VINCE CHHABRIA, United States District Judge.
Plaintiff Kathee Colman brought this suit under the Employee Retirement Income Security Act of 1974 ("ERISA"), alleging that Defendants American International Group, Inc. Group Benefit Plan (the "Plan"), and Hartford Life and Accident Insurance Company ("Hartford") failed to extend long-term disability benefits in violation 28 U.S.C. § 1132. The parties filed cross-motions for judgment. Because the plaintiff has failed to establish that Hartford abused its discretion in denying further long-term disability benefits beyond August 2013 based on its determinations that, (i) the plaintiff had exhausted her benefits for a disability arising from a mental illness, and (ii) she had not shown she was disabled as the result of her physical ailments, the plaintiff's motion is denied. The defendants' motion is granted in full.
The Plan provides long-term disability benefits for a claimant who is disabled because of: (1) "accidental bodily injury"; (2) "sickness"; (3) "Mental Illness"; (4) "Substance Abuse"; or (5) "pregnancy." AR 1511. For the first 24 months from the date of initial eligibility for benefits, a claimant is disabled within the meaning of the Plan if the claimant is unable to perform one or more of the essential duties of his or her occupation. Thereafter, to continue to receive benefits, a claimant must show that he or she is prevented from performing one or more of the essential duties of any occupation. Id.
For a disability caused by mental illness, the Plan provides a maximum of 24 months of benefits payments in a lifetime.
In February 2008, Colman left her position as a claims adjuster for American International Group and filed for short-term disability benefits. Colman had previously been diagnosed with a number of illnesses, including fibromyalgia. At the end of the Plan's short-term disability period, she filed a claim for long-term disability benefits. At Hartford's request, she also filed a claim for Social Security disability benefits.
In October 2008, Hartford, the insurer and claims administrator for long-term disability benefits under the Plan, approved Colman's claim. AR 229-232. Hartford determined that Colman's disability had begun on February 1, 2008, and that she was eligible for benefits as of August 1, 2008. (Under the terms of the Plan a claimant is only eligible for long-term disability
In April 2010, Hartford sent Colman a letter notifying her that she was reaching the end of her benefits period for a condition that prevented her from performing the essential duties of her occupation and that, as of August 2010, she would need to show that she was totally disabled — unable to perform the essential duties of any job — to continue receiving long-term disability benefits. AR 195.
In July 2010, after receiving records from Colman's psychologist, Hartford sent Colman a letter stating that information Hartford had received showed that Colman had been disabled "due to a Mental Nervous Condition" since June 2009. Hartford stated that Colman would therefore exhaust her benefits for disability caused by a mental illness in June 2011. The letter also informed Colman that it was "awaiting the medical information requested from your physicians ... to continue to evaluate your physical function. This information is needed in order to determine if you meet the policy definition of Disability and continue to qualify for benefits on and after 08/01/2010, due to a physical condition." AR 184.
In April 2011, Colman was examined by Dr. Ekaterina Malinovsky. Dr. Malinovsky reported to Hartford that, due to a combination of Colman's chronic pain, depression, and the side effects from her pain medication, Colman would continue to be completely disabled through April 2012.
In August 2011, Hartford requested that Colman undergo an independent medical examination. Dr. Aubrey Swartz conducted the examination. In his report, Dr. Swartz opined that Colman's physical ailments were not so severe as to render her totally disabled. Based on the activity restrictions in Dr. Swartz report, Hartford determined that Colman would be able to perform the essential duties of a number of occupations, including her own former occupation as a claims adjuster.
In October 2011, Hartford notified Colman that she no longer fell within the Plan's definition of disabled, and would therefore receive no further benefits beyond October 31, 2011. The letter informed Colman that she had exhausted her benefits for disability arising from mental illness, and that Dr. Swartz's examination showed that her physical disabilities were not so severe as to preclude her from working in any occupation. AR 162-64.
