McGill v. Unum Provident Corp.

Full title: CHERYL McGILL v. UNUM PROVIDENT CORP., ET AL

Court: United States District Court, E.D. Louisiana

Date published: Apr 12, 2005

Civil Action Number 04-1586, Section "L" (4) (E.D. La. Apr. 12, 2005)

Opinion

Civil Action Number 04-1586, Section "L" (4).

April 12, 2005

ORDER REASONS

ELDON FALLON, District Judge

Pending before the Court are the parties' cross motions for summary judgment, which were taken under submission by the Court. Having considered the administrative record, the memoranda filed by the parties, the applicable law, and the argument of counsel, the Court hereby GRANTS the Plaintiff's Motion for Summary Judgment and DENIES the Defendant's Motion for Summary Judgment.

I. BACKGROUND

The Plaintiff brings this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 001, et. seq. ("ERISA") and pursuant to 28 U.S.C. § 1331. For approximately twenty (20) years, Plaintiff Cheryl McGill was employed by Sherwin Williams Company as a Store Product Specialist, earning an annual salary of roughly $27,000. The Plaintiff's essential duties as a Store Product Specialist included, among other things, assisting sales representatives in making recommendations to customers, providing training of other in-store staff, handling customer telephone inquiries, and ensuring that the order forms for decorative products were properly completed. (PLACL 00013-00014, Tab D).¹ Furthermore, Sherwin Williams set forth the following physical requirements for a Store Product Specialist:

1 " PLACL" refers to the administrative record.

• Employee is required to retrieve material from shelves and floor stacks and lift and carry up to 50 lbs. frequently and up to 100 lbs. on occasion. May assist with handling drums of material in excess of 100 lbs.

• Employee will spend approximately 20% of the day sitting, 25% standing, 45% walking and 10% stooping, climbing and kneeling.

• Employee is required to tint paint, therefore, must have good color perception.

• In stores where employees may be required to make deliveries, employee must be able to drive a car or van.

• Employee must be able to operate a hand truck and/or material handling equipment in stores equipped with such equipment.

• Employee must be able to operate a computer and communication via the telephone. (PLACL 00014, Tab D).

The Plaintiff claims that she began to experience pain throughout her body, including her joints, muscles and lumbar area. According to the Plaintiff, the pain increased steadily and became so troublesome that in the last four months of her employment she was unable to lift normally. The Plaintiff stopped working completely on April 29, 2003 due to the increased pain.

The Plaintiff was examined by her treating physician, Dr. Lianter Albert, shortly after she stopped working. Dr. Albert submitted a report dated September 9, 2003, in which he diagnosed the Plaintiff with Fibromyalgia. (PLACL 00011, Tab C). Dr. Albert's report indicates that the Plaintiff should neither lift frequently nor should she lift more than twenty pounds. Furthermore, the report indicated that the Plaintiff cannot lift fifty-pound buckets of paint nor walk frequently on hard floors. (Id.). Additionally, Dr. Albert provided to Sherwin Williams, medical records dated from May 1, 2003 to July 20, 2003. (PLACL 00016-00025, Tab D). Those records include a recommendation from Dr. Albert dated July 20, 2003, in which Dr. Albert concluded that the Plaintiff's medical condition indefinitely precluded her from performing the essential functions of her job without posing a direct threat to the herself or others. (PLACL 00024, Tab E). Thereafter, on August 18, 2003, Sherwin Williams sent the Plaintiff a letter notifying her that she would be permanently replaced since she could not perform the essential functions of her position and that there was no reasonable way to accommodate her restrictions. (PLACL 00125, Tab Z).

On September 4, 2003, the Plaintiff filed a claim for disability benefits with Defendant Provident Life and Accident Insurance Company ("Provident"), Sherwin Williams' long-term disability benefit insurer and claims administrator. Provident notified the Plaintiff by correspondence dated December 5, 2003, that she had been approved for limited long-term disability benefits. (PLACL 00089, Tab P). The Plaintiff began receiving monthly payments of $1,353 in long-term disability benefits on October 26, 2003 and continued to receive them until January 21, 2004, after which date Provident concluded that the Plaintiff's condition no longer supported payments. The Plaintiff unsuccessfully appealed the decision to terminate her benefits and after exhausting her administrative remedies brings this action to recover disability benefits against Provident, alleging that Provident abused its discretion in terminating her benefits. In response, Provident claims that it complied with all of its obligations under it's long-term disability policy ("Policy"). Furthermore, Provident maintains that it did not abuse its discretion in making its benefit determination in this case. The parties have filed cross motion for summary judgment.

