Opinion
Civil No. 02-655 (JRT/SRN)
September 3, 2003
James S. Ballentine, SCHWEBEL GOETZ SIEBEN, Minneapolis, MN, for Plaintiff
Martin A. Carlson and Eric C. Tostrud, LOCKRIDGE GRINDAL NAUEN, Minneapolis, MN, for Defendant
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
In this ERISA case, plaintiff Dale Fogerty seeks reinstatement of long-term disability payments that were discontinued after the defendant, The Hartford Life and Accident Insurance Company ("Hartford") determined that plaintiff was no longer totally disabled according to the plan's definition. Hartford requests summary judgment, arguing that its decision to discontinue plaintiff's long-term disability benefits was well-supported and should be upheld regardless of the standard of review the Court applies. For the reasons discussed below, the Court grants defendant's motion.
This action was initially filed in state court as a breach of contract claim. Defendant removed to this Court, and the parties agree that this claim should be converted into one arising under ERISA's civil enforcement provision. 29 U.S.C. § 1132(a) (1) (B).
BACKGROUND
Plaintiff worked as a plant security guard for Unisys for about fourteen years. While employed at Unisys, plaintiff was enrolled in an employee benefit plan ("the Plan") designed to provide long term disability ("LTD") benefits. Unisys was the plan administrator, and defendant Hartford insured the Plan.
On June 28, 1998, plaintiff was trimming a tree on his property when he fell approximately 20-25 feet, and broke several bones in his foot, suffering a "Lisfranc" injury. Plaintiff spent five days in the hospital. After his release from the hospital, he continued to be under the care of an orthopedic surgeon, Dr. Peter Daly.
A "Lisfranc" injury is a fracture of small bones on the top of the foot. These bones form a joint, and a Lisfranc fracture results in impaired movement in that joint.
Plaintiff was unable to return to work, and in July of 1998 he applied for short-term disability benefits, which were awarded. Dr. Daly initially indicated plaintiff would be able to return to work by September of 1998. Plaintiff switched orthopedic doctors, and by September, he was under the care of Dr. Peter Boyum. Despite Dr. Daly's prediction, plaintiff was unable to return to work in September. In December Hartford notified plaintiff that he should apply for LTD benefits because his 26-week eligibility for short-term benefits was nearly exhausted.
Hartford also insures the short-term disability plan at Unisys.
Hartford initially approved plaintiff for LTD benefits under the "own occupation" definition of total disability. Plaintiff was awarded LTD benefits on February 9, 1999, retroactive to December 28, 1998. Despite this approval, Hartford continued to assess plaintiff's ability level. As part of this information gathering process, Hartford ordered an independent medical exam ("IME"), asked a private investigator to perform surveillance, and conducted a transferable skills analysis. Based on information gathered from those sources, Hartford informed plaintiff that his benefits would be discontinued on the "change date" of June 29, 2000 (the change date is the expiration of two years, when the "own occupation" test is replaced by the "any occupation" test). Hartford informed plaintiff that if he disagreed with the decision, he could appeal, or he could submit additional information within 60 days.
Plaintiff sent a timely notice of appeal on June 30, 2000. Plaintiff did not submit any additional information that would support his claim of total disability with that appeal. Defendant affirmed its decision to discontinue benefits in a letter dated August 24, 2000; defendant noted that "This concludes our review of your claim and your file is being closed." Plaintiff objected to this decision, and in a letter dated September 22, 2000 he asked that his benefits be reinstated. Again, he did not provide any evidence to support his contention that he was totally disabled. Again, his appeal was denied (this denial was dated October 23, 2000). This October 23 letter informed plaintiff that "you have exhausted the appeals process with Hartford and your file is being closed."
