Opinion
No. C-99-5056 JCS
August 2, 2001
On Friday, July 6, 2001, at 1:30 p.m, the following motions came on for hearing: 1) Plaintiff David Diffenderfer's Motion For Summary Judgment ("Plaintiff's Motion"); 2) Defendants Life Insurance Company of North America and Cigna Group Insurance Motion For Summary Judgment and/or for Judgment on the Record Under ERISA ("Defendants' Separate Motion"); and 3) Joint Motion For Summary Judgment By Defendants Allied Signal Inc. Voluntary Employee Beneficiary Association Long-Term Disability Income Plan, Cigna Group Insurance, and Life Insurance Company of North America ("Defendants' Joint Motion"). The parties filed Supplemental Briefs on July 16, 2001. For the reasons stated below, the Court GRANTS in part and DENIES in part Plaintiff's Motion, GRANTS Defendants' Separate Motion, DENIES Defendants' Joint Motion and REMANDS to the plan administrator for further proceedings.
I. INTRODUCTION
Plaintiff David Diffenderfer brings this action for disability benefits under 29 U.S.C. § 1132(a)(1)(B), which provides for civil actions against employee benefit plans governed by the Employee Retirement Income Security Act ("ERISA"). Plaintiff alleges that he was wrongfully denied long-term disability benefits to which he was entitled under the terms of the employee benefit plan offered by his employer, the Allied Signal Inc. Voluntary Employees Beneficiary Association Long-Term Disability Income Plan ("Plan"). The Plan is governed by ERISA, 29 U.S.C. § 1001 et seq. Plaintiff has sued the Plan and the Plan administrator, Life Insurance Company of North American d/b/a Cigna Group Insurance (hereinafter referred to as "LINA").
The parties have filed cross-motions for summary judgment. Plaintiff seeks an order awarding disability payments and attorneys' fees, arguing that he is totally disabled and that denial of his application for benefits was an abuse of discretion by the Plan. Defendants assert that the decision to deny Plaintiff's claim for benefits was not an abuse of discretion and seek an order affirming the decision of the Plan. In addition, in a separately filed motion, Defendant LINA asserts that it should be dismissed because it is not a proper defendant.
II. BACKGROUND A. Facts
1. History of Plaintiff's Disability Claim
Plaintiff was employed by Allied Signal Technical Services Corporation ("Allied Signal") as an "Electronics Technician, Level III." Administrative Record 104 [hereinafter A.R.]. In April 1997, Plaintiff began to experience weakness and cramps in his legs. A.R. 161. He consulted his regular doctor, Dr. Brian Ecker, on April 21, 1997. A.R. 123. Dr. Ecker described Plaintiff's condition as follows:
The administrative record is attached as Exhibit A to the Declaration of J. Richard Peterson in Support of Defendants' Separate Motion for Summary Judgment. At oral argument, the parties stipulated that the documents attached to the Peterson Declaration constitute a complete and accurate copy of the administrative record. However, following oral argument, Plaintiff filed with the Court a page that may (or may not) have been omitted from the copy of the record provided by Defendants. In particular, Plaintiff provided the back page of a form completed by Dr. Ecker stating that Plaintiff was totally disabled. See Appendix A to Declaration of William S. Bonnheim in Support of Plaintiff's Supplemental Brief re Plan's Reliance on "D.O.T." Job Description In Denying Claimant Benefits. The front page of this form is included in the Administrative Record as A.R. 182. According to Plaintiff, the back page was also provided by Defendants but was "so dark as to be unreadable." However, the Court has found no document in the record that appears to be the back page provided by Plaintiff, readable or unreadable. Because the Court does not rely on this page, it need not resolve the question of whether this particular page was contained in the Administrative Record.
David is 61 years old, he has been having some physical problems at work, unable to keep up with some of the younger guys. . . . There is a three story building he has to climb up and down during the day. He has been having some problems, some weakness in his legs, and actually had to stop wearing his safety shoes because they are a little too heavy. Also, he is having a hard time with position, having a hard time putting his feet on the stairs. . . . Other symptoms are that his legs seem to be getting progressively weaker and now cramping at night.
Id. Dr. Ecker was unsure of the cause of Plaintiff's symptoms. He concluded that Plaintiff's "[l]ower [e]xtremity [pain] and [w]eakness favor[ed] more of a neurologic problem than spinal stenosis" but noted, "I want to make sure we are not missing something surgical." Id. Dr. Ecker referred Plaintiff for an MRI and blood work. Id. Dr. Ecker's report concluded, "I will keep him off work as I don't want him to hurt himself as he is climbing up and down these stairs." Id. Plaintiff never returned to work after April 21, 1997.
On April 25, 1997, Dr. Ecker saw Plaintiff again to review the results of Plaintiff's MRI. A.R. 124. He wrote in his report that the MRI revealed "a little bit of arthritis but no real spinal stenosis." Id. He also referred Plaintiff to a neurologist, Dr. Oshtory "for verification and limitation of what the [patient] can and cannot do." Id. Once again, Dr. Ecker noted that "there will indeed be some modifications in his job description." Id.
Dr. Oshtory examined Plaintiff on May 5, 1997. A.R. 140. He described Plaintiff's symptoms as follows:
He was having some difficulty getting out of a deep chair and was having to use his arms to push himself up out of a chair. Since then, there has been some increase in these symptoms, which now include some degree of unsteadiness of gait. He states that he stumbles when going up steps, and he tends to lose his balance if he steps on a slightly uneven surface. He has been experiencing nocturnal cramps for the past two years, which in the last two to three months have gotten more severe, occurring two to three times a week. . .
