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Ward v. Aetna Life Insurance Co.

United States District Court, S.D. Mississippi, Southern Division

December 20, 2018




         BEFORE THE COURT are the [21] Motion for Summary Judgment filed by the defendant, Aetna Life Insurance Company, and the [23] Motion for Summary Judgment filed by the plaintiff, Jason Ward, in this lawsuit concerning the denial of long-term disability benefits under a plan governed by ERISA. The parties fully briefed Aetna's Motion, but Ward did not file a reply in support of his Motion. After reviewing the submissions of the parties, the record in this matter, and the applicable law, the Court finds that Aetna's Motion should be granted, and Ward's Motion should be denied.


         Aetna issued a group plan (policy number GP-737331-GID) that provided long-term disability insurance to eligible employees of Pacific Architects and Engineers Incorporated (hereafter “PAE”) effective January 1, 2015. (Admin. R. 91, ECF No. 14-1.) The plan's booklet-certificate[1] notifies employees that they must enroll in the long-term disability plan within thirty-one days of their eligibility date. (Id. at 95.) Employees who do not enroll within thirty-one days of eligibility are required to submit evidence of good health satisfactory to Aetna at their own expense to obtain coverage. (Id.) The plan grants Aetna discretion to determine whether an employee's claim for benefits should be granted, and Aetna is responsible for paying any valid claims.

         Jason Ward was diagnosed with renal cell carcinoma in November 2012 and underwent a right robotic nephrectomy on December 26, 2012. (Administrative R. 786, ECF No. 14.) On December 15, 2014, PAE hired Ward to work as an electrical engineer. (Id. at 1841.) Ward became eligible for long-term disability coverage when he was hired, but he did not enroll in the long-term disability plan within thirty-one days of eligibility. (Id. at 449.) An August 18, 2015 CT-scan revealed a nodule on Ward's right lung. (Id. at 786.) Ward's physicians recommended a six-month follow-up CT-scan. (Id.) Ward attempted to enroll in the long-term disability plan for the plan period beginning January 1, 2016. (Id. at 449.) On February 19, 2016, Ward's follow-up CT-scan revealed that Ward had an additional nodule on his right lung, so Ward traveled to M.D. Anderson for treatment recommendations. (Id. at 786.) At M.D. Anderson, physicians diagnosed Ward with metastatic renal cell carcinoma; thus, his physicians had determined that the cancer had spread from his kidney to his lung. (Id. at 803-04.)

         On March 17, 2016, Ward filed a claim with Aetna for short-term disability, which was ultimately granted. (Id. at 121, 211.) Ward then sought long-term disability benefits, but Aetna denied Ward's claim because he did not submit an evidence of insurability form demonstrating good health when he enrolled in the long-term disability insurance plan. (Id. at 291.) Ward appealed the denial of his claim, asserting that he was told in writing that he had coverage. He also noted that long-term disability insurance premiums had been deducted from his paychecks.[2] (Id. at 1759.) Aetna denied Ward's appeal, and he filed this lawsuit asserting claims for equitable relief pursuant to 29 U.S.C. § 1132(a)(3) and long-term disability benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). The parties have filed cross-motions for summary judgment.



         “[W]hen an administrator has discretionary authority with respect to the decision at issue, the standard of review should be one of abuse of discretion.” White v. Life Ins. Co. of N. Am., 892 F.3d 762, 767 (5th Cir. 2018) (quoting Conn. Gen. Life Ins. Co. v. Humble Surgical Hosp., LLC, 878 F.3d 478, 483 (5th Cir. 2017)). “If the plan administrator's interpretation is legally correct, then no abuse of discretion has occurred, and the analysis ends.” Owens v. W. & S. Life Ins. Co., 717 Fed.Appx. 412, 416 (5th Cir. 2018). However, if the plan interpretation is “not legally sound, we then move on to step two and determine whether the interpretation itself constitutes an abuse of discretion.” Id. “Only upon reaching this second step must the court weigh as a factor whether the administrator operated under a conflict of interest.” Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252, 257 (5th Cir. 2009); see also Gomez v. Ericsson, Inc., 828 F.3d 367, 374 n.5 (5th Cir. 2016). A court must “give deference to the decision of the plan administrator and may not substitute its judgment for the decision of the fiduciary.” Killen v. Reliance Standard Life Ins. Co., 776 F.3d 303, 307 (5th Cir. 2015) (citing 1A Couch on Ins. § 7:59 (3d ed. 2014)).


         “In determining whether an ERISA determination is legally correct, we consider: ‘(1) whether the administrator has given the plan a uniform construction, (2) whether the interpretation is consistent with a fair reading of the plan, and (3) any unanticipated costs resulting from different interpretations of the plan.'” Gomez, 828 F.3d at 373-74 (quoting Stone, 570 F.3d at 258). Ward has not argued that Aetna failed to give the plan a uniform construction or that there are any unanticipated costs resulting from the differing plan interpretations, so it is not necessary to discuss the first and third factors. Therefore, the Court must only address whether Aetna's interpretation of the plan is consistent with a fair reading of the plan.

         “Eligibility for benefits under any ERISA plan is governed in the first instance by the plain meaning of the plan language.” Acosta v. Bank of La., 88 Fed.Appx. 688, 690 (5th Cir. 2004) (citing Threadgill v. Prudential Secs. Grp., Inc., 145 F.3d 286, 292 (5th Cir. 1998)). Thus, “[w]hen interpreting plan provisions, we interpret the contract language in an ordinary and popular sense as would a person of average intelligence and experience, such that the language is given its generally accepted meaning if there is one.” White v. St. Luke's Episcopal Health Sys., 317 Fed.Appx. 390, 393 (5th Cir. 2009).

         Under the heading “How and When to Enroll, ” the plan's booklet-certificate provides:

You will be provided with plan benefit and enrollment information when you first become eligible to enroll. You will need to enroll in a manner determined by Aetna and your employer. To complete the enrollment process, you will need to provide all requested information including any evidence of good health. You will also need to agree to make required contributions for any contributory coverage. Your employer will determine the amount of your plan contributions, and will advise you of ...

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