Opinion
CIVIL ACTION NO. 7:21-CV-00123
2022-07-14
Jose M. MARTINEZ, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Defendants.
Mark Anthony Di Carlo, Attorney at Law, Corpus Christi, TX, for Plaintiff. Robert L. Galligan, Alexandro Benavides, Jones, Galligan, Key & Lozano, L.L.P., Weslaco, TX, for Defendants.
Mark Anthony Di Carlo, Attorney at Law, Corpus Christi, TX, for Plaintiff.
Robert L. Galligan, Alexandro Benavides, Jones, Galligan, Key & Lozano, L.L.P., Weslaco, TX, for Defendants.
ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AS MOOT
Randy Crane, United States District Judge
Now before the Court is "Defendants’ Motion for Summary Judgment" filed by Defendants Prudential a.k.a., d.b.a. Prudential Insurance Company of America a.k.a., d.b.a. The Prudential Insurance Company of America Disability Management Service a.k.a., d.b.a. Prudential Services Company of America ("Prudential") and American Electric Power Service Corporation ("AEPSC") (collectively "Defendants"). (Dkt. No. 31). Also before the Court is "Plaintiff's Response to Defendants Motion for Summary Judgment; Plaintiff's Motion for Summary Judgment" filed by Plaintiff Jose M. Martinez ("Plaintiff"). (Dkt. No. 34). After considering the two Motions and their responsive briefings (Dkt. Nos. 35, 37), the Court is of the opinion that Defendants’ Motion (Dkt. No. 31) should be GRANTED and Plaintiff's Motion (Dkt. No. 34) should be DENIED as moot for the following reasons.
I. Factual and Procedural Background
The Court does not revisit the entirety of this case's factual and procedural background. The Court only highlights the background relevant to the parties’ Motions.
A summary of Plaintiff's complaint and attached exhibits can be found in the Court's "Order Granting in Part and Denying in Part Defendants’ Motion to Dismiss Plaintiff's Complaint and Denying Plaintiff's Motion for Judgment and Sanctions." (Dkt. No. 24).
According to the Complaint, Plaintiff was the beneficiary of an American Electric Power System Long-Term Disability Plan ("Plan"). (Dkt. No. 1 at p. 2). Plaintiff alleges that he applied for long term disability benefits under the Plan on April 16, 2019, which was denied on July 17, 2019. Id. at p. 27, 63-64. Further, Plaintiff alleges that denial notice informed him that he had a right to appeal within 180 days of July 17, 2019, and that he filed a first level appeal the same day. Id. at p. 2, 64. Plaintiff also alleges that he filed a second level appeal on February 12, 2020. Id. at p. 2. According to Plaintiff, Prudential informed Plaintiff that his appeal was untimely on February 20, 2020. Id. at p. 70.
Plaintiff filed suit on April 2, 2021, alleging Defendants wrongfully denied him long term disability benefits under the Plan, asserting various claims under state and federal law. (Dkt. No. 1). On September 27, 2021, the Court granted in part and denied in part "Defendants’ Motion to Dismiss Plaintiff's Complaint" (Dkt. No. 7), dismissing all claims except for Plaintiff's claim under 29 U.S.C. § 1132(a)(1)(B), also known as § 502(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"). (Dkt. No. 24).
On March 4, 2022, Defendants filed their Motion for summary judgment, arguing Plaintiff's remaining claim is barred for his failure to exhaust administrative remedies. (Dkt. No. 31). On March 17, 2022, the Court granted "Plaintiff's Unopposed Motion to Continue Pretrial Motions Deadline," setting the new deadline to file pretrial motions to March 25, 2022. (Dkt. No. 33). On the deadline, Plaintiff filed his response to Defendants’ Motion and his own Motion for Summary Judgment on the issue of whether he is disabled under the Plan. (Dkt. No. 34).
II. Defendants’ Motion for Summary Judgment
Defendants move for summary judgment solely on the issue of whether Plaintiff exhausted administrative remedies. (Dkt. No. 31). Since Defendants’ argument has the potential to dispose of Plaintiff's remaining claim, the Court addresses it first.
A. Legal Standard
A district court must grant summary judgment "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(a). A fact is material if it might affect the outcome of the lawsuit under the governing law, and it is genuinely in dispute only if a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The movant has the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the pleadings and materials in the record, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party carries its burden, the burden shifts to the nonmovant to go beyond the pleadings and provide specific facts showing the existence of a genuine issue for trial. Id. at 324, 106 S.Ct. 2548 ; see FED. R. CIV. P. 56(c). Generally, a nonmovant "cannot resist summary judgment by resting on its allegations." Access Mediquip L.L.C. v. UnitedHealthcare Ins. Co. , 662 F.3d 376, 378 (5th Cir. 2011). The Court "review[s] the evidence and inferences drawn from that evidence in the light most favorable to the non-moving party." Lafleur v. La. Health Serv. and Indem. Co. , 563 F.3d 148, 153 (5th Cir. 2009) (en banc). The Court does not make credibility determinations nor weights the evidence when ruling on a motion for summary judgment. Anderson , 477 U.S. at 255, 106 S.Ct. 2505.
Failure to exhaust administrative remedies is an affirmative defense, not a jurisdictional bar. Crowell v. Shell Oil Co. , 541 F.3d 295, 308-09 (5th. Cir. 2008) ; Bourgeois v. Pension Plan for Emps. of Santa Fe Int'l Corp. , 215 F.3d 475, 479 (5th Cir. 2000). When a defendant asserts an affirmative defense in a motion for summary judgment, "he must establish beyond peradventure all of the essential elements" of the affirmative defense. Access Mediquip , 662 F.3d at 378 (discussing the legal standard in the context of the affirmative defense of ERISA preemption). Thus, "[o]nce the movant has carried the burden to establish all elements of the exhaustion defense, the burden shifts to the non-movant to establish an exception to exhaustion or a genuine dispute of material fact as to exhaustion." Mission Toxicology, LLC v. UnitedHealthcare Ins. Co. , 499 F.Supp.3d 338, 345 (W.D. Tex. 2020).
"[E]xhaustion of administrative remedies is a prerequisite to an ERISA action in federal court." Swanson v. Hearst Corp. Long Term Disability Plan , 586 F.3d 1016, 1018 (5th Cir. 2009) (per curium). Since Defendants’ Motion is based on exhaustion, the Court does not determine the standard of review regarding Prudential's denial of benefits, which differs depending on the existence of a delegation clause. See Ariana M. v. Humana Health Plan of Tex., Inc. , 884 F.3d 246 (5th Cir. 2018) (en banc) (holding a district court reviews challenges to denials of benefits for abuse of discretion when an ERISA plan lawfully delegates discretionary authority to the plan administrator and de novo , otherwise).
B. Summary Judgment Evidence
Defendants support their Motion with the claim file. (Dkt. No. 30). Rather than summarizing the whole claim file, the Court focuses on the information relevant to Defendants’ Motion.
