United States District Court, S.D. Ohio, Western Division, Dayton
CHARLIE DUNCAN, Executor of the Estate of Paul W. McVay, et al., Plaintiffs,
MINNESOTA LIFE INSURANCE COMPANY, Defendant.
M. Rose, District Judge
L. Ovington United States Magistrate Judge
bring this ERISA case seeking a declaration that
establishes they are entitled to receive accidental death
benefits under an insurance policy (the Policy) issued by
Defendant Minnesota Life Insurance Company. Plaintiffs allege
that the Policy is “entirely underwritten and
administered by Defendant Minnesota Life.” (Doc. #16,
PageID #439). In 2010, the insured under the Policy,
Paul W. McVay, died while he was a patient in a health-care
facility. The Policy names McVay's sister, Plaintiff
Janet Freel, as beneficiary. Plaintiff Charlie Duncan is
Executor of McVay's Estate.
Life denied Plaintiffs' claim for benefits under the
Policy based on its conclusion that McVay's death was not
accidental. Plaintiffs assert that Minnesota Life acted
arbitrarily and capriciously by denying Plaintiffs'
application for benefits. In support of these claims,
Plaintiffs' Amended Complaint alleges, in part:
[Minnesota Life] labored under a conflict of interest in that
it simultaneously occupied the roles of drafting plan terms,
interpreting those terms to its advantage, deciding all
benefit claims and funding the plan, such that its decision
to deny accidental death benefits arising from the death of
Mr. McVay inured to its financial advantage. In so acting to
decide the McVay benefit claim in face of these conflicts of
interest, [Minnesota Life] breached fiduciary duties owed to
plan beneficiaries, including Mr. McVay and by
(Doc. #11, PageID #64, ¶32).
presently seek an Order permitting them to conduct discovery
directed at Minnesota Life concerning its conflict of
interest and its medical director's (Dr. Gretchen M.
Bosacker's) possible conflict. They reason that
conflict-of-interest discovery is warranted and proper given
Minnesota Life's sole responsibility to decide claims and
appeals while simultaneously bearing the sole financial risk
for payment of all benefits. They also seek discovery
concerning other alleged procedural defects in the denial of
Plaintiffs' benefits application. One procedural defect
they identify is that Minnesota Life “blatantly ignored
the evidence of Mr. McVay's treating physician, the
postmortem examination, and the death certificate
itself.” (Doc. #16, PageID #445).
parties appear to agree that, in general, discovery beyond
the administrative record in an ERISA case is not permissible
because judicial review is limited to the administrative
record. This is correct, as a normative discovery rule.
See Wilkins v. Baptist Healthcare Sys., Inc., 150
F.3d 609, 619 (6th Cir. 1998); see also Calvert v.
Firstar Fin., Inc., 409 F.3d 286, 293 n.2 (6th Cir.
2005); Williams v. USAble Life, 3:12cv400, 2013 WL
3387806, at *1 (S.D. Ohio 2013) (Rose, D.J.). “An
exception is recognized, however, when evidence outside the
record ‘is offered in support of a procedural challenge
to the administrator's decision, such as an alleged lack
of due process afforded by the administrator or alleged bias
on its part.'” Johnson v. Connecticut Gen. Life
Ins. Co., 324 F. App'x 459, 466 (6th Cir. 2009)
(quoting, in part, Wilkins, 150 F.3d at 619 (Gilman,
J., concurring)); see Williams, 2013 WL 3387806, at
roles can create a conflict of interest for a plan
administrator: “Often the entity that administers the
plan, such as an employer or an insurance company, both
determines whether an employee is eligible for benefits and
pays benefits out of its own pocket.” Metropolitan
Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008).
“The [administrator's] fiduciary interest may
counsel in favor of granting a borderline claim while its
immediate financial interest counsels to the contrary.”
Id. at 112.
as in the present case, the plan administrator is an
insurance company that both processes benefit claims and pays
or declines to pay benefits, a conflict of interest exists
for ERISA purposes. Id. at 114; see
Johnson, 324 F. App'x at 465. Why might such a
conflict be significant? ERISA's beneficiary-favorable
language provides the answer:
ERISA imposes higher-than-marketplace quality standards on
insurers. It sets forth a special standard of care upon a
plan administrator, namely, that the administrator
“discharge [its] duties” in respect to
discretionary claims processing “solely in the
interests of the participants and beneficiaries” of the
plan; § 1104(a)(1); it simultaneously underscores the
particular importance of accurate claims processing by
insisting that administrators “provide a ‘full
and fair review' of claim denials, ”…; and
it supplements marketplace and regulatory control with
judicial review of individual claim denials, see
Glenn, 554 U.S. at 115 (quoting, in part,
Firestone Tire & Rubber Co. v. Bruch, 489 U.S.
101, 113 (1989)).
must consider a plan administrator's possible conflict of
interest as a factor in determining whether it acted
arbitrarily or capriciously in denying a claim for
benefits. Id. at 114-15; see
Calvert, 409 F.3d at 292 (“we must take into
consideration the fact that Liberty is acting under a
potential conflict of interest….”). Additional
factors might arise. Glenn, 554 U.S. at 116
(“conflicts are but one factor among many that a
reviewing judge must take into account.”).
present case, at this point, application of discovery rules
would seem straightforward: Plaintiffs have identified
Minnesota Life's possible conflict of interest in its
dueling roles as plan administrator or claim reviewer and
payor; a conflict of interest “must” be
considered when reviewing the plan administrator's
decision, Glenn, 554 U.S. at 116; see
Calvert, 409 F.3d at 292; and, consequently, information
regarding Minnesota Life's possible conflict is relevant
and discoverable. See Fed. R. Civ. P. ...