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Hendrickson v. Prudential Insurance Company of America

United States District Court, D. Utah

October 19, 2017

Alan Hendrickson, Plaintiff,
The Prudential Insurance Company of America, Defendant.


          Clark Waddoups United States District Judge


         Before the court is Defendant The Prudential Insurance Company of America's motion for summary judgment of all of Plaintiff Alan Hendrickson's claims for short-term and long-term disability benefits under the Employee Retirement Income Security Act.[1] (Defendant's Motion, ECF No. 40.) Prudential argues summary judgment is proper because Mr. Hendrickson failed to exhaust his administrative remedies and, in the alternative, that Prudential did not abuse its discretion in denying Mr. Hendrickson's claim for short-term disability benefits. (Dkt. No. 40.) The court held oral argument on October 18, 2017. (Dkt. No. 50.) Having carefully considered the arguments set forth in the briefs and during oral argument, the court now GRANTS Prudential's motion and ORDERS summary judgment be entered in Prudential's favor.


         Mr. Hendrickson formerly worked as a salesperson for Hilton. (Plaintiff's Response to Mot. Summ. J. 2, ECF No. 41.) Through his employment, Mr. Hendrickson participated in The Hilton Worldwide, Inc., Welfare Benefit Plan, which included short-term and long-term disability benefits that Prudential insured under Group Contract No. G-51532-VA (The Plan). (Id.)

         Addressing the beneficiary directly, the Plan “provides financial protection by paying a portion of your income while you are disabled, ” PRU 124, and states that “disability” exists if Prudential “determines that: you are unable to perform the material and substantial duties of your regular occupation due to sickness or injury; you are under the regular care of a doctor; and you have a 20% or more loss in weekly earnings due to the same sickness or injury.” PRU 133 (emphasis in original). Regular occupation, which is at issue in this case, is defined as “the occupation you are routinely performing when your disability begins” and includes “your occupation as it is normally performed, ” rather than “how the work tasks are performed for a specific employer or at a specific location.” PRU 133.

         The Plan vests “sole discretion to interpret the terms of the Group Contract, to make factual findings, and to determine eligibility for benefits” in “The Prudential Insurance Company of America as Claims Administrator.” PRU 119. The Plan also states that a claimant will receive notice of a claim determination within forty-five days of the receipt of the claim, with the possibility of that deadline being extended by thirty days when necessary. PRU 119. In the case of a denied claim, the Plan requires written notice detailing the reasons for the denial, identifying the Plan provision upon which the determination was made, a description of any materials that were missing from the original claim, “a description of Prudential's appeals procedures and applicable time limits, ” and an explanation of the scientific or clinical judgment if the adverse determination was based on a medical necessity or similar exclusion or limit. PRU 119-20. Regarding the appeal process, the Plan says that upon an adverse determination, “you or your representative may appeal your denied claim in writing to Prudential within 180 days of the receipt of the written notice of denial or 180 days from the date such claim is deemed denied.” PRU 120. It also states the form in which appeal may be filed and authorizes access to records upon request. PRU 120. The appeal process also includes a second level of appeal, which the Plan refers to as “a second, voluntary appeal of your denial” and about which the Plan states, “[i]f you elect to initiate a lawsuit without submitting to a second level of appeal, the [P]lan waives any right to assert that you failed to exhaust administrative remedies.” PRU 121.

