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Applegate v. Liberty Life Assurance Company of Boston

United States District Court, M.D. Florida, Fort Myers Division

February 22, 2018

ROBERT APPLEGATE, Plaintiff,
v.
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON and PARKER HANNIFIN CORPORATION, Defendants.

          ORDER

          MAC R. MCCOY, UNITED STATES MAGISTRATE JUDGE

         This action was brought under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. Pending before the Court are Plaintiff's and Defendant Liberty Life Assurance Company of Boston's (“Liberty Life”) Motion to Determine the Appropriate Standard of Review (Docs. 23-24) filed on July 14, 2017.[1] Plaintiff Robert Applegate requests that the Court find that a de novo standard of review applies in this action to review the denial of his long-term disability (“LTD”) benefits. (Doc. 24 at 1). Alternatively, Liberty Life moves the Court to establish “arbitrary and capricious” as the appropriate standard of review. (Doc. 23 at 1). Both Plaintiff and Liberty Life filed responses (Docs. 25-26) on August 1, 2017. This matter is ripe for review. For the reasons discussed herein, the Court finds that arbitrary and capricious is the appropriate standard of review to apply in this action to review the denial of Plaintiff's LTD benefits.

         I. Background

         Plaintiff was employed by Parker Hannifin Corporation (“Parker Hannifin”) and participated in Parker's Hannifin's Long Term Disability Plan (the “Plan”). (Doc. 29 at ¶ 15; Doc. 23 at 2). Parker Hannifin is the Plan Administrator and is the entity responsible for providing funds to pay any LTD claims approved under the Plan. (Doc. 32 at ¶ 13; Doc. 35 at ¶ 13; AR at 843).[2] Liberty Life is the claims administrator for the LTD Plan and is responsible for managing claims for LTD benefits. (Doc. 24 at 2; AR at 116, 802, 843, 846).

         Liberty Life originally approved LTD benefits for Plaintiff from March 28, 2013 through March 27, 2015. (Doc. 29 at ¶¶ 18-19; Doc. 32 at ¶ 18, Doc. 35 at ¶ 18). On February 11, 2015, however, Liberty Life informed Plaintiff that he was not eligible to receive LTD benefits beyond March 27, 2015. (Doc. 29 at ¶ 19; Doc. 32 at ¶ 19, Doc. 35 at ¶ 19; see also AR at 156-159). On August 6, 2015, Plaintiff appealed Liberty Life's decision regarding his LTD benefits. (AR at 66; see also Doc. 29 at ¶ 20). On November 5, 2015, Liberty Life notified Plaintiff of its decision to uphold the denial of Plaintiff's LTD benefits. (AR at 66; see also Doc. 29 at ¶ 21).

         Notwithstanding the denial, Liberty Life outlined the process for an additional appeal in the decision letter, which process required Plaintiff to submit a written request and any additional information pertinent for review to Liberty Life within sixty (60) days. (AR at 70; see also Doc. 29 at ¶ 22). On January 4, 2016, Plaintiff's counsel sent Liberty Life a letter requesting a ten (10) day extension. (AR at 64; Doc. 25 at 2; Doc. 26 at 1). On January 13, 2016, Liberty Life informed Plaintiff's counsel that Parker Hannifin would not permit the extension. (AR at 47; see also Doc. 25 at 2). On January 14, 2016, Plaintiff's counsel again requested an extension of time. (AR at 48-49; see also Doc. 29 at ¶ 22). The next day, on January 15, 2016, Liberty Life responded, informing Plaintiff's counsel once again that Parker Hannifin would not permit the extension. (AR at 45; see also Doc. 29 at ¶ 22). On January 29, 2016, Plaintiff's counsel sent a letter to Liberty Life requesting reconsideration of Plaintiff's claim and enclosing medical records from Plaintiff's physician. (AR at 37-43; Doc. 25 at 3; see also Doc. 29 at ¶ 23). On February 2, 2016, Liberty Life informed Plaintiff's counsel that it was unable to review Plaintiff's claim for LTD benefits further because Plaintiff “failed to properly exhaust his administrative right of appeal.” (AR at 37-43; Doc. 25 at 3; see also Doc. 29 at ¶ 23). Plaintiff filed the present action in response. (See Doc. 1).

         II. Legal Standard

         The current Motions (Docs. 23-24) seek to determine the appropriate standard of review for this ERISA action. ERISA does not provide a standard of review for courts to review the benefits decisions of plan administrators or fiduciaries. Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350, 1354 (11th Cir. 2011) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989)). As a result, the Supreme Court established two different standards of review depending upon the level of discretion afforded to the plan administrator under the terms of a plan. See Firestone, 489 U.S. at 115; see also Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 116-117 (2008).[3] Specifically, the Court held that that a denial of benefits “is to be reviewed 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. If the plan, however, gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan, then a denial of benefits is reviewed under an arbitrary and capricious standard. See id.

         Based on the Supreme Court's guidance in Firestone and Glenn, the Eleventh Circuit developed a multi-step framework to guide courts in reviewing an ERISA plan administrator's benefits decisions. See Blankenship, 644 F.3d at 1354. The steps are as follows:

(1) Apply the de novo standard to determine whether the claim administrator's benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator's decision); if it is not, then end the inquiry and affirm the decision.
(2) If the administrator's decision in fact is “de novo wrong, ” then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision.
(3) If the administrator's decision is “de novo wrong” and he was vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator's decision; if reasonable grounds do exist, then determine if he ...

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