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Bunch v. Liberty Life Assurance Company of Boston

January 19, 2007


The opinion of the court was delivered by: Thomas A. Varlan United States District Judge



This civil action is before the Court on two motions: plaintiff's Motion for Judgment on the Administrative Record [Doc. 20] and defendants' second Motion for Judgment as a Matter of Law [Doc. 22]. The Court previously ordered [Doc. 7] that plaintiff's claim under the long-term disability insurance policy issued by defendant Liberty Life Assurance Company ("Liberty Life") would be held in abeyance until plaintiff's claim under the short-term disability plan issued by defendant Rexnord Corporation ("Rexnord") was resolved by the Court. Accordingly, review of defendants' short-term disability determination is the only matter before the Court. The parties have fully briefed the issues [Docs. 23, 24, 25], and this matter is ripe for review. Plaintiff's claim for benefits is under an employee benefit plan established pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"). As such, the Court exercises federal question jurisdiction over this matter. See Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987).

Plaintiff argues in her motion that defendants' decision to terminate her short-term disability benefits was arbitrary and capricious.*fn1 Defendants argue that plaintiff's short-term disability benefits were terminated because she failed to submit any evidence showing that she had a "continued disability," as is required to receive benefits under the short-term disability plan. [Doc. 12 at 7-8.] Defendants also state that plaintiff and Rexnord settled a workers' compensation claim filed by plaintiff and argue that plaintiff's claim for short-term disability benefits is barred by the workers' compensation exclusion in that plan. [Doc. 23 at 1-3.] For the reasons set forth herein, the Court will deny plaintiff's motion for judgment on the administrative record and grant defendants' motion for judgment as a matter of law.

I. Relevant Facts

Defendant Rexnord Corporation ("Rexnord") employed plaintiff, Vina Bunch, beginning on April 10, 1975 as a bearing assembler. [AR at 169.] As an employee of defendant Rexnord, plaintiff was covered under the BTR Short Term Disability Benefits Plan (the "Plan"), which was administered by defendant Liberty Life Assurance Company of Boston ("Liberty Life"). [Id.] Pursuant to the Plan, plaintiff received short term disability benefits from September 17, 2001 until January 1, 2002 for vertigo caused by a viral inner ear infection. [AR at 82.] Plaintiff returned to work on January 2, 2002 and her short-term disability benefits were terminated on the basis of the Plan's requirement that an individual disabled to receive benefits. [AR at 6, 82.] The Plan defines disability as meaning that the covered individual is "unable to perform all of the material and substantial duties of [his or her] occupation on an Active Employment basis because of an Injury or Sickness." [AR at 4.]

Plaintiff continued working until January 23, 2002, at which point she visited her treating physician, Dr. Howard B. McNeeley, who advised her to stay home from work due to high blood pressure. [AR at 117]. In the note in which Dr. McNeeley made this recommendation, he wrote that plaintiff "is convinced that something she is breathing at work causes her blood pressure to go up," but no definitive reason for or details concerning this diagnosis are given. [AR at 117.] On February 6, 2002, Dr. McNeeley sent defendant Rexnord a letter stating that plaintiff "will need a family medical leave of absence for three months beginning February 4, 2002 until May 4, 2002." [AR at 77.] The letter also gives no reason or detail as to this diagnosis.

On January 31, 2002, plaintiff's attorney faxed defendant Liberty Life a letter stating that "Ms. Bunch's claim should not have been denied because of the additional medical information you have received from her treating physician, Dr. Howard McNeeley, as well as the additional medical information which we are now providing you." [AR at 86.] The records submitted along with this letter detail various conditions suffered by plaintiff from 1999 to 2000, including heart palpitations and asthma, but do not appear to relate to the ear infection that led to her short term disability award for the period between September 2001 and January 2002. [AR at 89-115.] While plaintiff's attorney suggested that these ailments were responsible for Dr. McNeeley's decision to advise plaintiff to take an absence from work, [AR at 87], there is no indication from Dr. McNeeley's records or the records attached to the January 31, 2002 letter that there was any kind of connection between plaintiff's condition in 1999 and 2000 and her condition in January 2002.

