JAMES E. GRITZNER, District Judge.
Plaintiff Margaret Pettit ("Pettit") filed this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. §§ 1001-1461, seeking judicial review of an appeal from the denial of long-term disability benefits by Defendant UnumProvident Corporation ("Unum"). Pettit further seeks review of Unum's calculation of benefits made payable as a result of her mental disability. The matter is submitted without oral argument on the administrative record and the briefs of the parties.
Pettit was hired by Great River Health Systems, Inc. ("Great River"), on August 12, 1999. As a Great River employee, Pettit was eligible for coverage under Great River's long-term disability plan (the "Plan"). The Plan is part of an "employee welfare benefit plan" covered by ERISA. 29 U.S.C. § 1002(1).
The Plan names Great River as the Plan administrator "with authority to delegate its duties." A.R. 29. The Plan designates Unum as a claims fiduciary, providing that Unum, as the administrator's designee, "has discretionary authority to determine. . . eligibility for benefits and to interpret the terms and provisions of the [Plan]." A.R. 11, 34. A participant is deemed disabled under the Plan when Unum determines that the participant (1) is "limited from performing the
During her employment with Great River, Pettit worked as a surgical technician in the Digestive Health Center and later as a Certified Registered Nurse ("CRN")
Pettit has a history of problems with allergies. She received treatment for her allergies while employed with Great River on numerous occasions. On March 28, 2006, Thomas Boyd, D.O., Pettit's primary physician, examined Pettit and noted that she was "having a lot of problems with allergies" and was "reacting to the chemicals used to clean instruments at her job." A.R. 732. Pettit was referred to David Wegner-Keller, M.D., an allergy specialist, who diagnosed Pettit with latex allergy, contact metal sensitivity, "perennial allergic rhinitis and seasonal rhinitis as well as chronic cough." A.R. 733, 567. Dr. Wegner-Keller also opined that Pettit was intolerant to Cidex and recommended that she wear a charcoal mask around this chemical or avoid contact with it completely. On or about October 30, 2006, after Pettit presented to Dr. Boyd with watery eyes, a runny nose and cough, Dr. Boyd made a diagnosis of "[a]llergic rhinitis with Cidex intolerance" and recommended that Pettit "consider rotating every 2 to 3 days to other work stations, to avoid Cidex exposure." A.R. 204.
Pettit also treated with Ravinder Agarwal, M.D., an allergy specialist, who confirmed the diagnosis of chronic rhinitis and also diagnosed Pettit with allergies to dust mites, cat, ragweed and latex. Dr. Agarwal recommended that Pettit undergo desensitization therapy to help control her symptoms. Pettit appears not to have received such therapy, however, due partially to her lack of resources.
Pettit was directed to visit Great River's occupational medicine provider as a result of the problems she was experiencing with her allergies while at work. On February 6, 2007, Pettit saw Patrick Bredar, PA-C, for "an evaluation secondary to chronic recurrence of shortness of breath, coughing, sneezing and breaking out in hives." A.R. 289. Mr. Bredar noted that Pettit appeared to develop "an asthmatic reaction with [a] runny nose, [and] shortness of breath" when exposed to Cidex. Id. Mr. Bredar recommended that Pettit "be placed on restricted duty from the use only of the Cidex chemical" but indicated she could return to work A.R. 290.
Pettit saw Ricky Garrels, M.D., another occupational medicine provider for Great River on February 8, 2007, with "complaints of respiratory issues related to Cidex exposure." A.R. 288. Dr. Garrels observed congestion in Pettit's upper airways, provided an assessment of allergies and rhinitis, and placed Pettit "on restrictions to avoid exposure to all chemicals, mist, vapors, and odors." Id.
On March 8, 2007, Dr. Garrels saw Pettit for a follow up examination. In his notes, Dr. Garrels reported that Pettit was missing a substantial amount of work. Dr. Garrels noted that Pettit has "significant environmental allergens including household dust, corn smut, and cats" and indicated that Pettit was complaining of increased nasal symptoms with "any exposure to dust, mist, vapor, chemical, or odor." A.R. 286. Following his examination, Dr. Garrels opined, "At this point, I
In addition to her allergies, Pettit has a history of anxiety and depression. On March 29, 2006, Gary Szymula, Ph.D., with Great River Mental Health Care Associates, examined Pettit and noted that she was "having severe problems at work related to depression and anxiety," and that she was "having panic attacks which intensified after the threat of being fired" due to excessive absences from work. A.R. 1435. Following his evaluation, Dr. Szymula diagnosed Pettit with major depressive disorder and panic disorder without agoraphobia and explained that he would document Pettit's concerns to "protect her from possible early termination." A.R. 1436. Pettit's panic attacks persisted despite recommendations from Dr. Szymula for reducing stress.
On March 3, 2007, Pettit treated with Robert Strayhan, M.D., for mental health issues. Pettit reported that she was experiencing "almost constant anxiety" with "3-4 major panic attacks per week." A.R. 954. The panic attacks made Pettit fearful of leaving home, and the most severe attacks required her to be placed on oxygen in the emergency room. Dr. Strayhan opined, "The patient appears at times to have an increased focus on somatic concerns and fears of illness due to chemical exposure. It does appear that the concerns about respiratory status result in precipitation of respiratory stress." A.R. 956. Dr. Strayhan diagnosed Pettit with major depression and panic disorder with agoraphobia.
