BALAS v. THE PNC FINANCIAL SERVICES GROUP, INC. AND AFFILIATES LONG TERM DISABILITY PLAN
Filing
64
MEMORANDUM OPINION on cross motions for summary judgment.Signed by Judge David S. Cercone on 2/29/12. (jmc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
KIMBERLY A. BALAS,
Plaintiff,
vs.
THE PNC FINANCIAL SERVICES
GROUP, INC. AND AFFILIATES,
LONG TERM DISABILITY PLAN,
Defendant.
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2:10cv249
Electronic Filing
MEMORANDUM OPINION
February 29, 2012
I.
INTRODUCTION
Plaintiff, Kimberly A. Balas (“Balas” or “Plaintiff”), filed a Complaint against
Defendant, the PNC Financial Services Group, Inc. and Affiliates Long Term Disability Plan
(the “Plan” or “Defendant”), alleging wrongful denial of long term disability (“LTD”) benefits
under the Plan pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. § 1132(a)(1)(B). The parties have filed cross-motions for summary
judgment, and the matters are now before the Court.
II.
STATEMENT OF THE CASE
Balas was employed by PNC as a Compliance Specialist from June 26, 1990, through
March 23, 2007. Plaintiff’s Statement of Undisputed Material Facts (“Pl. SUMF”) ¶¶ 1 &7;
Defendant’s Statement of Undisputed Material Facts (“Def. SUMF”) ¶ 1. The job responsibilities
of a PNC Compliance Specialist included coordination and oversight of the requirements of the
compliance program, including monitoring and reporting compliance with regard to the Bank
Secrecy Act. Def. SUMF ¶ 1. As an employee of PNC, Balas was a participant in the Plan. Pl.
SUMF ¶ 3; Def. SUMF ¶ 2.
The Plan provides full-time, salaried employees who are out of work for longer than
ninety (90) days, with LTD benefits. Def. SUMF ¶ 2. The Plan is a self-funded employee
welfare benefit plan, whose benefits are paid out of a separate trust established exclusively for
the benefit of the participants or beneficiaries. Def. SUMF ¶ 3. PNC is the Plan Administrator.
Def. SUMF ¶ 4. PNC and Sedgwick Claims Management Services, Inc. (“Sedgwick”) entered
into an Administrative Service Agreement (“Services Agreement”) under which PNC delegated
its discretionary authority to construe the terms of the Plan and determine eligibility for LTD
benefits under the Plan. Def. SUMF ¶ 6. Under the Services Agreement, Sedgwick was
conferred the discretion to evaluate and decide claims and any appeals of denied claims. Id.
Under the Plan, “Total Disability” and “Totally Disabled” means that “because of Injury
or Sickness”:
The [employee] cannot perform each of the material duties of his
or her regular occupation; and
After benefits have been paid for 24 months, the [employee]
cannot perform each of the material duties of any gainful
occupation for which he or she is reasonably fitted by training,
education or experience.
Administrative Record (“AR”) 9. PNC will pay a monthly LTD benefit after the “Elimination
Period” upon receiving proof that the employee is totally disabled due to sickness or injury and
the employee requires the regular attendance of a physician. AR 9-10. The LTD benefit will be
paid for the period of “Total Disability” if, upon request by PNC, the employee provides proof of
continued “Total Disability” and regular attendance of a physician. AR 10. LTD benefits cease
on the earliest of the date that Total Disability ceases, the date the employee fails to provide
2
proof of Total Disability, or the date the employee ceases employment with PNC. AR 10, 14 &
18.
On June 13, 2007, Balas submitted an “Employee Application for Benefits” seeking LTD
benefits in which she stated that she was unable to work due to extreme fatigue, mental
confusion and forgetfulness. AR 461. Balas listed her last day of work as March 23, 2007. Id. In
support of her application, Balas submitted a “Treating Physicians Statement” completed by
Monika Kassyk, M.D. (“Dr. Kassyk”). AR467-469. Dr. Kassyk listed Balas’ primary diagnosis
as chronic fatigue syndrome and memory loss. AR 467. Though Dr. Kassyk indicated that
Balas was unable to stay awake, needed frequent rests, and indicated that the date for release to
return to work “depended on final diagnosis,” Dr. Kassyk said Balas was released to return to
work without restriction. AR 469.
After review of Balas’ submissions, Sedgwick denied Balas’ request for LTD benefits by
letter dated August 30, 2007. AR 160-163. Specifically, Sedgwick found:
[I]nsufficient clinical medical evidence to support your inability to
perform each of the material duties of your own occupation as
Compliance Specialist throughout the elimination period.
Therefore, you are not eligible for LTD benefits . . .
AR 161. Balas appealed this initial denial by letter dated September 21, 2007, citing her
disability due to chronic fatigue syndrome. AR 159. On October 18, 2007, Sedgwick forwarded
Balas’ LTD claim file to Network Medical Review (“NMR”), an independent third-party, for
reviews of medical experts in the fields of Physical Medicine and Rehabilitation, Internal
Medicine, and Pulmonary Diseases. Def. SUMF ¶ 3. NMR then referred the LTD claim file to
Insurance Appeals, Ltd. (“Insurance Appeals”), an accredited review organization. Id.
Philip Jordan Marion, M.D., M.S., M.P.H. (“Dr. Marion”), who is board certified in both
Physical Medicine and Rehabilitation, and Pain Management, reviewed the disability claim file
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for Insurance Appeals. AR 180-183. Based on his review, Dr. Marion made the following
findings:
From a physical medicine and rehabilitation perspective, [Balas] is
not disabled from her unrestricted job as of 03/26/07.
