RICHARD G. STEARNS, District Judge.
This action is brought by plaintiff Thomas Breen under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132. Breen seeks review of defendant Liberty Life Assurance Company of Boston's denial of his request for benefits under a long-term disability (LTD) insurance policy sponsored by his former employer, Sovereign Bancorp Inc. Having undertaken limited discovery, the parties now cross-move for summary judgment.
In 1989, Breen sustained a work-related back injury. Since the injury, Breen has intermittently suffered lower back pain, bilateral buttocks pain, and numbness in his right thigh with calf spasms and tingling in his toes.
On June 27, 2007, Breen began working full-time as a Wealth Management Advisor for Sovereign. As part of his employment package, Breen was offered coverage under a group LTD insurance plan issued by Liberty (the Policy). Under the terms of the Policy, Breen became eligible for LTD coverage beginning on August 1, 2007. The Policy, however, contained a preexisting conditions provision, which stated as follows.
This policy will not cover any Disability or Partial Disability:
AR00031.
On July 9, 2007, before the LTD coverage took effect, Breen consulted with Dr. Dennis Ivill after a "flare up" of his back pain, and was given two anti-inflammatory injections. Dr. Ivill's impression was that Breen had multiple lumbar disk herniations with radiculopathy, later confirmed by an MRI that disclosed multilevel degenerative changes in various regions of Breen's lower lumbar spine, including disk herniations at L2-L3 and L4-L5.
Between August and October of 2007, Breen visited several doctors for diagnosis and treatment of his worsening back pain, which had begun to radiate into his buttocks and right leg. Breen consulted Dr. Zach Broyer (a pain specialist), Dr. Steven Blazar (an orthopedic surgeon), and Dr. Susan Pollan (another pain specialist). Dr. Blazar diagnosed Breen with lower back degenerative disk disease and chronic lumbar syndrome of indeterminate etiology. Breen received several anti-inflammatory injections to alleviate his pain symptoms.
In late December, Breen presented to Dr. David Marcoux, his primary care physician, and complained of an acute worsening of lower back pain radiating down his left leg. Dr. Marcoux diagnosed Breen as suffering from sciatica and diminished left ankle reflex likely due to an L5-S1 radiculopathy. On January 8, 2008, Breen followed-up with Dr. Blazar and reported a worsening of symptoms and constant pain in his left leg. An MRI revealed a disk herniation at the L4-L5 region in which part of the disk fragment was almost entirely free, and degenerative disk disease at L4-L5 and L5-S1. On January 17, 2008, Breen consulted Dr. Blazar regarding treatment options for his back pain, including surgery.
Breen's last day of full-time work at Sovereign was on January 18, 2008. On January 21, 2008, he underwent an L4-L5 disectomy to remove the free-disk fragment in his back. After the surgery, the pain in Breen's left leg improved and he returned to work part-time on February 4, 2008. However, after two weeks, the intense pain in Breen's right leg recurred. Breen left work permanently on February 22, 2008.
On March 4, 2008, Breen returned to see Dr. Blazar. Breen reported constant pain in his right lower leg as well as newly developed pain in his left lower leg. Reviewing the results from a fresh MRI, Dr. Blazar diagnosed Breen with severe post laminectomy syndrome,
On March 8, 2008, Breen underwent an electromyograph (EMG)
In May, Breen consulted with Dr. Adetokunbo Oyelese, a neurosurgeon. Dr. Oyelese noted that Breen was experiencing greater pain in his right than his left leg. He also observed that Breen was presenting with low back pain and post laminectomy syndrome. Dr. Oyelese concluded that Breen's MRI results did not support a diagnosis of arachnoiditis. Dr. Oyelese ordered a CT myelogram
On July 20, 2008, Breen's disability became eligible for LTD benefits under the Policy. In anticipation of Breen's LTD claim, Liberty obtained Breen's medical records and referred them to Dr. C. David Bomar, a Board Certified Orthopedic Surgeon, for a preexisting condition investigation. Dr. Bomar was asked to determine whether Breen had been treated for his primary diagnosis during the "preexisting period," that is, between May 1, 2007, through July 31, 2007. Dr. Bomar observed that Breen's primary disabling diagnoses included degenerative disk disease, post laminectomy syndrome, and possible arachnoiditis, but he concluded that Breen's "underlying condition of degenerative disk disease is basically responsible for his overall back condition." AR00299. He also determined that Breen had been treated for degenerative disk disease during the preexisting period by Dr. Ivill in July of 2007. Citing Dr. Bomar's review, on September 16, 2008, Liberty sent Breen a written denial of his LTD claim based on the preexisting condition exclusion in the Policy.
