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concluding that the plan administrator's delegation of authority to a third party to make benefits decisions did not affect the plaintiff's entitlement to vested benefits
Summary of this case from Williams v. Target Corp.Opinion
01 CIV. 365 (DLC)
May 8, 2001
For Plaintiff Laura Corvi: Stephane M. Montas, Binder Binder, PC, Hauppauge, NY.
For Defendant Eastman Kodak Company Long Term Disability Plan: William S. Brandt, Nixon Peabody LLP, Rochester, NY.
OPINION AND ORDER
Plaintiff Laura Corvi ("Corvi") brought this action against defendant Eastman Kodak Company Long Term Disability Plan ("LTD Plan"), a benefit plan governed by the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., to challenge the denial of disability benefits under the LTD Plan. Plaintiff seeks money damages and a declaratory judgment that she was and is entitled to benefits. Defendant has moved for summary judgment. For the following reasons, defendant's motion is granted.
BACKGROUND
The following facts are undisputed, unless otherwise noted.
Prior to and including December 15, 1996, Corvi was employed by Kodak as a Sales Representative in the Copy Products Division and was, along with other Kodak employees, a participant in the Eastman Kodak Company Long Term Disability Plan ("LTD Plan"), which is sponsored and funded by Kodak. The LTD Plan is an employee welfare benefit plan within the meaning of ERISA. The LTD Plan pays benefits to eligible participants who have a disability, defined as a condition that "results in a Participant's total and continual inability to engage in Gainful Work." "Gainful Work" is defined in the LTD Plan as "paid employment for which a person is, or becomes, reasonably qualified by education, training, or experience, and which is more than transitory in nature." Under the LTD Plan, the Plan Administrator has "the exclusive right: to interpret the Plan; to determine eligibility for Coverage; to determine eligibility for Benefits; to construe any ambiguous provision of the Plan; to correct any default; to supply any omission; to reconcile any inconsistency; and to decide any and all questions arising in the administration, interpretation, and application of the Plan." The Plan Administrator additionally has "full discretionary authority in all matters related to the discharge of his responsibilities and the exercise of his authority under the Plan including, without limitation, his construction of the terms of the Plan and his determination of eligibility for Coverage and Benefits." The Plan Administrator also has the right under the LTD Plan to "delegate some or all of his authority under the Plan to any person or persons provided that any such delegation shall be in writing."
Metropolitan Life Insurance Company ("MetLife") was, at all times relevant to this action, the Claims Administrator ("Claims Administrator") for the LTD Plan. As Claims Administrator, MetLife made initial assessments of disability claims. Before January 1, 1999, a claimant could appeal MetLife's denial of benefits to the LTD Plan Administrator. As of January 1, 1999, the LTD Plan Administrator delegated this authority — to review appeals and make final decisions regarding a claimant's eligibility for benefits — to MetLife, pursuant to an Administrative Services Agreement ("ASA").
On or about December 17, 1996, Corvi asserts that she stopped working due to her disability, caused by Fibromyalgia, Myofacial Pain Syndrome, Degenerative Osteoarthritis of the Cervical Spine, and lower left Cervical Radiculopathy. Corvi applied for benefits under the LTD Plan on July 30, 1997. With her application for benefits, Corvi included an evaluation by Dr. Alan T. Kaell, her treating rheumatologist, in which he concluded that Corvi was totally disabled for her own occupation, but could not determine whether the patient was totally disabled for "any" occupation. Corvi was referred by MetLife for an independent medical evaluation by Dr. Prem C. Chatpar, a rheumatologist, who, on January 7, 1998, concluded that she did not "appear to be totally disabled from performing any occupation," and noted that "[a] sedentary occupation where she is not carrying any briefcases or sales equipment could be performed" by Corvi. Dr. Chatpur's evaluation was sent to Dr. Kaell three times for comments, but Dr. Kaell never replied to MetLife's requests.
Corvi's application was denied by MetLife by letter dated April 16, 1998. In the April 16, 1998 letter, MetLife noted that it had repeatedly attempted to contact Dr. Kaell in order to further develop Corvi's claim, but that Dr. Kaell never responded, and offered that plaintiff provide additional information to MetLife. On May 4, 1998, plaintiff's counsel informed MetLife that plaintiff would submit additional evaluations in support of her claim for disability, and would seek review of MetLife's denial of benefits. Corvi submitted a letter from Dr. Craig Rosenberg, plaintiff's treating "vocational and chronic pain specialist," who did not offer a conclusion regarding Corvi's disability. Corvi submitted a second letter from Dr. Rosenberg, dated June 17, 1998, in which he did conclude that Corvi was "totally disabled" and "unable to work at the sedentary level which includes requirements for sitting and standing for up to four hours of the work day."
