Summary
finding that defendant's failure to consider new medical evaluations from plaintiff's physician in denying plaintiff disability benefits did not constitute bad faith
Summary of this case from Wilson v. Metropolitan Life Insurance CompanyOpinion
No. 99-1427-WEB
February 6, 2001
Memorandum and Order
Plaintiff brought this action alleging that the defendant improperly denied her claim for short-term disability benefits under an ERISA plan. The matter is now before the court on the parties' cross-motions for summary judgment. The court heard oral arguments in connection with the motions on November 6, 2000. The case was well-presented by counsel for both parties. For the reasons that follow, the court concludes that plaintiff's motion for summary judgment should be granted.
I. Facts.
For purposed of summary judgment, the court finds no genuine dispute as to the following facts.
Plaintiff was an employee of Tweco Products, Inc. ("Tweco"), a subsidiary of Thermadyne.
Thermadyne maintains various employee welfare benefit plans, including a Short-term Disability Income Plan ("the Plan"), for employees of Tweco. Plaintiff, as a Tweco employee, was a participant in the Plan.
The Plan was amended and restated effective January 1, 1997.
Thermadyne is the Administrator of the Plan.
The Plan provides that:
The Company will have full power to administer the Plan and all of its details, subject to applicable requirements of law. For this purpose, the Company's powers will include, but will not be limited to, the following discretionary authority, in addition to all other powers provided in the Plan:
* * *
(c) To interpret the Plan, its interpretation in good faith to be final and conclusive on all persons claiming benefits under the Plan.
(d) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan.
(e) To appoint such agents, counsel, accountants, consultants, and other persons as may be required to assist in administering the Plan.
(f) To allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, including, but not limited to, delegating certain claims administration duties to a Claims Administrator. . . .
The Plan further establishes the Standard of Review for decisions of the Plan Administrator as follows:
The Administrator shall perform its duties as the Administrator and in its sole discretion shall determine appropriate courses of action in light of the reason and purpose for which this Plan is established and maintained. In particular, the Administrator shall interpret all Plan provisions, and make all determinations as to whether any particular Participant is entitled to receive any benefit under the terms of this Plan, which interpretation shall be made by the Administrator in his sole discretion. Any construction of the terms of the Plan that is adopted by the Administrator and for which there is a rational basis shall be final and legally binding on all parties.
Any interpretation of the Plan or other action of the Administrator shall be subject to review only if such interpretation or other action is without rational basis. Any review of a final decision or action of the Administrator shall be based only on such evidence presented to or considered by the Administrator at the time it made the decision that is the subject of review. If any Participating Employer and/or any eligible Employee who performs services for the Company that are or may be compensated in part by benefits payable pursuant to this Plan, such an individual shall be treated as agreeing with and consenting to any decision that the Administrator makes in its sole discretion and further agrees to the limited standard of review described by the Section 8.08 by the acceptance of such benefits.
Under the terms of the Plan, an employee "will be eligible to receive benefit payments when due proof is provided to the Plan that:
(1) [the employee] became Disabled while a member in this Plan; and
(2) [the employee's] Disability has continued for a period longer than the Benefit Waiting Period."
The Benefit Waiting Period is seven days for a Sickness or an Accident.
The Plan defines "Disability" as follows: "You will be considered Disabled if, because of Injury or Sickness, you are unable to perform all the substantial and material duties of your regular occupation." The Plan defines "Sickness" as "a physical or mental illness."
The Maximum Benefit Period is 25 weeks for Accident or Sickness. Benefit payment ends on the date the employee ceases to be Disabled or the date the Maximum Benefit Period ends, whichever is earliest.
Thermadyne, pursuant to its authority under the Plan, entered into a Management Services Agreement with CIGNA IntegratedCare, Inc. ("CIGNA"), in which CIGNA performs services to assist in administering the Plan.
CIGNA provides initial and ongoing screening of claims to determine which benefits are payable in accordance with the terms of the Plan. CIGNA also seeks and obtains information from medical providers and others necessary to determine qualification for Plan benefits. CIGNA makes the initial determination of whether a claimant is entitled to short-term disability benefits. CIGNA provides advise regarding payment of benefits, but Thermadyne is responsible for the final decision whether to approve or deny benefits and for making any payment on such claims.