Colman appealed this determination, providing hundreds of pages of additional documents. In her appeal, Colman also questioned Hartford's claim procedures and Swartz's impartiality. As part of its review of Colman's appeal, Hartford sent Colman's file to University Disability Consortium for independent review. Two doctors, an orthopedist and a pain management specialist, reviewed Colman's file. The orthopedic specialist opined that Colman did not have any orthopedic problems that would cause her to be completely disabled. The pain management specialist opined that neither Colman's pain nor any side effects from her pain medication would prevent her from performing sedentary work, so long as she was able to take regular rest periods.
In November 2012, Hartford sent Colman a letter notifying her that, after reviewing her appeal, it was reversing its earlier determination that Colman was no longer disabled. Hartford acknowledged that its decision to invoke the mental illness limitation as of June 2009 had been "premature," because "it was not clearly established that [Colman's] physical complaints were not impairing at that time." AR 151. Hartford informed Colman that
Colman did not submit any further medical evidence. In August 2013, Hartford terminated Colman's mental illness benefits. This lawsuit followed.
Notes from a late-July visit with Dr. Carlo Esteves — a pain specialist who had been treating the pain from Colman's fibromyalgia and degenerative joint disease since February 2008, see AR 1971-74 — reported that Colman's "generalized body pain ... is being managed with medication, acupuncture, [physical therapy] and injections. Patient ... reported to be doing well." AR 2110.
Dr. Rapp referred Colman to Dr. Anatoliy Fortenko, a specialist at Kaiser, "for evaluation of neck and arm pain." AR 1351.
Dr. Esteves submitted to Hartford an Attending Physician Statement, in which he offered no opinion about Colman's ability (or lack thereof) to work. Like Walker, Dr. Esteves stated that Colman's return-to-work date "needs to be determined by patient physician." AR 942.
AR 866. Dr. Malinovsky concluded that Colman would be completely disabled for one year, until April 2012.
AR 807. Dr. Swartz noted that, in the "physical capacities checklist" Colman had completed during her visit, she stated she was only capable of dressing herself, preparing meals, and making the beds. Based on his in-person examination and his review of Colman's medical records from the prior three years, Dr. Swartz opined:
AR 812 (emphasis added). Dr. Swartz went on to describe the functional capacity he believed was justified based on his orthopedic examination. Based on these restrictions, Hartford determined that Colman had the ability to work in a number of jobs, including her previous position as a claims adjuster. AR 753.
Dr. Vodopich gave Colman another cervical epidural injection. Dr. Vodopich noted that Colman reported that her overall pain was "better," an average of "1-4/10" prior to the injection. AR 2429.
Dr. Peck's report provided a detailed description of the medical records from Colman's various doctors. He noted that "[t]hroughout the documentation there were consistent reports of pain and frequent reports of poor coping." AR 311. Dr. Peck opined, "From a purely musculosketetal standpoint, the claimant is able to perform the tasks required for light work. She has other factors which may further limit her to sedentary work, including pain, medication side effects, and the psychiatric sequelae of her pain (which lie beyond my field of expertise)." AR 311. Dr. Peck found that "with regard to
In 2009, at Hartford's request, see AR 217, Colman filed a claim for Social Security disability benefits. The Social Security Administration requested that an orthopedic doctor, Dr. Calvin Pon, and a psychiatrist, Dr. Stefan Lampe, examine Colman in connection with her claim. The physicians offered separate opinions about Colman's impairment. Neither doctor found limitations that would prevent Colman from performing sedentary work. See AR 2697-99, 2708-09. The Administration denied benefits. AR 1089-93. When Colman appealed this denial, the Administration requested additional evaluations by two psychologists. The first of these, Sokely Khoi, examined Colman in a December 2009. Based on this examination, Khoi opined that Colman suffered "[m]oderate to [m]arked" impairment in her ability "to withstand the stress of a routine work day," and "[m]oderate" impairment in her ability "to interact appropriately with coworkers, supervisors, and the public on a regular basis." Khoi offered no opinion about Colman's physical condition. The second psychologist, Preston Davis, reviewed Colman's case in January 2010. Based on his review, Davis opined that Colman's psychiatric condition was "severe" but that she could "sustain her concentration, pace, & her persistence w/her wk tasks for 2 hr blocks of time, w/customary breaks, over the course of a regular wkday/wk." Davis further opined that Colman could "interact w/supervisors & w/cowkers she knows well," but that she "has mood & personality problems," and "would have difficulty coping w/the stress of having to consistently interact w/the general public. She can perform her wk tasks w/little general public contact." AR 2826.
