Carpenter v. Purchase Area Development District et al

Filing 25

MEMORANDUM AND OPINION by Senior Judge Thomas B. Russell on 2/24/2012: an appropriate order shall issuecc:counsel (KJA)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
PADUCAH DIVISION
CASE NO. 5:11-CV-62
NANCY CARPENTER

PLAINTIFF

V.
PURCHASE AREA DEVELOPMENT DISTRICT
and
MUTUAL OF OMAHA INSURANCE COMPANY

DEFENDANTS

MEMORANDUM OPINION
This administrative review is before the Court on the Plaintiff’s briefs for Judgment on
the Administrative Record (DN 20). Defendant has responded (DN 21) and Plaintiff has replied
(DN 22). The Court has reviewed the administrative claim file (DN 19). This matter is now ripe
for adjudication.
BACKGROUND
Plaintiff, Nancy Carpenter, brings this action under §1132(a)(1)(B) of the Employment
Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). She alleges that
her application for long-term disability benefits under a group disability policy was improperly
denied by Defendant.
Carpenter was a participant in a long-term disability plan (“Plan”) issued to her former
employer, Paducah Area Development District (“PADD”), by United of Omaha Life Insurance
Company (“UOO”). Carpenter was employed by PADD as a Kentucky Home Care Case
Manager/Consumer Directed Options Support Broker. Generally, the Plan pays benefits to a
participant who is not able to perform the material duties of his or her occupation. The Plan
provided the following definition of “Disability:”

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Disability and Disabled means that because of an Injury or Sickness, a
significant change in Your mental or physical functional capacity has occurred in
which You are:
(a) prevented from performing at least one of the Material Duties of Your Regular
Occupation on a part-time or full-time basis; and
(b) unable to generate Current Earnings which exceed 99% of Your Basic
Monthly Earnings due to that same Injury or Sickness.
After a monthly benefit has been paid for 3 years, Disability and Disabled mean
You are unable to perform all of the Material Duties of any Gainful Occupation.
Disability is determined relative to Your ability or inability to work. It is not
determined by the availability of a suitable position with Your employer.
AR, DN 19 at p. 58-59.
The Plan defined “Material Duties” as “the essential tasks, functions, and operations
relating to an occupation that cannot be reasonably omitted or modified . . . One of the material
duties of Your Regular Occupation is the ability to work for an employer on a full-time basis.”
AR, DN 19 at p. 59. The Plan defined “Regular Occupation” as follows:
… the occupation You are routinely performing when you Disability begins.
Your regular occupation is not limited to the specific position you held with the
Policyholder, but will instead be considered to be a similar position or activity
based on job descriptions included in the most current edition of the U.S.
Department of Labor Dictionary of Occupational Titles (DOT) . . . To determine
Your regular occupation, We will look at Your occupation as it is normally
performed in the national economy, instead of how work tasks are performed for a
specific employer, at a specific location, or in a specific area or region.
AR, DN 19 at p. 60.
On October 12, 2009, Carpenter applied to UOO for benefits under the Plan, listing
“severe abdominal pain, fatigue, malaise” as the reason she was unable to work. AR, DN 19-2 at
p. 24. Carpenter stated that she first began experiencing her symptoms in December of 2004.

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Carpenter continued working until October 22, 2009, when she resigned her position with
PADD.1
UOO obtained the records of Carpenter’s treatment with the medical providers she
identified in her application: Dr. Danny Butler, Internal Medicine; and Dr. Joseph Mayo,
Vascular Surgeon. AR, DN 19-2 at p. 25. These records and Dr. Butler’s attending physician’s
statement indicated that Carpenter was diagnosed with abdominal pain, portal vein thrombosis,2
and degenerative joint disease of the knees. AR, DN 19-2 at p. 22. Carpenter was on anticoagulation therapy and received venipuncture blood draws intermittently. AR, DN 19-1 at p.
19–45. Records show that Carpenter suffered from abdominal distention, abdominal tenderness,
and pain. Id. A January 21, 2010 CT scan showed hepatocellular disease with diffuse fatty
infiltration in the liver, esophageal varices (dilated veins), splenomegaly (enlarged spleen), and
ileus. AR, DN 19 at p. 79. These conditions were all due to the portal vein thrombosis. Id.

