House v. Unum Life Insurance Company of America et al, No. 1:2017cv00220 - Document 61 (E.D. Tenn. 2018)
Court Description: MEMORANDUM OPINION. It is ORDERED that: Defendants' Motion for Summary Judgment (Doc. 23) is GRANTED; Plaintiff's Cross-Motion for Summary Judgment (Doc. 48) is DENIED; and the case is DISMISSED WITHOUT PREJUDICE. Signed by District Judge Harry S Mattice, Jr on 9/25/2018. (AML, )
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House v. Unum Life Insurance Company of America et al Doc. 61 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE at CHATTANOOGA LISA HOUSE, Plaintiff, v. UMUM LIFE INSURANCE COMPANY OF AMERICA and UNUM GROUP CORPORATION, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:17-cv-220 J udge Mattice Magistrate J udge Steger MEMORAN D U M OPIN ION This m atter is before the Court on Defendants’ Motion for Sum m ary J udgm ent (Doc. 23) and Plaintiff’s Cross-Motion for Sum m ary J udgm ent and Her Response to Defendants’ Motion for Sum m ary J udgm ent (Doc. 48). Because Plaintiff was required to exhaust her adm inistrative rem edies under the Em ployee Retirem ent Incom e Security Act, failed to exhaust those rem edies, and cannot establish that it would have been futile to do so, Defendants’ Motion for Sum m ary J udgm ent will be granted. Plaintiff’s crossm otion will be denied and the case dism issed. I. IN TROD U CTION This case involves a provision in Unum 's long-term disability policy which governs independent m edical exam s. Under that provision, Unum has the right to "have any [recipient of long-term disability benefits], whose injury or sickness is the basis of a claim . . . exam ined by a physician . . . of its choice . . . ." (Doc. 24-1 at PageID # : 748). Lisa House, the plaintiff, is a recipient of long-term disability benefits under a Unum insurance policy. Unum exercised its discretion to request that Ms. House undergo an independent 1 Dockets.Justia.com m edical exam to determ ine if she continued to m eet her policy's disability requirem ents. One of Ms. House's friends accom panied her to the m edical appointm ent with the intention of m onitoring and videotaping the physician's exam ination of Ms. House. The exam ining physician refused to perm it videotaping of the exam ination, and further refused to allow Ms. House's friend to accom pany her into the exam room . As a result, Ms. House declined to undergo the independent m edical exam . She then filed this lawsuit, asserting that she has a right under the policy to videotape the independent m edical exam and to have a witness present. II. FACTU AL SU MMARY Lisa House becam e disabled in 20 0 0 while working at a Toyota plant. Her disability arose as a result of neck and shoulder pain and restricted range of m otion. Toyota m ade available to its em ployees a Unum long-term disability plan. After Ms. House developed a disability, she applied for long-term disability benefits under the Unum insurance policy. Unum approved Ms. House's application and started paying her long-term disability benefits in J une 20 0 1. Benefits have continued from that date through the present. The insurance policy gives Unum the right to conduct a periodic claim review to determ ine whether a claim ant continues to be "disabled" as that term is defined in the policy. Pursuant to that provision, Unum instructed Ms. House in 20 17 to subm it to an independent m edical exam ination so that Unum could assess her current functional capacity and m ake a determ ination as to whether she is still disabled. Ms. House, with a friend, reported to the designated doctor's office for the exam ination. She planned to have the friend accom pany her into the exam room to m onitor and videotape the doctor's exam ination. Upon arrival at the doctor's office, staff 2 provided to Ms. House a consent form prohibiting any recording of the m edical exam and specifying that only Ms. House, the physician, and a physician-specified chaperone could attend the exam . Ms. House refused to sign the form , agree to the doctor's conditions, or subm it to the m edical exam without her friend present to videotape the event. Consequently, she left without undergoing the exam . Days later, Ms. House spoke with a Unum representative, who advised her that she would need to subm it to an independent m edical exam ination or her disability benefits could be term inated. Ms. House replied that Unum would need to provide a different doctor who would