Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Wilkinson v. Sun Life & Health Insurance
Citations: 127 F. Supp. 3d 545; 2015 U.S. Dist. LEXIS 116311; 2015 WL 5124323Docket: Civil No. 5:13CV87-RLV
Court: District Court, W.D. North Carolina; September 1, 2015; Federal District Court
Plaintiff Stephen Wilkinson seeks summary judgment against Defendant Sun Life and Health Insurance Company regarding a dispute over long-term disability benefits under ERISA. Wilkinson, a former Vice President and stockholder of Dolan, Traynor, Inc. (D.T.), experienced a decline in work performance following his wife's death in 2003, leading to the development of a heart condition. His emotional and physical struggles resulted in reduced productivity and increased absences from work, totaling about six weeks of paid time off over seven months. Discussions among D.T. shareholders regarding Wilkinson's ability to continue in his role took place, including considerations of potential Family Medical Leave Act (FMLA) leave and adjustments to his compensation and buy-out terms. These discussions were not resolved in the initial meetings, with further discussions planned. A follow-up email to Wilkinson summarized a prior meeting and included his assessment that partners doubted his ability to perform satisfactorily, despite his desire to work part-time. A subsequent meeting on April 21, 2004, led to a discussion about Wilkinson taking a leave of absence, which he agreed to under the condition that a written separation agreement would be prepared beforehand. On May 5, 2004, Wilkinson received a Family and Medical Leave Act (FMLA) request document acknowledging his need for leave due to a serious health condition, effective May 10, 2004. His last day of work was recorded as May 7, 2004, and he was on FMLA leave until August 2004, during which he informed D.T. he could not return. Prior to his FMLA leave, D.T. switched its long-term disability benefits provider to Sun Life, effective May 1, 2004. Wilkinson enrolled in Sun Life’s insurance plans in April 2004, indicating he was actively working 40 hours per week. On August 18, 2004, he filed a claim for long-term disability benefits with Sun Life, which required D.T. to confirm his employment status. D.T. confirmed Wilkinson’s role as Vice President with a standard work schedule of 40 hours per week and noted his last working day as May 7, 2004. His claim was supported by a physician’s statement indicating his cardiomyopathy as a slight limitation, with the cessation of work due to disability marked as May 7, 2004. Wilkinson received disability benefits shortly after his claim was approved, following periodic reviews and an independent medical examination by Dr. Catalino De La Cruz, who determined him to be permanently and totally disabled, leading to Sun Life’s approval of his claim on February 25, 2005. Sun Life classified Wilkinson's cardiomyopathy as a pre-existing condition but granted him Long-Term Disability (LTD) coverage due to his prior coverage with Unum and meeting other criteria for service credit. Sun Life paid Wilkinson monthly benefits from August 2004 to July 2008 without interruption, requiring him to submit updated medical information and evaluations, which he complied with. While receiving benefits, Wilkinson's premium payments were waived, terminating when benefits ceased. He was deemed "disabled" by the Social Security Administration, with an onset date of May 8, 2004. On November 15, 2007, Wilkinson filed a lawsuit against D.T. and its partners in New Jersey, alleging fraudulent inducement to sign a modification of his buyout agreement and resigning under pressure due to his disability. The suit was settled. Sun Life raised concerns about Wilkinson's eligibility for benefits after learning of the lawsuit, claiming that statements in Wilkinson's court pleadings indicated he left D.T. before the Sun Life policy took effect. Specifically, Wilkinson's assertion that he agreed to a leave of absence beginning May 7, 2004, was contested by Sun Life, which argued that his leave commenced on April 21, 2004, based on his statements. D.T. maintained that Wilkinson's last day of work was May 7, 2004, but also noted his declining performance and attendance related to his health issues and personal loss. On July 29, 2008, Sun Life notified Wilkinson that his long-term disability (LTD) benefits would be terminated after four years of payments, citing insufficient medical evidence regarding his ability to perform his regular occupation. Sun Life referenced medical notes from Dr. Richard Scherczinger, who indicated that while Wilkinson experienced symptoms like shortness of breath and fatigue, he was likely able to perform "Light work," characterizing his functional capacity as "Class 2 (Slight Limitation)." Sun Life's rationale included treatment notes from Dr. Rosenthal from 2005 and 2006, as well as a favorable note from Dr. Scherczinger in April 2008, which they used in a July 2010 