JOHN R. TUNHEIM, District Judge.
Plaintiff Carol A. McDonel brings this action under the Employee Retirement Insurance Income Security Act of 1974 ("ERISA"), seeking long-term disability ("LTD") benefits under Defendant Hartford Life and Accident Insurance Company's ("Hartford's") insurance policy. McDonel suffers from back and knee injuries that she claims prohibit her from performing her occupation. Both parties seek summary judgment regarding McDonel's entitlement to benefits. Because Hartford gathered inadequate information and thereby abused its discretion in denying McDonel LTD benefits, the Court remands this case to Hartford for further proceedings in accordance with this opinion.
McDonel began working at Andersen Corporation ("Andersen") in 1983. (LTD Insurance Claim File, Pl.'s Ex. 1, Docket No. 19, at HART1.) She was employed there as a "Value Stream I Associate." (HART160.) As a Value Stream I Associate, she assisted with window assembly in a manufacturing shop. (HART109-11, 160.)
In 2001, McDonel suffered a low back injury that led to a lumbar fusion surgery at L4-5 and L5-S1.
The record indicates that Andersen may have provided adjustments to McDonel's job for fifteen years because of her back injury. (HART3, 9.) There is no evidence, however, as to the nature of these adjustments. The record also indicates that McDonel worked "regular duty," but this term is not defined. (HART142, 160.)
McDonel received permanent job-related restrictions in 2007, imposed by Dr. Thomas Rieser, because of her back problems. (HART80-81, 113.) Dr. Rieser stated that McDonel should work only on "light duty" with "no frequent bending, lifting, or twisting." He also stated that she should "stretch/change position every 30 minutes," that she could lift/carry up to twenty-five pounds, and that she was capable of sitting, standing, and walking for six hours per day. (Id.) It is unclear if these restrictions required adjustments in McDonel's job. (See HART5, 18.) McDonel worked with her 2007 restrictions until August 2009.
On August 25, 2009, Andersen Corporation sent McDonel a letter threatening to terminate her employment because of her physical restrictions. The letter stated:
(HART134.) The letter further stated that Andersen would place McDonel on a sixty day leave. (Id.) The last day that McDonel worked at Andersen was August 26, 2009. (See HART161.) McDonel was thereafter approved for leave under the Family Medical Leave Act through January 13, 2010. (HART154.)
Hartford's notes indicated that Andersen sent this letter to McDonel because "there were changes in" Andersen and Andersen "was no longer able to accommodate [McDonel's] permanent [work] restrictions" due to her physical limitations. (HART9.) McDonel apparently told Hartford that the "new rotating jobs at work" were "not within her permanent restrictions." (HART10.) Nothing in the record explained this alleged new rotating system, however. Andersen's August 25 letter stated nothing about a new "rotating" system and discussed only McDonel's inability to perform the Value Stream I position. (HART134.)
Shortly after Andersen placed McDonel on leave, on September 11, 2009, McDonel visited Steven J. Lawson, PA-C,
(Id.) Lawson and Dr. Rieser recommended an MRI and epidural steroid injections, and instructed McDonel to remain completely off work from September 11, 2009 until January 13, 2010. (HART87-89.)
McDonel's MRI in November 2009 indicated a loss of intervertebral disc space height, as well as significant disc space narrowing, bulging, and bone-on-bone and stenosis producing low back and radiating hip, buttock, and leg pain. (HART90, 106-07, 124.) McDonel reported that she "ache[d] all the time" in her back and thigh and was "unable to work" due to the pain. (HART3, 93.) She received an epidural steroid injection that provided her with no relief. (HART124.) Dr. Rieser stated that a surgery at the L3-4 level might help. (See id.)
Although Dr. Rieser recommended back surgery, McDonel declined because, she claims, she had been advised to forego surgery until her knee improved. (HART7, 10.) McDonel visited a different physician, Dr. Nicholas G. Weiss, for problems with her left knee. (HART8, 133.)
