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Melinda Bair v. Life Insurance Company of North America

October 13, 2011

MELINDA BAIR, PLAINTIFF
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA, DEFENDANT



The opinion of the court was delivered by: James Knoll Gardner, United States District Judge

OPINION

This matter is before the court on defendant's oral motion for judgment on partial findings made on the record on July 7, 2011, the first day of the non-jury trial of this matter. Also before the court is defendant's Statement of Objection to the Admissibility of Any Evidence Beyond the Administrative Record of Defendant Life Insurance Company of North America (Document 82), which argues that no evidence should be admitted at trial other than the jointly filed Administrative Record.

For the following reasons, I overrule defendant's objection to admissibility of evidence beyond the Administrative Record of this matter. I grant defendant's motion for judgment on partial findings, and I enter judgment in favor of defendant Life Insurance Company of North America ("LINA") and against plaintiff Melinda Bair.

JURISDICTION

Jurisdiction in this case is based on federal question jurisdiction pursuant to 28 U.S.C. § 1331.

VENUE

Venue is proper pursuant to 28 U.S.C. § 1391(a)(2) because the events giving rise to plaintiffs' claims allegedly occurred in Elizabethtown, Lancaster County, Pennsylvania, which is within this judicial district.

PROCEDURAL HISTORY

Plaintiff initiated this action on February 9, 2009 by filing a one-count civil Complaint against the Mars, Inc. Long-Term Disability Benefits Plan. The Complaint alleges that plaintiff was previously employed by Mars, Inc. but that, because she suffers from bi-polar disorder, major depressive disorder, paranoid delusions and suicidal ideations, she was unable to work.

The gravamen of plaintiff's Claim for Disability Benefits Under 29 U.S.C. § 1132(a)(1)(B) is that the administrator of her former employer's long-term disability plan denied plaintiff long-term disability benefits to which she was entitled, in violation of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA").

By Stipulation and my Order dated June 2, 2009, LINA was substituted as the defendant in this action, in place of defendant Mars, Inc. Long-Term Disability Benefits Plan (the "Plan"), and the Plan was dismissed as a party to this action. Previously, on April 9, 2009, LINA had filed its Answer and Affirmative Defenses of Defendant Life Insurance Company of North America in response to the Complaint.

As discussed more fully below, on July 29, 2009 United States Magistrate Judge Henry S. Perkin issued an order on defendant's motion for clarification of Magistrate Judge Perkin's prior June 25, 2009 Order granting plaintiff's motion to compel the deposition of defendant's Appeal Claim Manager, Patty Ursiny. *fn1 Specifically, by his July 29, 2009 Order, Magistrate Judge Perkin limited the deposition of Ms. Ursiny to four specific alleged procedural irregularities. *fn2

Defendant filed a motion for reconsideration of Magistrate Judge Perkin's July 29, 2009 Order. After oral argument, and by Order dated September 20, 2009, I granted the motion in part, and remanded the issue to Magistrate Judge Perkin for a determination of the applicable scope of review in this ERISA matter, and the impact of that scope of review on the discovery dispute at issue.

On November 20, 2009, Magistrate Judge Perkin issued an Order and Memorandum which concluded that this court should consider the matter under a de novo standard of review. Neither party objected to this conclusion. Accordingly, as discussed below, my review of this case is de novo.

The parties filed cross-motions for summary judgment. On May 28, 2010, the parties filed a joint administrative record in this matter which, pursuant to Order of Magistrate Judge Perkin dated May 20, 2010, is filed under seal. *fn3 On August 23, 2010, I conducted oral argument on the parties' cross-motions for summary judgment, and took the matter under advisement.

By Order dated March 18, 2011, I denied both motions for summary judgment. Specifically, I concluded that there were genuine issues of material fact which precluded entry of summary judgment in favor of either party, including but not limited to why plaintiff did not return to work in August or September 2008 and whether plaintiff's inability to work with her manager and co-workers was caused by her disability.

The parties appeared before me on July 7, 2011 and July 19, 2011 for a two-day non-jury trial. Prior to trial, on June 14, 2011, defendant filed a Statement of Objection to the Admissibility of Any Evidence Beyond the Administrative Record of Defendant Life Insurance Company of North America (Document 82), arguing that no evidence should be admitted at trial other than the jointly filed Administrative Record.

On the first day of trial, I heard oral argument on the objection and took the issue under advisement, and permitted the parties to present evidence beyond the Administrative Record subject to my later ruling, in this Opinion, on the objection. In her case-in-chief, plaintiff Melinda Bair testified, and one document was offered into evidence in addition to excerpted deposition testimony of Ms. Ursiny.

