Smith v. Liberty Life Assurance Company of Boston et al
MEMORANDUM AND ORDER denying 31 Defendants' Motion for Summary Judgment; and granting 34 Plaintiff's Cross-Motion for Summary Judgment. Signed by Judge Marvin J. Garbis on 7/21/2017. (bmhs, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
WILEY JOSEPH SMITH
THE PNC FINANCIAL SERVICES
GROUP, et al.
CIVIL ACTION NO. MJG-15-2232
MEMORANDUM & ORDER RE: SUMMARY JUDGMENT
The Court has before it Defendants’ Motion for Summary
Judgment [ECF No. 31], Plaintiff’s Cross-Motion for Summary
Judgment [ECF No. 34], and the materials submitted relating
The Court has reviewed the exhibits and considered the
materials submitted by the parties. The Court finds a hearing
Plaintiff Wiley Joseph Smith (“Smith”) worked for Defendant
The PNC Financial Services Group, Inc. (“PNC”) from 1990 until
September 5, 2013, at which time he was a Regional Manager II in
PNC’s Realty Services.
Smith was a participant in PNC’s short-
The cross-motions for summary judgment were deemed to be
resubmitted pursuant to the April 7, 2017 stipulation that
clarified the parties. Stipulated Order Nunc Pro Tunc, ECF No.
and long-term disability plan, a self-funded plan under the
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §
1132 et seq.
Smith was diagnosed with depression and anxiety in
2008 and was receiving treatment, but his condition worsened in
August 2013, when he became unable to continue performing his
job duties as a result of disabling major depression and panic
Smith was granted short-term disability benefits
beginning on September 5, 2013.
He has never returned to work,
and the record contains no evidence indicating that a return to
work is reasonably feasible.
During the period of short-term disability, Smith applied
for long-term disability (“LTD”) benefits to commence on
December 4, 2013, after the 91-day elimination period covered by
the short-term disability benefits.
Defendant Liberty Life
Assurance Company of Boston (“Liberty Life”), the claims
administrator of the policy under which benefits are payable,
denied Smith’s claim for benefits.
Smith has brought the instant lawsuit against Defendants
PNC, Liberty Life, and The PNC Financial Services Group, Inc.
and Affiliates Long-Term Disability Plan (“the Plan”)
(collectively “Defendants”) under ERISA, 29 U.S.C. § 1001, et
seq., and more specifically, ERISA § 502, 29 U.S.C. § 1132.
Smith seeks a declaration of rights under the long-term
disability plan at issue, payment of all disability insurance
benefits due and owing plus interest, and an award of attorney’s
fees and costs.
The Benefits Plan
The Plan is an employee welfare benefits plan as defined by
ERISA, 29 U.S.C § 1002(1).
The Plan provides full-time,
salaried employees who are totally disabled due to injury or
illness for longer than ninety-one days (the “Elimination
Period”) with LTD benefits of up to 60% of their base salary.2
To qualify for LTD benefits, an employee covered by the
Plan must meet the definition of LTD.
For disabilities that extend beyond 91
consecutive calendar days and are considered
long term, the definition of disability is
For the first 24 months (from the date
LTD benefits begin): you are disabled if
your disability makes you unable to perform
the material or essential duties of your own
occupation as it is normally performed in
the national economy.
. . . .
The claims administrator determines
whether your disability meets these
Participants may elect to purchase an additional 10% of LTD
coverage, for a total LTD benefit of 70% of their base salary,
but Smith did not make this election..
AR 164, ECF No. 16.
The Plan also provides that LTD benefits
paid due to a mental illness will stop after 24 months, unless
certain circumstances exist, such as confinement in a hospital
Smith was employed as a Regional Manager II in PNC’s Realty
Services line of business.
The job is a “[s]enior level
operations position with direct responsibility for all day-today facility management activities for a portfolio of assigned
This includes “interaction with outside
property management companies, end-users, tenants,
vendors/contractors, problem resolution, and ongoing
AR 14. The job’s essential
functions are described as requiring “significant organizational
and time management skills” and are considered “critical to the
well being of the company.”
Also, close monitoring of
expenses is considered critical with direct responsibility for a
budget of $20-50 million dollars per year and shared
responsibility for capital/expense projects in excess of $10
AR 15, 18.
“The requirements of a Regional
Manager II are particularly complicated, requiring the
management of numerous sites spread out over a large geographic
Specific skills and competencies required to perform the
job are stated to include:
Must have demonstrated strong oral and
written communications skills, leadership,
and decision making abilities. Must be able
to assess strategic problems and make
accurate decisions with significant
financial and risk implications. Must be
team oriented and have an ability to provide
exceptional service to customers and service
partners. Must also have the ability to
balance increased workload due to the sheer
number of properties being managed. The
ability to identify opportunities, research,
analyze, question information and problem
solve is essential. Obtains information
from staff, service partners, consultants,
vendors and determines appropriate course of
action. Must be able to react to emergencies
in a decisive manner. Interacts with all
levels of management, including Corporate
CEOs and LOB heads. Also interfaces with
third parry property management firms, all
of levels of end users, and various outside
consultants, vendors, contractors, code
officials, and suppliers.
