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Hill v. Hartford Life & Accident Insurance Co.

October 15, 2007

NANCY HILL PLAINTIFF
v.
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY DEFENDANT



The opinion of the court was delivered by: Wm. R. Wilson, Jr. United States District Judge

ORDER

Pending is Defendant's Motion to Dismiss,*fn1 to which Plaintiff has responded.*fn2 Plaintiff filed a Complaint*fn3 in Cross County Circuit Court alleging that she is entitled to long-term and short-term disability benefits under a plan provided by her employer, Wal-Mart, and insured by Defendant. The case was removed.*fn4

I. Background

In 1990, Defendant issued an employee disability policy to Wal-Mart.*fn5 Defendant's plan outlines a procedure for filing and appealing disability claims.*fn6 Under the plan, Defendant may extend the time for a final decision as long as the beneficiary is given notice and a reasonable explanation. In this case, Defendant extended review of Plaintiff's claim because medical records from Drs. McKee, South, Birch, Garner, Jiu, and Pocsine had not been received or reviewed. These records were necessary to thoroughly evaluate the medical basis for Plaintiff's claimed impairments.*fn7 Defendant informed Plaintiff of its decision and explained that the evaluation would not begin until additional medical records were submitted. Plaintiff was also told that, if no additional information was received, a final decision would be made in April 2007.*fn8

Instead of waiting on Defendant's decision, Plaintiff filed this action. Defendant asks that Plaintiff's case be either dismissed without prejudice or remanded for final administrative review. Plaintiff objects to a dismissal, but agrees that this case should be stayed and remanded.

II. Authority

ERISA*fn9 broadly preempts state laws that relate to employee benefit plans.*fn10 Moreover, federal courts have exclusive jurisdiction over actions brought to enforce the terms of ERISA plans.*fn11

Because Plaintiff is making a claim against her employee disability plan, she cannot find redress in state court, and she cannot bring suit in federal court until she has exhausted all available procedures.

ERISA does not contain a requirement that employees exhaust contractual remedies before filing suit.*fn12 However, federal courts have concluded that Plaintiffs must exhaust the review procedure that is set out in an ERISA plan.*fn13

Exhaustion is not required if the plan does not contain such a process, or if the employee was not given notice.*fn14 But, if the plan contains a review procedure that complies with ERISA,*fn15 the employee must exhaust her claim before filing a complaint. This is so, even if a denial letter does not explicitly describe the review procedure as mandatory or as a prerequisite to suit.*fn16

III. Discussion

Defendant's plan contains a review process that complies with ERISA requirements. Plaintiff was given notice of this process and an explanation for the final determination delay. Therefore, Plaintiff was required to exhaust her administrative remedies, but instead of submitting the additional records, she filed suit. As a result, Defendant did not have all the medical information, and, without adequate information, a fair review is not possible.

The Eighth Circuit Court of Appeals has held that the core requirements of full and fair review include knowing what evidence was relied on, having an opportunity to address the accuracy and reliability of that evidence, and having the evidence presented by both parties considered before a final decision is made.*fn17

Full and fair review includes the right to review all documents, records, and other information relevant to the benefit claim, and an appeal that should take into account all comments, documents, records, and other information submitted by the claimant.*fn18 The extent of a Plaintiff's disability should be determined after all disabling conditions are considered and ...


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