Summary
In Petroff, the court concluded that a heightened degree of scrutiny should be applied because of "Dr. Hopkins' selective `pick and choose' approach in reviewing the medical records in the case."
Summary of this case from Kindelan v. Disability Management AlternativesOpinion
Civil Action No. 02-318 Erie.
May 4, 2004
MEMORANDUM OPINION
Presently pending before the Court are cross-motions for summary judgment. For the reasons that follow, we will deny the Defendant's motion and grant the Plaintiff's motion.
I. BACKGROUND
A. Factual Background
Plaintiff, Mercedes Petroff ("Plaintiff") was at all relevant times employed by Verizon North, Inc. ("Verizon") and its predecessor, GTE North, Inc. See Amended Complaint ¶ 5. Plaintiff worked as a telephone operator with Verizon from June 22, 1995 through July 6, 2000, her last day of employment. Def. Exs. 2-3. Her responsibilities included answering and completing local, toll and assist calls using the Operator Services Position Equipment. Def. Ex.
2. The physical requirements of the position included approximately 7 to 8 hours of sitting, standing or walking as desired, repetitive use of hands up to 8 hours, simple occasional grasping, and occasionally carrying up to 2 pounds approximately 3 feet. Def. Ex. 2.
As an employee of Verizon and its predecessor, GTE North, Inc., Plaintiff was covered by the Verizon North, Inc. Long-term Disability Income Plan ("the Plan"), an ERISA plan created by Verizon to permit employees of Verizon to purchase long-term disability insurance. See Amended Complaint [Doc. No. 6] ¶ 4. Rather than fund the benefit obligations of the Plan through its general assets, Verizon chose to satisfy the benefit obligations of the Plan through the purchase of group insurance from Metropolitan Life Insurance Company ("MetLife"). Def. Ex. 1. p. A27. The Plan documents designated the Employee Benefits Committee (the "EBC") as the Plan Administrator, which was a committee of individuals appointed by the Verizon Board of Directors. Def. Ex. 1, p. A28. The EBC delegated its authority to finally determine claims to the Verizon Claims Review Committee (the "CRC"), which was designated as the Claims Administrator for the Plan. Def. Ex. 1, pp. A28, A32.
Pursuant to the terms of the Plan, a participant would receive a monthly benefit if he or she became "totally disabled" for 26 weeks, the "qualifying disability period." Def. Ex. 1, pp. A11-12, A17-18. The Plan defined "total disability" as follows:
Under the LTD Plan, you're considered totally disabled if you are under a doctor's care because of illness or injury and:
• During the first 18 months you are absent from work, you're unable to perform the normal duties of your regular job or an alternative job with similar earnings potential for any employer. MetLife will decide this. Also, you must not be working in any other job for pay or profit.
• After the first 18 months you are absent from work, you're completely unable to perform the duties of any job for pay or profit for which you are, or may become, qualified by training, education or experience.
Def. Ex. 1, p. A18. The Plan further provided:
MetLife is responsible for determining whether your condition satisfies the Plan's definition of total disability. The GTE Employee Benefits Committee may review MetLife's decision, but only to determine whether MetLife followed proper procedures in making its decision. Once you are found to be disabled, you may be asked to submit to a medical examination from time to time.
Def. Ex. 1, p. A18.
1. Initial review by MetLife
Pursuant to the terms of the Plan, MetLife was initially responsible for determining whether an employee met the Plan's definition of total disability and was eligible for benefits. On or about October 13, 2000, the Plaintiff filed a claim for long-term disability benefits claiming disability as of July 7, 2000, due to severe arthritis in both knees and her right ankle; herniated and degenerated discs in her back; and other various medical conditions. Def. Ex. 3. In support of her claim for benefits, the Plaintiff submitted her statement of disability, a personal profile evaluation, office notes of her treating physicians, Attending Physician Statements and Physical Capacities Evaluation reports from her treating physicians, an Independent Medical Examination Report, and various medical reports. The following is a chronological summary of the substance of the medical documentation submitted by the Plaintiff in support of her claim:
Plaintiff was evaluated by James Mraz, M.D., on July 13, 1998 for complaints of low back pain due to a work related injury on September 24, 1987. Def. Ex. 10. Plaintiff reported that she had injured herself working as a barmaid when she lifted a bucket of water to empty it into a sink. She further reported that she was able to perform her current job as an operator with GTE as long as she could move around. Dr. Mraz reviewed prior diagnostic tests from July 1988 and March 1998, and performed a physical examination. His impression was that the Plaintiff suffered from chronic low back pain secondary to degenerative disc disease at multiple levels at L3-4, 4-5, and L5-S1, without evidence of disc herniation. Def. Ex. 10, p. A 224.
In May of 1999, office notes from Peter Wilczanski, M.D., showed that the Plaintiff had complaints of severe stress at work, and chronic pain in both knees and her right ankle. Def. Ex. 11, p. A 199. Dr. Wilczanski found that her anxiety was quite severe. He assessed severe exacerbation of anxiety and depression, and exacerbation of chronic pain due to severe arthritis of both knees and her right ankle.
On December 20, 1999, Plaintiff was seen by David McGee, M.D. Def. Ex. 5. Dr. McGee reviewed lumbar MRI films from 1998 which showed degenerative disc changes and bulging at L3-4 and L4-5, with some early spinal canal narrowing at both levels. On physical examination, Dr. McGee found that the Plaintiff exhibited a slow gait, had fair dorsiflexion and plantar flexion, and fair adduction and abduction at the knee level. Def. Ex. 5, p. A 240. He diagnosed Plaintiff with considerable back and low grade lumbosacral nerve root irritative symptoms related to degenerative disc changes, and early spinal canal narrowing. He recommended an epidural steroid injection and pool therapy. When seen by Dr. McGee on February 20, 2000, the Plaintiff had a slow gait, and on physical examination, be found she exhibited fair strength in both lower extremities. Def. Ex. 5, p. A 239. Dr. McGee's diagnosis was the same as in December, and he noted that the Plaintiff had "wax and waning" chronic back pain, muscle spasm, and low grade lumbosacral nerve root irritative symptoms. Def. Ex. 5, p. A 239. He suggested she continue off work, start her physical therapy program, and follow-up with Dr. Frank Tursi.