In October of 2008, Breen timely requested a review of Liberty's denial, and in support, submitted an opinion letter from Dr. Blazar stating that the herniated disk and left-side pain that had led to Breen's surgery was not present during his initial office visit in September of 2007. Moreover, Dr. Blazar stated that Breen's post surgical conditions — arachnoiditis and status post excision of a free-fragment disk herniation — also were not present during the preexisting period. Liberty forwarded Dr. Blazar's letter to Dr. Bomar for review. Although Dr. Bomar largely agreed with Dr. Blazar's assessments, he nonetheless concluded that "[t]he degenerative disk disease for which the claimant was treated in July 2007 clearly contributed to and made more likely the subsequent development of the L4-5 disk herniation and surgery." AR00290.
In response to Breen's request for further review, Liberty referred Breen's claim and some additionally obtained medical files to its Appeals Review Unit. Liberty also sought an additional medical opinion from Dr. Gale G. Brown Jr., who is Board Certified in Physical Medicine and Rehabilitation and Internal Medicine. Dr. Brown was asked her opinion on whether Breen's disability as of January 21, 2008 — the claimed LTD onset date — was "caused, contributed to, by or resulting from a condition (injury or sickness) for which he received treatment (consultation, care, etc) during the period 5/31/07-7/31/07?" AR00245. After reviewing Breen's medical records, including Dr. Blazar's assessments,
On January 19, 2010, Liberty informed Breen that his appeal had been denied based on Dr. Bomar's and Dr. Brown's review. In June of 2010, Breen, now represented by counsel, requested that Liberty process a second LTD claim with a new disability date of February 22, 2008 (the day he stopped part-time work), based on the diagnosis of post laminectomy syndrome. Liberty promptly denied the request explaining that because Breen "did not return to work for a period greater than 30 days, a new period of disability is not applicable to the LTD claim. The period that he returned to work would have been accumulated to the elimination period." AR00073. Liberty reiterated that its "determination pertaining to Mr. Breen's LTD claim remains as outlined in our letter dated January 20, 2009." Id. In November of 2010, Breen filed this lawsuit.
In the usual case, summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The standard, however, is modulated in a denial of benefits case under ERISA. "In an ERISA benefit denial case, trial is usually not an option: in a very real sense, the district court sits more as an appellate tribunal than as a trial court. It does not take evidence, but, rather, evaluates the reasonableness of an administrative determination in light of the record compiled before the plan fiduciary." Leahy v. Raytheon Co., 315 F.3d 11, 17-18 (1st Cir. 2002). Therefore, "summary judgment is simply a vehicle for deciding the issue. This means the non-moving party is not entitled to the usual inferences in its favor." Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir. 2005) (citations omitted).
An ERISA denial of benefits case is reviewed 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 (1989). In those cases where the "benefit plan gives the administrator or fiduciary discretion to determine benefit eligibility or construe plan terms, Firestone and its progeny mandate a deferential `arbitrary and capricious' standard of judicial review." Recupero v. New England Tel. & Tel. Co., 118 F.3d 820, 827 (1st Cir. 1997) (citation omitted).
