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holding that a plan administrator may not be individually liable for the denial of benefits under section 1132(B)
Summary of this case from Lacour v. Life Insurance Company of North AmericaOpinion
CIVIL ACTION NO: 99-2460 SECTION: "R" (2)
August 4, 2000
ORDER AND REASONS
This is an action for review of the denial of long-term disability benefits by the administrator of an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1054, et seq. Plaintiff alleges that defendants, The Limited Long Term Disability Program and Metropolitan Life Insurance Co., denied her claim for disability benefits in violation of 29 U.S.C. § 1132 (a)(1)(B) and breached their fiduciary duties under 29 U.S.C. § 1104 (a). By stipulation of the parties, the action has been submitted on the written record for a bench trial. The Court, having considered the trial memoranda, the parties' proposed findings of fact and conclusions of law, and the administrative record, issues the following findings of fact and conclusions of law.
I. FINDINGS OF FACT
Plaintiff, Debora Roig, was employed as a District Sales Manager for Victoria's Secret Stores, Inc. in Louisiana from July 21, 1986 to July 14, 1998. ( See Pl.'s Trial Br. App. Ex. M-102.) She was 47 years old at the time she stopped working.
Plaintiff's job duties at Victoria's Secret involved, among others, working up to 8-12 hours per day with a one-half to onehour break; travel on an average of 3-4 days per week; extensive driving to oversee multiple store locations 4-5 times per week; and store maintenance. ( See id. Ex. M-001.) Her job also involved heavy lifting. ( See Id. Ex. L-073.)
As a Victoria's Secret employee, plaintiff participated in The Limited Long Term Disability Program ["the Plan"], an employee welfare benefit plan governed by ERISA. (See Id. Ex. A-2.) The Limited, Inc. self-funded the Plan, and the Limited Associate Benefits Committee served as the Plan Administrator. (See Id. Ex. A-2, SPD; Ex. A-3, ASA, at 1.) Under an Administrative Services Agreement, the Limited contracted with Metropolitan Life Insurance Co. ["MetLife"] to serve as Claims Administrator and to "render certain services necessary in the administration of the disability benefits" under the Plan. (See Id. Ex. A-1, Plan ¶ 2.7; Ex. A-3, ASA, at 1.) The Limited delegated to MetLife the responsibility and discretionary authority for determining eligibility for disability benefits, construing Plan terms, and providing a full and fair review of determinations in connection with the appeal of claims denied. (See Id. Ex. A-1, Plan ¶ 2.7; Ex. A-3, ASA, at 6, 7.) MetLife assumed the role of Named ERISA Claims Review Fiduciary for the Plan. (See Id. Ex. A-3, ASA, at 7.) The Limited agreed that any determination made by MetLife pursuant to its discretionary authority would bind it. (See id.) MetLife was compensated by the Limited in accordance with a fee schedule. (See Id. at A-2.) It did not insure and was not liable for the Plan benefits. (See Id. at 15.)
In September 1995, plaintiff was involved in an automobile accident. (See id. Ex. L-036.) Approximately one year later, she sought treatment at a local medical center for low back pain and occasional leg pain and numbness. (See id. Exs. L-031-034.) Following an MRI scan on September 6, 1996, the attending physician diagnosed plaintiff with a moderate disc herniation at the L4-5 region of the spine and degenerative disc disease. (See id.) On February 28, 1997, she was referred to Thomas P. Perone, M.D. for a neurosurgical evaluation. (See Id. Exs. L-038-39.) Plaintiff consistently complained to Dr. Perone of back pain as well as radiating pain in her right leg and hip. (See Id. Exs. L-036; L-043; L-052.) She was also unable to tolerate many of the anti-inflammatory medications that Dr. Perone prescribed for her pain. (See Id.)
At Dr. Perone's direction, plaintiff underwent additional testing and evaluations of her low back pain and related symptoms, including a lumbar myelogram with post-myelogram CT scan on March 7, 1997 and an MRI scan on May 1, 1998. (See Id. Exs. L-040, 047, 050.) The radiologist who reviewed plaintiff's May 1, 1998 MRI scan reported that she still had degeneration at L3-4, L4-5 and L5-S1, but she had only a minimal, as opposed to moderate, disc herniation at L4-5. (See Id. Exs. L-047-48.) The change in disc herniation at L4-5 marked a "substantial improvement" over the MRI scan taken of her spine on September 6, 1996. (See id. Ex. L-048.) On June 1, 1998, after examining plaintiff, Dr. Perone reviewed these test results, noted the improvement of the herniated disc, and opined that "my suspicion is that [plaintiff] has reached the point where she can no longer physically do the requirements of her job simply because of her travel schedule." (See Id. Ex. L-049.)
On June 15, 1998, plaintiff went to see Dr. Perone for suture removal following surgery for carpal tunnel syndrome. (See Id. Ex. L-051.) At that visit, she told him that she had fallen at a mall on her way to work that morning, striking her left knee and further injuring her back. (See Id.) In connection with this visit, Dr. Perone noted that while plaintiff's "small disc herniation [had] resolved with conservative measures," she still suffered from "significant degeneration of the bottom three discs in her lumbar spine." (Id. Ex. L-050.) As a result of this degenerative condition of her spine, Dr. Perone recommended that plaintiff permanently avoid activities that were an integral part of her job, including the amount of lifting, bending, and driving she did at work as well as the number of hours she worked in a day. (See Id.) When plaintiff returned to see Dr. Perone four days later, again for suture removal related to her hand surgery, she continued to complain of hip pain. (See Id. Ex. L-052.) Dr. Perone advised plaintiff to try a new medication and to follow up with him in one month. (See Id.) He further advised plaintiff to call him if she did not feel better within two weeks so that he could order an MRI scan of her lumbar spine prior to her next visit. (See Id.)
