UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Theresa Fortier
v. Civil No. 16-cv-322-LM Opinion No. 2018 DNH 138 Hartford Life and Accident Insurance Company et al.
O R D E R
Plaintiff Theresa Fortier, a former doctor at the
Dartmouth-Hitchcock Clinic (“DH Clinic”), brings suit alleging
that defendants Hartford Life and Accident Insurance Company
(“Hartford”) and the Dartmouth-Hitchcock Clinic Long Term
Disability Plan (“Plan”) unlawfully stopped paying long-term
disability benefits to which she is entitled. She also alleges
that Hartford wrongfully terminated her waiver of premium
benefits under her life insurance policy.1 The causes of action
remaining in this case are two claims pursuant to the Employee
Retirement Income Security Act (“ERISA”) to recover benefits
under the LTD policy (Count I) and Fortier’s life insurance
policy (Count II); and a third claim seeking an award of
1 The Plan consists of both a long-term disability policy (the “LTD policy”) and a life insurance policy. In addition, the terms of the LTD Policy are provided in a certificate of insurance, which is expressly incorporated into the LTD policy. attorney’s fees and costs (Count IV).2 The parties cross-move
for judgment on the administrative record. The court held oral
argument on July 2, 2018.
STANDARD OF REVIEW
The standard of review in an ERISA case differs from that
in an ordinary civil case, where summary judgment is designed to
screen out cases that raise no trial-worthy issues. See Orndorf
v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir. 2005).
“In the ERISA context, summary judgment is merely a vehicle for
deciding the case” in lieu of a trial. Bard v. Bos. Shipping
Ass’n, 471 F.3d 229, 235 (1st Cir. 2006). Rather than consider
affidavits and other evidence submitted by the parties, the
court reviews the denial of ERISA benefits based “solely on the
administrative record,” and neither party is entitled to factual
inferences in its favor. Id. Thus, “in a very real sense, the
district court sits more as an appellate tribunal than as a
trial court” in deciding whether to uphold the administrative
decision. Leahy v. Raytheon Co., 315 F.3d 11, 18 (1st Cir.
2002).
2 Defendants previously moved to dismiss Counts I and III. The court denied the motion as to Count I, but granted the motion as to Count III, which alleged that a mental illness limitation in the Plan violates the Americans with Disabilities Act and certain state laws. See doc. no. 24.
2 BACKGROUND
The facts recited in this section are drawn from the
parties’ joint statement of material facts, which they submitted
pursuant to Local Rule 9.4(b), see doc. no. 29, as well as
documents contained in the administrative record.
At all times relevant to this case, Fortier was employed as
a physician at the DH Clinic. Through her employment, Fortier
was a beneficiary and participant in DH Clinic’s Plan, offered
through Hartford. The Plan provided both the LTD policy and a
life insurance policy. Fortier maintained coverage under both
policies throughout her employment.
On May 6, 2009, Fortier stopped working due to a medical
condition.3 In November 2009, she filed an LTD claim with
Hartford, stating that she was unable to work because of a
disability as of May 6, 2009. By letter dated December 18,
2009, Hartford notified Fortier that it had approved her LTD
claim and would begin paying benefits effective November 2,
2009.
On February 5, 2010, Hartford informed Fortier by letter
that her LTD policy required her to apply for Social Security
Disability benefits if she anticipated being out of work for 12
months or more. Fortier applied for Social Security benefits
3 As discussed further infra, the nature of Fortier’s medical condition is in dispute in this case.
3 and, on April 10, 2011, was awarded benefits effective May 6,
By letter dated June 1, 2010, Hartford notified Fortier
that because of her disability, she qualified for a waiver of
premium for her life insurance coverage under the Plan. The
letter stated that Fortier’s life insurance benefits “will
remain in effect without premium payment until date of
termination 01/07/2026, provided you remain Disabled as defined
by the Policy.” Doc. no. 29 at ¶ 11. The letter further
stated: “Periodically, we will be requesting updated medical
information from you to verify your continued disability, and
consequently your continued eligibility for the Waiver of
Premium benefit.” Admin. Rec. at 159.
I. Hartford Terminates then Reinstates Fortier’s LTD Benefits
In a letter dated September 13, 2011, Hartford notified
Fortier that her LTD benefits would terminate on November 1,
2011 because her disability was subject to the LTD policy’s
“Mental Illness” limitation, which limits LTD benefits to 24
months for disabilities “because of . . . Mental Illness that
results from any cause; . . . [or] any condition that may result
from Mental Illness.” Doc. no. 29 at ¶ 15. The letter stated
that Fortier’s medical records supported a diagnosis of
“Cognitive Disorder NOS,” which fell under the Mental Illness
4 policy provision. Id. The letter also provided: “If you do not
agree with our denial, in whole or in part, and you wish to
appeal our decision, you or your authorized representative must
write to us within one hundred eighty (180) days from your
receipt of this letter.” Id.
