Duncan v. Metropolitan Life Insurance Company
MEMORANDUM DECISION AND ORDER granting 16 Plaintiff's Motion for Decision on the Record; denying 18 Defendant's Motion for Summary Judgment. The case is REMANDED to MetLife for proceedings consistent with this order. Plaintiff's request for attorney's fees and costs (Docket No. 16 ) is GRANTED. Plaintiff has fourteen (14) days to submit an affidavit and bill of costs in compliance with Federal Rule of Civil Procedure 54(d) and DUCivR 54-2. The Clerk of the Court is directed to enter judgment as stated and close this case forthwith. Signed by Judge Ted Stewart on 11/10/2016. (eat)
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
MEMORANDUM ORDER AND
PLAINTIFF’S MOTION FOR
DECISION ON THE RECORD
METROPOLITAN LIFE INSURANCE
Case No. 2:15-CV-626TS
District Judge Ted Stewart
This matter is before the Court on the parties’ cross-motions for Summary Judgment in
Ms. Duncan’s ERISA claim. For the reasons set out below, the Court will grant Ms. Duncan’s
Motion and request for attorney’s fees and costs, remand the case to MetLife for further
proceedings, and order Ms. Duncan to submit an affidavit detailing attorney’s fees and a bill of
Michelle Duncan began working for U.S. West Paging after she graduated from high
school. For the next twenty-two years, Ms. Duncan worked for the company as it transitioned to
U.S. West Wireless and finally to Verizon. 1 Her most recent position was as a Global Enterprise
Manager. She reported having a very positive work history. Her husband described her as
“jovial, lighthearted, confident . . . sharp, driven.” 2 However, beginning in 2010, symptoms of
depression, paranoia, and ADHD began interfering with Ms. Duncan’s emploment. According
to Ms. Duncan, her workload had increased and “things she used to be able to do quickly were
taking longer and she was working up to 16 hours a day to complete tasks.” 3 She reported being
“told she wasn’t making sense when she talked” and she began having paranoid thoughts
involving her co-workers. 4
In April 2011, Ms. Duncan claimed she was receiving 200 emails per day while traveling
to and from work-related conferences. 5 At that time, Ms. Duncan visited a doctor who noted job
stress and severe ulcers. 6 Ms. Duncan’s job was described as an “8 to 5” job and a “light duty”
position, but she was expected “to do what [she had] to do to get the job done” and was exempt
from accruing overtime hours. 7 Ms. Duncan’s husband told doctors that Ms. Duncan would
“stare at a computer screen trying to construct a simple sentence (with 1400 emails to respond
to). She felt hopeless, couldn’t get back on top of the workload.” 8 Ms. Duncan described
“horrible anxiety.” 9 In April 2011, Dr. Kirkham found Ms. Duncan positive for psychiatric
symptoms. 10 The following month, Dr. Polk recorded that Ms. Duncan was paranoid, with
racing thoughts, was suffering from sleep deprivation, and was experiencing auditory
R. 149, 151.
R. 670; see also R. 704 (noting that Ms. Duncan “was struggling to respond to
emails and doing simple tasks that she was able to do when [her husband] met her”).
From 2010 until December 2011, Ms. Duncan labored under paranoid delusions at work,
believing that co-workers were attempting to poison her, that spam mail was part of a
government scheme to compensate her, and that a supervisor was locking her out of a computer
system, among other things. 12 In September 2011, Ms. Duncan traveled to San Diego on a
business trip when she became confused about where she was or why she was there, and
paranoid that someone was “targeting her.” 13 Ms. Duncan resumed work at Verizon
intermittently until December 5, 2011, when Dr. Polk found that Ms. Duncan desired to work but
had “disabling anxiety, mood swings and difficulty to focus and attention [sic].”14 Dr. Polk
concluded that Ms. Duncan was “[u]nable to return to work indefinitely.” 15
Ms. Duncan was a participant in Verizon Wireless’ disability benefits plan (the “Plan”).
The Plan promised benefits to participants who became unable to perform the essential functions
of their occupation due to illness or injury. First, it promised short term disability (“STD”)
benefits for up to twenty-six weeks. 16 Second, the Plan promised limited long-term disability
(“LTD”) benefits for up to twenty-four months at a discounted rate if an employee’s disability
remained. 17 Third and finally, the Plan promised continuing discounted benefits to insureds with
a mental or nervous disability attributable to schizophrenia, dementia, or organic brain disease. 18
Id.; see also R. 707.
