Opinion
C.A. No. 92-147-SLR.
March 27, 2000.
John M. Stull, Counsel for plaintiff.
Gretchen Ann Bender, Esquire of Morris, James, Hitchens Williams, Counsel for defendants. Of counsel: Evelyn Hassinger Brantley, Esquire of E.I. DuPont De Nemours Co., Inc.
MEMORANDUM OPINION
I. INTRODUCTION
Currently before the court is plaintiff Danny M. Skinner's motion for summary judgment (D.I. 150) on counts I-VII IX of his amended complaint. (D.I. 98) In his complaint, plaintiff alleges that defendants violated the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"), by arbitrarily and capriciously denying his application for disability benefits. Because genuine issues of material fact exist, the court shall deny the motion.
II. BACKGROUND
The court gleans the following facts from the various memorandum opinions issued in this case and from the evidence submitted by the parties. The present suit has its genesis in a September 13, 1988 back injury plaintiff suffered at DuPont's Seaford, Delaware nylon plant while working as a tow cut operator. At that time, plaintiff had been employed at the Seaford plant since approximately 1972. Except for a two-hour period in November 1988, plaintiff did not return to work following his injury. Physicians later diagnosed plaintiff with a herniated disc, and he underwent surgery to correct this herniation on March 10, 1989. Plaintiff's employment at the Seaford plant ended on March 31, 1989 when his short-term disability period ended. Shortly before his surgery and subsequent termination, plaintiff applied for pensions under two long-term disability plans offered by DuPont.
The undisputed evidence indicates that a tow cut operator uses machinery to cut extruded nylon fibers into manageable lengths. Tow cut operators also perform various quality control functions. (D.I. 155 at B139)
DuPont's Short Term Disability Plan gives injured employees a maximum leave of six months to recover from their injury and/or to have it corrected. To avoid being fired at the end of the six month period, an employee either must return to full employment or be pensioned under the appropriate pension plan. Whether or not an employee qualifies for a particular disability pension depends upon the onset date and permanency of his or her injuries.
The first plan, called an "incapability plan," is part of the DuPont Pension and Retirement Plan. The incapability plan provides benefits to employees deemed to be permanently incapable of performing their particular job with "the required degree of efficiency." (D.I. 155 at B81 (description of the incapability plan)). The second benefit plan, called the "Total and Permanent Disability Plan" ("TP Plan"), provides benefits to employees deemed to be totally and permanently incapable of performing any job. (D.I. 155 at B85) An employee is considered totally and permanently disabled "if [DuPont's] Board of Benefits and Pensions finds that he is totally disabled by injuries or disease and presumably will be totally and permanently prevented from pursuing any gainful occupation." (D.I. 155 at B85) (emphasis added). The total and permanent disability determination is made on the basis of the employee's condition immediately prior to the end of his/her employment at DuPont. (D.I. 155 at B85) If an employee is not incapable" (i.e., capable) of performing his/her job with the required degree of efficiency, that employee does not qualify for the incapability pension and, ipso facto, also does not qualify for the TP Plan.
At the time plaintiff filed his application, the review process for both plans was the same. Plaintiff submitted his application along with supporting medical information to the Seaford site benefits administrator. That administrator recommended approval of his application and then forwarded the application to DuPont's Case Determination Committee ("CDC") for review and determination of eligibility. (D.I. 155 at B137) All decisions by the CDC were appealable to DuPont's Board of Benefits and Pensions ("the Board")
At a March 21, 1989 meeting, the CDC rejected plaintiff's initial application for benefits because it concluded that, at the time of his termination, plaintiff was temporarily but not permanently incapable of performing the job of a tow cut operator. In a March 2, 1989 report to the CDC, the CDC's medical consultant, Dr. Hay, explained that:
Available information indicates Mr. Skinner is unable to perform his regular job as a tow cut operator, at least as evidenced in November 1988. It is assumed that . . . continued monitoring of his status has confirmed he remains incapable of doing his regular or any other job. Surgery is recommended and scheduled for the near future. It is reasonable to assume the surgery should relieve symptoms and impairment which result from radiculopathy. He may well have residual low back pain, which should not be disabling, although the degree of pain, if any, which will remain cannot be determined until a couple of months post operatively. I therefor [sic] find that Mr. Skinner is temporarily incapable of working. However, there is no credible objective medical evidence to support a conclusion that he is permanently disabled from performing the activities of a toe [sic] cut operator, with his history. It is prudent to permanently avoid frequent bending or heavy lifting activities. It is reasonable to assume he will be able to perform the activities of his job if allowed to sit, stand or walk as his comfort dictates. Mild to moderate pain alon [sic] would not be a basis for disability.
