Switzer v. Benefits Administrative Committee
Filing
19
MEMORANDUM AND ORDER denying 12 Motion of plaintiff for Summary Judgment; granting 13 Motion of defendant for Summary Judgment. Signed by Judge Marvin J. Garbis on 8/12/14. (jnls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
MICHELIE SWITZER
Plaintiff
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vs.
CIVIL ACTION NO. MJG-13-1613
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BENEFITS ADMINISTRATIVE
COMMITTEE
*
Defendant
*
*
*
*
*
*
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*
*
MEMORANDUM AND ORDER RE: SUMMARY JUDGMENT
The Court has before it Plaintiff's Motion for Summary Judgment,
or in the Alternative, Motion to Remand [Document 12], Defendant's
Motion for Summary Judgment [Document 13], and the materials submitted
relating thereto.
I.
The Court finds a hearing unnecessary.
BACKGROUND
Plaintiff Michelie Switzer ("Switzer") worked for Nationwide
Insurance Company ("Nationwide") from April, 1987 until November, 2010
when she began disability leave due to a fall she sustained while at
home in September, 2010.
AR 130, 1230.
Switzer has brought the
instant lawsuit against Defendant Benefits Administrative Committee
("the BAC"), under the Employee Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. § 1001, et seq., for denial of long-term disability
("LTD") benefits.
A.
The Benefits Plan
While employed at Nationwide, Switzer was covered by the
Nationwide Mutual Insurance Companies and Affiliates Plan for Your Time
and Disability Income Benefits ("the Plan"), a self-funded benefits
plan under ERISA.
See AR 2, 58-64.
The BAC is the Plan Administrator.
AR 58-59.
To qualify for LTD benefits, an employee covered by the Plan must
have an "LTD Disability" or be "LTD Disabled."
"LTD Disability" or "LTD Disabled" means a
disability or disablement that results from a
substantial change in medical or physical
condition as a result of Injury or Sickness and
that prevents an Active Associate from engaging
in Substantial Gainful Employment for which she
is, or may become, qualified. Continuation of an
existing medical or physical condition will
generally not constitute a substantial change in
medical or physical condition if Claimant
previously
demonstrated
through
attendance
and/or work that Claimant has been able to engage
in Substantial Gainful Employment, or such
medical or physical condition could be or has been
accommodated. A substantial change in medical or
physical condition may be evidenced by the change
or loss of at least one of the Activities of Daily
Living.
AR 13-14. "Substantial gainful employment" is defined as "any
occupation or employment from which an individual may receive an income
equal to or greater than one-half of such individual's Covered
Compensation as of her Date of Disability." AR 17.
Pursuant to the
Plan, if Switzer were LTD Disabled, she would be entitled to receive
60% of her covered compensation in effect on the date of disability
2
until she is 65 years old. AR 38, 42.
B.
Injury and Short-Term Disability Benefits
In September 2010, while at home, Switzer tripped and fell down
several steps, injuring her right knee, lower back, and right hip.
280.
AR
On November 16, 2010, she underwent a right knee arthroscopy and
began disability leave.
AR 290, 1119.
Switzer's short-term disability benefits commenced on November
23, 2010.
AR 1230.
On November 24, 2010, Switzer was diagnosed with
Lumbar Radiculopathy.
AR 1230.
On November 29, 2010, Switzer's
treating physician Dr. Lysa Charles, M.D. noted that Switzer was "doing
well" after the arthroscopy.
AR 1120.
At a January 6, 2011 visit, Switzer reported a tingling sensation
in her calf and foot, but no swelling or back pain.
that Switzer was "[d]oing relatively well."
Dr. Charles noted
AR 1121.
On March 16,
2011, Switzer was diagnosed with Spondylosis Lumbosacaral.
AR 1230.
On May 9, 2011, Dr. Charles noted on a Nationwide disability benefits
form that Switzer was unable to drive, sit, stand, or walk "for a period
of time."
AR 461.
Dr. Charles reported that no return to work was
expected and that Switzer had a poor prognosis for a full recovery
without restriction.
AR 461.
Switzer's short-term disability benefits ended on May 31, 2011.
AR 1230.
3
C.
LTD Benefits – June 1, 2011 through March 3, 2012
1.
Reports from Dr. Charles
Switzer began receiving LTD benefits on June 1, 2011.
She was examined by Dr. Charles on July 18, 2011.
AR 381.
AR 1230.
Dr. Charles
reported that Switzer was experiencing back pain at a level of 7/10
and that physical therapy and pain management injections had not eased
the pain.
AR 381.
Dr. Charles expressed her opinion that Switzer "is
suited for sedentary work only."
AR 382.
On a Long-Term Disability Attending Providers' Statement dated
August 5, 2011, Dr. Charles noted that she last examined Switzer on
July 18 and that Switzer was unable to return to work.
AR 465-66.
On
August 15, 2011, Nationwide requested copies of Dr. Charles's last 3
office progress notes, test results, and procedure notes for Switzer
"[f]or continued evaluation of Disability benefit certification."
AR
290.
On September 2, 2011, Dr. Charles responded that Switzer could
return to sedentary work that did not require a significant commute,
under 20-30 minutes.
AR 246.
Two months later, on November 4, 2011,
on a Long-Term Disability Attending Providers' Statement, Dr. Charles
once again reported that Switzer was unable to return to work.
