Opinion
IP 01-1861-C-T/K.
October 9, 2002
ENTRY ON MOTIONS FOR SUMMARY JUDGMENT
This Entry is a matter of public record and is being made available to the public on the court's web site, but it is not intended for commercial publication either electronically or in paper form. Although the ruling or rulings in this Entry will govern the case presently before this court, this court does not consider the discussion in this Entry to be sufficiently novel or instructive to justify commercial publication or the subsequent citation of it in other proceedings.
Defendant Hartford Life Insurance Company ("Hartford Life") and Plaintiff Sue Haynes have both moved for summary judgment on Plaintiff's claim for disability benefits brought pursuant to the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and related state claims. The court rules on both motions as explained below.
I. Background Facts
The following facts are undisputed, and indeed, the parties' main disagreements concern not the facts themselves but what inferences to draw from them. The Plaintiff currently suffers from Multiple Myeloma ("MM"), a form of bone cancer for which she underwent a bone marrow transplant in 1992. She has also been diagnosed with renal insufficiency, hypertension, and depression. (Pl.'s Statement of Material Facts ("SMF") 1-3.) In addition, X-rays taken in 1999 revealed evidence of degenerative disc disease and osteopenia, that is, decreased bone mass. (Pl.'s SMF at 4-5.)
Plaintiff continually refers to her illness as "terminal." The record supports the fact that MM is incurable (Administrative Record ("AR") at 89), but not that it is terminal in the case of Plaintiff. Nowhere in the case file does that diagnosis appear. Indeed, Ms. Haynes' treating physician Dr. Abonour noted in his June 18, 2001, letter that Plaintiff has had MM for 12 years, making that qualification a questionable one. (AR at 61.) Conversely, Defendant claims Plaintiff's cancer is "in remission." Although it is amply documented that her MM is well-controlled, it is not clear whether that is the same as being in remission. The distinction in any event is a technical one, with no importance to the outcome of this case.
Ms. Haynes was employed as a Sales Representative by Trayco. of S.C. and enrolled in its long-term disability plan, which was insured through a policy underwritten by Hartford Life. The policy provides monthly benefits for those who can establish, inter alia, that they have become "total disabled." In the part of the definition relevant to this case, that means the claimant "must be so prevented from performing the essential duties of any occupation for which [they] are qualified by education, training, or experience." (Def.'s SMF at 5.) The policy also grants Hartford Life "full discretion and authority to determine eligibility for benefits and to construe all terms and provisions of the Group Insurance Policy." (Def.'s SMF at 6.)
In 1996 the Plaintiff submitted a claim for long-term disability benefits supported by a statement of her attending physician, Dr. Rafat Abonour, regarding her health status. Dr. Abonour later supplemented Ms. Haynes' application with medical records. (Def.'s SMF at 7-8, 12.) On July 22, 1996, Hartford Life advised Plaintiff of its approval of her claim for benefits, which she continued to receive until April 2001. Throughout this time Hartford Life periodically updated Haynes' file with Dr. Abonour's attending physician statements, claimant questionnaires completed by Ms. Haynes, and other medical records. (Def.'s SMF at 19-21.) During the same period Hartford Life learned of Ms. Haynes' employment with the Chicago Regional Census Center and asked for payroll records. These records revealed that Plaintiff had worked a total of 358.5 hours from March 26, 2000 to July 22, 2000 for the Census Center — including the driving of 2,626 miles in that period. One week Plaintiff worked a full 38.5 hours; other weeks she worked much less. (Def.'s SMF at 23.)
For the initial approval and the first 24 months of benefits, Ms. Haynes did not have to meet the more stringent definition of total disability quoted above, but only prove that, as a result of her disability, she was earning less than 20% of her pre-disability earnings. (Def.'s SMF at 4-5.) However, the stricter definition governed her eligibility for all benefits subsequent to June 1, 1998. (Def's SMF at 18.)
