United States District Court, D. South Dakota, Southern Division
[Copyrighted Material Omitted]
For Karen Brake, Plaintiff: N. Dean Nasser, Jr., Nasser Law Offices, P.C., Sioux Falls, SD.
For The Hutchinson Technology Incorporated Group Disability Income Insurance Plan, Defendant: James Ellis Moore, LEAD ATTORNEY, Woods, Fuller, Shultz & Smith, PC, Sioux Falls, SD; Eric C. Tostrud, PRO HAC VICE, Lockridge, Grindal, Nauen P.L.L.P., Minneapolis, MN.
MEMORANDUM OPINION AND ORDER RE: MOTIONS FOR SUMMARY JUDGMENT
Lawrence L. Piersol, United States District Judge.
Plaintiff, Karen Brake, brought this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, (ERISA) after the Defendant Hutchinson Technology Incorporated Group Disability Income Insurance Plan denied Plaintiff ERISA long term disability benefits under a Buy-Up supplemental plan. Doc. 1. Both parties have moved for summary judgment. Doc. 14, 18.
Federal Rule of Civil Procedure 56(a) provides: " The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact  and the movant is entitled to judgment as a matter of law." " Where the unresolved issues are primarily legal, rather than factual, summary judgment is particularly appropriate." Jankovitz v. Des Moines Indep. Cmty. Sch. Dist., 421 F.3d 649, 652-653 (8th Cir. 2001). A district court, when faced with cross-motions for summary judgment, must review each motion separately on its own merits to determine whether either of the parties deserves judgment as a matter of law. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003).
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Karen Brake began working for Hutchinson Technology Incorporated at its Sioux Falls, South Dakota location in August of 1988. From September 1994 through the termination of her employment she was a manufacturing training/CM supervisor. Hutchinson Technology purchased a group long-term disability insurance policy (No. 83109052) (the " Policy" ) originally from CNA Group Life Assurance Company. CNA Group Life Assurance Company later changed its name to Hartford Life Group Insurance Company. The Policy became effective April 1, 2005.
The Policy's plan administrator was Hutchinson Technology. Hutchinson Technology delegated its sole discretionary authority to Hartford to determine questions of benefit eligibility and entitlement and to interpret the terms, and provisions of the Plan and any policy issued in connection with the Plan. The Plan offered both a " Core Plan" and " Buy-Up Plan" long-term disability monthly benefit options. Under the Hartford Core Plan, the basic monthly benefit amount payable to a qualifying beneficiary was either fifty percent of an employee's monthly earnings, or $7,000, whichever amount was less. Hutchinson Technology paid the entire cost of coverage under the Core Plan.
Under the Hartford Buy-Up Plan, the basic monthly benefit amount payable to a qualifying beneficiary was either seventy percent of an employee's monthly earnings, or $10,000, whichever was less. The employee paid the cost of coverage for the additional benefit amount, that being the amount in excess of Hutchinson Technology's contribution under the Core Plan.
In March 2007, during Hutchinson Technology's employee benefit open enrollment period, Plaintiff submitted a benefit enrollment form exercising her option to pay for
the additional coverage and participate in the Buy-Up long term disability plan. Plaintiff was covered under the Core Plan before April 1, 2007, and effective April 1, 2007, she participated in and was covered under the Buy-Up Plan.
Plaintiff was diagnosed with multiple sclerosis (MS) in approximately 2000. In a telephone interview with a Hartford representative, Plaintiff claimed to have begun experiencing heightened problems associated with her multiple sclerosis in April 2007. Plaintiff's application for long term disability benefits lists a diagnosis of MS with symptoms of fatigue, pain, bladder spasm and visual changes.
According to the Plan file Plaintiff went to part-time employment with Hutchinson Technology in July of 2007, and from July 25, 2007, onward, Plaintiff utilized short-term disability pay and worked adjusted hours but was not changed to a part-time status.(HART000048). On March 25, 2008, Plaintiff stopped working at Hutchinson Technology entirely. Plaintiff's short-term disability benefits expired July 3, 2008. Plaintiff submitted a claim to Hartford for long-term disability benefits in an application dated April 24, 2008. Plaintiffs attending physician, Dr. Olson, listed 9/10/2007 as the date Plaintiff became unable to work due to her impairment. Plaintiff has been paid all core long-term disability benefits.
The Hartford Group Policy addresses " Buy-Up Plan Pre-Existing Condition" as follows:
The portion of the Buy-Up Plan that exceeds the coverage available under the Core Plan will not apply to any Disability caused by a condition for which medical treatment or advice was rendered, prescribed or recommended within 12 months prior to the effective date of the Buy-Up Plan. A condition shall no longer be considered pre-existing for loss incurred or Disability commencing after the Buy-Up Plan has been in force for a period of 12 months.
On August 19, 2008, Hartford corresponded to Plaintiff and advised her that it had approved her claim for Long-Term Disability benefits under the Core Plan, but that benefits were not payable for the Buy-Up Plan because her disability was due to a Pre-Existing condition and that her medical records indicated that she received treatment for her MS condition during the pre-existing period. Hartford explained that its review disclosed treatment on 3/15/2006, 6/29/2006, 3/7/2007 and an MRI on 3/09/2007, all occurring during the pre-existing period.
Plaintiff contacted the Plan officials on September 30, 2008. In this correspondence she advised that her doctor's visit on June 29, 2006, was for a routine physical and pap smear with her family doctor. Plaintiff also explained that since she was diagnosed with MS in 2000, she was regularly seen by a neurologist every year as a routine well-care checkup and felt that she should not be penalized by trying to manage her condition and maintain a healthy life.
In correspondence dated October 20, 2008, the Appeal Specialist for Hartford Life and Accident Insurance Company explained the denial of buy up plan long-term disability benefits as follows:
Since your date of loss was within 12 months of the effective date of the Buy Up coverage a pre-existing investigation was completed. It is noted that during the pre-existing time frame which was from April 1, 2006 through March 31, 2007, you were treated for your MS condition.
On June 29, 2006, you were seen by Dr. Michael Olson for a pap and pelvic exam. However during the examination you advised
Dr. Olson that your biggest concern is fatigue. You further stated that you thought the fatigue was related to your MS. On March 7, 2007, you were seen by Dr. Eugene Matos with complaints of fatigue and numbness in the legs and knees. You also reported vision changes and other problems related to MS. An MRI of the brain was recommended and completed on March 9, 2007.
All of the above visits occurred during the pre-existing time period and therefore renders you ineligible for benefits under the exclusion noted in the policy.
In rendering the appeal decision we considered your letter of appeal dated September 30, 2008. Although we understand that you had to do what was needed in order to maintain a healthy life, we ...