Opinion
8:00CV630.
May 20, 2002
MEMORANDUM AND ORDER
This matter is before the court for decision after a trial on January 2, 2002. This is an action under the Employee Retirement Income Security Act (hereafter, ERISA), 29 U.S.C. § 1101, et seq.
I. Findings of Fact
The facts of the case are undisputed. The administrative record that was before Mutual of Omaha Insurance Company (hereafter, Mutual) at the time it made its decision to terminate Farfalla's disability insurance has been offered and received into evidence. Exhibit 3. The record shows that Ms. Farfalla was employed as a cardiac arrythmia technician — shift leader at Creighton University (hereafter, Creighton) and was covered by a group long-term disability policy issued by Mutual to Creighton. Creighton purchased the policy to fund its long-term disability plan (hereafter, the Plan) for eligible employees. Creighton is the plan administrator and Mutual is the fiduciary responsible for investigating and deciding claims under the Plan. Pretrial Order, Filing No. 25, Undisputed Facts, ¶ B (4). The Plan gives Mutual "full authority and discretion to construe the terms" of the Plan. Exhibit 2 at FAR-19.
Under the terms of the Plan, Farfalla was entitled to disability benefits for twenty-four months if she was unable to perform the functions of her job. Pretrial Order, Filing No. 25, Undisputed Facts, ¶ B (8). At the end of twenty-four months, she became entitled to total disability benefits only if she could not "work for pay at any job for which [she was] reasonably fitted by education, training, or experience." Id.
On December 31, 1994, Farfalla fractured her wrist. The injury ultimately required two surgical procedures. Exhibit 3 at FAR-722. On February 1, 1995, she filed a claim for long-term disability benefits due to the injury. Pretrial Order, Filing No. 25, Undisputed Facts, ¶ B (6). After an elimination period, Mutual began paying benefits to Farfalla beginning on January 30, 1995. Id. at ¶ B (7).
The medical records show that Farfalla continued to experience complications and pain from her injury throughout 1995 and 1996. Exhibit 3. Mutual obtained Farfalla's medical records and monitored her condition and continued paying benefits. Id. On October 16, 1995, an in-house reviewing physician noted "records reviewed and do not support [total disability] since at least 9-21-95 in my opinion based on job description," and recommended a Functional Capacity Assessment (hereafter, FCA). Exhibit 3, FAR-165-66. Farfalla underwent the assessment in November 1995. The report from the assessment indicates that Farfalla "remains limited in her tolerance to hand activities such as typing and manipulating small objects," but that she was able to work at a medium physical capacity level for occasional lifting and carrying, and at a heavy level for pushing and pulling.
On January 25, 1996, Farfalla's treating physician, Dr. Jeffrey Tiedeman, reviewed the FCA and released Farfalla to other work within its suggested guidelines, noting "she may have difficulty with constant operation of computer work station and frequent equipment operation." Exhibit 9 at FAR-100. He also suggested that a job site visit and specific recommendations by a physical therapist would be helpful. Id. In July 1996, after reviewing work analyses for Farfalla's prior jobs as both a "Monitor Tech" and a "Shift leader, Arrythmia Monitor Tech," Dr. Tiedeman released Farfalla to work as a shift leader, noting, with respect to the monitor tech position, that "[m]y main concern is the occasional twisting of the wrist which is apparently required." Exhibit 10 at FAR-523.
In August 1996, however, Farfalla underwent surgery for carpal tunnel syndrome. Exhibit 11. On September 26, 1996, Dr. Tiedeman released Farfalla to return to work with the limitation that she could "gradually increase use of right hand over next two weeks; OK to seek employment, should not do data entry more than 50% of time at present." Exhibit 12. Mutual also provided Farfalla with job placement assistance during the time she was receiving benefits. Exhibit 3, FAR 522-25. The record shows Farfalla applied for several positions, but was unable to find employment. Id.
On December 31, 1996, Mutual notified Farfalla that it would terminate her benefits on January 30, 1997, because it had determined that she did not meet the Plan's definition of total disability. Pretrial Order, Filing No. 25, Undisputed Facts, ¶ B(9). Farfalla appealed that decision. Exhibit 22.