The Social Security Administration's internal case analysis subsequent to these evaluations stated that the Administration had determined that Colman was disabled as of May 2009 "with increasing psy[chiatric] conditions and [diagnosis] as given above [in Davis's review]." The Administration notified Colman by letter that it had determined she was disabled as of May 2009. The letter did not specify the basis for the Administration's determination. AR 2614.
The standard by which a court reviews an administrator's denial of ERISA benefits depends on the terms of the benefit plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). Here, the Plan unambiguously grants discretion to Hartford.
Colman argues that the affidavit of a former Hartford long-term disability claims adjuster, Sandra Carter, a history of "poor and biased claim performance" on the part of Hartford. Pltf's MSJ at 19. But this affidavit is of little value in establishing the effect of Hartford's structural conflict of interest on its determination of Colman's eligibility for benefits. Carter worked in the disability claims department in Hartford's Georgia office for two years between 2004 and 2006. Her affidavit describes her experiences in that office during that time. AR 1891-92. Colman's claim was filed two years after Carter left the claims department. And there is no evidence in the record that anyone from Hartford's Georgia office had any involvement in Colman's claim.
Colman argues that Hartford's "failure to present extrinsic evidence of any effort on its part to assure accurate claims assessment[,]" Montour, 588 F.3d at 634 (internal quotation marks omitted), tends to show that Hartford's conflict affected its benefits decision. But while a conflict may "prove less important (perhaps to the vanishing point) where the administrator has taken active steps to reduce potential bias and to promote accuracy," Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 117, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), an administrator is not obligated to provide this type of evidence. Montour, 588 F.3d at 634.
Colman further argues that Hartford's use of Dr. Swartz as an independent medical examiner, and its subsequent inclusion of Dr. Swartz's report in the files it sent to Drs. Boscardin and Peck, serve as additional evidence that Hartford is biased against approving claims. In Hangarter v. Provident Life & Accident Insurance Co., 373 F.3d 998, 1011 (9th Cir.2004), the Ninth Circuit affirmed a district court's determination that Provident's repeated use of Dr. Swartz supported a jury's determination that Provident "engaged in a biased, and thus `bad faith,' investigation" of a claim. But nothing in Hangarter suggests that Dr. Swartz is necessarily biased in every independent medical review. Rather, the jury had been presented with evidence that an insurer's continual use of the same independent examiner could lead to the examiner becoming biased in favor of that particular insurer. See id. Colman points to no evidence about the frequency with which Hartford used Dr. Swartz or the other reviewers it employed in the case. See Montour, 588 F.3d at 634 (noting that "Montour ... did not submit
Without significant extrinsic evidence of either the effects of Hartford's conflict, such as "any evidence of malice, of self-dealing, or of a parsimonious claims-granting history," Abatie, 458 F.3d at 968, or its affirmative efforts to reduce bias, the Court finds that Hartford's structural conflict of interest warrants only a moderate level of skepticism.
Colman claims that a number of procedural errors in Hartford's claims determination prevented her from receiving a "full and fair review" of her claim. See 29 U.S.C. § 1133. "A procedural irregularity, like a conflict of interest, is a matter to be weighed in deciding whether an administrator's decision was an abuse of discretion." Abatie, 458 F.3d at 972. "When an administrator can show that it has engaged in an ongoing, good faith exchange of information between the administrator and the claimant, the court should give the administrator's decision broad deference notwithstanding a minor irregularity." Id. (internal quotation marks omitted). But "[a] more serious procedural irregularity may weigh more heavily," id. to the point where an administrator's use of a flawed claims procedure may itself constitute an abuse of discretion. See Glenn, 554 U.S. at 115, 128 S.Ct. 2343.
