Drake v. Lincoln National Corporation

• Court: District Court, D. Arizona
• Decided: June 11, 2024
• Docket: 3:22-cv-08230
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8

Susan D rake, ) No. CV-22-08230-PCT-SPL ) 9 ) 10 Plaintiff, ) ORDER vs. ) ) 11 ) Lincoln National Corporation, et al., ) 12 ) 13 Defendants. ) ) 14 )

15 Before the Court is Plaintiff Susan Drake’s (“Plaintiff”) Opening Brief (Doc. 30) in 16 support of her claim for benefits under § 502(a)(1)(B) of the Employee Retirement Income 17 Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). Defendants Lincoln National 18 Corporation and Lincoln National Life Insurance Company (“Defendants” or “Lincoln”) 19 filed a Response brief (Doc. 41), and Plaintiff filed a Reply brief (Doc. 44) and the 20 Administrative Record (Doc. 30-3). Having fully reviewed the record and the parties’ 21 briefing, the Court affirms Defendants’ determination. 22 I. BACKGROUND 23 This case concerns Plaintiff’s request for relief under § 502(a)(1)(B) of ERISA to 24 recover the disability income benefits she alleges were wrongfully denied to her by 25 Defendants, the claims administrator of the disability policy. (Doc. 1 at ¶¶ 5, 17). Plaintiff 26 was employed at Yavapai Regional Medical Center (“YRMC”) as a registered nurse. (Doc. 27 1 at ¶ 18). Defendants issued YRMC long term disability (“LTD”) coverage for YRMC’s 28 employees through a Group Disability Income Policy (the “LTD Policy”). (Doc. 30 at 6; 1 Doc. 30-1; Doc. 41 at 2). 2 On August 30, 2020, Plaintiff stopped working because an injury to her foot 3 prevented her from doing her job. (Doc. 1 at ¶ 18). On October 16, 2020, Dr. Blake Peterson 4 performed outpatient surgery on Plaintiff’s foot so that she may return to work. (Doc. 30 5 at 4; Doc. 41 at 3). On November 24, 2020, Defendants approved Plaintiff’s claim for 6 disability benefits due to Plaintiff’s foot injury and issued her three months of paid benefits. 7 (Doc. 1 at ¶ 22; Doc. 30 at 4; Doc. 41 at 3). On January 18, 2021, Dr. Peterson explained 8 that Plaintiff “may continue to be weight bearing as tolerated” and recommended that she 9 use a brace. (Doc. 30-3 at 312). Dr. Peterson also discussed additional surgery to correct 10 Plaintiff’s foot deformity and the risks associated with not obtaining the surgery. (Id.). 11 Plaintiff, however, declined to proceed with any additional reconstructive surgery. (Id.). 12 On February 8, 2021, Dr. Peterson opined that Plaintiff had “recovered well” and 13 that she “may return to work.” (Doc. 30-3 at 234). He also opined that Plaintiff still had 14 an “underlying foot deformity which may cause some pain and disability but from a surgery 15 standpoint, her torn tendons have healed.” (Id.). Thereafter, Defendants referred Plaintiff’s 16 matter to Dr. Chirag Patel, a board-certified orthopedic surgeon to review Plaintiff’s 17 medical records. (Doc. 41 at 5). On February 23, 2021, Dr. Patel concluded that “from an 18 orthopedic surgery perspective, a functional impairment and the need for restrictions is not 19 supported from 2/4/21 to ongoing.” (30-3 at 225). With respect to the additional surgery 20 that Dr. Peterson recommended, Dr. Patel concluded: 21 In regards to her right foot deformity, while [Plaintiff] was 22 offered and declined reconstructive surgery, there is no information to support a functional impairment secondary to 23 the deformity, as she worked with this condition prior to her tendon repair surgery. This suggests that while the condition 24 may cause some pain and/or discomfort, the condition was not 25 of such severity as to cause significant limitations or require urgent orthopedic surgery. Further comment regarding her 26 functional status secondary to congenital pes cavus would be 27 best reviewed by the appropriate specialty. 28 (30-3 at 225–26). 1 On February 26, 2021, Defendants informed Plaintiff that her LTD benefits were 2 not payable beyond February 27, 2021. (Doc. 30-3 at 217). Defendants advised Plaintiff 3 that she had a right to appeal the decision and instructed her to include with any appeal 4 “[u]pdated medical records for January 19, 2021 to the present.” (Doc. 30-3 at 221 5 (emphasis in original)). On March 8, 2021, Dr. Peterson provided an additional opinion 6 which stated: 7 The last time I spoke with [Plaintiff], I explained that she can 8 return to all normal activities. However, she may continue to experience some pain and disability due to her underlying 9 cavus foot deformity. I did discuss reconstructive surgery, which she declines at this time. She will continue using a lace 10 up ankle brace for added support. However, you are correct, 11 from a surgical stand point she does not have any restrictions at this point. 