Opinion
Cause No. NA 98-82-C-B/H.
January 14, 2003
ORDER ON DEFENDANT LIFE INSURANCE COMPANY OF NORTH AMERICA'S MOTION FOR SUMMARY JUDGMENT
Plaintiff filed his complaint on May 15, 1998, seeking to recover disability benefits from Defendants under insurance policies provided to him in the course of his employment with Dole Food Company, Inc. He alleges, and we so find, that there is federal jurisdiction to resolve this dispute under ERISA, 29 U.S.C. § 1132(f). Previously, on January 24, 2000, we ordered this case remanded to Defendants for further proceedings (Docket Item 27). After further consideration, Defendant again denied the benefits Plaintiff sought to have paid.
It is our belief that the proper defendant in this case is Life Insurance Company of North America because in its answer Life Insurance Company of North America has stated that Cigna Group Insurance is a non-existent entity and that Life Insurance Company of North America is the appropriate defendant. Thus we will refer to the Defendants in singular fashion.
On August 13, 2001, the parties filed their stipulation (Docket Item 43) indicating that the record for purposes of our decision-making consists of:
(1) the "Certified Record," filed May 8, 2001 (Docket Item 36); and
(2) a "Supplement to Certified Record," filed August 6, 2001 (Docket Item 42).
Plaintiff has filed a brief in support of his request for benefits (Docket Item 44, September 4, 2001). Defendant seeks summary judgment (Docket Item 47, September 7, 2001). Reply briefs were filed on October 3 and 4, 2001 (Docket Items 48-49). The Court, being duly advised, now enters the following findings of fact and conclusions of law, pursuant to which Summary Judgment is entered in favor of Plaintiff and against Defendant.
I. Findings of Fact
(A) Statement of Facts Relating to Issuance of Policy
1. Defendant, Life Insurance Company of North America ("LINA"), issued a long-term disability insurance plan to Dole Food Company, Inc. ("Dole"), effective January 1, 1992 (R., p. 16).
2. The plan was designed to replace lost income for salaried Dole employees who became disabled for an extended period of time due to injury or sickness (R., p. 5).
3. Plaintiff, Frederick Morgan Jr. ("Morgan"), who had been employed by Dole since March of 1989, was covered by this policy (R., p. 59).
4. The policy provides, in pertinent parts, as follows (R., pp. 20, 25, 33):
DEFINITIONS
* * * * *
DISABILITY. An Employee will be considered Disabled if because of Injury or Sickness:
1. he is unable to perform all the material duties of his regular occupation; and after Monthly Benefits have been payable for 24 months, he is unable to perform all the material duties of any occupation for which he is or may reasonably become qualified based on his education, training or experience.
* * * * *
RESIDUAL DISABILITY. An Employee will be considered Residually Disabled if, while he is Disabled, he returns to any work for wage or profit.
SCHEDULE
* * * * *
BENEFIT WAITING PERIOD. The Benefit Waiting Period for an Employee will be 180 days of continuous Disability. A period of Disability will be considered continuous even if the Disabled Employee returns to full-time work in his regular job for up to a total of 30 days during the Benefit Waiting Period. The Benefit Waiting Period will be extended by the number of days the Employee temporarily returned to work.
INSURING PROVISIONS
LONG TERM DISABILITY BENEFITS
COMMENCEMENT OF BENEFITS.
The Insurance Company will begin paying Monthly Benefits in amounts determined from the Schedule when it receives due proof that:
(1) the Employee became Disabled while insured for this Long Term Disability Insurance; and
(2) his Disability has continued for a period longer than the Benefit Waiting Period shown in the schedule.
(B) Facts Relating to Shoulder Injury
5. Morgan was employed at Dole as the Director of Can Manufacturing Operations (R., p. 59). Morgan's primary duties included directing the purchase of new equipment, establishing quality standards for the manufacturing facilities, and directing equipment installation (R., p. 57).
