Pankey v. Aetna Life Insurance Company

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

ORLANDO DIVISION

JUDSON PANKEY,

Plaintiff,

v. Case No.: 6:23-cv-1119-WWB-UAM

AETNA LIFE INSURANCE COMPANY,

Defendant.

/

ORDER

THIS CAUSE is before the Court on Plaintiff Judson Pankey’s Motion for Summary

Judgment (Doc. 22) and Defendant Aetna Life Insurance Company’s (“Aetna”) Motion for

Summary Judgment (Doc. 24). United States Magistrate Judge Embry J. Kidd issued a

Report and Recommendation (“R&R,” Doc. 29), in which he recommends that Plaintiff’s

Motion for Summary Judgment be granted, and Defendant’s Motion for Summary

Judgment be denied.1 Defendant filed an Objection (Doc. 31), to which Plaintiff filed a

Response (Doc. 32).

I. BACKGROUND

No party has objected to the relevant background as fully set forth in the R&R and

it is hereby adopted and made a part of this Order accordingly. (Doc. 29 at 1–12).

1 Defendant’s Motion fails to comply with this Court’s January 13, 2021 Standing

Order. In the interests of justice, the Court will consider the filing because this matter is

fully briefed and ripe for resolution on the merits. The parties are cautioned that future

failures to comply with all applicable rules and orders of this Court may result in the

striking or denial of filings without notice or leave to refile.

II. LEGAL STANDARD

When a party objects to a magistrate judge’s findings, the district court must “make

a de novo determination of those portions of the report . . . to which objection is made.”

28 U.S.C. § 636(b)(1). The district court “may accept, reject, or modify, in whole or in

part, the findings or recommendations made by the magistrate judge.” Id. The district

court must consider the record and factual issues independent of the magistrate judge’s

report, as de novo review is “essential to the constitutionality of [§] 636.” Jeffrey S. v.

State Bd. of Educ., 896 F.2d 507, 512 (11th Cir. 1990). The objecting party must state

with particularity findings with which it disagrees, along with its basis for the disagreement.

Kohser v. Protective Life Corp., 649 F. App’x 774, 777 (11th Cir. 2016) (citing Heath v.

Jones, 863 F.2d 815, 822 (11th Cir. 1989)). The court will not consider “[f]rivolous,

conclusive, or general objections.” Marsden v. Moore, 847 F.2d 1536, 1548 (11th Cir.

1988) (citation omitted).

III. DISCUSSION

A. Objections

Magistrate Judge Kidd recommends that the Court find Defendant’s decision to

terminate Plaintiff’s long-term disability (“LTD”) benefits was arbitrary and capricious

because: (1) Defendant only had the authority to suspend or adjust Plaintiff’s benefits

under the terms of the applicable employee welfare benefit plan (“Plan”), and (2) the

decision to terminate Plaintiff’s LTD benefits was inconsistent with Defendant’s past

practice and, therefore, unreasonable. Defendant raises three objections in opposition.

As an initial matter, Defendant argues that the R&R misconstrues the terms of the

Plan by failing to read relevant provisions as part of a whole. See SA Palm Beach, LLC

v. Certain Underwriters at Lloyd’s London, 32 F.4th 1347, 1356 (11th Cir. 2022) (“Under

Florida law, an insurance policy should be read ‘as a whole, endeavoring to give every

provision its full meaning and operative effect.’” (quoting U.S. Fire Ins. Co. v. J.S.U.B.,

Inc., 979 So. 2d 871, 877 (Fla. 2007))). “[W]here parties use different language in different

provisions of a contract, courts presume that those provisions have different meanings.”

Peterbrooke Franchising of Am., LLC v. Mia. Chocolates, LLC, No. 21-10242, 2022 WL

6635136, at *5 (11th Cir. Oct. 11, 2022) (citing Aleman v. Gervas, 314 So. 3d 350, 352

(Fla. 3d DCA 2020)). “[E]very provision in a contract should be given meaning and effect

to avoid rendering any provision mere surplusage.” Id. (quoting Nat’l R.R. Pass Corp.

