Opinion
Civil Action No. 01-0157, Section "C" (4)
March 20, 2002
ORDER AND REASONS
Before the Court are cross-motions for summary judgment by Plaintiff, Kevin Chauvin ("Chauvin"), and Defendant, UNUM Life Insurance Co. of America ("UNUM"). After reviewing the arguments of counsel, the record and the applicable law, IT IS ORDERED that the motions are hereby partially GRANTED and partially DENIED as set forth below. Furthermore, IT IS ORDERED that Chauvin's request for attorney's fees is hereby DENIED, but that his request for costs is hereby GRANTED.
STANDARD OF REVIEW
A district court can grant a motion for summary judgment only when 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 a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute . . . [to be] `genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] `material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)).
"If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Engstrom v. First Nat'l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24, 106 S.Ct. at 2552-53, 91 L.Ed.2d 265 and Fed.R.Civ.P. 56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly supported motion. See Anderson, 477 U.S. at 248, 106 S.Ct. at 2510, 91 L.Ed.2d 202. "If the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50, 106 S.Ct. at 2511, 91 L.Ed.2d 202 (citations omitted).
BACKGROUND
Chauvin alleges, and the Court accepts as true for the purposes of this opinion, the following: on or about October 11, 1996, while working as a truck driver for Venture Transport, Inc., he was injured while attempting to unload a hose from a flatbed truck. See Rec. Doc. 25, Mem. in Supp. of Pl.'s Mot. for Summ. J. and an Opp. to Def.'s Mot. for Summ. J. (hereinafter "Pl.'s Mem.") at 1. Chauvin was using a pry bar to attempt to secure the hose in a sling for offloading when he felt an immediate pain. See id. The injury ultimately resulted in Chauvin receiving two cervical fusions, on January 28, 1997, and June 30, 1998. See id.
Chauvin alleges in his motion that the year was 1997, but from the context of the events described in his motion, it is clear that the year was 1996.
The record indicates that Chauvin had a long-term disability insurance policy ("policy") with UNUM at the time of the accident, Chauvin was found "disabled" under the policy, and that UNUM paid Chauvin $1,600.00 per month in benefits from April 10, 1997, to December 9, 1999, and $426.67 from December 10, 1999 to December 17, 1999. See Rec. Doc. 11 at CL00386, CL00029.
Prior to the final benefit payment, UNUM registered nurse Connie Semones ("Semones") noted in an August 30, 1999, report that Chauvin's condition should be clarified. See id. at CL00276. Between the time of Semones' report and the termination of Chauvin's benefits, Chauvin's condition was evaluated.
An October 19, 1999, report by Dr. John Cazale ("Cazale") following Cazale's independent medical examination stated that Chauvin had suffered a loss of 11 to 15 percent of the use of his body. See id. at CL00031-CL00036. The report also concluded that Chauvin's complaints of neck and right shoulder pain were consistent with his injury. See id. at CL00036. Cazale opined that Chauvin "could perform some . . . sedentary type of work, light duty where he can alternately sit and stand where he does not have to push, pull, or lift objects greater than 15-20 pounds." Id.
Additionally, a physical therapist, Billy Naquin ("Naquin"), performed a functional capacity evaluation of Chauvin. See id. at CL00037-CL00045. Naquin noted that Chauvin did not appear to exert maximum effort during the evaluation, exhibited symptom magnification, and showed "self limiting behavior" in lifting tests. Id. at CL00040. In particular, the evaluation noted that Chauvin's "heart rate did not rise significantly with increase complaints of pain or when patient had to stop lifting task." Id. Naquin concluded that Chauvin "could return to at least light level work" but that this conclusion "may not be a true assessment of his maximum ability based on findings that were not consistent with maximum effort." Id.
A vocational consultant, Laura M. Sewell, then performed an analysis, dated December 16, 1999, of possible occupations in which Chauvin could engage. See id. at CL00149-CL00150. The consultant took into consideration Chauvin's education, work and medical history, and Cazale's and Naquin's reports. See id. The consultant developed a representative list of jobs, including chauffeur, dowel inspector, coil inspector, containers inspector, car rental deliverer, electronics inspector, sealing machine operator, and assembly press operator. See id. at CL00150.
In a December 17, 1999, letter, UNUM informed Chauvin that based on Cazale's, Naquin's, and Sewell's reports, disability benefit payments to Plaintiff would end. See id. at CL00028-CL00030.