Nearly two months after the file was closed, plaintiff submitted a letter from his primary care physician, Dr. Richard Powell, who indicated plaintiff was totally disabled because of constant pain and chronic fatigue, and could not perform even sedentary jobs. Defendant informed plaintiff that it would review the information and did not indicate that the letter would not be reviewed because plaintiff's file was closed. Defendant then requested that Powell complete a "physical capacities" form. However, Powell did not complete the form; instead he returned it with the notation "I am deferring all decisions herein requested to an orthopedic consultant at St. Croix ortho[pedic]. The patient will arrange." Defendant then asked plaintiff to get the form completed by an orthopedist within 30 days (this request was made on January 16, 2000). Plaintiff did not submit a completed form, and on March 9, 2001, defendant again affirmed its denial of LTD benefits.
About two months later, plaintiff's counsel contacted defendant and noted that they were scheduling an orthopedic evaluation, as well as a functional capacity evaluation. Then in early October 2001 counsel for plaintiff sent defendant a six-page report from another orthopedist, Dr. Michael Davis. Defendant contends that this was the first time defendant had any notice that plaintiff had mental health concerns. Davis concluded that plaintiff's mental health problems combined with his foot ailments left plaintiff totally disabled. Davis based this determination at least in part on plaintiff's descriptions of his limitations — including plaintiff's contention that he could not drive a car, could not walk without the aid of a cane, and could walk only short distances.
Defendant sent plaintiff yet another denial letter, on October 17, 2001, indicating that because Davis's opinion letter had not been received within thirty days, it would not be considered. Further, defendant indicated that even if Davis's opinion were considered, plaintiff's claims would be denied.
Plaintiff's next submission was a vocational/psychological evaluation from psychologist Philip Haber. Dr. Haber opined that plaintiff was totally disabled due to his chronic pain, orthopedic problems, and his "grossly abnormal" personality. Defendant again denied reinstatement of benefits, reasoning that Haber's report reflected plaintiff's current condition, not his condition on June 29, 2000 (the change date). Defendant also noted that there was no indication that plaintiff was being treated for the psychiatric conditions on the change date, as is required by the policy.
Plaintiff's final submission was another letter from Davis, indicating that plaintiff "has been permanently and totally disabled since June 28, 2000." This letter offered no basis for that conclusion, and benefits were denied again. Plaintiff then brought this lawsuit.
THE PLAN
Under the Plan, the definition of total disability shifts from an "own occupation" to an "any occupation" after a claimant has been disabled for two years. Specifically, the plan documents provide the following definition of disability:
What disability means — LTD
During the first two years of disability .
For purposes of the Unisys LTD Plan, during the first two-year period, you are considered disabled if all of the following apply:
you are unable to work your normal work schedule due to the disability
you are being treated for your illness, injury or pregnancy by a licensed physician
it can be verified by The Hartford that you are unable, due to your disability, to perform the essential functions of your regular occupation at any job site within Unisys (essential functions include the ability to work your normal work schedule)
***
After two years of disabilityThe definition of disability changes after you have been disabled for two years:
from your own occupation
to any occupation for which you may qualify or may become qualified by education, experience or training
The Plan also confers discretion on Hartford to make eligibility determinations. The discretion-granting language is as follows: "The plan administrator has the discretionary authority to supply omissions, make factual determinations, and to decide any dispute that may arise regarding the rights of participants. All such decisions are binding and conclusive on all interested parties."
ANALYSIS
I. Standard of ReviewERISA itself does not provide a standard of review, however "a denial of benefits . . . is to be reviewed under a de novo standard unless the benefit plan gives the administrator . . . 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, 115 (1989). If the plan confers discretion on the plan administrator, a deferential abuse of discretion standard of review applies. Bounds v. Bell Atlantic Enterprises Flexible Long-Term Disability Plan, 32 F.3d 337, 339 (8th Cir. 1994); Luke v. IKON Office Solutions Inc., 2002 WL 1835645 (D. Minn. Aug. 1, 2002). Yet another standard, the "sliding scale" approach is used when the Plan contains such "explicit discretion-granting language" but the plan participant has presented "material, probative evidence demonstrating that (1) a palpable conflict of interest or a serious procedural irregularity existed, which (2) caused a serious breach of the plan administrator's fiduciary duty to her." Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998).