Under the Management Services Agreement, CIGNA is paid a flat rate per month based on the number of employees who are eligible for the benefits plans. This fee is not based on whether CIGNA approves or denies the requests for benefits, and CIGNA receives no financial reward for denying benefits claims.
Thermadyne's 1999 Short-Term Disability Costs, including both administrative fees and claims for benefits, were less than 1% of Thermadyne's 1999 net sales.
Plaintiff's Disciplinary Incident.
On February 24, 1999, Kaye Perez, plaintiff's co-worker, complained to Dan Sinnett, their supervisor, that she was tired of plaintiff's harassment and that she was thinking about going to a lawyer to get it resolved. Sinnett then met with Kathy Dickey, plaintiff's lead, to discuss the matter. Dickey said that plaintiff had been very loud and irritated with her because of the fact that Perez did not assemble a certain part and that plaintiff sarcastically asked if Perez was getting out of this work because of Perez's disability. Plaintiff had complained to Sinnett in the past about the company's accommodation of Perez and other employees with permanent medical restrictions. Sinnett informed upper management and Human Resources about Perez's complaint.
The following day, February 25, Sinnett investigated the harassment complaint by interviewing and taking signed statements from several employees, including Perez and Dickey. The witnesses' statements corroborated Perez's complaint and that plaintiff had been complaining about the company's accommodation of other employees with medical restrictions.
Sinnett and his boss, along with the Human Resources Director, then met with plaintiff on February 25 and issued her a written warning for harassment. The warning stated: "Verbally abusing other employees, either towards them or another person . . . will not be tolerated. . . . We are telling you that any more incidents like these will result in you[r] immediate termination from Tweco Products, Inc. You are to come to work and perform you[r] job to the best of your abilities, without causing demonstration which might cause a disturbance or interfere with other employees['] ability to perform their jobs. We are committed to providing a working environment totally free of harassment."
After receiving the warning, plaintiff became upset and shouted that the company could get their lawyers together, because she had a lawyer, and the company had better be ready to defend itself in court, because they had opened up a can of worms. Plaintiff left the office, slamming the door as she walked out. She returned seconds later and said that she was going to take the rest of the day off. After leaving, plaintiff called back and requested a vacation day for the next day, Friday, February 26.
Plaintiff called in the next Monday and Tuesday, March 1 and 2, and left messages that she would not be in. On March 3, she called Sinnett and said she was still too upset to come to work and that she was not up to coming to work and being asked by other employees about her "situation" with the company. Plaintiff did not show up or call on March 4, so Sinnett called her. Sinnett told plaintiff she had not followed company policy, which requires prior approval for time off, and that if she did not come back to work or get an approved leave of absence she could be subject to possible discharge. In response, plaintiff said for the first time that she had a doctor's excuse for the time off. Sinnett told her that she needed to provide medical documentation to Michele Birdwell in Human Resources to obtain a leave of absence and advised her that she should contact CIGNA if she wanted to be on short-term disability. Plaintiff said something to the effect of "just fire me" or "just terminate me" twice and then hung up. Sinnett promptly reported this conversation to Birdwell.
Plaintiff's Claim for Benefits.
On March 4 or 5, plaintiff called CIGNA and made a claim for short-term disability benefits. Plaintiff told CIGNA in a telephone interview on March 9 that she had received a notice at work and was having problems with one of the managers and that she felt all of this just had her "run down" and now she was sick.
CIGNA interviewed plaintiff again on March 15 to investigate her short-term disability claim. Plaintiff reported that she left work on the afternoon of February 25 because she was upset that she had been given a written warning and that if she got another warning she would be subject to being fired. When asked what was preventing her from working, plaintiff reported myriad ailments, such as problems with her arms, headaches, diarrhea, bronchitis, viral infection, and depression caused "by all this." Plaintiff said all of these conditions were pre-existing but had gotten worse since her warning at work.