R. 51, 54.
These benefits may continue until age sixty-five unless the participant regains the ability to
perform a “gainful occupation” for which she is qualified. 19
Ms. Duncan applied for short term disability benefits in 2011. MetLife found her eligible
and paid the benefits. 20 In the following months, Ms. Duncan’s delusions and auditory
hallucinations worsened, and she began having visual hallucinations as well. 21 She heard voices
telling her to do bizarre things. 22 In response to a voice she believed to be a deity, Ms. Duncan
once cleaned her house all night, undressed and wandered the neighborhood, repeatedly washed
her hair in the toilet, and later attempted to drown herself, among other things. 23 In the midst of
delusions, she sometimes did not recognize her own family members. 24 Her delusions were
numerous and varied; they persisted for days or weeks in some cases and occasionally
endangered herself and her family. 25 After three major psychotic breaks, Ms. Duncan was
admitted to Salt Lake Behavioral Health Center in July 2012. After being discharged, she
regressed and was hospitalized two more times before the end of the year. 26 Between 2012 and
2013, Ms. Duncan was diagnosed with a variety of psychotic, mood, and stress-related
disorders. 27 Specifically, doctors began noting features suggesting schizophrenia in June 2012,
R. 63, 1166.
See R. 134–324 (detailing MetLife’s investigation of Ms. Duncan’s STD claim).
R. 662–63, 665.
R. 662–63, 675; see also R. 672, 705–08 (describing a number of delusions).
R. 662–63, 707.
Ms. Duncan was re-admitted to Salt Lake Behavioral in September 2012 and later
hospitalized at the University Neuropsychiatric Institute in December 2012. R. 670, 707–08.
and again in December 2012. 28 Dr. Oldroyd believed that Ms. Duncan had a schizophrenia
spectrum disorder, and eventually settled on a diagnosis of schizoaffective disorder, depressed
In March 2014, Dr. Parsons, a psychologist hired by MetLife, diagnosed Ms. Duncan
with Schizoaffective Disorder, Multiple Episodes Currently in Partial Remission in accordance
with the DSM-5. 30 Dr. Parsons explained that Ms. Duncan was “at a stable point in her illness
with partial remission of her symptoms,” 31 but was “vulnerable to future episodes and her
functional capacity may diminish significantly during exacerbations of her illness . . . . Stress
can contribute to the start of a schizoaffective episode.” 32 Dr. Parsons concluded that “future
exacerbations with particularly severe symptoms may require hospitalization for stabilization.” 33
MetLife denied Ms. Duncan continuing benefits and upheld its denial on appeal. In its
uphold letter, MetLife grounded its denial solely in its interpretation that the schizophrenia
exclusion does not include schizoaffective disorder. 34 Ms. Duncan argues that MetLife’s
interpretation was arbitrary and capricious.
II. STANDARD OF REVIEW
Where an ERISA plan gives the administrator discretionary authority to determine
eligibility for benefits or to construe the terms of the plan, courts “employ a deferential standard
R. 673, 812 (noting psychotic symptoms on June 27, 2012 and that Ms. Duncan
“has been diagnosed as possibly bipolar and possibly schizophrenic”); see also R. 666; 702–05.
R. 668, 706–07.
of review, asking only whether the denial of benefits was arbitrary and capricious.” 35 The Plan
grants MetLife discretionary authority “to interpret the terms of the Plan and to determine
eligibility for and entitlement to Plan benefits in accordance with the terms of the Plan.” 36 The
Court will review MetLife’s decision to deny Ms. Duncan’s claim under the arbitrary and
Using this standard, “we ask whether the administrator’s decision was reasonable and
made in good faith.” 37 A decision to deny benefits based on an interpretation of a plan’s
language “is arbitrary and capricious if it is not a reasonable interpretation of the plan’s terms.” 38
The Court looks for “‘substantial evidence’ in the record to support the administrator’s
conclusion, meaning ‘more than a scintilla’ of evidence ‘that a reasonable mind could accept as
sufficient to support a conclusion.’” 39
This Court’s review in ERISA cases involves the consideration of “several different,
often case-specific, factors, reaching a result by weighing all together.” 40 One factor, applicable
in this case, is an administrator’s conflict of interest between its own financial interest and the
interests of plan participants. Where factors are closely balanced, any one factor can act as a
Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1130 (10th
Cir. 2011) (citation and internal quotation marks omitted).
Eugene S., 663 F.3d at 1133 (quoting Phelan v. Wyo. Associated Builders, 574 F.3d
1250, 1256 (10th Cir. 2009)).
McGraw v. Prudential Ins. Co. of Am., 137 F.3d 1253, 1259 (10th Cir. 1998).
Eugene S., 663 F.3d at 1134 (quoting Adamson v. UNUM Life Ins. Co. of Am., 455
F.3d 1209, 1212 (10th Cir. 2006).
Holcomb v. Unum Life Ins. Co. of Am., 578 F.3d 1187, 1193 (10th Cir. 2009)
(quoting Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008)).
Glenn, 554 U.S. at 117.