Defendants assert that the Court must limit its review to the administrative record under circuit precedent. (Dkt. No. 31 at ¶ 8); see Vega v. Nat'l Life Ins. Servs., Inc. , 188 F.3d 287, 299 (5th Cir. 1999) (en banc), overruled on other grounds by Metro. Life Ins. Co. v. Glenn , 554 U.S. 105, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008) ("Once the administrative record has been determined, the district court may not stray from it except for certain limited exceptions."); Ariana M. , 884 F.3d at 256-57 (adhering to Vega ’s reasoning for generally limiting evidence to the administrative record while overruling the circuit's abuse-of-discretion standard to challenges of a plan administrator's factual determination that a beneficiary is not eligible for benefits). While Defendants’ assertion seems accurate, the Court is unable to locate case law suggesting such a limitation applies when the district court determines whether a plaintiff exhausted administrative remedies. Regardless, the claim file is the only summary judgment evidence before the Court, so the Court need not inquire further.
i. The Plan
The Plan is a welfare benefit plan providing long-term disability benefits. (Dkt. No. 30 at p. 179). Under the Plan, an eligible employee who is disabled for 1,040 hours or longer can receive up to 60% of his or her base pay through the Plan. Id. at p. 163. AEPSC pays the full cost of the base Plan coverage that provides up to 60% of the base pay coverage. Id. at p. 164. Eligible employees have the option to supplement the employer-provided base plan by purchasing an additional benefit equal to 10% of their base pay. Id. at p. 163-64. The Plan is "governed by the laws of the State of Ohio, except to the extent pre-empted by federal law, including ERISA." Id. at p. 178.
The claims file contains the Plan twice. (Dkt. No. 30 at p. 162-97). The Court will only cite to the first inclusion of the Plan.
AEPSC, along with its subsidiaries and affiliates that have adopted the Plan for the benefit of their employees, is the Plan's sponsor and administrator. Id. at p. 178. As the Plan's administrator, AEPSC "has the authority to control, administer and manage the operation of the plan." Id. AEPSC "delegated its claims administration authority for reviewing and processing [long-term disability] claims by eligible participants" to Prudential. Id. at p. 174, 179. "Prudential has full discretion and authority to determine eligibility for benefits and for continued benefits" and "to construe and interpret all terms and provisions of the plan." Id. at p. 178.
To begin receiving benefits under the Plan, an eligible participant must first submit a claim, which includes a long-term disability application and proof of disability. Id. at p. 167. After the claimant files a claim for benefits, the claimant will be advised of the determination within forty-five days after receipt of the claim either "by AEP Recovery Center (with regard to eligibility determinations) or Prudential (with regard to other benefit determinations)," but the period may be extended if certain criteria are met. Id. at p. 174. Any notification of an adverse benefit determination will include "[a] description of the plan's appeal procedures and of [the claimant's] right to bring a civil action under federal law following the denial of all required appeals." Id. at p. 174-75.
If a claimant disagrees with a benefits determination other than a determination regarding the claimant's eligibility, then the claimant may submit a written request for an appeal to Prudential. Id. at p. 175.
Your request should include your name, address, Social Security number and other identifying information requested. You should state the reasons you believe your claim should be treated differently, and include additional facts, pertinent information, and/or documentation to substantiate your position.
You have 180 days from receipt of the notice of an adverse benefit determination to file an appeal. All appeals must be in writing. You may submit comments, documents, records and other information in support of your appeal. The review on appeal will take into account any information you submit, even if not submitted or considered as part of the initial determination. Also, upon written request and free of charge, you will also be provided reasonable access to and copies of all documents, records, and information relevant to your claim.
Id. at p. 175-76. The Plan also outlines procedural protections regarding the appeal procedure. E.g., id. at p. 176 ("The health care professional consulted for the appeal will not be the professional (if any) consulted during the prior determination or a subordinate of such professional."). If a claimant's appeal is denied, then the notification of the decision will include "[a] description of the plan's procedure for a voluntary second level appeal with respect to determinations on appeal by Prudential and a statement of [the claimant's] right to bring a civil action under federal law." Id. Specifically, if a claimant is not satisfied with Prudential's determination regarding an issue other than the claimant's eligibility on appeal, then "rather than immediately filing a civil action in court, [the claimant has] the option to submit a request for an additional review of Prudential's adverse determination of your claim on appeal." Id. at p. 177.
ii. Denial of Plaintiff's Claim
Plaintiff was hired by American Electric Power ("AEP") on January 26, 1981. Id. at p. 5. Plaintiff applied for long-term disability under the Plan on April 16, 2019. Id. at p. 9. In a letter dated July 17, 2019, Prudential informed Plaintiff that it denied Plaintiff's claim for benefits under the Plan since Plaintiff did not "meet the definition of disability as defined in [the Plan]." Id. at p. 457-58. The letter also included information on Plaintiff's appeal rights:
If you disagree with this decision, you have a right to appeal. If you choose to do so, your appeal must be made in writing by you or your authorized representative, and submitted within 180 days of the date of receipt of this letter. Your appeal should contain:
• Your name, control number, and Social Security number (or claim number)
• The reasons that you disagree with our determination
• Medical evidence or other information to support your position that
your claim should be considered timely.
You may submit with your appeal any other written comments, documents, records, or information related to your claim.
You are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim.
...
If our decision to deny benefits is upheld at the first level of appeal, you or your authorized representative may file a voluntary second appeal.
...
After completion of the first level of appeal, you may file a lawsuit for Plan benefits under the Employee Retirement Income Security Act (ERISA). Your decision on whether to file a second appeal will not affect your rights to sue under ERISA.
Id. at p. 459. Prudential also communicated with Plaintiff via email and a telephone call regarding its decision to deny Plaintiff's claim for benefits under the Plan. Id. at p. 461-62, 467. On the telephone call, Plaintiff expressed understanding and thanked the disability claim manager for the call. Id. at p. 462.
On July 22, 2019, Plaintiff called Prudential and requested a copy of the decision be mailed to him. Id. at p. 469. Prudential verified Plaintiff's address on file and helped Plaintiff set up his online account. Id. at p. 469-70. On August 13, 2019, Plaintiff called Prudential and discussed how to file an appeal. Id. at p. 471.
On August 30, 2019, Plaintiff's counsel sent a letter to Prudential requesting the claim file related to Plaintiff's claim for benefits. Id. at p. 472-73. The same day, Prudential contacted Plaintiff's counsel and informed him that Prudential requires a signed authorization from Plaintiff to release information. Id. at p. 475. Accordingly, Plaintiff's counsel sent an authorization signed by both Plaintiff and his counsel. Id. at p. 476.
On October 8, 2019, Plaintiff sent a second request for the claim file related to Plaintiff's claim for benefits. Id. at p. 478-79. On October 10, 2019, Prudential mailed the claim file via UPS to Plaintiff. Id. at p. 484. Plaintiff received the claim file on October 14, 2019. See id. at 489 ("I received a copy of what purported to be the claim file, which I requested on August 28, 2019, on October 14, 2019.").
After August 30, 2019, Plaintiff's counsel communicated with Prudential exclusively on behalf of Plaintiff. The Court will refer to communication with Plaintiff's counsel as communication with Plaintiff.
On February 6, 2020, AEP asked Prudential whether Prudential had received an appeal on Plaintiff's claim. Id. at p. 485. Prudential responded that no appeal letter had been received and noted that the time to appeal appears to have expired. Id.
On February 12, 2020, Plaintiff informed Prudential via letter that the claim file "is incomplete and inadequate to file an appeal." Id. at p. 489. Accordingly, Plaintiff requested an extension of time to file an appeal and requested documents referenced in the letter. Id. Prudential interpreted the letter as a written request for an appeal. Id. at p. 508-16, 518. On February 20, 2020, Prudential informed Plaintiff via letter that it upheld its decision to deny plaintiff's request for long-term disability benefits. Id. at 517-18 ("We have upheld our decision to disallow LTD benefits."). Prudential noted that the deadline to submit an appeal was January 27, 2020. Id. at p. 518. Consequently, "the decision to deny [Plaintiff's] claim stands as initially communicated without appeal review." Id. at p. 518.
