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Allen v. Hartford Life & Accident Insurance Co.

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

April 30, 2019

MARTHA ALLEN, Plaintiff,
v.
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION

          ABDUL K. KALLON, UNITED STATES DISTRICT JUDGE

         Martha Allen filed this lawsuit against Hartford Life and Accident Insurance Company, alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. 1101 et seq. Doc. 1. Allen contends that Hartford wrongfully denied her long-term disability (“LTD”) benefits due to its duplicative requests for documentation, breach of fiduciary duty, bad faith, conflict of interest, and inability to provide a full and fail review. Id. at 5-18. Before the court is Hartford's motion to dismiss, or in the alternative, motion for summary judgment, doc. 7. The motion, which is fully briefed, docs. 14 and 15, and which the court addresses as one for summary judgment, is due to be granted.

         I. LEGAL STANDARD FOR SUMMARY JUDGMENT

         Although “the law is less clear as to what requirement governs when considering dismissal for failure to exhaust administrative remedies in an ERISA case, ” the Eleventh Circuit has affirmed district courts' decisions on ERISA claims and exhaustion requirements under both Rule 12(b)(6) and Rule 56 of the Federal Rules of Civil Procedure. See, e.g. Davis v. Prudential Ins. Co. of Am., No. 2:14CV43-MHT, 2018 WL 3094885, at *2 (M.D. Ala. June 22, 2018) (affirming dismissal of ERISA claim for a failure to exhaust under Rule 12(b)(6)) and Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1315 (11th Cir. 2000) (same under Rule 56).

         In light of both parties submitting evidence and affidavits in support of and opposition to Hartford's motion, [1] the court considers this matter pursuant to the provisions of Rule 56 of the Federal Rules of Civil Procedure. Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005) (“The district court generally must convert a motion to dismiss into a motion for summary judgment” once the court looks at matters outside of the pleading). Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56. “Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (alteration in original). The moving party bears the initial burden of proving the absence of a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmoving party, who is required to “go beyond the pleadings” to establish that there is a “genuine issue for trial.” Id. at 324 (citation and internal quotation marks omitted). A dispute about a material fact is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         On summary judgment motions, the court must construe the evidence and all reasonable inferences arising from it in the light most favorable to the non-moving party. Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255. Any factual disputes will be resolved in the non-moving party's favor when sufficient competent evidence supports the non-moving party's version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275, 1276, 1278 (11th Cir. 2002) (a court is not required to resolve disputes in the non-moving party's favor when that party's version of events is supported by insufficient evidence). However, “mere conclusions and unsupported factual allegations are legally insufficient to defeat a summary judgment motion.” Ellis v. England, 432 F.3d 1321, 1326 (11th Cir. 2005) (per curiam) (citing Bald Mountain Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere ‘scintilla' of evidence supporting the opposing party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson, 477 U.S. at 252).

         II. FACTUAL BACKGROUND

         Allen worked as an insurance claims adjuster for Infinity Property and Casualty Corporation until 2017 when she stopped working due to various medical ailments. Docs. 1; 13-1 at 59; 13-3 at 5-20. Thereafter, Allen applied in March 2017 for disability benefits through Infinity's Hartford-sponsored policy. Doc. 7-1. In April 2017, Hartford found Allen eligible for short-term disability (“STD”) benefits, which it deemed to be “not payable beyond June 28, 2017.” Doc. 7-4. Sometime in June, Hartford began a concurrent review of Allen's eligibility for LTD benefits and notified Allen that this inquiry would require a separate approval process. Id.

         During this period, the parties engaged in a flurry of correspondence regarding requests for and supplements to Allen's medical record. See docs. 7-1 through 7-14 and 13-1 through 13-5. Eventually, in September 2017, Hartford informed Allen of its decision to terminate her LTD benefits due to Allen's failure to provide proof of her ongoing disability and her “lack of response and lack of medical information.” Doc. 7-3 at 1. Hartford also notified Allen that she may “perfect her claim” by providing the necessary information, or “if [she is] unable to or do[es] not wish to provide the requested information, [she] may appeal submit an appeal of [the] decision to the Appeal Unit.” Id. at 4-5. Allen, through her attorney, contacted Hartford's Appeals Unit in January 2018. The correspondence relayed Allen's intent to revoke Hartford's access to the HIPAA authorization she previously provided, her decision to appeal the adverse LTD determination, and her submission of additional medical information Hartford previously requested. Doc. 7-5.

