Opinion
Case No. 2:02-CV-988 TC.
June 29, 2004
ORDER
Plaintiff Brent Barnett has brought this lawsuit against Defendants Deseret Mutual Benefit Administrators ("DMBA") and Deseret Healthcare Employee Benefit Trust (collectively "Defendants"). Mr. Barnett, who suffers from fibromyalgia and depression/anxiety, claims that he is eligible for continued disability benefits under the Deseret Healthcare Disability Income Plan. Mr. Barnett argues that DMBA, after paying him disability benefits for two years, arbitrarily and capriciously ended payments thereby violating the Employee Retirement Income Security Act ("ERISA").
DMBA contends that it paid Mr. Barnett all the benefits to which he was entitled and he is no longer eligible for disability benefits. In addition, DMBA claims that Mr. Barnett owes DMBA set-off and reimbursement for amounts he was eligible to receive from the United States Social Security Administration during the two-year period DMBA made disability payments to him.
The matter is before the court on the parties' cross-motions for summary judgment. For the reasons discussed below, the court grants in part and denies in part DMBA's motion and denies Mr. Barnett's motion.
FACTUAL BACKGROUND
Brent Barnett was a non-tenured professor at Brigham Young University ("BYU"). While he was employed by BYU, he was covered by a disability plan administered by DMBA. He became eligible for benefits in 1993. In 1998, because of his physical, mental and emotional ailments, he left his position at BYU.
On November 11, 1998, Mr. Barnett applied for disability benefits under the disability plan. The parties disagree on what version of the disability plan should govern Mr. Barnett's claim. Three versions of the disability plan are discussed by the parties: the 1992 Plan, the Modified 1992 Plan, and the 1999 Plan. This issue of which version applies is addressed later on in the order.
Mr. Barnett listed his symptoms on his application as "insomnia, fatigue, racing heart, anxiety, dizziness, headaches, foggy brain" and "anxiety, fatigue, dizzy spells, racing heart, insomnia, headaches, sleeping spells." (Ex. H to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J.) He listed his diagnosis as "Malaise Weakness, Vertigo, Depression, Diabetes." (Id.)
DMBA provisionally approved Mr. Barnett's application for disability benefits on January 27, 1999. (Ex. K to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J.) DMBA determined that Mr. Barnett was disabled as of November 17, 1998 ("Disability Date"). In the approval letter, DMBA told Mr. Barnett that DMBA was
administering your benefit under the Provisional Benefit of the Disability Plan. You may receive this benefit for up to one year from your Disability Date. The main purpose of the Provisional Benefit is to begin benefit payments while a more specific cause of your disability is discovered. If we decide that you qualify for benefits under the physical or mental illness part of the Plan, we will administer your benefit accordingly. Otherwise, your benefit will end on the earlier of the date you are able to return to work, or [one year from your Disability Date].
(Id. (emphasis added).) After the one-year Provisional Benefit period expired on November 17, 1999, DMBA determined that Mr. Barnett's disabling condition was depression and anxiety. As such, DMBA extended Mr. Barnett's benefits for one additional year under the "Emotional [Mental] Illness" portion of the plan. (See Feb. 8, 2000 Psychological Evaluation by DMBA-hired psychologist Bradley Edgington, attached as Ex. L to Defs.' Mem. in Supp.; Apr. 12, 2000 Letter from DMBA to Barnett, attached as Ex. M to Defs.' Mem. in Supp.) Because the Emotional Illness portion of the Plan provided for an aggregate total of twenty-four months of coverage for any single period of disability (see Jan. 1, 1992 Plan § 5.01, attached as Ex. A to Defs.' Mem. in Supp.), DMBA ended Mr. Barnett's disability benefits on November 16, 2000 (two years after his Disability Date). DMBA's decision ultimately provided Mr. Barnett with a total of two years of benefits.
