Opinion
Civil Action No. 03-1830 Section "K" (3).
November 22, 2004
ORDER AND REASONS
Before the Court is Plaintiff's Trial Brief In Support Of Claim For Long Term Disability Benefits (rec. doc. 15) and Defendant's Trial Brief Of The Entergy Corporation Companies' Benefits Plus Long Term Disability Plan (rec. doc. 19). The Court granted the joint motion of the parties to submit plaintiff's claims against the defendant for long term disability benefits for decision based upon written record and trial briefs. The Court also granted defendant's Motion to Sever and Stay Claims Other Than Those for LTD Benefits (rec. doc. 24). Thus, plaintiff's claims for other employment benefits, such as pension benefits and health insurance, will not be addressed in this decision. After consideration of the briefs, the administrative record, and relevant case law, the Court has determined that plaintiff is entitled to Long Term Disability Benefits ("LTD benefits") and that defendant abused its discretion in denying plaintiff's LTD benefits.
I. BACKGROUND
Vincent Cavaretta ("Cavaretta") was employed by Entergy (Louisiana Power Light) on May 17, 1971. Cavaretta was a plan participant and beneficiary of an Employee Retirement Income Security Act of 1974 ("ERISA") plan created by Entergy Corporation, namely the Entergy Corporation Companies' Benefits Plus Long Term Disability Plan (the "Plan"). Hartford Life and Accident Insurance Company ("Hartford") issued a LTD insurance policy to underwrite the benefits at issue in this case, policy No. GLT 032713 (the "Policy"). Administrative Record H0061 ("AR 61"). Due to a serious back injury, Cavaretta's last day of work for Entergy was on January 22, 1997. At the time, Cavaretta was 45 years of age and held the position of a Senior Line Mechanic. On January 29, 1997, Cavaretta underwent a disk excision at C5-6 and C6-7 with spinal fusion of C5 to C7.
On June 1, 1997, Cavaretta applied for LTD benefits under the plan due to incessant back and neck pain with associated weakness and numbness to his extremities. On July 23, 1997, Hartford approved Cavaretta for LTD benefit payments for the next 24 months, until July 23, 1999 as long as Cavaretta remained totally disabled under the policy definition. Discussed infra. By letter dated November 17, 1998, Hartford approved Cavaretta for LTD benefits "beyond 07/23/99" as long as Cavaretta met a different policy definition of total disability. Discussed infra.
In July of 1999, Hartford received a copy of an unfavorable decision from the Social Security Administration dated June 25, 1999 stating that plaintiff was not entitled to benefits under the Social Security Act. During that time Hartford investigated whether Cavaretta was eligible for benefits. On June 26, 2001, Hartford wrote to Cavaretta that it had completed its review of his claim for benefits and determined that he no longer met the definition of Total Disability and that no further LTD benefits were payable under the terms of the Policy after June 30, 2001. AR 334-336. On July 17, 2001, Hartford received a letter from counsel for Cavaretta appealing the decision to deny LTD benefits. AR 320-321. On February 12, 2002, Cavaretta's attorney was advised that Hartford was upholding the prior decision to deny his LTD benefits. AR 9. On July 7, 2002, Social Security Disability Benefits were awarded to Cavaretta. AR 178-182. Hartford's final appeal decision, denying LTD benefits, was made on October 28, 2002. AR 117-125. On June 25, 2003, Cavaretta filed suit in this Court seeking disability payments to be made retroactive to July 1, 2001 with interest, along with other claims, not addressed in this opinion. (rec. doc. 1).
II. DISCUSSION
Review of ERISA claims
A. Legal Standard
Federal Courts have jurisdiction to review determinations made by employee benefit plans, including disability benefit plans. 29 U.S.C. § 1132(a)(1)(B) (providing a beneficiary with the right to bring a civil action to recover benefits due to him under the terms of the plan).
Abuse of Discretion Standard of Review
Generally, benefit determinations made by a plan administrator, like Hartford, can be divided into two categories: 1) the determination of the facts underlying the claim for benefits; and 2) the determination of whether the administrator properly interpreted the terms of the plan. See Ramoos v. BellSouth Long-term Disability Plan, No. 01-0013, 2001 WL 1352319, *3 (E.D.La.) ( citing Wildbur v. ARCO Chemical Co., 974 F.2d 631, 637 (5th Cir. 1992). Case law provides different standards of review depending upon whether the plaintiff challenges the administrator's determination of facts underlying the plan, or the administrator's interpretation of plan terms. Id. Both parties agree that this case implicates the plan administrator's determination of facts underlying the claim for benefits, not the administrator's interpretation of the plan's terms.
