Clayman v. Zurich Am. Ins. Co.

[Cite as Clayman v. Zurich Am. Ins. Co., 2013-Ohio-3866.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
PORTAGE COUNTY, OHIO
ADELBERT CLAYMAN, et al., : OPINION
Appellants, :
CASE NO. 2012-P-0126
- vs - :
ZURICH AMERICAN INSURANCE :
COMPANY,
:
Appellee.
Civil Appeal from the Portage County Court of Common Pleas.
Case No. 2008 CV 01899.
Judgment: Reversed and remanded.
David W. Hilkert, 3475 Ridgewood Road, Akron, OH 44333 (For Appellants).
Tiffany C. Miller, Bailey Cavalieri, LLC, 10 W. Broad Street, 21st Floor, Columbus, OH
43215 (For Appellee).
TIMOTHY P. CANNON, P.J.,
{¶1} Appellants, Adelbert Clayman and Barbara Skarupa, appeal the decision
of the Portage County Court of Common Pleas granting judgment on the administrative
record in favor of appellee, Zurich American Insurance Company (“Zurich”). At issue is
the denial of coverage benefits under a group accident policy governed by the
Employee Retirement Income Security Act of 1974 (“ERISA”). We conclude the trial
court erred in granting Zurich’s motion for judgment on the administrative record,
because Zurich, as the plan administrator, acted in an arbitrary and capricious manner
by its selective, self-serving investigation. This includes its inexplicable failure to obtain
complete and necessary information—including its failure to make any attempt to
reconcile what is obviously a critical discrepancy in the college’s characterization of
decedent, Margaret Clayman’s, enrollment status. Rather, Zurich accepted the version
of Ms. Clayman’s status most beneficial viewed in light of the plan’s provisions. As
explained herein, the decision is reversed and remanded.
{¶2} On November 25, 2008, Adelbert Clayman and Barbara Skarupa filed a
complaint against Zurich alleging, inter alia, wrongful denial of life insurance benefits.
The complaint set forth that Clayman and Skarupa were beneficiaries under Zurich
group accident policy no. GTU 2907376, issued to Clayman’s employer, National City
Corporation. The policy included dependent coverage for children “more than 19 years
of age but less than 23 years of age and enrolled on a full-time basis in a college,
university, or trade school.” On April 21, 2007, Clayman and Skarupa’s daughter,
Margaret Clayman (age 20), died as the result of an automobile accident.
{¶3} The National City group accident policy is governed by ERISA. Clayman
and Skarupa submitted their claim to Zurich as the plan administrator.
{¶4} In a letter dated April 23, 2008, Zurich denied the claim filed regarding
Margaret Clayman, concluding “that Margaret Clayman was not a ‘Covered Child’ under
the Policy because, at the time of death, she was more than 19 years old and not
enrolled as a full time student.” (Emphasis added.)
{¶5} On September 17, 2010, Zurich filed a motion for judgment on the
administrative record. Also on September 17, 2010, Clayman and Skarupa filed a
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motion for summary judgment, based on the administrative record, but also supported
by the deposition of Sonya Hartburg, Campus Director for Bohecker College, and the
depositions of Zurich employees, Patricia Lane and Janet Warley.
{¶6} On February 15, 2012, the trial court issued a magistrate decision,
concluding the “benefit determination must be upheld because it is rational in light of the
plan’s provisions. There was substantial evidence including the Bohecker College
letters of November 1, 2007, and January 2, 2008, to support the administrator[’s]
determination. Zurich has discretionary authority to determine eligibility for benefits.”
{¶7} On February 28, 2012, Clayman and Skarupa filed Civ.R. 53 objections.
{¶8} On September 4, 2012, the trial court issued a journal entry and
order/adoption of magistrate decision, overruling Clayman and Skarupa’s objections
and granting Zurich judgment on the administrative record.