1. MetLife’s Conflict of Interest
ERISA imposes “higher-than-marketplace quality standards on insurers. It sets forth a
special standard of care upon a plan administrator, namely, that the administrator ‘discharge [its]
duties’ in respect to discretionary claims processing ‘solely in the interests of the participants and
beneficiaries’ of the plan.” 42 Here, MetLife serves both as plan administrator and as third party
insurer, and is therefore a “conflicted administrator.” 43 Because it both evaluates claims and
funds the plan, every dollar provided in benefits is a dollar spent by MetLife, while every dollar
saved is a dollar in MetLife’s pocket. 44 MetLife’s dual role creates a danger of biased decisionmaking because MetLife’s obligation to its insureds “may counsel in favor of granting a
borderline claim while its immediate financial interest counsels to the contrary.” 45
Congress, in enacting ERISA, desired “to offer employees enhanced protection for their
benefits.” 46 One way district courts effectuate this desire is by taking into account the existence
of a conflict of interest as a factor in reviewing an administrator’s denial of benefits. 47 The
conflict of interest factor should prove “more important (perhaps of great importance) where
circumstances suggest a higher likelihood that it affected the benefits decision.” 48 On the other
Id. at 115 (quoting 29 U.S.C. § 1104(a)(1)).
Gielas v. Life Ins. Co. of N. Am., No. 08-cv-01922-MSK-CBS, 2009 U.S. Dist.
LEXIS 112848, at *6 (D. Colo. Nov. 13, 2009) (unpublished).
See Glenn, 554 U.S. at 112 (quoting Bruch v. Firestone Tire & Rubber Co., 828
F.2d 134, 144 (3rd Cir. 1987)).
Id. at 114 (internal quotation marks omitted).
Id. at 108.
Id. at 117.
hand, it “should prove less important (perhaps to the vanishing point) where the administrator
has taken active steps to reduce potential bias and to promote accuracy.” 49
a. MetLife’s hiring of independent medical professionals
MetLife argues that the conflict of interest factor should be given little weight because
MetLife retained an independent psychiatrist to review the medical records and an independent
psychologist to examine Duncan. The hiring of non-employee medical professionals may lessen
a conflict, but does not resolve it. 50 In addition, the doctors’ roles in this case were limited to
determining a diagnosis and discussing disability, issues that are not disputed in this case. The
independent medical professionals were not asked to interpret the term “schizophrenia” or to
explain the differences or similarities between schizophrenia and schizoaffective disorder.
Because MetLife’s interpretation of schizophrenia is the sole issue before the Court, the hiring of
outside doctors has little effect on MetLife’s conflict of interest in this case.
b. MetLife’s administration of Ms. Duncan’s claim
MetLife also argues that the Court should give little weight to the conflict of interest
factor on the grounds that “MetLife administered Duncan’s claim in a fair and objective
manner.” 51 Ms. Duncan, on the other hand, argues that MetLife inappropriately delegated the
responsibility of interpreting Plan language to Dr. Meissler, a medical professional, and that Dr.
Meissler’s decision was rubber stamped by claims adjusters. As discussed below, evidence in
See Loughray v. Hartford Grp. Life Ins. Co., 366 F. App’x 913, 924 (10th Cir.
2010) (unpublished) (finding the conflict of interest of little weight when the insurer employed
the services of an independent medical examiner and the claimant never presented persuasive
evidence undermining the expert’s independence); Matthews v. Hartford Life & Accident Ins.
Co., No. 1:14-CV-94 TS, 2015 U.S. Dist. LEXIS 76623, at *7 (D. Utah June 12, 2015)
(unpublished) (finding the conflict mitigated but not obviated by hiring independent physicians).
Docket No. 19, at 18.
the administrative record suggests procedural irregularities in the way MetLife formulated,
documented, and explained its interpretation of the schizophrenia exclusion.
In 2014, after granting short term and limited long term benefits, MetLife’s LTD claims
specialist discussed the potential for a “new Dx of Schizo Affective Disorder” and hypothesized
that Ms. Duncan and her treating doctor were “requesting new Dx as they are aware willi [sic]
extend benefits to age 65.” 52 The specialist went on to note that Ms. Duncan’s prior diagnosis
was “limited by LDB 53 . . . potential to extend if new Dx is supported RLs.” 54 The claims
specialist acknowledged receiving information from Ms. Duncan’s psychiatrist “to be reviewed
for change in dx from LDB to non-LDB,” and referred Ms. Duncan’s file for “full-file review
and possibly higher level review.” 55
MetLife employees arranged a “claim discussion” with MetLife’s psychiatric medical
director (“PMD”), Dr. Meissler, to consult regarding medical reports from independent medical
examiners. 56 During that discussion, Dr. Meissler communicated to the other employees that
“[g]iven the medical evidence in support of the Schizoaffective diagnosis, which is not an
exclusion to the LDB, the claim is not supported beyond the LDB of 4-01-14.” 57
Dr. Meissler was the first to opine that the Plan’s exclusion for “schizophrenia” would
not include schizoaffective disorder. Dr. Meissler’s opinion subsequently became the position of
MetLife on the issue, and claims adjusters repeatedly referenced Dr. Meissler’s interpretation as
“LDB” refers to “Limited Disability Benefits,” a Plan provision that limits benefits
for many disabilities to two years unless they fall under a listed exclusion.