On August 29, 2000, Plaintiff underwent arthroscopic spur removal surgery on her right ankle performed by David Babins, M.D. Def. Ex. 16, p. A 170. When seen by Dr. Babins on September 9, 2000 for her post-operative check, he found mild edema around her ankle and foot. She reportedly had been doing her range of motion exercises daily, and thought her ankle had improved after surgery. Dr. Babins recommended that she continue her exercises, begin weight bearing, and follow-up in four weeks.
Plaintiff returned to Dr. Babins on September 28, 2000. She reported some relief from surgery, but still experienced pain on a daily basis. Def. Ex. 16, p. A 169. Dr. Babins found that her foot was mildly edematous, slightly tender to palpation, and she had decreased range of motion. He recommended she continue her stretching activities and exercises.
On October 2, 2000 the Plaintiff was seen by John Euliano, M.D., and reported discomfort from her recent ankle surgery. Her ankle ached, she was reluctant to bear weight, and she still used two crutches due to her discomfort. Def. Ex. 16, P. A 170. On physical examination, Dr. Euliano observed the arthroscopy portals to be well-healed, and she exhibited good early range of motion. Plaintiff also reported significant problems with both of her knees, in that her patella dislocated spontaneously bilaterally, which caused a severe amount of discomfort. Def. Ex. 16, p. A 170.
Plaintiff returned to Dr. Wilczanski on October 10, 2000 complaining of pain and swelling in her ankle following her ankle surgery, arthritis in her knees, and problems related to her anxiety disorder. Def. Ex. 11, p. A 196. On physical examination, Dr. Wilczanski found edema over her right ankle.
On October 18, 2000, Dr. McGee completed an Attending Physician Statement and Physical Capacities Evaluation form. Def. Ex. 6. He referenced his office notes of December 20, 1999 and February 20, 2000, but did not complete the Physical Capacities Evaluation form since he had not seen the Plaintiff since February 19, 2000, and referred to her treating physician for her current status.
On October 19, 2000. Frank Tursi, D.O. completed an Attending Physician Statement and Physical Capabilities Evaluation form. Def. Ex. 4. Dr. Tursi diagnosed the Plaintiff with osteoarthritis of both knees and her right ankle, hypertension, hyperlipidemia, degenerative disc disease, hypothyroidism, obesity and anxiety. Def. Ex. 4. p. A 226. He opined that she should cease her occupation as an operator, and engage in only limited stress situations and interpersonal relations. He found that she could only intermittently sit, stand and/or walk, was unable to perform her job duties due to recurrent, severe pain, and could only work a total of 2 hours per day. He concluded that she was unable to return to work since she was still post-operative for foot surgery, and had a past history of a work related injury and a fall at a grocery store. Def. Ex. 4, p. A 242. On the Physical Capacities Evaluation form, Dr. Tursi opined that the Plaintiff could only sit for 2 hours, stand for 1 hour, and walk for 1 hour in an 8-hour workday. Def. Ex. 4, p. 243. He found that she could occasionally lift up to 50 pounds, and carry up to 20 pounds, and could occasionally bend or squat. He further found that she was able to use her hands for simple grasping and fine manipulation, but could not engage in repetitive pushing and pulling activity.
On October 23, 2000, Dr. Babins indicated that the Plaintiff was to return to him for follow-up on January 10, 2001, and was to remain off work until that time. Def. Ex. 7. Also on October 23, 2000. Dr. Wilczanski completed an Attending Physician Statement. Def. Ex. 9. Basing his opinion of the Plaintiff's physical capabilities on her physical therapy treatment of February 2000. Dr. Wilczanski found that the Plaintiff could intermittently sit, stand and walk, could frequently lift/carry up to 10 pounds, and could perform repetitive hand movements. Under the prognosis section of the form, he advised that the Plaintiff should not to return to work, and opined on the need for a right ankle fusion in the future.
Dr. Euliano completed an Attending Physician Statement and Physical Capacities Evaluation form on October 27, 2000. Def. Ex. 8. He diagnosed severe post traumatic arthritis of the right ankle, and post traumatic arthritis of the knees, bilaterally. He opined that she could sit intermittently for 8 hours, stand intermittently for 1 hour, but could not walk. He found that she could not lift or carry, but could use her hands for repetitive actions. He concluded that she could work "0" hours per day, because severe pain in her ankle and knees precluded employment. Def. Ex. 8. p. A 229.
As reflected in Dr. Euliano's office notes of October 30, 2000, the Plaintiff reported swelling in her knee and that it would pop out of place when she walked. Def. Ex. 16, p. A 169. She also reported increased difficulty in ambulating. On physical examination, Dr. Euliano noted there was slight lateral instability about the left patella. His impression was that of post traumatic arthritis of the left knee with lateral subluxation of the patella. He prescribed a patellar sparing neoprene sleeve.
Pursuant to the request of the Pennsylvania Bureau of Disability Determination, the Plaintiff underwent an independent medical examination conducted on December 21, 2000, by Allan C. Johnson, Jr., D.O. Def. Ex. 15. Plaintiff complained of back pain, arthritis, leg cramps, chest pains, stomach reflux and headaches. On physical examination, Dr. Johnson found that the Plaintiff had decreased dorsiflexion of the right ankle, with medial joint tenderness to palpation. She was unable to lay supine with her leg extended and was unable to bring her knees to her chest due to back pain. She exhibited tenderness in the midline and the left lumbosacral area. Straight leg raising was approximately 20 degrees bilaterally with back and left leg pain. Dr. Johnson could not adequately assess the Plaintiff's range of motion in regard to rotation and side bending due to her inability to sit without leaning on her left hand She had approximately 15 to 20 degrees of flexion in the thoracic lumbar spine. He found that the Plaintiff exhibited tenderness of the cervical spine with rotation being approximately 45 degrees bilaterally, flexion approximately 45 degrees, extension 15 degrees, and side bending approximately 20 degrees bilaterally.
