Opinion ID: 2669297
Heading Depth: 2
Heading Rank: 2

Heading: analysis

Text: We review de novo the “decision of a district court granting judgment in an ERISA disability action based on an administrative record.” Helfman v. GE Grp. Life Assurance Co., 573 F.3d 383, 392 (6th Cir. 2009) (internal quotation marks omitted). Because the Plan administrator in this case had discretion to interpret the Plan, the denial of benefits is reviewed under the arbitrary-and-capricious standard. Id. This means that the decision denying benefits must be upheld so long as it is “the result of a deliberate, principled reasoning process and if it is supported by substantial evidence.” Id. (internal quotation marks omitted). Finally, where the “plan administrator both decides a claimant’s eligibility for benefits and pays [those benefits], we may consider the resulting potential for a conflict of interest when determining whether the decision was arbitrary or capricious.” Cook v. Prudential Ins. Co. of Am., 494 F. App’x 599, 604 (6th Cir. 2012). Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 6 B. The district court correctly concluded that the denial was not arbitrary or capricious Nicole offers several arguments in support of her contention that the BAC acted arbitrarily and capriciously in denying her claim. First, she argues that the BAC was operating under a conflict of interest because it is a division of Nationwide. Pointing to the BAC’s charter, she notes that each member of the BAC is a director-level or higher employee of Nationwide. Nicole contends that the district court failed to give adequate weight to this alleged conflict. But a conflict of interest, standing alone, does not require reversal. Judge v. Metro. Life Ins. Co., 710 F.3d 651, 664 (6th Cir. 2013). Instead, a conflict is simply “another factor in evaluating the quality of [the plan administrator’s] decisionmaking process.” Id. A claimant must do more than offer general inferences of a conflict based on self-interest. Id. But the only argument Nicole makes beyond such inferences is her contention that the BAC did not consult with an independent medical professional before denying her appeal. This argument is unavailing because a file-only review does not compel the conclusion that the Plan administrator acted improperly. See id. And, as the district court explained in its opinion, the Summit County Medical Examiner’s Office functioned as a de facto independent medical examiner in this case. See Cultrona, 936 F. Supp. 2d at 851 n.9 (“[T]he medical examiner is a disinterested medical expert.”). Because Nicole’s conflict-of-interest argument is not supported by the record in this case, we find it without merit. Nicole next contends that the BAC failed to perform a full and fair review of her claim. In particular, she asserts that (1) the BAC did not carry its burden of proving that Exclusion 12 applies, and (2) the BAC’s actions show that it was predisposed to deny her appeal from the start. Nicole argues that the BAC failed to determine whether Shawn was “deemed and presumed” to be intoxicated as a matter of law. According to Nicole, the BAC improperly relied on Ohio’s drunk-driving statute. Nicole points to StarLine’s initial denial letter, in which it explained that “the deceased’s blood level content [sic] was in excess of the level at which Ohio presumes intoxication as a matter of law.” Nicole contends that this language must refer to Ohio Revised Code (ORC) § 4511.19, which prohibits operating a motor vehicle while intoxicated. Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 7 But even if we assume that StarLine was referring to ORC § 4511.19 in its denial letter, this does not show that the BAC acted arbitrarily or capriciously in denying Nicole’s appeal. See Cook, 494 F. App’x at 608 (affirming the denial of benefits even though the plan administrator’s denial letter was “hardly a model of clarity”). The basic rationale for denying Nicole’s claim— namely, Shawn’s intoxication and the resulting application of Exclusion 12—stayed the same throughout. See McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059, 1065 (6th Cir. 2014) (holding that there was “no about face in the reason Defendants denied” a claim where the basic rationale for denying the claim was consistent) (internal quotation marks omitted). For this reason, the cases relied on by Nicole for the proposition that the BAC employed shifting rationales are distinguishable. See, e.g., Wenner v. Sun Life Assurance Co. of Can., 482 F.3d 878, 880 (6th Cir. 2007) (holding that the denial of benefits was arbitrary and capricious where the claim was initially denied for failure to provide documentation, but later denied because the claimant did not meet the policy’s definition of disabled). Nicole’s argument that the BAC employed shifting rationales therefore lacks merit. Nor did the district court err in concluding that another Ohio statute supported the BAC’s decision to deny Nicole’s appeal. The district court held that Shawn was deemed to be intoxicated under ORC § 313.19, which provides that the “cause of death and the manner and mode in which the death occurred, as . . . incorporated in the coroner’s verdict and in the death certificate . . . , shall be the legally accepted manner and mode in which such death occurred.” Cultrona v. Nationwide Life Ins. Co., 936 F. Supp. 2d 832, 847–48 (N.D. Ohio 2013); see also Vargo v. Travelers Ins. Co., 516 N.E.2d 226, 229 (Ohio 1987) (explaining that the coroner is “required to engage in quasi-judicial activity when inquiring into the cause of death”). Nicole argues that ORC § 313.19 is inapplicable because Exclusion 12 refers to the “law of the locale,” not Ohio state law. And the “law of the locale,” Nicole contends, must mean the laws of Twinsburg, Ohio, which has no ordinance equivalent to ORC § 313.19. She notes that the phrases “applicable state law,” “laws of the state,” and “state law” appear throughout the Plan documents, so Nationwide must have been meant something other than Ohio state law when it used the phrase “law of the locale” in Exclusion 12. Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 8 Nicole has pointed out several cases in which federal courts have construed the word “locale” as referring to cities or counties. Nevertheless, the bulk of authority supports the opposite conclusion—that the phrase “law of the locale” means state law. See Republic Ins. Co. v. Banco de Seguros del Estado, No. 10 C 5039, 2013 WL 3874027, at  (N.D. Ill. July 26, 2013) (discussing the “law of th[e] locale” in reference to state law); Rotec Indus., Inc. v. Aecon Grp., Inc., 436 F. Supp. 2d 931, 936 (N.D. Ill. 2006) (same); Coto Orbeta v. United States, 770 F. Supp. 54, 56 (D.P.R. 1991) (same); Babcock v. Maple Leaf, Inc., 424 F. Supp. 428, 433 (E.D. Tenn. 1976) (same). Although Nicole’s proffered interpretation of the phrase “law of the locale” is a rational one, it is equally rational to conclude that “law of the locale” means state law. See Morgan v. SKF USA, Inc., 385 F.3d 989, 992 (6th Cir. 2004) (holding that “equally rational” interpretations of a disputed term proffered by the plaintiff and the plan administrator were insufficient to show that the plan administrator acted arbitrarily or capriciously). We are required to resolve a tie in favor of the Plan administrator. See id. Accordingly, Nicole’s argument that the phrase “law of the locale” cannot mean Ohio state law is without merit. Nicole next asserts that the “coroner’s report does not support a legal finding that [Shawn] was deemed and presumed under the law of the locale to be intoxicated.” The language in the report, however, belies this assertion, stating that the manner of death was “[a]cute ethanol intoxication . . . ACCIDENT: Prolonged and extreme hypertension of neck and torso while intoxicated.” Neither the BAC nor the district court erred in relying on this report, particularly given that Nicole failed to offer any contrary evidence regarding the cause of Shawn’s death. See Vargo, 516 N.E.2d at 229 (holding that the “coroner’s report and death certificate . . . create a non-binding, rebuttable presumption” concerning the facts regarding a death). Nicole’s argument regarding the alleged insufficiency of the coroner’s report thus has no merit. Finally, Nicole contends that the BAC acted arbitrarily and capriciously by failing to consult an independent medical professional before denying her appeal. She argues that ERISA’s implementing regulations and the BAC’s charter require such a consultation. As the district court explained, however, the ERISA regulations relied on by Nicole for this argument are inapposite. See Cultrona, 936 F. Supp. 2d at 849 (explaining that Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 9 “29 C.F.R. § 2560.503-1(h)(3) pertains only to group health plans,” not to accidental-death policies) (internal quotation marks omitted). Moreover, the BAC charter requires a consultation with a medical expert only in cases involving a “medical issue.” Id. at 850. No disputed medical issue was present in this case because Nicole did not introduce any evidence to rebut the conclusions contained in the coroner’s report. The district court’s resolution of this issue was sound and Nicole offers no compelling reason for us to reach a contrary conclusion. C. The district court did not abuse its discretion in awarding Nicole a statutory penalty Turning now to the BAC’s cross-appeal, we examine whether the district court erred in awarding Nicole $55 per day (for a total of $8,910) as a statutory penalty for the BAC’s failure to timely provide her with a copy of the accidental-death policy upon written request. Nicole’s counsel, in a November 18, 2011 letter, requested “all documents that you contend prove that Nationwide provided notice of Amendment No. 1 . . . and all documents comprising the administrative record and/or supporting Nationwide’s decision.” The BAC, however, did not provide Nicole’s counsel with a copy of the accidental-death policy until June 12, 2012. Pursuant to 29 U.S.C. § 1132(c)(1), the district court imposed an $8,910 penalty against the BAC as a consequence of this delay. We review the imposition of a penalty under the abuse-of-discretion standard and any accompanying findings of fact under the clear-error standard. See Bartling v. Fruehauf Corp., 29 F.3d 1062, 1068 (6th Cir. 1994) (“Because [ERISA] expressly grants a district court discretion in imposing penalties for an employer’s failure to disclose, we review only for abuse of discretion.”); Hamilton v. Carell, 243 F.3d 992, 997 (6th Cir. 2001) (explaining that findings of fact in ERISA cases are “subject to a clearly erroneous standard of review”). The list of documents that a plan administrator must furnish to a participant or beneficiary upon written request is set forth in 29 U.S.C. § 1024(b)(4). These documents include a “copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is . . . operated.” Id. If a plan administrator fails to respond to a request for one or more of the above documents within 30 days, then the district court may in its discretion impose a penalty against the plan administrator of up to $110 per day. Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 10 29 U.S.C. § 1132(c)(1)(B); 29 C.F.R. § 2575.502c-1; see also Minadeo v. ICI Paints, 398 F.3d 751, 757 (6th Cir. 2005) (“Congress’ purpose in enacting the ERISA disclosure provisions was to ensur[e] that the individual participant knows exactly where he stands with respect to the plan.”) (internal quotation marks omitted) (alteration in original). The BAC argues that the district court erred in construing Nicole’s broadly worded document request as including a request for a copy of the accidental-death policy. In making this argument, the BAC urges us to adopt the “clear-notice” standard, a standard that several of our sister circuits have adopted. Under this standard, claimants seeking documents pursuant to § 1024(b)(4) must “provide clear notice to the plan administrator of the information they desire.” See Kollman v. Hewitt Assocs., LLC, 487 F.3d 139, 145 (3d Cir. 2007) (adopting the standard and collecting similar cases from the Second, Fifth, Seventh, and Tenth Circuits). We see merit in the BAC’s argument and thus adopt the standard on a going-forward basis. As summarized in Kollman, the key question under the clear-notice standard is whether the plan administrator knew or should have known which documents were being requested. Id. The clear-notice standard strikes a reasonable balance between a claimant’s right to timely receive plan-related documents upon request and the civil penalties facing plan administrators under § 1132(c) for excessive delay in providing those documents. See Fisher v. Metro. Life Ins. Co., 895 F.2d 1073, 1077 (5th Cir. 1990) (explaining that § 1132(c) “must be strictly construed” because it is a penalty provision). We further note that a plan administrator is free to place the burden of clarity squarely on the requester simply by replying to an ambiguous demand for § 1024(b)(4) documents with the administrator’s own request for greater specificity. With regard to the present case, we discern no abuse of discretion by the district court in imposing the statutory penalty in question. For one thing, the district court did not err by considering the circumstances surrounding the document request. See Kollman, 487 F.3d at 145 (“Each decision depend[s] upon the circumstances of that case and no general rule can be formulated.”). Nicole’s counsel, true enough, broadly phrased the request as one for “all documents comprising the administrative record and/or supporting Nationwide’s decision.” Although such language would not pass the clear-notice test for most of the documents identified in 29 U.S.C. § 1024(b)(4), one is hard-pressed to believe that the BAC should not have known Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 11 that the accidental-death policy was the key document supporting its decision to deny Nicole’s claim. Moreover, the administrative record reflects that the request was sufficiently clear for a StarLine employee to propose sending a “copy of the policy and amendment” to Nicole’s counsel. That employee, however, was instructed by a Nationwide employee to send only a copy of the amendment, not the underlying policy. See Cultrona, 936 F. Supp. 2d at 855 n.15 (citing the evidence of this exchange contained in the administrative record). Under these circumstances, the district court did not abuse its discretion in concluding that the BAC knew or should have known that the policy was being requested as one of the documents supporting its decision to deny benefits in this case. See Anderson v. Flexel, Inc., 47 F.3d 243, 248 (7th Cir. 1995) (“Courts have suggested . . . that an administrator’s knowledge of surrounding circumstances or the information being requested may require a response to an otherwise general request.”). Accordingly, we reject the BAC’s argument that the district court abused its discretion in imposing a statutory penalty under § 1132(c). D. The district court did not abuse its discretion in awarding Nicole less than the maximum penalty The final issue on appeal is whether the district court erred in awarding Nicole only $55 per day, rather than the $110 per day she requested as a penalty for the BAC’s delay in providing the policy in question. Section 1132(c) commits the amount of the penalty to the district court’s sound discretion. See 29 U.S.C. § 1132(c)(1) (explaining that the court may, in its discretion, impose a penalty “up to” the statutory limit). Here, the district court considered the lack of prejudice to Nicole in calculating the amount of the penalty. This consideration was proper. See Moothart v. Bell, 21 F.3d 1499, 1506 (10th Cir. 1994) (noting that the “circuits are in general accord that neither prejudice nor injury are prerequisites to recovery under the penalty provisions of the statute,” but that “these are factors the district court may consider in deciding to exercise its discretion to award a penalty”). Although Nicole argues that she did suffer prejudice as a result of the BAC’s failure to timely send her a copy of the policy, her arguments on this point are perfunctory and unconvincing. The district court therefore did not abuse its discretion in awarding Nicole only $55 per day as a statutory penalty for the BAC’s delay. Nos. 13-3558/3585 Cultrona v. Nationwide Life Ins. Co. et al. Page 12