By letter dated March 5, 2012, Fortier’s counsel requested
that Hartford extend the deadline to appeal the adverse benefit
determination by 60 days.4 Hartford granted the request and
extended Fortier’s time to appeal to May 11, 2012. Fortier’s
counsel appealed Hartford’s determination on that date, and
submitted medical records to Hartford to contest the diagnosis
of Cognitive Disorder NOS. The court will refer to Fortier’s
May 11, 2012 appeal as the “2012 appeal.”
By letter dated May 22, 2012, Hartford notified Fortier’s
counsel that “[b]ased on a complete and thorough review of this
file, we have determined that Dr. Fortier is entitled to
continued LTD benefits beyond November 1, 2011, subject to all
policy provisions and guidelines.” Id. at ¶ 19. Although not
stated in the letter, Hartford’s records show that Fortier’s
benefits were reinstated because, per Hartford’s policy, the 24-
month limitation for Mental Illness benefits begins to run from
the date Hartford informs the beneficiary of the limitation. In
4 Fortier’s counsel’s letter was sent no later than 174 days after he received the September 13, 2011 letter.
5 other words, Hartford reset the 24-month period to begin on
September 13, 2011, the date it informed Fortier of the
limitation. On June 4, 2012, Hartford notified Fortier by
letter of the reason for the reinstatement, and informed her
that “no benefits will be payable beyond 09/12/2013 for mental
illness.” Id. at ¶ 20.
II. Hartford Again Terminates Fortier’s LTD Benefits
By letter dated July 17, 2013, Hartford notified Fortier’s
counsel that Hartford would stop paying Fortier LTD benefits on
September 13, 2013. The letter read, in relevant part:
We based our decision to terminate Dr. Fortier’s claim on policy language. All the documents contained in her file were reviewed as a whole . . . .
As we indicated in our letter dated 06/04/2012, Dr. Fortier[] was notified on 09/13/2011 that her claim for benefits was subject to the limitation for Mental Illness benefits.
The information in Dr. Fortier’s file shows that she received LTD benefits beginning 11/02/2009 for Disability due to Cognitive Disorder NOS. When she stopped working 05/06/2009, she presented with reported impaired concentration and forgetfulness and it was suggested this was possibly due to encephalopathy secondary to viral infections. However, subsequent objective testing did not provide support of a physically disabling condition.
Since her Disability was the result of a Mental Illness, the LTD benefits were subject to the Mental Illness and Substance Abuse Benefits provision. Dr. Fortier’s benefits commenced on 11/02/2009. You were notified of the limitation for Mental Illness on 09/13/2011. Therefore, the 24 month duration of benefits for your Mental Illness will expire on
6 09/13/2013 and her claim will be closed. However, if she is hospitalized prior to that date, the benefits may be extended.
Please notify our office immediately if Dr. Fortier is hospitalized at any time, or if she becomes Disabled due to a physical impairment. If she were hospitalized at any time prior to the date her benefits are currently set to expire, we will need to obtain copies of the medical records from the hospital during the exact dates that she was hospitalized.
Id. at ¶ 21. Importantly, the letter also stated: “If you do
not agree with our denial, in whole or in part, and you wish to
appeal our decision, you or your authorized representative must
write to us within one hundred eighty (180) days from the
On August 10, 2013, Fortier’s counsel requested a copy of
the claim file from Hartford. On August 19, 2013, Hartford
provided the claim file to Fortier’s counsel.
By letter dated March 7, 2014, Fortier, through her
counsel, appealed Hartford’s adverse LTD benefit determination
(the “2014 appeal”). Hartford notified Fortier’s counsel in a
letter dated March 26, 2014, that Fortier’s appeal was untimely
because it was not submitted within 180 days of her receipt of
the July 17, 2013 adverse benefit determination letter.5 The
5 Although the record is not clear as to when Fortier received the July 17, 2013 letter, she does not dispute that it was more than 180 days prior to March 7, 2014.
7 March 26 letter informed Fortier’s counsel that Hartford would
not consider her appeal because it was untimely.
III. Hartford Terminates Fortier’s Waiver of Premium Benefits
By letter dated September 23, 2013, Hartford notified
Fortier’s counsel:
[I]n order for your client’s Group Life Insurance to continue through [the LWOP] benefit, she must remain totally Disabled as defined in this Policy. Please complete the enclosed Authorization to Obtain and Release Information form and the Personal Profile Evaluation form and return to us in the self-addressed envelope. In accordance with the terms of this Policy, we ask that you also submit evidence of continuing disability. Enclosed is an Attending Physician’s Statement, Psychiatric Attending Physician’s Statement, and Behavioral Functional Evaluation form that her physician must complete and return to us . . . by 10/7/13. We need this information to determine if you continue to meet the definition of Disability and remain under the care of a Physician.
Id. at ¶ 24.
Hartford sent Fortier’s counsel follow-up letters on
October 10 and November 8, 2013, reminding him that Hartford
needed additional information to determine whether Fortier
remained under a disability. The letters informed Fortier’s
counsel that absent further information, her waiver of premium
benefits would be terminated.
