Opinion
Case No. 5:99-CV-89
June 15, 2000
ORDER
In accordance with the opinion entered this date,
IT IS HEREBY ORDERED that Defendant Fortis' motion for judgment on the administrative record in support of the plan administrator's decision to deny the Plaintiff's request for benefits (Count II) (Docket #31) is GRANTED.
IT IS FURTHER ORDERED that Defendant MassMutual's motion for summary judgment as to Count I (Docket #48) is GRANTED.
IT IS FURTHER ORDERED that Defendant Lone Star's motion for summary judgment as to Count III (Docket #55) is GRANTED.
IT IS FURTHER ORDERED that JUDGMENT as to all counts is entered in FAVOR of the DEFENDANTS and the Complaint is dismissed in its entirety.
OPINION
The Plaintiff, Willard J. Hershey, challenges the denial of disability benefits by three insurance providers: Massachusetts Mutual Life Insurance Company ("MassMutual") (Count I); Fortis Benefits Insurance Company ("Fortis") (Count II); and the Lone Star Life Insurance Company ("Lone Star") (Count III). Counts I and III are breach of contract claims and Count II is an ERISA claim. The Plaintiff commenced this action state court and the Defendants removed on the grounds of diversity and federal question jurisdiction. Before this Court are motions for judgment by each of the three Defendants: (1) Fortis' motion for judgment on the administrative record; (2) MassMutual's motion for partial summary judgment; and (3) Lone Star's motion for summary judgment. The Court heard oral arguments on May 18, 2000, and thereafter invited the parties to submit supplemental briefs.
I
The Court first considers the Plaintiff's claim against Fortis. The Plaintiff, an endodontist, was employed by Endodontic Specialists of Lansing. His employer paid for a group long term disability policy to its employees provided by Fortis. Because the policy was provided to the Plaintiff as part of an employee welfare benefit plan, it is governed by ERISA and the Plaintiff challenges Fortis' denial of benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). The parties move for judgment on the administrative record pursuant to the framework established by Wilkins v. Baptist Healthcare System. Inc., 150 F.3d 609 (6th Cir. 1998).
A
The threshold issue to be determined is the proper standard of review to be applied to the administrative record. Courts review challenges to ERISA benefit determinations under the de novo standard, unless the benefit plan gives the plan administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir. 1997). If a plan has such discretion, the administrator's benefit determination is reviewed under an arbitrary and capricious standard. Id.
In Perez v. Aetna Life Ins. Co., 150 F.3d 550 (6th Cir. 1998), the court, sitting en banc, determined that the following language vested discretionary authority in the plan:
[Aetna] shall have the right to require as part of the proof of claim satisfactory evidence that [the claimant] has furnished all required proofs for such benefits.Id. at 555.
The Sixth Circuit reasoned that the "only reasonable interpretation of the Plan is that Aetna requests the evidence, reviews it and then makes a benefits determination." Id. at 557. The "plan clearly grants discretion to Aetna because, under the reasonable interpretation of the language, Aetna retains the authority to determine whether the submitted proof of disability is satisfactory." Id.
Fortis' plan provides "You must furnish whatever items we decide are necessary as proof of loss or to decide our liability." In 1997, Fortis amended its policy to add the following provision:
We have the sole discretionary authority to determine eligibility for participation or benefits and to interpret the terms of the Policy. All determinations and interpretations made by us are conclusive and binding on all parties.
This amendment, however, was not included in the administrative record but was submitted as an exhibit to the Defendant's brief.
Fortis argues that because the pre-amendment and post-amendment language reserves to it the right to determine what evidence is required to entitle a claimant to benefits, it is a grant of discretionary authority. The Plaintiff asserts that the Court should not consider the amendment because it was not part of the administrative record. It further asserts that the pre-amendment language does not confer discretion and thus the Court should apply a de novo standard of review.
