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EHRMAN v. HENKEL CORP. LONG TERM DISABILITY PLAN
April 4, 2002
BILL J. EHRMAN, PLAINTIFF
THE HENKEL CORPORATION LONGTERM DISABILITY PLAN AND PRUDENTIAL LIFE INSURANCE COMPANY, DEFENDANTS
The opinion of the court was delivered by: Bernthal, United States Magistrate Judge.
In April 2001, Plaintiff Bill Ehrman filed a Complaint (# 1) against
Defendants The Henkel Corporation Long Term Disability Plan (hereinafter
"Henkel Plan") and Prudential Life Insurance Company (hereinafter
"Prudential") alleging improper denial of disability income benefits
pursuant to Section 502(a)(1)(B) of the Employee Retirement Income
Security Act of 1974 (hereinafter "ERISA") (29 U.S.C. § 1132
(a)(1)(B)). This claim arose after Prudential terminated Ehrman's
disability benefits in April 2001. In November 2001, Ehrman filed a
Motion For Summary Judgment (# 21). In January 2002, Prudential filed a
Response To Plaintiff's Motion For Summary Judgment (# 25). After
reviewing the pleadings and record, this Court GRANTS Plaintiff's Motion
For Summary Judgment (# 21).
Bill Ehrman worked full-time for the Henkel Corporation as a chemist
and in various other capacities from May 1977 until October 1998. Through
his employment with the Henkel Corporation, Ehrman was insured under a
long-term disability insurance policy (hereinafter "LTD plan")
underwritten by Prudential. Under the LTD plan, benefits were payable for
"total disability," which was defined as follows:
"[D]isability" means your inability because of an
illness or injury to perform the type of occupation in
which you normally engage for the first 18 months of
longterm disability. The 18 month period begins the
day your LTD benefits commence. This period is called
the "Initial Duration." After the first 18 months of
disability, "disability" means your inability because
of illness or injury to perform any job for which you
are qualified by training, experience or education.
(Comp # 1, Exh. A, p. 1.) The LTD plan also noted that "[b]enefits are
not payable for your Total Disability for more than 24 months if your
Total Disability, as determined by Prudential, is caused at least in part
by a mental, psychoneurotic or personality disorder." (MSJ # 21, Exh. 3,
p. 2, hereinafter referred to as "R.") The LTD plan's benefits are payable
at a rate equal to 60% of monthly earnings.
After receiving benefits for approximately two years, Prudential
notified Ehrman in September 2000 that his benefits were being terminated
because his condition did not preclude obtaining gainful employment at
another occupation. (R. 79.) Ehrman appealed this decision to
Prudential, which resulted in a reinstatement of his benefits through
April 2001. At that point, Prudential claimed that the 24-month mental
disability limitation became applicable. In April 2001, Prudential
terminated Ehrman's benefits after determining that his disability was
caused at least partly by a mental, psychoneurotic, or personality
In April 2001, Ehrman filed a complaint (# 1) against the Henkel Plan
and Prudential, seeking recovery of benefits pursuant to Section
502(a)(1)(B) of ERISA (29 U.S.C. § 1132 (a)(1)(B)). Following
discovery, Ehrman filed a Motion For Summary Judgment (# 21) in November
The Court grants summary judgment "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a
matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett,
477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party
seeking summary judgment bears the initial burden of demonstrating the
absence of any genuine issue of material fact. Id. at 322-23, 106 S.Ct.
2548. The party opposing the motion must then make a showing sufficient
to demonstrate the existence of a material issue for trial. Id.
When reviewing an employee benefit claim decision brought under Section
1132(a)(1)(B) of ERISA, the court applies a plenary or de novo standard
of review unless the benefit plan or insurer has clearly reserved
discretion to determine benefit eligibility. Firestone Tire and Rubber
Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). De
novo review is the default rule, and thus any uncertain language
concerning the scope of judicial review must be construed as favoring de
novo review. Herzberger v. Standard Insurance Co., 205 F.3d 327, 330 (7th
In Herzberger, the Seventh Circuit formulated a two-step analysis for
determining whether an ERISA plan confers the necessary discretion to the
plan administrator. First, a court must determine whether the ERISA plan
uses the safe harbor language as established in Herzberger. Id. at 331.
The safe harbor language is as follows: "Benefits under this plan will be
paid only if the plan administrator decides in his discretion that the
applicant is entitled to them." Id. If the language does track the Seventh
Circuit's safe harbor language, then de novo review is foreclosed.
However, if the language does not follow the safe harbor, the court must
determine whether the ERISA plan made "reasonably clear that the plan
administrator is to exercise discretion." Id.
Prudential claims that de novo review is improper, and that the Court
should apply the "arbitrary and capricious" standard when interpreting
the LTD plan. Prudential claims that language contained in their LTD plan
confers the necessary discretion to determine benefit eligibility because
it makes reference to "when Prudential determines" the conditions are
This language is followed by what Prudential calls "subjective elements"
that they ...