Dr. Johnson also found crepitus in both knees on range of motion testing. He was unable to adequately assess the Plaintiff's true strength level, since she complained of pain with testing of the lower extremity strength in all muscle groups. Her gait was abnormal due to using a cane. Dr. Johnson diagnosed the Plaintiff with chronic back pain with herniated nucleus pulposus L4-5, L5-S1 with radiculopathy, osteoarthritis of the knees, right ankle and back, non-cardiac chest pain, abdominal pain, gastroesophageal reflux disease, hypothyrodism, and anxiety. Dr. Johnson concluded that based upon the Plaintiff's physical examination, as well as her history, she was incapable of any significant employment due to her multiple physical restrictions. Def. Ex. 15. p. 179.
Plaintiff returned to Dr. Babins on January 10, 2001 complaining of pain in her right ankle and bilateral knee pain. Def. Ex. 16, p. A 168. On physical examination, Dr. Babins observed limited dorsiflexion of her ankle, and moderate knee crepitance. X-rays taken that same date of her ankle and knees showed significant osteoarthritis of the right ankle, and mild to moderate degrees of degeneration of both knees. Def. Ex. 16, p. A 168 (emphasis added). Dr. Babins concluded that the Plaintiff was "disabled on a long-term basis" and he did not "see this changing any time soon." Her further opined that at some point she would require an ankle fusion.
Finally, on January 15, 2001, the Plaintiff was seen by Dr. Euliano and presented with complaints of pain in both knees and her right ankle. Def. Ex. 16, p. A 168. At that time, she used a cane to walk, as her difficulties with her knee continued. She reported an inability to wear her leg brace since it was improperly fit. Dr. Euliano reviewed the x-rays of her knees and right ankle, and concluded that her right ankle x-ray reflected a severe arthritic condition, and that her knee x-rays showed narrowing both medially and laterally, and there was a large osteophytic spur laterally on her left knee. Def. Ex. 16, p. A 168 (emphasis added). Dr. Euliano ordered an MRI to rule out meniscal tears because of the instability of her left knee, although he felt it was caused by arthritic changes.
As part of MetLife's initial review, it submitted the Plaintiff's claim and the supporting medical information set forth above for an Independent Physicians Consultant Review ("IPC"). Def. Ex. 17. Amy Hopkins, M.D., M.P.H, Ph.D., the reviewing physician, analyzed the medical evidence submitted by the Plaintiff, and concluded that the objective physical findings were not consistent with the Plaintiff's self-reported limitations. Specifically, Dr. Hopkins noted:
[Plaintiff] apparently has ankle and knee arthritis. No actual radiological studies were provided in the record. She apparently had two prior right ankle surgeries. No prior operative reports were provided. There was no indication in this record of any objective worsening of the ankle recently. She has continued right ankle pain and limitation of dorsiflexion. She apparently has mild to moderate knee arthritis per Dr. Babins. Other than a slight lateral instability of the left knee and crepitance, no significant physical findings have been documented on knee exam. No physical therapy has been documented, which is an important part of the treatment regiment for anyone with symptomatic knee arthritis. She has not been compliant [with] a knee brace. It is not clear why she is using a cane to ambulate. On back exam, Dr. McGee found only trace weakness of the left lateral toe extensors. [Plaintiff] was not compliant [with] recommended [treatment] of ESI's and pool therapy per Dr. McGee's last note. The only other back exam documented in this record was by Dr. Johnson, who was not a treating physician. He found reflex abnormalities, (+) SLR's, and TTP. He did not document any validity testing, such as Waddell signs. The other physicians in this record documented her complaints of back pain, but did not document any exams or treatment, so [Plaintiff] does not appear to be under [treatment] for this complaint. She also had a host of other somatic complaints which were not specifically addressed in the medical record. . . .
Def. Ex. 17.
The IPC was forwarded to the Plaintiff's physicians for review and comment. Dr. Euliano responded to Dr. Hopkins's IPC as follows:
She has severe post traumatic arthritis of her knees and right ankle and would benefit from total knee replacements and an ankle fusion, but this is precluded by her young age and probably would not allow her to work. X-rays document disability.
Def. Ex. 18. Dr. Wilczanski responded as follows:
This appears to be based on records review only likely including incomplete data. Obviously this type of review does not reflect reality of [patient's] situation. Although I cannot comment on her orthopedics condition, I can say from my end that the [patient] suffers from moderately severe anxiety and major depression requiring ongoing medical therapy providing some improvement but not to the point that [patient] could handle any stress ([e]specially one of her own occupation). I think independent physician evaluation of the patient (not just records) should take place.
Def. Ex. 19 p. A 136.
Based upon the medical information submitted, the IPC report prepared by Dr. Hopkins, and the comments of the Plaintiff's physicians on the IPC report, MetLife found that the Plaintiff did not qualify for disability benefits under the Plan. Def. Ex. 20. In its March 1, 2001 denial letter, MetLife stated the following:
The medical reports and records indicate a diagnosis of arthritis of both knees and right ankle and status post arthroscopic surgery of knees and right ankle. You experienced symptoms of intermittent back and leg pain. Aquatic/Pool Therapy treatment was recommended. We do not have any record that you underwent this form of treatment.
Your file was referred for an Independent Physicians Consultant Review of all of the medical documentation submitted. This report, dated 2/9/01 was referred to Drs. Euliano and Wilczanski for review and response. Office notes dated 5/17/99 from Dr. Wilczanski documented a severe exacerbation of anxiety and depression, noting work-related stress. Anti-depressant medication was prescribed and counseling was recommended. We do not have any record that you have undergone counseling. Office notes dated 10/200[0] from Dr. Euliano stated you were recovering well from your arthroscopy and you had good ankle range of motion. A Physical Capacity Evaluation form dated 10/27/00 from Dr. Euliano reported your ability to sit for 8 hours and stand for 1 hr. We have not received medical evidence of any objective worsening of the ankle recently.
Other than a slight bilateral instability of the left knee and crepitance, no significant physical findings have been documented on knee exam. There is no documentation of physical therapy treatment. It is also noted that you were non-compliant in wearing a knee brace. Back exam revealed only trace weakness of the left lateral toe extensors and non-compliance of the recommended treatment of ESI's and pool therapy. No documentation of validity testing. The objective physical findings were determined to be inconsistent with self-reported limitation. The medical evidence provided does not support an impairment that would preclude the ability to perform a sedentary occupation.
