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Holmes v. Aetna Life Insurance Co

United States District Court, E.D. Michigan, Southern Division

June 20, 2017

PHILIP J. HOLMES, Plaintiff,



         Plaintiff Philip J. Holmes alleges that defendants Aetna Life Insurance Co. (“Aetna”) and the United Parcel Services of American Welfare Plan (“the Plan”) wrongfully denied his claim for long term disability (“LTD”) and/or short term disability (“STD”) benefits under an employee benefit plan governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). The parties filed cross motions for judgment on the Administrative Record, which the court has duly considered. For the reasons set forth below, defendants' denial of Holmes' claim for disability benefits shall be AFFIRMED as Holmes' claim is time-barred and defendants' decision was not arbitrary and capricious where Holmes failed to submit objective clinical medical information in support of his claim.

         I. Findings of Fact

         Holmes worked for United Parcel Service of America, Inc. (“UPS”) and was covered under The Flexible Benefit Plan for employees of UPS (“the Plan”). STD benefits were offered under a self-funded plan administered by Aetna. LTD benefits provided under the Plan were insured by Group Insurance Policy No. GP-839230-GID (“the Policy”), issued by Aetna to the Policyholder, UPS.

         Under the Plan and Summary Plan Description (“SPD”), Aetna was designated as claims fiduciary and UPS as plan administrator. The Plan provides that UPS has “the exclusive right and discretion to interpret the terms and conditions of the Plan and to decide all matters arising with respect to the Plan's administration and operation (including factual issues).” (AR 193). The Plan designates Aetna as the claims fiduciary for benefits provided under the Policy, and grants Aetna full discretion and authority to determine eligibility for LTD benefits and to construe and interpret all terms and provisions of the Policy. (AR 145).

         The STD plan provides for benefits for six months if Holmes is unable to perform the material and substantial duties of his regular occupation. The Aetna policy provides for LTD benefits after the Elimination Period if Holmes cannot perform the material duties of his own occupation, for the first 24 months and then past 24 months if Holmes is unable to work at any reasonable occupation. Benefits are payable to the maximum benefit period, age 65, except that benefits for mental health or psychiatric conditions are limited to 24 months.

         For STD benefits, the Plan defines an employee as disabled when an employee is “unable to perform the material and substantial duties of [his or her] regular occupation because of an illness or injury.” (AR 119, 124). In order to qualify for STD benefits, an employee must provide “objective clinical medical information . . . that supports your disability.” (AR 119). The Plan provides that STD benefits will be terminated if an employee fails “to provide objective clinical documentation requested” by the administrator. (AR 122, 127).

         The Plan provides for two levels of appellate review for the denial of STD benefits: first, an employee has the right to file a first-level appeal with Aetna within 180-days of the denial; and second, an employee may file a second-level appeal with the UPS Claims Review Committee within 60-days of denial of the first-level appeal. Any legal action must be filed within six months from the date a determination is made.

         The Plan defines disability for LTD coverage as follows;

         Test of Disability From the date that you first became disabled and until monthly benefits are payable for 24 months you meet the test of disability on any day that:

         * You cannot perform the material duties of your own occupation solely because of an illness, injury or disabling pregnancy-related condition.

         (AR 1461) (emphasis in original). “Material duties” and “own occupation” are defined as follows:

         Material Duties

         Duties that:

         * Are normally needed for the performance of your own occupation; and

         * Cannot be reasonably left out or changed. However to be at work more than 40 hours per week is not a material duty.

         Own Occupation The occupation that you are routinely performing when your period of disability begins. Your occupation will be viewed as it is normally performed in the national economy instead of how it is performed:

         * For your specific employer; or

         *At your location or work site; and

         *without regard to your specific reporting relationship. (AR 1475) (emphasis in original). The LTD policy also provides for benefits of successive disabilities without a new Elimination Period, arising out of the same or related impairments if within six months:

         If You Become Disabled Again (Successive Disabilities)

         Once you are no longer disabled and your monthly benefit payments have ended, any new disabilities will be treated separately. However, 2 or more separate disabilities due to the same or related causes will be deemed to be one disability and only one Elimination Period will apply if your disability occurs again within 6 months or less of continuous active work from when the prior disability ended.