Colman argues that Hartford abused its discretion by failing to notify her of what she needed to provide to perfect her claim. To be sure, the October 2011 letter in which Hartford informed Colman that she had not established that qualified as disabled due to a physical condition was "hardly a model of clarity," Saffon v. Wells Fargo & Co. Long Term Disability Plan, 522 F.3d 863, 870 (9th Cir.2008). The letter cataloged some of the evidence in Colman's file, but provided little in the way of explanation for why the information was insufficient to establish disability due to a physical condition. See id. However, any deficiency in the letter was mitigated by the fact that, from July 2010 onward, Hartford had repeatedly notified Colman that she needed to provide Hartford with evidence that her physical ailments prevented her from working in any occupation. See AR 86, 178-84.
Moreover, to the extent that Colman now argues that Hartford's communication with her was not sufficiently clear for her to understand the need to provide evidence of her physical condition, this argument is contradicted by Colman's response to Hartford's October 2011 denial letter, which showed that Colman understood the need to show that she was physically disabled. In her appeal, Colman argued that her depression was "significantly secondary" to her physical ailments. And in support of her appeal, she submitted hundreds of pages of additional documents in an attempt to establish physical disability.
What's more, Hartford's November 2012 response to Colman's appeal provided a much more detailed explanation of its decision. This letter informed Colman that although Hartford had determined that she had not established a physical cause of her disability as of August 2011, she would continue to receive disability benefits based on her mental illness through July 2013. The letter also stated that she was free to submit additional evidence of her physical condition. Thus, in contrast to Saffon, where the information in Metlife's final denial letter "came too late to do Saffon any good," 522 F.3d at 871, here Colman had the opportunity to submit additional evidence in response to the explanations in Hartford's November 2012 letter.
Colman further argues that Hartford made no mention of the Social Security Administration's determination of disability in any of its communications with Colman about her claim under the Plan. In Montour, the Ninth Circuit observed:
588 F.3d at 635 (citations and internal quotation marks omitted).
Hartford would have been well-served to acknowledge the Social Security Administration's disability determination in its denial letter, and to explain why Hartford believed that determination was not contrary to its own benefits decision. See id. at 637. But unlike in Montour, here it appears that there is little if any inconsistency between Hartford's determination and that of the Administration. While Hartford did not address the Administration's decision in its own benefits determination, Hartford did acknowledge that Colman's mental illness prevented her from working in any position. AR 151. See also AR 160-63 (explaining that Hartford had been paying disability benefits based on Colman's mental illness, but that Colman had exhausted those benefits). Though it is not apparent from the Social Security Administration's letter granting benefits, the records from the Administration's evaluation of Colman's claim make clear that this is what the Administration determined as well. See supra Section I.D. Therefore, the Court accords only limited weight to Hartford's failure to mention the decision. See Sethi v. Seagate U.S. LLC Grp. Disability Income Plan, 597 Fed.Appx. 405, 407 (9th Cir.2014) ("Liberty did not abuse its discretion by denying benefits without addressing decisions made in her workers' compensation case. Because Sethi has not shown a conflict between Liberty's decision and the workers' compensation decisions, no further explanation was required.").
Nothing in the record suggests that Hartford purposely withheld information or was otherwise attempting to "hide the ball" from Colman in a way that would render its decision a procedural abuse of discretion. Cf. Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 680 (9th Cir.2011) (holding that the administrator's decision was procedurally arbitrary and capricious where the administrator denied
Turning to the substance of Hartford's decision, in its November 2012 letter responding to Colman's appeal, Hartford determined that Colman had failed to establish that a physical ailment, as opposed to mental illness, rendered her unable to perform any job as of August 2011 (or any time thereafter). Hartford therefore invoked the Plan's 24-month mental illness limitation as of as of August 2011. Though Hartford never expressly stated as much, it is implicit in Hartford's communications with Colman that Hartford interprets the Mental Illness limitation to apply where a claimant is unable to work in any occupation as the result of a combination of mental illness and physical ailments (so long as the physical ailments are not of such severity that these ailments taken alone would render the claimant unable to work). In other words, Hartford interprets the limitation to apply where mental illness is a but-for cause of the disability, irrespective of whether physical factors also contribute to the claimant's inability to work.