On July 13, 1998, plaintiff stopped working at Victoria's Secret. She submitted an application to MetLife for disability benefits on August 1, 1998. (See Id. Ex. M-098.) MetLife set the date of plaintiff's disability as July 14, 1998. (See Id. Ex. M-102.) Plaintiff attached to her application the Attending Physician's Statement of Dr. Perone dated July 31, 1998. (See Id. Ex. M-101.) In the statement, Dr. Perone indicated that plaintiff had been diagnosed with carpal tunnel syndrome and lumbar disc degeneration. (See Id.) He stated that he had seen plaintiff for treatment of these conditions on March 13, 1997, April 3, 1997 and June 1, 15, and 19, 1998. (See Id.) Dr. Perone opined that plaintiff was physically and/or mentally prevented from performing her normal occupation due to the degeneration of her lumbar spine which had been aggravated by a fall at work in June 15, 1998. (See Id.) He stated that she could not perform her job because her condition limited her lifting to 20 lbs., she could not repetitively bend or stoop, and she had to limit her driving. (See Id.)
On August 17, 1998, MetLife wrote to Dr. Perone seeking medical documentation to evaluate plaintiff's claim for disability benefits. (See Id. Exs. L-0ll-12.) Specifically, MetLife requested history and physical examination reports from July 14, 1998, radiology reports, other diagnostic studies/reports, daily treatment records, and a prognosis regarding plaintiff's ability to return to work. (See Id. Ex. L-012.) On or about August 21, 1998, MetLife received a letter from Smart Corporation, a medical record correspondence service, and a notation on a letter to Dr. Perone, indicating that plaintiff had not been seen by Dr. Perone on or after July 14, 1998, when her leave began. (See Id. Exs. L-014, M-092.) There is no evidence in the administrative record that plaintiff or her physician supplied any requested medical documentation to MetLife for its initial review of her claim.
Based on the information regarding the absence of office visits by plaintiff to Dr. Perone, MetLife denied plaintiff's claim for benefits on August 27, 1998. (See Id. Exs. L-016-17.) To receive disability benefits under the Plan, an employee must:
. . . be under a doctors care and be certified as being unable to perform any and every duty related to your job. Benefits continue under this definition for 12 months. After the first 12 months of benefit payments, you will be considered totally disabled if you cannot work at any gainful occupation for which you are reasonably qualified by education, experience or training.
(See Id. Ex. A-2.) MetLife concluded that "[b]ecause we have no record that you were under the care of a licensed physician at the time your disability commenced, you are not eligible for weekly LTD benefits." (Id. Ex. L-016.)
On September 15, 1998, plaintiff wrote to MetLife and requested a review of the denial of her benefits. (See Id. Exs. M-080-81.) In support, she attached a letter from Dr. Perone dated June 15, 1998, in which Dr. Perone stated that plaintiff had been under his care since February 1997 because of her back problems. (See Id. Ex. M-083.) Plaintiff also attached a note from Dr. Perone which excused her from work on July 13, 1998 and stated: "To whom it may concern — Ms. Roig is under my care for her back condition and should remain off work until I re-evaluate her in the next several weeks." (Id. Ex. M-082.) Dr. Perone also wrote to MetLife on September 15, 1998, stating that plaintiff had an appointment to see him on July 23, 1998, but, due to emergency surgery, he had to reschedule it. (See Id. Ex. M-077.) His next available appointment was September 14, 1998 and, after examining plaintiff on that date, Dr. Perone advised MetLife that her condition had not changed, and he continued to believe "that she is unable to return to her prior job on a permanent basis at Victoria's Secrets [sic] because of the degenerative condition of her lumbar spine." (Id.) MetLife thereafter requested from Dr. Perone a complete copy of his treatment notes on plaintiff as well as a copy of all diagnostic test results from February 1997. (See Id. Ex. L-024.) Dr. Perone forwarded plaintiff's treatment notes and test results to MetLife. (See Id. Exs. L-031-56.) His progress notes from October 12 and November 9, 1998 reiterate his opinion that plaintiff "remains disabled from her prior job because of the degenerative condition of her lumbar spine." (Id. Exs. L-055, L-056.)
After reviewing the medical records submitted by Dr. Perone, MetLife again denied plaintiff's claim for benefits on January 18, 1999. (See Id. Ex. L-027.) MetLife noted that plaintiff had not seen Dr. Perone for a period of three months, from June 19, 1998 to September 14, 1998. (See Id.) Further, MetLife found no evidence that plaintiff contacted Dr. Perone in the two-weeks following her June 19, 1998 visit, despite his recommendation at that time that she contact him if she had any problems with her back. (See Id.) Finally, MetLife concluded:
Although there is an indication that you have a degenerative condition in your lumbar spine, this does not, in and of itself constitute Disability. According to the medical information submitted, your condition was at it's [sic] worse in 1997; yet you were capable of continuing to work. By May 1998, your condition had improved significantly. There was no change in your condition on the September 1998 MRI when compared to the one performed in May 1998. There is no evidence that your condition has worsened to the point it would now prevent you from performing your job duties.
(Id. Exs. L-028-29.)
On August 12, 1999, plaintiff filed suit in this Court against MetLife and the Plan for failure to pay benefits and breach of fiduciary duties under ERISA. (See Compl. ¶ 16.) By agreement of the parties, the Court stayed the case for eighty days on December 10, 1999 to permit "[t]he Limited and MetLife to conduct an additional administrative review of plaintiff's claim for [long-term disability] benefits." (Plan's Trial Br. Exs. A, E.) The joint motion to stay provided that plaintiff's counsel would have twenty days to submit additional information to support plaintiff's claim for long-term disability benefits and all additional information would be added to the administrative record. (See Id. Ex. A, at 2.) The parties agreed that if defendants decided to approve plaintiff's claim, she would dismiss this action. (See Id.)
