Opinion ID: 1373111
Heading Depth: 2
Heading Rank: 2

Heading: Dismissal of Midgett's Long-Term Disability Claim

Text: Midgett also argues that the district court erred in dismissing her long-term disability claim for failure to exhaust administrative remedies. In this circuit, benefit claimants must exhaust [the benefits appeal] procedure before bringing claims for wrongful denial to court. Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770 (8th Cir.2001). Indeed, [w]here a claimant fails to pursue and exhaust administrative remedies that are clearly required under a particular ERISA plan, his claim for relief is barred. Layes v. Mead Corp., 132 F.3d 1246, 1252 (8th Cir.1998). But [a] party may be excused from exhausting administrative remedies... if further administrative procedures would be futile, and [a]n administrative remedy will be deemed futile if there is doubt about whether the agency could grant effective relief. Ace Prop. & Cas. Ins. Co. v. Fed. Crop Ins. Corp., 440 F.3d 992, 1000 (8th Cir.2006). [U]nsupported and speculative claims of futility do not excuse a claimant's failure to exhaust his or her administrative remedies. Klaudt v. U.S. Dep't of Interior, 990 F.2d 409, 412 (8th Cir.1993). Washington Group provided long-term disability benefits through a group disability insurance policy issued by Highmark Life Insurance Company. Highmark's group insurance certificate states that a claimant may not commence a legal action until 60 days after providing proof of a claim, but Midgett never applied for long-term disability benefits. Midgett contends that it would have been futile for her to pursue a long-term disability claim in light of the denial of her short-term disability claim. Highmark's group insurance certificate states that long-term disability benefits are only payable upon the expiration of the Benefit Qualifying Period, which begins on the day the beneficiary becomes disabled and ends upon the last to occur of the following: 1. The termination of your benefits under any salary continuation or short term disability benefits plan sponsored by the Policyholder; 2. The exhaustion of your accumulated sick leave days provided by the Employer; or 3. 26 weeks after the date you became Disabled. Midgett interprets the group insurance certificate as providing that long-term disability benefits are not payable unless all three of these events occur. According to Midgett, it would have been futile for her to seek long-term disability benefits because the termination of short-term disability benefits is one of the events necessary for the benefit qualifying period to end and she never received short-term disability benefits. Midgett's interpretation is contradicted by other language in the certificate. Specifically, the certificate requires a beneficiary to apply for any other benefits for loss of income that [he or she] may also be eligible for as a result of the same period of disability and states that the beneficiary may be required to appeal a denial of [his or her] claim for these other benefits. The certificate thereby implies that the denial of a claim for other loss of income benefits does not preclude a beneficiary from receiving long-term disability benefits. Furthermore, under Midgett's interpretation of the group insurance certificate, a beneficiary with no accumulated sick leave days provided by the Employer would also be ineligible to receive long-term disability benefits because that beneficiary would fail to satisfy each of the three events listed in the certificate. Such an absurd result seriously undermines Midgett's interpretation. See St. Louis-San Francisco Ry. Co. v. Armco Steel Corp., 490 F.2d 367, 371 (8th Cir.1974) (The construction of an insurance policy should be a natural and reasonable one, fairly construed to effectuate its purpose, and viewed in the light of common sense so as not to bring about an absurd result.). We believe that the most natural and reasonable reading of Highmark's group insurance certificate is that [t]he termination of ... short term disability benefits is one of the triggering events for the end of the benefit qualifying period only if such benefits are actually received. Because Midgett's claim for short-term disability benefits was denied, her benefit qualifying period would have ended upon the later of (1) the exhaustion of her accumulated sick leave days, if any, or (2) 26 weeks after the date she became disabled. Because it would not have been futile for Midgett to seek long-term disability benefits, she was required to fully exhaust Highmark's claims procedure before bringing her claim for long-term disability benefits in district court. We hold, therefore, that the district court did not err in dismissing Midgett's long-term disability claim for failure to exhaust administrative remedies.