Kavanay v. Liberty Life Assurance Company of Boston

Filing 42

Memorandum Opinion and Order granting 17 MOTION for Summary Judgment filed by plaintiff, denying 19 MOTION for Summary Judgment filed by Liberty Life, as set out herein. Signed by District Judge Tom S. Lee on 12/3/12 (LWE) Modified on 12/3/2012 (LWE).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF MISSISSIPPI
JACKSON DIVISION
JOHN R. KAVANAY

PLAINTIFF

VS.

CIVIL ACTION NO. 3:11CV598TSL-MTP

LIBERTY LIFE ASSURANCE COMPANY
OF BOSTON

DEFENDANT

MEMORANDUM OPINION AND ORDER
This case arises out of the termination of plaintiff John R.
Kavanay’s long-term disability benefits under an insurance policy
issued by defendant Liberty Life Assurance Company of Boston
(Liberty) to plaintiff’s former employer Allstate Insurance
Company (Allstate).

Plaintiff brought this action under 29 U.S.C.

§ 1132(a)(1)(B), the civil enforcement section of the Employee
Retirement Income Security Act of 1974 (ERISA), alleging wrongful
termination of long-term disability benefits payable under
Liberty's policy.

The case is presently before the court on the

parties’ cross-motions for summary judgment.

The court, having

considered the memoranda of authorities submitted by the parties,
and the administrative record, concludes for reasons which follow
that Liberty’s motion should be denied and plaintiff’s motion
should be granted as set forth herein.
During his employment with Allstate as a Claim Service
Adjuster, plaintiff Kavanay was a participant in a group long-term
disability plan sponsored by Allstate.

The plan was funded by a

policy of insurance issued and administered by Liberty.

Under the

terms of the policy, a participant is eligible for long-term
disability benefits if during the initial twenty-four months of
the claim life, the participant suffers from an injury or sickness
that renders him “unable to perform the Material and Substantial
duties of his Own Occupation.”

“Own Occupation” is defined as the

occupation performed when the “Disability” began.

The plan

states, “For the purposes of determining disability under this
policy, Liberty will consider the Covered Person’s occupation as
it is normally performed in the national economy.”
On April 24, 2009, Kavanay sustained an injury to his knee
while climbing a ladder at work.

Claiming the injury rendered him

unable to return to his job, Kavanay initially filed a claim for
benefits under Allstate’s short-term disability (STD) benefit
plan, which was denied because Allstate’s STD plan did not cover
on-the-job injuries.

Eventually, on September 20, 2009, his claim

was converted to a claim for long-term disability (LTD) benefits.
An MRI taken a few days after plaintiff’s injury indicated a
“small horizontal tear of the medial meniscus and mild mucinous
degeneration of the anterior cruciate ligament (ACL) in his right
knee.”

Plaintiff underwent surgery by Dr. Theodore Jordan, M.D.

on June 29, 2009 to repair his ACL, which was followed by physical
therapy.

A post-operative MRI on September 4, 2009 reflected that

the ACL graft was intact, but the tear in the medial meniscus
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seemed more prominent than in the earlier MRI.

On September 26,

2009, Dr. Jordan completed an Assessment of Capacity in which he
reported that plaintiff was able to work with restrictions for,
among other things, climbing, squatting, kneeling, frequent
standing, walking, bending, pushing/pulling and lifting up to
thirty pounds and constant sitting.

On October 2, 2009, plaintiff

informed Liberty that he had been examined by Walter Shelton,
M.D., and that he was to have a second surgical repair on October
12, 2009, which Dr. Shelton’s office confirmed on October 7, 2009.
Based on this information, and specifically the fact that further
surgical intervention was required, Liberty approved plaintiff for
benefits and by letter of October 13, 2009, informed plaintiff
that he would be paid LTD benefits effective July 27, 2009.
However, on March 26, 2010, Liberty informed Kavanay by
letter that it was terminating his LTD benefits effective that
date because it had concluded that Kavanay no longer met the
policy definition of disability.

Liberty wrote that it had

determined, based on an occupational analysis conducted November
3, 2009, that Kavanay’s “own occupation” could be performed within
a sedentary category, and since the available medical evidence did
not support an impairment which would physically preclude Kavanay
from performing full-time sedentary work activities, he was no
longer disabled under the policy.

