Rice v. Sun Life and Health Insurance Company (U.S.) et al
Filing
18
OPINION; signed by Judge Gordon J. Quist (Judge Gordon J. Quist, jmt)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
__________________________
SCOTT RICE,
Plaintiff,
v.
Case No. 1:12-CV-1362
SUN LIFE AND HEALTH
INSURANCE COMPANY,
HON. GORDON J. QUIST
Defendant.
___________________________________/
OPINION
Plaintiff, Scott Rice, has sued Defendants, Sun Life and Health Insurance Company (U.S.)
(Sun Life) and the Benco Dental Supply Company Ltd. Plan (referred to individually as the Plan and
collectively with Sun Life as Sun Life), under the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq., seeking to recover long-term disability (LTD) benefits
under a group disability policy issued to Rice’s former employer. Pursuant to the Amended Case
Management Order entered on January 15, 2013, Sun Life has filed the Administrative Record and
the parties have filed cross motions for judgment based upon the Administrative Record in
accordance with Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609 (6th Cir. 1998). For the
reasons set forth below, the Court will grant Sun Life’s motion, deny Rice’s motion, and affirm Sun
Life’s denial of LTD benefits.
I. BACKGROUND
Rice was employed by Benco Dental Supply as a Service Technician, which involved
significant physical demands, including frequent standing, sitting, walking, pulling, and lifting of
up to fifty-five pounds and occasional lifting of over one hundred pounds. (104–09.)1 During his
employment with Benco, Rice was a participant in the Plan, which provided LTD insurance benefits
under Sun Life group insurance policy number 057-5615-00 (Policy). (277–309.) The Policy
defines disability as “either Totally Disabled or Partially Disabled.” (287.) Total disability is
defined as:
Total disability must be caused by Sickness or Injury and must commence while you
are insured under the policy. You will be considered Totally Disabled if:
1.
During the Elimination Period and the following 24 months you are unable to
perform all the material and substantial duties of your Regular Occupation.
2.
After the Elimination Period and the following 24 months, you are unable to
perform the duties of Any Occupation.
(Id.) The Policy also provides that “Proof” is “[a]ny information that is . . . [r]equired by [Sun Life]
under the terms of the policy; and . . . [s]atisfactory to [Sun Life].” (286.)
Rice performed his job at Benco Dental Supply through June 12, 2009. (1366.) On or about
July 17, 2009, Rice filed a claim with Sun Life for LTD benefits under the Policy, claiming that he
was “unable to sit, stand or walk for long periods of time” due to “muscle, joint and nerve pain” in
his back, arms, legs and neck caused by peripheral neuropathy. (1357, 1360.) Rice also claimed
medication sensitivities and difficulty concentrating on daily activities with anxiety, muscle
weakness, and tremors. (1360.)
Rice supported his application with a statement from his treating physician, R. Troy Carlson,
M.D. Dr. Carlson stated that Rice had been diagnosed with “[p]rogressive neuropathy of upper
[and] lower extremities,” and that his symptoms had become progressively worse since 2007.
(1358.) These symptoms included “sporadic and progressive numbness [and] weakness of legs”
bilaterally, “generalized muscle fatigue [and] ‘electrical’ shocks impulses” in his extremities, and
the sudden and unexpected inability to lift any weight at all. (327–28.) Dr. Carlson declined to
1
Citations refer to pages of the Administrative Record in the CM/ECF Page ID# system.
2
specify any functional limitations, noting that he was “unable to determine [the] appropriate type
of work due to progression of symptoms.” (1358.) In June of 2009, Dr. Carlson had noted that in
spite of “extensive blood and diagnostic testing,” and multiple evaluations by neurologists and
physiatrists who objectively documented Rice’s loss of neural function, “no physician including
myself has been able to successfully diagnose and treat Scott’s progressing condition.” (1350.)
On September 22, 2009, Sun Life approved Rice’s application for LTD benefits based on
his inability to perform his own occupation of Service Technician. (1243–44.) Sun Life notified
Rice that benefits would be paid for two years, after which he would be required to show that he was
disabled from performing the duties of any occupation for which he was qualified. (1243.) Sun Life
paid Rice benefits for the duration of the own occupation period and for an additional eight months,
through April 2012.