Illness and Short-term Disability
Since 2008, when Smith was 55,3 he has experienced recurrent
major depression and has been receiving treatment for depression
In August 2013, he experienced a
Smith was born in 1953. AR 53.
recurrence of symptoms including “sense of dread, chest pain,
difficulty thinking and getting thoughts out, and panic
He was unable to function at work and was
advised by his treating doctor, Stephen W. Saunders, M.D. (“Dr.
Saunders”), to remain off work and avoid all stressors.
He was treated with two antidepressants, an anti-anxiety
medication, and a stimulant.
Dr. Saunders met with Smith again in October and on
November 21, 2013, at which times Dr. Saunders noted that Smith
was in “partial remission only.”
In Dr. Saunders’
letter of December 4, 2013, he summarized that Smith “appears
disabled from working in his previous employment, and also any
employment at this time.”
Smith stopped working on September 4, 2013 and was granted
short-term disability benefits beginning on September 5, 2013
(“Date of Disability”). AR 1, 8. Based on Smith’s Date of
Disability, the 91-day Elimination Period ended on December 5,
2013, which is also the LTD effective date.
AR 1, 164.
Liberty Life reviewed the records that Smith provided in
support of his short-term disability claim, which included Dr.
Saunders’ Office Visit notes.
Liberty Life wrote to
Smith on November 12, 2013 requesting further information and
documentation that it needed for making an LTD claim
Smith provided the requested
documents, including Smith’s completed Activities Questionnaire,
AR 54-56, and records from Dr. Saunders, AR 58-61 and 65-71, and
he spoke with Liberty Life by telephone on November 15, 2013, AR
Smith’s own statement explained what prevented him from
My depression and anxiety make it very
difficult for me to interact with people in
work situations or to handle multiple tasks
at one time. When anxiety and panic set in
I become forgetful and cannot function
Liberty Life referred Smith’s LTD claim for a psychiatric
medical review to determine if the record supported any
impairments that translated to restriction and limitations.
72. The review was performed by Dr. Roland Segal (“Dr. Segal”),
who opined in his December 17, 2013 report that the medical
records supported a diagnosis of major depressive disorder and
generalized anxiety disorder.
Dr. Segal reported
there was evidence of impairment through October 1, 2013, but
Dr. Segal added that there was no
evidence that the prescribed medications caused any impairment.
Dr. Segal misinterpreted some of Dr. Saunders’ notes,
reading the notes as indicating that Smith “was stressed by
multiple tasks of buying a house and wanting to attend a nursing
school and change working to part time.”
AR 76, see also AR 83
(“The claimant is apparently buying a house and is either
thinking of attending nursing school or is already attending
nursing school.”) In actuality, Dr. Saunders’ notes indicated
that Smith’s son (not Smith) was buying a house, and Smith’s
daughter (not Smith) was entering a nursing program.
Dr. Saunders completed an Attending Physician’s Statement
on November 21, 2013. AR 60-61. On the form, Dr. Saunders
indicated that Smith had a Class 4 Mental/Nervous Impairment,
“Patient is unable to engage in stressful situations or engage
in interpersonal relations (marked limitations).” AR 61.
Dr. Saunders also provided a medical summary letter dated
December 4, 2013, which stated:
He went off work and was advised to remain
off work and avoid all stressors [u]ntil
completely being recovered. He was seen by
me July 2013, September 2013, Oct 2013, and
lastly 11-21-13. At that time he was being
treated with 2 antidepressants, an antianxiety medication, and a stimulant, and was
in partial remission only.
In summary, he appears disabled from working
in his previous employment, and also any
employment at this time.
Although Dr. Segal was asked to make at least three
separate attempts to contact Dr. Saunders by telephone, he was
unable to make the contacts. See AR 75-76, 82-83.4
sent a letter to Dr. Saunders on December 17, 2013, stating Dr.
Segal’s opinion that there was no impairment after October 1,
2013, and asked Dr. Saunders to verify his understanding and
provide additional information if any disagreement. AR 79-80.
Dr. Saunders responded with a brief hand-written sentence on the
bottom of the letter stating: “Note- his symptoms improved when
the stress was relieved! (not at work)”.
AR 81 (emphasis in
Dr. Saunders called Dr. Segal on December 26, 2013.
Dr. Segal updated the file with a memorandum stating that Dr.
Saunders communicated that Smith “was better at a certain point
‘because he was not working and did not have a stress of that
“I called Dr. Saunders to discuss Mr. Smith current
psychiatric condition, severity of symptoms, and the impact of
these symptoms on daily level of functioning, her [sic] capacity
to perform the duties of occupation, possible restrictions, and
prognosis. Unfortunately, contact was not made.” AR 76.
“The case manager wanted three phone calls to the provider.
I called Dr. Saunders on 12/17/13 at 9:20am and sent a fax on
12/17/13 at 9:40am. I called again on 12/24/13 at 9:00am and set
[sic] a fax on 12/24/13 at 9:30am. I called again on l2/24/13 at
l2pm.” AR 83.
particular job, and that is the reason for his improvement.’