{¶9} On October 2, 2012, appellants filed their notice of appeal. On appeal,
they raise four assignments of error. Appellants’ first and second assignments of error
state:
{¶10} [1.] The Trial Court committed prejudicial error in granting
Defendant-Appellee Zurich’s Motion for Judgment on the
administrative record based upon its opinion that substantial
evidence supported Zurich’s determination that Margaret Clayman
was not a covered dependent.
{¶11} [2.] The Trial Court committed prejudicial error when it found no due
process violation and denied Plaintiffs/Appellants’ Request to
supplement the Administrative Record with the deposition transcript
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of Sonya Hartburg of Bohecker College and the transcripts of
Zurich’s claim adjusters.
{¶12} In their first assignment of error, appellants argue the trial court abused its
discretion when it found substantial and/or reliable evidence to uphold the determination
that Margaret Clayman was “not enrolled on a full-time basis in a college” at the time of
her death. In their second assignment of error, appellants argue the trial court erred in
finding no due process violation in the determination of their claim and, thus, in denying
their request to supplement the administrative record with the depositions of Zurich and
Bohecker College employees.
{¶13} At the outset, we note the accident policy in the case sub judice is
governed by ERISA, which is contained in 29 U.S.C. 1000 et seq. 29 U.S.C.
1132(a)(1)(B) states a civil action may be brought “to recover benefits due to him under
the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his
rights to future benefits under the terms of the plan[.]” 29 U.S.C. 1132(e)(1) confers
jurisdiction:
{¶14} Except for actions under subsection (a)(1)(B) of this section, the
district courts of the United States shall have exclusive jurisdiction
of civil actions under this title brought by the Secretary or by a
participant, beneficiary, fiduciary, or any person referred to in 29
USCS § 1021(f)(1). State courts of competent jurisdiction and
district courts of the United States shall have concurrent jurisdiction
of actions under paragraphs (1)(B) and (7) of subsection (a) of this
section. (Emphasis added.)
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{¶15} Thus, a claim to recover benefits under 29 U.S.C. 1132(a)(1)(B), as is the
case here, was properly brought in the Portage County Court of Common Pleas.
{¶16} Before we evaluate the merits of this contention, we first address Zurich’s
argument that Clayman and Skarupa failed to properly preserve issues for review by not
“stat[ing] with particularity all grounds for objection” to the magistrate decision and by
not supporting their objections “by a transcript of all the evidence submitted to the
magistrate,” as required by Civ.R. 53(D)(3)(b)(ii) and (iii). Our review of Clayman and
Skarupa’s objections reveals that they identified the issues in the magistrate decision
with sufficient particularity to preserve them for appeal. Moreover, because the
judgment was rendered based on the administrative record, and that record is available
for our review, a transcript of the proceedings is unnecessary.
{¶17} When a plan gives the administrator discretionary authority—which in this
case it does—we review a denial of benefits to determine whether the plan
administrator acted arbitrarily or capriciously, applying the same deferential standard of
review as the lower court. See Huffaker v. Metro. Life Ins. Co., 271 Fed.Appx. 493 (6th
Cir.2008); Penn v. Howe-Baker Engineers, Inc., 898 F.2d 1096, 1100 (5th Cir.1990), fn.
2A. However, in applying this standard, it is necessary to keep in mind the conflict of
interest that Zurich has in reviewing its own denial of benefits. Most courts have held
that “application of the standard should be shaped by the circumstances of the inherent
conflict of interest.” Miller v. Metro. Life Ins. Co., 925 F.2d 979, 984, citing Brown v.
Blue Cross & Blue Shield of Alabama, Inc., 898 F.2d 1556, 1563. An administrator’s
decision will be upheld when it “‘is the result of a deliberate, principled reasoning
process and if it is supported by substantial evidence[.]’” Elliott v. Metro. Life Ins. Co.,
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473 F.3d 613, 617 (6th Cir.2006), quoting Glenn v. MetLife, 461 F.3d 660, 666 (6th
Cir.2006).
