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Jacowski v. Kraft Heinz Foods Co.

United States District Court, W.D. Wisconsin

November 14, 2016

KATHY J. JACOWSKI, Plaintiff,
v.
KRAFT HEINZ FOODS COMPANY, AETNA LIFE INSURANCE COMPANY and KRAFT FOODS GROUP, INC. EMPLOYEE-PAID GROUP BENEFITS PLAN, Defendants.

          OPINION AND ORDER

          BARBARA B. CRABB District Judge.

         In this civil suit for monetary relief, plaintiff Kathy Jacowski contends that defendants violated her rights under the Employment Retirement Income and Security Act, 29 U.S.C. § 1132(a)(1)(B), by terminating her long term disability benefits arbitrarily and capriciously without a full and fair review and refusing to consider her voluntary appeal as mandated by the plan. Jurisdiction is present under 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e)(1). Before the court are the parties' cross motions for summary judgment, dkts. ##48 and 53, and defendants' motion, dkt. #68, to strike certain portions of the declaration of Brianna Covington.

         Plaintiff asserts that the decision to terminate her long-term disability benefits was arbitrary and capricious for five reasons: (1) in terminating her benefits and denying her two mandatory appeals, defendant Aetna selectively considered the medical evidence and relied on erroneous peer reviews instead of the opinions of her treating providers; (2) defendant Aetna failed to consider the Social Security Administration's 2009 determination that she is disabled; (3) defendant Aetna failed to identify what type of occupation she could perform or conduct any occupational analysis in support of its decision; (4) defendant Kraft failed to consider her voluntary appeal as it was required to do under the terms of the Plan; and (5) defendant Kraft had a conflict of interest that caused it to act in an arbitrary and capricious manner with respect to her voluntary appeal. Defendants argue that (1) they are entitled to summary judgment because they reviewed plaintiff's claim fully and fairly and had a rational basis for finding that she did not have a functional impairment that prevented her from working in any occupation during the relevant period; (2) plaintiff's voluntary appeal is not part of the administrative claim review process under ERISA and therefore not subject to review by this court; and (3) defendants are entitled to an award of attorney's fees and costs under 29 U.S.C. § 1132(g)(1) and Fed.R.Civ.P. 54(d)(2)(B).

         For the reasons stated below, I find that defendant Aetna did not act arbitrarily and capriciously in terminating plaintiff's benefits and that plaintiff has not raised a valid challenge to defendant Kraft's decision not to consider her voluntary appeal. Accordingly, I am granting defendants' motion for summary judgment with respect to plaintiff's claim that defendants violated 29 U.S.C. § 1132(a)(1)(B). I am denying plaintiff's motion for summary judgment in its entirety. Because defendants did not develop an argument with respect to their request for attorney fees and costs, I will deny their request without prejudice to their filing a motion that meets the requirements of Fed.R.Civ.P. 54(d)

         In their motion to strike, defendants assert that paragraph 3 of the Covington declaration, dkt. #56, contains information related to a January 27, 2015 telephone conversation between plaintiff's counsel, Brianna Covington, and an Aetna representative about plaintiff's voluntary appeal that is not part of the administrative record and cannot be considered by the court. Because I agree that the voluntary appeal is not subject to review, I will grant defendants' motion to strike these statements. Defendants also have moved to strike paragraph 4 of the declaration and exhibit #1 to the declaration on the ground that they contain information about which Covington lacks personal knowledge. Because plaintiff does not object to defendants' challenges, I will grant the motion to strike those provisions of dkt. #56.

         From the parties' proposed findings of fact and the administrative record (AR), I find the following facts to be undisputed. Except in a few limited instances to provide context, I have not included facts related to plaintiff's voluntary appeal or the medical treatment that she received after Aetna completed its final review of her second mandatory review because Kraft's decision not to consider plaintiff's voluntary appeal is not subject to the court's review in this case.

         UNDISPUTED FACTS

         A. Background

         Plaintiff Kathy Jacowski is an adult resident of Almond, Wisconsin. She began working for defendant Kraft Heinz Foods Company on October 5, 1981. Most recently, she worked as a customer service supervisor, a position that required strong and effective presentation skills, strong organizational skills, exceptional time management skills, effective negotiating skills, an ability to manage multiple priorities effectively, an ability to deal with ambiguity and unknowns, an ability to excel within a team environment, strong written and verbal communication skills, an ability to look for creative solutions to business issues, an ability to utilize technology to work smarter and improve the level of service to consultants and an ability to understand and comprehend complex procedures. Dkt. #31-5 at 12-13. Plaintiff stopped working on July 7, 2008, claiming she had mental health symptoms that prevented her from working.

