Opinion
Case No. C-1-06-837.
March 11, 2008
ORDER
This matter is before the Court upon Plaintiff's motion to reverse denial of benefits (Doc. 10); Defendant's motion for judgment on the administrative record (Doc. 11); their respective memoranda in support of and in opposition to those motions (Docs. 12-14), and the parties' oral arguments presented at the hearing before this Court on March 6, 2008.
Procedural Background/The Parties' Claims
On November 6, 2006, Plaintiff Robert Morgan filed a complaint in the Court of Common Pleas of Butler County, Ohio, setting forth a claim against Defendant United of Omaha Life Insurance Company ["United"] for the wrongful denial of benefits related to the amputation of Plaintiff's left leg. (Doc. 2). On December 8, 2006, Defendant removed the matter to this Court pursuant to 28 U.S.C. § 1441. (Doc. 1). Defendant's removal notice clarifies that the benefits Plaintiff seeks are pursuant to a group insurance plan sponsored by Plaintiff's employer ( see attachment to Doc. 2), and that this matter thus arises under the provisions of the Employee Retirement Income Security Act of 1974 ["ERISA"], 29 U.S.C. § 1001, et seq. Plaintiff's complaint acknowledges that this Court has jurisdiction pursuant to ERISA. (Doc. 2, ¶ 6).
On February 15, 2007, Defendant filed a copy of the administrative record relative to Plaintiff's claim. (Doc. 9). On March 16, 2007, Plaintiff moved this Court to reverse Defendant's denial of Plaintiff's application "for accidental limb loss benefits." ( See Doc. 10 and attachments thereto). Plaintiff in essence argues that because the amputation of his leg was necessitated by a staph infection following an accidental injury to his left foot — i.e., stepping on a screw — his loss is affirmatively covered under the terms of the plan. He urges that Defendant's denial of his claim based upon his underlying diabetic condition was arbitrary and capricious, and should be reversed. ( See also Doc. 12).
On March 30, 2007, Defendant countered with a motion for judgment on the administrative record. (Doc. 11). Defendant claims that the record demonstrates that Plaintiff's "uncontrolled diabetes" contributed to the need to amputate his leg. Defendant therefore urges that Plaintiff's loss was not covered under the terms of his employer's plan, and that the Court should deny Plaintiff's motion and grant judgment on the record of Defendant's administrative decision denying Plaintiff's application for benefits. ( See also Docs. 13, 14).
Because challenges to the denial of ERISA plan benefits are not subject to resolution via summary judgment, see University Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 845 (6th Cir. 2000), the proper procedural device in such circumstances is a motion for entry of judgment affirming the denial of disability benefits.
Applicable Standard of Review
A plan administrator's decision to deny ERISA benefits is subject to a de novo standard of review, 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 Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). As to benefits decisions made under plans which do grant such discretionary authority regarding eligibility determinations, however, a court must apply an arbitrary and capricious standard of review. Id.; see also, e.g., Spangler v. Lockheed Martin Energy Sys., Inc., 313 F.3d 356, 361 (6th Cir. 2002); Sanford v. Harvard Indus., Inc., 262 F.3d 590, 595 (6th Cir. 2001); Washburn v. UNUM Life Ins. Co.. 43 F. Supp.2d 848, 851 (S.D. Ohio 1998) (Dlott, J.), aff'd, 210 F.3d 373 (6th Cir. 2000). Under that highly deferential, "least demanding form of judicial review," a court must affirm the administrator's decision if the record evidence offers a reasoned explanation for the decision. Davis v. Kentucky Fin. Cos. Ret. Plan, 887 F.2d 689, 693 (6th Cir. 1989), cert. denied, 495 U.S. 905 (1990).
Both Defendant and Plaintiff acknowledge that the "arbitrary and capricious" standard applies to this Court's review. ( See Doc. 11, pp. 5-6; Doc. 12, pp. 1-2).
