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In Tholke, however, the district court was especially concerned with the fact that the review committee did not look at any of the underlying documents and provided no explanation for its decision, thus acting as a mere "rubber stamp" for the decision below.
Summary of this case from Zdzienicki v. Consolidated Edison Company of New York, Inc.Opinion
01 Civ. 5495 (HB)
April 15, 2002
OPINION ORDER
Plaintiff, Andrea Tholke ("Tholke"), brings this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., challenging the denial of longs term disability benefits under her employer's benefit plan. The parties filed cross-motions for summary judgment. For the following reasons, the plaintiffs motion is GRANTED, in part, and the defendants' motion is DENIED. This case is remanded to the defendant Unisys Employee Benefits Administrative Committee for a full and fair review as required under 29 U.S.C. § 1133(2), to take place no later than 90 days from the date of this order. The court shall retain jurisdiction and place this matter on its suspense calender with leave granted to any party to apply to reopen this case within 30 days of the Committee's final determination. Failure to so apply will result in dismissal, and leave is conditioned on prompt notification of the Committee's determination in accordance with this opinion and order.
I. FACTS
This action arises from the denial of long term disability benefits to plaintiff Tholke. Tholke was an employee of defendant Unisys Corporation ("Unisys"). Unisys' employee benefit plan is governed by the Unisys Long Term Disability Plan (the "LTD Plan"), in which Tholke is a participant. The LTD Plan is an "employee benefit welfare plan" as that term is defined under ERISA, 29 U.S.C. § 1002(3). Under the LTD Plan, disability is defined as follows:
For Purposes of the [LTD Plan], during the first two years of disability you are considered disabled if you are being treated for an illness, injury or pregnancy by a licensed physician and it can be verified by the Unisys Disability Certification Office (UDCO) that you are unable, due to your disability, to perform the essential functions of your regular occupation at any job site within Unisys.
(Courtian Aff., Ex. 2 at p. 142).
At all times relevant to this action, Hartford Life and Accident Insurance Co. ("Hanford") was designated by Unisys as the administrator responsible for processing claims under the LTD Plan. Additionally, the defendant Unisys Employee Benefits Administrative Committee ("Committee") was the LTD Plan administrator for final appeals within the meaning of ERISA, 29 U.S.C. § 1002(16)(A). The procedures for claims and appeals under the LTD Plan provides that an LTD Plan participant whose claim is denied may submit a written appeal to Hanford. If that appeal is denied, the participant may file a second appeal to Hartford. In the event of another denial, the participant within 60 days may forward a written request to the Committee for a final review.
Tholke was initially hired by Unisys in 1980 as a mail room clerk and later transferred to the reproduction room in 1983 where she essentially operated photo-copy machines as a "reproducer." Tholke suffers from cerebral palsy, a condition that was known to Unisys from the outset of employment. On December 5, 1992, she was involved in an automobile accident in which she sustained injuries to her left knee, neck and back. From that date forward, she missed work on medical leave until she returned on February 16, 1993. What was to be the first of several inconsistent medical examinations, Unisys referred Tholke to Dr. William Wortman ("Dr. Wortman"), who after reviewing her MRI found nothing extraordinary. However, at the beginning of 1993, Tholke was referred to Dr. Isaac Cohen ("Dr. Cohen") who determined that Tholke was disabled and unable to return to work due to an internal derangement of the left knee. (Courtian Aff. Ex. 5 and Ex. 6). Dr. Cohen issued Tholke a knee brace, prescribed medication and physical therapy twice weekly for most of all of 1993. Her medication apparently continued into 1994, during which she also continued to wear the knee brace.
Tholke was actually first hired by Sperry Corp., Electronic Systems, a predecessor of the defendants, although this detail is immaterial to the action here.
After returning to her job in February, 1993, Tholke found she was unable to resume her work due to the chronic pain in her left knee. She left work on July 9, 1993 and never returned. At around the time she stopped work for the final time, Tholke filed for and received short term disability benefits on the basis of Dr. Cohen's diagnosis.