This information does not change my opinion as it is outlined in
the original memorandum on December 17, 2013.”
letter of December 30, 2013, Smith was advised that his LTD
claim was denied because he did not meet the Plan’s definition
of disability, and impairment was not supported beyond October
On January 9, 2014, Smith sent a letter to Liberty Life to
appeal the denial of his claim.
He wrote a follow-up
letter on January 15, 2014, providing information that he
indicated was either missed, ignored, or misinterpreted by Dr.
Smith specifically clarified the misleading
statements in Dr. Segal’s report regarding Smith’s buying a
house and going to nursing school.
He also identified
restrictions from Dr. Saunders that appeared to have not been
taken into consideration. AR 94.
On January 30, 2014, Smith also filed a formal complaint
with the Maryland Insurance Administration (“MIA”) concerning
the “careless and inaccurate manner” with which Liberty handled
his claim and asking for a “fair and accurate review” of his
claim. AR 123-131. Liberty Life responded to MIA’s inquiry by
letter on February 19, 2014, advising MIA that it did not have
jurisdiction but adding, as a courtesy, that an appeal was in
progress. AR 132. MIA advised Smith by letter on February 21,
2014 that it did not have jurisdiction over the Plan. AR 138.
On January 20, 2014, Dr. Segal provided an addendum to his
report, noting that his December 26, 2013 addendum had not made
it into the file, nor had Dr. Saunders’ brief written response
to Dr. Segal’s letter: “His symptoms improved when the stress
was relieved! (not at work).” AR 119.
Dr. Segal noted that his
opinion had not changed: “In conclusion, the medical evidence
and communications with Dr. Sanders [sic] confirms the opinion
as outlined in the original memorandum that there is no medical
evidence of psychiatric impairment since October l, 2Ol3.” AR
Smith’s LTD claim file was referred to Liberty Life’s
appeals unit, and a letter was sent to Smith on January 22,
2014, stating that a decision is generally provided in 45 days,
but no longer than 90 days.
On February 26, 2014,
Liberty Life referred Smith’s LTD claim file to Behavioral
Management, Inc. (“BMI”), an independent vendor, requesting a
review to be conducted by an independent physician that was
board-certified in psychiatry.
Liberty Life also
sent a letter to Smith on February 26, 2014, advising him that
his medical records had been referred for further medical
review, and a decision would be rendered within the 90-day
The independent review was assigned to Dr. Sandra Kalnins
Dr. Kalnins spoke with Dr.
Saunders on March 5, 2014, and summarized the conversation by
letter dated March 6, 2014.
Dr. Saunders indicated
that he disagreed with Dr. Segal, that his records had been
misinterpreted, and that he did not consider Smith capable of
returning to work.
Dr. Saunders suggested that it
may be helpful for Dr. Kalnins to interview Smith.6
Kalnins also appeared to be under the false impression that
Smith had considered going to nursing school himself.
Dr. Kalnins reviewed Dr. Saunders’ records, Dr. Segal’s review
and correspondence, Smith’s job description, and other documents
from Smith’s LTD claim file. AR 145-147.
Dr. Kalnins provided a written report to Liberty Life on
March 13, 2014.
Dr. Kalnins’ review stated:
The available records and
teleconference information support diagnoses
of recurrent major depression and anxiety
disorder. The records support impairing
levels of symptoms from 9/5/13 until the
next psychiatric visit on l0/l/13, when the
claimant’s mood was improved and no
treatment changes made. The records and the
teleconference information from Dr. Saunders
do not provide objective evidence of severe
and persistent mood, cognitive, or
behavioral symptoms preventing the claimant
from functioning. Treatment was not
Dr. Kalnins’ records indicate that she did not interview
Smith. AR 145-149.
consistent with impairing levels of
symptoms, where the following would be
expected: frequent psychiatric visits with
aggressive medication adjustments,
documentation of severe and persistent
psychiatric symptoms, ongoing intensive
therapy, and referrals to higher levels of
treatment such as IOP, PHP, or
hospitalization if symptoms were persisting.
In teleconference, Dr. Saunders
indicated that the claimant was improved
when he was placed out of work. The
psychiatrist describes the placement out of
work as the treatment intervention without
explaining how that could be considered
active psychiatric treatment.
The records support impairing levels of
depression and anxiety from 9/5/13 to
l0/l/l3. These symptoms would interfere in
the claimant’s ability to maintain stable
emotions, make complex decisions,
concentrate adequately on complex tasks, and
maintain stable interpersonal interactions.
In an office visit on l0/l/l3, the
claimant’s mood was described as better and
no treatment changes were made. The records
do not support severe and persistent mood,
cognitive, or behavioral symptoms beyond
l0/l/13 and do not indicate levels of
psychiatric treatment expected with
impairing symptoms. The psychiatrist
indicated that there was no return to work
Liberty Life sent Smith a letter on April 10, 2014,
upholding its previous determination to deny Smith’s LTD claim.