II. CROSS MOTIONS FOR SUMMARY JUDGMENT

1) Summary Judgment

A. Applicable Law

Summary judgment will be granted only if the pleadings, depositions, answers to interrogatories, and admissions, together with affidavits show that there is no genuine issue as to any material fact and that the defendant is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56. When considering a motion for summary judgment, the Court must "review the facts drawing all inferences most favorable to the party opposing the motion." General Universal Systems, Inc. v. Lee, 379 F,3d 131, 137 (5^th Cir. 2004). If the party moving for summary judgment demonstrates the absence of a genuine issue of material fact "the nonmovant must go beyond the pleadings and designate specific facts showing that there is a genuine issue for trial." Willis v. Roche Biomedical Laboratories, Inc., 61 F.3d 313, 315 (5th Cir. 1995).

2) Review of ERISA Claims

Federal Courts have exclusive jurisdiction to review determinations made by employee benefit plans, including disability benefit plans. 29 U.S.C. § 1132(a)(1)(B). These determinations generally focus on two issues: (1) the meaning of the plan's terms and (2) the nature or extent of disability. With regard to the interpretation of the terms, a plan administrator's denial of benefits under ERISA is reviewed under a de novo standard unless the benefit plan gives the plan administrator the discretionary authority to construe the terms of the plan, in which case, the standard of review is abuse of discretion. Firestone Tire and Rubber Co. et al. v. Bruch, et al., 489 U.S. 101, 115 (1989); see also Ramos v. BellSouth Long Term Disability Plan, et al., 2001 WL 1352319, *3 (E.D. La. 2001). The parties agree that the plan at issue in this case gives Provident the discretionary authority to determine the eligibility for coverage, the entitlement to benefits, the amount of benefits payable, and the sufficiency and amount of information required to make those determinations. (PLACL 00055, Tab K). Therefore, the standard of review is an abuse of discretion standard. With regard to the nature and extent of the employee's disability, a determination that a participant is not "totally disabled" under a long-term disability policy is a factual determination also subject to review by a District Court under an abuse of discretion standard. Estate of Bratton v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, et al., 215 F.3d 516, 522 (5^th Cir. 2000); See also, Sweatman v. Commercial Ins. Co., 39 F.3d 594, 598 (5^th Cir. 1994).

Under the abuse of discretion standard on either issue, the Court must determine if the Defendants acted arbitrarily or capriciously. Sweatman, 39 F.3d at 601. A decision is arbitrary when made "'without a rational connection between the known facts and the decision or between the found facts and the evidence.'" Lain v. Unum Life Ins. Co. of Am., 279 F.3d 337, 342 (5^th Cir. 2002) (quoting Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822, 828 (5^th Cir. 1996)). Ultimately, if the Plan Administrator's decision "is supported by substantial evidence and is not arbitrary or capricious, it must prevail." Ellis v. Liberty Life Assurance Co. of Boston, 2004 WL 2635692, *6 (5^th Cir. 2005). On the other hand, "[i]f an administrator has made a decision denying benefits when the record does not support such a denial, the court may, upon finding an abuse of discretion on the administrator's part, award the amount due on the claim and the attorney's fees." Id.

The Fifth Circuit allows for modification of the abuse of discretion standard in cases in which the defendant is both the insurer and administrator of the plan. Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 299 (5^th Cir. 1999). In the instant case, Provident is both the benefit plan insurer and claims administrator, and could, therefore, potentially benefit from the denial of a claim. In such cases, under Vega, the Court applies a "sliding scale" to the abuse of discretion standard whereby the Court "gives less deference to the administrator in proportion to the administrator's apparent conflict." Id. at 296. The existence of a conflict is a factor to be considered in determining whether the administrator abused its discretion in denying a claim. Id. at 297. "The greater the evidence of a conflict on the part of the administrator, the less deferential [the Court's] abuse of discretion standard will be." Id. In a situation where a conflict exists, the reviewing court is "less likely to make forgiving inferences when confronted with a record that arguably does not support the administrator's decision." Id. at 298.

