Summary
finding Administrator's "failure to provide adequate notice under ERISA, and the consequent failure to afford plaintiff a 'full and fair review' of the decision to deny benefits, was arbitrary and capricious as a matter of law."
Summary of this case from Delprado v. Sedgwick Claims Mgmt. Servs., Inc.Opinion
02 CV 6140 (TPG).
August 7, 2006
OPINION
Plaintiff Huso Dzidzovic brings this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., alleging that defendant Building Service 32B-J Health Fund, an employee benefit plan governed by ERISA, wrongfully denied his application for disability benefits.
Defendant has moved for summary judgment and plaintiff has cross-moved for summary judgment. Both motions are denied and the case remanded to defendant for reconsideration.
FACTS
The Building Service 32B-J Health Fund
Defendant Building Service 32B-J Health Fund is a multi-employer benefit fund established pursuant to the Taft-Hartley Act, 29 U.S.C. § 186. The Fund is jointly administered by an equal number of management and union trustees and is governed by an Agreement and Declaration of Trust. The Agreement and Declaration of Trust provides that:
The Trustees have the power to construe terms and provisions of this Agreement and Declaration of Trust of the Plan and any terms or constructions adopted by the Trustees in good faith shall be binding upon the Union and all Contributing Employers.
According to the Summary Plan Description of the Health Fund ("Health SPD"), members who become "totally disabled" are eligible for long-term disability benefits in the form of monthly cash payments. The Health SPD defines "total disability" as a situation where
as a result of illness or injury, [an employee] is unable to perform work in any capacity, commencing on the date the disability was incurred and provided the Employee was eligible under the Plan rules on the date the disability was incurred. . . .
For all practical purposes, the terms long-term disability and total disability mean the same thing. The Health Fund requires medical proof of an applicant's long-term disability and reserves to the Trustees the right to require the applicant to submit to a medical examination for determination of the applicant's disability. The Health SPD further provides that "all determinations as to an applicant's disability are made in the sole and absolute discretion of the Trustees." Plaintiff's Injury and Benefits Application
On January 8, 1996, while working as a building superintendent in Manhattan, plaintiff slipped on ice and fell, striking his forehead on the ground, and jolting his neck and back in the process. He lost consciousness for approximately 10-15 minutes and was taken to the hospital by ambulance. Upon release from the hospital, plaintiff continued to suffer severe neck and lower back pain, as well as headaches, vertigo, blurred vision, and memory impairment. Plaintiff was unable to return to work because of these medical problems. After the accident, plaintiff sought treatment from a number of doctors and specialists in New York, but with little avail. Plaintiff thereafter moved to Florida, where he continued to seek treatment.
On January 23, 1998, plaintiff applied to defendant for Long-Term Disability Benefits. In a letter accompanying a form application, plaintiff stated that he had not returned to work since his accident due to his "multiple injuries and condition." In the letter, plaintiff stated that he had applied for and been awarded workers' compensation benefits, but that the award had been appealed by the carrier. Plaintiff also stated that his application for Social Security Disability Insurance and Supplemental Security Income had been denied by the Social Security Administration ("SSA"), and that he was appealing that decision.
Plaintiff's application for disability benefits was also accompanied by the required Attending Physician's Statement of Disability (the "Statement") on a form prescribed by defendant. The Statement, dated January 20, 1998, was completed by Dr. Louis Beshara of Congress Walk-in Medical Center, located in Lake Worth, Florida. The Statement describes both objective and subjective findings with respect to plaintiff's condition. Beshara's objective findings were that plaintiff was experiencing sacro lumbar strain/sprain, cervical spasms, thoracic spasms, acute anxiety, and depression disorder. Plaintiff's subjective symptoms were noted as chronic pain, migraine headaches, and anxiety/depression.
The Statement also includes a section entitled "Extent of Disability," which is reproduced below:
Is patient now totally disabled? Yes No
For any occupation? Yes No
For his/her regular occupation? Yes No
If no, when was (or will patient be) patient able to return to work?
