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Allen v. Lilly Extended Disability Plan

United States District Court, S.D. Indiana, Indianapolis Division

March 29, 2019

ANGEL ALLEN, Plaintiff,



         This matter is before the Court on Plaintiff Angel Allen's (“Allen”) Motion for Summary Judgment (Filing No. 54) and Defendants the Lilly Extended Disability Plan's and the Eli Lilly and Company Life Insurance and Death Benefit Plan's (together, “Defendants”) Cross-Motion for Summary Judgment (Filing No. 57). After Eli Lilly and Company (“Lilly”) and its agents terminated her disability benefits, Allen, a former Lilly employee, filed this suit alleging breach of contract. (Filing No. 15.) For the following reasons, the Court denies Allen's Motion for Summary Judgment and grants Defendants' Cross-Motion for Summary Judgment.

         I. BACKGROUND

         Allen began working at Lilly on January 8, 2001 as a sales representative and marketing associate. (Filing No. 29-7 at 12, 34.) Her employment with Lilly made her eligible for the Lilly Welfare Plan (“Welfare Plan”), an ERISA-governed benefit plan that provides medical, disability, and other benefits to Lilly employees.[1] (Filing No. 29-1 at 35.) The Welfare Plan has several component plans, one of which is the Lilly Extended Disability Plan (the “Plan”). (Filing No. 50- 2.) The Plan is administered by the Employee Benefits Committee (the “Benefits Committee”), which is comprised of members appointed by the Board of Directors of Eli Lilly and Company, the Plan's sponsor. (Filing No. 50-2 at 10.) It provides for three disability benefits: (1) a company-provided disability benefit (the “EDL”), (2) an employee paid contributory EDL Plus disability benefit (the “EDL Plus”), and (3) a life insurance benefit (the “Life WP”). (Filing No. 55-1 at 19, 135.)

         A. Initial Approval for EDL, EDL Plus, and Life WP

          Beginning in June 2006, based on her medical condition and resulting limitations and restrictions, Allen was forced to stop working at Lilly. (Filing No. 15 at 2.) She began receiving short-term disability leave due to her paranoid delusional disorder and attention deficit hyperactivity disorder; however, in early 2008, she began an extended disability leave under the terms of the Plan. (Filing No. 58 at 5; Filing No. 55-1 at 77.) For the first 24 months after a claimant's “Disability Date, ” the Plan provides benefits to a claimant who is unable “to engage, for remuneration or profit, in the Employee's own occupation provided that the inability results from the Employee's illness or accidental bodily injury and such illness or injury requires the Employee to be under the regular care of a Licensed Physician.” Id. at 16. After the initial 24-month period, the Plan only provides benefits to those claimants who are unable “to engage…in any occupation consistent with the Employee's education, training, and experience”. Id. The Plan also requires a claimant to apply for Social Security Disability Benefits (“SSDI”) within six months of her “Disability Date.” (Filing No. 55-1 at 7.) Allen applied, was approved, and began receiving SSDI in February 2007. Id. at 96. In February 2009, the Benefits Committee requested a medical evaluation of Allen to determine whether she met the stricter definition of disability that would become effective after 24 months. (Filing No. 29-8 at 3-5.) On August 20, 2009, the Plan confirmed that Allen was eligible for continued benefits. (Filing No. 29-7 at 23.)

         At some point after that date but before 2014, Lilly engaged an entity called Lilly Leave and Disability Center, which was administered by an entity called Sedgwick Claims Management Services, Inc. (“Sedgwick”). SeeFiling No. 29-7 at 13.[2] On January 9, 2014, Sedgwick wrote to Allen asking her to fill out a “Disability Progress Report, ” a document in which she was to disclose not only recent medical activity but also personal information like “Interests, Hobbies and Social Activities, ” “Household Care, ” and “Education/Experience.” Id. at 13-18. Allen filled out the form and mailed it to Sedgwick. Id. at 8-12. Then, on April 12, 2014, a Sedgwick representative wrote to Allen requesting two more documents: a completed “Authorization for Release and Use of Medical Information, ” and an “Attending Physician Statement” to be completed by her primary care physician. (Filing No. 29-6 at 55.) Allen successfully submitted these forms, and on June 4, 2014, Sedgwick wrote to inform her that her “request for benefits has been extended beginning 6/11/2014.” (Id. at 42-43) (A completed copy of the Attending Physician Statement is in the administrative record at Filing No. 29-6 at 44-48. It was faxed on May 28, 2014.)

         B. First Termination and Appeal (February 2014 - September 2015)

         Between June 4, 2014 and February 13, 2015, Sedgwick sent Allen a number of requests for information, including on October 16, 2014, a request for an “Authorization for Release and Use of Medical Information” form and an “Attending Physician Statement.” (Filing No. 29-6 at 36-37.) The October 16, 2014 letter requested that the Attending Physician Statement be sent by December 3, 2014. Id. Receiving no response, Sedgwick reiterated its request on November 6, 2014. Id. at 29-30.