letter denying Wilkinson’s administrative appeals. This letter also noted a Functional Capacity Evaluation by Physical Therapist Eduardo Regner on July 16, 2008, which assessed Wilkinson as capable of "Medium work." Additionally, Sun Life argued that a lawsuit Wilkinson filed against D.T. suggested his resignation was not solely due to medical issues but rather financial disputes with partners, undermining his claim of disability. Sun Life informed Wilkinson of his right to appeal the decision, also stating that he was no longer eligible for the waiver of premium benefit following the denial. Subsequently, on January 23, 2009, Wilkinson's attorney submitted a six-page letter challenging the termination of benefits, raising concerns about Sun Life's failure to conduct an updated Independent Medical Examination and questioning their reliance on medical reviews from MES Solutions, which primarily serves insurance carriers. Wilkinson contended that Sun Life favored another reviewing physician's opinion against that of the examining physician, who deemed him totally disabled. Wilkinson requested Sun Life to provide a previously undisclosed Functional Capacity Evaluation from July 16, 2008, and sought additional time to supplement his record. His appeal was assigned to benefits consultant Michelle Kelleher, who reviewed court documents indicating Wilkinson's inconsistent work attendance at D.T. and his initial agreement to take a leave of absence during an April 21 partner meeting. Sun Life faced challenges in obtaining information from D.T., with at least one unanswered request. Kelleher did not directly contact D.T. stockholders or conduct interviews. On May 13, 2009, Sun Life upheld the termination of Wilkinson’s long-term disability (LTD) benefits, positing he was not an "Active, Full-Time Employee" at the time of his application. The policy defined an active employee as one working at least 30 hours per week and meeting other criteria. Although Sun Life found grounds for discontinuing benefits, it did not assess Wilkinson's disability status under its policy. Sun Life sought repayment from Wilkinson for overpaid benefits totaling $386,539.37, citing a Reimbursement Agreement from September 28, 2004. Wilkinson appealed again on January 7, 2010, asserting he fulfilled the criteria for an "Active Full-Time Employee" and arguing that he would have been covered under a prior Unum Insurance policy had he filed earlier. He claimed Sun Life's inadequate investigation prejudiced his evidence-gathering efforts. Wilkinson's second appeal was assigned to a different consultant, Alan Carr. Sun Life required an updated Independent Medical Examination, which was performed by Dr. Lawrence Raymond on May 11, 2010. Dr. Raymond concluded Wilkinson was limited to largely sedentary duties, contradicting prior findings. Ultimately, based on Dr. Raymond's assessment, Sun Life determined that Wilkinson could not perform his regular occupation and classified him as "totally disabled" under the policy. Sun Life's internal investigation into Wilkinson's employment prior to his application for long-term disability (LTD) benefits revealed that no attendance records existed for company officers, as confirmed by D.T. In reviewing the New Jersey state court action, Carr concluded that Wilkinson accepted a leave of absence on April 21, 2004, and determined that he was not an "Active, Full-Time Employee" under Sun Life's policy when it became effective on May 1, 2004. This led Sun Life to reaffirm its decision to terminate LTD payments, asserting that Wilkinson's status did not meet policy requirements. Wilkinson initiated a civil action on June 18, 2013, against D.T. Employee Health and Welfare Benefit Plan and Sun Life under ERISA, seeking enforcement of his rights. Sun Life responded with a counterclaim for restitution of $386,539.37 in benefits previously paid. Following procedural motions, including Wilkinson's dismissal of D.T. from the case and his motion to dismiss Sun Life's counterclaim, both parties moved for summary judgment, each asserting no genuine issues of material fact exist. Wilkinson seeks an award of benefits and their continued payment until age 65 or until he is no longer disabled, while Sun Life seeks to maintain its benefits discontinuation and repayment order. The central dispute revolves around whether Wilkinson qualified as an "Active Full-Time Employee" on the date D.T.'s policy commenced. Federal jurisdiction is based on ERISA statutes. Summary judgment standards dictate that motions must be evaluated individually and favorably for the opposing party in the presence of factual disputes. Judicial review of a plan administrator's decision under ERISA is de novo unless the plan grants the administrator discretionary authority, in which case the review is for abuse of discretion. The Fourth Circuit evaluates the presence of discretionary authority based on clear language within the policy, as established in prior cases. The