Cases

Court of Appeals

DuPerry v. Life Ins. Co. Of North America, ___ F.3d ___, 2011 WL 199087 (4th Cir. 2011).
The Fourth Circuit upheld the rulings by the district court in all respects. The court ruled that Life Insurance Company of North America (“LINA”) abused its discretion in denying the claimant's application for long term disability (LTD) benefits, despite the conclusions of LINA's reviewing rheumatologist that the claimant's diseases did not prevent her from working. It was undisputed that the plaintiff suffered from chronic diseases that were potentially debilitating, including rheumatoid arthritis, osteoarthritis, and fibromyalgia. Her treating physicians and her employer confirmed that those diseases did, in fact, prevent her from working, and the reviewing rheumatologist did not give any principled reason for rejecting the claim. The court also upheld the district court's ruling that the plaintiff was entitled to benefits up to the date of judgment. LINA argued that the claim should be remanded to allow it to determine whether the plaintiff was entitled to benefits under the more restrictive “any occupation” definition of disability. The court upheld the district court's determination that it would have been futile for the plaintiff to have applied separately for LTD benefits under the any occupation definition, and thus the district court was within its discretion in awarding benefits up to date of its ruling. Finally, the court upheld the district court's award of attorney's fees costs and prejudgment interest.

Leone v. Tyco Electronics Corp., Case No. 09-1821, 2011 WL 96540 (4th Cir. Jan. 12, 2011).
In this case, the Fourth Circuit Court of Appeals upheld the ruling of the district court that, under North Carolina law, Tyco Electronics did not breach the terms of its short-term disability policy by refusing to pay the employee short-term disability benefits. Because the policy merely provided that short-term disability benefits “may” be available to an employee who has a short-term disability, and did not guarantee that an employee would receive such benefits, the right to benefits was contingent upon Tyco's exercise of its discretionary power. The Court agreed with the district court that the claimant failed to prove that Tyco failed to comply with the duties of good faith and fair dealing when it denied his claim.

Williams v. Metropolitan Life Insurance Co., 609 F.3d 622 (4th Cir. 2010).
The Court of Appeals ruled that even though the district court applied an incorrect legal standard following the Supreme Court's decision in Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105 (2008), the Court of Appeals would review the administrator's decision de novo, rather than remand the case to the district court, since the Court of Appeals and the district court each conduct the same de novo review in determining whether the administrator abused its discretion. Upon reviewing the evidence, the Court of Appeals agreed with the district court that substantial evidence did not support MetLife's determination that the plaintiff was no longer disabled from her customary occupation as customer service clerk, and thus the administrator abused its discretion in terminating the plaintiff's benefits. Although the plaintiff's neck and shoulder pain showed signs of improvement, her medical records contained overwhelming evidence reflecting significant problems with her hands and wrists. Despite seven operations to correct trigger finger syndrome on her hands and two carpal tunnel surgeries, participant's hand and wrist impairments continued to significantly impede her ability to type on a computer. The Court also announced that, as a result of the Supreme Court's decision in Hardt v. Reliance Std. Life Ins. Co., ___U.S. ___, 130 S.Ct. 2149 (2010), judges should consider a two-step inquiry in ruling on claims for attorney's fees and costs in ERISA cases. The Court, after conducting this analysis, affirmed the district court's decision to award attorney's fees and costs. The Court held that district courts may consider the claimant's poverty in deciding whether to award attorney's fees.

Gorski v. ITT Long Term Disability Plan for Salaried Employees, 314 Fed.Appx. 540, 2008 WL 4790117 (4th Cir. 2008).
In this case, the Fourth Circuit reversed the decision of the district court in favor of the plan and the plan administrator, MetLife. The Court held that MetLife's termination of the claimant's long-term disability benefits was an abuse of discretion. The evidence clearly demonstrated that the claimant's surgical hardware had dislodged and was irritating nerve tissue surrounding the hardware, causing the claimant substantial pain and other problems. A CT scan and flexion and extension films showed that her 4/5 cage was “kicked out laterally,” apparently compressing her right 4 nerve root and maybe even catching her right 5 nerve root as well, resulting in low back pain and right leg pain. The Court rejected the report of MetLife's reviewing physician, whose opinion that the claimant had failed to provide objective evidence was contrary to the record. Two of the three panel members ruled that reinstatement of long-term disability benefits was the appropriate remedy, rather than a remand to MetLife for a new determination. On this point, Judge Traxler dissented in part. His view was that although MetLife abused its discretion by relying on the faulty report of its reviewing physician, the case should be remanded to allow MetLife to consider conflicting evidence as to whether the claimant was entitled to benefits.