Findings of Fact
1. Plaintiff's employer, Pella Corporation, sponsored an employee benefit plan including "Basic" and "Supplemental" Life and Accidental Death and Dismemberment policies which were issued, underwritten and administered by Defendant. (Doc. 9 at MORG 0008, 0045, 0084).
2. Under the heading "Authority to Interpret Policy," the plan expressly grants Defendant "the discretion and the final authority to construe and interpret the Policy. This means that [United] ha[s] the authority to decide all questions of eligibility and all questions regarding the amount and payment of any Policy benefits within the terms of the Policy as interpreted by [United]." ( Id. at MORG 0033, 0076, 0111).
3. The subject plan consistently defines an "injury" covered thereunder as "an accidental bodily injury which requires treatment by a physician" and which " must result in loss independently of sickness and other causes. "( Id. at MORG 0009, 0046, 0085) (emphasis added).
4. Under the terms of the plan, "Sickness means a disease, disorder or condition, which requires treatment by a physician." ( Id.). In addition, the plan provides as follows:
Accident means a sudden, unexpected and unintended event, independent of sickness and all other causes. Accident does not include sickness, disease, bodily or mental infirmity or medical or surgical treatment thereof, bacterial or viral infection, regardless of how contracted. Accident does include bacterial infection that is the natural and foreseeable result of an accidental external bodily injury . . .
( Id. at MORG 0061, 0098; see also MORG 0022) (emphasis added).
5. On or about June 8, 2005, Plaintiff stepped on a screw at his home with his left foot. ( Id., MORG 0170). On June 12, 2005, he went to the emergency room at Mercy Hospital Fairfield in Fairfield, Ohio, where he was hospitalized through June 21, 2005, for treatment of that left foot with excisional debridement and IV antibiotics. ( Id., MORG 0146).
6. At the time of Plaintiff's discharge, his discharge summary showed a "primary diagnosis" of "diabetic foot infection," with secondary diagnoses including "insulin-dependent diabetes mellitus, poorly controlled," and "diabetic neuropathy." ( Id.). Additionally, the "Plan" portion of the discharge summary noted that Plaintiff "has been very noncompliant with his diabetes control." ( Id.).
7. On July 12, 2005, Plaintiff was re-admitted to Fairfield Mercy Hospital, again with an "admitting diagnosis" of "diabetic foot infection." ( Id. at MORG 0153). The "history" portion of Plaintiff's discharge summary remarked on Plaintiff's "long history of diabetes and diabetic neuropathy," and noted that Plaintiff's "[b]lood sugars ha[d] not been well controlled." ( Id.).
8. During the course of this hospitalization, a "left below-knee amputation [was] performed on July 18, 2005," due to the extent of necrosis stemming from his foot infection. ( Id.). Plaintiff was discharged on July 25, 2005, with discharge diagnoses of "necrotizing infection of the left foot," and "uncontrolled diabetes," and "with instructions for continued diabetes care." ( Id. at MORG-0153-0154).
9. On September 13, 2005, Plaintiff completed an application for accidental limb loss benefits under his employer's disability plan. ( Id. at MORG 0170). In the "statement of attending physician" portion of that application, Plaintiff's doctor answered "yes" to the question, "Did any disease or any previous injury or impairment contribute to the loss?", and listed "diabetes" as that contributing cause. ( Id. at MORG 0171). The paperwork submitted to Defendant with Plaintiff's application also included both hospital discharge summaries. ( See id. at MORG 0178-0184).
10. On October 2, 2005, Plaintiff's claim was reviewed by Defendant's corporate medical director, Stuart Schlanger, M.D. ( Id. at MORG 0158). Dr. Schlanger expressed the view that "this is not [a] loss of limb independent of sickness all other causes," because "contributing to a large degree was diabetic neuropathy." ( Id. at MORG 0159).
11. On October 4, 2005, Defendant notified Plaintiff that after review of his medical information, his claim was being denied because "you have a medical condition that contributed to the loss of you[r] leg," and "your loss was not independent of sickness and all other causes." ( Id. at MORG 0150, 0156).