The clinical findings consist primarily of her self-reported fatigue
complaints. This is not supported by any specific deficits via
physical examination or radiological studies. The patient remains
otherwise functionally independent.
The patient’s complaints of fatigue are clinically significant;
however, they are not supported by any specific underlying
objective impairment.
AR 181-182. As his rationale, Dr. Marion offered the following:
The patient had complaints of fatigue not associated with any
specific underlying objective findings via physical examinations or
radiological studies. She remains otherwise functionally
independent, ambulatory and not restricted from driving a motor
vehicle. From a physical medicine and rehabilitation perspective,
there remains no objective impairment to support any specific
inability to perform her regular unrestricted job . . .
AR 182.
Clayton T. Cowl, M.D., M.S. (“Dr. Cowl”), who is board certified in Internal Medicine,
Preventive Medicine/Occupational Medicine, and Pulmonary Diseases, reviewed the disability
claim file for Insurance Appeals. AR 184-186. Based on his review, Dr. Cowl made the
following findings:
Based on the medical information provided, [Balas] is not disabled
from her unrestricted job as of 03/26/07.
AR 185. Dr. Cowl offered the following rationale for his opinion:
There are no objective data provided that substantiates inability to
perform clerical sedentary work duties from a respiratory
perspective. This is supported by the fact that her pulmonary
function testing was normal and her primary care provider also
supports the fact that [Balas] would not be considered functionally
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impaired on a respiratory bass. Although, she was treated briefly
for brochitic symptoms and wheezing, these might be more
functional than infectious or asthmatic in nature. As such, it is the
opinion of the reviewer that [Balas] does not require
bronchodilation or inhaled corticosteroids based on the data
provided.
AR 186.
Michael Gross, M.D. (“Dr. Gross”), who is board certified in Internal Medicine and
Nephrology, also reviewed the disability claim file for Insurance Appeals. AR 187-189. Based
on his review, Dr. Gross made the following findings:
From an internal medicine standpoint, from the standpoint of
chronic fatigue syndrome . . . [Balas] would be disabled from her
regular job as of 03/26/07 to present.
The clinical findings in this case are related to chronic fatigue
syndrome with inability to stay up for more than 2 or 3 hours
before requiring a rest period. With this situation, the patient
cannot do any type of work.
AR 188-189. Dr. Gross offered the following rationale for his opinion:
This is a patient that carries diagnosis (sic) of chronic fatigue
syndrome, pulmonary issues, anemia with transfusion, joint pain
and depression. I am looking at this from an internal medicine
standpoint. From an internal medicine standpoint, from the
chronic fatigue syndrome and from the letter in the file dated
September 20, 2007 from Dr. Monika Kassyk, as well as my
conversation with Dr. Kassyk, [Balas] would not be able to
[perform] sedentary (sic) job due to her chronic fatigue syndrome.
From my discussion with the attending physician, the expected
appropriate length of disability is indefinite. In this case,
reevaluation would be appropriate every 3-6 months to reassess the
situation.
AR 189.
Based upon the review on appeal of Balas’ LTD claim file, Sedgwick approved her LTD
benefits on November 6, 2007, stating:
[T]he medical information contained sufficient clinical evidence to
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substantiate a disabling condition throughout the required waiting
period of March 26, 2007 through June 23, 2007 and as such, long
term disability benefits are approved from June 24, 2007 through
December 31, 2007.
AR 219.
On or about November 21, 2007, Balas informed Sedgwick that the Social Security
Administration (“SSA”) denied her request for Social Security Disability (“SSD”) benefits1.
Def. SUMF ¶ 45. Sedgwick then referred Balas to Allsup, Inc. (“Allsup”) to assist her in the
appeal of the SSA’s denial of her claim for SSD. Def. SUMF ¶ 46; Pl. SUMF ¶ 18; AR 32. After
her appeal, Balas was awarded SSD benefits on July 10, 2008, with an eligibility date of
September 1, 2007. Pl. SUMF ¶ 19. The Plan received an offset against the LTD benefits due
Balas in the amount of her SSD benefits. Pl. SUMF ¶ 20.
Balas began treating with Dr. Aldino Pierotti (“Dr. Pierotti”) at the Fibromyalgia &
Fatigue Center in January of 2008. Pl. SUMF ¶ 21. In February of 2008, Sedgwick contacted
Balas requesting updated information concerning her medical status. Def. SUMF ¶ 47. Balas
confirmed that she was still seeing Dr. Kassyk, and informed Sedgwick that her current
symptoms included joint stiffness and pain, but she was able to complete light housework, do
laundry and prepare meals. Id. In March of 2008, Sedgwick requested that Dr. Kassyk provide
Balas’ medical records from January 1, 2008, as well as information regarding her current
condition, restrictions or limitations, treatment and prognosis. Def. SUMF ¶ 48. In her response,
Dr. Kassyk indicated that Balas was totally disabled, she could not function or stay awake, and
the only treatment was “frequent rest.” AR 230.
In March of 2008, Sedgwick also contacted Dr. Pierotti and requested Balas’ medical
1
Pursuant to the Plan, Balas was obligated to apply for SSD benefits after five (5) months of
disability. AR 32.
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records as well as information regarding her current condition, restrictions and limitations,
treatment and prognosis. Def. SUMF ¶ 50. Dr. Pierotti indicated that Balas’ diagnosis included
chronic fatigue, hypothyroidism and adrenal insufficiency. AR 228. He stated that Balas was
unable to work because of lack of energy and stamina, but her prognosis to return to work was
extremely good. Id. On April 7, 2008, Dr. Pierotti provided the requested medical records which
consisted primarily of lab reports and notes from three (3) office visits. Def. SUMF ¶ 52.
