Fessenden v. Reliance Standard Life Insurance Company et al

Filing 66

OPINION AND ORDER: DENYING 55 MOTION for Summary Judgment by Plaintiff Donald Fessenden. GRANTING 58 MOTION for Summary Judgment by Defendants Oracle USA Inc Group Long Term Disability Plan, Reliance Standard Life Insurance Company. The Clerk shall enter judgment in favor of defendants and against plaintiff. Signed by Judge Philip P Simon on 1/17/2018. (lhc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
DONALD FESSENDEN,

)
)
Plaintiff,
)
)
vs.
)
)
RELIANCE STANDARD LIFE INSURANCE )
COMPANY and ORACLE USA, INC.
)
GROUP LONG TERM DISABILITY PLAN, )
)
Defendants.
)

3:15CV370-PPS

OPINION and ORDER
Some cases turn almost entirely on what the applicable standard of review is. This
case is one of them. This is an ERISA case that was transferred to me last year in a
district-wide reassignment of cases. Judge Lee, who previously was assigned to the case,
held that Reliance Standard Life Insurance Company’s decision to deny Donald
Fessenden long term disability benefits would be reviewed under the deferential
arbitrary and capricious standard, as opposed to deciding the case from scratch — the
so-called de novo standard. When that decision was made by Judge Lee, the die was
essentially cast.
There is substantial evidence on both sides of the issue of whether Mr. Fessenden
is disabled. Although, after thoroughly reviewing the record, I am inclined to believe
that Donald Fessenden is in fact disabled by his medical conditions, oddly, that
conclusion is not what dictates the outcome here. Instead, given Judge Lee’s earlier
ruling, I am limited to a highly deferential standard of review which means Reliance’s

rejection of Fessenden’s claim for benefits will not be overturned unless Fessenden
demonstrates that Reliance’s decision was “‘downright unreasonable’.” Walton v.
National Integrated Group Pension Plan, 587 Fed.Appx. 328, 329 (7th Cir. 2014), quoting
Williams v. Aetna Life Ins. Co., 509 F.3d 317, 321-22 (7th Cir. 2007); Edwards v. Briggs &
Stratton Retirement Plan, 639 F.3d 355, 360 (7th Cir. 2011), quoting Davis v. Unum Life Ins.
Co. of Am., 444 F.3d 569, 576 (7th Cir. 2006). See also Kennedy v. Lilly Extended Disability
Plan, 856 F.3d 1136, 1138 (7th Cir. 2017) (Manion, J., dissenting). As long as the “‘plan
administrator’s decision has rational support in the record,’” I must uphold it. Geiger v.
Aetna Life Insurance Company, 845 F.3d 357, 362 (7th Cir. 2017), quoting Edwards, 639 F.3d
at 360. Because there is rational support in the record for the decision made by Reliance,
I must reluctantly affirm it.
Let’s start with some background information. Donald Fessenden worked for
Oracle USA as a Software Engineer Manager until January 2, 2008, when he stopped
working due to fatigue and severe chronic migraine headaches. Fessenden applied for
and was granted short term disability benefits through an employee welfare benefits
plan with Reliance Standard Life Insurance Company. Years later on March 4, 2014,
Fessenden made a claim for long term disability benefits. Reliance denied the claim and
affirmed that decision in its administrative appeals process. Judge Lee held that the
latter decision by Reliance — the decision denying the appeal— was untimely under
applicable ERISA regulations. See DE 21 at 8; 29 C.F.R. § 2560.503-1. The delay in