{¶18} “[A] decision based upon a selective review of the record or an incomplete
record is arbitrary and capricious.” Zenadocchio v. BAE Sys. Unfunded Welfare Benefit
Plan, S.D.Ohio No. 3:12-cv-99, 2013 U.S. Dist. LEXIS 45749, *38 (Mar. 29, 2013), citing
Moon v. Unum Provident Corp., 405 F.3d 373, 381 (6th Cir.2005); see also Huffman v.
Am. Elec. Power Serv. Corp., N.D.Ohio No. 3:06CV1305, 2007 U.S. Dist. LEXIS 75524(Sept. 28, 2007) (holding that denial of coverage based on a selective review is arbitrary
and capricious). Further, “the administrator can abuse his discretion if he fails to obtain
the necessary information.” Salley v. E.I. DuPont de Nemours & Co., 966 F.2d 1011,
1015 (5th Cir.1992).
{¶19} For instance, in Metro. Life Ins. Co. v. Conger, 474 F.3d 258 (6th
Cir.2007), the Sixth Circuit Court of Appeals concluded that an administrator acted in an
arbitrary and capricious manner “by ignoring substantial contrary evidence in Conger’s
medical records” in reaching a decision denying coverage. Id. at 265. The court
reaffirmed the principle that “an administrator abuses its discretion when it refuses to
consider additional evidence presented in an insured’s appeal of a coverage denial, * * *
or when it engages in a ‘selective review of the administrative record’ to justify a
decision to terminate coverage.” Id., quoting Moon, supra, at 381. In finding the
administrator’s actions were arbitrary and capricious, the court pointed out that the
administrator “focused on slivers of information that could be read to support a denial of
coverage and ignored—without explanation—a wealth of evidence that directly
contradicted its basis for denying coverage. Such a decision-making process is not
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deliberate or principled, and the explanation provided was far from reasoned, as it failed
to address any of the contrary evidence.” Id. (Emphasis sic.)
{¶20} Similarly here, Zurich had before it two documents from the college which
contained contradictory conclusions concerning Ms. Clayman’s enrollment status. One
conclusion was beneficial to Zurich, and one was not. The first is a November 1, 2007
letter from Registrar employee Melissa Cower, which provides in relevant part:
{¶21} This letter is to state that Peggy Clayman was enrolled at Bohecker
College from 8/5/2006 to March 9, 2007 as a full time student. On
February 13, 2007, Peggy came into my office to arrange to take a
quarter off. When students do this, it is considered to be
withdrawing from school. Unfortunately, Peggy was not enrolled at
Bohecker at the time of her death. * * *
{¶22} Next, there is a January 2, 2008 letter from Bohecker College Campus
Director Sonya Hartburg, which states:
{¶23} The purpose of this letter is to confirm the enrollment status of
Margaret Clayman. Ms. Clayman enrolled in the Business
Associate Degree program and started classes on August 5, 2006.
Bohecker College is a year around school and Ms. Clayman chose
to take a break for one academic term beginning on March 8, 2007.
The following academic term began on May 24, 2007 which Ms.
Clayman was planning to attend and complete her program of
study. Her graduation date would have been March 15, 2008.
Please disregard the first letter you received as it was in error. It
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had been submitted in my absence by my registrar who did not
have all the necessary information.
{¶24} Both letters are signed, appear on Bohecker College letterhead, and
above all, set forth opposite conclusions concerning the enrollment status of Ms.
Clayman. Obviously, the letters cannot both be correct, and further investigation seems
not only warranted, but necessary. Indeed, a facial reading of Ms. Hartburg’s letter
suggests the previous Registrar employee’s letter was written without all the necessary
information and sent in error.
{¶25} The administrative record indicates, however, that the independent
investigator from CS Claims only interviewed and investigated the Registrar employee
responsible for the content in the first letter, i.e., the document beneficial to Zurich.
Investigator Paulette Kolcz, of CS Claims, prepared the following report regarding her
“investigation”:
{¶26} I spoke to Melissa Cower at Bohecker College and she informed us
that she had just spoken to the family attorney and was advised not
to release any information regarding Margaret to anyone. She was
able to tell us that once you withdraw from school, you are required
to re-enroll for the next term. Also, the only enroll status
designations that they have is [sic]: enrolled status- accepted to
school and planning to enroll[;] active student- currently attending
school[;] drop student- no longer attending school. I will close the
case unless I hear otherwise.
