Sherry Laake v. Benefits Committee W&S Fin. Grp.

RECOMMENDED FOR PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 23a0107p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

┐

SHERRY LAAKE,

│

Plaintiff-Appellee, │

│ Nos. 21-4178/22-3182

v. >

│

│

BENEFITS COMMITTEE, WESTERN & SOUTHERN │

FINANCIAL GROUP COMPANY FLEXIBLE BENEFITS │

PLAN; WESTERN & SOUTHERN FINANCIAL GROUP │

FLEXIBLE BENEFITS PLAN, │

Defendants-Appellants. │

┘

Appeal from the United States District Court for the Southern District of Ohio at Cincinnati.

No. 1:17-cv-00611—William O. Bertelsman, District Judge.

Argued: October 27, 2022

Decided and Filed: May 19, 2023

Before: SILER, NALBANDIAN, and READLER, Circuit Judges.

_________________

COUNSEL

ARGUED: Wesley R. Abrams, VORYS, SATER, SEYMOUR AND PEASE LLP, Cincinnati,

Ohio, for Appellants. Claire W. Bushorn Danzl, THE BUSHORN FIRM, LLC, Cincinnati,

Ohio, for Appellee. ON BRIEF: Wesley R. Abrams, Eric W. Richardson, VORYS, SATER,

SEYMOUR AND PEASE LLP, Cincinnati, Ohio, for Appellants. Claire W. Bushorn Danzl,

THE BUSHORN FIRM, LLC, Cincinnati, Ohio, for Appellee.

SILER, J., delivered the opinion of the court in which NALBANDIAN, J., joined.

READLER, J. (pp. 20–22), delivered a separate opinion concurring in part and dissenting in part.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 2

_________________

OPINION

_________________

SILER, Circuit Judge. Western & Southern Financial Group Flexible Benefits Plan (the

“Plan”) and the Benefits Committee of the Plan (together referred to as “W&S”) appeal the

district court’s 2019 remand order and 2022 judgment in favor of Western & Southern Financial

Group’s former employee, Sherry Laake. While W&S asserts several challenges on appeal, the

central issue throughout the course of this litigation is whether Laake qualifies for long-term

disability (“LTD”) benefits extending beyond 24 months pursuant to the terms of the Plan—an

employee welfare benefit plan as defined under the Employee Retirement Income Security Act

of 1974 (“ERISA”). The district court determined that she does, and it imposed penalties against

W&S and awarded Laake attorney’s fees and costs. We AFFIRM.

I.

W&S challenges both the district court’s 2019 remand order and 2022 judgment in favor

of Laake. We address each in turn here. Because the parties are familiar with the factual and

procedural history of this case, we restate only those facts necessary to explain our decision.

II.

“We review de novo the decision of a district court granting judgment in an ERISA

disability action based on an administrative record.” DeLisle v. Sun Life Assurance Co. of Can.,

558 F.3d 440, 444 (6th Cir. 2009) (cleaned up) (citation omitted). The default standard of review

of a plan’s determination is de novo unless the plan grants discretionary authority to an

administrator or fiduciary to determine benefits eligibility under the plan. See Shelby Cnty.

Health Care Corp. v. Majestic Star Casino, LLC, 581 F.3d 355, 365 (6th Cir. 2009) (quoting

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). If the plan administrator is

vested with discretion to determine eligibility under the plan, then we review the plan

administrator’s denial of benefits under the arbitrary and capricious standard. Id.; see also

Moore v. Lafayette Life Ins. Co., 458 F.3d 416, 427 (6th Cir. 2006) (“This Court reviews a

district court’s judgment in an ERISA case de novo, applying the same standard of review to the

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 3

administrator’s action as required by the district court.” (emphasis omitted)). “Nonetheless, even

when the plan documents confer discretionary authority on the plan administrator, when the

benefits decision is made by a body other than the one authorized by the procedures set forth in a

benefits plan, federal courts review the benefits decision de novo.” Shelby Cnty. Health Care

Corp., 581 F.3d at 365 (cleaned up) (citation omitted).

Moreover, “if a benefit plan gives discretion to an administrator or fiduciary who is

operating under a conflict of interest, that conflict must be weighed as a factor in determining

whether there is an abuse of discretion.” Clemons v. Norton Healthcare Inc. Ret. Plan, 890 F.3d

254, 264 (6th Cir. 2018) (quoting Firestone, 489 U.S. at 115). The Supreme Court has held that

if a plan administrator both determines a claim for benefits and pays the benefits under the claim,

then this dual role creates a conflict of interest. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105,

112 (2008).

With respect to the district court’s 2019 remand order, both parties agree that the court

properly applied the arbitrary and capricious standard of review because Laake did not challenge

whether the benefits decision was made by an unauthorized body. We agree with the district

court that W&S’s application of the Mental Illness exclusion to Laake’s claim was arbitrary and

capricious. Because we also find that W&S provided Laake with improper notice when it denied

her claim for extended LTD benefits, the district court properly remanded Laake’s claim to W&S

for it to determine, in the first instance, whether she satisfied the Plan’s definition for these

benefits.1

A. W&S’s Application of the Mental Illness Exclusion

The arbitrary and capricious standard requires courts to undertake a “review of the

quality and quantity of the medical evidence and the opinions on both sides of the issues” and

uphold the plan administrator’s decision “if it is the result of a deliberate, principled reasoning

process and supported by substantial evidence.” DeLisle, 558 F.3d at 444 (internal quotation

1

The Plan defines LTD, extending beyond the first 24 months, as “the complete and continuous incapacity

of the Covered Employee, to engage in any and every occupation, business or employment, including self

employment, for wages, compensation or profit.”

