Chavarria v. Metropolitan Life Insurance Company
ORDER AND REASONS granting Plaintiff's 25 Motion for Judgment as a Matter of Law; and denying Defendant's 24 Motion for Summary Judgment. In order to assist the Court in entering a final judgment, the parties shall submit a stipulation to the Court, no later than December 5, 2014, as to the amount of benefits due to Plaintiff for the period of April 512, 2012. Signed by Judge Jane Triche Milazzo. (ecm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SECTION "H" (4)
ORDER AND REASONS
Before the Court are Cross-Motions for Summary Judgment (Docs. 24 &
25). For the following reasons, Plaintiff's Motion is GRANTED and Defendant's
Motion is DENIED. The Court will enter final judgment in favor of Plaintiff.
Plaintiff filed this suit seeking reversal of the denial of long-term disability
benefits under an employee disability benefit plan governed by the Employee
Retirement Income Security Act of 1974 (“ERISA”).1
administrator of the plan.
29 U.S.C. §§ 1001–1461.
Defendant is the
Plaintiff was employed by DHH Investments as an automobile body
repairman ("bodyman"). As part of his employment, Plaintiff participated in a
disability benefits plan. Defendant funded the plan through an insurance policy
it sold to Plaintiff's employer. Defendant also was responsible for all benefits
In October of 2009, Plaintiff was awarded short-term disability benefits on
the basis of an inguinal hernia. He was paid benefits until May of 2010, the
maximum duration available under the plan. In May of 2010, Defendant opened
a new claim on Plaintiff's behalf for long-term disability benefits and Defendant
paid these benefits from May of 2010 until April 4, 2012. On April 5, 2012,
Defendant contacted Plaintiff and informed him that he no longer met the plan's
definition of disabled and that his benefits would be terminated effective April
4, 2012. Plaintiff appealed this decision through Defendant's administrative
review process. After receiving a final decision denying his claim for benefits,
Plaintiff filed the instant suit.
"The summary judgment standard for ERISA claims is 'unique,' because
the Court acts in an appellate capacity reviewing the decisions of the
administrator of the plan."2 "Where the decision to grant or deny benefits is
reviewed pursuant to ERISA, 'a motion for summary judgment is merely the
conduit to bring the legal question before the district court.'"
Reed v. Huntington Ingalls Indus., Inc., No. 11–1816, 2012 WL 4460822, at *2 (E.D.
La. Sept. 26, 2012).
An administrator's decisions regarding plan terms and eligibility for
benefits are subject to de novo review in the district court "unless the benefit
plan gives the administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan."3 If the plan grants
such discretion, the administrator's determinations are reviewed only for abuse
of discretion.4 In the Fifth Circuit, an administrator's factual determinations are
always reviewed for abuse of discretion, regardless of whether the plan grants
the administrator discretionary authority.5 The parties concede, and the Court
is convinced that, the abuse of discretion standard applies to this matter.
Under this standard, the Court looks to whether the administrator acted
arbitrarily or capriciously.6 "A decision is arbitrary only if 'made without a
rational connection between the known facts and the decision or between the
found facts and the evidence.'"7 The Court will uphold the administrator's
decision "if it is supported by substantial evidence."8 The Court's review "need
not be particularly complex or technical; it need only assure that the
administrator's decision fall somewhere on a continuum of reasonableness—even
if on the low end."9 "A district court may not engage in de novo weighing of the
Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
Vercher v. Alexander & Alexander Inc., 379 F.3d 222, 226 (5th Cir. 2004).
Meditrust Fin. Servs. Corp. v.. Sterling Chems., Inc., 168 F.3d 211, 214 (5th Cir. 1999).
Id. at 215
Holland v. Int'l Paper Co. Ret. Plan, 576 F.3d 240, 247 (5th Cir. 2009).
LAW AND ANALYSIS
The Court begins its discussion with the issues on which the parties agree.
There is no dispute that Plaintiff was entitled to short-term disability benefits
as a result of his injury or that Plaintiff was initially entitled to long-term
disability benefits. The parties also agree that, under the terms of the plan,
Plaintiff was only entitled to long-term disability benefits if "due to sickness,
pregnancy or accidental injury, you are receiving Appropriate Care and
Treatment from a Doctor on a continuing basis; and . . . you are unable to earn
more than 80% of your Predisability Earnings . . . at your Own Occupation11 for
any employer in your Local Economy."12 Therefore, the sole issue presented is
whether, on April 4, 2012, Plaintiff was capable of earning more than 80% of his
predisability earnings working as a bodyman. Defendant concluded that he was.