6. On May 3, 1994, Morgan was injured while attempting to close a heavy gate that ran along a track. As Morgan was closing it, the gate came off the track and fell on him. He tried to push the gate back on the track and in so doing injured his right shoulder, head, chest, wrist and left arm (R., p. 183).
7. The next day, May 4, 1994, Morgan was seen by Lance Yokochi, M.D., at the Straub Clinic and Hospital (R., p. 241). Dr. Yokochi noted tenderness in Morgan's right deltoid muscle and upper shoulder. Dr. Yokochi recommended physical therapy. Over the following month, he performed several follow-up examinations of Morgan (R., pp. 183-184).
8. In addition to prescribing physical therapy, Dr. Yokochi gave steroid injections to Morgan to treat his injured right shoulder. The injections and the therapy resulted in temporary improvement. However, on October 19, 1994, due to recurring pain in his shoulder, Morgan required further treatment (R., p. 233).
9. On November 22, 1994, an arthrogram, performed on Morgan's right shoulder in an effort to determine the cause of his continued pain, revealed a tear in Morgan's rotator cuff (R., p. 230).
10. Morgan was then referred to Gerald Mayfield, M.D., who, on March 2, 1995, surgically repaired Morgan's torn rotator cuff (R., p. 225).
11. On March 8, 1996, Clarissa Burkert, M.D., conducted an extensive follow-up examination of Morgan's shoulder on the basis of which she made the following findings:
He continues to work full-time as director of can manufacturing. Prior to plant closure he will be working for two more weeks, then will seek alternate employment as his medical condition allows. At the present time, his shoulder condition does not affect his work activities. . . . Mr. Morgan is a pleasant, overweight, middle-aged Caucasian man who is 6-feet tall and weighs 285 pounds by report. He uses both arms normally, wears no sling or splint, and demonstrates no discomfort except on certain movements of the right arm.
(R., p. 185). The exam further revealed that Morgan had no sensory or motor deficits and his strength was normal. (Id.) Morgan was given a slight impairment rating of 9% of the upper extremity based solely upon range of motion measurements and the fact that surgery had been performed (R., p. 186). Dr. Burkert further observed: "He is able to perform his job as director of can manufacturing without any limitations from the shoulder injury."
C) Facts Relating to Morgan's Neurological Condition
12. Fifteen months after Morgan's shoulder surgery (June 6, 1995), Alfred Park, M.D., examined Morgan to investigate his complaint of persistent hearing loss in his right ear (R., p. 212).
13. On July 17, 1995, Dr. Park again examined Morgan. After reviewing his MRI results, Dr. Park diagnosed Morgan with an acoustic neuroma for which possible treatment options, including surgery, were discussed (R., p. 211).
14. On August 11, 1995, Richard Miyamoto, M.D., performed acoustic neuroma surgery on Morgan (R., p. 362).
15. After the surgery, Morgan again returned to work at Dole where he continued until February of 1996 (R., p. 52).
16. Between his acoustic neuroma surgery and the time he stopped working, Morgan had other doctor visits. On September 8, 1995, Morgan returned to Dr. Park who noted that Morgan suffered from hypertension, general malaise and fatigue. Dr. Park also noted that Morgan was unable to hear at all out of his right ear, the ear on which the surgery had been performed. Morgan also was determined to have mild paresis on the right side of his face and some weakness around his mouth. Dr. Park recommended that Morgan again return for a follow-up exam (R., p. 198).
17. On September 12, 1995, Katherine Williams, M.D., examined Morgan, noting his chronic hearing loss and that he was suffering from facial weakness and fatigue. In Dr.Williams' opinion, the facial weakness was residual and Morgan had experienced the fatigue since his surgery (R., p. 196).
18. Dr. Williams examined Morgan two weeks later, on September 27, 1995, and noted that Morgan was still feeling unsteady with quick movements of his head and that he continued to experience fatigue and hypertension. Dr. Williams scheduled a return visit for Morgan to have another follow-up exam (R., p. 195).