Balas first saw Dr. Pierotti on January 10, 2008, with complaints of fatigue, brain fog,
poor sleep, stiffness, pain, a sore throat and chronic nasal/sinus problems. Def. SUMF ¶ 53. Dr.
Pierotti’s diagnosis was chronic fatigue/immune dysfunction syndrome, and he recommended a
treatment of antifungal therapy, back and muscle IV, sleep hygiene and a yeast diet. Id. Dr.
Pierotti also provided Balas with a detailed medication regimen in order to treat her issues with
sleep, energy, pain and infections. Def. SUMF ¶ 54. Results of blood tests performed on January
10, 2008, indicated that Balas’ immune system was impaired and she tested positive for certain
antibodies that could relate to flu-like fatigue. Def. SUMF ¶ 55.
In February 2008, Balas saw Dr. Pierotti and indicated that she was sleeping better, the
pain was better, and she had more energy. Def. SUMF ¶ 56. Balas complained of a sore throat
and concentration problems, but her physical examination was within normal limits. Id. When
Balas saw Dr. Pierotti in March of 2008, she complained of insomnia, pain, lack of energy and
poor concentration. Def. SUMF ¶ 57. Dr. Pierotti noted that Balas was “detoxing,” and
confirmed that her physical examination was within normal limits. Id. Balas submitted no other
records from Dr. Pierotti. Def. SUMF ¶ 58.
Balas continued to see Dr. Kassyk every two (2) to three (3) months, and continued to
complain of chronic fatigue and bronchial and/or sinus problems. Def. SUMF ¶¶ 70 & 71. Dr.
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Kassyk reported that Balas’ prognosis for a return to gainful employment was poor. Def. SUMF
¶ 70. In January, 2009, Balas reported that she was treating with Dr. Lauren Loya at the
Fibromyalgia & Fatigue Center. Def. SUMF ¶ 69. Dr. Kassyk provided addition medical records,
including lab reports and progress notes, to Sedgwick in February of 2009. Def. SUMF ¶ 71.
Balas’ lab results were normal except for a low iron reading, and her physical examinations were
normal. Id.
On or about February 24, 2009, Sedgwick sent Balas’ claim file to NMR for a third party
review. Def. SUMF ¶ 72. NMR sent the file to Elite Physicians, Ltd. (“Elite”) where it was
reviewed by D. Dennis Payne, M.D. (“Dr. Payne”), a physician board certified in Internal
Medicine and Rheumatology. Def. SUMF ¶ 72; Pl. SUMF ¶ 30. Dr. Payne discussed Balas’
case with Dr. Kassyk on March 5, 2009. AR 322. Dr. Kassyk informed Dr. Payne that Balas’
diagnosis included chronic fatigue syndrome, with fibromyalgia in association with anxiety, and
that she suffered cognitive problems, including confusion, forgetfulness and difficulty with
concentration. Id. Dr. Kassyk further indicated that there was no evidence of systemic
inflammatory disease and her examinations were unremarkable. Id.
Dr. Payne noted that the medical information submitted did not “detail the onset, pattern
and clinical course of her problem.” Id. Dr. Payne further noted that “there was no mention of
any cardiac, pulmonary, gastrointestinal, or neurological features that would be expected to be
producing restrictions and limitations on activities.” Id. The medical records were essentially
“normal,” without mention of joint damage, destruction, weakness, atrophy or synovitis, and
minimal mention of tender points. AR 323.
Based on this medical information, Dr. Payne found no evidence from a rheumatology
standpoint that any restrictions or limitations on activities existed in this case. Id. Dr. Payne’s
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specific rationale for his findings was as follows:
Following a careful and thorough review of the medical records in
this case, including the historical information, workup data,
examination findings, treatment data, and clinical course
information, there exists no objective or subjective information
that would support the presence of any restrictions or limitations
on activities. Therefore, from a rheumatology viewpoint, Ms.
Balas is expected to be capable of unrestrictive work.
AR 323. Finding that Balas had “failed to provide proof that [she] continue[d] to be totally
disabled as defined by the . . . PNC LTD plan”, Sedgwick informed Balas that her LTD benefits
were terminated effective March 1, 20092. AR 326.
On April 15, 2009, Balas appealed Sedgwick’s decision to terminate her LTD benefits.
Def. SUMF ¶ 77; Pl. SUMF ¶ 37. In support of her appeal, Balas provided a letter from Dr.
Loya dated April 7, 2009. AR 331-334. On or about April 30, 2009, Balas provided Sedgwick
with the records of her treatment at the Fibromyalgia & Fatigue Center from January 10, 2008,
through April 7, 2009. Def. SUMF ¶ 80. On or about May 15, 2009, Sedgwick sent Balas’ LTD
file to NMR for review. Def. SUMF ¶ 85. NMR then sent the file to Insurance Appeals where
the file and all documents submitted in support of the appeal were reviewed by Charles Brock,
M.D. (“Dr. Brock”) and Tanya C. Lumpkins, M.D. (“Dr. Lumpkins”). Def. SUMF ¶¶ 85 & 88.
Dr. Brock, who is board certified in both Neurology and Pain Management, reviewed the
medical records submitted and made the following findings:
From a pain management perspective, the available medical
records do not support disability from the ability to perform her
regular unrestricted occupation as of 03/01/09 to 6/22/09.
The available medical records indicate ongoing subjective
complaints of fatigue and memory loss. The available medical
2
Though Balas contends that the denial letter did not reference or discuss the opinions of Dr.
Loya, there record indicates that Dr. Loya’s records were not provided to Sedgwick until April of
2009, subsequent to Dr. Payne’s review and Sedgwick’s decision to terminate the LTD benefits.