Guthrie v. National Rural Elec. Cooperative Ass'n Long-Term Disability Plan, 509 F.3d 644 (4th Cir. 2007).
The Fourth Circuit reversed the district court's ruling in favor of the defendant's ERISA disability plan. The plan hired two pulmonologists to consider whether the claimant was disabled from asthma, a condition which the claimant's own physician conceded did not prevent her from working. The reviewing pulmonologists failed to consider whether the claimant was disabled by a combination of her other health conditions, including anxiety and depression, skin lesions and arthritis. The Court reviewed the case under the abuse of discretion standard, holding that the claims administrator's status as a subsidiary of a national cooperative association, which sponsored the group benefits plan, did not constitute a conflict of interest warranting application of the modified abuse of discretion standard, where the association established a trust funded by employers solely to pre-fund benefits claims and spread financial risk, and claims were paid from the trust, not from association's or administrator's assets.

District Court

Reininger v. Azdel, Inc. Retirement Plan, ___ F.Supp.2d ___, 2011 WL 814984 (W.D.N.C. February 24, 2011).
The plaintiff alleged the defendant, a pension plan, wrongfully reduced his pension benefit retroactively to the date of the plaintiff's retirement. After the plaintiff was terminated by his employer in 1998 due to a reduction in force, the pension plan began paying the plaintiff monthly benefits. Ten years later, the plan reduced the plaintiff's benefits in accordance with a plan amendment adopted in 2006. The plan applied the amendment retroactively to the plaintiff. As a result, the plan reduced the amount of the plaintiff's pension in accordance with the amendment and to recoup the alleged overpayment of benefits. The plaintiff sued. In his first claim for relief, under 29 U.S.C. § 1132(a)(1)(B), the plaintiff challenged the plan's determination of his monthly benefit. The plaintiff also alleged several alternative claims, including breach of fiduciary duty, equitable relief from recoupment, waiver, estoppel, laches, and statute of limitations. The plan moved to dismiss the second claim for breach of fiduciary duty. The district court agreed, ruling that the plan is not an ERISA fiduciary under 29 U.S.C. § 1002(21)(A).

Ward v. Life Ins. Co. of North America, Case No. 1:08CV675, 2009 WL 2740202 (M.D.N.C. August 26, 2009).
The plaintiff was employed as a Quality Assurance Technician by Railroad Friction Products Corporation (“RFPC”), a subsidiary of Wabtec. He had a history of degenerative disc disease and underwent back surgery in October 2004. On July 26, 2006, he injured his back while lifting at work. He did not return to work after that date. The plaintiff settled with his workers' compensation carrier for $60,000. On February 21, 2007, the plaintiff submitted a claim to LINA for long-term disability benefits. LINA denied the plaintiff's claim. The plaintiff then hired counsel and appealed. LINA denied the appeal. The plaintiff appealed again. On June 11, 2008, LINA notified Plaintiff that his second appeal had been denied. The denial letter contained numerous errors, including the wrong name of the plaintiff's employer, the wrong policy number, and a misstatement of the plaintiff's medical condition and impairments. For example, the denial letter identified the wrong employer and policy number and referred to plaintiff as having had a leg amputated. Following receipt of this denial letter, the plaintiff, through counsel, contacted LINA and pointed out the inaccuracies in the denial letter. Despite assurances from LINA that it would remedy the errors, no new decision on the plaintiff's appeal was ever issued by LINA. Plaintiff filed his lawsuit on September 19, 2008. The plaintiff asked the court to order LINA to pay benefits. LINA contended that notwithstanding the mix-up in the files that resulted in the erroneous denial letter, it was not required to consider the plaintiff's second appeal due to the fact that it was a “voluntary” appeal under the plan document. The district court disagreed, ruling that LINA had the duty to consider the plaintiff's appeal, notwithstanding the fact that second level appeal was described in the plan as a “voluntary” appeal, and ordered LINA to provide a full and fair review in accordance with 29 U.S.C. § 1133. The court also denied the plaintiff's request for attorney's fees and costs on the ground that he was not a “prevailing party” because the lawsuit resulted in a remand rather than an award of benefits. The case on which the district court relied in denying the claim for attorney's fees and costs was later in Hardt v. Reliance Std. Life Ins. Co., ___ U.S. ___, 130 S.Ct. 2149 (2010).