         On April 7, 2014, Mr. Hendrickson ceased working for Hilton, and in June 2014, he filed a claim for short-term disability benefits, asserting that work-related stress, anxiety, and panic attacks precluded him from working. (Plaintiff's Response to Mot. Summ. J. 4 & 10-11, ECF No. 41.) Mr. Hendrickson submitted an Attending Physician Statement executed on July 1, 2014, by Dr. Robert W. Hamilton, who is a family practitioner. (Id. at 11.) Dr. Hamilton opined that Mr. Hendrickson suffered from panic attacks, stress, and anxiety but that he would be able to return to work by December 27, 2014. (Id.) Mr. Hendrickson also submitted an Activities of Daily Living Questionnaire in which he noted that he had trouble sleeping but that had improved with medication; that he could dress and groom himself; that he drives and shops multiple times a week without assistance; and that he reads, watches TV, walks between one and three miles per day, uses a computer, and visits friends. (Id. at 12.) Prudential also reviewed medical records from Nurse Practioner Renae Lynn Power and Dr. Hamilton from April to July 2014. (Id. at 13- 16.) Prudential employee Collette Howe, RN, conducted an internal medical review and concluded that the medical documents demonstrated stress, anxiety, and depression brought on by Mr. Hendrickson's particular work environment, but also concluded that the record did not support an inability to work in his regular profession. (Id. at 16-17.)

         On July 25, 2014, Prudential notified Mr. Hendrickson that his short-term disability claim was denied. (Plaintiff's Response to Mot. Summ. J. 4-5, ECF No. 41.) The notice detailed the documents Nurse Howe had reviewed and explained that the medical documentation on file “does not support an inability to perform the material and substantial duties of your regular occupation as a salesperson, but rather suggest that your stress, anxiety and depression are a direct result of your work environment, and there is no evidence to suggest that you are globally impacted.” PRU 059-60.

         The notice of denial also conveyed the following regarding Mr. Hendrickson's ability to appeal: “If you disagree with this decision you have the right to appeal. We have enclosed information on our appeal process should you choose to appeal this decision. The enclosure also lists the information that should be included with your appeal. If you wish to appeal, you must follow the process in the enclosure and submit your written appeal within 180 days of receiving this letter.” PRU 060. Prudential enclosed a document named “Appeal Rights” in which the fact that Mr. Hendrickson “ha[d] a right to appeal [its] decision” was disclosed and procedures for appeal and review of the appeal were set out. Id. The enclosure also noted that “[i]f our decision to deny benefits is upheld at the first level of appeal, you . . . may file a voluntary second appeal” but also that “[a]fter completion of the first level of appeal, you may also file a lawsuit under the Employment Income Security Act (ERISA). . . . Your decision on whether to file a second appeal will not affect your rights to sue under ERISA.” Id. Finally, the enclosure addressed the timing for long-term disability claims subsequent to approval of short-term disability benefits. Id.

         Sometime after the denial, Prudential received medical records from Dr. Alteen A. Lee.[3](Plaintiff's Response to Mot. Summ. J. 4-5, ECF No. 41.) A second Prudential representative, Kaitlin Hamilton, RN, BSN, reviewed Mr. Hendrickson's file, including Dr. Lee's records, on August 1, 2014. (Id.) Based on Ms. Hamilton's review, Prudential wrote a second letter to Mr. Hendrickson in which it noted that the records showed Mr. Hendrickson's symptoms “stem[] from work related stress” and that, “[g]iven the available medical, one would not expect resulting limitations nor medical reasons that would restrict your functional capacity in regards to the above condition from Last Day worked through to the present time.” PRU 064. The letter also stated: “You were also advised in our July 25, 2015 letter that you had 180 days from your receipt of that letter to appeal the decision. If you choose to appeal, you must do so within 180 days of your receipt of the July 25, 2014 letter.” PRU 065.

         Mr. Hendrickson did not file anything with Prudential after the August 1, 2014 letter. (Plaintiff's Response to Mot. Summ. J. 8, ECF No. 41.) Believing he could not submit a claim for long-term disability until Prudential approved a claim for short-term disability, Mr. Hendrickson filed no claim for long-term disability. (Id.) On August 5, 2015, he filed the instant lawsuit for short- and long-term disability benefits as well as pre- and post-judgment interest and attorney fees and costs. (Complaint 31, ECF No. 2.)

         Legal Standard

         Federal Rule of Civil Procedure 56(a) requires the court to 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.” When applying this standard, the court must “view the evidence and draw reasonable inferences therefrom in a light most favorable to the nonmoving ...

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