Smith v. Voya Financial, Inc., 3:17-cv-00285

Background

Plaintiff Randy Smith, a Coater Team Operator at Appvion, participated in an Appvion group life insurance plan issued by ReliaStar that included a Total and Permanent Disability Income Benefit equal to his basic life insurance.
The Plan requires an insured to be "totally disabled" (unable to perform the material and substantial duties of any job suited to education/training/experience) and "permanently disabled" (total disability expected to continue 10 years or for life) to receive the Benefit.
Smith stopped working April 19, 2016, claimed disability for chronic pain, osteoarthritis, heart trouble, and fibromyalgia, and submitted an Attending Physician’s Statement in which Dr. O’Connell said Smith was disabled from his regular occupation but was not totally disabled for all occupations.
ReliaStar denied the claim, citing Dr. O’Connell’s statement that Smith could work in some capacity; Smith appealed and submitted additional records; ReliaStar’s ERISA review committee upheld the denial.
Smith sued under ERISA § 502 for wrongful denial seeking accelerated life-insurance benefits (~$50,000). The Plan grants ReliaStar discretionary authority; the court reviews under the arbitrary-and-capricious standard.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ReliaStar properly denied Total & Permanent Disability benefits under Plan definition requiring inability to perform any job	Smith: He is effectively unable to perform any gainful work given severe limitations, absenteeism, and need for frequent breaks	ReliaStar: Plan requires inability to perform any occupation; treating physician said Smith could perform some work, so he fails the Plan definition	Held: Denial upheld — record supports finding Smith could perform some work and thus not totally/permanently disabled under Plan
Whether ERISA notice of denial complied with §1133 and applicable regs	Smith: Notice was deficient because it failed to explain how limitations preclude work or identify types of jobs available	ReliaStar: Notice identified reason, cited treating physician’s form, quoted Plan definitions, and explained appeal rights — substantial compliance sufficed	Held: Notice met substantial compliance standard and was adequate for review
Whether administrator acted arbitrarily by ‘‘cherry-picking’’ medical evidence	Smith: ReliaStar relied selectively on favorable evidence and ignored contrary records	ReliaStar: Relied reasonably on treating physician’s opinion that Smith could work; appellate records did not contradict that opinion	Held: No arbitrary or capricious behavior — decision resulted from a permissible, principled reasoning process
Whether administrator had duty to obtain further exams/records before denial	Smith: ReliaStar should have requested more records or ordered an exam	ReliaStar: Plan did not grant broad examination authority for this life-insurance benefit; record did not indicate need for further development	Held: No abuse for not obtaining more evidence; reliance on existing record was reasonable

Key Cases Cited

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (standard for reviewing ERISA plan interpretations)
Vanderklok v. Provident Life & Accident Ins. Co., 956 F.2d 610 (6th Cir.) (life-policy acceleration requires inability to perform any occupation; notice defects can require remand)
Moore v. Lafayette Life Ins. Co., 458 F.3d 416 (6th Cir.) (substantial compliance standard for ERISA denial notices)
Glenn v. MetLife, 461 F.3d 660 (6th Cir.) (criticizes undue reliance on treating physician when later evidence contradicts it)
Shaw v. AT&T, 795 F.3d 538 (6th Cir.) (arbitrary-and-capricious review requires deliberate, principled reasoning supported by substantial evidence)
DeLisle v. Sun Life Assur. Co. of Canada, 558 F.3d 440 (6th Cir.) (standard that reasonable administrator’s decision should be upheld)