1

In the Employer’s Statement, PADD noted that Carpenter had exhausted all of her sick leave.
AR, DN 19-2 at p. 28.
2

The Merck Manual explains that portal vein obstruction results from thrombosis (blood clot) or
narrowing of the portal vein, which brings blood to the liver from the intestines. The Merck
Manual goes on to explain that:
Because the portal vein is narrowed or blocked, pressure in the portal vein increases. This
increased pressure (called portal hypertension) causes the spleen to enlarge (splenomegaly). It
also results in dilated, twisted (varicose) veins in the esophagus (esophageal varices) and often in
the stomach (portal hypertensive gastropathy). These veins can bleed profusely. Fluid
accumulation in the abdomen (called ascites) is not common but may deleveop when the
blockage of the portal vein is accompanied by liver congestion or damage when large amounts of
fluids are given intravenously to treat major bleeding from ruptured varices in the esophagus or
stomach.
Merck Manual, Portal Vein Thrombosis (2007), available at:
http://www.merckmanuals.com/home/liver_and_gallbladder_disorders/blood_vessel_disorders_o
f_the_liver/portal_vein_thrombosis.html.

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On February 27, 2009, Carpenter saw Dr. Butler with complaints of edema. Carpenter
saw Dr. Butler again on March 3, 2009, with complaints of moderate shortness of breath and
moderate swelling in her lower extremities. AR, DN 19-1 at p. 41. During this visit Dr. Butler
noted evidence of abdominal distention and measured Carpenter’s abdomen to be 36 inches in
circumference. Id. at p. 40. On March 10, 2009, Carpenter saw Dr. Butler for a follow up
regarding her shortness of breath. AR, DN 19-1 at p. 39. Carpenter also complained of fever,
chills, and pain from her chest down. Id. At this time, Carpenter reported that her pain patch
was working well to relieve her pain, but it made her nauseated. Id. On April 4, 2009, Carpenter
had a follow up visit to Dr. Butler for the edema. AR, DN 19-1 at p. 36. During this visit, Dr.
Butler noted that the abdomen was non-tender, non-distended, and without rebound. Id. Dr.
Butler also noted that there were no abdominal masses, no hepatomegaly, and no splenomegaly.
Id.
On October 6, 2009, Carpenter saw Dr. Butler complaining of visual disturbances,
worsening abdominal pain, and the need to take more pain medication. AR, DN 19-1 at p. 23.
Dr. Butler noted evidence of generalized abdominal distention and abdominal tenderness. Id. In
addition to the visual disturbances, Dr. Butler’s assessment at this visit was as follows: (1)
abdominal pain, an established problem which was worsening; (2) Thrombosis/Embolism-Vein,
an established problem which was stable and improved; and (3) long-term anticoagulation
therapy, an established problem which was stable and improved. Id.
On October 12, 2009, Carpenter saw Dr. Butler for a follow up regarding her abdominal
pain and the portal vein thrombosis, which were both noted as “chronic and uncontrolled,” and
degenerative joint disease of the knee, which was noted as “chronic and stable.” AR, DN 19-1
at p. 21. At this visit, Carpenter weighed 127 pounds and her waist measured 34 ½ inches. Id. at

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p. 21-22. Carpenter reported generalized fatigue and complained that, due to the pain, “she’s
having to lay down more often and take more of her pain meds.” Id. Dr. Butler noted evidence
of abdominal distention and tenderness with normal bowel sounds, and evidence of crepitus and
pain with palpitation of both knees. Id. at p. 22. Dr. Butler’s assessment at this visit was as
follows: (1) Carpenter’s abdominal pain and portal vein thrombosis were established problems
which were worsening; (2) her DJD was an established problem which was stable, improved; (3)
her long-term anti-coagulation therapy was an established problem which was stable and
improved; and (4) her fatigue was an established problem which was worsening. Id. Dr.
Butler’s notes state that Carpenter was to continue to take her medications as prescribed. Id.
Dr. Butler submitted an attending physician’s statement on October 20, 2009, listing
Carpenter’s primary diagnosis as abdominal pain and portal vein thrombosis, and a secondary
condition of degenerative joint disease of the knee. AR, DN 19-2 at p. 22. Dr. Butler noted that
Carpenter had a poor prognosis for recovery and that his treatment plan for Carpenter to return to
work or to prior level of function was comprised solely of medicine management. Id. He noted
that, in an eight-hour workday, Carpenter could sit for four hours, stand for one hour, and walk
for one hour. Id.

Dr. Butler also noted that Carpenter was restricted from driving or taking care

of patients after taking narcotics, and that she was limited in lifting, bending, squatting, crawling,
and climbing. Id. at p. 23.
On March 10, 2010, UOO denied Carpenter’s claim for LTD benefits on the basis that
the “[a]vailable medical documentation does not appear to support restrictions and limitations to
preclude sitting 6 hours out of an 8-hour day with ability to occasionally make position changes
or occasionally lift up to 10 pounds.” AR, DN 19 at p. 87-89. Thus, because Carpenter could