According to the policy, Hartford, as plan administrator, had discretionary authority to grant and deny claims for disability benefits. AR 61, 76, 77. The Fifth Circuit applies the abuse of discretion standard when reviewing factual determinations made by a plan administrator with discretionary authority. Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 599 (5th Cir. 1994); Salley v. E.I. DuPont De Nemours, 966 F.2d 1011, 1014 (5th Cir. 1992). A court's review of factual determinations under the abuse of discretion standard is limited to the administrative record and a court may not open the record and conduct discovery as to these determinations. Gooden v. Provident Life, 250 F.3d 329, 333 (5th Cir. 2001); Ramos, 2001 WL 1352319 at *4. The only exception in which a district court may allow discovery is when the plaintiff argues that additional evidence, such as an expert report, will assist the district court in understanding the medical terminology or practices relating to a claim. Gooden, 250 F.3d at 333. However, this exception is inapplicable to the case at bar, because the no party has presented this type of evidence or presented this argument before the Court. Plaintiff attached affidavits to his Trial Brief; however, the Court did not consider these documents in this matter.
When applying the abuse of discretion standard to an administrator's factual determinations, the Court analyzes whether the administrator acted arbitrarily or capriciously. Salley, 966 F.2d at 1014. A decision is arbitrary when made "without a rational connection between the known facts and the decision or between the facts and the evidence." Lain v. UNUM Life Ins. Co., 279 F.3d 337, 342 (5th Cir. 2002). A plan administrator's decision will be affirmed if it is supported by "substantial evidence." Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc. 168 F.3d 211, 215 (5th Cir. 1999). "Substantial evidence" is more than a mere scintilla . . . [i]t means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Girling Health Care, Inc., v. Shalala, 85 F.3d 211, 215 (5th Cir. 1996). A court may not substitute its judgment for that of the plan administrator. Marziale v. Hartford Life and Accident Ins., No. 01-480, 2002 WL 1359639, *4 (E.D.La.). The abuse of discretion standard exists to "ensure that administrative responsibility rests with those whose experience is daily and continual, not with judges whose exposure is episodic and occasional." Id.
The abuse of discretion standard sets a relatively high bar for the plaintiff to overcome. However, in cases where the plan administrator is a "self-interested insurer" who serves as both the insurer and the administrator of the plan and stands to gain from a denial of the claim, the Fifth Circuit applies a "sliding scale" that relaxes the abuse of discretion standard. Id. Just how far the scale slides depends upon the amount of evidence the plaintiff brings forward showing a conflict of interest. Id. If there is no evidence of a conflict of interest, an administrator's decision is viewed only with "a modicum less deference" than the ordinary abuse of discretion standard. Id. It is difficult to prove a conflict of interest beyond the inherent conflict of the "self-interested insurer" when the Court is confined to the evidence in the administrative record. However, as mentioned earlier, the Court must apply the "modicum less deference" standard in the instant case where there is no evidence of a conflict of interest other than the fact that the plan administrator is the insurer and has the authority to deny or approve claims.
The Court has not found any evidence of a conflict of interest that would compel it to use a standard that is below the "modicum less deference" standard. Following Fifth Circuit precedent, the Court has limited itself to reviewing the administrative record in order to resolve this inquiry. See Gooden, 250 F.3d at 333. The Court will now apply the abuse of discretion standard with a "modicum less deference" to the facts of the case.
B. Policy Provisions
Hartford approved Cavaretta as "Totally Disabled" on June 1, 1997 based on the following provision in the Policy.
Totally Disabled means during the Elimination Period, and for the next 24 months, you are prevented by Disability from doing all the material and substantial duties of your own occupation. After that, and for as long as you stay Totally Disabled, you are prevented by Disability from doing any occupation or work for which you are or could become qualified by training, education, or experience.
AR 92-93.
Thus, from June 1997 for the next 24 months, Cavaretta's disability was determined upon his inability from doing the duties of his own occupation as a Senior Line Mechanic. On November 17, 1998, Hartford extended the LTD benefits beyond 7/23/99. This decision was based upon the inability of Cavaretta from doing any occupation or work for which he could become qualified by training, education, or experience. The letter notifying plaintiff stated the following: "We are pleased to advise that your claim has been approved for benefits beyond 007/23/99. Benefits will continue, subject to policy terms and limitations, as long as meet the policy definition of total disability, but in no event beyond 09/11/2016." AR 472. On June 26, 2001, based on its investigation, Hartford terminated Cavaretta's LTD benefits.
