Opinion
Civ. No. 99-2134, SECTION "I" (5).
March 17, 2000.
ORDER AND REASONS
Plaintiff Vivian Menendez brought this suit challenging the decision of defendant, Sun Life Assurance Company of Canada (Sun Life), to deny her claim for long term disability benefits beyond 24-months. Sun Life seeks summary judgment on Menendez's claims on the ground that its decision is supported by substantial evidence and was not arbitrary or capricious.
Menendez was employed by Pendleton Memorial Methodist Hospital as a licensed practical nurse. The undisputed evidence submitted by Sun Life establishes that Pendleton sponsored an employee welfare benefit plan for the purpose of providing disability benefits to its employees, and that the Plan is governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq. It is undisputed that as an employee, Menendez was covered under the policy.
The undisputed evidence also shows that the Plan cannot meet all of the "safe harbor" criteria set forth in 29 C.F.R. § 2510.31(j) as required for exclusion from ERISA's coverage. Disability benefits under the Plan were funded by a group disability insurance policy issued to Pendleton by Sun Life. Pendleton paid all of the premiums for the policy and acted as the Plan administrator and sponsor. Thus, the undisputed evidence is that at least two of the safe harbor criteria — § 2510.3-1(j)(1) and (3) — cannot be met.
For a program to qualify for the safe harbor exclusion from ERISA, four elements must be satisfied:
(j) Certain group or group-type insurance programs. For purposes of Title I of the Act in this Chapter, the terms "employee welfare benefit plan" and "welfare plan" shall not include a group or group-type insurance program offered by an insurer to employees or members of an employee organization, under which
(1) No contributions are made by an employer or employee organization;
(2) Participation in the program is completely voluntary for employees or members;
(3) The sole functions of the employer or. employee organization with respect to the program are, without endorsing the program, to permit the insurer to publicize the program to employees or members, to collect premiums through payroll deductions or dues checkoffs, and to remit them to the insurer; and
(4) The employer or employee organization receives no consideration in the form of cash or otherwise in connection with the program, other than reasonable compensation, excluding any profit, for administrative services actually rendered in connection with the payroll deductions or dues checkoffs.
29 C.F.R. § 2510.3-1(j)(1)-(4) (1992).
Sun Life's decision that Menendez is not totally disabled as defined by the Plan is a factual determination subject to review by the court under an abuse of discretion standard. Meditrust Financial Services Corp. v. The Sterling Chemicals. Inc., 168 F.3d 211, 213 (5th Cir. 1999); Bass v. Metropolitan Life Ins. Co., No. CIV.A. 94-1588, 1995 WL 581761 *2 (E.D. La. Oct. 3, 1995) (and cases cited therein). In reviewing a decision for abuse of discretion, the court considers whether the decision was arbitrary or capricious. Sweatman v. Commercial Union Ins. Co., 39 F.3d 594, 601 (5th Cir. 1994). "When reviewing for arbitrary and capricious actions resulting in an abuse of discretion, we affirm an administrator's decision if it is supported by substantial evidence. A decision is arbitrary only if `made without a rational connection between the known facts and the decision or between the found facts and the evidence'."Meditrust, 168 F.3d at 215 (quoting Bellaire Gen. Hosp. v. Blue Cross Blue Shield, 97 F.3d 822, 828-29 (5th Cir. 1996)). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Girling Health Care, Inc. v. Shalala, 85 F.3d 211, 215 (5th Cir. 1996) (quoting Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971)). A federal court owes "due deference to an administrator's factual conclusions that reflect a reasonable and impartial judgment." Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir.), cert. denied, 502 U.S. 973, 112 S.Ct. 453, 116 L.Ed.2d 470 (1991). The court's review is limited to the administrative record before Sun Life. Vega v. National Life Ins. Serv., Inc., 188 F.3d 287, 299 (5th Cir. 1999).
The facts set forth in Sun Life's Statement of Uncontested Facts are deemed admitted and summarized herein. To be eligible for disability benefits under the Plan, the employee must be "totally disabled" as defined in the Plan. The Plan defines "totally disabled" as:
See Local Rule 56.2E.
Total Disability or Totally Disabled means during the Elimination Period and the next 24 months of Total Disability, the Employee, because of Injury or Sickness, is unable to perform all of the material and substantial duties of his own occupation. After benefits have been paid for 24 months, the Employee will continue to be Totally Disabled if he is unable to perform all of the material and substantial duties of any occupation for which he is or becomes reasonably qualified for by education, training or experience.
In August, 1996, Menendez filed a claim for long-term disability benefits due to several medical conditions, including cervical and lumbar disc syndrome, arthroscopic knee surgery, and bilateral carpal tunnel syndrome, resulting from an automobile accident in April, 1996. Sun Life paid Menendez's claim for disability benefits for the initial 24-month period in which the Plan defined "total disability" as "unable to perform all of the material and substantial duties of [her] own occupation." Thereafter, in accordance with the terms of the Plan, Sun Life advised Menendez that she needed to show that she was "totally disabled" from "any occupation." Sun Life allowed Menendez an opportunity to submit additional evidence and also conducted its own investigation.