19. The follow-up exam of Morgan by Dr. Park occurred on October 6, 1995. Morgan complained of scratchiness and dryness in his right eye and suffered from dysequilibrium and mild facial muscle weakness around the lips (R., p. 194).
20. On October 26, 1995, Morgan returned to see Dr. Williams, complaining of episodes of feeling woozy and being unsteady on his feet. He also said he was experiencing corneal discomfort. Dr. Williams noted that Morgan had hypertension, was suffering residual effects of the acoustic neuroma surgery, and had labyrinthine symptoms and right facial weakness. However, Plaintiff reported feeling significantly better and indicated he was returning to work on a "more full time basis" (R., p. 193).
21. Morgan did not return to his treating clinic for approximately four months during which time he had resumed working at Dole (R., pp. 192-93).
22. By February of 1996, Morgan was still complaining of visual difficulties, eye discomfort, dizziness and dysequilibrium and was referred to L. Maher, M.D., and D. Newbill, M.D., for continued care (R., pp. 188-91).
23. On February 22, 1998, Dr. Newbill, though he performed no testing himself, encouraged Plaintiff to schedule an "Equitest," to participate in physical therapy and to make some lifestyle changes. The "Equitest" score indicated a "normal" response in two of six categories, with "slightly depressed function" in four others. Morgan's movement coordination tests were normal (R., p. 190-91).
24. On February 22, 1996, Morgan also consulted Dr. Park who opined that Plaintiff's balance problems were "slightly worse over the last several months," for which physical therapy was recommended (R., p. 192).
25. A new physician, Dr. Maher, saw Morgan on March 8, 1996, identifying some neurological deficits in Plaintiff's ability to walk and recommending an MRI to determine whether Morgan had suffered a cerebellar stroke (R., p. 189). The MRI did not reveal evidence of a stroke (R., p. 182).
26. On April 16, 1996, Dr. Newbill again examined Morgan, finding his ENT "normal" and recommending that Morgan obtain an ENG (R., p. 181).
27. On April 19, 1996, Dr. Park reported that Morgan was unable to work through February 22, 1996, but because he was not his patient and had not been examined by him after that time, Dr. Park could not render an opinion on Plaintiff's condition after February 22, 1996; Morgan was told to consult Dr. Newbill for that opinion (R., p. 179).
28. On April 23, 1996, Dr. Newbill did examine Morgan and on the basis of his ENG determined there had been a marked unilateral weakness on Morgan's right side (R., p. 178).
29. A telephone memorandum appearing in Dr. Newbill's notes appears to reflect that Morgan called the office concerning a "work slip" on April 18, 1996. The slip references the fact that Dr. Newbill "will cover" Morgan for February 22, 1996, March 4, 1996, and April 16, 1996, "the days pt. seen here," and also reflects that Morgan had not worked since February 12, 1996 (R., p. 180).
30. In May of 1996, Morgan returned to Dr. Miyamoto who suggested further treatment, including physical therapy (R., p. 370).
31. Physical therapy was scheduled in July of 1996, but Morgan did not avail himself of any such therapy, at least through February of 1997 (R., pp. 357-58).
32. In August of 1996, Morgan reported he had "retired" and was "watching his 6-y/o grandson." He was using a cane and had mild facial weakness (R., p. 173).
33. In February of 1997, Dr. Williams determined that Morgan was "doing well," relying at that time only occasionally on a cane (R., p. 172).
34. By March 24, 1997, Dr. Miyamoto opined that Plaintiff was disabled as a result of his vestibular loss. However, the opinion as to disability was not substantiated by any additional testing or examination by Dr. Miyamoto, nor any indication that Dr. Miyamoto was aware of the vocational requirements of Morgan's job (R., p. 364).
