United States District Court, D. Minnesota
KRISTA M. CASSIDY, Plaintiff,
UNION SECURITY INSURANCE COMPANY, Defendant.
M. Nolan, NOLAN, THOMPSON & LEIGHTON, PLC, for plaintiff.
L. Anderson and S. Russell Headrick and Robyn L. Anderson,
LATHROP & GAGE LLP, and Terrance J. Wagener, MESSERLI
& KRAMER P.A., for defendant.
MEMORANDUM OPINION AND ORDER ADOPTING REPORT AND
RECOMMENDATION OF MAGISTRATE JUDGE
R. TUNHEIM CHIEF JUDGE
Krista M. Cassidy brings this Employee Retirement Income
Security Act (“ERISA”) action seeking benefits
under a long-term disability policy (“the Plan”)
issued by Defendant Union Security Insurance Company
(“Union Security”) through the Minnesota Bankers
Association Employee Benefits Trust (the “Bankers
Association”). (Compl., Dec. 15, 2016, Docket No. 1).
Cassidy moved for de novo review of Union Security's
adverse benefits determination. (Mot., Apr. 10, 2017, Docket
No. 14.) United States Magistrate Judge Franklin Noel issued
a Report and Recommendation (“R&R”) that the
motion be denied because the Plan explicitly bestows
discretionary authority to make benefit determinations upon
Union Security. (R&R at 3-4, Jan. 12, 2018, Docket No.
48.) Cassidy objected, contrasting the Plan's authority
provision with more explicit provisions in other Union
Security policies and in Eighth Circuit precedent. (Pl.'s
Objs. to R&R at 3, 6, Jan. 26, 2018, Docket No. 49.)
Nonetheless, it is clear enough to grant the relevant
authority. As such, the Court will overrule her objections,
adopt the R&R, and deny the motion.
magistrate judge files an R&R, a party may file
“specific written objections to the proposed findings
and recommendations.” Fed.R.Civ.P. 72(b)(2);
accord D. Minn. LR 72.2(b)(1). “The objections
should specify the portions of the magistrate judge's
report and recommendation to which objections are made and
provide a basis for those objections.” Mayer v.
Walvatne, No. 07-1958, 2008 WL 4527774, at *2 (D. Minn.
Sept. 28, 2008). “The district judge must determine de
novo any part of the magistrate judge's disposition that
has been properly objected to.” Fed.R.Civ.P. 72(b)(3);
accord D. Minn. LR 72.2(b)(3). “The district
judge may accept, reject, or modify the recommended
disposition; receive further evidence; or return the matter
to the magistrate judge with instructions.”
Fed.R.Civ.P. 72(b)(3); accord D. Minn. LR
review a determination of ERISA benefits de novo
“unless the benefit plan gives the administrator or
fiduciary discretionary authority to determine eligibility
for benefits or to construe the terms of the plan.”
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 115 (1989). Here, Plan documents identify the Bankers
Association as Policy Holder, Plan Sponsor, and Plan
Administrator, but do not explicitly designate any
fiduciaries. (Aff. of Mark M. Nolan (“1st
Nolan Aff.”) ¶ 2, Ex. A at 1, Apr. 10, 2017,
Docket No. 17; 1st Nolan Aff. ¶ 3, Ex. B at
2.) However, the Bankers Association - as Plan Sponsor -
included in the Plan a provision purporting to grant Union
Security the authority to determine eligibility for benefits
and to interpret the Plan's terms. Cassidy v. Union
Sec. Ins. Co., No. 16-4087, 2017 WL 6061620, at *3 (D.
Minn. Dec. 6, 2017). Because this grant of authority falls
under the wide net of “any discretionary authority,
” Union Security meets the statutory definition of
“fiduciary.” Id. (citing 29 U.S.C.