         On December 11, 2014, Allen's physician, Charles Bensenhaver, III., M.D. (Psychiatry) (“Dr. Bensenhaver”) faxed to Sedgwick medical records to document each visit he had with Allen in 2014. Id. at 12-19. Unsatisfied with these records, on January 14, 2015, Sedgwick requested additional information directly from Dr. Bensenhaver and Ken Edwards, LCSW (Psychology) (“Edwards”), Allen's treating clinical social worker. Id. at 10. The request asks for “the attached form, completed, ” “Office Treatment Notes dated 2 most recent from Ken Edwards, ” and “Please provide next office visit date.” Id.[3]The health care providers gave the dates they expected to see Allen for her next appointment and attached notes from her two most recent consultations with Edwards. Id.

         In a letter dated February 13, 2015, Sedgwick notified Allen of a decision to terminate her benefits, effective March 1, 2015. (Filing No. 29-5 at 47-48.) The letter informing Allen of the termination stated:

To review whether you remain eligible for continued benefits under the Plan, we requested an Attending Physician's Statement and Office Notes from Dr. Bensenhaver and Ken Edwards. Office notes were received on 12/11/2014, 01/20/2015, and 02/11/2015; however, we did not receive a completed Attending Physician's Statement. The office notes received state your mood is stable and provide no objective findings to indicate you continue to meet the definition of disability. We have not received additional medical documentation to establish that your condition continues to meet the definition of disability, as required by the Plan outlined above. As a result, your request for continued disability benefits under the Plan has been denied.


         On March 3, 2015, Dr. Bensenhaver and Edwards sent a letter to Allen's case manager at Sedgwick indicating their alarm at its decision to terminate Allen's benefits because “[a]s recently as January 6, 2015, Ms. Allen was reporting symptoms of ‘paranoid thinking (delusions probably fixed).'” Id. at 44. On March 13, 2015, Allen appealed Sedgwick's denial of her claim. Id. at 42. On March 20, 2015, Sedgwick acknowledged her appeal and pledged to provide a written response by May 2, 2015. Id. at 34. But on April 14, 2015, Sedgwick notified Allen by letter that it was moving her “determination date” to May 25, 2015 because she had not yet “attended the independent medical examination.” Id. at 32. Nothing in the administrative record indicates that Sedgwick had asked Allen to undergo an independent medical evaluation prior to sending this letter.

         On April 22, 2015, Allen received a letter from Lukki Giardono at “Network Medical Review Co. Ltd.” saying “Sedgwick CMS has requested that we schedule an Independent Medical Examination with a qualified examiner” and providing the details of an appointment he had scheduled. Id. at 31. Licensed psychologist Daniel Garst examined Allen on April 27, 2015 and reviewed some but not all of her medical history (some of her medical history was unavailable to him). (Filing No. 54-1 at 95-104.) Dr. Garst diagnosed Allen with “schizophrenia spectrum disorder and other psychotic disorder.” Id. at 100. He concurred with Dr. Bensenhaver that the “patient is unable to perform the duties of her own occupation at this time and is a poor candidate for interactions with other employees in a work setting.” Id. at 101. However, Dr. Garst thought there was some employment that Allen could potentially do:

[S]he could probably be trained for some type of employment which uses the computer but requires limited face-to-face interaction with other people. Also, the patient was able to complete a program in massage therapeutics. This suggests she would be suitable as a massage therapist if she would certify and keep up with her continuing education.

Id. at 102. He described her incapacity as “temporary.” Id.

         On May 22, 2015, under Sedgwick's letterhead, the Benefits Committee resolved Allen's appeal. (Filing No. 29-5 at 14.) The Benefits Committee approved Allen to receive disability benefits from March 1, 2015 through November 14, 2015. The letter cautioned Allen that if she sought disability benefits beyond November 14, 2015

[T]he Committee will require additional information from you relating to your (i) ability to perform other occupations consistent with your education, training and experience as assessed by vocational and medical experts; (ii) treatment plan to verify that it has been optimized for best medical results consistent with your symptomology and claimed disability; (iii) updated medical records to clarify any claimed disability, your opportunity to return to employment and any potential restrictions.

Id. at 15.

         On August 12, 2015, Sedgwick asked Allen to participate in vocational rehabilitation training and referred her to a vocational expert in Lexington, Kentucky. (Filing No. 29-4 at 47; Filing No. 29-5 at 12.) Allen participated in the training between August 2015 and December 2015 (Filing No. 54-1 at 109-128.) She felt the rehabilitation was unsuccessful because she was limited by her work experience and her mental illness. The vocational expert she worked with noted that Allen's mental illness limited her abilities and frustrated her (id. at 124-25), but also identified several careers she thought were suitable for Allen, including “graphic design, interior design, interpreter, childcare worker, floral design, and art teacher.” (Filing No. 29-4 at 26-27, 29.)

         C. Second Termination and Appeal (October 2015 - March 2016)

         In October 2015, Sedgwick began reviewing Allen's progress to determine whether to extend her benefits. (Id. at 16-17.) In an October 14, 2015 letter, Sedgwick requested that Allen provide an “Authorization for Release and Use of Medical Information” form, an “Attending Physician Statement” from her health care provider, and a completed “Disability Progress Report & Employment and Earnings Certification.” Id. Edwards' treatment records from August, September, and October 2015 indicated Allen's mood was “good” and that she was “motivated.” Id. at ...

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