Plaintiff submitted several additional materials for the Plan and MetLife to consider during the third administrative review, including a narrative report by Dr. Perone dated December 3, 1999; a report by Larry Stokes, Ph.D., dated August 26, 1999; and, an affidavit by plaintiff dated December 17, 1999. (See Id. Exs. L-070-79. L-080-84, L-085-88.) While the case was stayed, the Limited and MetLife retained Dr. F. Clifford Roberson, a board certified neurosurgeon, to review plaintiff's medical records and claim file. (See Pl.'s Trial Br. App. Exs. L-058-68, L-090-91.) On November 9, 1999, Dr. Roberson reported that, although plaintiff "might well have some degree of low back pain," she did not qualify for total disability as defined in the Plan. (See Id. Ex. L-067.) After reviewing the additional materials submitted by plaintiff, Dr. Roberson drafted a second report in which he reiterated that plaintiff's condition did not meet the definition of disabling when applied to her job description. (See Id. Exs. L-090-91.) Relying on Dr. Roberson's reports, the Limited Associate Benefits Committee upheld the denial of plaintiff's disability benefits on February 21, 2000. (See Id. Exs. L-001-006.)
II. CONCLUSIONS OF LAW
A. Validity of Third Administrative Review
Initially, the Court must determine whether to review the denial of plaintiff's claim for disability benefits issued by MetLife on January 18, 1999 or the one rendered by the Limited Associate Benefits Committee on February 21, 2000, after plaintiff filed suit. On June 19, 2000, the Court ordered the parties to brief the validity, vel non, of their agreement to modify the Plan's claims review procedure to permit the February 21, 2000 review. Specifically, the Court ordered the parties to address whether the writing requirement of 29 U.S.C. § 1102 (a)(1) and (b)(3) forecloses this agreement and limits the Court to a review of plaintiff's claim as of January 18, 1999, when it was denied by MetLife. Section 1102(a)(1) provides that "[e]very employee benefit plan shall be established and maintained pursuant to a written instrument, "and section 1102(b)(3) requires every plan to "provide a procedure for amending such plan." Since the parties' agreement was not a formal plan amendment modifying the plan for all participants, but an ad hoc modification to the plan review process in a single case, the Court raised the issue of whether the agreement was permissible under ERISA.
As noted supra, the Limited Associate Benefits Committee delegated to MetLife the responsibility and discretionary authority for providing the full and fair review of determinations concerning eligibility for Plan benefits pursuant to an Administrative Services Agreement. (See Pl.'s Trial Br. App. Ex. A-3, ASA, at 6-7.) The agreement between the two companies further provides that "[a]ny determination or interpretation made by MetLife pursuant to this discretionary authority shall be given full force and effect and be binding on the Participant, Customer and Plan Administrator [the Limited Associate Benefits Committee] unless it is demonstrated that the determination was arbitrary and capricious." (Id. at 7.) (See also Ex. A-l, Plan ¶ 2.7.) ("[MetLife's] decisions shall be final and binding."). The ASA indicates that MetLife will conduct an "initial evaluation" to determine whether disability benefits are payable. (See id. Ex. A-3, ASA, at 6.) That evaluation will "include review by medical professionals employed or retained by MetLife" when MetLife deems it appropriate. (See Id.)
The Summary Plan Description sets forth the procedures for applying for disability benefits and seeking review of a denial of benefits claim. (See Id. Ex. A-2.) Under the SPD, plan participants applying for disability benefits are instructed to obtain a note from their doctor, fill out a Medical Disability Claim statement, and then wait for a written notice of the approved period of disability. (See Id.) If a claim is thereafter denied, in whole or in part, the plan participant "may request to have the claim reviewed." (Id.) The request must be made in writing to MetLife within 90 days after receipt of the notice denying the claim. (See Id.) MetLife will then review the claim within 60 days, absent extenuating circumstances. (See Id.) The SPD finally advises plan participants that they may file suit in state or federal court if a benefits claim is denied. (See Id.)
MetLife detailed the Plan's claims review procedure in the letters it sent to plaintiff denying her benefits' claim, initially and on appeal. On August 27, 1998, MetLife denied plaintiff's claim and informed her to proceed as follows:
In the event a claim has been denied, in whole or in part, you may request a review of the claim in writing. This request for review should be sent to MetLife, at the address noted in this letter, no more than 60 days after you receive notice of denial of the claim.
Plaintiff requested a review, and MetLife reaffirmed its earlier denial of benefits on January 18, 1998. The concluding paragraph of that letter states:
This determination is the final decision on review, and constitutes completion of the full and fair review of your claim as required by your Plan and federal law. Please be advised that no further administrative appeals are available to you concerning your disability benefit. Should you wish to pursue this matter further, you should consult your appeal rights as set forth in the Summary Plan Description ("SPD").
(Id. Ex. L-029.) The SPD advises participants that they may file suit in state or federal court if a claim for benefits is denied in whole or in part. (See Id. Ex. A-2.)
The Plan argues that the doctrine of estoppel precludes plaintiff from now challenging the validity of the third administrative review, to which she consented by joint written agreement. Although the Fifth Circuit has expressly rejected an estoppel cause of action under ERISA in suits seeking to enforce rights to benefits based on purported oral modifications of plan terms, it has not addressed the propriety of informal written amendments to ERISA plans. See Weir v. Federal Asset Disposition Ass'n, 123 F.3d 281, 290 (5th Cir. 1997). Cf. Smith v. National Credit Union Admin. Bd., 36 F.3d 1077, 1080 (11th Cir. 1994) (holding that any modification or amendment to ERISA plan can be implemented only after amendment has been adopted in formal and written form). In holding that ERISA precludes oral plan modifications, the Fifth Circuit observed that the policy behind section 1102(a)(1)'s requirement that every ERISA employee benefit plan "shall be established and maintained pursuant to a written instrument" is "to prevent collusive or fraudulent side agreements between employers and employees." See Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1296 (5th Cir. 1989). The writing requirement "gives the plan's participants and administrators a clear understanding of their rights and obligations." Id. Without the requirement, employers could discriminate against selected plan participants. See Id.