Approx. Date __________ Indefinite Never
Beshara did not answer the first question at all, and answered "no" to the question whether plaintiff was disabled for any occupation but "yes" to the question whether plaintiff was disabled for his regular occupation. Beshara also indicated that plaintiff's inability to return to work was "Indefinite." In a section of the Statement designated for remarks, Beshara wrote "patient unable to work at this time due to physical and mental condition."
Defendant received plaintiff's application and Beshara's Statement on January 26, 1998. Two days later, Dr. Eugene G. McCarthy, a physician employed by defendant, completed a form entitled Total and Permanent Disability Certification, in which he rejected plaintiff's application. This form does not contain any reasoning or basis for the rejection.
By letter dated February 11, 1998, defendant informed plaintiff that his application had been rejected. The letter stated:
Your application for Health and Pension Fund Benefit due to disability has been rejected. Your medical condition at the time of termination does not qualify you under our standard of permanent disability: "the inability to work in any capacity."
No further explanation for the rejection was provided. The letter did indicate that plaintiff had a right to appeal the rejection, and contained instructions regarding the procedure for doing so.
On February 27, 1998, plaintiff wrote defendant to appeal on the grounds that "my disability is total and that I'm not able to work in any capacity due to my severe pain and mental condition." In conjunction with his appeal, plaintiff submitted a number of medical reports and other documents to substantiate his disability. The medical evidence submitted by plaintiff is summarized below.
Plaintiff submitted a November 5, 1997 report by Dr. William J. Gogan stating that plaintiff was complaining of "unbearable low back pain," "knife like neck pain which radiates to both arms," and some muscle weakness. Gogan's report also contains a review of plaintiff's previous medical records, including X-rays and MRIs, which showed that plaintiff had sustained several herniated discs in his lower back. In a section of the report entitled Work Status, Gogan wrote "He is unable to work."
Plaintiff also submitted an earlier, January 12, 1996, Comprehensive Initial Evaluation prepared by Dr. Gideon Hedrych, a specialist in emergency medicine. Hedrych's report, which is dated just four days after plaintiff's accident, indicates that plaintiff had sustained cervical and lumbar "strain, sprain and derangement," and recommended spinal X-rays, and consultations with a neurologist and rehabilitation specialist. Hedrych did not opine on plaintiff's ability to work.
The results of Hedrych's referrals were also submitted for defendant's consideration. The X-ray results are contained in a May 1, 1996 radiology report by Dr. Eugene Barasch, indicating that plaintiff had suffered a herniated disc at the L5-S1 disc level and a disc bulge at the L4-L5 disc level.
Neurologist Richard Chin's May 20, 1996 report indicated that plaintiff
continues to complain of neck pain, which is worse with turning of his neck to either side. His lower back pain radiates down both legs, and occasionally more to the left leg. This lower back pain is worse with prolonged sitting and prolonged standing; it is associated with numbness in the leg occasionally.
Upon motor and neuromuscular examination, Chin found "spasm and tenderness in the cervical and lumbar paraspinal region" but that plaintiff's sensation, coordination, and gait examination were otherwise normal.
An April 30, 1996 report prepared by rehabilitation specialist Dr. Ofra Blonder states "the patient continues to complain of pain in his neck and lower back area with very little improvement with therapy."
Plaintiff also submitted an April 8, 1997 report prepared by Dr. Jeffrey Spivak, an orthopedic surgeon, and an April 10, 1997 MRI report prepared by Dr. Steven Shankman, a radiologist, both of which reiterated the diagnosis contained in the earlier reports, that plaintiff's lower back pain was due to herniated discs in the lumbar region.
Aside from his orthopedic and neurological injuries, plaintiff also submitted evidence that the accident had precipitated certain psychiatric difficulties including loss of memory, inability to concentrate, and anxiety and depression. In support of these claims, plaintiff submitted to defendant two documents prepared by a psychiatrist named Dushan Kosovich.
