Petrusich v. UNUM Life Insurance Company of America
Filing
55
OPINION & ORDER: The Court GRANTS Petrusich's Motion 29 for Summary Judgement, DENIES Unum's Motion 37 for Summary Judgment, and ORDERS judgment in favor of Petrusich for an award of benefits. The Court further DIRECTS the parties to confer and to submit to the Court a form of judgment to be filed no later than December 6, 2013. See 29-page opinion & order attached. Signed on 11/22/2013 by Judge Anna J. Brown. (mr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
NANCY PETRUSICH,
3:12-cv-00779-BR
Plaintiff,
OPINION AND ORDER
v.
UNUM LIFE INSURANCE COMPANY
OF AMERICA,
Defendant.
MEGAN E. GLOR
JOHN C. SHAW
Megan E. Glor, Attorneys at Law PC
621 S.W. Morrison
Suite 900
Portland, OR 97205
(503) 223-7400
Attorneys for Plaintiffs
WILLIAM T. PATTON
Lane Powell, PC
601 S.W. Second Avenue
Suite 2100
Portland, OR 97204-3158
(503) 778-2100
Attorneys for Defendant
1 - OPINION AND ORDER
BROWN, Judge.
This matter comes before the Court on Plaintiff Nancy
Petrusich’s Motion (#29) for Summary Judgment and Defendant Unum
Life Insurance Company’s Motion (#37) for Summary Judgment.
The
parties filed under seal the Stipulated Administrative Record
(AR)(#19).
The Court heard oral argument on August 22, 2013.
At the
conclusion of oral argument the Court requested the parties to
submit additional briefing as to (1) which party has the burden
to develop the record at the administrative level and (2) the
scope of the Court’s authority to remand to the plan
administrator a case brought under the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq.
The
parties filed their supplemental briefs on September 9, 2013, and
the Court took the Motions for Summary Judgment under advisement.
For the reasons that follow, the Court GRANTS Petrusich’s
Motion (#29) for Summary Judgment and DENIES Unum’s Motion (#37)
for Summary Judgment.
BACKGROUND
I.
Petrusich’s Claims
Petrusich asserts a claim against Unum under ERISA.
Pursuant to 29 U.S.C. § 1332(a)(1)(B), Petrusich seeks to recover
from Unum unpaid Long Term Disability (LTD) benefits under the
2 - OPINION AND ORDER
LTD Plan purchased by CRESA Partners, Petrusich’s former
employer.
II.
Pertinent Facts
The following facts are undisputed unless otherwise noted:
Petrusich was employed by CRESA Partners as a principal
project manager.
On approximately April 18, 2011, Petrusich left
work due to an alleged disability.
Petrusich was diagnosed with,
among other things, anxiety, depression, adjustment disorder,
delayed-onset post-traumatic stress disorder (PTSD), normacelmic
hyperparathyroidism, and osteopenia.
On approximately May 10,
2011, Petrusich submitted an application to Unum for LTD benefits
pursuant to the Plan.
A.
The Plan
The Plan defines “disability” as:
You are disabled when Unum determines that:
– You are limited from performing the
material and substantial duties of your
regular occupation due to your sickness
or injury; and
– You have a 20% or more loss in your
indexed monthly earnings due to the same
sickness or injury.
* * *
You must be under the regular care of a
physician in order to be considered
disabled.
AR at 140 (emphasis in original).
3 - OPINION AND ORDER
“Regular occupation” is defined in the Plan as “the
occupation you are routinely performing when your disability
begins.
Unum will look at your occupation as it is normally
performed in the national economy, instead of how the work tasks
are performed for a specific employer or at a specific location.”
AR at 157.
The Plan contains a 90-day elimination period, which
is the length of time that a claimant must be disabled before
he/she is eligible to receive benefits.
AR at 140.
The Certificate Section of the Plan provides:
“When making
a benefit determination under the policy, Unum has discretionary
authority to determine your eligibility for benefits and to
interpret the terms and provisions of the policy.”
AR at 136.
The Plan also has a discretionary clause that provides:
The Plan, acting through the Plan
Administrator, delegates to Unum and its
affiliate Unum group discretionary authority
to make benefit determinations under the
Plan . . . . Benefit determinations include
determining eligibility for benefits and the
amount of any benefits, resolving factual
disputes, and interpreting and enforcing the
provisions of the Plan. All benefit
determinations must be reasonable and based
on the terms of the Plan and the facts and
circumstances of each claim.
Once you are deemed to have exhausted your
appeal rights under the Plan, you have the
right to seek court review under Section
502(a) of ERISA of any benefit determinations
with which you disagree. The court will
determine the standard of review it will
apply in evaluating those decisions.
AR at 164.
4 - OPINION AND ORDER
B.