Chauvin challenges UNUM's termination of his benefits, arguing that he continued to be and remains "disabled" or "partially disabled" and thus was and is entitled to a continuation of those benefits. Chauvin alleges, and the Court accepts as true for the purposes of this opinion, that he still has significant pain, muscle spasms, and limitation of neck motion, and suffers numbness in his arms and hands from time to time. See Pl.'s Mem. at 2.
Analysis
Chauvin seeks disability benefits pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq. Thus, the theory of recovery asserted by Chauvin and the propriety of UNUM's denial of that recovery rest upon whether UNUM as the plan's claims administrator abused its discretion in determining that Chauvin was and/or is not entitled to continue receiving long-term disability benefits following their termination. See Dowden v. Blue Cross Blue Shield of Tex., Inc., 126 F.3d 641, 643-44 (5th Cir. 1997).
As an initial matter, "[a] denial of ERISA benefits by a plan administrator is reviewed by the courts de novo unless the plan gives the plan administrator discretionary authority to determine the eligibility for benefits or to construe the terms of the plan." See id. at 643 (internal quotations omitted). Because ERISA does not dictate the appropriate standard of review for evaluating benefit determinations of plan administrators, courts must first look to the plan terms to determine if the plan administrator has the discretionary authority to interpret the plan terms." Id. "The abuse of discretion standard is the appropriate standard of review to challenges to a plan administrator's interpretation of the plan terms when that plan grants the administrator the authority to make a final and conclusive determination of the claim." Id. at 643-44.
Here, the abuse of discretion standard applies. The policy provides: "In making any benefits determination under this summary of benefits, [UNUM] shall have the discretionary authority, both to determine an employee's eligibility for benefits and to construe the terms of this summary of benefits." Rec. Doc. 11 at CL00220. Thus, because the policy grants UNUM discretionary authority to determine an employee's eligibility for benefits, the abuse of discretion standard is the appropriate standard of review here.
When applying the abuse of discretion standard, it is necessary to analyze whether the plan administrator acted arbitrarily or capriciously. See Dowden, 126 F.3d. at 644. "An arbitrary decision is one made without a rational connection between the known facts and the decision or between the found facts and the evidence." Id.
Some cases in the Fifth Circuit that have analyzed questions similar to the one before the Court today have suggested a two-step analysis. See Duhon v. Texaco, Inc., 15 F.3d 1302, 1307 n. 3 (5th Cir. 1994). First, the court determines the legally correct interpretation of the plan. See id. If the administrator did not so correctly interpret the plan, the court must determine whether the administrator's decision constituted an abuse of discretion. See id. Courts, however, are not "rigidly confined to this two-step analysis in every case." Id. Because the Court concludes that UNUM did not abuse its discretion with respect to its finding that Chauvin was not "disabled," it is unnecessary for the court to conduct the two-step analysis. See id.
Further guiding the analysis here is UNUM's concession that, as UNUM is both the insurer and administrator of claims for the plan, there is evidence of a conflict of interest. See Rec. Doc. 24, Mem. in Supp. of Mot. for Summ. J. ("Def.'s Mem.") at 9. When the administrator of a plan is also its insurer, the Fifth Circuit employs a sliding scale of deference in assessing whether the administrator has abused its discretion. See Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 297 (5th Cir. 1999). Here, UNUM asserts that it is not the plan administrator, but rather the claims administrator. See Def.'s Mem. at 9. Yet, as the Court reads UNUM's Motion for Summary Judgment, Defendant concedes that the conflict analysis here is the same as if UNUM were the plan administrator. See id. Thus, under Vega, "[t]he greater the evidence of conflict on the part of the administrator, the less deferential our abuse of discretion standard will be." Vega, 188 F.3d at 297. Chauvin, however, has offered no evidence of UNUM's financial arrangements that would illuminate the nature of the alleged conflict. Accordingly, the conflict must be reviewed "with only a modicum less deference" on the sliding scale balancing against the default standard of deference. Vega, 188 F.3d at 301; Duhon v. Texaco, Inc., 15 F.3d 1302, 1309 n. 6 (5th Cir. 1994).
Guided by this slightly tempered abuse of discretion standard, the Court turns to the crux of the dispute here, namely whether Chauvin was and/or is "disabled" or "partially disabled" and thus was and/or continues to be entitled to benefits following their termination by UNUM.
The policy contains the following provisions pertinent to the analysis here:
"Disability" and "Disabled" means that because of injury or sickness:
1. The insured cannot perform each of the material duties of his regular occupation; and
2. After benefits have been paid for twenty-four months, the insured cannot perform each of the material duties of any gainful occupation for which he is reasonably fitted by training, education or experience.
. . . . .