(Amtrack) v. Rountree Trans. & Rigging, Inc., 422 F.3d 1275, 1284 (11th Cir. 2005)). Four

provisions of the Plan are relevant to Defendant’s objection. First, the Plan provides that

a recipient of LTD benefits “will no longer be considered as disabled nor eligible for long

term monthly benefits” when the recipient “no longer meet[s] the LTD test of disability, as

determined by Aetna” or “fail[s] to provide proof that [recipient] meet[s] the LTD test of

disability.” (“Termination Provisions,” Doc. 21-2 at 1423). Second, the Plan confers on

Aetna “the right to suspend or adjust th[e] plan’s benefits by the estimated amount of the

other income benefits” when a recipient fails to provide “the proof that Aetna may require.”

(“Proof of Income Provision,” id. at 1427–1428). Third, the Plan provides that a

recipient “shall, upon request, submit proof that [the recipient] continues to meet the

definition of an eligible group as provided under applicable law or regulation.”

(“Compliance Provision,” id. at 1405). Finally, the Plan provides that “[b]enefits will be

paid as soon as the necessary proof to support the claim is received.” (“Payment

Provision,” id. at 1435). Defendant argues that these provisions, considered together,

contradict Magistrate Judge Kidd’s conclusion that Plaintiff’s submission of some proof—

even if not sufficient proof—limited Defendant to a suspension or adjustment of benefits

but that Defendant could only terminate benefits if Plaintiff failed to provide proof entirely.

These provisions, read together and giving the fullest effect to each individually

and in context, clearly afford Defendant discretion to reasonably determine whether

Plaintiff had submitted sufficient proof to avoid termination. At the outset, the Proof of

Income Provision warns that Aetna may suspend or modify benefits if they “do not provide

the proof that Aetna may require.” (Id. at 1427–1428 (emphasis added)). Further, the

Payment Provision provides that benefits shall issue only upon receipt of “necessary

proof.” (Id. at 1435). These provisions expressly condition the proof required and thus

confer on Defendant discretion to evaluate the sufficiency of Plaintiff’s proof of LTD

eligibility.

As the R&R notes, the Termination Provisions do not similarly condition the proof

Plaintiff must submit. (Doc. 21-2 at 1423). The R&R interprets this language to mean

that Aetna lacked discretion to terminate benefits because of insufficient proof, and

therefore, as long as Plaintiff submitted some proof of income, that was sufficient to avoid

termination. However, the R&R fails to consider that the Termination Provisions provide

that Aetna may terminate LTD benefits when Plaintiff no longer met the “LTD test of

disability, as determined by Aetna,” or if Plaintiff failed to “provide proof that [he met] the

LTD test of disability.” (Id. (emphasis added)). Because Aetna has discretion to

determine its own LTD test of disability, it necessarily follows that it must also have

discretion to evaluate the sufficiency of proof that Plaintiff meets that test. To conclude

otherwise would nullify Aetna’s express discretion to determine the LTD test of disability,

an illogical and impermissible outcome. See Peterbrooke Franchising of Am., LLC, 2022

WL 6635136, at *5 (“[E]very provision in a contract should be given meaning and effect

to avoid rendering any provision mere surplusage.” (quoting Nat’l R.R. Pass. Corp.

(Amtrak), 422 F.3d at 1284)). The Court will sustain this objection and therefore need not

address Defendant’s argument that the R&R improperly elevated form over substance.

Next, Defendant objects on the ground that the R&R misapplied the applicable

legal standard under the Employee Retirement Income Security Act (“ERISA”) by failing

to give deference to Defendant’s decision to terminate Plaintiff’s benefits. Specifically,

Defendant argues that Magistrate Judge Kidd “improperly substituted his own judgment

for that of Defendant” in concluding that “Defendant acted arbitrarily in terminating

benefits” on the grounds that “Plaintiff provided some proof (albeit not proof that

Defendant deemed sufficient)” that he met Aetna’s LTD test of disability. (Doc. 31 at 8).