         Defendant Kraft is a global food and beverages company that sponsors defendant Kraft Foods Group, Inc. Employee-Paid Group Benefits Plan, a welfare benefit plan, for its employees. The Plan is self-insured and funded by participating employee contributions. Defendant Kraft's Administrative Committee is the “plan administrator, ” and Kraft contracted with defendant Aetna Life Insurance Company to serve as the “disability claims administrator.” As disability claims administrator, Aetna provides claims management services, including determining qualification for benefits and disability claim duration. Aetna is responsible for all administration and payment of long-term disability claims and has full fiduciary authority with respect to any benefit determination.

         As a Kraft employee, plaintiff received short-term and long-term disability insurance as a benefit under the Plan. When she stopped working in 2008, she applied for and received 25 weeks of short-term disability benefits because her mental health problems left her unable to work. On or around December 18, 2008, defendant Aetna approved plaintiff's claim for long-term disability, which became effective on January 8, 2009. On May 16, 2009, the Social Security Administration approved plaintiff's claim for Social Security Disability Insurance benefits at a monthly rate of $1, 992.00, retroactive to January 2009.

         In a letter dated January 3, 2011, Aetna notified plaintiff that it had determined that she met the definition of being “totally disabled from any gainful occupation” after receiving 30 months of benefits. Dkt. #31-4 at 98. In addition, Aetna advised plaintiff in the letter that “[a]ccording to the plan requirements, you will continue to receive LTD benefits as long as you continue to meet the Plan definition and remain under the regular care of a licensed physician that is appropriate for your condition. We will continue to monitor your disability status by periodically requesting updated medical and/or other documentation to verify your continued eligibility for Long-Term Disability benefits.” Id. Plaintiff continued to receive long-term disability benefits under the Plan until Aetna terminated her benefits effective February 28, 2014.

         B. Terms of the Plan

         The Plan's “summary plan description” explains who is eligible for benefits and when coverage begins and ends. With respect to benefits, the summary plan description states the following:

LTD Benefits Provided by the Disability Plan
You are eligible to receive [short-term disability] STD benefits for the first 26 weeks of disability due to an injury or sickness. If you have enrolled in the [long-term disability] LTD Plan, LTD benefits begin after you have been disabled for 26 weeks and are approved by the DCA [disability claims administrator].

Dkt. #31 at 11. After twenty-six weeks of disability, the Plan provides a monthly long-term disability benefit of 60 percent of the insured's pre-disability earnings. Because plaintiff's monthly pre-disability earnings were $5, 775.00, her monthly benefit was $3, 465 after 26 weeks.

         The summary plan description also contains the following relevant provisions and definitions:

Long-Term Disability. . . You must apply for Social Security disability benefits. In addition, you must exhaust your appeal process with the Social Security Administration through the “Administrative Law Judge” level of appeal. However, you need not be receiving Social Security disability benefits to receive LTD benefits. The disability claims administrator can help you with the Social Security application process.

Dkt. #31 at 12.

Definitions of Disability

To be eligible for STD or LTD benefits, the DCA must determine that you satisfy the applicable definition of disability, as described below:

Total Disability

For the First 30 Months (six months of STD plus the first 24 months of LTD) of Disability

For the first 30 months of a disability period, you will be considered totally disabled if, due to a physical or mental impairment caused by injury or sickness:

• You are continuously unable to perform the material and substantial duties of your own occupation

AND

• You are not gainfully employed. The DCA makes an evaluation to determine whether an employee is or could be gainfully employed. Kraft and/or its disability claims administrator further reserves the right to modify such determination of gainful employment in the future, based on objective medical finding AND

• You are receiving appropriate and regular care for your condition from a doctor whose specialty or expertise is the most appropriate for your disabling condition(s) according to generally accepted medical practice. The care provided to you should be of demonstrable medical value for your disabling condition(s) and should continue until maximum medical improvement (MMI) is achieved and thereafter as is appropriate. You may be required by Kraft and/or its disability claims administrator to be under the care of a physician with expertise in treating your condition. For example, those disabled due to a psychiatric condition are expected to be under the care of a psychiatrist.