AR 242.
Dr. Charles also noted that Switzer had been discharged from her care.
AR 241.
4
2.
Labor Market Survey / Transferrable Skills
Analysis and Independent Medical Evaluation
Nationwide began to investigate Switzer's ability to return to
work in the Fall of 2011.
On September 16, 2011, Nationwide referred
Switzer's file to GENEX Services, Inc. for a Labor Market Survey and
Transferable Skills Analysis and ("LMS/TSA").
AR 353-55.
In
completing the LMS/TSA, GENEX reviewed Switzer's job summary, Dr.
Charles's note from September 2, 2011 indicating that Switzer could
return to sedentary work, and office notes from both Dr. Charles and
Switzer's pain management doctor from 2010-2011.
AR 353.
The
LMS/TSA, dated September 22, 2011, identified 3 positions with
sedentary work that met Switzer's skills, abilities, and
qualifications, with salaries ranging from $10.00/hour to $16.00/hour.
AR 354-55.
Nationwide referred Switzer for an independent medical evaluation
("IME") with Dr. Louis E. Levitt, M.D., Board-certified in orthopedic
surgery.
280-81.
Dr. Levitt examined Switzer on November 28, 2011.
AR
He reported in the IME that Switzer "filled out a pain diagram
. . . in a manner that suggests she has excessive pain responses [and
that she] perceives herself to be quite disabled," but he noted that
Switzer had "recovered quite nicely" from her injury.
AR 282.
Dr. Levitt observed that that there was a "lack of any objective
measure of pathology to substantiate [Switzer's] ongoing clinical
complaints."
AR 282.
He determined that "Switzer has no findings
5
consistent with a lumbar radiculopathy [or] a lumbar discopathy [or
a] spinal injury from her fall."
AR 283.
Dr. Levitt concluded that
Switzer "has no long term disability" and "has the capacity to return
to work immediately" without modification.
3.
AR 283-84.
First Denial of LTD Benefits
In a letter dated February 16, 2012, Nationwide's Disability
Assessment Committee ("DAC"), informed Switzer that she "no longer
qualif[ied] for Long Term Disability benefits under the [Plan]" and
that the benefits would terminate effective March 3, 2012.
AR 137.
Based upon a review of the Plan, documentation from Dr. Charles
(including the September 2, 2011 note indicating that Switzer was
capable of sedentary work), and the IME from Dr. Levitt, the DAC
"determined that [Switzer] d[id] not meet the definition of Disability
under the Plan [because she was] capable of engaging in Substantial
Gainful Employment."
AR 137-38.
The letter informed Switzer that,
pursuant to ERISA, she could submit a written request to the BAC for
a review of the decision.
AR 138.
The letter noted that the request
for review must explain why Switzer felt her claim should be reviewed
and that she could submit additional medical information.
D.
AR 138.
Switzer's First Appeal of the Denial of LTD Benefits
1.
Additional Information Submitted by Switzer
Switzer retained an attorney – counsel in the instant lawsuit –
6
who filed a formal appeal of the DAC's decision with the BAC on her
behalf on August 9, 2012.1
AR 130-36.
Attached to the appeal were a
Long-Term Disability Attending Providers' Statement from Dr. K.
Ambalavanar dated February 20, 2012 and an assessment from vocational
consultant Martin Kranitz dated July 24, 2012.
In the Long-Term Disability Attending Providers' Statement, Dr.
Ambalavanar reported that he examined Switzer on February 2, 2012.
150.
AR
He noted that Switzer had a Class 4 (out of 4) physical
impairment, meaning that she had "[c]omplete/severe limitation of
functional capacity, [i]ncapable of any activity."
AR 151.
Dr.
Ambalavanar indicated that modifications would not allow Switzer to
return to work.
AR 151.
Mr. Kranitz completed a vocational assessment at the request of
Switzer's attorney.
AR 157.
He reviewed the DAC decision, the
statement from Dr. Ambalavanar, the IME from Dr. Levitt, the LMS/TSA,
and 5 statements from Dr. Charles.2
AR 157.
that the LMS/TSA contained inaccuracies.
Mr. Kranitz explained
AR 158-59.
He also noted
that the IME was "somewhat specious" because Dr. Levitt "does not point
out that there are people (very credible people) for whom no
abnormalities can be found in the diagnostic [screening] studies but
[who] still make consistent and believable complaints about pain and
1
Switzer initially filed an appeal of the DAC decision, pro se,
which her attorney withdrew. AR 1061, 1063.
2
The September 2, 2011 note from Dr. Charles to Nationwide
indicating that Switzer could return to sedentary work was not listed
as one of the documents that Mr. Kranitz reviewed.
7
limitations."
AR 159.
Mr. Kranitz concluded that "Switzer meets the
definition of disability under the [Plan]."
AR 159.
In the first-level appeal letter of August 9, 2012, Switzer's
attorney contended that the record demonstrated that Switzer was
entitled to continued LTD benefits.
He argued that there had not been
a full and fair review of Switzer's eligibility for LTD benefits because
the DAC's decision was not based upon substantial evidence and that
the DAC's denial letter failed to comply with ERISA's notice
requirements.
AR 135.
2.
Additional Documentation from Reviewing Body
Switzer's first-level appeal was referred to Sedgwick Claims
Management Services Appeals Unit ("Sedgwick"), an independent third
party.