Def. Ex. 20. MetLife concluded that the Plaintiff did not meet the Plan definition of total disability and denied her claim. MetLife informed the Plaintiff of her right to request an additional review of her claim, including the right to submit additional documentation in support of her claim. Def. Ex. 20.
2. Second review by MetLife
The Plan provided that if MetLife denied the claim, the employee was to contact the GTE Benefits Center and/or MetLife in order to attempt to resolve any differences. Def. Ex. 1. p. A31. Accordingly, the Plaintiff contacted the GTE Benefits Center and requested a "full review" of MetLife's adverse decision, and supplemented the record with the following additional information: a copy of a letter from the Social Security Administration finding that the Plaintiff met the Act's definition of disability as of July 10, 2000, Def. Ex. 21; an x-ray report of the lumbar spine dated August 28, 1995, which showed that the Plaintiff's vertebrae were essentially well formed, and free of any demonstrated compression deformity, recent or old. Def. Ex. B. p. A 85.1. Minor lipping changes were seen on some of the lower lumbar segments, and there was notable reduction of disc space at L4-L5 levels, but other disc heights appeared well maintained. X-rays of March 5, 1998 showed mild narrowing of the intervertebral disc spaces, and moderately severe narrowing at the L4-5 and L5-SI level. Def. Ex. 22. An MRI of the lumbar spine dated March 5, 1998 revealed no definite posterior lumbar disc protrusion, and no spinal canal stenosis was identified at the L3-4 level secondary to posterior disc bulging and marginal spurring. There was however, moderately severe spinal canal stenosis demonstrated at the L4-5 level secondary to posterior marginal spurring and central broad based disc bulging. Def. Ex. 22.
On May 10, 2001, MetLife again rejected the Plaintiff's claim, stating:
Please understand that we do not dispute your diagnosis or that you may have discomfort and pain with your condition. However, many individuals experience a variety of discomforts, but these periodic discomforts do not render an individual unable to be gainfully employed.
You have multiple subjective complaints of pain[,] however[,] the objective evidence to support such pain complaints is mild. The severity of your symptoms does not correlate with your mild objective findings.
Def. Ex. 22.
3. Verizon Benefits Center review
Pursuant to the terms of the Plan, the Plaintiff appealed MetLife's denial of her claim to the Benefits Center requesting that the Plan Administrator review MetLife's decision on July 18, 2001. Def. Ex. 23. As referenced in correspondence from MetLife to the GTE Benefits Center dated August 31, 2001, the Plaintiff submitted the following additional information in connection with her appeal: records from CTI Physical Therapy from December 27, 1999 to March 14, 2000. Def. Ex. B, pp. A 85.4-A 85.13. Therapy notes dated December 27, 1999 reflected that the Plaintiff complained of low back pain. Later notes indicated that the Plaintiff failed to return for further therapy due to her work schedule. Pool therapy notes reflected that the Plaintiff had no difficulty performing pool exercises, and the discharge summary stated that she reportedly wanted to continue her pool exercises at the local YMCA. Plaintiff also submitted a delivery ticket for knee elastic dated February 15, 2001, Def. Ex. B, p. 42.1; an invoice order dated October 12, 2000 for a knee brace, Def. Ex. 25; and notes from Dr. Euliano dated January 26, 2000, January 15, 2001 and March 9, 2001 for a YMCA membership. Def. Ex. 25.
MetLife reviewed and summarized the above information, and informed Verizon that the medical documentation submitted by the Plaintiff on appeal did not contain sufficient supportive medical evidence that substantiated an impairment or impairments that would preclude the ability to return to sedentary activity or employment. Def. Ex. 25. MetLife therefore recommended that Verizon deny the Plaintiff's claim.
On September 12, 2001, Verizon's GTE Benefits Center denied the Plaintiff's claim. Def. Ex. 26. Verizon summarized MetLife's review of the medical information and conclusions with respect to its previous denials dated March 1, 2001 and May 10, 2001. Def. Ex. 26. With respect to the current appeal, Verizon stated:
In a letter to Verizon's GTE Benefits Center Review Unit, you requested additional consideration of your claim for LTD benefits. MetLife, again reviewed your claim in its entirety. . . .
. . .
MetLife states the physical therapy note dated December 23, 1999 references a complaint of low back pain as a result of an on the job injury that occurred on September 24, 1987. According to the notes, you never returned beyond December 23, 1999 for further physical therapy treatment due to your work schedule. The February 21, 22, 2000 pool therapy notes reflect no difficulty in performing pool exercises. The pool exercise discharge summary indicated that you wanted to continue pool exercises at the local YMCA. The medical documentation submitted does not provide sufficient medical evidence that substantiates an impairment that would binder the ability to return to sedentary employment. Therefore, MetLife's recommendation to deny your claim is upheld.
Def. Ex. 26. Verizon also informed the Plaintiff of her right to request an additional review of her claim by the Verizon CRC.
4. CRC review
Plaintiff's final stop on the administrative review trail was to request a full review by the Verizon CRC of the decision to deny her claim for long-term disability benefits. Def. Ex. 1, p. A31. Plaintiff requested such review on November 9, 2001, but did not submit any additional medical information in connection with her request. Def. Ex. 27. On January 22, 2002, the Plaintiff's counsel provided an update on her condition. Def. Ex. 28. This letter stated that the Plaintiff had surgery to remove bone spurs from her ankle in late 2001, followed by several surgeries for subsequent infections. Id. However, no medical documentation was submitted in support of this statement.
On February 14, 2002, the Verizon CRC informed the Plaintiff's counsel that her claim was denied. Def. Ex. 29. The CRC's denial letter chronicled MetLife's previous findings and recommendations, and stated the following:
In a letter to the Verizon Claims Review Committee dated November 9, 2001, you requested additional consideration of Ms. Petroff's claim for LTD benefits. No new information was submitted. MetLife again reviewed all the information in Ms. Petroff's file.