On December 4, 2013, Hartford notified Fortier’s counsel by
letter that it had not received any response to its September
23, October 10, or November 8, 2013 letters. Hartford stated in
8 its letter that it was terminating Fortier’s waiver of premium
benefits as of that date. The December 4 letter also stated:
“If you do not agree with the reason why your claim was denied,
in whole or part, and you wish to appeal our decision, you must
write to us within one hundred eighty (180) days of the date of
this letter.” Id. at ¶ 27.
By letter dated June 1, 2014, Fortier’s counsel timely
appealed Hartford’s adverse determination regarding the waiver
of premium benefits. In the letter, Fortier’s counsel stated
that he was including the March 7, 2014 letter appealing
Hartford’s termination of her LTD benefits, as well as “clinical
notes of Dr. Belliveau.” Admin. Rec. at 172. The letter also
stated “[a]dditional documents will be sent to Hartford soon.”
Id.
By letter dated June 10, 2014, Hartford acknowledged
receipt of the appeal, gave Fortier’s counsel the address to
send any additional documents, extended the deadline for
Fortier’s appeal to July 7, 2014 so that he could forward any
additional documents, and stated that if Hartford did not
receive additional documentation by that date, it would evaluate
the appeal based on the information it currently had.
Fortier’s counsel did not submit any further documents in
connection with Fortier’s appeal. By letter dated July 21,
2014, Hartford denied the appeal, noting that it had not
9 received any additional documentation, and that the psychiatric
office visit notes from Dr. Belliveau were not sufficient to
establish a disability under the Plan.
DISCUSSION
Fortier brings this suit to recover LTD benefits under her
LTD policy (Count I) and waiver of premium benefits under her
life insurance policy (Count II). Both counts are brought under
ERISA, 29 U.S.C. § 1132. Fortier also seeks attorney’s fees and
costs (Count IV). The parties cross-move for judgment on the
administrative record.
I. Termination of LTD Benefits (Count I)
As Fortier states in her motion, “this case ultimately
turns on whether Dr. Fortier timely appealed the September 13,
2013 termination and exhausted pre-suit remedies under ERISA.”
Doc. no. 35 at 9. Thus, unlike most ERISA cases, the court is
not reviewing the merits of Fortier’s claim that Hartford erred
in terminating her benefits. Instead, the court must determine
only whether Fortier exhausted her remedies prior to bringing
suit.
Under ERISA, every benefit plan must, among other things,
“afford reasonable opportunity to any participant whose claim
for benefits has been denied for a full and fair review by the
appropriate named fiduciary of the decision denying the claim.”
10 29 U.S.C. § 1133(2). The Secretary of Labor has promulgated
regulations for the administrative review of claims for plan
benefits. See 29 C.F.R. § 2560.503—1. Among these is a
requirement that every employee benefit plan “[p]rovide
claimants at least 60 days following receipt of a notification
of an adverse benefit determination within which to appeal the
determination.” Id. § (h)(2)(i). This period is extended to
“at least 180 days following receipt of a notification of an
adverse benefit determination” when the employee benefit plan is
a “group health plan.” Id. § (h)(3)(i).6
The regulations further require that the communication of
denial of benefits “spell out the specific reasons for an
adverse determination, delineate the particular plan provisions
on which the determination rests, furnish a description of any
additional material necessary to perfect the claim, and provide
a description of the plan’s review procedures and applicable
time limits.” Stephanie C. v. Blue Cross Blue Shield of
Massachusetts HMO Blue, Inc., 813 F.3d 420, 425 (1st Cir. 2016)
(citing 29 C.F.R. § 2560.503–1(g)(1)). Though a beneficiary may
bring suit challenging the denial of benefits under a plan
6 “The term ‘group health plan’ means an employee welfare benefit plan providing medical care (as defined in section 213(d) of Title 26) to participants or beneficiaries directly or through insurance, reimbursement, or otherwise.” 29 U.S.C. § 1167 (1). The parties agree that the Plan is a group health plan.
11 subject to ERISA, see 29 U.S.C. § 1132(a), she must first
exhaust her plan’s administrative remedies, see Tetreault v.
Reliance Standard Life Ins. Co., 769 F.3d 49, 52 (1st Cir.
2014); see also Heimeshoff v. Hartford Life & Acc. Ins. Co., 134
S. Ct. 604, 610 (2013) (noting that federal courts of appeals
have “uniformly required that participants exhaust internal
review before bringing a claim for judicial review”). That is,
a claimant must follow a plan’s internal appeal process before
bringing suit in order to exhaust the plan’s administrative
remedies. See, e.g., Terry v. Bayer Corp., 145 F.3d 28, 40 (1st
Cir. 1998).
Fortier contends that she exhausted her administrative
remedies because she timely appealed Hartford’s termination of
her LTD benefits in 2013. She further argues that even if she
did not submit a timely appeal, her failure to do so should be
excused under the substantial compliance doctrine and the
notice-prejudice rule. Defendants dispute Fortier’s arguments.