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perform the material duties of her regular occupation as determined by the vocational analyses,
UOO determined that she was not entitled to benefits under the Plan.
Carpenter appealed UOO’s initial decision denying her claim. In support of her appeal,
Carpenter submitted additional medical documentation: the January 21, 2010 CT Scan and a
report by Dr. Atul Chugh.3 According to Carpenter’s attorney, Carpenter saw Dr. Chugh at the
request of the Social Security Administration. AR, DN 19 at 77. Dr. Chugh’s March 13, 2010
report noted that Carpenter was positive for bilateral knee pain with erythematous changes over
the knee along with swelling bilaterally, more pronounced on the left than on the right. AR, DN
19 at p. 81-82. Additionally, Carpenter’s abdomen was distended, an umbilical hernia was
noted, and hypoactive bowel sounds were heard. Id. at p. 81. The report summarized
Carpenter’s medical history, noting that after having gastric bypass in 2002, Carpenter was noted
to have a small tumor near the bypass site. Id. at p. 80. As a result, Carpenter had a small bowel
resection. Id. Post-resection, Carpenter had multiple blood clots to the liver, spleen, and the
small intestine with superior mesenteric vein thrombosis. Id. Dr. Chugh agreed with the Mayo
Clinic’s opinion to keep Carpenter on anticoagulation, but noted that as a result of this treatment,
Carpenter is always bloated, has difficulty with digestion, has bowel disturbances, and has
constant pain in the belly. Id. Dr. Chugh’s report also noted that Carpenter reported having
problems with her daily activities as a result of the pain and can sit for 10 to 15 minutes, stand
for only 20 minutes, walk for only 20 to 30 minutes, and can carry only 10 pounds. Id. at p. 8081. With respect to Carpenter’s limitations, the report went on to note that there is no difficulty
with fine motor activities, speaking, or listening and that Carpenter could normally travel for an
hour. Id. at p. 81. Dr. Chugh concluded that Carpenter had “short gut syndrome and diffuse

3

It appears the UOO had already received the CT scan prior to its initial denial of Carpenter’s
claim.
6

amounts of fairly pronounced abdominal distention and pain” and that her “symptoms seems
very much in line with diffuse amounts of thrombosis that she has had.” Id. at 82. He further
concluded that Carpenter’s “clots seem to have been fairly large” and that as a result, he felt “that
the patient has the impairment that she has, namely, the ability to sit for 10 to 15 minutes, stand
for 20 minutes, walk for 20 to 30 minutes, and can carry 10 pounds.” Id. As a result of the
“gross amounts of abdominal distention and the pain,” Dr. Chugh thought Carpenter would
benefit from further expertise. Id.
UOO upheld its denial of Carpenter’s benefits by letter on June 8, 2010. AR, DN 19 at p.
64. As its basis for its denial, UOO stated that the records indicated Carpenter has had the
abdominal distention and portal vein thrombosis conditions for some time and that they are
established problem, noted to be “stable and improved.” Id. at p. 68. Thus, UOO concluded that
there was no documentation of a significant change in these conditions. Id. UOO further
concluded that the “medical documentation does not support restrictions and limitations due to
any functional or psychiatric impairment that would have to preclude Ms. Carpenter from
performing the material duties of her regular occupation and does not support a disability.” Id.
Carpenter now moves this Court to find that UUO’s decision to deny her LTD benefits was
arbitrary and capricious.
STANDARD
To begin with, the Court recognizes that “in an ERISA claim contesting a denial of
benefits, the district court is strictly limited to a consideration of the information actually
considered by the administrator.” Killian v. Healthsource Provident Adm'rs, Inc., 152 F.3d 514,
522 (6th Cir.1998). The administrative record includes all documentation submitted during the
administrative appeals process “because this information was necessarily considered by the plan

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administrator in evaluating the merits of the claimant's appeal.” Kalish v. Liberty Mut., 419 F.3d
501, 511 (6th Cir.2005). ERISA and federal regulations enacted under ERISA “require ‘full and
fair’ assessment of claims and clear communication to the claimant of the ‘specific reasons’ for
benefit denials.” Black & Decker Disability Plan, 538 U.S. at 825 (citing 29 U.S.C § 1133; 29
CFR § 2560.503-1 (2002)).
Generally, courts “review a plan administrator's denial of ERISA benefits de novo.”
Moon v. Unum Provident Corp., 405 F.3d 373, 378 (6th Cir.2005) (citing Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). However, when “a plan vests the administrator
with complete discretion in making eligibility determinations, such determinations will stand
unless they are arbitrary or capricious.” Id. “The arbitrary and capricious standard is the least
demanding form of judicial review and is met when it is possible to ‘offer a reasoned
explanation, based on the evidence, for a particular outcome.’” Admin. Comm. of the Sea Ray
Employees' Stock Ownership & Profit Sharing Plan v. Robinson, 164 F.3d 981, 989 (6th
Cir.1999) (citation omitted). “Consequently, a decision will be upheld ‘if it is the result of a
deliberate principled reasoning process, and if it is supported by substantial evidence.’” Evans v.
Unum Provident Corp., 434 F.3d 866, 876 (6th Cir.2006) (citations omitted).
Still, while the arbitrary and capricious standard is deferential, it is not “‘without some
teeth. ” McDonald v. W.-S. Life Ins. Co., 347 F.3d 161, 172 (6th Cir.2003) (citation omitted). A
court's obligation to review the administrative record “inherently includes some review of the
quality and quantity of the medical evidence and the opinions on both sides of the issues.” Id.
As the Sixth Circuit has noted, without such a review “courts would be rendered to nothing more
than rubber stamps for any plan administrator's decision as long as the plan was able to find a

