UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Nicole Smith-Emerson
v. Civil No. 14-cv-120-PB Opinion No. 2015 DNH 080 Liberty Life Assurance Company of Boston
MEMORANDUM AND ORDER
Nicole Smith-Emerson brought this action under
§ 502(a)(1)(B) of the Employee Retirement Income Security Act of
1974 (“ERISA”) challenging the decision of Liberty Life
Assurance Company of Boston to terminate her long-term
disability benefits. See 29 U.S.C. § 1132(a)(1)(B). Smith-
Emerson seeks a ruling that her claim is subject to de novo
review. For the reasons that follow, I deny her request.
I. BACKGROUND
A. Stipulated Facts
The parties have submitted a joint statement of material
facts pursuant to Local Rule 9.4(b). Doc. No. 14. Because the
joint statement is part of the record, I need not recount it
here. Facts relevant to the disposition of this matter are discussed as necessary below.
B. Procedural History
Smith-Emerson is a 44-year-old woman who lives in Concord,
New Hampshire. She formerly worked at Citizens Financial Group
as a loan officer. After sustaining a neck injury, she stopped
working in December 2011. As a Citizens employee, Smith-Emerson
was eligible for disability benefits through the company’s long-
term disability insurance plan (the “Citizens plan”), which was
administered by Liberty Life Assurance Company of Boston
(“Liberty”). After she stopped working, Smith-Emerson filed a
claim for disability benefits. She initially received short-
term disability benefits and, in July 2012, Liberty informed her
that it would begin paying her long-term disability benefits
under a reservation of rights. In September 2013, Liberty
terminated Smith-Emerson’s long-term disability benefits after
further review of her claim.
Smith-Emerson filed this action in Merrimack County
Superior Court challenging Liberty’s decision to terminate her
benefits. Liberty removed the action to this Court in March
2014. In December 2014, Smith-Emerson filed a motion for de
novo review of her claim. See Doc. No. 16. Liberty objected,
2 arguing that deferential review should apply. See Doc. No. 17.
II. DISCUSSION
“A denial of benefits challenged under [ERISA] is to be
reviewed under a de novo standard unless the benefit plan gives
the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of
the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989). “If, however, by its terms, the ERISA plan grants
the plan administrator discretionary authority in the
determination of eligibility for benefits, the administrator’s
decision must be upheld unless it is arbitrary, capricious, or
an abuse of discretion.” Wright v. R.R. Donnelley & Sons Co.
Grp. Benefits Plan, 402 F.3d 67, 74 (1st Cir. 2005) (internal
quotation omitted). The parties dispute whether the Citizens
plan extends sufficient discretionary authority to the plan
administrator to warrant review under the deferential arbitrary
and capricious standard.
The First Circuit’s series of decisions in Denmark v.
Liberty Life Assurance Co. of Boston is directly on point and
controlling. In the first of these decisions, Denmark I, the
3 plan under review provided that
Liberty shall possess the authority, in its sole discretion, to construe the terms of this policy and to determine benefit eligibility hereunder. Liberty’s decisions regarding construction of the terms of this policy and benefit eligibility shall be conclusive and binding.
481 F.3d 16, 27 (1st Cir. 2007) (“Denmark I”). The court held
that this language granted discretionary authority to the plan
administrator and, therefore, “warrant[ed] arbitrary and
capricious review under Firestone.” Id. at 29. In Denmark II,
the court granted rehearing and superseded Denmark I on grounds
that are immaterial here. 566 F.3d 1 (1st Cir. 2009) (“Denmark
II”). What matters for our purposes, however, is that Denmark
II affirmed the holding in Denmark I that the disputed plan’s
language extended discretionary authority to the plan
administrator, concluding that the plan “contain[ed] a
sufficient delegation of discretionary authority to trigger
deferential review.” Id. at 9.
Here, the Citizens plan provides that Liberty
shall possess the authority, in its sole discretion, to construe the terms of [the Citizens plan] and to determine benefit eligibility hereunder. Liberty’s decisions regarding construction of the terms of [the Citizens plan] and benefit eligibility shall be conclusive and binding.
4 Doc. No. 14 at 2-3. This language, of course, is virtually
identical to the provision at issue in the Denmark cases that
the First Circuit found to warrant deferential review. See
Denmark II, 566 F.3d at 9; Denmark I, 481 F.3d at 27. The
Denmark decisions, therefore, make clear that the Citizens plan
extends discretionary authority to the plan administrator and,
therefore, entitles decisions made by the administrator to
deferential review.
Smith-Emerson’s motion does not cite, much less attempt to
distinguish, the Denmark decisions. In fact, and despite its
centrality to the merits of her motion for de novo review, she
barely mentions the Citizens plan’s “sole discretion” provision
at all. Instead, she offers two other arguments in favor of de
novo review, neither of which is persuasive.