Late in the year 2000, two of Mr. Barnett's medical doctors diagnosed Mr. Barnett with fibromyalgia. (See, e.g., Exs. N, P, Q, attached to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J.) Also, in a January 3, 2004 decision issued by a U.S. Social Security Administration Administrative Law Judge, the agency concluded that Mr. Barnett suffers from severe impairments caused by "fibromyalgia, a mood disorder and an anxiety disorder." (Ex. S, attached to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J. (emphasis added).)
DMBA concedes for purposes of the motion that Mr. Barnett currently suffers from fibromyalgia, but argues that at the time DMBA considered Mr. Barnett's claim, there was no evidence or diagnosis of fibromyalgia. (See Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J. at xii ("Disputed Fact No. 11").) Moreover, DMBA contends that a claimant can never establish a diagnosis of fibromyalgia for purposes of determining continuing benefits (i.e., benefits beyond one or two years) under any version of DMBA's disability benefit plan, because the disease cannot be documented with the requisite "objective medical evidence." "Objective medical evidence" is not clearly defined in the record, but it appears DMBA means clinical evidence such as blood tests or other well-established diagnostic methods above and beyond reliance on patient-reported symptoms. (See, e.g., DMBA Benefit Advisory Committee Recommendation, attached as Ex. F to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J. ("Several insurance companies . . . limit disability benefits for `self-reported' symptoms or illnesses [such as fibromyalgia, etc.] where tests fail to identify an underlying cause").) Apparently, a medical doctor's diagnosis based solely on the patient's self-reported symptoms is not objective medical evidence.
DMBA further asserts that even if Mr. Barnett has fibromyalgia, the disease presented itself in 2000, after Mr. Barnett became disabled, and Mr. Barnett has not presented evidence that the condition caused his disability. According to DMBA, the late onset of the disease (at a time when Mr. Barnett was no longer a beneficiary of the disability benefit plan) relieves DMBA of any duty to provide benefits.
DMBA issued numerous denial letters to Mr. Barnett. On July 18, 2002, DMBA's Claim Review Committee conducted a two-hour hearing to resolve Mr. Barnett's appeal of DMBA's refusal to extend his benefits beyond the two-year period. The Claim Review Committee upheld the DMBA administrator's decision to deny Mr. Barnett's claim for continuation of benefits. The current suit followed.
ANALYSIS
A. Are Defendants Entitled to Summary Judgment Because They are Not Proper Parties to This Suit?
Mr. Barnett named DMBA and Deseret Healthcare Employee Benefit Trust ("Deseret Healthcare") as Defendants. DMBA is the plan administrator and trustee, and Deseret Healthcare is the trust funding the Plan. Mr. Barnett does not name the Plan as a Defendant.
Defendants argue that Mr. Barnett has no legal claim for benefits under ERISA against DMBA or Deseret Healthcare, because his claim is against the Plan, not them. Both parties cite to various cases which they contend support their arguments. It appears that the Tenth Circuit has not addressed this precise issue.
But assuming, without deciding, that Defendants are correct and the Plan is the proper party here, the court would simply allow Mr. Barnett to amend his Complaint and add the Plan as a party. Because this issue is not controlling and is easily resolved, the court assumes, for purposes of this order, that the Defendants are the appropriate parties.
B. Is Mr. Barnett Entitled to Continuing Disability Benefits? Scope of Review
In addition to the traditional summary judgment standard, the court must determine whether DMBA's decision to deny benefits should be reviewed de novo or for abuse of discretion. If the plan grants discretion to the plan administrator to determine eligibility under the plan, the court must review the decision under the arbitrary and capricious standard. Sandoval v. Aetna Life Cas. Ins. Co., 967 F.2d 377, 379-80 (10th Cir. 1992).
Deseret Healthcare, the plan's trust, has full discretion to interpret the plan and determine benefit eligibility. (See 1992 Plan ¶ 17.19 ("Deseret Healthcare shall have full discretion to interpret this Plan and determine benefit eligibility."); 1999 Plan ¶ 14.16 (containing same language).) DMBA, the plan administrator and trustee, made the decision regarding Mr. Barnett's claim. Mr. Barnett argues that because the Plan specifically names Deseret Healthcare (the trust) as the one with discretion, such discretion does not transfer to DMBA (the trustee). DMBA contends that the distinction drawn by Mr. Barnett "has no basis in the law" and that DMBA "is the entity through which the Benefit Trust [a legal fiction] exists and acts." (Defs.' Reply Mem. in Supp. at 1.)