This Court must determine whether that decision was arbitrary and capricious.
Dramse v. Delta Family-Care Disability and Survivorship Plan, 269 Fed. Appx. 470,
478 (5th Cir. 2008).
"'Own Occupation' means the activity that you regularly perform and that serves as
your source of income. It is not limited to the specific position you held with your Employer.
It may be a similar activity that could be performed with your Employer or any other
employer." Administrative Record at M-0018. The administrative record for Plaintiff's claim
was submitted to the Court manually, thus it does not appear in the electronic Court record.
Where the Court cites to the administrative record, it does so using the bates stamped
pagination contained in the record.
This definition of disability only applied for the first 24 months that Plaintiff received
benefits under the plan. After 24 months, the plan would only pay benefits if Plaintiff was
unable to earn more than 60% of his predisability earnings at any occupation in the local
It is helpful to begin with a review of Plaintiff's medical and claim history.
A. Medical and Claims History
On October 14, 2009, Plaintiff experienced severe pain in his abdominal
and groin area while at work. He was transported to the hospital where he was
diagnosed with an inguinal hernia. Plaintiff underwent surgery to repair the
hernia. While the surgery appears to have been successful, Plaintiff continued
to experience severe pain in his lower abdomen. When Plaintiff's pain failed to
abate, he was referred to Dr. Skaribas, a pain management specialist.
Dr. Skaribas first saw Plaintiff on April 8, 2010. Dr. Skaribas diagnosed
Plaintiff with bilateral ilioinguinal neuralgia, or severe nerve pain in the groin
area.13 Plaintiff was prescribed pain medication and scheduled for a nerve block
procedure. The nerve block was performed on August 17, 2010, and Plaintiff
experienced temporary improvement.
On June 23, 2010, pursuant to a request from Defendant, Plaintiff's
employer submitted a form detailing the requirements of a bodyman. The form
indicated, as relevant to Plaintiff's claim, that a bodyman was required to
occasionally lift up to fifty pounds and was never required to lift more than one
hundred pounds. Curiously, Plaintiff's employer did not indicate with what
frequency bodymen were required to lift fifty to one hundred pounds.
On March 25, 2011, Dr. Skaribas submitted an "attending physician
statement" to Defendant. Dr. Skaribas indicated that Plaintiff was suffering
from chronic pain syndrome and ilioinguinal neuralgia and that Plaintiff was
See Stedman's Medical Dictionary 199700, 271340 (27th ed. 2000).
incapable of standing for any period of time or lifting any weight.
In July of 2011, Plaintiff was in an automobile accident that Dr. Skaribas
believed exacerbated Plaintiff's condition.
Dr. Skaribas's notes from September of 2011 indicate that Plaintiff
continued to experience severe nerve pain following the nerve block procedure.
Dr. Skaribas saw Plaintiff again in October and November of 2011 and
noted on both occasions that Plaintiff was continuing to experience severe pain.
On January 11, 2012, Dr. Skaribas saw Plaintiff and reviewed an MRI
that was completed in late 2011. The MRI report indicated that Plaintiff had a
multi-level disc degeneration in his lumbar spine with multiple herniated discs.14
Dr. Skaribas noted that Plaintiff was continuing to experience severe pain.
On February 9, 2012, at Defendant's request, Plaintiff underwent an IME
with Dr. Silver. Dr. Silver noted that Plaintiff expressed complaints of severe
pain in his groin, lower back, and legs. Dr. Silver concluded that Plaintiff was
suffering from chronic pain syndrome, ilioinguinal neuritis, and chronic low back
syndrome with herniated discs. Dr. Silver expressed some skepticism regarding
the credibility of Plaintiff's pain complaints, as well as Plaintiff's diagnosis of
ilioinguinal neuritis, and opined that Plaintiff was able to return to work. Dr.
Silver did not identify or discuss the nature of Plaintiff's prior work.
Defendant wrote to Dr. Silver and requested clarification regarding what
work Plaintiff would be able to do, noting that Plaintiff had previously worked
This MRI report is not in the administrative record, however, it appears that
Defendant had the report at some point as it is referenced in the report prepared by Dr. Silver.
as a bodyman and that the bodyman job was classified as heavy work. Dr. Silver
responded on March 12, 2012 and opined that Plaintiff was able to work no more
than eight hours per day and lift no more than fifty pounds.