After 30 Months of Disability

After you have received disability benefits under the plans for 30 months, (the initial six months of STD benefits followed by 24 months of LTD benefits) you will be considered totally disabled if, due to a physical or mental impairment caused by an injury or sickness:

• You are continuously unable to engage in any occupation that provides you with a salary of at least 60% of your pre-disability earnings, and exists within your geographical area

AND

• You are not gainfully employed, except as approved by Kraft and/or the DCA under partial disability or rehabilitative employment as outlined in the next section. If you do not meet this definition of total disability at the end of the 30-month period, your LTD benefits will stop.

Dkt. #31 at 14 (emphases in original). The Plan defines “any occupation” as “any job for which you are qualified by education, training or experience, or become qualified by education, training or experience.” Id. at 6. “Sickness - means illness or injury causing a disability that occurs while your coverage under the plans is in effect.” Id. at 7.

         The Plan provides for two levels of appeal with the disability claims administrator (Aetna). After completing the second appeal, the claimant has exhausted the plan's administrative appeals process and may file a civil ERISA action in court. In addition, the Plan provides for an additional voluntary appeal:

Voluntary Appeal
If you disagree with the DCA's decision to deny your appeal, you or your authorized representative can file a voluntary appeal with the Benefits Department of Kraft Foods Global, Inc. This appeal is optional; it is not required by the plan. The Benefits Department, acting on behalf of Kraft, as plan sponsor, retains discretion to decide whether to pay claims under this voluntary appeal process. Voluntary appeals should be filed within 90 days after receipt of the second level appeal denial by the DCA. The Benefits Department will give you a final decision on your appeal within 60 days after it is received. However, the Benefits Department may take up to an additional 60 days to review your claim. In this case, you will be notified of the extension ahead of time. You can submit a written request for a voluntary appeal to:
Kraft Foods Global, Inc. Benefits Department Three Lakes Drive Northfield, Illinois 60093
Discretionary Authority of Plan Administrator
The plan administrator has complete discretionary authority to interpret and construe the terms of the plan and to decide factual and other questions relating to the plan and plan benefits, including, without limitation, eligibility for, entitlement to and payment of benefits, to the extent such authority has not been allocated to a disability claims administrator. Under the terms of the plan, the disability claims administrator has been allocated full discretionary authority over benefit determinations. See Claims Administrator for the name and address of the claims administrator. Benefits under the plans will be paid only if the plan administrator or the claims administrator decides in its discretion that under the terms of the plan the applicant is entitled to the benefit.

Dkt. #31 at 25. The Plan contains a nearly identical provision to this on the following page, except that the later provision refers to “claims administrators” instead of “disability claims administrators”:

         Plan Administrator

The plan administrator has complete discretionary authority to interpret and construe the terms of the plan and to decide factual and other questions relating to the plan and plan benefits, including, without limitation, eligibility for, entitlement to and payment of benefits, to the extent such authority has not been allocated to a claims administrator. Under the terms of the plan, each claims administrator has been allocated full discretionary authority over benefit determinations. See Claims Administrator for the name and address of the claims administrator. Benefits under the plans will be paid only if the plan administrator or the claims administrator decides in its discretion that under the terms of the plan the applicant is entitled to the benefit.

Dkt. #31 at 26 (emphasis added).

         C. Plaintiff's Claim and Relevant Medical Records

         1. Dr. Robinson

         In August 2007, Dr. David Robinson diagnosed moderate to severe major depression in plaintiff. He later noted that she also suffered from anxiety, post traumatic stress disorder and panic attacks. Plaintiff saw Dr. Robinson over the next several years for these conditions. In progress notes dated July 17, 2013 and August 7, 2013, Dr. Robinson noted that plaintiff complained of increased symptoms of depression and anxiety caused by marital, family, work and health problems. On August 26, 2013, Dr. Robinson wrote in a progress note that “patient presents with depressive symptoms that remain stable and anxiety symptoms that remain stable” and that she “reported a decrease in symptoms since her last session” and “is less angry and depressed recently, to a large extent because her anxiety about her father has diminished.” Dkt. #31-8 at 81.

         Dr. Robinson died in September 2013. Plaintiff later reported feeling devastated and having a hard time with the transition to a new provider.

         2. Social worker Vonck

         Plaintiff began seeing Breanna Vonck, a licensed clinical social worker, soon after Dr. Robinson's death. On September 30, 2013, Vonck noted that plaintiff presented with a depressed mood and ongoing symptoms of anxiety and relationship stress. At that time, plaintiff said that her symptoms had increased. Plaintiff also asked Vonck to complete paperwork for her long-term disability claim but Vonck noted that she might not be the most appropriate person because at that point, she had met with plaintiff only once.