AR 522.
Sedgwick reviewed the administrative record and
additional submissions from Switzer, as well as a second LMS/TSA from
GENEX and a report from Dr. John L. Turner, M.D., an independent
physician advisor and Board-certified Neurosurgeon.
AR 96.
Sedgwick referred Switzer's claim to Dr. Turner, who submitted
a report dated October 3, 2012, in which he determined that, based upon
the available clinical information, "[Switzer] can work unrestricted"
and that "there is nothing to support disability beyond 03/04/2012."
AR 346.
Dr. Turner noted that he spoke with Dr. Ambalavanar, who stated
that he only examined Switzer twice within a two-week period in February
2012 and that Switzer had complained of pain and wanted to be off work.
8
AR 342.
Dr. Turner made two attempts to speak with Dr. Charles, but
was unable to do so.
AR 343.
Dr. Turner observed that Switzer's last
reported physician contact was in February 2012.
He concluded that
"[t]here is no evidence of disability" and that Switzer "can work
unrestricted."
AR 345.
GENEX submitted a second LMS/TSA dated November 30, 2012.
494-501.
AR
GENEX reviewed the independent reports from Dr. Levitt and
Dr. Turner and noted that "both doctors concur that Ms. Switzer is able
to perform her pre-disability occupation as a[n] insurance adjuster."
AR 494.
The LMS/TSA identified 17 available employment positions for
Switzer based upon her training and work experience that involved
sedentary to light physical demand, were located within 50 miles of
Swizter's home, and that had salaries ranging from $14.86/hour to
$30.60/hour.
3.
AR 495, 501.
Second Denial of LTD Benefits
In a letter dated December 10, 2012, Sedgwick sustained the denial
of LTD benefits, explaining that its decision was based in part upon
clinical and vocational findings that indicated "Switzer can work
unrestricted[, that] there is nothing to support disability beyond
March 3, 2012," and that "Switzer is [able] to perform other tasks that
would allow her to perform other jobs."
AR 96.
Sedgwick concluded
that "Ms. Switzer's claim remains denied as she is not LTD Disabled
as defined by the Plan."
AR 96.
The denial letter stated that there
9
was "a second and final level of appeal available" and that the written
request for an appeal should be submitted to the BAC and should include
an explanation of why Switzer believed Sedgwick's decision was wrong
and any other information Switzer believed was relevant to the appeal.
AR 96-97.
E.
Switzer's Second Appeal of the Denial of LTD Benefits
1.
Additional Information Submitted by Switzer
Switzer's attorney filed the request for the second-level appeal
on January 30, 2013.
AR 98-99.
On February 12, 2013, Switzer's
attorney supplemented the appeal with: (1) an MRI of Switzer's cervical
spine taken November 10, 2011; (2) a report from Jenna Grossman, PA-C
(physician assistant in orthopedics) of Chesapeake Orthopaedic &
Sports Medicine Center dated March 9, 2012; (3) a report from Dr.
Ambalavanar dated January 29, 2013; and (4) an Addendum Report from
vocational consultant Mr. Kranitz dated January 29, 2013.
AR 92-94.
The MRI revealed "a moderate circumferential disk osteophyte" at
C5-C6 and "a moderate broad-based annular bulge at C3-C4."
AR. 101.
The report from Ms. Grossman noted that Switzer complained of
continuing sharp pain in her lower back, neck pain radiating down her
shoulders, and pain down into her right hip and leg.
AR 104.
Ms.
Grossman wrote that Switzer had a normal lumbar curve, no scoliosis,
and could heel-and-toe-walk normally.
AR 105.
Dr. Ambalavanar
reported that he examined Switzer for the first time in 11 months in
10
January 2013 and that her joint pain remained unchanged.
AR 110.
Mr. Kranitz stated in the Addendum Report that he had reviewed
the reports from Nationwide and Dr. Turner and noted that he found it
"strange" that Dr. Turner "discounted" the findings of Dr. Ambalavanar
"because he only saw Ms. Sweitzer [sic] twice when in most cases an
IME doctor [like Dr. Levitt] only sees an individual once and uses
medical reports to form an opinion."
AR 116.
Mr. Kranitz also stated
that Dr. Turner's report "ignored" reports from Dr. Charles, dated
March 28, 2011 and August 1, 2011, that indicated Switzer was unable
to work.
AR 116.
Mr. Kranitz concluded that he stood by the findings
in his original report.
AR 116.
In the second-level appeal letter, Switzer's attorney wrote that
"it is our contention that Nationwide failed to conduct a full and fair
review of this claim and its decision to deny benefits to Ms. Switzer
is arbitrary and unreasonable in view of this supporting
documentation."
2.
AR 94.
Third Denial of LTD Benefits
In a letter dated March 21, 2013, the BAC issued "the final
decision of the administrative review process" and denied Switzer's
request to reinstate LTD benefits.
AR 120-22.
The letter listed the
documents the BAC considered in reaching its decision, which included:
the exhibits attached to Switzer's second level appeal; the IME from
Dr. Levitt; medical records from Switzer's treating physicians and
11
consultants, including Dr. Ambalavanar, Dr. Charles, and Mr. Kranitz,
dated April 20, 2010 through July 4, 2012; the first and second LMS/TSA;
and Dr. Turner's report.