First, Smith-Emerson points to a different provision in the
Citizens plan that addresses how claimants should submit proof
to support their claims for benefits. That provision
stipulates, in relevant part, that “[p]roof must be submitted in
a form or format satisfactory to Liberty.” Doc. No. 16-1 at 8
(emphasis added); see Doc. No. 14 at 2. The word
“satisfactory,” Smith-Emerson argues, is ambiguous;
5 consequently, it does not suffice to grant discretionary
authority to the administrator.
Liberty, however, does not base its discretionary authority
argument on the plan’s satisfactory proof provision. Instead,
it points to the “sole discretion” provision, which is nearly
identical to the provision in the Denmark decisions, as the
source of this authority. Smith-Emerson’s argument, therefore,
is a red herring. She does not explain how potential ambiguity
in the satisfactory proof provision, assuming any exists at all,
might negate the unambiguous and conclusive “sole discretion”
provision, and I am not otherwise aware of any basis in law that
would support such a position. See Goodwin v. Liberty Life
Assurance Co. of Boston, 2014 DNH 047, 14 (DiClerico, J.)
(rejecting same argument). Therefore, I reject Smith-Emerson’s
argument regarding the satisfactory proof provision in view of
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Nicole Smith-Emerson
v. Civil No. 14-cv-120-PB Opinion No. 2015 DNH 080 Liberty Life Assurance Company of Boston
MEMORANDUM AND ORDER
Nicole Smith-Emerson brought this action under
§ 502(a)(1)(B) of the Employee Retirement Income Security Act of
1974 (“ERISA”) challenging the decision of Liberty Life
Assurance Company of Boston to terminate her long-term
disability benefits. See 29 U.S.C. § 1132(a)(1)(B). Smith-
Emerson seeks a ruling that her claim is subject to de novo
review. For the reasons that follow, I deny her request.
I. BACKGROUND
A. Stipulated Facts
The parties have submitted a joint statement of material
facts pursuant to Local Rule 9.4(b). Doc. No. 14. Because the
joint statement is part of the record, I need not recount it
here. Facts relevant to the disposition of this matter are discussed as necessary below.
B. Procedural History
Smith-Emerson is a 44-year-old woman who lives in Concord,
New Hampshire. She formerly worked at Citizens Financial Group
as a loan officer. After sustaining a neck injury, she stopped
working in December 2011. As a Citizens employee, Smith-Emerson
was eligible for disability benefits through the company’s long-
term disability insurance plan (the “Citizens plan”), which was
administered by Liberty Life Assurance Company of Boston
(“Liberty”). After she stopped working, Smith-Emerson filed a
claim for disability benefits. She initially received short-
term disability benefits and, in July 2012, Liberty informed her
that it would begin paying her long-term disability benefits
under a reservation of rights. In September 2013, Liberty
terminated Smith-Emerson’s long-term disability benefits after
further review of her claim.
Smith-Emerson filed this action in Merrimack County
Superior Court challenging Liberty’s decision to terminate her
benefits. Liberty removed the action to this Court in March
2014. In December 2014, Smith-Emerson filed a motion for de
novo review of her claim. See Doc. No. 16. Liberty objected,
2 arguing that deferential review should apply. See Doc. No. 17.
II. DISCUSSION
“A denial of benefits challenged under [ERISA] is to be
reviewed under a de novo standard unless the benefit plan gives
the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of
the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989). “If, however, by its terms, the ERISA plan grants
the plan administrator discretionary authority in the
determination of eligibility for benefits, the administrator’s
decision must be upheld unless it is arbitrary, capricious, or
an abuse of discretion.” Wright v. R.R. Donnelley & Sons Co.
Grp. Benefits Plan, 402 F.3d 67, 74 (1st Cir. 2005) (internal
quotation omitted). The parties dispute whether the Citizens
plan extends sufficient discretionary authority to the plan
administrator to warrant review under the deferential arbitrary
and capricious standard.
The First Circuit’s series of decisions in Denmark v.
Liberty Life Assurance Co. of Boston is directly on point and
controlling. In the first of these decisions, Denmark I, the
3 plan under review provided that
Liberty shall possess the authority, in its sole discretion, to construe the terms of this policy and to determine benefit eligibility hereunder. Liberty’s decisions regarding construction of the terms of this policy and benefit eligibility shall be conclusive and binding.
481 F.3d 16, 27 (1st Cir. 2007) (“Denmark I”). The court held
that this language granted discretionary authority to the plan
administrator and, therefore, “warrant[ed] arbitrary and
capricious review under Firestone.” Id. at 29. In Denmark II,
the court granted rehearing and superseded Denmark I on grounds
that are immaterial here. 566 F.3d 1 (1st Cir. 2009) (“Denmark
II”). What matters for our purposes, however, is that Denmark
II affirmed the holding in Denmark I that the disputed plan’s
language extended discretionary authority to the plan
administrator, concluding that the plan “contain[ed] a
sufficient delegation of discretionary authority to trigger
deferential review.” Id. at 9.
Here, the Citizens plan provides that Liberty
shall possess the authority, in its sole discretion, to construe the terms of [the Citizens plan] and to determine benefit eligibility hereunder. Liberty’s decisions regarding construction of the terms of [the Citizens plan] and benefit eligibility shall be conclusive and binding.