Request for Additional Review
In early 2015, Smith sought an additional administrative
review through his attorney, providing documentation of his
daughter’s nursing program and his son’s house purchase, and
offering to provide updated psychiatric information for Liberty
Life’s review to establish his continued disability.
¶ 16, AR 2 (Claim Note 49, 50, referencing letter from attorney
dated February 11, 2015).
Liberty Life advised by letter to
Smith’s attorney that there would be no further appeal review.
AR 2 (Claim Note 50).
Having exhausted his administrative remedies under the
Plan, Smith filed the Complaint [ECF No. 1] on July 29, 2015 and
the First Amended Complaint [ECF No. 11]7 on November 19, 2015.
On January 18, 2016, Defendants filed an Answer [ECF No. 19],
and PNC and Liberty filed a Motion to Dismiss Plaintiff’s
Amended Complaint [ECF No. 20]. PNC and Liberty moved to dismiss
on the basis that a claim for LTD benefits under the Plan may be
directed only against the Plan, and not against PNC or Liberty
PNC and Liberty maintain that they are neither proper
Deleting reference to the provision of ERISA relating to
obtaining other equitable relief and renaming PNC Financial
Services Group, Inc. as Plan Administrator rather than Plan
Sponsor (although it is both).
parties nor defendants, but the Plan is the only proper
defendant. After a telephone conference, the Court set a
schedule for Defendants to file a summary judgment motion that
could potentially moot the motion to dismiss and, accordingly,
dismissed the motion without prejudice.
Motion, ECF No. 29.
Order re Dismissal
The Court allowed Defendants to reinstate
the dismissal motion without the need for further briefing at
the time of filing a summary judgment motion.
then filed a joint Answer [ECF No. 30] on March 24, 2016.
Defendants’ Motion for Summary Judgment [ECF No. 31] was
filed on June 30, 2016.
Defendants also renewed their Motion to
Dismiss [ECF No. 20], which requested that Defendant’s Amended
Complaint be dismissed with prejudice.
Smith responded with a
cross motion for summary judgment [ECF No. 34].
On March 21, 2017, the Court entered its Memorandum and
Order Re: Summary Judgment [ECF No. 42] denying without
prejudice both Defendants’ motion and Plaintiff’s cross-motion,
in order to provide the opportunity for the parties to resolve
an outstanding issue regarding the status of the Plan as a party
to the case.
Also on March 21, 2017, the Court denied PNC’s and
Liberty’s Motion to Dismiss Plaintiff’s Amended Complaint.
Memorandum and Order Re: Dismissal Motion, ECF No. 43.
On April 7, 2017, Defendants filed, and the Court approved,
a Stipulated Order Nunc Pro Tunc [ECF No. 45], establishing that
the parties to the case and the motions included the Plan, and
resubmitting the cross-motions for summary judgment.
motions are now ripe for decision.
APPLICABLE STANDARDS OF REVIEW
Summary Judgment Standard8
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.
The well-established principles pertinent to summary
judgment motions can be distilled to a simple statement:
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.
The Court notes that since this case arises under ERISA, it
must evaluate the summary judgment motions in the context of the
proper standard of review under ERISA.
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).
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.”
Mackey v. Shalala, 43 F. Supp. 2d 559, 564 (D. Md. 1999)
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).
may grant summary judgment in favor of one party, deny both
motions, or grant in part and deny in part each of the parties’
Denial of ERISA Benefits
“In the ERISA context, courts conduct de novo review of an
administrator’s denial of benefits unless the plan grants the
administrator discretion to determine a claimant’s eligibility
for benefits, in which case the administrator’s decision is
reviewed for abuse of discretion.”
Cosey v. Prudential Ins. Co.
of Am., 735 F.3d 161, 165 (4th Cir. 2013)(citations omitted).
Thus, 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 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, 735 F.3d at
Here, the Plan states:
The Plan Administrator shall have the
exclusive discretionary authority to
determine eligibility for benefits under the
Plan, to construe the terms of the Plan and
to determine any question which may arise in
connection with its operation or
administration, except to the extent that
the Plan Administrator has authorized the
claims administrator to make such
determinations. . . . The Plan Administrator
may delegate any of its duties hereunder to
person or persons it may designate from time
. . . .
a review by a court of law shall be limited
to the facts, evidence and issues presented
to the Plan Administrator during the Plan’s
claims and appeal procedure and shall be
limited to a determination of whether the
Plan Administrator’s decision regarding the
claim was arbitrary and capricious.
Liberty Life and PNC entered into an Administrative
Services Only Agreement [AR 182-202], under which Liberty Life
assumed discretionary authority to construe and interpret the
terms of the Plan, as well as to evaluate and decide all
questions of eligibility and/or entitlement to LTD benefits
under the Plan.9
Specifically, “[w]hile the Agreement is in effect, Liberty
will accept for processing and payment or denial, all claims for
benefits under the Plan for which proof of claim is furnished in
a form or format satisfactory to Liberty. In processing,
reviewing and administering claim submissions Liberty shall make
the initial decision whether a claim should be paid under the
plan. In addition, . . . Liberty shall assume the responsibility
of the “appropriate named fiduciary” under Section 503(b) of
ERISA to provide a full and fair review of denied claims. In
performing such duty, Liberty shall have the authority to
construe any disputed and doubtful Plan terms subject to the
The Court accepts the parties’ agreement that the arbitrary
and capricious standard of review governs Smith’s claim for LTD
See McKoy v. Int’l Paper Co., 488 F.3d 221, 223 (4th
Cir. 2007); Defs.’ Mot. 20, ECF No. 31-1; Pl.’s Opp’n & Cross
Mot. 5-7, ECF No. 34-1.