C. Relevant Medical Information Prior to the June 26, 2001 Termination of LTD Benefits.
On January 27, 1997, Dr. Carey performed a disc excision of the C5-C6 and C6-C7 levels, and a H-graft bone strut fusion from the C5 to C7 levels. A portion of the left hip iliac crest bone was placed at the C6-C7 level. AR 404-405. Degenerative disc disease at the C5-6 and C6-7 levels was objectively diagnosed from cervical spines series of x-rays on February 27, 1997. AR 409. In June of 1997, Dr. Carey completed the Attending Physician's Statement of Disability ("Statement") form provided by Hartford. The Statement reported that Cavaretta was totally disabled as he suffered myelopathy and pseudarthrosis at the fusion site with neck pain, and that he may need to have his neck fused. AR 512-513. On July 23, 1997, Hartford approved LTD benefits up to 24 months. On October 29, 1998, Dr. Carey completed another Statement form and reported that Cavaretta suffered a cervical disk with myelopathy and that he complained of persistent neck and arm pains. AR 479-480. Dr. Carey reported plaintiff's disability ratings to lift/carry as "impaired permanent," to reach/work overhead as "severely impaired permanent," to push as "severely impaired permanent," to pull as "severely impaired permanent," and to use keyboard/repetitive hand as "moderately impaired." Id. Dr. Carey further opined that Cavaretta's limitations would last for an indeterminate amount of time. AR 470-480. On November 17, 1998 Hartford determined that plaintiff was not capable of performing any job and thus approved benefits beyond 7/23/99. AR 472.
On October 7, 1999, Hartford wrote to Cavaretta requesting updated medical information relative to his claim. On October 21, 1999, Dr. Carey examined Cavaretta again. Dr. Carey's narrative report to Hartford following this examination stated in part that his "neurological examination revealed that Mr. Cavaretta had an almost full range of motion to his neck and he had no paravertebral muscle spasm in the cervical area." AR 437. Dr. Carey reported that Cavaretta had undergone a carpal tunnel release on the right hand upon the recommendation of Dr. Polopoli whom Cavaretta saw in May of 1999. Id. On October 22, 1999, Dr. Carey completed another Statement form and reported again that his primary diagnosis was cervical disk with myelopathy. Dr. Carey's "physical examination findings" were that "[p]atient states that he has persistent neck and arm pains reason not evident of post op MRI scan." AR 439-440. However, Dr. Carey's disability ratings of Cavaretta on the Statement form were exactly the same as reported in the October 1998 Statement.
On November 2, 2000, Cavaretta saw Dr. Carey complaining of interscapular and neck pain and numbness in his arms and hands. Dr. Carey referred Cavaretta to Dr. Frank Schmidt, a vascular surgeon, to verify a prior diagnosis of bilateral thoracic outlet syndrome. AR 209-210. Dr. Schmidt found that Cavaretta did not suffer from thoracic outlet syndrome and recommended to "try shoulder girdle exercises. Stop if it aggravates symptoms." AR 207. The letter to Hartford following the visit contained the following observations: "neurological examination revealed that motor function in his upper extremities was intact . . . there was no median sensory loss . . . [m]edian motor function was intact." AR 209. Following the visit, Dr. Carey again completed another Statement form reporting Cavaretta's primary diagnosis as cervical disk with myelopathy and a possible diagnosis of thoracic outlet syndrome. AR 411-412. Dr. Carey did not fill out Cavaretta's disability ratings because there had been no functional capacity evaluation. Id. The Statement reads, "NOTE: I do not fill out disability ratings without a formal functional capacity evaluation." Id. Thus, the only disability ratings by Cavaretta's treating physician that are in writing are contained in the October 1998 and October 1999 Statement forms. Cavaretta's claim was referred for review by Hartford's Acting Medical Director, Dr. Lyon. AR 120. Dr. Lyon reviewed the medical information in Cavaretta's file and spoke with Dr. Carey. In his report after reviewing claimant's medical history, Dr. Lyon wrote on April 10, 2001:
It appears from the evidence that Mr. Cavaretta has continued subjective complaints for which there are no explanatory objective findings. It appears that his surgery was an appropriate procedure and had an objectively non-complicated positive outcome. With Mr. Cavaretta having normal strength in his upper extremities and some non-anatomic sensory changes post-operatively, it is my opinion that he retains the capacity to meet the demands of sedentary work . . . [and] has the capacity to lift ten pounds occasionally but no more than this.
AR 269-273.