On January 30, 2001, Mary Morgan, a Rehabilitation Clinical Case Manager for Hartford Life, conducted an "Employability Analysis" using OASYS, a computer system that matches an individual's qualifications, taking into account that person's physical limitations and education, with 12,741 occupations listed by the U.S. Department of Labor in the Dictionary of Occupational Titles. (Def.'s SMF at 27.) Ms. Morgan relied on Dr. Abonour's attending physician statements and a Physical Capacities Evaluation Form dated October 25, 2000, to determine Ms. Haynes' functional restrictions. (AR at 80-81.) According to the analysis, Plaintiff was qualified to perform around eight occupations, principally some type of sales representative.
Hartford Life notified Plaintiff of its decision to terminate her benefits on April 19, 2001. It informed her the decision was based on the totality of the claim file and provided a list of the items contained therein, which included claimant questionnaries as well as Dr. Abonour's medical records, attending physician statements, and physical capacities evaluations. The notice specifically cited Dr. Abonour's findings in the Physical Capacity Evaluation dated October 10, 2000, that Plaintiff could: sit for 6 hours, stand for 3 hours, walk for 3 hours, drive for 2 hours; occasionally (0-33% of the time) lift up to 10 lbs., climb, balance, stoop, kneel, crouch, handle; frequently (34-66%) reach, finger, feel; and maintain a sedentary job. (AR at 77, 88.) The letter also apprised Plaintiff of the results of the Employability Analysis and of her right to appeal the decision under ERISA. (AR at 78.)
Plaintiff, represented by counsel, advised Hartford Life of her intent to appeal, and in support thereof submitted a June 18, 2001, letter from Dr. Abonour. He stated that while Ms. Haynes' cancer "is successfully being controlled with Thalidomide" he believed that the side-effects of this medication would prevent her return to work: "She continues to have significant fatigue and will not be able to go without a daily nap. She has neuropathy in both lower and upper extremities in addition to the chronic arthritic pain she has. This clearly prevents her from doing any repetitive motion. Although her laboratory data looks reasonable, and she is ambulatory most of the time, I cannot see her working with these two significant debilitating conditions." (AR at 61.)
Defendant then had Dr. William Sniger, the Associate Medical Director for Hartford Life, review Plaintiff's medical records and speak with Dr. Abonour, though he did not personally examine Plaintiff. In his report, Dr. Sniger concluded that Ms. Haynes was fit for a sedentary occupation: "The claimant's multiple myeloma has remained under good control and Dr. Abonour stated that she does not have any symptoms of MM. She has no documented fatigue or other impairment. It was noted that she has `excellent energy' and that `her performance status is 100%,' and Dr. Abonour also stated, `Busy most of the day. She is no longer having fatigue.'" (AR at 49.) Dr. Sniger added that Plaintiff's hypertension is under control, and that she has normal vision, motor strength and gait. Thus, he saw nothing to prevent her from performing any of the occupations identified as suitable by the Employability Analysis.
On November 9, 2001, Hartford Life notified Plaintiff that its adverse benefits determination would stand, and Ms. Haynes brought this lawsuit. (Def.'s SMF at 32-34.)
II. Standards of Review A. Summary Judgment
The court must grant summary judgment if there is "no genuine issue as to any material fact." Fed.R.Civ.P. 56(c). The standard for summary judgment is the same as that of a directed verdict, that is, it is warranted where a jury or other trier of fact could not rationally render a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Colosi v. Electri-Flex Co., 965 F.2d 500, 504 (7th Cir. 1992). A "metaphysical doubt" regarding the existence of a material fact will not defeat a motion for summary judgment. Matsushita Elec. Indus. Co., Ltd. v Zenith Radio Corp., 474 U.S. 574, 587 (1986). Moreover, the moving party need not positively disprove the nonmovant's case, but may prevail by "pointing out to the district court" the absence of evidentiary support for it. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Summary judgment is an especially apt device for disposition of ERISA benefits cases such as this one because of the limited form of judicial review.
Where, as here, the parties have both filed motions for summary judgment, the court's review of the record "requires that [it] construe all inferences in favor of the party against whom the motion under consideration is made." Metropolitan Life Ins. Co. v. Johnson, 297 F.3d 558, 561-562 (7th Cir. 2002) (citation omitted). The court will begin with Defendant Hartford Life's first-filed motion, and, therefore, will draw all reasonable inferences in favor of Plaintiff.
