Civil Appeal from the Portage County Court of Common Pleas. Case No. 2008 CV 01899. J
David W. Hilkert, (For Appellants).
Tiffany C. Miller, Bailey Cavalieri, LLC, (For Appellee).
TIMOTHY P. CANNON, P.J.
(¶1} Appellants, Adelbert Clayman and Barbara Skarupa, appeal the decision of the Portage County Court of Common Pleas granting judgment on the administrative record in favor of appellee, Zurich American Insurance Company ("Zurich"). At issue is the denial of coverage benefits under a group accident policy governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). We conclude the trial court erred in granting Zurich's motion for judgment on the administrative record, because Zurich, as the plan administrator, acted in an arbitrary and capricious manner by its selective, self-serving investigation. This includes its inexplicable failure to obtain complete and necessary information-including its failure to make any attempt to reconcile what is obviously a critical discrepancy in the college's characterization of decedent, Margaret Clayman's, enrollment status. Rather, Zurich accepted the version of Ms. Clayman's status most beneficial viewed in light of the plan's provisions. As explained herein, the decision is reversed and remanded.
(¶2} On November 25, 2008, Adelbert Clayman and Barbara Skarupa filed a complaint against Zurich alleging, inter alia, wrongful denial of life insurance benefits. The complaint set forth that Clayman and Skarupa were beneficiaries under Zurich group accident policy no. GTU 2907376, issued to Clayman's employer, National City Corporation. The policy included dependent coverage for children "more than 19 years of age but less than 23 years of age and enrolled on a full-time basis in a college, university, or trade school." On April 21, 2007, Clayman and Skarupa's daughter, Margaret Clayman (age 20), died as the result of an automobile accident.
(¶3} The National City group accident policy is governed by ERISA. Clayman and Skarupa submitted their claim to Zurich as the plan administrator.
(¶4} In a letter dated April 23, 2008, Zurich denied the claim filed regarding Margaret Clayman, concluding "that Margaret Clayman was not a 'Covered Child' under the Policy because, at the time of death, she was more than 19 years old and not enrolled as a full time student." (Emphasis added.)
(¶5} On September 17, 2010, Zurich filed a motion for judgment on the administrative record. Also on September 17, 2010, Clayman and Skarupa filed a motion for summary judgment, based on the administrative record, but also supported by the deposition of Sonya Hartburg, Campus Director for Bohecker College, and the depositions of Zurich employees, Patricia Lane and Janet Warley.
(¶6} On February 15, 2012, the trial court issued a magistrate decision, concluding the "benefit determination must be upheld because it is rational in light of the plan's provisions. There was substantial evidence including the Bohecker College letters of November 1, 2007, and January 2, 2008, to support the administrator['s] determination. Zurich has discretionary authority to determine eligibility for benefits."
(¶7} On February 28, 2012, Clayman and Skarupa filed Civ.R. 53 objections. m On September 4, 2012, the trial court issued a journal entry and order/adoption of magistrate decision, overruling Clayman and Skarupa's objections and granting Zurich judgment on the administrative record.
(¶8} On October 2, 2012, appellants filed their notice of appeal. On appeal, they raise four assignments of error. Appellants' first and second assignments of error state:
(¶10} [1.] The Trial Court committed prejudicial error in granting Defendant-Appellee Zurich's Motion for Judgment on the administrative record based upon its opinion that substantial evidence supported Zurich's determination that Margaret Clayman was not a covered dependent.
(¶11} [2.] The Trial Court committed prejudicial error when it found no due process violation and denied Plaintiffs/Appellants' Request to supplement the Administrative Record with the deposition transcript of Sonya Hartburg of Bohecker College and the transcripts of Zurich's claim adjusters.
(¶12} In their first assignment of error, appellants argue the trial court abused its discretion when it found substantial and/or reliable evidence to uphold the determination that Margaret Clayman was "not enrolled on a full-time basis in a college" at the time of her death. In their second assignment of error, appellants argue the trial court erred in finding no due process violation in the determination of their claim and, thus, in denying their request to supplement the administrative record with the depositions of Zurich and Bohecker College employees.
(¶13} At the outset, we note the accident policy in the case sub judice is governed by ERISA, which is contained in 29 U.S.C. 1000 et seq. 29 U.S.C. 1132(a)(1)(B) states a civil action may be brought "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]" 29 U.S.C. 1132(e)(1) confers jurisdiction:
(¶14} Except for actions under subsection (a)(1)(B) of this section, the district courts of the United States shall have exclusive jurisdiction of civil actions under this title brought by the Secretary or by a participant, beneficiary, fiduciary, or any person referred to in 29 USCS § 1021(f)(1). State courts of competent jurisdiction and district courts of the United States shall have concurrent jurisdiction of actions under paragraphs (1)(B) and (7) of subsection (a) of this section. (Emphasis added.)
(¶15} Thus, a claim to recover benefits under 29 U.S.C. 1132(a)(1)(B), as is the case here, was properly brought in the Portage County Court of Common Pleas.
(¶16} Before we evaluate the merits of this contention, we first address Zurich's argument that Clayman and Skarupa failed to properly preserve issues for review by not "stat[ing] with particularity all grounds for objection" to the magistrate decision and by not supporting their objections "by a transcript of all the evidence submitted to the magistrate, " as required by Civ.R. 53(D)(3)(b)(ii) and (iii). Our review of Clayman and Skarupa's objections reveals that they identified the issues in the magistrate decision with sufficient particularity to preserve them for appeal. Moreover, because the judgment was ...