Discretion under a plan may be delegated. See Mauldin v. WorldCom, Inc., 263 F.3d 1205 (10th Cir. 2001). Nothing in the record expressly shows a delegation of discretion by Deseret Healthcare to DMBA. However, DMBA is essentially the arm through which Deseret Healthcare acts. In the Tenth Circuit case ofMauldin, it is suggested that implied delegation of discretion may be proper. See id. at 1213. Logic supports DMBA's position, and it appears that the proper standard of review is the arbitrary and capricious standard.
Under the arbitrary and capricious standard, the decision should be affirmed if it was "based on a reasonable interpretation of the plan's terms and was made in good faith."Trujillo v. Cyprus Amax Minerals Co. Retirement Plan Committee, 203 F.3d 733, 736 (10th Cir. 2000). This standard of review is very deferential.
When reviewing under the arbitrary and capricious standard, "[t]he Administrator['s] decision need not be the only logical one nor even the best one. It need only be sufficiently supported by facts within [his] knowledge to counter a claim that it was arbitrary or capricious." The decision will be upheld unless it is "not grounded on any reasonable basis." The reviewing court "need only assure that the administrator's decision fall[s] somewhere on a continuum of reasonableness — even if on the low end."Kimber v. Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir. 1999) (internal citations omitted; emphasis in original).
Under this standard of review, the court must consider only the evidence and arguments that were before the plan administrator at the time the decision was made. Sandoval, 967 F.2d at 380. That means that only the evidence presented to DMBA up until the time when DMBA made its final decision following a hearing, should be considered. See Kimber, 196 F.3d at 1098 (holding that evidence was limited to that which was presented up until the administrator's final decision denying benefits).
But even under a stricter standard of review, the court's decision would be the same. As discussed below, a straight-forward reading of the plan documents shows that Mr. Barnett is not entitled to continued benefits.
The Parties' Arguments
After careful reading, the court construes the parties' argument to be, in essence, as follows. Mr. Barnett claims that he is disabled as a result of fibromyalgia; Fibromyalgia is not covered by the 1992 Plan's section that provides limited coverage for "Chronic Fatigue Syndrome" (one year) and "Emotional Illness" (two years); Instead, the 1992 Plan covered fibromyalgia as a "sickness" under the plan, and therefore, Mr. Barnett, because of his sickness, suffered a "Total Disability" and was entitled to benefits until the age of 65. (See 1992 Plan, attached as Ex. A to Defs.' Mem. in Opp'n, at 3-5.)
The Defendants contend that the plan in effect on the Disability Date was the 1992 Plan as modified in 1997 (the "Modified 1992 Plan"). On November 13, 1997, DMBA approved and implemented a modification to the 1992 Plan. DMBA refers to this modification as the "Provisional Benefit." The Provisional Benefit eliminated the "Chronic Fatigue Syndrome" section which had existed in the 1992 Plan. That section reads: "Disability benefits for a fatigue related illness shall be available for an aggregate total of 12 months for any single period of disability. . . ." (1992 Plan Section IV.)
The Provisional Benefit replaced the Chronic Fatigue Syndrome section with coverage of one year for what DMBA characterizes as a "broader range of cases including those involving symptoms with the following characteristics: (i) primarily pain and/or fatigue; (ii) significant interference with the ability to work; (iii) medically documented [but without requirement that "objective medical evidence" be provided]; and (iv) not been identified with a correlating cause." (Defs.' Mem. in Supp. at p. iv, ¶ 8.) DMBA states that "[a]ccording to the DMBA's Benefit Advisory Committee at the time, without the Provisional Benefit, no benefits existed for `conditions where pain is essentially the only symptom, such as fibromyalgia.'" (Id. at p. iv. ¶ 9 (citation omitted; emphasis added).) The DMBA Board of Directors noted that pain-related claims such as those for fibromyalgia had been denied in the past because they are difficult to document. (Ex. F to Defs.' Mem. in Supp.) The Provisional Benefit covered diseases where the symptoms were primarily pain and/or fatigue-related. (Benefit Advisory Comm., Ex. F to Defs.' Mem. in Opp'n to Pl.'s Mot. for Summ. J. at 4.)
