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Browdy v. Hartford Life and Accident Insurance Co.

United States District Court, M.D. Louisiana

October 30, 2014

CAROLE K. BROWDY, M.D.
v.
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, et al.

RULING

SHELLY D. DICK, District Judge.

This matter is before the Court on the Cross Motions for Summary Judgment filed by the Defendant, Hartford Life & Accident Insurance Company ("Hartford" or "Defendant")[1] and Plaintiff, Carole K. Browdy, M.D. ("Plaintiff").[2] Both parties have filed Oppositions [3] and Replies [4] to the motions. For the reasons which follow, the Court finds that the Defendant's motion should be GRANTED, and Plaintiff's motion should be DENIED.

I. FACTUAL BACKGROUND

From October 1, 2006 until August 30, 2007, Plaintiff was employed as a physician by Comprehensive Occupational Resources, L.L.C. ("CORE") to serve support personnel at the Arnold Air Force Base in Tennessee. CORE was a subcontractor of Aerospace Testing Alliance which provided to its employees a group disability benefit plan identified as the "Group Short Term Disability and Long Term Disability Plan for Employees of Aerospace Testing Alliance-Salaried" (the "Plan"). The Plan is funded by and incorporates an insurance policy issued by Hartford. Specifically, Hartford Policy GRH/GLT-675502 provided several types of coverage, including short term disability ("STD") and long term disability ("LTD") benefits to Plaintiff who was a beneficiary of the Plan. Plaintiff contends CORE paid the premiums for her LTD benefits and she paid the premiums for her STD benefits.[5]

The Policy sets forth detailed claim procedures for the administration of handling claims and decisions. The Policy explicitly provides that Hartford has full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the Policy.[6] The Policy provides that the amount of any weekly short term disability benefit payable "shall be reduced by the total amount of all Other Income Benefits, including any amount for which you could collect but did not apply."[7] Likewise, the Policy provides that any "Other Income Benefits" will also be deducted from any long-term monthly disability benefit.[8]

In 2007, Plaintiff's physicians determined that her degenerative disc disease was worsening and a scooter was medically necessary to continue her normal daily activities.[9] Plaintiff's medical records indicate that she had developed numbness, pain, and decreased reflexes due to her back disease and resulting radiculopathy, which was evidence of worsening nerve damage.[10] Dr. Katharine Rathbun, Plaintiff's primary care physician, issued a report on Plaintiff's medical condition on August 21, 2007, outlining a plethora of conditions which Dr. Rathbun found to severely limit Plaintiff's ability to work.[11] Dr. Rathbun ultimately determined that Plaintiff's employer could no longer adequately accommodate her medical problems in a manner that would allow her to continue practicing medicine.[12]

Plaintiff initiated her disability claim by telephone in September of 2007 and provided detailed information to Hartford regarding her medical conditions and inability to work. Plaintiff contends that her claim for benefits was initially approved by Hartford on September 28, 2007;[13] however, she also claims that Hartford's Claims Manager continued to request information that had already been provided. On February 14, 2008, Hartford denied Plaintiff's disability claim, finding that she was not an active employee at the time she became disabled and was thus ineligible to receive short term disability benefits.[14] Hartford notes that it was more than 180 days after it denied Plaintiff's STD benefits and over 60 days after Plaintiff's election to receive pension benefits that Plaintiff appealed Hartford's coverage decision.

Following this denial of benefits, Plaintiff claims that she was forced to sell stock at a low point in the market, incur the expense of an attorney to obtain her disability benefits, apply for early payment of benefits from a pension plan from her previous employer, Dow Chemical Company ("Dow") (thereby incurring penalties for early withdrawal), and preparing her home to be sold at a significant loss.[15] Plaintiff received her first retirement distribution from the Dow pension plan on October 1, 2008. On October 24, 2008, Plaintiff appealed Hartford's denial of her disability benefits. Hartford advised Plaintiff on December 9, 2008, that it had reversed its denial of STD benefits, finding that Plaintiff was, in fact, eligible for STD benefits at the time she became totally disabled.[16] Hartford contends that, with her appeal, Plaintiff submitted additional information including, but not limited to, an Affidavit executed by Plaintiff regarding the date of her disability and employment termination date.[17] Hartford also claims that Plaintiff's employer was interviewed again regarding the effective date of her termination, and, based on additional information obtained, Hartford reversed the original claims decision.