The R&R acknowledges that the terms of the Plan grant Defendant “discretionary

authority to determine whether and to what extent eligible employees and beneficiaries

are entitled to benefits and to construe any disputed or doubtful terms[.]” (See Doc. 29

at 13 (quoting Doc. 21-2 at 1409)). The policy further states that Aetna “shall be deemed

to have properly exercised such authority unless [they] abuse [their] discretion by acting

arbitrary and capriciously,” and that Aetna possesses “the right to adopt reasonable

policies, procedures, rules, and interpretations” of the Plan “to promote orderly and

efficient administration.” (Id.). Because the terms of the policy unequivocally grant

Defendant the discretionary power to construe disputed terms and adopt reasonable

interpretations of the Plan, Aetna’s use of those powers are “not subject to control by the

court except to prevent an abuse by the trustee of his discretion.” HCA Health Servs. of

Ga., Inc. v. Emps. Health Ins. Co., 240 F.3d 982, 994 (11th Cir. 2011) (quoting Firestone

Tire & Rubber Co. v. Bruch, 499 U.S. 101, 111 (1989)). Put another way, “a trustee’s

interpretation will not be disturbed if it is reasonable.” Id. (quoting Firestone, 499 U.S. at

110–11 (1989)). “If the court determines that the claims administrator’s wrong

interpretation is reasonable, then this wrong but reasonable interpretation is entitled to

deference even though the claimant’s interpretation is also reasonable.” Id.

The Court finds that it is reasonable for Defendant to interpret the Plan to allow for

the termination of benefits absent sufficient proof. As noted above, the Compliance

Provision required Plaintiff to, “upon request, submit proof that [he] continues to meet the

definition of an eligible group as provided under applicable law or regulation.” (Doc. 21-

2 at 1405). Here, the Plan’s use of the word proof resembles the provision dictating that

Plaintiff “will no longer be considered as disabled nor eligible for long term monthly

benefits” on the day Plaintiff fails “to provide proof that [he] meet[s] the LTD test of

disability.” (Id. at 1423). Because these provisions mirror each other, Defendant could

have reasonably construed the use of the term “proof” to mean the proof sought “upon

request” rather than any proof provided or deemed sufficient by Plaintiff. That

interpretation, which allows Aetna to list what proof is necessary to support a claim, also

falls within Aetna’s discretionary “right to adopt reasonable policies, procedures, rules,

and interpretations” of the Plan “to promote orderly and efficient administration.” (Id. at

1409). Such an interpretation is further consistent with Defendant’s discretion to

determine its own LTD test of disability. (See id. at 1423).

Here, Plaintiff’s responsibility to provide “continuing proof of [his] disability” was

triggered by Defendant’s request on June 21, 2021, that Plaintiff specifically “complete

the attached Claimant Questionnaire within 60 days” and “include copies of [his] 2020

Tax Returns/Schedule K-1 Form.” (Doc. 21-1 at 705–706). It is undisputed that Plaintiff

did not respond with the proof sought despite several requests by Defendant. (See Doc.

29 at 7–9). After Defendant initially terminated Plaintiff’s benefits, Plaintiff submitted

documents to reverse the termination on appeal, but none of those documents included

the specific financial proof sought “upon request” by Defendant. (Id. at 9). Left without

the requested proof, Defendant’s decision to terminate Plaintiff’s LTD benefits was

reasonable. Because Defendant’s interpretation falls within its discretion and is

reasonable, that interpretation “is entitled deference” and “must be upheld as not arbitrary

or capricious.” HCA Health Servs. of Ga., Inc., 240 F.3d at 994; Collins v. Life Ins. Co. of

N. Am., No. 6:21-cv-1756, 2023 WL 2633309, at *7 (M.D. Fla. Mar. 24, 2023) (quoting

Eady v. Am. Cast Iron Pipe Co., 203 F. App’x 326, 328 (11th Cir. 2006)). Thus,

Defendant’s objection will be sustained.2

Finally, Defendant objects insofar as the R&R misstates that Defendant never

terminated Plaintiff’s benefits in the past for failure to provide personal tax returns. “In

determining whether a plan administrator’s decision is arbitrary and capricious, the Court

is limited to deciding whether [Aetna’s] interpretation of the Plan was made rationally and

in good faith.” Epolito v. Prudential Ins. Co. of Am., 737 F. Supp. 2d 1364, 1375 (M.D.