On March 21, 2007, Pettit's employment with Great River was terminated. Thereafter, on July 22, 2007, Pettit filed a claim with Unum for disability benefits under the Plan. Pettit claimed that she was unable to work as a result of chronic allergies and specifically noted problems with Cidex exposure in her claim.
Dr. Boyd authored a letter in support of Pettit's claim for long-term disability benefits on September 6, 2007. In this letter, Dr. Boyd explained that, while he "would not consider himself a medical expert in allergies or disability," it was his opinion that Pettit "suffered a great deal with her acquired allergies which have made it nearly impossible for her to function in the work environment for which she is trained and experienced." A.R. 946.
Unum granted Pettit's application for disability benefits on December 6, 2007, under a Reservation of Rights, explaining that "payment cannot be construed as an admission of past, present or future liability and we reserve our right to enforce any and all provisions of the policy." A.R. 1009. Unum indicated that it was "in the process of obtaining additional information from [Great River] to determine if [Pettit's] lost time at work prior to March 21, 2007 was due to [her] medical condition or scheduling issues." Id. Unum also explained that its medical department was "in the process of reviewing the medical information in [Pettit's] claim file," and that Pettit would "be notified once the review is completed and the final determination has been made." Id. Thereafter, Pettit began to receive monthly benefit payments from Unum in the amount of $1,410.24.
Dr. Broda also contacted Dr. Garrels on January 29, 2008, to gain a better understanding of his medical opinion regarding Pettit's claimed disability. In the summary of their conversation, Dr. Garrels reportedly stated that Pettit was "precluded from work due to severe allergic rhinitis." A.R. 1170. Dr. Garrels did not believe that Pettit had undergone desensitization therapy but indicated that if Pettit's condition were better controlled through such therapy, she would be able to return to work. When asked whether Pettit's "depression/anxiety might be a contributing factor in her perception of allergy difficulties," Dr. Garrels reportedly noted that he "had seen her only a few times but depression/anxiety are factors in her recovery." A.R. 1171.
Dr. Broda conducted a review of the available medical data concerning Pettit's claim on or about January 31, 2008. Following his review, Dr. Broda concluded that Pettit was not disabled as a result of her physical condition. In support of his conclusion, Dr. Broda explained that Pettit was capable of working in her previous job with avoidance of latex and Cidex, as it was reasonable to avoid these agents in her employment setting. Additionally, Dr. Broda disagreed with the restrictions imposed by Dr. Garrels, noting that they were not medically supported, and that it would be reasonable for Pettit to avoid work in excessively dusty environments. Dr. Broda did conclude, however, based upon the available medical data, that Pettit's behavioral health issues were disabling.
On February 4, 2008, Unum informed Pettit by letter that it had removed "the Reservation of Rights that was applicable to [her] prior payments." A.R. 1158. Unum explained that it had completed its review of the medical information in Pettit's file, and that it was approving Pettit's claim due to her conditions of "anxiety and panic disorder." A.R. 1158. Unum further advised that, under the terms of the Plan, payments for "disabilities due to mental illness and disabilities" were limited to twenty-four months. Id.
In April 2007, Pettit filed a disability claim with the Social Security Administration ("SSA"), alleging that she could no longer work due to chronic allergies and back pain. Pettit also noted that she suffered from severe panic attacks.
On May 10, 2007, Mary Greenfield, M.D., a medical consultant for the SSA, completed a functional capacity assessment as part of the SSA's evaluation of Pettit's claim for disability benefits. In this assessment, Dr. Greenfield concluded that Pettit had no limitations as a result of her allergies other than to avoid concentrated exposure to fumes, odors, and poorly ventilated areas, and all exposure to latex. Dr. Greenfield disagreed with Dr. Garrels' March 8, 2007, assessment regarding Pettit's limitations, explaining that Dr. Garrels' opinion should be "given less weight based on the presence of normal pulmonary function testing." A.R. 1448. The SSA subsequently denied Pettit's claim for benefits on October 16, 2007, finding that the medical evidence did not support an award of disability benefits, and that Pettit "should be able to do work similar to [her] past work as a nurse's aide." A.R. 1524.
Pettit sought reconsideration of the SSA's findings following the denial of her claim for disability benefits. In addition to seeking benefits based upon her allergies and back pain, Pettit submitted information in support of a claim for benefits based upon mental impairments. The SSA subsequently affirmed its decision to deny Pettit benefits for any physical disability. The SSA determined that Pettit was disabled due to affective and anxiety disorders as of March 21, 2007, however, and began sending Pettit disability payments in September 2007.
The Plan gives Unum the right to reduce monthly disability benefits payable to a Plan participant by an amount the participant receives or is entitled to receive from the SSA for "the same disability." A.R. 18-19. On June 10, 2008, Unum informed Pettit by letter that it had learned of Pettit's SSA award. Unum advised Pettit that the Plan provided for a reduction of her monthly benefit "by any Social Security benefits paid for the same period," and that it was accordingly entitled to recuperate an $8,352.00 "overpayment" resulting from Pettit's receipt of long-term disability benefits, unreduced by her SSA award. A.R. 1285.
On March 8, 2009, Unum informed Pettit that it had previously miscalculated her benefit payment based upon an 80-hour pay period, resulting in an overpayment of benefits in the amount of $4,792.32. Unum advised Pettit that it had discovered this miscalculation during an internal audit and review of her claim.