The Plan asserts that the policies underlying the writing requirements set forth in 29 U.S.C. § 1102 (a)(1) and (b)(3) are not implicated, and estoppel not precluded, when the parties agree to modify a purely procedural aspect of the Plan's claims review process. It cites Doe v. Blue Shield United of Wisconsin, 112 F.3d 869, 875 (7th Cir. 1997), in support. In Doe, the Seventh Circuit applied the doctrine of equitable estoppel to toll an ERISA plan's contractual limitations period after the defendant wrote a letter to plaintiff's counsel confirming a telephone conversation and reminding plaintiff's counsel that he had agreed to delay filing suit until defendant responded to plaintiff's settlement demand. 112 F.3d at 875-76. The court noted that the application of estoppel is controversial in ERISA cases because ERISA forbids the conferral of benefits other than in accordance with the written ERISA plan, 29 U.S.C. § 1102 (a)(1). See Id. (citations omitted). The Court nevertheless held that although this requirement bars oral plan modifications, "written modifications of purely procedural provisions, at least, are not barred" because such modifications are remote from the concerns that underlie the writing requirements. Id. at 876.
After considering the policies underlying ERISA's writing requirements, this Court finds that unlike Doe, those policies are implicated here, and equity does not favor the use of estoppel to permit amendment of the Plan to encompass a third, post-suit administrative review for one participant. Allowing an additional layer of administrative review not provided for in the Plan, and by an entity which has effectively delegated all administrative authority under the Plan [the Limited Associate Benefits Committee], would undermine the purpose of having a review procedure that provides all Plan participants with a clear understanding of their rights. The plan administrator must amend the plan terms as required by 29 U.S.C. § 1102 (b)(3) if it wishes to change the claims review process. The Court sees a substantive, and not merely procedural, danger with case-by-case alterations in the Plan's review process. It allows the administrator to deny claims on a cursory review, wait to see if the participant sues, and then use a "third review" to clean up the record for litigation. Accordingly, even if the Court recognized the possible application of estoppel to the joint agreement for an additional administrative review, the Court does not find that the equities favor the use of that doctrine here.
Further support for the Court's determination that it cannot consider the third administrative review comes from the Fifth Circuit's holding that a district court reviewing the denial of benefits by an ERISA plan administrator is limited to a review of the administrative record, namely, "relevant information made available to the administrator prior to the complainant's filing of a lawsuit and in a manner that gives the administrator a fair opportunity to consider it." Vega v. National Life Ins. Servs., Inc., 188 F.3d 287, 300 (5th Cir. 1999) (en banc) (emphasis added). The purpose of confining the district court to the evidence presented to the plan administrator is to promote ERISA's goal of prompt and efficient claims resolution by plan fiduciaries. See Wildbur v. ARCO Chemical Co., 974 F.2d 631, 639 (5th Cir. 1992)-. See also Perry v. Simplicity Eng'g, 900 F.2d 963, 967 (6th Cir. 1990) ("A primary goal of ERISA was to provide a method for workers and beneficiaries to resolve disputes over benefits inexpensively and expeditiously. Permitting or requiring district courts to consider evidence from both parties that was not presented to the plan administrator would seriously impair the achievement of that goal."). Thus, the Vega court declined to remand an ERISA claim to the plan administrator for additional evidentiary findings, reasoning as follows:
We want to encourage each of the parties to make its record before the case comes to federal court, and to allow the administrator another opportunity to make a record discourages this effort. Second, allowing the case to oscillate between the courts and the administrative process prolongs a relatively small matter that, in the interest of both parties, should be quickly decided.
Id. at 302 n. 13; accord Jourdan v. Domino Sugar Corp. Chalmette Refinery Pension Plan, 2000 WL 245859, at *8 (E.D. La. March 1, 2000)
Considering the Fifth Circuit's caution against allowing parties to supplement the administrative record after an ERISA case is filed in federal court, as well as ERISA's goal of promoting expeditious resolutions of employee benefit claims by plan administrators, the Court cannot uphold the third administrative review provided for here. The Court recognizes that plaintiff agreed to the additional review. However, the joint agreement granted plaintiff 30 days to submit additional information for review and provided that the Plan administrator would issue an opinion within 60 days thereafter. The agreement did not state that the Plan administrator could supplement the record with additional information to support its position, nor did it provide that the Committee, rather than MetLife, would rule on plaintiff's claim. In fact, plaintiff alleges that she only learned that defendants had added additional evidence to the administrative record in the form of the November 9, 1999 and February 4, 2000 opinions of Dr. F. Clifford Roberson, on March 10, 2000. Before the lawsuit, the Plan did not have an independent medical expert review plaintiff's claim. To approve the post-suit, extra-Plan review agreed to here would permit ERISA plan administrators to drag their feet until they are sued and then allow them to belatedly bolster the administrative record in their favor. It would also discourage the parties from making good faith efforts to resolve claims before suit is filed. For the foregoing reasons, the Court will not consider the Committee's February 21, 2000 denial of plaintiff's disability benefits claim. The Court will instead review the denial of plaintiff's disability benefits claim by MetLife on January 18, 1999 and will disregard any evidence introduced by either party thereafter.
B. MetLife as Proper Party Defendant
MetLife argues that under ERISA, only the Plan may be sued to recover benefits and that it is therefore not a proper defendant in this suit. Plaintiff's complaint raises two causes of action against MetLife and the Plan. The first action claims that defendants failed to pay Plan benefits under 29 U.S.C. § 1132 (a)(1)(B). The second alleges that defendants breached their fiduciary duties pursuant to 29 U.S.C. § 1104 (a). As compensation for these claims, plaintiff seeks to recover the amount of short- and long-term disability benefit payments allegedly denied her retroactive to July 14, 1998, along with interest, reasonable attorney's fees and costs.
