McCormack v. Liberty Mutual Insurance Co.
Filing
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ORDER granting 8 plaintiff's Motion for Summary Judgment to the extent that this case is REMANDED to Liberty for consideration of Dr. Workman's report, along with the other evidence submitted in connection with plaintiff 's claim, in determining whether plaintiff is entitled to LTD benefits. Defendant Liberty Life Assurance Company of Boston's motion for summary 9 is DENIED. The parties are DIRECTED to file a written report on the status of the administrative review on or before January 28, 2013. Signed by District Judge Thomas W Phillips on October 29, 2012. (AYB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT KNOXVILLE
CHRISTOPHER McCORMACK,
Plaintiff,
v.
LIBERTY LIFE ASSURANCE
COMPANY OF BOSTON,
Defendant.
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No. 3:11-CV-543
(Phillips)
MEMORANDUM AND ORDER
Plaintiff filed this action seeking review of the defendant’s denial of his
application for long-term disability (LTD) benefits under an employee benefit plan governed
by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(a)(1)(B). This
matter is before the court for consideration of the cross-motions for summary judgment filed
by the plaintiff and the defendant. Plaintiff avers that the defendant’s decision to deny him
LTD benefits was arbitrary, capricious, an abuse of discretion, and contrary to the law and
the facts. Defendant, on the other hand, avers that its decision to deny Plaintiff’s disability
application was the reasonable result of a deliberate, principled reasoning process and was
not arbitrary and capricious.
I. Statement of Facts
Liberty issued a group disability income policy to plaintiff’s employer in 2006.
The policy is an employee welfare benefit plan governed by ERISA. In addition to being
the insurer of the insurance policy, Liberty was the administrator of the policy and
determined benefit eligibility thereunder. Liberty denied plaintiff’s claim for LTD benefits
under the policy based on its determination, following a review of medical evidence
presented by several doctors on plaintiff’s behalf and two independent physicians engaged
by Liberty, that plaintiff was able to perform the duties of the occupation that he was
performing for his employer at the time he claimed his disability began.
McCormack submitted to Liberty a claim for LTD income benefits under the
policy on November 3, 2010. On his claim application, plaintiff listed approximately eight
physicians who had treated him. Their reports included the following:
Dr. Francis LeBuffe is plaintiff’s treating psychiatrist. Dr. LeBuffe sent a letter
to Liberty which stated:
I have seen Mr. McCormack again today and my findings are
unchanged. I believe he is totally and permanently disabled
due to his psychiatric condition. I have also reviewed the
record of his treatment with John Stuhl, Ph.D. and the results
of psychological testing from Edward Workman, M.D. I noticed
that both of these professionals agree with my opinion that Mr.
McCormack is permanently disabled. He also has been
involved in psychotherapy now on a weekly basis with Dr.
Stuhl. I have no doubt that he is totally and permanently
unable to work.
AR. 468.
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Dr. Chang-Wen Chen is McCormack’s primary care physician. On June 2,
2011, Dr. Chen wrote Liberty a letter stating:
Mr. McCormack is currently a patient of ours and due to his
chronic pain condition we feel that at this time Christopher
should be evaluated by a disability doctor. At this time he is
unable to hold down a job due to his conditions.
AR. 99.
The Administrative Record includes a May 25, 2011 letter from Dr. John H.
Stuhl, treating psychologist, to Liberty that included the following:
Mr. McCormack has been in treatment with me since March
16, 2011, and continues on a once weekly schedule. Since
becoming Mr. McCormack’s psychologist, I have diagnosed
him with Major Depression, Recurrent Severe (296.33), Post
Traumatic Stress Disorder, Severe (309.81) and Panic
Disorder with Agoraphobia (300.21).
The degree to which Mr. McCormack suffers from these
disabilities is debilitating, and renders him incapable of either
full time or part time employment. Mr. McCormack is in such
a fragile psychological state that if forced to work, it is very
likely he would at the least decompose and require
hospitalization, and at the worse be successful in a suicide
attempt. It is my professional opinion that Mr. McCormack is
truly disabled and should receive disability.
AR. 98.