The record developed thereafter presented conflicting evidence. On June 8, 1998, Dr. Seltzer reported a Class 4 moderate impairment meaning that Menendez was "capable of clerical/sedentary activity," but noted that she was not capable of work on a full-time basis "at this time." Two months later, he supplemented his report with a finding of a Class 5 severe impairment which made her incapable of all but "very limited" sedentary activity with physical limitations on sitting standing, walking, lifting and carrying.
On November 13, 1998, Sun Life obtained a Transferrable Skills Analysis and Labor Market Survey Report from Cindy Harris, a licensed rehabilitation counselor, who found six office nursing positions in the market within the light work category. She used a light work category based on the physical limitations of no frequent or heavy lifting, bending, climbing or working with arms overhead suggested in June, 1997 by Dr. Williams, an orthopaedic surgeon retained by Sun Life, and Dr. Seltzer's diagnosis of bilateral carpal tunnel syndrome.
Based on the recommendation of its medical reviewer, Sun Life also obtained a Functional Capacity Assessment from EmpNet FCE Network. EmpNet was forwarded all of Menendez's administrative medical information. Its January, 1999 report found physical limitations, but concluded after also finding symptom magnification, exaggerated postures and movements, and a failure to achieve maximum effort due to Menendez' emotional condition, that Menendez was capable of at least sedentary work.
On February 12, 1999, Sun Life denied Menendez's claim for long-term disability benefits on the ground that the administrative record showed that she could perform sedentary work and therefore, was not prevented from performing the material duties of any occupation for which she was qualified. Sun Life's decision cited the medical information from Dr. Seltzer and Dr. Williams, the Functional Capacity Examination, and the Labor Market Survey and Transferable Skills Analysis.
Menendez appealed Sun Life's decision and submitted further evidence in support of her claim. A February 25, 1999 report of Dr. Seltzer advised Sun Life that Menendez was not fit for sedentary employment on a regular basis. An April 1, 1999 report of Dr. R.C. Llewellyn, a neurosurgeon, reported that Menendez was functionally disabled.
Sun Life referred Menendez's claim for a medical review by Dr. James L. Sarni. He reported objective evidence of degenerative disc disease and agreed with the limitations suggested by Dr. Williams. Dr. Sarni concluded that the objective evidence showed that Menendez should be able to work safely as long as these conditions were met. Dr. Sarni found that Dr. R.C. Llewellyn's conclusions of neurological involvement were not supported by Dr. Liewellyn's own objective findings.
Sun Life advised Menendez by letter dated May 28, 1999, that it would affirm its decision denying her claim for disability benefits beyond the 24 month "own occupation" period. Sun Life stated that after review of the entire medical file, it accepted the findings of Dr. Sarni that she could work within the specified physical limitations. Sun Life cited the Functional Capacity Evaluation results indicating that Menendez was capable of sedentary work as she was able to sit continuously and stand frequently. Sun Life also noted the evidence that there were several positions in the market which fit within Menendez's physical limitations. Sun Life concluded that since Menendez could perform the substantial duties of a sedentary occupation, she was not disabled from "any occupation" and therefore, no further benefits were payable.
Menendez argues that Sun Life denied her claim by improperly emphasizing the findings of its own investigations and giving insufficient weight to the opinions of her treating physicians. She also points out that Sun Life's physicians did not actually examine her, but simply reviewed the medical records.
Sun Life had no duty to give the opinions of her treating physicians or physicians who actually examined her greater weight. See Dubuc v. Whitney Nat'l Bank Plan, No. CIV.A. 98-0683, 1999 WL 4919 *4 (E.D. La. Jan. 4, 1999); Milson v. St. Luke's Episcopal Hosp., 71 F. Supp. 634, 641 (S.D. Tex. 1999) andSalazar v. Owens-Illinois. Inc. Salary Employee-Welfare Benefit Plan, No. CIV.A. 3:94-CV-1785-D, 1997 WL 10022 *3 (N.D. Tex. Jan. 7, 1997) (citing Salley v. E.I. DuPont de Nemours Co., 966 F.2d 1011, 1016 (5th Cir. 1992)). Sun Life considered all of the evidence in the administrative record. It made a permissible choice to follow the opinion of the consultants it retained, rather than Menendez's treating physicians.
That this record contains conflicting evidence of Menendez's work capacity is without doubt. And clearly, some of the evidence Sun Life mentioned in support of its decision is subject to critical examination. For example, the Transferrable Skills Analysis and the Labor Market Survey examined the labor market for positions in the light, as opposed to sedentary, activity level. Whether this court agrees with Sun Life's determination is not the issue. The sole issue is whether Sun Life abused its discretion in denying Menendez's claim. Pierre, 932 F.2d at 1559, 1562.
The court finds that Sun Life did not abuse its discretion by denying Menendez's claim. The administrative record contains substantial evidence to show that Menendez is capable of performing some sedentary work for which she is qualified. The reports of Drs. Sarni and Williams together with the Functional Capacity Assessment provide substantial evidence supporting the decision to deny Menendez's claim for long-term disability benefits.
Accordingly,
IT IS ORDERED that Sun Life Assurance Company of Canada's Motion for Summary Judgment is GRANTED, dismissing plaintiff Vivian Menendez's claims.
New Orleans, Louisiana this 15th day of March, 2000.