Opinion
TH 01-0055-C T/H.
September 25, 2002
ENTRY ON DEFENDANT AMERICAN UNITED LIFE INSURANCE COMPANY'S MOTION FOR SUMMARY JUDGMENT AND MOTION TO STRIKE
This Entry is a matter of public record and is being made available to the public on the court's web site, but it is not intended for commercial publication either electronically or in paper form. Although the ruling or rulings in this Entry will govern the case presently before this court, this court does not consider the discussion in this Entry to be sufficiently novel or instructive to justify commercial publication or the subsequent citation of it in other proceedings.
Plaintiff Terry D. Dreiman brought this suit under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., against his former employer PSI Energy, Inc. ("PSI") and the insurer of its Long Term Disability Plan, American United Life Insurance Company ("AUL"), to obtain judicial review of AUL's decision to terminate his disability benefits under the Plan. AUL moved for summary judgment. Mr. Dreiman submitted a Response to Defendant's motion, and AUL replied and made an additional motion to strike certain exhibits attached to Plaintiff's Response brief. After having considered the submissions and arguments of the parties, the court rules as follows.
I. The Facts
None of the facts detailed in this section are in contention. The parties' only factual dispute of significance concerns Mrs. Dreiman's affidavit, which is addressed in part III of the opinion. See infra at 11.
Mr. Dreiman was an employee of PSI and enrolled in its Long Term Disability Plan (the "Plan"), when in 1991 he complained of major depression that inhibited his ability to maintain employment. In May of 1991 he was hospitalized for ten days, and at that time ceased to work. In October of 1991 he submitted an application for receipt of disability benefits under the Plan to AUL, the Plan's insurer. According to the express language of the Plan, PSI had reserved to itself and any properly designated agent "the right to interpret and regulate the Plan with discretionary authority, which interpretation and regulation shall be legally effective and binding on all parties concerned." (Def.'s Br., Ex. A at 30.) Pursuant to an agreement between PSI and AUL, PSI had transferred its administrative and fiduciary obligations under the Plan — including the authority to make eligibility determinations — to AUL. Thus AUL was the party responsible for assessing Mr. Dreiman's claim for benefits.
The insurance policy covering the Plan, incorporated into the Plan by reference therein, provided that a claimant is eligible for long-term disability benefits when that claimant is "totally disabled," defined as "that period of time during which the protected person is unable as a result of Sickness or Injury to engage in any gainful occupation for which he is reasonably fitted by education, training or experience." (Def.'s Br., App. B, Ex. 1 at 3.) In March of 1992, acting on the opinion of an independent medical examiner that Mr. Dreiman's depression disabled him from continued employment, AUL notified Mr. Dreiman of his eligibility for long-term disability benefits and commenced payments, which it made retroactive to November 1991. Prior to AUL's determination, Mr. Dreiman had been found eligible for and had been receiving Social Security disability and family payments. Mr. Dreiman continued to receive benefits from AUL for the next nine years.
In 1999 AUL undertook a reevaluation of Mr. Dreiman's claim. It retained Dr. Gregory Hale, a psychologist licensed to practice in the State of Indiana, to perform an independent medical examination ("IME") on Mr. Dreiman. In the course of a day-long exam, Dr. Hale engaged in a two-hour diagnostic interview and administered a battery of psychological tests in order to, in his words, "assess personality traits, psychological adjustment, psychological and behavioral factors related to health concerns, and malingering and deception." (Def.'s Br., App. B, Ex. 13 at 1.) Dr. Hale also reviewed the medical records of Mr. Dreiman's treating physicians, including his psychiatrist, Dr. Charles Kim. (Def.'s Br., App. B, Ex. 13 at 5.) He concluded that, despite suffering from higher than average levels of anxiety and some short term memory impairment, "Mr. Dreiman is not as disabled nor psychologically troubled as he reports." (Def.'s Br., App. B., Ex. 13 at 9.) He criticized Mr. Dreiman's treating physicians for not further investigating Mr. Dreiman's self-reports. In Dr. Hale's opinion, although Mr. Dreiman would likely face "several impediments" in re-integrating himself back into the working world, and although he would probably not return to PSI because of his dissatisfaction with certain aspects of his job there, "his psychological condition would not prevent employment opportunities commensurate with his education." (Id. at 10.)