11. Plaintiff appealed that decision by letter dated February 17, 2006. ( Id. at MORG 0134, 0143).
12. On appeal, Plaintiff's claim was reviewed by another of Defendant's corporate medical directors, Dr. Timothy Tse. ( Id. at MORG 0129). Dr. Tse's comments first noted as follows:
The clinical notes clearly showed the insured had "diabetic foot infection" (see discharge summaries for the June and July hospital stays). The physician statement on the claim form showed "yes" to the question "Did any disease or any previous injury or impairment contribute to the loss?" A[ttending physician] further identified diabetes as the disease.
( Id. at MORG 0130). Dr. Tse then opined that "[t]he available information showed the insured had injured his foot and later had [below the knee amputation] on his left foot, but the uncontrolled diabetes played a significant part for [sic] the necrosis that required amputation," and thus concluded that "[t]he loss was not the result of an accidental injury independent of sickness and all other causes" as required for coverage under the plan. ( Id. at MORG 0130).
13. By letter dated April 21, 2006, Defendant advised Plaintiff that "United's decision denying the claim must be upheld," for the following reason:
The medical information we have received indicates Mr. Morgan had diabetic foot infection . . . The uncontrolled diabetes played a significant part for [sic] the necrosis that required amputation. Based on this information the loss was not the result of an accidental injury independent of sickness and all other causes, therefore, the accidental dismemberment claim was denied.
( Id. at MORG 0124).
14. Defendant reasonably concluded that the amputation of Plaintiff's left leg was necessitated by complications attributable at least in part to his diabetic condition. As a result, Defendant's decision to deny benefits because Plaintiff's loss of limb was not "independent of sickness" was neither arbitrary nor capricious, and cannot be overturned by this Court.
Analysis
The administrative record filed by Defendant (Doc. 9) reflects that Defendant, as plan administrator, possessed complete discretion to construe the terms of the Accidental Death and Dismemberment policies at issue herein. Accordingly, this Court may disrupt Defendant's denial of benefits to Plaintiff under that plan only if it appears that Defendant acted unreasonably in interpreting the policies to exclude Plaintiff's amputation from coverage due to his underlying diabetic condition. We conclude that Defendant's conclusion to that effect was not arbitrary and capricious.
Plaintiff argues that Defendant's decision ignores policy language definitively stating that "accident" as defined in the plan " does include bacterial infection that is the natural and foreseeable result of an accidental external bodily injury." (Doc. 12, pp. 2-3). ( See Doc. 9, MORG 0061, 0098) (emphasis added). He urges that because his amputation was due to a staph infection following an accidental injury incurred by stepping on a screw, his loss of limb is covered under the policy. He also implies that because the policy did not expressly exclude "persons suffering from diabetes," coverage should be presumed to extend to them. ( See Doc. 10, pp. 2-3).
Despite Plaintiff's professed anger (Doc. 12, p. 2) over Defendant's misleading omission of the "bacterial infection" language from its quotation of policy terms, the Court finds such omission akin to Plaintiff's reference to the infection leading to amputation as a "staff [sic] infection" (Doc. 10, pp. 2-3) when that term appears nowhere in the administrative record, which instead characterizes Plaintiff's infection as a "diabetic foot infection."
Although Plaintiff's argument regarding the bacterial infection provision has some surface appeal, it is not sufficient to change the outcome of this matter. While Plaintiff undeniably suffered "an accidental external bodily injury" which ultimately culminated in amputation, the administrative record does not support the conclusion that the infection which necessitated the amputation of Plaintiff's leg was "the natural and foreseeable result" of that initial accidental injury. To the contrary, the discharge summaries for both of Plaintiff's hospitalizations characterize that infection as a " diabetic foot infection." (Doc. 9 at MORG 0146, 0153) (emphasis added). Defendant thus had a reasonable basis for concluding that the amputation was attributable at least in part to Plaintiff's diabetes — i.e., not independent of "sickness," per the terms of the policy.