Claims Fiduciary, GE Group Life Assurance Company (Sun Life), is explicitly granted broad discretionary authority to make determinations regarding claims and eligibility, with any findings only being overturned if made in an arbitrary or capricious manner. Wilkinson challenges the validity of the discretionary authority language, arguing it is not part of the Policy, while Sun Life asserts it is included in a Statement of ERISA Rights delivered with the Policy. This Statement, although not part of the Summary Plan Description, refers to it multiple times, suggesting the documents are independent. The core issue is whether the Statement of ERISA Rights effectively confers discretionary authority to Sun Life. The Supreme Court case Amara is referenced to illustrate the principle that relief awarded must be based on the terms of the plan and not on non-plan documents. Summary: The court in Amara ruled that summary plan documents communicate with beneficiaries but do not modify the terms of an ERISA plan under §502(a)(1)(B). It clarified that while these documents cannot alter the plan's terms, they can still be considered alongside other plan documents to determine if a plan administrator or fiduciary has discretionary authority, which affects the standard of review. In this instance, the Sun Life LTD Policy grants discretionary authority to Sun Life, leading to an abuse-of-discretion standard for judicial review. Under this standard, a plan administrator’s decision is upheld if it is reasonable, regardless of whether the court would have made a different choice. To be deemed reasonable, the decision must stem from a "deliberate, principled reasoning process" and be supported by substantial evidence. The court outlined eight nonexclusive factors for evaluating reasonableness, which include the language and goals of the plan, the adequacy of materials considered, consistency with the plan's provisions, and any conflicts of interest. The court emphasized that a conflict of interest should be given significant weight if it likely influenced the decision, particularly when the administrator has a history of biased claims administration. Following the precedent set in Glenn, conflicts of interest are assessed as part of the abuse-of-discretion standard, with the overall review of the plan’s determination considering these factors in evaluating reasonableness. Cross motions for summary judgment represent each party's assertion that it alone is entitled to summary judgment, and the existence of competing claims does not imply that if one is denied, the other is automatically justified. If genuine issues of material fact arise, a plenary trial is required instead of summary judgment. The court has approached the review of these motions as it would in a bench trial, first evaluating the evidence cited by the Plaintiff and then the evidence presented by the Defendant. A critical issue is the admissibility of an FMLA document produced by D.T. on May 5, 2004. Sun Life contends that the document should not be considered since it was not included in the administrative record and was not presented during eligibility hearings. Conversely, Wilkinson argues for its admissibility, citing Sun Life's acknowledgment of his FMLA leave in its denial letter. When the standard of review is abuse of discretion, evidence outside the record is typically inadmissible. However, the Fourth Circuit's ruling in Helton v. AT&T Inc. suggests a more nuanced approach in ERISA cases, allowing courts to consider extrinsic evidence if it was known to the plan administrator at the time of the benefits determination. This approach aims to prevent administrators from selectively using only favorable evidence, emphasizing that their failure to consider relevant evidence does not shield their decisions from scrutiny. The admissibility of the FMLA form hinges on whether Sun Life was aware of it when denying Wilkinson's benefits. Sun Life contends it did not manage claims under the employer's FMLA program, thus lacking FMLA-related documents. However, evidence shows Sun Life was aware of Wilkinson’s FMLA leave and had constructive notice of the relevant paperwork. This is supported by references in Sun Life's denial letter from May 13, 2009, to claims made by Wilkinson about taking FMLA leave in May, including a letter from Wilkinson stating his leave began on May 7, 2004, under unpaid FMLA. The absence of the FMLA form from Sun Life's records is significant, as it is crucial for assessing the adequacy of the materials considered in the decision-making process (related to the third Booth factor). The FMLA form indicates that Wilkinson notified D. T of his intent to take medical leave on April 21, 2004, and it also pertains to the eighth Booth factor concerning the fiduciary's motives and potential conflicts of interest. While the Supreme Court has established that conflicts of interest cannot alter the standard of review in benefits decisions, such conflicts