R. 553–54 (emphasis added).
a basis for denying Ms. Duncan’s claim. 58 MetLife speculated in oral argument that Dr.
Meissler’s statement was simply “her take” on the issue, not the final decision, and that the
doctor was simply summarizing and phrasing medical evidence using terminology that claims
adjusters would understand. This speculation is belied by the clear language in the claim file that
“Per PMD, Dr. Meissler, Schizoaffective D/O falls under LTD.” 59
If Dr. Meissler gave a reason for her interpretation, it is not recorded in the claim file. A
LTD claims specialist and a LTD unit leader later noted their agreement with Dr. Meissler’s
interpretation, but also failed to document any rationale for that interpretation before denying
Ms. Duncan’s claim. 60 While internal messages show that MetLife initially believed it could
deny Ms. Duncan’s claim either for lack of disability or its interpretation of schizophrenia,
MetLife’s denial letter focused almost exclusively on the issue of disability. The only hint to
Ms. Duncan that MetLife’s interpretation of schizophrenia did not encompass schizoaffective
disorder was couched in the following language:
The Medical Director [Dr. Meissler] opined that your records do not suggest any
long-lasting mental health symptom(s) or significant global psychiatric functional
limitations which would support a non-limited or excluded condition. . . .
[T]he file lacks clinical evidence to support a functional impairment . . . to
support a non-limited or excluded condition.
The determination of disability is not solely based on diagnosis, but is based on
functional ability . . . . 61
The Court finds the letter’s language so vague that it would not have given Ms. Duncan
or any reasonable participant notice that MetLife was denying benefits due to an interpretation of
See R. 580 (“Dr. Meissler Medical Director advised that a schizoaffective disorder
was not an LDB and benefits were terminated.”); R. 556, 559 (“[L]imitations based on dx of
Schizoaffective D/O are not supported . . . . Please see PMD diary under claim comment).
R. 556, 561.
schizophrenia. As a result, the supplemental information submitted by Ms. Duncan and her
treating doctors focused on disability rather than Ms. Duncan’s diagnosis.
When Ms. Duncan appealed MetLife’s decision, an appeals specialist completed an
“Appeal Decision Review.” 62 The specialist checked a box marked “Proceed with decision,” but
failed to complete the sections titled “Correct Definition of Disability/Plan Provision,” and
“Decision rationale clearly documented.” 63 There is no indication that MetLife undertook a
meaningful review of these issues. In its letter upholding the denial, MetLife dropped disability
as a basis for denial, but informed Ms. Duncan for the first time that it had interpreted
schizophrenia in a way that made her ineligible for benefits. MetLife stated that an Appeals
Psychiatric Clinical Specialist (“APCS”) had “indicated that [Ms. Duncan’s] disabling diagnosis
was schizoaffective disorder, which would not support a diagnosis of schizophrenia,” and that
“schizoaffective disorder [is] a separate diagnosis from schizophrenia with its own diagnostic
Setting aside the reasonableness of MetLife’s substantive interpretation, the procedures
by which MetLife reached, documented, and explained its interpretation of schizophrenia were
unreasonable. MetLife allowed a medical director, assigned the limited role of “review[ing]
IME testing,” to single-handedly interpret the scope of an undefined Plan term without
documenting any rationale. Dr. Meissler’s decision was accepted up the claims adjusting ladder
without any additional rationale until it reached the APCS.
The Department of Labor’s implementing regulations require that a claim denial
include “[t]he specific reason or reasons for the adverse determination.” 65 The goals of this
requirement are undermined when plan administrators choose to hold a basis for denial “in
reserve rather than communicate it to the beneficiary.” 66 The Court “will not permit ERISA
claimants . . . to be sandbagged by after-the-fact plan interpretations.” 67 While MetLife did
explain its interpretation as a basis for denial prior to this lawsuit, it did so mere paragraphs
before informing Ms. Duncan that her remedies were exhausted, leaving her with no chance to
supplement the record on the issue and no choice but to litigate her claim. MetLife’s delay
defeated the purpose of the implementing regulations and, as a side-effect, has left the Court with
an administrative record that has little information regarding the interpretation of schizophrenia.
The procedural irregularities in MetLife’s interpretative process heighten the likelihood
that MetLife made its interpretation in part to avoid a substantial payment of benefits to Ms.
Duncan rather than making a decision based “solely in the interests of the participants and
beneficiaries’ of the plan.” 68 Therefore, MetLife’s conflict of interest is a factor that weighs
against affirming MetLife’s interpretation in this case.
29 C.F.R. § 2560.503-1(g)(1)(i).
Spradley v. Owens-Ill. Hourly Emps. Welfare Benefit Plan, 686 F.3d 1135, 1140
(10th Cir. 2012) (quoting Glista v. Unum Life Ins. Co., 378 F.3d 113, 129 (1st Cir. 2004)).