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records do not indicate any focal abnormality neurologically or
demonstrate neuromuscular deficit by exam, and as such, does not
demonstrate objective evidence of inability to perform her
unrestricted occupation.
[T]he available medical records do not document any significant
neuromuscular deficits such as abnormal reflexes, muscle
weakness, loss of sensation, or radiculopathy. The available
medical records do not demonstrate any form Functional Capacity
Evaluation with demonstrated validity measures and do not
demonstrate an inability to perform the activities of vocation.
AR 418. Similarly, Dr. Lumpkins, who is board certified in Rheumatology and Internal
Medicine, opined that Balas was not disabled, finding:
The medical record fails to demonstrate objectively a
rheumatologic diagnosis of sufficient severity to preclude [Balas]
from performing the routine duties of a sedentary occupation as a
compliance specialist with PNC anti-money laundering position
for the dates in question.
It was noted by the attending physician from Fibromyalgia and
Fatigue Centers recommending that [Balas] is completely impaired
is based on the reported exhaustion and fatigue that [Balas] reports.
However, the sleep study was not included in the medical records
reviewed to ensure that [Balas] is not suffering from obstructive
sleep apnea. In addition [Balas’] workup to date is unrevealing
and does not support in any objective way that [Balas] has
significant cognitive impairment. There is no neuropsychological
testing that shows that the claimant’s cognition is sufficiently
impaired, and it is noted that [Balas] has not been restricted from
driving.
[Balas] has been diagnosed with chronic fatigue and fibromyalgia.
However, there is no objective data of impairment of her physical
function that would preclude [Balas] from performing the routine
duties of a sedentary occupation requiring her to sit six to eight
hours and stand and walk one to two hours each in an eight-hour
day. [Balas] has not been restricted from driving, and it is noted
that she has good days and bad days. A sleep study was not
included for review and [Balas] has not undergone a
neuropsychological evaluation to determine.
[The treating physician’s opinion that Balas is disabled] is based
on the self reported fatigue and decreased cognitive function that
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[Balas] states is present on a regular basis and the overall body
pain. The attending physicians do not have a specific finding that
supports the degree of impairment that [Balas] is stating. It is
noted that [Balas] has no evidence of sleep apnea and is reported to
have difficulty with REM sleep. However, the sleep study was not
included in the file for review.
AR 424-425. As her rationale, Dr. Lumpkins offered the following:
This is a female who carries the diagnoses of chronic fatigue and
fibromyalgia, who has had a fairly extensive rheumatologic
workup and imaging study, all of which are unremarkable. It was
noted that [Balas] has been previously exposed to EBV [Epstein
Barr Virus] infection but there is no evidence to support an acute
ongoing infection. [Balas] has self-reported fatigue and exhaustion
with decreased cognitive function, but there are no neuropsychic
evaluations to support that [Balas] is impaired and she has not been
restricted from driving. She is noted to be independent with her
activities of daily living and independent with ambulation. The
medical record fails to support a rheumatologic or internal
medicine diagnosis of sufficient severity to preclude the claimant
from performing the routine duties of a sedentary occupation.
AR 425.
On July 14, 2009, Sedgwick informed Balas that it was upholding its denial of her claim
for continued LTD benefits under the Plan. Def. SUMF ¶ 93; Pl. SUMF ¶ 54.
III.
LEGAL STANDARD FOR SUMMARY JUDGMENT
Pursuant to FED. R. CIV. P 56(c), summary judgment shall be granted when there are no
genuine issues of material fact in dispute and the movant is entitled to judgment as a matter of
law. To support denial of summary judgment, an issue of fact in dispute must be both genuine
and material, i.e., one upon which a reasonable fact finder could base a verdict for the
non-moving party and one which is essential to establishing the claim. Anderson v. Liberty
Lobby, 477 U.S. 242, 248 (1986). When considering a motion for summary judgment, the court
is not permitted to weigh the evidence or to make credibility determinations, but is limited to
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deciding whether there are any disputed issues and, if there are, whether they are both genuine
and material. Id. The court’s consideration of the facts must be in the light most favorable to the
party opposing summary judgment and all reasonable inferences from the facts must be drawn in
favor of that party as well. Whiteland Woods, L.P. v. Township of West Whiteland, 193 F.3d 177,
180 (3d Cir. 1999), Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir. 1987).
When the moving party has carried its burden under Rule 56(c), its opponent must do
more than simply show that there is some metaphysical doubt as to the material facts. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In the language of
the Rule, the nonmoving party must come forward with “specific facts showing that there is a
genuine issue for trial.” FED. R. CIV. P 56(e). Further, the nonmoving party cannot rely on
unsupported assertions, conclusory allegations, or mere suspicions in attempting to survive a
summary judgment motion. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir.1989)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The non-moving party must respond
Aby pointing to sufficient cognizable evidence to create material issues of fact concerning every
element as to which the non-moving party will bear the burden of proof at trial.@ Simpson v. Kay
Jewelers, Div. Of Sterling, Inc., 142 F. 3d 639, 643 n. 3 (3d Cir. 1998), quoting Fuentes v.
Perskie, 32 F.3d 759, 762 n.1 (3d Cir. 1994).
These rules apply with equal force to cross-motions for summary judgment. See
Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008). When confronted with crossmotions for summary judgment, as in this case, the Court considers each motion separately. See
Coolspring Stone Supply, Inc. v. Am. States Life Ins. Co., 10 F.3d 144, 150 (3d Cir. 1993) (noting
that concessions made for purposes of one party’s summary judgment motion do not carry over
into the court's separate consideration of opposing party’s motion).
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IV.
DISCUSSION
ERISA provides that a plan participant or beneficiary may bring a suit “to recover
benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan,
or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B).