The BAC denial letter stated that "[b]ased
on a thorough review of Ms. Switzer's appeal, the additional
information provided by [her attorney], and the relevant Plan
provisions, the [BAC] determined that Ms. Switzer does not meet the
Plan's definition of LTD Disabled."
AR 121.
The letter stated that
Switzer had exhausted her administrative rights under ERISA and that
she had the right to bring a civil action.
Switzer filed the instant lawsuit against the BAC in this Court
on June 4, 2013, pursuant to 29 U.S.C. § 1132.
By her Motion for Summary Judgment [Document 12], Switzer contends
that there is no dispute of material fact that: (1) the BAC "failed
to conduct a full and fair review of [her] claim;" (2) the BAC's decision
to deny LTD benefits was an abuse of discretion because the decision
was not based upon substantial evidence; and (3) the BAC "violated
ERISA's appeal and notice requirements."3
[Document 12] at 11.
By its Motion for Summary Judgment [Document 13],4 the BAC
3
In the alternative, Switzer contends that the case should be
"remand[ed] to the plan administrator for a new review." [Document
12] at 11.
4
The BAC captioned its Motion as a Motion to Dismiss and/or for
Summary Judgment, but the Memorandum in Support of the Motion focuses
almost exclusively on summary judgment. Switzer is on notice that the
BAC's Motion may be treated as one for summary judgment, not only by
virtue of the caption on the BAC's Motion, but also by her having filed
a Response to the BAC's Motion and her own Motion for Summary Judgment.
The Court will treat the BAC's Motion as a Motion for Summary Judgment.
12
contends that it is entitled to summary judgment because the decision
to deny Switzer's LTD benefits "was the result of a deliberate,
principled, reasoning process and is supported by substantial
evidence."
II.
[Document 13] at 22.
STANDARDS OF REVIEW
A.
Summary Judgment
A motion for summary judgment shall be granted if the pleadings
and supporting documents "show[] 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).
The well-established principles pertinent to summary judgment
motions can be distilled to a simple statement:
The Court may look
at the evidence presented in regard to a motion for summary judgment
through the non-movant’s rose-colored glasses, but must view it
realistically.
After so doing, the essential question is whether a
reasonable fact finder could return a verdict for the non-movant or
whether the movant would, at trial, be entitled to judgment as a matter
of law.
See, e.g., Celotex Corp. v. Catrett, 477 U.S. 317, 322-323
(1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
Shealy v. Winston, 929 F.2d 1009, 1012 (4th Cir. 1991).
Thus, in order
"[t]o defeat a motion for summary judgment, the party opposing the
motion must present evidence of specific facts from which the finder
of fact could reasonably find for him or her."
13
Mackey v. Shalala, 43
F. Supp. 2d 559, 564 (D. Md. 1999) (emphasis added).
When evaluating a motion for summary judgment, the Court must bear
in mind that the "[s]ummary judgment procedure is properly regarded
not as a disfavored procedural shortcut, but rather as an integral part
of the Federal Rules as a whole, which are designed 'to secure the just,
speedy and inexpensive determination of every action.'"
Celotex, 477
U.S. at 327 (quoting Fed. R. Civ. P. 1).
"Cross motions for summary judgment 'do not automatically empower
the court to dispense with the determination whether questions of
material fact exist.'" Equal Rights Center v. Archstone Smith Trust,
603 F. Supp. 2d 814, 820 (D. Md. 2009) (quoting Lac Courte Oreilles
Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th
Cir. 1983)). Rather, the court must examine each party's motion
separately and determine whether summary judgment is appropriate as
to each under the Rule 56 standard.
Desmond v. PNGI Charles Town
Gaming, L.L.C., 630 F.3d 351, 354 (4th Cir. 2011).
The court may grant
summary judgment in favor of one party, deny both motions, or grant
in part and deny in part each of the parties' motions.
B.
Denial of ERISA Benefits
A court reviewing a plan administrator's denial of disability
benefits under ERISA must first determine de novo whether the "plan's
language grants the administrator . . . discretion to determine
. . . eligibility for benefits." Gallagher v. Reliance Standard Life
14
Ins. Co., 305 F.3d 264, 268 (4th Cir. 2002).
The grant of discretion
must be clear, but "no specific words or phrases are required."
Cosey
v. Prudential Ins. Co. of Am., 735 F.3d 161, 165 (4th Cir. 2013).
Here, the Plan states that the Plan Administrator, the BAC:
has the power to take all actions required to carry
out the provisions of the Plan and further has the
following powers and duties,
. . .
(a) To exercise discretion and authority to
construe and interpret the provisions of the
Plan, to determine eligibility to participate
in the Plan, and make and enforce rules and
regulations under the Plan to the extent
deemed advisable;
(b) To decide all questions as to the rights of
Participants under the Plan and such other
questions as may arise under the Plan;
. . .
(e) to determine the amount, manner, and time of
payment of benefits hereunder . . . .
AR 58-59.
The Court finds, and the parties agree, that this language
vests the BAC with the "discretion and authority to construe and
interpret the provisions of the Plan and to pay all benefits."
Compl.
¶ 6; Ans. ¶ 6.
When a plan administrator's denial of benefits "was based on an
exercise of discretion . . . judicial review [of the denial of benefits]
is for abuse of discretion."
223 (4th Cir. 2007).