2

denying Fessesen’s appeal is important because it can have an effect on the standard of
review. I will return to this critical issue in a moment.
Fessenden filed this lawsuit challenging the denial of long term disability
benefits, and both sides now seek summary judgment. Summary judgment is proper “if
the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In reviewing
cross-motions for summary judgment, a court must apply this standard to both motions
and view all facts and draw all reasonable inferences in the light most favorable to the
party opposing each motion. Tate v. Long Term Disability Plan for Salaried Emps. of
Champion Int'l Corp. #506, 545 F.3d 555, 559 (7th Cir. 2008).
Oracle’s disability plan is governed by the Employee Retirement Income Security
Act of 1974, commonly called ERISA. With respect to an employee benefit plan governed
by ERISA, a plaintiff may bring an action “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.” 29 U.S.C. §1132(a)(1)(B). A court
considers the denial of benefits de novo unless the plan grants the plan administrator
discretionary authority to construe policy terms. Cheney, 831 F.3d at 849, citing Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Where the plan grants such
authority, the court reviews only for abuse of that discretion— the deferential arbitrary
and capricious standard. Fontaine v. Metropolitan Life Ins. Co., 800 F.3d 883, 885 (7th Cir.
2015); Holmstrom v. Metropolitan Life Ins. Co., 615 F.3d 758, 767 n.7 (7th Cir. 2010), citing

3

Raybourne v. Cigna Life Ins. Co. of New York, 576 F.3d 444, 449 (7th Cir. 2009). Most plan
administrators seem to have gotten the memo. Almost every ERISA case I have
encountered grants discretionary authority to plan administrators.
Here, the parties engaged in a lengthy dispute before Judge Lee about whether
the de novo standard or the more deferential arbitrary and capricious standard of review
applies. [DE 21, 29.] After two rounds of briefing, Judge Lee concluded that the plan
clearly contains a discretionary clause giving Reliance authority to construe the plan and
determine eligibility for benefits. Thus, the case would be governed by the arbitrary and
capricious standard of review. [DE 29]. Judge Lee further concluded that although
Reliance missed a deadline in making its claim decision, that wasn’t enough to mandate
a de novo review. [Id.] Reliance was saved by the substantial compliance doctrine. [Id.]
The guy who said that “close is only good in horseshoes and hand grenades”
must not have heard of ERISA and the substantial compliance doctrine. In the murky
world of ERISA litigation, being close enough is often considered to be good enough.
This is because the substantial compliance doctrine often excuses plan administrators
who don’t turn square corners in following ERISA regulations.
But the substantial compliance doctrine doesn’t always save the day from
administrative foul-ups. The Second Circuit recently held that an insurer can lose the
benefit of the deferential standard of review when it fails to comply with regulatory
requirements relating to time limits for making claim decisions. Halo v. Yale Health Plan,
Director of Benefits & Records Yale Univ., 819 F.3d 42 (2nd Cir. 2016). In other words, the

4

court held that the substantial compliance doctrine may be inapplicable where deadlines
are concerned. Id. at 55-58. This position is consistent with Seventh Circuit cases in other
areas of the law that hold that a deadline that is blown by even one day is blown
nonetheless. See e.g. United States v. Marcelo, 212 F.3d 1005, 1010 (7th Cir. 2000) (a habeas
corpus petition that is filed one day too late is untimely and must be dismissed). It is
also consistent with Seventh Circuit cases that have looked askance at an expansive use
of the substantial compliance doctrine where its application would conflict with a literal
requirement of the ERISA statute. Burns v. Orthotek, 657 F.3d 571, 575 (7th Cir. 2011). See
also Schneider v. Sentry Long Term Disability Plan, 422 F.3d 621, 627-28 (7th Cir. 2005); but
see Edwards v. Briggs and Stratton Retirement Plan, 639 F.3d 355, 361-62 (7th Cir. 2011). So
according to the Second Circuit, when an insurer blows a deadline in making a claims
decision, it may end up forfeiting the more deferential standard, and lead to district
courts reviewing the claims decision under the de novo standard unless it can show that
the failure to follow the regulations was inadvertent and harmless. Halo, 819 F.3d at 58.
Judge Lee was unpersuaded by the Second Circuit opinion in light of earlier
Seventh Circuit cases that seem to rely on the substantial compliance doctrine in similar
circumstances. DE 29 at 9, citing Halpin, 962 F.2d at 690. In sum, Judge Lee held that
Reliance’s failure to adhere to the regulations could be overlooked because their
compliance was good enough. In other words, because Reliance substantially complied
with the regulations governing the timing of its claims decision — remember, they
didn’t actually comply — the arbitrary and capricious standard governs this case.