Smith contends that the Court must also
take into consideration that Defendants had an inherent conflict
of interest based on his allegation that the plan administrator
had a dual role of both evaluating and paying benefits claims.
Pl.’s Opp’n & Cross Mot. 5-7 (citing Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105 (2008)).
The Fourth Circuit, however,
concluded that, based on the holding in Glenn, “courts are to
apply simply the abuse-of-discretion standard for reviewing
discretionary determinations by [the] administrator, even if the
administrator operated under a conflict of interest.”
v. Black & Decker (U.S.) Inc., 550 F.3d 353, 359 (4th Cir.
right of the Sponsor to provide guidance . . . . Liberty shall
be deemed to have properly exercised such authority unless it
has abused its authority by acting arbitrarily and
capriciously.” AR 193.
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, PNC funds the trust that pays Plan benefits, while
Liberty Life denied Smith’s claim and appeal. If the Court
considers a conflict of interest, it is only as “one factor,
among many, in determining the reasonableness of the
discretionary determination.” Champion, 550 F.3d at 359.
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).
is reasonable ‘if it is the result of a deliberate, principled
reasoning process and if it is supported by substantial
Id. (citation omitted).
Substantial evidence is
“‘evidence which a reasoning mind would accept as sufficient to
support a particular conclusion.’”
Id. (citation omitted).
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.
Nor may the court “substitute [its] own judgment in
place of the judgment of the plan administrator.”
Metro. Life Ins. Co., 609 F.3d 622, 630 (4th Cir. 2010).
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.”
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
(5) whether the decisionmaking process was
reasoned and principled;
(6) whether the decision was consistent with
the procedural and substantive requirements
(7) any external standard relevant to the
exercise of discretion; and
(8) the fiduciary’s motives and any conflict
of interest it may have.
Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan,
201 F.3d 335, 342-43 (4th Cir. 2000).
Full and Fair Review
“ERISA requires plan administrators to provide participants
with a ‘full and fair review’ of any adverse benefits
determination.” Clarke v. Unum Life Ins. Co., 852 F. Supp. 2d
663, 676 (D. Md. 2012)(quoting 29 U.S.C. § 1133; 29 C.F.R. §
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).
In cases where there is a
procedural ERISA violation, the appropriate remedy is to remand
the matter to the plan administrator so that a “full and fair
review” can be accomplished.
Gagliano v. Reliance Standard Life
Ins. Co., 547 F.3d 230, 240 (4th Cir. 2008).
Smith contends that Liberty Life’s decision to deny his
claim was based on inadequate information and, therefore, the
decision-making process was unsustainable.
contends that the review of his claim was illusory because it
rested on two factual errors or suspect rationales, a failure to
consider the role of workplace stress on his disability, and a
failure to take the necessary steps to resolve factual disputes.
Smith does not contend that Liberty Life failed to follow
ERISA’s procedural guidelines.
Smith received his requested
review upon written application to the Plan, and he received a
written decision that included specific reasons for the
Smith’s issues are, in essence, not related to
failure to conduct a full and fair review process, but rather
Smith contends that the substance of the review was not full and
fair and that the claim denial was an abuse of discretion.
Smith argues that he is entitled to LTD benefits under the
Plan, and his benefits were wrongly terminated because (1) the
review relied on factual errors, (2) the role of workplace
stress was not considered, and (3) the investigation was merely
The Court shall address each contention in turn.
In a December 30, 2013 letter to Smith denying his claim
for disability benefits, Liberty Life wrote:
The review states that the available
information supports the diagnoses of major
depressive disorder and generalized anxiety
disorder. However, when asked to provide a
description of your impairments, the
reviewer advised that while impairment is
supported from September 4, 2013 through
October l, 2013 due to difficulty in
interpersonal functioning, there is no
evidence of psychiatric impairment beyond
October l, 2013. It is of note that on
November l, 2013, Dr. Saunders documented
that you were stressed by the multiple tasks
of buying a house, wanting to attend a
nursing school and change working to part
time. He also wrote that your functioning
seemed normal at home and mood was not
depressed, although energy was low.
To ensure complete understanding of
your medical conditions and symptoms, the
reviewing physician attempted to contact Dr.
Saunders by phone on December l7th and
December 24th. Messages were left after each
attempt, however the call has not been
AR 87 (emphasis added).
The highlighted information, noted as
reasons for finding no evidence of impairment beyond October 1,
2013, was inaccurate.
Smith was not buying a house; his son
Smith did not want to attend nursing school; his
Smith was not planning on working part
time; his daughter was.