With regard to plaintiff's first cause of action, there is a split in authority regarding whether a plan is the only proper defendant in a suit to recover benefits under ERISA. In Gelardi
v. Pertec Computer Corp., the Ninth Circuit held that ERISA permits suits to recover benefits under section 1132(a)(1)(B) to be brought only against the plan as an entity. 761 F.2d 1323, 1324-25 (9th Cir. 1985) (per curiam). Accord Riordan v. Commonwealth Edison Co., 128 F.3d 549, 551 (7th Cir. 1997) ("It is true that ERISA permits suits to recover benefits only against the plan as an entity.") (citing Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996)); Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir. 1993) (same). In so concluding, the Gelardi court cited to section 1132(d)(2) of ERISA, which provides:
Any money judgment under this subchapter against an employee benefit plan shall be enforceable only against plan as an entity and shall not be enforceable against any other person unless liability against such person is established in his individual capacity under this subchapter.
By contrast to Gelardi, the Third Circuit has held that ERISA permits an entity other than a plan to be sued to recover benefits if that entity is a fiduciary with sufficient discretionary authority and responsibility in the administration of the plan. See Curcio v. John Hancock Mut. Life Ins. Co., 33 F.3d 226, 233 (3d Cir. 1994). See also Layes v. Mead Corp., 132 F.3d 1246. 1249 (8th Cir. 1998) (proper party against whom claim for ERISA benefits may be brought is party that controls administration of the plan); Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir. 1997) (same); Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir. 1988) (employer can be proper party defendant in action under section 1132(a)(1)(B) if shown to control plan administration). Notably, the Curcio court ultimately found the employer liable, not under section 1132(a)(1)(B), but under section 1132(a)(3) for making misrepresentations to its employees regarding the scope of its new life insurance plan. 33 F.3d at 235. Thus, it did not address the effect of section 1132(d)(2) and whether an entity other than a plan could be held liable for the denial of benefits under section 1132(a)(1). This Court's review of the Curcio line of cases allowing both plans and fiduciaries to be named as proper party defendants under section 1132(a) (1) has uncovered no case in which a court authorized relief against any entity other than the plan itself for wrongful denial of plan benefits. Although the Fifth Circuit has not yet addressed this issue, other district courts in this circuit have agreed with the Ninth Circuit's holding in Gelardi that the only proper defendant in a suit to recover benefits is the plan. See, e.g., Murphy v. WalMart Assocs.' Group Health Plan, 928 F. Supp. 700 (E.D. Tex. 1996) (no action against claims administrator for recovery of benefits under section 1132(a)(1)(B)); Crawford v. Exxon Corp., 851 F. Supp. 242, 244 (M.D. La. 1994) (granting summary judgment in Exxon's favor "because ERISA only provides for suits against the Plan as an entity to recover benefits"); Holloway v. HECI Exploration Co. Employees' Profit Sharing Plan, 76 B.R. 563, 570 (N.D. Tex. 1987) (citing Gelardi and 29 U.S.C. § 1132 (d)), aff'd, 862 F.2d 513 (5th Cir. 1988). Because the Court finds no authority for holding a plan administrator individually liable for the denial of benefits under section 1132(a)(1)(B), the Court concludes that the Plan is the only proper party defendant to plaintiff's claim under this section.
Plaintiff's second cause of action is for breach of fiduciary duties under 29 U.S.C. § 1104 (a). Although plaintiff can sue only the Plan to recover benefits, she can sue Plan fiduciaries for breach of their fiduciary duties. See Gelardi, 761 F.2d at 1324. MetLife could therefore be a proper party defendant in an action properly brought for breach of fiduciary duties. The Supreme Court has also held recently that an individual plan participant may bring an action for breach of the fiduciary duty set forth in 29 U.S.C. § 1104 (a) under 29 U.S.C. § 1132 (a)(3), which permits beneficiaries to obtain "other appropriate equitable relief." See Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065 (1996)
However, Varity held that a plaintiff can seek relief under section 1132(a)(3) only when no other "appropriate" relief is available. See Id. at 515, 116 S.Ct. at 1079. The Court stated that "where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be "appropriate'." Id. With particular importance for this case, the Court noted that "ERISA specifically provides a remedy for breaches of fiduciary duty with respect to . . . the payment of claims" in section 1132(a)(1)(B). Id. at 512, 116 S.Ct. at 1077. Accordingly, following Varity, courts have held that when a plaintiff brings actions under sections 1132(a)(1)(B) and 1132(a)(3) and the latter merely duplicates the relief sought under the former, appropriate relief is available under section 1132(a)(1)(B), and the section 1132(a)(3) action must be dismissed. See Wald v. Southwestern Bell Corp. Customcare Med. Plan, 83 F.3d 1002. 1006 (8th Cir. 1996); accord Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998); Joyce v. Curtiss-Wright Corp., 992 F. Supp. 259, 270 (W.D.N.Y. 1997), aff'd, 171 F.3d 130 (2d Cir. 1999); Kiefer v. Ceridian Corp., 976 F. Supp. 829, 844 (D. Minn. 1997). That is the case here. Plaintiff's breach of fiduciary duty claim is merely a disguised claim for failure to pay benefits. The only damages she seeks to recover are benefits allegedly due, along with interest, reasonable attorney's fees and costs. These remedies are all available to her under section 1132(a)(1)(B), and the Plan is properly before the Court. Because section 1132(a)(1)(B) provides an appropriate remedy, plaintiff's breach of fiduciary claim is not viable under section 1132(a)(3). As noted supra, the only proper party defendant to plaintiff's section 1132(a)(1)(B) claim is the Plan. The Court must therefore dismiss MetLife from this suit.