5

Whether use of the substantial compliance doctrine is appropriate in this case is not for
me to decide. After the case was transferred to me, I have not been asked to reconsider
Judge Lee’s ruling on this critical question. As a result, I will review Fessenden’s claim
under the arbitrary and capricious standard. [DE 29 at 10.]
In order to qualify for long term disability benefits under the plan, Fessenden was
required to demonstrate (among other things) that as a result of sickness or injury he
was unable to perform the material duties of his regular occupation from January 2, 2008
and for 24 months thereafter. [DE 57-1 at 7, 8, 17.] There are two decisions from
Reliance Standard — both in letter form — denying long term disability benefits to
Fessenden. [DE 57-4 at 34-44; DE 57-4 at 49-57.] Both the initial denial and its affirmance
after appeal acknowledge Fessenden’s history of migraine headaches and fatigue. [E.g.,
id. at 40, 53.] In each decision, Reliance expressed its conclusion that those conditions
had not rendered Fessenden unable to “perform the material duties of [his] regular
occupation,” as required to demonstrate disability under the plan. [Id. at 34, 42, 54.]
Reviewing all the medical history from 2006 to the time of decision, Reliance
concluded that Fessenden “retained the ability to perform the material duties of [his]
regular occupation” as of January 2, 2008. [DE 57-4 at 36.] That meant Fessenden was
not totally disabled as the term was defined in the plan. [Id. at 34.] As noted, the
question is not whether I agree with that decision but whether the decision is arbitrary
and capricious – meaning does it have rational support in the record. Geiger, 845 F.3d at
362.

6

Fessenden claims that he is disabled by chronic fatigue syndrome. Chronic fatigue
syndrome is “a complicated disorder characterized by extreme fatigue that can’t be
explained by any underlying medical condition. The fatigue may worsen with physical
or mental activity, but doesn’t improve with rest.” MAYO CLINIC, Diseases & Conditions,
Chronic Fatigue Syndrome, https://www.mayoclinic.org/diseasesconditions/chronic-fatigue-syndrome/symptoms-causes/syc-20360490. Chronic fatigue
syndrome can render a person feeble. Symptoms of the aliment include fatigue, sore
throat, unexplained joint and muscle pain, headaches and extreme exhaustion. Id.
January 2, 2008 is the date on which Fessenden claims his chronic fatigue
syndrome became disabling. Fessenden’s case is hindered by the lack of a formal
diagnosis contemporaneous with that claimed onset date. This problem is exacerbated
by the fact that Fessenden made his disability claim in 2014, some six years after he
claims he became disabled. Although it appears that Fessenden had many of the
symptoms of chronic fatigue syndrome going back over a decade, he was only recently
formally diagnosed with the affliction. He claims that he was misdiagnosed for many
years and in fact has been disabled by chronic fatigue syndrome since 2008.
As I said at the outset of this opinion, there is substantial evidence on both sides
of the disability issue. In support of his disability claim, Fessenden submitted evidence
from three of his attending physicians. Dr. Sara Bajuyo is Fessenden’s primary care
physician. She first treated him in February of 2010. [DE 57-14 at 46.] According to Dr.
Bajuyo, Fessesen has chronic fatigue syndrome and has had symptoms of the illness

7

since 2008 when he first left work. [DE 57-4 at 90]. Dr. Bajuyo says that the medical
records from “October 2007 to present” support that conclusion. [DE 57-14 at 47.] Dr.
Suhayl Nasr is a psychiatrist who first saw Fessenden in January or February of 2010.
[DE 57-9 at 122.] Dr. Nasr has also diagnosed Fessenden with chronic fatigue syndrome.
[DE 57-9.] She points to his various symptoms such as headaches, swollen lymph nodes,
sore throat, unstable sleep patterns, profound malaise and cognitive issues as proof of
her diagnosis. [Id.] Dr. Nasr says records going back to October 2007 support her
findings. [Id. at 1327.] Finally, Dr. Irma Rey, a specialist in internal medicine and
immunology, likewise has opined that Fessenden is disabled by chronic fatigue
syndrome. [DE 57-4 at 87-88; DE 57-13 at 30-31.] According to Dr. Rey, Fessesen has
exhibited all of the signs of that disease — persistent fatigue, sore throat, tender lymph
nodes, muscle pain, poor sleep and memory and concentration problems. [DE 57-13 at
30; DE 57-8 at 68-72.]
Reliance’s letters denying Fessenden’s claim focused a lot on the lack of evidence
of a disability contemporaneous with the 2008 onset date:
•