perm it her to have a third-party witness attend the exam ination to observe and videotape the exam . Unum declined Ms. House's dem and that another doctor be designated and that her m onitoring requirem ents be m et. Unum 's position is that it has a right under the policy to require an independent m edical exam ination without Ms. House being able to im pose any preconditions. Ms. House and Unum reached an im passe concerning this issue. Ms. House then filed the instant lawsuit, alleging that Unum violated her rights under the Em ployee Retirem ent Incom e Security Act (ERISA), 29 U.S.C. §§ 1132(a)(3) and (a)(1)(B). In her com plaint, she dem anded that the Court authorize her to videotape the independent m edical exam ination and/ or have her own designated third-party witness attend the exam as a witness. Unum denied liability and filed a counter-claim requesting that the Court enforce the term s of the policy under 29 U.S.C. § 1132(a)(3). Both parties m oved for sum m ary judgm ent. Unum asserts that the insurance policy gives it an unqualified right to require Ms. House to undergo an independent m edical exam ination without her being able to im pose any preconditions. Ms. House contends that she is entitled to sum m ary judgm ent because the policy does not expressly 3 preclude her from videotaping the m edical exam ination or having a third-party witness accom pany her during the exam . III. AN ALYSIS A. Exh au s tio n o f ad m in is trative re m e d ie s ERISA requires that a plaintiff exhaust all available administrative rem edies before filing a lawsuit in federal court. The exhaustion requirem ent "enables plan fiduciaries to efficiently m anage their funds; correct their errors; interpret plan provisions; and assem ble a factual record which will assist a court in reviewing the fiduciaries' actions." Ravencraft v. UNUM Life Ins. Co. of Am ., 212 F.3d 341, 343 (6th Cir. 20 0 0 ) (quoting Makar v. Health Care Corp., 872 F.2d 80 , 83 (4th Cir. 1989)). Every ERISA em ployee-benefit plan is required to "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate nam ed fiduciary of the decision denying the claim ." 29 U.S.C. § 1133. In fact, "[Section] 1132(a)(1)(B), provides a contract-based cause of action to participants and beneficiaries to recover benefits, enforce rights, or clarify rights to future benefits under the term s of an em ployee benefit plan." Fallick v. Nationw ide Mut. Ins. Co., 162 F.3d 410 , 418 (6th Cir. 1998). Though the statute is silent on this point, "[t]he adm inistrative schem e of ERISA requires a participant to exhaust his or her adm inistrative rem edies prior to com m encing suit in federal court." Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991). Dism issal of the lawsuit is appropriate where a plaintiff fails to exhaust all adm inistrative ERISA rem edies before filing suit in federal court. W einer v. Klais & Co., Inc., 10 8 F. 3d 86, 90 (6th Cir. 1997). 4 B. Ap p licatio n o f th e "fu tility e xce p tio n " 1. Statu to ry co n s tru ctio n ve rs u s co n tractu al in te rp re tatio n As indicated, a plaintiff norm ally has to exhaust adm inistrative ERISA rem edies before initiating a lawsuit in federal court. An exception to the "exhaustion of adm inistrative rem edies" requirem ent exists where it would be futile for the plaintiff to pursue such rem edies. In other words, the failure to exhaust adm inistrative rem edies m ay be excused "where resorting to the plan's adm inistrative procedures would sim ply be futile or the rem edy inadequate." Fallick, 162 F.3d at 419. Ms. House asserts that it would have been futile for her to exhaust Unum 's available adm inistrative rem edies in this case and, as a result, she should be perm itted to pursue her federal court lawsuit without first exhausting such adm inistrative rem edies. Ms. House seeks to fit within the futility exception to ERISA's exhaustion requirem ent. This exception is set forth in Hitchcock v. Cum berland University 40 3(b) DC Plan, 851 F.3d 552, 564 (6th Cir. 20 17), which holds "exhaustion is not required when plaintiffs seek to enforce statutory ERISA rights rather than contractual rights created by the term s of the plan." Ms. House argues that she is attem pting to enforce statutory ERISA rights rather than contractual rights created by the term s of Unum 's ERISA plan docum ents. However, as Unum points out, the futility exception "does not apply to 'planbased claim s artfully dressed in