(D.I. 155 at B94) Based in part on this recommendation, the CDC denied plaintiff's application for long-term benefits under both plans. (D.I. 155 at B95 (rejection letter))
On April 19, 1989 plaintiff appealed the CDC decision to the Board. (D.I. 155 at B111-12) In his appeal, plaintiff supplemented his application with post-operative reports by his orthopedic surgeons, Drs. DuShuttle and Venkataramana. Because this information was not available to the CDC during its review of plaintiff's application, the Board remanded the entire application to the CDC for further consideration. On remand, the CDC reviewed DuShuttle's post-operative report in which he concluded that plaintiff "is currently unable to work, [but] at this time I am not able to say whether or not he is completely disabled." (D.I. 155 at B116) The CDC also reviewed a July 19, 1989 report by Venkataramana, in which he concluded that plaintiff should not do any "heavy work" but limit his activities to "light work that does not involve kneeling, bending, pushing, pulling or lifting anything heavier than 25 lbs. at a time." (D.I. 155 at B128) Venkataramana also noted that plaintiff could return to work so long as his job did not involve any of the aforementioned contraindicated activities. After a second review of plaintiff's application, Dr. Hay concluded that
there is no evidence provided by [plaintiff's] physicians to indicate their surgery failed to relieve the pressure on the affected nerves or that there was a complication to the surgery. Their reports indicate only that everything is progressing as it should, and in their opinion, he is not ready to return to his job at this time.
I find there is no evidence to suggest Mr. Skinner is permanently incapable of performing activities of available work at the time of termination.
(D.I. 155 at B124) On June 12, 1989, the Board affirmed the CDC's March 21, 1989 denial of plaintiff's application for long term disability benefits. (D.I. 155 at B125)
Shortly thereafter, plaintiff filed suit in New Castle County Superior Court. Defendants then removed the suit to this court. Plaintiff sued the present defendants as well as individual DuPont employees Wayne P. Wilke, Robert Savage, and Steven Kimpton. In March 1993, the parties filed cross-motions for summary judgment. (D.I. 61, 66) The Magistrate Judge issued a Report and Recommendation regarding the motions on April 4, 1993. On August 31, 1993, the court adopted the Magistrate Judge's Report and made several rulings. First, it granted defendants' motion for summary judgment on count VIII of plaintiff's complaint, which alleged a breach of fiduciary duties by the individual defendants Wilke, Savage, and Kimpton. (D.I. 155 at B167) Second, it otherwise denied defendants' motion for summary judgment and remanded the matter to the Board for a ruling on the actual physical requirements of the tow cut operator position. Because neither the Board nor the CDC made any findings regarding the physical demands of that position, the court could not conclude whether the Board's denial of plaintiff's benefits was arbitrary and capricious. Third, the court denied plaintiff's motion for summary judgment that defendants violated § 503 of ERISA for failing to articulate an explanation for their denial of benefits. (D.I. 155 at B167) Although the court found that the Board "had only superficially complied with [ERISA's] requirements and that their notice to plaintiff did not meet the substantial compliance standard articulated in ERISA cases," the court declined to grant summary judgment to plaintiff and, instead, remanded plaintiff's appeal to the Board for a new determination. (D.I. 155 ¶ 65, at B165)
On remand, plaintiff submitted additional materials for the Board's consideration. Among these materials, plaintiff included the following:
• An October 7, 1993 letter from Richard Frick of the Delaware Department of Labor indicating plaintiff's inability to "engag[e] in employment given his present circumstances" (D.I. 155 at B171);
• A September 21, 1993 letter from DuShuttle explaining that plaintiff "is capable of performing sedentary duty work only with no lifting more than 10 pounds, no twisting, running, jumping, bending or prolonged standing" and that these "restrictions are permanent" (D.I. 155 at B173);
• An April 23, 1993 letter from Maurice A. LaPlace, a vocational expert, detailing the ergonomic demands of the tow cut operator position and concluding that they exceed the restrictions placed upon plaintiff by his doctors (D.I. 155 at B175).
The Board did not remand plaintiff's case to the CDC because that committee no longer existed. Instead, the Board reconsidered plaintiff's application in the first instance, and it informed plaintiff in a March 31, 1994 letter that it had rejected his application. (D.I. 155 at B193-98) After reviewing all of the evidence submitted by plaintiff since his initial application to the CDC, the Board concluded that plaintiff was "not incapable" of performing the tow cut operator position with the degree of efficiency required by DuPont.