On March 14, 2012, Dr. Skaribas saw Plaintiff and noted that he was
continuing to experience severe pain in his back, groin, and legs. Dr. Skaribas
referred Plaintiff to a spine surgeon and reduced Plaintiff's narcotic dosage in
an effort to reduce the risks of possible opioid dependency.
On April 5, 2012, Defendant informed Plaintiff that his disability benefits
were terminated, effective April 4, 2012. Defendant specifically cited the report
of Dr. Silver and noted that Plaintiff was able to lift up to fifty pounds and that
his prior job as a bodyman did not require lifting more than fifty pounds.
On May 8, 2012, Dr. Skaribas wrote a letter to Defendant. Dr. Skaribas
indicated that he had received a copy of Dr. Silver's report, and that he disagreed
with his findings. He further noted that an examination of Plaintiff revealed
both objective and subjective findings that supported a finding of disability, and
that Dr. Skaribas's evaluation of Plaintiff's functional capacity had not changed
since March of 2011.
On June 15, 2012, the Social Security Administration ("SSA") issued a
decision denying Plaintiff's request for Social Security Disability benefits. The
Administrative Law Judge ("ALJ") found that Plaintiff suffered from chronic
ililoinguinal neuraliga and degenerative disc disease and that Plaintiff was not
capable of returning to his prior job as a bodyman. Specifically, the ALJ found
that Plaintiff was only capable of lifting up to 20 pounds occasionally and that
he was "unable to perform past relevant work."15 Because the ALJ found that
Plaintiff had the ability to perform some work, Plaintiff's claim for social security
disability benefits was denied.
Dr. Skaribas saw Plaintiff again in May, July, and September of 2012 and
noted that Plaintiff continued to experience severe pain. At each of these visits,
Dr. Skaribas concluded that Plaintiff needed to continue the prescribed pain
medication, including narcotics.
On September 19, 2012, Plaintiff formally appealed Defendant's decision
to terminate his benefits. Plaintiff submitted an affidavit with his appeal in
which he attested that his job occasionally required lifting up to 150 pounds.
On October 18, 2012, at Defendant's request, Dr. Kalen reviewed Dr.
Silver's report. Dr. Kalen mentioned the presence of the unfavorable SSA
decision but did not discuss any of the ALJ's findings. Dr. Kalen indicated that
she unsuccessfully attempted to contact Dr. Skaribas regarding Plaintiff's
condition. Dr. Kalen concluded that Plaintiff was not suffering from any medical
conditions that limited his ability to work and that Plaintiff's lumbar MRIs were
"unremarkable." She also noted that she did not have any of Plaintiff's medical
records after April 5, 2012.
On November 21, 2012, Dr. Kalen issued an addendum to her report. She
indicated that she had been provided with additional medical records and that
her opinion was unchanged. She specifically noted that Plaintiff had undergone
an MRI in late 2011 but that she had not received a copy of the MRI images or
Administrative Record, M-0960.
report. Relying on Dr. Silver's description of the MRI findings, Dr. Kalen
reiterated that her conclusion was unchanged.
On December 6, 2012, Defendant issued a final decision denying Plaintiff's
appeal. The decision relies on the opinions of Dr. Silver and Dr. Kalen and
specifically concludes that Plaintiff is capable of lifting up to 50 pounds
occasionally. Having determined that Plaintiff was able to meet the physical
requirements of his "own occupation," Defendant found that Plaintiff no longer
met the plan's definition of disabled. Defendant's final decision makes no
mention of the SSA decision.
B. Defendant's Decision was Arbitrary and Capricious
In reviewing Defendant's decision, the Court must consider all of the
circumstances surrounding the decision.16 This includes the medical evidence,
any structural conflicts of interest inherent in plan administration, and, where
applicable, relevant SSA decisions.17 In reaching the conclusion that Defendant
abused its discretion, the Court relies heavily on the recent Fifth Circuit decision
in Schexnayder v. Hartford Life and Accident Insurance Company.
In Schexnayder, the plaintiff was denied long-term disability benefits by
Hartford.18 Schexnayder claimed to be suffering from several conditions that
completely prevented him from working.19 Hartford agreed that Schexnayder
was unable to perform his own occupation and paid him long-term disability
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008).
