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Schuman v. Aetna Life Ins. Co.

United States District Court, D. Connecticut

March 20, 2017

JEFF SCHUMAN, Plaintiff,
AETNA LIFE INS. CO, et al., Defendants.


          Stefan R. Underhill United States District Judge

         On July 1, 2015, the plaintiff, Jeff Schuman, filed a complaint against the defendants, Ahold USA, Inc.'s Master Welfare Benefit Plan, the Administrative Committee of Ahold USA, Inc. as Plan Administrator, and Aetna Life Insurance Company as Claims Administrator, alleging that they violated the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., by failing to provide him with all of the disability benefits to which he was entitled. Complaint (doc. 1); Amended Complaint (doc. 32-1).[1] On May 27, 2016, the parties filed cross-motions for summary judgment. (docs. 36 and 37) Schuman has also filed a motion for civil penalties, alleging that the defendants violated ERISA, 29 U.S.C. § 1132(c), by failing to disclose all policy documents in the timeframe required by the statute. (doc. 62)

         For the following reasons, I grant in part and deny in part the defendants' motion for summary judgment; deny Schuman's cross-motion for summary judgment; and deny Schuman's motion for civil penalties. In addition, I grant the defendants' alternative request and remand the matter for further development of the record.

         I. Standard of Review

         Summary judgment is appropriate when the record demonstrates that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment).

         When ruling on a summary judgment motion, the court must construe the facts of record in the light most favorable to the nonmoving party and must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson, 477 U.S. at 255; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970); see also Aldrich v. Randolph Cent. Sch. Dist., 963 F.2d. 520, 523 (2d Cir. 1992) (court is required to “resolve all ambiguities and draw all inferences in favor of the nonmoving party”). When a motion for summary judgment is properly supported by documentary and testimonial evidence, however, the nonmoving party may not rest upon the mere allegations or denials of the pleadings, but must present sufficient probative evidence to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); Colon v. Coughlin, 58 F.3d 865, 872 (2d Cir. 1995).

         “Only when reasonable minds could not differ as to the import of the evidence is summary judgment proper.” Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991); see also Suburban Propane v. Proctor Gas, Inc., 953 F.2d 780, 788 (2d Cir. 1992). If the nonmoving party submits evidence that is “merely colorable, ” or is not “significantly probative, ” summary judgment may be granted. Anderson, 477 U.S. at 249-50.

The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted.

Id. at 247-48. To present a “genuine” issue of material fact, there must be contradictory evidence “such that a reasonable jury could return a verdict for the non-moving party.” Id. at 248.

         If the nonmoving party has failed to make a sufficient showing on an essential element of his case with respect to which he has the burden of proof at trial, then summary judgment is appropriate. Celotex, 477 U.S. at 322. In such a situation, “there can be ‘no genuine issue as to any material fact, ' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 322-23; accord Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (movant's burden satisfied if he can point to an absence of evidence to support an essential element of nonmoving party's claim). In short, if there is no genuine issue of material fact, summary judgment may enter. Celotex, 477 U.S. at 323.

         II. Background

         Unless otherwise indicated, the following facts are drawn from statements in the parties' Local Rule 56(a)(1) Statements to which the other side did not object. See Defs.' L.R. 56(a)(1) Stmt. (doc. 36-6); Pl.'s L.R. 56(a)(1) Stmt. (doc. 37-2).

         A. Schuman's Disability Benefit Plan

         Prior to becoming disabled, Jeff Schuman had worked as a pharmacist in retail stores for thirty-five years. At the time that he became disabled, he was employed by Ahold USA, Inc. (“Ahold”) as a retail pharmacy manager at a Stop & Shop Supermarket (“Stop & Shop”).[2]Schuman's position required frequent walking, constant standing, and lifting up to 20 pounds. He became disabled from that position on April 30, 2013, and has remained unable to perform that job.

