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Hackney v. Lincoln National Life Insurance Co.

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

May 14, 2015

JAMES HACKNEY, Plaintiff,
v.
LINCOLN NATIONAL LIFE INSURANCE COMPANY, ET AL. Defendants.

MEMORANDUM OPINION

CHARLES R. SIMPSON, III, Senior District Judge.

This matter is before the Court on Defendant Lincoln National Life Insurance Co.'s ("Lincoln") motion to dismiss or, in the alternative, for summary judgment (DN 81). For the following reasons, the Court will grant summary judgment in favor of Lincoln. Plaintiff James Hackney's Second Amended Complaint (DN 80) will be dismissed with prejudice.

I. BACKGROUND

Defendant Vascular Solutions, Inc. ("VSI") developed and sold medical devices for use in coronary and peripheral vascular procedures. Plaintiff worked for VSI as Director of Marketing-Catheters. An Employment Agreement (DN 116-2) between Plaintiff and VSI governed the terms of the employment relationship. Through that employment, Plaintiff participated in VSI's Salary Continuation Plan (DN 81-3), which provided short-term disability ("STD") benefits to eligible employees. VSI paid all benefits under the Salary Continuation Plan out of its general assets.[1]

The Salary Continuation Plan explicitly named Lincoln as its "claims administrator." (Salary Continuation Plan, DN 81-3, at 1.) Lincoln administered the Salary Continuation Plan according to a separate agreement with VSI, known as the Advice to Pay Agreement. (Advice to Pay Agreement, DN 81-2, at 1; Salary Continuation Plan, DN 81-3, at 1.) Lincoln evaluated any claim made under the Salary Continuation Plan and advised VSI as to whether the claimant was eligible for STD benefits. (Advice to Pay Agreement, DN 81-2, at 1; Salary Continuation Plan, DN 81-3, at 6-7.) Though Lincoln provided claim review services, VSI retained exclusive authority to approve or deny claims and appeals. (Advice to Pay Agreement, DN 81-2, at 1-2.) VSI held sole responsibility for the payment of any approved STD benefits. (Advice to Pay Agreement, DN 81-2, at 1; Salary Continuation Plan, DN 81-3, at 2.)

On October 6, 2010, Plaintiff informed VSI that he believed his condition of hypoparathyroidism had disabled him such that he could no longer perform the necessary functions of his job. Five days later, on October 11, Plaintiff filed a claim for benefits under the Salary Continuation Plan. After conducting a review, Lincoln recommended that VSI approve Plaintiff's claim for approximately four weeks of STD benefits. VSI adopted that recommendation, and Plaintiff was notified that STD benefits would be paid through November 2, 2010. For benefits beyond that date, Plaintiff was required to submit medical evidence to establish his continuing disability.

Plaintiff did not report to work of November 3, 2010, and instead sought an extension of his disability benefits under the Salary Continuation Plan. Lincoln evaluated Plaintiff's medical records and recommended that VSI deny additional STD benefits because the evidence submitted failed to show that Plaintiff remained totally disabled. VSI again adopted Lincoln's recommendation, denying additional benefits beyond November 2, 2010.

Plaintiff appealed VSI's denial of extended benefits, but the appeal failed. Lincoln advised VSI to affirm the denial of benefits, explaining that the claim was not supported by sufficient medical evidence. Once more, VSI agreed and denied the appeal on March 30, 2011.

VSI held Plaintiff's position open until April 20, 2011, but Plaintiff never returned to work. On April 21, 2011, VSI informed Plaintiff that his employment would be terminated effective May 12, 2011. VSI viewed Plaintiff's failure to resume work as job abandonment.

On March 6, 2012, Plaintiff commenced this action in Jefferson County Circuit Court. (Compl., DN 1-1.) VSI and Lincoln removed the case to this Court, basing subject matter jurisdiction solely on diversity of citizenship. (Notice of Removal, DN 1.) Plaintiff asserts three claims against Lincoln: (1) tortious interference with contract; (2) negligence per se based on violation of Kentucky's medical licensing statute, KRS 311.560; and (3) violation of the Kentucky Unfair Claims Settlement Practices Act ("KUCSPA"), KRS 304.12-230. (Second Am. Compl., DN 80, Cls. F-H.) On May 17, 2013, Lincoln moved to dismiss or, in the alternative, for summary judgment on each of those claims (DN 81). The Court later determined that Lincoln's motion was more appropriately resolved as one for summary judgment and allowed additional time for the parties to complete discovery. (Mem. Op., May 30, 2014, DN 123, at 10-11; Order, May 30, 2014, DN 124; Mem. Op., Aug. 13, 2014, DN 132, at 7; Order, Aug. 13, 2014, DN 133.) Lincoln's motion for summary judgment is now fully briefed and ripe for decision.

The Court previously granted summary judgment in favor of VSI on all claims asserted against it. (Mem. Op., May 30, 2014, DN 123, at 12-24; Order, May 30, 2014, DN 124.) In doing so, the Court reached several conclusions on issues central to Lincoln's pending motion. Those prior conclusions will be addressed throughout the legal discussion.

II. STANDARD

The Court shall grant summary judgment if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The party seeking summary judgment bears the initial burden of explaining the basis of its motion and demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). That burden may be satisfied only by "citing to particular parts of materials in the record" or "showing that the materials cited do not establish the... presence of a genuine dispute." Fed.R.Civ.P. 56(c)(1). Should the movant meet its burden, the nonmoving party may not simply rest on its prior pleadings; it must produce further evidence showing a genuine issue for trial. Celotex, 477 U.S. at 324.

When considering a motion for summary judgment, the Court must view the facts and draw reasonable inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Even so, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, ...


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