Ellis v. Liberty Life Assurance Company of Boston

Filing 66

MEMORANDUM OPINION AND ORDER: Judgment is entered in favor of Liberty, and this case is dismissed with prejudice, by Judge Lewis T. Babcock on 9/18/2018. (ebuch)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
LEWIS T. BABCOCK, JUDGE
Civil Action No. 15-cv-00090-LTB
MICHAEL D. ELLIS,
v.

Plaintiff,

LIBERTY LIFE ASSURANCE COMPANY OF BOSTON, a New Hampshire
corporation,
Defendant.
______________________________________________________________________________
MEMORANDUM OPINION AND ORDER
______________________________________________________________________________
Babcock, J.
This ERISA case is before me for determination of the merits following
briefing by the parties. See Doc #s 57, 61 & 62. After consideration of the parties’
briefs, the record, and the case file, and for the reasons stated below, I enter
judgment in favor of Defendant Liberty Life Assurance Company of Boston
(“Liberty”).
I. Background
Plaintiff Michael D. Ellis is a former Senior Systems Architect for Comcast
Corporation (“Comcast”). As Senior Systems Architect, Mr. Ellis’s responsibilities
included (1) analyzing product requirements working with Senior Management,
Product Management, Product Design, Finance, Product Development,
Integration/Test, and Operations; (2) allocating system requirements into individual
requirements for new and existing components and interfaces; (3) analyzing feature

complexity and time estimates, negotiating with management to determine feature
set to be delivered; (4) creating detailed architectural documents; (5) managing
requirements database; (6) creating detailed interface documents; and (7)
performing bandwidth modeling. Doc # 35-12, p.1.
In January of 2012, Mr. Ellis, now 59 years of age, became ill with
pneumonia and developed severe chest pain caused by a pulmonary embolism. Doc
# 35-22, p. 10. While receiving emergency medical treatment for his chest pain on
February 1, 2012, Mr. Ellis went into cardiac arrest and his heart stopped beating
for a period of 24 seconds. Id. Several weeks later, Mr. Ellis reported diminished
concentration, dizziness, and feeling weak and wobbly. Doc # 35-21, p. 24-5. Mr.
Ellis’s last day of work for Comcast was February 29, 2012, and he was awarded
SSDI benefits from the Social Security Administration (“SSA”) beginning in August
of 2012 based on his claim of disability due to brain injury, cognitive deficits,
possible cerebral hypoxia, leg weakness, balance problems, depression, tremors, and
numbness. Doc # 33-12, pp. 9 & 11-15.
As a Comcast employee, Mr. Ellis was eligible to participate in Liberty’s
Group Disability Income Policy GF3-830-502315-01 (the “Policy”). Mr. Ellis was a
Class 4 employee for purposes of coverages under the Policy. Mr. Ellis’s claim for
short term disability benefits, payable by Comcast pursuant to its Short Term
Disability Plan, was first approved as of March 1, 2012. Liberty, as the
administrator of Comcast’s Short Term Disability Plan ultimately extended Mr.
Ellis’s short term disability benefits to the maximum period of September 5, 2012.
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A. Mr. Ellis’s Medical Records
Mr. Ellis received physical and speech-language therapy. Notes from Mr.
Ellis’s physical therapy sessions dated in 2012 reflect that Mr. Ellis was
experiencing weakness, fatigue, and loss of balance/coordination. See e.g. Doc # 3414, p. 9. Notes from Mr. Ellis’s speech therapy sessions in 2012 and 2013 reflect
that Mr. Ellis was experiencing mild to moderate cognitive deficits in areas
including attention, memory, and complex reasoning. See e.g. Doc #34-15, p. 22.
Dennis A. Helffenstein, Ph.D., performed a neuropsychological examination
of Mr. Ellis in August and September of 2012. Doc # 35-6, pp. 7-22. In a report
dated November 10, 2012, Dr. Helffenstein detailed cognitive deficits he observed in
Mr. Ellis and opined that these deficits “relate directly and solely to the medical
event that occurred on February 1, 2012” and that it “seems reasonable that an
episode of cerebral hypoxia did occur during this event.” Id. at p. 19. Dr.
Helffenstein concluded that due to a combination of his “physical, fatigue, visual,
cognitive, and emotional coping problems,” Mr. Ellis was totally disabled from
competitive employment at that time. Id. at p. 21.
Daniel C. Hadley, M.D., Mr. Ellis’s primary care physician who had been
treating him since February of 2012, completed a restrictions form for Liberty on
May 23, 2013 and stated that Mr. Ellis was unable to participate indefinitely in any
work situation requiring a minimal amount of concentration for more than 10 - 20
minutes due to “cognitive impairment from hypoxic encephalopothy.” Doc # 34-16,
p. 21. Alan Zacharias, a neurologist who began treating Mr. Ellis in May of 2012,
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also completed a restrictions form for Liberty on May 25, 2013 and stated that Mr.
Ellis was unable to work as shown by neuropsychological testing and his notes. Doc
# 34-16, p. 11.
On August 12, 2013, Dr. Hadley answered Liberty’s request for specific
activities restrictions/limitations and recommended that in an 8-hour workday Mr.
Ellis could sit for 1-1½ hours at a time for a cumulative total of over 5½ hours;
stand and walk for a cumulative total of 2½ hours; push, pull, lift, and carry up to
20 pounds for short distances for a cumulative total of 2½ hours; and was restricted
in climbing, squatting, bending, and kneeling due to dizziness. Doc # 34-12, pp. 1113. Dr. Hadley also noted that Mr. Ellis “continues to have cognitive impairment
resulting in ongoing disability related to concentration/memory.” Id. at p. 13.
On May 16, 2014, Mr. Ellis was seen for a high-resolution brain SPECT
imaging study. S. Gregory Hipskind, M.D. Ph.D., reported that the results of the
study were abnormal and that the abnormalities “were most consistent with the
scientific literature pertaining to a diffuse, toxic/hypoxic encephalopathic process
and the patient’s clinical history.” Doc # 34-7, pp. 22-4.
B. Liberty’s Policy
The Policy provides that “Liberty shall possess the authority, in its sole
discretion, to construe the terms of this policy and to determine benefit eligibility
hereunder. Liberty’s decisions regarding construction of the terms of the policy and
benefit eligibility shall be conclusive and binding.” Doc # 52, p. 42.

