United States District Court, E.D. Arkansas, Western Division
ROY WILSON, UNITED STATES DISTRICT JUDGE.
are Plaintiff's  and Defendant's  Motions for
Summary Judgement. Both, Plaintiff  and Defendant  have filed
responses to the motions. For the reasons set out below, the
Plaintiff's Motion is GRANTED in part, rendering all
other points moot.
was employed by AIG as a property claims adjuster and his job
duties involved field work, traveling, and desk work.
Plaintiff stopped working on July 20, 2016 and sought
long-term disability benefits through AIG's policy
insured by Defendant. On December 12, 2016, Defendant started
its review to determine Plaintiff's eligibility for
long-term benefits, and on May 23, 2017, Defendant denied
appealed Defendant's denial of long-term benefits. On
December 12, 2017, Defendant acknowledged receipt of the
appeal and added that if Plaintiff wanted his Social Security
Disability (“SSD”) to be considered during the
appeal review, he needed to provide the documents as soon as
January 2, 2018, Defendant informed Plaintiff it was
considering the appeal and stated it needed a 45-day
extension complete the review. Plaintiff signed the
authorization letter on January 8, 2018 and sent it to the
Social Security Administration on January 11, 2018. Plaintiff
received Defendant's denial on January 16, 2018.
STANDARD OF REVIEW
denial of an ERISA benefits under a plan is reviewed de
novo, “unless the benefit plan gives the
administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms
of the plan.”  When an ERISA plan grants discretion,
courts review a plan administrator's decision under an
abuse of discretion standard,  and the decision will be reversed
“only if it is arbitrary and capricious.”
Ordinarily, when the insurance company “both determines
whether an employee is eligible for benefit and pays benefits
out of its own pocket, ” there is a conflict of
interest, which should be considered when determining whether
there was an abuse of discretion.  The limiting circumstances
of this case provide that the court may apply a less
deferential standard of review if plaintiff presents evidence
demonstrating palpable conflict of interest or serious
procedural irregularity that caused breach of plan
administrator's fiduciary duty to plaintiff.
The proper standard of review in this case is de
argues: (1) he is entitled to disability benefits because he
meets the policy definition and he submitted the required
proof of loss; (2) Defendant's denial of benefits was
arbitrary and capricious; and (3) the claim should be
remanded and Defendant directed to consider his Social
Security records as indicated it initially
claims that Defendant should have reviewed his SSD award and
considered it in evaluating his claim for long-term benefits.
Defendant's original denial letters provided, “All
the papers contained in your file were viewed as a whole,
” and “[w]e reviewed all of the medical
information in your file.” During the appeal
process, Defendant was aware that Plaintiff had been granted
SSD benefits and requested that Plaintiff provide the SSD
records he wanted Defendant to review.
received Defendant's request for the SSD records on
December 19, 2017, and on January 8, 2018, he signed the
appropriate documents permitting Defendant to review the SSD
records. However, the next day Defendant denied
Plaintiff's appeal - just seven days after it requested
an extension to evaluate the appeal, and, more importantly,
before it received the requested SSD records.
believe this case is analogous to the issue in Harden v.
American Express Financial Corporation.  In
Harden, the plaintiff had applied for, and received,
Social Security benefits at the administrator's request.
The administrator, however, never obtained or reviewed the
available Social Security documents in determining whether
the plaintiff's eligibility under its plan. The court
found that, because the administrator made statements that it
had reviewed “‘[a]ll available documentation,
'” the plaintiff was justified in believing that
the administrator had obtained the Social Security medical
documents.  Because the administrator did not
consider the Social Security award, and had nevertheless
denied the plaintiff's claim, the “administrative
record did not contain the Social Security records that were
the basis of the Social Security Administrator's grant of
benefits to him.”  All of this after Defendant led
Plaintiff to believe the SSD would be considered.
in this case, Plaintiff had to present proof to Defendant
that he has applied for Social Security disability benefits.
Defendant required Plaintiff to execute a medical
authorization that would allow it to obtain his Social
Security Disability records, which he did. Defendant was
aware of Plaintiff's favorable SSD award and indicated it
would consider it in evaluating his claim. Likewise, the
administrator failed to obtain records concerning the SSD
benefits, while leading ...