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marks and citations omitted). The burden is on the plan, not the claimant, to prove that an

exclusion applies to deny benefits. McCartha v. Nat’l City Corp., 419 F.3d 437, 443 (6th Cir.

2005). The district court found that W&S misapplied the Plan’s Mental Illness exclusion based

on the medical evidence presented before it. We agree.

W&S failed to cite any provision of the Plan in its first denial of Laake’s claim for

extended LTD benefits; instead, it indicated that “[t]he Company’s Long Term Disability Plan

contains a provision that limits the LTD benefit to 24 months if the disabling condition is due to

any mental, nervous, psychiatric condition or chronic pain.” In its appeal letter upholding the

denial of these benefits, W&S cited Section 7.6(j) of the Plan and indicated that “payment of

long-term disability benefits is limited to 24 months if the disability is due to chronic pain

syndrome.” However, both denial letters indicated that Laake’s “disabling condition” was

“chronic pain,” rather than “Chronic Pain Syndrome.” W&S then proceeded in federal court

with the argument that Laake’s disabling condition fell under Schedule C’s list of exclusions

under the Plan, specifically “Chronic Pain Syndrome.”

However, as the district court explained, no medical doctor (up to that point) had ever

diagnosed Laake with “Chronic Pain Syndrome.”2 While there were copious notes, indications,

and diagnoses of “chronic pain,” no physician—including W&S’s own reviewing consultant and

rheumatologist, Dr. Sara Kramer—diagnosed Laake with the specific disability of “Chronic Pain

Syndrome.” Moreover, Dr. Kramer found that Laake was “impaired for a reason other than

pain,” and she concluded that Laake had “atypical inflammatory arthritis as supported by the

multiple rheumatologists she has seen” which “need[ed] to be considered in regards to long-term

disability.”

2

Dr. Emily Muntel—Laake’s rheumatologist who had been Laake’s physician for several years—did

diagnose Laake with Chronic Pain Syndrome on May 22, 2018. However, this was well after W&S concluded its

initial administrative procedures of Laake’s claim. Thus, this diagnosis was not part of the record W&S or the

district court considered and is therefore beyond the scope of our review. See McClain v. Eaton Corp. Disability

Plan, 740 F.3d 1059, 1064 (6th Cir. 2014) (“When reviewing a denial of benefits under ERISA, a court may

consider only the evidence available to the administrator at the time the final decision was made.”).

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 5

In addition, although the Plan fails to define “Chronic Pain Syndrome,” Schedule C of the

Plan—which lists conditions that are excluded from extended LTD benefits—explicitly

incorporates the Diagnostic and Statistical Manual of Mental Disorders, 4th Edition (“DSM-

IV”). While the DSM-IV does not specifically include “Chronic Pain Syndrome,” it does detail

the symptoms and features of “Pain Disorder.” It then qualifies “Pain Disorder” as “Chronic” or

“Acute” to specify the duration of the pain. As the district court observed, the DSM-IV

indicates, as to “Pain Disorder,” that “[p]sychological factors are judged to play a significant role

in the onset, severity, exacerbation, or maintenance of the pain.” The only subtype of “Pain

Disorder” that results from a general condition and in which psychological factors are considered

to play a minimal or no role “is not considered a mental disorder.” Moreover, W&S’s 2016

Summary Plan Description—which W&S maintains was the operative document at the time of

Laake’s claim—states that extended LTD benefits will not be paid if “the condition is due to any

mental, nervous, or psychiatric condition except irreversible psychosis or irreversible dementia.”

Consistent with these Plan-related documents, Schedule C of the Plan explicitly indicates

that it is “a list of Mental Illnesses.” Nevertheless, W&S focuses on the grouping of “Chronic

Pain Syndrome” with “Fibromyalgia” and “Chronic Fatigue Syndrome” at the end of that list to

establish that “Chronic Pain Syndrome” is not considered a mental illness under the Plan;

however, that is just three terms in a list that extends almost one and a half pages and includes

disabilities such as “Brief Psychotic Disorder,” “Cognitive Disorders,” and “Depressive

Disorders.” And importantly, W&S failed to ask Laake’s physicians in its questionnaires about

the Mental Illness exclusion or “Chronic Pain Syndrome,” and W&S did not explicitly ask any of

these doctors whether Laake suffered from any psychological disorders. Instead, in each of the

questionnaires, W&S merely asked each doctor whether Laake satisfied the actual definition for

extended LTD benefits. In response, none of her physicians indicated that there was any

psychological basis for her pain. Finally, W&S specifically asked its referring physician whether

Laake was disabled for a reason other than pain, and Dr. Kramer indicated there was: her

arthritis. At no point did Dr. Kramer indicate that there was any psychological basis for Laake’s

pain.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 6

Thus, without any explanation or supporting evidence, W&S acted arbitrarily and

capriciously in finding that Laake suffered from “Chronic Pain Syndrome,” thus disqualifying

her from receiving extended LTD benefits.

B. W&S’s Compliance with ERISA’s Notice Requirements

The district court further held that remand was warranted as W&S deprived Laake of

proper notice under ERISA in denying her claim. ERISA requires employee benefit plans to

“provide adequate notice in writing to any participant or beneficiary whose claim for benefits

under the plan has been denied, setting forth the specific reasons for such denial, written in a

manner calculated to be understood by the participant.” 29 U.S.C. § 1133(1). In addition, the

plan must “afford a reasonable opportunity to any participant whose claim for benefits has been

denied for a full and fair review by the appropriate named fiduciary of the decision denying the

claim.” Id. § 1133(2).