12 (Doc. 30-3 at 215). 13 However, the next day, on March 9, 2021, Dr. Peterson opined: 14 15 I saw [Plaintiff] again today. She continues to have significant pain and disability to the right foot and ankle. Despite being 16 healed from the previous surgery that was performed, she is 17 unable to walk for more than a few minutes at a time. I believe this is due to her underlying cavus foot deformity. She likely 18 developed tendon tears in the first place due to her cavus foot 19 deformity. Now, she is developing painful degenerative joint disease to the ankle and to the joints of the midfoot. We 20 discussed various treatment options today and injections were performed. I also ordered a custom AFO. We have previously 21 discussed reconstructive surgery to address the cavus foot but 22 I would not recommend this option except as a last resort. I don’t feel she is able to work at this point due to the severe pain 23 she is experiencing and the foot deformity. We are working to 24 get her pain improved as quickly as possible but she may have some long term disability due to these issues. 25 (Doc. 30-3 at 154). 26 Defendants argue that Dr. Peterson failed to supplement the March 9, 2021 letter 27 with medical records reflecting his diagnosis and treatment. (Doc. 41 at 6). Defendants also 28 1 argue that Dr. Peterson failed to give specific restrictions or limitations that support a 2 finding that Plaintiff is disabled. (Id.). 3 Plaintiff obtained counsel and sent an appeal letter with additional evidence on 4 March 23, 2022. (Doc. 41 at 6). This information included medical records from 2020, 5 additional reports from Dr. Peterson, and a report from vocational expert, Mark Kelman. 6 (Doc. 30 at 6; Doc. 30-3 at 28; Doc. 41 at 7). On May 16, 2022, Defendants denied 7 Plaintiff’s appeal concluding that “proof of [Plaintiff’s] continued disability in accordance 8 with the Policy provisions after February 27, 2021 has not been provided.” (Doc. 30-3 at 9 31). 10 On December 15, 2022, Plaintiff filed her Complaint in this action. (Doc. 1). 11 Plaintiff alleges that Defendants abused their discretion in terminating Plaintiff’s disability 12 benefits and did so in bad faith. (Id.). Plaintiff alleges that she is entitled to disability 13 benefits for the remaining 21 months of benefits payments at a rate of $4,052.88 per month 14 which totals to the amount of $85,110.48. (Doc. 1 at 12 ¶ 48). On December 15, 2023, 15 Plaintiff filed her Opening Brief (Doc. 30) and the Administrative Record (Doc. 30-3). On 16 January 24, 2024, Defendants filed a Response Brief. (Doc. 41). On February 15, 2024, 17 Plaintiff filed her Reply Brief. (Doc. 44). The Court now rules on Plaintiff’s Opening 18 Brief.1 19 II. LEGAL STANDARD 20 “ERISA was enacted to promote the interests of employees and their beneficiaries 21 in employee benefit plans and to protect contractually defined benefits.” Firestone Tire & 22 Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989) (internal quotations and citations omitted). 23 “The Act furthers these aims in part by regulating the manner in which plans process 24 benefits claims.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 830 (2003). Where

25 1 The parties have captioned their respective motions as “Opening,” “Response,” 26 and “Reply” Briefs per the Court’s Rule 16 Case Management Order (Doc. 26). The Court construes these motions as seeking and opposing judgment under Fed. R. Civ. P. 52 and 27 are to be resolved by a court trial. As such, this order constitutes findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52(a). To the extent that any of the Court’s 28 findings of fact may be considered conclusions of law or vice versa, they are so deemed. 1 a claimant is denied benefits by a plan administrator—both initially and after being given 2 an opportunity to appeal—the claimant “may then seek relief in federal court ‘to recover 3 benefits due to [her] under the terms of [her] plan, to enforce [her] rights under the terms 4 of the plan, or to clarify [her] rights to future benefits under the terms of the plan.’” Collier 5 v. Lincoln Life Assurance Co. of Bos., 53 F.4th 1180, 1185 (9th Cir. 2022) (quoting ERISA 6 § 502(a)(1)(B); 29 U.S.C. § 1132(a)(1)(B)). “Depending upon the language of an ERISA 7 plan, a district court reviews a plan administrator’s decision to deny benefits either de novo 8 or for abuse of discretion.” Ingram v. Martin Marietta Long Term Disability Income Plan, 9 244 F.3d 1109, 1112 (9th Cir. 2001). Generally, the Court reviews a plan administrator’s 10 denial of benefits de novo. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 11 (9th Cir. 2006) (citing Firestone, 489 U.S. at 115). “[F]or a plan to alter the standard of 12 review from the default of de novo to the more lenient abuse of discretion, the plan must 13 unambiguously provide discretion to the administrator.” Abatie, 458 F.3d at 963. 14 III. DISCUSSION 15 Plaintiff contends that she is entitled to receive disability benefits in the amount of 16 $85,110.48 because “Lincoln does not have a basis for terminating [Plaintiff’s] benefits.” 17 (Doc. 30 at 18). The parties disagree as to which standard of review is appropriate in this 18 case. Defendants argue that the Court should apply the discretion conferred by the LTD 19 Policy, however, Plaintiff argues that the Court should apply a de novo standard of review. 20 The Court will first address the appropriate standard of review. It will then turn to 21 addressing the merits of the case. 22 A. Standard of Review 23 As noted above, the presumptive standard of review of a decision to deny benefits 24 is de novo. Firestone, 489 U.S. at 115 (“De novo is the default standard of review.”). 25 However, where the decision-maker exercises discretionary powers, a deferential standard 26 of review is appropriate. See id. at 111. Therefore, if a plan unambiguously “gives the 27 administrator or fiduciary discretionary authority to determine eligibility for benefits or to 28 construe the terms of the plan,” a denial of benefits is reviewed for abuse of discretion. Id. 1 at 115. The party seeking discretionary review has the burden to establish that the plan 2 grants discretionary authority to the decisionmaker. Ingram, 244 F.3d at 1112. “To assess 3 the applicable standard of review, the starting point is the wording of the plan.” Abatie, 458 4 F.3d at 962–63 (citation omitted). “Although there are no ‘magic words’ that a plan must 5 include to confer discretion, it must nevertheless clearly indicate that the decision-maker 6 has discretion to grant or deny benefits, or to interpret the plan’s terms.” Tuttle v. Varian 7 Med. Syst. Inc., 15 F. Supp. 3d 944, 951 (D. Ariz. 2013) (citing Feibusch v. Integrated 8 Device Tech., Inc. Emp. Benefit Plan, 463 F.3d 880, 884 (9th Cir. 2006); Abatie, 458 F.3d 9 at 964. Here, Section 7 of the LTD Policy provides that: 10 Liberty shall possess the authority, in its sole discretion, to 11 construe the terms of this policy and to determine benefit eligibility hereunder. Liberty’s decisions regarding 12 construction of the terms of this policy and benefit eligibility shall be conclusive and binding. 13 (Doc. 30-1 at 45). 14 As such, the LTD Policy unambiguously grants Defendants sole discretionary 15 authority for determining eligibility. Therefore, the Court finds that abuse of discretion is 16 the appropriate standard of review. See Salomaa v. Honda Long Term Disability Plan, 642 17 F.3d 666, 673 (9th Cir. 2011) (reviewing the administrator’s decision for abuse of 18 discretion rather than de novo because the plan expressly and unambiguously provided the 19 administrator discretion to determine eligibility). 20 “Under the deferential abuse of discretion standard of review, ‘the plan 21 administrator’s interpretation of the plan ‘will not be disturbed if reasonable.’” Day v. AT 22 & T Disability Income Plan, 698 F.3d 1091, 1096 (9th Cir. 2012) (quoting Conkright v. 23 Frommert, 559 U.S. 506, 512 (2010)). “ERISA plan administrators abuse their discretion 24 if they render decisions without any explanation, . . . construe provisions of the plan in a 25 way that conflicts with the plain language of the plan or rely on clearly erroneous findings 26 of fact.” Day, 698 F.3d at 1096 (quotations and citations omitted) (cleaned up). Under the 27 abuse of discretion standard, a court considers “whether application of a correct legal 28 1 standard was ‘(1) illogical, (2) implausible, or (3) without support in inferences that may 2 be drawn from the facts in the record.’” Salomaa, 642 F.3d at 676 (quoting United States 3 v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc)). The court’s review is limited 4 to the record before the plan administrator. Jebian v. Hewlett–Packard Co. Employee 5 Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1110 (9th Cir. 2003). “A reviewing court 6 should weigh any conflict of interest or procedural irregularity as a factor in its review.” 7 Lewis v. Unum Life Ins. Co. of Am., 569 F. Supp. 3d 983, 1002 (D. Ariz. 2021) (citing Met. 8 Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008)). 9 i. Conflict of Interest 10 There is a structural conflict of interest “where the entity that administers the plan, 11 such as an employer or an insurance company, both determines whether an employee is 12 eligible for benefits and pays benefits out of its own pocket.” Salomaa, 642 F.3d at 674. 