On February 27, 2020, Plaintiff acknowledged that he received Prudential's February 20, 2020 letter and again requested "all of the documents in the claim file; a response as to why you have failed and are failing to provide the documents; and your response as to my clients request for damages for failure to tender the entire claim file." Id. at p. 529. Plaintiff also represented that the documents are needed "to file a lawsuit in Federal Court." Id. Prudential sent Plaintiff a copy of Plaintiff's claim file via UPS on March 4, 2020. Id. at p. 531, 539. On March 6, 2020, Plaintiff acknowledged receipt of the claim file, which was approximately 1.75 inches thicker than the original claim file sent. Id. at p. 540-43.
On July 30, 2020, Plaintiff contacted Prudential, representing that he "does not have the entire claim file because there are a number of abbreviations used in internal documents and notes where are not included nor defined and, therefore the contents of the file are incomplete and incoherent." Id. at p. 547-49. After some correspondence, Plaintiff received the list of acronyms on August 5, 2020. Id. at p. 556-639.
On November 16, 2020, Plaintiff sent Prudential a decision from an administrative law judge regarding Plaintiff's claim for disability under Social Security to be included in the claim file. Id. at p. 641-45
C. Analysis
Defendants’ motion for summary judgment is based exclusively on Plaintiff's failure to exhaust administrative remedies. (Dkt. No. 31). In response, Plaintiff asserts various arguments, which the Court summarizes as follows: (1) the Plan is governed by Ohio law; (2) ERISA does not require exhaustion of administrative remedies; (3) the Plan does not require an appeal before filing a lawsuit in federal court; (4) the cases Defendants cite are factually distinguishable; (5) Prudential was required to decide the appeal regardless of whether it was timely; (6) Prudential failed to consider a decision by an administrative law judge; (7) exhaustion would be futile; and (8) the time to file an appeal should be extended due to Prudential's initial failure to provide a list of acronyms with the claim file. (Dkt. No. 34 at p. 8-9, 18).
Plaintiff also complains that he is prejudiced by Defendants’ filing of the claim file on March 3, 2022. (Dkt. No. 34 at p. 1-2); see (Dkt. No. 30). Plaintiff complains about the amount of time he had to review the claim file and "asserts that the delay in filing the claim file is typical of the questionable practices of the Defendants in their handling of this case." Id. Prudential initially sent Plaintiff the claim file, as it existed at the time, in October of 2019. (Dkt. No. 30 at 484). Prudential sent the claim file again on March 4, 2020, and provided the list of acronyms on August 5, 2020. Id. at p. 539, 556-639. Additionally, Defendants gave Plaintiff access to the claim file in September of 2021 with its initial disclosures, which Plaintiff previously admitted receiving. (Dkt. No. 35 at ¶ 2, Exhs. 1-A, 1-B); (Dkt. No. 22 at ¶ 4). Plaintiff's complaint regarding the amount of time he had to review the claim file does not appear to be justified.
Since Plaintiff's brief includes some paragraphs with the same paragraph number, the Court will cite to the page number.
The Court will first address Plaintiff's arguments regarding the applicable law before analyzing the exhaustion requirement. After discussing why Plaintiff failed to exhaust his administrative remedies, the Court addresses Plaintiff's remaining arguments. Since the parties do not dispute the underlying facts, the overarching question is whether Defendants are entitled to judgment as a matter of law. FED. R. CIV. P. 56(a).
i. Governing Law
Plaintiff argues that Ohio law controls this Court's determination throughout his responsive brief. E.g., id. at p. 8. The Plan states that it "shall be governed by the laws of the State of Ohio, except to the extent pre-empted by federal law, including ERISA." (Dkt. No. 30 at p. 178). According to Plaintiff, Defendants rely on circuit precedent "which interprets Texas law." (Dkt. No. 34 at p. 8). Logically, Plaintiff's argument presupposes that the Plan is not preempted by ERISA.
The Court determined that the Plan is covered by ERISA in its September 27, 2021 Order. (Dkt. No. 24). The Court's determination was based on the documents attached to the complaint, which are also part of the claim file. Compare (Dkt. No. 2) and (Dkt. No. 22 at Exhs. 1, 2, 3, 4), with (Dkt. No. 30). Since then, Plaintiff has not moved the Court to reconsider its Order. To the extent that Plaintiff's responsive brief is a veiled request to reconsider, Plaintiff fails to argue a sufficient reason why the Court should reconsider its prior determination. See Krim v. pcOrder.com, Inc. , 212 F.R.D. 329, 331 (W.D. Tex. 2002) ("The Fifth Circuit typically interprets motions to reconsider dispositive pretrial orders as analogous to Rule 60(b) motions for relief from judgment or Rule 59(e) motions to alter or amend the judgment, depending on whether the motion is filed within ten days of the order's issuance."); FED. R. CIV. P. 60(b) (enumerating reasons as to why a court may relieve a party from an order). Consequently, the Court does not revisit its prior determination that the Plan is covered by ERISA.
Since the Plan is governed by ERISA, the Court applies federal law and is bound by Fifth Circuit precedent. In this circuit, "claimants seeking benefits from an ERISA plan must first exhaust available administrative remedies under the plan before bringing suit to recover benefits" except "when such attempts would be futile." Bourgeois , 215 F.3d at 479.
ii. The Plan's Required Procedures
Next, Plaintiff argues the Plan does not require an appeal before filing a lawsuit in federal court. (Dkt. No. 34 at p. 8, 16-18). Plaintiff cites the Plan's language stating a claimant "may " submit a written request for an appeal to Prudential if the claimant disagrees with a benefit determination under Prudential's jurisdiction. Id. at p. 16; (Dkt. No. 30 at p. 175). Plaintiff also cites language related to a claimant's ability to submit a request for a voluntary second level appeal "rather than immediately filing a civil action in court." (Dkt. No. 34 at p. 16-17) (quoting (Dkt. No. 30 at p. 177)). Defendant, on the other hand, argues "[t]he language in the Plan and the disability denial letter establish that Plaintiff was required to have filed an appeal prior to filing suit." (Dkt. No. 35 at ¶ 8). For the following reasons, the Court finds that the Plan requires a claimant to file an appeal before initiating a lawsuit in court.
Plaintiff cites language on how to appeal to the AEP LTD Plan Appeal Committee, as opposed to Prudential. (Dkt. No. 34 at p. 16). Still, the Court understands that Plaintiff is challenging whether an appeal is required.
First, the Court looks to the Plan's language. The Plan states, "Any notification of adverse benefit determination will ... include ... [a] description of the plan's appeal procedures and of your right to bring a civil action under federal law following the denial of all required appeals." (Dkt. No. 30 at p. 174-75). The Plan does not explicitly state what it considers a "required appeal," but it distinguishes an "appeal," or first-level appeal, from a "voluntary second level appeal," suggesting that the first-level appeal is not voluntary but the second level is voluntary. Id. at p. 175-78.
With respect to a first-level appeal, a claimant may submit a written request for an appeal to Prudential if the claimant disagrees with a benefits determination other than a determination regarding the claimant's eligibility. Id. at p. 175. The Plan details how a claimant can submit a request for an appeal within "180 days from the receipt of the notice of an adverse benefit determination." Id. at p. 175-76. If a claimant's first-level appeal is denied, the notification of the decision will include "[a] description of the plan's procedure for a voluntary second level appeal ... and a statement of [the claimant's] right to bring a civil action under federal law." Id. at p. 176.