On February 4, 2002 and February 5, 2002, defendant Liberty Life sent plaintiff two letters informing her that her claim for continued disability benefits was being denied and detailing the reasons for that denial. [AR at 80, 82.] Specifically, plaintiff's claim was denied because she had not submitted proof indicating that she was severely limited in performing her job duties due to the hypertension she was allegedly experiencing, [AR at 82], and because it appeared, based upon Dr. McNeeley's statement in his January 23, 2002 notes, that plaintiff believed something at work was causing her blood pressure to go up and that plaintiff was therefore attempting to recover disability benefits related to her job environment, which is excluded under the Plan. [AR at 83.] The February 5, 2002 letter goes on to quote the language from the Plan that stipulates that "[a] Weekly Benefit will not be payable if you become Disabled due to: (a) an Injury that arises out of or in the course of employment." [AR at 7.]

On February 8, 2002, plaintiff's attorney sent defendant Liberty Life a letter in response to this denial and included with it additional medical reports concerning plaintiff. [AR at 50-72]. This letter also stated that another doctor "agrees that Ms. Bunch needs to be restricted from extremes of temperature or humidity and free from dust irritants, fumes, and smoke which are present in her work environment" but that "he does not feel that her problems are work related." [AR at 50.] The Court notes that the attached medical reports are dated October 25, 1999 [AR at 69], October 11, 2000 [AR at 59] and December 4, 2000 [AR at 57.] In response, defendant Liberty Life sent plaintiff's attorney a letter on March 27, 2002, stating that "[t]he basis for our denial was outlined in our February 5, 2002 letter," [AR at 42], and emphasizing that plaintiff's benefits were terminated because of "the absence of medical documentation to support total disability." [AR at 43.] This letter also noted that the medical records submitted with the February 8, 2002 letter were approximately two years old and therefore were not the kind of "recent medical documentation" needed to support plaintiff's claim that she was currently disabled. [Id.]

Next, on April 9, 2002, plaintiff's attorney faxed a letter to defendant Liberty Life, to which was attached a medical report from Dr. C.M. Salekin, a neurologist, which plaintiff's attorney claims was undertaken on March 28, 2002. [AR at 23.] However, the Court notes that, save for the date, this report [AR at 24-28] is identical to one attached to plaintiff's January 31, 2002 letter, but dated October 25, 2001 [AR at 111-115.]*fn2 In response, defendant Liberty Life sent plaintiff's attorney a letter on April 16, 2002 again asserting that plaintiff's claim was denied on the basis of "medical records contained in the file." [AR at 21.]

Plaintiff filed suit against defendants on July 17, 2002 in the Chancery Court for Campbell County, Tennessee alleging that defendants violated ERISA in terminating her disability benefits. Defendants removed the case to this Court on August 19, 2002 on the basis of federal question jurisdiction. [Doc. 1.]

During this time, plaintiff was also pursuing a workers' compensation claim against defendant Rexnord in the Chancery Court for Campbell County, Tennessee in which plaintiff alleged she was exposed to chemicals during the course of her employment that resulted in her suffering occupational asthma and cardiac arrhythmia.*fn3 [Doc. 19, Ex. 2 at ¶¶ 3-4.] That lawsuit resulted in settlement of plaintiff's claim on June 29, 2005 for the lump sum of $50,000. [Id. at ¶ 6.] The Court notes that in approving the settlement, the Campbell County Chancery Court nevertheless commented on the "doubtful and disputed nature of Plaintiff's claims." [Id.]

On March 22, 2004, this case was remanded to defendants by order of the Court [Doc. 16] on the basis of newly discovered evidence, including a notice of an award to plaintiff from the Social Security Administration dated June 6, 2004, that the Court determined merited additional consideration by defendants. Defendants claim that following this remand, "no additional documents or items of evidence were submitted to the defendants for reconsideration of the plaintiff's claim for short term disability benefits." [Doc. 19 at 1.] Accordingly, defendants again denied plaintiff's claim on June 2, 2005, both on the basis of the administrative record and "based upon ...

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