# Davis v. United Of Omaha Life Insurance Company

> District Court, N.D. Alabama · October 17, 2023

URL: https://www.frixlaw.com/law-library/cases/9991872

## Case

- **Court:** District Court, N.D. Alabama
- **Decided:** October 17, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
WESTERN DIVISION

LAURA DAVIS, )
)
Plaintiff, )
)
v. ) Case No. 6:23-cv-57-ACA
)
UNITED OF OMAHA LIFE )
INSURANCE COMPANY, )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Laura Davis alleges that United of Omaha wrongfully concluded that
she was no longer entitled to disability benefits. Ms. Davis and United of Omaha
each move for partial summary judgment as to the standard of review this court must
use in evaluating United of Omaha’s decision. (Docs. 17, 19). Because the Eleventh
Circuit provides a six-part framework to analyze benefit-denial claims for plans
subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) and
neither party has persuaded the court that it is proper to deviate from that framework
in this case, the court WILL DENY both motions and employ the standards and
legal framework required by controlling precedent.
I. BACKGROUND

Ms. Davis worked as a nurse for DCH Healthcare Authority. (Doc. 1 ¶¶ 26–
28; see also doc. 18-1 at 114). DCH Healthcare Authority provided employees with
group welfare benefits that included a disabilities benefits plan. (See doc. 1 ¶¶ 14–
15, 17–18; doc. 7 ¶¶ 14–15, 17–18; see also doc. 19-1). Ms. Davis submitted a claim

for benefits under the plan and received monthly benefits for two years. (Doc. 1 ¶¶
35–37; doc. 7 ¶¶ 35–37; see also doc. 18-1 at 114).
After the two-year period expired, United of Omaha conducted a transferable

skills assessment, which considered whether Ms. Davis remained eligible for
benefits under the plan. (Doc. 18-1 at 114). United of Omaha concluded that Ms.
Davis was no longer eligible for benefits under the plan and notified her of that
determination. (Id. at 114–15; see also doc. 1 ¶¶ 37; doc. 7 ¶¶ 37).

Ms. Davis appealed. (Doc. 18-1 at 115). United of Omaha referred her claim
to a panel of board-certified physician consultants. (Id.). The panel included Dr.
Sergey Neckrysh, who is board certified in neurological surgery. (See id. at 21). Dr.

Neckrysh submitted to United of Omaha a report that supported the finding that Ms.
Davis was no longer eligible for benefits under the plan. (Id. at 9).
Dr. Neckrysh’s report discussed a “Functional Capacity Evaluation by Steve
Allison, PT – 8/3/22.” (Doc. 18-1 at 21 ¶ 19). The report further summarized the

treatment Ms. Davis received from each of her medical providers on various dates
of care. (See, e.g., id. at 26–40). The summary of Ms. Davis’s functional capacity
evaluation appeared under the following title: “August 3, 2022 – Bledsoe

Occupational Therapy, Steve Allison, PT – Functional Capacity Evaluation.” (Id. at
36). The report also discusses attempts to contact a “David Bledsoe, Jr.,” who is not
a medical provider otherwise discussed in Dr. Neckrysh’s report. (Compare id. at

37, with doc. 18-1 at 21 (listing Ms. Davis’s medical providers)).
Ms. Davis responded to Dr. Neckrysh’s report. (Doc. 18-1 at 12–16). Ms.
Davis first observed that Dr. Neckrysh discussed an assessment conducted by a

“Steve Allison, PT” when, in fact, David Bledsoe performed this evaluation. (Id. at
13) (quotation marks omitted). Ms. Davis sought confirmation that Dr. Neckrysh
received the medical records and reports from Mr. Bledsoe. (Id. at 14). Ms. Davis
also responded substantively to Dr. Neckrysh’s assessment. (See id. at 12–13, 15).