The differences between the notifications of an adverse benefits determination and an adverse first-level appeal decision supports the conclusion that the first-level appeal is the only required appeal. A notification of an adverse benefit determination includes a "description ... of [the claimant's] right to bring a civil action under federal law following the denial of all required appeals ," whereas a notification of an adverse first-level appeal decision includes a "statement of [the claimant's] right to bring a civil action under federal law." Id. at p. 175-76 (emphasis added). Since the notification of an adverse benefit determination includes a description of a claimant's right to bring a civil action after the denial of all required appeals, the Plan suggests that some appeal process is required to exhaust administrative remedies. In fact, the notification sent to Plaintiff regarding the denial of his benefits claim supports this interpretation as it states, "After completion of the first level of appeal , you may file a lawsuit for Plan benefits under the Employee Retirement Income Security Act (ERISA)." Id. at p. 459. Further, a notification of an adverse appeal decision provides a "statement" of the claimant's right to bring a civil action under federal law and does not mention any other required appeals. Thus, the logical conclusion is that the first-level appeal is the only required appeal for a claimant to exhaust administrative remedies.
The Plan's description of the voluntary second level appeal provides further support for this conclusion. The Plan states, "If you are not satisfied with the determination made by Prudential regarding your appeal on an issue that does not entail your eligibility under the plan, rather than immediately filing a civil action in court , you have the option to submit a request for an additional review of Prudential's adverse determination of your claim on appeal." Id. at p. 177. Thus, the Plan anticipates that a claimant has the right to file a civil action after Prudential decides a first-level appeal. Additionally, the description of the first-level appeal does not include language alluding to a claimant's ability to file an action in court, supporting the conclusion that a claimant must request a first-level appeal to exhaust the Plan's administrative remedies.
Finally, Plaintiff's argument that a claimant "may " submit a written request for an appeal does not persuade the Court that the Plan does not require any appeal before seeking judicial remedies. See (Dkt. No. 34 at p. 16); (Dkt. No. 30 at p. 175). The Plan uses the word "may" to acknowledge a claimant's choice to appeal or not to appeal a denial of benefits. "May" cannot reasonably be read to indicate that a claimant can bypass the appeal procedure before initiating a lawsuit. For these reasons, the Court finds that the Plan requires a claimant to pursue a first-level appeal before initiating a lawsuit.
iii. Exhaustion
Under the Plan, Plaintiff was required to appeal the denial of benefits within 180 days of receiving notice of the denial. (Dkt. No. 30 at p. 174-177, 459). Defendants argue that the claim file "conclusively establishes that the only appeal Plaintiff filed was the one dated February 12, 2020." (Dkt. No. 31 at ¶ 14). As a result, Defendants conclude that Plaintiff failed to exhaust his administrative remedies prior to filing suit. Id. at ¶ 15.
Plaintiff received notice of the denial of benefits via email, letter, and a telephone call on July 17, 2019. (Dkt. No. 34 at p. 457-462). Thus, the deadline to file a request for an appeal was January 13, 2020. Prudential, however, set the deadline to January 27, 2020, which accounts for a 14-day grace period. Id. at 518; (Dkt. No. 31 at ¶ 13). On August 13, 2019, Plaintiff and Prudential discussed how Plaintiff may file an appeal via a telephone call. (Dkt. No. 30 at p. 471). Communication between Plaintiff and Prudential in August and October of 2019 only indicate that Plaintiff sought the claim file; that is, Plaintiff did not request an appeal. Id. at p. 472-73, 475-76, 478-79, 482, 484. There was no other communication between Plaintiff and Prudential until Plaintiff's February 12, 2020 letter. Id. at p. 489-96. As mentioned, the February 12, 2020 letter stated the claim file Prudential provided to Plaintiff was "incomplete and inadequate to file an appeal." Id. at p. 489. Prudential interpreted the February 12, 2020 letter as a request for an appeal but stated that "the decision to deny [Plaintiff's] claim stands as initially communicated without appeal review" since the request was untimely. Id. at p. 517-18. Accordingly, the Court concludes that Plaintiff did not file a timely appeal and, thus, failed to exhaust administrative remedies.
Prudential's interpretation of the letter as a request for an appeal is generous considering the letter states the claim file "is incomplete and inadequate to file an appeal. " (Dkt. No. 30 at p. 489); see Swanson v. Hearst Corp. Long Term Disability Plan , 586 F.3d 1016, 1018-19 (5th Cir. 2009) (per curium) (concluding letters expressing an intention to appeal was not an appeal). Regardless of whether the letter was a request for an appeal, the letter was sent after January 27, 2020.
Despite the undisputed evidence that Plaintiff failed to timely request an appeal, Plaintiff maintains that the facts in this case should require a different outcome than other cases cited by Defendants. First, Plaintiff argues that Defendants’ reliance on Gonzalez v. Aztex Advantage , 547 F.App'x 424 (5th Cir. 2013) (per curium), is misplaced. (Dkt. No. 34 at p. 13). In Gonzalez , an appeal committee affirmed the denial of plaintiff's claim for benefits since the plaintiff failed to timely file the appeal. 547 F.App'x at 425. "[T]he appeals committee determined that [the plaintiff's] appeal was overdue and that [the plaintiff] did not provide any reason justifying his delay. " 547 F.App'x at 428 (emphasis added). The court could not conclude that the plan administrator abused its discretion in denying the plaintiff's claim. Id.
According to Plaintiff, he justified his reason for the untimely appeal, unlike the plaintiff in Gonzalez , citing Prudential's failure to provide a list of acronyms. (Dkt. No. 34 at p. 13-14) (citing (Dkt. No. 30 at p. 547-48)). Plaintiff's argument is unpersuasive since Plaintiff had notice of the deadline to appeal and, despite this notice, requested a list of acronyms on July 30, 2020, months after the appeal deadline passed. (Dkt. No. 30 at p. 459, 547-49). Plaintiff had sufficient time from October 14, 2019, to January 27, 2020, to review the claim file and request an appeal or the list of acronyms in preparation for a timely request for an appeal. As Defendants argue, "Plaintiff's failure to timely appeal could not have been due to his not having received the information timely, as he alleges." (Dkt. No. 35 at ¶ 3).
Plaintiff also argues that he "did make such allegations of the reasons for the delay" and argues that Defendants inadequately responded to these allegations in their answer. (Dkt. No. 34 at p. 13). Generally, a nonmovant "cannot resist summary judgment by resting on its allegations." Access Mediquip L.L.C , 662 F.3d at 378.
Additionally, Plaintiff separately argues that Gonzalez is distinguishable because the Gonzalez plaintiff's § 1132(a)(3) claim was dismissed by agreement. (Dkt. No. 34 at p. 14). This argument is meritless since the Gonzalez court's discussion on the exhaustion of administrative remedies related to the plaintiff's § 1132(a)(1) claims, not the § 1132(a)(3) claim. Gonzalez , 547 F.App'x at 426-27.
Plaintiff also argues Defendants’ reliance on Swanson is unfitting since the administrative appeal in that case was over three years late. (Dkt. No. 34 at p. 14). In Swanson , the plaintiff's benefits were terminated because the plaintiff was cleared to return to work on a full-time basis. 586 F.3d at 1017. The ERISA plan, like the one at issue here, gave the plaintiff 180 days to appeal this determination. Id. Within these 180 days, the plaintiff's counsel sent a letter to the plan administrator requesting various documents and stating that the letter is "notice of [the plaintiff's] intention to appeal your decision terminating her benefits under the above referenced policy." Id. The plan administrator labeled this letter as an "intent to appeal" letter. Id. Over three years later, plaintiff's counsel sent the plan administrator another letter, and the plan administrator rejected the new submission as a late-filed appeal. Id. at 1017-18. The court determined that the first letter sent within the 180-day period was not an appeal as it "merely expressed an ‘intention to appeal.’ " Id. at 1018. Because the court affirmed the district court's conclusion that there was no valid appeal on which to rule, the court ascribed no fault to the plan administrator for failing to rule on the merits of the appeal. Id. at 1019. Thus, Swanson ’s outcome was based on the untimely nature of the appeal, not the fact that the appeal was over three years late. See id. ("There is likewise no dispute that in order to exhaust remedies, Swanson needed to appeal the termination of benefits within 180 days of April 4, 2003.").