On July 8, 1998, MetLife requested additional medical information from plaintiff, including X-ray or MRI reports and office notes from Corvi's treating physicians. MetLife sent letters dated July 24, 1998 and August 24, 1998, noting that Corvi had not submitted the additional information requested on July 8, 1998. In the August 24, 1998 letter, MetLife informed Corvi's counsel that it would "hold Ms. Corvi's claim open an additional 30 days awaiting this information," but that, "[a]t that time, Ms. Corvi's claim [would] be reviewed based on all the information in [MetLife's] possesion." By September 28, 1998, Corvi had not supplied MetLife with the documents it requested, and MetLife informed Corvi that, based on the information in her file, its decision to deny her application benefits "remain[ed] the same."
Corvi appealed MetLife's decision. On October 1, 1998, Corvi's attorneys provided the additional information requested by MetLife on July 8, 1998, including records from Drs. Jean-Jacques Abitol and Coyle, an EMG report from Dr. Jacques Winter, and reports of an MRI and bone scan on Corvi. Corvi was also referred by MetLife for an independent medical examination on February 3, 1999, with Dr. Gerald Lutzer, a psychiatrist, who concluded that Corvi had no psychiatric disability or illness.
MetLife additionally conducted video surveillance of Corvi's daily activities from February 2-4, 1999, and, during that time, observed Corvi "running, bending, lifting, and conducting several errands" with "no visible signs of a disability." MetLife denied Corvi's appeal by letter dated May 13, 1999.
In the May 13, 1999 letter, MetLife reviewed the evidence in Corvi's administrative record, including the reports by Drs. Kaell, Chatpar, and Rosenberg. Based upon this information, MetLife concluded that "there is a lack of medical information that would indicate a severe condition to preclude sedentary work," and, therefore, MetLife "concluded that Ms. Corvi is not disabled within the meaning of . . . the Kodak Long-Term Disability Plan."
In her complaint, Corvi asserts that Kodak has breached its fiduciary duty to her by allowing MetLife — an insurance carrier with a pecuniary interest in denying claims — to determine her eligibility for benefits. Corvi additionally asserts that MetLife's decisions were arbitrary and capricious and not supported by the evidence. Corvi seeks a declaration that she has been disabled since December 1996 — and continues to be disabled — under the LTD Plan definitions. Corvi additionally seeks compensation for her disability in accordance with the LTD Plan and attorney's fees.
DISCUSSION
I. Standard of Review
A threshold issue is whether the LTD Plan Administrator's decision is subject to de novo review, or review under an "arbitrary and capricious" standard. A decision to deny benefits "is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999) (quoting Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). Where the administrator or fiduciary has such discretionary authority, "denials are subject to the more deferential arbitrary and capricious standard, and may be overturned only if the decision is without reason, unsupported by substantial evidence or erroneous as a matter of law." Id. (internal quotation omitted).
De novo review is also appropriate where a plan administrator has a conflict of interest, and is in fact influenced by that conflict in its decision making. See Pulvers v. First Unum Life Ins. Co., 210 F.3d 89, 92 (2d Cir. 2000); Whitney v. Empire Blue Cross and Blue Shield, 106 F.3d 475, 477 (2d Cir. 1997); Sullivan v. LTV Aerospace and Defense Co., 82 F.3d 1251, 1255 (2d Cir. 1996). As the Second Circuit explained in Sullivan:
Two inquiries are pertinent. First, whether the determination made by the administrator is reasonable, in light of possible competing interpretations of the plan; second, whether the evidence shows that the administrator was in fact influenced by such conflict. If the court finds that the administrator was in fact influenced by the conflict of interest, the deference otherwise accorded the administrator's decision drops away and the court interprets the plan de novo.
Sullivan, 82 F.3d at 1255-56. By contrast, where a claimant cannot show that the administrator's decision was actually affected by a conflict, "a reasonable interpretation of the Plan will stand." Id. at 1259.
The LTD Plan bears the initial burden of showing that the authority to make benefit determinations is vested in the Plan Administrator by the LTD Plan, so that deferential review is warranted. See Kinstler, 181 F.3d at 249. The Second Circuit has made clear, however, that the burden of showing that a plan administrator was influenced by a conflict of interest rests on the party seeking benefits. See Pulvers, 210 F.3d at 92; Whitney, 106 F.3d at 477; Sullivan, 82 F.3d at 1259.
