Opinion ID: 151538
Heading Depth: 3
Heading Rank: 1

Heading: MetLife's Plan Covers Mitchell's LTD Benefits Claim

Text: The district court correctly concluded that MetLife abused its discretion by denying Mitchell LTD benefits in its administrative review process. As the district court found, Mitchell had a disability as defined in MetLife's Certificate of Insurance when he submitted his claim. At that time, Mitchell was receiving appropriate treatment and was unable to earn 80% of his predisability earnings during the elimination period and the next 24 months, and was impaired in his capacity to work, despite working full-time hours. Mitchell, 523 F.Supp.2d at 1148. Therefore, MetLife abused its discretion in denying Mitchell's disability claim by determining that he was not disabled, and on the basis of an unwritten and unexplained objective evidence requirement not specified within its policy. Id. at 1146(citing Canseco v. Constr. Laborers Pension Trust for So. Cal., 93 F.3d 600, 608(9th Cir.1996)). [2] MetLife agrees that because it acts both as plan administrator and the funding source for benefits, it operates under a structural conflict of interest. Abatie, 458 F.3d at 967. We thus view its inconsistent bases of denial, culminating in its latest coverage defense based on Mitchell's claimed date of onset, with some fair amount of skepticism. On appeal, MetLife argues that the district court erred by concluding it waived its date of onset coverage defense by raising it for the first time in its answer. As best as we can discern, MetLife contends that the district court violated ERISA law by in effect extending its term of coverage back to October 2003, when its coverage was not in effect until January 1, 2004. Waiver aside, this argument lacks factual support, given that Mitchell was covered by MetLife's policy under at least one of its three definitions of disability and its Rules for When Insurance Takes Effect. When evaluating whether a plan administrator abused its discretion in the ERISA context, we review only the administrative record. Abatie, 458 F.3d at 970. Nothing in the voluminous record, however, supports MetLife's effort to exclude Mitchell from coverage due to his claimed onset date of October 2003. In support of its argument that the onset of a disability must occur after the Plan's effective date, MetLife points to a single line in its policy, the first clause of which states If you become Disabled while insured. MetLife would have us read this phrase out of context and without regard to its policy definitions of disabled set forth in the remainder of the Plan documents. The sentence, in its entirety, states If You Become Disabled while insured, proof of disability must be sent to Us. Thus, read in context, the clause upon which MetLife relies does not provide that coverage takes effect only if disability begins after the policy's effective date. Rather, it stipulates the requirement for submitting a claim if an individual is disabled while insured. MetLife also argues that the district court erroneously expanded coverage because he was covered only if he was actively at work on the date its policy replaced UNUM's. The district court, however, correctly found that Mitchell was covered because he was actively at work as defined by MetLife's policy on that date. MetLife's Certificate of Insurance provides that a participant is actively at work when You are performing all of the usual and customary duties of Your job on a Full-Time basis, and requires that full-time work be at least 30 hours a week. The summary plan description also defines Actively at Work or Active Work to mean Being on the job as required of an employee or Independent Contractor of CB Richard Ellis. As CB Richard Ellis reported to both MetLife and UNUM, Mitchell was never put on leave and never stopped working as a full-time employee. Mitchell's disability, however, reduced his capacity to generate sales, which, in turn, directly reduced his commission-driven income. Mitchell thus met the requirements that he be unable to earn more than 80% of his pre-disability income, as specified in MetLife's Certificate of Insurance. Moreover, because Mitchell stated on his claim form that the date of onset was October 2003, MetLife had ample opportunity to assert this coverage defense, had it believed it was meritorious. Indeed, the policy required MetLife to state the reason why [his] claim was denied and reference the specific Plan Provision(s) on which the denial is based. It also provided that [i]f MetLife denies the claim on appeal, MetLife will send you a final written decision that states the reason(s) why the claim you appealed is being denied and references any specific Plan provision(s) on which the denial is based. MetLife failed to meet these requirements and offers no explanation for this failure. Under these circumstances, MetLife could hardly be caught by surprise by an insistence that it comply with its own plan. Glista, 378 F.3d at 132. We therefore agree with the district court that MetLife abused its discretion in denying Mitchell LTD benefits.