McKoy v. Int'l Paper Co., 488 F.3d 221,
Here, the parties also agree that the appropriate
standard of review is for an abuse of discretion.
15
See BAC's Motion
[Document 13] at 14 ("[T]he abuse of discretion standard of review must
be applied . . . ."); Switzer's Opp. to BAC's Motion [Document 16] at
3 ("[A] deferential standard of review . . . is applicable . . . .").5
III. DISCUSSION
A.
Substantive Claim – Full and Fair Review
1.
Abuse of Discretion Standard
When reviewing a denial of benefits under ERISA for abuse of
discretion, a "court will set aside the plan administrator's decision
only if it is not reasonable."
DuPerry v. Life Ins. Co. of N. Am.,
632 F.3d 860, 869 (4th Cir. 2011).
A "decision is reasonable 'if it
is the result of a deliberate, principled reasoning process and if it
is supported by substantial evidence.'"
Id. (citation omitted).
Substantial evidence is "'evidence which a reasoning mind would accept
as sufficient to support a particular conclusion.'"
Id. (citation
omitted).
5
In her Motion, Switzer relied on a decision from the United States
Court of Appeals for the Ninth Circuit to suggest that this Court should
review the denial of LTD benefits de novo. See [Document 12] at 14-15
(citing and quoting Abatie v. Alta Health & Life Ins. Co., 458 F.3d
955, 971 (9th Cir. 2006) ("When an administrator engages in wholesale
and flagrant violations of the procedural requirements of ERISA, and
thus acts in utter disregard of the underlying purpose of the plan as
well, we review de novo the administrator's decision to deny
benefits.")). Not only is Abatie not the law in the Fourth Circuit,
but also Switzer appears to have abandoned this position in her Response
to the BAC's Motion by conceding that the appropriate standard of review
is for abuse of discretion, which requires "a Court [to] uphold a
discretionary determination of a plan administrator if the decision
was reasonable." [Document 16] at 3.
16
Under the abuse of discretion standard, a "court is not permitted
to re-weigh the evidence itself."
See Evans v. Eaton Corp. Long Term
Disability Plan, 514 F.3d 315, 325 (4th Cir. 2008).
Nor may the court
"substitute [its] own judgment in place of the judgment of the plan
administrator."
Williams v. Metro. Life Ins. Co., 609 F.3d 622, 630
(4th Cir. 2010).
Thus, as long as the plan administrator's decision
was reasonable, a court "will not disturb [the] decision . . . even
if [it] would have come to a contrary conclusion independently."
Id.
Factors to be considered in determining the reasonableness of a
plan administrator's decision include, inter alia:
(1) the language of the plan;
(2) the purposes and goals of the plan;
(3) the adequacy of the materials considered to
make the decision and the degree to which they
support it;
(4) whether the fiduciary's interpretation was
consistent with other provisions in the plan and
with earlier interpretations of the plan;
(5) whether the decisionmaking
reasoned and principled;
process
was
(6) whether the decision was consistent with the
procedural and substantive requirements of ERISA;
(7) any external standard relevant to the exercise
of discretion; and
(8) the fiduciary's motives and any conflict of
interest[6] it may have.
6
A plan administrator operates under a conflict of interest when
it "evaluates claims for benefits and pays benefits claims." Metro.
Life Ins. Co. v. Glenn, 554 U.S. 105, 112 (2008). In her Motion,
17
Booth v. Wal-Mart Stores, Inc. Associates Health & Welfare Plan, 201
F.3d 335, 342-43 (4th Cir. 2000).
2.
Denial of LTD Benefits
Switzer contends that the BAC denied her "a full and fair review"
of her claim for LTD benefits as required by 29 U.S.C. § 1133(2).
Specifically, she argues that the BAC "rel[ied] solely upon the
Switzer argued that because the BAC "admits that it both reviews claims
and is liable for the payment of benefits," there was an "inherent
conflict of interest." [Document 12] at 13-14. The BAC pointed out
in its Response that "[t]he Plan is a self-funded employee welfare
benefit plan in which . . . the BAC [pays] all benefits from
contributions made by employees" and that Switzer "cannot present any
evidence that the BAC has any financial stake in the outcome."
[Document 17] at 4-5. Switzer appears to have abandoned this argument,
as she neither filed a Reply to the BAC's Response, nor raised the issue
in her Response to the BAC's Motion.
Further, many of the cases addressing a plan administrator with
a conflict of interest involve an administrator "pay[ing] benefits out
of its own pocket." See, e.g., Glenn, 554 U.S. at 108. Here,
Nationwide employees, not the BAC, contribute the funds used to pay
benefits. See AR 64 ("The Active Associate must elect to reduce her
compensation for the year by the amount required to pay the Active
Associate's cost of coverage . . . ."). But see AR 64 ("The Employers
shall make, from time to time, further contributions to the Plan on
behalf of Active Associates.").
The Court finds that there is no conflict of interest. However,
even assuming there was conflict of interest, that is only one factor
in the abuse of discretion analysis. See Booth v. Wal-Mart Stores,
Inc. Associates Health & Welfare Plan, 201 F.3d 335, 343 (4th Cir.
2000). Here, the facts indicate that the BAC was not inherently
biased. It paid Switzer's disability benefits for over a year, sought
the advice of two independent medical professionals, and had an
independent third party conduct one of the administrative reviews.
