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Hancock v. Aetna Life Insurance Co.

United States District Court, W.D. Washington, Seattle

May 3, 2017



          JAMES L. ROBART United States District Judge


         Before the court is Defendants Aetna Life Insurance Company (“Aetna”), the Boeing Company Employee Health and Welfare Plan (Plan 503) (“Plan 503”), and Employee Benefit Plans Committee's (“the Committee”) (collectively, “Defendants”) motion for partial summary judgment. (Mot. (Dkt. # 26).) Ms. Hancock opposes Defendants' motion. (Resp. (Dkt. # 28).) The court has considered the motion, the parties' submissions in opposition to and support of the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court denies Defendants' motion for the reasons set forth below.


         This case arises from Aetna's denial of long-term disability benefits (“LTD benefits”) to Ms. Hancock. (See SAC (Dkt. # 24) ¶¶ 1.2, 4.40, 4.51.) Ms. Hancock began working at the Boeing Company (“Boeing”) in 1989 and remained at Boeing until October 2012, when she took leave for cancer treatment. (Hancock Decl. (Dkt. # 31) ¶ 3.) Ms. Hancock worked as a Human Resources Generalist at the time she took leave. (See Admin. Record (“AR”) (Dkt. # 27) at AET000272.)[2]

         While at Boeing, Ms. Hancock participated in the Group Life and Accident and Health Insurance Policy (“the Plan”). (See generally Id. at AET000001-191.) Aetna issued the Plan to Boeing (see id.), and Ms. Hancock alleges that Aetna is an administrator and fiduciary of the Plan as those terms are defined under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. (SAC ¶¶ 4.8-4.9). The Committee also administers the Plan. (Id. ¶ 4.3.) Plan 503 is an “employee benefit plan” within the meaning of ERISA. (Id. ¶¶ 4.2.)

         The Plan defines “disabled” for purposes of LTD benefits in pertinent part:

From the date that you first become disabled and until Monthly Benefits are payable for 24 months, you will be deemed to be disabled on any day if:
• you are not able to perform the material duties of your own occupation solely because of: disease or injury; and
• your work earnings are 80% or less of your adjusted predisability earnings.
After the first 24 months that any Monthly Benefit is payable during a period of disability, you will be deemed to be disabled on any day if you are not able to work at any reasonable occupation (this is any gainful activity for which you are, or may reasonably become fitted by education training or experience. It does not include work under an approved rehabilitation program) solely because of: disease; or injury.

(See Id. at AET000058 (emphasis omitted); see also Id. at AET000061; SAC ¶ 4.20.)

         Ms. Hancock alleges that on October 3, 2012, she became “unable to perform the material duties of her own occupation” when she underwent surgery and “extensive chemotherapy” to treat malignant cancer. (Id. ¶ 4.22.) Ms. Hancock applied for short-term disability benefits under the Plan, and Aetna agreed that Ms. Hancock was disabled under the Plan and entitled to short-term disability benefits. (AR at AET000530-31.)

         Aetna later found Ms. Hancock disabled for purposes of receiving LTD benefits. (Id. at AET001120-21, AET001265-66.) But on February 25, 2016, Aetna terminated Ms. Hancock's LTD benefits effective February 26, 2016. (Id. at AET000980-83.) Ms. Hancock appealed the termination on August 15, 2016 (id. at AET001215-1589), and Aetna received Ms. Hancock's appeal on August 18, 2016 (id. at AET002173). In support of her appeal, Ms. Hancock provided a declaration from her doctor, her own declaration, medical records, and medical journal articles describing her condition. (See id. at AET001215-1589) She contends that she is disabled by the following conditions: “peripheral neuropathy and a type of cognitive impairment sometimes referred to as ‘chemo brain'” (SAC ¶ 4.33; see also AR at AET001240); Sjogren's syndrome (SAC ¶ 4.34; AR at AET001240); a lack of feeling in her fingertips and feet, burning pain in her fingertips, sharp pain in her hands, burning pain in her feet and lower legs, painful cramping in her toes and calves, and swollen ankles and feet (SAC ¶ 4.35; AR at AET001240-41). Ms. Hancock also takes a medication that causes fatigue, dizziness, difficulty concentrating, confusion, and memory issues. (SAC ¶¶ 4.37-4.38; AR at AET001241.) Because of these conditions, Ms. Hancock alleges that she is “unable to work at any reasonable occupation.” (Id. ¶ 4.39.)