The first document is a letter dated April 19, 1996, in which Kosovich states that plaintiff "has been under my care since 01.11.96 because of his on-the-job accident of 01.08.96. His memory is reduced and he is totally disabled." The second document is a February 17, 1997 report prepared by Kosovich, which contains the following:
Mr. Dzidzovic suffers from persistent low back pain, anergia, anhedonia, sleep disturbance, nightmares, headaches, dizziness, weakness, sex impotence, suicidal thoughts. He also has difficulties concentrating, remembering, (particularly the recent events), cannot think clearly, feels fearful, anxious, irritable, and very depressed with suicidal thoughts.
. . . .
. . . Since this accident, in spite of multidisciplinary therapy, he has been having many complaints, somatic and emotional, and unfortunately was not able to adjust and reintegrate to do any meaningful job.
Kosovich's report concludes by diagnosing plaintiff with affective disorder, adjustment disorder and anxiety/depression, and states that plaintiff's psychiatric condition was caused by his January 8, 1996 accident.
Plaintiff also provided defendant with several invoices his medical providers had submitted to his workers' compensation carrier. The invoices are all of the same form, on an application for fees prescribed by the Workers' Compensation Board. The form asks the medical provider whether the patient is "disabled from regular duties or work" and if so whether such disability is total or partial. The form also asks "can patient do any kind of work?"
Hedrych submitted two such invoices, on March 6, 1997 and August 26, 1997. In each, he indicated that plaintiff is totally disabled from "regular duties or work" but left blank the question whether plaintiff can perform any type of work. Invoices completed by Kosovich on August 25, 1997 and October 18, 1997 state that plaintiff is not only totally disabled from his regular work, but that he is also unable to perform any type of work.
Dr. McCarthy reviewed the documents submitted on appeal and, in a memorandum to the Trustees Appeals Committee, recommended that the initial rejection be affirmed. In reaching this conclusion, the memorandum refers to Beshara's January 20, 1998 report, which stated that plaintiff was not disabled "for any occupation." McCarthy's memorandum stated that plaintiff had submitted "no conclusive medical reports of total disability and evaluation not necessary." The memorandum also noted that there was no record of plaintiff having been found disabled for purposes of qualifying for Social Security.
By letter dated April 1, 1998, defendant informed plaintiff that his appeal was denied. The letter provided no further explanation, merely stating:
Your file was reviewed again by the Medical Advisor. It was determined that you are not totally and permanently disabled and, therefore, the REJECTION STANDS.
Nevertheless, the letter stated that the case would be submitted to the Board of Trustees for a hearing and final determination. The hearing was held on October 7, 1998. On August 9, 1999, defendant's Executive Director Arthur Benvenuto sent a letter to plaintiff stating:
Your case concerning Long Term Disability benefits was reviewed by the appeals committee [of the Board of Trustees] at their meeting on Wednesday, October 7, 1998.
I am sorry to let you know that your appeal was denied. As you may have been already informed, your medical condition does not qualify you for this benefit under the plan definition of totally and permanently disabled: "unable as a result of bodily injury or disease to engage in any further employment or gainful pursuit."
More than two years later, in an October 26, 2001 decision, the Social Security Administration reversed its original denial of plaintiff's application for disability benefits, and found that plaintiff "has been under a disability, as defined in the Social Security Act, since January 8, 1996," and was therefore entitled to disability benefits beginning on that date. The decision thoroughly reviewed the medical evidence, basing its determination upon certain findings, including the following:
2. The medical evidence establishes that the claimant has the following "severe" impairments: herniated discs of the lumbar spine, adjustment disorder, anxiety and depression.
. . . .
4. The claimant's assertions concerning his ability to work are fully credible. 5. The claimant retains the residual functional capacity to perform less than a full range of sedentary work. He is precluded from lifting up to 10 pounds and cannot perform prolonged sitting, standing or walking in any combination to attain six of eight hours. Due to his mental impairments he is moderately to markedly limited in his ability to sustain attention and concentration and make social adjustments.
. . . .
9. Any transferable skills the claimant may have had have been rendered ineffective by his impairments and resultant limitations. Thus, he does not have the transferable skills to perform other work within his residual functional capacity.