35. Plaintiff's counsel scheduled a consultation examination for Morgan with Kenneth Bobb, M.D., (R., pp. 374-77) who, after reviewing all of the information available, coupled with the results of an examination that he personally performed, concluded that Morgan was in fact totally disabled as of August 1995, the date of Morgan's acoustic neuroma surgery (R., p. 374). In his March 14, 2000, report, Dr. Bobb explained his examination methodology and the bases for his diagnosis, as follows:
(a) Dr. Bobb initially examined Morgan in 1998, after which he concluded that Morgan would have been totally disabled from any gainful occupation as of the date of the acoustic neuroma surgery. In addition to his own examination results, Dr. Bobb also reviewed the Straub Clinic records, which "provide significant insight in to [sic] Mr. Morgan's condition" (R., p. 374).
(b) In his report, Dr. Bobb stated the reason for his conclusion that Morgan was disabled as of the time of the acoustic neuroma resection in 1995, as follows:
First, his resultant symptomatology was existent immediately following the surgery; and did not improve appreciably following the surgery at any time. Second, several of the present symptomatological complaints . . . based on a review of the Straub records, are directly related to the acoustic neuroma surgery and its aftermath.
(R., p. 375).
(c) Dr. Bobb discussed Morgan's more serious problems that prevented his returning to work, noting Morgan's worsening dysequilibrium problem, lack of balance, and difficulty walking. In addition, he discussed Morgan's facial paralysis, which produces drooling (R., p. 376), and eye difficulties, knee problems and shoulder injury (R., pp. 374-76).
(d) Dr. Bobb held out no hope of Morgan's condition improving, saying, "Morgan's situation over time likely will continue to deteriorate further" (R., p. 376).
(D) Morgan's Disability Determination by the Social Security Administration
36. Morgan applied for and received Title II disability benefits from the Social Security Administration (R., pp. 399-405) under a definition of disability providing, in pertinent part:
The law defines disability as the inability to do any substantial gainful activity by reason of any medically determinable physical or mental impairmentich [sic] can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. To meet this definition, you must have a severe impairment, which makes you unable to do your previous work or any other substantial gainful activity which exists in the national economy. To determine whether you are able to do any other work, we consider your residual functional capacity and your age, education, and work experience.20 C.F.R. § 404.1505(a).
(E) Defendant's Denial of Morgan's Claim for Disability Benefits
37. LINA denied Morgan's disability claim on December 1, 2000 (R., pp. 116-17). In the letter of denial, the case manager detailed LINA's reasons for denying Plaintiff's claim:
(a) Morgan's job was to oversee the purchasing and installation of equipment, which activity was "cerebral, not physical."
(b) Medical records did not support Morgan's claim of disability.
(c) Dr. Newbill's medical records established that he was able to work on all but three days. (However, the case manager did not discuss Dr. Newbill's report of Morgan's ongoing dysequilibrium and unilateral weakness on his right side.)
(d) During a period that he was at work performing his usual and customary duties, Morgan represented himself as "sick" and was told to cease this practice.
(e) Dr. Miyamoto suggested that Morgan undergo physical therapy for his vestibular abnormality. (However, she entirely ignored the opinion that Dr. Miyamoto had positively stated that Morgan was "certainly disabled by this persistent vestibular abnormality.") (R., p. 364).
(f) Morgan failed to complete physical therapy.
In denying Morgan's disability claim, the case manager mentioned two of the doctors that treated Morgan but made no mention of records from Dr. Williams, Dr. Park, Dr. Maher or Dr. Burkert. In addition, the case manager failed to consider or mention Dr. Kenneth Bobb's report, which included a comprehensive review of the Straub Clinic medical records and an assessment of Morgan's condition. Dr. Bobb unequivocally concluded that Morgan was disabled, an opinion not addressed by the case manager.