MetLife states, according to Ms. Petroff's job description, she sits for 7-8 hours a day with occasional standing and walking as desired. On October 27, 2000. Dr. Buhano [sic] medicated that Ms. Petroff had an 8-hour sitting capacity while standing up to one hour. Dr. Buliano's [sic] diagnosis of post-traumatic arthritis had no effect on Ms. Petroff's sedentary abilities. Based on the review of Ms. Petroff's file. MetLife recommended continued denial of LTD benefits
Def. Ex. 29. The CRC determined that the information available did not substantiate the Plaintiff's appeal for LTD benefits, and advised her that all decisions of the Committee were final.
B. Procedural background
Plaintiff initially instituted this action in the Court of Common Pleas of Erie County. Pennsylvania to recover benefits due under the Plan against Verizon and MetLife. Defendants removed the action to this Court arguing that the Plaintiff's claims arose under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et. seq. and completely preempted her state law claims. Plaintiff subsequently filed an Amended Complaint and added the Plan as a Defendant, and asserted a civil enforcement action under 29 U.S.C. § 1132(a)(1)(B), and a claim for bad faith in violation of 42 Pa.C.S.A. § 8371. On June 10, 2003, we found that only the Plan was a proper party, and dismissed Verizon and MetLife from the action. We also dismissed the Plaintiff's state law bad faith claim on the basis that it was preempted by ERISA. The parties have filed cross motions for summary judgment, and this matter is now hope for our determination.
II. STANDARD OF REVIEW
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). In order to withstand a motion for summary judgment, the non-moving party must "make a showing sufficient to establish the existence of [each] element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In evaluating whether the non-moving party has established each necessary element, the Court must grant all reasonable inferences from the evidence to the non-moving party. Knabe v. Boury Corp., 114 F.3d 407, 410, n. 4 (3d Cir. 1997) (citing Matsuchita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986)). "Where the record taken as a whole could not lead a reasonable trier of fact to find for the non-moving party, there is no `genuine issue for trial.'" Id. (quoting Matsushita, 475 U.S. at 587).III. DISCUSSION
A. Applicable Standard of Review under ERISA
A reviewing court ordinarily applies a de novo standard of review to a plan administrator's denial of ERISA benefits.Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989);Abnathya v. Hoffmann-LaRoche, Inc., 2 F.3d 40, 44-45 (3rd Cir. 1993). However, where the plan grants the administrator discretionary authority to construe the terms of the plan, or to determine eligibility for benefits, the court may reverse a denial of benefits only if the administrator's decision was "arbitrary and capricious." Firestone, 489 U.S. at 115; Orvosh v. Program of Group Ins. for Salaried Employees of Volkswagen of America, 222 F.3d 123, 128-29 (3rd Cir. 2000). This deferential review applies not only to decisions concerning interpretations of the plan itself, but also the administrator's fact-based determinations. Luby v. Teamsters Health, Welfare, and Pension Trust Funds, 944 F.2d 1176, 1187 (3rd Cir. 1991); see also Mitchell, 113 F.3d at 438 (where fact-based determinations concerned the administration, interpretation and application of an LTD plan and the administrator's decisions on those questions were to be "final and binding," the plan clearly provided that such determinations were to be afforded deference). Ordinarily, under this deferential standard, a "district court may overturn a decision of the Plan administrator only if it is without reason, unsupported by the evidence or erroneous as a matter of law." Abnathya, 2 F.3d at 45 (internal quotation omitted); Mitchell, 113 F.3d at 439. This scope of review is narrow and the court is not free to substitute its own judgment for that of the administrator in determining eligibility for plan benefits. Id.
Here, the Plan document designated the EBC as the Plan Administrator. Def. Ex. 1, p. A28. The EBC delegated its authority to determine claims to the CRC, which was designated as the Claims Administrator for the Plan. Def. Ex. 1, pp. A28, A32. The Plan specifically provided:
About the Claims Administrator and Its Authority to Review Claims
The Claims Administrator has the authority to make final determinations regarding claims for benefits under the Plans. The Employee Benefits Committee (EBC) has delegated its authority to finally determine claims to the Claims Review Committee (CRC)[.]
. . .
The Claims Administrator is authorized to determine eligibility for benefits and construe the terms of the Plans in its sole discretion, and all decisions by the Claims Administrator are final and binding on all parties. The CRC is the Claims Administrator for the Plans.
Def. Ex. 1, p. A32. The Plan language expressly vests Verizon, as the Plan Administrator, with discretionary authority to make eligibility determinations and to interpret the Plan. Therefore, under Firestone, the Plan Administrator's decision to deny long-term disability benefits must be reviewed under an "arbitrary and capricious" standard. See Orvosh, 222 F.3d at 129 (arbitrary and capricious standard applied where plan vested administrator with authority to interpret the plan and make final decisions with respect to eligibility and payment of benefits). Plaintiff conceded as much at oral argument. The parties do disagree however, as to whether the "heightened arbitrary and capricious" standard adopted by the Third Circuit in Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3rd Cir. 2000) applies.
1. Heightened standard
In Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3rd Cir. 2000), the Third Circuit held that when an insurance company funds and administers a plan, it has a conflict of interest, and courts must apply a heightened form of the arbitrary and capricious standard of review. Pinto, 214 F.3d at 387. Here, the Plaintiff argues that because MetLife was involved in the decision-making process and was ultimately obligated to pay the benefits upon approval of a claim, an inherent conflict existed which warrants the application of a heightened standard of review. The Plan counters that a heightened standard is not appropriate. Specifically, it contends that any potential conflict occasioned by MetLife's participation in reviewing claimants' eligibility for benefits and at the same time serving as the funding source for the payment of claims is sufficiently dissipated by virtue of vesting sole discretionary authority in the CRC to make the final determination as to eligibility.