In May 2012, Sun Life retained MES Solutions to review Rice’s file to determine Rice’s
continuing eligibility for LTD benefits. MES referred the file to Siva Ayyar, M.D., Board Certified
in Occupational and Preventative medicine, to review the file. In addition to reviewing Rice’s
records, Dr. Ayyar spoke with Dr. Carlson’s office. (975.) Based on his review, Dr. Ayyar
concluded that as of September 2011 (when the any occupation period commenced), Rice was not
disabled from performing a sedentary occupation. (911.) Dr. Ayyar noted that Rice exhibited
“relatively well-preserved neurological function on multiple occasions” and a “non-focal
neurological exam on at least one occasion,” had 5/5 strength in the bilateral upper and lower
extremities on multiple occasions in 2009, was ambulatory, and engaged in camping, fishing, and
exercising regularly—activities that were inconsistent with his stated capacity. (ID 912.) Dr.
Ayyar observed that Rice’s symptoms were “sporadic and irregular” and that some clinical findings
were consistent with peripheral neuropathy, while others were not. Dr. Ayyar continued:
3
The claimant is described as exhibiting normal serological function on multiple
occasions referenced above in March and June 2011. He is described as exhibiting
normal white count, normal hemoglobin A 1c, slightly elevated cholesterol panel,
etc., on multiple occasions referenced above. These findings suggest that the
claimant is both hemodynamically and serologically stable. He has no clinically
significant electrolyte derangement, anemia, or hypothyroidism that might account
for his symptoms. His thyroid function has been treated to resolution with Levoxyl.
(912.) Dr. Ayyar did note that electrodiagnostic studies confirmed peripheral polyneuropathy, but
the condition was “sensory polyneuropathy with symptoms of pain, paresthesias, numbness, and
dysesthesia” that did not produce any overt motor deficits. (913.) Finally, Dr. Ayyar stated that
restrictions of “[n]o standing or walking greater than one-hour continuously, maximum four hours
per eight hour work day,” might be appropriate at times when Rice was symptomatic. (913.)
After Dr. Ayyar completed his initial report, Dr. Carlson’s office contacted Dr. Ayyar to
confirm that “Dr. Carlson does believe that claimant could do sedentary work, both in the past and
going forward.” (975.) Dr. Carlson also indicated that Rice would need the option to stand and
move around to relieve his symptoms. (Id.) Dr. Ayyar confirmed that the new information did not
change his prior opinion. (Id.)
On May 24, 2012, Sun Life notified Rice of its decision that he no longer qualified for LTD
benefits under the Policy. (1387.) In its decision letter, Sun Life referred to Dr. Ayyar’s report, as
well as a vocational consultant’s assessment, which identified Dispatcher, Maintenance Service, as
a sedentary occupation that met Rice’s physical restrictions and qualifications. Sun Life concluded
that because Rice failed to submit proof establishing that he was disabled from performing the duties
of any reasonable occupation, he was no longer entitled to benefits. Finally, Sun Life acknowledged
that Rice had previously obtained Social Security Disability (SSD) Benefits, but noted that the
Social Security Administration’s (SSA) “decision may not have taken into consideration the updated
medical and vocational information presently contained in [Sun Life’s] file.” (1394.)
Rice appealed Sun Life’s decision as permitted by ERISA. As part of its review of the
appeal, Sun Life retained Donald Harrell, M.D., Board Certified in Occupational Medicine, to
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perform an independent medical examination of Rice. Dr. Harrell examined Rice for approximately
two hours on September 12, 2012. Dr. Harrell reported that Rice “remained seated in the molded
plastic (desk-type) chair next to the exam room desk, for direct physician history taking, lasting from
8:10 AM till about 10:20, without evident distress or interruption,” and that Rice “sat quietly without
significant repositioning for most of the exam.” (184.) Based on his examination and review of
Rice’s records, Dr. Harrell concluded that Rice was capable of lifting up to thirty pounds, frequently
lifting fifteen pounds, pushing or pulling fifty pounds, sitting eight hours in an eight hour day, and
standing and walking four hours each in an eight hour day. (198–99.) Dr. Harrell found no evidence
of functional impairment relating to sitting or standing and no evidence that Rice was impaired in
the use of his upper extremities, for example to operate a keyboard or use a telephone. (200.) Dr.