To apply the less deferential "sliding scale" standard, the court must find that plaintiff has "offer[ed] evidence that `gives rise to serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator's whim.'" Layes v. Mead Corp., 132 F.3d 1246, 1250 (8th Cir. 1998); see also West v. Aetna Life Ins. Co., 171 F. Supp.2d 856, 871 (N.D. Iowa 2001) ("when faced with a contention that less deferential review is appropriate the court must decide whether the claimant has offered evidence that gives rise to serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator's whim.").
In this case, the plan clearly included the requisite "discretion granting language" for the purpose of determining the standard of review. Therefore, the Court reviews the decision using the deferential abuse of discretion standard, unless plaintiff establishes that the Woo test is met and the sliding scale approach applies.
A. First prong of the " Woo test "
1. Conflict of Interest
"Something like a rebuttable presumption of conflict of interest exists when the insurer is also the plan administrator." Philips-Foster v. UNUM Life Ins. Co. of America, 302 F.3d 785, 795 (8th Cir. 2002); see also Tillery v. Hoffman Enclosures, Inc., 280 F.3d 1192, 1197 (8th Cir. 2002) ("when an entity funds a plan and is also the plan administrator there is a rebuttable presumption of a palpable conflict of interest") (citing Barnhart v. UNUM Life Ins. Co., 179 F.3d 583, 587-88 (8th Cir. 1999)). The conflict presented by this dual role is, of course, a financial one: That is, where the insurer is also the administrator, the insurer may have a direct profit motive to deny claims. See West v. Aetna Life Ins. Co., 171 F. Supp.2d 856, 871 (N.D. Iowa 2001) (discussing conflict); accord Farley v. Arkansas Blue Cross Blue Shield, 147 F.3d 774, 777 n. 5 (8th Cir. 1998) (finding no palpable conflict of interest even though insurer and plan administrator were same corporation because, as nonprofit entity, it "does not have a direct profit motive in denying claims").
This rebuttable presumption, however, does not necessarily lead to the conclusion that a palpable conflict of interest in fact exists. Tillery, 280 F.3d at 1197 ("Not every funding conflict, however, automatically leads to the conclusion a palpable conflict of interest exists.") (citing Davolt v. The Executive Comm. of O'Reilly Auto., 206 F.3d 806, 809-10 (8th Cir. 2000) (holding that the district court erred by finding an automatic conflict of interest merely because insurer and administrator were the same)). Evidence of mitigation of the conflict can overcome what might otherwise be a per se conflict. See Woo, 144 F.3d at 1161 n. 2. For example, an apparent funding conflict might be mitigated by an insurer limiting the potential loss with a retrospective premium. Id.
In this case, Unisys is the plan administrator, and defendant is the insurer. However, the financial conflict remains because the plan expressly confers discretion on defendant to determine questions of benefit eligibility. Although defendant denies that a conflict of interest exists, defendant offers no evidence of mitigation. The Eighth Circuit has held that this "indicia of bias can be negated by ameliorating circumstances, such as equally compelling long-term business concerns that militate against improperly denying benefits despite the dual role." Schatz v. Mutual of Omaha Ins. Co., 220 F.3d 944, 947-48 (8th Cir. 2000) (internal quotations omitted). However, defendant has presented no such ameliorating circumstances here. Therefore the Court is satisfied that there is a conflict. See id. at 948 (holding that first prong of the Woo test satisfied where only evidence of conflict presented was that insurer and plan administrator were same entity and insurer had not presented evidence of ameliorating circumstances to overcome the "structural bias" but nonetheless applying abuse of discretion standard because second prong of test was not satisfied).
The first prong of the Woo test does not require both a conflict of interest and procedural irregularities. Because there is some ambiguity regarding the rebuttable presumption of conflict of interest, the Court also analyzes plaintiff's claims of procedural irregularity.