13 “[I]f a plan gives discretion to an administrator operating under a conflict of interest, the 14 conflict must be weighed as a factor in determining whether there is an abuse of discretion.” 15 Id. (citations and quotation omitted); see Abatie, 458 F.3d at 965 (“Abuse of discretion 16 review applies to a discretion-granting plan even if the administrator has a conflict of 17 interest.”). The weight of this factor depends on the severity of the conflict. Demer v. IBM 18 Corporation LTD Plan, 835 F.3d 893, 900 (9th Cir. 2016). “When an administrator can 19 show that it has engaged in an ongoing, good faith exchange of information between the 20 administrator and the claimant, the court should give the administrator’s decision broad 21 deference notwithstanding a minor irregularity.” Id. at 972 (quotations and citations 22 omitted)). “The burden of proving that its decision was not improperly influenced has, 23 logically, been placed on that administrator.” Muniz v. Amec Const. Management, Inc., 623 24 F.3d 1290 (9th Cir. 2010). 25 Regardless of whether Plaintiff proves the conflict of interest affected Defendants’ 26 decision-making (here, she does not), the incentives inherent in ERISA cases remain 27 unchanged and require a court review with some additional skepticism. See e.g., Demer, 28 835 F.3d at 903 (“[T]he lack of such specific evidence does not mean that there is no 1 conflict of interest.”) (emphasis in original). “Structural conflicts do not divest the 2 administrator of his delegated discretion.” Lewis, 569 F. Supp. 3d at 1003–04 (citing Glenn, 3 554 U.S. at 115-16). “Rather, they weigh more or less heavily as factors in the abuse of 4 discretion calculus.” Id. (citations omitted). The parties disagree with how much additional 5 scrutiny is merited. 6 Here, there is a structural conflict of interest because Defendants are responsible for 7 determining whether Plaintiff is eligible for benefits and paying Plaintiff for those benefits. 8 Plaintiff argues that the structural conflict is shown by Defendants providing Dr. Patel with 9 incorrect contact information for Dr. Peterson. (Doc. 30 at 11). Plaintiff claims that this 10 action prevented Dr. Peterson from providing additional information about his opinion 11 prior to Defendants denying Plaintiff’s benefits. (Id.). However, Dr. Peterson had already 12 opined that Plaintiff was ready to return to work. (Doc. 30-3 at 234). Thus, a supplemental 13 report was not necessary for determining Plaintiff’s eligibility. Plaintiff was also able to 14 submit Dr. Peterson’s supplemental reports during her appeal. Therefore, the Court finds 15 that this is an example of a minor irregularity that does not arise to the level of abusive 16 discretion. 17 Moreover, Defendants have shown that they have taken active steps to reduce 18 potential bias and to promote accuracy. (Doc. 41 at 13). These steps include consistently 19 communicating with Plaintiff about her disability claim and quickly approving her claim 20 until Dr. Peterson released her to return to work. (Id.). Accordingly, the Court finds that 21 Defendants met their burden of showing that there was no bias in administering Plaintiff’s 22 disability claim. Thus, “the Court reviews Defendants’ conduct under the deferential abuse 23 of discretion standard, with only a moderate amount of additional skepticism required by 24 Defendants’ structural conflict of interest. Lewis, 569 F. Supp. 3d at 1005. 25 ii. Procedural Irregularities 26 “A reviewing court should also consider procedural errors in deciding whether a 27 plan administrator abused its discretion.” Id. at 1002 (citing Salomaa, 642 F.3d at 674). 28 The Ninth Circuit has held that “[t]here are . . . some situations in which procedural 1 irregularities are so substantial as to alter the standard of review.” Abatie, 458 F.3d at 971. 2 However, the violation must be “so flagrant as to alter the substantive relationship between 3 the employer and employee, thereby causing the beneficiary substantive harm.” Id.; see 4 Horton v. Phoenix Fuels, Co., Inc., 611 F.Supp.2d 977, 986 (D. Ariz. 2009) (“A small 5 procedural irregularity is a matter to be weighed in deciding whether an administrator’s 6 decision was an abuse of discretion, just as a court would weigh a conflict of interest.”). 7 Thus, procedural violations of ERISA do not alter the standard of review unless “an 8 administrator engages in wholesale and flagrant violations of the procedural requirements 9 of ERISA, and thus acts in utter disregard of the underlying purpose of the plan as well.” 10 Abatie, 458 F.3d at 971. 