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Weinkauf v. Unicare Life & Health Insurance Co.

April 23, 2010

DAVID WEINKAUF, PLAINTIFF,
v.
UNICARE LIFE & HEALTH INSURANCE COMPANY AND WHIRLPOOL CORPORATION GROUP BENEFIT PLAN, DEFENDANTS.



The opinion of the court was delivered by: Hon. Robert Holmes Bell

OPINION

Plaintiff filed this action pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"), which permits federal courts to entertain an action by an insured "to recover benefits due to him under the terms of his [ERISA-qualified] plan." 29 U.S.C. § 1132. This matter is before the Court on competing motions for judgment on the administrative record filed by Plaintiff David Weinkauf and Defendants Whirlpool Corporation Group Benefit Plan ("Whirlpool") and Unicare Life & Health Insurance Company ("Unicare"). (Dkt. Nos. 23, 25.) For the reasons that follow, Defendants' motion will be granted, and Plaintiff's motion will be denied.

I. Factual Background

ERISA Section 402 states that "[e]very employee benefit plan shall be established and maintained pursuant to a written instrument." 20 U.S.C. § 1102. On January 1, 2007, Whirlpool Corporation implemented the Whirlpool Corporation Group Benefit Plan ("2007 Plan Document") to comply with this requirement. (A.R. 4 ("This document (and the documents incorporated by reference) constitute the plan document required by ERISA Section 402.").) The 2007 Plan Document identifies each "welfare benefit program" available to Whirlpool employees, including the benefit programs covering health, dental, vision, life insurance, long-term disability, short-term disability and business travel accidents. (A.R. 35-39.) The 2007 Plan Document also contains a spreadsheet identifying the various documents that, in combination, set forth the entirety of an insured's rights and obligations under each respective benefits program. (Id.) Finally, the 2007 Plan Document provides some general terms that apply to all of the programs and all claims for benefits under the programs. (A.R. 4-22.)

From 2001 to 2008, Plaintiff worked for Whirlpool as a senior consumer specialist in the fabric care division. While under Whirlpool's employ, Plaintiff consulted a variety of medical specialists regarding his longstanding headaches and sinus congestion problems, and in 2007 he was ultimately diagnosed with fibromyalgia, chronic fatigue syndrome, and sleep apnea. (A.R. 524, 792.) Plaintiff ceased working for Whirlpool on March 28, 2008, due to his medical condition. On June 20, 2008, Plaintiff applied for, and received, short-term disability benefits covering the six-month period between March 29, 2008, and September 29, 2008. On August 15, 2008, Plaintiff applied for long-term disability ("LTD") benefits under Whirlpool's LTD benefits program. According to the 2007 Plan Document, the various documents that supplement the terms provided in the 2007 Plan Document itself to form the substance of Plaintiff's rights and obligations under the LTD benefits program include the Summary Plan Description of Whirlpool Corporation Benefit Plan for Salaried Employees (FlexChoice Benefits) ("SPD") and the "contract with UniCare governing long term disability benefits" ("Unicare contract"), among others. (A.R. 38.) The SPD is a document that provides a broad, but incomplete,*fn1 description of Plaintiff's LTD benefits program and how it operates. The Unicare contract is an agreement by which Whirlpool has delegated the responsibility for reviewing claims and making LTD benefit eligibility determinations to Unicare, a third party that offers claims review services.

On September 27, 2008, Unicare notified Plaintiff that his claim for LTD benefits had been denied because it did not meet the criteria set forth in Plaintiff's LTD benefits program and because "[t]he medical documentation presented [was] not sufficient evidence to support [Plaintiff's] lack of work capacity." (A.R. 186-87.) Plaintiff appealed the decision on April 8, 2009. Upon the recommendation of two of its affiliated physicians, Unicare denied Plaintiff's appeal on May 26, 2009. Plaintiff filed the instant action under Section 502(a)(1)(B) of ERISA, which permits federal courts to entertain an action by an insured "to recover benefits due to him under the terms of his plan." 29 U.S.C. § 1132(a)(1)(B).

In Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir. 1998), the Sixth Circuit held that generally a district court's review of a claim brought under ERISA Section 502 is limited to applying the appropriate standard of review, de novo or arbitrary and capricious, to the decision of the claims administrator based only on the evidence contained in the administrative record. Id. at 615-16. Defendants submitted the administrative record to the Court on November 23, 2009. The parties filed competing motions for judgment on the administrative record on December 22, 2009. (Dkt. Nos. 23, 25.)

II. Law and Analysis

A. Standard of Review

The proper standard of review is an important inquiry in actions brought under ERISA Section 502. It depends on whether the ERISA-qualified plan provides a "clear grant of discretion" to the plan administrator to make benefits decisions. Wulf v. Quantum Chem. Corp., 26 F.3d 1368, 1373 (6th Cir. 1994) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). If so, the Court reviews the denial under an arbitrary and capricious standard based on the evidence contained in the administrative record. Wulf, 26 F.3d at 1372-73. If not, the Court reviews the denial de novo. Id.

The 2007 Plan Document explicitly provides that "[a] Claims Administrator shall have the discretion and authority to determine eligibility for benefits... and to decide claims and, if applicable, appeals." (A.R. 11.) This language is sufficient to qualify as a "clear grant of discretion" and trigger the arbitrary and capricious standard of review. See Admin. Comm. of the Sea Ray Employees' Stock Ownership & Profit Sharing Plan v. Robinson, 164 F.3d 981, 986 (6th Cir. 1999). Nevertheless, Plaintiff contends that, for a variety of reasons, de novo is the proper standard of review. None of Plaintiff's arguments are viable.

Plaintiff first argues that, because the SPD does not contain any discretion-granting language, de novo is the proper standard. The Sixth Circuit has directly rejected this argument. There is no requirement that the discretion-granting language appear in the SPD. If the SPD is silent as to whether the administrator is entitled to discretion, as is the case here, discretion-granting language in the 2007 Plan Document itself is sufficient to trigger the arbitrary and capricious standard of review. Brooking v. Hartford Life & Acc. Ins. Co., 167 F. App'x 544, 547 (6th Cir. 2006) (unpublished); Sprague v. Gen. Motors Corp., 133 F.3d 388, 401 (6th Cir. 1998) ("An omission from the [SPD] does not, by negative implication, alter the terms of the plan itself. The reason is obvious: by definition, a summary will not include every detail of the thing it summarizes."); see also Teplick v. Boeing Co. Employee Health & Welfare Benefit Plan, No. Civ. 03-264-AS, 2004 WL 1058172, at *6 (D. Or. May 11, 2004) ("[T]here is no requirement that the discretionary language must appear in the SPD.").

Plaintiff next argues that the 2007 Plan Document should not be considered part of Plaintiff's ERISA plan at all, but that it should be considered an internal Whirlpool document that confers no rights or obligations on Plaintiff, and that for this reason the 2007 Plan Document cannot act as the document that grants decision-making discretion to the claims administrator. ERISA plans are commonly made up of several documents all integrated by one umbrella document that also sets forth broadly applicable terms, not unlike the 2007 Plan Document. In fact, the 2007 Plan Document itself establishes that it is not only part of the plan, but the foundation of the plan. (A.R. 4. ("This document (and the documents incorporated by reference) constitute the plan document required by ERISA Section 402.").) The 2007 Plan Document is undeniably part of Plaintiff's plan, and its terms, including its grant of discretion to the plan administrator, are binding on Plaintiff.

Third, Plaintiff argues that even if the discretion-granting language in the 2007 Plan Document is binding on Plaintiff and sufficient to trigger the arbitrary and capricious standard of review, the discretion-granting language did not extend to Unicare's review of Plaintiff's claim. As mentioned, the 2007 Plan Document grants decision-making discretion to a "claims administrator." The Plan defines a claims administrator as an entity that is "appointed by the Company to serve as the administrator of claims under the Plan." (A.R. 5.) The Plan further provides that "if no Claims Administrator is authorized to act under the terms of a Welfare Benefits Program, [a committee consisting of various Whirlpool officers] shall be the Claims Administrator." (Id.) Through the Unicare contract, Whirlpool delegated to Unicare responsibility for reviewing claims and appeals and determining eligibility for benefits under Plaintiff's plan. (Dkt. No. 26, Ex. 2.) Despite the existence of the Unicare contract, Plaintiff argues that for the grant of discretion laid out in ...


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