Pettit failed to reimburse Unum for the claimed overpayment by the date specified in Unum's March 8, 2009, letter. On May 4, 2009, Unum advised Pettit that it would "begin applying her full monthly benefit to the overpayment and refer her file to [Unum's] Recovery Unit to pursue full reimbursement." A.R. 1835. Unum thereafter withheld subsequent payments to Pettit in an effort to satisfy the balance resulting from the overpayment.
Pettit appealed Unum's decision to withhold Pettit's entire monthly benefit on June 9, 2009, arguing that Unum had "miscalculated the benefit amount to which [she] was entitled." A.R. 1908. In addition, Pettit appealed Unum's determination that she had received an overpayment as a result of her receipt of social security disability benefits. On August 21, 2009, Unum upheld its determination that Pettit had received an overpayment entitling it to reimbursement. Unum explained the basis for its monthly benefit calculation in its decision and determined that the calculation of the overpayment and Pettit's basic monthly earnings was correct.
On September 30, 2009, Unum informed Pettit that the maximum benefits under the Mental Illness provision of the Plan had been paid as of September 17, 2009, and that her claim had been closed effective September 18, 2009. Pettit was further informed that she owed Unum $4,292.32 due to an overpayment of her claim.
On October 1, 2009, Pettit appealed Unum's determination that Pettit had received the maximum amount of benefits to which she was entitled. Pettit argued that she met the Plan's definition of physical disability based upon her allergies and the limitations associated therewith, and that she was accordingly entitled to long-term disability payments until the age of 65 under the terms of the Plan.
As part of the appeals process, Unum reviewed Pettit's medical records, including opinions offered by Dr. Garrels, Dr. Wegner-Keller, Dr. Boyd, Dr. Agarwal, and Dr. Szymula regarding Pettit's allergies and/or psychiatric disorders. In addition, Unum obtained medical records from Dr. Randal Hanson, M.D., a pulmonologist, Dr. Eli Goodman, a primary care physician who previously treated Pettit, Dr. Chelli, who also provided care to Pettit, and records from Pettit's Workers' Compensation and SSA claim files.
Dr. Hanson completed an Independent Medical Examination of Pettit for Workers' Compensation on November 8, 2007. In his report, Dr. Hanson noted normal pulmonary function testing and no evidence of reactive airways disease upon methacholine challenge testing. Dr. Hanson also reviewed a CT scan of Pettit's chest and sinuses, as well as x-rays of Pettit's chest, and determined that the tests were normal. Based upon his examination, Dr. Hanson opined that Pettit did not have "any significant respiratory illness" or "disability related to her pulmonary status." A.R. 1073. Dr. Hanson did recognize, however, that Pettit "has profound phobia and depression which may qualify her for disability." Id.
Dr. Goodman treated Pettit after she was hospitalized in Keokuk, Iowa, in March 2008 with diagnoses of major depression, recurrent panic attacks, agoraphobia, and personality disorder. During the course of his treatment, Dr. Goodman documented diagnoses of severe psychiatric disorder and multiple environmental allergens. On July 17, 2009, Dr. Goodman stated that Pettit was disabled but did not offer a diagnosis as the basis for his opinion. Dr. Goodman did indicate, however, that Pettit was in continuing psychiatric care.
Dr. Goodman left his office and was replaced by Dr. Chelli, who provided treatment to Pettit, primarily for "severe anxiety." A.R. 2360, 2295. After reviewing Pettit's medical records, Dr. Chelli reported on or about September 28, 2009, that she believed Pettit's anxiety was more debilitating than her physical conditions, and that Pettit was unable to function in a social setting.
Costas Lambrew, M.D., a board certified internist, conducted an appellate review of the available medical data concerning Pettit's claim on or about November 3, 2009. Following his review, Dr. Lambrew concluded that Pettit had "no physical limitations precluding work activity based on the medical evidence." A.R. 2372, 2360. Dr. Lambrew's opinion was consistent with the opinions of two other reviewing physicians, Gary P. Greenhood, M.D., and Nancy L. Heimonen, M.D., who concluded that Pettit's physical condition did not interfere with her ability to sustain all gainful employment. Dr. Lambrew further agreed with Dr. Chelli's assessment that Pettit's "primary debilitating condition is her mental health disease." A.R. 2360.
In addition to the foregoing, Nancy Munroe, Certified Rehabilitation Counselor and Global Career Development Facilitator, conducted a vocational assessment of Pettit's education, training, and experience on Unum's behalf to determine if Pettit would be capable of performing other occupations. On or about August 18, 2009, after reviewing Pettit's claim file, and taking into account Pettit's former training, education, experience, strength level, and restrictions provided by Dr. Heimonen,
Unum upheld its determination that Pettit was not physically disabled under the terms of the Plan on November 10, 2009. In a decision letter provided to Pettit, Unum summarized the medical evidence reviewed for purposes of Pettit's appeal and concluded that the appellate record did not "support restrictions and/or limitations related to any physical condition that would preclude Ms. Pettit from working." A.R. 2374.
Pettit filed this lawsuit on January 1, 2010. Pettit's complaint alleges that Unum wrongfully denied her claim for long-term disability benefits based upon her physical condition. Additionally, Pettit claims that Unum improperly reduced her monthly benefit payment to account for her SSA award and withheld benefits to which she is entitled due to a miscalculation of her monthly benefits. Pettit seeks reimbursement of and compensation for any and all benefits due as a result of her claimed disability. Unum has filed a counterclaim in this matter, seeking to recover its claimed overpayment of $4,292.32.
