Opinion
1:03CV901LG-RHW.
March 26, 2005
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S CROSS-MOTION FOR SUMMARY JUDGMENT
BEFORE THIS COURT are the Defendant's Motion for Summary Judgment [12] and the Plaintiff's Cross-Motion for Summary Judgment [14], filed in the above-captioned cause on January 14, 2005, and January 24, 2005, respectively. The Plaintiff filed his complaint against the Defendant seeking contractual and extra-contractual damages for the Defendant's denial of his claim for long-term disability benefits. The Defendant contends that it did not abuse its discretion in denying the claim. For the reasons set forth below, the Defendant's motion should be granted, and the Plaintiff's motion should be denied.
FACTS AND PROCEDURAL HISTORY
The Plaintiff, Joseph K. Cuevas, was a participant in an employee benefit plan established by his employer, the Coca-Cola Bottling Company United, Inc., for the benefit of participating employees. Defendant Prudential Insurance Company of America insured and administered the plan. The plan included long-term disability coverage. Cuevas, who was employed as a supervisor, "went out-of-work from said occupation on August 29, 2002." Def.'s Br. in Supp. of Mot. for Summ. J., p. 2, filed Jan. 14, 2005. Cuevas subsequently submitted a claim for long-term disability benefits because, according to his physician, he was totally disabled. Prudential denied the claim. Cuevas twice appealed the denial, but both appeals were unsuccessful.
On October 30, 2003, Cuevas filed a complaint in the Chancery Court of Harrison County, Mississippi, contending that he was entitled to long-term benefits under the plan. Prudential removed the case to this Court on November 25, 2003. Prudential filed its motion for summary judgment on January 14, 2005, contending that the plan is governed by ERISA; that any state law claims are preempted by ERISA; and that Prudential did not abuse its discretion in denying the claim. Cuevas filed a cross-motion for summary judgment. Although Cuevas agrees that the plan is governed by ERISA, he contends that Prudential abused its discretion in denying his claim. Cuevas did not address the preemption issue in his motion.
DISCUSSION
STANDARD FOR MOTION FOR SUMMARY JUDGMENT PURSUANT TO RULE 56:
FED. R. CIV. P. 56 permits any party to a civil action to move for a summary judgment upon a claim, counterclaim, or cross-claim as to which there is no genuine issue of material fact and upon which the moving party is entitled to prevail as a matter of law. In effect, Rule 56(c) provides that as a matter of law, upon admitted or established facts, the moving party is entitled to prevail. Summary judgment "is not a catch penny contrivance to take unwary litigants into its toils and deprive them of a trial, it is a liberal measure, liberally designed for arriving at the truth. Its purpose is not to cut litigants off from their right of trial by jury if they really have evidence which they will offer on a trial, it is to carefully test this out, in advance of trial by inquiring and determining whether such evidence exists." Whitaker v. Coleman, 115 F.2d 305, 307 (5th Cir. 1940). A party seeking summary judgment bears the initial burden of identifying those portions of the pleadings and discovery on file, together with any affidavits, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the movant carries its burden, the burden shifts to the non-movant to show that summary judgment should not be granted. Id. at 324-25, 106 S.Ct. at 253-54. The non-moving party may not rest upon mere allegations or denials in its pleadings, but must set forth specific facts showing the existence of a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986).
DOES ERISA PREEMPT CUEVAS'S STATE LAW CLAIMS?
Prudential contends that Cuevas's state law claims are preempted by ERISA. According to Prudential, Cuevas's claims clearly relate to benefits arising under an employee benefit plan. As noted above, Cuevas did not address the preemption issue in his motion. In his complaint, however, he asserts that "[i]n accordance with federal and state law, Plaintiff also seeks attorney's fees, pre-judgment and post-judgment interest, and all costs of this litigation." Pl.'s Compl., ¶ 6.
"ERISA's preemption of state law claims is extensive." McNeil v. Time Ins. Co., 205 F.3d 179, 191 (5th Cir. 2000). ERISA "supersede[s] any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144(a). Section 1144(a) "preempts a state law claim if that claim addresses an area of exclusive federal concern, such as the right to receive benefits under the terms of an ERISA plan, and if that claim directly affects the relationship between traditional ERISA entities." McNeil, 205 F.3d at 191, citing Dial v. NFL Player Supplemental Disability Plan, 174 F.3d 606, 611 (5th Cir. 1999).