We agree with the Plaintiff, and find that a Pinto-type conflict is present here. It is undisputed that rather than fund the benefit obligations of the Plan through its general assets, Verizon chose to satisfy the benefit obligations of the Plan through the purchase of group insurance from MetLife. Def. Ex. 1, p. A 27. While the Plan document provided that the CRC had the final authority to construe the terms of the Plan and determine eligibility for benefits, the CRC delegated the initial eligibility determination to MetLife. In fact, a careful review of the administrative record here reveals carte blanche reliance on MetLife's recommendations at every stage of the review process. For instance, the CRC submitted the Plaintiff's appeal to MetLife and requested that MetLife review the claim and make a recommendation to the CRC. Def. Ex. B, pp. A 75, A 83. The CRC's meeting minutes state that MetLife reviewed the Plaintiff's claim and recommended continued denial of her claim. Def. Ex. B, pp. A 308-311. The CRC denied the Plaintiff's claim for benefits based on MetLife's recommendation. Def. Ex. 29. The record here reflects that the CRC functioned as a rubber stamp for MetLife's conclusions. Because MetLife had a financial interest in the benefits determination, was intimately involved in a substantive way in the final benefits determination, and because the record reflects a complete deferral to MetLife by the CRC, the same concerns which triggered a heightened standard of review inPinto apply here.
2. Degree of scrutiny Pinto teaches that once a court has found that a conflict of interest exists, we are to modify the arbitrary and capricious standard using a "sliding scale method, intensifying the degree of scrutiny to match the degree of conflict." Pinto, 214 F.3d at 379. This directive was recently reiterated by the Third Circuit in Stratton v. E.I. Dupont de Nemours Co., 363 F.3d 250, 254 (3rd Cir. 2004). The following factors are relevant in determining the severity of the conflict in order to formulate the appropriate level of scrutiny: (1) the sophistication of the parties; (2) the information accessible to the parties; (3) the exact financial arrangement between the insurer and the company; and (4) the stability of the employing company. Stratton, 363 F.3d at 254; Pinto, 214 F.3d at 379.
With respect to the first factor, we note that the Third Circuit in Stratton assumed that there was a "sophistication imbalance" between the parties since there was no reason why the plaintiff would have had ERISA or claims experience, and the defendant, which was a large, successful company with many employees, had numerous such claims. Stratton, 363 F.3d at 254. The court found that it followed that "this factor weigh[ed] in favor of heightening the standard." Id. We too assume that the Plaintiff here was not sophisticated in terms of ERISA, and that this factor supports increasing the degree of scrutiny.
Plaintiff has alleged no "information imbalance" that warrants increasing the degree of scrutiny. The record reflects that MetLife and/or Verizon adequately informed the Plaintiff of the process of her appeals. This factor therefore does not warrant a further increase in the degree of scrutiny. Id. (no information imbalance inferred since defendant kept plaintiff apprised of information at its disposal and reasons for its decision).
By way of highlighting the conflict here, it is useful to contrast the facts in this case relative to the third factor (i.e., the financial arrangement between the insurer and the company), with those in Stratton. The employer in Stratton funded the plan on a case-by-case basis instead of on a fixed price basis that had been actuarially determined. The court reasoned that theoretically, the employer may have had some incentive to deny coverage on individual requests, assuming it had no interest in avoiding the loss of employee morale and higher wage demands that could result from denials of benefits. The court found that "the fact that [the employer] structured the program by using [the insurer] to hear the claim initially provide[d] the safeguard of neutral evaluation." Stratton, 363 F.3d at 255 (emphasis added). The Third Circuit concluded that this factor counseled for only a "slightly heightened standard." Id.
Here, unlike the insurer in Stratton, MetLife had a direct financial interest in the resolution of each claim. Consequently, MetLife was not in a position to provide a "neutral evaluation" in this case. This factor weighs in favor of more than a "slightly heightened standard" of review. See Lasser v. Reliance Standard Life Ins. Co., 344 F.3d 381, 385 (3rd Cir. 2003) ("[I]f the same entity that determines whether a claimant is disabled must also pay for disability benefits, that entity has a financial incentive to find him or her not disabled.").
The fourth factor is irrelevant to the instant case, in that there is no evidence in the record concerning the financial stability of Verizon, i.e., whether the company was "breaking up, or laying off a significant percentage of [its] employees, or moving all [its] operations," Pinto, 214 F.3d at 392, which would undermine the "presumed desire to maintain employee satisfaction."
In applying a heightened arbitrary and capricious standard of review, "we are deferential, but not absolutely deferential."Pinto, 214 F.3d at 393. The greater the evidence of conflict on the part of the administrator, the less deferential our review must be. Id., (citing Vega v. Nat'l Life Ins. Serv., Inc., 188 F.3d 287, 297 (5th Cir. 1999)). In Pinto, the Third Circuit suggested that the presence of certain procedural anomalies could cause a court to examine the Plan's decision at the far end of the arbitrary and capricious range. Pinto, 214 F.3d at 394. Attempting to determine where on Pinto's sliding scale to "ratchet up" the review is, it would seem, more art than science. After careful consideration of all of the factors, we are of the opinion that a moderately heightened arbitrary and capricious standard is appropriate.
Our decision not to substantially heighten the standard of review is based upon the fact that the Plan documents, at least on their face, invest the CRC with final decision-making authority.
Here, we find that the Plan either ignored medical evidence or excerpted portions of it out of context. See Ferguson v. Hartford Life and Accident Ins. Co., 268 F. Supp.2d 463, 468 (E.D.Pa. 2003) (selectivity of what medical evidence insurer accepted and what it rejected invited closer scrutiny of the decision-making process); McGuigan v. Reliance Standard Life Ins. Co., 2003 WL 22283831 at *6 (E.D.Pa. 2003) (substantially heightened standard of review applied based on insurers' self-serving, selective, and incomplete review of the plaintiff's medical records).
In support of its decision that the Plaintiff was not precluded from performing her sedentary job, the Plan reads Dr. Euliano's Attending Physician Statement and Physical Capacities Evaluation form as supporting the proposition that the Plaintiff could sit for 8 hours. This characterization, however, is inaccurate. Dr. Euliano did not opine that the Plaintiff could sit continuously for 8 hours; to the contrary, he stated that she could sit only intermittently for 8 hours. More importantly, the Plan ignored Dr. Euliano's ultimate opinion that the Plaintiff could not work at all due to severe pain in her ankles and knees, which required the use of narcotic medication. Dr. Euliano advised her that she should not return to work since her "severe pain preclud[ed] gainful employment." Def. Ex. 8.Pinto, 214 F.3d at 393-94 (administrator used some of physician's specific limitations to explain rejection of benefits, but did not accept his conclusion that plaintiff was totally disabled).
