The opinion of the court was delivered by: Chief Judge Curtis L. Collier
Plaintiff Carolyn Smith ("Plaintiff") and defendants Group Short Term Disability and Long Term Disability Plan for Employees of Wal-mart Stores, Inc. and Hartford Life and Accident Insurance Company ("Defendants") both move this Court to render a judgment on the administrative record in their favor (Court File Nos. 23, 27). Plaintiff's claims are governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 ("ERISA"). This case involves two disability determinations: (1) whether Plaintiff was properly denied continued benefits, for a period of one year after the onset of her disability, based upon an "own occupation" analysis; and, (2) whether Plaintiff was properly denied benefits, for a period beyond one year, based upon an "any occupation" analysis.
After considering the administrative record, the arguments of counsel, and the applicable law, on the first issue the Court will GRANT in part Plaintiff's motion for judgment on the administrative record (Court File No. 23); and, will REVERSE the denial of the benefits spanning a period of one year after the onset of her disability.
On the second issue, the Court will DENY in part Plaintiff's motion for disability benefits extending beyond the first year after the onset of the disability (Court File No. 23), and will REMAND the issue for review on appeal (Court File No. 1).
The Court will DENY Defendant's motion for judgment on the record (Court File No. 27).
Plaintiff filed a long-term disability claim with Defendants on January 22, 2006 based upon lower back problems (Administrative Record ("AR"), pp. 310-316). Under the policy for Wal-Mart Stores, Inc. by the Hartford Life and Accident Insurance Company, a policy-holder is eligible for one year of benefits if disabled from her own occupation (AR, pp. 64-65). One's "own occupation" includes "similar job positions with the Employer, which may be offered [to the policy-holder], with a rate of pay 50%*fn1 or greater of your Indexed Pre-disability Earnings" (AR, p. 65). After the one-year time period, a policy-holder is eligible for disability if he is "prevented from performing essential duties of any occupation for which [he] is qualified by education, training, or experience" (id.) (emphasis added).
Defendant Hartford granted Plaintiff disability benefits, beginning January 29, 2006 (AR, ¶. 296-99). Those benefits were terminated on November 1, 2006 (AR, p. 216). At that time, Dr. Paul Broadstone, Plaintiff's attending physician, represented Plaintiff was capable of "full-time light work" as defined by the United States Department of Labor*fn2 (AR, ¶. 217, 252). Defendant Hartford determined Plaintiff's "own occupation" as an assistant manager was contained within the "full-time light work" classification (AR, p. 218). As a result, Defendant Hartford terminated Plaintiff's disability benefits under the "own occupation" standard (AR, ¶. 217-18).
Plaintiff, through counsel, appealed the denial of her disability claim on March 26, 2007 (AR, ¶. 192-96). Defendant Hartford rejected her appeal and affirmed the denial on April 25, 2007 (AR, ¶. 167-68).
The Court's review is limited to the record as it was before the employee-benefit plan's administrator. Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 616 (6th Cir. 1998); Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996). Where the language of a plan grants the plan's administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan, as it does here (AR, ¶. 112, 145), "the highly deferential arbitrary and capricious standard of review is appropriate." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Glenn v. Metro. Life. Ins. Co., 461 F.3d 660, 666 (6th Cir. 2006). This standard is the least demanding form of judicial review. In fact, the Court must defer to the administrator's decision as long as it was "rational in light of the plan's provisions," Osborne v. Hartford Life & Acc. Ins. Co., 465 F.3d 296, 302 (6th Cir. 2006), and as long as there is "a reasoned explanation, based on the evidence" to support the outcome, Abbott v. Pipefitters Local Union No. 522, 94 F.3d 236, 240 (6th Cir. 1996) (citation omitted). At the same time, "[w]hile the arbitrary and capricious standard is deferential, it is not . . . without some teeth." Evans v. UnumProvident Corp., 434 F.3d 866, 876 (6th Cir. 2006) ("federal courts do not sit in review of the administrator's decisions only for the purpose of rubber stamping those decisions"). The Court's obligation under this standard "includes some review of the quality and quantity of the medical evidence and the opinions on both sides of the issues." Id.
In its review, a court must also consider the inherent conflict of interest that exists when a defendant both funds the plan and decides whether to award benefits. Killian v. Healthsource Provident Adm'rs, Inc., 152 F.3d 514, 521 (6th Cir. 1998). A conflict of interest does not displace the arbitrary and capricious standard of review; rather, it is a factor to consider in a court's evaluation. Kalish v. Liberty Mut./Liberty Life Assurance Co. of Boston, 419 F.3d 501, 506 (6th Cir. 2005). Mere allegations of a conflict are not sufficient; there must be "significant evidence" the apparent conflict affected the administrator's decision to deny benefits. Peruzzi v. Summa Med. Plan, 137 F.3d 431, 433 (6th Cir. 1998); Wages v. Sandler O'Neill & Partners, L.P., 37 F. App'x 108, 112 (6th Cir. 2002). A court's ultimate determination is whether the conflict improperly influenced the insurer's actions towards the insured. Killian, 152 F.3d at 521.
In its review, a court cannot focus on a single consideration or piece of evidence in the record, but must consider the final determination of the plan administrator based upon the entire record. See Evans, 434 F.3d at 880."[T]he ultimate issue in an ERISA denial of benefits case is not whether discrete acts by the plan administrator are arbitrary and capricious but whether its ultimate decision denying benefits was ...