United States District Court, W.D. Washington, Tacoma
ANTHONY R. FLAAEN, Plaintiff,
PRINCIPAL LIFE INSURANCE COMPANY, Defendant.
FINDINGS OF FACT, CONCLUSION OF LAW, AND
BENJAMIN H. SETTLE United States District Judge
matter comes before the Court on Plaintiff Anthony R.
Flaaen's (“Flaaen”) trial brief on the
administrative record (Dkt. 33) and Defendant Principal Life
Insurance Company's (“Principal”) motion for
judgment on the administrative record (Dkt. 34). The Court
concludes that Flaaen is entitled to a reinstatement of
benefits and an award of benefits back to the date of
December 10, 2015, Flaaen filed a complaint for long-term
disability benefits against Defendants McLane Company, Inc.
(“McLane”) and Principal Life Insurance Company,
Inc. (“Principal”). Dkt. 1. Flaaen's sole
claim is wrongful denial of benefits under the Employee
Retirement Income Security Act of 1974, 29 U.S.C. §
1001, et seq. (“ERISA”). Id. On
February 1, 2016, Flaaen dismissed McLane. Dkt. 6.
22, 2016, Flaaen filed a motion for partial summary judgment
arguing that the applicable long-term disability plan's
(“LTD”) discretionary clause is invalid and
unenforceable as a matter of law. Dkt. 16. On December 22,
2016, the Court granted the motion and determined that the
standard of review is de novo. Dkt. 28.
April 3, 2017, Principal filed the administrative record.
Dkt. 31. On May 4, 2017, Principal supplemented the record.
31, 2017, the parties filed opening briefs. Dkts. 33, 34. On
June 16, 2017, the parties responded. Dkts. 36, 37. On June
30, 2017, the parties replied. Dkts. 39, 40. On August 9,
2017, the Court requested additional briefing. Dkt. 42. On
August 18, 2017, the parties submitted additional responses.
Dkts. 43, 44. On August 25, 2017, the parties submitted
additional replies. Dkts. 46, 47.
August 31, 2005, McLane applied for a group LTD plan with
Principal. AR 119-123. On January 1, 2006, Principal issued
an LTD plan effective that day. AR 1- 118
(“Plan”). Relevant to this matter, the Plan
provides that “A Member will qualify for Disability
benefits if . . . The Member is Disabled under the terms of
this Group Policy.” AR 36. The Plan defines Disability
and Disabled as follows:
A Member will be considered Disabled if, solely and directly
because of sickness, injury or pregnancy:
During the Elimination Period and the Own Occupation Period,
one of the following applies:
a. The Member cannot perform one or more of the Substantial
and Material Duties of his or her Own Occupation.
After completing the Elimination Period and the Own
Occupation Period, one of the following applies:
a. The Member cannot perform the majority of the Substantial
and Material Duties of any Gainful Occupation for which he or
she is or may reasonably become qualified based on education,
training, or experience.
b. The Member is performing the Substantial and Material
Duties of his or her Own Occupation or any occupation on a
Modified Basis and is unable to earn more than 60% of his or
her Indexed Predisability Earnings.
Plan defines Own Occupation as “The occupation the
Member is routinely performing when Disability begins as
performed in the national economy.” AR 38. The Plan
defines Gainful Occupation as “Employment in which the
Member could reasonably be expected to earn an amount equal
to or greater than the Primary Monthly Benefit.” AR 38.
Finally, the Plan proscribes that benefits will not continue
beyond “the date Disability ends.” AR 50.
12, 1989, McLane hired Flaaen as a truck driver in Tacoma,
Washington. Dkt. 16-1, Declaration of Chris Roy, ¶ 6. On
September 21, 2006, Flaaen suffered an injury to his back. AR
1813. His last day of work for McLane was January 29, 2007.
Id. On April 10, 2007, Flaaen applied for LTD
benefits under the Plan. AR 1811. On June 8, 2007, Principal
approved benefits effective July 29, 2007, at an amount of
$3, 927.04 per month. AR 1096, 1683.
Flaaen was unable to perform his previous occupation as a
truck driver, he qualified for retraining. Flaaen obtained an
associate's degree in Media Design and applied to the
University of Washington (“UW”) to pursue a
bachelor's degree in Art/Media/Culture. UW accepted
Flaaen, and his expected graduation was December 2014. On
November 4, 2014, Principal referred Flaaen's file for an
independent review “to determine which occupations
would meet Gainful requirement of $47, 124.48.” AR
1041. On December 12, 2014, a rehabilitation consultant from
Adling and Associates produced a report that listed potential
occupations and salaries as follows:
AR 1849 (“Adling Report”).
December 24, 2014, Principal terminated Flaaen's
benefits. AR 1836-9. In relevant part, Principal's letter
provides as follows:
We have been evaluating your current employability and on
12/12/2014 obtained an updated and current Labor Market
Search. Based off of the Labor Market Search with your
current educational and work history we found several Gainful
Occupations that you are capable of performing on a full time
basis. Examples would be Producer which has a mean or median
wage of $49, 525.00 Annually, Public Relations Representative
which has a mean or median annual wage of $65, 395.00,
Sales-Service Promoter which has a mean or median annual wage
of $54, 517.00.
AR 1837. The letter also provided that Flaaen could seek
reconsideration of the decision. AR 1838.
22, 2015, Flaaen appealed. AR 935-68. As part of his appeal,
Flaaen asserted that his relevant work history was as
During his education, Mr. Flaaen developed and produced
several documentary films both by himself as well as working
collaboratively with other student filmmakers. He interned at
Sirius Films as a camera operator while attending Clover Park
Technical College. While at the University of Washington he
held an internship with the Greater Tacoma Community
Foundation in which he produced local community interest
videos for Kickstarter to raise funds for the Foundation.
Mr. Flaaen did not work while he was attending college
full-time. After graduating, he accepted a part-time position
teaching art classes to children with the Young Rembrandts.
He has taught a total of 2 classes to date. Each class is 2
hours in length. He was paid $60 per class. He is not
scheduled on a regular basis as the company does not offer a
schedule of ongoing classes, but rather has short-term
contracts at local venues.
In January, 2015, Mr. Flaaen opened his own production
company, Mariposa Productions. He develops and produces video
segments for use by local companies. While Mr. Flaaen has
been able to secure a couple of contracts which he has
completed at this time, he does not have a regular or
primary contention on appeal was that Principal's
decision was based on “a deeply flawed employability