D. Review of Defendant's Decision to Terminate LTD Benefits
In its June 26, 2001 termination letter, Hartford provided a list numbered one through thirteen of specific documents that were considered in making its decision, along with entire claims file. Six of the listed items were dated prior to Hartford's decision to extend LTD benefits. AR 334-335. Thus, the Court will focus on those documents dated after Hartford's November 1998 decision to extend the LTD benefits as the Court assumes that these are the documents that, in large part, informed Hartford's decision to change its finding in November 1998. These include 1) Social Security notice of unfavorable decision dated 6/5/1999; 2) Medical records received from LSU Health Care Network dated 10/21/1999, 11/2/2000 11/20/2000 (these include the narrative reports from Dr. Carey and Dr. Schmidt); 3) Attending Physician Statements completed by Dr. Carey on 10/29/1998, 10/22/1999, 11/6/2000; 4) Telephone Conversation between Dr. Carey and Dr. Lyon on 4/10/2001; 5) Employability Analysis Report completed by Hartford's Case Manager 4/24/2001. AR 335. Hartford emphasized the telephone conversation between Dr. Lyon and Dr. Carey in the termination letter. Following this telephone exchange, on April 10, 2001, Dr. Lyon wrote Dr. Carey a letter memorializing the call. The letter included in pertinent part:
You stated that Vincent Cavaretta continues to complain of upper back and upper extremity symptomatology. You agreed that he had a relatively uncomplicated post-operative course after his cervical fusion procedure in January of 1997. You stated that you did not believe Mr. Cavaretta retained the capacity to return to his previous occupation. However, you stated that you felt Mr. Cavaretta retained the capacity to meet the demands of sedentary work. Please feel free to make any additions or corrections. If I do not hear from you within 15 business days, I will assume that you essentially agree with my understanding of our conversation.
AR 354. There was no reply by Dr. Carey. The administrator also relied on the Employability Analysis Report which stated that Cavaretta would be able to perform sedentary occupations. AR 339-350. The Analysis Report based its findings on Cavaretta's functional capabilities and education, training, and work history. The Report, primarily based upon Dr. Lyon's letter to Dr. Carey, provided the following:
Functional Capabilities: Mr. Cavaretta is capable of performing a sedentary job and lifting up to ten pounds according to the medical review completed by Dr. Lyon on 4/10/01. It is specified in the report that the Attending Physician, Dr. Carey, agreed with the fact that Mr. Cavaretta has sedentary work capacity.
AR 339.
Also, on June 1, 2000, Hartford had a telephone interview with Cavaretta. The notes that memorialize the interview state that "[h]e asked Entergy to take him back, but they don't have light duty and will only take him back at 100% released to full work." AR 32. Although this phone call is not referenced on Hartford's specific list of documents supporting its decision to terminate, Hartford does state that it considered all of the documents in the claims file. AR 335.
E. The Court's Analysis of Hartford's Initial Termination
The Court is of the opinion that, unless there is some additional medical evidence that shows a recognizable change in plaintiff's medical history between the November 1998 decision to continue the LTD benefits and the June 2001 decision to terminate the LTD benefits, Hartford's decision to terminate is not supported by substantial evidence. Furthermore, the additional evidence should support a change in Cavaretta's condition that would allow him to perform sedentary work. The Court finds that there is no first-hand medical evidence that supports that Cavaretta was able to return to work full-time sedentary work. Dr. Carey's October 29, 1998 Statement and disability ratings prior to Hartford's determination to continue the LTD benefits did not change in Dr. Carey's October 22, 1999 Statement and reported disability ratings. The narrative report (LSU Healthcare Network) following the October 1999 examination does describe Cavaretta's range of motion and motor function as positive; however, the note also reports Cavaretta's carpal tunnel problem, his decreased numbness in his fingers, and elbow pains which occur bilaterally. Furthermore, nothing in the report states that Cavaretta is capable of sedentary work. Dr. Carey's November 6, 2000 Statement form also shows no change in his primary diagnosis. Furthermore, Dr. Carey does not complete the disability ratings for Cavaretta in this form because he had not undergone a functional capacity evaluation. Thus, the only disability ratings that the administrator had to review were those in the October 1998 report which supported Hartford's determination that Cavaretta was eligible for continued LTD benefits and the October 1999 disability ratings which were exactly the same. Therefore, the only disability ratings by plaintiff's treating physician that are in writing are contained in the 1998 and 1999 Statements forms. The Administrator also considered the November 2, 2000 narrative report (LSU Healthcare Network) which described Cavaretta's motor functions as positive; however, the report does not state or indicate that Cavaretta is capable of returning to work.