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In pertinent part, the Policy defines “Disability” or “Disabled” for purposes of
long term disability as follows:
i. if the Covered Person is eligible for the 12 Month Own Occupation
Benefit, “Disabled” or “Disability” means that during the Elimination
Period and the next 12 months of Disability the Covered Person, as a
result of Injury or Sickness, is unable to perform the Material and
Substantial Duties of his Own Occupation; and
ii. thereafter, the Covered Person is unable to perform, with reasonable
continuity, the Material and Substantial Duties of Any Occupation.

Id. at p. 9. Under the Policy,
“Own Occupation” means the Covered Person’s occupation that he was
performing when his Disability or Partial Disability began. If the
Covered Person is unable to earn 80% of his predisability earnings he
will be considered unable to perform his Own Occupation. For
purposes of determining Disability under the policy, Liberty will
consider the Covered Person’s occupation as it is normally performed
in the national economy.
“Any Occupation,” with respect to Class 4, means any gainful
occupation that the Covered Person is or becomes reasonably fitted by
training, education, experience, age, physical and mental capacity.
Gainful occupation means an occupation in which the earnings are:
-equal to or greater than 80% of the Employee’s pre-disability income;
-less than 80 % of the Employee’s average pre-disability income, but
higher than the average earnings for the geographic area in which the
Employee resides; or
- equal to or greater than the gross benefit.

Id. at pp. 7 & 12.
The Policy provides that payment of long term disability benefits will cease
on the earliest of

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1. the date the Covered Person fails to provide Proof of continued
Disability or Partial Disability and Regular Attendance of a Physician;
...
8. The date the Covered Person s no longer Disabled according to this
Policy;
...

Id. at pp. 34-5. The Policy also contains a Mental Illness, Substance Abuse and/or
Non-Verifiable Symptoms Limitation (the “Mental Illness provision”) which
provides that the benefit for disability due to any of these conditions will not exceed
a period of 24 months. Id. at p. 26.
C. Liberty’s Handling of Mr. Ellis’s Claim for Long Term Disability Benefits
By letter dated January 21, 2013, Liberty advised Mr. Ellis that he would be
receiving long term disability benefits under a reservation of rights while it
conducted a medical review to determine his eligibility. Doc # 35-4, p. 22.
Liberty had Dr. John A. Crouch, a neuropsychologist affiliated with Liberty’s
Clinical Services Department, and Dr. Gilbert Wager, a doctor of internal medicine,
pulmonary medicine and critical care medicine, review Mr. Ellis’s medical records.
Dr. Wager stated that an assessment of Mr. Ellis’s reported neuropsychological
impairments was outside the scope of his expertise but opined that from a physical
perspective Mr. Ellis appeared able to perform sedentary work on a full time,
sustained basis. Dec # 35-5, p. 9. After reviewing Dr. Helffenstein’s raw data, Dr.
Crouch set forth the following findings in a report dated April 4, 2013:
...various statistically and clinically significant impairments are
revealed across multiple neurocognitive domains including
learning/memory, attention/concentration, and processing speed.