         Schuman was eligible to participate in a long- and short-term disability plan provided as part of a group insurance plan between Aetna Life Insurance Company (“Aetna”) and Ahold. As discussed further below, the parties adamantly disagree about which “version” of that policy should apply here. All of the potential policies provide for six months of short term disability (“STD”) benefits, followed by a period of long term disability benefits (“LTD”). All versions of the policy then provided an initial period in which LTD benefits would be paid if the claimant met the “own occupation” test, which awarded benefits:

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; and
Your earnings are 80% or less of your adjusted predisability earnings.

See Administrative Record (“AR”) at 9, 102; ADD at 1454, 1484.[3]

         At the end of the period in which the “own occupation” test applied, LTD benefits would pay for an additional period if the claimant met the “reasonable occupation” test, meaning he could not perform the material duties of any reasonable occupation “solely because of” his disability. See AR at 9, 102; ADD at 1454, 1484. A “reasonable occupation” is defined in all of the policies as:

[a]ny gainful activity:
For which you are or may reasonably become, fitted by education, training, or experience; and Which results in, or can be expected to result in, an income of more than 60% of your adjusted predisability earnings.

See AR at 23, 119; ADD at 1471, 1499.

         B. Versions of the Certificate

         Four different LTD certificates are discussed in the parties' briefing. Although the defendants object to the terminology, they have adopted Schuman's labeling of the certificates as Versions One, Two, Three, and Four. I will do the same.

         The dispute over which version of the certificate applies apparently did not arise until July 2014. Prior to that date, Schuman had been informed multiple times by Aetna representatives that the “own occupation” test would only last for a twelve-month period. For instance, in a September 4, 2013 letter, Kimberly Nee, a representative of Aetna, sent Schuman a letter stating that Schuman would receive LTD benefits for twelve months under the “own occupation” test, after which time the “reasonable occupation” test would apply. AR at 815. In a September 13, 2013 letter, Nee informed Schuman that he was “eligible to receive monthly benefits effective 10/27/2013, and continuing for up to twelve months as long as you remain totally disabled from your own occupation.” AR at 819. Nee also indicated on September 16, September 26, and December 12, 2013 that the “own occupation” test would be applied only for the first twelve-month period.[4] In a letter dated March 27, 2014, Nee once again informed Schuman that his benefits under the “own occupation” test would end on October 26, 2014, twelve months after the beginning of his LTD period. Schuman did not question or object to Nee's repeated statements that the “own occupation” test would only apply for twelve months until July 2014, and indeed appears to have asked several questions about the “reasonable occupation” test in 2013. See AR at 203 (note on September 26, 2013 stating that “EE also asked about RW of 60% after a year of benefits”); AR at 555 (note between July 17 and July 21, 2014 stating that “EE asked about the change in disability in Oct[ober] and how this [apparently indicating a recent surgery] affects it”).

         1. Version One, AR at 1-31

         Schuman asserts in an undated declaration submitted with his attempt to reopen his appeal that he downloaded a copy of Version One before May 2013. AR at 1033. In a Declaration dated February 25, 2016, Schuman asserts that he received Version One “through my company's intranet site or by mail, before I left . . . in May 2013.” ADD at 1510 (doc. No 35). Kimberly Cline, an Ahold employee, also sent Schuman a copy of Version One on July 30, 2014 in response to his request to receive a copy of his policy.

         Version One states that the “own occupation” test applies for a twenty-four-month period. AR at 9. The eligible class identified in Version One is defined as follows: You are in an eligible class if:

You are a regular full-time active executive or salary employees [sic], as defined by your employer.
AR at 6. The defendants assert that Version One does not apply to Schuman because it applies only to employees at the Carlisle unit of Ahold or Ahold Financial Services. They have not, however, shown that Version One actually includes that limitation in its text; rather, they have asserted that limitation in an interrogatory response. Defs' LR 56(a)(1) Stmt. at ¶ 78.