A. De Novo Versus Deferential Review
“ERISA does not establish the standard of review which
courts should apply when reviewing determinations made regarding
benefits claims.” Rodriguez-Lopez v. Triple-S Vida, Inc., 850
F.3d 14, 20 (1st Cir. 2017). “However, the Supreme Court has
held that a denial of benefits challenge ‘is to be reviewed
12 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.’”
Id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989)). Where the benefit plan at issue gives its
administrator discretion to decide whether an employee is
eligible 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).
Fortier devotes a substantial portion of her brief to
arguing that the deferential standard of review should not apply
to Hartford’s decision to terminate her LTD benefits despite the
Plan granting the administrator discretionary authority to
determine eligibility for benefits. Defendants argue that the
deferential standard of review should apply.
The court need not decide the appropriate standard of
review because, as Fortier correctly states, the only issue
presented in Count I is whether she exhausted her administrative
remedies prior to bringing suit. Because that issue is the
basis of Fortier’s claim in Count I, “there are no factual
findings or interpretations of the Plan made by the Claims
Administrator to which this court should defer” and the review
is de novo. Tetreault v. Reliance Standard Life Ins. Co., No.
13 CIV.A. 10-11420-JLT, 2011 WL 7099961, at *4 (D. Mass. Nov. 28,
2011), report and recommendation adopted, No. CIV.A. 10-11420-
JLT, 2012 WL 245233 (D. Mass. Jan. 25, 2012) (applying the de
novo standard of review to the issue of whether plaintiff’s
appeal of a plan administrator’s termination decision was
untimely).7
B. Timeliness of Fortier’s Appeal
In support of her argument that she timely filed her 2014
appeal, Fortier asserts that Hartford did not follow its own
internal guidelines regarding termination of LTD benefits. She
also contends that the documents submitted with her 2012 appeal,
which Hartford retained and which she asserts support her 2014
appeal, render her 2014 appeal timely. Defendants argue that
the 2014 appeal was untimely and that Fortier’s theories do not
excuse her failure to exhaust her administrative remedies.
1. Hartford’s failure to comply with its guidelines
Fortier contends that Hartford failed to comply with its
own guidelines concerning the termination of a beneficiary’s LTD
claim. She cites the “Denials and Termination” section of
Hartford’s LTD insurance “Product Manual.” See doc. no. 31-1.
7 At oral argument, defendants suggested that the discretionary standard of review could apply to the court’s review of Hartford’s decision to not consider Fortier’s untimely appeal. Defendants offer no support for that assertion.
14 That section provides, in relevant part:
When a policy is governed by ERISA, claimants must be notified of his or her appeal rights when benefits are wholly or partly denied (or terminated) . . . if the claimant submits a claim due to a physical disability but we approve the claim based on a Mental Illness as the primary cause of disability and/or after approving a claim where the primary basis of disability is a physical one we then determined that it is due to a Mental Illness for which a limited benefit duration applies, then the ERISA language should be included in our letter to the claimant advising him or her of their appeal rights for this “partial” claim denial. For either of these types of situations, appeal language should again be utilized once the limited benefit duration has been paid and the claim terminated.
Id. at 28 (emphasis added). Fortier argues that this section
required Hartford to send her a letter after her benefits
ceased, on September 13, 2013, again advising her of her
appellate rights. She contends that Hartford’s failure to do so
renders her 2014 appeal timely.8
Even assuming the Product Manual is properly before the
court, Fortier’s argument is without merit.9 First, it is
8 Fortier does not contend that she suffered any prejudice as a result of Hartford’s purported failure to follow its internal guidelines.
9 Defendants argue that the court should not consider the Product Manual because it is not a part of the administrative record and was not produced in discovery in this litigation. Defendants’ contention appears to have merit. See Liston v. Unum Corp. Officer Severance Plan, 330 F.3d 19, 23 (1st Cir. 2003) (noting that a court’s review under ERISA is generally limited to materials in the administrative record). Because the Product Manual does not support Fortier’s argument that her appeal was timely, however, and because defendants addressed the
15 unclear whether the Product Manual applied to or was in effect
when Hartford made the decision to terminate Fortier’s LTD
benefits. As Fortier concedes, the Product Manual is not a part
of Fortier’s claim file and her counsel obtained it in
connection with a separate litigation in 2009. See Jacoby v.
Hartford Life and Acc. Ins. Co., 254 F.R.D. 477 (S.D.N.Y. 2009).
Thus, it is not clear that the requirement Fortier cites in the
Product Manual applied to her claim.
More importantly, however, even if the Product Manual
applies to Fortier’s claim, she does not explain how Hartford’s
failure to follow the cited procedure renders her appeal timely.
Fortier does not assert that the Product Manual was a part of
the Plan and, thus, it cannot be used to override the Plan’s
plain language. See Karamshahi v. Ne. Utilities Serv. Co., 41
F. Supp. 2d 101, 105 (D. Mass. 1999) (holding that a plan
administrator’s “claims manual does not establish a legally
binding requirement” and does “not have the force of law”);
Wentworth v. Digital Equip. Corp., 933 F. Supp. 123, 127 (D.N.H.