statutory clothing, such as where a plaintiff seeks to avoid the exhaustion requirem ent by re-characterizing a claim for benefits as a claim for breach of fiduciary duty.'" Id. at 565 (quoting Stephens v. Pension Benefit Guar. Corp., 755 F 3d 959, 965-66, n. 7 (D.C. Cir. 20 14)). In determ ining whether a claim seeks to enforce statutory ERISA rights or whether it seeks to enforce (or challenge) contractual rights created by the ERISA plan docum ents, "'the relevant inquiry is what form s the basis of 5 [plaintiff's] right to relief: the contractual term s of the . . . plan or the provision of ERISA and its regulations.'" Id. (quoting Stephens, 755 F. 3d at 967). In her com plaint in this case, Ms. House fram es her first cause of action as a statutory ERISA right by seeking relief for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3). Sim ilarly, her second cause of action seeks to "clarify Plaintiff's rights to benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). In these causes of action, Ms. House pleads what appear to be statutory ERISA rights; however, her claim s are, in reality, based on contractual rights created by ERISA plan docum ents. More specifically, Ms. House's claim s rest upon: Unum 's right under the ERISA plan docum ents to choose a doctor to perform an independent m edical exam ination (Doc. 1 at ¶ 41); Unum 's right under the plan docum ents to require plaintiff to subm it to an independent m edical exam ination (Id. at ¶¶ 42-54); Whether Ms. House has a right, under the plan docum ents, to opt out of the independent m edical exam ination scheduled by Unum if her monitoring preconditions (i.e., third party witness and videotaping) are not m et (Id.); Whether the ERISA plan docum ents provide any guidance on the perm issibility of third party witness m onitoring and videotaping of the independent m edical exam (Id.); and In the absence of express guidance in the plan docum ents, whether Unum should m eet Ms. House's third party m onitoring requirem ents in connection with the independent m edical exam . (Id.). The ultim ate issue before the Court is rather sim ple. Ms. House believes that she should be entitled to have a witness attend and videotape the independent m edical exam ination required by Unum 's ERISA plan docum ents. Because the plan docum ents are silent on the issue of the third party witness and the videotaping, Ms. House argues that it is a m atter of statutory construction as to whether such a right is som ehow im plicit 6 under ERISA law. Unum argues that it is a m atter of contractual interpretation of the term s of Unum 's ERISA plan docum ents. By presenting the issue in this case as a m atter of statutory construction, it appears that Ms. House is attem pting to place a square peg in a round hole so that she can avail herself of the futility exception. The question as to whether Ms. House should be perm itted to bring a third party witness to m onitor and videotape her independent m edical exam ination is first and forem ost a m atter of contractual interpretation of the term s of Unum 's ERISA plan docum ents. The Court finds that it would not be futile for Ms. House to exhaust Unum 's adm inistrative requirem ents and, if necessary, obtain a review of this issue (i.e., m onitoring and videotaping by a third party witness) by Unum 's plan adm inistrator. And, in fact, to file this lawsuit before Unum was able to com plete its adm inistrative review of the claim subverts the exhaustion requirement and ERISA's goal of efficient and cost-effective resolution of claim disputes. See W ilkins v. Baptist Healthcare Sy s., Inc., 150 F. 3d 60 9, 618 (6th Cir. 1998). 2 . Th e facts an d circu m s tan ce s d o n o t d e m o n s trate "fu tility" Ms. House opted out of Unum 's adm inistrative claim process, choosing instead to preem pt that process by filing suit in federal court. For that reason, the Court does not— and, indeed cannot—know what would have becom e of Ms. House's LTD benefits had she exhausted Unum 's available adm inistrative rem edies. The decision tree has too m any branches to try to describe all of them , but several possible scenarios are set forth below. Had Ms. House participated in Unum 's independent m edical exam (with no witness/ no videotape), the doctor m ay have m ade findings supporting continued LTD benefits for Ms. House. In that instance, Ms. House would not have felt it necessary to bring this lawsuit in federal court. Had Unum 's