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{¶27} Ms. Kolcz’s February 29, 2008 report to Zurich reflects the same. The
report indicates the assignment was “to obtain additional information from Bohecker
College regarding the insured and her enrollment status.” The report then explains that
CS Claims contacted Melissa Cower, who was able to answer general questions
concerning Ms. Clayman’s enrollment. The report states Ms. Cower “indicated that the
insured would have been required to re-enroll at the college for the academic term
beginning May 24, 2007, as she had withdrawn from the college prior to this term.” The
report also detailed the enroll status designations that were provided to Ms. Kolcz by
Melissa Cower before concluding: “We forwarded the above information to your office,
and as we have not received any further instructions from you, we have concluded our
handling at this time. * * *”
{¶28} On January 21, 2008—months before the independent investigation
concluded—Attorney Theresa Farwell sent Zurich a letter pointing out the discrepancy
between the letters, noting that “the Director of Bohecker College clearly states, in
writing, that the letter you somehow previously obtained was in error as to Margaret’s
enrollment status. * * * [A]s stated in the correspondence from the Director, the
Registrar had neither authority nor the correct information regarding Margaret’s
enrollment status.”
{¶29} Despite this letter, Zurich inexplicably did not send Ms. Kolcz further
instruction concerning an investigation into Director Sonya Hartburg’s letter, even
though a review of Ms. Kolcz’s report concerning enrollment indicates she only spoke to
Melissa Cower. As observed by the Sixth Circuit Court of Appeals after finding an
administrator acted arbitrarily and capricious by “cherry-picking” parts of a file: “Why
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Met Life did not also send Dr. Rice’s report or the rest of Spangler’s file to Crawford for
review by the vocational consultant is inexplicable.” See Spangler v. Lockheed Martin
Energy Sys., Inc., 313 F.3d 356 (6th Cir.2002); Black & Decker Disability Plan v. Nord,
538 U.S. 822, 834 (2003) (a plan administrator “may not arbitrarily refuse to credit a
claimant’s reliable evidence”).
{¶30} This is a case of selective investigation marked by Zurich’s intentional
failure to obtain the complete and necessary information, to avoid contrary evidence,
and to initiate further investigation only into beneficial correspondence. Its failure to
follow up on the Hartburg letter appears to be deliberate. Zurich accepted Ms. Kolcz’s
investigation as adequate to support its pre-determined conclusion that Ms. Clayman
was not enrolled at the college, even though it had been informed that the underlying
support for this conclusion was incorrect and given by someone without authority.
{¶31} Further, Zurich failed to offer an explanation as to why it did not consider
the contradictory statement from Ms. Hartburg. Even the most cursory investigations
should have started with Ms. Hartburg to obtain the correct answer from someone with
knowledge and authority. Her title indicates she operates in a supervisory capacity at
the college. Also, Ms. Hartburg indicated she actually spoke with Ms. Clayman and
knew of her intentions. There is no indication in the record that the investigator even
attempted to communicate with Ms. Hartburg.
{¶32} We are mindful of Zurich’s argument that further investigation would not
make any difference because “both letters said the same thing—that Ms. Clayman had
chosen to take a break from her college courses.” We also acknowledge the body of
case law cited by Zurich requiring a student to attend classes to be considered a full-
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time student. However, this concept of “taking a break” must be taken into account with
the plan’s provision requiring “enrollment on a full-time basis.” It is disingenuous to
suggest the conclusion concerning Ms. Clayman’s enrollment status has been made
when further investigation into this status is warranted. Again, the problem is Zurich
tailored its investigation specifically to meet the conclusion that Ms. Clayman was not
enrolled at the college full-time for purposes of its policy. It may very well be that Zurich
will reach the same conclusion; but we must conclude, as it stands now, that Zurich’s
conduct was arbitrary and capricious given its blatant investigative deficiencies.