2 Defendant also objects to the R&R on the grounds that it misstates or overlooks

key facts in its analysis. (Doc. 31 at 3–4). Defendant specifically argues that the R&R

overlooks Plaintiff’s failure to submit the Schedule K-1 Forms and Updated Claimant

Questionnaire requested by Defendant. (Id.). This argument overlaps with the issue of

whether or not Defendant’s interpretation of the Plan was reasonable, as these

documents are part of the specific proof requested by Defendant. Because the Court

finds that Defendant’s interpretation of the Plan was reasonable, Defendant’s objection

on this ground will be sustained without further discussion.

Fla. 2010) (citing Cagle v. Bruner, 112 F.3d 1510, 1518 (11th Cir. 1997)). Several factors

can be relevant to determining whether “a plan administrator’s decision is arbitrary and

capricious,” including “(1) the uniformity of [Aetna’s] construction; (2) the reasonableness

of its interpretation; and (3) possible concerns with the way unexpected costs may affect

the future financial health of [Aetna].” Id. (quoting Cagle, 112 F.3d at 1518). “Other

factors may also be relevant, such as the internal consistency of a plan, the relevant

regulations formulated by administrative agencies, and the factual background of the

determination, including any inferences of bad faith.” Id. (quotations omitted).

In the R&R, Magistrate Judge Kidd found that “Plaintiff’s LTD benefits were

terminated on at least four other occasions prior to the termination at issue” and that

Defendant notified Plaintiff it had terminated those LTD benefits “based on Plaintiff’s

failure to provide his tax returns” in a letter dated June 22, 2015. (Doc. 29 at 2–4). In its

discussion of only the first factor above, however, the R&R asserts that Defendant

provided “no basis for terminating Plaintiff’s benefits based on Plaintiff’s failure to provide

tax returns, when—for years—Defendant never received them and never terminated

Plaintiff’s benefits for that reason.” (Id. at 16). The R&R then relies on this purportedly

inconsistent past practice as an additional basis for concluding that Defendant’s decision

to terminate Plaintiff’s LTD benefits was arbitrary and capricious. (Doc. 29 at 16–18).3

3 Defendant notes that “whether Defendant has interpreted the Plan’s terms

uniformly is one of numerous factors used to determine whether the decision at issue is

arbitrary.” (Doc. 31 at 9). The Court agrees. Indeed, the R&R admits that whether

Defendant uniformly applied its past interpretation is only “one factor in determining

whether a decision is arbitrary and capricious.” (Doc. 29 at 18); see also Cagle, 112 F.3d

at 1518–19 & n.6 (distinguishing relevant and irrelevant factors and analyzing all relevant

factors). However, for the reasons stated below, the Court need not analyze each factor

to address Defendant’s Objection because it does not agree with the R&R’s analysis of

that factor.

But the record belies this conclusion. As Defendant states, “[t]he claims

administrator had, in fact, terminated [Plaintiff’s] benefits in 2015 for his failure to provide

his 2011 to 2013 tax returns.” (Doc. 31 at 4; see also Doc. 21-1 at 553–563). Appealing

that decision, Plaintiff provided Aetna with financial documents related to his real estate

investment in Brown Little Development, and his LTD benefits were later reinstated. (Doc.