The medical evidence to which

Liberty alluded included the results of a March 11, 2010
3

independent medical examination by Robert S. Levine, M.D., who
determined, after reviewing plaintiff’s medical records and
contacting Dr. Shelton, that Kavanay should avoid climbing,
kneeling and crawling but could do a “desk job” that would allow
him to sit at a desk and use his upper extremities.
Where, as here, a plan governed by ERISA grants the
administrator “‘discretionary authority with respect to the
decision at issue,’” the court reviews a denial of benefits for
abuse of discretion.1

Corry v. Liberty Life Assurance Co. of

Bos., 499 F.3d 389, 397 (5th Cir. 2007) (quoting Vega v. Nat'l
Life Ins. Serv., Inc., 188 F.3d 287, 295 (5th Cir. 1999) (en
banc)).

The court “appl[ies] this deferential standard of review

even where (as here) the administrator is also the party obligated
to pay the benefits, although [the court] consider[s] any conflict
of interest as a factor in [its] review.”

Ewing v. Metropolitan

Life Ins. Co., 427 Fed. Appx. 380, 381-382, 2011 WL 2204797, 1 (5th
Cir. 2011) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105,
118, 128 S. Ct. 2343, 171 L. Ed. 2d 299 (2008)).

“If the decision

on eligibility is supported by substantial evidence and is not

1

The Liberty policy provides:
Liberty shall possess the authority, in its sole
discretion, to construe the terms of this policy and to
determine benefit eligibility hereunder. Liberty’s
decisions regarding construction of the terms of this
policy and benefit eligibility shall be conclusive and
binding.
4

erroneous as a matter of law, it will be upheld.
Inc., 121 F.3d 198, 201 (5th Cir. 1997).

Barhan v. Ry-Ron

An arbitrary decision “is

one made without a rational connection between the known facts and
the decision or between the found facts and the evidence.”

Dudley

v. Sedgwick Claims Mgmt. Servs. Inc., No. 11–11165, 2012 WL
5278919, 3 (5th Cir. 2012) (citations omitted).
The record reflects that in October 2010, Liberty assigned
plaintiff’s claim to a vocational consultant for an “own
occupation” analysis.

Using the U.S. Department of Labor’s

Dictionary of Occupational Titles (D.O.T.), the vocational
consultant determined that the job of Outside Adjuster at Allstate
is part of the occupation of Claims Examiner/Adjuster/
Investigator, and concluded that the most closely related D.O.T.
description was Claims Examiner, D.O.T. code 241.267-018, which,
she explained, is performed in two manners in the national
economy.

One, an Inside Claims Examiner/Adjustor/Investigator, is

“sitting at a desk using a computer and telephone in a typical
office setting,” and is sedentary.

The other is an Outside Claims

Examiner/Adjustor/Investigator, which falls in the light duty
category, with “[p]hysical demand requirements ... in excess of
those for sedentary Work[,]” including frequent standing and
walking.

The vocational consultant noted in her report,

According to the [Occupational Outlook Handbook] working
environments of claims adjusters, examiners and
examiners vary greatly. Most claims examiners employed
by life and health insurance companies work a standard
5

5-day, 40-hour work week in a typical office
environment. Many claims adjusters however often work
outside the office, inspecting catastrophic loss.
Adjusters who inspect damaged buildings must be wary of
potential hazards such as collapsed roofs and floors, as
well as weakened structures.
It is undisputed that Liberty terminated plaintiff’s LTD
benefits under the policy after finding that the medical evidence
did not prevent his performing sedentary work as an Inside Claims
Examiner;2 yet it is clear from the administrative record that
plaintiff was not employed as an Inside Claims Examiner but rather
as Outside Claims Examiner, investigating or inspecting
catastrophic property loss, i.e., damaged buildings.

In the

court’s opinion, even assuming Liberty’s conclusion that plaintiff
could perform sedentary work was rational based on the relevant
medical evidence,3 Liberty’s decision to use the D.O.T. category
of the sedentary Inside Claims Examiner/Adjustor/Investigator
2

Liberty asserts in its brief that, in fact, both the
inside sedentary and the outside light duty Claims Examiner
positions referenced in the occupational analysis as supported by
the Occupational Outlook Handbook would fall within the
restrictions noted by plaintiff’s treating physician. However,
Liberty terminated plaintiff’s LTD benefits because it found he
could perform sedentary work, and it is that decision which is
under review. In its denial letter, Liberty did reference the two
categories of claims examiners recognized in the D.O.T., but it
found only that plaintiff’s medical restrictions did not preclude
his performing the sedentary position of Inside Claims Examiner.
3

Plaintiff argues that Liberty’s conclusion that he could
perform sedentary work is an abuse of discretion because in
reaching that conclusion, Liberty considered only his knee injury
and limitations imposed therefrom, and it failed to consider
additional medical conditions, including a hip lesion, which
caused significant pain and precluded his sitting for long periods
of time.
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rather than the Outside Claims Examiner/Adjustor/Investigator
position as the basis for determining the physical requirements of
plaintiff’s occupation was an abuse of discretion.