In September. 1993, Unisys requested that Tholke be examined by an independent doctor, Dr. Armond Prisco ("Dr. Prisco"), for a second determination of her disability. Dr. Prisco issued a report in December, 1993, that noted a contusion of the "left knee as well as sprains of both the cervical and lumbar portions of the spine." (Courtian Aff. Ex. 7). However, Dr. Prisco determined that Tholke was not disabled from doing her job as a reproducer and that she "does not need any treatment." (Courtian Aff. Ex. 7).
On February 1, 1994, Tholke filed her claim with Hartford for benefits under the LTD Plan, accompanied by Dr. Cohen's diagnosis. Later that April while she awaited Hartford's determination, Tholke was awarded Social Security Disability benefits payable retroactive to January 1994.
Hartford, apparently troubled by the discrepancy between the conflicting recommendations of Dr. Prisco and Dr. Cohen, requested another independent medical examination from Dr. Charles Pitman ("Dr. Pitman"). Following his examination on May 2, 1994, Dr. Pitman noted that Tholke complained of constant pain in her left knee, walked with a cane and experienced a "click" in her knee. (Courtian Aff. Ex. 17). In yet another diagnosis for Tholke, Dr. Pitman determined that Tholke had a "moderate partial disability primarily on the basis of her cerebral palsy." Id. Further, he recommended that Tholke return to her job on the condition that her work was "sedentary." Id. In addition to seeking a diagnosis from Dr. Pitman, Hartford sent a letter to Dr. Cohen dated February 8, 1994, to request more specific information as to his certification of disability. (Courtian Aff. Ex. 13). Dr. Cohen responded with photocopies of his notes and a short letter, which merely repeated his prior diagnosis. (Courtian Aff. Ex. 14). Additionally, Hartford spoke with Tholke's former supervisor to obtain more information with respect to the nature of her work.
On July 11, 1994, Hartford denied Tholke's request for a disability under the LTD Plan. Denial of Tholke's claim was based on (1) the insufficiency of Dr. Cohen's medical records, (2) Dr. Prisco's reports, (3) Dr. Pitman's reports, and (4) Dr. Wortman's MRI report. (Courtian Aff. Ex 23). Additionally, Hartford's determination relied on the statements of Tholke's supervisors who described her job as primarily sedentary in nature. Tholke appealed the denial via letter dated August 19, 1994, in which she challenged her supervisors' characterization of her job and claimed that her duties required her to stand for the full eight hours of her shift. (Courtian Aff. Ex. 24). In support of her appeal, Dr. Cohen submitted an additional medical report that repeated his initial diagnosis of an "internal derangement of knee joint, patellofemroal joint chondromalacia, chronic," and again emphasized that she was disabled and unable to perform her normal activities because she could not "bend, lift or carry." (Courtian Aff. Ex. 25). However, Hartford again found Dr. Cohen's diagnosis to be based on insufficient objective data, and denied her appeal on December 8, 1994. Tholke appealed that denial on February 7, 1995 in which she again disputed the characterization of her job duties and asserted that the physical demands of her work had in fact increased after she returned from her accident. In response to her claim, Hartford spoke again with Tholke's supervisors as to the nature of her job and was told that Tholke's job had not changed. (Courtian Aff. Ex. 34). Hartford subsequently denied the appeal on March 31, 1995. Finally, in a letter dated May 30, 1995, Tholke appealed to the defendant Committee. (Courtian Aff. Ex. 37).
On June 6, 1995, Hartford forwarded the Committee a copy of Tholke's claim file, which was subsequently maintained by Mary Massman ("Massman"), a non-voting participant and the Secretary to the Committee. Upon receipt of the file, Massman prepared and forwarded to all members of the Committee a 6-page memorandum that summarized the background of the case, Hartford's prior decisions and denials of appeals, her own recommendation to deny benefits to Tholke, and a chart that compared Tholke's physical capabilities to the physical requirements of her job. (Courtian Aff. Ex. 41). On August 3, 1995, the Committee held a meeting with respect to Tholke's request for a final review of her claim and unanimously upheld Hartford's denials. The Committee communicated its decision to Tholke by a letter dated August 8, 1995. (Courtian Aff. Ex. 43).