We have held that the “essential purpose” of ERISA’s notice requirements is twofold:

“(1) to notify the claimant of the specific reasons for a claim denial, and (2) to provide the

claimant an opportunity to have that decision reviewed by the fiduciary.” Wenner v. Sun Life

Assurance Co. of Can., 482 F.3d 878, 882 (6th Cir. 2007). To determine whether a plan satisfies

these requirements, we apply the “substantial compliance” test. Id. Under this test, all

communications between the claimant and the plan administrator are considered to determine the

sufficiency of the information provided. Id. “If the communications between the administrator

and participant as a whole fulfill the twin purposes of § 1133, the administrator’s decision will be

upheld even where the particular communication does not meet those requirements.” Id.

(internal quotation marks and citation omitted).

In this case, the district court did not err in finding that W&S provided insufficient notice.

A plan administrator fails to comply with ERISA’s notice requirements when it denies a

participant’s claim “for one reason, and then turn[s] around and terminat[es] [her] benefits for an

entirely different and theretofore unmentioned reason, without affording [her] the opportunity to

respond to the second, determinative reason for the termination.” Id. In this case, W&S relied

solely on the Mental Illness exclusion when it initially denied Laake’s claim for extended LTD

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 7

benefits. The administrative appeal letter upholding the denial of extended LTD benefits was the

first time Laake was informed that W&S was considering whether Laake could engage in any

form of employment, and even that letter is ambiguous as to whether that was the reason for the

denial, as W&S still relied on the Mental Illness exclusion to limit Laake’s LTD benefits. W&S

did not fully rely on the argument that Laake was disqualified from extended LTD benefits based

on the definition itself, rather than the exclusion, until it was before the district court—and even

still, it offered that reason “[i]n the alternative” from the Mental Illness exclusion. Because

W&S “provided notice that implied one basis for its [denial] of benefits, but then in its final

decision letter included an entirely new basis,” it failed to substantially comply with ERISA’s

notice requirements under § 1133. Id. (citing McCartha, 419 F.3d at 446).

C. Remand Was Proper

Finally, W&S contends that “[t]here was no reason for the district court to remand the

case,” and in any event, it was a “useless formality.” “We review the district court’s choice of

remedy in an ERISA action for abuse of discretion.” Javery v. Lucent Techs., Inc. Long Term

Disability Plan for Mgmt. or LBA Emps., 741 F.3d 686, 699 (6th Cir. 2014).

Here, W&S provided Laake with improper notice and arbitrarily relied on the Mental

Illness exclusion. Thus, we agree with the district court that the issue of whether Laake was

entitled to extended LTD benefits remained unresolved because it is not clear whether W&S

properly considered Laake’s ability to work based on the Plan’s extended LTD definition, rather

than its exclusion. See Helfman v. GE Grp. Life Assurance Co., 573 F.3d 383, 396 (6th Cir.

2009) (“Where the problem is with the integrity of the plan’s decision-making process, rather

than that a claimant was denied benefits to which he was clearly entitled, remand to the plan

administrator is the appropriate remedy.” (cleaned up) (citation omitted)); McCartha, 419 F.3d at

444 (“If the denial notice is not in substantial compliance with § 1133, reversal and remand to

the district court or to the plan administrator is ordinarily appropriate.”). Accordingly, the

district court did not abuse its discretion in remanding Laake’s claim to W&S to determine,

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 8

in the first instance and via proper procedures, whether Laake satisfied the Plan’s definition for

extended LTD benefits.3

III.

Following the district court’s remand, W&S again denied Laake’s claim for extended

LTD benefits. Laake challenged this renewed determination before the district court, and in

March 2022, the court entered judgment in Laake’s favor, finding that Laake satisfied the Plan’s

definition for extended LTD benefits. The court further imposed statutory penalties against

W&S and awarded Laake attorney’s fees and costs. W&S challenges each of these

determinations.

A. Standard of Review

In the second action before the district court, Laake argued that the Benefits Department,

rather than the Benefits Committee, improperly adjudicated her claim. Because the Benefits

Committee, not the Department, is granted discretionary authority under the Plan, Laake argued

that W&S’s second denial of her claim should be reviewed under the de novo, rather than the

arbitrary and capricious, standard. The court agreed, finding that by W&S’s own admissions

through discovery, only two members of the Benefits Committee were present during the

Benefits Department’s meeting to decide Laake’s claim, and the remaining individuals who

reviewed her claim were members of the Benefits Department. And such representation by two

members of the Benefits Committee was insufficient to form the quorum necessary—that is, a

majority of the Benefits Committee’s members—to transact business. Furthermore, the court

found that the Plan’s terms permitting the Benefits Department to “assist” the Committee did not

3

Because we agree with the district court that W&S’s application of the Mental Illness exclusion was

arbitrary and capricious and W&S provided Laake with insufficient notice in denying her claim for extended LTD

benefits, we need not determine whether the district court erred in concluding that W&S should have made two

separate LTD determinations. The court found that the former two determinations “also” warranted remand, and

because W&S would have had to determine on remand in the first instance whether Laake was disabled without

considering the Mental Illness exclusion, we find it unnecessary to reach the latter determination. Cf. Elliott v.

Metro. Life Ins. Co., 473 F.3d 613, 622 (6th Cir. 2006) (“Thus, we believe that a remand to the district court with

instructions to remand to [the administrator] for a full and fair inquiry is the proper remedy here. . . . Such a remedy

will allow for a proper determination of whether, in the first instance, [the claimant] is entitled to long-term

disability benefits.”).

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constitute an explicit delegation of voting authority from the Benefits Committee to the Benefits

Department to determine Laake’s claim.

We “review[] a district court’s determination regarding the proper standard to apply in its

review of a plan administrator’s decision de novo.” Shelby Cnty. Health Care Corp., 581 F.3d at

364 (cleaned up) (citation omitted). “Factual findings inherent in deciding an ERISA claim are

reviewed for clear error.” Id. (citation omitted).