Harrell stated that electromyogram/nerve conduction studies were supportive but not definitive of
polyneuropathy of the upper and lower extremities, and he noted that the clinical data and objective
examination findings did not correlate with Rices’s subjective complaints of pain. (199–200.)
Sun Life also forwarded Rice’s medical records to Phillippe Chemaly, Jr., D.O., Board
certified in Physical Medicine and Rehabilitation, for a file review.2 Dr. Chemaly noted that
“[o]verall the medical file supports the claimant is independent with [activities of daily living] and
ambulating without assistive device, with widely varying subjective complaints.” (165.) Dr.
Chemaly stated that when Rice was symptomatic—occurring two to three days per week—he would
be able to stand and walk for up to one hour at a time, for a total of four hours in an eight hour day,
and at all other times he could stand and walk for up to two hours at a time for a total of four to six
hours in an eight hour day. Dr. Chemaly further opined that Rice could lift, push, pull, and carry
up to thirty pounds infrequently and up to fifteen pounds occasionally, and that he could lift one to
2
Sun Life also arranged a file review by Adam Ameele, a licensed psychologist, to opine on whether Rice has
psychological impairments that render him disabled. (143–47.) Dr. Ameele concluded that Rice was not disabled by
a psychological condition. Dr. Ameele’s opinion is irrelevant to whether Rice is disabled because, as Rice
acknowledges, he is not claiming disability due to a psychological impairment. (Pl.’s Br. Supp. at 8.)
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two pounds frequently. Finally, Dr. Chemaly concluded that Rice’s reports of pain during prolonged
sitting were unsupported. (Id.)
On November 13, 2012, Sun Life issued a written determination to Rice denying his appeal.
(134–42.) In support of its denial, Sun Life noted that Rice’s reported activities of camping, fishing,
and riding an off-road vehicle in the sand, and Rice’s statement during a psychiatric consult that he
did not ride his off-road vehicle in the woods more often due to the lack of places to do so, rather
than due to his impairment, suggested increased functional abilities. (139.) Sun Life also cited Dr.
Harrell’s findings on examination of Rice, as well as Dr. Chemaly’s conclusions, which established
that Rice’s impairments would not preclude him from performing sedentary work activities.
(139–41.) While Sun Life acknowledged that Dr. Harrell had made treatment recommendations,
it nonetheless stated that “the examination findings did not show functional impairments that would
not [sic] preclude sedentary work activities as Dr. Harrell concluded that functional limitations
relating to sitting and upper extremity use were not demonstrated on exam.” (140.) Finally, Sun
Life acknowledged Rice’s SSD benefits award, but cited reasons for reaching a different result.
(142.)
II. DISCUSSION
Standard of Review
Generally, in an ERISA case, a court reviews a denial of benefits de novo “unless the benefit
plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits
or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109
S. Ct. 948, 956-57 (1989); see also Perez v. Aetna Life Ins. Co., 150 F.3d 550, 555 (6th Cir. 1998).
However, a court employs a deferential standard of review if “the benefit plan gives the
administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe
the terms of the plan.” Id. at 115, 109 S. Ct. at 956–57; see also Cox v. Standard Ins. Co., 585 F.3d
6
295, 299 (6th Cir. 2009) (“When the plan gives the administrator discretionary authority, we apply
the highly deferential arbitrary and capricious standard.”).