It is undisputed that the 1997 amendment expressly grants the discretionary authority to the plan administrator. Assuming without deciding that the plan is limited to the pre-amendment language, this language is sufficient to confer discretionary authority to the plan administrator. The precise pre-amendment language presented here was construed in Richter v. Fortis Benefits Ins. Co., 41 F. Supp.2d 866, 869 (S.D. 111. 1998), andBennett v. Fortis Benefits Ins. Co., No. 97 CIV 346, 1998 WL 213199 (S.D.N.Y. April 30, 1998), as conferring discretion. Two other district courts that have considered the same language, however, have concluded otherwise. In Hensley v. Fortis Benefits Ins. Co., No. 1:99-CV-238, 1999 WL 1005651 (W.D.Mich. Aug. 24, 1999), and Barnable v. First Fortis Life Ins. Co., 44 F. Supp.2d 196 (E.D.N.Y. 1999), the courts concluded that the language did not confer discretionary authority because it did not contain the term "satisfactory" that appeared in Perez.
In construing the plan language, the Court is cognizant that discretionary authority does not hinge on the incantation of the word discretionary or any other magic word. Firestone Tire Rubber Co., 489 U.S. at 111. The absence of the word "satisfactory" is too slender a reed upon which to distinguish Fortis' language from that in Perez. Reading Fortis' pre-amendment contractual language in an "ordinary and popular sense," the only reasonable interpretation is that the plan administrator has the authority to request evidence and determine whether that evidence is sufficient to establish disability. Perez, 150 F.3d at 557. The requirement that the evidence be satisfactory to Fortis is implicit. Under the teachings of Perez and its progeny, this breadth of authority to determine eligibility for benefits triggers an arbitrary and capricious standard of review.
B
Under an arbitrary and capricious standard of review, the Court is called upon to determine whether the Defendant's decision to deny the Plaintiff benefits was rational and consistent with the terms of the policy. An arbitrary and capricious standard is highly deferential and requires that the administrator's decision be upheld as long as it is rational in light of the plan's provisions as well as reasonable with no abuse of discretion. University Hospitals of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846 (6th Cir. 2000).
The Plaintiff ceased working on February 20, 1998, at the age of fifty-nine. He claimed that he was no longer able to perform his job due to an anxiety disorder and atrial fibrillation. Specifically, he alleges that "stress and anxiety have decreased my ability to concentrate and remain steady. Performing surgery with microscopic detail requires intense concentration. My atrial fibrillation and elevated blood pressure can make me dizzy."
The Plaintiff filed a claim for long term disability benefits with Fortis. Under the policy, a physician is entitled to benefits if:
during a period of disability (including the qualifying period) an injury, sickness, or pregnancy requires that you be under the regular care and attendance of a doctor, and prevents you from performing at least one of the material duties of your regular occupation.
The Plaintiff identified Drs. Strandmark, an internist, and Anstett, a psychiatrist, as his health care providers in his claim for benefits. Fortis obtained the Plaintiff's records from them, from Sparrow Hospital and information from his employer as to his job duties and income. Fortis referred the records for both a medical and psychological review.
Denise Brennan, RN, CCM, conducted a review of the medical records on behalf of Fortis to determine whether the Plaintiff had physical limitations. In August 1997, the Plaintiff was first treated for atrial fibrillation at Sparrow Hospital. In March 1988, he was treated for insomnia, stress and irregular heartbeat. The Plaintiff began treating with Dr. Strandmark thereafter for transient atrial fibrillation, an abnormal rhythm of the heart.
He was diagnosed with hypertension and Lopressor was prescribed which successfully controlled the condition. Limitations arising from atrial fibrillation depend upon the severity of the abnormal rhythm. Dr. Strandmark did not prohibit him from working. In a November 17, 1998, "Attending Physician's Initial Statement of Disability," Dr. Strandmark stated that the Plaintiff suffered from an anxiety disorder and atrial fibrillation. He rated the Plaintiff as having a Class 4 psychiatric impairment, which is defined as being unable to engage in stress situations or engage in interpersonal relations. According to Dr. Strandmark, "[t]he degree of anxiety and depression with escalation over time has lead to decreased ability to provide the highly skilled and careful level of performance required of an endodontist with a negative spillover effect in his health and private life, additional health concerns include atrial fibrillation and an elevated blood pressure." Upon review of his medical records and his specific job description, which is classified as a light occupation, Ms. Brennan concluded that the Plaintiff was not physically impaired from engaging in his occupation.