The statute, however, does not specify a standard of review for an action brought pursuant to §
1132(a)(1)(B). Mitchell v. Eastman Kodak Co., 113 F.3d 433, 437 (3d Cir. 1997). The Supreme
Court addressed this issue and opined that “a denial of benefits challenged under § 1132(a)(1)(B)
is to be reviewed under a de novo standard 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 (1989). When the plan
affords the administrator with discretionary authority, courts must review the benefit decision for
an abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. at 115. The Court of
Appeals for the Third Circuit has referred to this standard of review as “arbitrary and capricious”
or “abuse of discretion.” Both standards of review are essentially identical and the Court views
and will use these terms as interchangeable. See Howley v. Mellon Fin. Corp., 625 F.3d 788, 793
n. 6 (3d Cir. 2010). The parties agree that the standard in this instance is arbitrary and capricious.
Under the arbitrary and capricious standard of review, the Court may overturn a decision
of the Plan administrator only if it is “without reason, unsupported by substantial evidence or
erroneous as a matter of law.” Abnathya v. Hoffmann-La Roche, Inc., 2 F.3d 40, 45 (3d Cir.
1993); see also Ellis v. Hartford Life and Accident Ins. Co., 594 F. Supp. 2d 564, 566 (E.D. Pa.
2009) (noting that a court applying an arbitrary and capricious standard of review is “not free to
substitute its judgment for that of the administrator”).
Because “benefits determinations arise in many different contexts and circumstances,”
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the factors to be considered from one case to the next are “varied and case-specific.” Estate of
Schwing v. Lilly Health Plan, 562 F.3d 522, 526 (3d Cir. 2009). “[A]ny one factor will act as a
tiebreaker when the other factors are closely balanced, the degree of closeness necessary
depending upon the tiebreaking factor’s inherent or case-specific importance.” Metropolitan Life
Insurance Co. v. Glenn, 554 U.S. 105, 117 (2008). The Court will consider all factors relevant to
determine whether PNC’s decision to deny Balas continuing LTD benefits was arbitrary and
capricious.
Balas contends that Sedgwick’s decision to deny her continuing LTD benefits was
arbitrary and capricious because the denial: (1) was based purely on a lack of objective findings;
(2) was in total disregard of the SSA’s determination that Balas was totally disabled; (3) failed to
provide any explanation for rejecting the opinions of the treating physicians; (4) reversed its
prior decision granting Balas LTD benefits even though her condition had not changed; and (5)
was based on opinions of reviewing physicians who had not been supplied with complete
medical records.
A.
Lack of Objective Findings
Balas’ diagnosis by two (2) treating physicians, Dr. Kassyk and Dr. Loya , is that she
suffers from chronic fatigue syndrome and fibromyalgia. These physicians further opined that
such conditions render Balas unable to perform the requirements of her job with PNC. The
Third Circuit has held that it is arbitrary and capricious to require objective medical evidence in
the context of a claim for long-term disability benefits as a result of chronic fatigue syndrome or
fibromyalgia. Mitchell v. Eastman Kodak Co., 113 F.3d 433, 442-443 (3d Cir. 1997) ( the
requirement of objective medical evidence to establish the etiology of chronic fatigue syndrome,
which is defined by the absence of objective medical evidence, is arbitrary and capricious, as it
14
creates an impossible hurdle for claimants.); Steele v. Boeing Co., 225 Fed. Appx. 71, 74-75 (3d
Cir. 2007) (finding that it was impermissible to require objective evidence for fibromyalgia, a
condition based on subjective complaints of pain and that cannot be proved objectively, and that
the effect of such requirement would be to eliminate arbitrarily and capriciously all disability
claims based on fibromyalgia.); see also Kuhn v. Prudential Ins. Co. of Am., 551 F. Supp. 2d
413, 427 (E.D. Pa. 2008) (“chronic fatigue syndrome cases are analogous to the situation
presented by fibromyalgia cases.”).
Defendant argues, however, that the discontinuation of Balas’ LTD benefits was not
based on a lack of a known etiology for either chronic fatigue syndrome or fibromyalgia, but was
based upon Balas’ failure to provide objective evidence that her condition limited her functional
capabilities such that she was disabled under the Plan. The distinction, therefore, is between
Sedgwick requiring objective proof that the Balas has the particular conditions diagnosed, with
requiring objective proof that such conditions render her unable to perform the functions of her
occupation. In Lamanna v. Special Agents Mut. Benefits Ass’n, 546 F. Supp. 2d 261 (W.D. Pa.
2008), this Court stated “[w]hile the amount of fatigue or pain an individual experiences may be
entirely subjective, the extent to which those conditions limit her functional capabilities can be
objectively measured.” Lamanna v. Special Agents Mut. Benefits Ass’n, 546 F. Supp. 2d at 296.
(citing Williams v. Aetna Life Ins. Co., 509 F.3d 317, 323 (7th Cir. 2007)); see also Boardman v.
Prudential Insurance Co. of America, 337 F.3d 9, 16, n.5 (1st Cir. 2003) (“While the diagnoses
of chronic fatigue syndrome and fibromyalgia may not lend themselves to objective clinical
findings, the physical limitations imposed by the symptoms of such illnesses do lend themselves
to objective analysis.”)
Moreover, courts within the Third Circuit have held that it is not an abuse of discretion to
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require objective evidence that a condition, including chronic fatigue syndrome and
fibromyalgia, is sufficiently disabling to warrant an award of LTD benefits. See WernickiStevens v. Reliance Std. Life Ins. Co., 641 F. Supp. 2d 418, 426-427 (E.D. Pa. 2009) (finding no
evidence that Reliance’s discontinuation of Plaintiff’s long-term disability benefits was based on
a lack of a known etiology for either chronic fatigue syndrome or fibromyalgia, but instead was
based upon the results of a Functional Capacity Examination (“FCE”) that demonstrated Plaintiff
was capable of full time sedentary work); Gibson v. Hartford Life & Accident Ins. Co., 2007 U.S.