Two issues regarding the appropriate standard of review are present in this case: (1) whether
the Plan contains the necessary clear grant of discretion requisite to application of the arbitrary and
capricious standard, see Perez, 150 F.3d at 555; and (2) if the Plan contains a discretionary
provision, whether Michigan Administrative Code Rule 500.2202(b), which prohibits provisions
granting discretionary authority to insurance companies in group insurance policies issued after July
1, 2007, bars enforcement of the discretionary provision. See Am. Council of Life Insurers v. Ross,
558 F.3d 600, 608-09 (6th Cir. 2009) (holding that ERISA does not preempt Michigan
Administrative Rules prohibiting discretionary clauses).
As to the first issue, Sun Life cites the following language:
Sun Life and Health Insurance Company (U.S.), as Claims Fiduciary, shall have the
sole and exclusive discretion and authority to carry out all actions involving claims
procedures explained in the Policy. The Claims Fiduciary shall have the sole and
exclusive discretion and power to grant and/or deny any and all claims for benefits,
and construe any and all issues relating to eligibility for benefits. All findings,
decisions, and/or determinations of any type made by the Claims Fiduciary shall not
be disturbed unless the Claims Fiduciary has acted in an arbitrary and/or capricious
manner. . . .
(309.) Rice does not dispute that this language constitutes a clear grant of discretion. Instead, he
argues that it does not apply because it is not part of the Policy, which Rice contends is the pertinent
document for purposes of ERISA. Although the quoted language appears as part of the ERISA
Rights language rather than within the Policy itself, Rice cites no authority for the proposition that
an ERISA plan may consist of only one document, and the Court finds no reason to conclude that
the ERISA Rights provisions are not part of the Plan. See Pettaway v. Teachers Ins. & Annuity
Ass’n of Am., 644 F.3d 427, 433 (D.C. Cir. 2011) (noting that “ERISA’s statutory text suggest that
multiple plan documents can be legally relevant” and that “the ERISA sections on fiduciary
7
responsibilities imply that there will be multiple legally important plan documents”). Moreover, the
Policy itself requires that proof of disability be “[s]atisfactory to [Sun Life].” (257.) As the Sixth
Circuit has observed, “[t]his Court has found ‘satisfactory proof,’ and similar phrases, sufficiently
clear to grant discretion to administrators and fiduciaries.” Frazier v. Life Ins. Co. of N. Am., 725
F.3d 560, 567 (6th Cir. 2013) (citing Perez, 150 F.3d at 556 , and Miller v. Metro. Life Ins. Co., 925
F.2d 979, 983 (6th Cir. 1991)). In light of this language, the Policy itself contains a sufficiently
clear grant of discretion.
As for the application of Michigan’s administrative rule prohibiting discretionary clauses,
the Court concludes that such rule does not apply to the Policy because the Policy states that it was
issued in Rhode Island and is governed by the laws of that state. There is no indication in the
administrative record that the Policy was issued or delivered in Michigan, and Rice does not contend
otherwise. Courts in both this district and the Eastern District of Michigan have held that when, as
in this case, a group insurance policy is neither issued nor delivered in Michigan and is governed
by the laws of another state, Michigan Administrative Code Rule 500.2202(b) does not apply.
Williams v. Target Corp., No. 12-cv-11775, 2013 WL 5372877, at *2 (E.D. Mich. Sept. 25, 2013)
(concluding that the “Michigan anti-discretionary clause regulation does not bar the grant of
discretionary authority in the 2010 Policy, because that Policy was not issued or delivered in
Michigan”); Foorman v. Liberty Life Assurance Co. of Boston, No. 1:12-CV-927, 2013 WL
1874738, at *3 (W.D. Mich. May 3, 2013) (holding that Michigan’s anti-discretionary clause rule
did not apply because the group disability insurance policy was not issued or delivered in Michigan
and a conflict-of-law analysis compelled application of Pennsylvania law); Grimmett v. Anthem Ins.
Cos., Inc., No. 2:11-cv-12623, at *9 (E. D. Mich. Sept. 27, 2012) (concluding that the policy’s
Indiana choice of law provision governed and precluded application of Michigan’s rule prohibiting
8
discretionary clauses). The Court finds the reasoning in these cases persuasive and, thus, concludes
that Michigan’s anti-discretionary clause rule likewise does not apply in this case.3
The arbitrary and capricious standard “‘is the least demanding form of judicial review of
administrative action. When it is possible to offer a reasoned explanation, based on the evidence,
for a particular outcome, that outcome is not arbitrary or capricious.’” Davis v. Kentucky Fin. Cos.