1995), as amended on reconsideration (Jan. 18, 1996) (holding
that a policy set forth in a company’s personnel manual cannot
be used to override the plain language of a benefits plan). As
substance of Fortier’s argument in their briefing, the court assumes without deciding that it is appropriate for the court to consider the document.
16 the court held in its prior order, the Plan required Fortier to
appeal her termination of LTD benefits within 180 days of her
receipt of the July 17, 2013 letter. See doc. no. 24 at 14-15.
The fact that Hartford did not send a second letter with similar
“appeal language” after it terminated Fortier’s benefits, as per
the guidance in the Product Manual, does not relieve Fortier of
her obligations under the Plan.10
In short, Fortier’s argument concerning the Product Manual
does not support her claim that the 2014 appeal was timely.
2. Effect of Fortier’s 2012 Appeal
Fortier notes that she timely appealed Hartford’s initial
termination of her LTD benefits in 2012. She asserts that she
submitted 613 pages of material in support of the 2012 appeal,
and contends that these documents show that she was disabled
because of a cognitive disorder due to encephalopathy, which
10In her reply, Fortier contends that an insurer must be held to statements in its internal manuals, relying on Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113 (1st Cir. 2004). In Glista, the First Circuit considered a plan administrator’s internal documents which interpreted the language of a benefit plan’s preexisting conditions exclusion. The court held the administrator’s internal memoranda and training manuals represented the administrator’s decision to “define terms” which helped to aid in the “interpretation of” the plan’s clauses concerning whether the claimant was under a disability. Id. at 124. In contrast to Glista, the language in the Product Manual cited by Fortier does not bear on the interpretation of any clause relating to Fortier’s disability. As such, the Product Manual is not relevant to Fortier’s claim, and the First Circuit’s holding in Glista does not support her argument.
17 does not fall under the Mental Illness limitation. Fortier
states that Hartford never reviewed the documents she submitted
with the 2012 appeal and that her submission of those documents
in 2012 renders her 2014 appeal timely.
Although framed differently, Fortier raised the issue of
her 2012 appeal in her objection to defendants’ motion to
dismiss. Fortier argued then that the language in the Plan
requiring a beneficiary or her representative to “appeal once”
before filing an action in court is ambiguous. In rejecting
that argument, the court held:
To this end, Fortier suggests that she could reasonably be viewed as already having “appealed once,” as she filed an appeal of a previous termination of her benefits in November of 2011. Such a reading is inconsistent with the language of the LTD certificate, however, which states: “On any wholly or partially denied claim, you or your representative must appeal once to [Hartford] for a full and fair review.” Doc. no. 16-3 at 33 (emphasis added). This language, by its plain terms, requires a beneficiary or her representative to “appeal once” to Hartford on each wholly or partially denied claim.
Doc. no. 24 at 14-15. Thus, the court held that the Plan’s
language unambiguously required Fortier to appeal the September
2013 termination of benefits, even though she had previously
appealed the September 2011 termination of benefits.
Fortier appears to argue now that because Hartford had
possessed the 613 pages of documents since 2012, the court
should deem her 2014 appeal to be timely. In other words, she
18 appears to contend that because she appealed the classification
of her disability as subject to the “Mental Illness” limitation
back in 2012, and because Hartford neither reviewed the
documents she submitted nor ruled on the substantive question
raised in that appeal, her 2014 appeal should be considered
timely.
The court notes first that Fortier does not contend that
the 2011 termination and the 2013 termination of benefits
represented a single termination of benefits, and she has
consistently described them in her filings as separate adverse
benefit determinations. See, e.g., doc. no. 35 at 4; (noting
that Fortier appealed Hartford’s 2011 termination of benefits);
id. at 6 (discussing “Hartford’s July 17, 2013 adverse benefit
determination”). As Fortier notes, she was successful in
appealing from the 2011 termination of her benefits, albeit for
procedural reasons unrelated to the substantive basis of her
appeal. And the record shows that in terminating Fortier’s
benefits in 2013, Hartford considered additional medical
evidence post-dating Fortier’s 2012 appeal. See Admin. Rec. at
284 (discussing how Hartford considered medical records from Dr.
Belliveau from May 3, 2011 to November 5, 2012, as well as Dr.
Belliveau’s August 6, 2012 Attending Physician Statement).
Fortier argues instead that because the basis of the 2011
termination was the same as the basis for the 2013 termination,
19 her appeal of the former must render her appeal of the latter
timely. She offers no support for that theory, however. As the
court previously held, the Plan required Fortier to timely
appeal her September 2013 termination of benefits. She did not
do so. The fact that documents she provided in connection with
her 2012 appeal could also have supported her 2014 appeal does
not render the latter appeal timely.11
Accordingly, Fortier’s 2014 appeal of the termination of
her LTD benefits was untimely. The court therefore turns to
Fortier’s arguments that her untimely appeal should be excused.