It is undisputed that Cuevas's claims relate to benefits under an ERISA plan and directly affect the relationship between Cuevas and Prudential. For this reason, Cuevas's state law claims are preempted by ERISA; Prudential is therefore entitled to summary judgment on this claim.
DID PRUDENTIAL ABUSE ITS DISCRETION IN DENYING CUEVAS'S CLAIM?
Prudential contends that it is entitled to judgment as a matter of law because it "did not abuse its discretion in determining that Plaintiff is not disabled pursuant to the terms of the plan." Prudential's Mot. for Summ. J., p. 1, filed Jan. 14, 2005. According to Prudential, Cuevas's position as supervisor is considered "a light-duty occupation." Def.'s Br. in Supp. of Mot. for Summ. J., p. 2. Prudential contends that Cuevas's job duties required him "to `lift/carry 10 pounds, occasionally pull, reach forward, reach overhead, stoop, and twist; frequently stand, sit and walk and rarely balance, crawl, kneel, climb stairs, and crouch.'" Def.'s Br., p. 2 n. 1, citing Admin. Record at PRU-062. Cuevas's physician, Dr. Beverly Myers, "opined that Cuevas suffered from `extensive degenerative disease of the spine' and that Cuevas was totally disabled from any `type ofphysical job.'" Def.'s Br., p. 3, citing Admin. Record at PRU-072. But, according to Prudential, "Dr. Myers was not given sufficient information concerning what Cuevas' occupation entailed on a day-to-day basis to formulate this opinion." Def.'s Br., p. 3. In addition, "Dr. Myers did not issue any opinion as to Cuevas' functional abilities for any type of sedentary or light-duty job such as his current occupation." Def.'s Br., p. 3. Moreover, another physician, Dr. Duff, "indicated that, although Cuevas moved slowly and reportedly had some tenderness throughout his spine, he was not in any acute distress." Def.'s Br. in Supp. of Resp. to Pl.'s Cross-Mot. for Summ. J., p. 5, filed Feb. 7, 2005; Admin. Record at PRU-086-087. Furthermore, Dr. Duff's exam revealed that Cuevas "reflected normal amounts of degenerative changes for people of Mr. Cuevas' age as follows:
August 8, 2002 — LEFT KNEE — No acute bone or joint abnormalities are seen and no significant degenerative changes are seen.
LEFT FOOT — No acute findings.
LATERAL CERVICAL SPINE — Alignment is good with exam otherwise unremarkable.
LEFT HIP — Two views of the left hip are submitted revealing no acute findings.
LEFT SHOULDER — No acute findings.
LUMBAR SPINE — Mild to moderate degenerative changes along the lower thoracic and lumbar spine."
Def.'s Br. in Supp. of Resp., pp. 5-6; Admin. Record at pp. PRU-086-087. Based upon the medical records and the requirements of Cuevas's job, Prudential "determined that Cuevas' alleged condition did not preclude him from performing light-duty or sedentary work such as his current occupation," and "the medical records in the file did not support disability from light-duty employment." Def.'s Br., pp. 3-4. For these reasons, Prudential contends that it did not abuse its discretion in denying the claim.
Cuevas also seeks summary judgment, contending that Prudential abused its discretion in denying his claim for disability. According to Cuevas, he "is totally disabled as determined by his physician, Dr. Beverly Myers, and is thus eligible for long term disability benefits." Pl.'s Br., p. 1, filed Jan. 24, 2005. Cuevas contends that because he is clearly eligible for benefits, Prudential abused it discretion in denying his claim. In addition, Cuevas contends that because Prudential is both the administrator of the plan and the insurer, the Court should apply a sliding scale standard to determine whether Prudential abused its discretion. Cuevas relies upon the following "record entries," which are in the administrative record:
a. An Analysis by the Defendant's claim manager, Philip Miraldo dated November 20, 2003 provides an "analysis", to-wit: Employee currently out of work due to degenerative disease of the spine. Appeal indicates which is diffuse idiopathic skeletal hyperostosis that involved the neck and thoracic lumbar spine. Appeal notes employee is completely disable from this work, and does not feel he can perform any type of physical jobs. Restrictions include no heavy lifting, pulling, pushing, and no overhead work. (PRU-005)
b. In a letter dated April 4, 2003, Claimant was advised by Mr. Miraldo that "your employer has advised us that in your occupation you are required to lift/carry ten pounds, occasionally pull, reach forward, reach overhead, stoop, and twist, frequently stand, sit, and walk, and rarely balance, crawl kneel, climb stairs, and crouch". (PRU-062)
c. Plaintiff's treating physician, Dr. Beverly Myers, an expert in arthritis, completed the Defendant's group disability/attending physician statement on February 26, 2003, and advised that Mr. Cuevas was totally and permanently disabled, and stated "he will never return to gainful employment". Dr. Myers noted in the report that Mr. Cuevas suffers from extensive degenerative disease of the spine, and "is unable to work". (PRU-072-PRU-073)
d. In an office note dated January 24, 2003, Dr. Myers noted Mr. Cuevas has "quite extensive degenerative disease of the spine", and "generalized osteoarthritis".