Dist. LEXIS 47337*39-*40 (E.D. Pa. June 27, 2007) (where Hartford relied, in part, on a
Physical Capacities evaluation form in which the consulting physician assessed the frequency
with which the plaintiff with fibromyalgia could perform basic physical activities such as
grasping with her hands and exercising fine motor skills with her fingers, the decision that the
claimant could perform other work was not arbitrary and capricious.); Magera v. Lincoln Nat’l
Life Ins. Co., 2009 U.S. Dist. LEXIS 106440 (M.D. Pa. Nov. 16, 2009) (finding it was not
arbitrary and capricious for Lincoln to find that the claimants’ chronic fatigue and fibromyalgia
were no longer so severe that she could be considered totally disabled, as defined by the LTD
plan, and was able to return to a position that was almost entirely sedentary.).
Here, Drs. Kassyk and Loya found that Balas was disabled based upon her self-reported
fatigue, exhaustion and decreased cognitive function. In March of 2008, Dr. Pierotti found Balas
unable to work due to” lack of energy and stamina,” but his prognosis for her return to gainful
employment was “extremely good.” There is no evidence, however, that Balas was limited in
any of her activities of daily living, she took care of her children, had no limitations of
ambulation and she had no driving restrictions. Moreover, from October 2007, through May
2009, five (5) independent physicians, Dr. Marion, Dr. Cowl, Dr. Payne, Dr. Brock and Dr.
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Lumpkins, reviewed Balas’ medical records and found that she was not disabled as defined
under the Plan. Only one (1) independent physician, Dr. Gross, found Balas disabled based upon
her chronic fatigue, but recommended she be re-evaluated “every 3-6 months to reassess the
situation.”
The Court finds that Sedgwick’s reliance on the opinions of Drs. Payne, Brock and
Lumpkins and its requirement that Balas provide objective evidence of her inability to perform
the material duties of her regular occupation weigh in favor of upholding Sedgwick’s
determination to terminate her LTD benefits. To dismiss such reliance, the Court must substitute
its judgment for that of the administrator.
B.
Disregard of the Findings of the SSA
Balas contends that Sedgwick’s decision to deny her continuing LTD benefits was
arbitrary and capricious because such denial disregarded the SSA’s determination that Balas was
totally disabled. Pursuant to the Plan, Balas was obligated to apply for SSD benefits after five
(5) months of disability. After an initial denial, Balas was awarded SSD benefits on July 10,
2008, with an eligibility date of September 1, 2007. Balas’ receipt of SSD benefits was not
addressed in Sedgwick’s denial letter of July 14, 2009.
In Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008), the Supreme Court
remarked that a plan administrator’s failure to address a claimant’s award of social security
disability benefits in denying a claim “suggested procedural unreasonableness” under
circumstances in which the plan administrator had itself encouraged the claimant to apply for
such benefits. Id. at 118. It is well established, however, that an award of SSD benefits does not
in itself establish that Sedgwick’s decision was arbitrary and capricious. See Connor v. Sedgwick
Claims Mgmt. Servs., 796 F. Supp. 2d 568, 584-585 (D.N.J. 2011)(citing Kosiba v. Merck & Co.,
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2011 U.S. Dist. LEXIS 23247, 52 (D.N.J. Mar. 7, 2011)). Because the legal principles
controlling the analysis the Social Security Act differ from those governing an ERISA analysis,
the SSA’s determination of disability is not binding on an ERISA benefit plan. See Kosiba v.
Merck & Co., 2011 U.S. Dist. LEXIS 23247 at 52; see also Burk v. Broadspire Servs., Inc., 342
Fed.Appx. 732, 738 (3d Cir. 2009) (failure to consider award of SSD benefits not abuse of
discretion); Pokol v. E.I. Du Pont De Nemours & Co., 963 F.Supp. 1361, 1380 (D.N.J. 1997)
(“[I]t is not inherently contradictory to permit an individual to recover benefits pursuant to the
Social Security Act while being denied benefits pursuant to a private ERISA benefit plan.”);
Krensavage v. Bayer Corp., 2006 U.S. Dist. LEXIS 69958, (W.D. Pa. Sept. 27, 2006) (“[C]ourts
have consistently held that ERISA plan administrators are not bound to follow [SSD]
determinations.”)).
An award of SSD benefits, however, “may be considered as a factor in evaluating
whether a plan administrator has acted arbitrarily and capriciously in reviewing a plaintiff’s
claim.” Marciniak v. Prudential Fin. Ins. Co. of Am., 184 Fed. Appx. 266, 269 (3d Cir. 2006). If
the plan administrator (1) encourages the applicant to apply for Social Security disability
payments; (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 the question of disability,
the reviewing court should weigh this in favor of a finding that the decision was arbitrary and
capricious. See Kosiba v. Merck & Co., 2011 U.S. Dist. LEXIS 23247 at 54 (citing Curry v.
Eaton Corp., 400 Fed. Appx. 51, 68 (6th Cir. Ky. 2010)).
As stated above, Sedgwick required Balas to apply for SSD benefits as a condition of her
continued receipt of LTD benefits. After an initial denial, Sedgwick referred Balas to Allsup to
assist her in the appeal of the SSA’s denial of her claim. The SSA then awarded Balas SSD
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benefits on July 10, 2008, with an eligibility date of September 1, 2007. Consequently, under the
terms of the Plan, this award financially benefitted Sedgwick because Balas’ LTD benefits were
offset by any payment she received from the SSA.