B. Contentions of the Parties

Under the terms of the Policy, the definition of "total disability" at issue in the present case is the inability to perform the material duties of one's job. The Plaintiff claims that Provident abused its discretion in denying her long-term disability benefits. In support of this contention, the Plaintiff argues that she was seen and treated by three different medical professionals, all of whom indicated that she was not capable of performing the essential functions of her position at Sherwin Williams. Specifically, the Plaintiff was examined by her internist, Dr. Albert (PLACL 00024-00025, Tab E; 00116-00118, Tab V; 00119, Tab W), a Rheumatologist, Dr, Frederick Talip (00064-00066, Tab N; 000), and a functional capacity evaluator, Trevor Bardarson (00130-00136, Tab AA). Furthermore, the Plaintiff refers to the August 18, 2003 letter from Sherwin Williams, which states that the Plaintiff was being terminated from her employment because she could not perform the essential functions of her position and that no alternative employment is available to accommodate her medical restrictions. (PLACL 00125, Tab Z). According to the Plaintiff, Provident's decision to deny her appeal for long-term disability benefits was based solely on the report of its own in-house medical examiner, Dr. Stephen Jacobson, who never physically examined the Plaintiff.

Provident maintains that it appropriately terminated payment of long-term disability benefits to the Plaintiff because it determined that she no longer met the definition of disabled under the Policy's provisions. According to Provident, the Plaintiff was not totally disabled as defined by the Policy because she could perform some of the material duties of her own occupation. Provident believes that the administrative record contains substantial evidence to show that Provident's decision to terminate the Plaintiff's long-term benefits reflected reasonable and impartial judgment. Specifically, Provident points to the conclusions of it's in-house physicians, which determined that the Plaintiff's treating physicians presented no clinical data, pathology, or functional test results to support the Plaintiff's self-reported functional impairment. Additionally, Provident's in-house physicians deemed the functional capacity evaluation incomplete for failing to use standard tests to determine functional capacity, and inconsistent for contradicting its own conclusions. Finally, Provident argues that, in the event that the Court rules in favor of the Plaintiff, her recovery is limited to the period from January 22, 2004 to October 25, 2005 because Provident has paid benefits to the Plaintiff from October 26, 2003, the date on which she became eligible for benefits, to January 21, 2004.

C. Analysis

Due to the fact that this is a case concerning the denial of benefits under an ERISA plan, the Court's resolution of the summary judgment motions can only be based, with few exceptions which are not applicable here,² on the evidence contained in the administrative record (referred to as " PLACL"). The parties' have submitted the Policy as part of the administrative record. The Policy provides a two-tiered definition of "total disability". (PLACL 00028-00056, Tab G). The "own occupation" phase is the first tier and lasts for a maximum of two years. (PLACL 00035, Tab I). Pursuant to the first tier, the Plaintiff is entitled to collect long-term disability benefits for two years provided that she is unable to perform her "own occupation". The terms of the Policy provides:

2 For example, the district court may consider other evidence related to how an administrator has interpreted terms of the plan in other instances and evidence, including expert opinion, that assists the court in understanding the medical terminology or practice related to a claim. Estate of Bratton, 215 F.3d at 521 (citing Vega, 188 F.3d at 299).

"TOTAL DISABILITY DURING OWN OCCUPATION PERIOD

Total Disability or Totally Disabled means that Covered Persons:

1. are unable to perform all the material duties of their own occupation on a full-time of part-time basis because of an injury or sickness that started while insured under this Policy;

2. do not work at all in any occupation; and

3. are under Physician's care." (PLACL 00039, Tab J).

The second tier of the Policy is the "any occupation phase", which follows the two-year "own occupation" phase. The second tier entitles the Plaintiff to collect long-term disability benefits, thereafter, provided she is disabled from performing "any occupation" for which she may become suited by education, training or experience. (PLACL 00039, Tab J). Provident's decision to terminate the Plaintiff's long-term disability benefits occurred within the first two years from when benefits became payable to the Plaintiff. Therefore, the Court will only discuss the "own occupation" tier of the policy.

The Fifth Circuit applies a two-prong test when reviewing an administrator's denial of benefits. First, the district court must determine the "legally correct interpretation of the policy." Lain, 279 F.3d at 344 (citing Tolson v. Avondale Indus., Inc., 141 F.3d 604, 608 (5^th Cir. 1998)). Second, if the court finds that the administrator failed to apply the legally correct interpretation of the policy, then the court must determine whether the administrator's denial was an abuse of discretion. Id.

1) The Legally Correct Interpretation

In ascertaining the legally correct interpretation of the Policy at issue, the Court must consider the following: (1) whether a uniform construction of the policy has been given by the administrator; (2) whether the interpretation is fair and reasonable; and (3) whether unanticipated costs will result from a different interpretation of the policy. Gosselink v. ATT, Inc., 272 F.3d 722, 726 (5^th Cir. 2001) (citing Wildbur v. ARCO Chem. Co., 974 F.2d 631, 637-38 (5^th Cir. 1992)). In the case at bar, there has been no allegation regarding whether Provident gave the Policy a uniform interpretation. As to the third question above, the only potential unanticipated cost resulting from a different interpretation than Provident's would be that Provident has to pay benefits to the Plaintiff. The central issue in this case is whether Provident's interpretation of the policy is fair and reasonable.