Farfalla underwent additional functional capacity assessments in February 1997 and in June 1997. Exhibits 25 and 28. The FCA performed in February 1997 found that Farfalla had "significant impairment of the hand which would preclude her from performing work requiring fine, rapid hand movements such as typing," but noted that "she would be able to use the hands for gross manipulation" and recommended limiting lifting to twenty pounds occasionally and ten pounds frequently. Exhibit 28 at FAR-317. The FCA performed in June 1997 included recommendations that Farfalla return to activities at or below levels of "minimal" for occasional hand grasping and fine manipulation, but did not otherwise impose substantial limitations on Farfalla's physical capacities. Exhibit 3 at FAR-375. Dr. Tiedeman reviewed the FCA and concluded "that the parameters outline[d] in the functional capacity assessment be used as a guide for appropriate work restrictions." Id. at FAR-676.
Mutual's Medical Review Department again reviewed Farfalla's records and determined that the additional FCAs did "not support disability from any occupation." Exhibit 26. Mutual then submitted the claim to Disability Solutions Plus, Inc., for a medical peer review. Exhibit 31. The physician who performed the review concluded that "the claimant was able to perform some occupation as of January 1, 1997," but noted that "she may have some yet undiagnosed and untreated mental/nervous condition" that, though not rendering her "unable to work on that basis," "may be contributing to her present condition and how she perceives it." Exhibit 3 at FAR-621. In December 1997, Mutual denied Farfalla's appeal and upheld its previous denial of disability benefits. Exhibit 33.
Ms. Farfalla was later awarded Social Security disability benefits for a disability beginning on June 5, 1998, by reason of fibromyalgia. Exhibit 3 at FAR 576-581. Farfalla sought reconsideration of the appeal, submitting the Social Security decision in support of her position. Exhibits 36 and 38. Mutual declined to reconsider the decision. Exhibit 3 at FAR-572. Farfalla then filed this action.
II. Discussion
A. Applicable Law
CONCLUSIONS OF LAW
Under ERISA, a plan beneficiary has the right to judicial review of a benefits determination. See 29 U.S.C. § 1132(a)(1)(B). The first issue to consider in an ERISA case is the appropriate standard of review. See, e.g., Tillery v. Hoffman Encls., Inc., 280 F.3d 92, 1197 (8th Cir. 2002). Where a plan gives the administrator discretionary authority to determine eligibility for benefits, the court ordinarily reviews the administrator's decision for an abuse of discretion. Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1996). However, even if a plan gives the plan administrator discretion, a less-deferential "sliding-scale" standard of review is appropriate where a beneficiary presents material, probative evidence demonstrating that: 1) a palpable conflict of interest or serious procedural irregularity existed, 2) which caused a serious breach of the plan administrator's fiduciary duty to the claimant. Morgan v. Contractors', Laborers, Teamsters, Eng'rs Pension Plan, No. 01-1839, 2002 WL 656049, *4 (8th Cir. April 23, 2002). A claimant must produce evidence sufficient to satisfy this two-point requirement in order for a court to apply the "sliding-scale" standard. Id. at *5. In so doing, the claimant offers evidence that gives rise to serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator's whim. Id.Farfalla has failed to meet that burden. She has not presented evidence that would warrant application of less deferential review. See, e.g., Ferrari v. Teachers Ins. Annuity Ass'n, 278 F.3d 801, 806 (8th Cir. 2002). Although Mutual's status as both insurer and administrator could be considered a conflict of interest, not every funding conflict compels that conclusion. Tillery, 280 F.3d at 1197. Farfalla has not produced evidence tending to show that the conflict, if any, caused a serious breach of the plan administrator's fiduciary duty. See id. at 1198.
Moreover, Farfalla can point to no procedural irregularities that are "`so egregious that the court has a total lack of faith in the integrity of the decision-making process'" from which to infer that the plan administrator did not use proper judgment. Id. The plan administrator did not merely use an in-house medical consultant to review plaintiff's claim; it sought review by an independent consultant. Compare Woo, 144 F.3d at 1161 (holding the "defendant failed to use proper judgment by not having a scleroderma expert review [the] claim"), with Heaser v. Toro Co., 247 F.3d 826, 833-34 (8th Cir. 2001) (noting failure to provide a participant diagnosed with fibromyalgia with an examination by a doctor with expertise relating to her condition does not constitute a procedural irregularity that warrants application of the less deferential standard). Similarly, a mere failure to investigate a "host" of vague medical problems is not a procedural irregularity in the face of treating physicians' opinions that a claimant is not disabled. See Clapp, 262 F.3d 827-28.