Dr. Myers noted on examination Mr. Cuevas is "very tender in the neck, has no neck extension, lateral rotation is only 10 degrees, lateral flexion is 5 degrees. Dr. Myers also observed that Mr. Cuevas has crepitus of both knees with flexion to 90 degrees". (PRU-078)
e. In an office note dated October 23, 2002, Dr. Myers noted "Mr. Cuevas is doing almost ninety percent better with stopping his work. His wife says his whole personality has changed because he has not had the pain he had previously. He (sic) feet are better unless he does a lot of walking. His left shoulder continues to bother him, particularly hurting him on left side at night. Even touching it hurts. He has difficulty getting his hand behind his neck". (PRU-079)
f. In an office note dated August 26, 2002, Dr. Myers confirmed that the Plaintiff is completely disabled, noting "I do feel that this patient is completely disabled for his work, and I do not feel he can perform any other type of physical job. He has quite advance degenerative disease involving cervical, lumbosacral spine, left great toe and left shoulder". (PRU-081)
Pl.'s Br., pp. 4-6. Cuevas contends that the foregoing facts in the record support his contention that Prudential did not rely upon substantial evidence in denying his claim, and therefore, Prudential abused its discretion by denying his claim. According to Cuevas, Prudential totally disregarded Dr. Myers's opinion, even though there is no contrary medical opinion in the record.
"When the ERISA plan vests the fiduciary with discretionary authority to determine eligibility for benefits under the plan or to interpret the plan's provisions, [the Court's] `standard of review is abuse of discretion.'" Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 269-70 (5th Cir. 2004), quoting Tolson v. Avondale Indus., Inc., 141 F.3d 604, 608 (5th Cir. 1998). The Court's review is limited to the administrative record. Dowden v. Blue Cross Blue Shield of Texas, Inc., 126 F.3d 641, 644 (5th Cir. 1997). Under the abuse of discretion standard, the Court must "`analy[ze] whether the plan administrator acted arbitrarily or capriciously.'" Lain v. UNUM Life Ins. Co. of America, 279 F.3d 337, 342 (5th Cir. 2002) (other citations omitted). "A decision is arbitrary when made `without a rational connection between the known facts and the decision or between the found facts and the evidence.'" Lain, 279 F.3d at 342, quoting Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822, 828 (5th Cir. 1996).
"The existence of a conflict [of interest] is a factor to be considered in determining whether the administrator abused its discretion in denying a claim." Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir. 1999). "[W]hen a complaining participant or beneficiary shows that the plan fiduciary has a conflict of interest, we apply a sliding scale to the Wildbur standard: `The greater the evidence of conflict on the part of the administrator, the less deferential our abuse of discretion standard will be.'" Ellis, 394 F.3d at 270, citing Vega, 188 F.3d at 297. "`The degree to which a court must abrogate its deference to the administrator depends on the extent to which the challenging party has succeeded in substantiating its claims that there is a conflict.'" Ellis, at 270, citing MacLachlan v. ExxonMobil Corp., 350 F.3d 472, 479 (5th Cir. 2003). The Court will not presume "that a conflict exists ipso facto merely because the plan fiduciary both insures the plan and administers it." Id., at 270 n. 18, citing MacLachlan, 350 F.3d at 479 n. 8. The Plaintiff "must come forward with evidence that a conflict exists." Id.