Id. at 1140 (quoting Flinders v. Workforce Stabilization Plan of Phillips Petroleum
Co., 491 F.3d 1180, 1190 (10th Cir. 2007), abrogated on other grounds by Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105 (2008)).
Glenn, 554 U.S. at 115 (quoting 29 U.S.C. § 1104(a)(1)).
2. MetLife’s interpretation of the schizophrenia exclusion
a. The “schizophrenia” exclusion is ambiguous
Where the interpretation of an ERISA Plan’s term is at issue, “the arbitrary and
capricious review encompasses the contract law standard of ambiguity.” 69 A provision is
ambiguous “if it is susceptible to more than one reasonable interpretation. 70 In determining
whether a plan’s language is ambiguous, the language “must be given ‘its common and ordinary
meaning as a reasonable person in the position of the plan participant would have understood the
words to mean.’” 71
The Plan caps benefits due to disability caused by a mental or nervous condition at two
years unless the condition is attributable to schizophrenia, dementia, or organic brain disease.
The Plan does not define schizophrenia. MetLife argues that a reasonable person would not
understand a diagnosis of schizoaffective disorder to be the same as a diagnosis of schizophrenia.
However, Ms. Duncan has submitted numerous webpages that list schizoaffective disorder as a
type or category of schizophrenia and has cited numerous judicial opinions that conflate the
terms schizophrenia and schizoaffective disorder, sometimes using the term “schizoaffective
schizophrenia.” The DSM-5, an authoritative source on the classification of mental disorders, 72
uses the term schizophrenia to refer both to a specific disorder and to a spectrum of disorders,
Flinders, 491 F.3d at 1193.
Id. (quoting Hickman v. GEM Ins. Co., 299 F.3d 1208, 1212 (10th Cir. 2002)).
See, e.g., Matter of State of N.Y. v. Harris, 12 N.Y.S.3d 762, 764 (Sup. Ct. 2015)
(stating that the DSM is the standard diagnostic handbook used by psychiatrists and
psychologists throughout the United States); People v. New (In re Det. of New), 21 N.E.3d 406,
409 (Ill. 2014) (stating that the DSM “provides an authoritative categorical classification of
mental disorders”); Carradine v. Barnhart, 360 F.3d 751, 770 (7th Cir. 2004) (stating that the
DSM is “regarded as a definitive psychiatric authority on mental disorders”).
including schizoaffective disorder. 73 In addition, the Plan’s exclusion for schizophrenia precedes
an exclusion for dementia, which is a general term that includes many neurocognitive disorders.
For these reasons, the Court finds the Plan’s exclusion for schizophrenia may reasonably be
understood as referring to the schizophrenia spectrum of disorders or to the specific disorder of
schizophrenia, and is therefore ambiguous.
b. MetLife’s interpretation is unreasonable
Where a plan’s term is ambiguous but “the plan administrator adopts one of two or more
reasonable interpretations, then the plan administrator’s decision to deny benefits based on that
interpretation survives arbitrary and capricious review.” 74 MetLife’s interpretation in this case
required that Ms. Duncan have the precise diagnosis of schizophrenia to qualify for this
exclusion. For the following reasons, the Court finds MetLife’s interpretation unreasonable.
i. MetLife’s interpretation is inconsistent with the DSM
The parties agree that the DSM is an appropriate reference for the disorders at issue and
both parties cite the DSM in their briefs. In addition, other courts have consulted the DSM when
reviewing an administrator’s interpretation of a mental disorder. 75 The Court will therefore
consider whether the DSM supports or undermines MetLife’s interpretation. The DSM explains
that it is not necessary for an individual diagnosed with schizoaffective disorder to satisfy all the
criteria of schizophrenia. Specifically: (1) schizophrenia requires a marked loss in occupational
See DSM-5, at 87–122 (2013) (“Schizophrenia spectrum and other psychotic
disorders include schizophrenia, other psychotic disorders, and schizotypal (personality)
Flinders, 491 F.3d at 1193.
See Berkoben v. Aetna Life Ins. Co., 8 F. Supp. 3d 689, 715 (W.D. Pa. 2014) (citing
the DSM for the criteria and definition of schizoaffective disorder).