[T]he medical evidence “did not substantiate a physical or mental health
condition at a level of severity precluding him from performing the fulltime material duties of a sedentary occupation” [DE 57-4 at 49];

•

“[M]edical documentation during the period in question was essential in
determining Mr. Fessenden’s level of impairment per his actual work
stoppage date” [Id. at 51];

•

“In reviewing the documentation submitted by Mr. Fessenden’s treatment
providers, while it is noted that he has a history of fatigue and migraine
headaches, there is no indication of a significant impairment relative to

8

these ailments prior to or immediately after the January 2, 2008, work
stoppage date” [Id. at 53];
•

“Prior to your work stoppage, you have a history of many chronic medical
problems for years during a period wherein you were able to continue
working, and the information considered does not reveal a significant
deterioration in your status, at the time that you have claimed an inability
to continue working.” [Id. at 41].

The plan’s adverse decisions reflected its review of the medical record, and its
consideration of evidence that supported the claim of disability as well as evidence that
did not. For instance, the plan cited visits to physicians in 2006 and 2007 with reports of
headaches and fatigue, prior to the claimed onset date of disability, but noted normal
MRI, ECG, laboratory testing and examination results. [DE 57-4 at 37.] In June 2007, Dr.
Ramadevi Gourineni concluded that Fessenden’s “sleep difficulties were likely due to
being a night owl and having poorly controlled migraines.” [Id.] In September 2007,
after several months of treatment with Dr. Gourineni, Fessenden reported he was
“sleeping better, and...only having a headache about once every two weeks.” [Id.]
The plan reviewed medical evidence suggesting that the migraines continued in
2008, but also reflected that in June 2008, Dr. Joseph Eapen “noted that [Fessenden’s]
headaches were stable and [he was] doing better” since changing medicines and was
“able to sleep well.” [Id. at 38.] Doctors’ records reflect that during visits in December
2008, Fessenden was “somewhat tired at the time, other than that no other real problems
were noted.” [Id.] In April 2009, the plan noted, Dr. Eapen’s treatment notes reflected
that headaches continued but “were described as mostly in the winter season.” [Id.] The

9

plan’s review of treatment in 2009 showed a focus on Fessenden’s reported fatigue, with
diagnoses of sleep phase disorder and depression or other mood disorder, rather than
chronic fatigue syndrome. [Id. at 39.]
So the evidence goes both ways. On the one hand, Fessenden’s more recent
doctors believe that the records show that he was disabled by chronic fatigue syndrome
going back to when he left work at Oracle in 2008. But none of these doctors saw
Fessenden contemporaneous with the alleged onset date. They are drawing that
conclusion by looking back in time. On the other hand, most of Fessenden’s medical
providers at the time believed that there were other explanations for his condition.
To break the tie in this kind of situation, Reliance tells me that they use thirdparty contractors to identify “independent and appropriately credentialed” doctors to
review records and render an opinion, and that they do not directly compensate these
doctors. [DE 59 at 15.]

Reliance requires that the reviewing doctors maintain active

medical practices or academic affiliations so that their income is not entirely derived
from insurance examinations. [DE 33 at 9.] Reliance professes not to track the outcome
of these medical record evaluations and it does not choose the third-party contractor
based on the outcomes. [Id.]
In this case, Reliance hired Dr. John Brusch and Dr. Michelle Park to do an
independent review of Fessenden’s medical records. Here’s what Dr. Park found:
A large part of [Fessenden’s] sleep disorder appears to be behavioral. He
does not follow a good sleep hygiene regimen as recommended by his
providers....[T] he claimant’s fatigue is likely due to poor sleep habits,