"Procedural irregularities include denial of a claim without seeking an independent review, failure to properly investigate, or similar failure to use proper judgment." Queen v. Hartford Life Ins. Co., 188 F. Supp.2d 1141, 1146 (D. Neb. 2002); see also Conley v. Pitney Bowes, Inc., 978 F. Supp. 892 (E.D. Mo. 1997). An example of a procedural irregularity rising to the level required to trigger less deferential review is found in Woo, in which the Eighth Circuit held that failing to have an independent medical expert review the plaintiff's claim even though there was conflicting medical evidence constituted a procedural irregularity. See Woo, 144 F.3d at 1161.
Plaintiff claims several procedural irregularities are present in this case, including the defendant's failure to notify plaintiff that defendant was relying on surveillance in its denial decision, the failure to fully investigate by not ordering an additional IME, and failure to fully consider plaintiff's vocational expert's opinion.
B. Surveillance
ERISA's notice requirement obligates plan administrators "to set out in opinion form the rationale supporting [the decision to deny benefits] so [claimants can] adequately prepare . . . for any further administrative review, as well as an appeal to the federal courts." Richardson v. Central States, S.E. S.W. Areas Pension Fund, 645 F.2d 660, 665 (8th Cir. 1981). See also DuMond v. Centex Corp., 172 F.3d 618, 622 (8th Cir. 1999) ("The purpose of [the notice] requirement is to provide claimants with enough information to prepare adequately for further administrative review or an appeal to the federal courts."); Davidson v. Prudential Ins. Co. of America, 953 F.2d 1093 (8th Cir. 1992) (discussing ERISA's notice requirements and finding them satisfied where the denial letters ensured that claimant had adequate notice of why his claim was denied, how to seek review, and what additional information would assist in the review process).
Defendant admittedly did not state in its denial letters that it had conducted any surveillance, or that it was relying on that surveillance in its benefits decision. Defendant also admitted that its normal procedure is to inform claimants when surveillance is gathered or used as a basis for denial of benefits. Despite this admitted procedural difference, defendant relies on a recent Supreme Court opinion in The Black Decker Disability Plan v. Nord, 123 S.Ct. 1965 (2003), and argues that while its failure to refer to the surveillance is a practical procedural irregularity, it is not a legal procedural irregularity.
The question before the Court in Black Decker was whether the "treating physician rule" requires ERISA plan administrators to afford special deference to the opinions of treating physicians. Id. at 1967. The treating physician rule requires special deference be paid to the social security claimant's treating physicians. Id. at 1969. The rule "was originally developed . . . as a means to control disability determinations . . . under the Social Security Act." Id. at 1967. Noting the important differences between ERISA actions and social security claims, the Court found the rule inapplicable in ERISA cases. Id. Important to defendant's argument in this case is the Black Decker Court's careful attention to the language of the Act itself. The Court examined the Act, and determined that "nothing in the Act itself . . . suggests that plan administrators must accord special deference to the opinions of treating physicians." Id. at 1970.
Defendant claims that Black Decker stands for the proposition that courts may not impose on ERISA plan administrators any duties beyond those required by the Act. Even if this Court agrees that Black Decker stands for that broad, general proposition, the requirement that administrators "provide adequate notice in writing to any participant or beneficiary whose claim or benefits under the plan has been denied" is expressly imposed by the Act. 29 U.S.C. § 1133(a). The Act is even more specific, going on to note that the notice must "set forth the specific reasons for the denial" and must be "written in a manner calculated to be understood by the participant." Id. In that important way, the notice requirement is different from the treating physician's rule. Specifically, while nothing in the Act mandates that plan administrators afford particular deference to treating physicians, the Act does require adequate notice.
Defendant's failure to notify plaintiff of the surveillance is admittedly a procedural irregularity, and the Court characterizes it as a serious and "legal" one. The Court need not go beyond the four corners of the Act to reach its conclusion. The notice requirement, and its purpose, is well established. The notice requirement is designed to allow claimants a full and fair opportunity to present their claims. Defendant posits, and it may be, that plan administrators need not list every consideration relied on for a particular denial, however, where a piece of evidence plays a critical role in the denial, as did the surveillance in this case, it is not reasonable to fail to provide that rationale in the denial letter. The Court finds that the failure to provide proper notice satisfies the first prong of the Woo standard.
