Free Motion for Miscellaneous Relief - District Court of Arizona - Arizona

R ANDOLPH G . B ACHRACH
ATTORNEY AT LAW

5103 E. THOMAS ROAD PHOENIX, ARIZONA 85018 Tel: (602) 852-9540 Fax: (602) 840-0318 (AZ #12621 - CA #93278)

Attorneys for Plaintiff

United States District Court
FOR THE DISTRICT OF ARIZONA

DAVID L. MAZET, Plaintiff, vs. HALLIBURTON COMPANY LONGTERM DISABILITY PLAN; and, HARTFORD LIFE & ACCIDENT INSURANCE COMPANY, Defendants.
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No.: CV 04 0493 PHX FJM PLAINTIFF'S MOTION FOR REMAND TO THE PLAN ADMINISTRATOR, OR, ALTERNATIVELY, FOR DE NOVO REVIEW (Oral argument requested)

Plaintiff requests that certain undecided matters in this case be further remanded to the Plan Administrator, or, alternatively, that the Court conduct a de novo review of Plaintiff's claim for further adjustments to his "pre-disability income" and the amount of benefits still owed to him. This motion is based upon the attached Memorandum of Points & Authorities and accompanying affidavit of counsel. ...

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MEMORANDUM OF POINTS & AUTHORITIES I. Background facts. On February 5, 2008, the Court ordered that this case be remanded to the Plan Administrator to correctly determine the amount of Plaintiff's pre-disability income. (Docket #76.) On May 1, 2008, Hartford issued its remand decision. (Exhibit 1, attached.) Taking into account Plaintiff's 401(k) contributions, Hartford recalculated Plaintiff's "own occupation" benefits and paid him an additional benefit in the amount of $11,017.82. Id., pg. 2. However, just as it failed during the pendency of Mr. Mazet's initial claim, Hartford has failed again to adjust ("index") Plaintiff's pre-disability earnings according to applicable "Consumer Price Index" ("CPI"), as required by the Plan. The parties briefed the issue of "indexed pre-disability earnings" at the time of crossmotions for judgment. At that time, Hartford argued that the issue of "indexed pre-disability earnings" should be remanded to the Plan Administrator for consideration "in the first instance." This Court agreed with Hartford's position and so ordered. Yet, upon remand, Hartford inexplicably ignored the issue of "indexed pre-disability earnings." Hartford's decision letter on remand makes no mention of Plaintiff's long-standing claim for "indexed" benefits.1 Thus, the matter continues to be unresolved. II. The Plan provides for "Indexed Pre-disability Earnings." The Plan has a provision by which a claimant's "pre-disability earnings" are adjusted ("indexed") in conformity with a specific cost-of-living index: ...

Hartford's remand decision letter only tangentially refers to "Mr. Mazet's Indexed Pre-disability Earnings." (See, Exhibit 1, pg. 2.)

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(Docket #56, Exh. 2, CF-00096.) Further, both "own occupation" and "any occupation" benefits are required to be adjusted according to the CPI:

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(Docket #56, Exh. 2, CF-00095, emphasis added.) There is nothing in the record that suggests that Plaintiff's pre-disability earnings have ever been adjusted for the CPI, as the Plan requires. Plaintiff has consistently asserted his claim for an accurate calculation of his "pre-disability earnings." Plaintiff's initial (Rule 26.1) disclosure statement (September 2004), asserted: Plaintiff is entitled to recalculation and payment of all benefits, past and future, according to his actual "predisability earnings" as defined by the Plan. This Court recognized Plaintiff's claim and sent the matter back to Hartford for administrative review and decision. Nevertheless, Hartford has ignored this Court's mandate by failing and refusing to adjust Plaintiff's pre-disability earnings. Moreover, Hartford chose to not even mention, much less, address the issue in its remand decision letter. (See, Exhibit 1.) As a result: 1) Mr. Mazet continues to remain underpaid as to his "own occupation" benefits; and, 2) the denial of his claim for "any occupation" benefits is, effectively, a nullity because it was supported by an incorrect "pre-disability earnings" calculation. III. Hartford admitted that Plaintiff's claim for "indexed pre-disability earnings" should be decided, "in the first instance," by the Plan Administrator.
Plaintiff addressed his claim for CPI-adjusted pre-disability earnings at the time of crossmotions for judgment. (Docket #28, pgs. 4:6, 5:8, 10:28.) At that time, Hartford argued that this was a new claim and argued for remand to "allow Hartford to consider these issues in the first

instance at significantly less cost to all parties." (Docket #32, pg. 2:6-12.) This Court agreed, and entered its remand Order. (Docket #40.) Apparently, however, when given the opportunity on remand to address the issue of "indexed pre-disability earnings," Hartford had second thoughts and decided to completely ignore this issue. Clearly, this was a decision based squarely upon Hartford's financial self-interest. Hartford's conduct falls far off the mark when judged in the light of the most recent U.S. Supreme Court pronouncement on the subject of an ERISA insurer's fiduciary obligations owed to plan participants:

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. . . ERISA imposes higher-than-marketplace quality standards on insurers. It sets forth a special standard of care upon a plan administrator, namely, that the administrator "discharge [its] duties" in respect to discretionary claims processing "solely in the interests of the participants and beneficiaries" of the plan, § 1104(a)(1); it simultaneously underscores the particular importance of accurate claims processing by insisting that administrators "provide a `full and fair review' of claim denials," Firestone [Tire & Rubber Co. v. Bruch], 489 U. S., at 113 (quoting § 1133(2)); and it supplements marketplace and regulatory controls with judicial review of individual claim denials, see § 1132(a)(1)(B). Metropolitan Life Ins. v. Glenn, 06-923, pg. 8 (U.S. 6-19-2008). As further evidence of Hartford's cavalier attitude in performing its fiduciary duties as Plan Administrator, Hartford disingenuously argued in its Motion for Judgment (Reply brief) that the Plan . . . contain[s] absolutely no mention of "indexing" or any similar concept such a cost of living adjustment. Hartford properly calculated Mr. Mazet's benefits based on the Plan. This Court should therefore either remand this argument to Hartford or reject it on the merits. (Docket #32, pg. 3:2, emphasis added.) As seen (supra), this specious argument is refuted by the plain language of the Plan, as well as, Hartford's own remand decision letter, which obliquely refers to "Mr. Mazet's Indexed Pre-disability Earnings." (See, Exhibit 1, pg. 2.) IV. Hartford failed to exercise its discretion. When a plan administrator fails to exercise vested discretion it is appropriate for the district court to review the matter de novo. Hartford, in failing on remand to address the issue of Mr. Mazet's claim for "indexed Pre-disability earnings," has failed to exercise its discretionary authority. The CPI-adjustment issue was addressed and briefed by the parties during cross-motions for judgment. Hartford argued (successfully) that the matter should be decided "in the first instance" by the Plan Administrator, on remand. Because Hartford chose, after remand, not to exercise its discretionary authority to decide this issue, Hartford is not entitled to deferential review on this issue. As recently held by the Ninth Circuit:

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"[t]he mere power to decide claims does not constitute discretionary authority." [citations omitted] *** Once it is established that a plan administrator has discretionary authority, a court reviewing the administrator's decision must next determine whether the administrator exercised its authority. Abatie [v. Alta Health & Life Ins. Co., 458 F.3d 955, 964 (9th Cir. 2006) (en banc)], 458 F.3d at 972. If it did not, de novo review is proper. Id. (citing Jebian v. Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1106 (9th Cir. 2003)). Johnson v. Georgia-Pacific Corp., pgs. 2-3. Hartford should not be rewarded for its unjustified failure to fulfill its duty of "accurate claims processing." Metropolitan Life Ins. v. Glenn, 06-923, pg. 8 (U.S. 6-19-2008). Thus, de novo review of this issue is requested. V. Conclusion. In light of Hartford's unwillingness to fulfill its duties as Plan Administrator, a full resolution of this case seems no closer today than when this case was filed, in 2004. That Mr. Mazet is entitled to a CPI adjustment of his "Pre-disability earnings" could hardly be more clear from a plain reading of the Plan documents. There simply is no ambiguity or vagueness in the Plan on this point. Nor, is there any reasonable doubt that Hartford has no intention of performing its duty in this regard unless it is specifically ordered to do so by this Court. By this motion, Plaintiff moves alternatively. Because the record sufficiently demonstrates that Hartford declined to exercise its own discretion, and, even refused to comply with orders of this Court, it is within the Court's discretion to now decide this issue de novo. If the Court agrees, in that case, limited briefing and oral argument is sufficient to fully inform the Court in making its decision on this matter. Otherwise, Mr. Mazet moves to have his claim for "indexed Pre-disability earnings" further remanded to Hartford with specific instructions and appropriate admonitions to finally and fairly decide the matter. ...

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Respectfully submitted: DATED: June 24, 2008 RANDOLPH G. BACHRACH Attorney at Law

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By s/Randolph G. Bachrach Randolph G. Bachrach, Esq. 5103 E. Thomas Road Phoenix, Arizona 85018 Attorney for Plaintiff I hereby certify that on June 24, 2008 I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
Steve Bressler LEWIS & ROCA, LLP 40 N. Central Ave. Phoenix, Arizona 85004-3329 Attorneys for Defendants

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s/Randolph G. Bachrach

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