8

single piece of evidence—no matter how obscure or untrustworthy—to support a denial of a
claim for ERISA benefits.” Id.
DISCUSSION
The Plan provides that the policyholder, PADD, delegated the discretion to determine
eligibility for benefits and to construe and interpret the terms and provisions of the Plan to UOO.
AR, DN 19 at p. 57. Accordingly, this Court will apply the arbitrary and capricious standard of
review. See Moon, 405 F.3d at 378.
I. UOO’s Review and Decision
To be considered disabled under the Plan, a significant change in Carpenter’s mental or
physical functional capacity must have occurred which renders her unable to perform at least one
of the material duties of her occupation. AR, DN 19 at p. 58-59. UOO denied Carpenter’s claim
for LTD benefits because it determined Carpenter did not met the Plan’s definition of disabled.
In her brief, Carpenter contends that UOO’s decision to deny her claim was arbitrary and
capricious because it was not supported by substantial evidence and was at odds with the medical
evidence in the administrative record. Carpenter also takes issue with UOO’s failure to obtain a
physician’s opinion in making its decision and in failing to consider Carpenter’s receipt of Social
Security disability benefits.
1. Conflict of Interest
Although neither party discusses the possibility of a conflict of interest in this case, the
Court must consider conflicts of interest in situations where the plan authorizes an administrator
both to decide whether an employee is eligible for benefits and to pay those benefits. Metro. Life
Ins. Co. v. Glenn, 554 U.S. 105, 112 (208); Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157, 165

9

(6th Cir. 2007). A conflict of interest is just one factor considered in the Court’s determination;
it does not change the standard of review. Glenn, 554 U.S. at 116-17.
Here, UOO is responsible for evaluating claims filed under the Plan. AR, DN 19 at p. 57.
Additionally, the ERISA Summary Plan Description states that “[t]he benefits under the Plan(s)
are fully insured by the insurance company shown on Your Certificate of Insurance under a
group insurance policy issued by such Company.” AR, DN 19 at p. 55. The insurance company
shown on the Certificate of Insurance is United of Omaha Life Insurance Company. AR, DN 19
at p. 28. Thus, UOO pays benefits in addition to evaluating claims. “In such a circumstance,
‘every dollar provided in benefits is a dollar spent by . . . [UOO]; and every dollar saved . . . is a
dollar in [UOO’s] pocket.’” See Glenn, 554 U.S. at 112 (quoting Bruch v. Firestone Tire &
Rubber Co., 828 F.2d 134, 144 (3d Cir. 1987)). Furthermore, UOO based its denial of
Carpenter’s claims based upon the in-house file reviews conducted by Nurses Grancer and
Rosenstock and Dr. Reeder (although he gave no individual report or opinion) and did not
employ an outside physician to conduct an independent review.
Although we have found no direct evidence in the record that UOO’s potential conflict of
interest tainted its decision-making process, “the potential for self-interested decision-making is
evident” in such a situation. Calvert, 409 F.3d at 292. As the Court of The Sixth Circuit has
stated, “[t]he Supreme Court made clear in Glenn that such a conflict is a red flag that may
trigger a somewhat more searching review of a plan administrator's decision . . . .” Schwalm v.
Guardian Life Ins. Co. of Am., 626 F.3d 299, 311–12 (6th Cir.2010) (citing Glenn, 554 U.S. at
114). Accordingly, the Court will consider this potential conflict of interest in determining
whether UOO’s decision was arbitrary and capricious.
2. UUO’s Review of Carpenter’s Claims