Cf. Anderson v. Reliance Standard Life Ins. Co., No. WDQ-11-1188, 2013
WL 1190782, at *7 (D. Md. Mar. 21, 2013). Therefore, any structural
conflict of interest would "not have a significant role in the [abuse
of discretion] analysis." Williams v. Metro. Life Ins. Co., 609 F.3d
622, 632 (4th Cir. 2010).
18
opinions of its independent physicians and vocational consultants, and
fail[ed] to adequately consider [her] medical condition,
functionality, attending physician statement and vocational opinion."
[Document 12] at 16.
a.
Medical and Vocational Evidence
During the initial evaluation of Switzer's continued eligibility
for LTD benefits, Nationwide contacted Dr. Levitt, a Board-certified
orthopedic surgeon, to review Switzer's medical records and conduct
an IME.
Dr. Levitt examined Switzer on November 28, 2011 and reported
a "lack of any objective measure of pathology to substantiate
[Switzer's] ongoing clinical complaints," stating that there were no
findings consistent with a disability.
AR 282.
He concluded that
Switzer "has the capacity to return to work immediately" without
limitations or modifications.
AR 283.
In evaluating of Switzer's first-level appeal, Sedgwick referred
the claim to Dr. Turner for an independent assessment.
In a report
dated October 3, 2012, Dr. Turner stated that he attempted to speak
with Dr. Charles regarding Switzer's treatment, but was unable to do
so and was told that Dr. Charles was no longer treating Switzer.
343.
AR
Dr. Turner concluded that there was no evidence Switzer was
disabled and that she could return to work unrestricted.
AR 345.
Switzer contends that the reports from Dr. Levitt and Dr. Turner,
which determined that Switzer was not disabled and could return to work
19
immediately, contradict the reports from her treating physicians, Dr.
Charles and Dr. Ambalavanar, which suggested that Switzer was disabled.
However, Dr. Charles's reports regarding Switzer's medical condition
contradict each other.
For example, on July 18, 2011, Dr. Charles
reported that Switzer was capable of sedentary work with driving
restrictions. AR 318-21.
Then, on August 5, 2011 on a Long-Term
Disability Attending Providers' Statement, Dr. Charles noted that
Switzer's condition remained unchanged, despite not having conducted
a physical examination of Switzer since July 18, yet she reported that
Switzer was "totally disabled from all types of work."
AR 464-66.
However, one month later, on September 2, 2011, Dr. Charles stated that
Switzer was capable of sedentary employment with driving restrictions
of under 20-30 minutes.
AR 245.
Finally, in November 2011, Dr.
Charles again reported that Switzer was unable to return to work.7
AR
242.
Switzer contends that the two LMS/TSA reports from September 2011
and November 2012 conflict with each other and with the medical reports.
See, e.g., [Document 16] at 8.
However, the LMS/TSA reports were based
upon the medical evidence available at the time of their preparation.
The September 2011 LMS/TSA was completed before Dr. Levitt examined
7
Dr. Ambalavanar examined Switzer twice within a two-week period
in February 2012 and indicated to Dr. Turner that Switzer complained
of pain and expressed her desire to be off work. AR 342. After a
follow-up visit in January 2013, Dr. Ambalavanar reported that
Switzer's joint pain remained unchanged, and he gave Switzer an
application to receive a handicap parking pass from the Maryland Motor
Vehicle Administration. AR 110-14.
20
Switzer in November 2011 and was, therefore, based upon Dr. Charles's
recommendation that Switzer could return to "sedentary work that does
not require significant commute (less than 20-30 minutes)."8
353-355.
AR
The November 2012 LMS/TSA was based upon the opinions of Dr.
Levitt and Dr. Turner that Switzer was not disabled and could work
unrestricted.
AR 494-506.
While a plan administrator cannot "arbitrarily refuse to credit
a claimant's reliable evidence, including the opinions of a treating
physician," a court cannot "require administrators automatically to
accord special weight to the opinions of a claimant's physician."
Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
This
is because:
the assumption that the opinions of a treating
physician warrant greater credit than the
opinions of plan consultants may make scant sense
when, for example, the relationship between the
claimant and the treating physician has been of
short duration, or when a specialist engaged by
the plan has expertise the treating physician
lacks. And if a consultant engaged by a plan may
have an "incentive" to make a finding of "not
disabled," so a treating physician, in a close
case, may favor a finding of "disabled."
Id. at 832.
8
Switzer emphasizes that the DAC did not disclose the first LMS/TSA
in the initial denial letter of February 16, 2012. However, the
failure of the DAC to mention the September 2011 LMS/TSA merely suggests
that in making the initial denial, the DAC relied upon De. Levitt's
IME from November 2011, which concluded that Switzer could work
unrestricted, and did not rely upon the LMS/TSA, which focused on
finding sedentary work for Switzer, as Dr. Charles had recommended in
July 2011.
21
When a claimant presents "inconsistent or incomplete [in
connection with a claim for disability benefits], other evidence is
helpful in providing an accurate evaluation of a patient's condition."
McCready v. Standard Ins. Co., 417 F. Supp. 2d 684, 701 (D. Md. 2006).
Thus, a plan administrator does not abuse its discretion by "deny[ing]
disability pension benefits where conflicting medical reports were
presented."