"Partial Disability" and "Partially Disabled" means that because of injury or sickness the insured, while unable to perform all of the material duties of his regular occupation on a full-time basis, is:
1. performing at least one of the material duties of his regular occupation or another occupation on a part-time or full-time basis; and
2. earning currently at least twenty percent less per month than his indexed pre-disability earnings due to that same injury or sickness.See Rec. Doc. 11 at CL00234.
Chauvin first apparently argues that he was "disabled" or "partially disabled" because he is allegedly suffering from continuing effects of his injury and has experienced a loss of body use of 11 to 15 percent. See Pl.'s Mem. at 2. Chauvin appears to equate his combination of pain and limitations with total or partial disability, yet offers no specific authority for this definition. The policy, on the other hand, defines "disabled" or "partially disabled," in terms of a policyholder's ability to perform or actual performance of certain work duties, as set forth above. Rec. Doc. 11 at CL00234.
The Fifth Circuit has faced a similar argument from a plaintiff seeking benefits pursuant to a policy governed by ERISA. See Thibodeaux v. Cont'l Cas. Ins. Co., 138 F.3d 593 (5th Cir. 1998). In Thibodeaux, the benefit plan defined "total disability" "as being `unable to perform the duties of an occupation for which [one] is or [will] become qualified by education, training, or experience.'" Id. at 595 (alteration in original). The plaintiff nevertheless argued that total disability should be governed by an asserted state law definition, which interpreted "total disability" "to allow recovery when the claimant cannot perform the substantial and material parts of his job in the usual way." Id. The court rejected the plaintiffs contention, holding that the correct definition of "total disability" was that stated by the plan. Id. at 596. Just as in Thibodeaux, where the court rejected the plaintiffs attempt to alter the plan's definition of "total disability" in a benefit plan governed by ERISA, likewise, the Court declines to venture outside the policy to define the identical and similar terms at issue here.
The Court thus analyzes whether there was a rational connection between UNUM's refusal to find Chauvin (1) "disabled" or (2) "partially disabled" and the known facts. See Dowden, 126 F.3d. at 644.
First, UNUM determined that Chauvin was not "disabled" under the policy's definition. i.e., because he was capable of performing "each of the material duties of a gainful occupation for which he is reasonable fitted by training, education or experience." As noted above, UNUM took into consideration Chauvin's education, experience, and physical condition and produced a non-exhaustive list of occupations it found Chauvin capable of performing. See Rec. Doc. 11 at CL00149-CL00150. Because Chauvin was capable of performing these occupations, UNUM concluded that he was not "disabled."
Chauvin does not contend that he cannot perform each of the material duties of these occupations. Rather, he argues that "UNUM did not specifically identify jobs available to Mr. Chauvin nor did UNUM confirm that [t]he salary levels identified by the vocational consultant were actually available within a reasonable distance from Mr. Chauvin's home." Pl.'s Mem. at 2. The policy, however, does not place the burden on UNUM to demonstrate "that Plaintiff can find a job, but rather that Plaintiff is able to perform any gainful occupation." Couzens v. Equitable Life Assurance Soc'y of the United States, No. 98-527, 1998 U.S. Dist. LEXIS 15505, at *10 (E.D. Pa. Oct. 2, 1998). UNUM met that burden under the tempered abuse of discretion standard here by basing its determination of no disability on the reports by Cazale, Naquin, and Sewell.
Second, the Court considers Chauvin's argument that UNUM improperly failed even to consider the possibility that he was "partially disabled" and thus qualified for partial disability benefits. See Pl.'s Mem. at 7-8. As noted above, to receive partial disability benefits, it is required, inter alia, that the insured be (1) "performing at least one of the material duties of his regular occupation or another occupation on a part-time or full-time basis" and (2) "earning currently at least twenty percent less per month than his indexed pre-disability earnings" due to the injury in question. Rec. Doc. 11 at CL00234. Chauvin contends that "all indicators" demonstrate that Chauvin "is unable to engage in any occupation" that would bring his earnings beyond the threshold for denial of benefits in condition (2). Pl.'s Mem. at 8. The question when considering whether an insured meets this condition for partial disability is not, however, whether Chauvin is unable to engage in any occupation in which his earnings would exceed the threshold, but rather whether he is earning an amount below the earnings threshold.