In Ellis v. Liberty Life Assurance Co. of Boston, supra at *4, the Fifth Circuit concluded that the proper interpretation of "unable to perform all" is that the phrase is synonymous with "not able to perform every." In other words, a claimant must demonstrate that she cannot perform "every single" or "each and every" material and substantial duty of her occupation to obtain long-term disability benefits. Id. at *6. In this case, Provident argues that, even in if Provident were to agree with the Plaintiff's treating physician's restrictions and limitations on her activities, the Plaintiff could still perform all of the "Essential Duties", and at the very least, three of the "Additional Duties" and five of the "Physical Requirements" as provided by her job description. (PLACL 00013-00014, Tab D). The Court agrees that there are many duties on the list of "Essential Duties" and "Additional Duties" that the Plaintiff can perform, even with the restrictions placed upon her by her physicians and the functional capacity evaluator. There are even a few "Physical Requirements" that the Plaintiff can perform. However, in this case, considering the Job Description for a Store Product Specialist, the Court is not persuaded that the Plaintiff is not totally disabled if she can perform at least one of the material duties listed in the Job Description.

The Job Description sets forth duties as well as requirements. As requirements, the physical aspects of the Job Description are those tasks which the Plaintiff must be able to carry out in order to hold the position of a Store Product Specialist. Therefore, it appears to the Court that the "Physical Requirements" should be treated as a bundle of necessary attributes that Store Product Specialist must possess. A simple example will illustrate this point. A member of the New Orleans Saints football team clearly has multiple duties, some of which are sedentary, such as watching films of past games, discussing plays or evaluating the opponent's defense. But there are a bundle of physical requirements which cannot be dissected. For example, the fact that a player (employee) can walk but not run, or stretch but not jump, does not qualify him for a position on the team even if he can do one or more of the sedentary functions. Of course, this is hyperbole, but it illustrates the point at issue in this case.

Accordingly, if the Plaintiff cannot perform all that is physically required of a Store Product Specialist, then it does not matter that she can perform some of the essential or additional duties of the position. It would be inconsistent for the Court to conclude that the Plaintiff can carry out the material and substantial duties of her job though she cannot perform the duties actually required of a Store Product Specialist. As such, so long as there are any Physical Requirements that the Plaintiff cannot execute, it is unnecessary for the Court to reach the issue of whether she can perform any of the material duties of her occupation. This interpretation of the Policy is supported by the termination letter sent to the Plaintiff by Sherwin Williams. The Plaintiff was terminated because she could not perform the physical requirements of her job. It would be unfair and unreasonable to interpret the Policy in such a way that would allow an employee to be fired from her job for a physical inability to execute the required elements of the job, and at the same time, disallow that employee's recovery of long-term disability benefits. For these reasons, the Court finds that Provident incorrectly interpreted the terms of the Policy by determining that the Plaintiff would be ineligible for long-term disability benefits if she could perform at least one of the material duties of her occupation even if she could not perform each and every physical requirement of her position.

2) Abuse of Discretion

The Court now turns to whether the Defendant's interpretation of the Policy, while legally incorrect, constitutes an abuse of discretion. A legally incorrect interpretation of a policy does not in itself demonstrate an abuse of discretion. Lain, 279 F.3d at 346. The Fifth Circuit considers the following four factors to determine whether there has been an abuse of discretion: (1) the plan's internal consistency under the administrator's interpretation; (2) any relevant regulations; (3) the factual background underlying the decision; and (4) any indication of lack of good faith. Wildbur, 974 F.2d at 638. Only the third factor is an issue in the instant case. Regarding the third factor, "[t]o find an absence of abuse of discretion, [this] court must scour the record and pleadings for any legal basis upon which the administrator could have based [its] interpretation." Lain, 279 F.3d at 346 (citing Kennedy v. Electricians Pension Plan, 954 F.2d 1116, 1124 (5^th Cir. 1992).