21-1 at 570–572). Because Plaintiff’s benefits were reinstated on this basis, the R&R

notes that “Aetna, for years, determined that benefits were payable pursuant to the terms

of the LTD Plan based on Plaintiff’s provision of the Schedule K-1 forms for Brown Little

Development.” (Doc. 29 at 18). Thus, the R&R reasoned that it “is unclear, based on the

entirety of the record and the parties’ lengthy history, why the termination at issue in this

case was different.” (Id.). Because the Plan’s terms vest Aetna with the “discretionary

authority to determine whether and to what extent eligible employees and beneficiaries

are entitled to benefits and to construe any disputed or doubtful terms,” Aetna could have

deliberately construed the terms of its plan in a light favorable to Plaintiff and allowed the

K-1 forms as a substitute. (Doc. 21-2 at 1409). But it is undisputed that Plaintiff did not

provide updated K-1 forms in this case as he had done in the past. (Id. at 9–10). At a

minimum, this change in circumstance weighs against a finding that Defendant abused

its discretion in terminating Plaintiff’s LTD benefits due to an inconsistent construction of

the Plan. Accordingly, the Court will sustain this objection.

B. Motions for Summary Judgment

As an initial matter, to the extent Plaintiff attempts to raise an ERISA retaliation

claim, the argument will not be considered. (Doc. 22 at 15); see also Norton v. nexAir,

LLC, No. 1:19-CV-03901, 2022 WL 1669468, at *6 (N.D. Ga. Mar. 29, 2022) (“[I]t is well-

established that plaintiffs cannot ‘raise new claims at the summary judgment stage’ or

seek to amend their claims ‘through argument in a [summary judgment] brief[.]’” (quoting

Qian v. Sec’y, Dep’t Veterans Affs., 432 F. App’x 808, 809–10 (11th Cir. 2011))).

Plaintiff’s Complaint does not allege a standard ERISA retaliation claim. See Wolf v.

Coca-Cola Co., 200 F.3d 1337, 1343 (11th Cir. 2000) (“ERISA also protects employees

against retaliation for asserting claims to benefits under an ERISA plan.” (citing 29 U.S.C.

§ 1140)). Rather, Plaintiff only raises a claim under 29 U.S.C. § 1132(a)(1)(B) for payment

and reinstatement of his benefits, along with attorney’s fees, under the Plan. (See Doc.

1, ¶¶ 12–17).

The Court now turns to resolve the remaining arguments raised in the parties’

motions for summary judgment. Because the Court concludes that the terms of the Plan

confer discretion on Aetna to determine claims and appeals, the “dispositive question is

whether [Aetna’s] decision was arbitrary and capricious.” Prelutsky v. Greater Ga. Life

Ins. Co., 692 F. App’x 969, 973 (11th Cir. 2017) (citing Jett v. Blue Cross & Blue Shield

of Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989)). If “reasonable grounds do exist” for

the administrator’s decision, the Court must “then determine if he operated under a

conflict of interest.” Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350, 1355 (11th Cir.

2011). “If there is a conflict, the conflict should merely be a factor for the court to take

into account when determining whether an administrator’s decision was arbitrary and

capricious.” Id. (citing Capone v. Aetna Life Ins. Co., 592 F.3d 1189, 1195 (11th Cir.

2010)).4

4 Plaintiff has not met his burden to demonstrate that Aetna’s conflict of interest,

created by its authority to approve and pay benefits, tainted its decision. See Capone,

592 F.3d at 1196 (citation omitted). Specifically, Plaintiff has cited no evidence that the

Upon review, it appears that Plaintiff raises only one other argument in support of

his Motion for Summary Judgment.5 Plaintiff argues that Aetna did not have the “authority

to request tax returns related to Pankey’s passive real estate investment with Brown Little

Development” under the terms of the Plan’s “Test of Disability.” (Doc. 22 at 19). The

Plan provides that a benefits recipient meets the Test of Disability “any day [the recipient

is] unable to work at any reasonable occupation solely because of an illness, injury or

disabling pregnancy-related condition.” (Doc. 21-2 at 1422 (emphasis added)). Though

Plaintiff admits the Plan does not define the term “work,” Plaintiff nonetheless argues that

the use of the term “work” excludes his “ability to earn money from investments,” which

he describes as “passive” in nature. (Doc. 22 at 20–22). Even if the Court were to agree

with Plaintiff’s interpretation, that is not a basis for the Court to hold that his interpretation

is controlling, as Defendant has the “right to adopt reasonable policies, procedures, rules,

and interpretations of this Policy to promote orderly and efficient administration.” (Doc.