C. Review of MetLife's Denial of Disability Benefits
1. Legal Standard
ERISA does not expressly delineate a standard of review for actions challenging benefit determinations. Rather, the appropriate standard has been set forth in caselaw from the Supreme Court and the Fifth Circuit and depends upon whether the district court is asked to review an issue of plan interpretation or a factual determination by the plan administrator. In Firestone Tire Rubber Co. v. Bruch, the Supreme Court held that an administrator's denial of benefits is reviewed de novo, unless the benefit plan gives the administrator "discretionary authority to determine eligibility for benefits or to construe the terms of the plan." 489 U.S. 101, 115, 109 S.Ct. 948, 956-57 (1989). If the plan grants such discretion, a court will reverse an administrator's decision only for abuse of that discretion. See id. Regardless of the discretion granted an administrator, however, the Fifth Circuit has held that all factual determinations under ERISA plans are to be reviewed under an abuse of discretion standard. See Meditrust Fin. Servs. Corp. v. The Sterling Chemicals, Inc., 168 F.3d 211, 215 (5th Cir. 1999) (citing Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir.), cert. denied, 112 S.Ct. 453 (1991)). See also Chabert v. Provident Life Accident Co., 1994 WL 374213, at *4-5 (E.D. La. July 11, 1994) (reviewing factual determinations for abuse of discretion even when plan did not confer discretion on administrator). Here, the Plan expressly grants MetLife "discretionary authority to determine eligibility for Program benefits under the Program, to construe the terms of the Program, and to make determinations regarding appeals of denied claims for Program benefits." (Pl.'s Trial Br. App. Ex. A-2.) Accordingly, the abuse of discretion standard applies.
Plaintiff asks this Court to "presume" bias and conflict in the claims administration process because MetLife and the Plan refused to produce discovery that "may have led to discovery of bias." (See Pl.'s Reply Br., at 6-7.) There is no evidence that plaintiff moved to compel responses to this discovery prior to agreeing to submit this case for trial on the written record. The Court cannot presume bias based upon a failure to respond to discovery requests. Moreover, the record is clear that MetLife does not insure and is not liable for benefits under the Plan. (See Pl.'s Trial Br. App. Ex. A-3, ASA, at 15.) Because the Court finds no evidence that MetLife's denial of plaintiff's benefits' claim was conflicted, it will not modify the abuse of discretion review. See, e.g., Vega, 188 F.3d at 296 (when inference of conflict of interest arises, court should apply abuse of discretion standard on sliding scale).
Under the abuse of discretion standard, the Court considers whether the plan administrator's actions were arbitrary and capricious. See Meditrust, 168 F.3d at 215; Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 601 (5th Cir. 1994) (quoting Salley v. E.I. DuPont de Nemours Co., 966 F.2d 1011, 1014 (5th Cir. 1992)). The Court must determine if substantial evidence exists in the record to support the decision. See Meditrust, 168 F.3d at 215. Substantial evidence "is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Girling Health Care, Inc. v. Shalala, 85 F.3d 211, 215 (5th Cir. 1996) (quoting Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427 (1971)); accord Rhodes v. Panhandle E. Corp., 1993 WL 346188, at *8 (E.D. La. Aug. 31, 1993) (substantial evidence requires more than a scintilla but less than a preponderance) (internal quotations omitted) (quoting Sandoval v. Aetna Life and Cas. Ins. Co., 967 F.2d 377, 381 (10th Cir. 1992)). The court charged with reviewing the denial of benefits under an ERISA plan may not substitute its judgment for that of the plan administrator. See Rig.by v. Bayer Corp., 933 F. Supp. 628, 633 (E.D. Tex. 1996) (citing Denton v. First Nat'l Bank of Waco, 765 F.2d 1295 (5th Cir. 1985)). See also Pierre, 932 F.2d at 1559 ("[t]he Courts simply cannot supplant plan administrators, through de novo review, as resolvers of mundane and routine fact disputes") (citation omitted); Kolodzaike v. Occidental Chem. Corp., 88 F. Supp.2d 745, 749 (S.D. Tex. 2000) ("just because this court may have conducted the investigation differently . . . does not mean that the Administrator abused her discretion"). As noted supra, the Court's review of whether an administrator abused its discretion in making factual determinations is limited to the administrative record before the administrator. See Vega, 188 F.3d at 299 (collecting cases); Wildbur, 974 F.2d at 639.
2. Discussion
After reviewing the standard for "total disability" under the Plan and the evidence before MetLife, the Court concludes that MetLife abused its discretion in denying plaintiff's claim for disability benefits. The Plan provides that in order for plaintiff to be considered "totally disabled," she must have been under a doctor's care and certified as being unable to perform all duties related to her job. (See Pl.'s Trial Br. Exs. A-1 ¶ 2.26, A-2.) After one year, plaintiff is considered totally disabled if she cannot work at any gainful occupation for which she is reasonably qualified by education, experience, or training. (See id.)
MetLife denied plaintiff's claim for disability benefits on January 18, 1999 on essentially two grounds. First, MetLife found that plaintiff had not been "under a doctor's care" at the time she sought benefits. Second, MetLife found that although plaintiff had a degenerative condition of the lumbar spine, that condition was not disabling in accordance with the Plan terms. Neither of these findings is supported by substantial evidence in the administrative record. The Court will address each in turn. MetLife's finding that plaintiff was not "under a doctor's care" at the time she applied for disability benefits, August 1, 1998, is premised on the fact that she had not seen Dr. Perone for a period of three months from June 19, 1998 to September 14, 1998. Specifically, MetLife notes that plaintiff's last visit to Dr. Perone before August 1st was for suture removal following carpal tunnel surgery on June 19, 1998; that at the June 19th appointment Dr. Perone prescribed medication for plaintiff's back problem and advised her to follow up with him in two weeks if her condition did not improve; and that plaintiff did not see Dr. Perone again for her back condition until September 14, 1998. However, the record indicates that although plaintiff saw Dr. Perone on June 15 and 19, 1998 primarily for her carpal tunnel syndrome, she also advised him that she had fallen on her way to work on June 15 and further injured her back. Dr. Perone prescribed medication for her back condition and explained to her that the degenerative condition of her back could lead to such falls. On June 15th, Dr. Perone drafted a letter "To Whom it May Concern" stating that plaintiff had been under his care since February 1997 because of problems with her back. The note he drafted excusing plaintiff from work on July 13, 1998 explained that plaintiff was under his care for her back condition and should remain off work until he could evaluate her in the next several weeks. Based on the foregoing, the record is clear that plaintiff was "under a doctor's care" at the time disability began on July 14, 1998. Furthermore, the record indicates that plaintiff had scheduled an appointment with Dr. Perone for July 23, 1998, but that an emergency surgery had forced him to reschedule that appointment to his next available date, September 14, 1998. MetLife summarily dismissed this explanation in its appellate review, stating:
It would seem reasonable, however, if a doctor had to cancel a patient's appointment because of an emergency situation, he would make every attempt to work that patient back into his schedule as quickly as possible, rather than require the patient to wait an additional 60 days before being seen. This would be especially true if the patient was experiencing symptoms to the severity that would prevent them [sic] from working.
