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Howell v. Liberty Life Assurance Company of Boston

United States District Court, D. Colorado

June 26, 2018



          Nina Y. Wang United States Magistrate Judge

         This civil action comes before the court on Plaintiff Wanika Howell's “Motion Requesting Discovery and Objection to Submission of Administrative Record” (“Motion for Discovery”), [#27, filed April 16, 2018]. The Motion for Discovery was referred to the undersigned Magistrate Judge pursuant to the Order Referring Case dated January 29, 2018 [#17] and the memorandum dated April 17, 2018 [#28]. The court has reviewed the Motion for Discovery, the associated briefing, the case file, and the applicable law, and, for the reasons stated below, GRANTS IN PART and DENIES IN PART the Motion.


         On December 12, 2017, Plaintiff Wanika Howell (“Plaintiff” or “Ms. Howell”) initiated this action pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., seeking accidental death benefits related to the death of her son, Joel McClain, Jr., who was killed when his motorcycle was struck by a car attempting to make a left-hand turn at the intersection Mr. McClain was passing through. See [#1 at 2]. Prior to the accident, Plaintiff had purchased an Accidental Death and Dismemberment Policy (the “Policy”), through her employer, from Defendant Liberty Life Assurance Company of Boston (“Defendant”). The Policy provided a death benefit of $500, 000 and identified Mr. McClain as the insured party and Plaintiff as the beneficiary. Plaintiff submitted a claim for the $500, 000 death benefit following the death of her son. Defendant investigated the facts giving rise to the accident, which included speaking with the officer who investigated the accident, Detective Ferrucci. [#34 at 4]. Defendant subsequently denied the claim on the basis of an exclusion in the Policy, which provides that no benefits are payable for a loss that is “contributed to or caused by…committing or attempting to commit a felony or misdemeanor.” [Id. at 3 (citing #1-6)].[1] In support of its application of the exclusion, Defendant stated that Detective Ferrucci “verbally confirmed that if Mr. McClain had survived the collision, he would have been charged with reckless driving…, ” which, in the State of New York, is classified as a misdemeanor. [Id. at 3]. Defendant further stated that it had:

determined that Mr. McClain subjectively expected serious injury or death to occur as a result of driving at excessive speeds…our determination is supported by the facts of this claim, mainly the investigating detectives statement [sic] that he would have charged Mr. McClain with a misdemeanor traffic violation of reckless driving had he survived the crash…Based on these determinations, no accidental injury occurred and the AD&D benefits are not payable.

[Id. at 3-4].

         Plaintiff alleges in her Complaint that she “corresponded with the Defendant in an effort to protest and appeal the company's denial of benefits, ” but that Defendant upheld its denial of the Policy benefit, “again stating that the investigating officer would have charged Mr. McClain with reckless driving had he survived, and that ‘no additional information was submitted on appeal to suggest that Mr. McClain would not have been charged. In the State of New York, reckless driving is a misdemeanor.'” [#1 at 5 (citing #1-2)]. Plaintiff asserts one claim for breach of contract under ERISA section 502(a), 29 U.S.C. § 1132(a)(1)(B).

         Defendant filed an Answer on January 23, 2018, and an Amended Answer on January 25, 2018. [#10; #14]. On February 2, 2018, this court entered a Scheduling Order setting certain pretrial dates and deadlines, including a deadline of April 15, 2018 by which to file the Administrative Record, and a deadline of August 1, 2018 by which to file Opening Briefs. [#22]. Defendant thereafter filed the Administrative Record. [#26].

         On April 16, 2018, Plaintiff filed the Motion for Discovery, in which she asserts that her counsel spoke with Detective Ferrucci, who stated that it was only a possibility that he would have charged Mr. McClain with reckless driving had Mr. McClain survived the accident, and that he “would need more information to address that type of decision.” [#27 at 4]. Plaintiff asserts that Detective Ferrucci also represented that in his prior communication with Defendant, he had “stated that charging Mr. McClain with reckless driving was only a possibility had he survived” [id.], and agreed “that a confirming letter could be sent to the effect that he would need more information to make a charging decision, ” which information Plaintiff's counsel relayed to counsel for Defendant in a letter dated April 13, 2018. [Id. (citing #27-4)]. Plaintiff asks the court to permit discovery to allow the deposition of Detective Ferrucci and of “a company representative to address bias and prejudice as it may affect the standard of review.” [Id. at 10]. Plaintiff also argues that this discovery is permissible because the court should engage in a de novo review. [#27 at 9 (citing Colo. Rev. Stat. § 10-3-1115)].