On January 13, 2010, Dr. Rieser indicated that McDonel was ready to return to work but imposed numerous new restrictions on McDonel: no static positions; no more than one to three hours per day of bending, twisting, turning, kneeling, squatting, or overhead reaching; no operating of forklift or vibrating tools; a maximum of fifty pounds pushing or pulling, and the weight must be on a cart with wheels; only occasional driving and stair climbing; and avoidance of ladders. (HART85-86, 125.) Dr. Rieser also reiterated the same permanent restrictions that had been in place in 2007. (HART92, 125.)
Hartford insured McDonel under Group Long Term Disability Insurance Policy No. GLT-675805. On February 23, 2010, McDonel submitted an application for longterm disability benefits under this policy. (HART160-63.) In her application for LTD benefits, McDonel stated that she was applying for benefits because a "permanent weight restriction" prevented her from doing her job. (HART11, 161.)
Hartford's LTD policy possessed the following critical terms:
(HART43-47.)
Ann Simpson, Ability Analyst with Hartford, initially handled McDonel's claim. (HART156-57.) Simpson requested some of McDonel's medical records as part of her investigation, including Dr. Rieser's work restrictions from 2007 and 2010. There is no evidence that Simpson requested Dr. Weiss' records to obtain more information about McDonel's knee or that she consulted with other physicians.
On March 1, 2010, Simpson sent an e-mail to Andersen requesting the following information: a job description for McDonel, a Physical Demands Analysis ("PDA")
On March 11, 2010, Simpson sent another e-mail to Andersen indicating that she had found a short job description for McDonel. (HART109.) It is unclear where Simpson obtained this description and if Andersen viewed it as an accurate and complete description of McDonel's job duties. The description stated that: McDonel assembled window models on a waist-high work table, McDonel was required to extend her elbow greater than 4-6 inches from her body at or below chest height "occasionally," McDonel was required to use battery operated drills and glue guns "on a frequent basis" and did not need to reach over her head to obtain these tools, and McDonel would "rarely" pick supplies from shelving behind her work table at a maximum of 56" height. (Id.) The description also identified the presence of a rolling cart with window models measuring 55" inches high, but did not explain what task McDonel performed in relationship to the cart. (See id.) Simpson admitted in this same e-mail that an "actual PDA [for McDonel] was never completed." (Id.) Simpson also admitted that she did not know the amount of weight requirement for "Lift/Carry/Push/Pull" applicable to McDonel's position — a critical piece of information, because McDonel had stated that a "permanent weight restriction" associated with her job was at least one reason she could no longer perform it. (See HART11, 161, 109.)
Simpson further obtained a two-page document describing duties associated with the "Corner Section Line" at Andersen. (HART110-11.) It is unclear from the face of the document what it purports to describe. (See id.) At oral argument, Hartford indicated that this document provided one example of a task that a window assembler performs, and that this task was likely a representative example of one of McDonel's duties.
On April 13, 2010, Hartford informed McDonel that it had denied her claim for LTD benefits. (HART79-82.) In its denial letter, Hartford stated that McDonel was not disabled because she could perform the essential duties of her occupation. (HART79, 81.) Hartford determined that nothing had changed to prevent McDonel from performing the same occupation that she had performed, with restrictions, for the previous fifteen years.
Specifically, the letter stated, "The Report of Workability signed by Dr. Thomas Rieser on January 18, 2010, indicated that you were released to return to work on January 13, 2010 with
On April 16, 2010, McDonel informed Simpson that she was completely removed from work due to her knee problems.
On April 19, 2010, McDonel appealed the denial of her LTD benefits. (HART67.) In doing so, she stated:
(Id.)
Angie Ager, Appeal Specialist with Hartford, handled McDonel's appeal. (HART64.) Ager sent a letter denying McDonel's appeal on May 11, 2010, twelve days after the appeal was filed. (HART63-64.) The letter stated, in part, the following:
(Id. (emphases added); see also HART3-4.) Hartford informed McDonel that she had exhausted her administrative remedies and also advised her of the right bring a claim in court under ERISA. (HART63-64). There is no evidence that Ager conducted additional factual investigation after McDonel filed her appeal.