CIGNA interviewed Michele Birdwell and obtained information about plaintiff's written warning for harassment and failure to return to work after that day.
Dr. Schlageck, plaintiff's primary care physician, stated in a March 12 letter report: "Marsha Powers has been suffering from a great deal of stress as a result of workplace activities. The patient subsequently has been suffering from viral illnesses as well as muscle strain and tension headaches. It was recommended that she not be at work until resolution of the workplace issues. Should there be any questions or considerations please do not hesitate to contact me."
CIGNA interviewed Dr. Schlageck on March 23. Dr. Schlageck told CIGNA that he sees the patient as disabled due to these symptoms: muscle strain, neck strain, tingling hands, liability of emotion, and stress related to workplace issues. He said plaintiff could work if the work issues were resolved, and that she could work somewhere else. He said he had referred her to a therapist for coping skills and that she could return to work on April 5.
CIGNA interviewed Teresa Tuggle, plaintiff's therapist, on March 23. CIGNA's notes from that interview state that Tuggle's "perception is that job created disability with harassment issues, and attorney involvement. Sleep/depression are main problem, job function is strained and concentration is distracted. Therapist is working with EE [employee] to cope with job issues after a 20-30 year employment with company. Her job is with heavy machinery. She is also diagnosed with dysthymia of long standing nature." Tuggle indicated that she believed plaintiff's medical doctor, not Tuggle, should determine disability.
Clinical materials from Tuggle and Dr. Schlageck were received by CIGNA and reviewed on March 24. The March 24, 1999, computer notes of Cathy Baswell, a "Behavioral Care Specialist" to whom the case was assigned for a recommendation, stated: "Clinical materials were received from providers Tuggle and Schageck and reviewed. Results were presented to a psychiatric panal for consideration of disability. My recommendation results from this review. Recom denial of disability due too behavioral factors. Thiss case seems sto be an HR issue. The clinical information presented does not support an inability of this employee from performance of her job responsibilities. Therefore a behavioral disability is not recommended." [typographical errors in original].
The record indicates that Baswell's qualifications included: Master's degree in Psychology and Counseling, Licensed Professional Counselor and Chemical Dependency and Addiction Professional, Certified Employee Assistance Professional, and post-graduate research or study in employee/employer relations.
There is some indication in the record that this panel ordinarily consists of two psychiatrists and three to five licensed clinical professionals, nurses and psychologists, who are either employed by or under contract with CIGNA. There is nothing in the record, however, to indicate what particular review was conducted in Ms. Power's case, nor is there any record of any opinion of any panel member disputing Dr. Schlageck's diagnosis or his opinion that Ms. Powers was disabled.
On March 30, 1999, Baswell made the following recommendation to CIGNA: "This EE has a DX [diagnosis] of Adjustment disorder superimposed on a chronic Dysthymic condition. Symptoms and treatment seem to stem from workrelated HR issues. The M.D. increased her medication with no other changes and she began therapy to get coping skills for the workplace issues. After the week of waiting period (5 workdays following first day out) this EE should have been able to treat outpatient and continue her work duties. M.D. states. SX [symptoms] are mostly physical. She has been able to focus and spend energy in a legal pursuit. I recommend that she has 5 initial days off for disability related to adjustment reaction and than [sic] is able to perform duties of her job. (Her providers have made it clear that if these job duties were in another work place that she could do them.) . . Staffed this case with Philip and he recommends that the work place make the decision of whether she gets any disability."
CIGNA, acting on Thermadyne's behalf, denied plaintiff's claim on April 2. CIGNA sent plaintiff a letter dated April 2, 1999, that read as follows:
We have carefully reviewed your claim for Short-Term Disability benefits and have determined that we cannot consider any benefits payable to you at this time.
An employee is considered to have a covered disability if that employee can provide medical evidence to support that he or she is unable to perform the essential duties of his or her occupation. To date we have not received medical information which supports your total disability from your occupation.
