Source: http://openjurist.org/419/f3d/437/mccartha-v-national-city-corporation
Timestamp: 2013-05-23 16:55:11
Document Index: 721414549

Matched Legal Cases: ['§ 1132', '§ 1001', '§ 1002', '§ 1132', '§ 502', '§ 11333', '§ 1133', '§ 1133', '§ 502', '§ 1133', '§ 2560']

419 F3d 437 McCartha v. National City Corporation | OpenJurist
419 F. 3d 437 - McCartha v. National City Corporation	Home 419 f3d 437 mccartha v. national city corporation
419 F3d 437 McCartha v. National City Corporation 419 F.3d 437
Sharon McCARTHA, Plaintiff-Appellant,v.NATIONAL CITY CORPORATION; National City Long-Term Disability Plan; National City Bank of Michigan/Illinois, Defendants-Appellees.
ARGUED: Lawrence J. Breskin, Detroit, Michigan, for Appellant. Mark S. Allard, Varnum, Riddering, Schmidt & Howlett, Grand Rapids, Michigan, for Appellees. ON BRIEF: Lawrence J. Breskin, Detroit, Michigan, for Appellant. Mark S. Allard, Varnum, Riddering, Schmidt & Howlett, Grand Rapids, Michigan, for Appellees.
Plaintiff Sharon McCartha ("McCartha") appeals from the order of the district court granting judgment on the administrative record to Defendants National City Corporation ("National City") and National City Long-Term Disability Plan ("Disability Plan" or "Plan") (collectively "Defendants"), and from the order granting Defendants' motion for reconsideration in this action brought under 29 U.S.C. § 1132(a)(1)(B) of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"). For the reasons that follow, we AFFIRM.
Prior to the Appeal Committee's meeting on June 20, 2001, McCartha requested an extension of time to respond to the April 23, 2001 letter, because she had a doctor's appointment scheduled for June 26, 2001. The Appeal Committee acquiesced, and agreed to delay its decision until June 28, 2001. McCartha failed to submit any information, however, and, on June 28, 2001, the Appeal Committee denied McCartha's appeal and upheld the denial of benefits.1 The letter stated in relevant part: The Committee considered the information and opinions provided by all physicians who examined you. No current opinions indicate that you are prevented from engaging in any activity on account of a physical or mental impairment. Further, no information was presented to demonstrate compliance with your treatment protocol (as we requested via the Physician Questionnaire and letter dated April 23, 2001).
The parties do not dispute that the Disability Plan is an employee benefit plan as defined in ERISA. See 29 U.S.C. § 1002(1) & (3). Section 502(a)(1)(B) gives a participant or beneficiary the right to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Our review of the ERISA administrative decision is limited to evidence presented to the Appeal Committee. See Wilkins v. Baptist Healthcare Sys. Inc., 150 F.3d 609, 617-20 (6th Cir. 1998).
First, McCartha challenges the standard of review used by the district court. We review the denial of benefits under § 502(a)(1)(B) de novo "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). When a plan affords discretion to an administrator or fiduciary, the arbitrary and capricious standard of review applies. Marks v. Newcourt Credit Group, Inc., 342 F.3d 444, 456 (6th Cir.2003). Under this standard, the decision is affirmed if "`rational in light of the plan's provisions.'" Id. at 456-57 (quoting Borda v. Hardy, Lewis, Pollard & Page, P.C., 138 F.3d 1062, 1066 (6th Cir.1998)).
The documents provided to the district court in support of Defendants' motion for judgment on the administrative record included the following provision: "(ADMINISTRATION) This Plan shall be administered by the Named Fiduciary in accordance with the procedures and provisions of the Flex Plan." As the record before the district court did not originally contain the Flex Plan referenced in the Disability Plan, McCartha argues that the arbitrary and capricious standard of review was inapplicable.2 Further, in her response to Defendants' motion for judgment on the administrative record, McCartha clearly argued that the de novo standard of review applied.
In any event, because McCartha's claim fails under either standard of review, as the district court found, the point is moot. The Flex Plan provides in pertinent part that the Plan Administrator "shall have such duties and powers as National City may prescribe as necessary to administer this Plan and each Benefit Plan," and that the Plan Administrator and each Named Fiduciary shall have the power "to construe and interpret this Plan and each Benefit Plan and to decide all questions of eligibility." This language clearly confers discretion on the Plan. Cf. Marks, 342 F.3d at 457 (discretion conferred by plan language providing that "`[t]he Plan Administrator shall make the rules and regulations necessary to administer the Plan and shall have the responsibility and discretionary authority to interpret the terms of the Plan, determine eligibility for benefits and to determine the amounts of such benefits'"); Borda, 138 F.3d at 1066 (discretion conferred by plan language stating that "[t]he Administrator shall have the power to make determinations with respect to all questions arising in connection with the administration, interpretation, and application of the Disability Plan, as well as "establish procedures, correct any defect, supply any information, or reconcile any inconsistency ... as it deems necessary" to carry out the purposes of the plan").
Further, because National City's Plan is self-funded, and National City management employees make the decisions regarding termination of benefits, we must take into account the administrator's self-interest in applying the arbitrary and capricious standard of review. Marks, 342 F.3d at 457. However, this Court has rejected the notion that the conflict of interest inherent in a self-funded and self-administered plan alters the standard of review. Peruzzi v. Summa Med. Plan, 137 F.3d 431, 433 (6th Cir.1998).