On March 27, 2002, counsel for plaintiff wrote to defendant requesting that the Board of Trustees "review his application given the degeneration of his health since the denial." The letter also noted that plaintiff had recently been awarded Social Security disability benefits. On May 24, 2002, defendant replied that "since the decision of the Trustees is final and binding on all concerned, no further action can be taken by the Fund, and the file will remain closed as rejected."
On June 20, 2002, plaintiff's workers' compensation and social security representative sent defendant a copy of the SSA's decision awarding plaintiff Social Security benefits. By letter dated July 2, 2002, defendant acknowledged receipt of the decision but took no action.
On August 1, 2002, plaintiff filed the complaint in the present action. Two months later, on October 4, 2002, defendant wrote to plaintiff stating that:
The Medical Advisor upon review of your application for Total Disability benefits from the Fund, request that you undergo an independent disability evaluation prior to a claim decision.
The letter directed plaintiff to report for an appointment with Dr. Michelle Rottenstein, a psychiatrist, on October 25, 2002. The results of this evaluation were reported in an October 25, 2002 letter from Rottenstein to defendant. The letter questioned the accuracy of the diagnoses contained in plaintiff's earlier medical reports, stating that "many of the symptoms elicited during this evaluation were inconsistent with those described in the patient's medical records." The letter concludes:
In summary, Mr. Dzidzovic is a 42 year old man who, according to his records from Dr. Kosovic, suffers from anxiety and depression. However, he currently presents with symptoms consistent with a psychotic disorder (although his description of visual hallucinations is highly unusual). According to his presentation during this evaluation, the differential diagnosis of his condition would include Ritalin-induced psychotic disorder, psychotic disorder due to head injury (unlikely given his history), schizophreniform disorder, bipolar disorder, or malingering. Although he may be currently disabled on the basis of psychotic symptoms, these appear to be acute and likely to resolve completely with discontinuation of Ritalin and possible antipsychotic treatment. His depressive symptoms appear to be mild and do not meet criteria for a disabling condition.
DISCUSSION
Standard of ReviewA decision to deny benefits to a participant in an employee benefits plan covered by ERISA is reviewed "under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Where such discretionary authority is conferred upon a plan administrator or fiduciary, decisions relating to a participant's eligibility for benefits will not be disturbed by a court unless the decision is arbitrary and capricious. Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999); Murphy v. International Business Machines Corp., 23 F.3d 719, 721 (2d Cir. 1994).
A decision made by a plan administrator or fiduciary is arbitrary and capricious "only if it was without reason, unsupported by substantial evidence or erroneous as a matter of law." Pulvers v. First Unum Life Ins. Co., 210 F.3d 89, 92 (2d Cir. 2000). Substantial evidence in turn is evidence that a reasonable mind might accept as adequate to support the conclusion reached and "requires more than a scintilla but less than a preponderance." Miller v. United Welfare Fund, 72 F.3d 1066, 1072 (2d Cir. 1995); Lekperic v. Bldg. Serv. 32B-J Health Fund, 02-CV-5726, 2004 U.S. Dist. LEXIS 14020 (E.D.N.Y. July 23, 2004).
In the present case, the terms of the Agreement and Declaration of Trust give the Trustees complete authority to determine eligibility for benefits and to construe the terms of the plan. Furthermore, the Health SPD explicitly grants sole discretion to the Trustees in ascertaining disability status: "All determinations as to an applicant's disability are made in the sole and absolute discretion of the Trustees."
Indeed, this court has repeatedly found that the very plan at issue grants the Trustees discretionary authority as to its terms and determinations of eligibility, thereby limiting the court's review to the arbitrary and capricious standard. See Mehaj v. Bldg. Serv. 32B-J Health Fund, 04-CV-7613, 2005 U.S. Dist. LEXIS 17758 at *2-3 (S.D.N.Y. August 22, 2005); Lekperic, 2004 U.S. Dist. LEXIS 14020 at *9-10; Sekoulovic v. Bldg. Serv. 32B-J Health Fund, 99-CV-10321, 2001 U.S. Dist. LEXIS 8042 at *11-12 (S.D.N.Y. June 18, 2001).
The court will therefore review the Trustees' denial of benefits under the arbitrary and capricious standard to determine whether it was "unsupported by substantial evidence or erroneous as a matter of law." Pulvers, 210 F.3d at 92.