AUL's disability claims examiner sent a copy of Dr. Hale's report to Mr. Dreiman's treating psychiatrist, Dr. Kim, requesting he provide AUL with any clinical information which would tend to contradict Dr. Hale's findings. Dr. Kim responded with a statement in which he reasserted his belief that Mr. Dreiman suffered from "Pseudo-Dementia (Depression) and Panic Disorder" and that he "did not believe his [Mr. Dreiman's] cognitive impairments and perceptual distortions are willfull and under his voluntary control." (Pl.'s Br., Ex. G at 3.) Dr. Kim also questioned the objectivity of the psychological tests relied on by Dr. Hale, stating that there have been "many controversies in terms of validity, reliability and standardization of tests." (Pl.'s Br., Ex. G at 2.) Finally, Dr. Kim brought to the attention of AUL's claims specialist a neuropsychological examination of Mr. Dreiman performed by Dr. Jeffrey Gray in 1992. In his written evaluation Dr. Gray observed that the test data on Mr. Dreiman are consistent with "recent research suggesting a right temproparietal lobe locus for organic affective disorder." (Def.'s Br., App. B., Ex. 18 at 3.)
In light of the conflicting opinions of Dr. Hale and Mr. Dreiman's treating physicians, principally Dr. Kim, AUL sought a second independent review of Mr. Dreiman's medical records by Dr. Reginald Givens, a psychiatrist licensed in Illinois and Missouri. Dr. Givens reviewed Dr. Hale's IME, Dr. Kim's response and progress notes, and Dr. Gray's consultation. (Def.'s Br., App. B, Ex. 19 at 1.) While he acknowledged that, according to the medical records, Mr. Dreiman has a "mild impairment" and that his history is consistent with depression, Dr. Givens concluded that Mr. Dreiman's medical file failed to demonstrate his inability to maintain employment. (Def.'s Br., App. B, Ex. 19 at 1.) He also endorsed Dr. Hale's IME as conforming to accepted professional standards. (Def.'s Br., App. B, Ex. 19 at 3.)
AUL subsequently decided to terminate Mr. Dreiman's benefits on the belief he no longer met the definition of "totally disabled" based upon Dr. Hale's report, Dr. Givens' review of the medical record, and the records of Mr. Dreiman's treating physicians and therapist. Mr. Dreiman ceased receiving benefits on May 24, 2000. (Pl.'s Br. at ¶ 5.) On March 9, 2001, represented by counsel, Mr. Dreiman filed this lawsuit; shortly thereafter AUL allowed Mr. Dreiman to take appeal of AUL's adverse benefits decision. Mr. Dreiman submitted the updated records of Dr. Kim, Dr. Michael Kelly, his family physician, and Mr. Gary Morgan, his therapist. (Def.'s Br. at ¶¶ 67-70.) AUL stood by its original decision.
II. Standards of Review A. Summary Judgment
Summary judgment is proper if "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 judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party has the burden of production to demonstrate the absence of an issue of material fact. Outlaw v. Newkirk, 259 F.3d 833, 837 (7th Cir. 2001) (citing Logan v. Commerical Union Ins. Co., 96 F.3d 971, 978 (7th Cir. 1996) (citation omitted)). This burden may be met "by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Celotex v. Catrett, 477 U.S. 317, 325 (1986). If the movant discharges its burden of production, "the nonmovant must `set forth specific facts showing that there is a genuine issue for trial.'" Outlaw, 259 F.3d at 837 (quoting Fed.R.Civ.P. 56(e)) A genuine issue of material fact exists when there is "sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Summary judgment is especially well-suited to cases involving judicial review of ERISA benefits decisions, such as this one, because of the limited form of such review.