McCartha contends that the Plan improperly denied benefits under an exclusion for "refusing" to be treated because the record establishes that she did not "refuse" treatment, but simply missed some of her appointments. McCartha further asserts that the Plan failed to carry its burden of showing that she refused to be treated because the Plan did not investigate the legitimate reasons she presented for each missed appointment. An ERISA plan, not the participant, has the burden of proving an exclusion applies to deny benefits. Caffey v. Unum Life Ins. Co., 302 F.3d 576, 580 (6th Cir.2002) (citation omitted).
The evidence in the administrative record supports the Appeal Committee's decision to terminate McCartha's disability benefits on the basis of this exclusion. See Univ. Hosps. of Cleveland v. Emerson Elec., 202 F.3d 839, 846 (6th Cir.2000) (stating that this Court must defer to an administrative appeal committee's decision if "it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome"). The record reflects that McCartha's treatment plan called for her to attend monthly doctor appointments and monthly therapy sessions, as well as to take the prescribed medications. McCartha's own treating physician and therapist established McCartha's noncompliance. As of January 5, 2001, Dr. Quadir refused to provide her with any additional prescription medications because she had missed numerous scheduled appointments. Savel confirmed that she had also missed several therapy sessions, and that she had a pattern of showing up merely to get prescription refills. Although McCartha argues that her behavior does not constitute a "refusal" under various dictionary definitions, we cannot say that the Plan acted arbitrarily and capriciously in concluding that McCartha's repeated failure to follow her treatment protocol was tantamount to a refusal to be treated. Significantly, the Disability Plan gives the named fiduciary discretion "to construe and interpret this Plan" as well as to decide questions of eligibility. See Peruzzi, 137 F.3d at 433 (holding that where ERISA plan gives the administrator discretion to interpret its terms, the administrator's interpretation must be upheld unless it is arbitrary and capricious or unreasonable). In short, the record supports the Appeal Committee's decision under Section 6.4 of the Plan.
McCartha claims that the Disability Plan did not meet its burden because it failed to refute her legitimate reasons for missing appointments. Again, the record itself undermines McCartha's argument. The Disability Plan called Savel to confirm McCartha's assertion that she had scheduled an appointment for December 26, 2000. In so doing, the Disability Plan was informed that the office was not even open that day. The Disability Plan also asked Savel if McCartha had a walk-in appointment on January 5, 2001. Savel stated that McCartha was a no-show for that appointment. In any event, McCartha's litany of excuses cannot save her claim. Based on the undisputed report of her own treating physician, McCartha herself frustrated all efforts for proper treatment. Thus, the Committee's decision cannot be considered arbitrary and capricious on this basis, even when considering the Committee's self-interest. Cf. Miller v. Metro. Life Ins. Co., 925 F.2d 979, 984-85 (6th Cir.1991) (holding that insurance company's decision to terminate benefits was not arbitrary or capricious, despite its self-interest, where two psychiatrists, including the plaintiff's own treating physician, had indicated that the plaintiff's prolonged depressive reaction was in partial remission).
29 U.S.C. § 11333; see also Marks, 342 F.3d at 459.
We review de novo the legal question of whether the procedure employed by the fiduciary in denying the claim meets the requirements of § 1133. Kent v. United Omaha Life Ins. Co., 96 F.3d 803, 806 (6th Cir.1996).
This Court has adopted a "substantial compliance" test in deciding whether denial notices meet the requirements of § 1133. See Marks, 342 F.3d at 460; Kent, 96 F.3d at 807-08. In making that assessment, the court must consider all the communications between the administrator and plan participant. Marks, 342 F.3d at 460. "In this analysis, it is crucial for us to determine whether the plan administrators fulfilled the essential purpose of § 502-notifying [the claimant] of their reasons for denying [her] claims and affording [her] a fair opportunity for review." Id. (citing Kent, 96 F.3d at 807). If the denial notice is not in substantial compliance with § 1133, reversal and remand to the district court or to the plan administrator is ordinarily appropriate. See id. at 461 (citing VanderKlok v. Provident Life & Acc. Ins. Co., 956 F.2d 610, 619 (6th Cir.1992)). However, a remand is not required if it would "represent a useless formality." Kent, 96 F.3d at 807.
In urging that a remand is required, McCartha relies on White v. Aetna Life Ins. Co., 210 F.3d 412, 417-18 (D.C.Cir.2000). There, the plaintiff, a registered nurse who suffered from osteoarthritis, applied for and received short-term disability benefits based on a short-term disability certification by Dr. Engh, an orthopedic surgeon. Upon being informed in December 1996 that her short-term disability benefits were about to end, the plaintiff applied for long-term disability benefits. The plaintiff submitted a leave of absence certificate from Dr. Engh along with a report in which he described his diagnosis as "osteoarthritis" and stated that White needed hip replacement surgery. An Aetna claims representative orally informed the plaintiff that her claim had been denied. Aetna gave three reasons for the denial: (1) the Plan had not been able to contact the plaintiff's orthopedic surgeon over a three-day period; (2) the plaintiff's internist had refused to confirm that White was disabled to work; and (3) White should have already undergone hip replacement surgery. Id. at 415. White asked Aetna for a written confirmation but received none.
The record also reflects that at 8:35 a.m. on June 28, 2001, the Plan left McCartha a voice mail message informing her that the Appeal Committee had not received any information from her, and that the meeting was at 10:30 a.m. that day
Defendants concede that the Flex Plan itself was not before the district court until Defendants filed their motion for reconsideration
C.F.R. § 2560.503-1(g) (2005)
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