The issue thus becomes whether there was a rational connection between the decision that Chauvin was not "partially disabled" and therefore not entitled to partial disability benefits and the known facts upon which that decision was based. See Dowden, 126 F.3d. at 644. Such a decision must be based, in part, on a determination that, during the period Chauvin claims he was and/or is entitled to benefits, Chauvin was or is not "performing at least one of the material duties of his regular occupation or another occupation on a part-time or full-time basis." Rec. Doc. 11 at CL00234. UNUM adequately stated the basis for its conclusion that Chauvin was not disabled. But UNUM's denial of benefits includes no mention of a decision as to whether Chauvin was partially disabled. Title 29 § 2560.503-1(f)(2000) requires that the notice denying benefits contain "[s]pecific reference to pertinent plan provisions on which the denial is based." Schadler v. Anthem Life Ins. Co., 147 F.3d 388, 398 (5th Cir. 1998). Thus, the case must be remanded to UNUM for the development of a full factual record and for the making of the decision whether Chauvin was and/or is partially disabled and thus entitled to partial disability benefits under the policy. See id. at 398.
Attorney's fees and costs
ERISA expressly permits a federal court, in its discretion, to award reasonable attorney's fees and costs. See 29 U.S.C. § 1132(g)(1). Nevertheless, there is no presumption under ERISA in favor of awarding attorney's fees and costs. See Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1458-59 (5th Cir. 1995). To determine whether to award attorney's fees and costs to a party pursuant to ERISA, a court should consider the following factors:
1. The degree of the opposing party's culpability or bad faith;
2. The ability of the opposing party to satisfy an award of attorney's fees;
3. The deterrent effect of an award on other persons under similar circumstances;
4. Whether the party requesting fees sought to confer a common benefit on all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA; and
5. The relative merits of the parties' positions.
Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255, 1266 (5th Cir. 1980)). "No one of these factors is necessarily decisive, and some may not be apropos in a given case, but together they are the nuclei of concerns that a court should address in applying section 502(g)." Id.
Based on the Bowen factors, the Court denies Chauvin's request for attorney's fees, but grants his request for costs.
First, as noted above, UNUM did not abuse its discretion in finding that Chauvin was not "disabled," and thus UNUM cannot be considered culpable or as having acted in bad faith in this regard. Nevertheless, given UNUM's failure to notify Chauvin as to whether he was "partially disabled" as required under § 2560.503-1(f) indicates a disregard of its responsibility pursuant to this regulation and supports the Court's award of costs:
[O]nce the interpretation of plan provisions becomes an issue, both the administrator and the claimant should (1) adduce, at the earliest possible point in the process, all possible reasons bearing on the granting or denial of benefits under the plan and (2) develop the necessary factual record so that those issues may be addressed and decided . . . Doing so will ultimately further ERISA's purpose of streamlining and shortening the timeframe for disposing of claims.Schadler at 396. That said, the Court finds that UNUM's failure to consider whether Chauvin was partially disabled" does not rise to the level of culpability or bad faith sufficient to support an award of attorney's fees. Chauvin has not brought evidence to light affirmatively demonstrating his entitlement to partial disability benefits or that UNUM, for instance, improperly refused to consider evidence indicating that Chauyin was "partially disabled."
As to the second and third factors, UNUM appears able to satisfy an award of attorney's fees and costs, and an award of both no doubt would encourage more care on the part of claims administrators to thoroughly render their decisions.
Nevertheless, the fourth and fifth factors weigh in favor of denying Chauvin's requests both for attorney's fees and costs. Chauvin makes no claim that he is seeking to confer a common benefit. Moreover, the record simply does not indicate whether Chauvin should have been found "partially disabled" under the policy.
Thus, because UNUM should have addressed whether Chauvin was "partially disabled" under the policy, because it can satisfy an award of costs, and because such an award will put other administrators on notice as to their duties in assessing benefits, an award of costs is appropriate. Cf. also Schadler at 398-99 (awarding costs in ERISA case remanded to administrator for development of full factual record and for making of decision whether to grant or deny benefits). Nevertheless, given the lack of bad faith, the absence of any indication that Chauvin seeks to confer a common benefit through his suit, and the lack of evidence to suggest whether Chauvin is, is not, was, or was not "partially disabled" for the purpose of determining benefit eligibility, his request for attorney's fees is denied.
Conclusion
For the foregoing reasons,
IT IS ORDERED that:
(1) as to the issue of UNUM's determination that Chauvin was not "disabled," Chauvin's Motion for Summary Judgment is hereby DENTED and UNUM's Motion for Summary Judgment is hereby GRANTED;
(2) as to the issue of whether Chauvin was "partially disabled," the motions are hereby DENIED;
(3) the case is hereby REMANDED to UNUM for further proceedings consistent with this opinion;
(4) Chauvin's request for attorney's fees is hereby DENIED; and
(5) Chauvin's request for costs is hereby GRANTED.