Under ERISA, a plan participant may bring a civil action to "recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). For claims challenging the denial of benefits, the applicable standard of review is de novo, "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). When an ERISA plan provides a plan fiduciary with discretion to interpret the terms of the plan and/or to determine eligibility for benefits, the fiduciary's decision regarding benefits is reviewed under an abuse of discretion standard. Jones v. ReliaStar Life Ins. Co., 615 F.3d 941, 944 (8th Cir.2010) (citing Bruch, 489 U.S. at 115, 109 S.Ct. 948).
Under the abuse of discretion standard, a plan fiduciary's interpretation of uncertain terms in a plan "will not be disturbed if reasonable." King v. Hartford Life and Acc. Ins. Co., 414 F.3d 994, 999 (8th Cir.2005) (quoting Bruch, 489 U.S. at 111, 109 S.Ct. 948). In determining whether a plan fiduciary's interpretation is reasonable, a court considers (1) whether the interpretation is consistent with the goals of the plan; (2) whether the interpretation renders any language of the plan meaningless or inconsistent; (3) whether the interpretation conflicts with the substantive or procedural requirements of the ERISA statute; (4) whether the words at issue have been interpreted consistently; and (5) whether the interpretation is contrary to the clear language of the plan. Id. (citations omitted). These factors, commonly referred to as the Finley factors,
In evaluating whether a plan fiduciary's fact based determinations are reasonable under an abuse of discretion standard, the Court must decide whether the fiduciary's decision was "supported by substantial evidence. Substantial evidence means `more than a scintilla but less than a preponderance.'" Darvell v. Life Ins. Co. of N. Am., 597 F.3d 929, 934 (8th Cir.2010) (quoting Wakkinen v. UNUM Life Ins. Co. of Am., 531 F.3d 575, 580 (8th Cir.2008)). A decision will be deemed reasonable "if a reasonable person could have reached a similar decision, given the evidence before him, not that a reasonable person would have reached that decision.'" Midgett v. Wash. Group Int'l Long Term Disability Plan, 561 F.3d 887, 897 (8th Cir.2009) (quoting Jackson v. Metro. Life Ins. Co., 303 F.3d 884, 887 (8th Cir.2002)).
In addition to the foregoing, when reviewing a plan fiduciary's decision to deny benefits, the Court must focus on the evidence available to the plan fiduciary at the time of the decision and "may not admit new evidence or consider post hoc rationales." King, 414 F.3d at 999. "Courts reviewing a plan administrator's decision to deny benefits will review only the final claims decision, Galman v. Prudential Ins. Co. of Am., 254 F.3d 768, 770-71 (8th Cir.2001), and not the `initial, often succinct denial letters,' in order to ensure the development of a complete record." Khoury v. Group Health Plan, Inc., 615 F.3d 946, 952 (8th Cir.2010) (quoting Wert v. Liberty Life Assurance Co. of Boston, 447 F.3d 1060, 1066 (8th Cir.2006)).
In the present case, the Plan designates Unum as a claims fiduciary, providing that Unum, as the administrator's designee, "has discretionary authority to determine. . . eligibility for benefits and to interpret the terms and provisions of the [Plan]." A.R. 11, 34. The Plan further provides that
A.R. 34. The Eighth Circuit has held that discretionary review of a claim decision is appropriate when presented with identical policy language. See Wakkinen, 531 F.3d at 580-81. Accordingly, the Court must review Unum's decision for an abuse of discretion.
Pettit argues that a less deferential standard of review is appropriate in this case because Unum rendered its decision while operating under a conflict of interest. In Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008), "the Supreme Court determined specifically that when the entity that administers the plan `both determines
Under Glenn, an insurer's "conflict of interest can `act as a tiebreaker' when the issue is close and can assume `great importance' `where circumstances suggest a higher likelihood that it affected the benefits decision.'" Id. (quoting Glenn, 554 U.S. at 117, 128 S.Ct. 2343).
Anderson v. Nationwide Mut. Ins. Co., 592 F.Supp.2d 1113, 1126 (S.D.Iowa 2009) (quoting Glenn, 554 U.S. at 117, 128 S.Ct. 2343) (internal citation omitted). In the absence of evidence regarding an insurer's claims administration history and efforts "to reduce potential bias and to promote accuracy," courts are required to "give the conflict some weight, but the existence of the conflict alone is not determinative." Khoury, 615 F.3d at 954 (citing Glenn, 554 U.S. at 118, 128 S.Ct. 2343); Darvell, 597 F.3d at 934.
In the present case, Unum concedes that it both evaluates and pays benefits for claims under the Plan. As a result, an inherent conflict of interest must be recognized. However, "[a]side from the history of the claim at issue here, the record contains no evidence of [Unum's] claims administration history or its efforts `to reduce potential bias and to promote accuracy.'" Khoury, 615 F.3d at 954. Accordingly, the Court must give Unum's conflict of interest some weight. Id. The impact this conflict has on the Court's decision will be addressed in the course of this order.
Pettit contends that Unum erred in concluding that she was not disabled as a result of her allergies under the Plan's definition of disability governing the first twenty-four months of benefit payments. Pettit argues that Unum's decision to award benefits based solely on her mental condition was unreasonable in light of the medical evidence at issue in this case. In addition, Pettit asserts that Unum's conflict of interest affected the decision to deny benefits for her physical condition because Unum had an interest in limiting its liability exposure.
