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Schlachter v. Life Insurance Co. of North America

January 11, 2007

DENNIS SCHLACHTER, PLAINTIFF,
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Leon Jordan United States District Judge

MEMORANDUM OPINION

This civil action is brought pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., for the recovery of disability insurance benefits under a special accident insurance policy. Now before the court are the motion for judgment filed by defendant Life Insurance Company of North America ("LINA") [doc. 18] and the "motion to reverse" filed by plaintiff. [Doc. 20]. For the reasons stated herein, plaintiff's motion will be denied, defendant's motion will be granted, and judgment will be entered in favor of defendant. Because the court concludes that oral arguments are unnecessary, plaintiff's motion for oral arguments [doc. 29] will also be denied.

I. Background

BWXT Y-12, LLC sponsors a special accident insurance policy which provides a "total and permanent disability benefit" for employees who meet the requirements for eligibility. BWXT Y-12 serves as the plan administrator. [A.R. 35].*fn1 LINA is the claims administrator. [A.R. 45]. Plaintiff was formerly employed by BWXT Y-12 as a chemist and was covered by the accident policy.

The special accident policy provides that it "IS AN ACCIDENT POLICY WHICH DOES NOT PAY BENEFITS FOR LOSS FROM SICKNESS." [A.R. 1] (emphasis in original). Benefits under the policy are paid only for "loss from bodily injuries caused by an accident which happens while a Covered Person is covered by this policy . . . which, directly and from no other causes, result in a covered loss." [A.R. 1] (emphasis added). Losses must not be caused by "sickness, disease, or bodily infirmity[.]" [A.R. 1].

Similarly, the policy's disability benefit requires, inter alia, that the claimant be "injured by an accident covered by this policy[.]" [A.R. 3]. The summary plan description makes clear that the claimant must "become totally and permanently disabled as a result of the accident[.]" [A.R. 30] (emphasis added).

In August 2003, plaintiff submitted a claim for disability benefits based on "incapacitating chronic back and hip pain due to injury removing horse from swimming pool." [A.R. 711].*fn2 On October 6, 2003, LINA issued a letter denying benefits. [A.R. 646].

Following a review of the available medical record and the pertinent policy provisions, LINA specified two reasons for the denial: (1) plaintiff did not become totally disabled within 365 days of the alleged accident as required by the policy; and (2) his pain and disability "are not the direct result of an accident, independent of all other causes." [A.R. 647-48].

By letter dated December 2, 2003, plaintiff through counsel requested reconsideration of the denial of benefits. [A.R. 595, 617, 624]. LINA again denied plaintiff's claim, citing the same reasons for denial. [A.R. 367-72].

Plaintiff then filed a second administrative appeal in February 2005. [A.R. 89]. By letter dated May 25, 2005, LINA again notified plaintiff that it would uphold its original decision. [A.R. 54]. The letter included a summary of the pertinent medical records and policy terms, along with citation to an Independent Medical Records Review conducted by Dr. Robert Smith. LINA again concluded that plaintiff was not permanently totally disabled within 365 days of the horse incident, and that the medical record does not support the conclusion "that Mr. Schlachter's impairments are directly and from no other causes" produced by the horse incident. [A.R. 59] (emphasis in original). The present appeal followed.

II. Analysis

The parties dispute whether plaintiff became totally and permanently disabled, as defined by the accident policy, within 365 days of the horse incident. Based on conflicting interpretations of the amount of discretionary authority granted to LINA under the instant plan, the parties also disagree as to the standard of review to be applied by this reviewing court. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) (Review is de novo absent a grant of "discretionary authority to determine eligibility for benefits or to construe the terms of the plan."); Wulf v. Quantum Chem. Corp., 26 F.3d 1368, 1373 (6th Cir. 1994) (The highly deferential arbitrary and capricious standard of review should only be employed when there has been "a clear grant of discretion") (emphasis in original).

The court need not reach these issues. Even under a de novo review, the administrative record indicates that plaintiff's alleged disability was not, as required by the special accident policy, "caused by an accident which happens while a Covered Person is covered by this policy . . . which, directly and from no other causes [including bodily infirmity], result[s] in a covered loss." LINA's decision to deny accident disability benefits on that basis must accordingly be affirmed.

Plaintiff applied for disability benefits under the special accident policy in August 2003. [A.R. 711]. By letter dated September 8, 2003, LINA wrote to plaintiff requesting "[a] complete description of the accident which you feel caused your disability." [A.R. 709]. In response, plaintiff submitted a September 17, 2003 letter detailing "the accident that caused my disability." [A.R. 683]. Plaintiff described an October 23, 2001 incident in which he fell while extracting one of his horses from his swimming pool. [A.R. 683-84]. In the September 2003 letter, plaintiff specified that, following the horse incident, ...


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