Ret. Plan, 887 F.2d 689, 693 (6th Cir. 1989) (citation omitted) (quoting Pokratz v. Jones Dairy
Farm, 771 F.2d 206, 209 (7th Cir. 1985)); see also Miller, 925 F.2d at 984 (noting that
administrators’ decisions “are not arbitrary and capricious if they are ‘rational in light of the plan’s
provisions’”) (quoting Daniel v. Eaton Corp., 839 F.2d 263, 267 (6th Cir. 1988)). Although the
standard is highly deferential, it still requires “some review of the quality and quantity of the
medical evidence and the opinions on both sides of the issues.” McDonald v. Western-Southern Life
Ins. Co., 347 F.3d 161, 172 (6th Cir. 2003). Thus, a court must do more than merely rubber stamp
the administrator’s decision. Id. The decision must be upheld, however, “if it is the result of a
deliberate, principled reasoning process and if it is supported by substantial evidence.” Balmert v.
Reliance Standard Life Ins. Co., 601 F.3d 497, 501 (6th Cir. 2010) (internal quotation marks
omitted).
Sun Life’s Denial of Benefits
In reviewing a plan administrator’s denial of benefits, “the ultimate issue . . . [for the court]
is not whether discrete acts by the plan administrator are arbitrary and capricious but whether its
ultimate decision denying benefits was arbitrary and capricious.” Spangler v. Lockheed Martin
Energy Sys., Inc., 313 F.3d 356, 362 (6th Cir. 2002). Rice contends that Sun Life’s acceptance of
the opinions of its hired consultants over those of Rice’s treating physicians, Sun Life’s inherent
3
Even if Michigan law applied to the Policy, the anti-discretionary clause rule would still not preclude
application of the arbitrary and capricious standard because the Policy was issued before July 1, 2007— the effective date
of the rule— and was not revised after that time. See Mich. Admin. Code R. 500.2202(b)–(c).
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conflict of interest, and the award of Social Security Disability Benefits estops Sun Life from
concluding that Rice is not disabled.
A.
Sun Life’s Decision is Supported by Substantial Evidence
Under the arbitrary and capricious standard, when a plan administrator provides a reasoned
explanation, based on the evidence, for its decision to deny a claim for benefits, a court must defer
to the decision “so long as it is rational in light of the plan’s provisions.” Frazier, 725 F.3d at 567
(citing Miller, 925 F.2d at 984). In light of the record, the Court cannot say that Sun Life’s decision
was unreasonable or irrational. Sun Life’s decision is supported by the following:
•
The opinions of two independent reviewers (Drs. Ayyar and Chemaly) who
acknowledged clinical support for a diagnosis of polyneuropathy and some
level of impairment when Rice was symptomatic with pain, but found no
basis for limitations that would preclude Rice from performing full-time
sedentary work (165, 880–82);
•
An IME by Dr. Harrell, who noted that Rice sat in a chair for well over an
hour during the examination without evident distress or interruption or the
need for significant repositioning, and found no specific functional
impairments as to sitting or standing or use of the upper extremities (184,
199–200);
•
Rice’s reported activities of camping, fishing, exercising, and riding an offroad vehicle in the sand that were inconsistent with Rice’s claimed
limitations (139, 912); and
•
A statement from Rice’s treating physician, Dr. Carlson, that Rice was
always capable of performing sedentary work, although his condition would
require that such work afford him the opportunity to get up and move around,
at times, to relieve his symptoms (975).
Moreover, there is no indication that Sun Life ignored or misconstrued any of the medical evidence
Rice submitted in support of his claim. In fact, Sun Life explained in its written denial letters why
such evidence failed to support his claim.