B. ERISA
As an ERISA case, this court must also consider the standard of review of administrative decisions taken pursuant to an employee benefits plan regulated by that statute. Generally, such review is de novo. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). But where the plan confers discretion on the plan administrator to interpret and apply its terms, courts will reverse administrative decisions only where they are "arbitrary and capricious." Carr v. Gates Health Care Plan, 195 F.3d 292, 294 (7th Cir. 1999) (citing Firestone Tire Rubber, 489 U.S. at 115; Butler v. Encyclopedia Brittanica, Inc., 41 F.3d 285, 288 (7th Cir. 1994)). This is a "deferential standard of review." Hess v. Hartford Life Accident Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001). Thus, if the claims administrator offers a reasonable explanation for its decision, "[that] decision should not be disturbed even if another reasonable, but different, interpretation may be made." Krawczyk v. Harnishfeger Corp., 41 F.3d 276, 279 (7th Cir. 1994). See also Hess, 274 F.3d at 461 ("[It] is not [the court's] function to decide whether [it] would reach the same conclusion as the Plan or even rely on the same authority") (citation omitted). The court will uphold the administrator's decision so long as it is not "downright unreasonable." Id. (citing Butler, 41 F.3d at 291).
Both parties agree that the arbitrary and capricious standard applies to review of Hartford Life's denial of benefits. (Pl.'s Br. at 5; Def.'s Br. at 15.) The employee benefit plan in which Plaintiff participated was insured through a Hartford Life insurance policy which specifically reserved full discretion in the Defendant to make benefits determinations and construe all terms of the policy. (Def.'s SMF at 6.) The policy language used to state the reservation of discretion closely resembles language the Seventh Circuit has designated as a "safe harbor" for plan administrators seeking protection from de novo judicial review. See Herzenberger v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000). Therefore, that is the standard which will guide this court's analysis.
C. Conflict of Interest
Plaintiff raises an additional point that bears on the standard of review, or at least the analysis in general. Ms. Haynes asserts that Hartford Life operated under a conflict of interest when it denied her benefits because it was both claims administrator and insurer, and, thus, had a financial stake in the decision to deny benefits pursuant to the employee plan of which it was a fiduciary. In Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989), the Supreme Court declared that the administrator's self-interest does not affect the standard of review, but is a factor to weigh in considering whether the administrator acted arbitrarily and capriciously. The Supreme Court did not say how much it should weigh, however, and as Judge Easterbrook puts Judge Boudin's conclusion, "it can't weigh very much without exceeding the judicial capacity to tailor [intermediate] standards of review." Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 981 (7th Cir. 1999) (citing Doe v. Travelers Ins. Co., 167 F.3d 53, 57 (1st Cir. 1999)). Fortunately, whether a conflict of interest is a factor which has the practical effect of heightening the standard of review need not concern this court. For Perlman makes clear that Hartford Life's self-interest in the outcome of the decision cannot, without more, be imputed to the actual person who made the benefits decision. Perlman, 195 F.3d 981 ("We have no reason to think UNUM's benefits staff is any more `partial' against applicants than federal judges when deciding income tax cases.")
As reasons for this rule, Perlman cited (1) the discrepancy between the interests of a large corporation and its individual agents; (2) the incentive a large business has in maintaining its reputation for paying meritorious claims to its employees; and (3) the fact that many businesses retrospectively reimburse the insurer for all disbursements. Id. at 981. As to the last rationale, there is no proof in this case regarding the structure of Hartford Life's arrangement with Trayco. But (1) and (2) still retain their force.