Id. Dr. Oshtory observed in his diagnostic assessment that Plaintiff's examination showed "some mild sensory impairment in the toes bilaterally and some degree of weakness of the proximal muscles, with depressed ankle jerks bilaterally." Id. Dr. Oshtory noted also that Plaintiff had been scheduled for electrodiagnostic studies. Id.
On May 22, 1997, Dr. Ecker saw Plaintiff and reported that "he has had a progression of his neurologic symptoms with some increasing pain." He continued, "the working diagnosis is a demyelating neuropathy." Id. Later in the report, Dr. Ecker stated that Plaintiff's condition "seems to be a lot more progressive than what I initially felt." Id. Dr. Ecker extended Plaintiff's disability to July 31, 1997 but noted that "this is starting to look like it might be a permanent thing." Id.
On June 20, 1997, Dr. Oshtory wrote a letter referring Plaintiff to another neurologist, Dr. Layzer, of UCSF. A.R. 127. Dr. Oshtory wrote that "David does have a documented peripheral neuropathy on electrodiagnostic studies. I have called this a demyelinating neuropathy because the conduction velocities are significantly slowed, and yet the EMG study does not show denervation potentials." Id.
Apparently, Dr. Layzer disagreed with Dr. Oshtory's conclusion that Plaintiff's symptoms were neurologically based. See A.R. 144 (9/11/97 Letter of Dr. Oshtory to Dr. Ecker stating that "Dr. Layzer did not feel that David had a significant peripheral neuropathy or myopathy and felt that patient's symptoms were non-neurological"). However, the administrative record contains no reports of examinations by Dr. Layzer.
On September 11, 1997, Dr. Oshtory saw Plaintiff for a follow-up visit. Id. He reported that Plaintiff "has continued to complain of unsteady gait, weakness particularly of the proximal muscles of the lower extremities and some parasthesia." Id. He wrote that he had "scheduled David for some strengthening exercises with physical therapy to see if this would help." Id.; see also A.R. 66 (9/25/97 report of physical therapist).
On September 26, 1997, Dr. Ecker saw Plaintiff. He reported that "[a]fter the consultation in San Francisco [apparently with Dr. Layzer] and nothing really being found, Dr. Oshtory is of the mind that [Plaintiff's] symptoms may be related to some sort of depressive illness and is increasing his Prozac." A.R. 129. Dr. Ecker once again extended Plaintiff's disability, this time to January 1998. Id.
On November 3, 1997, Plaintiff applied for long-term disability benefits from his employer. A.R. 161. In the application, Plaintiff listed the reason for his disability claim as "lower extremity numbness and weakness, unknown cause." Id. He stated that the first date of treatment for his disability was April 21, 1997. Id.
On December 12, 1997, the benefits analyst for LINA, Scott Ramaley, wrote a letter to Dr. Ecker requesting further details concerning Plaintiff's condition and sending him a form to be completed concerning Plaintiff's physical capacity. A.R. 131. On January 2, 1998, Dr. Ecker responded, providing some of the information requested by Ramaley but declining to complete the form, stating that he was "unable to do" it because he was "not qualified for QME Exam/Disability Rating." A.R. 134. Dr. Ecker described Plaintiff's condition as "weakness and uncoordination of lower extremities." A.R. 131. He described Plaintiff's prognosis as "poor." A.R. 133.
On January 23, 1998, Ramaley requested further information from Dr. Oshtory. A.R. 105. Another faxed request was made to Dr. Oshtory on January 26, 1998. A.R. 115-116. The record does not reflect that Dr. Oshtory responded. However, Plaintiff's wife sent the Plan a number of medical reports by Dr. Oshtory on April 15, 1998.
On February 3, 1998, Ramaley referred Plaintiff's application to a registered nurse at LINA, Janet Frontera, for review. A.R. 104. In the written referral, Ramaley listed Plaintiff's job as "Electronics Tech, Maintenance III." Next to the heading entitled "Type of Work," Ramaley put a question mark next to "medium." Id. He circled "yes" next to the heading "job description on file." Id. In the section for specific questions, Ramaley wrote, "At first, they thought he had a form of demyelinating disease because his father apparently had similar symptoms at age 61. Now it seems they are shifting to depressive illness. But what would be causing the leg muscle problems?" Id.
Frontera responded with a written report stating that it "appears patient continues in the evaluation/work up process." A.R. 103. She continued, "[u]ntil all of the testing is completed, unclear the diagnosis for this patient and the medical management plan of care." Id. Frontera recommended that Ramaley continue to try to obtain Dr. Oshtory's notes and to consider trying to obtain reports from Dr. Layzer and Plaintiff's physical therapy provider. Id. She made no recommendation with respect to whether or not Plaintiff should be found to be disabled. Id.
On March 10, 1998, LINA sent Plaintiff a letter denying his application based on "lack of medical information on file to support total disability from your occupation as defined by your policy." A.R. 171. The letter began by quoting the following definition of total disability under the Plan:
Total disability means complete inability to perform any and every duty of your regular occupation because of sickness or accident. You do not qualify if you engage in any occupation for wages or profits. After benefits have been paid for 24 months, total disability means the complete inability to perform the duties of any gainful occupation for which you are fitted by training, education or experience.