On January 19, 2009, in possession of the Pension Questionnaire which was completed by Plaintiff, Hartford requested additional information relating to Plaintiff's retirement benefit that might be subject to reduction under the "Other Income Benefits" provision of the policy.[18] On April 16, 2009, Hartford determined that Plaintiff was entitled to LTD benefits as well.[19] Plaintiff claims this letter was accompanied by a "LTD Benefit Calculation" showing that Plaintiff's gross monthly LTD benefits would be reduced only by social security disability benefits and not by the Dow pension.[20] Hartford contends it had no knowledge that Plaintiff was receiving funds from the Dow pension until January 9, 2009.

On October 21, 2009, Hartford advised Plaintiff that she owed Hartford $64, 884.12 based on its overpayment of LTD benefits after application of the "Other Income Benefits" provision of the policy which provided for an offset of the pension benefits Plaintiff had received. Hartford requested this reimbursement within fifteen (15) days.[21] Through her counsel, Plaintiff challenged Hartford's request for overpayment recovery on the basis that Hartford's "improper withholding and denial of disability benefits" was the reason Plaintiff withdrew from the Dow pension.[22] On March 21, 2011, Hartford responded that, after review, its request for overpayment recovery was "proper and in accordance with the Policy provisions."[23] When Plaintiff failed to refund the contested overpayment, Hartford applied future benefits otherwise payable to Plaintiff to the reduction of the overpayment, retroactive to the date Plaintiff's entitlement to pension benefits began.

Dissatisfied with this result, Plaintiff filed this lawsuit on December 6, 2011, pursuant to 29 U.S.C. § 1132(e)(1) of the Employment Retirement Income Security Act of 1974 ("ERISA"). In summary, Plaintiff claims that she did not receive her STD payments until she appealed Hartford's initial decision with the assistance of counsel, and over a year and a half after the benefits were due. Plaintiff further claims that she was forced to withdraw her retirement funds due to the erroneous denial. Hartford reversed its decision and approved Plaintiff's STD benefits; however, Plaintiff contends that the reversal was based on no new facts or evidence. Plaintiff also contends that the retirement funds Hartford offset were not withdrawn "because of disability" but rather because of Hartford's "admitted wrongful withholding of STD payments."[24]

The parties have filed cross-motions for summary judgment. The Court now turns to a discussion of the applicable law governing this case.

II. LAW AND ANALYSIS

A. Summary Judgment Standard

Summary judgment should be granted if the record, taken as a whole, "together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."[25] The Supreme Court has interpreted the plain language of Rule 56© to mandate "the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."[26] A party moving for summary judgment "must demonstrate the absence of a genuine issue of material fact, ' but need not negate the elements of the nonmovant's case."[27] If the moving party "fails to meet this initial burden, the motion must be denied, regardless of the nonmovant's response."[28]

If the moving party meets this burden, Rule 56© requires the nonmovant to go beyond the pleadings and show by affidavits, depositions, answers to interrogatories, admissions on file, or other admissible evidence that specific facts exist over which there is a genuine issue for trial.[29] The nonmovant's burden may not be satisfied by conclusory allegations, unsubstantiated assertions, metaphysical doubt as to the facts, or a scintilla of evidence.[30] Factual controversies are to be resolved in favor of the nonmovant, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts."[31] The Court will not, "in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts."[32] Unless there is sufficient evidence for a jury to return a verdict in the nonmovant's favor, there is no genuine issue for trial.[33]

B. ERISA

ERISA regulates any "employee welfare benefit plan" which, under the terms of ERISA, is defined in pertinent part, as follows:

The terms "employee welfare benefit plan" and "welfare plan" mean any plan, fund, or program which was heretofore or is hereafter established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, ...

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