or social functioning while schizoaffective disorder does not; 76 and (2) a schizophrenic
disturbance or episode must exceed six months while a schizoaffective episode may be shorter. 77
On the other hand, those with schizophrenia need not satisfy all criteria of schizoaffective
disorder; specifically, schizoaffective disorder requires a mood episode concurrent with activephase schizophrenia symptoms while schizophrenia does not. 78
While schizoaffective disorder may be less disabling and shorter in duration, this is not
necessarily true in every case. 79 Substantial occupational and social dysfunction are common in
those with schizoaffective disorder, and an uninterrupted period of schizoaffective illness can
last “years or even decades,” with ongoing “active or residual symptoms of psychotic illness.” 80
The DSM provides several hypotheticals illustrating that schizoaffective disorder can be a
schizophrenia-plus disorder. First,
[i]f the mood symptoms are present for only a relatively brief period, the
diagnosis is schizophrenia, not schizoaffective disorder . . . . For example, an
individual with a 4-year history of active and residual symptoms of schizophrenia
develops depressive and manic episodes that, taken together, do not occupy more
than 1 year . . . . This presentation would not meet Criterion C [of schizoaffective
Second, the DSM explains that a diagnosis of schizoaffective disorder “would be
changed to schizophrenia if active psychotic or prominent residual symptoms persist over several
years without a recurrence of another mood episode.” 82 In sum, the DSM makes clear that all
See id. at 107 (“Criteria B (social dysfunction) . . . [does] not have to be met.”).
Id. at 105.
Id. at 106–07.
See id. at 109 (noting in regard to loss of function that “there is substantial
variability between individuals diagnosed” with schizoaffective disorder ).
Id. at 107 (“Occupational function is frequently impaired, but this is not a defining
criterion [in contrast to schizophrenia]”).
Id. at 109.
features of schizophrenia may be present in an individual suffering from schizoaffective
While the features and symptoms of the two disorders may co-exist, the diagnoses never
do. The DSM makes clear that when all criteria of both disorders are present, only a diagnosis of
schizoaffective disorder should be given. 84 As a result, MetLife’s reliance on the name of the
diagnosis and the diagnostic criteria in the abstract—without attempting to determine whether an
individual could actually satisfy the diagnostic criteria of schizophrenia—is an arbitrary and
capricious way of defining the scope of schizophrenia exclusion.
ii. MetLife’s interpretation is inconsistent with other Plan exclusions
The Plan’s other exclusions undermine MetLife’s interpretation of the schizophrenia
exclusion. “Schizophrenia” is followed by the term “dementia,” 85 which is not a single disorder,
but rather a group of disorders. 86 The Plan elsewhere excludes physical conditions including
vascular malformations, spinal tumors, malignancy, radiculopathies, myelopathies,
musculopathies, and “Chronic Fatigue syndrome and related conditions,” 87 all of which are
umbrella terms that encompass many diagnoses. The plan includes only a few specific
exclusions, including Seropositive Arthritis and Traumatic Spinal Cord Necrosis. 88
See id. (stating that Criteria C for schizoaffective disorder—the mood component—
“is designed to separate schizoaffective disorder from schizophrenia”); see also id. at 89–90
(“There is growing evidence that schizoaffective disorder is not a distinct nosological
Id. at 99.
See DSM-5, at 591 (listing types neurocognitive disorders, formerly known as
The Plan defines the specific exclusions not in terms of diagnoses, but by features or
criteria. 89 For example, to qualify for the Seropositive Arthritis exclusion, a participant must
have “an inflammatory disease of the joints supported by clinical findings of arthritis plus
positive serological tests for connective tissue disease.” 90 There is no requirement that the
participant have the precise diagnosis of “seropositive arthritis.” MetLife’s requirement that Ms.
Duncan be diagnosed with schizophrenia, without considering whether Ms. Duncan’s condition
satisfied the criteria of schizophrenia is inconsistent with the requirements for any other
iii. Analogous case law does not support MetLife’s interpretation
Where interpretation of a Plan term rather than disability is at issue, the Tenth Circuit has
considered analogous case law interpreting the term. 91 Ms. Duncan cites many cases, but only
one where ERISA plan participants with schizoaffective disorder were treated differently than
those with schizophrenia. In Berkoben v. Aetna Life Insurance Co., an ERISA Plan limited
benefits for disabilities caused by most mental or nervous disorders to two years. 92 However,
Aetna adhered to an internally generated list that identified some mental disorders that were not
subject to this limitation. 93 The list included “every type of schizophrenia but schizoaffective
disorder.” 94 The court considered the DSM’s explanations and a doctor’s statement that
“schizoaffective disorder is a condition where a person has all the criteria for schizophrenia as
See Torix v. Ball Corp., 862 F.2d 1428, 1431 (10th Cir. 1988) (approving the
Eleventh Circuit’s exploration of insurance and social security cases to interpret the phrase “any
occupation or employment for remuneration or profit” in an ERISA plan).