Id.; see also Plan, § 1.15, Exh. 1 to Declaration of Robert Hollenbach in Support of Joint Motion ("Hollenbach Decl."). The letter went on to summarize the medical information LINA had received about Plaintiff to date. Id. The letter described Dr. Ecker's reports between April and September 1997 concerning Plaintiff's unsteady gait and weakness in his lower extremities. Id. It went on to highlight the apparent disagreement between Plaintiff's doctors as to the cause of Plaintiff's symptoms, noting that while Dr. Ecker had initially postulated that Plaintiff's symptoms might indicate a neurological problem, Dr. Oshtory and Dr. Layzer apparently believed Plaintiff's condition might be "non-neurological" and that his "condition [might] be related to a depressive illness. Id. The letter went on to note that LINA had not received medical records from Dr. Oshtory in response to Ramaley's request. Id.
This definition is taken from a summary of the Plan rather than the Plan itself. See A.R. 208. The Plan defines total disability in virtually the same terms:
"Total Disability": For the Qualifying Period and the first twenty-four months of any continuous Disability for which benefits are paid, the complete inability of an Employee, who is not engaged in any occupation for wage or profit, to perform any and every duty of his or her regular occupation. After benefits have been paid for twenty-four months of any continuous Disability, then for the balance of the period of Disability, the complete inability of an Employee to perform any and every duty of any gainful occupation for which he or she is reasonably fitted by training, education, or experience.
Plan at § 1.15.
The March 10 letter did not address the specific requirements of Plaintiff's job. However, the administrative record contains a job description upon which LINA apparently relied in making its determination that Plaintiff was not disabled:
ELECTRONICS TECHNICIAN, MAINTENANCE III
Applies advanced technical knowledge to solve unusually complex problems that typically cannot be solved solely by referencing manufacturers' manuals or similar documents. Examples of such problems include determining the location and density of circuitry, evaluating electromagnetic radiation, isolating malfunctions, and incorporating engineering changes.
Work typically requires a detailed understanding of personal and mainframe computers and terminals; industrial, medical, measuring, and controlling equipment; satellite equipment; and industrial robotic devices. Applies technical knowledge of electronics principles in determining equipment malfunctions, and applies skill in restoring equipment.
A.R. 183-184. The record does not indicate the source of the definition quoted above. According to Plaintiff, this definition is taken from a Dictionary of Occupational Titles. Plaintiff's Motion at 9. Defendants do not dispute that this is the source of the definition.
Plaintiff notified LINA that he wished to appeal the denial of his disability claim in a letter dated April 15, 1998. A.R. 63. A few days later, Plaintiff provided Scott Ramaley with a copy of a report by psychiatrist Dr. Richard Wagner, which had been prepared in connection with Plaintiff's application for Social Security disability. A.R. 54-59. Dr. Wagner's report refers to Plaintiff's problems with his legs, stating that Plaintiff "was certainly shaken by the fact that . . . he could not keep up the demanding pace [at his last job], climb stairs and produce like the younger people." A.R. 56. However, the focus of the report is Plaintiff's psychological condition rather than his physical condition.
On June 5, 1998, Dr. Reza Nazemi, a neurologist who examined Plaintiff on May 18, 1998, and May 27, 1998, faxed two reports to Ramaley addressing Plaintiff's condition in detail. A.R. 28-33. Dr. Nazemi wrote in the May 18 report that Plaintiff suffered from "[c]hronic, painful muscle cramps and weakness of the lower extremities, with numbness of both hands . . . probably secondary to a neuropathic process, though a primary muscle disease cannot be entirely ruled out." A.R. 33. In his May 27 report, Dr. Nazemi wrote that he performed an electromyographic examination of Plaintiff's upper and lower extremities and that "[t]he result was compatible with mild demyelinating polyneuropathy involving both upper and lower extremities." A.R. 29. Dr. Nazemi also completed an "Estimated Functional Capacity" form, which he faxed to Ramaley on June 15, 1998. In the functional capacity form, Dr. Nazemi indicated that Plaintiff could do the following:
1) sit for up to two hours at a time, not to exceed a total of four hours in a day; 2) walk for up to one hour at a time, not to exceed a total of one hour in a day; 3) stand for up to one-half hour at a time, not to exceed an hour in a day; and 4) lift, push or pull up to 10 pounds occasionally. A.R. 21. In response to the question "Can Patient now work?" Dr. Nazemi wrote, "He will not be able to resume his old occupation." Id.
On June 5, 1998, Dr. Robert Sullivan, an orthopedist, faxed Ramaley a report of a visit on March 24, 1998, by Plaintiff. A.R. 23-25. Although the purpose of the visit was to examine a knee injury, Dr. Sullivan noted in the report that Plaintiff "also has an underlying quasi neurologic disorder that was worked up before that leads to some muscle weakness, and it may be related to some polyneuropathy." A.R. 24.
On June 2, 1998, Desert Orthopedic Center faxed Ramaley a completed "Estimated Functional Capacity Form." A.R. 39. This form stated that Plaintiff could do the following: 1) lift, push or pull up to 10 pounds frequently; 2) lift, push or pull up to 35 pounds occasionally; 3) sit up to eight hours at a time; 4) stand for up to an hour at a time, for a total of no more than an hour in a day; 5) walk no more than one-half hour at a time, for a total of no more than one-half hour in a day. A.R. 39. In response to the question, "Can patient now work?" the form stated "with some limitation." Id.
It is not clear which doctor completed this form.