6

A variety of significant restrictions and limitations would likely result
from this claimant’s impairment including difficulty with
concentration, persistence, pace, and adaptation. Given the reportedly
cognitively demanding nature of [Mr. Ellis’s] job, he would likely be
precluded from performing the usual duties of the job, regardless of
accommodations provided.
... the likelihood that his 2/1/12 reported 24-second period of asystole is
the sole cause of his functional difficulties is highly unlikely. Although
findings from measures of emotional/psychological functioning suggest
a possible psychiatric contribution, other possible contributors remain
unclear. Given this lack of diagnostic clarity, [Mr. Ellis’s] prognosis for
possible future RTW remains unclear.
Doc # 35-4, p.4.
By letter dated April 11, 2013, Liberty notified Mr. Ellis that “[a]lthough the
etiology of your cognitive deficits is unclear at this time, we have determined you
are disabled from cognitive deficits and are eligible to receive LTD benefits.” Doc #
35-3, p. 22. By this letter, Liberty also advised Mr. Ellis that both of its medical
reviewers indicated that it was highly unlikely that 24-second period of asystole
was the cause of his impairments and that its reviewing neuropsychologist
identified a possible psychiatric component to his cognitive deficits. Id. at pp. 21 22. Based on the latter, Liberty further notified Mr. Ellis and that his claim for
long term disability benefits was subject to the Mental Illness provision of the
Policy. Id. at p. 22. Liberty identified Mr. Ellis’s date of disability as March 1, 2012
and determined that he was entitled to receive benefits (after the elimination
period) as of September 6, 2012. Id.
In response to this letter, Mr. Ellis provided Liberty with a letter from Dr.
Helffenstein in which he expressed his agreement with Liberty’s reviewing doctors’
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opinions that it was highly unlikely that the 24-second period of asystole Mr. Ellis
experienced on February 1, 2012 was the cause of his cognitive impairments. Doc #
34-12, pp. 1-2. Dr. Helffenstein stated that Mr. Ellis’s cognitive dysfunction “most
likely relates to a more extended period of cerebral hypoxia.” Id. at p. 1. Dr.
Helffenstein further stated that he had no indication “that depression or any other
psychiatric issue was contributing to [Mr. Ellis’s] cognitive dysfunction identified by
[his] testing” and that Liberty would be making a grievous error if it limited Mr.
Ellis’s disability benefits under the Policy’s Mental Illness provision “as absolutely
no part of his cognitive dysfunction relates to a mental illness.” Id. at pp. 1-2.
Following a request for clarification by Mr. Ellis, Liberty, by letter dated
August 26, 2013, explained that Mr. Ellis was approved for long term disability
benefits but because “the etiology of Mr. Ellis’s cognitive impairments remains
unclear and a psychiatric condition has been noted as a contributing condition,” the
Policy’s Mental Illness provision had been applied and was running concurrently as
Liberty continued to evaluate Mr. Ellis’s claim. Doc # 34-11, pp. 23-24. Liberty
further advised that it was evaluating whether Mr. Ellis could perform any
alternative occupations since the Policy definition of “Disability” changed after
twelve months of benefits. Id. at p. 24.
A Transferrable Skills Analysis/Vocational Review (“TSA/VR”) dated July 24,
2013 was performed on behalf of Liberty. The Vocational Case Manager indicated
that she based her report on a presumed full time sedentary work capacity and that
she did not include any cognitive and/or mental restrictions and limitations. Doc #
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34-13, pp. 10-11. The Vocational Case Manager identified software engineer,
project director/manager, computer systems engineer, and computer information &
systems manager as occupations that Mr. Ellis could perform. Id. at p. 13.
In September of 2013, Liberty again referred the case to Dr. Crouch and
asked him to provide an updated assessment of Mr. Ellis’s ability to perform
alternate occupations. Doc # 34-11, p. 11. Dr. Crouch responded, in part, that he
found it “unlikely that the claimant could perform the job duties of alternate
occupations comparable to his prior job.” Id.
Dr. Bob L. Gant performed neuropsychological testing of Mr. Ellis on behalf
of Liberty in October of 2013 and reported his results as “invalid.” Doc # 34-10, p. 8.
Dr. Gant opined as follows:
...it is my determination that within reasonable medical probability the
patient has not suffered cognitive impairment related to the asystole
event which lasted 24 seconds on February 1, 2012. In fact, I am not
certain that the patient suffers from cognitive impairment. It is likely
that elements of secondary gain and/or impairment related to somatic
exaggeration is responsible for [Mr. Ellis’s] presentation. During this
examination, Mr. Ellis displayed evidence of symptom exaggeration
and poor effort within the context of a disability examination.