Plaintiff asserts that, despite the discretion granted the Trustees under the plan, a higher standard of review than just described is appropriate for two reasons. First, plaintiff claims that the Appeals Committee that ultimately denied his application was subject to a conflict of interest because one of its two members was a trustee who represented management. Plaintiff also argues that the Trustees' determination to deny him benefits is not entitled to deferential review because the decision to reject his application was actually made by McCarthy, to whom deference is unwarranted. These arguments are without merit.
As to plaintiff's first contention, there is no factual basis for his claim that a conflict existed. The management trustee was not a contributing employer or employed by a contributing employer and had no financial motivation with respect to the payment of benefits or the financing of the Fund. In any event, even were the court to find that a conflict existed, the Supreme Court has held that it would not operate to change the standard of review, but rather becomes merely "a factor in determining whether there is an abuse of discretion." Bruch, 489 U.S. at 115; Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995).
Plaintiff's second argument, that the Trustees delegated their decision to McCarthy and that his determination is not entitled to deference, is likewise incorrect. Although McCarthy did make the initial decision to deny plaintiff's application, that decision was reviewed by an Appeals Committee composed of Trustees, which met and considered the matter. The ultimate decision to deny benefits was made by the Trustees and is therefore entitled to deferential review under the arbitrary and capricious standard.
The Parties' Motions
Defendant moves for summary judgment on the grounds that its denial is supported by substantial evidence and should be upheld as a matter of law. Plaintiff counters that the Trustees' denial of benefits was arbitrary and capricious for three reasons: (1) defendant failed to provide plaintiff with adequate notice of the reasons for their denial and deprived plaintiff of his right to a "full and fair review" of its decision; (2) defendant's denial of benefits is unsupported by substantial evidence; and (3) the definition of "total disability" employed by defendants, — i.e., unable to work in any capacity, is ambiguous because it fails to account for his age, education, and vocational skills. Plaintiff seeks back pension benefits beginning January 8, 1996, attorney's fees, and compensatory and punitive damages.
ERISA's Notice and Review Requirements
Plaintiff contends that the Trustees' decision to deny him benefits was arbitrary and capricious because they provided him with insufficient notice of the reasons for the denial. In particular, plaintiff asserts that defendant violated ERISA's notice requirement when it determined that he was not totally disabled, — i.e., able to work in some capacity, but failed to specify any employment options or the specific medical evidence relied upon in reaching its decision. Plaintiff also argues that defendant's failure to provide him with any specific evidentiary basis for its decision deprived him of information necessary to adequately challenge the denial on appeal, thereby precluding a "full and fair review" of the decision.
ERISA provides that every employee benefit plan shall:
(1) provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant, and
(2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for full and fair review by the appropriate named fiduciary of the decision denying the claim.29 U.S.C. § 1133.
Department of Labor regulations promulgated under ERISA provide specific guidelines for the content of the required notice:
The notification shall set forth, in a manner calculated to be understood by the claimant —
(i) The specific reason or reasons for the adverse determination;
(ii) Reference to the specific plan provisions on which the determination is based;
(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.29 CFR 2560.503-1(g).
The purpose of the notice requirements is "to provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts."Juliano v. Health Maintenance Organization of New Jersey, Inc., 221 F.3d 279, 287 (2d Cir. 2000).
Under ERISA, an administrator's decision to deny a plan participant's claim for disability benefits is arbitrary and capricious if it is made in the absence of the "full and fair review" required by 29 U.S.C. § 1133(2). Crocco v. Xerox Corp., 137 F.3d 105, 108 (2d Cir. 1998); see also Cook v. N.Y. Times Co. Group Long Term Disability Plan, 02 Civ. 9154, 2004 U.S. Dist. LEXIS 1259 at *6 (S.D.N.Y. Jan. 30, 2004). A full and fair review means "knowing what evidence the decision-maker relied upon, having an opportunity to address the accuracy and reliability of the evidence, and having the decision-maker consider the evidence presented by both parties prior to reaching and rendering his decision." Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 598 (5th Cir. 1994); Sandoval v. Aetna Life And Cas. Ins. Co., 967 F.2d 377, 382 (10th Cir. 1992).