Summary judgment is appropriate where there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A fact is material if it might affect the outcome of the suit, and a dispute is genuine if the evidence is such that it could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences that can be drawn from those facts. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
The Court must first determine if McDonel has adequately preserved the legal issues that she raises in this action. ERISA possesses a judicially-created exhaustion requirement. "`Where a claimant fails to pursue and exhaust administrative remedies that are clearly required under a particular ERISA plan, his claim for relief is barred.'" Chorosevic v. MetLife Choices, 600 F.3d 934, 941 (8
In her administrative appeal, McDonel raised the most important issues relevant to this action. Her appeal explicitly disputed whether Hartford had adequately considered her new permanent restrictions imposed in 2010. (See HART67.) In doing so, she also implicitly addressed whether Hartford had failed to compare these restrictions to the duties involved in her occupation.
The issues that McDonel did not raise in her administrative appeal are also not waived, however, because ERISA does not require issue exhaustion. The Eighth Circuit has suggested that ERISA "does not require either issue or theory exhaustion; it requires
In this action, McDonel explicitly raised for the first time that Hartford did not gather enough information to define her occupation and that Hartford inappropriately considered Andersen's modifications to her job. She also now raises Hartford's failure to investigate her knee condition. The Court finds that McDonel did not waive these issues because Hartford provided inadequate notice of (1) the reasons why it denied McDonel's claims and (2) the existence of an issue exhaustion requirement.
First, Hartford did not provide McDonel with sufficient notice of the reasons for her claim denial. ERISA states that every employee benefit plan shall:
29 U.S.C. § 1133.
Second, Hartford's LTD policy did not demand that McDonel raise all of the issues she wished to appeal. The policy states that an applicant "
To decide if either party is entitled to summary judgment, the Court must determine if Hartford abused its discretion in denying McDonel's claim. "[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator . . . 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). If the plan confers discretion on the plan administrator, a deferential abuse-of-discretion standard of review applies. Bounds v. Bell Atl. Enters. Flexible Long-Term Disability Plan, 32 F.3d 337, 339 (8
In this case, there is no dispute that the administrator has discretion to interpret the provisions of the Hartford's LTD policy. The policy states that Hartford has "full discretion and authority to determine eligibility and benefits and to construe and interpret all terms and provisions of the policy." (HART43.) Accordingly, the Court will review Hartford's denial of benefits under an abuse of discretion standard.
Under an abuse of discretion standard, the proper inquiry is whether the decision by the plan administrator to deny benefits is reasonable. King v. Hartford Life and Accident Ins. Co., 414 F.3d 994, 998-99 (8
When the plan administrator is also the insurer, it has an inherent conflict of interest. Darvell v. Life Ins. Co. of N. Am., 597 F.3d 929, 934 (8
In this action, the investigator and the appeal specialist both worked for Hartford, creating a conflict.
Using the above standard, the Court must determine if Hartford abused its discretion. A plan administrator abuses its discretion if it fails to identify and request additional information needed to make a reasoned decision.
Hartford primarily based its denial of McDonel's application on a short description of the "Value Stream I Associate" position, contained in Simpson's e-mail, and on the job restrictions imposed by Dr. Rieser. Using this information, Hartford determined that McDonel's job restrictions did not meaningfully affect the essential duties of the "Value Stream I Associate" occupation. The Court finds that this decision was a flagrant abuse of discretion for two reasons.
First, Hartford did not possess an adequate description of McDonel's occupation and her essential duties. The description of the "Value Stream I Associate" position in the record is from an unknown source and has relatively little information in it.