§ 1002(21)(A)(i)). But the question remains whether the
grant of authority is sufficient to bestow
“discretionary authority to determine eligibility for
benefits or to construe the terms of the plan” upon
Union Security as fiduciary such that de novo review is
unwarranted. See Firestone, 489 U.S. at 115.
an insurance policy is the ERISA plan, ” courts must
determine whether the contested provision uses
“explicit discretion-granting language.”
Walke v. Grp. Long Term Disability Ins.,
256 F.3d 835, 839 (8th Cir. 2001) (quoting
Bounds v. Bell Atl. Enters. Flexible Long-Term Disability
Plan, 32 F.3d 337, 339 (8th Cir. 1994)). In
the Eighth Circuit, language reading “like a typical
insurance policy” does not merit deference.
Ravenscraft v. Hy-Vee Emp. Benefit Plan & Tr.,
85 F.3d 398, 403 n.2 (8th Cir. 1996).
The decision to confer discretion on an ERISA plan
administrator affects both the rights of plan participants
and beneficiaries, and the administrator's burden to
assemble an adequate claims record and to adequately explain
its decision at the administrative level. It is relatively
easy for an insurer to use unambiguous discretion-conferring
language when its group policy will serve as an ERISA plan .
. . . Therefore, when the insurer instead issues a policy
containing ambiguous claims submission language commonly used
in non-ERISA contexts, the presumption should be there was no
intent to confer such discretion.
Walke, 256 F.3d at 840 (citations omitted). Thus, it
is not sufficient to state that benefits will be paid if the
insured “submits satisfactory proof of
Total Disability to us, ” even though it would have
been sufficient to state that benefits will be paid only if
the insured submits “proof satisfactory to
us.” Id. at 839-40 (emphases added).
Likewise, it is insufficient to state that benefits will be
paid “after [the insurer] receives adequate proof of
loss, ” Bounds, 32 F.3d at 339, or to state
that “[w]ritten proof of loss must be furnished”
for benefits to be paid, Brown v. Seitz Foods, Inc.,
Disability Benefit Plan, 140 F.3d 1198, 1200
(8th Cir. 1998); see also Bowers v. Life Ins.
Co. of N. Am., 21 F.Supp.3d 993, 1000 (D. Minn. 2014)
(“In order to qualify for Waiver of Premium an Employee
must submit due proof that he or she has been Disabled . . .
a grant of authority for one purpose sufficient to grant
authority for others. For instance, authority to make a
“conclusive” determination about whether or not
an institution is approved to provide certain care does not
confer discretionary authority to determine the nature of a
patient's care. Dvorak v. Metro. Life Ins. Co.,
965 F.2d 606, 609 & n.3 (8th Cir. 1992). And
“final authority to determine all matters of
eligibility for the payment of claims” does not confer
discretionary authority to construe ambiguous terms in the
plan. Baxter ex rel. Baxter v. Lynn, 886 F.2d 182,
188 (8th Cir. 1989).
contrast, it is sufficient in the Eighth Circuit to state
that the insurer may insist on proof “satisfactory to
[the insurer], ” that a party has “full and exclusive
authority to control and manage the Plan, to administer
claims, and to interpret the Plan and resolve all questions,
” that the insurer has “full
discretion and authority to determine eligibility for
benefits and to construe and interpret [the policy's]
terms and provisions, ” or that term definitions may be
construed “as determined by the [plan
sponsor].” See generally Armstrong v. Great Lakes
Higher Educ. Corp., No. 00-1543, 2002 WL 459077, at *3
(D. Minn. Mar. 18, 2002) (collecting cases and noting that
there is “no bright line test” for courts to use
in making this determination).
Court must determine whether the authority provision in the
Plan is more like “unambiguous discretion-conferring
language” or “ambiguous claims submission
language.” The authority provision reads as follows:
The policyholder delegates to us and agrees that we
have the authority to determine eligibility for participation
or benefits and to interpret the terms of the
policy. However, this provision will not restrict
any right you may have to pursue an ...