Schexnayder v. Hartford Life & Acc. Ins. Co., 600 F.3d 465, 469–71 (5th Cir. 2010).
Id. at 467.
benefits under the plan for 24 months.20 After 24 months, however, the plan's
definition of disability changed.21 In order to receive more than 24 months of
disability payments, Schexnayder was required to demonstrate that he was
unable to perform any occupation.22 Hartford concluded that Schexnayder was
able to perform full-time sedentary work.23 Because Schexnayder was not
incapable of working, Hartford declined to pay any additional benefits.24
Schexnayder appealed and Hartford employed several reviewing physicians who
concluded that he was capable of performing some work.25 Relying on these
conclusions, Hartford denied benefits.26
After exhausting his administrative remedies, Schexnayder filed suit in
federal district court.27 The district court issued judgment for Schexnayder and
On appeal, the Fifth Circuit noted that Hartford's
investigation revealed conflicting medical evidence regarding the extent of
Schexnayder's physical limitations.29
Specifically, Hartford's reviewing
physicians questioned the credibility of Schexnayder's pain complaints and
concluded that the complaints were not consistent with the objective medical
Id. at 467–68.
Id. The plan at issue in this case contains a similar provision.
Id. at 468.
Id. at 469.
evidence.30 In the face of this conflicting testimony, the Fifth Circuit held that
the decision was based on substantial evidence.31
This analysis, however, did not complete the Court's inquiry. The Court
was required to consider the impact of any conflict of interest.32 The Court noted
that Hartford not only funded the plan but also made the benefits
determinations.33 The Court found that this structural conflict of interest was
exacerbated by the absence of any control measures designed to minimize the
impact of the conflict.34 Finally, the Court held that Hartford's failure to address
the SSA finding that contradicted its decision constituted procedural
unreasonableness.35 That procedural unreasonableness, coupled with Hartford's
structural conflict of interest, compelled the conclusion that Hartford had abused
The instant matter is materially indistinguishable from Schexnayder.
Defendant's investigation revealed conflicting medical evidence regarding the
extent of Plaintiff's physical limitations. The reviewing physicians questioned
the credibility of Plaintiff's pain complaints and concluded that the complaints
Id. at 470.
Id. at 471 ("Because Hartford failed to acknowledge an agency determination that was
in direct conflict with its own determination, its decision was procedurally unreasonable.).
Id. ("Although substantial evidence supported Hartford's decision, the method by
which it made the decision was unreasonable, and the conflict, because it is more important
under the circumstances, acts as a tiebreaker for us to conclude that Hartford abused its
were not consistent with the objective medical evidence.
As in Schexnayder, Defendant, MetLife, has a structural conflict of
interest. Specifically, MetLife both administers and funds the plan. Thus,
Defendant's decision to pay or deny benefits directly impacts its bottom line.
Additionally, there is no evidence that Defendant has taken any significant steps
to minimize the impact of the conflict.
Finally, Defendant failed to address the SSA decision that contradicted
Defendant's decision to deny benefits. Defendant insists that this case is
distinguishable from Schexnayder because Schexnayder involved a favorable
SSA decision, while the decision in Plaintiff's case was unfavorable. This is a
distinction without a difference. While it is true that the SSA declined to award
Plaintiff disability benefits, the ALJ judge specifically found that "[t]he physical
demands of [Plaintiff's] past work exceed his residual functional capacity."37 The
SSA decision was in direct conflict with Defendant's finding that Plaintiff can
return to work as a bodyman. Defendant's denial does not mention, much less
attempt to address, this discrepancy.38
Indeed, the record is devoid of any evidence that would suggest that
Defendant afforded the SSA decision any consideration at all.
mentions that the SSA denied benefits but does not discuss the decision. The
Court cannot say with confidence that Dr. Kalen or any of Defendant's
employees even read the ALJ's decision. Instead, it appears that Defendant may
Administrative Record, M-0960.
Id. at M-0721–00725.
have viewed the fact that the decision was unfavorable as a fact supporting its
decision to deny benefits.