Rice contends that selected portions of Dr. Harrell’s report and Dr. Chemaly’s report support
his claim. There is some merit to this assertion, but read as a whole, the doctors’ reports
10
unquestionably conclude that Rice was not functionally impaired from performing sedentary work.
For example, Dr. Harrell stated that clinical studies supported a diagnosis of polyneuropathy, that
Rices’s current pharmacological treatment was inadequate, and that with treatment from a physical
therapist and an occupation therapist Rice could return to work within six to twelve months.
However, he also concluded that Rice was not functionally impaired in sitting, standing, or using
his upper extremities. (199-200.) Moreover, Dr. Harrell found that “[t]he clinical data and
objective examination findings do not correlate to the subjective complaints of the examine.” (200
(emphasis in original).) Similarly, Dr. Chemaly found that Rice was suffering from “upper
extremity paresthesias and lower extremity paresthesias in a stocking and glove pattern” indicative
of polyneuropathy that was “functionally impairing,” but he concluded that even when Rice was
symptomatic, he could still stand and walk up to one hour at a time, with a total time of four hours
in an eight-hour day. (165.) In short, the gravamen of Rice’s argument appears to be that his
diagnosis of polyneuropathy, alone, suffices to establish disability. As courts have recognized,
however, a “medical diagnosis [by itself] does not establish a disability.” Jordan v. Northrop
Grumman Corp., 370 F.3d 869, 880 (9th Cir. 2004), overruled on other grounds by Abatie v. Alta
Health & Life Ins. Co., 458 F.3d 955, 969 (9th Cir. 2006). Instead, Rice was required to
demonstrate that his medical condition precluded him from working any occupation. See Herring
v. Aetna Life Ins. Co., 898 F. Supp. 2d 1313, 1317 (S.D. Fla. 2012). In this regard, Sun Life was not
required to accept Rice’s subjective complaints of pain, which were not supported by the objective
medical evidence in the record.
Rice contends that the Court should reverse Sun Life’s determination because Sixth Circuit
precedent favors the opinions of the claimant’s treating physicians over the opinions of the plan
administrator’s hired consultants who merely perform a “cold” review of the record. This
contention, however, is not entirely accurate. A plan administrator is not required to defer to a
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treating physician’s opinion, see Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834, 123
S. Ct. 1965, 1972 (2003), but it must give reasons for adopting an alternative opinion. See Evans
v. UnumProvident Corp., 434 F.3d 866, 877 (6th Cir. 2006). While in some cases the Sixth Circuit
has criticized the decisions of plan administrators to opt for file reviews in lieu of physical
examinations, see, e.g., Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 621 (6th Cir. 2006); Kalish v.
Liberty Mut./Liberty Life Assurance Co. of Boston, 419 F.3d 501, 509 (6th Cir. 2005); Calvert v.
Firstar Fin., Inc., 409 F.3d 286, 295 (6th Cir. 2008), it has also noted that there is “nothing
inherently objectionable about a file review by a qualified physician in the context of a benefits
determination.” Calvert, 409 F.3d at 296. Whether a plan administrator’s reliance on a file review
should be rejected depends on the particular circumstances of the case. The Sixth Circuit “has found
fault with file-only reviews in situations where the file reviewer concludes that the claimant is not
credible without having actually examined him or her,” or “when the plan administrator, without
any reasoning, credits the file reviewer’s opinion over that of a treating physician.” Judge v. Metro.
Life Ins. Co., 710 F.3d 651, 663 (6th Cir. 2013).
In the instant case, Sun Life did not abuse its discretion by accepting the opinions of Drs.
Ayyar, Harrell, and Chemaly, all of whom concluded that Rice had no impairment that precluded
him from performing a sedentary job. In rendering their opinions, neither Dr. Ayyar nor Dr.