Cejaj v. Bldg. Serv. 32B-J Health Fund, 02-CV-6141, 2004 U.S. Dist. LEXIS 3401 (S.D.N.Y. March 4, 2004), involved the same employee benefit plan at issue in this case. In Cejaj, the plaintiff, who sustained on-the-job injuries while working as a porter in a commercial building in Manhattan, claimed that the Fund's denial of benefits was arbitrary and capricious because it failed to provide him with adequate notice under ERISA. As in the present case, the various letters that the plaintiff had received from the Trustees informing him that his application had been denied contained no explanation or reasoning for their decision, stating only that plaintiff did not meet the medical standard for permanent disability, defined as the inability to work in any capacity, commencing on the date the disability was incurred.
The court found such sparse and unelucidating notice insufficient to meet the requirements of ERISA for two separate reasons. First:
The letters do not explain why the Trustees concluded that plaintiff is not totally disabled — that is, they fail to specify whether the Trustees find him capable of returning to his original work, or capable of obtaining less physically demanding employment. This failure to identify other viable employment options suggests that the Trustees did not conduct a "full and fair review."Id. at *24.
The court noted that an inquiry into the plaintiff's employment prospects was particularly warranted given that plaintiff was in his early sixties, possessed little formal education, had limited abilities to read and write English, and spent over twenty-five years employed in the same capacity, as an unskilled laborer.Id. at n. 5.
The court also found notice to be insufficient for the more basic reason that the Fund had failed to explain why it had chosen to credit certain pieces of medical evidence over others:
The letters that plaintiff received from the Trustees failed to elucidate whether and how they had reconciled the reports from plaintiff's treating physicians, who diagnosed plaintiff as permanently and completely disabled . . . with the reports from their own expert, Dr. Rubin, who determined that plaintiff was fit to return to work, albeit of some unspecified kind.Id. at *25.
The court acknowledged that, under Supreme Court precedent, plan administrators need not accord deference to the opinion of a claimant's treating physicians. See Black and Decker Disability Plan v. Nord, 538 U.S. 822, 830-34 (2003). The court emphasized, however, Nord's warning that administrators must not "arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Id. at 834. The court held that this requirement — to consider all reliable evidence — implied that in conducting a "full and fair review," an administrator must demonstrate that it considered the evidence from both sides and explain why it found one medical opinion more credible than the other, directly conflicting opinions. The court concluded that the Trustees' failure to do so violated ERISA's notice requirement and the plaintiff's right to a "full and fair review" of their denial, and remanded to the administrator for reconsideration. See also Brown v. Bd. of Trs. of the Bldg. Serv. 32B-J Pension Fund, 392 F. Supp. 2d 434 (E.D.N.Y. 2005); Nerys v. Bldg. Serv. 32B-J Health Fund, 03-CV-0093, 2004 U.S. Dist. LEXIS 19766 (S.D.N.Y. September 29, 2004) (finding insufficient notice under ERISA).
In Brown, a case also involving the Fund, the court relied onCejaj to find the denial of benefits to an injured maintenance worker arbitrary and capricious on the basis of inadequate notice. In that case, the court found notice insufficient because, despite the existence of substantial medical evidence supporting his claim, the letters sent to plaintiff merely stated that the denial was based upon a doctor's report unfavorable to the plaintiff and thus failed to "elucidate the reasons for rejecting plaintiffs claim." Brown, 392 F. Supp. 2d at 444. As in Cejaj, the Brown court also faulted the Trustees for failing to specify what work the plaintiff, a sixty year-old who had performed manual, unskilled labor for the past twenty-two years, could hope to find. Id.
In Brown, the Fund argued that it need not consider an applicant's age, education, or vocational skills in determining eligibility because the plan's definition of "totally disabled" — unable to work in any capacity — makes such attributes irrelevant. The court rejected this argument, holding that an interpretation of "total disability" that failed to take into account all of plaintiff's circumstances including age, education, and prior work experience, would be "unduly restrictive," and would "render the plan's promise of a disability pension hollow for all but the most grievously incapacitated claimants." Brown, 392 F. Supp. 2d at 444.