Elliott v. Sara Lee Corp., 190 F.3d 601, 606 (4th Cir.
1999).
It appears that Switzer is asking this Court to do exactly what
the Supreme Court of the United States has held is not permissible –
credit the conflicting opinions of Switzer's own vocational consultant
and treating physicians over the opinions of the independent consultant
and physicians.
Resolving conflicts between the vocational assessments from
LMS/TSA and those from Mr. Kranitz and any apparent conflicts between
the medical reports from Switzer's treating physicians, and those from
the independent physicians is the responsibility of the BAC, not the
Court.
See Spry v. Eaton Corp. Long Term Disability Plan, 326 F. App'x
674, 679 (4th Cir. 2009).
The Administrative Record demonstrates that
it was reasonable for BAC to adopt the medical opinions of Dr. Levitt
and Dr. Turner stating that Switzer was not disabled and could work
unrestricted.
The Court finds that "there was nothing inherently
unreasonable in the [BAC's] decision not to adopt the opinions of
[Switzer's treating vocational consultant and treating] physicians."
22
Id.
b.
Full and Fair Review
For a plan administrator's review of a claim for benefits to be
"full and fair," the administrator must "establish and maintain a
procedure by which a claimant shall have a reasonable opportunity to
appeal an adverse benefit determination to an appropriate named
fiduciary of the plan."
29 C.F.R. § 2560.503–1(h)(1).
Here, the BAC
provided Switzer with two opportunities for administrative review of
the denial of LTD benefits – a first-level appeal reviewed by Sedgwick,
an independent third party, and a second-level appeal reviewed by the
BAC – which is more than what ERISA requires.
Where an ERISA administrator rejects a claim to
benefits on the strength of substantial evidence,
careful
and
coherent
reasoning,
faithful
adherence to the letter of ERISA and the language
in the plan, and a fair and searching process,
there can be no abuse of discretion—even if
another, and arguably a better, decision-maker
might have come to a different, and arguably a
better, result.
Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315, 325-26
(4th Cir. 2008).
The BAC's final decision was based upon substantial
evidence in the form of medical opinions and vocational assessments,
and all of the denial decisions were presented in the three denial
letters in a coherent manner.
That the BAC chose to credit the
conclusions of the independent medical reports over the conflicting
information provided in the reports from Switzer's treating physicians
23
does not warrant a finding of an abuse of discretion.
In a similar ERISA case involving three levels of administrative
review in which the defendant considered all of the medical evidence
submitted by the plaintiff, procured an independent medical
evaluation, and obtained a vocational assessment, Judge Bennett of this
Court held that the "process of review was both deliberate and
principled" and that the denial of benefits was supported by
substantial evidence.
See McCready v. Standard Ins. Co., 417 F. Supp.
2d 684, 697-98, 701-02 (D. Md. 2006).
Like the defendant in McCready,
the BAC conducted a deliberate and principled review to reach a
conclusion supported by substantial evidence.9
9
Switzer's suggestion that this Court cannot rely on McCready v.
Standard Ins. Co., 417 F. Supp. 2d 684 (D. Md. 2006), because McCready
had not been receiving LTD benefits, unlike Switzer – who received LTD
benefits before they were terminated – is misplaced. Switzer suggests
that the BAC's decision to deny her LTD benefits is inconsistent with
the fact that the BAC initially provided the benefits. See [Document
16] at 10 ("It has been held that 'a reversal of a decision of disability
may warrant significant skepticism when substantial evidence does not
support the conclusion that the disability has ceased.'" (quoting Smith
v. Cont'l Cas. Co., 276 F. Supp. 2d 447, 460 n.6 (D. Md. 2003), vacated
on other grounds, 369 F.3d 412 (4th Cir. 2004)). However, the Fourth
Circuit has stated:
a plan administrator [does not] abuse its
discretion by terminating benefits after a review
of available information shows that the initial
grant of benefits was contrary to the terms of the
plan [because o]therwise, plan administrators
would be severely constrained from terminating
benefits that were erroneously granted, resulting
in plan administrators becoming more hesitant
about initially granting benefits lest they be
stuck with a wrong decision.
24
The Court concludes that a reasonable jury could not find that
the BAC's denial of Switzer's claim for LTD benefits was anything but
reasonable in light of the evidence presented during the administrative
review process.
Thus, the Court holds that Switzer received a full
and fair review of her claim for LTD benefits that was supported by
substantial evidence and that was the result of a deliberate and
principled reasoning process.
B.
Procedural Claim – Appeal and Notice Requirements
Switzer contends that the BAC did not provide her with adequate
notice of the denial of LTD benefits as required by 29 U.S.C. § 1133(1)
and the federal regulations implementing and interpreting ERISA.
ERISA requires a plan administrator provide a claimant with a
notification of the denial of benefits that "set[s] forth the specific
reasons for such denial."
29 U.S.C. § 1133(1); 29 C.F.R. §
2560.503-1(g)(1)(i).10
Wilson v. Metro. Life Ins. Co., 183 F. App'x 286, 292 (4th Cir. 2006).
10
The ERISA regulations also require "the plan administrator [to]
provide a claimant with written or electronic notification of any
adverse benefit determination" that "set[s] forth, [inter alia, t]he
specific reason or reasons for the adverse determination." 29 C.F.R.