Dr. David Lund, a psychiatrist, conducted the review of the Plaintiff's psychological condition. Dr. Strandmark referred the Plaintiff to Dr. Anstett, a psychiatrist, for his anxiety, with whom he began treatment in May 1998. Dr. Anstett's notes state that the Plaintiff "woke up one morning after a restless night of sleep and worry and decided he didn't want to work any more. Called in and quit." The Plaintiff expressed concern to Dr. Anstett about financial commitments and about the change in his lifestyle now that he had stopped working. He was also anxious about the perceptions of his family and his former co-workers. In response to Fortis' "Attending Physician's Initial Statement of Disability," Dr. Anstett wrote:
I am writing to try and describe the situation of [Willard Hershey] in regards to his reactions to work in his former profession. Dr. Hershey had been working in a highly stressful job that required great attention to detail, physical stamina, highly technical skills and extreme patience in highly charged interpersonal interactions. Dr. Hershey found this increasingly anxiety provoking and it became more and more difficult to work. This began affecting his health, his sleep, and his personal relationships.
Dr. Hershey finally found it impossible to continue working. I think that a return to his previous employ would result in the same reaction and resultant difficulties."
Dr. Lund opined that the diagnosis of adjustment disorder with mixed emotional features and dysthymia are fairly low-level psychiatric disorders which would not prevent him from working. He further concluded that the adjustment disorder was in reaction to adjusting to his retirement. According to Dr. Lund,
[i]t is very clear that the claimant is making a lifestyle choice and chose to retire from his practice of thirty-three years. Although he admitted to ongoing problems with anxiety in the initial session with his psychiatrist, subsequent sessions reveal that his mood was observed as good and normal and that his affect was in full range. As . . . noted, the claimant was on Lopressor, but did not need any major psychiatric medications, such as the ones in the anti-anxiety or antidepressant realm.
It is felt that the claimant's treatment was appropriate, given the lack of severity of his condition and that he did not need any psychiatric medications, nor did he need any ongoing intensive psychotherapy.
The diagnosis of adjustment disorder with mixed emotional features is made when an individual has to psychologically adjust to an external stressor which is overwhelming the coping abilities of that individual. With this diagnosis the affective components include anxiety and depression. This is a diagnosis that typically remits after one month. The diagnosis of dysthymia is a low level depression which an individual has to have more often than not over the past two years. This would be suggestive that the claimant was able to work with this diagnosis prior to going out on disability.
Dr. Lund concluded that the Plaintiff s psychiatric condition was not of a severity that would be disabling.
On March 8, 1999, Fortis denied the Plaintiff's request for benefits. On April 9, 1999, Plaintiff's counsel advised Fortis that he wished to appeal the decision and requested a copy of the file. On April 27, 1999, Fortis sent counsel a copy of the file and a copy of the policy. On June 21, 1999, Fortis advised Plaintiff's counsel that it had "not received documentation of Mr. Hershey's restrictions. If we do not hear from you or Mr. Hershey by July 5, 1999, we will assume that Mr. Hershey no longer wishes to pursue his long term disability claim and we will close his file." Rather than file an appeal, the Plaintiff commenced this action.
III
The Plaintiff argues that Fortis' decision to deny his claim was arbitrary and capricious because it did consider letters from Dr. Strandmark, Dr. Anstett and Dr. Schmidt.
The letters he proffers are dated January 2000 and were submitted to this Court, not to the Plan. Thus, they were not considered by the plan administrator in rendering its decision to deny benefits. It is well established that the Court's review is limited to the material in the record before the plan administrator. "[W]hen reviewing a denial of benefits under ERISA, a court may consider only the evidence available to the administrator at the time the final decision was made. This limitation applies to both an `arbitrary and capricious' or a `de novo' standard." Miller v. Metropolitan Life Ins. Co., 925 F.2d 979, 986 (6th Cir. 1991).