The next day, United of Omaha sent Ms. Davis an amended report from Dr.
Neckrysh to correct the misidentifications she identified. (Doc. 18-1 at 83–109;
compare id. at 21, 36, 38, with id. at 87, 102, 104). Other than correcting this

misidentification, the amended report and the original report are identical. (Compare
id. at 21–43, with Doc. 18-1 at 87–109). United of Omaha did not give Ms. Davis an
opportunity to respond to the amended report. (See id. at 83). The next day, United
of Omaha issued its final decision that Ms. Davis was no longer eligible for disability

benefits under the plan. (Id. at 111–21).
Ms. Davis timely filed this complaint against United of Omaha. (Doc. 1).
After the court entered a scheduling order (doc. 11), Ms. Davis moved to modify the

court’s scheduling order to first resolve the standard of review used in this case, (doc.
12). United of Omaha agreed “with the premise in [Ms. Davis’s] motion that the first
issue the [p]arties need[ed] the [c]ourt to decide is the applicable standard of review”

yet disagreed with Ms. Davis’s proposed process. (Doc. 13 at 1).
The court granted in part Ms. Davis’s motion to amend the court’s scheduling
order and bifurcated this case as suggested by United of Omaha. (Doc. 14). The

first—and current—phase of this case considers the appropriate level of deference,
if any, the court should give to United of Omaha’s determination. (Id. at 2). The
second phase will address the merits of Ms. Davis’s complaint. (Id.).
II. DISCUSSION

Ms. Davis asserts a claim against United of Omaha “to secure disability
benefits due to” her under the plan. (See doc. 1 ¶ 1). “ERISA provides no standard
for reviewing decisions of plan administrators or fiduciaries.” Capone v. Aetna Life

Ins. Co., 592 F.3d 1189, 1195 (11th Cir. 2010). The Supreme Court “established
three distinct standards for reviewing an ERISA plan administrator’s decision: (1)
de novo where the plan does not grant the administrator discretion; (2) arbitrary and
capricious where the plan grants the administrator discretion; and (3) heightened

arbitrary and capricious where the plan grants the administrator discretion and the
administrator has a conflict of interest.” Id. (footnote omitted).
The Eleventh Circuit incorporates these three standards of review into a six-

step framework. Blankenship v. Metro. Life Ins. Co., 644 F.3d 1350, 1355 (11th Cir.
2011). “At each step, the court makes a determination that results in either the
progression to the next step or the end of the inquiry.” Hill v. Emp. Benefits Admin.

Comm. of Mueller Grp. LLC, 971 F.3d 1321, 1326 (11th Cir. 2020) (quotation marks
omitted). Under this framework, a district court evaluating a denial of benefits under
ERISA should:

(1) Apply the de novo standard to determine whether the claim
administrator’s benefits-denial decision is “wrong” (i.e., the
court disagrees with the administrator’s decision); if it is not,
then end the inquiry and affirm the decision.

(2) If the administrator’s decision in fact is “de novo wrong,”
then determine whether he was vested with discretion in
reviewing claims; if not, end judicial inquiry and reverse the
decision.

(3) If the administrator’s decision is “de novo wrong” and he was
vested with discretion in reviewing claims, then determine
whether “reasonable” grounds supported it (hence, review his
decision under the more deferential arbitrary and capricious
standard).

(4) If no reasonable grounds exist, then end the inquiry and
reverse the administrator’s decision; if reasonable grounds do
exist, then determine if he operated under a conflict of interest.

(5) If there is no conflict, then end the inquiry and affirm the
decision.

(6) 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.

Blankenship, 644 F.3d at 1355. Although the Eleventh Circuit has not held that a
district court errs when applying these steps out of order, e.g., Doyle v. Liberty Life
Assur. Co. of Bos., 542 F.3d 1352, 1357–58 (11th Cir. 2008), controlling precedent
strongly suggests that district courts should apply this framework sequentially, e.g.,

Hill, 971 F.3d at 1326 (describing the six-step framework as a “progressi[ve]”
analysis) (quotation marks omitted).
Ms. Davis contends that the court should review United of Omaha’s decision

using only a de novo standard. (Doc. 18 at 9–10). United of Omaha contends that the
court should employ only an arbitrary and capricious standard. (Doc. 19 at 2). The
court considers first the arguments by Ms. Davis.
1. Ms. Davis’s Motion

