Free Response in Support of Motion - District Court of Arizona - Arizona

1 Jay A. Zweig (011153) Jeffrey B. Kuykendal (021878) 2 GALLAGHER & KENNEDY, P.A. 2575 E. Camelback Road 3 Phoenix, Arizona 85016-9225 (602) 530-8407 4 Attorneys for Defendants 5 6 7 8
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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Constance Ann Maynard, an individual, Plaintiff, vs. NO. CV 04-0525-PHX-RCB DEFENDANTS' REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

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CNA Group Life Assurance Company, an 11 Illinois Corporation; Continental Casualty Company, an Illinois Corporation; Hewitt 12 Associates, L.L.C., an Illinois Limited Liability Company; and Hewitt Long Term 13 Disability Plan, 14 15 16 Defendants.

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Defendants CNA Group Life Assurance Company and Continental Casualty

17 Company (collectively "CNA") and Defendants Hewitt Associates, L.L.C. and Hewitt 18 Long Term Disability Plan (collectively "Hewitt") reply to Plaintiff's Opposition to 19 Defendants' Motion for Summary Judgment. Plaintiff fails to provide any evidence, 20 let alone evidence that meets the high standard required, to demonstrate that CNA 21 abused its discretion in denying Plaintiff's long term disability ("LTD") benefits. 22 Rather, Plaintiff appears to want to reargue the standard of review the Court
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1 determined in its March 28, 2005 Order and reaffirmed in response to Plaintiff's two 2 Motions for reconsideration. This Reply is supported by the following Memorandum 3 of Points and Authorities. 4 5 I. 6 MEMORANDUM OF POINTS AND AUTHORITIES PROCEDURAL BACKGROUND On August 24, 2004, CNA moved for partial summary judgment to determine

7 the appropriate standard of review. Plaintiff argued, despite well-established law to 8 the contrary, that CNA was bound to a prior policy that had been appropriately 9 amended and provided to Plaintiff before CNA denied Plaintiff's claims for LTD 10 benefits. Plaintiff further argued that CNA was operating under a conflict of interest, 11 and thus, the Court should evaluate CNA's decision under a heightened standard of 12 review. On March 28, 2005, the Court granted CNA's motion for partial summary 13 judgment and determined that the 2001 amendment to the policy was part of the 14 operative policy and that CNA's decision would be reviewed under an abuse of 15 discretion standard. See March 28, 2005 Order. 16 On April 7, 2005, Plaintiff filed a motion for reconsideration with the Court

17 regarding its determination of the standard of review. On May 9, 2005, the Court 18 affirmed its decision. See May 9, 2005 Order. On May 23, 2005, Plaintiff filed a 19 second motion for reconsideration, which also failed to alter the Court's prior 20 determination. See May 31, 2005 Order. 21 Despite the fact that Plaintiff spends the bulk of her Response rearguing the

22 appropriate standard of review, as a matter of law, CNA's decision to deny Plaintiff's Case 2:04-cv-00525-RCB Document 94 -2Filed 10/11/2005 Page 2 of 12

1 LTD benefits must be evaluated under an abuse of discretion standard, which requires 2 that CNA acted arbitrarily and capriciously and that the Court has a "definite and firm 3 conviction that a mistake has been committed." Snow v. Standard Ins. Co., 87 F.3d
th 4 327, 331 (9 Cir. 1996) overruled on other grounds Achtel v. Connecticut Mutual Life th 5 Ins. Co., 2000 U.S. App. LEXIS 5228 (9 Cir. 2000); see also Concrete Pipe &

6 Products, Inc. v. Construction Laborers Pension Trust, 508 U.S. 602, 623 (1993). 7 II. 8 LEGAL ARGUMENT Plaintiff makes a production out of the fact that CNA does not dispute that

9 Plaintiff suffers from ailments. Plaintiff's arguments are much ado about nothing. 10 CNA did not deny Plaintiff's LTD benefits on the basis that she did not suffer from 11 various ailments, rather, CNA's denial was based upon the fact that Plaintiff was not 12 disabled and the medical evidence did not demonstrate that Plaintiff could not 13 continuously perform the substantial and material duties of her regular occupation.
th 14 See, e.g., Jordan v. Northrop Grumman, 370 F.3d 869, 878-879 (9 Cir. 2003) (plan

15 administrator's denial of claimant's claims was not an abuse of discretion because 16 there was evidence that claimant's fibromyalgia did not prevent her from performing 17 the normal duties of her occupation); Bendixen v. Standard Insurance Co., 185 F.3d
th 18 939, 944 (9 Cir. 1999) (because there was no indication that claimant could not

19 perform the duties of her occupation the plan administrator did not abuse its discretion 20 in denying her claims). 21 CNA made its determination after review of the available records, including

22 the medical records it obtained, the documents Plaintiff herself supplied, and the Case 2:04-cv-00525-RCB Document 94 -3Filed 10/11/2005 Page 3 of 12

1 opinion of a doctor board certified in internal medicine. CNA's decision was not an
1 2 abuse of discretion and is supported by the administrative record.