Colman argues that the Plan's mental illness limitation is ambiguous, and that any ambiguity must be construed in favor of coverage under the principle of contra proferentem. Colman is correct that Contra proferentem generally applies in interpreting ambiguous terms in an ERISA-covered plan. But the applicability of the principle in the ERISA context is subject to a number of exceptions, including where "the plan grants the administrator discretion to construe its terms." Blankenship v. Liberty Life Assur. Co. of Bos., 486 F.3d 620, 625 (9th Cir.2007). Where the plan grants discretion to the administrator, it is the administrator who resolves ambiguities in the plan's language. The only question for a reviewing court is whether the administrator's interpretation is reasonable. Day v. AT & T Disability Income Plan, 698 F.3d 1091, 1098 (9th Cir.2012). Here, even if the language of the mental illness limitation were ambiguous about whether a disability caused in part by a physical ailment and in part by a psychological, behavioral, or emotional ailment falls within the limitation, Hartford's interpretation of the limitation is a reasonable one. See Maurer v. Reliance Standard Life Ins. Co., No. C 08-04109 MMC, 2011 WL 1225702, at *7 (N.D.Cal. Mar. 31, 2011), aff'd, 500 Fed. Appx. 626 (9th Cir.2012).
Given this interpretation, Hartford reasonably invoked the 24-month mental illness limitation, beginning August 2011, when, in November 2012, Hartford retroactively reinstated Colman's benefits payments. To be sure, Colman's medical records list a host of diagnoses, many of them for physical ailments, going back to 2005. See, e.g., AR 901. But a diagnosis of a
Moreover, in determining that Colman's physical ailments did not render her unable to work in any occupation, Hartford did not dispute that those physical ailments cause her pain. Indeed, given her diagnoses of chronic pain and fibromyalgia, it would have been improper for Hartford to deny Colman's claim based on a lack of objective evidence of pain. See Montour, 588 F.3d at 635; see also Benecke v. Barnhart, 379 F.3d 587, 594 (9th Cir.2004). But unlike in Montour, where the doctor treating Montour's condition "consistently maintained to Hartford that Montour remained physically disabled and unable to work in any job" and listed specific restrictions on Montour's physical activities, 588 F.3d at 627, 635, Colman is unable to point to a single medical opinion stating that any of the physical ailments listed in her records (as opposed to her depression or a combination of her physical ailments and her depression) prevented her from working as of August 2011.
Indeed, the record shows that the only doctor to opine that Colman remained completely unable to work as August 2011 was Dr. Malinovsky. In her April 2011 Attending Physician Statement, Dr. Malinovsky opined that Colman would be completely disabled through April 2012. But Dr. Malinovsky found that Colman was disabled due to a combination of chronic pain, depression, and side effects from pain medication. The report did not explain whether one of these causes predominated over others. Nor did it provide any detail as to Colman's functional limitations. And when Dr. Peck contacted Dr. Malinovsky in October 2012, Dr. Malinovsky was unable to elaborate on her report, explaining that she had only seen Colman only once. AR 301. Consequently, it was not unreasonable for Hartford to determine that Colman had not established that she was disabled due to physical ailments as of August 2011. See Lee v. Kaiser Found. Health Plan Long Term Disability Plan, 812 F.Supp.2d 1027, 1041 (N.D.Cal.2011), aff'd in relevant part, 563 Fed.Appx. 530 (9th Cir.2014).
Considering all the relevant circumstances, Hartford's determination that Colman had not established that her physical condition prevented her from working in "any occupation" as of August 2011 was neither procedurally nor substantively unreasonable. Hartford therefore did not abuse its discretion. Accordingly, the Court denies Colman's motion for judgment and grants Hartford's motion for judgment.