Pinario v. The Prudential Life Insurance Company of America, Case No. 4:08-CV-161-F (E.D.N.C. July 23, 2009).
The plaintiff suffered from chronic fatigue syndrome and fibromyalgia, which limited her to half-time work in her position as an administrative assistant. The district court ruled that the employer's disability insurance policy failed to reserve discretionary authority to Prudential, the claims administrator, citing Woods v. Prudential Insurance Co. of America, 528 F.3d 320 (4th Circ. 2008) and other cases. The court then reviewed the evidence under the de novo standard of review and found that the plaintiff was entitled to benefits. The court credited the opinions of the plaintiff's physicians, one of whom was a prominent expert in the field of chronic fatigue syndrome, fibromyalgia and related disorders. It found that the reports of Prudential's reviewing physicians, none of whom ever examined the plaintiff, were not persuasive. However, the court limited benefits to 24 months under the policy's 24-month limitation for claims based on "self-reported symptoms."

Allen v. Metropolitan Life Insurance Co., Case NO. 4:06-CV-175-H (E.D.N.C. March 31, 2008).
The plaintiff began her 20-year career with IBM in 1981. She ceased working in 2001 as a Manufacturing Inventory Program Manager after become exposed to toxic mold following a flood at her workplace. The plaintiff's physicians differed as to whether the cause of her disability was a physical or mental illness. However, all of the treating physicians and one of MetLife's reviewing physicians agreed that the plaintiff actually suffered from the symptoms she claimed. The district court held that the plaintiff had satisfied her burden of submitting evidence that she was disabled. Although MetLife relied on the reports of several reviewing physicians, the court found that the reviewing physicians' reports did not constitute “substantial evidence” as required by the Fourth Circuit case of Stup v. UNUM Life Insurance Co. of America, 390 F.3d 301 (4th Cir. 2004). MetLife did not initially act on the reports of three of its reviewing physicians. Following the receipt of each of the three reports, the plaintiff responded by submitting additional materials in support of her claim, however MetLife did not share the additional materials with the reviewing physicians. Rather, MetLife chose to continue to pay benefits. MetLife mischaracterized the report of Dr. Susco, the only doctor who performed an independent examination of the plaintiff at the request of MetLife. Dr. Susco found that the plaintiff's impairment was “quite enough to limit her daily functioning” and estimated her GAF score to be 45. The court found that the plaintiff was entitled to prejudgment interest. The case was settled while the plaintiff's motion for attorney's fees and costs was pending.

Thornton v. Metropolitan Life Insurance Company, Case No. 5:05-CV-827-H(3) (E.D.N.C. June 13, 2007).
The district court, having granted the plaintiff's motion for summary judgment, concluded that she was also entitled to attorney's fees, costs and prejudgment interest.

Alford v. Metropolitan Life Insurance Co., Case No. 1:05CV207 (M.D.N.C. March 5, 2007).
The Magistrate Judge recommended that summary judgment be granted to the plaintiff, who claimed long-term disability benefits provided by MetLife based on her fibromyalgia. The Magistrate Judge recommended that the plaintiff's motion for prejudgment interest and costs be granted but that her motion for attorney's fees should be denied.

Alston v. Metropolitan Life Ins. Co., Case No. 1:05CV00121, 2006 WL 3102970 (M.D.N.C. October 27, 2006).
In this case there was no dispute that the plaintiff suffered from relapsing/remitting multiple sclerosis. MetLife reevaluated the plaintiff's medical records while her symptoms were in relative remission. MetLife's reviewing physicians opined that the plaintiff was capable of working in a sedentary occupation. According to the court, “MetLife's decision simply came down to a permissible judgment call between conflicting medical opinions. Given the differing conclusions of [the plaintiff's] treating physicians along with those of [MetLife's physicians], MetLife's denial of long-term disability benefits was reasonable and not an abuse of discretion.” The Magistrate Judge therefore recommended that the district court grant MetLife's motion for summary judgment.

