Summary
granting summary judgment for an insurer where the insured did not submit any Local Rule 56.1 materials, the court held that insurer's decision that the insured failed to "provide a complete and valid proof of loss was reasonable"
Summary of this case from TIPTON v. CNA FINANCIALOpinion
Case No. 99 C 2149
May 23, 2000
MEMORANDUM OPINION AND ORDER
This is an action for recovery of long-term disability benefits under an ERISA qualified employee welfare benefit plan. Before the Court is defendant Hartford's motion for summary judgment.
DISCUSSION
Summary judgment must be granted when, after viewing all the evidence in the light most favorable to the non-movant, the court finds that "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c);Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). That is the case here.
Mr. Auston, in his response to Hartford's motion for summary judgment, did not submit any materials in compliance with Local Rule 56.1(b), either disputing Hartford's Rule 56.1 statement of facts or setting forth any additional relevant facts. As such, all facts set forth in Hartford's Rule 56.1 statement and supported by reference to the record is deemed by this Court to be admitted and uncontroverted. See Dade v. Sherwin-Williams Co., 128 F.3d 1135, 1139 (7th Cir. 1997). In reviewing these uncontroverted facts, the Court concludes that no genuine issue of material fact exists to support Mr. Auston's claims and summary judgment for Hartford is, therefore, appropriate.
Hartford is the insurer and administrator of a group disability policy issued through Mr. Auston's former employer, Columbia/HCA Healthcare Corporation. Among other benefits, the policy provided for total disability insurance. According to the terms of the policy, if a participant becomes totally disabled, he will be eligible for monthly disability benefits calculated at 60% of the participant's wage or salary paid by Columbia minus any other benefits, settlements, or judgments received from third parties for the claimed disability. The minimum monthly benefit is set at $50.00. In addition, the policy requires that as part of a valid proof of loss, the participant must stipulate as to any and all other benefits, settlements, or judgments that the participant is receiving and/or pursuing. Finally, the policy grants Hartford all discretion and authority to determine eligibility for benefits and to construe and interpret the terms of the policy.
On July 19, 1996, Mr. Auston, while employed with Columbia, was injured in an automobile accident and subsequently applied for total disability benefits. After approving Mr. Auston's claim, Hartford began requesting information from Mr. Auston as to any other income benefits that he was receiving or pursuing. Hartford repeatedly sought this information from Mr. Auston, explaining the relevant provisions of the policy, but to no avail. When finally, by March 1999, Hartford still had not received the requested information, Hartford reduced Mr. Auston's monthly benefit to the minimum $50.00. On April 1, 1999, Mr. Auston filed the operative complaint. According to the complaint, Mr. Auston believes not only that he is eligible for the full amount of benefits calculated against the salary he received at Columbia, but also for other income that he derived from other employers for whom he apparently moonlighted.
Even though Mr. Auston's original complaint was styled as one for breach of contract, this Court, in response to a motion to dismiss by Hartford under the preemption doctrine, found that Mr. Auston's complaint stated a claim for benefits under ERISA. Hartford thus withdrew its motion to dismiss. Now, in its motion for summary judgment, Hartford first submits that Mr. Auston's claims should be dismissed because an ERISA claim for benefits can only be brought against the plan itself, and Hartford is not the plan. The Court, however, finds it unnecessary to address the issue of whether Hartford is the right party. Even if Hartford is the correct party, summary judgment is proper since the reduction of Mr. Auston's benefit was reasonable.
Hartford is given full discretion to administer and interpret the terms of the policy by express language in the policy. (Def. 56.1 Stmt., ¶ 16). Therefore, this Court cannot overturn Hartford's decision unless Mr. Auston demonstrates that Hartford acted in an arbitrary and capricious manner in calculating his benefits. Herzberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000). He has not done so.
First, the express language of the policy itself stipulates that Mr. Auston is only entitled to coverage with respect to his employment at Columbia, and not any other employer for whom Mr. Auston may have been moonlighting. (Def. 56.1 Stmt., ¶¶ 10, 11). Second, the policy requires participants to disclose to Hartford any additional sources of benefits as part of a valid proof of loss. ( Id. at ¶ 14). And benefits do not become payable until such a valid proof of loss has been submitted. (Id. at ¶ 6) However, the record demonstrates that Mr. Auston repeatedly refused to comply with the provision despite Hartford's patient attempts for more than two years to explain the requirements under the policy. (Id. at ¶¶ 23-34). Therefore, Hartford's decision to reduce benefits to the minimum, in light of Mr. Auston's failure to provide a complete and valid proof of loss, was reasonable. Mr. Auston, on the other hand, points to nothing in the factual record that would entitle him to any benefits greater than the minimum or that Hartford's action was arbitrary and capricious.
CONCLUSION
For the reasons stated herein, summary judgment is granted in favor of Hartford.
IT IS SO ORDERED.