The strongest contradictory medical evidence that Hartford provided was the letter written by Dr. Lyon, Hartford's Acting Medical Director, summarizing the phone conversation he had with Dr. Carey. Even if Dr. Carey perhaps acknowledged that plaintiff might do sedentary work, the Court places minimal probative value on this ex parte summary of a phone discussion. The Court does not know in what context the questions to Dr. Carey were asked. Furthermore, no physician who has treated Cavaretta has stated that he can perform sedentary work; the sole evidence of this is in a summary of a phone conversation as reported by Hartford's physician. The Court places very little emphasis on the fact that Dr. Carey did not respond to Dr. Lyon's letter. First, the Court does not have proof that Dr. Carey received the letter nor does the Court find that Dr. Carey's failure to respond is critical when his written medical evidence does not coincide with Dr. Lyon's written summary of Dr. Carey's spoken words. Dr. Carey clearly stated in his final disability ratings evaluation that he could not complete it without a functional capacity evaluation. There is no evidence in the record that a functional capacity evaluation was even requested by Hartford.
The Employability Analysis Report, prepared by the Vocational Rehabilitation Counselor, concluded that Cavaretta could work as a service or work dispatcher, thermometer maker, programming equipment operator, or semiconductor dies loader. However, because this Report relies primarily on Dr. Lyon's letter of April 10, 2001, upon which the Court gives very little probative value, this document does not add substantial evidence to Hartford's decision to terminate Cavaretta's benefits. Finally, of the thirteen item list that Hartford considered in terminating plaintiff's LTD benefits, six of the items pertained to information known to Hartford in making its initial determination to grant LTD benefits and also in its subsequent determination that plaintiff satisfied the policy definition of total disability that went beyond the initial two year period. Furthermore, the remaining documents, listed above, fail to provide any additional substantial evidence that Cavaretta's condition had improved or that his limitations had decreased. The Court does not see any connection between the known facts and the decision made by Hartford's initial decision to terminate the LTD benefits other than Dr. Lyon's letter summarizing the telephone conversation between Doctors Lyon and Carey and the medical records received from LSU HealthCare Network which do not provide any statement that the plaintiff is capable of performing full-time sedentary work. Furthermore, Dr. Lyon's description of Cavaretta's post-operative course as "relatively un-complicated" is rather difficult to conceive, given Hartford's determination of his total disability after the operation.
The fact that plaintiff stated in a phone conversation that he would return to work to perform light duty does not necessarily make this veritable evidence upon which the Court can rely either. Although defendant does include this evidence in its brief, Hartford does not include this as one of the stated considerations underlying the discontinuation of benefits. The Court is of the opinion that Hartford did not provide any additional medical evidence after its decision to continue LTD benefits that constitutes substantial evidence to support its subsequent determination to discontinue the claimant's LTD benefits. The Court will now consider the additional evidence on appeal and Hartford's final decision to deny benefits.
F. Additional Medical Evidence Considered on Appeal
Cavaretta timely filed an administrative appeal for reinstatement of LTD benefits. Additional medical evidence became a part of the administrative record which Hartford considered in making its final determination on appeal. On September 21, 2001, Cavaretta was treated by Dr. Palopoli, who had earlier diagnosed Cavaretta with bilateral carpal tunnel syndrome. AR 160-162. He conducted a nerve conduction and needle electromyography studies at the request of Dr. Nicholson, Cavaretta's treating orthopedic specialist at that time. Id. The testing provided by Dr. Palopoli provided some evidence of median motor entrapment neuropathy of both wrists, but there was no evidence of cervical radiculopathy. Id. In July of 2001, Dr. Nicholson began treating plaintiff for evaluation and treatment of his neck pain and persistent right arm pain. AR 216-221. He opined that there was probable non-union at C5-6 and possible non-union at C6-7 based upon his X-Rays and small disc bulges at T1-2 through 7-8 based upon an MRI scan performed on 7/20/01. AR 220. He also stated that "I don't think he is capable of working at this time, and I do think this gentleman should be back on disability in that there is essentially no way he can do any sort of work which involves the use of the head or neck, even minimal type activities." AR 219. There was a bone scan administered on August 1, 2001 which suggested increased activity for instability of either of these two levels as determined by the radiologist. AR 311. The radiologist stated that although the fusion may be solid, there is still visualization of the dorsal and ventral aspect of the disk spaces, raising the possibility of nonunion. Id. Dr. Nicholson treated Cavaretta again on August 23, 2001 because of continued neck pain radiating in both upper extremities. AR 218. Dr. Nicholson stated that he would need a C5-6 and C6-7 redecompressed which will probably require mesh and anterior plating. AR218. He also discussed the use of antidepressants. Id. On September 24, 2001, Cavaretta saw Dr. Nicholson again and continued on Serzone for depression and Neurontin. AR 217. Cavaretta also saw Dr. J. Rhea Jones, M.D. on August 27, 2001 and September 21, 2001 because Cavaretta continued to have neck pain with pain running bilaterally to the elbows and shoulder blades. AR 213 and 215. Dr. Jones diagnosed acute cervical radiculitis. AR 213.