With regard to the third factor, Sedgwick need not follow the decision of the SSA, it must
only explain why its decision is contra to that of the SSA. In this instance, Sedgwick failed to
indicate whether it reviewed or considered the SSA’s decision in either its denial letters or in the
administrative record. Defendant argues that Sedgwick was unable to review the decision by the
SSA because Balas failed to provide Sedgwick with a copy of the SSA’s decision, instead
providing Sedgwick with the dates and amounts of the SSD payments awarded to her. Because
Balas was required under the Plan to apply for SSD benefits, it was the obligation of the Plan
Administrator to request a copy of the decision and make it a part of the administrative record.
In Haisley v. Sedgwick Claims Mgmt. Servs., 776 F. Supp. 2d 33 (W.D. Pa. 2011), this
Court found that it was unreasonable for Sedgwick to ignore an award of SSD benefits when it
required the plaintiff to apply for such benefits. Haisley v. Sedgwick Claims Mgmt. Servs., 776 F.
Supp. 2d at 51. See also Funk v. Cigna Group Ins., 2010 U.S. Dist. LEXIS 90541n.8 (D.N.J.
Aug. 31, 2010) (concluding that a plan administrator’s failure to reconcile an award of SSD
benefits with its determination that the plaintiff was not disabled was a factor which indicated the
plan administrator’s decision was arbitrary and capricious, especially because the plan
administrator assisted the plaintiff in filing for benefits). This Court, therefore, finds that
Sedgwick’s failure to address the decision of the SSA granting Balas SSD benefits weighs in
favor of finding that its decision to terminate her LTD benefits was arbitrary and capricious.
C.
Opinions of Treating Physicians
Balas contends that Sedgwick’s decision to deny her continuing LTD benefits was
19
arbitrary and capricious because it failed to provide any explanation for rejecting the opinions of
the treating physicians. Specifically, Balas argues that “[t]here is a conspicuous lack of credence
regarding the opinions of [Balas’] treating physicians [regarding her] total disability.”
A plan administrator is not required to give greater weight to the opinions of a claimant's
treating physicians than to those of independent medical examiners. In Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 829-830, 832 (2003), the Supreme Court explicitly
distinguished ERISA disability cases from Social Security disability claims in which the
opinions of treating physicians are given great, if not controlling, weight on matters regarding the
severity of a claimant's disability, even though, as the Court acknowledged, in many cases,
treating physicians have a better opportunity to know and observe the patient over a period of
time as compared to one-time consultants. Black & Decker Disability Plan v. Nord, 538 U.S. at
829-830, 832. At the same time, Black & Decker did not hold that treating physicians’ opinions
are never entitled to deference over retained consultants’ opinions, only that administrators are
not required “automatically to accord special weight to the opinions of a claimant's physician.”
Id. at 834. In weighing such opinions, an administrator should consider the length of the
relationship between claimant and physician and whether any of the physicians in question are
specialists in the relevant medical discipline. Id. at 832. On the other hand, plan administrators
“may not arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of a
treating physician.” Id. at 834.
Here, Balas’ treating physicians, Drs. Kassyk and Loya, opined that Balas was disabled
based only upon her self-reported fatigue, exhaustion and decreased cognitive function. Neither
doctor listed any restrictions or limitations on her activities. There was no objective evidence that
Balas was physically limited with regard to the essential functions of her occupation. To the
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contrary, the evidence of record indicates that Balas was not limited in any of her activities of
daily living, she took care of her children, had no limitations of ambulation and had no driving
restrictions. Moreover, Balas admitted that as of January 15, 2009, she was fully ambulatory, and
she could drive, take care of her two(2) children, clean the house, prepare meals do laundry and
sleep nine (9) to ten (10) hours per night. Sedgwick’s consulting physicians, therefore, found no
objective evidence of an impairment of Balas’ physical function that precluded her from
employment. The Court finds that Sedgwick’s failure to accord the opinions of Drs. Kassyk and
Loya regarding Balas total disability controlling weight, does not make its decision to deny
continued LTD benefits arbitrary and capricious.
D.
Reversal of Prior Decision Granting LTD Benefits
Balas further contends that Sedgwick’s decision to deny her continuing LTD benefits was
arbitrary and capricious because it reversed its prior decision granting her LTD benefits even
though her condition had not changed. The Third Circuit has held that an administrator’s
reversal of its decision to award a claimant LTD benefits “without receiving any new medical
information to support this change in position is an irregularity that counsels towards finding an
abuse of discretion.” Miller v. Am. Airlines, Inc., 632 F.3d 837, 848 (3d Cir. Pa. 2011); see also
Post v. Hartford Ins. Co., 501 F.3d 154, 164-165 (3d Cir. 2007). Though the Miller court
recognized that the initial payment of benefits does not “operate as an estoppel” prohibiting a
plan administrator from ever terminating benefits, Miller v. Am. Airlines, Inc., 632 F.3d at 849, it
requires that any decision to terminate benefits be based on additional medical evidence not
originally reviewed. See McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 590 (8th Cir.
2002)(reversal of position supported arbitrary and capricious finding where information used to
terminate benefits did “not vary significantly from the [previous] opinions”).