Plaintiff also argues that Defendants’ reliance on Mission Toxicology is inappropriate. (Dkt. No. 34 at p. 14-15). Since the Court does not rely on Mission Toxicology , the Court need not address this argument.
Next, Plaintiff argues that Prudential was required to decide the appeal regardless of whether it was late. (Dkt. No. 34 at p. 9, 16, 18). The primary issue with Plaintiff's argument is the premise. Prudential decided the appeal and upheld is initial decision due to Plaintiff's failure to timely file an appeal. (Dkt. No. 30 at p. 517-18). But even disregarding this fact, Prudential was not required to review the untimely appeal. The Plan states, "Prudential is responsible for reviewing all appeals of adverse benefit determinations that are made under the plan other than those involving a determination as to your eligibility." Id. at p. 176 (emphasis added). Plaintiff contends that this language requires Prudential to have reviewed his appeal. (Dkt. No. 34 at p. 9, 16, 18). Defendants argue "the only reading of this provision that makes sense is that "all appeals" means those that are timely filed." (Dkt. No. 35 at ¶ 8). The Court agrees with Defendants that "all appeals ... that are made under the plan" refers only to timely-filed appeals; an untimely appeal is not an appeal made under the plan. See Swanson , 586 F.3d at 1019 ("We ascribe no fault to Hartford for failing to rule on the merits of the appeal, because we have affirmed the district court's conclusion that there was no valid appeal on which to rule.").
Plaintiff next argues that the Plan required Plaintiff to apply for Social Security disability, but Prudential failed to consider an administrative law judge's decision that Plaintiff is disabled. (Dkt. No. 34 at p. 9). While the portion of Plaintiff's filing that is designated as his response to Defendants’ Motion does not elaborate on this argument, Plaintiff supports his own summary judgment motion with the ALJ's decision. See id. at p. 90-91. Plaintiff received the notice of the ALJ's decision on September 8, 2020, months after the administrative appeal period ended. (Dkt. No. 30 at p. 642). Defendants acknowledge that Prudential would have considered the ALJ's decision in its initial decision if Plaintiff had submitted it but notes that Plaintiff did not submit the documents until November 16, 2020. (Dkt. No. 35 at ¶ 4); (Dkt. No. 30 at p. 641). While the ALJ's decision may have been relevant to Prudential's decision under the Plan, the ALJ's decision was made after the appeal period ended and does not change the fact that Plaintiff failed to timely request an appeal. Therefore, the Court concludes that Plaintiff failed to exhaust his administrative remedies.
iv. Futility
A plaintiff is exempt from ERISA's exhaustion requirement "when such attempts would be futile." Bourgeois , 215 F.3d at 479. "A failure to show hostility or bias on the part of the administrative review committee is fatal to a claim of futility." McGowin v. ManPower Int'l, Inc. , 363 F.3d 556, 559 (5th Cir. 2004). Plaintiff argues the futility exception applies "as there was a previous denial by the Defendant; the Defendant failed to consider the appeal on the pretext that it was filed late; failed to submit claim files; and failed to submit the acronyms which were used in the claim file which would make the claim file comprehensible." (Dkt. No. 34 at p. 18).
In Bourgeois , the Court found that a company's high-ranking official's statements did not show that an administrative committee would not consider the plaintiff's claim of benefits and concluded that no evidence indicated an attempt to present the plaintiff's claims to the committee would be futile. 215 F.3d at 480. In McGowin , the plaintiff performed services for a corporation while employed by another entity. 363 F.3d at 558. Similar to Bourgeois , the court concluded that statements made by employees of the corporation "who are not responsible for adjudicating benefits claims does not show that [the plaintiff's] claim would be futile if she properly presented it for administrative review." Id. at 559-60. While Plaintiff's arguments do not relate to representations made by Defendants or their employees, Bourgeois and McGowin exemplify the high hurdle Plaintiff must jump to show the futility exemption applies to him.
Ultimately, Plaintiff fails to show why the futility exception should apply. To begin, two of the factual bases Plaintiff cites involve events that occurred after the appeals deadline occurred. Plaintiff's contention that Prudential failed to consider his late appeal does not indicate how a timely appeal would have been futile. Moreover, Prudential's failure to provide a list of acronyms does not show bias or hostility, especially since Plaintiff requested the list months after the appeal deadline ended and Prudential provided the list shortly thereafter. See (Dkt. No. 30 at p. 547-49, 629-30, 633-639). Thus, these two bases do not show bias or hostility on Prudential's behalf.
Second, Prudential's initial denial of benefits does not support a showing of hostility or bias. Under the Plan's terms:
If the adverse determination on your claim was based on a medical judgment, the LTD Plan Appeal Committee or Prudential, as appropriate, will ensure that a health professional is consulted
with appropriate training and experience. The health care professional consulted for the appeal will not be the professional (if any) consulted during the prior determination or a subordinate of such professional. Upon your request, you will be provided the name of medical or vocational experts whose advice was obtained on behalf of the plan in connection with the adverse benefit determination being appealed, even if the advice was not relied upon in making the benefit determination.
Id. at p. 176. These procedural safeguards suggest that the hostility or bias, if any, of the health professional consulted during the initial determination will not be imputed to the health care professional consulted during an appeal. Without further argument, Plaintiff fails to show how the previous denial shows hostility or bias.
Finally, Plaintiff fails to show how the asserted failure to submit a claim file shows hostility or bias. To start, Plaintiff's premise is questionable since Plaintiff received the claim file on October 14, 2019. Id. at p. 484, 489. But even if the claim file Prudential sent was incomplete, as Plaintiff asserts, Plaintiff knew how to file an appeal and knew the deadline was 180 days after receiving the denial notice. Id. at p. 175-76, 457-59, 471. Moreover, Plaintiff fails to explain how an incomplete claim file indicates Prudential would be hostile or biased in a first-level appeal. Accordingly, the failure to submit a complete claims file, as argued, is not sufficient for Plaintiff to show the futility exception applies.
Overall, Plaintiff's reasons to support a futility finding do not indicate hostility or bias on the part of the administrative review committee. As a result, the futility exemption is inapplicable.
v. Procedural Challenges
Last, Plaintiff argues this Court should extend the time to file his administrative appeal for a few reasons. Plaintiff primarily argues an extension is warranted due to Prudential's "failure to tender the entire claim file in a timely manner." (Dkt. No. 34 at p. 9, 21-22). Specifically, Plaintiff argues Prudential's failure to tender the list of acronyms "should extend the time to appeal." Id. at p. 9. Relatedly, Plaintiff contends that his time to file was abrogated by the time it took Prudential to submit the claim file in the fall of 2019. Id. at 22-23. Additionally, in the portion of Plaintiff's filing designated as his Motion for Summary Judgment, Plaintiff argues that Defendants "lost jurisdiction to timely deny the case" since its notification for an extension of time to make an initial determination did not comply with the Plan's requirements. (Dkt. No. 34 at p. 27, 76, 94).
Although this argument was not necessarily raised in response to Defendants’ Motion, the Court considers it since it relates to ERISA procedural requirements.