10

possibly a sleep latency disorder, and behavioral issues. The Claimant
adamantly denies the depression is a contributing factor to any of his
symptoms, and he has gone to great length to find a physician that agrees
with him...The claimant was followed for some time by a multidisciplinary headache clinic but was skeptical of their treatment methods
and therefore stopped going. He has not been reporting severe or frequent
headaches recently.
[DE 57-4 at 40.] Because Fessenden had several conditions that can cause fatigue,
including poor sleep and likely depression, Dr. Park found that Fessenden did not meet
the diagnostic criteria for chronic fatigue syndrome. [Id.] Dr. Park expressed the
conclusion that there was no evidence to support that either Fessenden’s headaches or
his fatigue were functionally impairing. [Id.]
On Fessenden’s appeal of the initial plan decision, the plan again reviewed the
medical evidence Fessenden had submitted. From the medical record leading up to
Fessenden’s claimed onset date of January 2, 2008, the plan noted physician observations
in June, July and August 2007 indicating that Fessenden’s headaches had “decreased in
severity,” were “mild,” and “were okay.” [DE 57-4 at 51.] The plan’s appeal decision
acknowledges a continuing record of headache and sleep issues in 2008, but cites
indications that the headaches were sometimes noted to be stable. [Id. at 52.] The plan’s
decision concludes that review of Fessenden’s medical treatment for fatigue and
migraine headaches showed “no indication of a significant impairment relative to these
ailments prior to or immediately after the January 2, 2008 work stoppage.” [Id. at 53.]
A second independent medical review was obtained by the plan for purposes of
Fessenden’s appeal. Dr. John Brusch noted that although Fessenden had complaints of

11

fatigue, sore throat, headaches and swollen lymphadenopathy, the conditions did not
occur simultaneously, and that physical and neurological examinations produced no
findings suggesting any need for restrictions or limitations. [Id. at 54.] Dr. Brusch
expressed some skepticism about Fessenden’s “willing[ness] to explore all reasonable
possibilities and treatment,” noting that he “essentially has refused to have adequate
psychiatric evaluation and treatment as well as evaluation for obstructive sleep apnea.”
[Id.] He also pointed out that Fessenden had not undergone a formal functional capacity
evaluation, which might have supported his claims of being unable to perform his job
due to his medical conditions. [Id.] On appeal, the plan concluded that “the medical
documentation provided fail[ed] to reveal restrictions and limitations consistent with a
period of 90 consecutive days of ‘Total Disability’ following [the] January 2, 2008, work
stoppage date,” that Fessenden “was capable of performing the material duties of his
regular occupation prior to the Elimination Period ending April 1, 2008," and so was not
“Totally Disabled” as defined in the policy. [Id.]
As this summary indicates, Fessenden has substantial medical evidence to point
to in support of his claim that he is afflicted with a debilitating case of chronic fatigue
syndrome, but there is also medical evidence to the contrary. As I said at the outset of
this opinion, I am inclined to believe that the greater weight of the evidence supports
Fessenden’s disability claim. But under the arbitrary and capricious standard, the
claimant may lose even if a preponderance of the evidence supports a finding of
disability, so long as the decision has “rational support in the record.” Davis v. Unum

12

Life Ins. Co. of America, 444 F.3d 569, 576 (7th Cir. 2006), quoting Leipzig v. AIG Life Ins. Co.,
362 F.3d 406, 409 (7th Cir. 2004). Because there was medical evidence on both sides of the
disability analysis, and two reasoned opinions explaining the denial of benefits, I must
reluctantly affirm the plan’s decision under the arbitrary and capricious standard.
“[R]eaching a decision amid...conflicting medical evidence is a question of judgment that
should be left to [the Plan administrator] under the arbitrary-and-capricious standard.”
Davis v. Unum Life Ins. Co. of America, 444 F.3d 569, 578 (7th Cir. 2006).
ACCORDINGLY:
Plaintiff Donald Fessenden’s motion for summary judgment [DE 55] is DENIED.
Defendants Reliance Standard Life Insurance Company and Oracle USA, Inc.
Group Long Term Disability Plan’s motion for summary judgment [DE 58] is
GRANTED.
The Clerk shall enter judgment in favor of defendants and against plaintiff,
affirming the denial of long term disability benefits to plaintiff Fessenden under the
defendant plan.
SO ORDERED.
ENTERED: January 17, 2018

/s/ Philip P. Simon
UNITED STATES DISTRICT JUDGE

13