Petrusich’s Application for LTD Benefits
In her May 10, 2011, application, Petrusich and CRESA
Partners identified her duties as follows:
(1) manage, plan, and
coordinate activities to ensure that project goals are
accomplished within the prescribed timeframe and funding
parameters; (2) review project proposals to determine timeframe,
funding limitations, and allotment of resources; (3) establish
work plan and staffing for each project phase; (4) in larger
organizations, may have the responsibility of managing
supervisors assigned to projects; (5) confer with project staff
to outline work plan and assign duties, responsibilities, and
authority; (6) may manage subcontractors and their workers; (7)
direct and coordinate project personnel to ensure that project
progresses on schedule and within budget;
(8) review status
reports and modify schedules; (9) prepare reports for management
and clients; (10) assist clients, including real-estate agents
and brokers, in solving their real-estate needs in a specific
area such as listing, selling, leasing, or appraisal of
commercial or residential property;
(11) research, analyze,
market, or negotiate the lease or sale of real estate.
AR at 61-
62, 338-39, 871-73.
C.
Unum’s Denial of Plaintiff’s Application
In a September 28, 2011 letter, Unum denied Petrusich’s
claim for LTD benefits.
5 - OPINION AND ORDER
Unum advised Petrusich in the denial
letter that:
“Your symptoms appeared to be in the mild to
moderate range given that you have not required the use of
psychotropic medications . . . .
The paucity of notes and lack
of medications suggests that your symptoms were not that
pervasive and could be monitored concurrent with employment.”
AR at 691.
Unum concluded the medical evidence did not support
Petrusich’s claim of an impairing disability of a psychiatric
nature after four to six weeks from the time Petrusich stopped
working on April 18, 2011.
According to Unum, therefore,
Petrusich did not meet the 90-day elimination period.
AR at 691-
92.
On October 10, 2011, Petrusich submitted to Unum a prelitigation appeal of Unum’s decision denying her LTD claim.
In a
January 31, 2012, letter, Unum informed Petrusich that it denied
her pre-litigation appeal and affirmed its decision denying her
LTD claim.
In that letter Unum noted even though Petrusich’s
doctors opined she was not well enough to return to work, Unum’s
“psychiatrist review concluded that the medical evidence did not
support that [Petrusich] was impaired enough from a psychiatric
standpoint to be unable to work.”
AR at 899-900.
Unum stated in
the letter that:
The psychiatrist review concluded that the
medical information showed you had a job
specific conflict and you chose not to return
to your regular occupation. The notes
demonstrated that you were able to function
in recreational and personal activities and
6 - OPINION AND ORDER
are able to go on a month-long trip to New
Zealand. You indicated you were having
cognitive difficulties but mental status
examinations were not consistent with severe
and pervasive anxiety or marked cognitive
impairment.
AR 899.
If Unum had approved her claim, Petrusich's gross monthly
LTD benefit under the Plan would have been $4,494.68 reduced by
any deductible sources of income.
STANDARDS
I.
Summary Judgment in ERISA Cases
Although this matter is before the Court on cross-motions
for summary judgment, the usual summary-judgment standard under
Federal Rule of Civil Procedure 56 is not the appropriate
standard in an ERISA action.
When reviewing a benefit plan’s
decision to deny benefits, “a motion for summary judgment is
merely the conduit to bring the legal question before the
district court and the usual tests of summary judgment, such as
whether a genuine dispute of material fact exists, do not apply.”
Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 1999).
II.
Standard of Review
Review of an ERISA plan administrator’s decision to grant or
to deny ERISA benefits is reviewed de novo.
Salomaa v. Honda
Long Term Disability Plan, 642 F.3d 666, 673 (9th Cir. 2011).
7 - OPINION AND ORDER
See also Kearney v. Standard Ins. Co., 175 F.3d 1085, 1095 (9th
Cir. 1999).
A plan may be subject to a more lenient standard of
review, however, if the plan “unambiguously gives the
administrator discretion to determine eligibility.”
F.3d at 673.
Salomaa, 642
See also Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 115 (1989).
Even when a plan provides an unambiguous grant of discretion
to the administrator, a heightened standard may be required
because of the administrator’s conflict of interest.
642 F.3d at 673.
Salomaa,
The Supreme Court has held a conflict of
interest should be considered “as a factor in determining whether
the plan administrator has abused its discretion.”
Metropolitan
Life Ins. Co. V. Glenn, 554 U.S. 105, 108 (2008)(citing
Firestone, 489 U.S. at 115).
An apparent conflict is present
when a plan administrator is responsible for both funding and
paying claims.
F.3d at 674.
Glenn, 554 U.S. at 108.
See also Salomaa, 642
The weight of this factor depends on the likelihood
that the conflict impacted the administrator’s decisionmaking.
Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 929 (9th Cir.
2012).
Even when a conflict of interest exists, “a deferential
standard of review remains appropriate.”
674.
Salomaa, 642 F.3d at
In other words, a “plan administrator’s interpretation of
the plan will not be disturbed if reasonable” even when a
8 - OPINION AND ORDER
conflict of interest exists.
Id. at 675 (citing Conkright v.
Frommert, 130 S. Ct. 1640, 1651 (2010)).
The reasonableness of a plan administrator’s decision to
deny benefits must be viewed with skepticism, however, when a
conflict of interest exists.
Salomaa, 642 F.3d at 676.
To
determine the reasonableness of the plan administrator’s
decision, the Ninth Circuit has adopted a modified abuse-ofdiscretion standard.
See id.
The court must consider “whether
application of a correct legal standard was ‘(1) illogical, (2)
implausible, or (3) without support in inferences that may be
drawn from the facts in the record.’”
Id. (quoting U.S. v.
Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc)).
DISCUSSION
I.
Standard of Review in This Matter
As noted, the presence of a discretionary clause in a plan
generally requires review for an abuse of discretion.
Here it is
undisputed that the Plan grants the requisite discretion to the
Plan Administrator.
Petrusich argues Unum’s discretionary
clause, however, violates the Oregon Insurance Code (OIC), Or.
Rev. Stat. § 742.005, because the OIC does not permit
discretionary clauses in insurance policies, and, therefore, the
proper standard of review is de novo.
In the alternative,
Petrusich argues the Court should apply heightened scrutiny
9 - OPINION AND ORDER
because Unum’s structural conflict of interest1 resulted in a
breach of Unum’s fiduciary duty to Petrusich.
The Court concludes, however, that it need not determine
whether a de novo or a heightened abuse-of-discretion standard of
review is warranted in this case.
Viewing the facts in the light
most favorable to Unum, the Court concludes that, even under a
deferential abuse-of-discretion standard, Unum’s evaluation of
the record on which it based its denial was a cursory,
superficial paper review.
As discussed below, the insufficiency
of Unum’s review is evidenced by the numerous errors and
misstatements that Unum’s reviewing physician made when citing to
the record, Unum’s disregard of evidence in the record that
supports Petrusich’s disability, and Unum’s failure to assess
Petrusich’s condition in the context of her ability to perform
her position.
Accordingly, the Court concludes even under the most
deferential review (and, therefore, under either standard of
review) the record does not support Unum’s denial of Petrusich’s
claim.
II.
Proof of Petrusich’s Disability
“Plaintiff bears the burden to establish that she is
disabled and, therefore, is entitled to benefits.”
1
Torres v.
The parties do not dispute Unum has a structural conflict
of interest because it acts as both the funding source and the
Plan administrator. See Salomaa, 642 F.3d at 674.
10 - OPINION AND ORDER
Reliance Std. Life Ins. Co., 551 F. Supp. 2d 1221, 1228 (D. Or.
2008), rev’d on other grounds, 319 Fed. App’x 602 (9th Cir.
2009).
Here the Plan explicitly required Petrusich to provide proof
of her alleged disability by showing, among other things, that
she was under the regular care of a physician, the date her
disability began, the cause of her disability, and the extent of
her disability (including restrictions and limitations preventing
her from performing her regular occupation).
AR at 131.
Petrusich asserts she met her burden because she provided her
medical records and physicians’ statements to Unum, and those
records proved from the time she left work on April 19, 2011, she
was “limited from performing the material and substantial duties
of [her] regular occupation due to sickness” and, therefore, was
disabled under the terms of the Plan.
See AR at 140.
The Court
agrees.
A.
Petrusich’s Treating Physicians
The record reflects Petrusich’s treating physicians
confirmed her disability at the time she left work in April 2011
through the 90-day elimination period necessary to qualify as
“disabled” under the Plan.
1.
Victorya Khary, M.D.
On April 26, 2011, Petrusich’s internist, Victorya
Khary, M.D., gave Petrusich a primary diagnosis of anxiety and
11 - OPINION AND ORDER
secondary diagnoses of depression/insomnia and possible hyperparathyroidism.
Dr. Khary advised Petrusich to stop working.
AR
at 69-70.
2.
Leasia Cleary, L.C.S.W.
Petrusich’s therapist, Leasia Cleary, L.C.S.W., treated
Plaintiff from April 26, 2011, through December 20, 2011.
534-43, 821-59.
AR at
On April 27, 2011, Dr. Cleary gave Petrusich a
primary diagnosis of “Adjustment Disorder w/ Mixed anxiety and
Depressed mood” and noted:
“[A]nxiety and depression are greatly
impacting sleep and concentration.”
