Fitzgerald v. Sedgwick Claimis Management Services, Incorporated

CourtDistrict Court, E.D. Michigan
DecidedJuly 21, 2021
Docket2:19-cv-10450
StatusUnknown

This text of Fitzgerald v. Sedgwick Claimis Management Services, Incorporated (Fitzgerald v. Sedgwick Claimis Management Services, Incorporated) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fitzgerald v. Sedgwick Claimis Management Services, Incorporated, (E.D. Mich. 2021).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

KRISTEN FITZGERALD, Case No. 2:19-cv-10450 Plaintiff, HONORABLE STEPHEN J. MURPHY, III v.

GENERAL MOTORS, LLC, and GENERAL MOTORS LIFE AND DISABILITY BENEFITS PROGRAM FOR SALARIED EMPLOYEES,

Defendants. /

OMNIBUS OPINION AND ORDER

Plaintiff sued Defendants under § 502(a)(1)(B) of the Employment Retirement Insurance Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), to overturn a denial of disability benefits. ECF 1, PgID 19–21. Plaintiff also claimed that Defendants violated her right to a full and fair review under ERISA § 503, 29 U.S.C. § 1133, and that she is entitled to an order compelling production of relevant documents, per diem penalties against Defendants, interest, costs, and attorney's fees. Id. at 21–27. The parties cross-moved for judgment on the administrative record, ECF 42; 43, and Plaintiff moved for summary judgment on the document production claim, ECF 44. The Court reviewed the briefs carefully and finds that a hearing is unnecessary. See E.D. Mich. LR 7.1(f). For the following reasons, the Court will remand the case to the Plan Administrator for further review and deny the pending motions. BACKGROUND Defendants provided Plaintiff with disability benefits. ECF 38-1. Plaintiff worked for General Motors as a "Senior Performance Engineer." ECF 1, PgID 5. Then,

in April 2017, Plaintiff stopped working and alleged that she was disabled due to depression, anxiety, and ADHD. See ECF 39, PgID 919, 921.1 She further alleged that Defendants then began paying "Sickness and Accident" ("S&A") benefits to her. ECF 1, PgID 10. In March 2018, Defendants informed Plaintiff that if she "continue[d] to be totally disabled and receive[d] [S&A] or Salary Continuance benefits for the maximum period to which [she was] entitled, [she] may be eligible for monthly

Extended Disability Benefits" ("EDB"). ECF 39, PgID 1777. Defendants also told Plaintiff that if she were to apply for EDB, then she would have to fill out a "Statement of Claim for [EDB] form." Id. On April 3, 2018, Plaintiff filled out an EDB claim form. Id. at 1788–89. Defendants later denied Plaintiff's EDB claim because "there was insufficient medical evidence to substantiate total disability for [EDB] purposes." Id. at 1803. The

denial stated that Plaintiff's claim "was reviewed by [an] internal [m]edical [s]pecialist." Id. Plaintiff later requested a copy of her claim file. Id. at 1799. Defendants then provided "the medical information that [was] used in the review that lead [sic] to the denial of" Plaintiff's benefits. Id. at 1805.

1 The claim file, docketed as ECF 39, is sealed. In response, and through counsel, Plaintiff again requested her entire claim file. Id. at 1819–20, 1829–30. Plaintiff's counsel noted in the request that Defendants' previous "response did not contain the internal medical review that" multiple

correspondences stated, "the Denial depended upon." Id. at 1819. Next, Plaintiff appealed her EDB claim denial through Defendants' internal appeal system. Id. at 1885–1906. She argued that her own extensive medical records supported her disability claim. Id. at 1890–1900. She also argued that Defendants abused the ERISA claim process by not providing her with her full claim file, id. at 1901–03, that Defendants erred when they denied the claim because one of Defendants' claim reviewers noted that the claim was supported, id. at 1903–04, and

that Defendants miscalculated her years of service, id. at 1904–05. After further review, Defendants denied Plaintiff's appeal. Id. at 1994–96. Defendants' denial was based in part on a record review by "Dr. Carol Flippen, a General Motors Psychiatric Consultant." Id. at 1995. The denial letter specifically stated that "Dr. Flippen's review, which summarize[d] her decision and rationale" was "enclosed" with the denial letter. Id. at 1996. After Defendants denied the

internal appeal, Plaintiff filed the present case. ECF 1. STANDARD OF REVIEW The parties disagree as to the applicable standard of review. Plaintiff argues that under the Secretary of Labor's claims procedure regulation, 29 C.F.R. § 2560.503-1, de novo review applies. ECF 43, PgID 4441–42; ECF 47, PgID 4775–77. But Defendants argue that an arbitrary and capricious standard applies under the ERISA Plan. ECF 42, PgID 4399–4400; ECF 45, PgID 4665–68. The Court must therefore determine the applicable standard of review. Section 2560.503-1(h)(1) mandates that all "employee benefit plan[s] shall

establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse" decision. If there is no full and fair review, "the claim or appeal is deemed denied on review without the exercise of discretion by an appropriate fiduciary." § 2560.503-1(l)(2)(i). Thus, the Court must review the administrator's decision de novo if there is no full and fair review.

Before deciding whether there was a full and fair review, the Court must first determine what version of § 2560.503-1 applies. At issue is paragraph (h)(4) of the regulation that explains the circumstances in which a claimant was not entitled to a full and fair review of his or her claims. See § 2560.503-1(h)(4). The current version of the regulation states that paragraph (h)(4)'s full and fair review does not apply to "claims for disability benefits filed under a plan from January 18, 2017 through April

1, 2018." § 2560.503-1(p)(4). Here, Plaintiff argues that paragraph (h)(4)'s full and fair review applies because she filed her EDB claim on April 3, 2018. ECF 43, PgID 4441 (noting that the current version of the regulation became effective April 1, 2018); ECF 51, PgID 4968 (noting that Plaintiff's EDB claim is dated April 3, 2018). But Defendants argue that paragraph (p)(4) of the regulation applies instead because Plaintiff first claimed a disability in April 2017 and first received S&A benefits in May 2017. ECD 45, PgID 4666; ECF 49, PgID 4907–08. Based on the Court's review, no federal court has interpreted 29 C.F.R.

§ 2560.503-1(p)(4). The Court must therefore interpret the regulation based on its plain text. See Roebuck v. USAble Life, 992 F.3d 732, 740 (8th Cir. 2021) (Grasz, J.) (Adopting an "interpretation . . . [that] does not contradict the plain terms of the ERISA regulation."). Indeed, as Justice Gorsuch explained, interpreting a regulation is the same as "interpreting any other written law: We 'begin our interpretation of the regulation with its text' and, if the text is unclear, we 'turn to other canons of interpretation' and tie-breaking rules to resolve the ambiguity." Kisor v. Wilkie, ---

U.S.---, 139 S. Ct. 2400, 2446 (2019) (Gorsuch, J., concurring) (quotation omitted). Here, the regulation's plain text states that paragraph (h)(4)'s full and fair review does not apply "to claims for disability benefits filed under a plan from January 18, 2017 through April 1, 2018." § 2560.503-1(p)(4) (emphasis added). The regulation defines a "claim for benefits" as "a request for a plan benefit or benefits made by a claimant in accordance with a plan's reasonable procedure for filing benefits claims."

§ 2560.503-1(e).

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