The Board rejected Frick's letter as based "on subjective impressions." (D.I. 155 at B196) The Board also took note of the physical limitations DuShuttle placed on plaintiff but concluded that plaintiff could perform the tow cut operator job within those restrictions. (D.I. 155 at B196) In reaching this conclusion, the Board viewed a video tape produced by DuPont of a tow cut operator at work. (D.I. 155 at B198) Based on this videotape, the Board explained that:
Approximately 90% of the job allows the operator to sit or stand while observing tow and push a button to cut out that portion not consistent with standards. 10% of the job requires other tasks such as stringing up the kreels which may require up to 90 lbs. force. However, this activity is rarely necessary because the kreels are not normally permitted to run out. Regarding other tasks, such as, removing knots, changing knife blades, cleaning cutter and yarn chute, etc. help is available from a floater operator or other co-worker who is there to assist when requested.
(D.I. 155 at B197) It also noted that, while other evidence indicated that plaintiff was temporarily unable to work prior to and following his surgery, none of the evidence indicated that this disability was permanent. (D.I. 155 at B197) Because the Board concluded that plaintiff was capable of performing the tow cut operator job with the degree of efficiency required by DuPont, it also concluded that he was not totally and permanently disabled under the TP Plan. Plaintiff had no avenue of appeal from the Board's decision.
Following this second denial of his appeal, plaintiff filed an amended complaint in this court (D.I. 98) that added two new claims arising from the Board's March 31, 1994 denial of his application for disability benefits. The parties conducted discovery and filed cross-motions for summary judgment in October 1996. (D.I. 126, 133) In his motion, plaintiff asserted that the Board's decision on remand was arbitrary and capricious and that the Board again failed to comply with the procedures set forth in § 503 of ERISA and its implementing regulations. For their part, defendants sought judgment on each of plaintiff's remaining nine counts. The court issued a memorandum opinion and order on June 23, 1997 granting in part and denying in part both plaintiff's and defendants' motions. (D.I. 155 at 201-15) Specifically, the court concluded that the Board violated § 503 of ERISA and its related regulations by not providing plaintiff an opportunity to appeal the Board's decision. The court again remanded the matter to the Board with instructions that it send the case to the CDC for an initial determination of plaintiff's claims. The court also granted defendants' motion and denied plaintiff's motion with respect to count X of the amended complaint, finding that the Board did not arbitrarily and capriciously deny plaintiff's application for TP Plan benefits by reference to the incapability provision of the pension plan. (D.I. 155 at 214-15) The court denied without prejudice the parties' cross-motions on counts I-VII and IX of the amended complaint.
Plaintiff did not remove count VIII or the dismissed individual defendants from his amended complaint. For purposes of clarity, the court notes that count VIII is no longer a viable claim and that the individual defendants are no longer parties to plaintiff's suit in this court.
Plaintiff filed a motion to amend his complaint seeking to add proposed counts IX-XI. Count IX of the amended complaint adds an allegation that the Board breached its fiduciary duty to plaintiff by relying upon an allegedly fraudulent videotape of the tow cut operator position. Count X alleges that the Board arbitrarily and capriciously denied plaintiff benefits under the TP Plan. (D.I. 98 ¶¶ 694-114) In a February 28, 1996 order, the court permitted plaintiff to add counts IX and X to his complaint but denied plaintiff's motion to add the proposed count XI. (D.I. 103)
Because the court was uncertain whether or not the CDC had been disbanded, the court ordered the Board to send the case to the former members of the CDC if, in fact, the CDC no longer existed. (D.I. 155 at B212 n. 3)
Following this second remand, plaintiff submitted to the former members of the CDC portions of depositions addressing both plaintiff's disability and the accuracy of the video tape's portrayal of the tow cut operator position. Plaintiff also challenged the CDC to reconcile its prior conclusion that plaintiff was not totally and permanently disabled at the time of his termination with the comments of Seaford personnel who reached the opposite conclusion. The individual members of the CDC then considered and rejected plaintiff's application for benefits. In a January 23, 1998 letter, the CDC explained that plaintiff failed to submit any "objective" evidence indicating that, at the time of his termination, plaintiff was permanently incapable of performing the tow cut operator position. (D.I. 155 at B283-84) As examples of such "objective" evidence, the CDC suggested "significant or positive results of tests such as MRI, x-ray reports and complete medical evaluations." (D.I. 155 at B284) The CDC also noted that, "[o]pinions of healthcare providers are not sufficient without objective medical evidence to support such opinions." (D.I. 155 at B284) With respect to the opinions of Seaford personnel regarding plaintiff's disability, the CDC explained that only the Board and its delegates have the authority to determine eligibility for long-term disability benefits. In addition to denying his incapability benefits, the CDC also rejected plaintiff's application for TP Plan benefits.