AR at 72.
In correspondence with Unum, Cleary repeatedly opined
Plaintiff was not fit to return to work.
Dr. Cleary noted in a
July 23, 2011, letter to Unum that she was treating Petrusich for
“309.81 PTSD” and opined Petrusich’s symptoms of “intense
anxiety, hypervigilance, and depressive symptoms” precluded
Petrusich from working “in such a high stress, triggering
environment.”
AR at 399.
Dr. Cleary noted Petrusich’s
“inability to organize her thoughts, concentrate on one task, and
her intense hypervigilance would prevent her from doing her work
effectively.”
Id.
Dr. Cleary also stated Petrusich “is tearful
often, and is having some vegetative signs of depression that are
impacting her sleep, and her self-care.”
Id.
In a September 1, 2011, letter to Unum, Dr. Cleary
again explained Petrusich was being treated for “309.81 Post-
12 - OPINION AND ORDER
Traumatic Stress Disorder.”
Dr. Cleary noted Petrusich “often
speaks rapidly, is most frequently on the verge of tears . . . .
At present, therapy is focusing on helping [Petrusich] manage her
triggers, and improve her over-all [sic] functioning.
Nancy
should not go back to the stressful work environment in [sic]
which she left.”
AR at 561-62.
In December 2011 Dr. Cleary confirmed Petrusich’s
continuing disability and stated:
“[Petrusich] will not be able
to return to her past employment, and is also unable to return to
the same type of high profile, demanding position.
She simply
would not be able to handle that level of stress, or emotional
triggers . . . .
[N]ot much has changed other than [Petrusich’s]
improved ability to cope with her symptoms.”
3.
AR at 811.
Cheryn Grant, D.O.
Petrusich’s psychiatrist, Cheryn Grant, D.O.,2 saw
Petrusich for monthly treatment between June 2011 and November
2011 and confirmed Plaintiff’s disability.
86.
AR at 484, 651, 766-
On June 22, 2011, Dr. Grant gave Plaintiff a primary
diagnosis of “PTSD, delayed onset,” an Axis III diagnosis of
hyperparathyroidism, and a diagnosis of “work family, legal
and memories of past trauma” on Axis IV.
AR at 329.
Dr. Grant
opined in an August 28, 2011, letter to Unum that Plaintiff met
2
Dr. Grant is “Board Certified in Adult Psychiatry and in
Child & Adolescent Psychiatry by the American Board of Psychiatry
& Neurology.” AR at 366.
13 - OPINION AND ORDER
the “PTSD criteria” and could not perform her regular work
because “[h]er job includes interacting with people, making major
contract decisions, and planning and negotiating contracts with
multiple agencies.
She is unable to perform these tasks as she
can’t organize her thoughts coherently under stress and is so
emotionally fragile that the least amount of pressure causes her
to burst into tears.”
AR at 484.
In September 2011 Dr. Grant responded “yes” to an
inquiry from Unum’s reviewing physician, Kevin Hayes, M.D., as to
whether Petrusich had an impairing psychiatric condition.
AR at
651.
During the appeal process in December 2011, Dr. Grant
told Unum’s reviewing physician, Peter Brown, M.D., that she did
“not believe [Petrusich] would be able to manage the ordinary
day-to-day stressors of work in an appropriate manner.”
840.
AR at
In response to the question “How are you measuring progress
and the ability to return to work?,” Dr. Grant responded:
“I
would assume [Petrusich] is able to [return to work] when she
doesn’t need to check with several people to make a simple
decision – needs reassurance it’s okay.
Also when she no longer
cries for no reason & her voice stops quivering while talking.”
AR at 652.
4.
Priya Krishnamurthy, M.D.
In November 2011 Petrusich’s endocrinologist, Priya
14 - OPINION AND ORDER
Krishnamurthy, M.D., confirmed Petrusich’s Graves disease
exacerbated her psychological symptoms.
AR at 796.
Dr. Krishnamurthy noted Petrusich’s main problem was “work
related stress induced depression and anxiety” that “resulted in
the escalation of her psychological issues including PTSD which
reduced her from being a highly[-]productive individual to
someone who has had to take leave from work.”
Dr. Krishnamuthy added:
Id.
“There is no question that the
impairment of her cognitive function and depression/PTSD were
contributed to by the Graves disease which is [sic] turn was
triggered to a significant degree by her work[-]related
psychological stress.”
B.
Id.
Petrusich’s Employer
In addition to her physicians’ opinions that she could not
perform her job, on at least three occasions CRESA Partners told
Unum that Petrusich could no longer perform her job.
191, 485, 493-94.
See AR at
For example, in an August 29, 2011, letter to
Unum, Craig Reinhart, CRESA Partners’ Managing Partner, stated:
“Nancy was and I believe is in no condition to work in corporate
real estate . . . .
industry.”
