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Hartquist v. Emerson Electric Co.

United States District Court, M.D. North Carolina

March 30, 2017



          Joi Elizabeth Peake United States Magistrate Judge

          This matter comes before the Court on the parties' supplemental cross motions for summary judgment [Docs. #70 and #72]. This action has been referred to the undersigned to conduct all proceedings pursuant to 28 U.S.C. § 636(c) [Doc. #16]. For the reasons set forth below, the Court will grant Defendants' Supplemental Motion for Summary Judgment and deny Plaintiff's Supplemental Motion for Summary Judgment.


         This case involves claims made by Plaintiff Scott L. Hartquist (“Plaintiff”) pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., against his former employer, Emerson Electric Co., The Emerson Electric Manufacturing Company, and Emerson Appliances & Tools, Inc. (collectively, “Defendants” or “Emerson”) as Plan Sponsor and Plan Administrator of a Long Term Disability Plan.

         On or about June 13, 2003, while working at a Home Depot store on behalf of Defendants, several ladders fell and struck Plaintiff on the back of the head, allegedly causing severe injury and exacerbating certain pre-existing conditions. (Hartquist Aff. [Doc. #28] ¶¶ 2-3.) Plaintiff contends that this incident rendered him disabled and that the resulting disability caused him to resign from his employment with Defendants six months later, on December 9, 2003. (Id. ¶ 4; Compl., Ex. E, G [Docs. #6-6, #6-8].)

         At the time of Plaintiff's resignation, Defendants maintained long-term disability insurance coverage for their employees under the UNUM Group Corporation (“UNUM”) Group Plan (the “Plan”). (Compl., Ex. I, K [Docs. #6-9, 6-11]; Plan [Doc. #63-1]; Defs.' Mot. Sum. J., Ex. 2 [Doc. # 21-2].) Defendants served as the Plan Sponsor and Administrator. (Answer to Am. Compl. [Doc. #64] ¶ 14). Plaintiff had received a Benefits Sheet at the time he was hired in January 2003 that included a description of the Plan. (Pl.'s Decl. [Doc. #28] ¶ 8.) Plaintiff kept the Benefits Sheet, along with other job-related documentation, in his personal files. (Pl.'s Decl. [Doc. #28] ¶ 10.) However, Plaintiff asserts that at the time he resigned, Defendants did not specifically notify him of his potential eligibility under the Plan, and Plaintiff contends that he therefore assumed that he could not qualify for long term disability benefits. (Hartquist Aff. [Doc. #28] ¶ 14; see also Compl., Ex. I, K [Docs. #6-9, 6-11]).

         Following his injury and resignation, Plaintiff sought benefits under the North Carolina Workers' Compensation Act, and the Parties settled that claim by Agreement dated October 13, 2004, signed by Plaintiff on November 30, 2004. (See Compl., Ex. F [Doc. #6-7].)

         Six years later, in November 2010, Plaintiff contacted Defendants requesting re-evaluation of his prior workers' compensation claim. (Compl., Ex. G [Doc. #6-8].) That request was denied. Plaintiff contends that around that same time, in November 2010, he happened to be reviewing his personal file of job-related documents and discovered the Benefits Sheet in his records. (Compl., Ex. I [Doc. #6-9]; Hartquist Aff. [Doc. #28] ¶¶ 15-16.) On November 27, 2010, Plaintiff sent a letter to Defendants asserting that he was eligible for benefits under the Plan at the time of his resignation in December 2003. (Compl., Ex. I [Doc. #6-9].)

         Defendants reviewed Plaintiff's file and informed him by letter on January 20, 2011 that he was “not offered LTD at the time of [his] resignation, ” that he was “entitled to apply for LTD benefits and may do so at this time, ” and that the insurer “will make the final determination, not Emerson.” (Compl., Ex. K [Doc. #6-11].) Plaintiff subsequently submitted his application for benefits, and included medical records and other materials he wanted considered. (Record, Part 1 [Doc. #71-1] at 28-45; Record, Part 2 [Doc. #71-2]; Record, Part 3 [Doc. #71-3] at 1-3.) Defendants then forwarded Plaintiff's application to UNUM for review.[1] (Defs.' Mot. Sum. J., Ex. 2 [Doc. #21-2]). However, Defendants subsequently informed Plaintiff that UNUM would not review his application because “UNUM insurance policies contain a provision requiring notification of a disability within one year of occurrence in order to be eligible for benefits.” (Id.)

