Opinion
Civil Action No. 99-3736, Section "K"(3)
June 20, 2000
ORDER AND REASONS
Before the court is plaintiff's Motion for Summary Judgment, which the defendant has opposed. For the following reasons, the court finds that plaintiff's motion lacks merit and should be denied.
I. Introduction
Sterling Coffman ("Coffman") brought this action to recover long term disability benefits under a health and accident policy he obtained through his employment. Coffman has moved the court for summary judgment on grounds that there is no genuine issue of material fact as to 1) the defendant's wrongful denial of long term disability benefits, and 2) the defendant's failure to p. produce requested documentation as required under the Employee Retirement Income Security Act ("ERISA").
A. Standard for Motion for Summary Judgment
Summary judgment should be granted only where "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 a judgment as a matter of law." Fed.R.Civ.P. 56(c). In reviewing this motion, the court views all facts in the light most favorable to the non-movant. Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.s. 574, 588, 106 S.Ct. 1348, 1357, 89 L.Ed.2d 538 (1986). If, taken as a whole, the record could not lead a rational trier of fact to find for the non-moving party, there is no "genuine issue for trial." Id.
B. Standard of Review of Denial of Claim
Under ERISA, federal courts are empowered to review determinations regarding employee benefit plans, including health care plans. 29 U.S.C. § 1132 (a)(1)(B). Generally, employee benefit plans are created in two ways: 1) the plan is employer funded and the employer either contracts with a third party to administer the plan or provides for administration by a trustee; or 2) the employer contracts with a third party that both insures and administers the plan. In the latter instance, the plan administrator may have a conflict of interest because denials of coverage are potentially beneficial to the insurer.
A denial of benefits challenged under ERISA is reviewed de novo, unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct 948, 103 L.Ed.2d 80 (1989). When, however, an ERISA plan gives an administrator or fiduciary discretionary authority to determine benefits or interpret the plan, the standard of review of factual determinations should be one of abuse of discretion. Vega v. National Life Ins. Services, 188 F.3d 287, 295 (5th Cir. 1999). The ultimate claim decision, which involves questions of law, is reviewed de novo.
Since Bruch, the Fifth Circuit has struggled with the appropriate standard of review for determinations made by a self-interested administrator or fiduciary with discretionary authority. Id. at 296. In Vega, the Fifth Circuit concluded that the appropriate standard of review of decisions made by an administrator with a conflict of interest is "a sliding scale approach." Id. at 297. Using the sliding scale approach, the reviewing court gives less deference to the administrator in proportion to the administrator's conflict. In essence, the abuse of discretion standard is still applied to factual determinations, but the court will consider the conflict of interest as a factor in determining whether there has been an abuse of discretion. Id. at 296.
In this case, the parties disagree about the identity of the plan administrator. Regardless of whether Guarantee is called an administrator or a fiduciary, it is clear that Guarantee was making the coverage determinations under the plan. Furthermore, it appears to the court that, under the terms of the policy, the defendant had discretionary authority to make coverage decisions. First, the policy requires a claimant to submit proof of disability to the insurer. See Group Policy Number 01-0009676, page GLIC 00011. Second, the policy requires that a claimant submit to a physician's examination "as often as it is reasonably required." See Group Policy Number 01-0009676, page GLIC 00011. The fact that Guarantee required the submission p. of proof of claims and reserved the right to require physician's examinations indicates that it had discretion in determining eligibility for benefits. See, e.g., Bollenbacher v. Helena Chemical Co., 926 F. Supp. 781, 787 (N.D.Ind. 1996); Guarino v. Metropolitan Life Ins. Co., 915 F. Supp. 435 (D.Mass. 1995).
Because Guarantee exercised discretion in making coverage determinations and had a conflict of interest therein, the court will review the factual determinations for abuse of discretion with a sliding scale to account for the conflict. The court now turns to the merits of the plaintiff's arguments.