The current Nancy cannot function in our
AR at 493.
Based on its review of the medical evidence in this record,
the Court concludes Petrusich sufficiently supported her claim of
disability.
The record reflects at or around the time that
15 - OPINION AND ORDER
Petrusish left work in April 2011, she was diagnosed with, among
other things, anxiety, depression, and PTSD and she was being
treated through the Plan’s 90-day elimination period.
The record
shows Petrusich was under the regular care of several physicians
who all opined Petrusich’s symptoms were severe enough to be
considered disabilities and rendered her unable to perform the
specific tasks of her regular occupation.
This opinion was
supported by Petrusich’s employer, who agreed Petrusich could no
longer do her job.
III. Unum’s Review of Petrusich’s Claim
Although the insured carries the burden of showing she is
entitled to benefits, ERISA administrators have a fiduciary duty
to conduct an adequate investigation when considering a claim for
benefits.
Cady v. Hartford Life & Accidental Ins. Co., 930 F.
Supp. 2d 1216, 1226 (D. Idaho 2013)(citing Booton v. Lockheed
Med. Ben. Plan, 110 F.3d 1461, 1463 (9th Cir. 1997)).
See also
Rasenack v. AIG Life Ins. Co., 585 F.3d 1311, 1324 (10th Cir.
2009).
“This requires that the plan administrator engage in
‘meaningful dialogue’ with the beneficiary.
If the administrator
‘believes more information is needed to make a reasoned decision,
they must ask for it.’”
Cady, 930 F. Supp. 2d at 1226 (quoting
Booton, 110 F.3d at 1463).
A plan administrator may not “shut
[its] eyes to readily available information when the evidence in
the record suggests that the information might confirm the
16 - OPINION AND ORDER
beneficiary's theory of entitlement."
Rodgers v. Metropolitan
Life Ins. Co., 655 F. Supp. 2d 1081, 1087 (N.D. Cal.
2009)(citations omitted).
A.
Summary of Unum’s Review
On June 16, 2011, Louis Gallo, R.N., C.C.M., one of Unum’s
senior clinical consultants, reviewed Petrusich’s records and
concluded:
“None of the office visit notes from the claimant’s
providers . . . clearly demonstrate a level of impairment that
would impair the claimant for more than 4-6 weeks.”
AR at 310.
Kevin Hayes, M.D., a Unum medical consultant, also reviewed
Petrusich’s file and concluded Petrusich’s “psychiatric symptoms
would not be supported as impairing the 4-6 weeks from the time
she stopped working. . . .
Her symptoms appear to be in the mild
to moderate range given that she has not required the use of
psychotropic medications. . . .
[T]he paucity of notes and lack
of medications suggest that her symptoms are not that pervasive
and she could be monitored concurrent with employment.”
AR at
404.
In September 2011 after receiving updated records from
Petrusich’s physicians, Dr. Hayes confirmed his earlier opinion:
“The level of care is not commensurate with severe
psychopathology as certified by the [treatment] providers.
Furthermore, the claimant is demonstrating a significant level of
activity, which also suggests her symptoms are in the mild range
17 - OPINION AND ORDER
and not pervasively impairing.”
AR at 672.
Keith A. Caruso, M.D., an independent consulting physician,
was also hired by Unum to review Petrusich’s file.
Dr. Caruso concluded:
In July 2011
“In my opinion, the records do not reflect
the level of psychiatric impairment suggested by [Petrusich’s
attending physician], and therefore I concur with [Dr. Hayes].”
AR at 410.
Like Dr. Hayes, Dr. Caruso concluded the fact that
Petrusich was not taking medication was “inconsistent with the
treatment plan for a severe case of PTSD or another impairing
psychiatric condition.”
AR at 410.
After reviewing updated
medical records in September 2011, Dr. Hayes noted Petrusich’s
diagnoses of PTSD was sufficiently supported.
Nevertheless,
Dr. Hayes affirmed his earlier opinion because “the
contemporaneous [office visit notes did] not reflect the same
severity described in the treatment summaries.”
AR at 680.
Unum again reviewed Petrusich’s file on appeal.
As part of
the appeal process, Unum had two additional physicians, Peter
Brown, M.D., and Costas Lambrew, M.D., review Petrusich’s file.
Drs. Lambrew and Brown also concluded Petrusich was not disabled.
See AR 868-69.
B.
Unum’s Review Was Inadequate
1.
Unum’s Reviewing Physicians Misstated the Record
As noted, Dr. Hayes based his conclusion that Petrusich
was not disabled in part on her perceived “activity level.”