B. ERISA
The standard of judicial review of an administrative decision taken pursuant to an employee welfare benefit plan governed by ERISA depends on the terms of the plan. Courts recognize that an ERISA plan is a kind of contract, see Herzberger v. Standard Insurance Co., 205 F.3d 327, 330, (7th Cir. 2000) and thus its meaning is "ordinarily decided by the court, rather than by a party to the contract." Id. There is, therefore, a presumption of plenary judicial review. See Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). But as with other contracts, an ERISA plan may designate one of the parties — normally the administrator — as possessed with discretion to interpret or apply its provisions. Herzenberger, 205 F.3d at 331. Due to the importance of the rights involved in decisions respecting employee benefits, however, this grant of discretion should not be assumed, and indeed, must be expressly reserved in the plan instrument. Id.
Where in fact such discretion has been conferred upon the plan administrator, courts will review administrative decisions such as benefits eligibility under an "arbitrary and capricious" standard. Carr v. Gates Health Care Plan, 195 F.3d 292, 294 (7th Cir. 1999) (citing Firestone Tire and Rubber, 489 U.S. at 115; Butler v. Encyclopedia Brittanica, Inc., 41 F.3d 285, 288 (7th Cir. 1994)). The Seventh Circuit articulated in Carr the factors to which courts must look in applying this level of review: "the impartiality of the decision-making body, the complexity of the issues, the process afforded the parties, the extent to which the decision makers utilized the assistance of experts where necessary, and finally the soundness of the fiduciary's ratiocination." Carr, 195 F.3d at 295 (citing Chalmers v. Quaker Oats Co., 61 F.3d 1340, 1344 (7th Cir. 1995)). It is important to keep in mind, however, that the arbitrary and capricious standard is a "deferential standard of review," Hess v. Hartford Life Accident Insurance Co., 274 F.3d 456, 461 (7th Cir. 2001) and thus "it is not our [the courts'] function to decide whether we would reach the same conclusion as the Plan or even rely on the same authority." Carr, 195 F.3d at 294 (citation omitted). Rather, an adverse benefits decision made by a plan administrator vested with discretionary authority will stand so long as it is not "downright unreasonable." Id. (citing Butler, 41 F.3d at 291).
In this case, both parties agree, or at least don't dispute, that the arbitrary and capricious standard governs this Court's review of AUL's determination that Mr. Dreiman is fit for gainful employment. (Def.'s Br. at 17; Pl.'s Br. at 7). Indeed, the Plan language is unequivocal in reserving discretion in the Plan administrator: "the [Administrative Committee] shall have the following powers, duties and responsibilities: . . . (h) to interpret, with discretionary authority, the provisions of the Plan and to resolve, with discretionary authority, all disputed questions of Plan interpretation and benefit eligibility." (Pl.'s Br., Ex. B at 21; see also Pl.'s Br., Ex. B at 20 ("PSI, by action of the Administrative Committee, reserves the right to interpret and regulate the Plan with discretionary authority, which interpretation and regulation shall be legally effective and binding on all parties concerned.")) Morever, there is no dispute between the parties as to whether PSI properly transferred this authority to AUL. (See Pl.'s Br., Ex. B at 21 (granting Administrative Committee power to "employ agents to assist it in performing its administrative duties" and "to allocate and delegate its fiduciary responsibilities in accordance with ERISA Section 405.")) In view of the agreement of the parties on this matter and the close resemblance between the Plan language and language the Seventh Circuit has identified as a "safe harbor" for ERISA plan administrators seeking protection from de novo judicial review, see Herzberger, 205 F.3d at 331, this Court finds that the arbitrary and capricious standard governs its analysis.
III. Discussion
The sole question in Defendant's motion for summary judgment, therefore, is whether a genuine issue of material fact exists as to whether AUL's denial of disability benefits was "arbitrary and capricious." Because AUL relied on the opinion of an independent expert in psychology who performed an extensive, day-long examination on Mr. Dreiman; because AUL afforded Mr. Dreiman's treating physicians a chance to respond to the IME; because AUL sought the advice of a second independent psychiatrist who reviewed the initial IME and Mr. Dreiman's medical records; and because AUL granted Mr. Dreiman, represented by counsel, the opportunity to submit his updated medical records and any other relevant information in support of his administrative appeal, the answer to that question is no.