Mitchell v. Metropolitan Life Insurance Company, Case No. 5:05-CV-129-BO(1) (E.D.N.C. March 24, 2006).
Summary judgment granted for the plaintiff. The plaintiff was unable to continue her work as a Group Leader at Siemens Energy & Automation, Inc. due to severe depression, bipolar affective disorder, panic disorder with agoraphobia, and seizure disorder. While her appeal was pending, the plaintiff was admitted to a psychiatric hospital upon the recommendation of her counselor. Upon admission, her GAF score was between 20 and 25, which indicates “serious impairment in communication or judgment... or inability to function in almost all areas.” The plaintiff notified MetLife of her hospitalization. The next day MetLife denied the plaintiff's appeal without requesting any medical records from the hospital. The plaintiff hired counsel who submitted, among other things, the medical records from the psychiatric hospital. MetLife denied the second appeal after obtaining reports from a psychiatrist and a psychologist. The district court held that it was “impossible for the Court to conclude that Defendant's initial decision to deny Plaintiff's claim for STD benefits was reasoned and principled.” The court further found that the reports of both reviewing physicians suffered from deficiencies. The court awarded attorney's fees and prejudgment interest.

Brown v. Nortel Networks, Inc., Case No. 5:03-CV-658-FL (3) (E.D.N.C. November 29, 2004).
The plaintiff's evidence showed that she suffered from a number of medical problems, including severe depression, cognitive impairments, basilar artery migraines, coronary artery disease, hypercholestoremia, and multiple neurological symptoms. Nortel paid short-term benefits, but limited long-term benefits to 24 months under the plan's mental illness limitation. The plaintiff's appeals focused on the evidence from the plaintiff's neurologist, neuropsychologist and primary care physician that her disability was the result of small vessel ischemia caused by her hyperchlestoremia. Small vessel ischemic disease causes problems with blood circulation and can result in reduced blood supply to an area of the brain. The syndrome produces transient ischemic attacks, also known as mini-strokes. Based on testing by the neuropsychologist, the plaintiff's neurologist concluded that she was suffering from cognitive impairments caused by a physical condition, rather than a purely psychological condition or mental illness. Another neurologist concurred with this assessment. Nortel's claims administrator, Prudential, referred the matter to a neuropsychologist, but failed to provide him important documents submitted as part of the plaintiff's appeal, including the latest neuropsychological evaluation performed on the plaintiff. Nortel's Employee Benefits Committee affirmed the decision of Prudential to deny benefits. The district court held that Nortel failed to provide the plaintiff a full and fair review of her claim and remanded the case to Nortel for an independent review of the claimant's file.

Driver v. Nortel Networks, Inc., Case No. 5:03-CV-86-BR(3) (E.D.N.C. March 31, 2004).
The district court granted summary judgment to the plaintiff, a technical writer for Nortel Networks, Inc. The plaintiff suffered from failed back syndrome. The court held that the plaintiff's descriptions of his symptoms constituted “clinical evidence” of disability. None of the plaintiff's treating physicians questioned his descriptions of the severity of his pain or suspected any malingering. Essentially, Nortel simply disregarded the diagnoses of the plaintiff's physicians and their opinions regarding his inability to work because the precise etiology of his symptoms could not be determined by testing. The court agreed that Nortel abused its discretion by looking to the test results as the only acceptable “clinical evidence” instead of the diagnoses of numerous treating physicians based on their professional observations of the plaintiff. The court also found that activities performed by the plaintiff did not establish that he was able to return to work.

Driver v. Nortel Networks, Inc., Case No. 5:03-CV-86-BR(3) (E.D.N.C. August 29, 2003).
The court granted the plaintiff's motion to compel Nortel to produce notes prepared by an in-house attorney during a meeting of its Employee Benefits Committee at which the plaintiff's claim was considered. The court upheld the plaintiff's motion based on the “fiduciary exception” to the attorney-client and attorney work product privileges.