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This Court must determine if UOO’s decision denying Carpenter’s claim was “the result
of a deliberate principled reasoning process, and if it is supported by substantial evidence.” See
Evans, 434 F.3d at 876. Carpenter contends that UOO’s reasoning is not supported by
substantial evidence, as its position and conclusions are inaccurate and directly at odds with the
medical evidence in the administrative record. Carpenter further contends that UOO offers no
other basis for its denial of her claim, did not have her examined by a physician, and did not ask
a physician to review her medical records. UOO responds that, because its healthcare
professionals’ opinions were based on all of the available medical and vocational evidence, it has
offered a reasoned explanation based on the evidence for its denial.
To be considered disabled under the Plan, a significant change in Carpenter’s mental or
physical functional capacity must have occurred which renders her unable to perform at least one
of the material duties of her occupation. AR, DN 19 at p. 58-59. In her brief, Carpenter
discusses the duties of her job with PADD, which included travel by automobile to eight
different counties in Western Kentucky. In support of her argument that UOO acted arbitrarily
and capriciously, Carpenter asserted that UOO ignored Dr. Butler’s statement that she should not
drive or take care of patients after taking narcotic pain medication. UOO contends that its
decision was not arbitrary and capricious because it focused on Carpenter’s functional capacity
to perform the material duties of her occupation instead of her job with PADD.
The Plan’s definition of “Occupation” includes a statement that “Your regular occupation
is not limited to the specific position you held with the Policyholder, but will instead be
considered to be a similar position or activity based on job descriptions included in the most
current edition of the U.S. Department of Labor Dictionary of Occupational Titles (DOT) . . .”
AR, DN 19 at p. 60. Thus, Carpenter’s specific job requirements with PADD are not necessarily

11

material duties of her occupation, as defined under the Plan. Based upon a job analysis provided
by Carpenter’s employer,4 and the U.S. Department of Labor Dictionary of Occupational Titles
(“DOT”), UOO’s Vocational Rehab Department found that Carpenter’s position was most
closely related to two DOT occupation titles: (1) social worker, medical and (2) caseworker.
AR, DN 19-2 at p. 58. Both of these DOT occupational titles are sedentary physical demand
occupations. Id. Therefore, UOO determined that Carpenter’s occupation required occasional
standing, walking, sitting, pulling, lifting, carrying, and pushing up to 10 pounds, reaching,
handling, and fingering. AR, DN 19-2 at p. 59- 64.
UOO Nurse Julie Grancer made the initial review of Carpenter’s LTD Claim. In making
her review, Nurse Grancer considered the following: (1) Carpenter’s MTD Claims Employee’s
Statement, (2) Dr. Butler’s Attending Physician’s Statement, (3) Progress note and laboratory by
Jeffery Ward, and (4) Dr. Butler’s encounter notes. Nurse Grancer noted that there was no
indication of abnormal bleeding or poorly controlled blood pressure as is sometimes seen with
portal vein thrombosis. AR, DN 19-2 at p. 55. Additionally, Nurse Grancer found that there
were “no current vital signs to reflect pain is causing a systemic medical issue or indication of
subjective limitations. There’s no pain treatment change.” Id. Based on her review, Nurse
Grancer opined that there was no support for restrictions and limitations that would preclude
sitting for 6 hours out of an 8-hour day with the ability to occasionally change positions and
occasionally lift up to 10 pounds. Id. at p. 56.
In the March 10, 2010 letter denying Carpenter’s claim, UOO recited the terms of the
Policy and the information used to make its determination, stated that Carpenter’s occupation

4

A Job Analysis, submitted by PADD, showed that Carpenter’s position required travel by
automobile about 40% of the time and required frequent sitting, and occasional standing,
walking, stooping, balancing, reaching, and light lifting. AR, DN 19-2 at p. 31.
12

was a sedentary physical demand occupation, and recounted various details of Carpenter’s
medical evaluations. AR, DN 19 at p. 87-90. UOO referenced the October 6 and October 12,
2009 visits to Dr. Butler and acknowledged the evidence of abdominal distention, abdominal
tenderness, and crepitus and pain with palpitation in both knees. Id. at 89. However, UOO
concluded as follows:
Based on the medical documentation, it was determined, in regards to your
abdominal pain there was no current vital signs to reflect pain is causing a
systemic medical issue or indication of subjective limitations. There is no pain
treatment change. Your examinations have revealed intermittent abdominal
distention with tenderness as sole abnormality. Your [sic] neurologically intact
with normal motor, sensation, reflexes and gait. There’s no indication of
abnormal bleeding seen or poorly controlled blood pressure as sometimes seen in
portal vein thrombosis. Available medical documentation does not appear to
support restrictions and limitations to preclude sitting 6 hours out of an 8-hour
day with ability to occasionally make position changes or occasionally lift up to
10 pounds.
Id.
UOO’s minimal analysis focused on the symptoms Carpenter does not exhibit, such as
abnormal bleeding or poorly controlled blood pressure, instead of focusing on the symptoms she
does exhibit and then analyzing how these symptoms would not prevent her from performing the
material duties of her occupation. Although UOO notes that there was no pain treatment change,
it failed to address that Carpenter’s abdominal pain was worsening as of her October 6 and 12
visits to Dr. Butler, that her duragesic patch made her nauseous, and that she was having to
increase her pain medication and lay down more. UOO disregarded Dr. Butler’s opinion
regarding Carpenter’s limitations and restrictions but did not expressly explain why it did so.
Further, UOO did not explain the medical evidence upon which Nurse Grancer based her opinion
that Carpenter could perform the material duties of her occupation.