{¶33} Although this selective, self-serving investigation, by itself, denotes
arbitrary and capricious conduct, Zurich’s conflict of interest further supports this court’s
conclusion. As noted above, the investigation was “shaped by the circumstances of the
inherent conflict of interest”; see also Hogan-Cross v. Metro. Life Ins. Co., 568
F.Supp.2d 410, 415 (S.D.NY 2008) (“The ultimate question in these cases is whether
the decision in question was arbitrary and capricious. In making that determination, the
existence, nature, extent, and effect of any conflict of interest are relevant
considerations.”). Indeed, “[a] situation in which the party paying the benefits also
decides whether to pay involves ‘an actual, readily apparent conflict.’” Conger, supra,
266, quoting Killian v. Healthsource Provident Admrs., Inc., 152 F.3d 514, 521 (6th
Cir.1998). We therefore conclude the trial court erred in granting Zurich’s motion for
judgment on the administrative record.
{¶34} Due to the lack of meaningful, independent investigation and review, we
also hold that the trial court should have allowed for supplementation of the
administrative record to permit a proper and effective review of the coverage
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determination. At its core, due process requires a full and fair review which, in turn,
“includes knowing what evidence the decision-maker relied upon, having an opportunity
to address the accuracy and reliability of that evidence, and having the decision-maker
consider the evidence by both parties before reaching and rendering his decision.”
Anderson v. Sotheby’s Inc., S.D.NY No. 04 Civ. 8180, 2006 U.S. Dist. LEXIS 42539,
*18 (June 21, 2006). This conclusion is largely inconsequential given that Zurich will
first have to conduct a full and fair investigation in accordance with the remand
instructions of this court outlined in full below.
{¶35} Appellants’ first and second assignments of error have merit.
{¶36} Appellant’s third assignment of error states:
{¶37} “[3.] The Trial Court erred in denying Plaintiffs-Appellants’ motion for
default judgment and granting Defendant’s motion for judgment on the administrative
record.”
{¶38} In their third assignment of error, appellants argue the trial court erred by
granting Zurich leave to file its answer, applying a prejudice standard rather than an
excusable neglect standard. In support, appellants cite Miller v. Lint, 62 Ohio St.2d 209(1980). To a certain extent, this assignment of error is rendered moot by the foregoing
analysis. Nonetheless, we note appellants did not challenge the subject order by filing a
motion to set aside the magistrate’s order, as provided for in Civ.R. 53(D)(2)(b). In the
absence of a motion to set aside or a record, the decision to grant Zurich leave to file its
answer instanter has not been preserved for appeal. Harkey v. Harkey, 11th Dist. Lake
No. 2006-L-273, 2008-Ohio-1027, ¶119.
{¶39} The third assignment of error is without merit.
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{¶40} Appellants’ fourth assignment of error states:
{¶41} “[4.] The Trial Court erred in granting final judgment to Zurich on the
administrative record because Plaintiffs-Appellants had a viable fiduciary count not
subject to resolution based upon the administrative record.”
{¶42} In their fourth and final assignment of error, appellants argue the trial court
erred in granting final judgment to Zurich because they had an independent fiduciary
claim. Clayman and Skarupa’s argument sets forth a “fiduciary” claim based on 29
U.S.C. 1132. Clayman and Skarupa allege Zurich should be estopped from denying
coverage “based upon Zurich’s acceptance of the application and premium for
dependent coverage for Margaret Clayman.” This argument, to a certain extent, is
resolved by our disposition of the first two assignments of error.
{¶43} We note that in its motion for judgment on the administrative record,
Zurich prayed that the court “dismiss this action with prejudice.” The trial court granted
the motion, thereby rendering judgment on all claims, which would include this
“fiduciary” or “estoppel” claim. Because we reverse the trial court’s judgment granting
the motion for judgment on the administrative record, any order purporting to grant
judgment with respect to this “fiduciary” claim is also vacated. This claim does not
appear to have been addressed by either party in their respective dispositive motions.
{¶44} To the extent indicated, the fourth assignment of error is with merit.
