Free Reply to Response to Motion - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

40 North Central Avenue Phoenix, Arizona 85004-4429 Stephen M. Bressler, State Bar No. 09032 Direct Dial: (602) 262-5376 Direct Fax: (602) 734-3742 E Mail: [email protected] Ricki L. Cohen, State Bar No. 024884 Direct Dial: (602) 262-5759 Direct Fax: 602 748-2502 E Mail: [email protected] Attorneys for Defendants

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ) ) Plaintiff, ) ) vs. ) ) Halliburton Company Long-Term Disability ) ) Plan; and, Hartford Life & Accident ) Insurance Company, ) ) Defendants. ) ) David L. Mazet, No. CV 04-00493 PHX-FJM DEFENDANTS' CORRECTED SUR-REPLY IN OPPOSITION TO PLAINTIFF'S MOTION FOR REMAND

If Plaintiff's current earning potential is greater than 60% of his indexed predisability-earnings, then he does not meet the Plan definition of disability during the "any occupation period," and he is not entitled to disability benefits. In Defendants' proposed Sur-Reply, undersigned counsel endeavored to explain the calculations Hartford made in determining that Plaintiff was not eligible for continuing disability benefits. But as the Court pointed out in its August 1, 2008 Order, undersigned counsel's explanation was somewhat flawed. The flaw was a misstatement of the amount of Plaintiff's indexed pre-disability earnings and the extent to which Plaintiff's earning potential exceeds 60% of his indexed pre-disability earnings. The error was due entirely to a misunderstanding on undersigned counsel's part and in no way reflects any error or inaccuracy in Hartford's calculations. Most importantly, and contrary to Plaintiff's assertions, Hartford did index Plaintiff's pre-disability earnings for the purpose of calculating his eligibility for continuing benefits. Plaintiff's earning potential exceeds 60% of his indexed pre-disability earnings, and Plaintiff is ineligible for
Case 2:04-cv-00493-FJM Document 89 Filed 08/04/2008 Page 1 of 5

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

continuing disability benefits. The analysis begins with the Plan language, which provides during the "any occupation" period, a participant is not disabled if his earning potential is greater than 60% of his indexed pre-disability earnings:

See Plan, p. 9, CF-00095, Exhibit 1 to Defendants' Statement of Facts in Support of Cross-Motion for Summary Judgment, filed August 13, 2007 Following the Court's February 5, 2008 Order1, Hartford studied whether Plaintiff met the definition of total disability during the any occupation period. After recalculating Plaintiff's pre-disability earnings for purposes of determining what back benefits were owed, Hartford then "indexed" these earnings. This resulted in the adjusted amount of $5,149.18 in indexed pre-disability earnings. See Response at p. 5. Then Hartford multiplied the indexed pre-disability earnings by 60%, resulting in a figure of $3,089.51. Plaintiff does not qualify for continuing disability benefits in the "any occupation" period
1

Document 76
Document 89

Case 2:04-cv-00493-FJM

2

Filed 08/04/2008

Page 2 of 5
1959531.1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

if his earning potential (present estimated median wage) exceeds $3,089.51 (60% of his indexed pre-disability earnings). Defendants then needed to determine Plaintiff's present estimated median wage. Had Hartford used the employability assessment it performed in 20032, yielding a $3,103.03 estimated median wage in matching occupations, plaintiff would not qualify for continuing disability benefits because his earning potential in matching occupations exceeds 60% of his indexed pre-disability earnings. $3,103.03 (estimated median wage) minus $3,089.51 (60% of Plaintiff's indexed pre-disability earnings) = $13.52 over the 60% threshold. But Hartford did not rely solely upon its 2003 employability assessment. To comply with the Court's order requiring a reassessment of plaintiff's eligibility for continuing disability benefits, it ordered an updated assessment. Vocational Rehabilitation Counselor Maggie White completed the updated assessment (employability analysis) on April 16, 2008. Ms. White took into consideration Plaintiff's current functional capabilities as reported by his attending physician, his educational and employment history and skill set. She used the Occupational Access System (OASYS) to identify several occupations that match those skills and functional capabilities. This is a computerized job matching system that cross references an individual's qualifications with all the occupations classified by the U.S. Department of Labor in the Dictionary of Occupational Titles. The OASYS includes data reflecting 2006 national median wages. Ms. White found matching occupations with an estimated median wage of $3218.80. See Exhibit A to Defendants' Sur-Reply, page 2. With the updated employability analysis and following the Plan's direction, Defendants made the following calculation: $3,218.80 (estimated median wage) ÷ $3,089.51 (60% of Plaintiff's indexed pre-disability earnings) = a 104% earning potential compared to 60% of Plaintiff's indexed pre-disability earnings. Put more simply,
2

See Exhibit A, CF-00203-00236.
Document 89

Case 2:04-cv-00493-FJM

3

Filed 08/04/2008

Page 3 of 5
1959531.1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

$3,218.80 (Plaintiff's estimated median wage) minus $3,089.51 (60% of Plaintiff's indexed pre-disability earnings) = $129.29 over the 60% threshold. Plaintiff's earning potential exceeds 60% of his indexed pre-disability earnings. Thus, he does not qualify for disability benefits. For the first time in his Reply, Plaintiff also argues that Hartford's estimate of Plaintiff's present earning potential was not well-founded. In doing so, Plaintiff went outside of the administrative record, presenting the Court with a print-out from the U.S. Department of Labor with data on a single occupational category ­ to the exclusion of all others. See Reply at pp. 2-3 and Exhibit 3. This is an inadequate measure of Plaintiff's employability. Both the 2003 and the 2008 employability analyses performed by qualified Vocational Rehabilitation Clinical Case Managers thoroughly analyzed Plaintiff's functional capabilities, education, training and work history and used a sophisticated, computerized job matching system (the OASYS) that cross-referenced Plaintiff's qualifications and capabilities with over 12,000 occupations to find the closest job-person matches that would also provide a sufficient monthly earning potential. Plaintiff's handselection of one occupational category (for which plaintiff likely would be over-qualified and in which he likely would be substantially underpaid) is not an appropriate measure of Plaintiff's earning potential and certainly does not entitle him to de novo review. RESPECTFULLY SUBMITTED this 4th day of August, 2008. LEWIS AND ROCA LLP By s/Ricki L. Cohen Stephen M. Bressler Ricki L. Cohen Attorneys for Defendants

Case 2:04-cv-00493-FJM

Document 89

4

Filed 08/04/2008

Page 4 of 5
1959531.1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case 2:04-cv-00493-FJM

CERTIFICATE OF SERVICE I certify that on August 4, 2008, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing of the following CM/ECF registrants: Randolph G. Bachrach, Esq. Law Offices of Randolph G. Bachrach 5103 East Thomas Road Phoenix, Arizona 85018 Attorneys for Plaintiff

s/Michelle T. Gallegos

Document 89

5

Filed 08/04/2008

Page 5 of 5
1959531.1