Defendants argue that Liberty’s initial decision was not
based on these factual errors and that neither inaccuracy was a
factor in the final decision to deny Smith’s appeal.
independent of the misunderstanding, the evidence of record
reviewed by Dr. Segal included the following:
Smith’s statement of November 20, 2013 listed anxiety,
panic, and depression as preventing him from working
and interfering with his ability to concentrate. AR
Attending Physician’s Statement on November 21, 2013.
AR 60-61. On the form, Dr. Saunders indicated that
Smith had a Class 4 Mental/Nervous Impairment,
“Patient is unable to engage in stressful situations
or engage in interpersonal relations (marked
limitations).” AR 61.
Dr. Saunders also provided a medical summary letter
dated December 4, 2013, which stated:
He went off work and was advised to remain
off work and avoid all stressors [u]ntil
completely being recovered. He was seen by
me July 2013, September 2013, Oct 2013, and
lastly 11-21-13. At that tíme he was being
treated with 2 antidepressants, an antianxiety medication, and a stimulant, and was
in partial remission only.
In summary, he appears disabled from working
in his previous employment, and also any
employment at this time. AR 66.
Dr. Saunders’ notes from October 1, 2013,
after Smith had been off work about one
month, as noted by Dr. Segal in his
analysis: “claimant’s mood was good, sleep
was better and that the claimant had no
panic attacks.” AR 76.
Dr. Saunders’ notes from November 21, 2013,
as noted by Dr. Segal in his analysis
(excluding comments about buying a house and
attending nursing school): “claimant’s
functioning seemed normal at home and mood
was not depressed, although energy was low.”
AR 76. Dr. Saunders added a prescription
for a stimulant in addition to the two drugs
already prescribed (antidepressant and sleep
aid). AR 76. Dr. Saunders’ notes also
stated: “feels there’s no way he could
return, deal with people issues without
return of depression,” and commented that
there were no stressful events, no
communication with people at work, and
anxiety, couldn’t handle situations multiple tasks. AR 70, 77.
It is apparent from Dr. Segal’s analysis that beyond
October 1, 2013, Dr. Segal consistently attributed Smith’s
stress to the alleged “multiple tasks of buying a house and
wanting to attend a nursing school and change working to part
At the time of his report to Liberty Life, Dr.
Segal had not spoken to Dr. Saunders.
The Court also notes that in
refers to Smith as “her.” AR 76.
mere typo, it may also indicate a
especially when combined with the
reasons for Smith’s stress.
Dr. Segal added
Dr. Segal’s analysis, he
Although this may have been a
level of carelessness
misinterpretation of the
an addendum on December 24, 2013 to report that he had made
additional efforts to contact Dr. Saunders.
addendum, Dr. Segal stated: “I reviewed this claim on December
17, 2013 and opined that t [sic] there was no evidence of social
impairment since October 1, 2013. The claimant is apparently
buying a house and is either thinking of attending nursing
school or is already attending nursing school.”
Certainly, in the ERISA context, “courts have no warrant to
require administrators automatically to accord special weight to
the opinions of a claimant’s physician; nor may courts impose on
plan administrators a discrete burden of explanation when they
credit reliable evidence that conflicts with a treating
Black & Decker Disability Plan v.
Nord, 538 U.S. 822, 834 (2003).
However, “[p]lan administrators
. . . may not arbitrarily refuse to credit a claimant’s reliable
evidence, including the opinions of a treating physician.” Id.
Based on the evidence that was before Liberty Life at the
time of the decision, if the inaccuracies, and the
misinterpretations made as a result by Dr. Segal, are removed,
it appears there is a lack of substantial evidence to support
the termination of benefits at October 1, 2013.
On the appeal, the following additional evidence was
provided to Liberty Life:
Smith’s appeal letter of January 15, 2014
identifying the errors and clarifying the
misunderstanding. AR 94-95. He also
identified restrictions from Dr. Saunders
that appeared to have not been taken into
consideration. AR 94-95.
Dr. Segal updated the file with a memorandum
stating that Dr. Saunders communicated that
Smith “was better at a certain point
‘because he was not working and did not have
a stress of that particular job, and that is
the reason for his improvement.’ This
information does not change my opinion as it
is outlined in the original memorandum on
December 17, 2013.” AR 84.
Dr. Saunders response to Dr. Segal’s
December 17, 2013 letter with a brief handwritten sentence on the bottom of the letter
stating: “Note- his symptoms improved when
the stress was relieved! (not at work)”. AR
81. In providing this update to the file,
Dr. Segal noted that his communications with
Dr. Saunders confirmed his original opinion.
An independent evaluation by Dr. Kalnins.
AR 139-153. In addition to reviewing the
appeal file, Dr. Saunders’ notes, and Dr.
Segal’s report, Dr. Kalnins spoke with Dr.
Saunders on March 5, 2014, and summarized
the conversation by letter dated March 6,
2014. AR 139-140. Dr. Saunders indicated
that he disagreed with Dr. Segal, that his
records had been misinterpreted, and that he
did not consider Smith capable of returning
to work. AR 139-140.
