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Buchanan v. Sun Life and Health Insurance Co.

United States District Court, E.D. Tennessee

March 1, 2017

KIMBERLY D. BUCHANAN, Plaintiff,
v.
SUN LIFE AND HEALTH INSURANCE COMPANY, Defendant.

          MEMORANDUM OPINION

          THOMAS A. VARLAN, CHIEF UNITED STATES DISTRICT JUDGE

         This civil action is before the Court on the Report and Recommendation (“R&R”) issued by United States Magistrate Judge C. Clifford Shirley, Jr. [Doc. 31]. In the R&R, Judge Shirley recommends that defendant's Motion for Summary Judgment on the ERISA Record [Doc. 17] be granted, and plaintiff's Motion for Judgment on Administrative Record [Doc. 19] be denied. Plaintiff filed an objection to the R&R [Doc. 32], and defendant responded to the objection [Doc. 33]. For the reasons stated herein, the Court will overrule plaintiff's objection and accept the R&R in whole.

         I. Background[1]

         Plaintiff brought this action against defendant seeking long-term disability benefits under an Employee Retirement Income Security Act (“ERISA”) plan that is insured by defendant [Doc. 31 p. 1]. She asserts that she was “totally disabled” under the terms of the policy and thus was entitled to benefits [Id.]. Defendant denied plaintiff's claim, determining that she did not satisfy the definition of “totally disabled” as provided in the plan [Id. at 8-9].

         The policy defines “Total Disability and Totally Disabled” as follows:

Total Disability must be caused by Sickness or Injury and must commence while you are insured under the policy. You will be considered Totally Disabled if:
1. During the Elimination Period and the following 24 months, you are unable to perform all the material and substantial duties of your Regular Occupation.
2. After the Elimination Period and the following 24 months, you are unable to perform the duties of Any Occupation [Id. at 3].

         Plaintiff completed an application for long-term disability benefits on August 14, 2011 [Id. at 4]. She provided that she had not worked since May 2010 [Id.]. In the job description section, plaintiff stated: “Being the owner[, ] I do everything in the store. Over all employees, billing, sales and the operation of store” [Id. at 5].

         To determine whether plaintiff satisfied the policy requirements, defendant consulted with Jeffrey Bannon, a certified public accountant [Id. at 7]. In a report dated September 10, 2013, Bannon provided that plaintiff had submitted copies of cancelled checks from June 2009 through June 2013, and that these checks “indicate that [plaintiff] has been continually involved in the operation of the business” [Id. at 8]. He concluded this because “the majority of the 110 to 120 monthly checks were signed by [plaintiff], ” and he further provided that, “[a]t a minimum, this reflects an ongoing financial/managerial participating in the business” [Id.].

         On September 24, 2013, defendant sent plaintiff a letter informing her that she failed to prove she was totally disabled because the numerous checks she signed “reflects an ongoing financial/managerial participation in the business” [Doc. 9-9 p. 98]. Defendant further explained that the signing of the checks “suggest[] that [plaintiff] continued to perform at least one of the material duties of [her] Regular or Any Occupation on a Full-time or Part-time Basis” [Doc. 9-10 p. 6]. Defendant then notified plaintiff of her right to appeal that decision, providing:

If you disagree with any part of our decision, you may request in writing a review within 180 days after receiving this notice.
You may submit written comments, documents, records, or other information relating to your claim for benefits, and may request free of charge copies of all documents, records, and other information relevant to your claim for benefits [Id.].

         On March 3, 2014, plaintiff appealed defendant's denial of benefits [Doc. 31 p. 10]. In a decision letter dated October 1, 2014, defendant responded to the appeal [Id.]. The letter references a flash drive plaintiff submitted during the appeal, which contained video statements from plaintiff and her husband, as well as audio statements from other employees [Id.]. In addition, plaintiff submitted her own description of her duties at the store [Doc. 9-8 p. 51]. She stated that she was responsible for hiring and training staff, shipping and receiving, merchandising, inventory and vendor relations, dress repairs, returns, and certain accounting duties [Doc. 9-10 p. 54]. ...


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