Id. at p. 11. Dr. Gant reviewed Dr. Helffenstein’s November 10, 2012 report and
concluded that “inadequate testing was done [by Dr. Helffenstein] to evaluate
patient effort and test validity.” Id. at p. 3. Dr. Gant further opined about Dr.
Helffenstein’s testing:
... the performance validity tests utilized by Dr. Helffenstein ... are
considered inadequate by current standards ... for assessing a patient
referred within the context of a disability assessment with unequivocal
evidence of secondary gain .... Several of the tests discussed by Dr.
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Helffenstein are no longer published and Dr. Helffenstein did not
appear to utilize the most current version of the available tests for
assessing secondary gain issues and poor effort.

Id. Dr. Gant indicated that he would be happy to confirm or amend his opinions if
provided with additional information, including Dr. Helffenstein’s raw data. Doc #
34-9, p. 23.
By letter dated December 10, 2013, Liberty advised Mr. Ellis that long term
disability benefits would no longer be paid to him after December 3, 2013. Doc # 349, pp. 11-16. By way of explanation, Liberty stated that Mr. Ellis’s failure to put
forth valid and reliable effort at the neuropsychological testing performed by Dr.
Gant left Liberty “unable to accurately assess his cognitive complaints to determine
if he remains impaired from working in any capacity.” Id. at p. 15. Liberty also
noted Mr. Ellis’s subjective complaints of fatigue and dizziness but stated that there
was no indication from any treatment provider that these symptoms were causing
impairment to Mr. Ellis or that these symptoms required continued restrictions and
limitations that would prevent Mr. Ellis from performing the duties of Any
Occupation. Id.
Mr. Ellis appealed Liberty’s termination of his long term disability benefits.
Doc #s 34-5, pp. 13-16 & 34-7 pp. 1-12. In connection with his appeal, Mr. Ellis
provided Liberty with the report from his neuropsychological re-evaluation
performed by Dr. Helffenstein in March of 2014. Doc # 33-6, p. 21 - Doc # 33-7, p.
10. Therein, Dr. Helffenstein noted that Mr. Ellis had shown improvement in some
areas of testing but had reached maximum medical improvement such that all
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remaining cognitive deficits were to be considered permanent. Doc # 33-7, pp. 9-10.
Dr. Helffenstein ultimately concluded that Mr. Ellis was totally and permanently
disabled from competitive employment and further opined as follows:
... Mr. Ellis experienced a 24-second period of asystole (i.e., cardiac
standstill). It is obvious that such a brief period of cardiac standstill
would not be expected to result in any significant cerebral hypoxia.
However, Mr. Ellis did experience some type of neurological event
during this timeframe.
Based on my re-evaluation with Mr. Ellis, I am even more convinced
that he did experience some type of neurological event (likely a hypoxic
episode or episodes) during the early part of February of 2012 related
to his various medical conditions. ... I am not sure that any physician
or neuropsychologist could point to a specific time or event that
resulted in Mr. Ellis’s neurological injury but, at this point, I am
absolutely convinced that such an injury did occur.
Doc # 33-6, pp. 21-22 & Doc # 33-7, p. 9.
Mr. Ellis also provided Liberty with a letter from his speech-language
therapist who indicated that his “observations and evaluations of Mr. Ellis over
many sessions demonstrate that he has cognitive deficits, most notably in the areas
of attention, memory, organization, speed of cognitive processing, problemsolving/reasoning, word-finding and cognitive overload.” Doc # 33-12, p. 8. Mr.
Ellis’s therapist further indicated that his observations were consistent with the
areas of impairment identified by Dr. Helffenstein. Id.
Liberty referred Mr. Ellis’s claim to Dr. Timothy Belliveau, Ph.D., for review.
Dr. Belliveau summarized Mr. Ellis’s medical records and provided a detailed
analysis of the three neuropsychological evaluations. Doc # 33-3, p. 3 - 33-4, p. 1.
Dr. Bellivaeu concluded that the records provided insufficient support “for the
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presence of cognitive or psychologically-based impairment that would necessitate
occupational restrictions or limitations” and “for the presence of cognitive
impairment attributed to hypoxic-ischemic encephalopathy.” Doc # 33-3, pp. 5-6.
By letter dated September 19, 2014, Liberty advised Mr. Ellis that his
medical condition “is not of a nature and severity that would preclude him from
performing the material and substantial duties of the alternative occupations
identified as being within his functional capacity and vocational skills” and that
Liberty was therefore maintaining its decision to deny continued long term
disability benefits to him beginning December 4, 2013. Doc # 33-2, p. 20 - 33-3 p.1.
II. Standard of Review
While Liberty captioned its brief as a Combined Response Brief and Motion
for Summary Judgment in an ERISA Case [see Doc # 61], it concedes that Fed. R.
Civ. P. 56 standards are not applicable in ERISA cases. Instead, I act as an
appellate court and evaluate the reasonableness of Liberty’s decision based on the
evidence contained in the administrative record. Panther v. Synthes, 380 F. Supp.
2d 1198, 1207 n. 9 (D. Kan. 2005).
“‘[A] denial of benefits’ covered by ERISA ‘is to be reviewed under a de novo
standard unless the benefit plan gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to construe the terms of the plan.’”

LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment &
Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010) (quoting Firestone Tire
& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). Where the plan gives the
12

administrator such discretionary authority “[courts] employ a deferential standard
of review, asking only whether the denial of benefits was arbitrary and capricious.”

Id. (quoting Weber v. GE Group Life Assur. Co., 541 F.3d 1002, 1010 (10th Cir.
2008)).
The Policy expressly gives Liberty discretion to construe its terms and to
determine benefit eligibility. Mr. Ellis argues that I should nonetheless employ a de
novo standard of review because the applicable provision of the Policy is void
pursuant to C.R.S. § 10-3-1116(2) which states as follows:
An insurance policy, insurance contract, or plan that is issued in this
state that offers health or disability benefits shall not contain a
provision purporting to reserve discretion to the insurer, plan
administrator, or claim administrator to interpret the terms of the
policy, contract, or plan or to determine eligibility for benefits.
For § 10-3-1116(2) to be applicable, I must first determine if this case is
subject to Colorado law. Liberty argues that this case is governed by Pennsylvania
law because the Policy so expressly provides and the Policy was issued to Comcast
there. In response, Mr. Ellis argues that the Policy was in fact issued to him as a
Comcast employee in Colorado and that Liberty has failed to cite any authority to
support the argument that it can exempt itself from Colorado’s statutory insurance
regulations by electing to be governed by the laws of another state. I agree with Mr.
Ellis.
Contracting parties may choose the law to govern their relations “unless
there is no reasonable basis for their choice or unless applying the law of the state
so chosen would be contrary to the fundamental policy of a state whose law would
13

otherwise govern.” Hansen v. GAB Bus. Servs., Inc., 876 P.2d 112, 113 (Colo. App.
1994) (citing Restatement (Second) of Conflict of Laws § 187 (1971)). Colorado has
an express public policy of regulating insurance to promote the public welfare. See
C.R.S. § 10-1-101. § 10-3-1116(2) was enacted in furtherance of this policy.
Because there is no comparable statutory provision under Pennsylvania law,
applying Pennsylvania law here would be contrary to a fundamental policy of the
State of Colorado. Having failed to cite any authority to show otherwise, Liberty’s
argument based on the Policy’s choice-of-law provision must fail. See LaAsmar, 605
F.3d at 796 (party arguing for more deferential arbitrary and capricious standard of
review bears the burden of establishing that it should be applied). I further
conclude that the Policy was issued in Colorado for purposes of § 10-3-1116(2). See

Shafer v. Metro. Life Ins. Co., 80 F. Supp. 3d 1244, 1250-51 (D. Colo. 2015) (policy
issued to corporate employer out-of-state but then issued to claimant in Colorado
was issued in Colorado for purposes of §10-3-1116(3)).
Liberty also argues that § 10-3-1116(2) is not applicable in this case because
it is preempted by ERISA. This issue has not been addressed by the Tenth Circuit
but another judge of this Court considered this question in McClenahan v. Metro.

Life Ins. Co., 621 F. Supp. 2d 1135 (D. Colo. 2009), and concluded that § 10-31116(2) is not preempted by ERISA. I agree with and adopt the preemption
analysis in McClenahan. I further note that the only authority cited by Liberty in
support of its preemption argument is distinguishable because there the court
considered whether § 10-3-1116(3), not §10-3-1116(2), was preempted by ERISA.
14

See Shafer, 80 F. Supp. 3d at 1251-57. See also C.R.S. § 10-3-1116(6) (providing
that provisions of § 10-3-1116 are severable).
Finally, Liberty argues that § 10-3-1116(2) does not apply in this case
because the statute is not retroactive. See McClenahan v. Metro. Life Ins. Co., 416
Fed. Appx. 693, 696 (10th Cir. 2011). This argument is predicated on the fact that
the Policy was issued in 2005, prior to the enactment of §10-3-1116(2) in 2008. In
response, Mr. Ellis argues that because relevant events, including renewals and
amendments to the Policy and his disability claim, occurred after the 2008
enactment of § 10-3-1116(2), application of this statute would not be retroactive. I
agree with Liberty that application of § 10-3-1116(2) in this case would be
retroactive and therefore improper.
Two other judges of this Court have considered the question of whether § 103-1116(2) can be applied to policies renewed after its effective date and both
concluded that it could not though by different reasoning. See Johnson v. Life Ins.