21-2 at 1409). It provides no such right to Plaintiff. “[T]he arbitrary and capricious

standard of review would have little meaning if ambiguous language in an ERISA plan

conflict of interest tainted Aetna’s decision, other than the conflict itself. See Nunnelly v.

Life Ins. Co. of N. Am., No. 4:19-cv-0138, 2021 WL 2826430, at *20 (N.D. Ala. July 7,

2021) (“[Plaintiff] does not elaborate how [the administrator’s] conflict of interest tainted

its eligibility decision, and thus he fails to establish the conflict rendered [the

administrator’s] decision arbitrary and capricious.”), aff’d, No. 21-12537, 2022 WL

1640790 (11th Cir. May 24, 2022).

5 Plaintiff also argues that the Plan does not support the termination of his benefits

if the financial information requested by Aetna was sought to determine benefit offsets.

(See Doc. 22 at 23–25). However, “[t]he parties agree that Defendant terminated”

Plaintiff’s benefits pursuant to the policy requiring Plaintiff to submit proof he meets the

“LTD test of disability.” (Doc. 29 at 11). Thus, this argument will not be considered.

were construed against the [plan administrator].” White v. Coca-Cola Co., 542 F.3d 848,

857 (11th Cir. 2008) (quoting Cagle, 112 F.3d at 1519).

Furthermore, the two cases Plaintiff cites in support of his interpretation are not

persuasive. See Zanny v. Kellogg Co., No. 4:05-cv-74, 2006 WL 1851236, at *1 (W.D.

Mich. June 30, 2006) (noting how “the controlling plan language did not assign

discretionary authority” to the plan administrator and that the “plan review is to be

conducted de novo based upon the administrative record”); Cates v. Reliance Stand. Ins.

Co., No. 1:18-cv-543, 2019 WL 4751860, at *7 (N.D. Ga. July 2, 2019) (holding that “no

reasonable grounds existed for [the plan administrator’s] decision to demand copies of

[Plaintiff’s] tax returns and then reduce his benefits for failing to comply with that demand”

because the only policy provision “potentially relevant” to his income did not apply). In

this case, Plaintiff does not dispute that he had a continuing obligation to meet Aetna’s

Test of Disability under the terms of his Plan. (See Doc. 22 at 11). Plaintiff also does not

dispute that he refused to provide any of the documents specifically requested by

Defendant in order to make this determination. (See id. at 10). He simply requests that

the Court defer to his judgment and interpretations of the Plan over Aetna.

Where, as here, a plan requires a benefits recipient to demonstrate financial proof

of disability, and the recipient fails to provide the proof requested, courts have granted

summary judgement in favor of a plan administrator. See Coates v. Guardian Life Ins.

Co. of Am., No. 8:07-cv-291-T, 2009 WL 1043981, at *4 (M.D. Fla. Apr. 16, 2009). Plaintiff

fails to explain how this case is any different in light of Defendant’s reasonable

interpretation of the Plan, and thus fails to carry his burden of showing that Defendant’s

decision to terminate his LTD benefits was otherwise arbitrary.

IV. CONCLUSION

Therefore, itis ORDERED and ADJUDGED as follows:

1. Defendant’s Objection (Doc. 31) is SUSTAINED.

2. The Report and Recommendation (Doc. 29) is ADOPTED to the extent

consistent with this Order and REJECTED in all other respects.

3. Plaintiff's Motion for Summary Judgment (Doc. 22) is DENIED.

4. Defendant's Motion for Summary Judgment (Doc. 24) is GRANTED.

5. The Clerk is directed to enter judgment, in favor of Defendant and against

Plaintiff, providing that Plaintiff shall take nothing on his claims. Thereafter,

the Clerk is directed to terminate any pending motions and close this case.

DONE AND ORDERED in Orlando, Florida on March 28, 2025.

UNITED STATES T JUDG

Copies furnished to:

Counsel of Record

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