II. Denial of Claim for Long Term Disability
Coffman was the president and chief executive officer ("CEO") of Coffman Enterprises, a home health care management company. On June 23, 1995, Coffman Enterprises purchased an insurance policy from Guarantee. The policy provided coverage for Long Term Disability ("LTD") benefits to eligible employees, including Coffman. All premiums for LTD coverage were paid by the employer directly to Guarantee, with no contribution requirement for employees.
Coffman has had a long and complex medical history and has been treated for a variety of physical and mental ailments for sometime. Among his numerous physical problems, Coffman asserts that he has suffered from and been treated for severe chronic pain for a number of years. Coffman's treatment includes a regimen of "opioid therapy," prescribed by Dr. Joseph Talley of Grover, North Carolina, whose methods Coffman had discovered on a television program and subsequently sought out. Dr. Talley began treating Coffman in November of 1995, but Coffman alleges that by late 1997, he had begun "to experience frequent debilitating bouts of spine pain p. radiating to the neck, thoracic area, and low back, as well as cervical pain spreading into the arms and causing numbness in the hands, headaches, and bilateral knee pain with swelling and aches." Coffman's Statement of Uncontested Material Facts ¶ 7.
Coffman stopped working in April 1998 and applied for both short term disability benefits and LTD. He received short term disability benefits through the end of the elimination period, in October 1998. On his April 17, 1998 application for LTD, Coffman reported a number of ailments, all of which he asserts contribute to his disability. The primary complaint is of chronic pain in virtually every part of his body. in support of his LTD application. Coffman provided Guarantee with a description of his duties as CEO of Coffman Enterprises. Coffman claimed that his pain rendered him unable to perform each of the duties of his occupation and that he was therefore disabled under the terms of the policy. According to Coffman, his duties included:
interacting and meeting with doctors . . ., [acting as] the primary and essential contact for. various community and business groups . . ., [allocating] staff and other Company resources, interview[ing] and hir[ing] both office and technical personnel, supervis[ing] all technical staff. He generated policy and other required operations manuals, handled Company relations with financial institutions and with the federal government. . . . [He] was responsible for after hours and emergency calls for service.
Coffman' s Statement of Uncontested Material Facts ¶ 6
By letter dated October 5, 1998, Guarantee requested from Coffman "the names and addresses of all doctors, hospitals, and pharmacies that [had] provided services for [him] in the past three years" so that it could evaluate and process his application for long term disability benefits. On October 30, 1998, Guarantee advised Coffman of the differences between "job" and "occupation" as defined by the U.S. Department of Labor. Guarantee explained that "disability" under the terms of the policy meant inability to perform each of the material duties of his occupation, rather than specific job. According to Guarantee, the occupation of CEO is described as primarily sedentary.
Of the twenty-six physicians Coffman listed on his LTD application, he and Guarantee jointly agreed upon nine of them who might be the most beneficial source of information. This Guarantee requested information from the following physicians: Dr. Kenneth Mann ("Dr. Mann"); Dr. Ida Fattel ("Dr. Fattel"), Dr. Gerald Burns ("Dr. Bums"), Dr. Joseph Talley ("Dr. Talley"), Dr. Daniel Seltzer ("Dr. Seltzer"), Dr. Robert Ambrosea ("Dr. Ambrosea"), Dr. Stuart Phillips ("Dr. Phillips"). Dr. Chemmaole ("Dr. Chemmaole"), Dr. Joseph Epps ("Dr. Epps"), and Dr. John McFadden ("Dr. McFadden").
A. The Information Available to Guarantee Prior to Its Initial Denial of LTD
As of March 26, 1999, Guarantee had only received the following responses to its request for information:
Dr. Chemmaole responded that he had last treated plaintiff in 1995.
Dr. Phillips said that he had only seen plaintiff once, on March 19, 1998, at which time he concluded that Coffman was totally disabled and diagnosed him with lumbar/lumbosacral disc degeneration.
Dr. Epps reported that he had only seen Coffman once in January of 1994 and had referred Coffman to a rheumatologist because his problems were not neurological.
Dr. Arnbrosea replied that he had never treated Coffman.
Dr. McFadden had evaluated Coffman on October 15, 1998. It does not appear, however, p. that he submitted a response to Guarantee until his letter dated February 25, 1999. Guarantee, denies having considered this letter prior to the denial of LTD.