In a March 21, 1998 letter, plaintiff appealed the CDC ruling to the Board. (D.I. 155 at B285-87) On November 16, 1998, the Board denied his appeal, explaining that, "[t]he Board's opinion remains that he was not permanently incapable of performing the duties of his job, with the degree of efficiency required by the Company, at the time of his termination, 3/13/89." (D.I. 155 at B299) Following this denial, plaintiff filed the present motion for summary judgment.
III. STANDARD OF REVIEW
A court shall grant summary judgment only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of proving that no genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 10 (1986). "Facts that could alter the outcome are `material,' and disputes are `genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct." Horowitz v. Federal Kemper Life Assurance Co., 57 F.3d 300, 302 n. 1 (3d Cir. 1995) (internal citations omitted). If the moving party has demonstrated an absence of material fact, the nonmoving party then "must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting Fed.R.Civ.P. 56(e)). The court will "view the underlying facts and all reasonable inferences therefrom in the light most favorable to the party opposing the motion."Pennsylvania Coal Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment; there must be enough evidence to enable a jury reasonably to find for the nonmoving party on that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
IV. DISCUSSION
Counts I-VII and IX of plaintiff's amended complaint remain viable. Count I alleges that defendants acted arbitrarily and capriciously by finding that plaintiff was not incapable of performing the duties of a tow cut operator. (D.I. 98 ¶¶ 627-37) Counts II-IV and VI-VII seek reinstatement in, and damages for the allegedly wrongful exclusion from, various health care and pension plan benefit programs in which plaintiff would have participated had the Board found him incapable of performing his job. (D.I. 98 ¶¶ 638-61, ¶¶ 670-83) Count V alleges that the Board arbitrarily and capriciously denied plaintiff membership in the TP Plan and seeks damages arising out of this denial. (D.I. 98 ¶¶ 662-69) Finally, Count IX alleges that the Board breached its fiduciary duty to plaintiff by "admitting into evidence" a fraudulently staged and "artificially easy" video depiction of the tow cut operator position. (D.I. 98 ¶¶ 696-97) Plaintiff seeks summary judgment on each of these claims. Plaintiff also asserts in his brief various procedural deficiencies in the Board's decision.
In their brief, defendants mistakenly suggest that only counts I-V, and IX survived the previous motions for summary judgment. (D.I. 154 at 14)
A. Counts I-IV and VI-VII
At issue in these counts is whether the Board acted arbitrarily and capriciously when it found that plaintiff was not incapable of performing the tow cut operator position. Under an arbitrary and capricious standard of review, a court may overturn the Board's decision only if it is "without reason, unsupported by substantial evidence or erroneous as a matter of law."Abnathya v. Hoffmann-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993). The court may not substitute its own judgment for that of the Board's in determining eligibility for plan benefits. See id.
The court previously ruled that it would review the Board's decision to deny plaintiff disability benefits under an arbitrary and capricious standard. (D.I. 155 at B162) Plaintiff does not dispute the propriety of this deferential standard of review.
The benefits plan language itself provides one of the most important factors in considering whether a denial of benefits was arbitrary and capricious. See Lockhart v. United Mine Workers of Am. 1974 Pension Trust, 5 F.3d 74, 78 (4th Cir. 1993). The incapability provision of DuPont's Pension Plan provides that employees "may qualify for an incapability pension if the Company determines you have become permanently incapable of performing your job and you have at least 15 years of service." (D.I. 155 at B76) Genuine issues of material fact exist with respect to whether plaintiff was permanently incapable of performing the tow cut operator position. For example, the parties disagree as to the physical demands placed upon a tow cut operator. Defendants have submitted evidence that the position is regarded as one of the easiest jobs at the Seaford plant and that plaintiff could perform the job even with his physical limitations. (D.I. 155 at B318-19, 330-32) If true, this would indicate that plaintiff was not permanently incapable of working as a tow cut operator. Plaintiff, on the other hand, has submitted evidence indicating that the position requires intermittent heavy lifting, bending, and pulling — all of which allegedly exceeds the restrictions placed upon him by his doctors. (D.I. 155 at B175-76) Thus, disputed factual issues exist as to whether plaintiff could work at the tow cut operator position within the physical limitations placed upon him by his doctors. Accordingly, plaintiff is not entitled to summary judgment that the Board acted arbitrarily and capriciously in denying him benefits under the incapability provisions of the Pension Plan.
B. Count V
Similarly, plaintiff is not entitled to summary judgment on his allegation that the Board acted arbitrarily and capriciously in denying him benefits under the TP Plan. The TP Plan provides that:
An individual shall be considered "totally and permanently disabled" if the Board of Benefits and Pensions finds that he is totally disabled by injuries or disease and presumably will be totally and permanently prevented from pursuing any gainful occupation. . . .