The Perlman court's refusal to presume a conflict of interest in administrators who double as insurers is shared by the majority of cases in the Seventh Circuit to have addressed the issue. See Lande v. Zurich Am. Ins. Co. of Ill., No. 00-208, 2000 U.S. Dist. WL 1372833, at *4 (N.D.Ill. Sept. 22, 2000) (collecting cases). There is, nonetheless, an outlier. In Hightshue v. AIG Life Insurance Co., 135 F.3d 1144, 1148 (7th Cir. 1998), the court found that an insurer had a conflict of interest solely because of its dual role as plan insurer and administrator, and "[w]hen it is possible to question the fiduciaries' loyalty, they are obliged at a minimum to engage in an intensive and scrupulous independent investigation of their options to insure that they act in the best interests of the plan beneficiaries." Id. at 1148. This court agrees with the Lande court that, considering the great weight of contrary authority, including the subsequently decided Perlman case, Hightshue would be dubious authority to support a departure from the arbitrary and capricious standard of review in these situations. See Lande, 2000 WL 1372833 at *4. Instead, to establish a conflict of interest Plaintiff must come forward with evidence suggesting actual bias on the part of the first-level decision-maker. See Mers v. Marriott Int'l Group Accidental Death Dismemberment Plan, 144 F.3d 1014 (7th Cir. 1998) (requiring proof of actual bias); Perlman, 195 F.3d at 981 ("Perlman has not asked us to probe the terms on which UNUM's insurance was written, or to investigate the compensation and promotion opportunities of the benefits staff.") Since Ms. Haynes has not produced such evidence, this court will not count Hartford Life's dual role as administrator and insurer as a strike against it in this analysis.
III. Discussion
The court must therefore decide whether a triable issue of fact exists as to the reasonableness of Hartford Life's decision. In reviewing a benefits determination for arbitrariness and capriciousness, the court must evaluate factors such as "the impartiality of the decision-making body, the complexity of the issues, the process afforded the parties, the extent to which the decision-makers utilized the assistance of experts where necessary, and finally the soundness of the fiduciary's ratiocination." Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1344 (7th Cir. 1995); see also Hughes v. Life Ins. Co. of N. Am., 112 F. Supp.2d 780 (S.D.Ind. 2000) (applying Chalmers factors). In this regard, the impartiality of Hartford Life has already been discussed, and Plaintiff does not dispute the adequacy of the process afforded her. Instead, the parties' disagreement focuses on Hartford Life's use of experts and the overall support for its decision. In defense thereof, Hartford Life adduces Plaintiff's work records and the conclusions of its experts, Ms. Morgan and Dr. Sniger. Because Ms. Haynes has not produced sufficient evidence from which a rational trier of fact could find that reliance on this evidence was "downright unreasonable," she cannot withstand summary judgment in Defendant's favor.
Plaintiff first claims that in telling her she was fit to "sell pencils," Defendant relegated Ms. Haynes to a menial job in violation of the policy clause limiting the type of occupation a claimant would have to accept to one commensurate with that person's education, training, and qualifications. See Hammond v. Fid. and Guar. Life Ins. Co, 965 F.2d 428 (7th Cir. 1992) ("Although broad in scope, `general' disability provisions should not be construed so literally that an individual must be utterly helpless to be considered disabled.") Plaintiff misrepresents Ms. Morgan's findings, however. Her analysis revealed at least eight occupations in the sales representative area for which Ms. Haynes was qualified by education and experience, and which complied with her physical limitations. (AR at 81-82.) Hartford Life could hardly be said to be condemning
Plaintiff to a job far beneath her qualifications when it recommended the same kind of occupation as she held with her former employer. This argument therefore fails to raise a rational inference of arbitrariness on Defendant's part. Plaintiff also maintains that the chronology of events in this case demonstrates the unreasonableness of Hartford Life's denial of benefits. Instead of performing a medical assessment prior to rendering its initial determination, Hartford Life supposedly issued this decision solely in reliance on Ms. Morgan's vocational assessment, and did not seek medical review of Haynes' file until after Plaintiff retained counsel and submitted her treating physician's contrary opinion. This sequence is allegedly probative of Hartford Life's intent to deny Haynes benefits from the start. First, Plaintiff's argument does not rest on a fully accurate statement of the facts, because Hartford Life did have before it Dr. Abonour's medical records at the time of its original decision. It is true that the Defendant did not seek a second medical opinion until after Ms. Haynes took administrative appeal of its decision. But that is of no moment. Plaintiff has failed to cite any authority obligating a plan fiduciary to consult with medical experts prior to rendering a preliminary determination. Indeed, such a requirement would seem to unduly restrict an administrator's discretion. Nor does the absence of a medical review prior to the initial decision reasonably give rise to an inference that Hartford Life had intended to terminate the benefits before the review was commenced. The sequence of which Plaintiff complains simply does not impugn Hartford Life's intent in conducting the review. And where, as here, there is no evidence of an evil intent, the court need not pause at the reasonableness of the administrator's preliminary determination; rather, the proper focus of this court's review is whether the ultimate denial of benefits was done arbitrarily and capriciously.