II. Conclusions of Law
1. This Court has federal question jurisdiction over this ERISA case, pursuant to 29 U.S.C. § 1132(a) which provides, in pertinent part, as follows:
A civil action may be brought . . .(1) by a participant or beneficiary . . .(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan. . . .
2. Benefit determinations in ERISA cases arising under 29 U.S.C. § 1132(a)(1)(B) are reviewed by the court de novo, unless the plan administrator has "discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). If the plan vests discretionary authority in the plan administrator, the standard of review is "arbitrary and capricious." Hightshue v. AIG Life Ins. Co., 135 F.3d 1144, 1147 (7th Cir. 1998).
3. Here, the LINA plan grants discretion to the administrator. Accordingly, our review of LINA's denial of benefits to Morgan is according to the "arbitrary and capricious" standard.
4. Under this arbitrary and capricious standard, the court reviews the administrator's decision to determine whether it is unreasonable. Schaub v. Consolidated Freightways, Inc. Extended Sick Pay Plan, 895 F. Supp. 1136, 1140 (S.D.Ind. 1995). An administrator must "consider the factors that are relevant to the important aspects of the decision, and articulate an explanation that makes a `rational connection' between the issue, the evidence, the text and the decision made." Schaub, 895 F. Supp. at 1140; Cuddington v. Northern Indiana Public Service Co. (NIPSCO), 33 F.3d 813, 817 (7th Cir. 1994) (citing Exbom v. Central States, Southeast and Southwest Area Health and Welfare Fund, 900 F.2d 1138, 1142-43 (7th Cir. 1990)).
5. A court can conclude that a decision was arbitrary and capricious only if it is very confident that the plan administrator overlooked something important or otherwise seriously erred in appreciating the significance of the evidence. Patterson v. Caterpillar, Inc., 70 F.3d 503, 505 (7th Cir. 1995). An administrator's decision is arbitrary and capricious if the administrator entirely failed to consider an important aspect of the problem or offered an explanation for its decision that runs counter to the evidence. Trombetta v Cragin Federal Bank for Sav. Employee Stock Ownership Plan, 102 F.3d 1435, 1438 (7th Cir. 1996).
III. Analysis
In the case at bar, Defendant's case manager, in reliance upon information concerning Plaintiff's job, characterized his position as one that was "cerebral, not physical." (Finding of Fact 37(a)). Plaintiff does not challenge this description of his job, and, in fact, we hold that the evidence of record fairly supports it. (Finding of Fact 5.)
The case manager, in looking at the medical examinations in the record, correctly noted that the examinations indicated essentially normal findings, given Plaintiff's prior surgery. However, "normal" findings do not illuminate Plaintiff's physical functional abilities, given his surgery for the acoustic neuroma. The case manager does not discuss whether Morgan's residual physical problems are a "normal" consequence of his surgery. Further, there is no description of Plaintiff's physical complaints, no description of any tests or measurements performed, and no description of how such tests relate to Plaintiff's general job duties in his "cerebral" position. (Finding of Fact 37).
The case manager referenced the existence of a file "memo" which memorialized a telephone call in which Plaintiff appears to have requested a "work slip." (Finding of Fact 29). The memo suggests that Dr. Newbill would not issue an "excused absence" from work except on those days when Plaintiff was actually at the doctor's office. While a person could infer from this memo that the doctor felt that Morgan did have the capability to work during the period between February 22, 1996, and April 16, 1996, that is not the only logical inference from that evidence. It is clear that Plaintiff's last day of work at his job was on February 9, 1996. If Morgan were asking the doctor to provide an opinion as to whether or not he was disabled, the phone message might actually misstate the purpose of the call. Such reliance on a rather cryptic note in the doctor's file — without delving into what the doctor had observed or how the test results and the doctor's opinion fit together — is a superficial assessment at best of Plaintiff's physical condition as observed by Dr. Newbill.