Plaintiff makes essentially three arguments to the contrary. First, Mr. Dreiman points to numerous social security reviews utilizing a standard similar to that of the PSI Plan in assessing a claimant's application for disability benefits and confirming Mr. Dreiman's eligibility for payments. (Pl.'s Br. at 4.) These reviews "have consisted primarily of the Social Security Administration ("SSA") contacting his treating physician to obtain updated reports of his complaints." (Pl.'s Br. at ¶ 11.) However, there is no indication the SSA reviews were performed in the same time period as AUL's, nor, insofar as the SSA relied principally on the recommendations of Mr. Dreiman's treating psychiatrist, were they based on the same record — since AUL had before it Dr. Kim's records and opinion as well as the opinions of two other medical experts. Thus, the SSA reviews cannot serve as a touchstone with which to measure the reasonableness of AUL's benefits decision.
In its review of Plaintiff's submissions, this Court could not find any Social Security correspondence more recent than 1997. (See Pl.'s Br., Ex C.) AUL's reevaluation of Mr. Dreiman's claim was undertaken in 1999. (See supra at 3.)
Second, Mr. Dreiman emphasizes the findings of his treating psychiatrist, Dr. Kim, regarding his capacity to engage in full time employment. Additionally, he cites Dr. Kim's skepticism of the ability of standardized psychological testing, such as used by Dr. Hale in his IME, to make an objective determination as to a person's fitness to work. But there is no requirement that the medical evidence before the claims examiner be unanimous or uncontested. It is not "downright unreasonable" for an ERISA plan administrator to side with one medical expert against another, provided that the expert whose opinion the company chooses to follow is sufficiently qualified. See Wilczynski v. Kemper Nat'l Ins. Cos., 178 F.3d 933, 938 (7th Cir. 1999) (upholding under de novo review plan administrator's reliance on independent medical examiners over claimant's treating physicians where independent examiners had "sufficient experience and expertise"); Donato v. Metro. Life Ins. Co., 19 F.3d 375, 380 (7th Cir. 1994) ("Metlife's decision simply came down to a permissible choice between the positions of . . . Metlife's independent medical consultant, and the position of [claimant's] clinical ecologists. . . .") Moreover, in this case AUL specifically obtained the opinion of a second independent medical examiner, Dr. Reginald Givens, who reviewed Mr. Dreiman's medical records, including Dr. Hale's IME and Dr. Kim's records and opinion, and reached the same conclusion as Dr. Hale. Due to the support found in the opinions of two qualified medical experts for AUL's final determination, this court cannot qualify it as arbitrary and capricious because of a disagreement with Mr. Dreiman's treating psychiatrist.
Plaintiff also represents Mr. Dreiman's family physician, Dr. Michael Kelly, as arriving at the same conclusion as Dr. Kim regarding Mr. Dreiman's employability (Pl.'s Br. at ¶ 14), but scrutiny of Dr. Kelly's records attached as Plaintiff's Exhibit I reveals no such opinion expressed anywhere therein.
Plaintiff's third argument for the unreasonableness of AUL's decision attempts to undermine Dr. Hale's IME. It points to alleged irregularities in the administration of the psychological tests as well as the partiality of the examination. As evidence of the former, Mr. Dreiman adduces an affidavit by his wife, Margaret Dreiman, who accompanied Mr. Dreiman to the IME and attests that she had to explain the last few tests to her husband. She also states that Dr. Hale permitted her to write down answers to some of the questions. (Aff. of Margaret Dreiman.) If true, the last allegation in particular would seem to cast at least some doubt on the integrity of Dr. Hale's IME. Further, on a motion for summary judgment, "[a]ll doubts should be resolved in the nonmoving party's favor." Outlaw v. Newkirk, 259 F.3d at 837. However, Mrs. Dreiman's affidavit was sworn to on April 15, 2002, and thus could not have been submitted to AUL as part of the appeals process, which terminated on January 25, 2002, with the denial of Mr. Dreiman's appeal. Nor is there any indication in the record that AUL was otherwise aware of this alleged irregularity. Yet the events described in the affidavit occurred on October 5, 1999, and Mr. Dreiman had ample opportunity to present proof thereof to AUL during the pendency of the appeals process.