On June 18, 2001, Tholke commenced this action.
II. DISCUSSION
A. Standard of Review
A motion for summary judgment may not be granted unless the Court determines there is no genuine issue of material fact to be tried. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-52 (1986). The moving party has the burden of demonstrating the absence of any genuine issue of material fact. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). The court must "draw all factual inferences in favor of the party whom summary judgment is sought." Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995).
Where a benefit plan's administrator or fiduciary has discretionary authority to determine eligibility, as the parties agree the Committee had here, a court will review the denial of benefits under an "arbitrary and capricious" standard. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Miller v. United Welfare Fund, 72 F.3d 1066, 1070-71 (2d Cir. 1995). In this regard, a district court will overturn a denial of benefits only if the plan administrator's decision was "without reason, unsupported by substantial evidence or erroneous as a matter of law." Miller, 72 F.3d at 1070 (quoting Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995)). However, while the court is mindful of the standard of review, see Jordan v. Retirement Committee of Rensselaer Polytechnic Inst., 46 F.3d 1264, 1271 (2d Cir. 1995), I am equally aware of ERISA's guarantee of "a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. § 1133 (2) (emphasis added). The fiduciary's failure to provide a full and fair review can constitute a decision that was arbitrary and capricious. See Crocco v. Xerox Corp., 137 F.3d 105, 108 (2d. Cir. 1998).
B. The Committee's failure to perform full and fair review
Tholke argues that the Committee failed to afford her a full and fair review of the denial of her claim by Hartford. I agree with the plaintiff that while the Committee may have afforded her a "review," it resembled one that was more perfunctory than "full and fair."
In support of her argument, Tholke points to several statements made by Massman during her sworn testimony at an arbitration hearing between Tholke's labor union and Unisys on February 22, 1996. The defendants assert that lam precluded from considering Massman's testimony under Miller 72 F.3d at 1071 (noting that the court's review under the arbitrary and capricious standard is to be limited solely to the administrative record). However, the Circuit has suggested that my consideration of the testimony of Massman, a member of the Committee, is appropriate to determine whether a review was "full and fair." See Crocco, 137 F.3d at 108.
The arbitrator ruled that the denial of benefits to Tholke under the LTD Plan was inarbitrable. (Courtian Aff. Ex. 32).
While I agree that consideration of Massman's testimony is appropriate under Crocco, I do not find persuasive the plaintiff's argument that my review be expanded to include additional evidence outside the scope of the administrative record. The plaintiff in this regard argues that the Committee operated under a "conflict of interest," which necessarily warrants a de novo review of Tholke's claim. The plaintiff, however, fails to set forth sufficient evidence to show a conflict of interest or, more importantly, that the Committee was in fact influenced by any such conflict, assuming one even existed. See Sullivan v. LTV Aerospace and Defense Co., 82 F.3d 1251, 1255-56 (2d Cir. 1996).
Unfortunately there are no minutes of the Committee's August 3, 1995, meeting. Nonetheless, Massman's testimony offers a window into the nature of the proceedings. The Committee, as the plaintiff suggests, appears to have served only as a rubber-stamp for Massman's 6-page summary report, which was endorsed on its face without further comment. (Massman, p. 319:18-21). In this way, a Committee of four was effectively reduced to the evaluation of one — the opinion of Massman. Not one of the four voting members ever requested to review the underlying documents on which Massman's report was based. (Massman, p. 320:7-9). Nor did they make a single request for Massman to further explain her findings. One member of the Committee endorsed the denial of the benefits prior to the meeting, (Massman, p. 315:18-21), a fact that begs the question whether the Committee engaged in any type of discourse with respect to Tholke's claims. Although several discrepancies were apparent in Tholke's file in relation to three different medical diagnoses and the extent of the physical demands of her job, the Committee neglected to consider these issues beyond Massman's conclusory characterizations in her report. As the plaintiff points out, Tholke may have benefitted from a more thorough review of Massman's findings. For instance, Massman described Dr. Pitman's medical report as indicating that "Andrea was not disabled from her job," when his report had noted that Tholke had "a moderate partial disability . . ." Certainly, the fact that Tholke was earlier awarded benefits by the Social Security Administration at least raises the issue that a finding in her favor is not as remote as the defendants suggest, even though a plan administrator is not bound by the determination of the Social Security Administration. See Gaitan v. Pension Trust Fund, 2000 WL 290307, at *5 (S.D.N.Y. March 20, 2000) (citing Kunstenaar v. Connecticut General Life Insurance Co., 902 F.2d 181, 184 (2d Cir. 1990)).