The evidence submitted on behalf of plaintiff also includes a Neuropsychiatric
Medicine Consultation Evaluation by Dr. Edward Workman. Dr. Workman is a clinical
Associate Professor of Medicine at UT Medical Center and is board certified in psychiatry,
neurology and pain medicine. Dr. Workman evaluated plaintiff for two days, upon referral
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from Dr. Stuhl. Dr. Workman reviewed plaintiff’s medical records, imaging studies, medical
history, and performed his own personal examination. Dr. Workman performed the
following tests: Structured Clinical Interview for DSM-IV; Operational Psychodynamic
Diagnosis; Coolidge Axis II Inventory; Personality Assessment Inventory; International
Personality Disorders Exam; Symptom Questionnaire and Clinical Assessment of
Depression;
Omni-IV
Personality
Disorder
Inventory;
Illness
Behavior
Questionnaire/Whitely Index; Subtle Substance Abuse Screening Inventory; Oswestry
Function Inventory; Neurobehavior Status Exam/Mental Status Exam; and 6th Ed. AMA
Guides for the Evaluation of Permanent Impairment.
Dr. Workman noted that, about five years previously, plaintiff began having
severe attacks of nervousness, shortness of breath, sweats and tachycardia at work.
These episodes resulted in two hospitalizations and a cardiology work-up. Further, he
began treatment with psychiatrist Dr. LeBuffe and psychotherapy with Dr. Stuhl. In addition
to various medications for high blood pressure, back pain, and hypertension, plaintiff was
taking Pristig for depression, Alprazolam for anxiety and panic, and Aznaflex for
myospasm.
Dr. Workman wrote that plaintiff reported rarely driving a car, and had only
driven once or twice in the past year due to extreme anxiety attacks while in traffic.
Further, Dr. Workman stated that plaintiff had difficulty coping with opening mail and paying
his bills. “He also could not name any activities that he enjoys.” According to the
evaluation, plaintiff began having social difficulties in high school. He had no real friends
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and was alone most of the time. In addition, “he has always been fearful of others and he
feels like he is being watched in public.”
SCID screening showed that plaintiff had a long history of depressive and
anxiety spectrum symptoms that worsened in his 30's. Panic attacks occur about four
times a week and cause him to have chest pain, shortness of breath, tachycardia and
sweats. Dr. Workman noted that these attacks are “quite disabling” and have put plaintiff
out of the workforce. “He is also developing agoraphobia and he meets the DSM-IV criteria
for Panic Disorder with Agoraphobia.” In addition, Dr. Workman found that he meets the
DSM-IV criteria for Major Depression, recurrent and severe. Continuing symptoms include
sleep dysfunction, very low energy, psychomotor slowing, complete loss of interests, very
poor concentration and attention, suicidal thoughts, and leaden sensitivity. According to
Dr. Workman, the medical records do not show a medical condition that would account for
plaintiff’s symptoms.
Dr. Workman’s diagnosis summary shows: Axis I, Panic disorder with
Agoraphobia; Major Depression – recurrent and severe; Axis II, Mixed Borderline
Personality Disorder; Axis III, low back pain, GERD, hypertension and hyperlipidemia; Axis
IV, pain chronicity, lack of motivation; Axis V, GAF of 40/45 showing very serious
psychiatric pathology that fully impairs the ability to work and engage in functional activities
other than basic self care.
Pursuant to the American Guides to the Evaluation of
Permanent Impairment, 6th Ed., Dr. Workman opined that plaintiff’s impairment “represents
a fully and totally impaired state in terms of ability to perform useful work.” Further, Dr.
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Workman opined that plaintiff meets the Social Security Disability Guidelines for major
depression, panic disorder, and borderline personality disorder.
Dr. Workman concluded that plaintiff is “fully disabled from any work activity,
and exposing him to work stress runs the risk of further schizotype progression into a
systematized psychotic state.” He further found that plaintiff suffered from lumbar and
migraine pain syndromes that add to his disability and impairment.
Dr. Workman
additionally opined that, “I can say beyond a reasonable medical psychiatric certainty that
this patient is fully disabled from all work activity. It is not possible for him to function in any
work setting without risking his developing a full psychotic break due to the stress thereof.”
AR. 86-97.
Dr. Marcus Goldman was hired by Liberty conduct a peer review of the
medical evidence. Dr. Goldman is board certified in psychiatry, and he is an Associate
Clinical Professor at Tufts School of Medicine. After reviewing the medical evidence, Dr.
Goldman made the following findings:
Based on review of the available data, this reviewer is unable
to establish the presence of any functionally impairing or major
DSM affective or anxiety disorder . . . . The claimant is
suggested to have multiple somatic complaints, but there are
no comprehensive assessments and no psychological testing
to better ascertain the nature and extent of any possible DSM
diagnosis such as a somatization disorder or a depressive or
anxiety disorder. The data possibly suggests depression
and/or anxiety NOS, yet due to the almost exclusively
subjective nature of the record as well as the poorly
comprehensive nature of the documents, this reviewer is
unable to establish those diagnoses.
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It is clear that the claimant self reports panic, anxiety and
depression. However, no major DSM diagnoses can be
adequately established.
