Potts v. Hartford Life & Accident Insurance Co.
272 F. Supp. 3d 690
W.D. Pa.2017Background
- Jennifer Potts worked as Denny’s general manager and stopped working April 26, 2012 due to fibromyalgia, thoracic disc disease and related psychiatric complaints; she received STD and then LTD benefits under a Hartford policy.
- Hartford paid LTD benefits for the 24‑month "own‑occupation" period but terminated benefits effective Jan 1, 2015 after concluding Potts did not meet the stricter "any‑occupation" disability standard.
- Hartford relied on paper reviews by independent physicians (physical and psychiatric), an Employability Analysis Report (EAR) matching Potts to six occupations, and the ALJ’s Social Security finding that Potts could perform light work.
- Potts appealed administratively (submitting treating‑provider forms) and sued under ERISA § 502(a)(1)(B) after Hartford denied the appeal.
- The parties disputed the applicable standard of review (de novo v. arbitrary and capricious) because benefits decisions were made by staff paid by a related Hartford entity; the court found Hartford Life retained and exercised discretionary authority.
- The court granted Hartford’s summary judgment and denied Potts’s, holding Hartford’s termination of benefits was not arbitrary and capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review (delegation) | Potts: decision‑makers employed by affiliated Hartford Fire means improper delegation; apply de novo review | Hartford: decision‑makers acted as agents of Hartford Life; policy grants Hartford Life discretion; apply deferential review | Court: Hartford Life retained/discharged discretion; arbitrary‑and‑capricious review applies |
| Need for new/improved medical evidence when switching from Own Occupation to Any Occupation | Potts: abrupt termination without showing improvement or new evidence was arbitrary | Hartford: Any Occupation is a stricter standard; need not show improvement to terminate when standard changes | Court: terminating after "own occupation" period without new evidence of improvement is permissible given higher Any Occupation standard |
| Failure to order independent physical/functional exam | Potts: Hartford should have required an IME/functional capacity test (pain is subjective) | Hartford: no obligation to perform IME; paper review of treating and independent records was reasonable | Court: No legal requirement to obtain IME; Hartford’s decision to rely on records and independent reviewers was not arbitrary |
| Adequacy of appeal process, explanation, and reliance on EAR | Potts: appeal process flawed; Hartford failed to explain why it rejected treating doctors; EAR defective | Hartford: complied with ERISA procedural rules, consulted independent professionals; denial letter and EAR sufficiently explained basis and matched jobs to restrictions | Court: Appeal review complied with regs; no special burden to defer to treating physicians; EAR and explanations were adequate; denial not arbitrary |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard of review for ERISA benefit denials)
- Black & Decker Disability Plan v. Nord, 538 U.S. 822 (plan administrators need not give treating physicians special deference or supply discrete explanation when crediting other reliable evidence)
- Miller v. Am. Airlines, Inc., 632 F.3d 837 (3d Cir.) (arbitrary and capricious standard; reversal without new evidence may be an irregularity — distinguished where standard changed)
- Fleisher v. Standard Ins. Co., 679 F.3d 116 (3d Cir.) (applying arbitrary and capricious review where plan grants discretion)
- Anderson v. Unum Life Ins. Co. of Am., 414 F. Supp. 2d 1079 (M.D. Ala.) (distinguished; involved a contractual delegation/independent‑contractor structure not present here)