Brown cited with approval Helms v. Monsanto Co., 728 F.2d 1416 (11th Cir. 1984), a case in which the court essentially rewrote a plan that defined total disability as "prevented thereby from engaging in any occupation or employment for remuneration or profit," finding that the provision was overly harsh and should not be given an absolute and literal interpretation. Id. at 1420. The Helms Court looked to insurance law and social security cases to find a definition of "total disability" that accounted for all of the circumstances of a particular applicant.
The court declines to adopt the reasoning of Brown to the extent it imposes a substantive requirement on the Trustees to consider an applicant's specific vocation-related attributes. The Fund's admittedly excruciatingly strict eligibility standard, which requires an inability to work in any capacity, is a result of a delicate negotiation process between labor and management that does not warrant judicial interference. See Mario v. P C Food Markets, Inc., 313 F.3d 758, 763 (2d Cir. 2002); Cejaj, 2004 U.S. Dist. LEXIS 3401 at *28 ("We simply lack the authority to rewrite these plans to include consideration of other factors.")
The Trustees have exercised their authority under the Agreement and Declaration of Trust to set eligibility criteria that, unlike Social Security determinations, prohibits the use of individualized vocational assessments. As stated in an affidavit submitted by defense counsel:
The Funds' pensions are based on total physical disability, meaning the physical inability to work at all. Plaintiff seems to have in mind an occupational, or vocational, disability pension, in which the claimant is unable to work in his or her field, and for other, non-medical reasons, is unable to secure other kinds of employment. This distinguishes the Funds' eligibility requirements from those of Social Security, which awarded plaintiff disability benefits at least partially because the SSA found that plaintiff was no longer able to work as a cleaner and his skills and background were not transferable to other activities. The Funds do not, however, include occupational pensions, and it is for this reason that plaintiff's insistence that we consider his lack of language skills, education, training, etc., irrelevant and improper.
As a consequence, the Trustees are under no obligation to identify specific employment options actually available to the plaintiff to satisfy ERISA's notice requirement. Such an obligation would necessarily entail analysis of plaintiff's language abilities, education, and vocational skills, which is not contemplated under the plan.
The fact that the Fund need not consider these other circumstances does not, however, excuse it from the ERISA's basic requirement to provide "adequate notice" or to afford applicants a "full and fair" review of a decision to deny benefits. ERISA and its regulations require the administrator to set forth the "specific reasons" for the denial. 29 U.S.C. § 1133; 29 CFR 2560.503-1(g)(i). A general statement that the applicant does not meet the eligibility criteria coupled with a verbatim quotation of such criteria from plan documents does not suffice. Cejaj, 2004 U.S. Dist. LEXIS 3401 at *8-9; Alternative Care Sys v. Metropolitan Life Ins. Co., 92-CV-7208, 1996 U.S. Dist. LEXIS 1705 at *3 (S.D.N.Y. Feb. 16, 1996); Omara v. Local 32B-32J Health Fund, 97-CV-7538, 1999 U.S. Dist. LEXIS 14323 at *3 (E.D.N.Y. Mar. 30, 1999).
Rather, the notice must state both the evidence relied upon in reaching the adverse determination and why that evidence was credited over any other reliable evidence supporting the application. Nerys, 2004 U.S. Dist. LEXIS 19766 at *26-30.
In the present case, the various letters sent to plaintiff informing him that his application for benefits had been denied utterly failed to comply with ERISA's notice requirements. The letters merely state that plaintiff's medical condition did not meet the plan's criteria for "totally disabled" and quoted the plan's definition of that term. Basically, no reasons were given. None of the three letters sent by defendant dealt with the substantial supporting medical evidence proffered by plaintiff. Nor did these denial letters attempt to explain why plaintiff would be able to work in some capacity. The court therefore finds that the Trustees' failure to provide adequate notice under ERISA, and the consequent failure to afford plaintiff a "full and fair review" of the decision to deny benefits, was arbitrary and capricious as a matter of law.