The LTD Plan clearly vests discretionary authority in the Plan Administrator, including discretion to make findings of fact. As described above, the LTD Plan gives the Plan Administrator the "full discretionary authority in all matters related to the discharge of his responsibilities and the exercise of his authority under the Plan including, without limitation, his construction of the terms of the Plan and his determination of eligibility for Coverage and Benefits." Compare O'Shea v. First Manhattan Co. Thrift Plan Trust, 55 F.3d 109, 112 (2d Cir. 1995) (arbitrary and capricious standard appropriate where plan asserted that trustees "shall determine any questions arising in the administration, interpretation, and application of the Plan, which determination shall be binding and conclusive"). Plaintiff has raised three arguments in support of her assertion that de novo review is appropriate. First, Corvi asserts that the version of the LTD Plan produced by defendant does not govern this case because its effective date is January 1, 1997, and plaintiff's injury occurred in December 1996.
Plaintiff's ERISA cause of action accrued, however, when she was denied benefits, Barnett v. I.B.M. Corp., 885 F. Supp. 581, 591 (S.D.N.Y. 1995), and the version of the LTD Plan in effect at the time Corvi was denied benefits controls, Randazzo v. Federal Express Corp. Long Term Disability Plan, No. 99 CIV. 2895 (SAS), 2000 WL 20698, at *4 (S.D.N.Y. Jan. 11, 2000). Moreover, the language in the LTD Plan material to plaintiff's claims is identical in the version effective as of January 1, 1996, and the version effective December 17, 1996, when plaintiff alleges that her injury arose.
Plaintiff additionally asserts that the Plan Administrator improperly delegated authority to MetLife to review her claim because the ASA became effective January 1, 1999, after her disability arose and after she applied for benefits. Corvi points to a clause in the LTD Plan which provides that "no termination, suspension or modification of the Plan shall restrict the availability of Benefits with respect to a Claim resulting from a Disability pre-dating such termination, suspension or modification," and argues that the delegation to MetLife constitutes a "plan modification" and cannot, therefore, be applied retroactively to her. The Plan Administrator's exercise of its right under the LTD Plan to delegate "some or all of his authority under the Plan," was not, however, a "termination, suspension or modification" of the LTD Plan's benefit terms. Because the Plan Administrator's delegation of final authority to MetLife does not affect plaintiff's entitlement to vested benefits, the cases cited by plaintiff are inapposite to her claim. Cf. Member Services Life Ins. Co. v. American Nat'l Bank Trust Co., 130 F.3d 950, 954 (10th Cir. 1997); Medina v. Time Ins. Co., 3 F. Supp.2d 996, 1000 (S.D.N Y 1998).
Finally, plaintiff has pointed to no evidence to support a claim that MetLife decision-makers were "actually affected by a conflict of interest," and the fact that a Plan Administrator also serves as the Plan's insurer, "although a factor to be weighed in determining whether there has been an abuse of discretion, is alone insufficient as a matter of law to trigger stricter review." Pulvers, 210 F.3d at 92 (citations omitted). Because the LTD Plan gives the Plan Administrator discretionary authority to determine eligibility for benefits and to construe the terms of the plan, as well as the right to delegate this authority to MetLife, the LTD Plan's denial of benefits is properly assessed under the "arbitrary and capricious" standard.
II. Review of MetLife's Decision
A. The Legal Standard
As discussed above, the LTD Plan Administrator's (and, thus, MetLife's) determinations are to be disturbed only if they are "without reason, unsupported by substantial evidence or erroneous as a matter of law." Kinstler, 181 F.3d at 249 (internal quotation omitted). "Substantial evidence" is "such evidence that a reasonable mind might accept as adequate to support the conclusion reached by the decisionmaker and requires more than a scintilla but less than a preponderance." Miller v. United Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995) (citation omitted). "[A] district court's review under the arbitrary and capricious standard is limited to the administrative record." Id. at 1071. Under the arbitrary and capricious standard, questions of law are reviewed de novo. See Weil v. Retirement Plan Administrative Committee of the Terson Co., Inc., 913 F.2d 1045, 1049 (2d Cir. 1990), aff'd in part and vacated in part on other grounds, 933 F.2d 106 (2d Cir. 1991).
Having reviewed the administrative record, the decision by MetLife to deny disability benefits to Corvi was not arbitrary or capricious. Of all the doctors that examined plaintiff, only Drs. Rosenberg and Chatpar reached a conclusion regarding whether she was disabled. Both doctors concluded that Corvi suffered from fibromyalgia, but Dr. Rosenberg concluded that Corvi was "totally disabled" while Dr. Chatpur concluded that Corvi was not totally disabled and could perform sedentary work. In light of Dr. Chatpur's evaluation and the additional evidence in the administrative record — including the inconclusive report by Dr. Kaell and the surveillance of Corvi in February 1999 — MetLife's determination that Corvi "is not totally and continually unable to engage in gainful work for which she is reasonably qualified," is supported by substantial evidence in the administrative record. MetLife's final denial of Corvi's application for benefits was not, therefore, arbitrary or capricious.
CONCLUSION
Defendant's motion for summary judgment is granted. The Clerk of Court shall close this case.
SO ORDERED: