United States District Court, D. Maine
KEVIN R. HARDING, Plaintiff
AETNA LIFE INSURANCE COMPANY, Defendant
DECISION AND ORDER ON CROSS-MOTIONS FOR JUDGMENT ON
THE ADMINISTRATIVE RECORD
BROCK HORNBY UNITED STATES DISTRICT JUDGE
issue in this case is whether settlement proceeds resulting
from a general release for injuries from a car accident
amount to “other income benefits” that can be
offset against disability benefit payments otherwise due
under an employee disability insurance plan provided by a
group life, accident, and health insurance policy. Both
parties have moved for judgment on the administrative
record. I conclude that the language of the
insurance plan supports the insurance carrier’s
decision to offset a portion of the proceeds.
result of a car accident, the plaintiff Kevin Harding has
received disability benefit payments from the defendant Aetna
Life Insurance Company under a plan that his employer
offered. R. at 205, 366. Harding also obtained a $100, 000
settlement (after attorney fees, $76, 471.33) from the driver
of the other vehicle and that driver’s insurance
company. Id. at 381, 385. Aetna notified Harding
that the settlement would reduce its disability payments to
Harding, id. at 247, 385-86, because of language in
the insurance plan that provided: “Any other income
benefits you are eligible for may affect your benefits from
this plan. The amount of the other income benefits will be
subtracted from your monthly LTD benefit for which you are
eligible.” Id. at 37.
filed this lawsuit to challenge Aetna’s determination
that his settlement amounted to an “other income
benefit” that could be offset against his disability
a claim under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. §§ 1001-1461.
Federal courts have subject-matter jurisdiction over ERISA
claims. Id. § 1132(a)(1)(B), (e); 28 U.S.C.
judicial standard of review for a denial of benefits in an
ERISA case is de novo, “unless the benefit
plan gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to
construe the terms of the plan.” Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). In
this case, Harding’s disability insurance plan is
governed “by applicable federal law and the laws of
Texas.” R. at 28. Texas law prohibits discretionary
clauses in group health insurance policies issued after
February 1, 2011, that include “disability income
protection coverage providing for periodic payments during
disability due to sickness and/or accident.” 28 Tex.
Admin. Code §§ 3.1201-3.1203. Because
Harding’s policy was issued on August 1, 2014, R. at
28, any discretionary clause cannot apply, and I must apply
the de novo standard of review, as Aetna concedes.
Def.’s Mot. at 4 (ECF No. 18).
the de novo standard of review, I “grant no
deference to the administrators’ opinions or
conclusions.” Richards v. Hewlett-Packard
Corp., 592 F.3d 232, 239 (1st Cir. 2010). “In
other words, [I] stand in the shoes of the administrator to
determine whether the administrative decision was
correct.” Id. (internal quotation marks
in plans governed by ERISA is interpreted under principles of
federal common law. See Forcier v. Metropolitan Life Ins.
Co., 469 F.3d 178, 185 (1st Cir. 2006). “That body
of law requires that [courts] accord an ERISA plan’s
unambiguous language its plain and ordinary meaning.”
Id. Under de novo review, ambiguous plan
terms must be strictly construed against the drafter/insurer
(in this case Aetna). See Stamp v. Metropolitan Life Ins.
Co., 531 F.3d 84, 93 (1st Cir. 2008).
Aetna disability insurance plan states:
Any other income benefits you are eligible for may affect
your benefits from this plan. The amount of the other income
benefits will be subtracted from your monthly LTD benefit for
which you are eligible. If the result is less than the
minimum monthly benefit shown in the Schedule of
Benefits, the plan will pay an amount equal to the
minimum monthly benefit. Please refer to the Other Income
Benefits section of this ...