13

After Carpenter appealed the decision denying her claim, UOO submitted all of
Carpenter’s medical records and the additional records submitted with her appeal to UOO Nurse
Nancy Rosenstock for review. On May 13, 2010, Nurse Rosenstock issued her findings with
respect to Carpenter’s claim. Nurse Rosenstock reviewed Dr. Chugh’s report, along with the
previous medical documentation previously provided, but found that the “overall medical
documentation appears to indicate that claimant would be able to sit up to 6 hours out of an 8
hour day [with ability to change position as needed]; stand up to 1 hour [20 minute intervals];
and walk up to 1 hour [30 minute intervals], and lift/carry 10 lbs., per Department of Labor
guidelines.” AR, DN 19-2 at p. 51. She concluded that, “[b]ased on the medical analysis,
Carpenter’s “restrictions and limitations do not appear to be supported from 10/19/09 forward,
which would preclude claimant from performing predominately sedentary physical activities . . .
.” AR, DN 19-2 at p. 51.
In the letter denying Carpenter’s appeal, UOO states a different definition of “disability”
than appears in the Policy and in the first denial letter.5 This letter then goes on to state the
material duties of the DOT occupational titles most closely related Carpenter’s occupation.
There is then a one page recitation of the technical aspects of Carpenter’s condition, visits to Dr.
Butler, the January 2010 CT scan, and Dr. Chugh’s medical assessment. UOO then provides its
analysis:

5

The letter states, that “[t]he provision(s) in the policy on which the denial of the claim is based
state(s) the following:
Total Disability and Totally Disabled, for other than a pilot, means that because of
an Injury or Sickness: (a) You are unable to perform all of the material duties of
Your regular occupation on a full-time basis; and (b) You are unable to generate
Current Earnings which exceed 20% of Your Basic Monthly Earnings due to that
same Injury or Sickness.
AR, DN 19 at p. 64.   
14

. . . The most recent office visit with Dr. Butler, dated October 12, 2009, indicated
evidence of abdominal distention and abdominal tenderness with normal bowel
sounds. Evidence of crepitus and pain with palpation of both knees were noted;
however, records indicate Ms. Carpenter has had this condition for some time and
is an established problem, which was noted to be “stable and improved.” It was
also noted that she had been on long-term anticoagulation therapy that was “stable
and improved.” There is no documentation of a significant change in these
conditions. Dr. Butler indicated on the attending physician’s statement completed
October 9, 2009, that Ms. Carpenter was able to sit up 4 hours, stand up to 1 hour,
and walk up to 1 hour out of an 8 hour day and lift/carry up to 25 pounds. The
clinical evidence in file does not support that Ms. Carpenter would be unable to
perform the material duties of her regular occupation, as performed in the national
economy.
AR, DN 19 at p. 68. UOO thus concluded that the “medical documentation does not support
restrictions and limitations due to any functional or psychiatric impairment that would have to
preclude Ms. Carpenter from performing the material duties of her regular occupation and does
not support a disability.” Id.
UOO’s limited commentary in its second denial letter contains little more than
conclusory assertions. UOO appears to take the position that Carpenter was not disabled because
there was no documentation of a significant change in her degenerative joint disease or anticoagulation therapy, which were noted as stable. However, UOO does not address that the sideeffects of the anti-coagulation therapy (bloating, difficulty with digestion, bowel disturbances,
and constant pain in the belly) and how those side-effects may affect Carpenter’s ability to
perform the material duties of her occupation. Furthermore, UOO does not explain its apparent
dismissal of the medical documentation that Carpenter’s abdominal pain was worsening as of
October 6, 2009, and that, as of October 12, 2009, her abdominal pain and portal vein thrombosis
were chronic, uncontrolled, and worsening and that she had to lay down more and take more pain
medication.