8 F. Supp. 3d 689, 715 (W.D. Pa. 2014).
Id. at 714.
well as episodes meeting the criteria for mood disorder.” 95 The court found Aetna’s decision to
terminate benefits based on a diagnosis of schizoaffective disorder arbitrary and capricious
because “although the Plan gives Aetna the authority to establish policies and guidelines for
administering claims and determining eligibility, a procedural irregularity exists where the
administrator relies on an internal policy that lacks any apparent medical, psychiatric, or
scientific authority for which mental disorders are included on the exclusions list and which are
MetLife’s interpretation is analogous to Aetna’s in Berkoben because it creates a
distinction between schizophrenia and schizoaffective disorder. MetLife claims that the
distinction is supported in this case by the reports of Dr. Parson and Dr. Becker. Dr. Parson, a
psychologist, noted that “[d]istinguishing schizoaffective disorder from schizophrenia and
bipolar disorders with psychotic features is often difficult.” 97 Dr. Becker, a psychiatrist, stated
that “[s]chizoaffective disorder is a condition that has features of both schizophrenia and a mood
disorder, but does not strictly meet the diagnostic criteria for either alone.” 98
These statements do not create a reasonable basis for MetLife’s interpretation when
considered in the context of the DSM’s explanations. First, a review of Dr. Parson’s report
shows that Dr. Parson was struggling to estimate the duration and severity of Ms. Duncan’s
mood episodes, 99 an aspect of schizoaffective disorder that goes beyond what is required for
See R. 923 (discussing the difficulty of determining the temporal relationship
between the mood disturbance and psychosis and the severity of depressive or manic symptoms).
schizophrenia. Dr. Parson’s report does nothing to suggest that those with schizoaffective
disorder cannot meet the criteria of schizophrenia.
Next, Dr. Becker’s statement is perfectly consistent with the DSM’s list of diagnostic
criteria, but does not include the DSM’s explanation that an individual with schizoaffective
disorder can also meet the criteria for schizophrenia. This is understandable because MetLife
asked Dr. Becker only to determine whether the evidence supported a diagnosis of
schizoaffective disorder, not whether the evidence could satisfy the features of schizophrenia.
In sum, the extent of potential overlap between schizophrenia and schizoaffective
disorder is so great that it is not reasonable for MetLife to rely solely on the name of the
diagnosis or diagnostic criteria in the abstract to define the scope of the schizophrenia
exclusion. 100 The snippets from the reports of Dr. Parson and Dr. Becker—without important
context in the DSM—do not create a substantial basis for MetLife’s interpretation.
iv. MetLife’s interpretation undermines public policy
The Tenth Circuit has cautioned against literal interpretations of ERISA plan terms when
the interpretation is unduly restrictive. In Torix v. Ball Corp, the Tenth Circuit found MetLife’s
literal interpretation of “total disability” unreasonable where it would “deny benefits to the
disabled if he should engage in some minimal occupation, such as selling peanuts or pencils,
which would yield only a pittance.” 101 The Tenth Circuit relied heavily on Congress’ stated
DSM-5 at 89–90 (noting that “[t]here is growing evidence that schizoaffective
disorder is not a distinct nosological category.”).
862 F.2d at 1431 (quoting Helms v. Monsanto Co., 728 F.2d 1416, 1421 (11th Cir.
desire that “those who participate in [ERISA] plans actually receive the benefits they are entitled
to and do not lose these as a result of unduly restrictive provisions.” 102
In this case, a hyper-literal interpretation of schizophrenia results in the denial of benefits
to every participant with schizoaffective disorder simply because some of those participants may
not satisfy every criterion of schizophrenia. Further, a Plan participant initially diagnosed with
schizophrenia may develop the additional symptoms of schizoaffective disorder, at which time
MetLife would terminate benefits in spite of the fact that the symptoms of schizophrenia did not
change. Therefore, MetLife’s literal reading is the type of overly restrictive interpretation that
results in arbitrary claim denials and undermines public policy.
Weighing these factors and considering MetLife’s conflict of interest, the Court
concludes that MetLife’s interpretation is arbitrary and capricious. The Court will therefore
overturn MetLife’s denial of Ms. Duncan’s claim.
3. The appropriate remedy
When a plan administrator’s decision is overturned as arbitrary and capricious, the Court
“may either remand the case to the plan administrator for a renewed evaluation of the claimant’s
case or . . . may order an award of benefits.” 103 The proper remedy “depends upon the specific
flaws in the plan administrator’s decision.” 104 “If the plan administrator failed to make adequate
factual findings or failed to adequately explain the grounds for the decision, then the proper
remedy is to remand the case for further findings or additional explanation.” 105 On the other
Id. at 1430 (quoting H.R. Rep. No. 93-807, 93rd Cong., 2d Sess. 3, reprinted in
1974 U.S.Code Cong. & Admin. News 4639, 4670, 4676-77).
Flinders, 491 F.3d at 1194.
DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161, 1175 (10th Cir. 2006).
Flinders, 491 F.3d at 1194.
hand, an award of benefits is warranted when either “the evidence clearly shows that the
administrator’s actions were arbitrary and capricious, or the case is so clear cut that it would be
unreasonable for the plan administrator to deny the application for benefits on any ground.” 106
Here, although the Court has found MetLife’s actions arbitrary and capricious, it will
remand to MetLife because it is not convinced that “it would be patently unreasonable, under any
standard of review, for the Plan to deny Plaintiff coverage.” 107 For example, it is undisputed
that Ms. Duncan’s condition satisfied criteria A and E of schizophrenia, but no medical expert
considered whether Ms. Duncan’s condition satisfied the equivalent of criteria B and C. While
the parties agree that Ms. Duncan was disabled due to schizoaffective disorder and the record
suggests that Ms. Duncan’s mental disturbance persisted continuously for at least 6 months—
considerations relevant to criteria B and C—the Court will not substitute its judgment for that of
a medical professional.