Hartford's registered nurse reviewed the medical records from Dr. Rhea Jones and Dr. Nicholson. AR 20. The results of the review are in Hartford's Comments: "The updated information is inconclusive as to whether or not the EE has a non union of the cervical fusion . . . Will call Dr. Nicholson . . . if the EE can work in a sedentary occupation." Id. The medical records and the case were then referred to Dr. Lyon who called Dr. Nicholson on December 20, 2001. On that date, Hartford received an "Addendum to Medical Report" written by Dr. Lyon which states in part:
Dr. Nicholson indicated that he felt Mr. Cavaretta's orthopedic and medical conditions did not render him incapable of sedentary work. He agreed that his medical conditions would continue to allow him to meet the demands of full-time sedentary work. However, Dr. Nicholson discussed Mr. Cavaretta's depression and felt this was fairly significant . . . He indicated that Cavaretta's depression affected his motivation to work.
AR 264.
Dr. Lyon concluded that the evidence "demonstrates the possibility of some minimal instability of the cervical spine, but the degree of this appears so small as to, at this point in time, not require additional cervical surgery." Id. He also stated that the "depression appeared to be more of a significant issue than the medical records demonstrated." Id. He concluded that he continued "to believe that the evidence supports Mr. Cavaretta's continued capacity to meet the demands of full-time sedentary work." Id. On February 12, 2002, Hartford's Behavioral Health Case Manager in the Appeal Final Assessment concluded, "[b]ased on this review, there is insufficient clinical information to show psychiatric symptoms of impairing proportion." AR 9-10. On that date, plaintiff's attorney was advised that Hartford was upholding the prior decision to deny Plaintiff LTD benefits. AR 9. On March 11, 2002, Hartford was informed that plaintiff was appealing the denial of LTD benefits. AR 609-0611. Hartford acknowledged the appeal and requested a copy of all documents relevant to the claim.
One of the additional documents on appeal included a letter dated February 18, 2002 from Dr. Nicholson to Dr. Lyon making clear Cavaretta's condition. The letter states in part:
When we spoke December 20, 2001 it was my intent to indicate that the combination of Mr. Cavaretta's orthopedic and medical conditions did not preclude him from the capacity to meet the demands of full-time sedentary work as you stated, but that this being the situation if one or both of the conditions had been successfully addressed, i.e. treated . . . If and when his medical/psychological condition had been addressed or evaluated, if treatment were indeed successful, I think that Mr. Cavaretta would be able to return to full-time sedentary work.
AR 186.
Other additional information included a letter sent by Cavaretta's attorney on August 12, 2002 to Hartford. AR 175. The letter stated that an Administrative Law Judge had approved Social Security Disability Benefits and concluded that Cavaretta has been disabled since November 15, 1997, indicating that Cavaratta's condition had worsened from the first determination by an ALJ. Id.
Hartford then requested and received a Medical Review from Dr. Barry Turner, Orthopedic Surgeon, dated October 17, 2002. Dr. Turner stated,
Therefore, I do not find that the question of union versus nonunion [of the cervical fusion] is a truly significant issue. If in fact, he did truly have a minor nonunion, it would appear to be insignificant . . . as concerns his ability to perform full-time sedentary level work. As is noted above, even Dr. Nicholson appears to recommend full-time sedentary level work, with the stipulation that the psychiatric issue be addressed.
AR 137.
G. Review of Defendant's Determination to Deny Cavaretta's Appeal
On October 28, 2002, Hartford wrote an extensive letter explaining its evidence used to support the final denial of Cavaretta's claim. AR 117-125. Hartford focused upon Dr. Carey's narrative report dated October 21, 1999 stating that he observed full range of motion to the claimant's neck with motor function intact in both upper and lower extremities. Hartford reviewed Dr. Polopoli's exam conducted on May 31, 1999 with no findings for right or left cervical radiculopathy. Hartford noted Dr. Lyon's assessment, through his conversation with Dr. Carey, that Cavaretta retained the capacity to return to sedentary work, along with the Vocational Rehabilitation Case Manager's employability assessment. Hartford pointed out Dr. Nicholson's findings — reporting that Cavaretta has not had to use any narcotics on any sort of regular basis. Hartford focused upon Dr. Palopoli's September 21, 2001 EMG/Nerve Conduction Studies and Reports, stating that his review showed that the Carpal Tunnel Release was successful and that there was no cervical radiculopathy, as previously noted in the letter. Hartford also relied upon Dr. Lyon's conclusions based upon Dr. Nicholson's medical reports. Hartford also noted the evaluation of the Behavioral Health Case Manager that reviewed the records of Doctors Jones, Carey, Schmidt, and a Social Security Decision and stated that these "revealed no evidence for a documentation of a psychiatric diagnosis, symptoms, medication, or treatment." Hartford addressed Cavaretta's depression as reported by Dr. Nicholson; however, it stated that here is no record of current symptoms nor is there information relating to his mental status. Finally, Hartford's letter focused on Dr. Turner's conclusions based on his review of medical records. He found that non-union was a possibility, but stated that this was difficult to conclude definitively. Hartford pointed out that Dr. Turner found that the diagnostic testing and objective exam findings did not correlate with Cavaretta's pain in his arms, fingers, neck and shoulders. Hartford reported Dr. Turner's recommendation stating that use of the hands for repetitive overhead activities, reaching overhead and lifting greater than 10 pounds are "contra-indicated," but "return to full-time sedentary work related activity given the previous restrictions is reasonable."