11 Here, Plaintiff accused Defendants of several procedural violations in an effort to 12 heighten the scrutiny applicable in this case. The Court analyzes each of these allegations 13 in the sections below adjudicating the merits of whether Defendants abused their discretion. 14 As such, the Court need not reiterate that discussion here. It is sufficient here to note that, 15 as the analysis below will show, the record does not suggest “wholesale and flagrant 16 violations of the procedural requirements of ERISA” that necessitate de novo review. Id. 17 B. Merits 18 Having disposed of the parties’ arguments regarding preliminary matters and the 19 weight of deference applicable to this case, the Court turns to the ultimate question: 20 whether Defendants abused their discretion in the denial of Plaintiff’s claim. Plaintiff 21 argues that Defendants abused their discretion by failing to provide specific reasons for 22 denying her claim, failing to provide her with full and fair review of the denial, failing to 23 consider Dr. Peterson’s opinion without an explanation, misinforming Plaintiff, failing to 24 consider other medical impairments, and terminating Plaintiff’s benefits without evidence 25 of an actual medical improvement to the degree that Plaintiff can return to work. (See Docs. 26 30 and 44). Plaintiff also claims that she is entitled to additional damages due to 27 Defendants’ delay in providing her the claim file. (Doc. 30 at 21). 28 /// 1 i. Failure to Provide Specific Reasons for Denying Plaintiff’s Claim 2 Plaintiff argues that Defendants abuse their discretion and violated the procedural 3 requirements of ERISA by not providing her with specific reasons for denying her claim. 4 (Doc. 30 at 9). The evidence shows otherwise. On February 8, 2021, Dr. Peterson reported 5 that Plaintiff had “recovered well” and that she was able to “return to work.” (Doc. 30-3 at 6 234). On February 26, 2021, Defendants sent a letter to Plaintiff denying her benefits. (Id. 7 at 217–222). In the letter, Defendants explained that Plaintiff’s disability benefits were 8 terminated because the “medical records on file from [her] treating provider confirm[ed] 9 that [her] condition had improved and [she was] no longer being given restrictions” that 10 prevented her from working. (Id. at 219). Defendants also referenced provisions in the LTD 11 Policy that supported its decision. (Id. at 220). Defendants further advised Plaintiff that if 12 she should decide to appeal, she will need to provide the following information: 13 Medical records, including but not limited to, office 14 treatment notes, diagnostic test results, procedure reports, restrictions and limitations, physical therapy notes, 15 counseling records, operative reports, hospital records, prescription histories, which we do not already have in our 16 file from your treating providers; Updated medical records 17 for January 19, 2021 to the present. 18 (Id. (emphasis in original)). On March 8, 2021, Dr. Peterson faxed a letter reiterating his 19 opinion that Plaintiff was ready to return to work with no restrictions. (Id. at 215). The 20 Court finds that this explanation complied with statutory requirements. Moreover, the 21 Court finds that Defendants did not abuse their discretion in determining that Plaintiff was 22 no longer eligible for benefits. 23 On March 23, 2022, Plaintiff filed an appeal with Defendants that included a letter 24 and two forms from Dr. Peterson. (Id. at 140–190). The letter from Dr. Peterson was sent 25 on March 9, 2021, and it completely contradicted the letter Dr. Peterson sent on March 8, 26 2021. (Id. at 154). In the March 9, 2021, letter Dr. Peterson explained that Plaintiff visited 27 his office and “[s]he continues to have significant pain and disability to the right foot and 28 1 ankle.” (Id.). Dr. Peterson also stated that he did not “feel [Plaintiff] is able to work at this 2 point due to the severe pain she is experiencing and the foot deformity.” (Id.). He concluded 3 the letter by stating “she may have some long term disability due to these issues.” (Id.). 4 The forms were completed on July 6, 2021, and suggests that Plaintiff has developed 5 disabling symptoms. (Id. at 40–41). 6 On May 16, 2022, Defendants reviewed this new information and explained that the 7 Disability Nurse Case Manager reviewing her claim concluded the following: 8 The last medical evaluation / treatment records on file are from 9 a follow-up visit on January 18, 2021 with Dr. Peterson. . . . Given the lack of updated records, there is insufficient 10 evidence to reasonably support occupational or functional impairment or to warrant the need for sustained restrictions and 11 limitations ongoing after February 27, 2021. Updated exam 12 findings and medical records would be needed to determine ongoing impairments and reasonable restrictions limitations 13 after February 27, 2021. 