C. Failure to fully investigate
Plaintiff's next argument is premised on defendant's failure to order a repeat IME before denying his benefits. This failure, plaintiff argues, represents a serious error in judgment that should also satisfy the first prong.
Defendant ordered an initial IME, which was performed on March 17, 1999, by Dr. Jeffrey Nipper, an orthopedist. Dr. Nipper reviewed plaintiff's X-rays and other medical records relating to his foot injury and also did a physical exam. Nipper provided a nine-page report, including responses to several questions posed by defendant. One such question was whether plaintiff had reached maximum medical improvement. In response to that question, Nipper indicated that plaintiff had probably not reached maximum improvement, and that he "would re-evaluate at a period of 9-12 months" following the accident for "final evaluation."
Dr. Nipper noted that plaintiff was "very combative, very belligerent, rather hostile, and moderately uncooperative. . . . Nonetheless, the exam continued." Dr. Nipper does not indicate that plaintiff was so noncompliant as to call into doubt the exam results.
Despite this "reevaluation" notation, defendant did not request another examination and instead relied on Nipper's initial report in terminating plaintiff's benefits. Plaintiff characterizes the initial report as "stale" and "incomplete." Defendant argues that because the surveillance revealed that plaintiff was not disabled, there was no need to request another IME.
Although it may have been preferable to order the reexamination, the Court finds that the failure to order it does not qualify as a "failure to fully investigate." Defendant did not rely solely on the IME when terminating plaintiff's benefits. At the time defendant terminated benefits, plaintiff had not submitted any conflicting medical or vocational evidence that would call into doubt the IME (although he had been invited to do so). In addition, plaintiff reads too much into the "reevaluation" clause, given the rest of the IME. For example, the IME reports that "[c]ertainly [plaintiff] should be able to walk short distances with the aid of a cane" and also notes that plaintiff "certainly is able to perform activities at a desk setting with keyboard, light lifting up to 20 pounds, short walks in an office setting." These responses are in a different section, and appear independent from the "reevaluation clause." The opinion that plaintiff would be able to perform activities at a desk setting would not be impacted by a subsequent evaluation of plaintiff's foot. Finally, given the surveillance evidence and the opinion of plaintiff's physical therapist that he could return to work, it was not unreasonable to assume that plaintiff's condition had not deteriorated since the IME. (Plaintiff could clearly walk without cane, could walk for more than a few steps, could drive, could lift things, could bend over, etc.).
Defendant spoke with plaintiff's physical therapist by telephone. The therapist indicated that plaintiff's mobility was good, everything felt normal, and that plaintiff should return to work.
D. Competing vocational reports
Plaintiff argues that defendant summarily dismissed the vocational report plaintiff provided, and relied instead on the vocational report prepared by defendant's in-house rehabilitation specialist. There is no requirement, however, that an insurer give equal weight to a claimant's vocational report. Bremer v. Hartford Life Accident Ins. Co., 16 F. Supp.2d 1057, 1062 (D. Minn. 1997) (holding that it was reasonable to rely in part on in-house transferable skills analysis). Neither report in this case was "neutral," and the report provided by plaintiff was conclusory in one important respect. Specifically, plaintiff's expert opines that plaintiff has been disabled since June 28, 1998, but does not explain how he reaches that conclusion. Reliance on its in-house vocational report does not amount to a procedural irregularity.
E. Second prong of the " Woo test " (breach of fiduciary duty)
Plaintiff has shown the first prong of the Woo test satisfied; plaintiff "must also show the conflict or irregularity caused a serious breach of [defendant's] fiduciary duty." Tillery, 280 F.3d at 1197. The alleged breach must be significant to trigger less deferential review. See Tillery, 280 F.3d at 1197.