         2. Version Two, AR at 94-124

         Version Two apparently was not provided to Schuman until it was produced as part of the Administrative Record. See Defs.' Sum. J. Br. at 2 n.1. It includes an “own occupation” test of twelve months. AR at 102. Version Two has an effective date of January 1, 2012, and an issue date of January 11, 2012. AR at 96. It was “signed” by Mark Bertolini as CEO. Id. The defendants assert that Version Two is the only “version” of the Certificate that applies to Schuman. They point to the “eligible class” definition, which is as follows:

You are in an eligible class if:
You are a regular full-time Executive, salaried, Non-Union Hourly, and Union 99 Associates[sic] employed by Stop and Shop, Giant of Maryland, and American Sales Company employees [sic], as defined by your employer.

AR at 99. Schuman asserts that he was not a Stop & Shop employee, but rather an employee of Ahold, and accordingly is not a member of the eligible class.

         3. Version Three, ADD at 1446-76

         Schuman received Version Three in the following manner: when Cline sent Schuman Version One, which has a twenty-four-month “own occupation” test period, she also provided him with a summary plan description (“SPD”) dated January 1, 2011, stating that the “own occupation” test only applied for twelve months. Schuman pointed out the inconsistency. Traci McAllen, a manager of Benefits Administration at Ahold, was notified and emailed Ronald Mattson, Aetna's Group Insurance Account Executive responsible for the Ahold account, about the inconsistency. Mattson responded on August 1, 2014, stating:

This should absolutely read 12 months Own Occupation. It's been that way for years on the Stop & Shop / Giant of Maryland plans. I'm having the policy updated TODAY.
We updated the policy in 2012 to make sure we had clean documents across the board, and someone missed this very important provision.
My apologies. I have reviewed the entire document and am making another change to the Eligibility statement to make sure it indicates Nonunion hourly associates.
[Mattson included a copy of what appears to be the eligible class definition in Version One.]
The Giant-Carlyle policy correctly indicates 24 months Own Occ.

ADD at 1525. Later that day, Mattson provided McAllen with Version Three. Id. On August 25, 2014, McAllen sent Version Three to Schuman, stating in her transmittal email that the correct time for the “own occupation” test was twelve months. McAllen described the twenty-four month “own occupation” period as “an administrative error.” ADD at 1504.

         Version Three contains the same eligible class definition as Version Two, ADD at 1451; however, it also contains an inconsistency. It states that the “own occupation” test applies for twenty-four months, but that the “reasonable occupation” test applies after the first twelve months. ADD at 1454.

         4. Version Four, ADD at 1477-1503

         Schuman was provided with Version Four apparently after he identified the inconsistency in Version Three in a call to Robert Watts, Director of Benefits at Ahold, on August 25, 2014. ADD at 1509. Watts attached Version Four along with an email to Schuman on August 29, 2014, stating, in relevant part:

We understand that Aetna, the Company's LTD insurer and claims administrator, provided to you a Certificate that contained an administrative error in that it mistakenly set forth a period of 24 months for the test of disability. The correct time period under the LTD Plan is 12 months. I have enclosed a corrected Certificate [Version Four] which, as you will see, includes the 12-month time period.

ADD at 1509.

         Version Four states that the “own occupation” test applies for twelve months, and after those twelve months, the “reasonable occupation” test applies. ADD at 1484. Version Four states on its cover page that it was “Prepared Exclusively for Stop and Shop / Giant of Maryland, ” but does not mention those entities in its eligible class definition, which is as follows:

You are in an eligible class if:
You are a regular full-time employee, as defined by your employer.

ADD at 1481. Version Four has an effective date of January 1, 2010, and an issue date of September 13, 2012. ADD at 1479. It was “signed” by Ronald A. Williams as CEO, but Williams ceased to hold that position in 2010.

         C. Schuman's Disability Claim

         On or around June 16, 2011, Schuman commenced a short term disability (STD) claim and was absent from work while he underwent surgery to address pain in his right foot. He returned to work without restrictions on January 30, 2012. On or around March 28, 2013, Schuman commenced a second STD claim and was absent from work starting on April 30, 2013 to have the hardware installed during the 2011 surgery removed. The parties agree that Schuman received the requested STD benefits, including during the period from April 30, 2013 through October 28, 2013.