The Plaintiff next argues that he was not informed that the administrative record was going to be closed nor advised as to how this would affect his rights. The record clearly indicates that Fortis notified the Plaintiff that it was waiting to hear from the Plaintiff and would close the file if he did not respond. The Plaintiff did not avail himself of the opportunity afforded by Fortis to supplement the record with medical evidence supporting his claim. It is intuitive that this internal dispute mechanism provided the best opportunity for the Plaintiff to present his case and persuade the plan administrator as to his entitlement.
The Plaintiff also asserts that by commencing suit, the administrative record remained open, and that therefore the Court should consider the physicians' letters. The Plaintiff has no authority to support this theory. Such an approach runs contrary to the established judicial role in ERISA cases. This Court's function is not to sit as a plan administrator in the first instance, but is confined to reviewing the plan administrator's decision. Perry v. Simplicity Engineering, 900 F.2d 963, 966 (6th Cir. 1990) ("[N]othing in the legislative history suggests that Congress intended that federal district courts would function as substitute plan administrators, a role they would inevitably assume if they received and considered evidence not presented to the administrators concerning an employee's entitlement to benefits.").
The Plaintiff next claims that the decision was arbitrary and capricious because Fortis did not contact his treating doctors, request narratives from them nor require the Plaintiff to undergo an independent medical examination. These arguments reveal a fundamental misunderstanding of the claim process. The burden is not on Fortis to gather evidence to support the Plaintiff's entitlement to disability benefits under the plan. Rather, the burden is on the Plaintiff to provide evidence establishing that he is disabled. Fortis based its decision on the medical evidence from the physicians that the Plaintiff identified. Had the Plaintiff wished to supplement these records, he was provided ample opportunity to do so.
Moreover, Fortis solicited the medical opinions of his physicians. See Attending Physician's Initial Statement of Disability. Finally, it was not arbitrary or capricious not to conduct an independent medical examination where the policy did not so require.
The Plaintiff next argues that the plan administrator improperly considered his occupation to be a dentist, rather than an endodontist. The record, however, demonstrates that Fortis specifically referenced a description of the Plaintiff's job requirements as an endodontist and thus was aware of what the Plaintiff s occupation entailed in considering his disability claim.
The Court, having considered the administrative record, the parties' briefs and oral arguments, is satisfied that the plan administrator did not act arbitrarily and capriciously in denying the Plaintiff's claim. There is substantial evidence to support that the Plaintiff was not disabled as defined in the Fortis plan. The Plaintiff was not under the regular care of a physician for atrial fibrillation and anxiety at the time he terminated his employment. Dr. Strandmark did restrict his physical activities because of his atrial fibrillation. His psychiatric care largely dealt with adjustment issues in response to not working. Neither physician advised him that he should not return to work nor opined that either the Plaintiff's medical or psychiatric conditions or a combination thereof rendered him unable to engage in his occupation. "When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or capricious." Davis v. Kentucky Finance Cos. Retirement Plan, 887 F.2d 689, 693 (6th Cir. 1989). Accordingly, the Court grants the Defendant's motion for entry of judgment seeking affirmance of the plan administrator's decision to deny the Plaintiff's request for benefits.
IV
The Plaintiff was insured by three MassMutual disability income protection policies and a Lone Star disability policy. Both Defendants denied the Plaintiff's claim on the grounds that his conditions of atrial fibrillation and anxiety do not render him disabled as defined under the policies. MassMutual and Lone Star now move for summary judgment as to the Plaintiff's breach of contracts claims.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. In evaluating a motion for summary judgment the Court must look beyond the pleadings and assess the proof to determine whether there is a genuine need for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp, 475 U.S. 574, 587 (1986). If Defendants carry their burden of showing there is an absence of evidence to support a claim then Plaintiff must demonstrate by affidavits, depositions, answers to interrogatories, and admissions on file, that there is a genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25 (1986).
In determining a motion for summary judgment the court views the evidence in the light most favorable to the opposing party and draws all justifiable inferences in his favor. Morales v. American Honda Motor Co. Inc., 71 F.3d 531, 535 (6th Cir. 1995). The mere existence of a scintilla of evidence in support of Plaintiff s position is not sufficient to create a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). The proper inquiry is whether the evidence is such that a reasonable jury could return a verdict for Plaintiff. Id. See generally, Street v. J.C. Bradford Co., 886 F.2d 1472, 1476-80 (6th Cir. 1989).
