United States District Court, N.D. Indiana
RANDY L. RICHARDSON, Plaintiff,
FEDERAL EXPRESS CORPORATION SHORT TERM DISABILITY PLAN, Defendant.
OPINION AND ORDER
THERESA L. SPRINGMANN, District Judge.
The issue in this litigation, which is before this Court pursuant to the Employee Retirement Income Security Act (ERISA), is whether Defendant Federal Express Corporation Short Term Disability Plan acted arbitrarily and capriciously when it denied short term disability benefits to Plaintiff Randy L. Richardson. The Defendant maintains that it rightfully denied coverage because the Plaintiff's Short Term Disability benefits ceased when he ended his leave of absence from his full time courier job and accepted a material handler position that his employer did not consider to be full time. When the Plaintiff decided that he could not perform the material handler job due to medical reasons, he requested reinstatement of the Short Term Disability benefits he had been receiving while on leave of absence from his courier position. According to the Plaintiff, his attempt at performing the material handler position did not render him ineligible because he held the position as part of the Defendant's Temporary Return to Work Program, and he never lost his full time status. This matter comes before the Court on the Defendant's Motion for Summary Judgment [ECF No. 15] and the Plaintiff's Motion for Partial Summary Judgment [ECF No. 19].
STANDARD OF REVIEW
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. In ruling on a motion for summary judgment, the admissible evidence presented by the nonmoving party must be believed and all reasonable inferences must be drawn in the nonmovant's favor. Hemsworth v. Quotesmith.com, Inc., 476 F.3d 487, 490 (7th Cir. 2007); Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) ("We view the record in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor."). When cross motions for summary judgment are filed, the court looks to the burden of proof that each party would bear on an issue and then requires that party to go beyond the pleading and affirmatively establish a genuine issue of material fact. Diaz v. Prudential Ins. Co. of Am., 499 F.3d 640, 643 (7th Cir. 2007).
Where, as here, an ERISA plan grants an administrator discretion to construe terms and determine coverage under the policy, a reviewing court may not overturn the administrator's interpretation unless the administrator's determination was arbitrary or capricious. Weitzenkamp v. Uunum Life Ins. Co. of Am., 661 F.3d 323, 329 (7th Cir. 2011); Ruttenberg v. U.S. Life Ins. Co., 413 F.3d 652, 659 (7th Cir. 2005). Under this standard, a court upholds the plan's decision if "(1) it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, (2) the decision is based on a reasonable explanation of relevant plan documents, or (3) the administrator has based its decision on a consideration of the relevant factors that encompass the important aspects of the problem." Sisto v. Ameritech Sickness & Accident Disability Benefit Plan, 429 F.3d 698, 700 (7th Cir. 2005) (quoting Houston v. Provident Life & Accident Ins. Co., 390 F.3d 990, 995 (7th Cir. 2004), and Hess v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001)). Under the arbitrary or capricious standard, the reviewing court "do[es] not ask whether the administrator reached the correct conclusion or even whether it relied on the proper authority." Kobs v. United Wis. Ins. Co., 400 F.3d 1036, 1039 (7th Cir. 2005). Rather, the question before a reviewing court is whether the administrator's "decision has rational support in the record.'" Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569, 576 (7th Cir. 2006) (quoting Leipzig v. AIG Life Ins. Co., 362 F.3d 406, 409 (7th Cir. 2004)). "Put simply, an administrator's decision will not be overturned unless it is downright unreasonable." Id. (quotation marks and citation omitted). The standard, however, "is not a euphemism for a rubber-stamp." Majeski v. Metro. Life Ins. Co., 590 F.3d 478, 483 (7th Cir. 2009).
To grant summary judgment in favor of the Defendant in this case, the Court must find that, when the facts are taken in the light most favorable to the Plaintiff, there is no evidence that the Defendant's denial of benefits was arbitrary and capricious. The Plaintiff's cross motion for partial summary judgment can only be granted if the evidence, viewed in a light most favorable to the Defendant, shows that the administrator's decision was arbitrary and capricious.
