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Horton v. United of Omaha Life Insurance Co.

United States District Court, N.D. Alabama, Eastern Division

March 24, 2017

JOEY HORTON, Plaintiff,
v.
UNITED OF OMAHA LIFE INSURANCE CO., Defendant.

          MEMORANDUM OPINION

          JOHN E. OTT, CHIEF UNITED STATES MAGISTRATE JUDGE

         In this action, Plaintiff Joey Horton (“Horton”) brings a claim pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., challenging Defendant United of Omaha Life Insurance Company's (“United of Omaha”) denial of his long-term disability and continuation of life insurance benefits claims. (Doc. 1, ¶ 2 (“Complaint or “Compl.”)).[1] United of Omaha contends that Horton did not timely exhaust his administrative remedies as to its “final determination that he was no longer disabled under the terms of the applicable long-term disability policy” prior to filing this case. (Doc. 31 at 1; See also Doc.32).[2] On that basis, United of Omaha asks the court to enter judgment in its favor on its motion for summary judgment. (Doc. 32). For the reasons set forth below, the court finds the defendant's motion for summary judgment is due to be granted.

         I. FACTUAL BACKGROUD[3]

         For ten years, Horton, a 55-year old man, worked as a quality engineer at American Furuwaka, Inc. (Doc. 1, ¶ 6). He installed and repaired machinery and equipment for the company. (Id.). Horton suffers from “coronary artery disease, congestive heart failure, high cholesterol, dyslipidemia, hypertension, diabetes mellitus type II, peripheral neuropathy, joint pain, degenerative disc disease, chronic back pain, and depression.” (Doc. 36-1, ¶ 3). According to Horton, he “take[s] medications that affect [his] everyday living and [his] ability to function.” (Id., ¶ 4). Horton claims that his “disabilities force[d] him to stop working” at the company as of March 25, 2011. (Doc. 1, ¶ 6). And since that time, Horton maintains that he has been “critically ill, ” “hospitalized numerous times.” (Doc. 36-1, ¶¶ 5-6).

         A. The Plan

         As an American Furuwaka employee, Horton participated in the company's employee welfare benefit plan (the “Plan”). (Doc. 30-4, pp. 173-74). United of Omaha administered the Plan. (Doc. 1, ¶ 2; Doc. 32, ¶ 1).[4] The Plan provided Horton with short-term disability (“STD”); long-term disability (“LTD”); life and accidental death and dismemberment insurance (“LADD”); and voluntary term life insurance (“VTLP”). (Docs. 30-2; 30-7; 30-16 & 17; 30-19; 40-1).[5] Each policy of the Plan sets forth its coverage terms, as well as procedures for appealing adverse benefit determinations. (Docs. 30-2; 30-7; 30-16 & 17; 30-19; 40-1).[6] For instance, under the STD and LTD policies, an insured must “appeal within 180 days following [the] receipt of notification of an Adverse Benefit Determination.” (Doc. 30-2, p. 24; Doc. 30-7, p. 32). According to United of Omaha, if an insured does not appeal an adverse benefits determination within United of Omaha's allotted timeframe, barring special circumstances, that decision is final and binding. (Doc. 30-9, p. 3).

         B. Termination of STD and LTD Benefits

         Not long after Horton stopped working at American Fukuwara, United of Omaha approved Horton's application for STD benefits. (Doc. 30-4, pp. 173-176).From April 2, 2011 to September 30, 2011, United of Omaha paid Horton $600.93 per week in STD benefits. (Doc. 30-4, pp. 3-5, 7). But pursuant to the Plan, after United of Omaha pays an insured STD benefits for 26 weeks, an STD claim converts into an LTD claim. (Doc. 30-2, pp. 4, 11; Doc. 30-4, pp. 3-5). On October 1, 2011, Horton's STD claim converted into an LTD claim. (Doc. 30-4, pp. 3-5; Doc. 30-12, pp. 1-2; Doc. 30-11, p. 74). United of Omaha assigned Horton LTD claim number “111020007802.” (Doc. 1-2, p. 2; Doc. 12, pp. 1-2; Doc. 30-9, p. 26).

         After paying monthly LTD benefits to an insured for two years, under the LTD policy, United of Omaha will continue extending LTD benefits only if the insured is “disabled.” (Doc. 30-7, p. 39). That is, an insured must be “unable to perform all the [m]aterial [d]uties of any [g]ainful [o]ccupation.” (Doc. 30-7, p. 39). On November 15, 2013, after disbursing $833.01 per month in LTD benefits for two years to Horton, United of Omaha notified Horton by letter that it was terminating his LTD benefits. (Doc. 1-2; Doc. 30-9, pp. 26-31). In that letter, United of Omaha provided the LTD policy number and Horton's LTD claim number. (Doc. 1-2; Doc. 30-9, p. 26). Based on Horton's more recent medical records, United of Omaha determined that Horton was not disabled, as defined by the LTD policy. (Doc. 30-9, pp. 26-31). United of Omaha advised Horton not only of his right to appeal, but also the steps to do so. (Doc. 30-9, p. 30). In particular, United of Omaha's November 15, 2013 letter warned Horton that if it did not “receive [Horton's] appeal within 180 days from the date [he] received t[he] [November 15, 2013] letter, ” the termination of his LTD benefits would be final. (Doc. 30-9, p. 31).