Dr. Mann submitted an Attending Physician's Statement ("APS"), which certified Coffman to be totally disabled from his present and all other occupations. Interestingly, the APS appears to have been completed in Coffman's own hand.
Dr. Fattel issued an APS, which stated that Coffman was unable to perform his own or any job. Like Dr. Mann's APS, the form appears to have been completed by Coffman himself, and no medical records or reports accompanied it.
In response to Guarantee's request for information, Dr. Talley stated that Coffman was prevented from returning to his occupation by "[s]evere intractable pain, severe anxiety, and major depression." Further, Dr. Talley stated that he doubted that Coffman was able to work on a part-time basis and that he had not reached maximum medical improvement. Dr. Talley was unable to answer the questions regarding Coffman's ability to sit, stand, bend, and walk. To the question about what modifications could be made in the occupation to facilitate Coffman's return to work, Dr. Talley responded, "Get the Federal Government out of his present occupation, with all of their investigators, and he would probably begin to recover!"
On March 26, 1999, Guarantee denied Coffman's claim for the stated reason that no physician had provided objective medical documentation which would support Coffman's inability to perform the main duties of his occupation. Furthermore, Guarantee stated that there was no medical evidence which showed a change in Coffman's condition prior to April of 1998 that would prevent him from performing the duties of a CEO.
B. The Information Available to Guarantee Prior to the Denial on Appeal
Sometime after Coffman's claim was denied, Guarantee received a response from Dr. McFadden. The letter is dated February 25, 1999 and stamped (by Guarantee?) March 8, 1999. In the letter, Dr. McFadden opined that Coffman had reached maximum medical improvement and was unable to work even on a part time basis because of his spine pain and associated depression. Dr. McFadden estimated that Coffman could stand no more than one to two hours, walk no more than one hour, and sit no more than one to two hours in an eight hour period. Dr. McFadden included with the letter a copy of his office notes dated October 15, 1998, which appears to be the only time Dr. McFadden saw Coffman.
Guarantee received a letter dated April 30, 1999 from Dr. Fattel, who stated that Coffman had been her patient for nearly one year. She prescribed medications for his hypertension, hyperlipidemia, hypercholesterolimia, gastritis, gastric ulcers, hiatal hernia, herpes simplex types I and II, and small break through pain. Dr. Fattel also explained that she had referred Coffman to Dr. Gerald Burns, who had made several findings: 1) C5 or C6 root pathology; 2) Thoracic root pathology ICD-9-353.3; 3) Mild left carpal tunnel syndrome ICD-99-354.0; 4) Left ulnar neuropathy and some sensory slowing at the elbow ICD-9-354.2; 5) Lower extremities pathology in posterior nerve bilaterally ICD-9-NEC 724.4; and 6) Positive Bactrain sign.
By letter of August 16, 1999, Guarantee informed Coffman that it had received letters from Dr. Fattel and Dr. McFadden, both of whom stated that Coffman was totally disabled. Despite its requests for medical records to substantiate these determinations, Guarantee stated that neither Dr. Fattel nor Dr. McFadden had responded with copies of office and treatment p. notes. Thus, Guarantee concluded that an Independent Medical Examination was warranted, in accordance with its rights under the terms of the policy.
Dr. Keith Binder performed an Independent Medical Examination of Coffman in October, 1999. In his report, Dr. Binder wrote
there are little objective physical findings to support [Mr. Coffman's] significant and multiple subjective complaints. . . . It is my impression that he is focusing on all of his reported medical and orthopaedic problems and seems to have significant evidence of hypochondriasis. I do not find any orthopaedic objective findings to support his claim for long term disability as I believe he would be more than able to act as an administrator or CEO for a home health agency. I do think that he could perform this work and I think that this would be very helpful in taking his focus off of the medical and orthopaedic complaints.
On December 13, 1999, Guarantee denied Coffman's appeal.