3 4

A.

CNA Did Not Abuse its Discretion

Plaintiff does not dispute that there are only three recognized means of

5 demonstrating that a plan administrator has abused its discretion. However, Plaintiff 6 is unable to demonstrate that CNA's actions and decisions were in violation of even 7 one of those means. 8 9 1. CNA provided a detailed explanation of its denial.

Courts have held that ERISA plan administrators "abuse their discretion if they

10 render decisions without any explanation, or construe provision of the plan in a way 11 that conflicts with the plain language of the plan." Taft v. The Equitable Life
th 12 Assurance Society, 9 F.3d 1469, 1472 (9 Cir. 1993) (emphasis added); Eley v. th 13 Boeing Company, 945 F.2d 276, 279 (9 Cir. 1991) (because plan administrator gave

14 "an explanation," claimant was left with showing the denial clearly conflicts with the 15 plain language of the plan). 16 CNA provided detailed letters outlining the records it reviewed, its conclusion

17 that Plaintiff was not disabled and could continuously perform the substantial and 18 material duties of her regular occupation. See Statement of Facts filed with 19 Defendants' Motion for Summary Judgment ("SOF") ¶¶ 14-17 and 20-23; see also 20 21 22
1

It is worth nothing that Plaintiff seeks to introduce numerous documents and affidavits that are inadmissible under an abuse of discretion standard of review. Those offending documents are detailed in Defendants' motion to strike filed concurrently herewith. Defendants expressly incorporate their arguments herein.
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Case 2:04-cv-00525-RCB

1 March 28, 2005 Order at 11-12. Further, CNA provided its bases for that conclusion, 2 including the opinion of Dr. Truchelut. See id. 3 Plaintiff fails to cite to any authority that even suggests that CNA's level of

4 explanation was inadequate under an abuse of discretion standard. Rather, the two
th 5 cases relied upon by Plaintiff, Friedrich v. Intel Corp., 181 F.3d 1105 (9 Cir. 1999) th 6 and Lang v. Standard Ins. Co., 125 F.3d 794 (9 Cir. 1997), were decisions in which

7 the court did not apply an abuse of discretion standard to the decision of the 8 administrator. While Plaintiff clearly would like to relitigate the issue of the 9 appropriate standard of review a fourth time, that issue has been decided by this Court 10 and, accordingly, the cases relied upon by Plaintiff are inapposite to the issue before 11 the Court. 12 Ultimately, Plaintiff's issue is not with the adequacy of the level of explanation

13 offered by CNA, but rather with whether that explanation was "clearly erroneous." 14 As discussed below, CNA's determination was not "clearly erroneous." Ultimately, 15 CNA provided a sufficient explanation of its denial of benefits and did not abuse its 16 discretion. 17 18 19 20 21 22
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2.

CNA's decision does not conflict with the plain language of the policy.

Again, Plaintiff appears to want to relitigate the issues decided by the Court in its Order on March 28, 2005. The Court has determined that the 2001 amendments to the policy are part of the operative documents and CNA's decision will be reviewed under an abuse of discretion standard. See March 28, 2005 Order. Plaintiff's reliance

1 on irrelevant cases with different facts does not indicate that CNA's decision 2 conflicted with the plain language of the policy. There is no indication in Camerer v.
th 3 Continental Casualty Co., 76 Fed. Appx. 837 (9 Cir. 2003) or Varity v. Howe, 516

4 U.S. 489 (1996) that the policies at issue were the same or even similar to the policy 5 at issue in the case or that the plan administrator denied the claims for similar reasons. 6 Accordingly, neither case is relevant to whether CNA's decision in this case 7 conflicted with the plain language of this ERISA policy. 8 Moreover, both the 1997 policy and the 2001 amendments require Plaintiff to

9 demonstrate she was disabled, which required a showing that Plaintiff could not 10 continuously perform the substantial and material duties of her regular occupation. 11 Plaintiff fails to offer any specifics of how CNA's decision conflicted with the 12 language of the policy, how she would have "perfected" her claim based upon the 13 alleged differences, or how she was harmed or prejudiced by the alleged changes. 14 Accordingly, CNA's decision to deny Plaintiff's LTD benefits on the basis that

15 the administrative record demonstrated Plaintiff was capable of continuously 16 performing the substantial and material duties of her regular occupation did not 17 conflict with the plain language of the policy and, thus, was not an abuse of 18 discretion. 19 20 3. CNA's decision was not "clearly erroneous."