{¶45} The issue of how the trial court should proceed on remand has not been
addressed by the parties, though a review of federal cases that have been reversed and
remanded for similar reasons is instructive. For instance, in Jones v. Metro. Life Ins.
Co., 385 F.3d 654 (6th Cir.2004), the Sixth Circuit reversed the district court’s order
13
granting MetLife’s motion for judgment on the administrative record. The circuit court
remanded the case to the district court with instructions to remand the claim to MetLife
for reconsideration in light of the opinion. More recently, in McCandless v. Std. Ins. Co.,
509 Fed.Appx. 443 (6th Cir.2012), the Sixth Circuit reversed and remanded a similar
case to the district court “with instructions to remand to the plan administrator for a full
and fair review” of the claim, which “presumably [would] include” additional material the
administrator previously neglected to evaluate. Id. at 449.
{¶46} We agree the most appropriate disposition is for the trial court to stay the
proceedings below and order Zurich to conduct an objectively impartial investigation.
The goal is to determine what the truth is, not what is best for either of the parties. It is
clear that an investigation with that goal has yet to be done, and at this juncture,
judgment on the administrative record is not appropriate for either party.
{¶47} For the foregoing reasons, the journal entry and order of the Portage
County Court of Common Pleas, granting judgment in favor of Zurich on the
administrative record, is reversed and remanded for proceedings consistent with this
opinion.
COLLEEN MARY O’TOOLE, J., concurs,
DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.
____________________
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DIANE V. GRENDELL, J., dissents with a Dissenting Opinion.
{¶48} I respectfully dissent. As recognized by the majority, a plan
administrator’s decision should be upheld “if it is the result of a deliberate, principled
reasoning process and if it is supported by substantial evidence.” Baker v. United Mine
Workers Health & Retirement Funds, 929 F.2d 1140, 1144 (6th Cir.1991).
{¶49} In the present case, the plan administrator’s decision was the result of
deliberate, principled reasoning and supported by substantial evidence.
{¶50} To be covered under the Zurich policy, Margaret Clayman had to be
“enrolled on a full-time basis in a college” at the time of her death. At that time,
Margaret Clayman was not enrolled in any college classes, having decided “to take a
quarter off” according to Bohecker College Registrar, Melissa Cower, or “to take a break
for one academic term” according to Bohecker College Campus Director, Sonya
Hartburg. Based on the undisputed fact that Margaret Clayman was not enrolled in any
classes, Zurich denied coverage for the deliberate and principled reason that Margaret
Clayman was not “enrolled on a full-time basis in a college.”
{¶51} The propriety of this conclusion has been affirmed and approved by a
“significant body of case law requiring a student to attend classes to be considered a
full-time student.” Fuller v. Natl. Union Fire Ins. Co. of Pittsburgh, E.D.Ky. No. 07-138-
ART, 2008 U.S. Dist. LEXIS 41994, *22 (May 27, 2008); see Margie Bridals, Inc. v. Mut.
Benefit Life Ins. Co., 379 N.E.2d 62, 65 (Ill.App.1978) (a “withdrawal from classes and
leave of absence from the university cannot be considered in keeping with the activities
of a ‘full-time student’”); accord Miller v. Universal Bearings, Inc. Emp. Beneficiary Assn.
Plan, 876 F.Supp. 1038, 1043 (N.D.Ind.1995); Imerson v. Dist. School Bd. of Pasco
15
Cty., 818 F.Supp. 1500, 1503 (M.D.Fla.1993); Prudential Ins. Co. of Am., Inc. v.
Superior Court of Santa Cruz Cty., 98 Cal.App.4th 585, 600, 119 Cal.Rptr.2d 823 (2002)
(“[n]umerous decisions agree with the ruling in Margie Bridals that the ordinary,
unambiguous meaning of the phrase ‘full-time student’ in a group health policy is
attendance at classes on a substantial basis”) (cases cited); compare Bancale v. RCA
Serv. Co., 2nd Dist. No. 10051, 1987 Ohio App. LEXIS 5764, *9 (Feb. 3, 1987) (“the
intent to reenroll at some future date does not satisfy the policy’s requirement that a
student be in full-time attendance on the date of injury”).