Although MetLife’s favored interpretation is unreasonable, it is “not th[is] court’s
function ab initio to apply the correct standard to the participant’s claim.” 108 “That function,
under the Plan, is reserved to the Plan administrator.” 109 In its original determination, MetLife
failed to make a good faith, supported, and documented interpretation of the Plan’s
schizophrenia exclusion as it applied to Ms. Duncan’s condition. In addition, MetLife failed to
adequately and timely explain the basis for its denial, and failed to do the factual investigation
necessary to discover whether Ms. Duncan’s specific condition could fall within the
Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1289 (10th Cir. 2002)
(citations and internal quotation marks omitted).
Flinders, 491 F.3d at 1195.
Id. (quoting King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 1005 (8th
Cir. 2005) (alteration in original)).
King, 414 F.3d at 1005–06 (quoting Saffle v. Sierra Pac. Power Co. Bargaining
Unit Long Term Disability Income Plan, 85 F.3d 455, 461 (9th Cir. 1996)).
schizophrenia exclusion. MetLife must remedy these deficiencies on remand should it again
choose to deny Ms. Duncan’s claim.
4. Attorneys Fees and Costs
Under 29 U.S.C. § 1132(g)(1), a district court “in its discretion may allow a reasonable
attorney’s fee and costs of action to either party.” Several non-exclusive factors the Court may
“1) the degree of culpability or bad faith, 2) the ability of the party to satisfy the
award, 3) whether an award of fees would deter others from acting under similar
circumstances, 4) whether the party seeking fees sought to benefit all participants
of the plan or resolved a significant legal question, and 5) the relative merit of the
parties’ positions.” 110 This list of factors is neither exhaustive nor exclusive. 111
First, the steps taken by MetLife to interpret the Plan and its handling of Ms. Duncan’s
claim were unreasonable, and did not give Ms. Duncan adequate notice of the basis for denial.
In addition, MetLife’s interpretative process was not well reasoned or documented. MetLife’s
late explanation of its interpretation gave Ms. Duncan no choice but to hire counsel and litigate
MetLife’s interpretation in federal court. These actions weigh in favor of awarding Ms. Duncan
attorney’s fees and costs.
Second, there is no doubt that MetLife has the ability to satisfy an award of fees and
costs. MetLife is one of the largest global providers of insurance and employee benefits, with a
net income of more than 5 billion dollars in 2015.112 Third, the practice of reserving a reason for
denial until the final administrative appeal undermines the purpose of the Department of Labor’s
implementing regulations and cannot be tolerated. Administrators may have a financial
incentive to hold back a basis for denial, or to find a new basis for denial in the final stages of
Moothart v. Bell, 21 F.3d 1499, 1507 (10th Cir. 1994).
MetLife, Inc., Annual Report 2 (2016), http://media.corporateir.net/media_files/IROL/12/121171/Files/ar/HTML1/tiles.htm.
administrative action in the hope that a participant will not pursue an appeal in federal court or to
prevent a participant from submitting evidence on that issue. Granting attorney’s fees and costs
helps disincentive this behavior.
Fourth, Ms. Duncan’s appeal impacts not only her, but other Plan participants because it
helps clarify an ambiguous Plan term. This consideration also weighs in favor of awarding
attorney’s fees and costs to Ms. Duncan. Fifth, the balance of merits tips in favor of Ms. Duncan
because MetLife’s interpretation relied on two statements which only briefly touched on
schizophrenia and schizoaffective disorder while ignoring the DSM and reaching an
interpretation that is inconsistent with other Plan exclusions.
For these reasons, the Court will award Ms. Duncan reasonable attorney’s fees and costs.
The Court orders counsel for Ms. Duncan to submit an affidavit detailing reasonable attorney’s
fees and a bill of costs in compliance with Federal Rule of Civil Procedure 54(d) and
DUCivR54-2 within fourteen (14) days.
It is therefore
ORDERED that Ms. Duncan’s Motion for Decision on the Record (Docket No. 16) is
GRANTED and that the case REMANDED to MetLife for proceedings consistent with this
order. It is further
ORDERED that Ms. Duncan’s request for attorney’s fees and costs (Docket No. 16) is
GRANTED. Ms. Duncan has fourteen (14) days to submit an affidavit and bill of costs in
compliance with Federal Rule of Civil Procedure 54(d) and DUCivR 54-2. It is further
ORDERED that MetLife’s Motion for Summary Judgment (Docket No. 18) is DENIED.
The Clerk of the Court is directed to enter judgment as stated and close this case forthwith.
DATED November 10, 2016.
BY THE COURT:
United States District Judge
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