Here, the parties do not dispute that the Plan confers on the Benefits Committee the

discretionary authority to determine eligibility for benefits. In addition, the district court did not

clearly err in finding that it was the Benefits Department, not the Benefits Committee, that

determined Laake’s claim.4 See id. As established during discovery, the Benefits Department

and Benefits Committee were largely comprised of different individuals, and neither the Benefits

Department nor the Benefits Appeals Committee consisted of enough Benefits Committee

members to constitute the quorum required for the Benefits Committee to transact business when

deciding Laake’s claim on remand.

However, W&S contends that the Plan confers authority on the Benefits Committee to

appoint the Benefits Department to resolve benefits claims. We “require that the plan’s grant of

discretionary authority to the administrator be ‘express.’” See Yeager v. Reliance Standard Life

Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996) (citation omitted). The Plan clearly grants the Benefits

Committee, as opposed to the Benefits Department, the authority to administer the Plan. And

while the Benefits Committee may appoint the Benefits Department “to assist in the

administration of the Plan,” the Department’s ability to “assist” aligns more closely with the

performance of a “ministerial function[],” which does not qualify as a “fiduciary function”

4

W&S does not contend that regardless of whether the Benefits Department improperly made the initial

denial determination, the Benefits Appeals Committee made the ultimate decision, and thus, this court should

consider W&S’s final decision to have been made by the Benefits Committee, as the Benefits Appeals Committee is

allegedly a “subset of the Benefits Committee.” Moreover, based on W&S’s admissions, only three of the six

Benefits Committee members reviewed and decided Laake’s administrative appeal on remand. Again, such

representation failed to satisfy the quorum necessary for the Benefits Committee to transact business. Because

W&S merely maintains that the Benefits Department had authority to determine Laake’s claims, whether by virtue

of being an agent of W&S or granted discretionary authority from the Benefits Committee pursuant to the Plan, we

address just those arguments here.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 10

necessary for an explicit grant of discretionary authority. See Walker v. Fed. Express Corp.,

492 F. App’x 559, 565 (6th Cir. 2012); Assist, Merriam-Webster’s Unabridged Dictionary (“to

give support or aid”). Thus, we agree with the district court that the Plan does not permit the

Benefits Committee to delegate its authority to resolve claims to the Benefits Department.

W&S alternatively asserts, for the first time on appeal, that delegation from the Benefits

Committee to the Benefits Department was not “required because everyone involved was an

agent of W&S,” relying on our decisions in Fenwick v. Hartford Life & Accident Insurance Co.,

841 F. App’x 847 (6th Cir. 2021), and Davis v. Hartford Life & Accident Insurance Co., 980

F.3d 541 (6th Cir. 2020). By failing to raise this argument before the district court, such that

Laake could adequately respond and the district court could consider this issue in the first

instance, W&S has waived that argument here. See Est. of Quirk v. Comm’r, 928 F.2d 751, 757–

58 (6th Cir. 1991).

Even if we were to consider the merits of this argument, W&S’s reliance on Fenwick and

Davis is misplaced. In both cases, the claimants argued that another entity in the corporate

family “impermissibly made the [benefits] decisions” rather than the plan administrator.

Fenwick, 841 F. App’x at 852; see Davis, 980 F.3d at 545–47. We concluded otherwise in both

cases; while the employees of the administrator were paid by the other entity for administrative

reasons, they reviewed only the administrator’s policies, displayed the same logo, and

consistently signed paperwork using the administrator’s name. Fenwick, 841 F. App’x at 852;

Davis, 980 F.3d at 545–47.

Conversely, as W&S conceded at oral argument, the Benefits Department and Benefits

Committee are two separate arms of W&S, and the Plan clearly recognizes them as such,

granting them each separate and distinct functions under the Plan. By agreeing with W&S that

they are functionally the same because they operate within the same corporate family, we would

be disregarding the explicit terms of the Plan. See Sanford v. Harvard Indus., Inc., 262 F.3d 590,

595–97 (6th Cir. 2001) (holding that the district court did not err in applying de novo review

based on its finding that it was the company’s board of administration that was granted

discretionary authority under the plan, but the company—rather than the board—rescinded the

claimant’s benefits). Moreover, unlike in Fenwick and Davis, in this case, W&S’s denial letter

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 11

repeatedly indicated that it was the Benefits Department that reviewed and determined Laake’s

claim, not the Benefits Committee. The letter also does not indicate that the determination was

made on behalf of the Benefits Committee. Accordingly, we reject W&S’s assertion that

delegation from the Benefits Committee to the Benefits Department was not required.

Having found that the Plan grants sole authority to the Benefits Committee to determine

benefits claims, and the Benefits Department instead of the Benefits Committee adjudicated

Laake’s claim, the district court did not err in reviewing W&S’s second denial of Laake’s claim

de novo. Therefore, we too review that denial determination de novo. See Moore, 458 F.3d at

427.

B. Proof of Laake’s Claim

Pursuant to the Plan’s terms, W&S may withhold payment of LTD benefits if the

employee “fails or refuses to furnish proof of Long Term Disability.” However, the Plan fails to

define the meaning of “proof.” The district court rejected W&S’s apparent contention that only

objective evidence was allowed to be considered under the Plan, and it considered both

subjective and objective evidence. Our precedent supports this determination.

In support of its argument that the district court improperly considered Laake’s subjective

complaints of pain, W&S cites Hunt v. Metropolitan Life Insurance Co., where we held that

“requiring a claimant to provide objective medical evidence of disability is not irrational or

unreasonable, even when such a requirement does not appear among the plan terms.” 587 F.

App’x 860, 862 (6th Cir. 2014) (cleaned up) (citation omitted). However, as the district court

maintained, the issue is not whether Laake provided any objective evidence; the issue is whether

her subjective complaints of pain could be considered, in addition to the objective evidence

provided.

