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Knox v. Prudential Ins. Co. of America

United States District Court, W.D. Kentucky, Louisville

March 31, 2014

DANNY KNOX, Plaintiff,


JAMES D. MOYER, District Judge.

This matter is before the court on the plaintiff's motion to compel document discovery. (DN 41). The plaintiff, Danny Knox, is the beneficiary of, and estate representative for, Karen Knox. Mrs. Knox was insured under a long term disability insurance policy ("LTD Policy") and a life and accident insurance police ("Life Policy"). These policies were issued, underwritten and administered by the defendant, Prudential Insurance Company of America. The plaintiff filed suit to recover benefits due or to enforce rights under these policies, under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B). The court referred discovery and non-dispositive matters to the undersigned magistrate judge, pursuant to 28 U.S.C. § 636(b)(1)(A) and (B), for adjudication. For reasons stated below, the court will grant the plaintiff's motion to compel in part.


Mrs. Knox ceased work on April 6, 2009, and applied for LTD benefits. Prudential agreed she was totally disabled and began paying her a disability monthly income under the LTD Policy and a waiver of premiums under the Life Policy. As required under the terms of these policies, Mrs. Knox applied for Social Security Disability benefits, which were approved, resulting in a reduction of her monthly disability income by a similar dollar amount.

Prudential continued to pay disability monthly income and waiver of premiums to Mrs. Knox until July 6, 2011. The plaintiff avers that despite a lack of improvement in her condition and contrary to the medical evidence, Prudential arbitrarily terminated all disability benefits under the policies. Mrs. Knox exhausted her appeals and Prudential upheld its decision to terminate her disability benefits.

Mrs. Knox died on November 11, 2011. The plaintiff represents the coroner ruled her death was accidental, resulting from a house explosion and a fire.

In addition to Prudential's eventual denial of disability benefits, the LTD policy provides a survivor benefit of $2, 236.00, the sum equal to three additional months of her gross disability payment. The plaintiff avers Prudential has failed to pay to Mrs. Knox's survivor, her spouse, Danny Knox, these survivor benefits. The plaintiff further contends that Mr. Knox is the beneficiary for Mrs. Knox's life and accidental death insurance benefits of $200, 000 as well as an accidental insurance benefit of an additional $200, 000. The plaintiff claims that Prudential has failed to pay Mr. Knox the life and accidental death insurance benefits.

With regard to Prudential's administration of Mrs. Knox's disability claims, the plaintiff avers that Prudential actively sought to terminate her claim, including mischaracterizing her medical conditions (the severity of her sleep apnea), ignoring the disabling effects of her fibromyalgia, ignoring examination results supporting her restrictions and limitations, and disregarding the opinions of her treating physicians. The plaintiff further contends that Prudential did not have Mrs. Knox physically examined by a physician licensed to practice medicine in Kentucky but relied on the opinions of its paid medical reviewers.

The plaintiff asserts that Prudential was operating under an inherent and structural conflict of interest because the policy benefits were paid from Prudential's own assets. The plaintiff claims that as a result of this inherent bias, Prudential's claims personnel are trained to make coverage decisions which are reasonable rather than accurate.


Under ERISA, the plaintiff must show that the administrator's denial of benefits or interpretation of the plan was arbitrary and capricious or constituted an abuse of discretion. Firestone Tire & Rubber Co. v Bruch, 489 U.S. 101, 115 (1989) (stating that principles of trust law undergird ERISA's statutory framework). More recently, the Supreme Court of the United States observed, "Often the entity that administers the plan, ... such as an insurance company, both determines whether the employee is eligible for benefits and pays benefits out of its own pocket. We here decide that this dual role creates a conflict of interest; that a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend on the circumstances of the particular case." Metropolitan Life Ins. Co. v. Glenn, 544 U.S. 105, 108 (2008) (citing Firestone, 489 U.S. at 115).

Before Glenn, ERISA discovery in this judicial circuit was routinely limited to the administrative record. Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609, 619 (6th Cir. 1998). Wilkins recognized an exception, nevertheless, for "procedural challenges" to the administrator's decision, "such as an alleged lack of due process afforded by the administrator or alleged bias on its part, " but clarified that discovery should be limited to such procedural challenges. Id.

The defendant argues the plaintiff is not entitled to such due-process, or non-record, discovery because the plaintiff alleges bias or structural conflict of interest in conclusory fashion - an insufficient showing under the Wilkins exception for due-process discovery. The magistrate judge disagrees.

In the complaint, the plaintiff provides more than a conclusory allegation of bias or conflict of interest. The plaintiff alleges that the policies at issue do not permit Prudential to rely on medical reviews and, instead, requires Prudential to have an insured physically examined.[1] The plaintiff continues that Prudential relied solely on the opinion of paid medical reviewers, who are under contract to provide such services. The paid medical reviewers, moreover, provided the defendant with final reports, containing an opinion of coverage. The plaintiff seeks the reviewers' documentation underlying such final reports, as well as information including the rate structures and contractual terms governing their services. The plaintiff ...

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