The plaintiff provided the court with a unorganized mass of documents, some of which are medical records and office notes from physicians not mentioned in the briefing. The court has no way of determining whether or when these documents ever became part of the record p. upon which Guarantee relied in denying coverage. Under no circumstances will the court accept exhibits which are not collated, stapled, and tabbed in an orderly and logical fashion. "Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 n. 7 (5th Cir.), cert. denied, 506 U.S. 832, 113 S.Ct. 98, 121 L.Ed.2d 59 (1992). Likewise, the district court is not obligated to sift through the entirety of a party's discovery to find support for its motion.
C. Genuine Issues of Material Fact
On the record before it, the court finds that there are genuine issues of material fact and cannot say that the denial of Coffman's claim for LTD on March 26, 1999 was an abuse of discretion. Guarantee claims that the only relevant information it had was the response of Talley, who had blamed Coffman's disability on the meddling federal government, and who had treated Coffman almost exclusively by phone as Dr. Talley practices medicine in North Carolina. Coffman, on the other hand, points to the APS's of four physicians, wherein Coffman is pronounced disabled and incapable of performing minimum sedentary activity. Guarantee disputes the relevance of the statements, as they were apparently completed by Coffman himself. Clearly, there are genuine issues of material fact as to whether the denial of coverage was an abuse of discretion.
The court is only able to find the APS's of Dr. Fattel and Dr. Mann.
When Guarantee denied Coffman's request for review of its denial, it had the benefit of the reports of Dr. Binder, Dr. McFadden, and Dr. Fattel. While Dr. McFadden and Dr. Fattel pronounced Coffman to be disabled, neither supplied Guarantee with any office notes or test results to substantiate these opinions. Dr. Binder, however, recommended that additional psychological testing and a functional capacity evaluation be performed. Coffman filed suit before any additional testing was performed and has refused to submit to further examinations. The court has been presented with so much conflicting and extraneous information that it is impossible to determine whether the record before Guarantee on appeal supported its denial of Coffman's claim.
III. Failure to Produce Requested Documents
Coffman maintains that he is entitled to summary judgment on his claim for penalties for Guarantee's failure to produce documents he requested on September 17, 1999. ERISA provides for penalties to be assessed against the plan administrator if documents properly requested are not produced in a timely fashion. ERISA § 502(c)(1).
Guarantee argues that it is not the plan administrator under the terms of the plan. The policy designates Gerald Peebles as the plan administrator, however, at the time the requests for p. information, Gerald Peebles was no longer employed by Coffman Enterprises. ERISA § 1002 (16)(a) provides that if no plan administrator is named in the policy, the plan is administered by the plan sponsor (i.e., the employer). Because § 502(c), by its own terms, applies only to a plan administrator, Guarantee argues that Coffman cannot maintain an action for penalties.
The court agrees with Guarantee. Section 502(c) applies only to a plan administrator's duty to furnish information. See Cline v. Indust. Maintenance Engineering Contracting Co., 200 F.3d 1223 (9th Cir. 2000) (only plan administrator can be held liable for failing to comply with ERISA reporting and disclosure requirements); Moran v. Aetna Life Ins. Co, 872 F.2d 296 (9th Cir. 1989) (same); Mitchell v. First Unum Life Ins. Co., 65 F. Supp.2d 686 (S.D.Ohio 1998) (same); Anweiller v. American Elec. Power Service Corp., 836 F. Supp. 576 (N.D.Ind. 1992) (same). Coffman has presented no evidence that Guarantee was the plan administrator as defined by ERISA § 1002 (16)(a). Rather, he argues that Guarantee was somewhat of a de facto administrator. Nonetheless, Coffman cites no cases in which a party was held to be a plan administrator who was neither the plan sponsor nor designated as administrator in the plan. Thus, Coffman is not entitled to summary judgment as a matter of law on his claim for penalties under § 502(c).
IV. Conclusion
In light of the foregoing, the court finds that, as to Coffman's claim that Guarantee wrongfully denied LTD, there are genuine issues of material fact. With respect to Coffman's claim for penalties, he is not entitled to summary judgment as a matter of law. Accordingly,
IT IS ORDERED that Coffman's Motion for Summary Judgment is hereby DENIED.