STATEMENT OF FACTS
The Plaintiff worked for many years as a full time courier for Federal Express Corporation (FedEx), stationed out of South Bend, Indiana. His job required that he maintain a Commercial Driver's License (CDL). In November 2009, the Plaintiff suffered a heart attack caused by arrhythmia. The Plaintiff had a pacemaker and defibrillator surgically implanted. United States Department of Transportation regulations preclude a person with an implanted defibrillator from holding a CDL.
Effective November 17, 2009, FedEx granted the Plaintiff Short Term Disability benefits under its ERISA qualified employee benefits plan. Aetna Life Insurance Company was the Claims Paying Administrator for the Short Term Disability Plan. The Short Term Disability Plan grants discretionary authority to the Aetna Review Committee.
A FedEx employee covered by the Short Term Disability Plan is eligible to receive short-term disability benefits from the Short Term Disability Plan if he or she becomes Disabled as that term is defined by the Short Term Disability Plan. The Short Term Disability Plan's definition of Disabled includes an Occupational Disability, which is defined as "the inability of a Covered Employee, because of a medically-determinable physical impairment or Mental Impairment, to perform the duties of his regular occupation." (Administrative Record (A.R.) 345-46, 348, ECF No. 14.) The Short Term Disability Plan defines an Eligible Employee as an employee "engaged in Permanent Full-Time Employment with a Sponsoring Employer." (A.R. 312.) "An Employee who is classified as casual, permanent part-time, restricted schedule, seasonal, student/college intern, temporary or work study or who is on military leave of absence shall not be an Eligible Employee." ( Id. ) A Permanent Full-Time Employee is one "who customarily works a regularly scheduled thirty-five hour work week for the Employer and who is designated as full-time employee as evidenced by documentation in the employee's personnel file." (A.R. 348.) The Plan provided that "[C]overage under the Plan will automatically terminate as to any Covered Employee on... the date he ceases Permanent Full-Time Employment... [or] the date he ceases to meet the definition of an Eligible Employee." (A.R. 352.)
On January 4, 2010, the Plaintiff's cardiologist released the Plaintiff to return to work full duty and without restrictions. However, he was still ineligible to operate a commercial vehicle per United States DOT regulations pertaining to CDLs and thus unable to perform the duties of a courier.
In February 2010, the Plaintiff accepted a permanent, part-time position as material handler at a FedEx facility in San Diego, California. The Plaintiff began work in the position on March 2, 2010. On March 3, 2010, Aetna informed the Plaintiff that he was no longer entitled to benefits under the Short Term Disability Plan because he had "accepted another part-time position within the Federal Express Corporation and [was] no longer employed full-time." (A.R. 1.) Aetna's letter referenced specific provisions of the Short Term Disability Plan regarding the termination of coverage when full time employment ceases. ( Id. ) The Plaintiff worked in the material handler position until March 9, when he stopped due to concerns with his medical condition. He then attempted to obtain disability benefits, but was informed that he no longer qualified because he was a part time employee, a fact that Aetna had confirmed with FedEx.
On April 7, 2010, the Plaintiff contacted Aetna to verbally request an appeal of the cessation of his short term disability benefits, claiming that he had been a full time employee, became part time when he returned from disability, and was back to being considered full time. Elaine Fremer, a Sr. LTD Claim Analyst, sent an email to FedEx personnel advising that the Plaintiff was appealing the denial of Short Term Disability benefits on grounds that FedEx had rescinded his part time status and restored him as full time employee. She asked that FedEx provide appropriate documentation to show this restoration had occurred. The response, authored by Richard Watring from FedEx's human resource department, stated that the Plaintiff status "should revert to his former status, which is still on SBN's books and still on STD." (A.R. 6.)
On April 20, Fremer advised FedEx that the appeal review had been completed and the denial of benefits was being overturned. A FedEx Human Capital Management Program Advisor, Chris Niec, immediately advised Fremer that the company had further complications regarding the Plaintiff's actual job status, specifically whether it was full time or part time. Fremer responded, requesting to know the status and stating that she would hold on to the claim until she heard further. Fremer ...