The Court finds that MetLife acted arbitrarily and capriciously when it attributed Dr. Perone's inability to promptly reschedule appointments to plaintiff. All indications are that plaintiff sought her doctor's care for her back condition on July 23rd, one week before filing her disability application. At that point, plaintiff had been managing her back condition for approximately two years and had been advised by Dr. Perone that her condition was permanent and degenerative. The degenerative nature of her condition had already resulted in significant restrictions on her work. There would thus be no reason for plaintiff to seek emergency treatment for her condition on the day that she decided that she could no longer continue to work. For the foregoing reasons, the Court finds no substantial evidence in the administrative record to support MetLife's denial of plaintiff's disability claim based on a finding that she was not under a doctor's care as required by the Plan.
MetLife also concluded that plaintiff was not disabled within the meaning of the Plan because it found that her back condition had improved, yet she continued to keep working. Specifically, MetLife points to a comparison between MRI scans taken of plaintiff's lumbar spine on September 6, 1996, May 1, 1998, and September 17, 1998. Although the May 1, 1998 scan reported substantial improvement over the earlier scan, and plaintiff continued to keep working, MetLife oversimplifies the radiologist's report comparing those two scans. The radiologist noted that the September 6, 1996 scan had revealed a moderate disc herniation on the left side of L4-5 and that a review of L4-5 on May 1, 1998 demonstrated only minimal disc protrusion at the same area of the spine, marking a substantial improvement. With regard to plaintiff's degenerative disc condition, the May 1, 1998 report indicated that she had decreased disc size at L3-4, L4-5 and L5-S1. Thus, any substantial improvement concerned plaintiff's disc herniation at L4-5, not the degenerative condition of her spine. The September 17, 1998 scan reported no change from May let and continued to indicate that plaintiff has generalized disc degeneration at L3-4, L4-5 and L5-Sl. A review of Dr. Perone's progress notes reveals that he took into consideration the improvement in plaintiff's disc herniation indicated by the MRI scans, yet his examination of her still led him to opine that her degeneration was unchanged and had rendered her permanently disabled from her job at Victoria's Secret. Before MetLife were Dr. Perone's October 12 and November 9, 1998 progress notes stating that plaintiff was disabled from her job because of the degenerative condition of her lumbar spine and a letter sent to MetLife outlining that opinion on September 15, 1998. The Court finds that MetLife's determination that plaintiff was not disabled based on a claim analyst's understanding of MRI scans, which starkly contradicts the opinion of the only physician to appear in this case, is wholly insufficient to support the denial of disability benefits.
MetLife did not interview plaintiff, did not independently observe her activities, and did not order an independent medical examination or review by a vocational rehabilitation expert. The Court recognizes that the Fifth Circuit has rejected the notion that the plan administrator has a duty to independently gather evidence in making benefit determinations. See Vega, 188 F.3d at 299. See also Rhodes, 1993 WL 346188, at *9 (no duty on part of plan administrator to seek out medical evidence). It has also rejected a bright-line rule that would require that a plan administrator's benefits determination be supported by a vocational rehabilitation evidence. See also Duhon v. Texaco, 15 F.3d 1302, 1308 (5th Cir. 1994) (plan administrator not required to obtain vocational rehabilitation evidence before making final disability determination) (citing Block v. Pitney Bowes, Inc., 952 F.2d 1450 (D.C. Cir. 1992) (Ginsburg, J.)). Rather, the district court must decide "on a case-by-case basis whether under the particular facts the plan administrator abused his discretion by not obtaining the opinion of a vocational rehabilitation expert." Id. at 1309. This Court's review of Fifth Circuit caselaw affirming a denial of benefits reveals no case in which the plan administrator did not have the support of either a physician or a vocational rehabilitation expert. See, e.g., Meditrust, 168 F.3d at 215 (administrator's denial of benefits not abuse of discretion when based on opinions of physicians who disagreed with plaintiff's doctor and analysis of all hospital records); Rigby, 933 F. Supp. at 633 (collecting cases); Menendez v. Sun Life of Can., 2000 WL 300923, at *3 (E.D. La. March 17, 2000) (plan administrator made permissible choice to follow opinion of medical consultants it retained, rather than conflicting report of plaintiff's treating physicians); Dubuc v. Whitney Nat'l Bank Plan, 1999 WL 4919, at *4 (E.D. La. Jan. 4, 1999) (finding substantial evidence to support administrator's denial of benefits when two independent medical consultant groups opined that plaintiff was not totally disabled in contradiction to opinions of plaintiff's treating physician and occupational therapist). In fact, in the one case in which the plan administrator did not have medical or vocational expertise to support its termination of disability benefits, the court found that substantial evidence did not support the administrator's determination. See Rigby, 933 F. Supp. at 634. Here, the only evidence MetLife relied on to support its decision was the fact that plaintiff's disc herniation at L4-5 had improved yet she continued to work. As noted, this improvement is consistent with Dr. Perone's evaluation that her overall degenerative condition had rendered her permanently disabled.