The Court understands that Plaintiff is arguing that the time he had to file an appeal should be tolled due to various procedural violations. While the Court has not found, and Plaintiff does not cite, case law that allows the Court to toll the time to file an administrative appeal, "[r]emand to the plan administrator for full and fair review is usually the appropriate remedy when the administrator fails to substantially comply with the procedural requirements of ERISA." Lafleur v. La. Health Serv. and Indem. Co. , 563 F.3d 148, 157 (5th Cir. 2009) (en banc). Although this remedy for procedural challenges does not exactly toll the administrative appeal period, it provides Plaintiff with the remedy he seeks—review of the denial of his benefits by Prudential. Therefore, the Court must determine whether Prudential substantially complied with the ERISA procedural requirements that Plaintiff argues have been violated.
Although Defendants cite the deemed-exhausted provision in their response to Plaintiff's Motion, (Dkt. No. 37 at ¶ 21), Plaintiff never argued that it pursued remedies under § 502(a) of ERISA due Defendants’ failure to strictly adhere to federal regulations. Accordingly, the Court considers the argument waived. Similarly, the Court also considers a potential argument to estop Defendants from making an exhaustion argument waived for failure to assert the argument.
Under the substantial compliance standard, technical noncompliance with ERISA procedures is excused under this standard if the purpose of 29 U.S.C. § 1133 has been fulfilled. Lafleur , 563 F.3d at 154 (discussing the standard in the context of a challenge to a denial notice). Section 1133 ’s purpose is "to afford the beneficiary an explanation of the denial of benefits that is adequate to ensure meaningful review of that denial." Id. (quoting Wade v. Hewlett-Packard Dev. Co. LP Short Term Disability Plan , 493 F.3d 533, 539 (5th Cir. 2007), abrogated on other grounds by Hardt v. Reliance Standard Life Ins. Co. , 560 U.S. 242, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010) ); Theriot v. Bldg. Trades Pension Tr. Fund , 850 F.App'x 231, 236 (5th Cir. 2021) (per curium). Under the substantial compliance standard, the Court considers all communications, including oral communications, between the claims administrator and claimant to determine whether the administrator sufficiently provided the required information to the claimant under the circumstances. Lafleur , 563 F.3d at 154. "Substantial compliance requires ‘meaningful dialogue between’ the beneficiary and administrator." Id.
a. Denial Notice
The Court first determines whether the initial denial notice complied with ERISA requirements. Since Plaintiff's primary argument stems from the Prudential's failure to tender a list of acronyms, the Court specifically turns to requirements related to a claimant's entitlement to requested materials. An ERISA plan must "provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant[.]" 29 U.S.C. § 1133(1). When the denial notice regards an adverse benefit determination with respect to disability benefits, the denial notice must include "[a] statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits." 29 C.F.R. § 2560.503-1(g)(1)(vii)(D). The Court finds that Prudential substantially complied with the federal regulation because Defendants provided the statement required under 29 C.F.R. § 2560.503-1(g)(1)(vii)(D). The denial notice states, "You are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim." (Dkt. No. 30 at p. 459). Accordingly, the record undisputedly shows that Defendants complied with 29 C.F.R. § 2560.503-1(g)(1)(vii)(D).
Federal law also requires an ERISA plan to "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. § 1133(2). Like denial notices, federal regulations also contain a similar access requirement with respect to full and fair reviews:
[T]he claims procedures of a plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of the claim and adverse benefit determination unless the claims procedures—
...
(iii) Provide that a claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits.
29 C.F.R. § 2560.503-1(h)(2)(iii). Plaintiff grounds his argument on the regulation related to full and fair review, rather than the regulation regarding denial notices. (Dkt. No. 34 at p. 15, 21). Since Plaintiff did not timely request an appeal, his challenge is better understood by the Court as a challenge to the denial notice. Still, even if the Court were to consider the requirement under § 2560.503-1(h)(2)(ii) instead of § 2560.503-1(g)(1)(vii)(D), the Plan states that a denial notification will include "[a] statement that you are entitled to receive, upon request in writing and free of charge, reasonable access to or copies of all documents, records, or other information relevant to the claim." (Dkt. No. 30 at p. 175).
b. List of Acronyms
Although the denial notice complied with 29 C.F.R. § 2560.503-1(g)(1)(vii)(D), the Court acknowledges the crux of Plaintiff's argument is that Prudential failed to provide a list of acronyms as part of the claims file. (Dkt. No. 34 at p. 22). As mentioned above, a denial notice must include "[a] statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits." 29 C.F.R. § 2560.503-1(g)(1)(vii)(D). Implicitly, Defendants were required to tender "all documents, records, and other information relevant" to Plaintiff's claim of benefits after Plaintiff requested them.
Plaintiff's argument fails since Plaintiff does not persuade the Court that the list of acronyms is a relevant documents, records, and other information as defined in 29 C.F.R. § 2560.503-1(m)(8).
A document, record, or other information shall be considered "relevant" to a claimant's claim if such document, record, or other information
(i) Was relied upon in making the benefit determination;
(ii) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination;
(iii) Demonstrates compliance with the administrative processes and safeguards required pursuant to paragraph (b)(5) of this section in making the benefit determination; or
(iv) In the case of a group health plan or a plan providing disability benefits, constitutes a statement of policy or guidance with respect to the plan concerning the denied treatment option or benefit for the claimant's diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.
29 C.F.R. § 2560.503-1(m)(8). The record does not indicate (1) Prudential relied on the list of acronyms in making its benefit determination; (2) the list of acronyms were submitted, considered, or generated in the course Prudential's benefit determination; (3) the list of acronyms demonstrate compliance with the requirements under 29 C.F.R. § 2560.503-1(b)(5) in the course of Prudential making its benefit determination; and (4) the list of acronyms is a "statement of policy or guidance with respect to the plan concerning the denied treatment option or benefit for the claimant's diagnosis." See 29 C.F.R. § 2560.503-1(m)(8). The list of acronyms simply explains acronyms used throughout the claim file.
Plaintiff argues "that words were absent which were generated in the course of making the benefit determination." (Dkt. No. 34 at p. 22). The record, however, does not hint, suggest, or otherwise indicate that the list of acronyms was itself generated in the course of Prudential's review of Plaintiff's claim.
Further, the Court cannot ignore the fact that Plaintiff waited until July 30, 2020, months after the appeal period ended, to request the list of acronyms. (Dkt. No. 30 at p. 547-49). If the list of acronyms were a major hinderance on Plaintiff's ability to understand the claim file, then Plaintiff would likely have requested them soon after receiving the claim file in October of 2019. See id. at p. 489 ("I received a copy of what purported to be the claim file, which I requested in August 28, 2019, on October 14, 2019."). Instead, the record reveals that Plaintiff was able to understand the claim file as he was able to pinpoint specific issues with Prudential's determination as exemplified in the February 12, 2020 letter. See id. at p. 489-93. Thus, Plaintiff's contention that Prudential failed to provide a comprehensible plan "as it relied upon a sort of secret code through acronyms" is not supported by Plaintiff's own actions. See (Dkt. No. 34 at p. 18).
For this reason, the February 12, 2020 letter also suggests that the denial letter paired with the claim file afforded Plaintiff "an explanation of the denial of benefits that is adequate to ensure meaningful review of that denial," fulfilling the purpose of 29 U.S.C. § 1133.
c. Timeliness of Sending Claim File
Next, Plaintiff states that he "requested the claim file on August 30, 2019; that is approximately 65 days after requesting the claim file.... This was a manner of abrogating the plaintiff's ability to file an adequate appeal within 60 days." Id. at p. 22. To start, Plaintiff's math is incorrect. Plaintiff requested the claim file on August 30, 2019, and October 8, 2019. (Dkt. No. 30 at p. 472-73, 478-79). Prudential sent the claim file on October 10, 2019. Id. at p. 484. Plaintiff received the claim file on October 14, 2019. Id. at 489. Prudential sent the claim file 41 days after Plaintiff initially requested it, not 65 days as Plaintiff argues. Moreover, the deadline to submit a request for an appeal was January 27, 2020, more than 60 days after Plaintiff received the claim file.