18 - OPINION AND ORDER
Dr. Hayes noted inaccurately that Petrusich was “involved in some
activities with an import business and construction of a
property” and had been “traveling to Hawaii on vacation.”
672.
AR at
As Petrusich points out, however, the only reference to an
import business in the record is a note from Dr. Cleary about
Petrusich’s anxiety after being in a crowded Asian import store.
AR at 570-71.
Furthermore, the only reference in the record to a
construction project is also in Dr. Cleary’s notes where she
noted Petrusich was in tears after being yelled at by a
construction worker in front of Dr. Cleary’s office building.
AR
at 570-72.
As for Dr. Hayes’s statement about a trip to Hawaii,
the record reflects Petrusich discussed with Dr. Cleary a trip to
Hawaii that triggered Petrusich’s memory of a sexual assault that
occurred when she was in her twenties.
See AR 604.
Petrusich
contends this trip occurred before she left work in April 2011.
Pl.’s Memo. at 35.
Thus, nothing in the record supports
Dr. Hayes’s conclusion that Petrusich took a trip to Hawaii after
her date of alleged disability.
Another misstatement made by Unum’s physicians and
again by Unum in its September 2011 denial letter is that
Petrusich “infrequently” attended psychotherapy.
672, 680, 691.
AR 404, 410,
The record, however, reflects Petrusich was
seeing Dr. Cleary weekly for therapy and was seeing Dr. Grant
19 - OPINION AND ORDER
“every few weeks for supportive therapy.”
AR 562, 671.
This
hardly qualifies as “infrequent.”
Unum concedes the statements about the import business
and construction project were inaccurate, but Unum contends those
misstatements are not material because it did not base its
decision on them.
case.
This, however, does not appear to be the
Dr. Hayes based his opinion in part on Petrusich’s
“activity level” and pointed out these inaccurate “activities.”
Dr. Hayes’s misstatements were then repeated verbatim in a
September 21, 2011, “final addendum review” by Denise
Chamberland, a lead disability-benefits specialist for Unum who
subsequently concluded Petrusich’s claim should be denied.
703.
AR at
In any event, the Court concludes these inaccurate
statements support the conclusion that Unum conducted a
superficial and cursory review rather than performing an adequate
investigation of Petrusich’s claim as required by law.
2.
Unum Failed to Investigate the Medication Issue
As noted, Unum based its denial of Petrusich’s claim in
part on the fact that she was not taking medication to manage her
condition.
AR at 691 (“[L]ack of medications suggests that your
symptoms were not that pervasive and could be monitored
concurrent with employment.”).
The record reflects, however, Petrusich’s refusal to
take medication was not because her symptoms were not severe
20 - OPINION AND ORDER
enough but because she believed she was highly sensitive to
medications.
See AR at 483, 562.
In fact, Dr. Grant wrote in
August 2011 that Petrusich’s condition was severe enough to
warrant her taking medications, but she “still doesn’t want them
because she feels they will make her ill.”
AR at 483-84.
Dr. Grant again wrote to Unum in September 2011 clarifying that
Petrusich’s refusal “to take medications is not the same as not
requiring psychotropic medication” and “[l]ack of medications is
due to her fear of them and not due to having few symptoms.”
AR
at 578-78.
The record also reflects Petrusich opted for
alternative therapies such as weekly therapy, yoga, and
meditation instead of medications.
Drs. Cleary and Grant
supported these therapies and noted Petrusich was benefitting
from them.
AR at 562, 841, 848.
Although Unum based its denial on the fact that
Petrusich was not taking medication, nothing in the record shows
Unum investigated her alleged sensitivity to medications.
In any
event, even if Petrusich were able to take medication, her
doctors clearly stated she would still not be able to return to
work.
The record does not reflect Unum looked into this issue,
and, therefore, the record does not support Unum’s conclusion
that Petrusich would have been able to return to work if she had
taken medication.
21 - OPINION AND ORDER
The Court concludes Unum’s disregard of the record and
its failure to look into this issue, particularly in light of its
conclusion that Petrusich was not disabled in part because she
was not taking medication, also supports the conclusion that Unum
did not perform an adequate investigation of Petrusich’s claim as
required by the law.
3.
Unum Did Not Order an Independent Medical
Examination
Petrusich also contends Unum abused its discretion
because it conducted only a “paper review” of her file and failed
to conduct an independent medical examination (IME).
A plan administrator is not required to examine the
claimant.
Kushner v. Lehigh Cement Co., 572 F. Supp. 2d 1182,
1192 (C.D. Cal. 2008)(“ERISA also does not require that an
insurer seek independent medical examinations.”).
Nevertheless,
one factor that courts consider when determining if a plan
administrator abused its discretion, particularly in cases where
the administrator has a conflict of interest, is whether the plan
administrator conducted only a paper review of the claimant’s
file.