§ 2560.503-1(g)(1)(i). Switzer alleges that the violation of the
ERISA appeal and notice requirements was the BAC's failure to include
in the denial letter "[a] description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary." 29
C.F.R. § 2560.503-1(g)(1)(iii); see Compl. ¶ 17. However, Switzer's
briefings focus on the alleged "fail[ure] to identify the specific
reasons for the[] adverse determination in both the initial review of
December 12, 2012 . . . and second level decision of March 21, 2013."
25
It appears that Switzer contends that the BAC failed to identify
the specific reasons for the denial of benefits in the December 10,
2012 initial denial letter and the March 21, 2013 second-level appeal
denial letter because those letters did not "specify the type of
employment that [Switzer] could perform" and gave "no clear indication
as to whether or not the [BAC] found that [Switzer] has the ability
to engage in alternate sedentary work, or the ability to perform her
own occupation."11
[Document 12] at 18, 24.
Whether a benefits denial letter complied with the applicable
"ERISA regulations is a question of law, and therefore, subject to de
novo review."
Brogan v. Holland, 105 F.3d 158, 165 (4th Cir. 1997).
However, as long as there is "substantial compliance" with the ERISA
regulations, a procedural defect will not invalidate a plan
administrator's decision.
Id.
Substantial compliance exists when a
plan administrator has provided the claimant "'with a statement of
reasons that, under the circumstances of the case, permitted a
sufficiently clear understanding of the administrator's position to
permit effective review.'"
Id. (citation omitted).
See, e.g., [Document 12] at 25. The Court concludes that Switzer's
contention as to the notice requirements is properly brought under §
2560.503-1(g)(1)(i).
11
Switzer appears to conflate her substantive and procedural
claims. See [Document 12] at 18, 21, 24-25. However, whether the BAC
included the specific reasons for denial in the December 10, 2012 and
March 21, 2013 denial letters does not affect the substantive validity
of an ERISA claim. Therefore, the Court will analyze the content of
the letters under Switzer's procedural claim as to the appeal and notice
requirements.
26
Here, it is clear that the initial and the second-level appeal
denial letters complied with this standard.
Switzer provides no
authority, either from case law, ERISA, or the ERISA regulations, to
support her contention that to comply with the "specific reasons for
[a] denial" requirement, the BAC must have stated, in finding that
Switzer was capable of engaging in substantial gainful employment,
whether the finding was based upon a determination that Switzer could
perform her own occupation or another occupation with an income level
equal to or greater than on-half of her previous income.
Further, the
evidence indicates that Switzer had "'a sufficiently clear
understanding of the [BAC']s position to permit effective review.'"
See Brogan, 105 F.3d at 165.
The initial denial letter states that the DAC denied Switzer's
claim for LTD benefits because Switzer "d[id] not meet the definition
of Disability under the Plan, specifically that [she] was capable of
engaging in Substantial Gainful Employment."
AR 138.
It also states
that the DAC based its denial, in part, on the IME from Dr. Levitt,
who found "that [Switzer] ha[s] the capacity to return to work
immediately" with no limitations or modifications.
AR 138.
Before
submitting her first-level appeal, Switzer received the IME from Dr.
Levitt and the September 22, 2011 LMS/TSA, which she provided to Mr.
Kranitz for purposes of preparing a vocational assessment.
AR 157.
Switzer's attorney wrote in the first-level appeal letter, that "the
issue in this case is whether or not Ms. Switzer is able to engage in
27
substantial gainful employment as defined by the policy and earn at
least 50% of her pre-disability income." AR 131.
Similar to the initial denial letter, the second-level appeal
denial letter stated that the BAC denied Switzer's claim because she
was not prevented from engaging in substantial gainful employment and
was therefore not LTD Disabled.
AR 121.
The letter also relied upon
the IME and supplement from Dr. Levitt, as well as the independent
report from Dr. Turner.
The Complaint in the instant case, filed in
response to the denial of the second-level appeal, alleges that Switzer
is disabled because she is precluded from engaging in substantial
gainful employment.
Compl.
¶ 18.
The Court holds that the initial and second-level appeal denial
letters did set forth the specific reasons why Switzer's claim for LTD
benefits was denied because the letters stated that they were based
upon findings that Switzer was capable of returning to work without
restriction and/or was capable of engaging in substantial gainful
employment.
"Even if [the letters] could have been more explicit,
the[y] complied with ERISA's notice requirements" because "[r]ead in
[their] entirety, the [letters] provided [Switzer] with all the
information necessary to perfect h[er] claim."
Cf. Gelumbaukskas v.
USG Corp. Ret. Plan Pension & Inv. Comm., 1:09-CV-00890, 2010 WL
2025128, at *5 (D. Md. May 17, 2010).
The Court concludes that no reasonable jury could find that the
initial denial letter of February 16, 2012 and the second-level appeal
28
denial letter of March 21, 2013 violated ERISA's appeal and notice
requirements.
IV.
CONCLUSION
For the foregoing reasons:
1.
Plaintiff's Motion for Summary Judgment, or in the
Alternative, Motion to Remand [Document 12] is DENIED.
2.
Defendant's Motion for Summary Judgment [Document 13]
is GRANTED.
3.
Judgment shall be entered by separate Order.
SO ORDERED, on Tuesday, August 12, 2014.
__________/s/__________
Marvin J. Garbis
United States District Judge
29
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