Porter v. Metropolitan Life Insurance Company, 17 F.Supp.2d 500 (D.S.C. 1998) – decided September 16, 1998 – United States District Court for the District of South Carolina – Robert E. Hoskins

I represented Porter.  This case involved an ERISA governed claim for long term disability benefits.  My client had a limited disability that prevented her from doing her own job, but not other work.  MetLife denied her claim.  The summary plan description and actual plan document had differing definitions of “disability” as explained by the court:

“The parties each assert a competing definition of “total disability.”  Porter claims that the definition included in the SPD controls.  MetLife applied the definition found in the official Plan document.  These two definitions are very different.  The definition in the SPD employs an “own occupation” standard:  Porter is disabled if she is “wholly and continuously unable to perform the duties pertaining to [her] own occupation.”  (Pl.’s Ex. A at 5 (emphasis added).)  The definition further clarifies that over the first two and one-half years, the employee must be unable to “perform each and every duty pertaining to your occupation” and that “thereafter, you cannot perform the duties of any occupation.”  (Id. (emphasis added).)  The official Plan document, however, defines it as being “unable to perform each of the material duties of any gainful work or service for which you are reasonably qualified taking into consideration your training, education and experience.”  (Def.’s Ex. 2 at 8 (emphasis added).)  Porter readily concedes that “if the court determines that the Defendant’s definition of ‘disability’ is applicable to the Plaintiff’s claim, the Defendant should prevail.”  (Pl.’s Reply to Ct.’s June 4, 1998, Order at 6.)” 

I argued that the terms of the summary plan description should apply and that under those terms my client was disabled.  The seminal case on the issue in the Fourth Circuit is Aiken v. Policy Management Systems, 13 F.3d 138 (4th Cir. 1993).  Aiken requires a disjunctive showing of either “significant reliance” or “possible prejudice” for an SPD to apply over conflicting terms of an OPD.  The district court held that Porter had shown neither.  The court, in a well reasoned opinion, stated:

“The only reliance by Porter occurred after MetLife denied her benefits.  MetLife, however, included in its denial letter the definition of “disabled,” which it introduced with the statement:  “Your plan states . . . .” (Def.’s Ex. 8.)  Thus, when Porter procured the affidavits, she was well aware that MetLife was using a different definition.  Her situation is similar to that of Adams: 

This court finds plaintiff’s reliance entirely unreasonable and without basis.  Plaintiff may have reasonably assumed that her loss appeared to be covered when she initially read the SPD in July 1993.  At no time, though, did defendants give any indication to plaintiff that her loss was covered.  Once plaintiff made inquiries, she was informed that she was not covered under the SPD.  Plaintiff cannot assert that defendants mislead her after July 1993.

. . . The evidence is undisputed that as far back as July 1993, plaintiff was put on notice of a genuine dispute regarding coverage of her hearing loss.  Plaintiff testified that she learned in late July 1993 from Mr. Bell that “there was some policy language that was against” her.  Thus, plaintiff’s own evidence shows that she had knowledge that the policy did not provide coverage well before any reliance by her. 

. . .  Plaintiff does not testify that she made any statement to obtain a copy of the policy referred to by Mr. Bell or that her request was refused.  This court is not persuaded that defendants withheld the Policy information until November 10, 1993.  Plaintiff had ample notice that she may not be covered prior to that time.

Adams, 865 F.Supp. at 1463 (emphasis omitted) (citations omitted).  Porter is in the same situation as Adams.  She received notice of policy language against her, yet in her appeal did not even attempt to address the definition of disability upon which MetLife based its decision.  Rather, Porter continued to rely on the SPD’s definition.  To countenance her argument would “vitiate the very requirement of reliance. . . . Otherwise, no provider would be safe from a post-denial self-serving policy interpretation by an insured.”  Id. (emphasis added). 

Porter also claims that she would be prejudiced by the adoption of the definition in the official Plan document because (1) it was too late to change her ducments in order to address the “any occupation” standard, and (2) adopting the “any occupation” standard “would ‘shut her out’ from receiving any benefits.”  (Pl.’s Reply to Ct.’s June 4, 1998, Order at 7.)  These arguments have no merit.  As for the first point, it has already been stated that Porter had ample opportunity to address the “any occupation” standard.  Cf. McKenzie v. General Tel. Co., 41 F.3d 1310, 1315-16 (9th Cir. 1994) (finding that there was no prejudice to an ERISA plan recipient who never received an SPD but who had notice of its terms).  As for the second point, Porter has offered no case law in support of her assertion that she would suffer prejudice when the adoption of an unfavorable definition would “shut her out” of benefits.  If this is what prejudice requires, then all denials of benefits would result in prejudice.  Thus, there is no prejudice to Porter.”  (Click here to see the whole opinion)