         C. Life Insurance Benefits

         While United of Omaha reviewed Horton's LTD claim, it considered simultaneously Horton's life waiver of premium benefits (“LWOP” or “life insurance benefits”) claim under the Life Policies. (Doc. 30-21, p. 30). At first, United of Omaha determined that Horton qualified for a LWOP. (Doc. 32, ¶ 15). But in a March 19, 2013 letter, United of Omaha reversed that determination, concluding that Horton “no longer qualified for waiver of premium coverage based on the any occupation provisions of the policy.” (Doc. 30-21, pp. 42-45). In other words, because Horton could “perform the physical and mental demands of a sedentary occupation” and was not “totally disabled, ” pursuant to the Life Policies, Horton was no longer eligible to receive life insurance benefits. (Id., p. 42). As with the November 15, 2013 LTD benefits termination letter, the March 19, 2013 LWOP termination letter informed Horton how to appeal United of Omaha's decision. (Id. pp. 43-44). The letter also listed in the subject line the Life Policies and Horton's LWOP claim number. (Id., p. 42).

         On April 22, 2013, Horton appealed United of Omaha's adverse LWOP determination, citing to the Life Policies' numbers. (Doc. 30-21, p. 36). The subject line says, “Appeal the Denial of Life Insurance, ” and the first line of Horton's appeal states, “Please accept this as my appeal to the life insurance denial from Mutual of Omaha Life Insurance Company!” (Doc. 30-21, p. 36). On May 3, 2013, referencing the Life Policies and Horton's LWOP claim number, United of Omaha acknowledged receipt of Horton's LWOP appeal. (Doc. 30-21, p. 65). On December 10, 2013, Omaha upheld its denial of his LWOP claim. (Doc. 1-3, pp. 2- 4). The letter references Horton's LWOP claim number; and the first line of the letter states that it concerns Horton's “appeal for continuation of life insurance benefits.” (Id., p. 2). The letter concluded that the medical evidence in Horton's claim file did not support disability under the Life Policies and that the denial of LWOP benefits determination was final. (Id., p. 4). The letter informed Horton that he had exhausted his administrative remedies with regard to his LWOP benefits and that Horton had “the right to bring a civil action suit.” (Id.).

         Horton contends that when he received United of Omaha's December 10, 2013 final decision letter relating to the Life Policies, he believed “that [the letter] related to all his claims with Omaha, ” including his STD and LTD claims. (Doc. 35, p. 6). Horton states that he was “critically ill” and “frequently” hospitalized in 2013 and 2014, and that he was taking medication that affected his cognitive abilities as well as his memory, which, Horton alleges, affected his ability to appeal and impaired his reading comprehension. (Doc. 36-1, ¶¶ 4-6).

         Horton alleges that he retained legal counsel to pursue his LTD benefits shortly after being released from the hospital. (Doc. 35, pp. 6, 22-23). On August 22, 2014, Horton, through counsel, wrote to United of Omaha. (Doc. 30-21, pp. 7- 9). In the subject line of that letter, it is undisputed that counsel for Horton referenced the Life Policies and Horton's LWOP claim number. (Doc. 1-4, p. 2; Doc. 30-21, p. 7). Counsel wrote that her firm had “been retained to represent Mr. Horton in his claim for disability benefits.” (Doc. 1-4, p. 2). Horton sought “a copy of any Plan document that govern[s] [his] claim and all other documents that [Horton] must be furnished pursuant to a request under 29 U.S.C. § 1024(b)(4).”[7](Doc. 1-4, p. 2). In addition, Horton's August 22, 2014 inquiry requested that United of Omaha confirm whether Horton “has exhausted all administrative rights to appeal.” (Id., p. 2). Furthermore, in the accompanying privacy release to the August 22, 2014 letter, although Horton cited to the Life Policies and his LWOP claim number, Horton wrote that he was “seeking a reassessment of my claim for Long Term Disability benefits.” (Doc. 1-4, p. 4; Doc. 30-21, p. 9).

         On September 15, 2014, United of Omaha responded to Horton's August 22, 2014 letter, “providing information only for [Horton's] waiver of premium claims.”

         (Doc. 1-5; Doc. 35, pp. 6-7; Doc. 30-21, pp. 4-6). That letter also confirmed that Horton had exhausted his appeal rights with respect to the Life Policies. (Doc. 32, pp. 10-11; Doc. 35, pp. 6-7; Doc. 30-21, pp. 4-6). But as with the subject line of Horton's August 22, 2014 letter, the reference line in Omaha's September 15, 2014 response letter dealt only with Horton's Life Policies and Horton's LWOP claim number. (Doc. 1-5; Doc. 30-21, pp. 4-6). The September 15, 2014 letter did not discuss Horton's STD or LTD policies. (Doc. 1-5; Doc. 30-21, pp. 4-6).

         D. Appeal of LTD Benefits

         On March 10, 2015, Horton appealed United of Omaha's termination of his LTD benefits. (Doc. 1-6; Doc. 30-9, pp. 9-10). In the subject line of Horton's letter, he referenced the LTD disability policy as well as his LTD policy number. (Doc. 1-6; Doc. 30-9, p. 9). Horton stated that, on December 10, 2013, while he received information related to the Life Policies, he did not receive information pertaining to his LTD claim. (Doc. 1-6; Doc. 30-9, p. 9). Horton also said that he had “previously requested that Mutual of Omaha clarify [Horton's] appeal rights on his disability claim.” (Doc. 1-6; Doc. 30-9, p. 9). “[G]iven the apparent confusion, ” Horton requested copies of his ...


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