On July 26, 1998, Plaintiff's disability appeal was rejected. A.R. 179-181. The reason for the rejection was that while "[t]he medical information on file does document care and treatment for pain and weakness in your lower extremities and depression, it does not provide that your functional level would be affected to the degree that you would be unable to perform your regular occupation for the entire period for which you have not been at work." A.R. 179. Plaintiff's request for reconsideration was rejected on August 28, 1998. A.R. 1-2. In that letter, LINA cited to medical evidence in the record that Plaintiff could work with "some limitations." Id.
2. Institutional Structure
Plaintiff is covered by the Allied Signal Technical Services Corporation Long-Term Disability Plan. See Exh. 1, Declaration of Robert Hollenbach ("Hollenbach Decl."). The Plan is funded by employee contributions. Marcotte Decl. at 2. Neither Allied Signal nor the Plan administrator fund the Plan. Id. Authority to administer the Plan is vested in a benefits committee (the "Committee"), which has full discretion in Plan administration. Plan § 7.4, Exh. 1 to Hollenbach Decl.
In January 1994, the Committee delegated Plan administration to Connecticut General Life Insurance Company (Connecticut General), as permitted by the Plan. Administrative Services Agreement, Exh. B to Hollenbach Decl. A separate company, LINA, in turn administers claims for Connecticut General. Decl. of J. Richard Petersen at 2. Connecticut General and LINA are wholly owned, indirect subsidiaries of CIGNA Corporation. Cigna Group Insurance ("CGI") is an operating division of CIGNA Corporation and is not a legal entity. Id.
B. Procedural Background
Plaintiff initiated this lawsuit on October 15, 1999, when he filed a complaint in the Superior Court of California for the County of Alameda. On November 24, 1999, Defendants removed to the United States District Court for the Northern District of California on the basis of both federal question and diversity jurisdiction. On February 11, 2000, Plaintiff voluntarily dismissed Defendant Allied Signal.
On April 20, 2000, Plaintiff filed his First Amended Complaint For Benefits ("FAC"). The amended complaint named the Plan, LINA, and CGI as defendants. Plaintiff asserted a single cause of action under 29 U.S.C. § 1132(a)(1)(B) for wrongful denial of long-term disability benefits. Plaintiff requested the following relief: (a) a declaration by the Court that Defendants violated the Plan and Plaintiff's rights thereunder by failing to pay benefits; (b) an order requiring that Defendants pay Plaintiff's benefits through the date of judgment, together with prejudgment interest on each and every monthly payment through the date of judgment; (c) a declaration by the Court that Plaintiff is entitled to receive future disability payments; and (d) award Plaintiff reasonable attorney's fees. FAC at 4.
On April 13, 2001, all Defendants filed a joint motion for summary judgment and Defendants LINA and CGI filed a separate motion for summary judgment. On April 16, 2001, Plaintiff filed a motion for summary judgment.
In Plaintiff's Motion, Plaintiff asserts that he is totally disabled and that denial of his benefits was an abuse of discretion. In their Separate Motion, Defendants LINA and CGI argue that they should be dismissed because § 1132(a)(1)(B) allows for suits only against the Plan itself and neither LINA nor CGI is the Plan. LINA and CGI further assert that the denial of benefits should be affirmed because it was not an abuse of discretion. The Plan, LINA, and CGI argue in their joint motion that the denial of disability benefits to Plaintiff was not an abuse of discretion.
III. ANALYSIS A. Proper Defendant Under § 1132(a)(1)(B)
In their Separate Motion, Defendants LINA and CGI argue that they should be dismissed because the single claim in Plaintiff's action, brought under § 1132(a)(1)(B), may be asserted against the Plan only, and not the Plan administrator. See Gelardi v. Pertec Computer Corporation 761 F.2d 1323 (9th Cir. 1985) (holding that plaintiff who was denied long-term disability benefits could not sue her employer or Plan administrator because neither were the Plan or the fiduciary). At oral argument, Plaintiff conceded that the Plan is the only proper defendant in an action under 29 U.S.C. § 1132(a)(1)(B) for disability benefits and, therefore, that LINA and CGI are not proper defendants in this action.
Therefore, Defendants LINA and CGI are DISMISSED from this action with prejudice.
B. Standard of Review
"A denial of benefits challenged under [29 U.S.C.] § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit Plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the Plan." Firestone Tire and Rubber Company v. Bruch that 489 U.S. 101 (1989); see also Kearney v. Standard Insurance Company, 175 F.3d 1084, 1089 (9th Cir. 1999) (en banc) (holding that "the default is that the administrator has no discretion, and the administrator has to show that the Plan gives it discretionary authority in order to get any judicial deference to its decision.").
The Allied Signal Plan designates the Benefits Committee as the Plan administrator and unambiguously gives it or its designee, full discretionary authority:
The Benefits Committee, or any individual or entity designated by the Benefits Committee or the Company to carry out such administrative duties, shall have the exclusive right to interpret the Plan, including full discretionary authority to interpret and construe the terms of the Plan, to determine eligibility for Plan benefits, to compromise claims, to decided any and all matters arising thereunder or in connection with the administrator of the Plan. . .
Plan § 7.4. This discretionary authority, is, in turn, delegated to Connecticut General and then to LINA, which administers claims for Connecticut General. Administrative Services Agreement, Exh. 2 to Hollenbach Decl.; Petersen Decl. at 2. Therefore, this Court may review the denial of Plaintiff's benefits only for an abuse of discretion.