C. Equitable Considerations
Fortier argues that even if her 2014 appeal was untimely,
the court should hold that she exhausted her administrative
remedies because of the substantial compliance doctrine and the
notice-prejudice rule. Defendants contend that neither applies
in the circumstances of this case.
11In support of her argument, Fortier cites Foley v. Int’l Bhd. of Elec. Workers Local Union 98 Pension Fund, 91 F. Supp. 2d 797 (E.D. Pa. 2000), which she contends is “remarkably parallel” to this case. Doc. no. 35 at 17. Foley presented a “convoluted” set of facts, in which a plan administrator sent three separate letters concerning a single denial of benefits. The court held that the last letter, which advised the plaintiff of his appeal rights and which plaintiff timely appealed, constituted a denial under the relevant plan, and thus deemed the plaintiff’s appeal timely based on the date of that letter. Fortier does not explain, and the court does not see, how the holding in Foley supports her argument here.
20 1. Substantial compliance doctrine
Fortier cites the “substantial compliance” doctrine, which
excuses an insurer’s failure to strictly comply with ERISA’s
notice requirements so long as “the beneficiary [was] supplied
with a statement of reasons that, under the circumstances of the
case, permitted a sufficiently clear understanding of the
administrator’s position to permit effective review.” Niebauer
v. Crane & Co., 783 F.3d 914, 927 (1st Cir. 2015); Terry, 145
F.3d at 35. She asserts that Hartford has availed itself of the
substantial compliance doctrine in several cases, and argues
that it is “unreasonable for Hartford to strictly apply
deadlines against participants while excusing its own missed
deadlines.” Doc. no. 35 at 24.
Fortier offers no support for her theory that the
substantial compliance doctrine, which applies to insurers and
plan administrators, should be extended to excuse a
beneficiary’s failure to timely appeal an adverse benefits
determination. Indeed, the only case Fortier cites that
considered the issue rejected the argument that the substantial
compliance doctrine should apply to claimants. See Edwards v.
Briggs & Stratton Ret. Plan, 639 F.3d 355, 362 (7th Cir. 2011)
(“Finally, it seems consistent neither with the policies
underlying the requirement of exhaustion of administrative
remedies in ERISA cases nor with judicial economy to import into
21 the exhaustion requirement the substantial compliance
doctrine.”). In short, the court finds unpersuasive Fortier’s
substantial compliance argument.
2. Notice-prejudice rule
Fortier argues that Hartford cannot demonstrate that it was
prejudiced by her late appeal and, therefore, her failure to
exhaust her administrative remedies should be excused. In
support of this argument, Fortier relies on the notice-prejudice
rule, a doctrine recognized in some states that requires an
insurer to demonstrate prejudice before it can deny insurance
coverage solely on the basis that the insured’s claim was
untimely.
As was discussed in the court’s order on defendants’ motion
to dismiss, in states that recognize the notice-prejudice rule,
the rule applies to save untimely initial claims for benefits
under an ERISA plan. See UNUM Life Ins. Co. of Am. v. Ward, 526
U.S. 358, 367–73 (1999). New Hampshire recognizes at least a
limited form of the notice-prejudice rule, see Bianco Prof’l
Ass’n v. Home Ins. Co., 144 N.H. 288, 295 (1999), but there are
no New Hampshire cases applying the notice-prejudice rule in the
ERISA context or to group disability insurance contracts. While
neither the First Circuit nor district courts in the circuit
have addressed the issue, the majority of courts have held that
22 the notice-prejudice rule does not apply to save untimely ERISA
appeals.12 See doc. no. 24 at 16.
Fortier makes several arguments in support of the
application of the notice-prejudice rule to untimely ERISA
appeals in this case. She argues: 1) unlike many other states
in which courts have held that the notice-prejudice rule does
not apply to ERISA appeals, New Hampshire’s notice-prejudice
rule is a product of common law, not a creature of statute; 2)
no New Hampshire cases expressly limit the notice-prejudice rule
to liability policies; and 3) to not apply the rule here would
perpetuate an “artificial distinction” between the initial
denial of claims and the denial of appeals. The court addresses
each argument in turn.
a. Common law
Fortier first argues that New Hampshire’s common law
notice-prejudice rule is different from the rules derived from
state statutes that several courts have held do not apply to
untimely ERISA appeals. See Edwards, 639 F.3d 355 (discussing
12As the court noted in its prior order, contrary authority could be found in an opinion out of the Eastern District of Pennsylvania, in which the court suggests in dictum that an untimely ERISA appeal would have been subject to the notice- prejudice rule, and a subsequent decision out of the Western District of Pennsylvania that parenthetically quotes that dictum. See doc. no. 24 at 16-17 (citing cases).
23 notice-prejudice rule derived from Wisconsin statute);
Tetreault, 2011 WL 7099961 (same with Massachusetts statute).
To the extent Fortier asserts that New Hampshire’s rule
originates from case law other than a statute, she is correct.