We requested medical information from Dr. Schageck [sic] as well as your therapist, Ms. Tuggle. This information was received by our Behavioral Care Specialist in our office. You have been diagnosed with an adjustment reaction with mixed emotional features. Although in some cases an individual may take a few days to recover from this condition, less than five days in most cases, this is not a condition which is generally considered to be a disabling condition.
We received a questionnaire completed by Ms. Tuggle dated March 22, 1999. This information indicates that you have had reactions to work related issues and that you have been able to pursue a legal matter. The information received appears to show that unresolved workplace issues, rather than a medical disability, have prevented your return to work. In a conversation with Dr. Schageck [sic] on March 23, 1999, he indicated you had symptoms of muscle strain, neck strain, tingling hands, liability of emotion, and stress related to work place issues, however he has also indicated that you could work if the work issues were resolved.
After a thorough and careful review of the information in your file, we have found there is no objective medical evidence to support a claim for continued total disability. Therefore, in light of the fact that we have not received medical information that supports your continued inability to perform the essential duties of your occupation, we cannot approve continued benefits for this claim.
We realize there may be factors of which we are unaware, and if you feel this determination is incorrect, we shall be pleased to review any objective medical evidence either you or your attending physician may wish to submit and, if the information warrants, alter our decision. If you will be submitting additional medical information, we respectfully request that you have the attending physician most familiar with your condition provide you with a medical narrative which objectively discusses the basis of the physician's opinion.
A handwritten note in CIGNA's files from "PG" dated April 5, 1999, stated that based on a review of medical information, plaintiff should be able to return to her job as it is normally performed. He recommended that the claim be denied "as Employee does not satisfy definition of disability."
"PG" is not identified in the note. The name "Philip Goodrich" appears elsewhere in the record, but the record does not disclose who this individual is or the nature of his occupation or qualifications.
On May 4, 1999, counsel for plaintiff wrote a letter demanding that CIGNA reconsider and reverse its decision. The letter stated that CIGNA had denied benefits because its "Behavioral Care Specialist" had determined that Ms. Powers was not disabled, but noted that Ms. Powers' treating physician, Dr. Schlageck, who had personally examined and treated Ms. Powers, "believes Ms. Powers is presently unable to perform work of any kind." Counsel enclosed a copy of a Family Medical Leave certificate prepared by Dr. Schlageck on April 29 1999, in which Dr. Schlageck had marked an "X" in the "No" box in response to the question, "Is employee able to perform work of any kind?" He also marked the "No" box following the question, "Is employee able to perform the functions of employee's position?" The form indicated the onset of disability was February 27, 1999, and the probable duration of the condition was unknown. The form contained no narrative or discussion of any kind by Dr. Schlageck.
Plaintiff also requested review of the denial of disability benefits in a handwritten letter dated May 11, 1999.
CIGNA received additional medical records by facsimile on May 13, 1999, from Via Christi Rehabilitation Services in Wichita, stating that plaintiff was receiving physical therapy to her neck and shoulder under Dr. Schlageck's care pursuant to a referral on April 13, 1999, due to recent stresses at work. The records indicated objective evidence of swelling and tightness in plaintiff's neck and shoulder.
On May 18, CIGNA's Behavioral Care Specialist, Cathy Baswell, reviewed Dr. Schlageck's notes. Baswell's notes of that day reflect: "There was not sufficient clinical information to impact behavioral disability issues. The clinical present in this file was reviewed with a psychiatrist on 4/29 and again a recommendation was made that the clinical present is insufficient to support an inability of this employee to perform the duties of her job. It seems clear [from] the notes that provider believes this employee could perform her job duties if in any other job circumstances. This seems to be a Human Resources issue rather than a disabling condition from ability to perform job duties."
Dr. Schlageck provided another letter report on June 24, 1999. The letter stated:
Marsha has been a patient of mine for numerous years. I have seen her on several occasions secondary to chronic neck pain. Patient has a long history of work related neck pain and has been treated with physical therapy and by chiropractors with significant success. For the last three to four months, patient has experienced an exacerbation of this discomfort without significant improvement through the usual modalities. We did a trial of anti-anxiety medicines, thinking that this discomfort was exacerbated more from anxiety and stress. Patient was placed on a trial of anti-anxiety medication for one week with marked resolution of her symptoms.