         Vonck completed two “Behavioral Health Clinician Statement - Update” forms in support of plaintiff's claim. On a form dated October 11, 2013, Vonck noted that plaintiff was “tearful and upset due to loss of previous clinician, reports an increase in depressive symptoms.” Dkt. #31-8 at 89. In response to questions about plaintiff's ability to work and return to work status, she wrote that she was not able to answer because she had met with plaintiff only once. Id. Vonck also noted that she had not yet assessed many areas related to plaintiff's cognitive functioning or activities of daily living and that plaintiff had not reported having panic attacks in their one meeting. She assigned plaintiff a global assessment of functioning score of 55 but did not explain what this meant.

         On a form dated November 25, 2013, Vonck noted that plaintiff could follow a three-step command, did not have any memory deficits or problems focusing or concentrating the their session, did not exhibit hallucinations and showed impaired decision making only by gambling in recent weeks. With respect to emotional functioning, Vonck stated that plaintiff exhibited an irritable affect and fidgeting and reported having a high level of anxiety in public settings that resulted in her heart racing and her wanting to leave the situation. Plaintiff also exhibited a limited energy level and reported that she felt secure only at home and that it took her more time than it should to complete tasks. Vonck stated generally that plaintiff's “level of functioning at this time would limit her ability to perform a job effectively [and] efficiently.” AR, dkt. #31-8, at 62-63.

         3. Dr. Matthew

         On March 27, 2014, after the termination of her long-term disability benefits, plaintiff began seeing Dr. Ronald Matthew, a psychologist. At that visit, plaintiff reported the following:

• After working for 31 years at Kraft, she became severely depressed. It got worse because she started having nightmares and flashbacks about her childhood sexual molestation.
• Her anxiety got so bad that she did not want to get out of bed or leave the house. When she did leave the house, she had “horrific” anxiety attacks, which she still gets.
• She “crashed” after Dr. Robinson died, feeling devastated and abandoned. Although she started seeing Vonck, whom she thought was a doctor, Vonck was not helpful to her.
• Aetna informed her a week ago that she would no longer be getting benefits.

         Upon examination, Dr. Matthew noted that plaintiff's attention and concentration were clinically intact but that her prognosis for treatment was only fair. He gave her a global assessment of functioning score of 50. Dr. Matthew diagnosed recurrent major depressive disorder, post traumatic stress disorder and social environment, occupational and economic problems.

         Following the March 2014 examination, Dr. Matthew completed a Behavior Health Clinician Statement for Aetna, dated April 10, 2014. He noted on the form that although he did not observe plaintiff having a panic attack, she reported having them “daily” and “out of the blue” “several times a week.” AR, dkt. #31-9, at 35-36. He also checked boxes stating that plaintiff could not perform “any reasonable occupation” and was “unable to work currently.” AR, dkt. #31-9, at 35-37. Dr. Matthew wrote that “concentration disrupted by emotional flooding, sadness. Daily panic attacks, some paranoia over husband's activities.” AR, dkt. #31-9, at 36. He also noted that he observed the following during his examination of plaintiff: “crying, anger (words, volumn [sic] & intensity), disgusted looks, sarcasm.” Id. Dr. Matthew noted that plaintiff reported some suicidal thoughts but had no plan and exhibited normal reasoning and judgment.

         In a letter to Aetna dated July 15, 2014, Dr. Matthew stated that he had completed a Detailed Assessment of Post-Traumatic Stress (DAPS) of plaintiff and the results confirmed that she had post traumatic stress disorder. AR, dkt. #31-7, at 81-82. He noted that plaintiff continued to experience intrusive flashbacks to childhood sexual abuse, nightmares, panic attacks, hyper arousal, trouble concentrating, avoidance and peritraumatic distress (guilt, shame, helplessness and suppressed rage) on a daily basis. Dr. Matthew stated his opinion that plaintiff was unable to work at gainful employment because she was unable to sustain productive effort for more than several hours in a row for multiple days in a row. Although plaintiff was taking medication, she reported that it did not always help and that she suffered panic attacks whenever she left the house.

         4. Plaintiff's letters to Aetna

         In a letter dated June 22, 2014, plaintiff described herself as a hermit who does not drive, go grocery shopping, get gas, go to the pharmacy, do housework, do laundry, make meals or do the dishes. She stated that as of the date of her appeal letter, she had not showered, washed her face or brushed her teeth in more than a month. She did not watch television because it might trigger her flashbacks and anxiety attacks. Plaintiff reiterated many of these symptoms in her July 2, 2014 and July 8, 2014 letters to Aetna. In her ...


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