Salomaa, 642 F.3d at 676 (“An insurance company may choose
to avoid an independent medical examination because of the risk
that the physicians it employs may conclude that the claimant is
entitled to benefits.
The skepticism we are required to apply
because of the plan's conflict of interests requires us to
consider this possibility in this case.”).
22 - OPINION AND ORDER
See also Montour v.
Hartford Life & Acc. Ins. Co., 588 F.3d 623, 630 (9th Cir.
2009)(“Other factors that frequently arise in the ERISA context
include the quality and quantity of the medical evidence, whether
the plan administrator subjected the claimant to an in-person
medical evaluation or relied instead on a paper review of the
claimant's existing medical records.”); Calvert v. Firstar Fin.,
Inc., 409 F.3d 286, 295 (6th Cir. 2005)(“We find that the failure
to conduct a physical examination . . . may, in some cases, raise
questions about the thoroughness and accuracy of the benefits
determination.”).
In Salomaa the claimant’s treating physicians opined he
was disabled.
The plan administrator conducted only a paper
review and did not have the claimant examined.
642 F.3d at 676
(“The only documents with an ‘M.D.’ on the signature line
concluding that he was not disabled were by the physicians the
insurance company paid to review his file.
claimant].”).
They never saw [the
The Ninth Circuit held the plan administrator
abused its discretion when it denied the claim in part as the
result of failing to have the claimant examined.
Id. at 676,
680-81.
As noted, it is undisputed that Unum has a structural
conflict of interest because it acts as both the funding source
and Plan Administrator.
It is also undisputed that Unum did not
conduct an IME of Petrusich even after Petrusich appealed Unum’s
23 - OPINION AND ORDER
initial denial.
stated:
In its final denial letter to Petrusich, Unum
“You have also made complaints of cognitive impairment,
however, there is no documentation of this and it appears you
have not completed any testing to substantiate this.”
AR at 692.
As noted, Unum concluded Petrusich’s symptoms were not disabling
as illustrated by her failure to take medication.
An independent
examination, however, could have confirmed or denied these
conclusions.
Despite the fact that its physicians disagreed with
Drs. Cleary and Grant (who both opined Petrusich was disabled and
could not return to work), Unum chose to rely exclusively on a
paper review of Petrusich’s file (which, as noted, was
inaccurate) rather than conduct an IME to support its reviewing
physicians’ conclusions.
Nevertheless, Unum contends it was not required to perform
an IME and that it was Petrusich’s burden to request an IME.
The
Court agrees that ERISA does not require a plan administrator to
conduct an IME.
This does not, however, mean there are not
circumstances under which a plan administrator should conduct an
IME.
Here Petrusich contended cognitive impairments were the
cause of her disability and rendered her unable to perform her
occupation.
The Court has concluded there was sufficient
evidence in the record to support Petrusich’s contentions,
including the opinions of her treating physicians.
Under the
circumstances, Unum had a fiduciary duty to engage in a
24 - OPINION AND ORDER
meaningful dialogue with Petrusich and to request an IME or
whatever additional evidence it deemed necessary to confirm or to
deny Petrusich’s assertion of cognitive impairment.
In light of
Unum’s structural conflict of interest, Plaintiff’s showing of
disability, the inaccuracies in Unum’s review of the record, and
the conflicting opinions between Petrusich’s treating physicians
and Unum’s reviewing physicians, the Court concludes Unum’s
failure to conduct an IME raises questions about the sufficiency
of Unum’s review and supports a conclusion that Unum did not
undertake the investigation of Petrusich’s claim that was legally
required under the circumstances.
4.
Unum Failed to Analyze Whether Petrusich Could
Perform Her Job
As noted, the Plan defines disability as meaning “You
are limited from performing the material and substantial duties
of your regular occupation due to your sickness or injury.”
AR
at 140 (emphasis in original).
Petrusich argues Unum abused its discretion by failing to
assess whether Petrusich's symptoms prevented her from performing
her job.
Petrusich relies on Heffernan v. Unum Life Ins. Co.,
101 Fed. App’x 99 (6th Cir. 2004) to support her position.
In
Heffernan Unum denied the claim on the basis that the claimant’s
“depression was stress-induced such that she could act as a
litigator in a low-stress environment, or alternatively that her
25 - OPINION AND ORDER
departure from her litigation position at [her former] law firm
was a voluntary life-style choice.”
The court disagreed.
[S]uggesting that a litigation attorney who
is prone to stress-induced mental illness
might be able to function in an employment
environment with less stress is akin to
observing that a tight-rope walker with
acrophobia would do well to avoid high
places. The mental status of both likely
would improve in the friendlier environments,
but finding work would be challenging.
Id. at 107.