Although Plaintiff's computation is off, the Court understands that Plaintiff is arguing that the time to file an administrative appeal should have been tolled due to the length of time Prudential took to send Plaintiff the claim file. As noted above, however, the Court is unaware of any case law supporting Plaintiff's argument that it can toll the administrative appeals period. Therefore, the Court instead determines whether Prudential substantially complied with ERISA requirements. Here, Plaintiff has not identified, and the Court has not identified, a Plan provision or federal regulation specifying how quickly Prudential must tender the claim file. Therefore, the Court cannot conclude that Defendants failed to substantially comply with ERISA requirements.
But even if the Court entertained Plaintiff's argument that a claims administrator's delay in sending a claim file tolls the administrative appeal period, Plaintiff has not argued how much time should be tolled for Prudential's delay. Since Plaintiff wants his appeal to be deemed timely, Plaintiff must be implicitly arguing that his appeal should be tolled for at least either 16 or 30 days, depending on whether the 14-day grace period still applies. Without guidance from federal regulation or the Plan, the Court assumes that a claims administrator must tender the claim file within a reasonable period. The underlying problem is that Plaintiff does not argue what a reasonable period is for Prudential to have tendered the claim file. The record establishes that Prudential took 41 days to send the claim file to Plaintiff, and Plaintiff received the claim file 45 days after requesting it. In turn, this means that Plaintiff must be making one of four possible arguments, depending on whether Plaintiff accounts for the grace period and when tolling ends. If tolling ends when Prudential sent the claim file, then Plaintiff is either arguing that Prudential should have sent the claims file to Plaintiff (1) within 11 days of Plaintiff's original request to fall within the 180-day appeal period or (2) within 25 days of Plaintiff's original request to fall within the 180-day appeal period and 14-day grace period. If tolling ends when Plaintiff receives the claims file, then Plaintiff is either arguing that he should have received the claims file (3) within 15 days of his original request to fall within the 180-day appeal period or (4) within 29 days of his original request to fall within the 180-day appeal period and 14-day grace period. Since case law does not support Plaintiff's tolling argument and Plaintiff does not specify the standard by which the Court should arguably toll the administrative appeal period, the Court declines to further indulge the argument.
The February 12, 2020 letter is dated 30 days after January 13, 2020, and 16 days after January 27, 2020.
d. Extension Notice
Last, Plaintiff argues in his Motion for Summary Judgment that Defendants "lost jurisdiction to timely deny the case" since it's notice for an extension of time to make an initial determination did not comply with the Plan's requirements. (Dkt. No. 34 at p. 27, 76, 94). Specifically, Plaintiff asserts that he "did not receive timely written notice of the extension; the reason for the extension; and the date by which [Defendants] will render a decision." Id. at p. 27. Defendants did not respond to the argument. See (Dkt. No. 37). Since Plaintiff is unclear with the relief he seeks, the Court analyzes the argument under the substantial compliance framework. See supra note 14 (considering arguments related to estoppel and the deemed-exhausted provision waived).
Plaintiff states that "Defendant did not receive timely written notice of the extension; the reason for the extension; and the date by which they will render a decision." (Dkt. No. 34 at p. 27) (emphasis added). The Court understands that Plaintiff made a typo.
The record shows that Prudential did not technically comply with the Plan's requirements regarding its extension notice. The Plan states:
If you file a claim for LTD benefits, you will be advised of the determination within 45 days after receipt of your claim by the AEP Recovery Center (with regard to eligibility determinations) or Prudential (with regard to other benefit determinations). This period may be extended by the claim reviewer for up to 30 days, provided that the reviewer both determines that the extension is necessary due to matters beyond its control and notifies you, prior to the expiration of the initial 45-day period , of the circumstances requiring the extension of time and the date by which the reviewer expects to render a decision.
(Dkt. No. 30 at p. 174). Federal regulations contain a similar requirement. 29 C.F.R. § 2560.503-1(f)(3) ("This period may be extended by the plan for up to 30 days, provided that the plan administrator ... notifies the claimant, prior to the expiration of the initial 45-day period, of the circumstances requiring the extension of time and the date by which the plan expects to render a decision."). The record indicates that Plaintiff submitted his claim on April 16, 2019. Id. at p. 9. Prudential received the claim on May 2, 2019. Id. at p. 152. As a result, under the Plan and federal regulations, Prudential was required to advise Plaintiff of the benefits determination by June 16, 2019. See id. at p. 174; 29 C.F.R. § 2560.503-1(f)(3). On June 18, 2019, Prudential's internal notes "suggest sending extension letter." Id. at 428-29. Accordingly, Prudential sent Plaintiff a letter the same day, notifying Plaintiff that it is "taking an extension of up to 30 days to make a determination on your claim for LTD benefits." Id. at 430. The extension notice states that the extension is needed "to review the additional information received on June 12, 2019," and that a determination is expected to be made by July 18, 2019. Id. Thus, Prudential notified Plaintiff of the circumstances requiring the extension and the date by which Prudential expects to render a decision. Prudential, however, failed to notify Plaintiff "prior to the expiration of the initial 45-day period," which was June 16, 2019. See id. at p. 174.
Despite Prudential's failure to notify Plaintiff of the extension "prior to the expiration of the initial 45-day period," the Court finds that Prudential substantially complied with the Plan's requirements for the following reasons. First, Prudential's extension notice was only two days late, and June 16, 2019, was a Sunday. Second, the Court has not found any complaint about this two-day delay within the claim file; Plaintiff asserts this argument for the first time in its Motion. Third, the record shows meaningful dialogue between Prudential and Plaintiff. See Lafleur , 563 F.3d at 154 (noting the substantial compliance test considers all communications and requires meaningful dialogue between the claimant and administrator). Within the initial 45-day period, Prudential requested more information from Plaintiff twice via letter, and the second letter's deadline to submit the information was after the initial 45-day period. (Dkt. No. 30 at p. 210-11, 246-47). Prudential also conducted an interview with Plaintiff on May 16, 2019, and verified correspondence with Plaintiff on June 5, 2019. Id. at p. 219, 381. The same day that Prudential sent Plaintiff the extension notification, Prudential called Plaintiff to advise him of the extension. Id. at p. 432. Plaintiff "expressed understanding and thanked [Prudential] for the call." Id. After requesting the extension, Prudential and Plaintiff discussed the Social Security Disability Benefits filing process on June 25, 2019, and discussed the status of Prudential's benefit determination on July 16, 2019. Id. at p. 434, 455. Prudential then made its benefit determination on July 17, 2019. Id. at p. 457, 462. Considering all communications, the record shows meaningful dialogue between Plaintiff and Prudential.
For these reasons, the Court finds that despite Prudential's two-day delay in sending the extension notice, Prudential substantially complied with the extension notice requirements. Moreover, § 1133 ’s purpose was ultimately fulfilled since Plaintiff's claim was decided by Prudential, and the denial notice afforded Plaintiff an adequate explanation of the denial of benefits to ensure meaningful review of that denial.