The case manager's statement (Finding of Fact 37(d)) that —
[i]t, also, appears for a period that you were at work performing your usual and customary duties that you were presenting yourself as "sick." You were in fact told to cease this practice.
is without any factual support in the record.
Concerning the case manager's reference to the fact that Plaintiff did not comply with Dr. Miyamoto's suggestion that he undergo further physical therapy, her analysis does not include any other discussion concerning Dr. Miyamoto's treatment of Plaintiff. Neither did the case manager discuss or explain why Dr. Miyamoto's subsequent opinion that Plaintiff was disabled is not credible. The records of Dr. Miyamoto indicate that the doctor expected a recovery shortly after Morgan's surgery. But nowhere is it discussed whether a "normal" recovery by Plaintiff would leave him with residual physical limitations. By April of 1997, Dr. Miyamoto had concluded that Plaintiff had continuing balance problems that exceeded what the doctor initially believed were likely to occur following the surgery. Without some discussion of Dr. Miyamoto's findings from his examination and treatment and an explanation for why the case manager did not credit his opinion, we must conclude that the case manager did not seriously consider Morgan's physical limitations, whatever they might have been, resulting from the surgery performed by Dr. Miyamoto.
It is significant as well that the case manager failed to discuss the medical evidence from Drs. Williams, Park, Maher or Burkert. Each of these four treating physicians had examined Plaintiff and found some degree of physical incapacity to have existed continuously since February of 1996.
Similarly, the case manager included no reference to the consultative report of Dr. Bobb. While not a treating physician, Dr. Bobb's opinion, based upon a thorough review of the medical records and an examination in 1998, would certainly have been relevant. (Finding of Fact 35). Inexplicably, the case manager simply ignored it.
In summary, the case manager failed to include in her report and assessments substantial, significant evidence of physical limitations identified by four treating physicians and one consulting physician. The case manager also failed to address the findings of the two physicians mentioned in Defendant's denial letter. Instead, the case manager cited the failure of Plaintiff to timely complete a course of physical therapy and the cryptic, ambiguous telephone memorandum as evidence of an ability to work. Finally, the decision referenced facts which find no support in the record, e.g., that somehow Plaintiff was using sick leave when he was not sick. Clearly, the case manager failed to include much relevant evidence. These failures and inadequacies in the case manager's report cause us to conclude that Defendant did abuse its discretion in concluding that Plaintiff was not disabled. The Defendant's examiner did not articulate an explanation for the denial of benefits that creates a rational connection between the issues, the evidence, the text and the decision made.
Plaintiff argues that the case manager should have discussed the fact that Plaintiff received Social Security disability benefits. (Finding of Fact 36). We conclude that the decision of the Social Security Administration is not binding upon LINA, even though the definition of disability under the Social Security Act is quite similar to LINA's own definition. We do not believe that the failure to consider the information found at Finding of Fact 36 to be error because LINA is entitled to make its own independent judgment as to disability.
For these reasons, LINA's Motion for Summary Judgment seeking dismissal of Plaintiff's claim for benefits must be DENIED. Case law in this circuit suggests that the usual remedy in a circumstance where a defendant has abused its discretion is to remand the case for further consideration. Quinn v. Blue Cross and Blue Shield Ass'n, 161 F.3d 472 (7th Cir. 1998). However, having previously ordered a remand, we will not do so again. Instead, we hereby order the Defendant to reinstate retroactively Plaintiff's benefits, effective February 12, 1996, to the date of this order, with interest payable from the earlier date. Our ruling does not preclude Defendant's review of the issue of Morgan's continuing disability under the terms of the plan for the future.
It is so ORDERED this day of March 2003.
FINAL JUDGMENT
Final judgment is hereby entered on behalf of the Plaintiff and against the Defendant. Defendant is ordered to reinstate retroactively the disability benefits under the plan to Plaintiff effective February 12, 1996, through the date of this order, and pay that amount to Plaintiff with interest.
DATED the 14TH day of January, 2003.