Importantly, the Plan does not require the claimant to produce only objective evidence,

nor does it foreclose the consideration of subjective evidence. See James v. Liberty Life

Assurance Co. of Bos., 582 F. App’x 581, 589 (6th Cir 2014). Moreover, in Helfman, we held

that refusing to consider subjective complaints is inappropriate when the terms of the policy are

themselves subjective. 573 F.3d at 395. In that case, “the terms of the policy require[d] the

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 12

administrator to determine whether a particular employee is able to perform the material and

substantial duties of his occupation.” Id. We found that “[t]he fact that stress is highly

subjective does not, under the terms of the policy, render it irrelevant to a determination of

disability.” Id. A similar question is presented here: whether Laake was able “to engage in any

and every occupation, business or employment,” and whether Laake’s subjective complaints of

pain should be considered. See also James, 582 F. App’x at 589 (“Furthermore, some aspects of

[the claimant’s] comorbid diagnosis are not capable of confirmation through objective indicators.

Complaints of pain necessarily are subjective as they are specific to the patient and are reported

by the patient.”). And the fact that Laake’s complaints of pain are subjective do not render them

irrelevant as to whether she was disabled. See Glenn v. MetLife, 461 F.3d 660, 673 (6th Cir.

2006) (pointing to the absence of language in the plan indicating that “self-reported or

‘subjective’ factors should be accorded less significance than other indicators”), aff’d on other

grounds, 554 U.S. 105 (2008).

Accordingly, we agree with the district court that both the subjective and objective

evidence of Laake’s condition may be considered.

D. Laake’s Qualification for Extended LTD Benefits

Finally, W&S faults the district court for “cherry-picking” through the medical records

and concluding that Laake qualified for extended LTD benefits under the terms of the Plan.

Ultimately, as the district court concluded, the outcome boils down to the findings of Laake’s

physicians on one side and those of W&S’s referring physicians on the other. Under de novo

review, we agree with the district court that Laake qualified for extended LTD benefits.5

5

W&S further faults the district court for limiting its review of the record and excluding evidence

submitted after the court reopened the matter in June 2020, specifically the opinion letter by Dr. Vladimir Liarski—

W&S’s reviewing consultant on the administrative appeal following remand—and W&S’s second administrative

appeal decision. The district court limited its review of the record in this manner based on its conclusion that

W&S’s November 14, 2019 denial letter—which was the last administrative decision before Laake moved to reopen

her case—was the “final” administrative decision for the court to consider.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 13

In response to each of W&S’s questionnaires (which appear to have only been distributed

during the first administrative decision), Dr. Muntel determined in 2016 that Laake was unable to

work and satisfied the Plan’s definition of LTD. Dr. Muntel relayed that Laake hopefully would

“be able to return to at least sedentary work in the next few years.” At that time, Dr. Muntel

specifically diagnosed Laake with “undifferentiated inflammatory arthritis (most consistent with

seronegative rheumatoid arthritis), significant osteoporosis, chronic pain, chronic fatigue,

chronic recurrent pulmonary/sinus symptoms . . . , recurrent abdominal pain/vomiting,

IgG subclass deficiency,” with a history of aseptic meningitis and blood clots.

Dr. Angela Stillwagon—Laake’s neurologist—also determined in 2016 that Laake

satisfied the Plan’s definition for LTD, though she determined Laake did “have the capacity to

return to work at a sedentary position once her work up has been complete” and was anticipated

to return to work in some capacity within three to four months. She diagnosed Laake with

“[s]eronegative inflammatory arthritis, myalgias, chronic steroid use, osteoporosis,” as well as

back, hip, and groin pain. Dr. Jonathan Bernstein—Laake’s allergist—similarly found in 2016

that Laake satisfied the LTD definition for at least the initial 24-month period and could not

“work due to her severe myofascial pain syndrome and chronic inflammatory arthritis which

severely limits her physical activities in and out of the workplace.” He further indicated that

“[d]epending on her response to treatment, it is possible she could return to work with restricted

activities but this would have to be reassessed in 6 months to determine this possibility.”

Notably, Dr. Muntel expressed to Dr. Kramer in 2019 that Laake “would not be able to

hold down a job since she has sinus infections every couple of months causing discontinuation of

her medications and exacerbation of the arthritis; especially her ankles.” Further, Laake “would

not be able to work for several weeks at a time until her arthritis stabilized after restarting anti-

The district court did not abuse its discretion by finding that Laake exhausted her administrative remedies

because W&S sat on its hands for 270 days in violation of ERISA’s requirement to provide an “adverse benefit

determination” within “45 days after receipt of the claim,” thereby permitting the court to reopen the matter before

W&S completed its administrative appeals process. 29 C.F.R. § 2560.503-1(f)(3), (l)(2)(i); see Wallace v. Oakwood

Healthcare, Inc., 954 F.3d 879, 887 (6th Cir. 2020); Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 418–19 (6th

Cir. 1998); Winchell v. Gen. Motors Corp., 774 F.2d 1165 (6th Cir. 1985) (per curiam) (table). However, we need

not decide whether the district court’s decision to limit its review of the record was erroneous, as even considering

all the evidence, we conclude that Laake satisfied the extended LTD definition at issue.

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arthritis medication.” Moreover, while Laake had a successful hip replacement surgery that

reduced pain in her hip, “her major problem has always been in her ankles.”