At this time, I feel that Marsha's chronic neck pain is a result of exacerbation of an old work related injury by chronic stress. Marsha relates that she is continuing to have disfunction with her employers and is currently seeking legal help to have this resolved. I feel that she should remain under medication at this point in time. I am working slowly at weaning her off of the anti-anxiolytic because I am concerned of the possibility of addiction. She appreciates the potential of this medication. I do hope that the employer and employee relationship can be resolved so that prolonged exposure to this anti-anxiety medication does not continue and addiction would not occur.
Should you have any further opinions or concerns, please do not hesitate to contact me.
CIGNA reviewed plaintiff's file and advised plaintiff in a June 28 letter that it was again denying her request for benefits. The letter stated:
We have received your letter dated May 1, 1999 [sic] requesting a review of our decision to decline your Short-Term disability benefits.
According to Thermadyne Holdings/Tweco Short-Term Disability plan, it is provided:
You will be considered Disabled if, because of Injury or Sickness, you are unable to perform all the substantial and material duties of your regular occupation.
No weekly Benefits will be paid for a period of Disability when you are not under the care of a licensed physician.
. . . .
[T]he information received does not indicate you are unable to perform all the substantial and material duties of your regular occupation as of your event date of disability beginning on February 25, 1999.
As mentioned in our letter addressed to you on April 02, 1999, the information we received appeared to show that unresolved workplace issues have prevented your return to work. We also mentioned the conversation with Dr. Schageck [sic] on March 23, 1999, [in] which he indicated you could work if the work issues were resolved.
. . . .
If you choose to appeal a second time, address your letter to The Plan Administrator, Thermadyne Holdings Corporation 101 South Hanley Road St. Louis, MO 63105 to the attention of Lisa Meckfessel.
We realize there may be factors of which we are unaware, and if you feel this determination is incorrect, we shall be pleased to review any objective medical evidence either you or your attending physician may wish to submit, and if the information warrants, alter our decision. If you will be submitting additional medical information, we respectfully request that you have the attending physician most familiar with your condition provide you with a medical narrative which objectively discusses the basis of the physician's opinion.
After plaintiff learned of this denial, plaintiff's lawyer sent a letter to Dr. Schlageck. The letter included the Tweco Plan's definition of "disability" and a description of the tasks performed by plaintiff as part of her job with Tweco. The letter asked for the doctor's opinion on two questions:
QUESTIONS
1. At any time since February 27, 1999, has [plaintiff] been under a "disability" as that term is defined in the Tweco short-term disability plan?
Yes No
2. If your answer to Question 1 is "yes", please indicate, in the space provided below, the date or inclusive dates during which she has been so disabled.
Dr. Schlageck marked an "X" on the "yes" line. He wrote in the lines under question two, "Start of Disability Feb. 26/1999. Poss. return to work Aug. 1/1999." Dr. Schlageck signed the letter under a provision stating, "The above is my opinion within a reasonable degree of medical certainty."
Plaintiff's lawyer wrote a letter to Lisa Meckfessel, Thermadyne's Director of Employee Benefits, on July 10, 1999, making a "final demand and appeal" for disability benefits. Plaintiff's lawyer enclosed his July 7 letter, in which Dr. Schlageck had marked "X" to indicate that plaintiff was disabled. Also enclosed in with the July 10, 1999, letter were Dr. Schlageck's narrative reports from March 12 and June 24, 1999, and his FMLA certification dated 4/29/99.
Lisa Meckfessel is responsible for deciding whether an employee's request for short-term disability benefits is approved or denied. Meckfessel spoke with Michele Birdwell at Tweco and a CIGNA benefits manager, reviewed and considered CIGNA's prior decision denying plaintiff's request for benefits, and then made the decision to deny plaintiff's final request for benefits.
