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McBurrows v. Verizon

United States District Court, D. New Jersey

June 11, 2019

LEON MCBURROWS, Plaintiff,
v.
VERIZON, et al., Defendants.

          OPINION

          KEVIN MCNULTY, U.S.D.J.

         The plaintiff, Leon McBurrows, asserts claims against Verizon Employee Benefits Committee ("VEBC") and the Verizon Claims Review Committee ("VCRC") (together, the "Plan Committees") under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et. seq., for the alleged wrongful denial of disability benefits. Mr. McBurrows also asserts claims against Verizon New Jersey, Inc. ("Verizon")[1] under the New Jersey Law Against Discrimination ("NJLAD"), N.J. Stat. Ann. § 10:5-12.

         Now before the Court is the motion of the Plan Committees for summary judgment pursuant to Fed.R.Civ.P. 56. (DE 74).[2] For the reasons expressed herein, I will grant the Plan Committees' motion for summary judgment.

         I. SUMMARY

         A. Procedural History

         Mr. McBurrows originally filed this action in state court against, among others, Verizon. The defendants removed the case to federal court because claims based on the denial of disability and health insurance benefits are preempted by ERISA, see 29 U.S.C. §§ 1132 & 1144. The defendants then moved to dismiss the complaint on the grounds that it failed to state an ERISA claim. I filed a short order noting that the plaintiff had neither ERISA nor federal pleading standards in mind when he filed his state-court complaint, dismissing the complaint without prejudice, and granting leave to file an amended complaint. (DE 15). The plaintiff then filed his First Amended Complaint, which for the first time named the Plan Committees as defendants. (DE 16).

         Defendants then moved to dismiss the First Amended Complaint. (DE 21; DE 23). In an Opinion dated February 17, 2017, I dismissed without prejudice the Count 1 NJLAD claim of disability discrimination, asserted against Verizon, for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). (DE 33; DE 34). McBurrows v. Verizon, No. 15-CV-6321 (KM), 2017 WL 1243145, at *1 (D.N.J. Feb. 17, 2017). With respect to the ERISA claims, I denied the motion to dismiss, holding that the asserted defenses "relie[d] on facts extrinsic to the complaint" and were therefore "best considered in connection with a motion for summary judgment." Id.

         Magistrate Judge Dickson granted plaintiffs motion for leave to file a Second Amended Complaint. (DE 52). Mr. McBurrows then filed his Second Amended Complaint, which is the currently operative pleading. (DE 53).[3]Counts 3, 4, and 5 assert ERISA claims against the Plan Committees. Now before the Court is the motion of the Plan Committees for summary judgment pursuant to Fed.R.Civ.P. 56. (DE 74).

         B. Facts

         From approximately 1986 through June 2015, Mr. McBurrows was employed by Verizon at various locations in New Jersey. (DE 79-2 at 4; DE 16-2 at 21). Mr. McBurrows seeks, as against the Plan Committees, short term disability ("STD") and long term disability ("LTD") benefits under Verizon's Plan for Group Insurance (the "Plan"). The parties do not dispute that the Plan is an employee benefit welfare plan governed by ERISA and that Mr. McBurrows was a participant in the Plan while employed by Verizon.

         The Plan document is entitled "Your Disability Coverage Verizon January 1, 2011." (DE 75 ¶ 2; DE 79-1 ¶ 2; DE 74-3 at 4). As to STD coverage, the Plan explains that an eligible Verizon employee is "automatically enrolled for STD coverage" on his or her first day of work, but that one "must enroll for LTD coverage." (DE 74-3 at 7, 12; DE 75 ¶ 7; DE 79-1 ¶ 7). If one is enrolled and approved for LTD coverage, LTD benefits are payable when STD benefits end, assuming one meets the Plan's definition of totally disabled. (Id.).

         Mr. McBurrows suffered from certain medical ailments that worsened in August 2013 and thereafter. (DE 79-2 at 4). Due to those health complications, Mr. McBurrows went on short term leave from Verizon in August 2013 and received STD benefits under the Plan during that time. (DE 79-2 at 4). On June 17, 2014, Verizon sent Mr. McBurrows a letter explaining that his STD benefits expired on May 24, 2014, and that if he did not return to work he would be deemed to be "on an unauthorized absence." (DE 16-2 at 4, 27). After Mr. McBurrows's counsel successfully appealed this STD benefits determination, his STD benefits were extended to August 12, 2014. (DE 16-2 at 33, 36).

         Meanwhile, on July 14, 2014, Mr. McBurrows returned to work at Verizon, although at a different location in New Jersey. His job duties changed, and instead of full time, he worked "shortened days." (2AC 1 ¶ 7; DE 16-2 at 16). Thereafter, on October 6, 2014, he was placed on unpaid personal leave. (DE 16-2 at 17).

         On June 25, 2015, Verizon sent Mr. McBurrows a letter stating that his unpaid leave of absence expired on June 5, 2015, and that Verizon had been made aware that he was unable to return to work following that date. (DE 16-2 at 21). The June 25, 2015 letter informed Mr. McBurrows that his request for an extension of the unpaid leave was denied and that Verizon considered Mr. McBurrows to have abandoned his position. (Id.). Verizon officially terminated his employment on June 25, 2015. (Id.).

         Mr. McBurrows did not receive LTD benefits in the relevant period described above. Mr. McBurrows did not submit a claim for LTD benefits to the Plan Committees. Instead he filed the present lawsuit as described in the procedural history above. (DE 75 ¶ 14; DE 79-1 ¶ 14).

         Mr. McBurrows's enrollment history for LTD benefits is as follows. He had varying amounts of LTD coverage through Verizon for each year from 2002 through the end of 2006. (DE 74-30 at 57-58; DE 79-2 at 8-9). A Verizon historical LTD enrollment record shows that he did not elect to have any LTD coverage for the years 2001, 2007, 2008, 2009, 2010, 2011, and 2012. (Id.). That enrollment record is silent as to the years before 2001 and after 2012. (Id.).