Both Dr. Muntel and Dr. Sandra Eisele—Laake’s orthopedic physician—submitted

surveys entitled “Arthritis Medical Source Statement” in 2019, and they both indicated that

Laake’s symptoms had lasted, or would continue to last, at least 12 months, Laake would

sometimes need to take unscheduled breaks during a workday, her legs would have to be

elevated during prolonged periods of sitting, and she would likely have to be absent from work

more than four days per month due to her impairments or treatment if she was trying to work full

time. While Dr. Eisele indicated that Laake was capable of low stress work, Dr. Muntel found

that Laake was unable to tolerate such work. Both doctors indicated that Laake’s symptoms

would be so severe that they would impede her attention and concentration for at least 25% of a

typical workday.

As to Laake’s upper body limitations, while Dr. Kramer found that Laake was not

restricted in the use of her hands, Laake herself reported several issues with pain in her hands,

wrists, and shoulder throughout the period at issue. Dr. Muntel also reported pain and tenderness

in Laake’s fingers, shoulders, and wrists. Moreover, Dr. Muntel diagnosed Laake with

“subdeltoid bursitis” of the right shoulder in 2017. Dr. Kramer also recognized that Laake

“required steroid injections to [her] ankles, elbows and hips.” In addition, Dr. Kramer concluded

that Laake could lift and carry only negligible amounts, could not climb stairs or ladders, and is

limited in standing and walking to 15 minutes at a time for up to one hour over an eight-hour

workday.

W&S concluded that the objective medical evidence established that Laake could

perform at least sedentary work, and it contends here that even Laake’s treating physicians

concluded similarly. The term “sedentary work” is undefined in the Plan and W&S’s denial

letters. Accordingly, the district court looked to Department of Labor (“DOL”) guidance, as

adopted by the regulations set forth by the Social Security Administration, for the definition of

“sedentary work.” We have similarly taken judicial notice of the DOL definition of “sedentary

work” in an ERISA action. See Evans v. Metro. Life Ins. Co., 190 F. App’x 429, 436 n.7 (6th

Cir. 2006). While W&S objects to the district court’s reliance on these regulations, its own

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 15

expert—Dr. Liarski—cited “DOL guidelines” when determining that Laake’s job at W&S was

“consistent with a sedentary-level occupation.”

Under these regulations, “[a]lthough a sedentary job is defined as one which involves

sitting, a certain amount of walking and standing is often necessary in carrying out job duties.

Jobs are sedentary if walking and standing are required occasionally and other sedentary criteria

are met.” 20 C.F.R. § 404.1567(a). We have acknowledged that this may mean standing or

walking for two hours or up to one-third of a workday. See Creech v. UNUM Life Ins. Co. of N.

Am., 162 F. App’x 445, 451 n.10 (6th Cir. 2006); Wages v. Sec’y of Health and Hum. Servs., 755

F.2d 495, 498 (6th Cir. 1985). W&S fails to offer a competing definition. And while Dr. Liarski

concluded summarily that Laake could stand and walk occasionally, Dr. Kramer found that

Laake was limited to standing and walking for up to only one hour during an eight-hour

workday.

We are also mindful of the district court’s finding that W&S engaged in particularly

“egregious conduct throughout the course of this litigation” and its “potential” conflict of interest

in this matter, which may have impacted Laake’s benefits determination. See Gilewski v.

Provident Life & Accident Ins. Co., 683 F. App’x 399, 408–09 (6th Cir. 2017) (addressing the

defendant’s conflict of interest on de novo review); cf. Glenn, 554 U.S. at 112. Ultimately, given

the weight of the evidence from Laake’s treating physicians—not just those who reviewed her

file, see Javery, 741 F.3d at 701–02—we affirm the district court’s finding that Laake satisfied

the Plan’s definition for extended LTD benefits and its award of back pay and benefits.

IV.

W&S also challenges the district court’s imposition of statutory penalties under

29 U.S.C. § 1132(c). We review a district court’s award of statutory penalties under ERISA for

an abuse of discretion. Bartling v. Fruehauf Corp., 29 F.3d 1062, 1068 (6th Cir. 1994). We

review “[a]ny accompanying findings of fact under the clear-error standard.” Cultrona v.

Nationwide Life Ins. Co., 748 F.3d 698, 706 (6th Cir. 2014).

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 16

W&S first claims that Laake failed to timely move for statutory penalties. The district

court found that Laake’s motion for summary judgment, which included her request for statutory

penalties, was untimely. However, the court considered the claim for statutory penalties

pursuant to Rule 52(a) of the Federal Rules of Civil Procedure because W&S moved for

judgment in its favor on the statutory penalties claim. On appeal, W&S provides no legal

rationale for reversing the district court on this basis. Accordingly, we turn to the merits of the

court’s decision to impose penalties.

“ERISA provides that retirement plan documents must be provided to beneficiaries on

their request.” Gatlin v. Nat’l Healthcare Corp., 16 F. App’x 283, 289 (6th Cir. 2001) (citing 29

U.S.C. § 1024(b)(4)). If a plan administrator fails to provide the material within 30 days of the

request, the court may in its discretion impose a penalty of up to $110 per day from the date of

such failure. 29 U.S.C. § 1132(c)(1); 29 C.F.R. § 2575.502c-1. Here, the district court

determined that Laake properly submitted her request for documents on November 18, 2019,

when Laake’s counsel wrote a letter and made “a formal request for all documents ‘relevant’ to

W&S’s denial of . . . Laake’s claims.” That letter then set forth the definition of “relevant” under

ERISA’s regulations and specified the scope of what Laake considered to be a “proper

response.” While the court found that Laake was “not entitled to the administrative record she

[sought],” her request “clearly show[ed] that she sought documentation that showed the

‘currently operative, governing Plan documents,’ all of which are ‘instruments under which the

plan is established or operated’ per § 1024(b)(4).” Despite W&S’s response on November 22,

2019, indicating that it would provide Laake with the requested documents, the court found that

W&S did not provide the Plan documentation, specifically the Plan, Summary Plan Documents,

and the Trust Agreement, to Laake until February 6, 2020, and September 10, 2020, well outside

the statutory 30 days for compliance, and it imposed the maximum penalty of $110 per day for

the delay.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 17

W&S failed to respond to Laake with any of the requested documents until February 6,

2020, even though she sent her request on November 18, 2019. Laake’s counsel then raised the

issue that documents appeared to be missing, and on March 18, 2020, W&S indicated it would

be providing Laake and her counsel with additional materials. However, the court found that

W&S did not fully produce the requested information until September 10, 2020, a date W&S

does not dispute. Instead, W&S argues that it lacked “clear notice” of the documents Laake

sought, and that, in any event, the delay was “inadvertent” and Laake did not suffer prejudice.