In response to Pettit's arguments, Unum asserts that whether Pettit was physically disabled as a result of her allergies
In responding to Unum's argument, "Pettit does not deny that, going forward, she would need to meet the increased definition of `disabled' which accompanies the receipt of LTD benefits beyond two years." Pl.'s Reply Br. 2. Pettit asserts, however, that her "current claim is for past due benefits — unreduced by her [social security disability income] — under the authority of the policy for the first twenty-four months." Id.
The propriety of Unum's decision to offset Pettit's benefits by her SSA payments must be analyzed, at the outset, by determining whether Unum's interpretation of the Plan language providing for the offset is reasonable. This is so because Unum interprets the "same disability" language referenced by Pettit to refer to the "same period of disability," rather than the same diagnosis, illness, or injury. See A.R. 1285; Def.'s Br. 20-21. The record in this case indicates that Pettit receives SSA benefits due to affective and anxiety disorders with a determined onset date of March 21, 2007. Accordingly, if Unum's interpretation of the "same disability" language is reasonable, then Unum is entitled to offset Pettit's monthly benefit to account for her SSA award regardless of whether Pettit's disability is characterized as physical or mental in nature.
Unum cites to Campos v. Mutual of Omaha Insurance Co., 23 Fed.Appx. 614 (8th Cir.2001), and Bacquie v. Liberty Mutual Insurance Co., 435 F.Supp.2d 318 (S.D.N.Y.2006), aff'd., 247 Fed.Appx. 296 (2d Cir.2007) (unpublished per curiam), in arguing that its interpretation of the Plan language at issue is reasonable. In Campos, the Eighth Circuit was called upon to decide whether the administrator of an ERISA plan abused its discretion by offsetting the plaintiff's "plan benefits by the amount of her social security disability benefits." Campos, 23 Fed.Appx. at 615. The plan in Campos authorized the offset only if benefits received from the SSA were payable for the "same disability." Id. In addressing the propriety of the administrator's decision, the court found that the administrator had reasonably interpreted the phrase `same disability' to mean `based upon the same period ... and cause of disability,' and not `based upon the same medical diagnosis,. ...' Id.
The plaintiff challenged the administrator's decision in Bacquie, arguing that the phrase "same disability" should be "interpreted as synonymous with `diagnosis.'" Id. at 328. In declining to find that the administrator abused its discretion in offsetting the plaintiff's disability payments, the court explained,
Id.
The Court finds the foregoing authority persuasive and similarly concludes that Unum's interpretation of the "same disability" language is reasonable. The Plan defines "disabled," during the first twenty-four months of payments, to mean that a participant is "limited from performing the
An analysis of the five Finley factors discussed supra confirms that Unum's interpretation of the Plan language is reasonable. See King, 414 F.3d at 999 (discussing the five factors). Under the first factor, the Court must consider whether Unum's interpretation of the Plan language is consistent with the goals of the Plan. Here, the central purpose of the Plan is to provide protection to participants by paying them a portion of their income while they are disabled. As was the case in Bacquie, Unum's refusal "to equate disability with diagnosis ... prevents Plan participants from receiving benefits in excess of their contractual entitlement by recovering benefits from [Unum] for one `sickness' and then again from the SSA for another `sickness' that disabled the insured during the same period." Bacquie, 435 F.Supp.2d at 328. The Plan's protective function serves only to replace income lost due to a participant's disability. This function would be undermined if a participant could receive more in disability than earned while working. Unum's interpretation prevents this result and furthers the Plan's purpose.
With regard to the remaining Finley factors, the Court must consider (1) whether Unum's interpretation renders any language of the Plan meaningless or internally inconsistent; (2) whether the Plan language has been interpreted consistently; (3) whether the interpretation is contrary to the clear language of the Plan; and (4) whether the interpretation conflicts with the substantive or procedural requirements of the ERISA statute. King, 414 F.3d at 999. Here, the Court is unable to identify any language in the Plan that would be rendered meaningless or inconsistent by Unum's interpretation of the Plan language at issue. There likewise is no indication that Unum has failed to consistently interpret the relevant terms of the Plan or that its interpretation is otherwise contrary to the Plan's clear language. In addition, because the Eighth Circuit has previously recognized that a reduction in disability payments to account for SSA awards "is permitted by ERISA," this Court is unable to find that Unum's interpretation in any way conflicts with ERISA's requirements. See Brandis v. Kaiser Aluminum & Chem. Corp., 47 F.3d 947, 950 (8th Cir.1995) (citing Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 514-17, 101 S.Ct. 1895, 68 L.Ed.2d 402 (1981)). An evaluation of the Finley factors therefore supports Unum's interpretation of the Plan.