An abuse of discretion review is synonymous with an arbitrary and capricious standard of review. See Atwood v. Newmont Gold Co., Inc., 45 F.3d 1317, 1321 n. 1 (9th Cir. 1995) (noting that "[s]ome of our cases state that an `arbitrary and capricious' standard is applied, while others uses the term `abuse of discretion' . . . The standards differ in name only . . . [and we will use] the `abuse of discretion' terminology").
Plaintiff, however, argues that a heightened abuse of discretion standard — or even a de novo standard — should be applied because there is a conflict of interest with respect to the Plan administrator. Where the Plan administrator has a conflict of interest, courts afford less deference to the determination of the Plan administrator. See Lang v. Long-Term Disability Plan of Sponsor Applied Remote Technology, Inc., 125 F.3d 794, 797 (9th Cir. 1997) (holding that less deference was warranted where insurance company was both administrator and funding source for Plan, creating conflict of interest); Tremain v. Bell Industries, Inc., 196 F.3d 970, 976 (9th Cir. 1999). As the Ninth Circuit explained in Tremain:
If . . . the Plan administrator is also the insurer `that conflict [of interest] must be weighed as a `facto[r] in determining whether there is an abuse of discretion.'' Our review in such a circumstance, although still for abuse of discretion, is `less deferential.' If however, the program participant presents `material, probative evidence, beyond the mere fact of the apparent conflict, tending to show that the fiduciary's self interest caused a breach of the administrator's fiduciary obligations to the beneficiary,' a rebuttable presumption arises in favor of the participant. The Plan then `bears the burden of rebutting the presumption by producing evidence to show that the conflict of interest did not affect its decision to deny or terminate benefits.' If the Plan fails to carry this burden of rebutting the presumption, we review de novo its decision to deny benefits.
Tremain, 196 F.3d at 976.
Plaintiff asserts that Defendant has a conflict of interest but has presented no evidence of any kind in support of this assertion. Moreover, Defendants have presented evidence that there is no conflict of interest. In particular, they have presented a declaration stating that the Plan in this case is self-funded by the employees who are covered by the Plan and not by LINA (or any other entity). Marcotte Decl. at 2. The declaration further states that LINA administers claims based on a flat rate; that is, LINA is paid the same amount for each claim administered regardless of whether or not the claim is accepted or rejected. Id. In the absence of any evidence supporting Plaintiff's assertion that there is a conflict of interest, the Court reviews Defendants' denial of benefits for an abuse of discretion and does not apply the heightened abuse of discretion standard applied in cases involving apparent conflicts of interest.
As discussed below, under the abuse of discretion standard, the court is generally limited to evidence in the administrative record. Taft v. Equitable Life Assurance Society, 9 F.3d 1469, 1472 (9th Cir. 1994). However, the holding of Taft does not preclude the court from considering evidence outside of the record relating to threshold issues such as whether the Plan had a conflict of interest. Tremain, 196 F.3d at 976-977.
Because an abuse of discretion standard is applied, "the usual tests of summary judgment, such as whether a genuine dispute of material fact exists, do not apply." Bendixen v. Standard Insurance Company, 185 F.3d 939, 942 (9th Cir. 1999). Rather, "[w]here the decision to grant or deny benefits is reviewed for abuse of discretion, a motion for summary judgment is merely the conduit to bring the legal question before the district court." Id.
C. Materials Outside the Administrative Record
Plaintiff submits the following materials in support of his motion that are not contained in the administrative record: 1) a declaration by Dr. Nazemi, with medical records attached; 2) a declaration by Plaintiff; and 3) a letter from Dr. Nazemi to Ann Reilly at CIGNA, dated August 4, 1998. Plaintiff argues that the Court may consider these documents because they provide evidence of the Plan's conflict of interest. Motion at 12. Plaintiff also suggests that these documents may be considered because they merely summarize the documents contained in the administrative record. Reply at 2. Defendants assert that the Court may not consider these materials.It is well established that in determining whether a Plan abused its discretion in rejecting a claim for disability benefits, generally only information in the administrative record should be considered. Snow v. Standard Insurance Company, 87 F.3d 327, 332 (9th Cir. 1996) (overruled on other grounds, Kearney, 175 F.3d 1084); see also Taft v. Equitable Life Assurance Society, 9 F.3d 1469, 1472 (holding that "[p]ermitting a district court to examine evidence outside the administrative record would open the door to the anomalous conclusion that a Plan administrator abused its discretion by failing to consider evidence not before it"); cf. Mongeluzo v. Baxter Travenol Long-Term Disability Benefit Plan, 46 F.3d 938, 943-944 (9th Cir. 1995) (quoting Quesinberry v. Life Insurance Company of North America, 987 F.2d 1017, 1025) (4th Cir. 1993)) (holding that under a de novo review a district court in its discretion may consider evidence that was not before the Plan administrator "only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision"). However, documents outside the administrative record may be considered where they relate to the threshold issue of the appropriate standard or review to be applied. Tremain, 196 F.3d at 976-977. Thus, the court in Tremain held that documents outside of the administrative record could be considered in determining whether or not the Plan had a conflict of interest, which, in turn, would give rise to a more rigorous review of the administrator's decision. Id.
While Plaintiff is correct that the Court may consider documents that are not contained in the administrative record in order to determine whether there is a conflict of interest, however, the Court does not find that any of the documents provide evidence of a conflict of interest. The Court also disagrees with the Plaintiff's assertion that it may consider these documents as they relate to the merits of his claim because they merely summarize the administrative record. To the contrary, these documents include medical records and other evidence that is not included in the Administrative Record. Therefore, the Court does not consider the documents outside of the Administrative Record that were submitted by Plaintiff in support of his Motion.