         (AR 1463) (emphasis in original). The LTD policy also provides for continuing LTD benefits if a person works at less than his or her pre-disability earnings while disabled. (AR 1462).

         Holmes began working for UPS in 2004. On February 1, 2014, Holmes began working as an On Road Supervisor. Prior to that, he worked as an Industrial Engineer. The On Road Supervisor position had a physical exertional rating of heavy as it required lifting, pushing and pulling equipment and packages weighing up to 70 pounds and assisting in moving packages up to 150 pounds. The position paid $71, 808 per year. Ten days after his promotion to On Road Supervisor, on February 11, 2014, Holmes applied for STD benefits based on his absence from work beginning on February 4, 2014. Holmes had only been on the job as On Road Supervisor for three days when he allegedly became disabled. Holmes applied for benefits based on right ankle and foot and knee pain which was related to right ankle triple fusion surgery he had ten years earlier in 2004, as well as because of depression. Defendants awarded Holmes STD benefits from the period of February 4, 2014 until June 30, 2014. Holmes' doctor indicated that he expected Holmes to return to work on May 5, 2014. On June 23, 2014, Aetna told Holmes that it needed updated records by June 30, 2014, or the claim would be closed. Aetna then granted Holmes a one week extension to do so, but Holmes failed to submit any additional records. Aetna cut off STD benefits on June 30, 2014 based on a lack of clinical evidence to support his continued disability. Aetna's letter cutting off disability benefits advised Holmes of his right to appeal the decision within 180 days. On July 21, 2014, Holmes timely appealed that decision. Aetna affirmed its denial by letter dated October 2, 2014. That letter specifically advised Holmes of his right to seek a second-level of appellate review within 60-days.

         Holmes did not timely file a second-level appeal of that decision. Holmes attempted to do so by filing a letter with Aetna 95-days later, on January 5, 2015, which was outside the 60-day window for perfecting a second-level appeal. Holmes' attorney also attempted to submit further untimely appeals in March and April, 2015. Holmes' counsel's March 13, 2015 letter requested certain Plan and claim documents. On April 2, 2015, Aetna provided Holmes' counsel with a copy of all documents relevant to plaintiff's STD claim, including a copy of the LTD plan and application and reiterated that requests for copies of the STD plan short documents needed to be addressed to UPS. On April 27, 2015, Holmes' counsel requested Plan documents from UPS which UPS provided on May 19, 2015.

         On June 19, 2015, the UPS Claims Review Committee upheld Aetna's decision that Holmes' second-level appeal was time-barred. The Committee notified Holmes that its denial was the Claims Review Committee's final decision and that any lawsuit under ERISA “must be filed within six months of your having received this decision.” Holmes did not file his lawsuit until ten months later on April 28, 2016.

         On October 30, 2014, Holmes returned to work as a Financial Analyst, a position meant to accommodate his physical limitations related to his foot and ankle problems. That position paid $48, 256 per year, about $23, 000 less than the On Road Supervisor position. Holmes did not file a claim for residual disability benefits based on his decreased earnings as a Financial Analyst. The new position was mostly sedentary, although during peak season the position would be classified as medium, and required a high level of cognitive ability, concentration, and judgment.

         Forty days after beginning the position as Financial Analyst, on December 9, 2014, Holmes applied for STD benefits a second time based on stress, panic, and anxiety. (AR 1883-84). He later submitted documentation in support of that claim which also included information about his foot and ankle pain related to osteoarthritis.[1] In support of his claim, he relied on the report of his psychiatrist, Dr. Chalakudy Ramakrishna, who indicated that Holmes would be off work from December 9, 2014 to December 23, 2014. Aetna paid him STD benefits ...

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