14 15 (Id. at 29). Accordingly, Defendants found that the reports were based on Dr. Peterson’s 16 visit with Plaintiff in January 2021 and denied Plaintiff’s appeal because she failed to 17 provide sufficient evidence to support Dr. Peterson’s change in opinion. (Id. at 30). 18 Defendants concluded: 19 In summary, we acknowledge that Ms. Drake may have continued to experience some symptoms associated with her 20 condition beyond February 27, 2021. However, the 21 information does not contain physical exam findings, diagnostic test results or other forms of medical documentation 22 supporting impairment and symptoms remained of such 23 severity, frequency and duration that they resulted in restrictions or limitations rendering her unable to perform the 24 duties of her occupation after that date. 25 (Id.). The Court finds that this explanation also complied with statutory requirements 26 because Defendants provided specific reasons for denying Plaintiff’s claim fails. 27 Defendants’ decision to terminate Plaintiff’s benefits due to lack of medical records 28 1 documenting her visits with Dr. Peterson after January 2021 was reasonable and not an 2 abuse of discretion. 3 ii. Failure to Provide Full and Fair Review of the Denial 4 Plaintiff argues that she was not afforded a reasonable opportunity to a full and fair 5 review of the denial. (Doc. 30 at 9–10). In her briefing, Plaintiff alleges that Defendants 6 hired Dr. Patel to review her medical record and instructed him to contact Dr. Peterson to 7 gather additional information about his opinion. (Id. at 9). Plaintiff claims that the contact 8 information that Defendants provided for Dr. Peterson included his fax number and an 9 incorrect telephone number. (Id.). Because the telephone number was incorrect, Dr. Patel 10 was not able to contact Dr. Peterson by phone. (Id. at 10). However, Dr. Patel sent Dr. 11 Peterson a letter via fax explaining that Dr. Peterson had ten days to respond with 12 information to supplement his medical reports. (Id.). Defendants did not wait for Dr. 13 Peterson’s response and terminated Plaintiff’s benefits within those ten days. (Id.). Plaintiff 14 surmises that this violated her right to a full and fair review of the adverse benefit 15 determination under ERISA and warrants a shift in the standard of review. (Id. at 10–11). 16 Defendants argue that these allegations do not amount to flagrant violations. (Doc. 17 41 at 10). The Court agrees. Defendants’ failure to provide the correct telephone number 18 and wait for an additional response from Dr. Peterson was not a flagrant violation. Dr. 19 Peterson had already concluded that Plaintiff was able to return to work (Doc. 30-3 at 234), 20 and Defendants notified Plaintiff that they reached their decision by relying on this 21 conclusion. (Id. at 219). Additionally, Defendants provided Plaintiff with the appropriate 22 information for appealing the denial of benefits. (Id. at 220–21). Defendants even followed 23 up with Plaintiff’s attorney to inquire about whether Plaintiff intended to appeal. (Id. at 24 192). Therefore, Defendants provided Plaintiff with a reasonable opportunity to seek a full 25 and fair review of the denial. See Abatie, 458 F.3d at 974 (“requiring that an administrator 26 notify a claimant of the reasons for the administrator’s decisions” and allowing the claimant 27 to review those reasons “allows for a full and fair review of the denial decision, [] required 28 under ERISA.”). 1 iii. Failure to Consider Dr. Peterson’s Opinion 2 Plaintiff argues that Defendants violated procedural requirements because 3 Defendants only considered Dr. Patel’s opinion and failed to explain why they disagreed 4 with Dr. Peterson’s opinion. (Doc. 30 at 9; Doc. 44 at 2). “Accepting the opinion of the 5 insurance company’s medical consultant over the opinion of the treating physician is not 6 clearly erroneous.” See Fergus v. Standard Ins. Co., 27 F. Supp. 2d 1247, 1254 (D. Or. 7 1998) (citing Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480, 482 (9th 8 Cir.1990)). Regardless, there is no indication that Defendants disagreed with or refused to 9 follow Dr. Peterson’s opinion by also relying on Dr. Patel’s opinion. (Doc. 30-3 at 219). 10 In fact, in the denial letter, Defendants explained that it reached its decision by relying on 11 Dr. Peterson’s opinion. (Id.). In his reports, Dr. Peterson opined that Plaintiff had an 12 “underlying foot deformity which may cause some pain and disability but from a surgery 13 standpoint, her torn tendons have healed.” (Id. at 234 (emphasis added)). Dr. Peterson 14 concluded that Plaintiff had “recovered well” and that she “may return to work.” (Id.). 