Ms. Davis asserts that United of Omaha “forfeited as a matter of law” its
“entitle[ment] to a deferential review standard” because it did not provide her “an
opportunity to respond to new evidence or grounds for decision before issuing an

appeal determination.” (Doc. 18 at 2–3). She relies on two ERISA claims-procedure
regulations for this assertion.
Section 2560.5030-1(h) obligates plan administrators to “establish and
maintain a procedure by which a claimant shall have a reasonable opportunity to

appeal an adverse benefit determination . . . , and under which there will be a full
and fair review of the claim and the adverse benefit determination.” 29 C.F.R. §
2560.503-1(h)(1). As part of the full and fair review process, a plan administrator

must “provide the claimant . . . with any new or additional evidence considered,
relied upon, or generated by the plan, insurer, or other person making the benefit
determination . . . in connection with the claim . . . sufficiently in advance of . . . the

notice of adverse benefit determination.” Id. at (h)(4)(i).
Section 2560.5030-1(l) requires plan administrators to “strictly adhere to all
the [claims procedure] requirements.” Id. at (l)(2)(i). If the plan fails to do so, “the

claimant is deemed to have exhausted the administrative remedies available under
the plan” and “is entitled to pursue” judicial review “on the basis that the plan has
failed to provide a reasonable claims procedure that would yield a decision on the
merits of the claim.” 29 C.F.R. § 2560.503-1(l)(2)(i). On judicial review, “the claim

or appeal is deemed denied on review without the exercise of discretion by an
appropriate fiduciary.” Id.
Notwithstanding the strict adherence requirement, the regulations contain an

exception for de minimis violations of ERISA-claims procedure regulations. Id. at
(l)(2)(ii). De minimis violations of claims procedure regulations are those that do not
“prejudice or harm” the claimant if the plan administrator “demonstrates that the
violation was for good cause or due to matters beyond the control of the plan and

that the violation occurred in the context of an ongoing, good faith exchange of
information between the plan and the claimant.” Id.
So, that is the needle Ms. Davis seeks to thread: (1) that United of Omaha

violated the full and fair review regulatory requirement and (2) that this violation
was not a de minimis one. (See doc. 18 at 2–3). United of Omaha contends the
amended report “does not provide any new or additional evidence considered and

does not offer any new rationale for denying [Ms. Davis’s] claim” because it
corrected only the name of a single provider. (Doc. 19 at 8–9). According to United
of Omaha, it did not violate the full and fair review regulatory requirement. (Id.).

The court does not (and need not) find that United of Omaha violated ERISA’s
claim procedure regulations by failing to provide Ms. Davis an opportunity to
respond to the amended report. The court finds instead that even if United of Omaha
violated ERISA’s regulations, the violation was de minimus. See 29 C.F.R. §

2560.503-1(l)(2)(ii).
First, Ms. Davis has not established that she suffered or is likely to suffer any
prejudice or harm by not receiving an opportunity to respond Dr. Neckrysh’s

amended report. See id. Dr. Neckrysh amended his report because Ms. Davis
identified a typo in the original report. (See doc. 18-1 at 13–14). Although Ms. Davis
expressed confusion regarding the reference to “Steve Allison, PT” rather than Mr.
Bledsoe in the original report (see id. at 15), the original report summarized the

providers’ findings based on date; described specific medical care Ms. Davis
received; and for the particular provider Ms. Davis identified, stated that the
evaluation occurred at “Bledsoe Occupational Therapy” (id. at 36). The presence of

this identifying information mitigates concerns that Ms. Davis was unable to fully
respond to Dr. Neckrysh’s assessment. Further, Ms. Davis did respond substantively
to Dr. Neckrysh’s original report. (See id. at 12–13, 15).

Second, United of Omaha has shown that the alleged claims procedure
violation was for good cause and part of the ongoing, good faith exchange of
information with Ms. Davis. See 29 C.F.R. § 2560.503-1(l)(2)(ii). Again, Dr.

Neckrysh amended his report because Ms. Davis identified a typo in the original
report. (See doc. 18-1 at 13–14). In all other respects, the original report and
amended report are identical (compare id. at 21–43, with id. at 87–109), and Ms.
Davis had already responded to the original report (see id. at 12–13, 15). The court

is satisfied that the alleged violation of ERISA’s claim-procedure regulations was
for good cause and because of the ongoing, good faith exchange of information. See
29 C.F.R. § 2560.503-1(l)(2)(ii). Accordingly, even if United of Omaha violated

ERISA’s claim procedure regulations, the court will not apply solely the de novo
standard to review United of Omaha’s decision.
Ms. Davis asserts that the de novo review standard is “well supported” and
aligns “with an increasing number of courts, including most importantly within the

Eleventh Circuit.” (Doc. 18 at 14). But the Eleventh Circuit has held that the
violation of ERISA’s claims-procedure regulations does not per se trigger de novo
review. See White v. Coca-Cola Co., 542 F.3d 848, 855–56 (11th Cir. 2008). The
Eleventh Circuit instead applies a six-step framework in “virtually all ERISA-plan
benefit denials.” Id. at 853 (quotation marks omitted; emphasis in original).