At the close of plaintiff's case-in-chief on the first day of trial, defendant made a motion for judgment on partial findings pursuant to Rule 52(c) of the Federal Rules of Civil Procedure. On the second day of trial, I heard oral argument on defendant's motion and deferred my ruling on it until after the close of evidence, as permitted by Rule 52(c). Defendant's case-in-chief consisted solely of additional excerpts from Ms. Ursiny's deposition which had been counter-designated by defendant.

Accordingly, the issues before the court for purposes of this Opinion are defendant's objection to admission of evidence beyond the Administrative Record, defendant's motion for judgment on partial findings, and adjudication of the non-jury trial. Hence this Adjudication.

STANDARD OF REVIEW

ERISA provides that a plan participant may bring a civil action "to recover benefits due to 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...." 29 U.S.C. § 1132(a)(1)(B). Ordinarily, courts conduct a de novo review of a company's denial of benefits under ERISA unless the benefit plan grants the plan administrator discretionary authority to construe terms of the plan, in which case courts review the denial of benefits under an arbitrary and capricious standard. Bill Gray Enterprises, Inc. Employee Health and Welfare Plan v. Gourley, 248 F.3d 206, 216 (3d Cir. 2001).

Where, as here, the policy at issue requires plaintiff to provide "satisfactory proof" of disability before benefits will be paid and "continued proof" of disability for benefits to continue, the policy administrator (here, LINA) does not have discretionary authority to determine eligibility for benefits.

See Adams v. Life Insurance Company of North America, 2009 WL 2394150, at *6 (E.D.Pa. Aug. 3, 2009)(Padova, S.J.); Farina v. Temple University Health System Long Term Disability Plan, 2009 WL 1172705, at *11-13 (E.D.Pa. Apr. 28, 2009)(Schiller, J.). *fn4

In such cases, as here, the standard of review is de novo.*fn5

De novo review means that this court's inquiry is not limited to, or constricted by, the administrative record, nor is the plan administrator's decision due any deference. Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176, 1184 (3d Cir. 1991). Thus, the district court is not limited to evidence before the plan administrator. Id.

However, this does not require the district court to conduct an evidentiary hearing or a full trial de novo. Rather, "[i]f the record on review is sufficiently developed, the district court may, in its discretion, merely conduct a de novo review of the record of the administrator's decision, making its own independent benefit determination. Luby, 944 F.2d at 1184-1185.

Defendant's Objection

As an initial matter, I address defendant's objection to the introduction of any evidence at trial beyond the jointly filed Administrative Record.

Defendant contends that, for purposes of this non-jury trial, evidence should be limited solely to the Administrative Record, which consists of the universe of information presented to defendant, as plan administrator, for determination of plaintiff's claim for long-term benefits. In support of its position, defendant asserts that the goal of ERISA and the administrative review process set forth therein is to provide an expeditious review of benefit decisions, and to keep district courts from becoming substitute plan administrators. Donatelli v. Home Insurance Company, 992 F.2d 763, 765 (8th Cir. 1993).

Defendant further asserts that by considering extra-Administrative Record evidence, this court would effectively become a substitute plan administrator, because I would be evaluating evidence which was not reviewed by LINA in determining plaintiff's claim. It argues that ultimately, this court's role is to determine whether LINA made the right decision regarding plaintiff's claim, based on the information it had at the time.

Moreover, defendant contends that the Administrative Record contains sufficient evidence from which to determine plaintiff's claim. Specifically, defendant avers that the Administrative Record is a sufficiently developed record, and is the result of plaintiff's two opportunities to provide documentation to LINA. Defendant contends that plaintiff previously had ample opportunity to present documentation to LINA and should not be permitted to offer even further evidence in support of her claim.

Plaintiff contends that my March 18, 2011 Order denying both cross-motions for summary judgment should be construed as a determination that the Administrative Record was not, in fact, sufficient from which to enter judgment for either party. Therefore, she asserts that this court is not constricted by the Administrative Record, and that additional evidence should be permitted.

As discussed above, the United States Court of Appeals for the Third Circuit has held that, in this context, de novo review means that my inquiry is not limited to, or constricted by, the administrative record. Luby, 944 F.2d at 1184. Thus, I am not limited to evidence before the plan administrator. Id. However, I am not required to accept additional evidence; "[i]f the record on review is sufficiently developed, the district court may, in its discretion, merely conduct a de novo review of the record of the administrator's decision" and make its own independent benefit determination. Luby, 944 F.2d at 1184-1185.