The Court notes that the facts here are distinguishable from the facts in Shelby County Health Care Corp. v. Genesis Furniture Indus., Inc. , 100 F.Supp.3d 577 (N.D. Miss. 2015). In Shelby County , the Court concluded that the plan administrator failed to render a timely decision because the purported extension notice "neither sets forth the circumstances requiring a time extension, nor includes the date by which the Plan expected to reach and render a decision," as required by ERISA regulations. 100 F.Supp.3d at 582-83. Here, Prudential sent an extension notice and notified Plaintiff of the extension via telephone call. (Dkt. No. 30 at p. 430-32). Additionally, the notice stated the circumstances requiring the extension and the date by which Prudential expects to render a decision. Id. at 430-31.
III. Plaintiff's Motion for Summary Judgment
Plaintiff primarily moves for summary judgment on the issue of whether Plaintiff is "disabled" under the terms of the Plan. (Dkt. No. 34 at p. 23). To this extent, Plaintiff's motion is mooted by the Court's conclusion that Plaintiff failed to exhaust his administrative remedies. Plaintiff's Motion is also moot to the extent that he asserts claims that have already been dismissed. Plaintiff's Motion, however, is not entirely moot since Plaintiff asserts a new claim for a violation of 29 U.S.C. § 1132(a)(1)(A), ERISA § 502(a)(1)(A). (Dkt. No. 34 at p. 27-28, 41, 95, 101-02). While Defendants responded to this new claim, (Dkt. No. 37 at ¶¶ 13-23), the Court will not consider it for the following reasons.
Plaintiff asserts claims for breach of fiduciary duty, for fraud, for a violation of 20 C.F.R. § 701.217(b), and for a violation of 42 U.S.C. § 1320d-5. (Dkt. No. 34 at p. 40, 95, 98-101, 103). The Court previously dismissed these claims and will not consider them as part of Plaintiff's Motion. (Dkt. No. 24 at p. 21-22, 26).
Plaintiff specifically argues that Defendants are in violation of 29 U.S.C. § 1132(c)(1). (Dkt. No. 34 at p. 27-28). Section 1132(a)(1)(A) allows a participant or beneficiary to bring a civil action for relief provided in § 1132(c)(1). 29 U.S.C. § 1132(a)(1)(A).
To begin, the Court has discretion whether to consider a claim first asserted in a motion for summary judgment. For instance, courts in this circuit routinely decline to consider new claims asserted at the summary-judgment stage of litigation. See Garza v. City of La Porte , 160 F.Supp.3d 986, 993 (S.D. Tex. 2016) (holding state-law claims raised by the plaintiff for the first time in his motion for summary judgment were not properly before the court since "a party cannot use a motion for summary judgment to raise new claims"); United States ex rel. DeKort v. Integrated Coast Guard Sys. , 475 F.App'x 521, 522 (5th Cir. 2012) ("We also conclude that the district court did not err in denying DeKort's motion for partial summary judgment because he attempted to raise a new claim, not asserted in his fifth amended complaint."); see Quintanilla v. Tex. Television, Inc. , 139 F.3d 494, 498-99 (5th Cir. 1998) (agreeing with the district court that the plaintiffs did not plead a joint ownership copyright claim and holding the district court did not abuse its discretion in denying a plaintiff leave to amend to add a joint ownership claim"). Still, at least one court has stated that "[t]he rule forbidding new claims at the summary judgment stage is only strictly applied to claims raised in response to a summary judgment motion." Pena v. Saul , No. 7:19-CV-0005, 2019 WL 8223588, at *2 (S.D. Tex. Dec. 26, 2019), report and recommendation adopted , 2020 WL 1234281 (S.D. Tex. Mar. 13, 2020) (collecting cases); but cf. Boateng v. BP, P.L.C. , 779 F.App'x 217, 220 n.1 (5th Cir. 2019) ("When a plaintiff raises a new claim in opposition to a summary judgment motion, the district court may consider the new claim for relief even if the claim is not asserted in the pleading."); Stover v. Hattiesburg Pub. Sch. Dist. , 549 F.3d 985, 989 n.2 (5th Cir. 2008) (finding no error when a district court considered a claim raised in response to a motion for summary judgment). Even so, other cases are not clear on the exact contours of the rule. For example, in Pickle v. Universal Cable Holdings, Inc. , the district court declined to reach the merits of a claim asserted by the plaintiff in response to a motion for summary judgment, but it generally stated that "[a] plaintiff may not raise a new claim for the first time at the summary-judgment stage." 534 F.Supp.3d 663, 682 (N.D. Tex. 2021). Thus, upon reviewing the case law, the Court has discretion whether to consider Plaintiff's new claim.
Additionally, the Court has discretion to consider the assertion of a new claim in a motion for summary judgment as a motion for leave to amend a complaint. See La Union del Pueblo Entero v. Fed. Emergency Mgmt. Agency , 141 F.Supp.3d 681, 701 (S.D. Tex. 2015) ("A response to a motion for summary judgment raising a new claim may be treated as a motion to amend the complaint and, if the applicable standard is met, may be granted." (internal citations omitted)); Ganther v. Ingle , 75 F.3d 207, 211-12 (5th Cir. 1996) (per curium) ("The district court should have construed Ganther's response to the motion for summary judgment as a motion to amend his complaint and grant it."); Sherman v. Hallbauer , 455 F.2d 1236, 1242 (5th Cir. 1972) ("Still, we conclude that in the interests of justice the district court should have construed the Shermans's frantically revised theory of the case, as plainly set forth in their memorandum in opposition to summary judgment, as a motion to amend the leadings filed out of time."). Construing a response as a motion for leave to amend is recommended so that "the party moving for summary judgment has the procedural benefit of an opportunity to oppose the new claim in whatever way it sees fit." La Union del Pueblo Entero , 141 F.Supp.3d at 701. Otherwise, "[e]ntering summary judgment without affording the party that originally moved for summary judgment an opportunity to oppose the new claim would be unfair." Id. (citing FED. R. CIV. P. 56(f) ). Here, Defendants already responded to Plaintiff's new claim. See (Dkt. No. 37 at ¶¶ 13-19).
Exercising its discretion, the Court will not consider Plaintiff's new claim as Plaintiff fails to fully brief the Court on how he may recover on this new theory of liability. Plaintiff's new claim is based on Defendants’ failure to provide information under 29 U.S.C. § 1024(b)(4), ERISA § 104(b)(4). (Dkt. No. 34 at p. 27, 41). Under § 1024(b)(4), "[t]he administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated." 29 U.S.C. § 1024(b)(4). Plaintiff fails to explain how the claim file or list of acronyms falls within these categories of documents. In response, however, Defendant argues that the claim file and list of acronyms do not fall within these categories. (Dkt. No. 37 at ¶¶ 15-19). Thus, Plaintiff does not provide any persuasive reason why the court should consider the new claims. Furthermore, the Court will not consider Plaintiff's assertion of a new claim as a motion for leave to amend the complaint. The deadline to amend the pleadings with leave of Court was on January 7, 2022. (Dkt. No. 20). Since then, Plaintiff has not formally sought leave and has not argued or hinted why justice would require leave in this instance. See FED. R. CIV. P. 15(a)(2).
Therefore, the only claim properly before the Court in Plaintiff's Motion is his claim for benefits under 29 U.S.C. § 1132(a)(1)(B), which is mooted by Plaintiff's failure to exhaust administrative remedies.
IV. Conclusion
For the foregoing reasons, the Court ORDERS that Defendants’ Motion (Dkt. No. 31) is GRANTED and Plaintiff's Motion (Dkt. No. 34) is DENIED as moot.
SO ORDERED July 14, 2022, at McAllen, Texas.