D. Abuse of Discretion
"It is an abuse of discretion for an ERISA Plan administrator to make a decision (1) without any explanation, or (2) in a way that conflicts with the plain language of the Plan, or (3) that is based on clearly erroneous findings of fact." Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323-24 (9th Cir. 1995) (citing Taft, 9 F.3d at 1472-73). Plaintiff asserts that the Plan abused its discretion because: (1) its rejection of Plaintiff's claim conflicts with the plain language of the Plan, and (2) its determination is based on clearly erroneous findings of fact. The Court finds that the Plan administrator construed the Plan in a manner that is inconsistent with the plain language of the Plan and thereby abused its discretion. In particular, the Plan abused its discretion by: 1) construing the term "total disability" as requiring Plaintiff establish that he could not perform his regular job, even with accommodation; and 2) relying on a generic definition from the Dictionary of Occupational Titles ("D.O.T.") to determine the requirements of Plaintiff's job, even though there was evidence in the administrative record which indicated that the D.O.T. definition did not completely and/or accurately describe Plaintiff's job duties.
1. Definition of "Total Disability"
In its final letter to Plaintiff rejecting his claim, LINA explained that Plaintiff was not disabled as defined under the Plan because the medical evidence showed he could work "with some limitations." See A.R. 1 (final rejection letter stating that Plaintiff was not disabled and noting that both Dr. Nazemi and the Desert Medical Center had said that Plaintiff could perform his job with "some limitations"). LINA's reasoning is based upon an interpretation of the term "total disability" that requires the claimant to demonstrate for the first 24-month period of his alleged disability not only that he cannot perform the duties of his job but also, that he could not perform the tasks of some modified job (assuming one existed) that would accommodate his "limitations." The Ninth Circuit has expressly rejected such an interpretation in a case involving a plan that is very similar to the Plan here. See Saffle v. Sierra Pacific Power Company, 85 F.3d 455, 459 (9th Cir. 1996).
In Saffle, the plaintiff worked as a customer services clerk, a clerical job which involved using the telephone, the computer and various office machines and interacting with customers. Id. at 457. Plaintiff sought disability benefits after she developed a foot condition that required her to keep her foot elevated at all times. Id. Like the Plan in this case, the employee-benefits Plan in Saffle defined "total disability" during the first 24 months after the initial qualifying period as the inability to perform the duties of the claimant's regular occupation, whereas "total disability" after the initial 24-month period was defined as the inability to perform the duties of any job for which the claimant was qualified. Id. at 459. The Plan defined disability from one's regular occupation as being "completely unable to perform each and every duty of [the employee's] regular occupation." Id. at 457. The Plan denied the plaintiff's disability claim on the basis that she could perform some portion of her job with modifications and that her employer had offered her a job that would have allowed her to keep her feet elevated, thus accommodating her disability. Id. at 457.
The Ninth Circuit in Saffle began its analysis by looking to the definition of "total disability" for the first 24-month period, that is, the period during which disability is determined with reference to the claimant's regular occupation. The Court noted that the definition could, if read literally, be construed in two different ways, neither of which would be "wholly sensible." Id. at 459. The court stated:
Reading "each and every" literally could mean either that the claimant is not totally disabled if she can perform any single duty of her job, no matter how trivial — or that a claimant is totally disabled if she cannot perform any single duty, no matter how trivial.
Id. at 458. The court concluded that the plan would not abuse its discretion by declining to adopt either interpretation of this language and instead construing the provision as requiring that a claimant demonstrate an inability to perform "all of the substantial and material duties of [the employee's] regular occupation." Id.
However, the Saffle court rejected the Plan's argument that the term "completely unable" meant the claimant was required to demonstrate that she could not perform all of the substantial and material duties of her job even with accommodation. Id. The court noted that the definition of total disability did "not talk in terms of accommodation at all." Id. The court continued:
Total disability for purposes of occupational benefits depends on whether the participant can perform the duties of her "regular occupation." . . . [T]he Committee construed "regular occupation" as "work available for which she is qualified that would have allowed her to work with her feet elevated" and to remain sedentary virtually always. This construction is inconsistent with the plain language of the Plan, and is inconsistent with the Plan's two-tiered disability structure because it collapses the threshold for occupational disability into the standard for general, or permanent disability.
Id. Having concluded that the Plan administrator had misconstrued the plain language of the Plan, the court remanded to the Plan administrator in order to allow the Plan to reevaluate the claim based on a proper construction of the Plan. Id. at 460-461.
Here, the Plan requires that a claimant demonstrate a "complete inability . . . to perform any and every duty of his or her regular occupation" in order to establish entitlement to disability payments for the first 24-month period. Plan at § 1.15. This provision — which is very similar to the provision in Saffle — does not talk in terms of accommodation. Nor is it reasonable to interpret this definition as requiring that a claimant demonstrate not only that he cannot perform his own job but also, that he cannot perform the duties of some hypothetical job that would have accommodated his limitations. As the court explained in Saffle, such an interpretation of the term "total disability" for the first 24-month period conflicts with the plain language of the Plan by collapsing the threshold requirement for occupational disability into the standard for general disability. Saffle, 85 F.3d at 459. In adopting this interpretation of the term "total disability," the Plan abused its discretion.
