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Jackson v. Aetna Life Insurance Co.

United States District Court, E.D. Louisiana

December 19, 2017


         SECTION "F"



         Before the Court are cross motions for summary judgment by John Jackson and Aetna Life Insurance Company. For the following reasons, Jackson's motion is DENIED and Aetna's motion is GRANTED.


         John Jackson was a process safety management and risk management program coordinator at a biofuel plant in Mississippi. He was diagnosed with chronic inflammatory demyelinating polyradiculoneuropathy (CIDP), [1] multi-focal motor neuropathy, [2]diabetes, muscle weakness, high blood pressure, and bilateral carpal tunnel syndrome. He took disability leave around October 2013, and has not returned to work.[3]

         Jackson was enrolled in a group insurance policy provided by his employer, KiOR, Inc. The policy provides disability and life insurance benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act. Specifically, the plan offers Long Term Disability coverage which provides the plan participant with a source of income if they become disabled and are unable to work because of an illness, injury, or disabling pregnancy-related condition. In the event that the participant is “permanently and totally disabled, ” he is also eligible for life insurance waiver of premium (WOP) benefits.[4] This relieves the participant of making any further contributions for life insurance coverage and relieves his employer from making them on his behalf, while maintaining his coverage. Finally, the plan provides an Accelerated Death Benefit feature, which allows the participant to receive a partial life insurance benefit if they are terminally ill. A person is terminally ill if they have an illness or physical condition “which can reasonably be expected to result in death in two years or less.” Following his diagnosis, Jackson submitted a claim to the plan's issuer, Aetna Life Insurance Company, for Long Term Disability benefits and WOP benefits. Aetna determined that Jackson was totally disabled and approved both claims. In the letter approving his claim for LTD benefits, Aetna informed Jackson that his gross LTD benefit was $3, 750 per month and would begin April 27, 2014. However, it notified him that if he is awarded Social Security Disability Income benefits, his monthly LTD would be reduced by the amount awarded by the Social Security Administration. Failure to disclose an award of SSDI benefits would result in an overpayment, and Aetna may attempt to collect the surplus amount. The letter also notified him that his policy may require him to apply for SSDI benefits.[5]

         The Social Security Administration informed Jackson on July 16, 2014 that he was approved for SSDI benefits totaling $1, 636.80 per month, effective April 1, 2014. By letter dated August 27, 2014, Aetna notified Jackson that his LTD benefit would be reduced by $1, 636, and he would, as a result, receive a LTD benefit of $2, 114 per month. Further, it stated that Jackson was overpaid $6, 745.45 and he would need to reimburse Aetna for that amount. If Jackson failed to reimburse Aetna within two weeks, Aetna said, his monthly benefit amount would be applied toward his overpayment. By letter dated September 8, 2014, the Social Security Administration notified Jackson and his wife that their son was awarded $818 per month, effective April 2014, due to Jackson's disability. Unaware that Jackson's son had received the award, Aetna reminded Jackson that Family Social Security benefits awarded to Jackson's dependent would reduce his LTD benefit in a letter dated September 30, 2014. It stated that because Jackson's son was born in October 1996, he appeared to be eligible, and directed them to apply if they hadn't already.[6] Jackson provided Aetna with the FSS Notice of Award in late November 2014. Aetna informed Jackson that his monthly LTD benefits would be reduced by $818 as long as his son received the FSS payments and that he must reimburse Aetna $5, 835.07 for the LTD overpayment. Jackson unsuccessfully appealed the offsets for his SSDI award and his son's FSS award to Aetna.[7]

         In addition to his claims for LTD and WOP benefits, Jackson filed a claim for Accelerated Death Benefits in January 2016. If Jackson was successful, Aetna would pay him $187, 500 immediately and would pay the remainder of his life insurance policy, $62, 500, when he died. However, it is undisputed that Jackson is not terminally ill.[8] Accordingly, Aetna denied Jackson's claim, stating that terminal illness is a condition of receiving ADB coverage. Jackson appealed, claiming that the plain language of the policy provides an exception for disabled claimants, and in the alternative, that Texas law requires that Aetna provide ADB coverage to totally disabled claimants.

         On October 25, 2017, Jackson sued Aetna, claiming wrongful denial of Long Term Disability benefits and Accelerated Death Benefit coverage, in violation of ERISA.



         “Standard summary judgment rules control in ERISA cases.” Vercher v. Alexander & Alexander, Inc., 379 F.3d 222, 225 (5th Cir. 2004). Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine dispute as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine dispute of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claims. Id. Hearsay evidence and unsworn documents that cannot be presented in a form that would be admissible in evidence at trial do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987); Fed.R.Civ.P. 56(c)(2). "[T]he nonmoving party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence." Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007)(internal quotation marks and citation omitted). Ultimately, "[i]f the evidence is merely colorable . . . or is not significantly probative, " summary judgment is appropriate. Id. at 249 (citations omitted); King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“Unauthenticated documents are improper as summary judgment evidence.”).

         Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In deciding whether a fact issue exists, courts must view the facts and draw reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378 (2007). Although the Court must "resolve factual controversies in favor of the nonmoving party, " it must do so "only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013)(internal quotation marks and citation omitted).


         The insurance policies in this lawsuit are governed by ERISA, 29 U.S.C. § 1001 et seq. ERISA requires that a fiduciary should discharge its duties in the interests of the plan participants and beneficiaries. 29 U.S.C. § 1104(a). But it “does not set out the appropriate standard of review for evaluating benefit determinations of plan administrators, fiduciaries or trustees . . . .” Pierre v. Connecticut Gen. Life Ins. Co./Life Ins. Co. of N. Am., 932 F.2d 1552, 1555 (5th Cir. 1991). The Fifth Circuit determined that the appropriate standard to review factual determinations by plan administrators is abuse of discretion. Id. at 1562. In regards to reviewing plan interpretations, the United States Supreme Court held that de novo is the appropriate standard of review “unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firest ...

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