         A 2014 Annual Enrollment Confirmation Statement, documenting Mr. McBurrows's coverage elections as of November 2013, indicates that he did not have any LTD coverage in 2013. (DE 74-12 at 76; DE 75 ¶ 21; DE 79-1 ¶ 21). That document shows that in November 2013, Mr. McBurrows did elect to enroll in LTD coverage for the following year, but that such 2014 LTD coverage was "(p]ending [e]vidence of insurability." (Id.).

         On June 1, 2015, MetLife sent a letter to Mr. McBurrows that noted his STD benefits exhausted on August 12, 2014. That letter referred to a recent notice sent to Mr. McBurrows confirming that he was not currently enrolled for LTD coverage. (DE 74-26 at 40). On June 5, 2015, Verizon also sent Mr. McBurrows a letter which referred to MetLife's recent notice confirming that he was not enrolled in LTD coverage with Verizon. (DE 74-29 at 42; DE 75 ¶ 13; DE79-1 ¶ 13).

         The June 5, 2015 letter from Verizon additionally noted that MetLife's records indicated that any LTD coverage Mr. McBurrows previously had with Verizon expired around January 2011. (Id.). The Plan Committees contend that this is was an error; Mr. McBurrows, they say, was not enrolled for LTD coverage at any time subsequent to 2006. (DE 75 ¶ 13).

         On August 2, 2017, Verizon sent a letter to Mr. McBurrows's counsel explaining that VCRU issued a claim determination that Mr. McBurrows "sought enrollment for LTD coverage on October 31, 2013, via the Benefits Connection website when making 2014 calendar year annual enrollment elections." (DE 74-8 at 13; DE 75 ¶ 22). Overall, VCRU concluded that Mr. McBurrows "was not enrolled for or eligible to participate in the LTD coverage under the Plan" and that he "had not been enrolled for LTD coverage since 2006 when coverage became subject to employee-paid premiums." (Id.).

         In the August 2, 2017 letter, Verizon also noted that in October 2013, while Mr. McBurrows was receiving STD benefits, he attempted to enroll in LTD coverage. (Id.). VCRU explained the reasons why it believed Mr. McBurrows was not entitled to LTD under those circumstances:

[E]nrollment for LTD coverage under the Plan is predicated on submission of evidence of insurability to MetLife, acceptance of evidence of insurability by MetLife, payment of required premiums and return to active employment for a minimum of 90 days after STD.
Benefits Center records indicate that Mr. McBurrows never submitted the required evidence of insurability. As a result, evidence of insurability was never accepted by MetLife and he was not enrolled for LTD coverage under the Plan. Moreover, he did not pay premiums for LTD coverage. Additionally, he did not return to active employment for a period of 90 consecutive days after his return from STD.
Despite the fact that Mr. McBurrows failed to satisfy the requirements for enrollment for LTD coverage as noted above, the Verizon Claims Review Unit consulted with MetLife to determine whether a submission of evidence of insurability by Mr. McBurrows would have been accepted by MetLife as required under the Plan.
Evidence of insurability requires the submission of the enclosed Statement of Health Form. MetLife has determined that if Mr. McBurrows had completed the Statement of Health Form, yes answers would have been required to items 1 lb., 1 Ik., and 1 It [relating to whether a pre- existing medical condition exists]. MetLife has indicated that yes responses to these items would have resulted in MetLife's determination that the evidence of insurability was unacceptable (a copy of that opinion is also enclosed). As a result, coverage and enrollment would also have been denied on the basis of insurability.

(DE 74-8 at 15-16; DE 75 ¶ 22; DE 79-1 ¶ 22).

         On January 24, 2018, Mr. McBurrows appealed the LTD claim determination to the VCRC. (DE 75 ¶ 23; DE 79-1 ¶ 23). Kevin Cammarata, the Chairperson of the VCRC, considered the appeal and whether Mr. McBurrows was eligible for LTD coverage under the Plan. (DE 75 ¶ 24; DE 79-1 ¶ 24). The VCRC issued a final determination on April 30, 2018, and concluded that Mr. McBurrows was ineligible for LTD coverage because (1) he did not submit evidence of insurability to MetLife; (2) he did not pay the required premiums for LTD coverage; and (3) he did not return to full-time employment for a minimum of 90 days following receipt of his STD benefits. (DE 74-27 at 62-66; DE 75 ¶ 25; DE 79-1 ¶ 25), Moreover, even if MetLife had received his evidence of insurability, that evidence would have established that he was not eligible for coverage, because he had a pre-existing medical condition. (Id.).

         i. LTD Coverage under the Plan

         The Plan sets forth the following applicable provisions with respect to enrolling for LTD coverage:

Enrolling
You must enroll in the LTD plan in order to be eligible for LTD coverage.
You can enroll for LTD coverage within 31 days of your hire date. If you enroll for LTD coverage during the initial 31-day period, you will not need to provide evidence of insurability for coverage to take effect. Evidence of insurability is a statement of your medical health that MetLife will use to determine if you are approved for LTD coverage.
During the year
You can enroll for LTD coverage at any time during the year, including during annual enrollment. However, you will need to provide evidence of insurability to MetLife, and that evidence must be accepted, before coverage can take effect.
If you do not enroll
You will receive "no coverage" for LTD if you do not enroll.
Paying for coverage
You pay the cost of LTD coverage through after-tax payroll deductions, which provides the advantage of tax-free LTD benefits. Your contributions for coverage are based upon your annual benefits compensation as of July 1 of the previous calendar year and the LTD coverage option you choose. If you are on an ...

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