In contrast to Saffle, where the plan pointed to evidence in the record that the claimant's employer was aware of her specific physical limitation (the need to work with her feet elevated) and had offered the plaintiff a job that would accommodate that limitation, there is no indication here that the Plan was aware of either: 1) Plaintiff's specific needs and limitations; or 2) the availability of a job that would have accommodated those needs. Indeed, as will be discussed below, the administrative record indicates that the Plan administrator had very little information about what Plaintiff's actual job duties were or how his physical limitations might affect his ability to perform the duties of his job.
2. Reliance on D.O.T. Definition
In rendering its decision, LINA relied on a Dictionary of Occupation Titles definition of "Electronics Technician, Maintenance III" to determine Plaintiff's regular occupation. The definition describes Plaintiff's job as follows:
ELECTRONICS TECHNICIAN, MAINTENANCE III
Applies advanced technical knowledge to solve unusually complex problems that typically cannot be solved solely by referencing manufacturers' manuals or similar documents. Examples of such problems include determining the location and density of circuitry, evaluating electromagnetic radiation, isolating malfunctions, and incorporating engineering changes.
Work typically requires a detailed understanding of personal and mainframe computers and terminals; industrial, medical, measuring, and controlling equipment; satellite equipment; and industrial robotic devices. Applies technical knowledge of electronics principles in determining equipment malfunctions, and applies skill in restoring equipment.
A.R. 183-184. Plaintiff argues that LINA "should be required to use the job description for the work that Plaintiff was actually performing in determining whether Plaintiff could perform `any and every duty of [his] regular occupation,'" and that the evidence demonstrates that LINA rendered its decision with an incorrect, or at least, incomplete, understanding of the duties of Plaintiff's "regular occupation." Plaintiff's Motion at 10 (quoting Plan § 1.15). The Court agrees.
A Plan administrator construes a term of the Plan inconsistently with the plain language of the Plan where it relies on a generic definition of a claimant's regular occupation that does not accurately describe the claimant's actual job duties. Mizzell v. Paul Revere Life Insurance Co., 118 F. Supp.2d 1016, 1022 (C.D.Cal. 2000). In Mizzell, the plaintiff's job title was Vice-President/ General Manager. Id. at 1020. Plaintiff sought disability benefits from an ERISA-governed benefits Plan following a heart attack. Id. at 117-118. The Plan defined "totally disabled" as "unable to perform the important duties of his own occupation on a full-time or part-time basis because of an [i]njury or [s]ickness that started while insured under this Policy." Id. at 1019. The Plan denied the plaintiff's application for benefits, explaining the basis for the denial of benefits as follows:
According to the Dictionary of Occupational Titles, which is based upon Department of Labor statistics, your occupation as a vice president/general manager is considered to be sedentary. Both positions require negotiating, coordinating and handling; these positions require complex decision making, multiple activity Planning, coordinating, supervision, and staff management. These duties are not considered to be of a physical nature. It should be noted that we insured you for a loss of income due to disability which prevented you from performing the duties of your occupation. We did not insure your inability to perform job duties specific to your place of employment.
Id.
The plaintiff in Mizzell brought an action for benefits in federal district court, asserting that the Plan misconstrued the definition of "total disability." Id. at 1020. In particular, the plaintiff argued that regardless of the definition contained in the Dictionary of Occupational Titles, his actual job duties were not sedentary and involved traveling up to two days a week. Id. Thus, the issue was whether "plaintiff needed to be disabled from his "general occupation" or from his actual job or "own occupation." Id. Relying on Saffle and a number of district court cases following Saffle, the court concluded that the Plan administrator had acted contrary to the terms of the Plan in construing the Plan as allowing it to rely on the Dictionary of Occupational Titles definition of Plaintiff's job rather than examining Plaintiff's actual job duties. Id. at 1022. As in Saffle, the court remanded to the Plan administrator to consider the merits of the plaintiff's claim consistent with the court's opinion.
Here, as in Mizzell, the Plan administrator relied on a generic description of Plaintiff's job from the Dictionary of Occupational Titles. That description did not explicitly describe any physical duties. See A.R. 183-184. However, the medical evidence in the administrative record clearly indicated that Plaintiff's actual job included physical duties that were difficult for Plaintiff to perform. In particular, Dr. Ecker wrote in his April 21, 1997 report that Plaintiff:
has been having some physical problems at work, unable to keep up with some of the younger guys. . . . There is a three story building he has to climb up and down during the day. He has been having some problems, some weakness in his legs, and actually had to stop wearing his safety shoes because they are a little too heavy. Also, he is having a hard time with position, having a hard time putting his feet on the stairs. . . .
A.R. 123; see also A.R. 124 (notes of Dr. Ecker stating that "there will indeed be some modifications in his job description"). Similarly, in response to the question "Can Patient now work?" on the residual functional capacity form submitted by Dr. Nazemi, Dr. Nazemi wrote, "He will not be able to resume his old occupation." Id. A.R. 21. The residual functional capacity form submitted in the summer of 1998 by the Desert Medical Center expresses the same opinion, namely that Plaintiff would be able to work only "with limitations." A.R. 39.
Notwithstanding the medical reports stating that Plaintiff could not perform the duties of his job, LINA rejected Plaintiff's claim, apparently concluding that Plaintiff could perform all of the tasks described in the generic D.O.T. description of his job, rather than examining the actual requirements of Plaintiff's job. To the extent that LINA relied on the D.O.T. definition rather than considering Plaintiff's actual job duties, it abused its discretion in denying benefits. See Mizzell, 118 F. Supp.2d at 1022.