There is no documentation in the claim file indicating that CIGNA requested or reviewed any medical records after June 24, 1999. There is an internal Thermadyne memorandum from Lisa Meckfessel to Tom Drury, Vice President for Human Resources, dated July 14, 1999, stating in part:
Based on what [Greg Marbury at CIGNA] has received from Michelle (the attorney's letter), CIGNA's decision stands with regard to the disability decision — nothing has changed. If we want to re-review the claim one more time, however, there is apparently, one additional avenue we can pursue. We can request that Ms. Powers (at our expense) see a QME doctor, since Dr. Schlageck is a family practitioner and may not have been the best doctor to diagnose Marsha. My feeling is that before denying it a second time, plus they [CIGNA] knew she had an attorney and was threatening legal action, they should have called us and questioned us as to whether we'd like to pursue this avenue. We can discuss this option in our teleconference later today.
Ms. Meckfessel sent another internal memorandum on July 20, 1999, to Tom Drury, along with a draft of a response on plaintiff's appeal. In that memo, Ms. Meckfessel stated that, "It does bother me somewhat that CIGNA's panel of clinical professionals are actually a subsidiary of CIGNA (I just confirmed that — I had thought they were independent based on our earlier teleconference call — did you get that feeling?)." The draft response on the appeal included a proposed statement to Ms. Powers that her claim had been reviewed by the Behavioral Care Specialist and "a panel of licensed clinical professionals, including two disability psychiatrists," but this statement was deleted from the final letter sent to Ms. Powers.
Meckfessel communicated the denial of benefits to plaintiff in a July 30 letter. The letter stated:
I am in receipt of a letter from your attorney, Paul S. McCausland, dated July 10, 1999, requesting reconsideration of your claims denial for short-term disability (STD) benefits.
Under Thermadyne's STD policy for Tweco/Arcair Products, STD benefits are only approved if it is determined that there is a disabling diagnosis that constitutes short-term disability benefits. The definition of "disability" under the Plan is defined as follows:
" You will be considered disabled if, because of injury or sickness, you are unable to perform all of the substantial and material duties of your regular occupation."
It has been determined that you are not unable to perform the "substantial and material duties of your regular occupation." Since no new evidence was presented in the July 10, 1999 letter from your attorney, the denial of your appeal is upheld.
Meckfessel is not an officer of Thermadyne. She owns only one share of Thermadyne stock.
Plaintiff was given a medical release to return to work on August 4, 1999. Plaintiff contends her short-term disability ended on August 4, 1999, 22 1/2 weeks after she left work.
II. Summary Judgment Standards.
The standards and procedures for summary judgment are well established and will not be fully repeated here. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). In essence, summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Id. A disputed fact is "material" if it might affect the outcome of the suit under the governing law, and a dispute is "genuine" if the evidence is such that a reasonable fact finder could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The parties have filed cross-motions for summary judgment in this case, and they agree that the matter is one that can appropriately be determined upon the motions.
III. Discussion.
a. Standard of Review.
Section 1132(a)(1)(B) of Title 29 of the United States Code permits a participant in a benefit plan covered by ERISA to bring an action in U.S. District Court challenging a denial of benefits. Where, as here, the ERISA plan gives the administrator discretion to interpret the plan and to determine a participant's eligibility to receive benefits, the court is to apply an "arbitrary and capricious" standard of review, meaning the administrator's decision will not be reversed unless it is found to be arbitrary or an abuse of the administrator's discretion. See Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Charter Canyon Treatment Ctr. v. Pool Co., 153 F.3d 1132, 1135 (10th Cir. 1998). If a plan administrator is operating under a conflict of interest, however, "the court may weigh that conflict as a factor in determining whether the plan administrator's actions were arbitrary and capricious." Charter Canyon, 153 F.3d at 1135. "[T]he Tenth Circuit has adopted a sliding scale, decreasing the level of deference in proportion to the severity of the conflict." Jones v. Kodak Med. Assistance Plan, 169 F.3d 1287, 1291 (10th Cir. 1999). In this case a conflict of interest does exist because Thermadyne acts as the Administrator of a self-funded plan. When benefits are awarded, the decision has an adverse financial impact on Thermadyne. Thermadyne appoints and compensates Ms. Meckfessel, who is responsible for making benefit determinations. In making such decisions, Ms. Meckfessel faces a potential conflict of interest between her duty to act in the best interests of her employer and her duty to act solely in the interest of the participants and beneficiaries for whom the plan was established. This potential conflict is mitigated by several factors, including the fact that an initial review of benefit claims is performed by agents outside of Thermadyne, the relatively minor impact of short-term disability decisions on Thermadyne's overall financial well-being, and the lack of any direct financial interest on Ms. Meckfessel's part in making benefit determinations.