         On May 14, 2018, Defendant filed a Response to the Motion, arguing that an arbitrary and capricious standard of review applies to the plan administrator's decision, ERISA preempts any state statutory authority to the contrary, and evidence in ERISA cases is typically limited to the administrative record. [#34 at 2]. Defendant further argues that “Plaintiff was afforded a full and fair opportunity to appeal the initial claim determination, during which she had the opportunity and obligation to submit for Liberty's consideration and review the precise evidence she now seeks in discovery.” [Id.] And that, in appealing the denial of benefits, while Plaintiff disagreed with the witnesses at the scene of the accident and argued that “it was never proven beyond a reasonable doubt” that her son “was involved in reckless driving causing the accident, ” she did not disagree with Defendant's recitation of Detective Ferrucci's comments or describe her difficulty in contacting Detective Ferrucci. [#34 at 5]. Additionally, Defendant contends, Plaintiff did not provide contradictory comments or information from Detective Ferrucci or ask for additional time to complete her appeal, nor did she ask Defendant to speak again with Detective Ferrucci. [Id.]

         In her Reply, Plaintiff asserts that because “Defendant did not obtain any type of independent accident assessment or even address the facts of the accident itself, but based its decision on a Police Officer's potential charging decision, ” the “circumstances…involve an insurer with an inherent conflict of interest, which must be scrutinized given the direct financial interest of the administrator/insurer.” [#40 at 5]. Defendant thereafter sought and received leave to file a Surreply, [#41; #43; #44], in which it contends that Plaintiff misapplies case law in her efforts to secure a de novo review, and that “[w]hen an ERISA policy grants discretion to the administrator to determine eligibility for benefits or construe the policy terms (as it does here), any conflict of interest ‘should be weighed as a factor in determining whether there is an abuse of discretion.'” [#44 at 1 (citing Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008))]. Defendant also contends that Plaintiff's disagreement with the claim determination “is not a basis to conduct discovery outside the administrative record - especially where Plaintiff failed to argue that the information she seeks in discovery could not have been provided to Liberty as part of the administrative process.” [Id. at 3].


         Plaintiff's chief contention is that Detective Ferrucci's comments, regarding whether he would have charged Mr. McClain with reckless driving had Mr. McClain survived the accident, are misrepresented in the Administrative Record, and thus give rise to a factual “disparity between what is recorded by the claims adjuster, ” and what Detective Ferrucci determined following his investigation. [#27 at 5]. Plaintiff therefore wishes to depose both Detective Ferrucci, regarding his charging determination, and a representative of Defendant, regarding how the claims adjustor may have been biased and/or prejudiced, and to amend the Administrative Record by adding such testimony. Defendant asserts that the court should utilize an arbitrary and capricious standard of review of the administrator's decision and deny Plaintiff's request to take what it contends is merits-based discovery. This court addresses first the Parties' dispute regarding which standard of review is appropriate.

         I. Standard of Review

          In support of her position that a de novo review is appropriate, Plaintiff cites Colo. Rev. Stat. 10-3-1115. [#27 at 9]. Defendant argues in response that section 10-3-1115 does not provide a basis for applying a de novo review, and that to the extent Plaintiff means to rely on Colo. Rev. Stat. § 10-3-1116(3), “any alleged statutory right to de novo review or a jury trial, ” provided under that statute is preempted by ERISA. [#34 at 2]. Defendant states simply that “Plaintiff's argument ignores District of Colorado precedent clearly holding that ‘the part of Colo. Rev. Stat. § 10-3-1116(3) providing for a jury trial conflicts with ERISA's remedial structure by altering the judiciary's role. Thus…ERISA preempts, in its entirety, Colo. Rev. Stat. § 10-3-1116(3).'” [#44 at 4].

         Subsection 10-3-1116(3) provides that:

[a]n insurance policy, insurance contract, or plan that is issued in this state shall provide that a person who claims health, life, or disability benefits, whose claim has been denied in whole or in part, and who has exhausted his or her administrative remedies shall be entitled to have his or her ...

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