In this case, Section 7 of the Policy explicitly states that "Liberty shall possess the authority, in its sole discretion, to construe the terms of this policy and to determine benefit eligibility hereunder. Liberty's decisions regarding construction of the terms of this policy and benefit eligibility shall be conclusive and binding." AR00036. Because the plan unequivocally gives Liberty the discretion to construe terms and determine benefit eligibility, the arbitrary and capricious standard of review must be applied.
Under the arbitrary and capricious standard,
Vlass v. Raytheon Emps. Disability Trust, 244 F.3d 27, 30 (1st Cir. 2001) (citations omitted). Thus, while arbitrary and capricious review is not to be wielded as "a rubber stamp," Lopes v. Metro. Life Ins. Co., 332 F.3d 1, 5 (1st Cir. 2003) (citation omitted), "the hallmark of such review [is] that `a court is not to substitute its judgment for that of the [decision-maker].'" Terry v. Bayer Corp., 145 F.3d 28, 40 (1st Cir. 1998), quoting Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
The merits of this case begin with the undisputed facts that Breen sought medical treatment for his chronic back pain within the Policy's preexisting period — the three months prior to August 1, 2007 — and that he received a diagnosis of degenerative disk disease of his lumbar spine. The disputed issue is whether Liberty acted unreasonably in folding Breen's post-operative disability into the Policy's preexisting condition exclusion. Liberty asserts that its decision was based on the opinions of two physicians (Bomar and Brown) who were Board Certified in the relevant specialties.
Breen, for his part, argues that Liberty's decision is unreasonable under controlling Pennsylvania law, which according to Breen, does not permit a preexisting conditions exclusion as broad as the "caused or contributed to by, or results from" exclusion incorporated in Liberty's LTD Policy.
31 Pa. Code § 89.402 (emphasis added). Breen's bottom line is that the "caused to or contributed by" language of the Policy should be disregarded, thereby only permitting exclusion of disabilities that directly "result from" preexisting conditions.
Consistent with his reformulation of the standard of causation, Breen argues that his disability diagnosis of post laminectomy syndrome did not directly result from preexisting degenerative disk disease, but instead from his less than successful back surgery, which occurred after coverage attached under the Policy. Under Breen's analysis, Liberty's stated reason for denying his LTD claim, that a preexisting degenerative disk disease led eventually to the need for back surgery, which in turn led to a post-operative disability, is too attenuated in a Palsgraffian sense to satisfy his "directly results" test.
In response, Liberty first points out that 31 Pa. Code § 89.402 is a relic of a bygone era when Pennsylvania required that insurance policies be pre-approved by the Commissioner of Insurance. See 31 Pa. Code. § 89.2. Pennsylvania deregulated the sale of group LTD insurance in 1996. See 26 Pa. Bull. 1453. Thus, according to Liberty, the regulatory language cited by Breen is no longer applicable. In the alternative, Liberty argues that the Policy's definition of a "pre-existing condition" — "a condition resulting from an Injury of Sickness for which the Covered Person is diagnosed or received Treatment within three months prior to the Covered Person's effective date of coverage" — is consistent with the definition under 31 Pa. Code. § 89.402(a), and substantially complies with requirements of 31 Pa. Code § 89.402. See 31 Pa. Code. § 89.404.
Although the court appreciates the parties' detailed supplemental briefing on this issue, it is not necessary for present purposes to decide whether Pennsylvania law either invalidates or narrows the scope of the Policy's preexisting condition exclusion.
Moreover, although Breen did not manifest post-laminectomy syndrome during the preexisting period, it was not arbitrary or capricious for Liberty to have determined that the post-laminectomy syndrome resulted substantially from Breen's preexisting degenerative disk disease and disk herniations. Contrary to Breen's reading, the Pennsylvania regulation does not mandate
Breen's case is also distinguishable from Fought. In Fought, the claimant underwent an initial surgery to treat her preexisting condition of coronary artery disease. After a series of unfortunate medical events, she was forced to undergo a number of additional procedures to repair the initial wound, and was then found to have contracted a resistant staph infection (most likely from an unsterile hospital environment).
For the foregoing reasons, Breen's motion for summary judgment is
SO ORDERED.