Co. of North Amer., 2017 WL 1154027 at *11-*13 (D. Colo. Mar. 28, 2017);
Mustain-Wood v. Nw. Mut. Life Ins. Co., 938 F. Supp. 2d 1081,1085 (D. Colo. 2013).
I am persuaded by the reasoning in Johnson that the Colorado Legislature’s failure
to expressly state that § 10-3-1116(2) would apply to insurance policies renewed
after its effective date despite having done so with respect to other statutes was an
intentional omission that precluded the prospective application of § 10-3-1116(2)
based on policy renewals. Mr. Ellis’s remaining argument that application of § 103-1116(2) in this case would not be retroactive because all of the events giving rise
15

to his disability claim occurred well after the statute’s effective date is also
unavailing. Because § 10-3-1116(2) prohibits the inclusion of certain discretionary
authority provisions in insurance policies, the applicable date for retroactivity
analysis must necessarily relate directly to the policy at issue. Compare Kisselman

v. Amer. Family Mut. Ins. Co., 292 P.3d 964, 975-6 (Colo. App. 2011)(provisions of
§§ 10-3-1115 & 1116 that prohibit acts of unreasonable delay or denial of payment
of benefits can be violated by insurer’s post-effective date conduct regardless of
when claim for benefits was made).
Consistent with the terms of the Policy then, I apply the arbitrary and
capricious standard of review. Under this standard, my “review is limited to
determining whether the interpretation of the plan was reasonable and made in
good faith.” Kellogg v. Metro. Life Ins. Co., 549 F.3d 818, 826 (10th Cir. 2008)
(internal quotations omitted). A benefits decision will be upheld unless it is not
grounded on any reasonable basis. Kimber v. Thiokol Corp., 196 F.3d 1092, 1098
(10th Cir. 1999) (citation omitted). The decision need not be the only logical one nor
even the best one so long as it falls somewhere on a continuum of reasonableness even if on the low end. Id. Indicia of arbitrary and capricious decisions include lack
of substantial evidence, mistake of law, bad faith, and conflict of interest by the
fiduciary. Caldwell v. Life Ins. Co. of N. Amer., 287 F.3d 1276, 1282 (10th Cir.
2002). Substantial evidence is such evidence that a reasonable mind might accept
as adequate to support the decision. Rekstad v. U.S. Bancorp, 451 F.3d 1114, 111920 (10th Cir. 2006).
16

An inherent conflict of interest arises when the entity that determines
eligibility for benefits is the same entity that pays the benefits. Metro. Life Ins. Co.