Considering the contradictory medical evidence, the failure to address the
SSA decision and Defendant's structural conflict of interest, the Court finds
Defendant's denial of benefits was an abuse of discretion and grants summary
judgment to Plaintiff. It is important to note, however, the outer boundaries of
the Court's decision today. The Court has granted judgment to Plaintiff because
Defendant unreasonably concluded that Plaintiff was able to return to work as
a bodyman. Under the terms of the plan, this decision entitles Plaintiff to
precisely eight days of benefits, from April 5–12, 2012. On April 12, 2012, the
plan's definition of disability changed. After April 12, Plaintiff would only
receive benefits if he could demonstrate that he was unable to earn 60% of his
predisability earnings at any gainful occupation.39 Because Defendant never
reached a conclusion on this issue, the question of Plaintiff's entitlement to
benefits under this provision is not before the Court and the Court expresses no
C. Attorney's Fees
Under ERISA, "the court in its discretion may allow a reasonable
attorney's fee and costs of action to either party."40 In deciding whether to award
attorneys' fees to a particular party,
a court should consider such factors as the following: (1)
the degree of the opposing parties' culpability or bad
Id. at M-0018.
29 U.S.C. § 1132(g)(1).
faith; (2) the ability of the opposing parties to satisfy an
award of attorneys' fees; (3) whether an award of
attorneys' fees against the opposing parties would deter
other persons acting under similar circumstances; (4)
whether the parties requesting attorneys' fees sought to
benefit all participants and beneficiaries of an ERISA
plan or to resolve a significant legal question regarding
ERISA itself; and (5) the relative merit of the parties'
positions. No one of these factors is necessarily decisive,
and some may not be appropriate in a given case, but
together they are the nuclei of concerns that a court
should address in applying section [1132(g)(1)].41
Applying the factors to this case, the Court cannot find any evidence of bad
faith on the part of Defendant. Examples of bad faith conduct include, situations
in which "the insurer provide[s] additional compensation for plan administrators
who den[y] claims or  the insurer has a history of biased claims."42 In the
absence of such evidence in this case, the Court finds that the first factor weighs
against the award of attorney's fees. There is no question that Defendant has
the ability to satisfy an award, therefore the second factor weights in favor of an
Awarding attorney's fees to Plaintiff in this case may have some
deterrent effect on future benefits decisions made by Defendant, therefore the
Court finds that the third factor weighs slightly in favor of an award. Plaintiff
in this case has not presented any significant legal question, nor does he seek to
benefit all participants of the plan at issue, therefore the Court finds that the
fourth facts weighs against an award.
Finally, as the Court has already
Schexnayder, 600 F.3d at 471 (citing Iron Workers Local No. 272 v. Bowen, 624 F.2d
1255, 1266 (5th Cir.1980)).
explained, Defendant's decision, while ultimately incorrect, was based on
substantial evidence. Therefore, the Court does not find that the relative merit
of the parties positions was so drastic as to justify an award and the fifth factor
weighs against an award. Viewing the factors together, and in light of the fact
that the Fifth Circuit held than an award of fees under similar circumstances
was an abuse of the district court's discretion,43 the Court declines to award fees
in this case.
D. Pre-judgment Interest
Plaintiff also requests pre-judgment interest. Federal courts have the
discretion to award pre-judgement interest in ERISA cases.44 Because there is
no federal statute governing the rate of pre-judgment interest in ERISA cases,
courts ordinarily look to state law.45 In this case, the Court elects to award prejudgment interest from the date of the denial of benefits, April 5, 2012 until the
entry of final judgment in this case, at the rate provided in Louisiana Revised
Statute 13:4202. In this case, that rate is 4%.46 Post-judgment interest will
accrue at the federal rate.47
Hansen v. Cont'l Ins. Co., 940 F.2d 971, 983–84 (5th Cir. 1991).
The Louisiana judicial interest rates are published by the Louisiana Bar Association
and available on its website. https://www.lsba.org/Members/JudicialInterestRate.aspx
See Enhanced La. Capital v. Brent Homes, No. 12–2409, 2013 WL 5428687, at *4
(E.D. La. June 6, 2013).
For the foregoing reasons, Plaintiff's Motion for Summary Judgment is
GRANTED and Defendant's Motion is DENIED. In order to assist the Court
in entering a final judgment, the parties shall submit a stipulation to the Court,
no later than December 5, 2014, as to the amount of benefits due to Plaintiff for
the period of April 5–12, 2012. By entering this stipulation, Defendant shall not
waive any rights it may have to challenge this Order or the final judgment in
this matter, on appeal or otherwise. If the parties cannot agree on the amount
of benefits due pursuant to this Order, Plaintiff shall file a motion to determine
New Orleans, Louisiana, this 25th day of November, 2014.
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
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