...
The data do not adequately support the presence of an
impairing mental condition.
...
Given the totality of the data, this reviewer is unable to
establish the presence of an impairing mental condition or any
social, cognitive or occupational restrictions.
...
There are no objective data to support any adverse effects
from the claimant’s psychotropic medications.
AR. 128-33.
Liberty also hired Dr. Heidi Klingbell to conduct a review of the medical
evidence. Dr. Klingbell is board certified in physical medicine and rehabilitation, and she
is an Associate Clinical Professor at Columbia University Medical Center. Dr. Klingbell
submitted a report to Liberty, which included the following:
The submitted clinical records do not provide objective
pathology that would establish the need for restrictions or
limitations from a PM&R perspective. The records indicate the
claimant has diffuse subjective complaints that are not
validated by objective findings on physical examination. Serial
examinations provide no evidence of motor strength loss,
sensory abnormalities, or loss of relevant reflexes indicative of
neurologic compromise. The claimant’s imaging studies have
been unrevealing and do not identify a cause for his diffuse
subjective complaints. The claimant has psychological issues
which are reported to be severe but not supported by any
objective psychological testing. Further comment in this regard
will not be made and is deferred to a mental health specialist.
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In total, the claimant’s physical complaints/findings do not
translate to functional impairment and Mr. McCormack does
not have any resulting restrictions/limitations on activities
including sitting, standing, walking, reading, lifting, carrying and
performing repetitive and fine motor hand activities.
...
It would appear that the claimant would have no physical
limitations from a PM&R perspective and therefore, Mr.
McCormack can engage in work in an unrestricted fashion
eight hours per day and five days per week. He may require
restrictions from a psychological perspective. However, this
would be outside the expertise of this reviewer.
AR. 124-27.
The record shows that Liberty initially denied plaintiff’s claim for disability
benefits on January 7, 2011.
On June 13, 2011, McCormack sent Liberty a letter
requesting a review of the January 7 denial of his claim for LTD benefits, along with a copy
of the Comprehensive Mental Status Examination performed by Dr. Workman. In a letter
dated June 28, 2011, Liberty again denied plaintiff’s claim for disability benefits. On
October 13, 2011, plaintiff brought an action against Liberty in Loudon County General
Sessions Court for LTD benefits. Liberty filed a notice of removal on November 14, 2011.
The parties have filed cross-motions for summary judgment on the record.
II. Standard of Review
This court reviews de novo an ERISA plan administrator’s denial of benefits
where the administrator has no discretion to determine benefits eligibility. McDonald v.
Western-Southern Life Ins. Co., 347 F.3d 161, 168 (6th Cir. 2003). If an ERISA benefits
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plan “gives the plan administrator discretionary authority to determine eligibility for benefits
or to construe the terms of the plan,” however, the court reviews a decision to deny benefits
under an “arbitrary and capricious” standard of review. Id. The parties agree that the plan
at issue gives the plan administrator such discretionary authority. Specifically, the plan
provides that:
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.
AR. 54.
“The arbitrary and capricious standard is the least demanding form of judicial
review of administrative action.” McDonald, 347 F.3d at 169. Under this standard of
review, the court determines whether, in light of the plan’s provisions, the plan
administrator’s decision was rational. “When it is possible to offer a reasoned explanation,
based on the evidence, for a particular outcome, that outcome is not arbitrary or
capricious.” Id. The court bases its determination upon a review of the administrative
record. Wilkins v. Baptist Healthcare Sys., 150 f.3d 609, 613 (6th Cir. 1998).
Although the court reviews Liberty’s denial of benefits to McCormack under
the highly deferential “arbitrary and capricious” standard, the court must take into
consideration the fact that Liberty is acting under a potential conflict of interest because it
is both the decision-maker, determining which claims are covered, and also the payor of
those claims. Marks v. Newcourt Credit Group, 342 F.3d 444, 457 (6th Cir. 2003). Liberty’s
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ultimate disability determination was based upon the reports of Dr. Marcus Goldman and
Dr. Heidi Klingbell, both of whom Liberty selected and paid to assess McCormack’s claim.
As the plan administrator, Liberty had a clear incentive to contract with individuals who
were inclined to find in its favor that McCormack was not entitled to disability benefits.
Therefore, there is an incentive for Liberty to deny the claim. Under such facts, “the
potential for self-interested decision-making is evident.” Univ. Hosps. of Cleveland v.