15

Although UOO acknowledged Dr. Butler’s and Dr. Chugh’s opinions regarding
Carpenter’s limitations and restrictions, it then summarily rejects them without giving a reason
for doing so.6 The Court is aware that “[n]othing in [ERISA] . . . suggests that plan
administrators must accord special deference to the opinions of treating physicians.” Black &
Decker Disability Plan v. Nord, 538 U.S. 822, 831, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003).
However, “a plan administrator may not arbitrarily disregard reliable medical evidence proffered
by a claimant, including the opinions of a treating physician.” Evans, 434 F.3d at 877; see
Calvert, 409 F.3d at 296 (finding a reviewing physician’s report to be inadequate because, even
though the reviewing physician did mention the claimant’s doctors by name, he did not explain
why their conclusions were rejected out-of-hand). Here, the only explanation offered as to why
Dr. Butler’s and Dr. Chugh’s opinions were disregarded was that “[t]he clinical evidence does
not support that Ms. Carpenter would be unable to perform the material duties of her regular
occupation . . .” AR, DN 19 at 68. UOO did not pinpoint any evidence that contradicted Dr.
Butler’s and Dr. Chugh’s opinions or provide its own analysis regarding how Carpenter was able
to perform the material duties of her occupation. “Logically, [UOO] could have made a
reasoned judgment only if it relied on medical evidence that assessed [Carpenter’s] physical
ability to perform job related tasks.” See Elliot v. Metropolitan Life Insurance Co., 473 F.3d
613, 618 (6th Cir. 2006). “Put differently, medical data, without reasoning, cannot produce a
logical judgment about a claimant’s work ability.” Id.
UOO instead chose to credit the opinions of Nurses Grancer and Rosenstock that
Carpenter’s condition did not preclude her from performing the duties of her regular occupation,

6

Dr. Chugh concluded that Carpenter could only sit for 10 to 15 minutes, stand for 20 minutes,
walk for 20 to 30 minutes, and can carry 10 pounds. AR, DN 19 at p. 82. Dr. Butler concluded
that, in an eight-hour workday, Carpenter could sit for four hours, stand for 1 hour, and walk for
1 hour. AR, DN 19-2 at p. 22.
16

and Dr. Reeder’s statement of agreement with Nurse Grancer’s assessments.7 Although there is
no “discrete burden of explanation” placed upon plan administrators “when they credit reliable
evidence that conflicts with a treating physician's evaluation,” Black & Decker Disability Plan,
538 U.S. at 834, the plan administrator must offer “a reasonable explanation based upon the
evidence for its decision . . . to rely upon the medical opinion of one doctor over that of another
doctor.” Roumeliote v. Long Term Disability Plan for Employees of Worthington Industries, 475
F.Supp.2d 742, 746 (S.D. Ohio 2007), aff'd 292 Fed. Appx. 472 (6th Cir.2008). Furthermore,
“when a plan administrator's explanation is based on the work of a doctor in its employ, we must
view the explanation with some skepticism.” Moon v. Unum Provident Corp., 405 F.3d 373,
381-82 (6th Cir.2005). Lacking here is a reasonable explanation as to why UOO credited the
opinions of two of its nurses, who performed a file-only review. That UOO gave greater weight
to these non-treating healthcare professionals in its employ for no apparent reason lends weight
to the conclusion that UOO acted arbitrarily and capriciously.
Finally, the Court notes that conducting a file review only is not necessarily arbitrary and
capricious. Calvert v. Firstar Finance, Inc., 409 F.3d 286, 296 (6th Cir.2005) (“[W]e find
nothing inherently objectionable about a file review by a qualified physician in the context of a
benefits determination.”). It is, however, a factor to be considered in the Court's determination.
Smith v. Continental Cas. Co., 450 F.3d 253, 263 (6th Cir.2006). “[T]he failure to conduct a
physical examination-especially where the right to do so is specifically reserved in the plan-may,
in some cases, raise questions about the thoroughness and accuracy of the benefits

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Defendant states that Dr. Thomas A. Reeder, UOO’s Senior Vice President and Medical
Director, carefully reviewed the claim in its entirety and specifically approved its medical
aspects. However, nowhere in the Administrative Record does Dr. Reeder provide an opinion
regarding Carpenter’s limitations beyond merely stating that Dr. Reeder “agree[d] with the
NCM assessment.” AR, DN 19-2 at p. 44.
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determination.” Calvert, 409 F.3d at 295. Here, UOO's right to conduct a physical examination
is explicitly provided for in the Plan. AR, DN 19 at p. 49. A physical examination of Carpenter
was never requested. Therefore, the Court considers this factor in its analysis.
UOO’s failure to conduct a physical exam is especially troublesome in this case because
the extent or severity of Carpenter’s abdominal pain is largely subjective, although the record is
replete with objective medical evidence of the cause of this pain. Dr. Chugh, after examining
Carpenter, noted that there was fairly pronounced abdominal distention and pain, which was in
line with the fairly diffuse amounts of thrombosis she has had. If UOO believed that Carpenter’s
condition did not prevent her from being able to perform her occupation, then UOO could have
ordered its own physical examination instead of summarily concluding that the medical
documentation did not support such restrictions.
3. Social Security
Lastly, Carpenter contends that UOO failed to consider or rebut her award of Social
Security disability benefits. According to Carpenter’s complaint, she “received a fully favorable
disability decision dated April 6, 2010, by an Administrative Law Judge awarding her
supplemental security income benefits which further details the medical evidence supporting her
disability under the Plan.” DN 1 at ¶ 17. UOO issued its letter upholding the denial of
Carpenter’s claim on June 8, 2010. AR, DN 19 at p. 64. In its review of UOO’s decision, the
Court may not consider any evidence not presented to the administrator unless the evidence is
offered in support of a procedural challenge to the administrator’s decision, such as an alleged
lack of due process or alleged bias. Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609,
619 (6th Cir. 1998). The Sixth Circuit has said that evidence of a SSA disability determination
“does not fall under the exception to the rule that federal courts can only consider evidence