No substantial evidence existed in the record to rebut Dr. Perone's finding of disability. The Court concludes that MetLife abused its discretion when it determined that plaintiff was not disabled from performing all duties related to her job at Victoria's Secret in accordance with the Plan terms. Plaintiff is thus entitled to recover disability benefits for the first twelve months immediately following the date her disability began or July 14, 1998. The Court will enter a judgment in plaintiff's favor in the amount of these benefits below. However, because there was no evidence presented to MetLife regarding plaintiff's inability to work at any occupation for which she is, or could become, reasonably qualified by education, experience or training, the Court finds that plaintiff did not furnish substantial evidence that she was entitled to disability benefits beyond the initial twelve-month period.
D. Award of Disability Benefits
The Plan provides disability benefits equal to sixty percent of plaintiff's monthly earnings subject to a reduction for any benefits paid during the disability period. (See Pl.'s Trial Br. App. Ex. A-1, Plan, § 4.3.) The administrative record shows that plaintiff's disability began on July 14, 1998. (See id. Ex. M-102.) Victoria's Secret continued to pay plaintiff her regular salary from July 14, 1998 to August 12, 1998. (See id. Ex. L-008.) At the time plaintiff stopped working she was earning $1,115.39 per week. (See id.) Accordingly, she is entitled to recover disability benefits in the amount of $669.23 per week from August 12, 1998 to July 14, 1999, for a total amount of $32,123.04.
1. Post-Judgment Interest
Plaintiff is entitled to a mandatory award of post-judgment interest pursuant to 28 U.S.C. § 1961 (a).
2. Pre-Judgment Interest
The Court also finds that plaintiff is entitled to prejudgment interest on her award. An award of prejudgment interest is permissible (1) if the federal statute creating the cause of action does not preclude such interest, and (2) if an award of prejudgment interest would further the policies underlying the statute. See Carpenters Dist. Council v. Dillard Dep't Stores, Inc., 15 F.3d 1275, 1288 (5th Cir. 1994); Transitional Learning Co. v. Metropolitan Life Ins. Co., 913 F. Supp. 504, 508 (S.D. Tex. 1996). When these two criteria are met, the court has discretion to award prejudgment interest. See Carpenters, 15 F.3d at 1288 (citing Calderon v. Presidio Valley Farmers Ass'n, 863 F.2d 384, 392 (5th Cir. 1989); Oil, Chem. Atomic Workers Int'l Union v. American Cyanamid Co., 546 F.2d 1144, 1144 (5th Cir. 1977))
In Hansen v. Contimental Insurance Co., the Fifth Circuit observed that ERISA does not preclude an award of prejudgment interest and further indicated that "an award of prejudgment interest under ERISA furthers the purposes of that statute by encouraging plan providers to settle disputes quickly and fairly, thereby avoiding the expense and difficulty of federal litigation." 940 F.2d 971, 984 n. 11 (5th Cir. 1991). This Court may therefore exercise its discretion to award prejudgment interest here. In so doing, the Court notes plaintiff has been denied access to funds owed her for a significant period of time. To compensate her for this loss and to encourage plan administrators to resolve disputes quickly and fairly without recourse to litigation, an award of prejudgment interest is appropriate. As noted, ERISA is silent on prejudgment interest. The district court has discretion to select an equitable rate of interest and may look to state law for guidance. See Hansen, 940 F.2d at 984. Looking to Louisiana, the law of the situs of plaintiff's employment, the Court finds that plaintiff is entitled to prejudgment interest from August 12, 1998 at the rate set by La. Civ. Code art. 2924. See e.g., Bourg v. NN Investors Life Ins. Co., 1992 WL 28063, at *4 (E.D. La. 1992).
3. Reasonable Attorney's Fees and Costs
ERISA expressly permits a federal court, in its discretion, to award reasonable attorney's fees and costs. See 29 U.S.C. § 1132 (g)(1). Nevertheless, the Fifth Circuit has rejected the notion that any presumption under ERISA exists in favor of awarding costs and attorney's fees. See Todd v. AIG Life Ins. Co., 47 F.3d 1448 (5th Cir. 1995); Harms v. Cavenham Forest Indus., Inc., 984 F.2d 686, 694 (5th Cir. 1993). To determine whether to award attorney's fees and costs to a party pursuant to ERISA, a court should consider the following factors:
1. The degree of the opposing party's culpability or bad faith;
2. The ability of the opposing party to satisfy an award of attorney's fees;
3. The deterrent effect of an award on other persons under similar circumstances;
4. Whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or a significant legal question regarding ERISA; and
5. The relative merits of the parties' positions.
See Harms, 984 F.2d at 694 (citing Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980)). "No one of these factors is necessarily decisive, and some may not be apropos in a given case, but together they are the nuclei of concerns that a court should address in applying section 502(g)." Bowen, 624 F.2d at 1266.
Applying the Bowen factors here, the Court concludes that an award of plaintiff's reasonable attorney's fees and costs is warranted. It is true that plaintiff did not seek in this matter to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself. Nevertheless, the Court believes that an award of attorney's fees will serve as a deterrent and will encourage plan administrators not to shirk their responsibilities in the claims review process. The Plan appears to have the ability to pay an award of attorney's fees, and the relative merits of the parties' positions with respect to the benefits the Court awarded were lopsidedly in favor of plaintiff. Based on the foregoing, the Court finds an award of reasonable attorney's fees and costs appropriate here. However, no attorney's fees will be awarded with respect to the "third review" conducted after this suit was filed.
III. CONCLUSION
For the foregoing reasons, the Court awards plaintiff disability benefits in the amount of $32,123.04. Defendant is ordered to pay plaintiff pre-judgment interest on this amount in accordance with La. Civ. Code art. 2924 and post-judgment interest pursuant to 28 U.S.C. § 1961 (a). The Court also finds that plaintiff is entitled to an award of reasonable attorney's fees and costs. Plaintiff shall submit to the Court within 10 days a properly authenticated affidavit establishing the amount of attorney's fees and costs expended in this matter, subject to the exception outlined above. The Court will then determine the proper award using the "lodestar" method. See Todd, 47 F.3d at 1459.
New Orleans, Louisiana, this 4th day of August, 2000.