Accordingly, the court will apply the "abuse of discretion" or "arbitrary and capricious" standard of review. Under that standard, the court determines whether the plan administrator's decision to deny benefits was reasonable. Clapp v. Citibank, N.A. Disability Plan, 262 F.3d 820, 828 (8th Cir. 2001). To determine reasonableness, "the court must determine whether the decision is supported by substantial evidence, which is `more than a scintilla but less than preponderance.'" Id. (quoting Sahulka v. Lucent Techs., Inc., 206 F.3d 763, 767-68 (8th Cir. 2000)). A plan administrator's decision will be deemed reasonable if a reasonable person could have reached a similar decision, given the evidence before him. Id. Thus, the court will not disturb a decision supported by a reasonable explanation even though a different reasonable interpretation could have been made. Id.
Additionally, in conducting judicial review under the abuse of discretion standard, the reviewing court is limited to review of the evidence that was before the plan administrator when the final decision was made. Oldenburger v. Central States S.E. and S.W. Areas Teamster Pension Fund, 934 F.2d 171, 174 (8th Cir. 1991). Additional evidence may be considered by a district court in an ERISA benefit-denial case, however, if the plaintiff shows good cause for the district court to do so. Ferrari, 278 F.3d at 807. Farfalla has made no such showing. Under the circumstances, the court can consider only the evidence presented to Mutual before its denial of her appeal on December 18, 1997. Five factors are relevant to the determination of reasonableness: 1) whether the administrator's interpretation is consistent with the goals of the plan; 2) whether the interpretation renders any language in the plan meaningless or internally inconsistent; 3) whether the administrator's interpretation conflicts with the substantive or procedural requirements of the ERISA statute; 4) whether the administrator has interpreted the relevant terms consistently; and 5) whether the interpretation is contrary to the clear language of the plan. Finley v. Special Agents Mut. Ben. Ass'n, 957 F.2d 617, 621 (8th Cir. 1992).
Even if the court were to consider the evidence presented to Mutual later, the court would come to the same conclusion. The evidence presented to Mutual after the Social Security Administration had granted Farfalla's application for disability benefits did not establish that Farfalla was totally disabled at the time her benefits were terminated in January 1997.
The court's review of the evidence submitted to Mutual before its final decision shows that Mutual's decision was reasonable. The only conclusion that the administrative record supports is the conclusion that Farfalla was not totally disabled from "work[ing] for pay at any job" for which she was qualified. There is no evidence in the record that would support a contrary conclusion. Although there were intimations in the record, particularly in the February 1997 FCA, that Farfalla's condition was worsening, the evidence did not suggest any rapid deterioration or inability to function. Farfalla's own treating physician released her to return to work. The record shows that Mutual tracked plaintiff's medical history for two years and offered her job training. A determination that a claimant suffers from a disability under the Social Security regulations does not require an ERISA plan to reach the same conclusion. Coker v. Metropolitan Life Ins. Co., 281 F.3d 798 (8th Cir. 2002). ERISA plans are not bound by Social Security determinations, and this court owes no deference to findings made under the Social Security Act. Id.
The record demonstrates that Mutual's decision to deny benefits to the plaintiff was not unreasonable. The decision comports with the purpose of a disability benefits plan. There has been no showing that Mutual's interpretation renders other plan language meaningless or inconsistent, or that the plan had been inconsistently applied. Farfalla does not contend that Mutual's denial did not comport with any substantive or procedural requirements of ERISA. The record amply demonstrates that Mutual's decision to deny total disability benefits to Farfalla was reasonable. The court finds Mutual is entitled to judgment in its favor on Farfalla's claim.
Accordingly,
IT IS HEREBY ORDERED that judgment is entered in favor of Mutual of Omaha.