The Court begins with the language of the insurance policies. MassMutual deems "the insured to be totally disabled if the incapacity prevents the insured from performing substantially all of the duties of his usual occupation, business, employment or profession." Lone Star defines total disability as "the inability of the insured to engage in his regular occupation or profession."
An insured seeking disability benefits has the burden of establishing by a preponderance of the evidence that he is disabled. Besh v. Mutual Benefit Health Acc. Ass'n, 304 Mich. 343, 353, 8 N.W.2d 91, 93 (1943). The Plaintiff concedes that at no time did either Dr. Strandmark, Dr. Anstett, or Dr. Voice, his cardiologist, with whom he began treatment in April 1999, advise the Plaintiff not to work or that he was unable to work. In fact, the Plaintiff was not receiving treatment for his conditions at the time he ceased working.
It is undisputed that his present cardiac and psychiatric conditions are stable. According to Dr. Voice, atrial fibrillation is a treatable condition that, if properly controlled, would not prevent an individual from continuing to work. Although Dr. Voice recommended stress reduction in response to the Plaintiff's condition, he did not correlate this to an inability to perform his job as an endodontist. Dr. Voice opined that the Plaintiff's cardiac condition does not prevent him from performing his duties as an endodontist. The Plaintiff had a myocardial infarction in the summer of 1999 as a result of coronary artery disease, unrelated to the atrial fibrillation. In a followup appointment in July 1999, six weeks after the heart attack, Dr. Voice did not feel that any physical restrictions were necessary. None of his treating physicians imposed any physical restrictions upon him.
The Plaintiff's anxiety arose from concerns about both his health and his adjustment to not working. According to Dr. Strandmark, the Plaintiff stopped working because he was overwhelmed by his job and his heart concerns. They had discussed "burnout." Dr. Strandmark opined that the Plaintiff's anxiety had improved since his heart rhythm had stabilized. Dr. Anstett's notes reveal that the Plaintiff's anxiety had reduced, his spirits were good and that he was active. Although Dr. Anstett speculated that he thought it likely that the Plaintiff would experience a resurgence of his previous symptoms should he return to work, he did not find that the Plaintiff's anxiety prevented him from resuming his occupation.
The Plaintiff argues that Dr. Strandmark's deposition testimony and his April 18, 2000 affidavit in which he states that the Plaintiff is disabled create a genuine issue of material fact. In his deposition, Dr. Strandmark explained that the Plaintiff felt it was not safe to continue his practice because of his episodes of dizziness and palpitations. Dr. Strandmark has not imposed limitations on the Plaintiff and concedes that his current medical condition is under control through medication. His conclusory statement that the Plaintiff is disabled is not supported by the facts and the testimony of the Plaintiff's specialists and are insufficient to create an issue of material fact.
The Plaintiff also asserts that Dr. Voice "clearly stated that pursuant to Dr. Anstett's testimony, he would specifically consider Plaintiff disabled from a career in endodontics." However, a careful examination of the deposition testimony reveals that Dr. Voice was asked to assume, as part of a hypothetical situation, that Dr. Anstett had advised the Plaintiff not to return to work because of the stress it caused him. Based on this assumption, Dr. Voice was then asked if he would recommend that Dr. Hershey resume his practice to which he replied that based on those facts, it would be "reasonable" for Dr. Hershey not to resume working. The Plaintiff's reliance on Dr. Voice's deposition testimony is misplaced. There is no evidence to support that Dr. Anstett proscribed the Plaintiff from working based on his anxiety. He simply opined that a resumption likely would cause his symptoms to reappear. Secondly, Dr. Voice's response to the hypothetical posed did not state that the Plaintiff's health rendered him disabled.
The Plaintiff has failed to adduce sufficient evidence to create a genuine issue of material fact as to whether the Plaintiff is disabled as that term is defined in the two insurance policies at issue. Accordingly, the Court grants summary judgment in favor of MassMutual and Lone Star.
An order and judgment consistent with this opinion will be entered.