Wykstra v. Life Insurance Co. of North America
2012 U.S. Dist. LEXIS 12839
| N.D.N.Y. | 2012Background
- Wykstra seeks wrongful termination of LTD benefits under ERISA and declaratory relief, plus prejudgment interest and fees.
- LINA terminated Plaintiff's LTD benefits after evaluating PAAs, TSA, and independent reviews.
- Policy defines disability as inability to perform his occupation or earn 80% of earnings, with a shift to any-occupation after 30 months.
- PAAs from treating physicians suggested some sedentary capabilities, while subsequent SSA judgment indicated disability.
- LINA relied on a TSA and independent physician reviews to conclude Plaintiff could perform sedentary work and six occupations.
- Plaintiff exhausted administrative remedies after two appeals and now challenges LINA's decision as arbitrary and capricious.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LINA’s termination was arbitrary and capricious under ERISA | Wykstra argues LINA misinterpreted PAAs and relied on a faulty TSA | LINA asserts decision supported by substantial evidence and independent reviews | Yes; termination arbitrary and capricious based on flawed physical/vocational analyses |
| Weight given to the conflict of interest | LINA’s conflict should be weighed due to SSA consideration and procedural irregularities | Conflict weight limited absent evidence of its effect | Some weight given to conflict of interest in deciding arbitrariness |
| Plaintiff’s physical ability analysis | PAAs show substantial impairment preventing sedentary work | Independent reviews and PAAs support sedentary capacity | Arbitrary and capricious; PAAs do not support sedentary capacity as defined |
| Plaintiff’s vocational qualification analysis | TSA relied on erroneous physical capabilities to find no disability | TSA supported by VA and independent reviews; upheld denial | Arbitrary and capricious; reversal justified on TSA grounds |
| Relief and remedies | Reinstatement and fees warranted due to improper termination | Remedy limited by policy terms and fees/interest procedures | Plaintiff entitled to reinstatement going forward and attorney’s fees plus prejudgment interest; judgment form to be submitted |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (establishes arbitrary and capricious review standard when plan grants discretion)
- Novella v. Westchester County, 661 F.3d 128 (2d Cir. 2011) (defines substantial evidence in ERISA review and standard of review)
- Durakovic v. Bldg. Serv. 32 BJ Pension Fund, 609 F.3d 133 (2d Cir. 2010) (upholds reliance on independent doctors; no deference to treating physicians required)