Opinion ID: 212482
Heading Depth: 2
Heading Rank: 1

Heading: Authorization for Termination

Text: Palmer argues that MetLife’s decision violated ERISA because MetLife improperly “attempted to reverse its initial decision that [his] claim was not precluded by the preexisting condition.” Aplt. Opening Br. at 19. 3 He contends that by this action, MetLife wrongfully made “a new and different decision on the same facts it had for its initial decision.” Id. at 21. The district court correctly determined under ERISA that MetLife’s initial decision in Palmer’s favor on the pre-existing condition issue did not preclude MetLife from revisiting this issue and reaching an opposite result. This is true 3 Palmer does not argue that MetLife was prohibited from revisiting the pre-existing condition issue unless specifically authorized by language in the Plan to conduct a review of that issue. Instead, he argues (apparently under general ERISA principles) that MetLife should “not get a second bite at the apple when its first decision was simply contrary to the facts.” Aplt. Opening Br. at 21 (quotation omitted). His arguments concerning language in the Plan center on whether it authorized MetLife to request and use existing medical records in its review. We confine our discussion to the contentions he has specifically raised and developed on appeal. -10- whether or not MetLife relied on additional evidence concerning the pre-existing condition issue when it reached its decision to terminate benefits. We find our prior case of Kimber v. Thiokol Corp., 196 F.3d 1092 (10th Cir. 1999), strongly persuasive on this issue. In Kimber, the administrator of a disability plan granted the plaintiff insured disability benefits based upon evidence of his diabetic symptoms. Id. at 1096. Upon further review, however, the administrator changed its mind: it now determined the insured had not adequately demonstrated medical evidence of his total disability. The administrator therefore requested further proof of disability before continuing to pay benefits. When such evidence was not forthcoming, it terminated benefits. Id. The insured appealed, providing additional medical evidence. Finding this evidence insufficient to overturn its earlier decision on the issue of physical disability, the administrator upheld the denial of benefits for a physical disability but did grant a limited, two-year benefit based on the insured’s mental condition. On appeal, we affirmed the administrator’s actions, noting that “[a] one-time determination of eligibility for benefits under the Plan does not foreclose subsequent principled review.” Id. at 1098. Kimber supports the ability of a plan administrator to revisit disability issues and to reach a different result even in the absence of evidence of medical improvement, so long as the administrator’s review is “principled,” that is, authorized under ERISA and conducted in accordance with its principles. Id. -11- A contrary result “would basically prohibit a plan fiduciary from ever terminating benefits if it later discovered evidence that the ERISA plaintiff was not disabled at the time of the initial grant of benefits” and “would have a chilling effect on the promptness of granting initial benefits in the first place.” Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 274 (5th Cir. 2004). While Kimber concerned medical evidence of disability, the Fourth Circuit has applied similar principles to an exclusion for pre-existing conditions. See Gagliano v. Reliance Standard Life Ins. Co., 547 F.3d 230, 239 (4th Cir. 2008) (“[T]he ‘mistake’ by [insurer] in failing to initially assert the Pre-Existing Conditions Limitation cannot estop [insurer] from asserting that exclusion under some notion of waiver because [insurer] is required to administer the Plan as written, including the Pre-Existing Conditions Limitation.”). We agree with this reasoning and therefore conclude that MetLife’s initial failure to assert the pre-existing condition provision did not prevent a later assertion of the condition in connection with MetLife’s review of Palmer’s continued entitlement to benefits. Palmer further argues, however, that MetLife’s termination decision was in fact a “(second) initial determination” that was untimely under the deadlines for initial determinations of claims established by 29 C.F.R. § 2560.503-1(f)(3). See Aplt. Opening Br. at 22. Palmer’s argument rests on an artificial dichotomy: he assumes MetLife was only authorized to avoid paying continued benefits if it either issued an initial determination or terminated benefits to which he was -12- initially entitled. See Aplt. App., Vol. III at A733 (defining when benefit payments may end); A776 (same). As we have seen, however, benefits could also terminate as the result of a principled review, such as the review MetLife conducted in connection with its two-year redetermination of Palmer’s disability. We therefore reject this argument.