This "second prong presents a considerable hurdle for plaintiffs." Schatz v. Mutual of Omaha Ins. Co., 220 F.3d 944, 948 (8th Cir. 2000) (quoting Barnhart v. UNUM Life Ins. Co., 179 F.3d 583, 588 n. 9 (8th Cir. 1999)). For example, denial of benefits, even when that denial is contrary to some medical evidence, does not necessarily qualify as such a breach. See Schatz, 220 F.3d at 949. See also Barnhart, 179 F.3d at 589 ("The mere fact that [defendant] reached a decision contrary to [plaintiff's] medical evaluators, when it based this decision on substantial evidence in the record, reports of outside medical reviewers, and conflicting evidence in [plaintiff's] own submissions to the record, does not raise doubts in the mind of this Court that [defendant's] decision was arbitrary or capricious.").
In this case, the failure to inform plaintiff of the surveillance and the resulting inability of plaintiff to respond to that evidence presents the most serious breach. This clear breach of fiduciary duty undermines the Court's confidence in the integrity of defendant's decision-making process. McGarrah v. Hartford Life Ins. Co. , 234 F.3d 1026, 1031 (8th Cir. 2000). Therefore, the Court applies the less deferential sliding-scale review.
II. Sliding Scale Review
A. General standard
Under this less deferential review, the "[C]ourt will always review for an abuse of discretion, but it will decrease the deference given to the administrator in proportion to the seriousness of the conflict of interest or procedural irregularity." Woo, 144 F.3d at 1161-62 (citing Chambers v. Family Health Plan Corp., 100 F.3d 818, 825-27 (10th Cir. 1996)). Plaintiff urges the Court to grant little deference to the defendant's decision, and suggests that defendant must prove by a preponderance of the evidence that its decision was the correct one. Before the Court analyzes the evidence, however, the Court must decide what evidence is properly considered.
B. Administrative record
In the usual circumstance, the Court may consider "only the evidence that was before the administrator when the claim was denied." Farley v. Arkansas Blue Cross and Blue Shield, 147 F.3d 774, 777 (8th Cir. 1998) See Brown v. Seitz Foods, Inc., Disability Ben. Plan, 140 F.3d 1198, 1200 (8th Cir. 1998) (holding that admitting evidence outside the administrative record is impermissible on deferential review of ERISA plan administrator's claims decision, and discouraged on de novo review to ensure expeditious judicial review of ERISA benefit decisions and to keep district courts from becoming substitute plan administrators). The Court may consider additional evidence on de novo review, but only if the plaintiff shows good cause to do so. Id.
The parties dispute what constitutes the "administrative record." Plaintiff claims that his "additional" evidence (including the reports of Drs. Davis and Haber, and Davis's supplemental letter) is a part of the administrative record. Defendant disagrees, and argues that the file was closed at least as of March 9, 2001 — after plaintiff failed to submit the requested physical capacities form. Plaintiff does not argue that he had good cause in failing to provide this information to defendant in a more timely fashion. Plaintiff essentially makes a waiver argument — suggesting that because defendant agreed to reconsider its decision based on untimely submitted evidence, defendant has waived any argument that the evidence is not part of the record.
Plaintiff's waiver argument does not find support in the case law, or in the Act itself. Nothing in the Act requires plan administrators to allow limitless appeals. Further, the Court does not agree with plaintiff's characterization that defendant "re-opened" the investigation. Defendant acknowledged receipt of the later information, but expressly noted that these later letters and reports would not be considered. Defendant did note, in the alternative, that even if the letters and reports were considered, the same decision would be reached. This action does not amount to a "re-opening" of the administrative record.
Because the Court finds that the supplemental reports and letters are not part of the administrative record, plaintiff must show "good cause" for the Court to consider an expanded record. Plaintiff has not given the Court any indication of what such "good cause" might be, and the Court can discern none from the record. Although the Court declines to consider the reports and letters of Drs. Davis and Haber, the Court will consider the December 18, 2000 letter from Dr. Powell, which stated that plaintiff was totally disabled because of nearly constant pain. The Court will also consider Powell's deferral to an orthopedic doctor for any more specific information about plaintiff's limitations.