15 Therefore, the Court concludes that Defendants did in fact consider Dr. Peterson’s opinion. 16 Dr. Peterson, however, offered additional evidence contradicting his initial opinion 17 that Plaintiff could return to work. This information was brought before Defendants once 18 Plaintiff filed her appeal. Defendants argues that the evidence was not objective and 19 “simply adopted [Plaintiff’s] subjective beliefs about functionality.” (Doc. 41 at 17). Upon 20 reviewing Plaintiff’s request for appeal, Defendants explained that Dr. Peterson’s 21 additional evidence was rejected because the evidence was “based off the January 18, 2021 22 office visit [] when Dr. Peterson last saw [Plaintiff].” (Doc. 30-3 at 30). Ultimately, 23 Defendants denied Plaintiff’s appeal because there was no additional information to reflect 24 Plaintiff’s condition after January 18, 2021. (Id.). Defendants determined that without 25 additional information to support Dr. Peterson’s contradicting opinions, Plaintiff could not 26 prove that she had an ongoing disability. (Id.). Therefore, the Court rejects Plaintiff’s 27 argument that Defendants failed to provide an explanation for disagreeing with Dr. 28 Peterson’s opinion. Accordingly, the Court finds that Defendants did not violate the 1 procedural requirements of ERISA. 2 iv. Misinforming Plaintiff 3 Plaintiff argues that Defendants misinformed her about what additional material or 4 information was necessary to support continuation of benefits and improperly changed the 5 reasons for denying her claim. (Doc. 30 at 13). Even further, Plaintiff alleges that these 6 actions amount to fraud. (Id.). The Court rejects Plaintiff’s claims. As previously explained, 7 the evidence shows that Defendants properly informed Plaintiff that she needed to provide 8 current medical information to show that she suffered from an ongoing disability. (See Doc. 9 30-3 at 219) Additionally, Plaintiff failed to show that Defendants improperly change the 10 reasons for denying her claim. Upon initial review, Defendants rejected Plaintiff’s claim 11 because Dr. Peterson concluded that she was ready to return to work. Defendants advised 12 Plaintiff to provide updated medical records for January 19, 2021 to present if she would 13 like to appeal the termination of her benefits. During Plaintiff’s appeal, Defendants upheld 14 their determination and concluded that the supplemental letter and reports from Dr. 15 Peterson was insufficient because the most recent medical record was from January 18, 16 2021 and Plaintiff failed to provide additional medical records for the relevant time period. 17 (Doc. 30-3 at 30). 18 v. Failure to Consider Other Medical Impairments 19 Plaintiff argues that the medical records she submitted to Defendants several months 20 after her benefits were denied should have been considered during her appeal. (Doc. 44 at 21 6). Defendants argue that Plaintiff’s coverage under the group policy ended when she was 22 no longer actively at work and did not prove continuous disability. (Doc. 41 at 15). 23 Therefore, Defendants argue that Plaintiff cannot meet her burden of proof that she is 24 entitled to benefits for these injuries because she failed to submit a single medical record 25 to show that they existed prior to her losing eligibility for disability benefits. (Doc. 41 at 26 15, n.6). Plaintiff argues that Defendants have not shown that Plaintiff lost her coverage 27 under the LTD Policy. (Doc. 44 at 7). Rather, Plaintiff suggests that the “[LTD Policy] 28 expressly recognizes medical conditions that arise while the covered person is covered 1 under the Policy will be treated as a sickness which must be considered under the Policy.” 2 (Id. (citing Doc. 30-1 at 11)). 3 The LTD Policy provides that “[c]essation of [a]ctive [e]mployment will be deemed 4 termination of employment, except the insurance will be continued for an Employee absent 5 due to [d]isability during: a. the Elimination Period; and b. any period during which 6 premium is being waived.” (Doc. 30-1 at 40). The “‘Elimination Period’ means a period of 7 consecutive days of [d]isability or [p]artial [d]isability for which no benefit is payable. The 8 Elimination Period . . . begins on the first day of [d]isability.” (Id. at 9). The Elimination 9 Period is 90 days. (Id. at 4). Plaintiff stopped working on August 20, 2020. (Doc. 30-3 at 10 428). The earliest medical record reflecting injuries that were not previously disclosed to 11 Defendants is dated May 17, 2021. (Id. at 89). Plaintiff failed to provide evidence that these 12 injuries existed during the Elimination Period. Accordingly, Plaintiff is not eligible to 13 receive benefits for these injuries because she is no longer covered by the LTD Policy. 