Dr. Kalnins’ letter to Dr. Saunders
indicates that she is operating under the
false impression that Smith was considering
going to nursing school. AR 139. This
comment did not appear in her report to
In the letter to Dr. Saunders, Dr. Kalnins
refers to an additional visit by Smith with
Dr. Saunders in January 2014. See AR 139
(“In November 2013 he was doing better at
home. You had since increased alprazolam and
added methylphenidate. You last saw him in
January. You did not consider him capable of
returning to a work setting until his
condition was fully recovered.”). Reference
is made to this visit in Dr. Kalnins’ report
to Liberty Life, although she did not note
the medication change or that Dr. Saunders
opinion in January 2014 was that Smith was
not capable of returning to work. AR 147.
There are no corresponding notes by Dr.
Saunders, and the visit wasn’t listed in Dr.
Kalnins’ outline of records reviewed. AR
Dr. Kalnins did not speak with Smith.
indicated that there was a lack of “objective evidence of severe
and persistent depression, anxiety, panic attacks, cognitive
difficulties, or interpersonal difficulties that would preclude
the claimant from performing his occupational duties from
Liberty Life’s denial letter of April
9, 2014, states:
Although Dr. Saunders reports you are
unable to work and your symptoms improved
because you did not have the stress of “that
particular job,” reviewing physicians Dr.
Segal and Dr. Kalnins report there is no
evidence of psychiatric impairment beyond
October 1, 2013. Additionally, your
treatment plan is not consistent with
treatment expected for severe and impairing
Although Liberty Life still credits Dr. Segal’s flawed
opinion,12 Dr. Kalnins’ report provides Liberty Life with some
additional supporting evidence for the conclusion that Smith is
not disabled after October 1, 2013.
It is unclear how much Dr.
Kalnins’ opinion may have been influenced by Dr. Segal’s report
or any false impression she had regarding Smith’s considering
Role of Workplace Stress
The Plan defines disability by stating: “you are disabled
if your disability makes you unable to perform the material or
essential duties of your own occupation as it is normally
performed in the national economy.”
In the appeals
denial letter of April 9, 2014, Liberty Life states:
PNC reported in your job of Regional
Manager II you were responsible for the dayto-day facilities management for multiple
bank properties. In the definition of
disability in The PNC Financial Services
Group, Inc. Group Benefit Plan, occupation
refers to the occupation that you were
performing at the time your absence from
work began. The Plan considers your
occupation as it is normally performed in
the national economy, rather than your
specific job at PNC Financial Services
Nothing in the record indicates that Dr. Segal was asked if
the corrected facts changed his opinion.
Neither Dr. Segal nor Dr. Kalnins make reference to
whether Smith was able to perform his pre-disability occupation.
Dr. Segal makes no reference to Smith’s occupation. Dr. Kalnins
indicates that she reviewed the “Job Description and/or
Occupational Demands,” AR 145, but makes no reference to Smith’s
ability to perform the functions of that occupation.
there is no analysis in the record of the occupation “as it is
normally performed in the national economy” as opposed to
Smith’s specific job.
Smith contends that Liberty Life failed to consider that
the stress associated with his job was a major cause of his
disability and that a return to that stress would likely cause a
relapse of his impairment.
Certainly, there seems to be general
agreement that it was the stress of the job that caused the
crisis leading to his inability to function at work on September
4, 2013, and that Smith suffered from recurring major depression
and anxiety disorder.
See, e.g., AR 156.
However, Dr. Segal
and Dr. Kalnins both opine that the crisis ended less than a
month later (“no later than October 1, 2013”) when Dr. Saunders
reported him as being in a better mood.
Yet Dr. Kalnins, for example, stated that the symptoms
Smith exhibited prior to that date would interfere with his
ability to “maintain stable emotions, make complex decisions,
concentrate adequately on complex tasks, and maintain stable
Dr. Saunders plainly
indicated that the symptoms improved because he was not at work.
It is reasonable to expect that Smith would require
these abilities to perform his job, but there is nothing on the
record to indicate that there was any review of the impact of
Smith returning to work.
The burden to prove disability rests on Smith.
AR 172; see
also Brodish v. Federal Express Corp., 384 F. Supp. 2d 827, 835
(D. Md. 2005)(“in all or most plans, the burden of proving . . .
disability is on the employee.”).
The initial burden of proof
can be carried by Smith’s subjective assessment and the
statements of his treating physician that he was unable to
return to work.
See Clarke, 852 F. Supp. 2d at 679.
administrator, of course, is not obligated to take the
claimant’s evidence at face value, and it may ultimately reject
the evidence altogether and find that the claimant is not
disabled. But, to do so, it must carry its own burden by
pointing to substantial evidence that refutes the claimant’s
claim of disability.”
Id., see also Harrison v. Wells Fargo
Bank, N.A., 773 F.3d 15, 21 (4th Cir. 2014) (“[T]he law
anticipates, where necessary, some back and forth between
administrator and beneficiary.”).
“Although independent reviews of medical evidence and
independent examinations of claimants are not required, both are
common in ERISA cases.”
Laser v. Provident Life & Acc. Ins.