Defendant relies on Luby for the proposition that where the record on review is sufficiently developed, the district court should not consider additional evidence. Although I am mindful of ERISA's goal of an expeditious review of a benefit determination, see Donatelli, 992 F.2d at 765, I conclude that Luby does not prohibit me from considering additional evidence. Rather, Luby makes clear that where the record on review is sufficiently developed, the district court has discretion regarding whether to simply conduct a de novo review of that record, or whether to consider additional evidence. Luby, 944 F.2d at 1184-1185.

In this case, I concluded in my March 18, 2011 Order that genuine issues of material fact existed which precluded entry of summary judgment for either party. The issues identified in that Order, while not limiting either party's ability to prove other issues at trial, included why plaintiff did not return to work in August or September 2009, and whether her inability to work with co-workers and her supervisor was caused by her disability.

Although I agree with defendant that the Administrative Record contains documentation relevant to those fact issues, I conclude that those fact question require credibility determinations for my de novo review of plaintiff's claim. Accordingly, I overrule defendant's objection, and I will consider the extra-Administrative Record evidence to the extent it is relevant. *fn6

FINDINGS OF FACT

1. In 1999, plaintiff began employment with Mars, Inc.

2. From 2003 until 2008, her position with Mars was as a Material Testing Senior Operator. *fn7

3. The primary function of a Material Testing Senior Operator is to inspect and test cocoa beans. Another primary function is to provide assurance that raw materials specifications are being met, and that only quality cocoa beans are being used.

4. Accountabilities of the position include the analytical and sensory evaluation of incoming cocoa beans. The Materials Testing Senior Operator has to make decisions and recommendations including analytical compliance and analytical audit plan, and to uncover potential problems based on data results.

5. The job description for Materials Testing Senior Operator does not state that it is a job duty, requirement or right to work during certain preferred hours of the day, or to work only with certain co-workers or not work with certain co-workers. Whether plaintiff likes or dislikes her co-workers is not a material duty of her position.

6. Plaintiff was covered under a policy of insurance administered by LINA, known as Group Policy No. LK-422838 ("Policy"). *fn8 The Policy was effective on January 1, 1994 and has a policy rewrite date of August 1, 2001. The Policy is fully insured, that is, LINA both administers the Policy, and pays long-term disability benefits to disabled claimants under the Policy.

7. Psychiatric medical records dated March 18, 2008 indicate that plaintiff had been suffering from depression and anxiety on and off for years, including during her working years at Mars. As of March 18, 2008, she was feeling particularly depressed because of problems with her job and her marriage.

8. Ms. Bair stopped working at Mars, Inc. on or about May 15, 2008.

9. On May 15, 2008, plaintiff was hospitalized at Philhaven Hospital in Mt. Gretna, Pennsylvania, because of psychiatric problems. She was under the care of Dr. Camelia Popa, M.D., a staff psychiatrist at Philhaven.

10. Upon her admission at Philhaven, plaintiff had a Global Assessment of Function ("GAF") score of 25. Her highest GAF within that past year was reported to be 70. On admission, plaintiff reported increased stress, conflict at work and some family issues that added stress to her and her husband.

11. Plaintiff's diagnoses at the time of her discharge from Philhaven on May 22, 2008 included bipolar disorder type II, depression, and panic disorder with agoraphobia. At discharge, plaintiff had a GAF score of 50.

12. On May 23, 2008, plaintiff was re-admitted to Philhaven. At that time, she reported expressing symptoms of depression, hopelessness, fatigue, decreased motivation, fleeting death wish, racing thoughts, chest pains, and paranoia. Her stressors were reported to be job-related, marital strife, and strife in relationships.

13. While in an acute partial program at Philhaven from May 23 to May 29, 2008, Ms. Bair was under the care of Dr. Kathryn R. Rexrode, Ph.D., and Dr. Jeremy Walters, M.D., a staff psychiatrist at Philhaven. During that time, it was reported that Ms. Bair admitted to having auditory and visual hallucinations which were much more extensive than she had disclosed in her previous admissions.

14. Ms. Bair's husband reported that she can be very paranoid, to the extent that she would close all the curtains in her house. Ms. Bair also stated that she would turn all the pictures in the house face down on a table so that she does not have them staring at her.

15. After seeing Dr. Walters on May 29, 2008, Ms. Bair was again admitted to the inpatient program at Philhaven because she reported a "high level of depression and anxiety and indicated that she was unsure if she could be safe that evening". She felt "increased depression and suicidal ideation" following a marital session with her husband where her husband asked her whether she was having an affair with a man at work, an accusation Ms. Bair denied. *fn9

16. Plaintiff's diagnoses on discharge included bi-polar disorder type II, depression and panic disorder with agoraphobia.

17. At the time of her second admission, plaintiff's GAF was 30, and her discharge GAF was 60. Her highest GAF within that past year was reported to be 60, ...


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