As explained above, three medical professionals indicated that the Plaintiff is unable to perform all of the physical requirements of her position as a Store Product Specialist. Provident relied upon its in-house physicians' conclusions that the Plaintiff's self-reported symptoms were not supported by any observable or measurable evidence in the record. (PLACL 00082-00087, Tab N; 00141-00144, Tab BB). The Plaintiff takes issue with the fact that Provident's in-house physicians did not base their conclusions on a physical examination of the Plaintiff, but rather on a review of her medical records. The Fifth Circuit has concluded that it is not an abuse of discretion for a Plan Administrator to rely upon the conclusions of physicians who have reviewed a claimant's medical records without physically examining the claimant. Gooden v. Provident Life Accident Ins. Co., 250 F.3d 329, 335 (5^th Cir. 2001); see also Chapman v. The Prudential Life Ins. Co. of America, 267 F.Supp.2d 569, 579 (E.D. La. 2003). Provident "need not give more weight to the opinion of a claimant's treating physician than it gives to the opinions of other physicians or other evidence in the record." Ramos, 2001 WL 1352319 at *4; see also Chapman, 267 F.Supp.2d at 579, citing Black Decker Disability Plan v. Nord, 538 U.S. 822 (2003). Rather, an administrator's denial of benefits must be "based on evidence, even if disputable, that clearly supports the basis for its denial." Vega, 188 F.3d at 299.

While the Court would generally defer to the Provident's supported decisions, taking into consideration any possible conflict of interest, the Court "owes no deference to the administrator's unsupported suspicions." Id. at 302. In this case, there was overwhelming evidence of the Plaintiff's inability to fulfill the physical requirements of her position. Although the administrator can normally rely on doctors who have only reviewed the claimant's medical records, in this case, Provident's in-house doctors did not make any independent diagnosis of the Plaintiff's condition. Instead, the in-house physicians merely took issue with the diagnosis provided by the Plaintiff's treating physicians. Provident's in-house physician Dr. Karen York opined that "[a]s fibromyalgia is non-progressive and non-destructive, one would not anticipate any complications from this chronic pain syndrome." (PLACL 00080, Tab N). Dr. York, however, does not conclude that the Plaintiff does not have a chronic pain syndrome. The same is true for Provident's in-house physician Laird Caruthers. Though Dr. Caruthers suspected that the Plaintiff suffered from depression rather than a condition that would render the Plaintiff physically unable to perform her job, Dr. Caruthers also recommended that "temporarily at least, it would not be unreasonable to agree with" the restrictions and limitations determined by the Plaintiff's treating physicians. (PLACL 00086, Tab N). Dr. Caruthers concluded that "for now, at least, [the Plaintiff's treating physician's] restrictions and limitations are supported." (PLACL 00086, Tab N). Considering the Plaintiff's treating physicians' reports and the functional capacity evaluation, it was unreasonable for Provident to rely so heavily on the conclusions of it's in-house physicians who base their determinations on their own suspicions regarding the treating physicians' reasons for diagnosing the Plaintiff with Fibromyalgia. Accordingly, the Court finds that Provident abused its discretion in denying the Plaintiff's claim.

3) Benefits

It is undisputed that the Plaintiff became eligible for long-term disability benefits beginning October 26, 2003. Provident paid long-term disability benefits to McGill from October 26, 2003 to January 21, 2004. Therefore, Provident terminated the Plaintiff's benefits during the first two-year "own occupation" phase of the Policy. Therefore, the Plaintiff's recovery is limited to the period from January 22, 2004 to October 25, 2005. If the Plaintiff desires to recover benefits beyond this time period, she must file another claim against Provident for long-term benefits under the "any occupation" phase of the Policy. This claim would raise a litany of new issues and definitions.

4) Attorney's Fees

"If an administrator has made a decision denying benefits when the record does not support such a denial, the court may, upon finding an abuse of discretion on the administrator's part, award the amount due on the claim and the attorney's fees." Ellis, 2004 WL 2635692 at *6. In determining whether to award attorneys' fees, a district court should consider the following factors: (1) the degree of the opposing party's fault or bad faith; (2) the ability of the opposing party to satisfy an award of attorneys' fees; (3) whether an award of attorneys' fees would deter other persons acting under similar circumstances; (4) whether the party requesting the fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the respective parties' positions. Lain, 279 F.3d at 437-48 (citing Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5^th Cir. 1980).

In this case, while the Court finds that the Defendant has abused its discretion in denying benefits under the Policy, the Court does not feel that it is appropriate to award attorney's fees to the Plaintiff. This case is not one in which the Court finds the denial particularly abusive or in utter bad faith. The Defendant misinterpreted the terms of the Policy and did not rely upon substantial evidence to support its denial of benefits. However, the Defendant's position was not wholly without merit. Therefore, each party shall bear it's own costs.

III. CONCLUSION

For the aforementioned reasons: (1) The Plaintiff's Motion for Summary Judgment is GRANTED; (2) The Defendant's Motion for Summary Judgment is DENIED. Each party shall bear it's own costs.