b. Review of Decision.
After considering all of the relevant factors in this case, the court concludes that Thermadyne abused its discretion in denying Ms. Powers' claim for short-term disability benefits. In its initial denial of the claim, CIGNA wrote to plaintiff that "[t]he information received appears to show that unresolved workplace issues, rather than a medical disability, have prevented your return to work," and that her diagnosed condition, which consisted of an adjustment reaction with mixed emotional features and various physical symptoms, "is not a condition which is generally considered to be a disabling condition." Whether or not such a condition is "generally considered" disabling and whether it takes less than five days to recover "in most cases," however, was not determinative of the plaintiff's claim. The issue was whether Ms. Powers' particular condition, taking into account her circumstances and the severity of her symptoms, rendered her unable to perform the duties of her regular occupation. Significantly, although CIGNA's notes state that an unspecified "psychiatric panel" was consulted in connection with its review, no opinion or recommendation from any medical doctor is cited or included in CIGNA's records to support its assertion that plaintiff's condition was not disabling.
CIGNA also emphasized the fact that unresolved "workplace issues" prevented plaintiff from returning to work. Clearly, the stress associated with plaintiff's disciplinary incident triggered her condition. Regardless of the underlying cause of the stress, however, and despite the fact that plaintiff herself may have contributed to it, the significant fact insofar as her claim for ERISA benefits is concerned is that plaintiff was, in the uncontradicted opinion of her doctor, unable to perform the duties of her regular occupation due to a physical or mental illness. Under the terms of the Short-Term Disability Plan, it was simply irrelevant that plaintiff may have been capable of working in some other occupation or that "workplace issues" were the cause of her stress. In this respect, the court notes that the definition of "disability" under the Thermadyne Plan differs from the definition of "disability" under the ADA. The latter statute typically requires a much greater showing. See e.g. 29 C.F.R. § 1630.2(j)(3)(i) (Under the ADA, an impairment substantially limits the employee's activity of working only if the employee is "significantly restricted in the ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills, and abilities.") and Weiler v. Household Fin. Corp., 101 F.3d 519, 524 (7th Cir. 1996) ("The major life activity of working is not `substantially limited' if a plaintiff merely cannot work under a certain supervisor because of anxiety and stress. . . . ").
After CIGNA's initial denial of the claim, plaintiff submitted additional materials, including records of ongoing therapy and a Family Medical Leave certificate prepared by Dr. Schlageck on April 29 1999, in which he indicated that plaintiff was unable to perform the functions of her position and was unable to perform work of any kind. Dr. Schlageck represented that the onset of disability was February 27, 1999, and that the probable duration of the condition was unknown. CIGNA again denied the claim, stating that "the information received does not indicate you are unable to perform all the substantial and material duties of your regular occupation," and specifically noting the "conversation with Dr. Schageck [sic] on March 23, 1999, [in] which he indicated you could work if the work issues were resolved." In denying the claim in this manner, CIGNA simply ignored the opinion set forth in the FMLA certificate, and instead treated its March 23rd conversation with the doctor as the only evidence of his opinion. No basis whatsoever was given for rejecting Dr. Schlageck's April 29th opinion that plaintiff was unable to perform the functions of her position or work of any kind. Under the circumstances, it was arbitrary for CIGNA to ignore the treating physician's opinion that plaintiff was disabled without at least determining the basis for that opinion.