v. Glenn, 554 U.S. 105, 111-15 (2008). When such a conflict of interest exists as it
does here, the benefits decision is still subject to the arbitrary and capricious
standard of review but the conflict is weighed as a factor in determining whether
there is an abuse of discretion. Id. at 115-16.
III. Analysis
The question presented by this appeal is whether Liberty’s decision to deny
Mr. Ellis long term disability benefits under the Policy’s “Any Occupation” provision
was reasonable. Under the arbitrary and capricious standard of review applicable
to this case, I conclude that it was and therefore enter judgment in favor or Liberty
for the reasons set forth below.
Preliminarily, Mr. Ellis argues that Liberty’s handling of his claim for long
term disability benefits became arbitrary and capricious beginning in April of 2013
when it took the position that Mr. Ellis’s claim was subject to the Policy’s Mental
Illness provision and questioned the causal connection between the 24-second
period of cardiac arrest and Mr. Ellis’s cognitive deficits. Mr. Ellis acknowledges,
however, that Liberty continued to pay benefits for several months after April of
2013. Moreover, Liberty’s ultimate decision to terminate Mr. Ellis’s long term
disability benefits was not based on either the Policy’ Mental Illness provision or a
lack of causation but rather because Mr. Ellis did not meet the Policy’s definition of
disability under the Policy’s “Any Occupation” provision after December 3, 2013.
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Doc # 34-9, p. 15. I therefore attach little significance to Liberty’s reference to these
considerations in its correspondence in April of 2013 or in subsequent
correspondence.
As for Liberty’s decision to terminate his long term disability benefits, Mr.
Ellis makes several arguments to undermine the neuropsychological evaluation
performed at Liberty’s request by Dr. Gant. First, Mr. Ellis argues that Liberty’s
reliance on Dr. Gant’s evaluation was not reasonable because Dr. Gant failed to
comply with Dr. Crouch’s specifications for what should be included in a
neuropsychological re-evaluation of Mr. Ellis. Doc # 34-11, p. 11-12. Specifically,
Mr. Ellis asserts that Dr. Gant failed to discuss Mr. Ellis’s background, work
accomplishments, earnings, activities, and physical issues and failed to obtain
information from a collateral source regarding Mr. Ellis’s functioning prior and
subsequent to his alleged impairment. Dr. Crouch, however, reviewed Dr. Gant’s
report and did not note these purported deficiencies. Dr. Belliveau, who reviewed
Dr. Gant’s report in connection with Mr. Ellis’s appeal, likewise did not identify
comparable deficiencies in Dr. Gant’s report.
Next, Mr. Ellis argues that Liberty’s reliance on Dr. Gant’s report was
arbitrary and capricious because Dr. Gant did not review Dr. Helffenstein’s raw
data. That Dr. Gant’s evaluation was meant to be independent undermines this
argument. Since Dr. Gant expressed a willingness to review this data, it may have
nonetheless been preferable for Liberty to provide it to him but its failure to do so
was not unreasonable particularly since Dr. Helffenstein’s raw data was provided to
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Drs. Crouch and Belliveau who, unlike Dr. Gant, did not have the benefit of their
own firsthand observations or conduct their own testing of Mr. Ellis.
Mr. Ellis also argues that Dr. Gant’s report fails to reconcile his own
observations of Mr. Ellis with his conclusion that there was insufficient evidence
that Mr. Ellis suffered from a cognitive impairment. Dr. Gant’s ultimately
concluded that Mr. Ellis “displayed evidence of symptom exaggeration and poor
effort” during his evaluation. Doc # 39-9, p. 22. While Mr. Ellis clearly disagrees
with this conclusion, it is obvious that Dr. Gant attached greater significance to the
results of symptom validity tests administered to Mr. Ellis than to his observations,
and no further explanation was warranted.
Mr. Ellis faults Dr. Gant, and more generally Liberty, for ignoring
“voluminous” evidence from his treating physicians and therapists. However, Drs.
Gant, Crouch, Wager, and Belliveau all discuss Mr. Ellis’s medical records at some
length. This consideration of his medical records contradicts Mr. Ellis’s attempt to
characterize Liberty’s treatment of the evidence in this case as “cherry-picking.”
Under ERISA, Liberty was not required to accord special weight to the opinions of
Mr. Ellis’s treatment providers nor did it bear the burden of explaining why it
credited other reliable evidence that arguably conflicted with these opinions. Black

& Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003). In many cases,
however, the records simply reflect Mr. Ellis’s subjective reporting of his condition.

See e.g. Doc # 35-13, p. 1038. For all of these reasons, I find no reversible error in

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Liberty’s treatment of the records from Mr. Ellis’s treating physicians and
therapists.
Mr. Ellis also argues that Liberty’s review of its decision to terminate Mr.
Ellis’s long term disability benefits was arbitrary and capricious based on claims
notes that show little activity on Mr. Ellis’s claim other than referring it to Dr.
Belliveau for review. In light of the detailed letter Liberty sent regarding its review
of Mr. Ellis’s claim and the thorough report prepared by Dr. Belliveau, there is no
basis for me to conclude that Liberty failed to give due consideration to Mr. Ellis’s
appeal. The fact that Dr. Belliveau is affiliated with Liberty does not alter this
conclusion. By the same token, it is noted that Dr. Helffenstein, on whose opinions
Mr. Ellis repeatedly relies, was retained by his counsel.
Turning to the substance of Liberty’s September 19, 2014 letter denying
continued long term disability benefits, Mr. Ellis first asserts that Liberty mischaracterized Dr. Gant’s otherwise flawed report. See Opening Brief, p. 77. The
distinctions Mr. Ellis attempts to make between Liberty’s characterization of Dr.
Gant’s report and the report itself, however, are inconsequential; the fact remains
that Dr. Gant disputed the results of Dr. Helffenstein’s first neuropsychological
evaluation of Mr. Ellis and questioned whether Mr. Ellis suffered from any
cognitive impairment.
Next, Mr. Ellis challenges Liberty’s purported failure to account for Mr.
Ellis’s abnormal SPECT study as evidenced in its letter denying Mr. Ellis’s appeal.
Liberty accurately summarized the conclusions of this study, including its
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statement that “[h]owever, [Dr. Hipskind] noted that correlation with [Mr. Ellis’s]
entire medical history is advised.” Mr. Ellis argues that the advised correlation was
provided by Dr. Helffenstein and his brief in this appeal. However, as also
referenced in Liberty’s September 2014 letter, Dr. Belliveau opined that the
scientific studies supportive of SPECT studies related to evaluating dementia or
brain injury to trauma and may not be applicable to evaluating brain injury due to
hypoxic-ischemic events and that neuropsychological evaluations were a more direct
way to assess functional status. Doc # 33-4, p. 7. Although Mr. Ellis takes issue
with this opinion, his unsupported argument fails to demonstrate that it is
categorically unreasonable. While Dr. Belliveau went on to say that he would defer
to a consulting neurologist or radiologist’s analysis if there was a need for further
review of the SPECT study, Liberty’s failure to seek further review of the study,
while arguably preferable, was not arbitrary and capricious in light of the
neuropsychological evaluations available to it.
Mr. Ellis argues that another portion of Dr. Belliveau’s report cited by
Liberty is confusing and/or irrelevant. See Opening Brief, p. 80. This argument has
merit yet the quoted language has little significance in the context of Liberty’s
ultimate decision on Mr. Ellis’s claim for continued long term disability benefits.
Indeed, Mr. Ellis identifies other conclusions in Dr. Belliveau’s report concerning
validity test results as “the opinion that is at the crux of the case:” See Opening
Brief, p. 81. Liberty accurately summarized this conclusion as follows:

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The reviewer notes that Mr. Ellis passed the tests for validity in the
2014 exam with relatively lower sensitivity; but, he had previously
failed the tests with relative higher sensitivity during the 2012 and
2013 exams; and his passing on the performance of the most sensitive
cognitive performance validity test in 2012, is actually a failure by
current test interpretation standards.
Doc # 33-2, p. 25. See also Doc # 33-3, pp. 17-19.
Mr. Ellis argues Dr. Belliveau’s did not adequately explain his conclusion
regarding Mr. Ellis’s performance on the most sensitive validity test administered
in 2012, i.e., the Word Memory Test (“WMT”), but this argument does not warrant a
finding that Liberty acted unreasonably in relying on this expert conclusion which
was supported by some explanation though not to the degree propounded by Mr.
Elis. Additionally, Dr. Gant similarly concluded that Dr. Helffenstein did not
appear to utilize the most current version of tests to assess issues of secondary gain
and poor effort. Doc # 34-10, p. 3. Mr. Ellis continues to focus on the WMT
throughout the remainder of his argument about Dr. Bellivau’s validity testing
conclusions when in fact Mr. Ellis had invalid results on other tests in 2013 and
showed signs of symptom over-reporting/exaggeration in 2012 and 2013. Doc # 33-3,
pp. 13, 15-16.
Mr. Ellis also argues that Liberty’s denial letter demonstrates that it acted
unreasonably because of its reliance on the TSA/VR to demonstrate Mr. Ellis’s work
capabilities when this analysis did not consider any cognitive impairments or
restrictions. This approach, however, is entirely consistent with Liberty’s position

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that Mr. Ellis did have a demonstrable cognitive impairment that affected his
ability to perform full time sedentary work.
Lastly, Mr. Ellis argues that Liberty acted unreasonably in failing to consider
the SSA’s determination that he was disabled and entitled to benefits. The relevant
evidence in the record does not allow for my review of the context of or basis for the
SSA’s determination of disability. See Doc # 33-12, pp. 9 & 11-15 & Doc # 34-8, pp.
13-18. There is therefore no basis for me to conclude that Liberty’s contrary
determination was arbitrary and capricious or to reject Liberty’s assertion that its
decision to terminate Mr. Ellis’s may well have been based on information not
available to the SSA at the time of its decision.
While reasonable minds might differ on the question of Mr. Ellis’s
entitlement to continued long term disability benefits under the Policy, I conclude
that the decision by Liberty to terminate those benefits it is not subject to reversal
under the arbitrary and capricious standard of review applicable here even after
taking Liberty’s conflict of interest is taken into account. See Nance v. Sun Life

Assur. Co. of Canada, 294 F.3d 1263, 1269 (10th Cir. 2002) (arbitrary and
capricious standard is “a difficult one for a claimant to overcome”). It is not
surprising that in a 90 page brief Mr. Ellis was able to identify some issues with
Liberty’s handling of his claim for continued long term disability benefits. However,
based on the record before me, these issues, viewed both separately and
cumulatively, do not render Liberty’s ultimate decision to deny Mr. Ellis continuing

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long term disability benefits under the Policy’s “Any Occupation” provision
unreasonable.
IV. Conclusion
For the reasons set forth above, IT IS HEREBY ORDERED that judgment is
entered in favor of Liberty, and this case is DISMISSED WITH PREJUDICE.

Dated: September

18 , 2018.
BY THE COURT:
s/Lewis T. Babcock
Lewis T. Babcock, Judge

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