According to Defendants, Mr. Barnett did not base his November 11, 1998 claim on fibromyalgia. It was not until sometime in 2000 that Mr. Barnett asserted that he was suffering from fibromyalgia. Defendants contend that by then, because Mr. Barnett was no longer employed by BYU, under the Modified 1992 Plan he was not entitled to disability benefits based on a newly-raised diagnosis.
Defendants further argue that Mr. Barnett's claimed disability, whether it was mental illness, chronic fatigue, depression or even fibromyalgia, fell under the Provisional Benefit. Therefore, Mr. Barnett was entitled to, and did receive, benefits for one year as provided by the Provisional Benefit.
Defendants maintain that even under the 1992 Plan, Mr. Barnett was entitled to at most 24 months of disability benefits: 12 months for chronic fatigue syndrome (Section IV) or 24 months for emotional illness (Section V). Defendants argue that even had Mr. Barnett properly claimed fibromyalgia as the reason for his disability on the Disability Date (a proposition they strongly contest), he would not be entitled to benefits under the "sickness" provision of the 1992 Plan because a diagnosis of fibromyalgia cannot be verified by objective medical evidence and no benefits would be paid.
The Plan in Effect on the Disability Date
The first question is whether the 1992 Plan or the Modified 1992 Plan was in effect on the Disability Date. The 1992 Plan was in effect when Mr. Barnett became eligible for benefits in 1993 (when he began employment with BYU). Later, in November 1997, as discussed above, the DMBA Board of Directors adopted, on a trial basis, the Provisional Benefit which modified the 1992 Plan. According to DMBA, the Modified 1992 Plan was the effective plan when Mr. Barnett submitted his disability application on November 11, 1998.
Mr. Barnett argues that the 1992 Plan is the appropriate plan because the modification of the 1992 Plan in 1997 (through the addition of the Provisional Benefit) was invalid. According to Mr. Barnett, because the Provisional Benefit allegedly reduced existing benefits, a formal amendment to the Plan was required (which did not occur). Instead, the Board simply adopted the recommendation of its Benefit Claim Advisory Committee, which, Mr. Barnett contends, rendered the attempted modification a nullity.
According to Mr. Barnett, fibromyalgia was a "sickness" under Section 1.16 of the 1992 Plan. It follows, Mr. Barnett maintains, that the Provisional Benefit reduced coverage for conditions such as fibromyalgia under Section 1.16 of the 1992 Plan (which otherwise would have entitled Mr. Barnett to benefits until he was no longer disabled or reached the age of 65) to a benefit of only one year for pain- and fatigue-related illness.
DMBA disagrees, arguing that the Provisional Benefit expanded the benefits under the 1992 Plan and so no formal plan amendment procedures were required. DMBA's position is that the Provisional Benefit extended plan coverage to illnesses such as fibromyalgia that had, for many years, not been covered at all (because of claimants' inherent inability to present objective medical evidence) even under the limited fatigue-related illness or mental illness categories.
The court agrees with DMBA. Although the 1992 Plan does not expressly require production of "objective medical evidence" to establish a disability, the DMBA Board of Directors' November 13, 1997 minutes (in which the Provisional Benefit is adopted) and the Board's policy statement that is part of the Provisional Benefit, establish that pain-related conditions such as fibromyalgia were not covered under the original 1992 Plan. Nothing in the factual record contradicts the implication created by the Provisional Benefit that DMBA historically interpreted the 1992 Plan to require objective medical evidence to establish a disability that is eligible for continuing benefits. Nothing in the record contradicts DMBA's contention that fibromyalgia was therefore not covered at all under the 1992 Plan.
