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Boyles v. American Heritage Life Insurance Co.

United States District Court, W.D. Pennsylvania

December 28, 2016

RONALD P. BOYLES, JR., Plaintiff,
v.
AMERICAN HERITAGE LIFE INSURANCE COMPANY d/b/a ALLSTATE BENEFITS a/k/a ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK, JEFFREY AZZATO, ST. MARYS INSURANCE AGENCY, INC., and UNUM LIFE INSURANCE COMPANY OF AMERICA a/k/a UNUM GROUP, Defendants.

          MEMORANDUM OPINION

          KIM R. GIBSON, UNITED STATES DISTRICT JUDGE

         I. Introduction

         This case arises under the Employee Retirement Income Security Act of 1974 (ERISA) from the denial of disability benefits to Plaintiff Robert P. Boyles, Jr. (“Boyles”) by American Heritage Life Insurance Co. (“AHL”) and Unum Life Insurance Company of America (“Unum”). Pending before the Court are AMERICAN HERITAGE LIFE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT (ECF No. 60) and UNUM'S MOTION FOR SUMMARY JUDGMENT ON THE ADMINISTRATIVE RECORD (ECF No. 64). The parties have developed their respective positions as to the Concise Statements of Material Facts and submitted numerous exhibits (including the administrative records of AHL and Unum, filed under seal) (ECF Nos. 61, 66-70, 74, 75, 77) and have thoroughly briefed the legal issues (ECF Nos. 62, 65, 71, 72, 73, 76, 80). The motions are now ripe for disposition. For the reasons that follow, the motions are GRANTED.

         II. Jurisdiction and Venue

         The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331, as Plaintiff's claims arise under federal law. Venue is proper in this judicial district pursuant to 29 U.S.C. § 1132(e)(2).

         III. Background

         A. Procedural Background

         Plaintiff initiated the instant action by filing a twenty-count complaint (the Original Complaint) in the Court of Common Pleas of Blair County, Pennsylvania, on September 29, 2015. (See ECF No. 1-2.) Defendants AHL, Unum, Azzato, and St. Marys removed the action to this Court on October 22, 2015. (See ECF No. 1.) Defendants then filed several motions related to Plaintiff's Original Complaint. These motions were denied as moot because on November 24, 2015, Plaintiff filed a twelve-count First Amended Complaint (“FAC”). (See ECF No. 26). Defendants then filed motions to dismiss portions of the FAC. On July 25, 2016, the Court issued a Memorandum Opinion and Order which: (1) granted the partial motions to dismiss filed by AHL and Unum and dismissed counts II, IV, VI and VII of the FAC; and (2) granted in part and denied in part the motions filed by Defendants Azzato and St. Marys, and dismissed counts IX and X of the FAC.

         Plaintiff, AHL, and Unum agreed that no discovery was necessary between them and the case should be decided on the respective administrative records.[1] Pursuant to the Court's Initial Scheduling Order (ECF No. 43), AHL and Unum filed summary judgment motions as to the ERISA claims and Plaintiff has filed his responses thereto.

         B. Factual Background

         At this stage of the case, the Court must view any disputed facts in the light most favorable to Boyles, the non-moving party. However, the facts in this case are largely undisputed. The following recitation is based primarily on Plaintiff's briefs (ECF Nos. 72, 73).

         i. Work History

         Plaintiff Ronald Boyles was employed by St. Marys as a commercial insurance producer from 2006-when St. Marys acquired Boyles' family-operated insurance company, Boyles Insurance Agency-until his employment was terminated in November 2013. By virtue of that employment, Boyles participated in an employee welfare benefit plan sponsored and administered by St. Marys. From January 1, 2010 through July 31, 2013, the plan was insured by a policy underwritten by AHL. Effective August 1, 2013, St. Marys switched coverage to a policy underwritten by Unum.[2]

         Boyles had a history of back problems, which required multiple surgeries. On September 25, 2012, Boyles had surgery to reposition a medical device that was implanted in his back. In December 2012, Boyles expressed interest in filing a disability claim to Azzato, the President of St. Marys. Azzato informed Boyles that, due to Boyles' long-time commitment to the agency and his work ethic, St. Marys would continue to pay Boyles his full salary while he recovered. Azzato stated that he considered Boyles to be on a type of “full-paid medical leave” from December 2012 through November 22, 2013, when his employment terminated.

         From October 2012 through May 2013, Boyles would come into the office or work from home, as his condition allowed. On January 10, 2013, Boyles tripped over an electrical cord in his office and injured his left shoulder and wrist, and sustained a concussion. On May 10, 2013, Boyles had shoulder surgery. After that time, Boyles only worked a few hours per week. St. Marys did not use time clocks. Azzato estimated that Boyles' actual hours worked were approximately 10-20 hours per week from May to November, 2013. Azzato terminated Boyles' employment on November 22, 2013.

         ii. Claims History

         On December 19, 2013, Boyles submitted a disability claim to AHL. It was denied initially by AHL for the stated reason that his condition resulted from the January 10 workplace accident. Boyles filed three appeals, all of which were rejected by AHL. The overarching basis for the denials was that Boyles continued to receive his full salary, and thus did not satisfy the definition of “disability” under the terms of the AHL policy. AHL's processing of the claim will be discussed in more detail below.

         On July 10, 2014, Boyles submitted a disability claim to Unum. On December 26, 2014, Unum denied the claim for the stated reason that Boyles was not in “active employment” on August 1, 2013 (the date the Unum policy became effective), and thus, was not covered under the policy. The denial letter from Unum also referenced the policy's “continuity of coverage” provision and determined that ...


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