Further, the Court rejects Defendants' argument that the plan administrator did not have a duty to learn Plaintiffs' actual job duties because the claimant bears the burden of proof that he is entitled to long-term disability. See July 11, 2001 Supp. Letter Brief of Defendants LINA and Cigna. The cases relied upon by Defendants are distinguishable because they involve claimants who failed to provide adequate medical documentation of their alleged disability after being asked by the Plan to do so. See, e.g., Bali v. Blue Cross and Blue Shield Ass'n, 873 F.2d 1043 (7th Cir. 1989) (affirming denial of benefits on basis that claimant had failed to provide specific medical records that were repeatedly requested by the plan). Here, in contrast, the Plan never informed the Plaintiff that it needed an accurate description of his job duties, even though reports by Plaintiff's doctors put LINA on notice that Plaintiff's job involved tasks that were not included in the D.O.T. definition, as discussed above. Indeed, the claims administrator acknowledged in his referral to an RN at LINA that he did not know the nature of Plaintiff's job duties, placing a question mark next to the entry for "Type of Work." See A.R. 104. Still, the Plan made no effort to obtain an accurate description of Plaintiff's job. The Plan's failure to make any effort to determine the actual requirements of Plaintiff's job was an abuse of discretion. See Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 538 (9th Cir. 1990) (holding that Plan abused its discretion where its conclusion that autism was not a "mental illness" under the Plan was based on inadequate investigation and was contrary to the plain and ordinary meaning of that term); Booton v. Lockheed Medical Benefits Plan, 110 F.3d 1461, 1464 (9th Cir. 1997) (holding that denial of benefits was abuse of discretion where plan administrator made decision without necessary and easily obtainable information and holding that "if the plan administrators believe that more information is needed to make a reasoned decision, they must ask for it").
E. Remedy
"[W]here an ERISA Plan administrator, with discretion to apply a Plan, has misconstrued the Plan and applied a wrong standard to a benefits determination . . . remand for reevaluation of the merits of a claim is the correct course to follow." Saffle, 85 F.3d at 461. Because the Plan administrator construed the Plan in a manner that is inconsistent with the plain language of the Plan, Plaintiff's claim must be remanded to the Plan administrator to address the merits of Plaintiff's claim, consistent with this opinion. On remand, Plaintiff will be permitted to present additional evidence of his disability and the Plan will be permitted to conduct additional investigation of Plaintiff's claims if it wishes to do so, as was stipulated by the parties at oral argument. See also Henry v. Home Ins. Corp., 907 F. Supp. 1392, 1399 n. 8 (C.D. Cal. 1995) (holding that plan's denial of benefits was abuse of discretion because its interpretation of plan terms was unreasonable and noting that on remand, the claimant was to be allowed to supplement the record because "the present administrative record was made under a misapprehension of the applicable Plan provisions"). In addition, on remand the Plan should conduct sufficient investigation concerning the nature of Plaintiff's actual job duties to allow it to make a reasonable determination concerning Plaintiff's disability claim.
The Court does not resolve the question of when the six-month qualifying period for Plaintiff's disability commenced. This issue was raised by the Court at oral argument and addressed in Defendants' supplemental brief. Because the Plan administrator has not yet addressed this question, it is inappropriate for the Court to do so at this time. Similarly, the Court does not reach the question of whether Plaintiff may satisfy the requirements for general disability because the Plan administrator has not yet reached that question. The Defendants represented in their supplemental brief, however, that if LINA were to determine that Plaintiff had satisfied the requirements for occupational disability, it would, as part of its ongoing duties in administering the Plan, reach the question of whether Plaintiff has a general disability.
IV. CONCLUSION
For the reasons stated above, Defendants Separate Motion (Docket No. 40) is GRANTED and Defendants Life Insurance of North America and Cigna Group Insurance are DISMISSED from this action with prejudice. Plaintiff's Motion (Docket No. 44) is DENIED as to Defendants Life Insurance of North America and Cigna Group Insurance. Plaintiff's Motion (Docket No. 44) is GRANTED with respect to Defendant Allied Signal Inc. Voluntary Employee Beneficiary Association Long-Term Disability Income Plan to the extent that he seeks reversal of the denial of disability benefits. Plaintiff's Motion (Docket No. 44) is DENIED with respect to Defendant Allied Signal Inc. Voluntary Employee Beneficiary Association Long-Term Disability Income Plan to the extent that he seeks an award of benefits. Plaintiff's claim is REMANDED to the Plan administrator for further consideration of Plaintiff's claim consistent with this opinion. Defendants' Joint Motion (Docket No. 39) is DENIED. This Order disposes of all of Plaintiff's claims. Therefore, the Clerk of the Court is ordered to issue judgment and close the file in this case.
Within fourteen (14) days of the date of this order, the parties shall meet and confer regarding Plaintiff's request for attorneys' fees. If the parties are unable to reach agreement, Plaintiff shall submit within fourteen (14) days of the meet-and-confer an application for attorneys' fees addressing the following issues:
1) Plaintiff's entitlement to attorneys' fees and costs; and
2) The appropriate amount to be awarded, detailing attorney hours spent and costs incurred.
The Defendants shall file an opposition, if any, within ten (10) days of receipt of Plaintiff's application. Plaintiff shall have seven (7) days to reply. Upon completion of briefing, the Court will advise the parties whether oral arguments will be heard on Plaintiff's application for attorneys' fees and costs.
IT IS SO ORDERED.