The Court finds Heffernan analogous to this case and the
court's reasoning persuasive.
Although Unum concluded Petrusich
was not disabled under the terms of the Plan, there is nothing in
the record indicating that Unum conducted an analysis to
determine whether Petrusich’s condition prevented her from
performing the duties of her job.
Similar to Unum’s assessment
in Heffernan that the claimant left work because of a “life-style
choice,” here Unum attributed Petrusich’s decision to leave her
job to what it perceived as a “job[-]specific conflict.”
To
support its denial of her claim, Unum focused on the fact that
Petrusich had formed an LLC and was able to travel, to do yoga,
to meditate, and to participate in dragonboat racing.
AR 899
(“The notes demonstrated that you were able to function in
recreational and personal activities. . . .” and “[t]he
psychiatrist review concluded that the medical information showed
you had a
job[-]specific conflict and you chose not to
26 - OPINION AND ORDER
return to your regular occupation.”).
See also Def.’s Mem. at
41-42; Def.’s Reply Mem. at 5; AR at 868.
Unum did not, however,
assess whether Plaintiff’s symptoms prevented her from performing
the duties required in her high-stress occupation.
Unum’s failure to assess whether Petrusich was capable of
performing her job is particularly troubling given that, as
noted, Drs. Cleary and Grant specifically opined Petrusich was
unable to return to work due to her symptoms and the high-stress
nature of her job.
The Court concludes Unum’s failure to perform
this evaluation is further evidence that it abused its discretion
when it denied Petrusich’s claim for benefits.
Based on its review of the record, the Court concludes
Petrusich satisfied her burden to prove that she was disabled
under the Plan.
The Court further concludes that even under the
most deferential abuse-of-discretion standard of review, Unum’s
denial of Petrusich’s claim is not supported by the record:
Unum
performed a superficial and cursory review of Petrusich’s claim,
ignored evidence that supported Petrusich’s claim of disability,
and failed to undertake an adequate investigation of Petrusich’s
claim.
Accordingly, the Court concludes Unum abused its discretion
when it denied Petrusich’s claim.
IV.
Remand or Award of Benefits
“Remand to the plan administrator is appropriate where that
27 - OPINION AND ORDER
administrator has ‘construe[d] a plan provision erroneously’ and
therefore has ‘not yet had the opportunity of applying the
[p]lan, properly construed, to [a claimant's] application for
benefits.’” Canseco v. Constr. Laborers Pension Trust, 93 F.3d
600, 609 (9th Cir. 1996)(quoting Saffle v. Sierra Pac. Power Co.
Bargaining Unit Long Term Disability Income Plan, 85 F.3d 455,
461 (9th Cir. 1996).
In cases where the plan administrator has
abused its discretion when denying a claim for disability that
was supported by the record, however, courts have ordered payment
of benefits on the ground that the administrator should not be
given a second chance.
See, e.g., Cooper v. Life Ins. Co. Of No.
Amer., 486 F.3d 157, 172 (6th Cir. 2007)(“Plan administrators
should not be given two bites at the proverbial apple where the
claimant is clearly entitled to disability benefits.
They need
to properly and fairly evaluate the claim the first time
around.”).
In Fleet v. Independent Federal Credit Union the
district court stated:
If the procedure were to become routine, it would pose
a serious risk of simply allowing ‘Mulligans’ to sloppy
plan administrators -- at the expense of both the
courts and plan participants and beneficiaries . . . .
“It would be a terribly unfair and inefficient use of
judicial resources to continue remanding a case to [the
plan administrator] to dig up new evidence until it
found just the right support for its decision to deny
an employee her benefits.”
No. 1:04CV0507DFHTAB, 2005 WL 1183177, at *3 (S.D. Ind.
2005)(quoting Dabertin v. HCR Manor Care, Inc., 373 F.3d 822, 832
28 - OPINION AND ORDER
(7th Cir. 2004))
The situation here is not one in which the Plan
Administrator failed to apply the plan provisions properly.
Instead, as noted, even under the most deferential abuse-ofdiscretion standard of review, Unum’s denial of Petrusich’s claim
is the result of a superficial and cursory review of the record
and is unsupported by the record.
The Court, therefore, concludes it should not permit Unum to
have another “bite at the apple” and that an award of benefits is
appropriate.
CONCLUSION
For these reasons, the Court GRANTS Petrusich’s Motion (#29)
for Summary Judgement, DENIES Unum’s Motion (#37) for Summary
Judgment, and ORDERS judgment in favor of Petrusich for an award
of benefits.
The Court further DIRECTS the parties to confer and
to submit to the Court a form of judgment to be filed no later
than December 6, 2013.
IT IS SO ORDERED.
DATED this 22nd day of November, 2013.
/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
29 - OPINION AND ORDER
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