Plaintiff also argues that Ms. Morgan failed to take account of the fact that in 1992 she allegedly had three automobile accidents cause by fatigue at the wheel. The only proof of this fact is Plaintiff's answer to a Personal Profile Evaluation sent by Hartford Life. (AR at 290.) Even assuming its truth, as the court must on summary judgment, those accidents occurred in 1992, and since then Plaintiff has driven at least 2,626 miles as part of her job for the Chicago Regional Census Center without record of a single accident. In addition, Plaintiff's medical file documents her decreasing levels of fatigue since that time. Ms. Morgan was thus fully justified in discounting the import of the 1992 accidents.
In that regard, Plaintiff seeks to undermine the credibility of the defense experts whose conclusions underlie its final decision. Plaintiff first argues bias based on the fact that both Ms. Morgan and Dr. Sniger are in-house employees of Hartford Life. They are thus allegedly prejudiced in favor of their employer. The Seventh Circuit position on conflicts of interest articulated in Perlman and other cases is fatal to this argument (see supra at 8). Those cases hold that the financial interest of the insurer cannot be attributed to its agent without specific evidence of partiality. If that is true of the employee making the benefits decision, it must be all the more true of experts one step removed from that decision. See, e.g., Reagan v. First Unum Life Ins. Co., 39 F. Supp.2d 1121, 1126 (C.D. Ill 1999) (rejecting presumption of bias on part of in-house physician).
Plaintiff also presses the argument that greater deference should be accorded the opinion of her treating physician, who thought benefits should continue, than that of the reviewing physician, who declared her fit to work. She invokes the "treating physician" rule applicable in the social security context and argues for its extension to the ERISA context. See Regula v. Delta Family-Care Disability Survivorship Plan, 266 F.3d 1130, 1139 (9th Cir. 2001) (applying treating physician rule to ERISA-governed plan); Donaho v. FMC Corp., 74 F.3d 894, 901 (8th Cir. 1996) (same). One circuit has expressed doubt about this extension, see Elliott v. Sara Lee Corp., 190 F.3d 601, 607-608 (4th Cir. 1999), and the Seventh Circuit has yet to confront the issue. The court need not resolve the matter. For even in the social security context, "while the treating physician is important, it is not the final word on a claimant disability." Micus v. Bowen, 979 F.2d 602, 608 (7th Cir. 1992) (quoting Reynolds v. Bowen, 844 F.2d 451, 455 (7th Cir. 1988)). Even granting deference to Dr. Abonour's opinion as the attending physician, as discussed below, the conclusion expressed in his letter to Hartford Life is not substantiated by his own medical records. Hartford Life was thus entirely justified in disregarding his recommendation to continue benefits. See, e.g., Wilczynski v. Kemper Nat'l Ins. Cos., 178 F.3d 933, 938 (7th Cir. 1999) (upholding administrator's reliance on consulting medical examiners over claimant's treating physicians); Donato v. Metro. Life Ins. Co., 19 F.3d 375, 380 (7th Cir. 1994) ("Metlife's decision simply came down to a permissible choice between the positions of . . . . Metlife's independent medical consultant, and the position of [claimant's] clinical ecologists. . . .")