4 Doc. No. 14 at 2-3. This language, of course, is virtually
identical to the provision at issue in the Denmark cases that
the First Circuit found to warrant deferential review. See
Denmark II, 566 F.3d at 9; Denmark I, 481 F.3d at 27. The
Denmark decisions, therefore, make clear that the Citizens plan
extends discretionary authority to the plan administrator and,
therefore, entitles decisions made by the administrator to
deferential review.
Smith-Emerson’s motion does not cite, much less attempt to
distinguish, the Denmark decisions. In fact, and despite its
centrality to the merits of her motion for de novo review, she
barely mentions the Citizens plan’s “sole discretion” provision
at all. Instead, she offers two other arguments in favor of de
novo review, neither of which is persuasive.
First, Smith-Emerson points to a different provision in the
Citizens plan that addresses how claimants should submit proof
to support their claims for benefits. That provision
stipulates, in relevant part, that “[p]roof must be submitted in
a form or format satisfactory to Liberty.” Doc. No. 16-1 at 8
(emphasis added); see Doc. No. 14 at 2. The word
“satisfactory,” Smith-Emerson argues, is ambiguous;
5 consequently, it does not suffice to grant discretionary
authority to the administrator.
Liberty, however, does not base its discretionary authority
argument on the plan’s satisfactory proof provision. Instead,
it points to the “sole discretion” provision, which is nearly
identical to the provision in the Denmark decisions, as the
source of this authority. Smith-Emerson’s argument, therefore,
is a red herring. She does not explain how potential ambiguity
in the satisfactory proof provision, assuming any exists at all,
might negate the unambiguous and conclusive “sole discretion”
provision, and I am not otherwise aware of any basis in law that
would support such a position. See Goodwin v. Liberty Life
Assurance Co. of Boston, 2014 DNH 047, 14 (DiClerico, J.)
(rejecting same argument). Therefore, I reject Smith-Emerson’s
argument regarding the satisfactory proof provision in view of
controlling First Circuit precedent.1
1 Smith-Emerson’s recitation of New Hampshire insurance and contract law is immaterial for the same reason. As an initial matter, beyond her vague assertion that “the regulation of insurance policies is still a matter for the fifty states,” Doc. No. 16-1 at 10, Smith-Emerson does not explain how or why state law affects a determination under ERISA of whether a benefits plan extends discretionary authority to an administrator. I need not address this question, however, because Smith-Emerson apparently appeals to New Hampshire law to show that the plan is 6 Smith-Emerson’s second argument alludes to – without
actually quoting – the “sole discretion” provision, arguing that
it does not apply here because the administrator terminated her
benefits after she had already been receiving them for two
years. In making this argument, Smith-Emerson apparently refers
to the language in that provision stipulating that “decisions
regarding . . . benefit eligibility shall be conclusive and
binding.” Doc. No. 14 at 2-3 (emphasis added). Because “this
is a termination case, not an eligibility case,” she argues, the
“sole discretion” provision does not apply to her claim. Doc.
No. 16-1 at 12.
The distinction that Smith-Emerson attempts to draw between
termination and initial denial of benefits lacks merit. First,
the plan’s text provides no support for it. A termination of
benefits is simply a determination that the claimant is no
longer “eligible” to receive benefits. The fact that this
determination follows a period of benefit disbursement makes it
no less a “decision . . . regarding . . . benefit eligibility”
than an initial denial of benefits. See Doc. No. 14 at 2-3.
ambiguous and should therefore be construed against the insurer. As I have explained, there is nothing ambiguous about the “sole discretion” provision, and nothing else in the plan renders that provision ambiguous. 7 Second, First Circuit precedent again undermines this argument.
In Terry v. Bayer Corp., the plan under dispute granted “the
exclusive right to make . . . the determination of the
eligibility for and the amount of any benefit payable.” 145
F.3d 28, 37 (1st Cir. 1998) (emphasis added). The claimant
appealed a termination of benefits, but the court nevertheless
determined that the plan’s language extended discretionary
authority to the administrator and, accordingly, warranted
deferential review. Id. This Court, too, has repeatedly found
benefits plans to extend discretionary authority under ERISA
when deciding appeals of terminated benefits. See Goodwin, 2014
DNH 047, 12; Fifield v. HM Life Ins. Co., 900 F. Supp. 2d 110,
116 (D.N.H. 2012) (Laplante, J.). Despite insisting that her
position is correct “as a matter of law,” Doc. No. 16-1 at 12
(emphasis in original), Smith-Emerson cites no authority that
recognizes any material distinction between the termination of
benefits and the initial denial of benefits. I therefore reject
Smith-Emerson’s second argument as well.
III. CONCLUSION
For these reasons, I conclude that Smith-Emerson’s claim
8 will be subject to the deferential arbitrary and capricious
standard of review. Thus, I deny Smith-Emerson’s motion for de
novo review (Doc. No. 16).
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge
April 10, 2015
cc: Charles G. Douglas, III, Esq. William D. Pandolph, Esq.