McCulloch v. Hartford Life and Accident Insurance Company

Background

Kristin E. McCulloch was an Employee Benefits Insurance Agent for BB&T Corporation from June 2015 through March 2018. Hartford Life Insurance Company was the insurance plan provider for BB&T Corporation’s long-term disability plan, and McCulloch was a covered participant. Hartford Life denied her long-term disability claim on November 20, 2019.

McCulloch filed an amended complaint alleging that Hartford Life violated the Employee Retirement Income Security Act of 1974, a federal law governing employee benefit plans. The parties agreed to divide the case into two phases. The first phase concerned whether McCulloch was disabled from performing her own occupation during the plan’s elimination period. The second phase concerned whether she belonged to Class 1 or Class 2 under the plan.

The court held a bench trial on the disability issue on December 2, 2020. On December 29, 2020, it issued findings of fact and legal conclusions determining that McCulloch was disabled from performing her own occupation during the elimination period. The parties then began discovery on class eligibility. McCulloch later told the court that Hartford Life had not paid her long-term disability benefits despite the disability ruling.

Rule 54(b) request

McCulloch asked the court to enter a partial final judgment under Federal Rule of Civil Procedure 54(b). That rule permits a court to enter a final judgment on one or more, but fewer than all, claims when the court expressly finds that there is no just reason to delay judgment on those claims.

The proposed judgment sought $285,329.29 in long-term disability benefits for September 2018 through December 29, 2020, and reinstatement of monthly long-term disability benefits beginning December 30, 2020, in the amount stated in the proposed judgment as $10,802,50 per month. The proposed judgment excluded prejudgment interest, attorney’s fees, and costs.

Hartford Life argued that the earlier order finding McCulloch disabled was not a final judgment because it did not resolve all of the claims. Hartford Life also argued that judgment should be delayed. McCulloch argued that the court’s disability ruling finally resolved her claim concerning benefits during the elimination period.

Court’s analysis

The court agreed with McCulloch. It determined that the disability-benefits issue and the class-eligibility issue required different factual showings. The disability issue involved McCulloch’s symptoms, medical tests, expert reports, and occupational analyses during the elimination period. Class eligibility involved her salary grade and affected the review of benefits after the elimination period.

The court also noted that the parties themselves had agreed to separate the litigation into two phases and that Hartford Life acknowledged that the second phase addressed the discrete issue of class eligibility. The court concluded that the phase-one ruling was a final judgment on McCulloch’s claim relating to disability during the elimination period, and that the later class-eligibility decision would not affect that ruling.

The court found no just reason for delay because the issues involved different facts, reducing the likelihood that an appeal would require repeated review of the same issues. It also concluded that entering judgment would help resolve McCulloch’s long-term disability benefits claim promptly. The court rejected Hartford Life’s argument that McCulloch needed to proceed under a different federal rule concerning partial findings.

Disposition

The court determined that there was no just reason to delay entry of judgment in McCulloch’s favor on her long-term disability benefits claim and granted McCulloch’s proposed judgment pursuant to Rule 54(b). The class-eligibility phase remained to be determined.