Shaw v. AT&T Umbrella Benefit Plan No. 1

Shaw v. AT&T Umbrella Benefit Plan No. 1

Opinion

 [*541]  [***2]   COLE, Chief Judge. Plaintiff Raymond Shaw sued defendant AT&T Umbrella Benefit Plan ("the Plan"), alleging that the Plan denied his claim for long-term disability ("LTD") benefits in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"). The district court granted summary judgment to the Plan, finding that the Plan had properly denied Shaw benefits. Because we find that the Plan acted arbitrarily and capriciously in denying Shaw LTD benefits, we reverse the district court's judgment. [**2]  Further, because Shaw has demonstrated that he was denied benefits to which he was clearly entitled, we remand this case to the district court and direct it to enter an order awarding Shaw LTD benefits.

I. BACKGROUND

Shaw is a 39-year-old male who was employed as a customer service representative for Michigan Bell until he stopped working as a result of chronic neck pain. Shaw was covered under the AT&T Midwest Disability Benefits Program, a component of the AT&T Umbrella Benefit Plan No. 1.

A. Disability Plan

Under the disability plan, short-term disability ("STD") benefits of full or partial wage replacement are available to employees for up to 52 weeks. To be eligible for STD benefits, an employee must have a "sickness, pregnancy, or an off-the-job illness or injury that prevents [him] from performing the duties of [his] job (or any other job assigned by the Company for which [he is] qualified) with or without reasonable accommodation." (R. 15-5, PageID 1129.) After STD benefits run out, an employee may be eligible for LTD benefits. To be eligible for such benefits, an employee must have "an illness or injury, other than accidental injury arising out of and in the course of employment [**3]  by the Company or a Participating Company, supported by objective Medical Documentation." (Id. at 1142.) Further, "[s]uch illness or injury [must] prevent[] [him] from engaging in any occupation or employment (with reasonable accommodation as determined by the Claims Administrator),  [*542]  for which [he is] qualified or may  [***3]  reasonably become qualified based on education, training or experience." (Id.) In determining eligibility for either STD or LTD benefits, the Plan reserves the right to conduct its own "examination by a Physician chosen by the Claims Administrator, if the Claims Administrator determines that such an examination is necessary." (Id. at 1134, 1146.)

The disability plan provides that "[t]he Plan Administrator (or, in matters delegated to third parties, the third party that has been so delegated) will have sole discretion to interpret [the disability plan], including . . . determinations of coverage and eligibility for benefits, and determination of all relevant factual matters." (Id. at 1156.) The disability plan also states that "[t]he Claims Administrator has been delegated authority by the Plan Administrator to determine whether a particular Eligible Employee who has filed a claim for benefits is entitled to benefits" and that [**4]  "[t]he Appeals Administrator has been delegated authority by the Plan Administrator to determine whether a claim was properly decided by the Claims Administrator." (Id.)

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