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properly presented to the plan administrator when reviewing the reasonableness an ERISA
determination.” Storms v. Aetna Life Ins. Co., 156 Fed. Appx. 756, 760 (6th Cir. 2005). Here,
there is no evidence that Carpenter submitted the SSDI award letter to UOO during its review of
her claim and Carpenter does not contend that she did so. Therefore, the Court may not consider
Carpenter’s SSDI award in its determination of whether or not UOO’s determination was
arbitrary and capricious.
4. Conclusions and Remedy
Considering the factors discussed above, the Court concludes that UOO’s denial of
disability benefits to Carpenter was arbitrary and capricious. The Court is troubled by UOO’s
determination that the available medical documentation did not support Carpenter’s reported
restrictions when it never had a physician examine her or provide a full analysis of her claim.
The Court is also troubled by the failure of UOO to clearly articulate a basis for its conclusions
and for its ultimate denial of Carpenter’s claim. Finally, an inherent conflict of interest exists
because UOO both reviews claims and pays benefits. The Court believes that, as a whole, these
factors support a finding that Defendant’s denial of Carpenter’s claim was not the result of a
deliberate principled reasoning process and was not supported by substantial evidence.
However, the Court does not believe the record clearly establishes that Plaintiff is entitled to long
term disability benefits. Therefore, this case is remanded to Defendant to conduct a full and fair
review. See, e.g., Elliott v. Metro. Life Ins. Co. of N. Am., 473 F.3d 613, 622 (6th Cir.2006)
(remand to MetLife appropriate where the Court did not find that the plaintiff was “clearly
entitled to benefits”)).
II. State Law Claims Pre-Empted by ERISA

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In her complaint, Carpenter asserts a state law claim against UOO for consequential and
punitive damages for UOO’s bad faith refusal to pay Plaintiff’s claim for benefits. ERISA
preempts “any and all State laws insofar as they may now or hereafter relate to any employee
benefit plan.” 29 U.S.C. § 1144(a). The United States Supreme Court and Sixth Circuit Court of
Appeals have held that under 29 U.S.C. § 1144(b), an ERISA action preempts state law claims
by beneficiaries who sue for the recovery of benefits in connection with an ERISA plan.
Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 737-738 (1985); Pilot Life Insurance
Co. v. Dedeaux, 481 U.S. 41 (1987) Daniel v. Eaton Corp., 839 F.2d 263, 266-67 (6th Cir.1988).
“[I]n interpreting ERISA's preemption clause, a court ‘must go beyond the unhelpful text and the
frustrating difficulty of defining its key term, and look instead to the objectives of the ERISA
statute as a guide to the scope of the state law that Congress understood would survive.’”
Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp., 399 F.3d 692, 698 (6th Cir.2005)
(quoting N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S.
645, 655 (1995)).
In Briscoe v. Fine, the Sixth Circuit Court of Appeals held that “‘any state-law cause of
action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts
with the clear congressional intent to make the ERISA remedy exclusive and is therefore
preempted.’” Briscoe v. Fine, 444 F.3d 478, 498 (6th Cir.2006) (quoting Aetna Health, Inc. v.
Davila, 542 U.S. 200, 209 (2004)). In order to determine whether or not a state law claim is
preempted by 29 U.S.C. § 1144(a), the Court must find that the claim is “related to” the recovery
under the ERISA plan. In looking at whether a state law claim relates to an ERISA plan, courts
should consider “the kind of relief that plaintiffs seek, and its relation to the pension plan.”
Ramsey v. Formica Corp., 398 F.3d 421, 424 (6th Cir.2005).

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The Supreme Court and the Sixth Circuit have clearly held that a state-law claim for
breach of fiduciary duty and/or bad faith is preempted by ERISA. Pilot Life Ins. v. Dedeaux, 481
U.S. 41 (1987) (holding that bad faith claim arising out of failure to pay benefits was preempted
under ERISA); Smith v. Provident Bank, 170 F.3d 609, 612-13 (6th Cir. 1999).
Accordingly, Carpenter’s state law claims against Defendant are preempted by ERISA.
CONCLUSION
For the foregoing reasons, the Court grants judgment for Plaintiff. Count II of Plaintiff’s
complaint is dismissed. This matter is REMANDED to Defendant for a full and fair review in
light of the Court’s instructions.

February 24, 2012

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