The district court largely focused on W&S’s failure to provide the 2019 Summary Plan

Description and the Trust Agreement. W&S maintains that it was not on “clear notice” that

Laake’s request for all “relevant” documents included these materials, asserting that the 2019

Summary Plan Description is irrelevant as it was not controlling for the determination of Laake’s

claim and the Trust Agreement does not discuss LTD claims. See Cultrona, 748 F.3d at 707

(“[T]he key question under the clear-notice standard is whether the plan administrator knew or

should have known which documents were being requested.”). However, as an initial matter, the

district court penalized W&S for its initial delay in providing “the Plan and Summary Plan

Documents,” not just the 2019 Summary Plan Description. And W&S admitted that these were

the documents that it found to be “relevant to . . . Laake’s claim.” Cf. id. (“We further note that a

plan administrator is free to place the burden of clarity squarely on the requester simply by

replying to an ambiguous demand for § 1024(b)(4) documents with the administrator’s own

request for greater specificity.”). Arguing before us now that these documents are irrelevant

amounts merely to a post-litigation rationalization, as these are the exact documents W&S found

to be relevant—and sufficiently on notice to provide—in the first instance.

Moreover, W&S maintained that it would be providing Laake with additional documents

but failed to provide Laake with the Trust Agreement until September 10, 2020. Despite W&S’s

assertion that the Trust Agreement is not relevant to LTD claims, the Trust Agreement and the

Plan explicitly cross-reference each other, thereby incorporating the Trust Agreement as part of

the Plan. Laake also asserts that the Trust Agreement raises an additional question of whether

another entity is authorized to decide benefits claims. Thus, given the ties between the Trust

Agreement and the Plan, W&S “knew or should have known” that it was on notice to provide the

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 18

Trust Agreement. See id. Accordingly, the district court did not abuse its discretion by

determining that W&S failed to timely provide the Plan, Summary Plan Documents, and Trust

Agreement.6

The district court also found that W&S’s delays and lack of production prejudiced Laake,

and it took note of W&S’s “severe negligence in providing” the requested documentation. See

Ciaramitaro v. Unum Life Ins. Co. of Am., 628 F. App’x 410, 417–18 (6th Cir. 2015). While

W&S takes issue with this finding, district courts may consider bad faith and prejudice in

imposing penalties under ERISA, and we find no error in the district court’s consideration of

these factors—in Laake’s favor—here. See id.

Accordingly, the district court did not abuse its discretion in imposing statutory penalties

against W&S.

V.

Finally, the district court awarded Laake attorney’s fees and costs. ERISA provides that

a district court may award either party reasonable attorney’s fees and costs. 29 U.S.C.

§ 1132(g)(1). We review a district court’s award of attorney’s fees in an ERISA matter for an

abuse of discretion, Shelby Cnty. Health Care Corp., 581 F.3d at 376, and we consider several

factors to determine whether a district court abused its discretion in awarding such fees, Hardt v.

Reliance Standard Life Ins. Co., 560 U.S. 242, 245 (2010); Shelby Cnty. Health Care Corp.,

581 F.3d at 376; see also Wallace, 954 F.3d at 899. W&S merely challenges the district court’s

conclusion that the factors weigh in Laake’s favor. Based on our review of the record and given

the district court’s careful application of each pertinent factor, the court did not abuse its

6

To be clear, requests for all “relevant” documents may not in every case put an administrator or insurer on

“clear notice” to provide the documents required under § 1024(b)(4). However, based on the circumstances in this

case, the district court did not err in finding that W&S was on “clear notice” to provide the Plan, Summary Plan

Documents, and the Trust Agreement, which were the sole bases for the imposition of the statutory penalties. See

Cultrona, 748 F.3d at 706–08 (finding that “the district court did not abuse its discretion in concluding that the

[administrator] knew or should have known” that the document at issue was covered by the request, despite

recognizing that the claimant’s “broadly worded document request” “would not pass the clear-notice test for most of

the documents identified in . . . § 1024(b)(4)”).

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 19

discretion in awarding Laake attorney’s fees and costs. See Cent. States, Se. & Sw. Areas Health

& Welfare Fund v. First Agency, Inc., 756 F.3d 954, 962 (6th Cir. 2014).

AFFIRMED.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 20

____________________________________

CONCURRENCE AND DISSENT

____________________________________

CHAD A. READLER, Circuit Judge, concurring in part and dissenting in part. As plan

administrator, Western & Southern deserved deference in determining whether Sherry Laake was

entitled to a benefits award. The district court should have applied arbitrary and capricious

review, and, on that basis, should have affirmed W&S’s second decision denying those benefits.

On this point, my view differs from that of the majority opinion. I concur, however, as to its

resolution of the statutory penalties and attorneys’ fees.

A. All agree on the general framework under which we examine an ERISA plan

administrator’s decision. The default standard is de novo review. Davis v. Hartford Life &

Accident Ins. Co., 980 F.3d 541, 545 (6th Cir. 2020). We shift to an “extremely deferential”

arbitrary and capricious standard when the plan grants the administrator discretion to determine

benefit eligibility. Id. at 545, 547 (quoting McClain v. Eaton Corp. Disability Plan, 740 F.3d

1059, 1064 (6th Cir. 2014)). But we switch back to de novo review if someone “other than the

authorized administrator” actually makes the benefits decision. Id. at 545 (citing Shelby Cnty.