The last of Plaintiff's claims demands closer scrutiny of the record. Ms. Haynes contends that Dr. Sniger engaged in selective review of the medical file and therefore his advice regarding Plaintiff's functional capacity lacks foundation. See Govindarajan v. FMC Corp., 932 F.2d 634, 637 (7th Cir. 1991) (reversing administrator's denial of benefits based on physician's selective review of the medical evidence). Specifically, Plaintiff claims that Dr. Sniger ignored evidence of Haynes' degenerative disc disease. The claim is not borne out by the record. In the summaries of Dr. Abonour's medical notes contained in his report, Dr. Sniger mentions a 1999 X-ray revealing "degenerative disc disease at multiple levels." (AR at 48-49.) The issue is not addressed in the short discussion section of his report, but with good reason, for the Haynes' medical file is devoid of any indication of any symptoms she suffered on account of this disease or, for that matter, any other token of its seriousness.
Indeed, this court finds that as a whole Dr. Sniger conducted a thorough review of Plaintiff's medical records, which he discussed with Dr. Abonour himself. While Dr. Sniger reached a different conclusion from Dr. Abonour, he amply documented the support for his position in Dr. Abonour's own records.
For instance, although Dr. Abonour claimed in his June 18, 2001, letter to Hartford Life that Plaintiff's neuropathy in her lower and upper extremities and chronic arthritis prevented her from working, in the Physical Capacity Evaluation dated October 10, 2000, he listed a variety of light physical activities in which she could engage and concluded that she could maintain a sedentary job. (AR at 88-89; see supra at 4.) There is no report of any deterioration in her physical condition from October 10, 2000, to June 18, 2001, which would explain this discrepancy. In the same letter, Dr. Abonour also stated that the agent used to control Plaintiff's cancer causes her "significant" fatigue and would preclude her from pursuing gainful employment. Yet this conclusion is squarely contradicted by his own notes on the matter. He observed on December 15, 1999, that Plaintiff, while on Thalidomide, "felt excellent" and "had excellent energy and denied any complaints." (AR at 96.) On March 8, 2000, he again noted that Plaintiff "is reasonably free of fatigue and she has been able to do minor chores around the house." (AR at 94.) Finally, Dr. Abonour claimed in his letter that Plaintiff was "without remission until a year and a half ago when she developed worsening of her myeloma protein," but in his earlier September 27, 2000, office record he gave the unabridged version of Plaintiff's medical history: "this [high monoclonal protein] was treated with a single agent Thalidomide and [Plaintiff] had a significant drop in her monoclonal protein." (AR at 196). He further added that while Ms. Haynes had "vague complaints of stiffness and generalized aches," she "has no skeletal pain with movement." (Id.) In sum, Hartford Life did not act unreasonably in rendering a decision at odds with Dr. Abonour's largely unsupported conclusion as to Plaintiff's inability to resume a sedentary occupation.
As further proof of arbitrariness, Plaintiff points to her continued receipt of social security benefits. Hartford Life is not bound by the Social Security Administration's determination, however, nor has Plaintiff shown that Defendant had before it the same information as contained in the social security file while making its benefits decision. See Donato v. Metro. Life Ins. Co., 19 F.3d at 380 (dismissing as immaterial applicant's continued receipt of social security benefits for failure to demonstrate Social Security Administration had before it identical information).
The court does not doubt that Plaintiff suffers from a serious illness, and should at some point her condition worsen, she may present a stronger case for disability benefits than at the time of this lawsuit. But on the record as it stands, Ms. Haynes has not carried her burden of creating a genuine issue of arbitrariness.
Plaintiff also brought supplemental state claims for breach of contract and bad faith. These claims relate directly to Plaintiff's claim under ERISA and thus are thereby preempted. See Tr. of The Aftra Health Fund v. Biondi, No. 00-3598, 2002 WL 31001891, (7th Cir. Sept. 6, 2002) (state law claims pre-empted when they either bind plan administrators to particular choices, inhibiting uniform regulation, or function as an alternative enforcement mechanism to ERISA) (citing New York State Conference of Blue Cross Blue Shield Plans v. Travelers Ins. Com, 514 U.S. 645, 658-660 (1995)).
IV. Conclusion
In conclusion, Defendant's motion for summary judgment is GRANTED. Plaintiff's arguments in support of her own motion for summary judgment are merely the converse of the reasons she unsuccessfully contends that the Defendant should not prevail on its first-filed dispositive motion. Plaintiff's motion is therefore DENIED.
ALL OF WHICH IS ORDERED this ___ day of October 2002.