Emerson Elec. Co., 202 F.3d 839, 846 n. 4 (6th Cir. 2000). The possible conflict of interest
inherent in this situation “should be taken into account as a factor in determining whether
Liberty’s decision was arbitrary and capricious.” Id.; see also Whitaker v. Hartford Life and
Accident Ins. Co., 121 Fed.Appx. 86, 87 (6th Cir. 2005) (holding that a court is to factor an
insurer’s dual role into its review under the arbitrary and capricious standard, though the
standard remains arbitrary and capricious).
The ultimate issue in an ERISA denial of benefits case is not whether discrete
acts by the plan administrator are arbitrary and capricious, but whether its ultimate decision
denying benefits is arbitrary and capricious. Spangler v. Lockheed Martin Energy Sys., 313
F.3d 356, 362 (6th Cir. 2002). The burden of proof is on the plaintiff to show that Liberty’s
denial of his claim was arbitrary and capricious. See Hunkel v. Navistar, Int’l Corp., 1992
WL 5435 (6th Cir. Jan. 15, 1992).
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III. Analysis
Liberty determined that McCormack was not entitled to LTD benefits because
he did not satisfy the definition of disability or disabled. McCormack does not dispute
Liberty’s finding that his physical conditions did not render him disabled, but rather argues
that his severe mental condition renders him disabled. Liberty responds that the record
contains no objective data to support the conclusion that McCormack suffered from a
mental disability or any functional limitations as a result of his mental condition. In its
determination, Liberty relies almost exclusively on the conclusions rendered by Dr.
Goldman and Dr. Klingbell after a review of McCormack’s file. For the reasons stated
below, the court finds that Liberty’s denial of benefits was not based on a reasoned or
rational reading of the record before it, and thus, was arbitrary and capricious in light of the
actual record evidence.
First, Liberty’s psychiatric consultant, Dr. Goldman cited a lack of evidence
to support a diagnosis for a disabling mental disorder.
However, plaintiff’s treating
physicians Dr. Stuhl, Dr. Chen and Dr. LeBuffe all opined that plaintiff could not return to
work given his mental condition. Second, there is no indication in the administrative record
that Dr. Goldman reviewed Dr. Workman’s two-day mental evaluation report. Liberty stated
that the report was considered, but it added nothing further to the evaluation of the claim.
Liberty relies on Dr. Goldman’s conclusion that the record contained “no comprehensive
assessments and no psychological testing to ascertain the nature and extent of any
possible DSM diagnosis.” This conclusion simply does not square with Dr. Workman’s
report which details the comprehensive testing and diagnostic procedures utilized by Dr.
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Workman. Dr. Goldman never discusses Dr. Workman’s report and simply seems to ignore
it.
Contrary to Liberty’s argument, the highly deferential standard of review
applicable to this case does not automatically mandate adherence to Liberty’s decision.
“Review under the arbitrary and capricious standard is extremely deferential and has been
described as the least demanding form of judicial review. It is not, however, without some
teeth.” McDonald, 347 F.3d at 172. The court has an obligation under ERISA to review
the administrative record in order to determine whether the plan administrator acted
arbitrarily and capriciously in making ERISA benefits determinations. This obligation
includes some review of the quality and quantity of the medical evidence and the opinions
on both sides of the issues. Otherwise, courts would be rendered to nothing more than
rubber stamps for any plan administrator’s decision as long as the plan was able to find a
single piece of evidence – no matter how obscure or untrustworthy – to support a denial
of a claim for ERISA benefits. See Hackett v. Xerox corp. Long-Term Disability Income
Plan, 315 F.3d 771, 774-75 (7th Cir. 2003) (“Review under the deferential arbitrary and
capricious standard is not a rubber stamp and deference need not be abject. Even under
the deferential review we will not uphold a termination when there is an absence of
reasoning in the record to support it.”).
Based on the administrative record, and in particular, the report of Dr.
Workman, the court finds that Liberty acted arbitrarily and capriciously in evaluating
plaintiff’s claim and that its decision denying LTD benefits to McCormack must be
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overturned. This matter is remanded to the plan administrator for consideration of Dr.
Workman’s report and opinions.
IV. Conclusion
Because Liberty failed to provide a full and fair review of McCormack’s claim
for LTD benefits, plaintiff’s motion for summary judgment [Doc. 8] is GRANTED to the
extent that this case is REMANDED to Liberty for consideration of Dr. Workman’s report,
along with the other evidence submitted in connection with plaintiff’s claim, in determining
whether plaintiff is entitled to LTD benefits. Defendant Liberty Life Assurance Company
of Boston’s motion for summary [Doc. 9] is DENIED.
The parties are DIRECTED to file a written report on the status of the
administrative review on or before January 28, 2013.
IT IS SO ORDERED.
ENTER:
s/ Thomas W. Phillips
United States District Judge
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