designated physician m ade findings that did not support continued LTD benefits, Ms. House could have solicited an opinion from 7 her own designated physician. Faced with conflicting m edical evidence, Unum m ay have decided to continue paym ent of Ms. House's LTD benefits. Again, no federal lawsuit would have been necessary. Alternatively, had Unum m ade an initial decision to term inate Ms. House's LTD benefits based on the results of the independent m edical exam , Ms. House m ay have been able to get that decision reversed in the course of pursuing and exhausting Unum 's adm inistrative rem edies. Ultim ately, in the course of pursuing Unum 's adm inistrative rem edies, Unum 's plan adm inistrator m ay have determ ined that the independent m edical exam was flawed in som e way and that Ms. House should be entitled to a new m edical exam with a different physician. By exhausting Unum 's adm inistrative rem edies, Unum 's plan adm inistrator would have been given an opportunity to determ ine whether she should be allowed to have a witness accom pany her and videotape the independent m edical exam . Unum would have been entitled to address this issue at its highest adm inistrative level. Unum 's plan adm inistrator did not have an opportunity to address any of the scenarios listed above because Ms. House did not pursue the adm inistrative rem edies that were available to her. Ms. House argues that, by opting out of the independent m edical exam ination, it was a given that Unum would discontinue her benefits. While that m ay or m ay not be accurate, the initial denial of benefits would not have prevented Ms. House from pursuing Unum 's adm inistrative rem edies under its ERISA plan docum ents. See Com m c'ns W orkers of Am . v. AT&T, 40 F.3d 426, 433 (D.C. Cir. 1994) ("[T]he denial of initial claim s . . . is not enough to show futility of internal Plan rem edies."). By way of analogy, Ms. House opted for what am ounts to an interlocutory appeal before the "judge" (in this case, Unum 's plan adm inistrator) had an opportunity to rule on the issue. The Court is not persuaded that it would have been futile for Ms. House to pursue and exhaust the adm inistrative rem edies available to her through Unum 's processes. A variety of outcom es could have occurred that would have obviated the need for this lawsuit. 8 "The standard for adjudging the futility of resorting to the adm inistrative remedies . . . is whether a clear and positive indication of futility can be m ade." Fallick, 162 F.3d at 419. Plaintiffs m ust dem onstrate that "it is certain that [their] claim will be denied on appeal, not m erely that [they] doubt . . . that an appeal will result in a different decision." Id. (quoting Lindem ann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir. 1996)); see Com m c'ns W orkers of Am ., 40 F.3d at 432 ("The futility exception is . . . quite restricted and has been applied only when resort to adm inistrative rem edies is clearly useless.") (internal quotation m arks and citations om itted). Ms. House cites several Sixth Circuit decisions to support her argum ent that she should be excused from exhaustion of adm inistrative rem edies because it would be futile to pursue such rem edies. First, Ms. House relies upon Constantino v. TRW , 13 F.3d 969 (6th Cir. 1994) and Durand v. Hanover Insurance Group, Inc., 560 F.3d 436 (6th Cir. 20 0 9). In these cases, the Court concluded that plaintiffs were excused from ERISA's exhaustion requirement; however, the Court in Constantino and Durand excused exhaustion because plaintiffs were challenging the legality of the ERISA plan rather than the term s of policy itself.1 In the instant case, Ms. House is not challenging the legality of the ERISA plan. Rather, she is seeking a determ ination of specific rights and responsibilities under Unum 's plan docum ents. Consequently, the cited cases do not apply. Ms. House then relies upon Fallick v. Nationw ide Insurance Com pany , 162 F.3d 410 (6th Cir. 1998), to support her futility argum ent. There, the Sixth Circuit held that the 1 See Constantino, 13 F.3d at 975 (noting that adm inistrative exhaustion would be futile since plaintiffs' claim s were "directed to the legality of [the] . . . Plan, not to a mere interpretation of it."); Durand, 560 F.3d at 439-40 (finding that a plan participant's challenge to a plan's m ethodology for calculating lum p-sum distributions was not subject to adm inistrative exhaustion because the challenge was directed at the plan's legality). 