Opinion
No. 98 Civ. 5018 (KMW) (RLE).
June 6, 2001
ORDER
This action arises out of defendants' decision to terminate the long-term disability benefits of pro se plaintiff. By Order dated March 21, 2000, the Court denied defendants' motions for summary judgment on plaintiff's claim under Section 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132 (the "benefits claim"), but granted summary judgment for defendants on all of plaintiff's other claims.
All parties moved for summary judgment on the benefits claim. On March 27, 2001, Magistrate Judge Ellis issued a Report and Recommendation (the "Report"), which recommended that the Court grant summary judgment in favor of defendant Chase and dismiss the benefits claim; the Report did not address the motions for summary judgment on behalf of the other defendants. The Court adopts the Report's recommendation and grants Chase summary judgment dismissing the benefits claim. The Court also grants summary judgment dismissing the benefits claim against Liberty Life Assurance Company of Boston ["Liberty"] and CIGNA Life Insurance Company ["CIGNA"].
DISCUSSION
In opposition to the Report, plaintiff argues that (1) CIGNA had a conflict of interest; (2) defendants' denial of benefits was arbitrary and capricious; (3) the benefits plan was ambiguous; (4) defendants intentionally concealed medical evidence to this Court and intentionally classified plaintiff's disability as mental rather than physical to profit from a shorter benefits period; and (5) the Report considered evidence outside of the administrative record. The Court conducts a de novo review of the factual and legal findings and recommendations in the Report, see 28 U.S.C. § 636(b), and examines each of plaintiff's objections in turn.
Plaintiff's claim under the Business Accident Insurance plan was dismissed in the Court's March 17, 2000 Order.
1. Conflict of Interest
Plaintiff contends that CIGNA and Chase Manhattan Bank ["Chase"] had a financial incentive to classify plaintiff's disability as mental rather than physical, that this incentive resulted in a conflict of interest, and that the Court should therefore apply a de novo standard of review to the decision to deny plaintiff's disability claim. The Court disagrees. It is undisputed that plaintiff's benefits determination was made by CIGNA and that CIGNA was not financially responsible for paying benefits under the policy. Accordingly, there is no basis for the Court to find a conflict of interest, and the Court adopts the Report's conclusion that the arbitrary and capricious standard of review applies. 2. Denial of Benefits
Courts in Second Circuit will apply an arbitrary and capricious standard of review to a claim denial even in the face of a potential conflict of interest unless plaintiff can show that the "conflict affected the reasonableness of the . . . decision." See Whitney v. Empire Blue Cross and Blue Shield, 106 F.3d 475, 477 (2d Cir. 1997) (citing Sullivan v. LTV Aerospace Defense Co., 82 F.3d 1251 (2d Cir. 1996) (internal citations omitted)). Plaintiff has not made such a showing in this case.
Under the arbitrary and capricious standard of review, the Court may overturn a decision to deny benefits only if it was "without reason, unsupported by substantial evidence or erroneous as a matter of law." Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995) (citing Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993). As the Report carefully establishes, none of these bases exist in this case: defendants had substantial medical evidence of plaintiff's mental disability, and had evidence that his physical impairments were not totally disabling. The Court adopts the Report's conclusion that the decision to deny plaintiff's benefits was not arbitrary or capricious and thus declines to overturn the decision.
In March 1994, Dr. Najovits indicated that plaintiff's physical impairments were "not a reason for disability" but recommended psychiatric care. (Colello Aff. at 112). In May 1994, Dr. Perdik reported that plaintiff was unable to work "because of emotional distress." (Id. at 59.) In June 1994, Dr. Lee's office reported to CIGNA that plaintiff was not medically disabled from his job. (Id. at 77-78.) In August 1994, Dr. Browne diagnosed plaintiff with "Axis II 30.00 Paranoid Personality." (Id. at 155.) In September 1994, Dr. Eshkenazi reported that plaintiff suffered from "Dysthymic Disorder" and "Personality Disorder, Schizoid Type." (Id. at 175.) Drs. Greefield and Tucci reported in November 1994 that plaintiff suffered from both physical and mental impairments (id. at 189, 191); Dr. Greenfield affirmed this conclusion in July 1995, and reported (1) that the mental impairments were more severe and (2) that the physical impairments did not preclude plaintiff from certain types of work. (Id. at 259.)
3. Ambiguity of Plan Language
Plaintiff further contends that LTD plan language was ambiguous in its distinction between mental and physical disabilities and that this ambiguity should be resolved in plaintiff's favor. This contention is without merit. The rule of contra proferentum, under which ambiguities in drafting are resolved against the drafter, does not apply in the context of a review under the arbitrary and capricious standard. See Pagan, 52 F.3d at 443-44. Under this deferential standard, the Court considers merely whether CIGNA's interpretation of the plan language is reasonable. In relevant part, the plan provides for a 24 month cutoff in benefits for "[a]ny disability from mental or emotional disease or disorders" unless the participant remains in a hospital or mental institution at that time. (LTD Plan § 2.23.) It is reasonable to read this language as applying to disabilities stemming from any mental or emotional disease or disorder, regardless of the cause of such disease or disorder. For this reason, the Court declines to find that the benefits denial should be overturned on the basis of any ambiguity in the plan language.
4. Defendants' Alleged Misfeasance
Plaintiff next argues that defendants "misled" this Court as to the relevant medical evidence, and acted in bad faith by intentionally classifying plaintiff's disability as mental rather than physical. In determining that the decision to deny benefits was neither arbitrary nor capricious, the Report reviewed the administrative record and considered plaintiff's objections to various alleged improprieties by defendants and in the record. The Report found, and the Court accepts, that plaintiff has not demonstrated any bad faith on the part of defendants, any improprieties in defendants' behavior in this litigation, or any problems in the record. Consequently, the Court rejects this objection to the Report.
5. Scope of the Administrative Record
Finally, plaintiff argues that the Report relies on evidence outside of the administrative record. Specifically, plaintiff contends that the medical report of Dr. Eshkenazi should not considered part of the record because Dr. Eshkenazi examined plaintiff at the time of his initial claim for short-term disability benefits. This claim is without merit. CIGNA could, and did, rely on Dr. Eshkenazi's examination during its evaluation of plaintiff's disability claims, and this examination thus unquestionably constitutes part of the administrative record. See Sandoval v. Aetna Life Casualty Ins. Co., 967 F.2d 377, 380 (10th Cir. 1992) (upholding consideration of independent medical examination).
CONCLUSION
For the reasons set forth above, the Court rejects plaintiff's objections to the Report. The Court accepts the objections of defendants Liberty and CIGNA, and grants summary judgment dismissing plaintiff's benefit claim against all defendants. The Clerk of Court is directed to close this case. All pending motions are moot.
SO ORDERED.