Pettit contends that the Court should reject the reasoning employed in Bacquie and follow the court's rational in Gruber v. Unum Life Insurance Co. of America, 195 F.Supp.2d 711 (D.Md.2002). In Gruber, the court appeared to construe plan language permitting an offset for SSA benefits payable for the "same disability" as requiring that the SSA benefits be awarded for the same illness or injury. Id. at 719. The plaintiff in Gruber had received disability benefits under an ERISA plan for depression and post-traumatic stress
Gruber is readily distinguishable from the case at hand. In Gruber, Unum, for reasons that are not apparent, did not advance the plan interpretation at issue here. Id. Rather, Unum argued that the offset was proper under the plan because the SSA considered and included the plaintiff's "depression and/or post-traumatic stress disorder in making [its] award." Id. This is significant because under the abuse of discretion standard applied in this case, the Court must give deference to Unum's reasonable interpretation of relevant Plan language. King, 414 F.3d at 999. The Gruber court applied federal common law in interpreting the plan provision at issue, construing ambiguities in the plan against the insurer and in favor of the insured. Id. (citing Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1451-52 (5th Cir.1995)). In the Eighth Circuit, "the common law rule of construction that ambiguous language in an insurance policy is construed against the insurer has no place in the construction of an ERISA plan," Bernards v. United of Omaha Life Ins. Co., 987 F.2d 486, 488 n. 1 (8th Cir.1993) (citing Finley v. Special Agents Mut. Ben. Ass'n, Inc., 957 F.2d 617, 619 (8th Cir.1992)).
Based upon the foregoing, the Court readily concludes that Unum's interpretation of the Plan language is reasonable generally and within the context of this case. Additionally, while the Court has considered Unum's conflict of interest in reviewing Unum's interpretation of the Plan, it does not consider the issue before it to be a close one where the conflict is capable of tipping the balance in Pettit's favor. See Jones, 615 F.3d at 946. Because Unum is entitled to offset Pettit's monthly benefit payments by an amount equal to her SSA benefits paid for the same time period of disability, the Court upholds Unum's offset determination and declines to address whether the record supports an award of benefits during the first twenty-four months of payments for Pettit's physical condition.
The Plan requires that participants provide satisfactory proof of disability when
ERISA requires that benefit plans "afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim." 29 U.S.C. § 1133(2). This entails "a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination." 29 C.F.R. § 2560.503-1(h)(2)(iv). A plan fiduciary therefore abuses its discretion when it "ignore[s] relevant medical evidence in the records before it." Anderson, 592 F.Supp.2d at 1130 (citing Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003)).
Pettit focuses on the opinions of Dr. Boyd and Dr. Garrels in arguing that Unum abused its discretion by ignoring relevant medical evidence.
A review of Unum's appeal decision reveals that Unum considered Dr. Garrels' opinion,
A plan fiduciary does not abuse its discretion when it accepts the opinion of a reviewing physician over the conflicting opinion of a treating physician "unless the record does not support the denial." Midgett, 561 F.3d at 897 (citing Dillard's Inc. v. Liberty Life Assur. Co. of Boston, 456 F.3d 894, 899 (8th Cir.2006)). The record in this case demonstrates that Dr. Greenfield formulated her opinion based, in part, on the results of normal pulmonary function tests administered to Pettit. An objective basis therefore existed for Dr. Greenfield to discredit the restrictions imposed by Dr. Garrels. While it is true that Dr. Garrels treated Pettit on several occasions, his opinion regarding Pettit's restrictions and limitations appears to have been based primarily on Pettit's subjective complaints; specifically that "almost everything she does," "just anything that results in exposure to dust, mist, vapor, chemical, or odor," causes her "some difficulties with exposure." A.R. 286.
In addition to the foregoing, the record also demonstrates that Unum considered and rejected Dr. Boyd's opinion regarding Pettit's disability in favor of conflicting medical evidence. In discrediting Dr. Boyd's conclusions regarding Pettit's inability to work, Unum cited to the opinion of Dr. Lambrew and the SSA's findings pertaining to Pettit's claim for SSA benefits. Dr. Lambrew's opinion that Pettit had "no physical limitations precluding work activity" was consistent with the opinions of Dr. Greenhood and Dr. Heimonen, who concluded that Pettit's physical condition did not interfere with her ability to sustain all gainful employment. A.R. 2258, 2266. The SSA similarly concluded that Pettit was capable of doing "work similar to [her] past work as a nurse's aide" based upon Dr. Greenfield's functional assessment. A.R. 1524.
Unlike the opinions of Unum's reviewing physicians and the SSA's disability determination,
Because Pettit has not demonstrated that Unum failed to afford her a full and fair review of her claim on the grounds alleged, remand to Unum for a re-opening of the record and determination as to whether Pettit qualifies for benefits under the Plan's post twenty-four month definition of "disabled" is inappropriate. Unum has already rendered its decision on Pettit's entitlement to benefits under the definition of "disabled" at issue, and that decision is now final. Accordingly, the Court proceeds to determine whether Unum's decision is supported by substantial evidence in the record.
In denying Pettit's claim for benefits based upon her physical condition, Unum relied, in part, on the opinions of Dr. Lambrew and Dr. Hanson, and the SSA's prior disability determination, including the medical opinion of Dr. Greenfield. Both Dr. Lambrew and the SSA (based upon Dr. Greenfield's functional assessment) concluded that Pettit was not precluded from working due to her allergies. Dr. Hanson concluded that Pettit did not have "any significant respiratory illness" or "disability related to her pulmonary status." A.R. 1073.
In addition to the aforementioned medical opinions, the vocational assessment performed by Nancy Munroe on or about August 18, 2009, determined that Pettit could perform the occupations of cashier, sales clerk, and gambling broker consistent with restrictions recommended by Dr. Heimonen to avoid latex and metal exposures and to work in well-ventilated environments. Dr. Heimonen opined that Pettit's physical condition did not preclude her from all gainful employment. This position was endorsed by Dr. Goodman, who concluded that Pettit was capable of working with avoidance of agents to which she reacts adversely.