The bald assertion that "[Plaintiff] did not loose [sic] his lower leg directly, or indirectly, because of diabetes" (Doc. 10, p. 3) is further belied by the statement of Plaintiff's own treating physician in Plaintiff's application for benefits. Asked whether "any disease or any previous injury or impairment contribute to the loss," Plaintiff's doctor answered "yes," and identified "diabetes" as a contributing factor. ( Id. at MORG 0171). In light of such uncontroverted evidence of an underlying disease's role in the amputation, Defendant cannot be said to have acted arbitrarily or capriciously by concluding that Plaintiff's loss of limb would not have occurred "independent of sickness" ( i.e., diabetes), and that the "diabetic foot infection" necessitating amputation was not "the natural and foreseeable result" of stepping on a screw alone. This Court cannot reverse Defendant's denial of benefits based upon the administrative record before us.
This decision is consistent with the almost uncannily on-point decision in Ganapolsky v. Boston Mut. Life Ins. Co., 138 F.3d 446 (1st Cir. 1998). In Ganapolsky, a diabetic plaintiff filed a claim for benefits under an accidental death and dismemberment policy for the amputation of his left leg below the knee after he developed gangrene following an accidental injury to his left foot when he tripped on a step. There, as here, the policy excluded losses resulting from sickness and disease, and the medical evidence indicated "that [the plaintiff's] diabetes substantially contributed to his loss." 812 F. Supp. at 448. The court there stated that "if no considerable injury at all would have resulted had the insured not been afflicted with the existing disease or condition, the accidental means are not the sole cause of the injury." Id. Just as the court there observed that a loss such as that plaintiff's "normally does not arise from tripping on a step," this Court does not consider amputation to be a normal consequence of stepping on a screw, absent some extenuating circumstance. Here, Plaintiff's diabetes was the exacerbating factor.
Moreover, the plaintiff in Ganapolsky also contended on appeal that the sickness and disease exclusion did not apply to him, because his policy [again, much like that at issue here] contained an exception for "[b]acterial infection resulting from an accidental . . . wound." Id. That argument mirrors this Plaintiff's even as to the fact that it was raised for the first time on appeal, as we can find no evidence in the administrative record that Plaintiff Morgan ever brought the policies' "bacterial infection" provisions to the attention of the plan administrator considering his claim. Like the court in Ganapolsky, we find that Plaintiff's failure to introduce that argument during the administrative proceedings on his claim precludes him from raising it for the first time on appeal. See id. at 449; see also Donaldson v. Metropolitan Life Ins. Co., 812 F. Supp. 103, 106 (E.D. Mich. 1993) (affirming denial of accident benefits under employee plan for below-knee amputation of foot where plaintiff failed to refute his own attending physician's determination that the loss was at least partially due to plaintiff's pre-existing diabetes). Defendant's decision denying benefits thus must be affirmed.
Conclusions of Law
1. The plan language granting Defendant discretion to construe and interpret the subject insurance policies makes Defendant's decision denying benefits for the amputation of Plaintiff's left leg subject to review under an arbitrary and capricious standard.
2. Defendant's conclusion that Plaintiff's underlying diabetic condition contributed to the necessity of amputating Plaintiff's left leg was not arbitrary and capricious under the terms of the plan.
3. Defendant's denial of Plaintiff's application for loss of limb benefits was not arbitrary and capricious under the terms of the plan.
IT THEREFORE IS ORDERED that Plaintiff's motion to reverse denial of dismemberment loss of foot (Doc. 10) hereby is DENIED with prejudice, and Defendant's motion for judgment on the administrative record (Doc. 11) hereby is GRANTED. Accordingly, the Clerk of Courts hereby is DIRECTED to enter judgment in favor of Defendant and against Plaintiff, in accordance with the decision of the plan administrator as reflected in the administrative record.
This matter is TERMINATED on the docket of this Court.