magistrate Judge Blewitt concluded that LINA was entitled to offset from its monthly long term disability payment to Mr. George the amount in wage loss benefits he was receiving from his automobile insurance carrier, Liberty Mutual. Mr. George argues that the Magistrate Judge erred in his interpretation of the applicable provisions of the group long term disability policy. Following de novo review of the record and plenary consideration of the issues, I concur with the Magistrate Judge's recommendation, albeit for reasons slightly different than those articulated by him.
Accordingly, judgment will be entered in favor of LINA.
The facts are not in dispute. Mr. George was injured in a non-work related automobile accident in January of 2006. At the time of the accident, Mr. George was an employee of PPL Services Corporation, and covered by a group Long Term Disability ("LTD") policy issued by LINA to Mr. George's employer. The LTD policy, in pertinent part, provides a disability benefit of "[t]he lesser of 60% of an Employee's Monthly Covered Earnings rounded to the nearest dollar or the Maximum Disability Benefit, reduced by any Other Income Benefits." (LINA Group Policy LK-030562, attached as Exhibit "A" to the Complaint, Dkt. Entry 1-2 at 18.)*fn2 The maximum disability benefit payable to Mr. George is $5,000 per month. (Id.) The term "Other Income Benefits," which serve to reduce the disability benefit payable by LINA, is defined as "any benefits listed in the Other Income Benefits provision that an Employee receives on his or her own behalf." (Id.)
The "Other Income Benefits" provision of the LTD Policy explains that "[w]hile an Employee is Disabled, he or she may be eligible for benefits from other income sources. If so, the Insurance Company may reduce the Disability Benefits payable by the amount of such Other Income Benefits." (Id. at 23.) The LTD Policy identifies a number of benefits that reduce the amount otherwise payable by LINA, such as social security disability benefits, "any proceeds payable under any group insurance or similar plan," amounts an employee receives under "any local, state, provincial, or federal governmental disability or retirement plan or law . . . ," as well as any amounts the employee receives "under any unemployment compensation law or similar state or federal law, including all permanent as well as temporary disability benefits." (Id.)
At issue here are two examples of Other Income Benefits specifically listed in the LTD policy:
(1) "any benefits received from coverage subject to the mandatory part of the vehicle financial responsibility law;" and
(2) "any amounts paid on account of loss of earnings or earning capacity through settlement, judgment, arbitration or otherwise, where a third party may be liable, regardless of whether liability is determined." (Id.)
Mr. George has received monthly wage loss benefits of $1,500 under his personal automobile insurance policy with Liberty Mutual. Under the policy, he is entitled to a maximum wage loss payment of $25,000.
Mr. George received his first payment of LTD benefits in the amount of $2,823 on August 11, 2006. This amount represented 60% of his monthly Covered Earnings of $4,705.65. By letter dated October 4, 2006, LINA informed Mr. George that, as a result of receipt of information that he was being paid "No Fault Benefits in the amount of $1,500 monthly," it was reducing his monthly LTD payment by that amount. As a result of its determination, Mr. George's net monthly benefit was reduced from $2,823 to $1,323 per month. (Exhibit "C" to Defendant's Motion for Summary Judgment, Dkt. Entry 9-4 at 3.) LINA also asserted that it was entitled to be reimbursed in the amount of $3,000, the amount that it claimed represented the overpayments for the prior two disability benefit payments it had made.
Mr. George brought this action pursuant to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA") on April 9, 2007. He claims that LINA violated ERISA by not paying the full amount of the benefits to which he claims entitlement. Specifically, Mr. George contends that wage loss payments made pursuant to the Liberty Mutual policy are not "Other Income Benefits" by which LTD benefits may be reduced. Alternatively, Mr. George asserts that the wage loss payment may reduce only the $5,000 monthly maximum benefit payable by LINA. Claiming that the policy provides for the payment of either the lesser of 60% of his covered earnings or the maximum disability benefit of $5,000 reduced by Other Income Benefits, Mr. George argues that, in any event, he is entitled to monthly payments of $2,823.
Agreeing that there is no genuine dispute as to any material fact, both Mr. George and LINA moved for summary judgment. ...