A reasonable person could accept the foregoing evidence as adequate to support the conclusion that Pettit's physical condition did not preclude her from all gainful employment for which she is reasonably fitted by education, training, or experience. The presence of some conflicting evidence in the record does not alter this conclusion. See Midgett, 561 F.3d at 898. Substantial evidence therefore supports the decision to deny benefits.
Pettit maintains that Unum abused its discretion in denying benefits for her physical condition because Unum's conflict of interest impacted the decision on her claim. Pettit cites to evidence of alleged procedural irregularities in the record that she contends supports her position.
First, Pettit argues that evidence in the record supports the conclusion that Unum
Even if the Court were to conclude that Unum initially adopted a position inconsistent with its determination that Pettit was disabled only by her mental illness, this finding would not impact the Court's decision in this matter. A determination that Pettit was disabled as a result of her allergies prior to February 4, 2008, would have been made under the Plan's definition of "disabled" governing the first twenty-four months of payments, and not the stricter definition presently at issue. In reviewing Unum's decision to deny benefits based upon Pettit's physical condition, the Court must focus on the final claims decision rendered on appeal to ensure the development of a complete record. Khoury, 615 F.3d at 952. Unum's final decision, issued by a separate appeals specialist, involved a different set of considerations under the post twenty-four month definition of "disabled," including additional medical evidence, which renders any benefit determination made prior to February 4, 2008, irrelevant for purposes of the Court's review.
Pettit also argues that the "vague character of [Unum's] initial "mental" disability award and the complete lack of medical evidence in support thereof `gives rise to serious doubts as to whether the result reached was the product of an arbitrary decision or [Unum's] whim.'" Pl.'s Br. 15 (citing Layes v. Mead Corp., 132 F.3d 1246, 1250 (8th Cir.1998)). In addressing this argument, however, the Court must reiterate that its review is limited to Unum's final decision on appeal and does not concern the initial benefit determination referenced by Pettit. Khoury, 615 F.3d at 952 (quoting Wert, 447 F.3d at 1066). Unum's failure to cite to medical evidence supporting its mental disability determination, as set forth in the February 4, 2008, letter approving Pettit's claim, is therefore irrelevant. Id. In any event, sufficient evidence in the record exists to support Unum's final determination that Pettit's mental illness was disabling.
As a final matter, Pettit argues that Unum's acceptance of medical opinions rendered by its reviewing physicians, and rejection of contrary opinions offered by her treating physicians, demonstrates that Unum's conflict of interest tainted the benefits
In light of the above findings, the circumstances of this case do not suggest a high likelihood that Unum's conflict of interest affected the decision to deny benefits under the relevant definition of "disabled" provided for in the Plan. As a result, even if the Court were to conclude that the issue of whether Unum abused its discretion in denying benefits was a close one, the tiebreaker conflict of interest analysis under Glenn would not itself support an abuse of discretion finding. See Hackett v. Standard Ins. Co., 559 F.3d 825, 829 (8th Cir.2009). Because the record demonstrates that Unum afforded Pettit a full and fair review of her claim, and because substantial evidence supports Unum's decision to deny benefits under the definition of "disabled" presently at issue, the Court concludes that Unum's denial of benefits was not an abuse of discretion.
The Plan provides that disabled participants are entitled to monthly benefit payments equal to "60% of [their] monthly earnings." A.R. 4. "Monthly earnings" are defined as "gross monthly income from your Employer in effect just prior to your date of disability." A.R. 16. Pettit argues that Unum improperly calculated her monthly earnings based upon the number of hours she actually worked, as opposed to the number of hours she was scheduled to work. As a result, Pettit asserts that Unum failed to pay her the appropriate amount of benefits to which she was entitled under the authority of the Plan governing the first twenty-four months of payments.
The propriety of Unum's benefit calculation hinges on the meaning of the term "gross monthly income." This term is not defined in the Plan. Unum interprets "gross monthly income," however, to mean income actually received from an employer in the month preceding the determined date of disability, rather than income an employee could have received had they worked the maximum number of hours for which they were scheduled. Unum notes that in Pettit's case, her "income" was directly related to the number of hours she actually worked. As a result, Unum asserts that its benefit calculation was proper and should be upheld.
The Court addresses this dispute by employing the five-factor Finley test. King, 414 F.3d at 999. Under the first factor, the Court considers whether Unum's interpretation is consistent with the goals of the Plan. Pettit asserts that Unum's interpretation, if given effect, "would defy principles of fairness and equity... [by] punishing insured individuals for absences accumulated while suffering
As previously indicated, the purpose of the Plan is to provide protection to participants by paying them a portion of their income while they are disabled. The Plan's definition of "monthly earnings" clarifies that the portion of income to be received by a participant will be calculated based upon monthly income in effect "just prior to [the] date of disability." A.R. 16. In the present case, Pettit's gross monthly income was related directly to the number of hours she actually worked; she was not compensated for scheduled but unworked hours. Unum's interpretation of "gross monthly income," applied to the facts of this case, was therefore consistent with the goals of the Plan, as Pettit received benefits accounting only for a portion of the monthly income she actually received from her employer prior to her determined date of disability.
Under the second Finley factor, the Court considers whether Unum's interpretation renders any Plan language meaningless or inconsistent. King, 414 F.3d at 999. Pettit focuses on a provision in the Plan providing that "[e]mployees must be scheduled to work at least 30 hours per week" to be eligible for benefits. A.R. 4 (emphasis added). Pettit believes that this provision "suggests that scheduled hours, as opposed to average hours worked, are the appropriate measure [for determining gross monthly earnings] under the policy's terms." Pl.'s Br. 34.