The plaintiff argues that the Committee additionally owed her an evidentiary hearing but cites no authority for her assertion, and I find none either.
In light of the Committee's failure to perform a full and fair review, I find its decision to be "arbitrary and capricious." Accordingly, I remand this case to the Committee for reconsideration to take place no later than 90 days from the date of this order. See Miller v. United Welfare Fund, 72 F.3d 1066, 1071 (2d Cir. 1995) (noting remand as the appropriate action when the district court finds that the trustees' decision to deny benefits was arbitrary and capricious). Specifically, the Committee shall fully consider (1) the discrepancy between the statements by Tholke and her supervisors as to the nature of her job, and (2) the discrepancy between the diagnoses of Dr. Cohen, Dr. Prisco and Dr. Pitman.
C. Statute of Limitations
The defendants additionally argue that Tholke's ERISA claim is barred by the statute of limitations pursuant to Carey v. International Brotherhood of Electrical Workers Local 363 Pension Plan, 201 F.3d 44 (2d. Cir. 1999). Although the law is unsettled in this area, I find that Tholke's claim was timely filed. In Carey, the Circuit held that an ERISA cause of action for benefits is governed by a six-year statute of limitation that accrues "upon a clear repudiation by the plan that is known, or should be known, to the plaintiff— regardless of whether the plaintiff has filed a formal application for benefits." Carey, 201 F.3d at 49 (emphasis added). There is disagreement within the Circuit, however, as to whether a claim accrues on the date of the initial denial of benefits or the date of the final denial of benefits after plaintiff has exhausted the appeals process. See Yuhas v. Provident Life and Cas. Ins. Co., 162 F. Supp.2d 227, 232 (S.D.N.Y. 2001) (noting disagreement within the Circuit); Miele v. Pension Plan of New York State Teamsters Conference Pension Retirement Fund, 72 F. Supp.2d 88, 99 n. 7 (E.D.N.Y. 1999) (same). In any event, it is undisputed that the accrual date for the statute of limitations is triggered when the plaintiff receives "clear repudiation." It can not be said that Tholke received an unequivocal message of repudiation when Hartford first denied her benefits in July, 1994, only to later entertain her subsequent appeals with further investigations and additional requests for information. Therefore, I find that the six-year statute of limitations began to run on August 8, 1995, the date of the letter that notified Tholke of the Committee's denial of her benefits. Consequently, her complaint was filed with approximately 2 months to spare.
III. CONCLUSION
For the foregoing reasons, the plaintiff's motion is GRANTED to the extent that this case is remanded to the defendant Unisys Employee Benefits Administrative Committee for review of the denial of her claim by Hartford. The review shall be "full and fair" as required by 29 U.S.C. § 1133(2) and shall take place within 90 days from the date of this order with prompt notification of any such decision to the court in writing. The court shall retain jurisdiction and place the matter on its suspense calender, with leave granted to any party to apply to reopen this case, if necessary, within 30 days of the Committee's final determination. Failure to so notify the court will result in dismissal. Leave is conditioned on prompt notification of the Committee's determination in accordance with this opinion and order.
The matter is removed from my active docket and placed in suspense.