         Despite UNUM's denial, Defendants subsequently retained GENEX Services, Inc. (“GENEX”), a medical review firm, to review Plaintiff's claim as an independent consultant “before making any final determination on [Plaintiff's] request for benefits.” (Id.) GENEX concluded that “[t]here is no evidence submitted that would indicate [Plaintiff] had impairments that would render him disabled as of 12/09/03.” (Id., Ex. 3 [Doc. #21-3].) Defendants informed Plaintiff of this denial by way of letter dated August 31, 2011. (Id., Ex. 2 [Doc. #21-2].) In the same letter, Defendants stated, “[W]e have fulfilled our obligation to allow you to apply for Long Term Disability benefits. Your claim unfortunately has been denied.” (Id. at 2.)

         As a result of these events, Plaintiff filed suit and now asserts claims against Defendants for (1) Breach of Fiduciary Duties in violation of 29 U.S.C. §§ 1109 and 1132; (2) Breach of Contract in violation of 29 U.S.C. §§ 1132(a)(1)(A), 1132(a)(1)(B), and 1132(c); (3) Failure to Notify in violation of 29 U.S.C. § 1132(c); (4) Common Law Negligence; and (5) Common Law Breach of Fiduciary Duty. (Am. Compl. [Doc. #63].)

         Defendants previously moved for summary judgment [Doc. #65], contending, inter alia, that Plaintiff's ERISA claims were barred by the applicable statute of limitations and that Plaintiff's state common law claims were preempted by ERISA. By Order dated March 31, 2016, the Court granted in part and denied in part the Motion. (Mar. 31, 2016 Order [Doc. #69].) Specifically, the Court found that ERISA preempted Plaintiff's state common law claims (id. at 7-10). See also Prince v. Sears Holdings Corp., 848 F.3d 173 (4th Cir. 2017) (confirming the scope of ERISA preemption). In addition, with respect to Plaintiff's ERISA claims under 29 U.S.C. § 1132(c) based on Defendants' alleged failure to provide notification regarding the Plan at the time of Plaintiff's resignation, the Court noted that Plaintiff was relying on 29 U.S.C. § 1166, which relates to COBRA and is inapplicable to the instant case. See also Austell v. Raymond James & Assoc., Inc., 120 F.3d 32, 34 (4th Cir. 1997) (affirming district court's conclusion that COBRA does not require employee welfare benefit plan sponsors to offer continuation of coverage for disability insurance). The Court further concluded that Plaintiff's claims under 29 U.S.C. § 1132(c) were time-barred. (Mar. 31, 2016 Order at 15-18). With respect to Plaintiff's ERISA Breach of Fiduciary Duty claim (Count 1), the Court noted that Plaintiff did not appear to state a claim under 29 U.S.C. § 1109 and § 1132(a)(2) since Plaintiff was not seeking remedies to protect the Plan, and was instead seeking individual relief; that to the extent Plaintiff's claim was a claim for benefits, the claim could be considered as part of Plaintiff's claim under § 1132(a)(1)(B); and that to the extent the claim related to the time period prior to Plaintiff's resignation, it appeared barred by the applicable statute of limitations (id. at 18-22). However, the Court found that Plaintiff's ERISA Breach of Contract claim challenging the denial of benefits in 2011 and his related ERISA Breach of Fiduciary Duty claim were not time-barred. (Id. at 13-15, 22.) Noting that Plaintiff's remaining claims would be for a bench trial, the Court permitted the parties to file cross motions for summary judgment, which are now before the Court. (Id. at 14-15.)

         In support of their instant Motion for Summary Judgment, Defendants contend that Plaintiff's Breach of Contract claim is untenable because: 1) Plaintiff failed to satisfy threshold eligibility requirements under the Plan; 2) UNUM employed a reasonable review process and did not abuse its discretion in denying Plaintiff's claim for benefits as untimely; 3) UNUM, as the only entity with authority to determine Plaintiff's eligibility, is a necessary party to this action who Plaintiff failed to join; and 4) Plaintiff failed to comply with the Plan's contractual limitation period for filing suit. (Defs.' Br. [Doc. #71] at 1-2, 9.) Further, Defendants argue that Plaintiff cannot pursue a separate Breach of Fiduciary Duty claim since his claim is for denial of benefits. (Id. at 1.)

         In support of Plaintiff's instant Motion for Summary Judgment, Plaintiff argues that his medical evidence establishes that he was totally disabled both in December of 2003 when he resigned from his job with Emerson and in August of 2011 when he submitted his claim for benefits. (Pl.'s Br. [Doc. #73] at 6-9.) Plaintiff contends that “with the plain language of the Plan providing for benefits in the case of ...

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