But she fails to explain how that distinction is material. That
is, she does not explain why New Hampshire’s common law rule
would apply to untimely ERISA appeals. Indeed, contrary to
Fortier’s position, there are several cases in various
jurisdictions which hold that a state’s common-law notice-
prejudice rule does not apply to untimely ERISA appeals. See
Chang v. Liberty Life Assur. Co. of Boston, 247 F. App’x 875,
878 (9th Cir. 2007) (noting that to extend California’s common-
law “notice-prejudice rule to ERISA appeals” would be “a
significant and unprecedented extension of the rule”); Stacy v.
Appalachian Reg’l Healthcare, Inc., 259 F. Supp. 3d 644, 654
(E.D. Ky. 2017) (refusing to extend Kentucky’s common-law
notice-prejudice rule to untimely ERISA appeals because such “an
application would extend the notice-prejudice rule beyond its
accepted bounds and eviscerate ERISA's exhaustion requirement
entirely”); Dietz-Clark v. HDR, Inc., No. 3:15-CV-00035 JWS,
2015 WL 6039587, at *2-3 (D. Alaska Oct. 15, 2015) (holding that
Alaska’s common-law notice-prejudice rule does not apply to
ERISA appeals), aff’d, 696 F. App’x 844 (9th Cir. 2017).
24 Fortier’s reliance upon the common-law origin of New Hampshire’s
notice-prejudice rule falls short of the mark.
b. Limitation on notice-prejudice rule
Fortier next argues that no New Hampshire cases expressly
limit the notice-prejudice rule to liability policies. As
Fortier notes, New Hampshire’s notice-prejudice rule has been
applied only to occurrence-based coverage in the liability
insurance context. See, e.g., Sleeper Vill., LLC v. NGM Ins.
Co., No. 09-cv-44-PB, 2010 WL 3860373, at *3 (D.N.H. Oct. 1,
2010) (describing New Hampshire’s notice-prejudice rule as
providing “that a claim for coverage under an occurrence-based
liability insurance policy will not be defeated by late notice
of a claim unless the insured can establish that it was
prejudiced by the late notice”). The rationale for applying the
notice-prejudice rule in the context of occurrence-based
coverage is clear: the insurer contracts to pay for all
occurrences within a certain time-period. If the insured makes
a late claim on such an occurrence, it makes sense to impose a
requirement on the insurer to show prejudice before denying such
a claim—where the parties contracted for coverage on just such a
claim. These considerations do not exist for claims-based
policies, where the insured contracts for claims brought within
a certain time-period.
25 Fortier asserts nevertheless that New Hampshire’s notice-
prejudice rule is not limited to the occurrence-based, liability
insurance context and can be extended to ERISA exhaustion. She
argues that although New Hampshire’s notice-prejudice rule has
been applied only in the occurrence-based, liability insurance
context, no New Hampshire case has expressly limited its
application to that context. That argument, by itself, is not
persuasive.
Fortier also attempts to analogize ERISA appeals to
uninsured motorist coverage, an area where New Hampshire courts
have applied the notice-prejudice rule. Other than stating that
both involve the evaluation of medical records, however, Fortier
offers no argument in favor of her uninsured motorist coverage
analogy. Without more, the court does not see how the
application of the notice-prejudice rule to uninsured motorist
coverage supports extending the rule to untimely ERISA appeals.
See, e.g., Knight v. Provident Life & Acc. Ins. Co., No. 3:12-
CV-01226, 2014 WL 460018, at *2 (M.D. Tenn. Feb. 5, 2014)
(suggesting that the Tennessee notice-prejudice rule, which
applies to uninsured motorist policies, should not be extended
to apply to untimely ERISA appeals). The court therefore finds
Fortier’s second argument unpersuasive.
26 c. Initial claims versus appeals
Fortier’s final argument is that the rationale behind the
notice-prejudice rule supports applying it to untimely ERISA
appeals, and that not applying it here would perpetuate an
“artificial distinction” between the initial denial of claims
and the denial of appeals. Doc. no. 37 at 2.
The difference between initial claims and appeals is more
than a mere arbitrary designation. ERISA mandates claims
procedures and processes to effectuate certain policies:
Congress’ apparent intent in mandating these internal claims procedures was to minimize the number of frivolous ERISA lawsuits; promote the consistent treatment of benefit claims; provide a nonadversarial dispute resolution process; and decrease the cost and time of claims settlement. It would be anomalous if the same reasons which led Congress to require plans to provide remedies for ERISA claimants did not lead courts to see that those remedies are regularly utilized.
Terry, 145 F.3d at 40 (internal citation omitted). In other
words, ERISA’s exhaustion requirement serves different purposes
than the denial of claims process. See Edwards, 639 F.3d at
360-61 (noting how ERISA’s exhaustion requirements “encourages
informal, non-judicial resolution of disputes about employee
benefits” and “helps to prepare the ground for litigation in
case administrative dispute resolution proves unavailing”);
Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594
(2d Cir. 1993) (same); see also Schorsch v. Reliance Standard
27 Life Ins. Co., 693 F.3d 734, 739 (7th Cir. 2012) (discussing how
ERISA’s exhaustion requirement works “to promote the consistent
treatment of claims for benefits; to provide a nonadversarial
method of claims settlement; and to minimize the cost of claims
settlement for all concerned” (internal quotation marks and
citation omitted)).