The Substantial Evidence Requirement
Both parties have also moved for summary judgment on the merits, with defendant claiming that its denial is supported by substantial evidence as a matter of law, and plaintiff arguing to the contrary. The present record is insufficient to grant either motion. Evidence favorable to plaintiff includes the medical reports of Gogan and Kosovich, each of whom stated that plaintiff cannot work, as well as the SSA's finding of disability. On the other hand, the Statement of Disability initially submitted by Beshara, which indicated that plaintiff was not disabled for any occupation, and the Rottenstein report support defendant's position. In light of this conflicting evidence, and in the absence of any reasoning or explanation for the Trustees' decision, the court finds that neither party has succeeded in eliminating any genuine issue of material fact, making summary judgment on the merits inappropriate.
Remand
A finding that the Trustees' determination concerning plaintiff's eligibility for disability benefits was arbitrary and capricious does not license the court to substitute its own judgment for that of the Trustees and simply conclude that the plaintiff has established his entitlement to benefits. Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995); Cook, 2004 U.S. Dist. LEXIS 1259 at *19. Unless the evidence in the record is such that it would be unreasonable for the plan administrator to deny the application for benefits on any ground, the appropriate remedy is to remand to the administrator for further consideration.Cejaj, 2004 U.S. Dist. LEXIS 3401 at *28-29; Quinn v. Blue Cross Blue Shield Ass'n, 161 F.3d 472, 477 (7th Cir. 1998);Miller v. United Welfare Fund, 72 F.3d 1066, 1073-74 (2d Cir. 1995).
As the evidence in the present case is not so clearly one-sided as to require a finding for either party, the case is remanded to the Trustees for reconsideration in compliance with the requirements of 29 U.S.C. § 1133.
Attorneys' Fees and other Damages
In his complaint, plaintiff requests compensatory damages for mental distress, punitive damages, and attorney's fees and costs. The request for monetary damages, both compensatory and punitive, must be denied as a matter of law because such extracontractual relief is not available in a suit under ERISA. See Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 148 (1985); Lee v. Burkhart, 991 F.2d 1004, 1011 (2d Cir. 1993); Thomas v. Verizon, 02-CV-3083 2004 U.S. Dist. LEXIS 17576 at *15-16 (S.D.N.Y. September 2, 2004).
The request for attorney's fees and costs is also denied. ERISA provides that "the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132 (g)(1). The factors to be considered in deciding an application for attorneys' fees in an ERISA case under are set forth in Chambless v. Masters, Mates Pilots Pension Plan, 815 F.2d 869 (2d Cir. 1987):
(1) the degree of the offending party's culpability or bad faith, (2) the ability of the offending party to satisfy an award of attorney's fees, (3) whether an award of fees would deter other persons from acting similarly under like circumstances, (4) the relative merits of the parties' positions, and (5) whether the action conferred a common benefit on a group of pension plan participants.
Id. at 871.
After reviewing these factors, the court concludes that an award of attorneys' fees would not be appropriate. As to the first factor, there is no evidence that defendant acted in bad faith in denying plaintiff's application for benefits. Furthermore, defendant's culpability, for failing to provide adequate reasons for denying plaintiff's application for benefits, is not extreme. The second and third factors weigh in favor of an award of attorneys' fees because defendant has not denied an ability to satisfy such an award and because it may well deter defendant and other plan administrators from failing in the future to comply with ERISA's notice requirement.
However, the final two Chambless factors weigh heavily against an award. Defendant's position in this litigation was not frivolous or without any support in the record. Moreover, plaintiff brought this case on his own behalf and it conferred no common benefit on other plan participants. Accordingly, the request for attorneys' fees is denied.
CONCLUSION
Defendant's motion for summary judgment is denied. Plaintiff's motion for summary judgment is granted only to the extent of his claim for insufficient notice and failure to provide a "full and fair review" as required by ERISA. The case is remanded to the Trustees for reconsideration of their decision in compliance with the procedural requirements of 29 U.S.C. § 1133.
SO ORDERED