The Plan also relied on portions of Dr. Euliano's office notes relative to the Plaintiff's progress following her ankle surgery, and implicitly suggested that her ankle surgery was curative. In its initial denial letter, MetLife observed that Dr. Euliano "stated you were recovering well from your arthroscopy and had good ankle range of motion." Def. Ex. 20. Dr. Euliano's notes reflected however, that the Plaintiff had a good "early" range of motion, and that her ankle still ached, she was reluctant to bear weight, and used crutches due to her discomfort. Def. Ex. 16, p. A 170. The Plan found that the Plaintiff was non-compliant in wearing her knee brace. A more careful review of the administrative record would have revealed however, that far from being non-compliant, the Plaintiff attempted on two occasions to secure a properly fitting knee brace for her leg. Def. Ex. B, p. A 55.1; Def. Ex. 16, p. A 168. Ultimately, a brace was custom made for her. Def. Ex. B, pp. A 42.1, 55.1.
Further support for a heightened degree of scrutiny is found in Dr. Hopkins' selective "pick and choose" approach in reviewing the medical records in the case. Dr. Hopkins completely mischaracterizes Dr. Babins' opinion as to the Plaintiff's ability to return to work. She states in her correspondence of February 9, 2001: "[Dr. Babins] wrote an APS 10/23/00 which stated that [Plaintiff] was to remain OOW through 1/10/01." Def. Ex. 17. A fair reading of the Attending Physician Statement suggests that Dr. Babins did not want the Plaintiff to return to work between October 23, 2000 and the date of her next visit, January 10, 2001, at which time a further evaluation would be made concerning her disability status. Def. Ex. 7. Tellingly absent from Dr. Hopkins' report is a reference to Dr. Babins' complete office note of January 10, 2001 (the date Dr. Hopkins indicated that Dr. Babins released her to return to work), wherein Dr. Babins unqualifiedly stated:
. . . She is disabled on a long-term basis and I do not see this changing any time soon. She may at some point require an ankle fusion, although given her bad knee[,] this certainly will be difficult overall.
Def. Ex. 16, p. A 168 (emphasis added). Dr. Hopkins also found that it was "not clear why she . . . us[ed] a cane to ambulate." Def. Ex. 17. Once again, the medical records provide the answer. Dr. Euliano's office notes reflected that she used a cane due to continuing difficulties with her knees, Def. Ex. 16, p. A 168, and Dr. Johnson stated that the Plaintiff was unable to walk without a cane due to severe pain in her back and extremities. Def. Ex. B, p. A 174.
Finally, there is no explanation contained in the CRC's decision as to why it rejected the Plaintiff's treating physicians' opinions that she was disabled. Dr. Tursi opined that the Plaintiff could only intermittently sit, stand and/or walk, was unable to perform her job duties due to recurrent, severe pain, and could only work for a total of 2 hours per day. Dr. Johnson, the only independent physician who physically examined the Plaintiff, opined that she was totally disabled. Dr. Hopkins' opinions, of course, were based on a paper review of the Plaintiff's medical records, while the treating physicians' and Dr. Johnson's opinions were based upon their examination of the Plaintiff and forming professional opinions about what they observed. Cohen v. Standard Ins. Co., 155 F. Supp.2d 346, 352 (E.D.Pa. 2001) (noting that defendant's physician reviewed "cold test results" of plaintiff's medical file while the plaintiff's treating physicians "form[ed] professional opinions based upon what they personally observed.").
While we recognize that the Social Security Administration's determination of disability is not binding on the Plan, see Dorsey v. Provident Life and Accident Ins. Co., 167 F. Supp.2d 846, 856 n. 11 (E.D.Pa. 2001), it may be considered as a factor in determining whether the decision was arbitrary and capricious. Id., see also Rosen v. Provident Life and Accident Ins. Co., 2003 WL 22254805 at *10 (E.D. Pa. 2003); Wilkerson v. Reliance Standard Life Ins. Co., 2001 WL 484126 at *1 (E.D.Pa. 2001).
We now direct our attention to whether the Plan's decision to deny benefits was arbitrary and capricious under the moderately heightened standard.
B. Review of Verizon's claim determination
The issue before the CRC was whether the Plaintiff was "unable to perform the normal duties of [her] regular job or an alternate job with similar earnings potential for any employer." Def. Ex. 1, p. A18. The CRC denied the Plaintiff's claim based on MetLife's recommendation at each stage of the review that the medical documentation provided did not substantiate any objective medical findings that the Plaintiff was totally disabled and unable to perform her job duties. Def Exs. 20, 22, 25, 26. In reviewing the Plan's decision to deny benefits to the Plaintiff in this case under a moderately heightened review, we are of the opinion that the Plan's decision was arbitrary and capricious for the reasons that follow.
First, as previously discussed, the Plan's decision was based on a selective review of the medical evidence. See Cohen, 155 F. Supp.2d at 353-54 (stating that evidence demonstrating the defendant's conflict also demonstrates an arbitrary and capricious denial); Sanderson v. Continental Casualty Corp., 279 F. Supp.2d 466, 475-76 (D.Del.) (same) recons. denied, 2003 WL 22078075 (D.Del. 2003).
Second, the Plan's conclusion that there were no objective physical findings to support the Plaintiff's limitations is inaccurate. Plaintiff's claim is supported by objective evidence, such as x-ray reports, and her physicians' observations and examinations. See Holzschuh v. Unum Life Ins. Co. of America, 2002 WL 1609983 at *8 (E.D.Pa. 2002) (insurer's conclusion that no objective finding precluded sedentary employment was without basis since claim was supported by objective evidence such as MRI, CT and x-ray reports, and plaintiff's doctors' observations). With respect to the Plaintiff's back problems, Dr. McGee found that, based upon his physical examination of the Plaintiff and a review of her MRI films, she suffered from degenerative disc changes and bulging at the L3-4 and L4-5 level, with some early spinal canal narrowing at both levels. Def. Ex. 5. On physical examination, she exhibited a slow gait, fair dorsiflexion and plantar flexion, and fair adduction and abduction at the knee level. He diagnosed her with considerable back and low grade lumbosacral nerve root irritative symptoms related to degenerative disc changes, and early spinal canal narrowing. In February 2000, the Plaintiff had "wax and waning" chronic back pain, muscle spasm, and low grade lumbosacral nerve root irritative symptoms. Def. Ex. 5. Dr. Johnson found that the Plaintiff was unable to lay supine with her leg extended and was unable to bring her knees to her chest due to back pain. Def. Ex. 15. She exhibited tenderness in the midline and the left lumbosacral area. She had approximately 15 to 20 degrees of flexion in the thoracic lumbar spine. Dr. Johnson found tenderness of the cervical spine with rotation being approximately 45 degrees bilaterally, flexion approximately 45 degrees, extension 15 degrees, and side bending approximately 20 degrees bilaterally.