can influence the evaluation of evidence's reasonableness and fairness in ERISA cases. The clarity on whether Sun Life had actual possession of the FMLA form or acted with improper motives remains unclear, but its inclusion in the court’s consideration is deemed essential for a fair evaluation of the claims. Plaintiff seeks long-term disability benefits under ERISA, claiming Sun Life wrongfully terminated his benefits and requesting all retroactive benefits owed. The court must assess whether Wilkinson was performing all job duties full-time, as of May 1, 2004, a key factor for determining eligibility for LTD benefits under Sun Life’s policy. Sun Life asserts that the burden rests on Wilkinson to prove his eligibility for these benefits. Plaintiff bears the burden of proving that his claim is covered under the Plan, as established in Jenkins v. Montgomery Indus. A fundamental principle of insurance law stipulates that the insured must demonstrate a covered loss, while the insurer must prove any relevant exclusions. The court finds that Wilkinson has met his burden of establishing that a covered loss occurred. Under ERISA, there is a delicate balance between prompt enforcement of plan rights and the promotion of plan creation, with heightened standards imposed on insurers. ERISA requires plan administrators to act solely in the interests of participants and beneficiaries and mandates a "full and fair review" of claims denials. In evaluating a summary judgment motion, the arbitrary and capricious standard assesses whether evidence supports a rational decision by the plan administrator regarding claim denial. The court grants the Plaintiff’s motion for summary judgment and denies the Defendant’s. It concludes that Sun Life abused its discretion in terminating Wilkinson's benefits, as its decision lacked substantial evidence. Specifically, Sun Life's assertion that Wilkinson was not an "Active, Full-Time Employee" was inadequately supported, relying heavily on selective interpretations of Wilkinson's statements made in a separate lawsuit, while disregarding context that could contradict their conclusions. Timothy Dolan requested that Wilkinson take a leave of absence during a conversation on April 21, 2004, which Wilkinson agreed to, indicating that his leave began immediately after this conversation. However, Wilkinson later stated that he initiated a medical leave for an indefinite duration starting May 7, 2004, based on promises from partners to reach an agreement. Sun Life’s argument that Wilkinson ceased working on April 21 is challenged as inaccurate and misleading. The record indicates that discussions about Wilkinson's work performance and potential leave occurred on at least three occasions. Wilkinson filed a Family Medical Leave Act (FMLA) request on May 5, 2004, and Sun Life contended that he worked less than 30 hours per week before their policy with D. T became effective on May 1, 2004. Sun Life suggested he may have been "Partially Disabled" before this date, which would disqualify him from long-term disability (LTD) benefits. Wilkinson countered that he worked 60 hours per week prior to his wife’s death and that his hours decreased to 30-40 as his health deteriorated. Wilkinson highlighted that if he had been medically disabled before May 7, 2004, he would have sought financial benefits earlier. The absence of attendance records for D. T officers limits evidence of Wilkinson's work hours, relying primarily on his declaration. D. T personnel confirmed he had 25 days of unused Personal Time Off (PTO) before his FMLA leave, undermining Sun Life's claims that he worked less than 30 hours weekly, which appear speculative and unsupported by substantial evidence. In a related case, Bowers v. Life Ins. Co. of N. America, summary judgment favored the plaintiff when benefits were denied based on similar eligibility questions regarding work schedules, reflecting the factual disputes present in Wilkinson's case. Under the Plan, Bowers’s eligibility for the waiver of premium (WOP) benefit depended on his status as a full-time employee, defined as regularly working at least 30 hours per week. Bowers provided documentary evidence, including an affidavit from himself and his former supervisor, asserting he was classified as a full-time employee and worked a minimum of 30 hours weekly until his departure due to disability. However, as a salaried employee, Bowers could not produce timesheets to substantiate his claim. His employer, C.H. Robinson, confirmed the absence of specific documentation to verify or dispute Bowers’s assertion. The district court found the evidence from the defendant lacking specificity and did not contradict Bowers's claims. Bowers stated in his affidavit that he initially worked 25 hours per week after returning from surgery but increased his hours to 34.5 weekly and maintained full-time status until leaving in June 2009. The court regarded Bowers’s affidavit as probative due to its foundation