H. The Court's Analysis of Hartford's Final Review
The Court finds the following statement in the final termination letter to be significant. "Based on the medical evidence reviewed by our in-house professionals, as well as the opinions of two Independent Medical Advisors as detailed previously, we find the determination to terminate benefits effective June 30, 2001 was appropriate." The Court is not convinced by the conclusions of Hartford's Registered Nurse, Hartford's Behavioral Case Manager, Dr. Lyon's review of Dr. Carey's medical diagnoses, or Dr. Turner's review of Dr. Nicholson's medical diagnoses or his independent evaluation. The medical evidence simply does not provide "substantial evidence" for Hartford's conclusion that Cavaretta is capable of a full-time employment of sedentary work. It is only upon Hartford's interpretation of evidence, which the Court finds to be unsupported by the objective findings, medical tests, and various treatments, that Hartford comes to its final decision. Hartford focuses upon the gray areas in the medical reports where the doctors are not 100% certain whether Cavaretta has a specific diagnosis or not, but Hartford avoids the concrete and substantial evidence of the treating physicians that continually report severe problems in Cavaratta's physical and mental health.
Furthermore, as described above in the Court's analysis of Hartford's initial determination to discontinue LTD benefits, Hartford has not shown any additional evidence that is substantial indicating an improvement in Cavaretta's condition from the time of Hartford's determination in November 1998 to continue Cavaretta's LTD benefits to Hartford's final denial of benefits in October 2002. In fact, the evidence provided by Dr. Nicholson seems to show a possible worsening of his condition with the probable non-union of the vertebrate and Cavaretta's additional emotional and mental problems. Hartford cannot point to any new evidence after November 1998 that shows Cavaretta's condition strengthening or his physical limitations subsiding. Thus, the Court concludes that there is "no rational connection between the known facts and the decision or between the facts and the evidence." Lain, 279 F.3d at 342. Also, the Court notes that Hartford considered as a factor the refusal of Social Security Disability Benefits in its initial determination to terminate Cavaretta's LTD benefits, although Hartford did not consider this a factor in its final determination when Social Security Disability Benefits were subsequently awarded. The Court recognizes that an administrator's decision to deny LTD benefits is not dependent upon the determination of a Social Security Disability Claim and that the denial of benefits can be a cause for further investigation of the claim. Johnson v. Sun Life Assurance Co. of Canada, 2000 WL 33225469 at *7(M.D.La.). However, the Court notes that Hartford's use of the Social Security Administration's decisions is quite inconsistent and self-serving.
In addition, at no time did Hartford request that Cavaretta undergo an Independent Medical Examination when it had a right to do so under the Plan. AR 77, 90. Hartford relies on its consulting physicians' interpretation of Cavaretta's treating physician reports on the issue of disability. The Court recognizes that the Supreme Court has rejected the "treating physician rule" in the context of ERISA holding that plan administrators are not required to accord greater deference to the treating physicians's opinions. Black Decker Disability Plan v. Nord, 538 U.S. 822, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003). The Court realizes that Hartford was not required to give greater credit particularly to Dr. Carey and Dr. Nicholson and Cavaretta's other treating physicians; however, the Court does expect that Hartford's consulting physicians' opinions and review of the claims file are supported by substantial medical evidence or that their opinions glean new evidence that would support the conclusion that Cavaretta is not totally disabled and is capable of returning to full time employment. Twice, Hartford's consulting physicians provide opinions based upon phone conversations with Cavaretta's treating physicians that are unknown to the Court, except by written interpretations of these calls by Hartford's physicians. Moreover, Dr. Nicholson substantially corrects the report of his phone conversation written by Dr. Lyon. Furthermore, the Administrative Record does not provide any evidence by Cavaretta's treating physicians stating that he is physically able to meet the demands of sedentary work.