It is well-established that in reviewing a plan administrator's decision to deny benefits, courts are limited to the information that was submitted to the claims examiner. See, e.g., Hess, 274 F.3d at 462 ("Hartford is, of course, correct that in evaluating a plan administrator's decision under the arbitrary and capricious standard of review, we should consider only the evidence that was before the administrator when it made its decision"); Perlman v. Swiss Bank Corp. Comprehensive Disability Protection Plan, 195 F.3d 975, 981 (7th Cir. 2000) ("when there can be no doubt that the application was given a genuine evaluation, judicial review is limited to the evidence that was submitted in support of the application for benefits. . . .") Accordingly, since Plaintiff failed to submit Mrs. Dreiman's affidavit as part of his challenge to AUL's adverse benefits determination, Defendant's motion to strike Plaintiff's Exhibit K is GRANTED.
For the same reason, Defendant's motion to strike Plaintiff's Exhibit G, which purports to be an interview between Defendant's counsel Ms. Susan Todino and Dr. Kim, is likewise GRANTED. As with Mrs. Dreiman's affidavit, Plaintiff has presented no evidence that this statement was submitted to AUL as part of its administrative review of Mr. Dreiman's claim. Defendant's motions to strike Plaintiff's Exhibits C, F, H, I, and L are, however, DENIED. Plaintiff's Exhibits C, F, H, I are largely duplicative of Defendant's own submissions. (See Def.'s Br., App. B, Ex. 3, 17, 27, 28.) Plaintiff's Exhibit L is an excerpt of a work referenced by Defendant's own independent medical examiner, Dr. Reginald Givens. (See Def.'s Br., App. B, Ex. 19 at 3.)
Plaintiff's second attack on Dr. Hale's IME concerns the comprehensiveness of the exam. Mr. Dreiman argues that Dr. Hale based his opinion on the American Medical Association's Guides to the Evaluation of Permanent Impairment, and yet failed to follow its recommendations to investigate factors such as "1) the effects of treatment; 2) the effects of structured settings; 3) the variability of mental disorders; 4) an assessment of workplace function; and 5) the effects of common mental and behavioral conditions." (Pl.'s Br. at 5.) Instead Dr. Hale allegedly relied solely on standardized testing. In fact, this Court cannot find any reference to the above-cited work in Dr. Hale's report (see Def.'s Br., App. B., Ex. 13); it was rather Dr. Givens who alluded to it in his psychiatric review, stating that "in addition to documenting clinical observations, diagnosis and treatment," the AMA guide in question "should be utilized." (Def.'s Br., App. B, Ex 19 at 3.) In any event, Plaintiff's characterization of Dr. Hale's IME as relying exclusively on standardized psychological tests is plainly erroneous. Dr. Hale conducted a two-hour diagnostic interview in addition to reviewing the medical records of Mr. Dreiman's treating physicians and therapist. (See supra at 3.) Furthermore, as previously noted, AUL's decision was based on the conclusions of Dr. Givens as well, who expressly endorsed Dr. Hale's IME as adhering to acceptable standards. (Def.'s Br., App. B, Ex 19 at 3.) In sum, Plaintiff has not succeeded in raising serious suspicions regarding the trustworthiness of AUL's medical authorities.
As stated above, it is undisputed that PSI properly transferred authority to administer the Plan to AUL (even if the precise nature of this arrangement has not been made clear). Plaintiff, furthermore, has offered no evidence of PSI's involvement in the administration of the Plan. Thus, while PSI has neither joined AUL's motion for summary judgment nor moved on its own to address the charges, the court finds that it is not a proper party to this suit. Mr. Dreiman's claims against PSI are therefore dismissed. See Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir. 1988) ("Unless an employer is shown to control administration of a plan, it is not a proper party defendant in an action concerning benefits.")
IV. Conclusion
In conclusion, Defendant's motions to strike are GRANTED in part and DENIED in part, as discussed above. Defendant's motion for summary judgment is GRANTED.
ALL OF WHICH IS ORDERED this ___ day of October 2002.