in personal knowledge, although it did not consider it conclusive, instead evaluating it alongside other evidence. The court concluded that the documented evidence indicated Bowers consistently worked at least 30 hours per week. In a related comparison, Sun Life critiqued Wilkinson for not providing definitive proof of his working hours in April and May 2004. Nevertheless, circumstantial evidence indicated May 7, 2004, as the last day Wilkinson was an active full-time employee. Wilkinson's communications with D.T. partners suggested he sought to limit his hours to 30-40 per week but was not allowed to do so. Even if he had reduced his hours prior to May 1, 2004, he would still be classified as a full-time employee under Sun Life’s policy. A key piece of evidence supporting his full-time status was an FMLA request from D.T.’s Human Resource Department, dated May 5, 2004, indicating that Wilkinson would begin FMLA leave around May 10, 2004, consistent with his claim that he started leave on May 7. The timing of this request undermined Sun Life's assertion that Wilkinson had taken leave earlier, on April 21, 2004. In April 2004, Wilkinson communicated his need for family/medical leave, which aligns with the assertion that he decided to take medical leave on April 21, 2004, rather than that date marking the start of his leave. D.T's statements during Wilkinson's lawsuit against his former employer confirm that Wilkinson's last working day was May 7, 2004, after which he took medical leave. D.T indicated that Wilkinson was employed from March 15, 1973, until May 7, 2004, and continued to receive his full salary until that date, supporting the conclusion that he was a full-time employee until then. The evidence suggests that Wilkinson should be classified as an “Active, Full-Time Employee” up to May 7, 2004. Sun Life's attempts to argue that no single document proves Wilkinson worked at least thirty hours a week are unconvincing, as the overall record supports his full-time status. Sun Life's decision-making process is criticized for being unprincipled, as it was reportedly influenced by Wilkinson's lawsuit against D.T rather than objective medical evidence. Sun Life's denial letters indicate a shift in rationale, initially claiming insufficient medical evidence for disability and later alleging Wilkinson's departure was due to disagreements, only to subsequently claim he worked fewer than thirty hours per week. This sequence of reasoning suggests a lack of a thorough and principled investigation into Wilkinson's eligibility for benefits, as Sun Life's claims evolved in response to his appeals. The overall impression is that Sun Life's decisions were driven by a desired outcome rather than a fair assessment of the facts. Sun Life did not seek clarification from D. T principals regarding Wilkinson's work schedule prior to May 1, 2004, and failed to acknowledge that the passage of time hindered Wilkinson's ability to provide concrete evidence of his daily work activities from five to ten years ago. Despite the lack of documentation, it is undisputed that Wilkinson cooperated with Sun Life to establish his eligibility for long-term disability (LTD) benefits, submitting evidence such as emails with D. T partners and sworn statements from a previous lawsuit. Wilkinson declared May 7, 2004, as his date of disability in several corroborating documents, including Social Security and life insurance records. He voluntarily underwent a second Independent Medical Examination, which confirmed his total disability. The Court concluded that Sun Life's investigation did not meet the higher standards set by ERISA. Consequently, it ruled in favor of Wilkinson, granting him all benefits under the Sun Life LTD Policy, including reinstatement of LTD benefits and waiver of premiums. The Court also granted Wilkinson's Motion for Summary Judgment and dismissed Sun Life's Counterclaim with prejudice, rendering Wilkinson’s Motion to Dismiss that challenged the recovery of allegedly overpaid benefits moot. The document notes that while D. T was incorporated, its stockholders referred to each other as "partners," and that Wilkinson's email representations were not sworn or affirmed but reflected his perspective. Wilkinson's account of events is supported by the documentary evidence and statements from D. T stockholders. He mentioned considering a leave of absence during a lunch with the D. T Partners, who were hesitant due to concerns from vendors about his extended absence. Sun Life contends that the FMLA form should not be considered by the court, as detailed in Section III. According to the Policy, Wilkinson could not apply for long-term disability (LTD) benefits until after a ninety-day elimination period. The characterization of Wilkinson’s cardiomyopathy as a pre-existing condition indicates that Sun Life thoroughly examined his original LTD claim. The Policy includes a provision for waiving premiums while the insured is disabled and