The Court invited discussion of this topic at oral argument, and plaintiff did not proffer any rationale that could amount to "good cause." Instead, plaintiff persisted in his argument that the records are a part of the administaritve record, and that the Court need not expand the record to include the untimely submitted medical evidence.
C. Application of the sliding scale to the facts of this case
1. Excluding reports and letters of Davis and Haber
The conflict of interest is defendant's financial interest as the de facto plan administrator and the insurer, and the procedural irregularity is the failure to notify plaintiff of all the reasons for the denial of benefits. In this case, the violations slide the scale away from deferential review, but are not serious enough to require that the defendant prove the reasonableness of its decision by a preponderance of the evidence. Compare Armstrong v. Aetna Life Ins Co., 128 F.3d 1263 (8th Cir. 1997) (pre- Woo case where egregious conflict led to de novo review — conflicts included incentive to claims agents to deny claims) with Woo, 144 F.3d at 1161 (heightened, but not de novo review).
The evidence supporting the denial includes the IME, the surveillance, and the vocational report by defendant's in-house rehabilitation specialist. As noted above, the opinion expressed by Dr. Nipper in the IME was that plaintiff was able to work sedentary jobs and was able to walk short distances. The Court finds it reasonable to rely on this IME, and disagrees with plaintiff's criticism that the IME was "stale" and "incomplete." In addition, defendant was under no obligation to defer to plaintiff's treating physicians, The Black Decker Disability Plan v. Nord, 123 S.Ct. 1965 (2003); Smith v. UNUM Life Ins. Co. of America, 305 F.3d 789, 795 (8th Cir. 2002), and in this case, there was no substantive or contrary opinion to which defendant could have deferred.
The surveillance also provides evidence that plaintiff is not "totally disabled" as that term is defined by the Plan. See McGarrah v. Hartford Life Ins. Co., 234 F.3d 1026, 1031 (8th Cir. 2000) (relying on videotape surveillance to determine whether plaintiff was disabled). In the portion of the videotape surveillance submitted to the Court, plaintiff drives his car, walks up and down stairs, walks without the aid of a cane, and shops at a retail store without assistance. This is in contradiction to his reports to his medical providers about his limitations (for example, he told providers he could not drive, and could not walk without a cane). This is also in contradiction to his representations to defendant on his disability forms. The surveillance is persuasive evidence that plaintiff is not totally disabled by his foot injury. Although plaintiff complains that he was not able to respond to the surveillance, he had the opportunity to do so in this Court, and he offered no explanation.
Defendant also relies on the vocational report (transferable skills analysis) prepared by defendant's employee. The report identified three jobs that plaintiff could perform given his limitations, and indicated that these jobs exist in sufficient numbers in the national economy. Plaintiff did not submit the competing vocational report until after the administrative record was closed, therefore defendant's reliance on its internal report was reasonable. Plaintiff also objects to the "in-house" nature of the report, but insurers are allowed to perform and rely on their own vocational assessments. Bremer v. Hartford Life Accident Ins. Co., 16 F. Supp.2d 1057, 1062 (D. Minn. 1997).
Specifically, the report identified Ampoule Sealer, Button Spindler and Leaf Tier. Although plaintiff is a high school graduate with three years of college, the Rehabilitation Specialist recommended only jobs that can be learned with short demonstration or on the job training.
The evidence in plaintiff's favor includes the rather cursory letter from his personal physician, Dr. Powell. However, when defendant requested more information regarding plaintiff's specific limitations, Dr. Powell deferred to the opinion of an orthopedic specialist. Given the deferral, it is not unreasonable to give somewhat less weight to Powell's opinion. To the extent Powell's opinion was based on self-reported limitations, it is also reasonable to give less weight to the opinion, because defendant had reason (the surveillance) to doubt plaintiff's veracity in reporting his own limitations.