Every court that has substantively addressed the issue has
held that the notice-prejudice rule does not apply to the denial
of an untimely ERISA appeal. Fortier has not shown that New
Hampshire law supports a different result. In light of the
justifications for ERISA’s administrative exhaustion
requirement, the court sees no basis on which to extend the
notice-prejudice rule beyond its current limits in the ERISA
context.
3. Futility
In her reply, Fortier raises for the first time the
argument that the court should excuse her failure to timely
appeal in 2014 because her appeal would have been futile.
Although a party generally cannot raise or develop arguments for
the first time in a reply, Andersen v. Dartmouth Hitchcock Med.
Ctr., No. 13-cv-477-JD, 2015 WL 847447, at *5 (D.N.H. Feb. 26,
2015), the court briefly addresses Fortier’s argument.
28 Futility is an exception to ERISA’s exhaustion requirement.
An employee is not required to exhaust her administrative
remedies in those instances where it would be futile for her to
do so. Madera v. Marsh USA, Inc., 426 F.3d 56, 62 (1st Cir.
2005) (internal citation omitted). A claimant “bears a heavy
burden of establishing futility” and must make “a clear and
positive showing of virtual certainty that resort to
administrative remedies would result in denial of the claim.”
Corsini v. United Healthcare Corp., 965 F. Supp. 265, 269
(D.R.I. 1997) (internal quotation marks and citation omitted).
Fortier’s argument appears to be that her appeal would have
been futile because Hartford did not look at the medical
documents she submitted in connection with her 2012 appeal.
But, in response to the 2012 appeal, Hartford reinstated
Fortier’s benefits based on its review of her record and its own
determination that it had not properly calculated the beginning
point for the benefits period. Fortier’s attempt to draw a
negative inference from her successful 2012 appeal is misplaced.
The record does not show that Hartford would have denied a
timely appeal in 2014.
As a result, Fortier has not met her burden of showing the
doctrine of futility applies to excuse her from exhausting her
administrative remedies.
29 D. Summary
The court is not unsympathetic to Fortier’s situation. The
administrative record, however, shows that she did not timely
appeal Hartford’s decision to terminate her LTD benefits and
thus failed to exhaust her administrative remedies. Neither the
substantial compliance doctrine nor the notice-prejudice rule
operates to excuse that failure. For these reasons, defendants
are entitled to judgment on Count I.
II. Termination of Waiver of Premium Benefits (Count II)
In her amended complaint, Fortier alleges in support of
Count II that Hartford’s “decision to terminate life insurance
coverage was not supported by substantial evidence [and] was
wrongful and not in compliance with applicable laws.” Doc. no.
13 at ¶ 13. Other than one stray sentence in her motion for
judgment on the administrative record, however, Fortier makes no
mention of her claim for waiver of premium benefits. She also
does not respond in her reply to Hartford’s assertion that she
appears to have abandoned her claim in Count II. At oral
argument, Fortier asserted that she was not abandoning her claim
in Count II, though she could not articulate an argument in
support of that claim.
The facts underlying Hartford’s decision to terminate
Fortier’s waiver of premium benefits under the life insurance
30 policy are not in dispute. Despite Hartford’s several requests,
Fortier failed to provide information from her doctors to allow
Hartford to evaluate her disability. Although Fortier timely
appealed the termination of her waiver of premium benefits, she
provided minimal medical records, and did not provide any
additional information, despite stating that she would do so.
Fortier does not explain how these facts could give rise to an
ERISA claim.13
Accordingly, defendants are entitled to judgment on Count
II.
III. Attorney’s Fees and Costs (Count IV)
In Count IV, Fortier seeks attorney’s fees and costs under
29 U.S.C. § 1132(g). That statute provides: “In any action
under this subchapter (other than an action described in
paragraph (2)) by a participant, beneficiary, or fiduciary, the
court in its discretion may allow a reasonable attorney’s fee
and costs of action to either party.” Because defendants are
entitled to judgment on both of Fortier’s ERISA claims, Fortier
is not entitled to fees and costs.
Because Fortier makes no argument as to Count II, the 13
court need not decide whether deferential or de novo review would be appropriate to evaluate Hartford’s decision to terminate her waiver of premium benefits in Count II.
31 CONCLUSION
For the foregoing reasons, plaintiff’s motion for judgment
on the administrative record (doc. no. 34) is denied.
Defendants’ motion for judgment on the administrative record
(doc. no. 36) is granted. The clerk of court shall enter
judgment accordingly and close the case.
SO ORDERED.
__________________________ Landya B. McCafferty United States District Judge
July 23, 2018
cc: Counsel of Record