{¶52} Given the fact of Margaret Clayman’s voluntary withdrawal from classes
and the above-cited case law, Zurich’s denial of Adelbert Clayman’s and Barbara
Skarupa’s claims was neither arbitrary nor capricious.
{¶53} The majority concedes that the record as is supports Zurich’s denial of
benefits, but chides Zurich for conducting a “selective, self-serving investigation” into
Margaret Clayman’s enrollment status. Supra at ¶ 31-32. Understandably, the majority
is somewhat vague about the point of such further investigation. Margaret Clayman had
voluntarily withdrawn from classes and was not currently enrolled at the time of her
death. Further investigation cannot alter those facts. Her enrollment status vis-à-vis the
Bohecker College administration is irrelevant. Regardless of whether Bohecker College
considered her enrolled or “taking a break,” the Zurich policy required enrollment “on a
full-time basis.” Not being enrolled in any classes is inconsistent with being enrolled “on
a full-time basis.”
{¶54} Contrary to the majority’s characterization, this is not “a case of selective
investigation marked by Zurich’s intentional failure to obtain the complete and
16
necessary information, to avoid contrary evidence, and to initiate further investigation
only into beneficial correspondence.” Supra at ¶ 29. Such a statement is unfair and
misleading.
{¶55} Zurich retained an independent investigating firm, CS Claims, to conduct
its investigation. When the Zurich review committee requested additional information
about the claim, CS Claims contacted Bohecker College, which, on the advice of
counsel for Adelbert Clayman and Barbara Skarupa, refused to divulge any
information about Margaret Clayman, other than to confirm that she had withdrawn from
school. This is hardly an intentional failure on Zurich’s part to obtain the necessary
information.
{¶56} Even more telling, Zurich advised Clayman and Skarupa that, during the
administrative review process, they had the right “to submit written comments,
documents, or other information in support of your appeal,” that their appeal “should
include supplemental documentation that will have a bearing on our decision,”
specifically “evidence that Ms. Clayman satisfied the definition of a ‘covered child’ within
the meaning of the policy.” In other words, Clayman and Skarupa had the opportunity
to selectively “cherry-pick” whatever information they thought supported their claim and
submit it to Zurich’s review committee. Assuming, arguendo, that the claims
investigation was incomplete, Clayman and Skarupa had the right, opportunity, and
incentive to supplement the record themselves. Balmert v. Reliance Std. Life Ins. Co.,
601 F.3d 497, 502 (6th Cir.2010) (“[a] claimant’s failure to fully explore and exercise her
procedural rights does not undermine the fundamental fairness of an otherwise full and
fair administrative review process”).
17
{¶57} Far from intentionally failing to obtain a complete record, Zurich’s efforts to
supplement the record were foreclosed by counsel’s advice to Bohecker College not to
provide information regarding Margaret Clayman. Despite having the opportunity to
provide such information on their own, Clayman and Skarupa failed to take advantage
of the opportunity.
{¶58} The majority relies upon the case of Metro. Life Ins. Co. v. Conger, 474
F.3d 258, 265 (6th Cir.2007), for the proposition that “an administrator abuses its
discretion when it refuses to consider additional evidence presented in an insured’s
appeal of a coverage denial,” and instead “focuse[s] on slivers of information that could
be read to support a denial of coverage and ignored-without explanation-a wealth of
evidence that directly contradicted its basis for denying coverage.” (Emphasis sic.)
{¶59} The record before us demonstrates that Zurich did not refuse to consider
additional evidence - Clayman and Skarupa offered no additional evidence and
hindered Zurich’s attempt to obtain such evidence. Likewise, the record before us
demonstrates that Zurich’s denial of the claim did not rely on ambiguous “slivers of
information,” but on the principled, reasoned, and well-established proposition that a
student must attend classes to be considered a full-time student.
{¶60} The judgment of the trial court should be affirmed. I respectfully dissent.
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