Clearly erroneous requires "having a `definite and firm conviction that a

21 mistake has been committed.'" Snow, 87 F.3d at 331; see also Concrete Pipe & 22
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1 Products, Inc., 508 U.S. at 623. There is simply no evidence that CNA made a 2 mistake in denying Plaintiff's LTD benefits. 3 Plaintiff attempts to demonstrate that CNA's decision was clearly erroneous by

4 elevating the opinion of her doctors and discounting the opinion of Dr. Truchelut. It 5 is well-established that under an abuse of discretion review, the plan administrator 6 and the Court do not need to give any deference to a claimant's treating physicians 7 versus the physicians retained by the plan administrator. See Jordan v. Northrop
th 8 Grumman, 370 F.3d 869, 878-879 (9 Cir. 2003) ("courts have no warrant to order

9 application of a treating physician rule to employee benefit claims made under 10 ERISA....Nothing in the Act...suggests that plan administrators must accord special 11 deference to the opinions of treating physicians. Nor does the Act impose a 12 heightened burden of explanation on administrators when they reject a treating 13 physician's opinion.") quoting Black & Decker Disability Plan v. Nord, 538 U.S. 822, 14 825 (2003). 15 Further, Dr. Truchelut's opinions and reasoning were reasonable and certainly

16 were not "clearly erroneous." In his report he noted the medical records at the time 17 Plaintiff voluntarily stopped working, indicated that her "physical examination was fairly 18 benign, and laboratory studies prior to that were generally negative." See SOF ¶ 12. 19 Further, Dr. Truchelut also determined that the tests performed on Plaintiff indicated she 20 was capable of performing the sustained sedentary activity required for her job at Hewitt. 21 See SOF ¶ 13. Based upon his review, he determined that there was no indication that 22 Plaintiff was unable to perform the material duties of her sedentary job. See SOF ¶ 9. Case 2:04-cv-00525-RCB Document 94 -7Filed 10/11/2005 Page 7 of 12

1 Accordingly, CNA's decision to reject the opinions of Plaintiff's treating physicians in 2 favor of the opinion of Dr. Truchelut is not "clearly erroneous." 3 Next, Plaintiff seems to indicate the fact that Dr. Truchelut did not examine the

4 Plaintiff himself indicates that CNA abused its discretion. However, there is no 5 requirement in the subject ERISA policy or the law that an independent medical 6 examination is required before benefits may be denied. See, e.g., Gooden v.
th 7 Provident Life & Accident Insurance Co., 250 F.3d 329, 335 (5 Cir. 2001) (despite

8 claimant's complaints that the plan administrator denied claimant's benefits despite 9 the fact that its doctor never physically examined claimant, never spoke with 10 claimant's treating physicians, and did not review all of the medical records, the Court 11 determined plan administrator did not abuse its discretion by relying upon the opinion 12 of its doctor); Kenna v. Hartford Life & Accident Insurance Co., 2005 U.S. Dist. 13 LEXIS 19385 at * 40-41 (D.N.H. 2005) ("the mere presence of a conflict between the 14 opinions of [claimant's] treating physicians and [plan administrator's] non-examining 15 records reviewers does not render [plan administrator's] decision arbitrary or 16 capricious."). 17 Plaintiff fails to point to any specific facts that indicate she was unable to

18 perform the substantial and material duties of her job as of the date of her claimed 19 loss. Moreover, to the extent that Plaintiff relies upon any evidence that is contrary to 20 the opinions and determinations of CNA or Dr. Truchelut, such contrary evidence
th 21 does not indicate an abuse of discretion by CNA. See Taft, 9 F.3d 1469, 1473 (9 Cir.

22 1993) ("In the ERISA context, even decisions directly contrary to evidence in the Case 2:04-cv-00525-RCB Document 94 -8Filed 10/11/2005 Page 8 of 12

1 record do not necessarily amount to an abuse of discretion."); Bolling v. Eli Lilly &
th 2 Co., 990 F.2d 1028, 1029-1030 (8 Cir. 1993) ("[t]he [administrator] did not abuse its

3 discretion merely because there was evidence before it that would have supported an 4 opposite decision."); Madden v. ITT Long Term Disability Plan for Salaried
th 5 Employees, 914 F.2d 1279, 1285 (9 Cir. 1990) (plan administrator's decision was not

6 arbitrary and capricious when it denied benefits without considering a finding by the 7 social security board that claimant was totally disabled). 8 Rather than provide specific factual information, Plaintiff attempts to support