21
On November 6, 2007, Sedgwick awarded Balas LTD benefits under the Plan effective
from June 24, 2007 through December 31, 2007, and advised her of her continuing obligation
under the Plan to provide proof of her continuing total disability. In February of 2008, Sedgwick
contacted Balas requesting updated information concerning her medical status. Balas confirmed
that she was still seeing Dr. Kassyk, and informed Sedgwick that her current symptoms included
joint stiffness and pain, but she was able to complete light housework, do laundry and prepare
meals. In March of 2008, Sedgwick requested that Dr. Kassyk provide Balas’ medical records
from January 1, 2008, as well as information regarding her current condition, restrictions or
limitations, treatment and prognosis. In her response, Dr. Kassyk indicated that Balas was totally
disabled, she could not function or stay awake, and the only treatment was “frequent rest.”
Sedgwick was then informed that Balas began treating with Dr. Pierotti at the
Fibromyalgia & Fatigue Center in January of 2008. Dr. Pierotti indicated that Balas’ diagnosis
included chronic fatigue, hypothyroidism and adrenal insufficiency, but unlike Dr. Kassyk, he
indicated that Balas’ prognosis to return to work was “extremely good.” Dr. Pierotti
recommended a treatment of antifungal therapy, back and muscle IV, sleep hygiene and a yeast
diet. He also provided Balas with a detailed medication regimen in order to treat her issues with
sleep, energy, pain and infections. In February 2008, Balas saw Dr. Pierotti and indicated that
she was sleeping better, the pain was better, and she had more energy. There is no indication in
the record that Balas saw Dr. Pierotti after March of 2008. Clearly, Dr. Pierotti’s records
represent new medical information reviewed by Sedgwick subsequent to its granting LTD
benefits to Balas.
In January, 2009, Balas reported that she was treating with Dr. Lauren Loya at the
Fibromyalgia & Fatigue Center, however, no submissions were provided to Sedgwick from Dr.
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Loya until April 15, 2009, after Sedgwick terminated her LTD benefits. In support of her appeal,
Balas provided a letter from Dr. Loya dated April 7, 2009. The letter indicated that Dr. Loya
began treating Balas in October of 2008. On or about April 30, 2009, Balas provided Sedgwick
with the records of her treatment at the Fibromyalgia & Fatigue Center from January 10, 2008,
through April 7, 2009. The records indicated that Balas reported some improvement at her
December 2008 appointment as she was sleeping better and her pain had decreased. During her
follow-up appointments in February and April 2009, Balas complained of increased pain and
poor concentration.
Dr. Lumpkins conducted a teleconference with Dr. Loya on May 19, 2009. AR 427-428.
Dr. Loya indicated that Balas reported that her symptoms had improved 80 to 90% but, it was
insufficient for Balas to return to work as she had good days and bad days. AR 428. Dr. Loya
further indicated that Balas’ function supported that she was independent with ambulation, that
she required no assistance with her activities of daily living, and she was not restricted from
driving. Id. Dr. Loya opined that Balas was not capable of sedentary work.
The records provided to Sedgwick prior to its determination to uphold its denial of Balas’
claim for continued LTD benefits on July 14, 2009, did in fact contain new medical information.
Though the treating physicians continued to opine that Balas was unable to work, the records
indicated some improvement in her condition, and failed to list any physical limitations or
restrictions. Sedgwick’s reversal in this instance does not weigh in favor of an arbitrary and
capricious finding.
E.
Opinions Based on Incomplete Medical Records
Finally, Balas contends that Sedgwick’s decision to deny her continuing LTD benefits
was based upon opinions of reviewing physicians who had not been supplied with complete
23
medical records. Specifically, Balas contends that Dr. Payne failed to consider any information
from Dr. Loya, and that Dr. Brock did not speak personally with either Dr. Kassyk or Dr. Loya.
The Court finds such contentions to be without merit.
Dr. Payne actually discussed Balas’ case with Dr. Kassyk on March 5, 2009, and issued
his report March 10, 2009. Dr. Loya did not write her report regarding Balas’ condition until
April 7, 2009, and the letter was not submitted to Sedgwick until April 15, 2009. Further, Balas
did not provide Sedgwick with the records of her treatment at the Fibromyalgia & Fatigue Center
until April 30, 2009. Therefore, Dr. Payne had no opportunity to review either Dr. Loya’s letter
or records from the Fibromyalgia & Fatigue Center. Dr. Brock indicated that he contacted the
offices of both Drs. Kassyk and Loya on two (2) occasions, left his contact information, but
received no return call from either doctor. AR 416-417. Dr. Brock did a comprehensive review
of all the medical records submitted, however, and prepared his report based thereon. There is
no evidence that Sedgwick made its decision on anything less than the full record in this case.
Taking into account the above factors, the Court finds only one factor-that being
Sedgwick’s failure to reconcile an award of SSD benefits with its determination that Balas was
not disabled-that weighs in favor of a finding that Sedgwick’s determination was arbitrary and
capricious. The Court finds Sedgwick’s reliance on the opinions of Drs. Payne, Brock and
Lumpkins, as well as its requirement that Balas provide objective evidence that her chronic
fatigue syndrome and/or fibromyalgia was sufficiently disabling to warrant an award of LTD
benefits, weigh in favor of upholding Sedgwick’s determination to terminate her LTD benefits.
Viewing all of the factors in their totality, the Court concludes Sedgwick’s decision to deny
benefits was not arbitrary and capricious.
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V.
CONCLUSION
Based on the foregoing, the Court finds that Defendant’s denial of Balas’ continuing long
term disability benefits under the Plan was not arbitrary and capricious. Therefore, Balas’
motion for summary judgment shall be denied, and Defendant’s motion for summary judgment
shall be granted. An appropriate order follows.
s/ David Stewart Cercone
David Stewart Cercone
United States District Judge
cc:
Wesley T. Long, Esquire
Victor H. Pribanic, Esquire
Gina D. Wodarski, Esquire
Pamela G. Cochenour, Esquire
(Via CM/ECF Electronic Mail)
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