Chemaly—who conducted file-only reviews—purported to assess Rice’s credibility. Rather, both
doctors simply noted that Rice’s subjective complaints of pain were not supported by objective
evidence. As for Dr. Harrell, he actually examined Rice and concluded, based on his own
observations and his review of the records, that Rice’s claim that sitting exacerbated his condition
was unsupported and that Rice was otherwise able to engage in activity consistent with sedentary
work. Moreover, Sun Life gave adequate reasons for accepting the opinions of its consulting
physicians. And, although Dr. Carlson repeatedly certified that Rice was disabled, Dr. Carlson’s
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statement that Rice was always capable of performing sedentary work undermined his conclusion
that Rice was disabled.
B.
Sun Life’s Inherent Conflict of Interest Provides No Basis for Reversal
In applying the arbitrary and capricious standard, a court must consider and evaluate
potential conflicts of interest that may affect the plan administrator’s decision. See Glenn v.
MetLife, 461 F.3d 660, 666 (6th Cir. 2006), aff’d 554 U.S. 105, 128 S. Ct. 2343 (2008). Sun Life
has a conflict of interest because it both reviews and pays claims. See id. A conflict of interest does
not change the standard of review, but is simply one consideration a court weighs in applying the
arbitrary and capricious standard. Smith v. Continental Cas. Co., 450 F.3d 253, 260 (6th Cir. 2006).
A conflict of interest carries more than only some weight, however, when there is “significant
evidence in the record that the insurer was motivated by self-interest, and the plaintiff bears the
burden to show that a significant conflict was present.” Id. For example, a court may accord a
conflict of interest greater weight where there is evidence that “an insurance company administrator
has a history of biased claims administration.” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117, 128
S. Ct. 2343, 2351 (2008). A court should give the conflict of interest factor more weight when “the
claimant offers more than conclusory allegations of bias.” Judge, 710 F.3d at 664 (internal quotation
marks omitted).
In this case, Rice raises Sun Life’s conflict of interest but fails to offer anything of substance
to justify according this factor more than minimal weight. The record shows that Sun Life fully
considered Rice’s medical evidence, conducted a thorough review, including an in-person
examination, and gave good reasons for denying Rice’s claim.
C.
The Award of SSD Benefits Does Not Preclude Sun Life’s Denial of Benefits
“A determination that a person meets the Social Security Administration’s . . . uniform
standards for disability benefits does not make her automatically entitled to benefits under an ERISA
13
plan, since the plan’s disability criteria may differ from the SSA’s criteria.” Allen v. Life Ins. Co.
of Am., 504 F. App’x 435, 439 (6th Cir. 2012) (citing Whitaker v. Hartford Life & Accident Ins. Co.,
404 F.3d 947, 949 (6th Cir. 2005)). However, the Sixth Circuit has held that
if the plan administrator (1) encourages the applicant to apply for Social Security
disability benefits; (2) financially benefits from the applicant’s receipt of Social
Security; and then (3) fails to explain why it is taking a position different from the
SSA on a question of disability, the reviewing court should weigh this in favor of a
finding that the decision was arbitrary or capricious.
Bennett v. Kemper Nat’l Servs., Inc., 514 F.3d 547, 554 (6th Cir. 2008) (citing Glenn, 461 F.3d at
669). Thus, a plan administrator’s failure to explain a decision contrary to an SSA decision may be
indicative of an arbitrary and capricious determination. Bennett, 514 F.3d at 553 n.2 (stating that
“mere mention of the decision is not the same as a discussion about why the administrator reached
a different conclusion from the SSA”).
In the instant case, although Sun Life apparently encouraged Rice to apply for SSD benefits
and financially benefitted from the award, Sun Life did not arbitrarily ignore the award, but instead
offered an adequate explanation for reaching a different result. That is, Sun Life noted that the
Policy’s conditions for an award of LTD benefits were not necessarily consistent with those for
receiving SSD benefits, and the SSA did not have the same information Sun Life had before it at the
time it made its decision to deny LTD benefits.
III. CONCLUSION
For the foregoing reasons, the Court will grant Sun Life’s motion for judgment on the
administrative record and deny Rice’s motion for judgment on the administrative record.
An Order consistent with this Opinion will be entered.
Dated: January 2, 2014
/s/ Gordon J. Quist
GORDON J. QUIST
UNITED STATES DISTRICT JUDGE
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