Wildbur v. ARCO Chem. Co., 974 F.2d 631, 645 (5th Cir.), clarified, 979 F.2d 1013 (5th Cir. 1992).
"An administrator's decision to deny benefits must be `based on evidence, even if disputable, that clearly supports the basis for its denial.'" Lain, 279 F.3d at 342, quoting Vega, 188 F.3d at 299. If the administrative record does not include "some concrete evidence . . . that supports the denial of the claim, . . . the administrator abused its discretion." Lain, at 342. "The law requires only that substantial evidence support a plan fiduciary's decisions, including those to deny or to terminate benefits, not that substantial evidence (or, for that matter, even a preponderance) exists to support the employee's claim of disability." Ellis, 394 F.3d at 273, citing Meditrust Fin. Servs. Corp. v. Sterling Chem., Inc., 168 F.3d 211, 215 (5th Cir. 1999). "Substantial evidence is `more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Ellis, at 273, citing Deters v. Sec'y of Health, Educ. Welfare, 789 F.2d 1181, 1185 (5th Cir. 1986) (citing Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971)).
The plan states that "[y]ou are disabled when Prudential determines that:
• you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury ; and
• you have a 20% or more loss in your indexed monthly earnings due to that sickness or injury.
Long Term Disability Plan, p. 10, att. as part of Ex. A to Ex. 4. (Admin. Record at PRU-100), Def.'s Mot. for Summ. J., filed Jan. 14, 2005. The plan also provides as follows:
Material and substantial duties means duties that:
• are normally required for the performance of your regular occupation; and
• cannot be reasonably omitted or modified.
Regular occupation means the occupation your are routinely performing when your disability begins. Prudential will look at your occupation as it is normally performed instead of how the work tasks are performed for a specific employer or at a specific location.
Long Term Disability Plan, p. 10 (PRU-100).
As noted above, Cuevas suggests that a conflict of interest exists because Prudential is both the insurer and the administrator; however, Cuevas has provided no evidence to support his contention that a conflict exists. Prudential is both the insurer and administrator, but this fact alone does not support Cuevas's contention that this Court should give less deference to the administrator's decision without any evidence that a conflict exists.
Prudential's decision to deny the claim was essentially based upon a comparison of Cuevas's job description with Dr. Myers's opinion regarding Cuevas's ability to perform certain job duties. Cuevas's position as supervisor is considered a light-duty position, and there is nothing in the record to indicate that Cuevas disputes that his position was light-duty. Cuevas's duties included "lift/carry 10 pounds, occasionally pull, reach forward, reach overhead, stoop, and twist; frequently stand, sit and walk and rarely balance, crawl, kneel, climb stairs, and crouch." Def.'s Br. in Supp. of Mot. for Summ. J., p. 2 n. 1. Cuevas has not pointed to any facts in the record that indicate that his duties were any more strenuous than this. Dr. Duff indicated that Cuevas was not in any acute distress, and that his exam reflected normal amounts of degenerative changes for someone of Cuevas's age. Dr. Myers, on the other hand, stated that Cuevas "is completely disabled for his work and I do not feel that he can perform any other type of physical job." Attending Phys. Stmt., dated Feb. 26, 2003, Admin. Record at PRU-072. Dr. Myers limited Cuevas's activities as follows: "No heavy lifting, pulling pushing, etc. No overhead work." Attending Phys. Stmt., Admin. Record at PRU-072. Cuevas has failed to show any facts in the record that indicate that he was unable to perform the light-duty requirements of his position as supervisor. Based upon the foregoing facts in the record, Prudential's decision is supported by substantial evidence in the record. For this reason, Prudential did not abuse its discretion in denying Cuevas's claim for benefits. Prudential's motion for summary judgment should therefore be granted, and Plaintiff's motion should be denied. IT IS THEREFORE ORDERED AND ADJUDGED, that for the reasons stated above, the Plaintiff's Cross-Motion for Summary Judgment [14] should be and is hereby DENIED. IT IS FURTHER ORDERED AND ADJUDGED for the reasons stated above, that there are no remaining material fact questions. Therefore, Defendant's Motion for Summary Judgment [12], pursuant to FED. R. CIV. P. 56, should be, and is hereby GRANTED.
SO ORDERED AND ADJUDGED.