Under the abuse of discretion standard, a plan administrator's decision will be affirmed if it is supported by "substantial evidence." Meditrust Fin. Servs. Corp., 168 F.3d at 215. The Court does not find Hartford's decision to be based upon or supported by substantial evidence. Furthermore, the Court cannot find a rational connection between the known facts and the decision made by Hartford. The Court, therefore, holds that Mr. Cavaretta is entitled to an award of LTD benefits retroactive to July 1, 2001 with postjudgment interest.
III. PREJUDGMENT INTEREST AND ATTORNEY'S FEES
Plaintiff seeks an award of prejudgment interest. To determine whether an award of prejudgment interest is appropriate, the Court must determine if this award is precluded by the federal statute giving rise to such cause of action. Hansen v. Cont'l Ins. Co., 940 F.2d 971, 984, n. 11 (5th Cir. 1991). ERISA is silent on prejudgment interest; therefore, the Court must determine whether it would further the congressional policies embodied in the act. Id. ( citing Guidry v. Booker Drilling Co., 901 F.2d 485, 488 (5th Cir. 1990). The Fifth Circuit found that an award of prejudgment interest furthers the "purposes of that statute by encouraging plan providers to settle disputes quickly and fairly, thereby avoiding the expense and difficulty of federal litigation." Hansen, 940 F.2d at 984, n. 11. The Court finds that Cavaretta has been denied LTD benefits owed to him since July 1, 2001, and thus, to compensate him for his loss, the Court awards Cavaretta prejudgment interest from this date. The Court has discretion to select an equitable rate of interest for this award and may turn to state law for guidance. Bowers v. Unumprovident Corp., 2002 WL 10467 (E.D.La.). The Court finds that Cavaretta is entitled to prejudgment interest from July 1, 2001, at the rate set by La. Civ. Code art. 2924 and post-judgment interest pursuant to 28 U.S.C. § 1961(a).
Courts are given discretionary authority to award attorney's fees in ERISA cases. 29 U.S.C. § 1132(g)(1). Courts are to consider: (1) the degree of the opposing party's culpability or bad faith; (2) the ability of the opposing party to satisfy an award of attorney's fees; (3) whether an award of attorney's fees against the opposing party would deter other persons acting under similar circumstances; (4) whether the party requesting attorneys' fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties' positions. Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980).
The Court finds that there was no bad faith on the part of Hartford in denying Cavaretta's LTD benefits; however, the Court finds that the degree of Hartford's culpability was substantial considering the following illustrative, but not inclusive findings: (1) Hartford provided no substantial medical evidence to change its position as it did not demand an additional functional capacity evaluation or independent medical examination;(2) Hartford mischaracterized Dr. Nicholson's opinion; and (3) Hartford minimized additional medical evidence provided on plaintiff's appeal. Thus, the Court finds that the first factor weighs in favor of an award of attorney's fees and costs. The Court finds that the second factor also weighs in favor of attorney's fees and costs because Hartford does not address its inability to satisfy an award of attorney's fees. The Court also is of the opinion that an award of attorney's fees would deter Hartford and other plan administrators from relying upon their physicians' interpretation of medical evidence and encourage plan administrators to provide substantial contrary evidence of their own, whether that means paying for an independent medical examination or ordering a functional capacity evaluation. The fourth of the Bowen factors is not found in this case. The fifth factor weighs in favor of awarding attorney's fees. The merits of plaintiff's case seem to far outweigh the merits of defendant's case for the reasons stated in this opinion. Hartford failed to convince the Court that there was any evidence that indicated an improvement in Cavaretta' condition that could explain Hartford's discontinuation of benefits on June 26, 2001 or its final denial on appeal. The Court finds that four of the five elements weigh in favor of awarding attorney's fees and costs, and, thus, this award is appropriate. See Bowers v. Unumprovident Corp., 2002 WL 10467 (E.D.La) (awarding attorney's fees and costs where four of the five Bowen factors were satisfied); Acosta v. Bank of Louisiana, 2003 WL 11406182 (E.D.La.) (awarding attorney's fees where four of the five Bowen factors were satisfied).
IT IS ORDERED that:
Hartford shall pay to Cavaretta:
(1) long-term disability benefits retroactive to July 1, 2001;
(2) prejudgment interest on this amount pursuant to La. Civ. Code art. 2924 and postjudgment interest pursuant 28 U.S.C. § 1961(a);
(3) reasonable attorney's fees and costs. Within 15 days of the date of this Order, Cavaretta shall submit to the Court an authenticated affidavit establishing attorney's fees and costs expended in this matter. The Court will then determine the appropriate award using the "lodestar" method. See Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1458 (5th Cir. 1995).