14 vi. Terminating Benefits Without Evidence 15 “[D]istrict courts within this circuit have consistently held that the burden of proof 16 continues to lie with the plaintiff when disability benefits are terminated after an initial 17 grant.” Muniz, 623 F.3d at 1296. “That benefits had previously been awarded and paid may 18 be evidence relevant to the issue of whether the claimant was disabled and entitled to 19 benefits at a later date, but that fact should not itself shift the burden of proof.” Id. 20 Here, Plaintiff argues that Defendants abused their discretion by terminating her 21 benefits without evidence establishing actual medical improvement to the degree she could 22 return to work. (Doc. 30 at 17). However, Plaintiff’s medical provider, Dr. Peterson, 23 established that she was healed and ready to return to work. Plaintiff failed to provide 24 medical records to show that there was any change in her condition. Therefore, Plaintiff’s 25 argument fails. 26 vii. Failure to Provide Claim File 27 Plaintiff claims that she is entitled to damages under 29 U.S.C. § 1132(c)(1) because 28 Defendants failed to provide her with a copy of her claim file. (Doc. 30 at 21). “ERISA 1 mandates that the administrator of an employee benefit plan ‘shall, upon written request of 2 any participant or beneficiary, furnish’ certain plan documents.” Anderson v. Intel Corp. 3 Inv. Pol’y Comm., 602 F. Supp. 3d 1238, 1240 (N.D. Cal. 2022) (quoting 29 U.S.C. § 4 1024(b)(4)). “Under ERISA section 502(c)(1), where an administrator ‘fails or refuses to 5 comply’ with such a request within 30 days, the administrator ‘may in the court’s discretion 6 be personally liable to such participant or beneficiary in the amount of up to $100 a day 7 from the date of such failure or refusal, and the court may in its discretion order such other 8 relief as it deems proper.’” Id. (quoting 29 U.S.C. § 1132(c)(1)). 9 “The purpose of ERISA’s penalty provision is not so much to penalize as to induce 10 plan administrators to respond in a timely manner to a participant’s request for 11 information.” Hamilton v. Hartford Life & Acc. Ins. Co., No. CV-06-417-TUC-DCB, 2009 12 WL 5872975, at *5 (D. Ariz. Apr. 14, 2009), aff’d sub nom. Hamilton v. Hartford Life And 13 Acc. Ins. Co., 378 F. App’x 717 (9th Cir. 2010) (citing Hess v. Hartford Life and Accident 14 Ins. Co., 91 F.Supp.2d 1215 (C.D. Ill. 2000)). “An administrator’s failure to produce 15 documents properly requested by a participant subjects the administrator to liability for 16 statutory penalties.” Hamilton, 2009 WL 5872975 at *5. “The relevant plan documents are 17 those documents that provide individual participants with information about the plan and 18 benefits.” Id. (citing Hughes Salaried Retirees Action Committee v. Administrator of the 19 Hughes Non–Bargaining Retirement Plan, 72 F.3d 686, 690 (9th Cir.1995)). Here, Plaintiff 20 argues that Defendants are liable because they failed to provide her the claim file within a 21 timely manner. (Doc. 30 at 21). The claim file is not considered a relevant plan document. 22 See id.; see e.g. Prado v. Allied Domecq Spirits & Wine Grp. Disability Income Pol’y, 800 23 F. Supp. 2d 1077, 1101 (N.D. Cal. 2011) (“By its terms, section 1132(c) is limited to 24 information required by ‘this subchapter.’ 29 U.S.C. § 1132(c). As such, it does not extend 25 to documents identified in 29 C.F.R. § 2560.503–1.”). Accordingly, the Court rejects 26 Plaintiff’s request for statutory damages. 27 /// 28 /// 1 IV. CONCLUSION 2 The LTD Policy grants Defendants discretion in interpreting it and administering it. | Defendants’ structural conflict of interest and alleged procedural errors did not arise to the 4} level of an abuse of discretion. The evidence shows that Plaintiff's medical provider approved her to return to work and changed his opinion without any supporting medical 6 | records only after Plaintiff was denied benefits. Accordingly, Defendants’ interpretation of 7 | the LTD Policy was reasonable and, thus, not an abuse of discretion. Additionally, Plaintiff 8 | is not entitled to statutory damages because a claim file is not a relevant plan document. 9 Accordingly, 10 IT IS THEREFORE ORDERED that Plaintiff’s request for relief in her Opening 11 | Brief (Doc. 30) is denied. 12 IT IS FURTHER ORDERED the Clerk of Court shall terminate this action and 13 | enter judgment accordingly. 14 Dated this 10th day of June, 2024. 15 16 LE 17 18 19 20 21 22 23 24 25 26 27 28