Co., 211 F. Supp. 2d 645, 650 (D. Md. 2002).
independent examination of Smith.
Here, there was no
There is no evidence on the
record that either independent reviewer ever spoke with Smith,
although Dr. Saunders suggested to Dr. Kalnins that she do so.
Dr. Segal did not even speak to Smith’s examining physician
prior to writing his initial report, which was used by Liberty
Life in its decision for denial of benefits.13
See AR 119.
In Zhou v. Met. Life Ins. Co, Judge Williams observed that
“a claim of disability due to depression is fundamentally
different from other types of disability claims that can be
proved solely through a clinical medical record.
broken bone or a heart attack, depression is a disease which
relies largely on self-reported symptoms.”
471-72 (D. Md. 2011).
807 F. Supp. 2d 458,
In Zhou, the court found that although
there was no obligation to send the claimant for an independent
Dr. Segal did speak with Dr. Saunders after his initial
report was submitted, and he updated his report with an addendum
indicating his opinion had not changed despite Dr. Saunders
stating that Smith was better “because he was not working and
did not have a stress of that particular job, and that is the
reason for his improvement.” AR 84.
medical examination, in that case a reasonable review would have
involved such an examination.
Id. at 474.
Because depression is a disease that
encompasses inherently subjective
complaints, it was inappropriate for MetLife
to continually deny Plaintiff’s claim based
solely on the opinions of psychiatrists who
merely reviewed Plaintiff’s file, to the
exclusion of statements and diagnoses by
Plaintiff’s treating physicians, and without
an independent medical examination
supporting the view of MetLife's
Of course, the circumstances may be different in every
case, but the observation is generally apt.
Under the circumstances of the instant case, where there is
evidence provided by Smith, himself, and his treating physician,
Dr. Saunders, that Smith is not capable of returning to work due
to the stress and anxiety caused by work, more than a mere
cursory file review is needed.
Liberty Life does not point to
substantial evidence that refutes Smith’s claim of disability
nor supports its denial.
Liberty Life’s conclusion to disallow
the claim is arbitrary and capricious.
A reasoned process and a complete record is necessary to
support a decision with substantial evidence.
See Harrison, 773
F.3d at 21.
The record herein, as discussed, contained factual
errors, and did not include analysis of Smith’s ability to
perform his occupation nor a review of the impact of returning
to work on his ability to perform his occupation.
Not only was
there no independent examination, but the independent reviewers
did not even speak with Smith.
Liberty Life appears to have
unreasonably relied on the independent reviews of the file and
gave little credibility to Smith’s own subjective reports or his
treating physician’s opinions.
Accordingly, the Court concludes that there is a lack of
substantial evidence in the record to support Liberty Life’s
denial of Smith’s claim for LTD benefits.
Benefits and Legal Fees Payable
In the cross-motion for summary judgment, Smith states:
“Under the terms of the Plan, [Smith] should be paid his full
short-term disability benefit term (through December 4, 2013),
and then two years of long-term disability benefits.”
ECF No. 34-1.14
Smith also requests reasonable attorneys’ fees
as a prevailing plaintiff under ERISA.
Defendants object and note that in any event, “the record
indicates that Smith received STD benefits for the maximum
Note that in his Complaint, Smith asks for amounts payable
from December 5, 2013. Am. Compl. 8, ECF No. 11.
period allowed, through December 13, 2013. AR 10.”
at 11, ECF No. 41.15
The dispute as to the amount of benefits to
be paid remains pending.
ERISA provides for an award of attorney’s fees, stating:
“In any action under this subchapter .
. . by a participant, beneficiary, or
fiduciary, the court in its discretion may
allow a reasonable attorney’s fee and costs
of action to either party.” 29 U.S.C. §
The Fourth Circuit has identified a set of factors “that a
district court should consider in informing its exercise of
discretion when ruling on a motion for attorneys’ fees in an
Williams v. Metro. Life Ins. Co., 609 F.3d 622,
635 (4th Cir. 2010)(citing Quesinberry v. Life Ins. Co. of N.
Am., 987 F.2d 1017, 1029 (4th Cir. 1993)(en banc)).
The parties shall attempt to agree on the amount of
benefits and any legal fees payable to Smith.
agreements, the Court shall make the determinations by further
For the foregoing reasons:
Defendants’ Motion for Summary Judgment [ECF No.
31] is DENIED.
The date noted as 12/13/2013 by Defendants may be a typo,
since AR 10 refers to 12/4/2013 as the “Date Ceased Receiving.”
Plaintiff’s Cross-Motion for Summary Judgment
[ECF No. 34] is GRANTED.
Plaintiff shall be awarded all disability
insurance benefits due and owing with interest.
The parties shall attempt to reach agreement upon
the amounts of benefits and legal fees to be
awarded Plaintiff consistent with the instant
Plaintiff shall arrange a telephone conference to
be held by August 4, 2017, to discuss matters
requiring resolution prior to the entry of final
judgment and to schedule such further proceedings
as may be necessary.
SO ORDERED, on Friday, July 21, 2017.
Marvin J. Garbis
United States District Judge
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