Health Care Corp. v. Majestic Star Casino, 581 F.3d 355, 365 (6th Cir. 2009)).

So which standard applies here? To my mind, both facts and law point to deference.

Beginning with the facts, we are again of one mind. The plan vested discretion to determine

coverage in a Benefits Committee, including the ability to solicit “assist[ance]” from a separate

Benefits Department and “any individuals” with its administrative responsibilities. Twelve

individuals met to decide Laake’s claim. Two were members of the Benefits Committee. The

rest worked for the Benefits Department. In short, all who participated in the benefits

determination were either members of the Benefits Committee or individuals authorized to assist

that Committee in making benefits determinations.

Turning, then, to the law, our precedent commands that we afford deference to W&S’s

determination. Two decisions confirm as much. Davis, 980 F.3d at 545–47; Fenwick v.

Hartford Life & Accident Ins. Co., 841 F. App’x 847, 852 (6th Cir. 2021). Davis and Fenwick

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 21

both involved the same insurer, Hartford Life, and its sister company, Hartford Fire Insurance

Company, under a single corporate umbrella. Davis, 980 F.3d at 546; Fenwick, 841 F. App’x at

852. In the benefits plan at issue, Hartford Life was the designated benefits administrator. The

employees making benefits determinations, however, were paid and employed by Hartford Fire,

not Hartford Life. Davis, 980 F.3d at 546; Fenwick, 841 F. App’x at 852. That arrangement, we

agreed, did not alter Hartford Life’s status as the benefits decisionmaker for ERISA purposes.

Davis, 980 F.3d at 546; Fenwick, 841 F. App’x at 852. Rather, as a matter of law, an authorized

administrator continues to exercise its authority under a plan even when the actual decisionmaker

acting on the administrator’s behalf is employed by another entity within the same corporate

family. Davis, 980 F.3d at 547 (citation omitted); Fenwick, 841 F. App’x at 852. Like any other

business, after all, insurers operate through their employees and agents. Davis, 980 F.3d at 546.

So too for W&S. Every employee who reviewed Laake’s claim was employed by the

same corporate family—indeed, the same company. That alone should be dispositive. Add in

the fact that, unlike in Davis and Fenwick, the plan itself expressly provided for the participation

of the related entity, here the Benefits Department, and today’s outcome is straightforward: we

apply arbitrary and capricious review to the benefits denial at issue.

The majority opinion sees things differently. To begin, it says that W&S waived this

argument. But W&S’s response to Laake’s motion for judgment on the administrative record

addressed at length whether the authorized administrator decided her claim, preserving the issue

for appeal. See Chelf v. Prudential Ins. Co. of Am., 31 F.4th 459, 468 (6th Cir. 2022).

Next, the majority opinion attempts to distinguish Davis and Fenwick. True, both Davis

and Fenwick arose out of a factual setting where the Hartford Fire employees’ actions were

seemingly identical to work done by Hartford Life itself. Davis, 980 F.3d at 546; Fenwick, 841

F. App’x at 852. And here, I acknowledge, the Benefits Department employees were not

Benefits Committee members. That said, the legal principle still abides: when an employee

within the same corporate family (here, in fact, the same company) acts as the agent of the plan

administrator to which discretionary authority is conferred, the ERISA standard of review

remains the same.

Nos. 21-4178/22-3182 Laake v. Benefits Committee, W&S Fin. Grp., et al. Page 22

Sanford v. Harvard Industries does not say otherwise. 262 F.3d 590 (6th Cir. 2001). The

Sanford plan, part of a collective bargaining agreement between a company and a union, vested

an independent six-member board with discretionary authority to grant or deny benefits. Id. at

592, 595. Half of the board’s members were appointed by the employer, the other half by the

union. Id. at 595. So when the employer overturned the board’s decision granting early

retirement benefits to Sanford, id. at 593, we held that the employer’s determination was

undeserving of deference, as the employer failed to comply with the plan’s written procedures.

Id. at 596–97. But that was so because the six-member board alone (not the employer) was

entrusted with benefits decisions. Laake’s plan, on the other hand, contemplated participation by

a broader audience in benefits determinations. It instructs that Benefits Department members

and “any [other] individuals” could “assist” with the Benefits Committee’s work. Nor, unlike in

Davis, Fenwick, and here, were all individuals charged with making benefits determinations

within the administrator’s corporate umbrella. 980 F.3d at 547. In Sanford, remember, the

administrator—a mixed-member board—was not the company itself. Sanford’s collective

bargaining agreement, in other words, ensured some protection for him in benefits decisions

through the presence of union representatives. But as to W&S, there is no practical reason to

distinguish between two entities within the same company.

B. Viewed through the deferential lens of arbitrary and capricious review, Laake’s denial

of benefits should have been affirmed by the district court. Under that benchmark, a plan

administrator’s decision stands if it is the “result of a deliberate, principled reasoning process”

and is “supported by substantial evidence.” Autran v. Procter & Gamble Health & Long-Term

Disability Benefit Plan, 27 F.4th 405, 411 (6th Cir. 2022) (citation omitted). W&S grounded its

second denial of benefits in medical opinions and diagnostic evidence suggesting that Laake was

not totally disabled. No procedural defects in that process have been identified. See id. at 412

(listing relevant criteria). And a rational person would find the evidence “adequate” to justify

denial. See id. (quoting Davis, 980 F.3d at 549). Laake, in sum, was ineligible for benefits, as

she did not meet the disability threshold.