         The applicable ERISA regulations gave Aetna 45 days to decide Ms. Hancock's appeal unless special circumstances warranted an additional 45 days to consider the appeal. See 29 C.F.R. § 2560.503-1(i)(1)(i); Id. § 2560.503-1(i)(3)(i). On September 13, 2016, Aetna confirmed with Ms. Hancock and her counsel that Aetna had received all of the records Ms. Hancock intended for Aetna to consider in her appeal. (AR at AET000992, AET002173.) On the same day, Aetna also contacted an independent third party to conduct a peer review of Ms. Hancock's file. (Id. at AET002189-91.) Aetna assigned the peer review on September 14, 2016. (Id. at AET002191.) On September 26, 2016, the fortieth day after Ms. Hancock appealed Aetna's LTD benefits determination, Aetna sent Ms. Hancock a notice that Aetna was invoking a 45-day extension to decide her appeal. (Id. at AET000993.) The notice informed Ms. Hancock that her appeal would be decided by November 10, 2016, and that the reason for the extension was to give the peer reviewer enough time to complete his review. (Id.) The peer reviewer completed his review on September 28, 2016. (Id. at AET002192-93.)

         Aetna informed Ms. Hancock on October 20, 2016, that Aetna was upholding its decision to deny LTD benefits under the Plan.[3] (Id. at AET000997-99.) “[B]ased on the clinical review and vocational review, ” Aetna concluded that Ms. Hancock was “no longer considered disabled from any occupation.” (Id. at AET000982.) Aetna decided Ms. Hancock's appeal in 64 days. (See Id. at AET000997-99.)

         Ms. Hancock brings two claims under ERISA: (1) “to recover the long-term disability benefits due her under the Plan, to enforce her rights under the Plan[, ] and to clarify her rights to future benefits under the Plan” (SAC ¶ 5.4); see also 29 U.S.C. § 1132(a)(1)(B); and (2) breach of fiduciary duty (SAC ¶¶ 5.6-5.18); see also 29 U.S.C. § 1132(a)(3). Ms. Hancock asserts six theories of breach of fiduciary duty: (1) unreasonably delaying and then denying Ms. Hancock's appeal; (2) unreasonably failing to investigate all of the bases on which to pay Ms. Hancock's claims and refusing to give her interests or the interests of the Plan at least as much consideration as Aetna gave its own; (3) unreasonably failing to adopt and implement reasonable standards to promptly and fairly investigate, process, and adjudicate Ms. Hancock's appeal; (4) unreasonably engaging in a selective review of the evidence to minimize the evidence supporting the continuation of benefits while focusing exclusively on evidence supporting the termination of benefits; (5) unreasonably failing to establish administrative processes and safeguards to ensure and verify appropriately consistent decisionmaking; and (6) unreasonably failing to train and supervise employees to ensure they are aware of such administrative processes and safeguards. (SAC ¶ 5.10.)

         On March 15, 2017, Defendants filed a motion for partial summary judgment. (Mot. at 1.) Defendants contend that Ms. Hancock's breach of fiduciary duty claim under 29 U.S.C. § 1132(a)(3) should be dismissed as a matter of law because (1) Aetna did not breach its fiduciary duty by seeking a 45-day extension to decide Ms. Hancock's appeal (id. at 9-10), (2) Aetna's policies and procedures comply with applicable Department of Labor (“DOL”) regulations regarding the time for deciding LTD benefits appeals (id. at 10-11), (3) Aetna properly applied its timing policies and procedures to the adjudication of Ms. Hancock's appeal (id. at 11-12), (4) any recovery under Section 1132(a)(3) is barred as duplicative relief (id. at 13-14), and (5) public policy considerations militate against finding a breach of fiduciary duty (id. at 14-15). Ms. Hancock opposes Defendants' motion and argues that her fiduciary duty claim is cognizable because she seeks different relief under Section 1132(a)(3) than under Section 1132(a)(1)(B). (Resp. at 20.) Ms. Hancock also asserts that Defendants' motion for summary judgment fails to address most of her theories of breach of fiduciary duty and that there are genuine factual disputes regarding whether Defendants unreasonably delayed a decision on her appeal.[4](Id. at 22-24.) The court now addresses Defendants' motion.

         III. ...

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