         A month later, the Appeals Unit acknowledged receiving Allen's letter and documents, but construed the submission as a response to perfect the denied LTD claim. Consequently, the Appeals Unit “forward[ed] [Allen's] letter and attachments to the Maitland Claim Office” for further evaluation of her claim in light of additional materials which appeared in response to prior requests for documentation. Doc. 7-6. Thereafter, Tameka Caldwell, a senior disability analyst in the Maitland Claim Office, noted the receipt of the documents included in “Allen's request for an appeal, ” and requested additional information from Allen, including past and present neuropsychological exams, as well as medical records from Dr. Aaron Fobian who had treated Allen since March 2017. Doc. 7-7. Allen's attorneys subsequently provided updated medical records from various physicians, including Dr. Fobian. Counsel also inquired about Hartford's delay in reinstating Allen's benefits, contending that their submission of additional documents fully addressed the grounds for the denial of the claim. Doc. 13-2 at 41.

         Hartford responded that it initially denied the LTD claim due to incomplete records and that “an appeal is not necessary at this time until a decision is made.” Doc. 7-8. Hartford also informed counsel of the difficulties it had in obtaining a “neuropsychological evaluation documented in the medical records.” Doc. 7-8. Nearly a month later, Hartford warned that it would make a determination on the LTD claim based on the records it had received, which might result in a denial, and inquired again about the missing medical records, including past and present neuropsychological exams and Dr. Fobian's mental health records. Doc. 7-9. In response, Allen's attorneys sent additional records they had recently received from Dr. Fobian. Doc. 13-3 at 34. The submission proved incomplete, however, causing Hartford to respond that Allen's LTD claim remained under review because its clinical staff needed Allen's neuropsychological exams. Id. at 45. Hartford explained a few days later that while it understands that Allen did not want to undergo a new neuropsychological exam, it needed a copy of the 2016 exam. Doc. 7-10 at 1. Counsel for Allen refused to provide the 2016 neuropsychological exam, stating that “it is not relevant as to whether Ms. Allen is disabled as of the date this benefit is to commence” and “precedes the date of disability for the STD claim which was paid.” Doc. 13-3 at 51. Counsel also explained that Allen would not answer the request for more assessments and that they expected to receive a timely determination on Allen's claim. Id.

         Thereafter, Hartford requested a list of Allen's current treatment providers, attending physician's statement, and neuropsychological evaluation reports. Doc. 7-11 at 2. Allen's attorneys responded with a request for clarification on what additional information Hartford needed to review the LTD claim. Doc. 13-3 at 56. The following day, Hartford explained that it needed a list of Allen's past and current treatment providers and that if Allen refuses to provide the information, she “may submit an appeal to the Appeals Unit at the time a decision is made based on the information currently in the claim file.” Doc. 7-12. Counsel for Allen responded that they had already provided a list of Allen's medical providers. Doc. 13-3 at 61. Roughly a month later, counsel expressed concern over the “endless cycle” of document requests in the six months since Allen submitted documentation for her LTD claim and asked Hartford to explain why Allen should not file a lawsuit. Id. at 62. The following day, Hartford notified Allen that it “has completed [its] review of her claim for benefits and [has] determined that [it is] unable to complete [the] investigation. Because of this, [it] must deny her claim.” Doc. 7-13 at 1. Hartford explained that Allen may perfect her claim by providing the necessary information or she may appeal the decision. Id. at 5. Allen filed this lawsuit in response. Doc. 1.

         III. ANALYSIS

         Although ERISA does not include an exhaustion requirement, the Eleventh Circuit strictly enforces this requirement with narrow exceptions for exceptional circumstances, such as where the administrative scheme is unavailable, futile, or fails to offer an adequate legal remedy. Perrino, 209 F.3d at 1315. Exhaustion is not excused even for “technical violations of ERISA regulations that do not deny plaintiffs meaningful access to an administrative remedy procedure through which they may receive an adequate remedy.” Id. at 1317. As the Circuit puts it, “[a]dministrative claim-resolution procedures reduce the number of frivolous lawsuits under ERISA, minimize the cost of dispute resolution, enhance the plan's trustees' ability to carry out their fiduciary duties expertly and efficiently by preventing premature judicial intervention in the decision-making process, and allow prior fully considered actions by pension plan trustees to assist courts if the dispute is eventually litigated.” Mason v. Cont'l Grp., Inc., 763 F.2d 1219, 1227 (11th Cir. 1985). Consequently, “if a reasonable administrative scheme is available to a plaintiff and offers the potential for an adequate legal remedy, then a plaintiff must first exhaust the administrative scheme before filing a federal suit.” Id. Ultimately, the plaintiff “must carry the burden of proof, demonstrating that [s]he is entitled to recover under ERISA's civil ...


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