9 her argument by relying upon inapposite cases. Small v. First Reliance Standard Life 10 Insurance Company, 2005 U.S. Dist. LEXIS 3153 (E.D. Pa. 2005) and Dorsey v. 11 Provident Life and Accident Ins. Co., 167 F. Supp. 2d. 846 (E.D. Pa. 2001) were both 12 decided under a heightened standard of review and not an abuse of discretion 13 standard. Accordingly, neither is informative on the issue of whether CNA abused its 14 discretion or whether its decision was "clearly erroneous." 15 Camerer, 76 Fed. Appx. 837, Peterson v. Continental Casualty Co., 2004 U.S.

th 16 Dist. LEXIS 19831 (D. Minn. 2004), and Blau v. Del Monte Corp., 748 F.2d 1348 (9

17 Cir. 1984) are clearly factually distinguishable from the instant case. In Camerer, the 18 medical records demonstrated that the claimant had suffered a "traumatic brain 19 injury." See 76 Fed. Appx. at 839. The plan administrator did not have a physician 20 review the medical records and the opinion of the psychologist did not refute the 21 opinions of the claimant's physicians. See id. at 839-840. Here, CNA retained a 22 board certified physician in internal medicine to review Plaintiff's medical records. Case 2:04-cv-00525-RCB Document 94 -9Filed 10/11/2005 Page 9 of 12

1 Further, the physician's review resulted in an evaluation that contradicted the opinion 2 of Plaintiff's physicians and indicated that Plaintiff was capable of performing the 3 substantial and material duties of her regular occupation. 4 In Peterson, the administrator denied the claimant's benefits claim because it

5 disputed that there was sufficient objective evidence that the claimant was disabled. 6 See 2004 U.S. Dist. LEXIS 19831 at * 10-12. Here, CNA does not dispute that 7 Plaintiff suffers from various ailments, but rather, based upon its review of the 8 administrative record and the opinion of a physician board certified in internal 9 medicine that Plaintiff, despite her ailments, was capable of performing the 10 substantial and material duties of her regular occupation. 11 In Blau, the Court determined that the administrator "failed to comply with

12 virtually every applicable mandate of ERISA." See 748 F.2d at 1353. The 13 administrator actively concealed the policy, failed to institute a claims procedure, and 14 failed to respond to claimant's claim of benefits. See id. Unlike the facts in Blau, 15 CNA had an effective claims procedure that was communicated to Plaintiff. Further, 16 as noted above, CNA provided a detailed explanation of its denial of Plaintiff's claim 17 for LTD benefits. Finally, despite Plaintiff's attempt to relitigate the issue, CNA 18 provided Plaintiff with the subject ERISA policy, which the Court determined was 19 part of the applicable policy. See March 28, 2005 Order. 20 Accordingly, the cases relied upon by Plaintiff are inapposite and do not

21 demonstrate that CNA's decision in this case was "clearly erroneous." CNA's 22
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1 decision is supported by the administrative record, the opinion of Dr. Truchelut, and 2 the subject ERISA policy and, thus, cannot be considered "clearly erroneous." 3 III. 4 CONCLUSION CNA's decision to deny Plaintiff's LTD benefits was based upon CNA's

5 detailed review of the administrative record, the clear language in the policy and 6 supported by the opinion of a board certified doctor in internal medicine. CNA 7 provided Plaintiff with a detailed explanation of its decision, which was in accord 8 with the clear language of the subject ERISA policy. Further, CNA's decision was 9 not "clearly erroneous" and does not rise to the high level required to demonstrate an 10 abuse of discretion. Accordingly, CNA respectfully requests that the Court grant its 11 motion for summary judgment. 12 13 14 15 16 17 18 19 20 21 22
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RESPECTFULLY SUBMITTED this 11th day of October, 2005. GALLAGHER & KENNEDY, P.A.

By/s/ Jeffrey B. Kuykendal Jay A. Zweig Jeffrey B. Kuykendal 2575 E. Camelback Road Phoenix, Arizona 85016-9225 Attorneys for Defendants

th 1 Electronically filed this 11 day of October, 2005, with electronic copies to: 2 David F. Gomez, Esq. Michael J. Petitti, Jr., Esq. 3 GOMEZ & PETITTI, P.C. 4 2525 E. Camelback, Suite 860 Phoenix, Arizona 85016 Co-Counsel for Plaintiff 5 th 6 COPY of the foregoing mailed this 11 day of October, 2005, to: 7 Stuart H. Sandhaus, Esq. 8 STUART H. SANDHAUS, A.P.C. Los Rios Historic District 9 31901 Los Rios Street San Juan Capistrano, California 92675 10 Co-Counsel for Plaintiff

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1302656/130-2669

/s/ Jan Vigorito