There is also no evidence that Hartford identified, as required under the LTD policy, McDonel's "occupation as it is recognized in the general workplace." (See HART43-47.) The only job descriptions in the record are (1) a list of certain duties McDonel performed, contained in Simpson's e-mail, and (2) what appears to be an example of one task that Andersen's window assemblers perform. (See HART109-11.) The Court finds no basis to conclude that these descriptions defined the essential duties of window assemblers at Andersen, much less the essential duties of window assemblers in the general workplace.
Hartford's failure to investigate the "general workplace" duties of McDonel's occupation is further demonstrated by its statement to McDonel that "your modified position is considered Your Occupation." (See HART63-64.) Hartford claims that Andersen accommodated McDonel's disabilities for many years, and that Hartford considered these accommodations when defining McDonel's occupation. Yet the record does not indicate what accommodations Andersen provided to McDonel, other than an assertion that Andersen accommodated her 2007 restrictions in some way. (See HART81.) The record also does not show whether Andersen's accommodations were legally required or whether they would have been regularly or reasonably provided in the general workplace. The Court finds that, without this information, it was impossible for Hartford to determine whether the McDonel's "modified position" was consistent with her "occupation as it is recognized in the general workplace." See Love v. Nat'l City Corp. Welfare Benefits Plan, 574 F.3d 392, 397 (7
Second, Hartford did not adequately investigate or consider McDonel's workrelated restrictions. Hartford discounted the new restrictions imposed by Dr. Rieser in 2010, declaring that they were "the same restrictions and limitations" as those from 2007. (HART5, 79.) The restrictions, however, were not the same. Aside from conclusory statements, it has provided no explanation for why any administrator could view these restrictions as the same. Furthermore, no physician — or non-physician, for that matter — has reviewed a comprehensive description of McDonel's occupation and determined that she can fulfill its essential duties with her limitations.
Hartford's inadequate investigation is particularly evident because McDonel indicated that a "permanent weight restriction" prevented her from doing her job. (HART109.) Hartford claims that "there is no indication that [McDonel's] Occupation requires pushing or pulling greater than 50 lbs.," but Hartford also possesses no reliable evidence that her occupation did
The lack of evidence supporting Hartford's decision is further demonstrated by its discounting of McDonel's 2010 restrictions because she "chose not to pursue additional treatment" for her back. (See HART64.) Hartford never investigated if McDonel's knee problems prohibited her from seeking surgery. (See HART8.) Further, Hartford cannot deny McDonel benefits because she continued to work for some years with a back injury or because Andersen provided some kind of accommodations to her during this time. See Seitz, 433 F.3d at 651 (stating that courts should not "unfairly punish individuals who test their limitations and attempt to keep working before seeking benefits").
In sum, the record is replete with relevant information that Hartford did not know. It did not know the essential functions of McDonel's job; it did not know about her occupation in the general workplace; it did not know if her occupation had changed; it did not know how Andersen had accommodated her; it did not know the limitations imposed by her knee condition; and it did not know how her medically-recommended restrictions affected her occupation. Hartford may have had "little incentive to come to grips with" McDonel's claims, but it had the obligation to do so. See Booton, 110 F.3d at 1463 n.6. The Court finds that Hartford made its decision "blindfolded" and, accordingly, abused its discretion. See id. at 1463.
Although the Court has determined that Hartford abused its discretion, there is not enough evidence in the record to determine if McDonel is entitled to LTD benefits. The record does not adequately demonstrate the functional limitations associated with McDonel's injuries or the essential duties of her occupation. The Court may not gather additional evidence outside of the claim file. Brown v. Seitz Foods, Inc., 140 F.3d 1198, 1200 (8
Based on the foregoing, and all the files, records, and proceedings herein,
1. Plaintiff's long-term disability benefits claim is
2. This action is
3. Defendant's Motion for Summary Judgment [Docket No. 12] is
4. Plaintiff's Motion for Summary Judgment [Docket No. 17] is
5. Both parties shall be under an obligation to notify this Court by written correspondence within thirty (30) days after Defendant reaches a final decision regarding Plaintiff's long-term disability benefits claim.