Unum's interpretation of "gross monthly income" can be applied consistently with the scheduled hours requirement reference by Pettit. The scheduled hours requirement simply defines the class of employees who are eligible to receive coverage under the Plan. This requirement has no bearing upon the method in which an employee's "monthly earnings" are calculated for purposes of determining a participant's monthly benefit payment. Unum's interpretation of "gross monthly income," therefore, does not render the scheduled hours requirement meaningless or inconsistent. Nor is the Court able to identify other language in the Plan that would be rendered meaningless or inconsistent by Unum's interpretation.
The third Finley factor to consider is whether Unum's interpretation conflicts with the requirements of the ERISA statute. King, 414 F.3d at 999. The Plan language at issue in this case establishes the level of benefits provided to participants who are disabled under the Plan. ERISA leaves the level of benefits conferred under a plan within the control of the private parties creating the plan. Waller v. Hormel Foods Corp., 120 F.3d 138, 140 (8th Cir.1997). Unum's interpretation therefore does not conflict with ERISA's requirements.
While Unum's inconsistency in interpreting the Plan language at issue may appear suspicious at first glance, this factor does not compel the finding that Unum's interpretation of the Plan is unreasonable. Contrary to Pettit's assertion, the Court finds that Unum's interpretation applied in this case is consistent with the Plan's clear language. As previously indicated, the Plan defines "monthly earnings" as "gross monthly income from your Employer in effect just prior to your date of disability." A.R. 16. In this context, "[i]ncome from your Employer" connotes income actually received. Here, Pettit received income from her employer only for the amount of hours she actually worked. Unum's interpretation of "gross monthly income," as income actually received in the month preceding the determined date of disability rather than potential income based upon scheduled but unworked hours, is therefore entirely consistent with the plain language of the Plan. Unum should not be prohibited from correcting a mistake made during the processing of a claim when the correction is justified by a reasonable interpretation of the Plan language.
The fifth Finley factor requires an analysis of whether Unum's interpretation is contrary to the clear language of the Plan. King, 414 F.3d at 999. The Court has already addressed this issue in its analysis of the previous factor and finds Pettit's interpretation to be consistent with the Plan's clear language.
In light of the foregoing factors, the Court concludes that Unum's interpretation is reasonable and fully consistent with the Plan language at issue. As a result, Unum did not abuse its discretion in calculating Pettit's monthly benefit payments based upon hours actually worked. Additionally, the rate calculation appears correct under Unum's interpretation of the Plan. As a result, Unum's calculation of Pettit's monthly benefit payment must be upheld.
The Plan provides that "Unum has the right to recover any overpayments due to... any error Unum makes in processing a claim." A.R. 7. The record in this case reflects that Pettit received an overpayment of $4,292.32 on her claim due to her receipt of SSA benefits and the initial miscalculation of her monthly benefit payment. Pettit does not deny that Unum has a right to recover overpayments due to an error made in processing her claim. Pettit argues only that the calculation of her monthly benefit payment, and the reduction of her monthly payment to account for her SSA award, was improper. On this record, however, the Court has determined that Pettit's monthly rate calculation and the offset accounting for the SSA award are correct and consistent with the language of the Plan.
ERISA authorizes plan fiduciaries to bring suit to recover overpayments made by a plan to a beneficiary. See 29 U.S.C. § 1132(a)(3)(B)(ii); Gilchrest v.
For the reasons stated, Unum's decision must be affirmed. The Clerk of Court is directed to enter judgment in favor of Unum and against Pettit on Pettit's claim. Judgment is also entered against Pettit on Unum's counterclaim in the amount of $4,292.32 with interest.
A.R. 21 "Mental Illness" is defined as "a psychiatric or psychological condition classified in the Diagnostic and Statistical Manual of Mental Health Disorders (DSM), published by the American Psychiatric Association, most current as of the start of a disability. Such disorders include, but are not limited to, psychotic, emotional or behavioral disorders, or disorders relatable to stress." A.R. 36-37.
In calculating Pettit's monthly benefit payment, Unum initially determined that Pettit was scheduled to work 36 hours per week, or 72 hours per pay period. The representative processing Pettit's claim calculated Pettit's gross monthly income based upon Pettit's scheduled hours despite recognition that Pettit was working less than the number of hours for which she was scheduled. Following its internal audit and review of Pettit's claim, Unum noticed a fluctuation in what Pettit earned per pay period and determined that Pettit's gross monthly income should have been calculated based upon the number of hours she actually worked in the month preceding her determined date of disability. Because Pettit had experience a reduction in the amount of hours she normally worked in the month preceding the onset of her disability, however, Unum determined that it was appropriate to average Pettit's hours over three months "to provide her with the best benefit possible." A.R. 2229. This yielded a monthly benefit payment of $907.31, representing 60% of Pettit's gross monthly income based upon a three-month average of 51.47 hours worked.
A.R. 1060.
Dr. Voss's opinion, while relevant to the issue of whether Pettit suffers from a mental impairment, is not relevant to the issue of whether Pettit qualifies for benefits for her physical condition under the Plan's post twenty-four month definition of disabled, as the opinion does not address whether Pettit's physical condition precludes her from any gainful occupation for which she is reasonably suited by education, training, or experience.