Plaintiff subsequently appealed to Thermadyne, the Plan Administrator, and her attorney again submitted additional materials, including a new certificate from Dr. Schlageck containing his opinion that plaintiff was disabled "as that term is defined in the Tweco short-term disability plan." Like CIGNA, Thermadyne ignored this representation, stating in its denial letter that "no new evidence was presented in the July 10, 1999 letter from your attorney. . . ." No basis was given for rejecting this opinion from plaintiff's treating physician.
If, as Thermadyne now argues, the doctor's April 29th certificate was "entirely inconsistent" with his prior verbal representations, the court concludes that in view of Thermadyne's conflict of interest it at least had a duty to inquire into the basis of the doctor's April 29th opinion, rather than simply disregarding it without comment.
As Ms. Meckfessel pointed out in an internal memorandum, Dr. Schlageck was a family practitioner and "may not have been the best doctor to diagnose Marsha" given that he did not specialize in mental health. But if Thermadyne felt that Dr. Schlageck's opinion was lacking, it could have required the submission of additional information or it could have required plaintiff to be examined by a doctor of Thermadyne's choosing. For reasons not disclosed by the record, Thermadyne pursued neither option. Under the circumstances, Thermadyne's failure to consider the opinion of the treating physician that plaintiff was disabled — an opinion that was not contradicted by any other doctor's opinion — amounted to an arbitrary and capricious denial of benefits.
See THPO 66f: "[T]he Plan may require a medical examination, at its own expense, or additional information in order to make a determination on your claim. If additional information is required, you will receive a request, in writing, specifying the nature of the information needed and an explanation as to why it is needed. If a medical examination is necessary, you will be given the time of appointment and the doctor's name and location."
According to the statement of uncontroverted facts, plaintiff's short-term disability ended on August 4, 1999, 22 1/2 weeks after she left work. The Plan provided for short-term disability benefits of $400 per week. The court thus concludes plaintiff is entitled to recover from defendant the sum of $9,080 for short-term disability benefits.
Plaintiff has also requested attorney's fees pursuant to ERISA. Under ERISA, a district court "in its discretion may allow a reasonable attorney's fee . . . to either party." 29 U.S.C. § 1132 (g)(1). Generally, a district court should consider the following factors in making this determination: "(1) the degree of the opposing parties' culpability or bad faith; (2) the ability of the opposing parties to personally satisfy an award of attorney's fees; (3) whether an award of attorney's fees against the opposing parties would deter others from acting under similar circumstances; (4) whether the parties requesting fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and (5) the relative merits of the parties' positions." Gordon v. United States Steel Corp., 724 F.2d 106, 109 (10th Cir. 1983).
After considering all of the relevant factors, the court concludes that plaintiff should recover a reasonable attorney's fee for prosecution of this action. Although the court finds no bad faith on the part of the defendant, given the equities of the situation and the defendant's failure to consider appropriate evidence the court concludes that an award of attorney's fees is proper. The court further concludes that an award of fees is necessary in this case to effectuate ERISA's underlying purposes. Cf. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147 (1985) ("[i]n answer to a possible concern that attorney's fees might present a barrier to maintenance of suits for small claims, thereby risking underenforcement of beneficiaries' statutory rights, it should be noted that ERISA authorizes the award of attorney's fees.").
The court will determine the amount of allowable attorney's fees through a properly filed motion filed pursuant to Fed.R.Civ.P. 54(d)(2) and Local Rule 54.2. Any such motion must be filed by plaintiff within 14 days of entry of final judgment.
Conclusion.
Defendant Thermadyne's Motion for Summary Judgment (Doc. 32) is hereby DENIED; plaintiff Marsha Powers' Motion for Summary Judgment (Doc. 34) is hereby GRANTED.
The clerk is directed to enter judgment providing that plaintiff Marsha L. Powers shall recover of the defendant Thermadyne Holdings Corporation the sum of $9,080 on plaintiff's claim for improper denial of ERISA benefits, with interest thereon at the rate provided by law, and her costs of action, as well as a reasonable attorney's fee for prosecution of this action. IT IS SO ORDERED this day of February, 2001, at Wichita, Ks.