         The treatments did not resolve Schuman's pain, however, and Schuman's treating doctor determined that he was only capable of sedentary work. On August 29, 2013, Schuman informed an Aetna representative that he would not be able to return to his position. The parties agree that Schuman's disability has continued to render him incapable of holding that position until the present.

         In September 2013, [5] close to the end of Schuman's six-month STD benefit period, his claim was referred for a determination whether he was eligible for LTD benefits. Throughout the relevant period, the parties agree that Schuman's treating physician, Dr. Aronow, consistently determined that Schuman was capable of performing sedentary work. See, e.g., Defs' LR 56(a)(1) Stmt. at ¶ 30 (citing AR at 651, 827-28, 1232, 1260-61, 1299, 1314-15). The parties also agree that Schuman met the “own occupation” test of disability throughout the relevant period. The following facts thus describe Aetna's assessment of Schuman in preparation for the application of the “reasonable occupation” test.

         On September 25, 2013, Joseph Thompson of Coventry Health Care provided an “Aetna Vocational Assessment” to Diane Winiarski, an Aetna employee listed as the “Claim Owner.” AR at 822-25. The report indicated that Schuman had several transferable skills, but that transferability was “limited” because “his vocational background is concentrated in one specific occupation.” It identified three “job goals” in occupations that would not have met Schuman's reasonable wage requirements: peer reviewer, claims examiner, and instructor-pharmaceutical.

         On September 26, 2013, Winiarski completed an in-house transferrable skills assessment and identified the additional occupation of “Quality-Control Coordinator, Pharmaceuticals.” AR at 499. Winiarski's notes indicate that she asked Thompson “to assess if this occupation exist [sic] in EE's locale as CT does have numerous pharmaceutical companies.” Id. On October 18, 2013, Winiarski's notes indicate that she received an email from Thompson regarding additional labor market research. She indicated that the documentation he provided “appears to note the existence of auditor positions of a sedentary nature consistent with the educational achievement, it is not known whether they would meet the reasonable wage.” AR at 504. She further stated that she had sent a follow-up email to Thompson to discuss the results because she was

concerned that vendor may not have understood task assignment. Need labor market research to to [sic] determine if the labor market would support the alt. occ. identified in [her previous analysis], Quality Control Coordinator. Need direct ER [employer] contacts to verify the position[s] exist, hiring trends, wags [sic], and would consider the clmt for employment based on his education and work experience.


         On November 18, 2013, Winiarski received a draft Labor Market Survey Report from Thompson. Her notes indicate that she asked Thompson to make various edits to the report regarding “ER [employer] contacts and typos.” AR at 511. She stated that she wanted to clarify whether Thompson had been able to reach specific employers and asked him to remove from his report occupations that did not meet the reasonable wage requirement. She also noted that Schuman had been apprised of the process for completing a Labor Market Survey and would be informed that Thompson was adding additional employer contacts to the report. On November 26, 2013, Winiarski's notes indicate that Schuman was informed about the results of the final Labor Market Survey Report and that he discussed them with her. AR at 516. Her notes indicate that, as per policy, Schuman was not provided with a copy of the report.

         On or about December 18, 2013, Schuman registered for two courses at a community college as part of Aetna's vocational rehabilitation program. In a January 3, 2014 letter, Kimberly Nee, a representative of Aetna, informed Schuman that he had been approved for a Rehabilitation Program, with Lori Karickhoff serving as his vocational rehabilitation counselor. AR at 870. In a January 2, 2014 note, Karickhoff observed that Schuman would need additional computer training in order to be considered a qualified candidate for the alternative occupations under consideration. AR at 537.

         On June 2, 9, 10, 11, 12, 13, and July 10, 2014, Schuman informed Karickhoff that he was not qualified for or had been rejected from the positions she was sending his way. His primary concern was that many of the positions required a Pharm. D. degree, which he did not have and which would require several years of supplemental education and training at considerable expense. On June 11, 2014, Sarah Coughlin of Ability Services Network provided Karickhoff with ...

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