. . .
The determination of whether an employee is totally and permanently disabled shall be made on the basis of his condition immediately prior to his termination of service with the Company, and an employee who becomes totally and permanently disabled after termination of service with the Company will not qualify for benefits under this Plan.
(D.I. 155 at B85) Genuine issues of material fact exist with respect to whether, immediately prior to the termination of his employment, plaintiff was "totally and permanently" prevented from pursuing any gainful occupation. As an initial matter, there is little evidence to suggest that, immediately prior to his termination, plaintiff was totally and permanently disabled. Even after his surgery, plaintiff's doctors could not say whether he was permanently disabled. Moreover, following his termination, plaintiff's doctors indicated that he could pursue light-duty, sedentary work. (D.I. 155 at B173) This suggests that plaintiff was (and is) not prevented from pursuing "any gainful occupation." Accordingly, the court shall deny plaintiff's motion for summary judgment as it relates to count V of the amended complaint.
For this reason, defendants argue that the court should grant, sua sponte, summary judgment in favor of defendants on count V. Defendants' request must be denied in light of a February 3, 1989 report on the physical examination of plaintiff by defendants' own medical consultant, Dr. Jensen. In that report, Jensen noted that plaintiff
is now scheduled for repeat surgery in mid-March, 1989, with his doctors apparently not at all optimistic about his prognosis. At best, after surgery, he will have a degree of impairment which will restrict him from any jobs he is qualified by training and experience to hold on this plant site.
(D.I. 155 at B107 (emphasis added)). This report, which the Board reviewed during its eligibility determinations (see D.I. 155 at B194), raises a genuine issue of material fact about the reasonableness of the Board's conclusion that plaintiff was not, immediately prior to his termination, totally and permanently disabled. It also raises a genuine issue of material fact regarding the reasonableness of the Board's conclusion that plaintiff was not incapable of performing the tow cut operator position.
C. Count IX
In count IX plaintiff contends that the Board breached its fiduciary duty to plaintiff by reviewing an allegedly fraudulent video tape of the tow cut operator position. Plaintiff seeks to have "this illegal `evidence' . . . stricken and removed as evidence [as] a basis for the decision of the Board . . . (D.I. 98 ¶ 101) Rather than stating a separate cause of action, count IX merely asserts another instance of the Board's allegedly arbitrary and capricious behavior. As such, it repeats the substantive allegations of count I and is redundant. Moreover, ERISA does not provide a vehicle for excluding "evidence" from an eligibility review proceeding. Because count IX does not state claim for relief, the court shall dismiss it.
D. Alleged Procedural Defects with the Board's Review
In his brief, plaintiff also argues that the Board's decision does not meet the procedural requirements of § 503 of ERISA. Specifically, he complains that the Board's decision lacked a coherent discussion of plaintiff's medical evidence. He seeks yet another remand to the Board for a more specific explanation of why the Board denied his application for benefits.
Section 503 of ERISA requires that benefit plan administrators "provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant." 29 U.S.C. § 1133(1). The regulations implementing § 503 of ERISA further require that a notice of a claim denial contain:
(1) The specific reasons for the denial;
(2) Specific reference to pertinent plan provisions in which the denial is based;
(3) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and
(4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his claim or her claim for review.
29 C.F.R. § 2560.503-1(f). A review of the evidentiary record establishes that the Board satisfied both the statutory and regulatory notification standards during its most recent denial of plaintiff's application.
The January 23, 1998 denial by the CDC explained that the CDC did not consider plaintiff permanently incapable of performing his job duties at the time of his termination. (D.I. 155 at B283) It explained that, in reaching its decision, the CDC considered not only the new information plaintiff submitted to it but also all of the other information previously submitted. The Board's denial of plaintiff's appeal from the CDC decision also explained that it did not consider plaintiff permanently incapable of performing his job as of the time of his termination. (D.I. 155 at B299) That denial incorporated a previous letter to plaintiff's counsel in which the manager of the Pension Plan carefully delineated the standards of eligibility and what types of evidence plaintiff would have to produce to meet those standards. (D.I. 155 at B291-94) In short, the Board and the CDC's most recent denial of plaintiff's application complied with the procedural requirements outlined in § 503 of ERISA and the implementing regulations. Therefore, the court shall deny plaintiff's request for a remand.
V. CONCLUSION
For the aforementioned reasons, the court shall deny plaintiff's motion for summary judgment and dismiss count IX of the amended complaint. An appropriate order shall issue.