Given the combination of the evidence on which defendant relied in denying benefits, and the absence of support for plaintiff's position, the Court finds that defendant has established that adequate evidence exists for its decision. The evidence on which defendant relies approaches the preponderance standard, and therefore satisfies the "sliding-scale" review. The Court upholds defendant's determination that plaintiff is not "totally disabled" as the plan defines that term.
2. Including reports of Davis and Haber
Even if plaintiff offered "good cause" that would allow the Court to expand the administrative record, defendant's determination would be upheld. Plaintiff submitted three pieces of evidence after the record was closed. First, he submitted a report of Dr. Davis, an orthopedist. He then submitted the vocational report prepared by Dr. Haber. Finally, he submitted an additional letter from Dr. Davis.
Dr. Davis indicated that plaintiff was "totally and permanently disabled" given plaintiff's multiple injuries and persistent symptoms referable to neck, back, head, both eyes, both lower extremities, and right ribcage, and also considering the psychiatric diagnoses based on the medical records from the Veterans Administration Hospital. It is not clear from this letter whether plaintiff was treating for any, or all, of these problems at the end of the initial two years of disability as is required by the Plan. The Court also notes that it would not be unreasonable for the defendant to give less weight to the opinion of an orthopedist when that opinion is on matters outside the doctor's specialty (such as psychological matters).
The Court notes that these records have not been provided to the Court and there is no indication they were provided to defendant.
The Court next considers Dr. Haber's report dated November 26, in which he opined that plaintiff was permanently and totally disabled. This determination was based in part on plaintiff's "grossly abnormal" personality. Haber's report supports a finding that plaintiff has serious mental health difficulties, and it may even support a finding of total disability on that basis. At the time defendant terminated benefits, however, there was little, or perhaps no, indication that plaintiff's psychological difficulties contributed to his disability. Other than Haber's report, plaintiff points to no professional documentation of psychological or psychiatric problems, and no evidence that plaintiff was treating for those difficulties on the "change date." Absent a clear indication that plaintiff was relying on psychological or psychiatric problems in his disability claim, the Court cannot find that defendant's benefit denial was unreasonable. "ERISA does not require plan administrator to assess an `alternative diagnosis to the one [ ] submitted for benefits . . . much less to determine whether that alternative diagnosis constitutes a total disability.'" DuMond v. Centex Corp., 172 F.3d 618, 622 n. 9 (8th Cir. 1999) (quoting Donato v. Metropolitan Life Ins. Co., 19 F.3d 375, 382-83 (7th Cir. 1994)). The Court also recognizes that Haber opines that defendant was disabled on the "change date." However, that opinion is conclusory, and it is not clear on what basis Haber makes this determination; therefore it would not be unreasonable for the defendant to give less deference to that opinion.
Finally, Dr. Davis submitted a supplemental letter dated November 21, 2001, which asserted, in two short paragraphs and with no explanation or rationale, that plaintiff has been disabled since June 28, 2000. The Court does not find this letter persuasive evidence.
The Court does find the description of plaintiff's psychological ailments distressing, and does not doubt that plaintiff suffers from psychological problems that may well be severe. It is not accurate to say that defendant had no notice of psychological difficulties; in plaintiff's initial appeal of the denial of benefits, he noted that "[m]y nerves are shot and I am very upset [and] I have terrible thoughts daytime [and] at night." However, plaintiff did not supply any medical reports, or any records from past treating mental health professionals. He also did not indicate that he was then being treated by any health professional for those problems. There is no evidence in the record that plaintiff cannot be successfully treated for the psychological problems — in fact, there is no evidence that he is pursuing treatment at all, and plaintiff's attorney was unable to represent that plaintiff was receiving treatment. Absent such evidence, plaintiff is not entitled to LTD benefits under the plan.
Haber reports that plaintiff's symptoms include homicidal ideation, depression, rage, and delusional disorder.
ORDER
Based upon the foregoing, the submissions of the parties, the arguments of counsel and the entire file and proceedings herein, IT IS HEREBY ORDERED that:
1. Defendant's Motion for Summary Judgment [Docket No. 9] is GRANTED.
2. Plaintiff's complaint is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.