9 district court abused its discretion in failing to find futility where the plaintiffs had engaged in a two-year "triangular dialogue of com m unications in every direction [with] the State Insurance Departm ent and [the insurer]" regarding the m ethodology by which the insurer com puted the reim bursem ent rate under their health-insurance plan. Id. at 417. Though the district court "found that this lengthy dialogue did not com ply with the Plan's form al appeals process" and declined to excuse the plaintiff's failure to exhaust, the appellate court reversed and excused exhaustion as futile since the insurer had consistently defended its practice, refused to provide "m ore than but a cursory explanation of its m ethodology," and insisted that it would continue to use the sam e process "to calculate its reim bursem ent determ inations despite evidence that this policy violate[d] the actual term s of the [health-insurance plan]." Id. at 417, 420 . The conclusion reached in Fallick is inapposite here. Unlike the plaintiff in Fallick, Ms. House m ade no attem pt to avail herself of the adm inistrative rem edies available under Unum 's plan. Rather, she sim ply opted out of the plan rem edies by filing the present lawsuit in federal court. Finally, Ms. House relies upon Hill v. Blue Cross Blue Shield of Michigan, 410 F.3d 710 (6th Cir. 20 0 5). In Hill, the beneficiaries of an em ployer-sponsored health-insurance program filed a class action against a third-party adm inistrator alleging that the adm inistrator's handling of m edical-expense claim s constituted a wrongful denial of benefits and a breach of fiduciary duty. Id. at 715-16. The beneficiaries claim ed that exhaustion of adm inistrative rem edies was futile because the adm inistrator's interests were aligned with the com pany, and the adm inistrator refused to m odify its claim shandling process. Id. at 719. Although the Sixth Circuit rejected the beneficiaries' conflictof-interest claim , the court approved their refusal-to-m odify argum ent, noting that the 10 adm inistrator had "already reached a determ ination on the issue that would be presented in adm inistrative-review proceedings, i.e., that it is not required to adopt a new claim shandling procedure that would prevent the denial of claim s based solely on the claim ant's final diagnosis." Id. at 719. In other words, the Hill plaintiffs dem onstrated that exhaustion of rem edies was unnecessary because the insurer would have affirm ed the sam e claim s-handling process in an adm inistrative appeal. See id. The circumstances in the instant case are different than those presented to the Court in Hill. Ms. House has not challenged Unum 's adm inistrative appeal process. In fact, she never attem pted to utilize the adm inistrative rem edies available under Unum 's plan. The Court cannot know how Unum would respond to Ms. House's challenge to its claims handling procedure because Unum was never given an opportunity to address that challenge through its adm inistrative appeal process. The cases cited by Ms. House are distinguishable from the instant case. They do not lend support to the application of the futility exception in this case. Where there has been no denial of benefits, such claim s should rem ain in the purview of the plan adm inistrator, not the courts. See Durand, 560 F.3d at 439 (finding that "ERISA plans are often com plicated things, and the question whether a plan's m ethodology was properly applied in a particular case is usually one best left to the plan adm inistrator . . . . not [the] courts . . . ."). IV. CON CLU SION ERISA requires that a plaintiff exhaust available adm inistrative rem edies before filing a lawsuit in federal court. Ms. House did not attem pt to utilize adm inistrative rem edies available to her under Unum 's ERISA plan prior to filing this lawsuit in federal 11 court. She has not dem onstrated that it would have been futile for her to pursue such adm inistrative rem edies. For the reasons set forth herein, it is ORD ERED that: 1. Defendants' Motion for Sum m ary J udgm ent (Doc. 23) is GRAN TED .; 2. Plaintiff's Cross-Motion for Sum m ary J udgm ent (Doc. 48) is D EN IED ; and 3. The case is D ISMISSED W ITH OU T PREJU D ICE. SO ORD ERED this 25th day of Septem ber 20 18. /s/ Harry S. Mattice, Jr._______ HARRY S. MATTICE, JR. UNITED STATES DISTRICT JUDGE 12
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