Ms. Davis has not established that this court can depart from this framework
in a way that is consistent with controlling precedent. Accordingly, her motion is
DENIED.

2. The Motion By United of Omaha

United of Omaha asserts that the arbitrary and capricious standard of review
applies because the Plan grants United of Omaha discretionary authority to
determine eligibility. (Doc. 19 at 4–5). In essence, United of Omaha requests that
the court bypass the first step of the Eleventh Circuit’s six-step framework and
proceed directly to the second step. (See id.); see also Blankenship, 644 F.3d at 1355
(summarizing the six-step framework). But the Eleventh Circuit applies the six-step

framework in “virtually all ERISA-plan benefit denials.” White, 542 F.3d at 853
(quotation marks omitted; emphasis in original); see also Hill, 971 F.3d at 1326
(describing the “progression” of this analysis) (quotation marks omitted).
United of Omaha also has not established that this court may depart from the

six-step framework in a way that is consistent with controlling precedent.
Accordingly, the motion is DENIED.
3. The Scope of Discovery

When the court bifurcated this case, the court advised the parties that the court
“w[ould] address the permissible limits of discovery” as part of its ruling. (Doc. 14
at 2). Ms. Davis now asserts that the question of discovery is premature and “requests
the opportunity submit briefing specific to that issue.” (Doc. 21 at 7).

The court disagrees that issues regarding the scope of discovery are premature.
The court already advised the parties that the court would address the limits of
discovery in its ruling. (Doc. 14 at 2). The court does not ordinarily consider motions
that are buried in parties’ briefs. See United Techs. Corp. v. Mazer, 556 F.3d 1260,

1280–81 (11th Cir. 2009). To the extent Ms. Davis has buried a motion for further
briefing on the scope of discovery in her response brief, that request is DENIED,
and the court ORDERS as follows:

The Eleventh Circuit’s six-step framework requires this court to first apply
the de novo standard to determine whether United of Omaha’s benefits-denial
decision is wrong. Blankenship, 644 F.3d at 1355. At that step, “the scope of
discovery [i]s not limited to the administrative record compiled by [United of

Omaha] insofar as additional discovery could shed light on how [United of Omaha]
reached its decision[] or in examining whether [United of Omaha] fulfilled its
fiduciary duties.” Capone, 592 F.3d at 1196 (cleaned up).
Based on this controlling precedent and the parties’ briefing, the parties are
permitted to conduct limited discovery regarding the extent to which United of

Omaha’s consultant panel received the analysis and evaluation conducted by Mr.
Bledsoe. (See generally, e.g., doc. 18-1 at 14–15). If any party requires discovery
outside the scope of this order, that party may make an appropriate motion on or

before November 28, 2023.
At step one of the merits phase of this case, the court will permit the parties
to present “evidence beyond that which was presented to [United of Omaha] at the
time the denial decision was made.” Shaw v. Conn. Gen. Life Ins. Co., 353 F.3d

1276, 1284 n.6 (11th Cir. 2003). If the case proceeds to step three, the court will
limit review to the administrative record. Cf. Harris v. Lincoln Nat’l Life Ins. Co.,
42 F.4th 1292, 1296 (11th Cir. 2022).

The court’s independent review of the docket reveals that deadlines in this
case have passed as the parties awaited the court’s ruling. (See doc. 11). Accordingly,
the parties are DIRECTED to meet and confer and submit a jointly proposed
scheduling order on or before October 31, 2023.

III. CONCLUSION

The court WILL DENY the motion by Ms. Davis. (Doc. 17). The court
WILL DENY the motion by United of Omaha. (Doc. 19). The parties are
DIRECTED to meet and confer and submit a jointly proposed scheduling order on

or before October 31, 2023.
DONE and ORDERED this October 17, 2023.

ANNEMARIE CARNEY AXON
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9991872. Public record. Not legal advice.