Cosgrove v. Provident Life and Acc. Ins. Co., 317 F.Supp.2d 616 (E.D.N.C. 2004).
Applying the modified abuse of discretion standard, the district court held that Provident abused its discretion in denying long term disability benefits to the plaintiff. The court ruled that Provident lacked substantial, objective evidence to controvert the plaintiff's claim of disability due to vertigo. Her evidence of symptoms of extreme vertigo was uncontradicted, no physician indicated malingering, and the most advanced specialist to examine the plaintiff confirmed the existence of Meniere's Disease, a disabling disorder. The court found that the report of Provident's treating physician was not credible. The reviewing physician had never treated the plaintiff and based his opinion that she was not suffering from Meniere's Disease on the records of one of her treating physicians. The court also found that Provident's disregard for the plaintiff's personal account of her symptoms and the effect of her symptoms was not a fair evaluation of the evidence of her ability to perform her job.

Bursell v. General Elec. Co., 243 F.Supp.2d 460 (E.D.N.C. 2003).
In this case, the court held that the de novo standard of review applied to the decision by General Electric's plan administrator to deny the plaintiff's claim for benefits for disability due to mental illness. The court denied both parties' motions for summary judgment, stating that fact questions remained as to whether the plaintiff was “totally disabled” by his mental condition, as required to receive short-term and long-term benefits.

Beasley v. UNUM Life Insurance Company of America, Case No. 5:02-CV-4-BO(3) (E.D.N.C. September 26, 2003).
This decision demonstrates the importance to a claimant of having strong support from all treating physicians. The court found that the plaintiff's claim of disability was insufficiently supported in the medical records.

Garrett v. Fortis Benefits Insurance Company, Case No. 2:02-4280-18 (D.S.C. August 5, 2003).
The plaintiff's evidence showed that his cognitive problems commenced following a hospitalization for pneumonia, during which he experienced severe hypoxemic respiratory failure and was placed on mechanical ventilation for a time. Fortis denied the claim after paying benefits for 24 months and finding that the plaintiff's disorder was the result of a mental illness. The plaintiff appealed After Fortis failed to decide plaintiff's appeal within 60 days as required the ERISA regulations, the plaintiff filed suit in the district court for the District of South Carolina. At issue before the court was Fortis' motion to dismiss for failure to exhaust administrative remedies under the plan or, in the alternative, to remand the matter to Fortis to allow it to determine whether the plaintiff was entitled to benefits. The court ruled that the plaintiff had the right to file suit after Fortis failed to decide his appeal within the time limits allowed by the regulations and therefore denied Fortis' motion. Later, Fortis conceded that the plaintiff was entitled to benefits. The court awarded the plaintiff attorney's fees, costs and prejudgment interest.

Casey v. Pierce, Case No. 5:02-CV-945-H(3) (E.D.N.C. June 5, 2003).
The plaintiff, a small business owner, sued the insurance agent and the insurer, UnumProvident Corporation, in state court to recover disability benefits under an individual disability insurance policy. The defendants removed the case to federal court, alleging that the claim was governed by ERISA. The defendants contended that the policy was part of an ERISA “plan” because several employees of the plaintiff's business purchased similar individual disability policies and for a time the business paid the policy premiums for all employees. The plaintiff moved to remand the case to state court. The court ruled that the claim was not covered by ERISA under the “safe harbor” contained in the Department of Labor's regulations. The safe harbor was met because the employer had not made premium contributions for a number of years, participation in the program was completely voluntary, the employer did not endorse the insurance, and the employer received no consideration from the insurer.

Conrad v. Continental Casualty Co, 232 F.Supp.2d 600 (E.D.N.C. 2002).
In this case, the court ruled that Continental's decision to deny long term disability coverage to the plaintiff diagnosed with fibromyalgia was unreasonable based on the medical record and the language of the employee welfare plan. The court faulted Continental for, among other things, requiring that the plaintiff submit objective evidence to substantiate the extent of her disability, thereby discounting her subjective complaints and the opinions of her treating physicians. The requirement of objective evidence was unreasonable given that the plan did not require it and given that the symptoms of the plaintiff's fibromyalgia, pain and fatigue could not be measured by objective testing.