There was also ample objective medical evidence to support the severity of the Plaintiff's ankle and knee problems. Plaintiff underwent arthroscopic surgery for spur removal of her right ankle in August 2000. Def. Exs. 7, 16. Following surgery, she had a mild amount of edema around her ankle and foot. In September 2000, her foot was mildly edematous, slightly tender to palpation, and she exhibited a decreased range of motion. In October 2000, Dr. Wilczanski observed edema over the Plaintiff's right ankle. Def. Ex. 11. Dr. Euliano noted slight lateral instability about the left patella. Def. Ex. 8. In December 2000, Dr. Johnson found that the Plaintiff had decreased dorsiflexion of the right ankle, with medial joint tenderness to palpation. Def. Ex. 15. He found crepitus in both knees on range of motion testing. On January 10, 2001, the Plaintiff exhibited limited dorsiflexion of her ankle, and moderate knee crepitance. Def. Ex. 16. X-rays taken that same date showed significant osteoarthritis of the right ankle, and mild to moderate degrees of degeneration of both knees. Dr. Babins opined that at some point the Plaintiff would require an ankle fusion, but such surgery would be difficult overall due to her bad knee. On January 15, 2001, Dr. Euliano reviewed her x-rays, and found that her right ankle showed severe arthritis, and that her knee x-rays showed narrowing both medially and laterally, and there was a large osteophytic spur laterally on her left knee. Def. Ex. 8. Thus the administrative record was replete with objective evidence which supported the severity of the Plaintiff's limitations.
Moreover, the Plan mischaracterized the nature of the Plaintiff's symptoms, referring to them as "periodic discomforts." In its first level review, MetLife informed the Plaintiff:
Please understand that we do not dispute your diagnosis or that you may have discomfort and pain with your condition. However, may individuals experience a variety of discomforts, but these periodic discomforts do not render an individual unable to be gainfully employed.
You have multiple subjective complaints of pain[,] however[,] the objective evidence to support such pain complaints is mild. The severity of your symptoms does not correlate with your mild objective findings.
Based on our review we have not been provided with substantially medical information to support a severe condition that would preclude you from performing your sedentary occupation. . . .
Def. Ex. 22 (emphasis added). The administrative record reflects that the office notes from the Plaintiff's treating physicians' consistently documented the Plaintiff's severe pain due to her ankle, knee and back problems. In May of 1999, Dr. Wilczanski found an exacerbation of chronic pain due to severe arthritis of both knees and her right ankle. Def. Ex. 11, p. A 199. In February 2000, Dr. McGee diagnosed the Plaintiff with chronic back pain and muscle spasm. Def. Ex. 5, p. A 239. In September 2000 following ankle surgery, Dr. Babins noted that the Plaintiff experienced pain on a daily basis. Def. Ex. 16, p. A 169. In October 2000, her ankle ached, she was reluctant to bear weight, and still used crutches due to her discomfort. Def. Ex. 16, p. A 170. She also experienced significant problems with both of her knees, which caused a significant amount of discomfort. Def. Ex. 16, p. A 170. During her physical examination conducted by Dr. Johnson, Dr. Johnson observed that she was unable to perform a number of the tests due to pain. Def. Ex. 15. In short, the characterization of the Plaintiff's pain as "periodic discomforts" bespeaks a completely unobjective minimization of the severity of her pain in light of the overwhelming and uncontradicted medical evidence.
As previously discussed, there was significant objective medical evidence before the CRC that the Plaintiff suffered from severe arthritis of the right ankle, moderate arthritis of the knees, and degenerative disc disease of the back with nerve root irritative symptoms. These objective findings were far from "mild" and fully supported both the severity of the Plaintiff's conditions and the corresponding pain produced by them.
Third, the Plan's decision contravenes the opinions of Drs. Euliano, Tursi, and Babins, the Plaintiff's treating physicians. Dr. Euliano opined that the Plaintiff was precluded from working due to "severe" pain in her ankle and knees. Def. Ex. 8. Dr. Tursi opined that she could only work a total of 2 hours per day, and was unable to perform her job duties due to "recurrent/severe pain." Def. Ex. 4. Dr. Babins considered her disabled on a long-term basis with no change expected. Def. Ex. 16, p. A 168. The Plan argues that it accorded this information its due, but not controlling, weight, relying on Black Decker Disability Plan v. Nord, 538 U.S. 822, 123 S.Ct. 1965 (2003), which held that ERISA plan administrators are not required to accord special deference to the opinions of treating physicians. Black Decker, 123 S.Ct. at 1972; Stratton, 363 F.3d at 257-58. While it is true that the Plan is not required to assign controlling weight to a treating physician's opinion, it still "may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of a treating physician." Black Decker, 123 S.Ct. at 1972.
For all of the above reasons, we find that the Plan arbitrarily and capriciously denied the Plaintiff long-term disability benefits. Accordingly, we shall grant the Plaintiff's motion for summary judgment and deny the Defendant's motion for summary judgment.
IV. CONCLUSION
An appropriate Order follows.
ORDER
AND NOW, this 4th day of May, 2004, and for the reasons set forth in the accompanying Memorandum Opinion,IT IS HEREBY ORDERED that the Plaintiff's Motion for Summary Judgment [Doc. No. 25] is GRANTED, and the Defendant's Motion for Summary Judgment [Doc. No. 23] is DENIED.
The clerk is hereby directed to mark the case closed.