Accordingly, the court concludes that the Provisional Benefit expanded, rather than reduced, benefits and a formal amendment process was not required. On the Disability Date, the Modified 1992 Plan was the plan in effect at the time Mr. Barnett became disabled. Accordingly, for the reasons set forth above, the Modified 1992 Plan is the applicable plan here. Mr. Barnett's Entitlement to Benefits under the Modified 1992 Plan
Mr. Barnett argues that DMBA acted arbitrarily and capriciously when it required objective medical evidence to establish conditions such as fibromyalgia. But under the applicable Modified 1992 Plan, DMBA's Provisional Benefit expressly states that no objective medical evidence is necessary, and that moots Mr. Barnett's argument under Mitchell v. Eastman Kodak Co., 113 F.3d 433 (3d Cir. 1997) (holding that it was arbitrary and capricious to require objective medical evidence of whether chronic fatigue syndrome made plaintiff totally disabled).
Even if the original 1992 Plan were applicable and even if the court were to find that DMBA arbitrarily and capriciously determined that objective medical evidence was required to establish fibromyalgia, Mr. Barnett would still not have a claim. The court finds, based on the evidence presented to DMBA by Mr. Barnett in his application for disability, that DMBA did not arbitrarily and capriciously determine that Mr. Barnett was not disabled by fibromyalgia.
Regardless of whether Mr. Barnett established fibromyalgia as the reason for his disability on his Disability Date (as he contends) or depression/anxiety (as DMBA argues), he has exhausted his benefits under the Modified 1992 Plan. Under the Modified 1992 Plan, the most he would have received for fibromyalgia would have been one year of benefits. DMBA's determination that Mr. Barnett suffered from a mental illness actually gave him two years of benefits, more than he would have received for fibromyalgia under the Modified 1992 Plan. Accordingly, DMBA's Motion for Summary Judgment on that point is GRANTED and Mr. Barnett's Motion for Partial Summary Judgment is DENIED. DMBA's Claim for Reimbursement from Mr. Barnett
Under the Modified 1992 Plan, a recipient's disability benefits "shall be reduced" by the amount of compensation from the United States Social Security Administration ("SSA") "as a result of thedisabling condition resulting in this disability." (Modified 1992 Plan § 9.01(a) (emphasis added).) DMBA claims that because the SSA determined in April 2003 that Mr. Barnett was disabled as of April 1, 1998, and was eligible for SSA disability benefits, Mr. Barnett must reimburse DMBA for the amounts he received (or was eligible for) during the two-year DMBA benefits period.
DMBA has consistently denied that Mr. Barnett had fibromyalgia during the disability period and that his disability was caused by fibromyalgia. The SSA, however, did find that he was disabled from "fibromyalgia, a mood disorder and an anxiety disorder" as of April 1, 1998. (See Apr. 11, 2003 SSA Decision at 1, attached as Ex. C-11 to Pl.'s Mem. in Supp.)
DMBA's denial that Mr. Barnett was disabled by fibromyalgia prevents DMBA from obtaining reimbursement for SSA benefits awarded on the basis that Mr. Barnett was disabled by fibromyalgia. The court will not allow DMBA to disavow Mr. Barnett's fibromyalgia disability claim, pay out disability benefits pursuant to a mental illness provision of the plan based on a finding of depression/anxiety, and then get money back based on an SSA determination that Mr. Barnett was disabled by fibromyalgia, as well as a mood disorder and an anxiety disorder. The "disabling condition" found by DMBA (depression/anxiety) is different than the "disabling condition" found by the SSA (fibromyalgia, mood disorder, and anxiety disorder). Accordingly, DMBA's claim for reimbursement and set-off is DENIED.
ORDER
For the foregoing reasons, the court orders as follows:1. Plaintiff Brent Barnett's Motion for Partial Summary Judgment is DENIED.
2. Defendants' Cross Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART. Specifically, DMBA has no obligation to extend continuing disability benefits to Mr. Barnett. However, DMBA is not entitled to reimbursement and set-off from Mr. Barnett.