In so

concluding, the court certainly recognizes that under the policy,
the standard for whether an insured is disabled from his “own
occupation” is determined by the duties of the position in the
national economy and not necessarily by the insured’s duties for
his particular employer.

However, the Fifth

Circuit has rejected

the argument that the specific tasks listed by a claimant’s own
employer are irrelevant to an “own occupation” analysis, noting
that “while the correct standard is the occupation in the general
economy and not the specific job for a specific employer, the
specific duties of the employee’s job, as described by the
employer, are relevant.”

See Burtch v. Hartford Life & Accident

Ins. Co., 314 Fed. Appx. 750, 2009 WL 714078, at 4

(5th Cir. 2009)

(citing Robinson v. Aetna Life Ins. Co., 443 F.3d 389 (5th Cir.
2006) (“Though her precise duties do not define her regular
occupation, in this case they well illustrate the duties of a
director of nursing at a small health care facility and nothing in
the record provides any basis for thinking that such a position at
a facility comparable to hers requires different duties.”).
Here, it is apparent that in selecting the sedentary position
of Inside Claims Examiner from the D.O.T. as establishing the
requirements of Kavanay’s “own occupation,” Liberty arbitrarily

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disregarded the nature of Kavanay’s position with Allstate and the
specific tasks he was required to perform as an Outside Claims
Adjuster.

Its consequent determination that Kavanay was not

disabled because he was not medically precluded from performing
the sedentary occupation of Inside Claims Examiner amounts to an
abuse of discretion and cannot stand.

It follows that Liberty’s

motion for summary judgment must be denied.
Plaintiff has filed his own motion for summary judgment, in
which he contends the vocational and medical evidence in the
administrative record establishes beyond reasonable dispute that
he was unable to perform the material and substantial duties of
the occupation of an Outside Claims Examiner - Catastrophic.

The

medical evidence establishes without contradiction from any source
that plaintiff was restricted from climbing, kneeling, squatting
and crawling.

The evidence in the administrative record also

reflects that plaintiff’s job with Allstate involved examining
roofs, attics, basements and collapsed buildings, and that persons
performing such jobs need to have “good flexibility, balance,
strength to carry equipment while safely walking and/or crawling.”
The nature of the job, as performed at Allstate, required a
substantial amount of squatting, bending, climbing ladders,
kneeling and climbing stairs – none of which plaintiff was able to
do.

8

The evidence in the administrative record which relates to
the requirements of the occupation of a catastrophic claims
examiner/adjuster/investigator, as the position is performed in
the national economy, suggests that the nature of the job, and
consequent physical demands of the job, as it is performed in the
national economy, are comparable to the position as it is
performed at Allstate since the position involves inspection of
damaged buildings, which cannot be done without the ability to
access all parts of the structure, including parts above and below
ground level, an ability which plaintiff lacks.4

The record lacks

substantial evidence to support a contrary conclusion and the
court therefore concludes that plaintiff is entitled to receive
LTD benefits for the “own occupation” disability period.5

His

motion for summary judgment will therefore be granted to the
extent it seeks an award of such benefits.6
4

There is certainly nothing to suggest that the position
as performed in the national economy is not comparable to the
position as performed at Allstate.
5

Plaintiff has moved to supplement the record to include
his recent notification of award of social security disability
benefits. Liberty has agreed that if the court determines that
the denial of benefits was an abuse of discretion, evidence of the
social security award is relevant to determine the amount of
setoff for social security benefits. Accordingly, the motion to
supplement the record to include the social security award is
granted.
6

Plaintiff purports to seek by his motion a judgment that
he is entitled to both “short-term” disability benefits – by which
he apparently means benefits for the 24-month “own occupation”
disability benefit period – and “long-term” disability benefits,
by which he apparently means benefits following the initial 249

Accordingly, based on the foregoing, it is ordered that
defendant’s motion for summary judgment is denied, and plaintiff’s
motion for summary judgment is granted as set forth herein.
SO ORDERED this 3rd day of December, 2012.

/s/ Tom S. Lee
UNITED STATES DISTRICT JUDGE

month disability period, during which benefits are payable under
the policy only if plaintiff is disabled from performing “any
occupation.” Alternatively, he seeks a judgment in his favor for
“own occupation” disability benefits and remand to the plan
administrator for consideration of his claim for “any occupation”
disability benefits. The court cannot conclude on summary
judgment that plaintiff is disabled from performing “any
occupation” and therefore plaintiff’s alternative request for
remand will be granted.
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