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Schorsch v. Reliance Standard Life Insurance Co.

September 29, 2010


The opinion of the court was delivered by: Judge Robert W. Gettleman


Plaintiff Deborah Schorsch filed the instant action under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA", 29 U.S.C. § 1132(a)(1)(b)), against defendant Reliance Standard Life Insurance Company, the administrator of a long-term disability income disability coverage plan ( "Plan") sponsored by plaintiff's former employer. Defendant filed the instant motion for summary judgment pursuant to Fed. R. Civ. P 56(b) for failure to exhaust administrative remedies. For the following reasons, defendant's motion is granted.


Plaintiff was a salaried employee at United Conveyor Corporation from 1990 to 1993. While employed by United Conveyor Corporation, plaintiff purchased long-term disability insurance coverage through the United Conveyor Corporation Group Disability Plan ("Plan"). Defendant provided the coverage and served as the plan administrator. In August 1992, plaintiff was involved in a serious car accident and sustained a spinal contusion, resulting in permanent and disabling injury. Defendant approved the plaintiff's claim for long-term disability benefits, and plaintiff became entitled to receive benefits under the Plan on January 29, 1993.

The Plan provides that, for the first sixty months for which a monthly benefit is payable, "total disability" means that an insured cannot perform the material duties of her regular occupation on a full-time basis. After a monthly benefit has been paid for sixty months, "total disability" means that an insured cannot perform the material duties of any occupation (meaning any occupation that the insured's education, training, or experience will reasonably allow).

Beginning on January 29, 1993, defendant paid plaintiff her long-term disability benefits, without interruption, until January 29, 1998, when plaintiff's first sixty months receiving benefits ended. At that time, defendant conducted an investigation of plaintiff's medical and physical condition, and determined that plaintiff satisfied the second definition of "totally disabled," and that she was therefore eligible to continue receiving benefits until January 27, 2018 (when plaintiff reaches the age of 65), or when she no longer met the provisions of the plan.

On May 19, 2006, at defendant's request, plaintiff underwent an independent medical examination ("IME") at Northwest Orthopedic Surgery, which found her capable of performing, on a full-time basis, in a medium-duty occupation. In a letter dated June 13, 2006 ("June 13 Letter"), defendant informed plaintiff that it was terminating plaintiff's benefits as of June 29, 2006, because the results of the IME, along with the other medical documentation in plaintiff's claim file, led defendant's vocational staff to conclude that plaintiff could perform a number of occupations on a full-time basis. The June 13 Letter explained that plaintiff had the right to request a review of defendant's decision within 6o days, and asked that the written request for review "state the reasons why you feel the claims should not have been denied" and "[i]nclude any additional documentation" in support of the claim. The June 13 Letter further explained that plaintiff "is also entitled to review the pertinent documents upon which [defendant's] determination was predicated."

Within the 60-day period, in a letter dated August 3, 2006 ("August 3 Letter"), plaintiff notified defendant that she intended to ask defendant to review its decision to revoke her disability benefits, stating that "[w]e will ask that you review the revocation decision" sometime "before the end of August." The August 3 Letter asked defendant to "please consider this notice of an intent to ask for your reconsideration." Plaintiff did not send the promised request for review. On February 13, 2007, defendant sent plaintiff a letter stating that no letter of appeal had been received and defendant's decision to terminate plaintiff's benefits was therefore final. Almost three years after her benefits were terminated, plaintiff brought the instant lawsuit.


I. Legal Standard

Defendant has moved for summary judgment pursuant to Fed. R. Civ. P. 56. A movant is entitled to summary judgment when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Village Church v. Village of Long Grove, 468 F.3d 975, 988 (7th Cir. 2006). The moving party bears the initial burden of pointing out the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Once the moving party has met that burden, the nonmoving party must go beyond the pleadings and "set forth specific facts showing there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 322-23. The court considers the record as a whole and draws all reasonable inferences in the light most favorable to the party opposing the motion. Fisher v. Transco Services-Milwaukee, Inc., 979 F.2d 1239, 1242 (7th Cir. 1992). The court's role "is not to evaluate the weight of the evidence or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact." Doe v. R.R. Donnelley & Sons Co., 42 F.3d 439, 443 (7th Cir. 1994).

II. Defendant's Motion for Summary Judgment

Defendant seeks summary judgment because plaintiff has failed to exhaust her administrative remedies. While ERISA does not specifically require that a plaintiff exhaust administrative remedies before bringing a lawsuit in federal court, the Seventh Circuit has typically required administrative exhaustion. E.g., Gallegos v. Mount Sinai Medical Center, 210 F.3d 803, 807 (7th Cir. 2000) ("[I]t has long been recognized in this Circuit that the intent of Congress is best effectuated by granting district courts discretion to require administrative exhaustion."); Ames v. American Nat. Can Co., 170 F.3d 751, 756 (7th Cir. 1999); Lindemann v. Mobil Oil Corp., 79 F.3d 647, 650 (7th Cir. 1996). Requiring administrative exhaustion advances ERISA's policy goals, such as "to minimize the number of frivolous lawsuits; promote consistent treatment of claims; provide a non-adversarial dispute resolution process; and decrease the cost and time of claims settlement." Powell v. A.T. & T. Comms., Inc., 938 F.2d 823, 826 (7th Cir. 1991), citing Makar v. Health Care Corp. of Mid-Atlantic, 872 F.2d 80, 83 (4th Cir. 1989).

Because plaintiff did not file a timely request for review, she failed to exhaust her administrative remedies. Gallegos, 210 F.3d at 808 ("Failure to file a request for review within [a limitations period on an application for review] is one means by which a claimant may fail to exhaust her administrative remedies.") (citation omitted). Plaintiff's August 3 Letter unambiguously expressed an intention to appeal, but was not itself a request for review. See Swanson v. Hearst Corp., 586 F.3d 1016, 1018-19 (5th Cir. 2009) (notice to appeal sometime in the future is not an appeal). The August 3 Letter explicitly requests defendant to "consider this notice of an intent to ask for your reconsideration," states that plaintiff "will ask that you review the revocation decision," and informs defendant that plaintiff "should have a more detailed analysis presented to you for your consideration before the end of August." These ...

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