receiving benefits. Wilkinson asserts that Sun Life also waived premiums for his life insurance policy while he received LTD benefits. Sun Life refutes this claim, arguing that the language from the LTD policy cited by Wilkinson does not pertain to life insurance and suggests that this issue, while related, is not directly under the court's jurisdiction. Sun Life's denial letters from July 29, 2008, and July 12, 2010, outline the medical records justifying their conclusion that Wilkinson no longer qualified for LTD benefits. However, since Sun Life now acknowledges that Wilkinson is totally disabled under the policy, a detailed review of all medical evidence is unnecessary. Notable entries from Dr. Rosenthal's records indicate Wilkinson's stable condition in 2005 and 2006, but the primary issue relates to whether he performed all duties of his job for at least 30 hours a week. Wilkinson claims he lacks access to the requested records or that any existing records are protected by a confidentiality agreement from a previous settlement. The definitions of "Total Disability" and "Regular Occupation" are crucial to determining eligibility, indicating that total disability must arise from sickness or injury while the individual is insured under the policy. The excerpt outlines several key legal issues related to long-term disability (LTD) coverage under a policy administered by Sun Life. It clarifies that the evaluation of an employee's eligibility for benefits should consider their occupation broadly, rather than specific duties or employer criteria. Sun Life did not dispute that Wilkinson qualified as part of the "Eligible Class" for LTD coverage. The local rules allow a party to preserve an affirmative defense in their initial pleadings, requiring a separate motion and brief for court decisions. Sun Life claims Wilkinson is not entitled to a jury trial, asserting an affirmative defense to this effect. Wilkinson seeks benefits under a provision for waiver of premium payments due to disability, arguing it extends to his life insurance policy as well, though Sun Life argues for an abuse of discretion standard in reviewing claims, while Wilkinson advocates for a de novo standard. The document emphasizes the importance of the Summary Plan Description for understanding rights under ERISA, and cites the Supreme Court's Amara decision, which asserts that plan language must be enforced over summaries. It also notes that conflicting terms in summary documents are unenforceable. Sun Life references cases from other circuits where summary judgment serves as a method for resolving benefits issues, with no entitlement to usual inferences for the non-moving party. Wilkinson contends that Sun Life's omission of certain forms from the administrative record indicates a deliberate disregard of evidence supporting his full-time employment status until May 7, 2004. The excerpt concludes by discussing the relationship between the summary judgment review standard and the arbitrary and capricious standard in ERISA cases, affirming that the cross-motions for summary judgment do not diminish the legal standards established in Firestone v. Bruch, which requires deference to the plan administrator's findings. A district court is restricted from independently weighing evidence when reviewing a plan administrator's decision. The third Booth factor requires evaluation of the adequacy and support of materials used in the decision-making process, while the fifth factor assesses whether the process was reasoned and principled. Wilkinson did not admit to starting his leave on April 21, 2004; he only agreed to steps for pursuing FMLA leave afterward. There is no evidence indicating that this discussion equated to his leave status changing on that date. Sun Life disputes the May 7, 2004, date as Wilkinson's last day of employment, arguing that D. T's statements are not binding since Sun Life holds fiduciary responsibility for determining Wilkinson's eligibility for LTD benefits. Although D. T’s records are relevant, they are not conclusive. The Bowers case, which involved denial of a waiver of premium for life insurance based on work hours and disability, is referenced to contextualize the review of Wilkinson's work schedule. Sun Life inconsistently claims Wilkinson's departure date as April 21, 2004, while the FMLA form dated May 5, 2004, suggests a later date around May 10, 2004. Sun Life's argument that D. T's payment of salary through May 7, 2004, does not indicate eligibility for LTD benefits is noted, but this payment remains a factor for the court's review. The denial basis shifted after an Independent Medical Examiner concluded Wilkinson was unable to perform his job. Sun Life maintains that both medical issues and the lawsuit against D. T were cited in the initial denial letter, but the letter did not claim Wilkinson worked less than full time. The court finds no evidence supporting claims that Wilkinson falsified information to defraud Sun Life.