Filed: Jul. 19, 2006
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 05-2482 _ Dillard’s Inc., Individually and as * Assignee of Janet Bolton, * * Plaintiff/Appellee, * * v. * * Liberty Life Assurance Company of * Boston, a Member of the Liberty * Mutual Group, * Appeals from the United States * District Court for the Defendant/Appellant. * Eastern District of Arkansas. * _ * * * Liberty Life Assurance Company of * Boston, * * Third Party Plaintiff/ * Appellant, * * v. * * Janet Bolton, * * Third Party D
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 05-2482 _ Dillard’s Inc., Individually and as * Assignee of Janet Bolton, * * Plaintiff/Appellee, * * v. * * Liberty Life Assurance Company of * Boston, a Member of the Liberty * Mutual Group, * Appeals from the United States * District Court for the Defendant/Appellant. * Eastern District of Arkansas. * _ * * * Liberty Life Assurance Company of * Boston, * * Third Party Plaintiff/ * Appellant, * * v. * * Janet Bolton, * * Third Party De..
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 05-2482
___________
Dillard’s Inc., Individually and as *
Assignee of Janet Bolton, *
*
Plaintiff/Appellee, *
*
v. *
*
Liberty Life Assurance Company of *
Boston, a Member of the Liberty *
Mutual Group, * Appeals from the United States
* District Court for the
Defendant/Appellant. * Eastern District of Arkansas.
*
_____________________ *
*
*
Liberty Life Assurance Company of *
Boston, *
*
Third Party Plaintiff/ *
Appellant, *
*
v. *
*
Janet Bolton, *
*
Third Party Defendant/ *
Appellee. *
___________
No. 05-2517
___________
Dillard’s Inc., Individually and as *
Assignee of Janet Bolton, *
*
Plaintiff, *
*
v. *
*
Liberty Life Assurance Company of *
Boston, a Member of the Liberty *
Mutual Group, *
*
Defendant/Appellee. *
*
_____________________ *
*
*
Liberty Life Assurance Company of *
Boston, *
*
Third Party Plaintiff/ *
Appellee, *
*
v. *
*
Janet Bolton, *
*
Third Party Defendant/ *
Appellant. *
___________
Submitted: March 17, 2006
Filed: July 19, 2006
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Before WOLLMAN and RILEY, Circuit Judges, and ROSENBAUM,1 District Judge.
___________
WOLLMAN, Circuit Judge.
Liberty Life Assurance Co. of Boston (Liberty) appeals from the district court’s
grant of judgment on the pleadings for Dillard’s, Inc. (Dillard’s) in an Employee
Retirement Income Security Act (ERISA) claim brought by Dillard’s on behalf of
itself and as assignee of Janet Bolton. Bolton cross-appeals from the district court’s
judgment awarding Liberty reimbursement of overpayments resulting from her receipt
of social security disability benefits. We affirm on Bolton’s cross-appeal, reverse on
Dillard’s ERISA claim, and remand the case to the district court with directions that
the ERISA complaint be dismissed.
I.
From 1980 to 2000, Bolton worked at Dillard’s as vice president of corporate
advertising. She was responsible for making all managerial decisions for the
corporate advertising department, including decisions regarding catalog
advertisement, television advertisement, and the corporate advertising catalog. She
also acted as the corporate director of all divisional and corporate catalogs, direct mail,
statement enclosures, magazine advertisements, corporate gift wrap, logos, and special
events. Bolton maintained this position until August 7, 2000, when her primary care
physician, Charles B. Barg, M.D., recommended that she terminate her employment
because of her severe fatigue and uncontrolled hypertension (high blood pressure).
Dr. Barg stated that this hypertensive crisis exacerbated Bolton’s fibromuscular
1
The Honorable James M. Rosenbaum, Chief Judge, United States District
Court for the District of Minnesota, sitting by designation.
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dysplasia (FMD)2 symptoms and that he was attempting to bring her blood pressure
under control and deal with her fatigue, which was unchanged.
Bolton had suffered from symptoms related to hypertension and FMD since
1992. FMD is a disease of the blood vessels that causes stenoses and aneurysms. It
most often affects the kidney arteries, and its cause is unknown. FMD can lead to
high blood pressure and stroke, and shrinkage of the kidney is also often present in
FMD patients. Hypertension is a condition in which there is a rise in systemic blood
pressure as a result of stenosis of one or more arteries or their branches. It may be
caused, at least in part, by FMD. A patient may have high blood pressure and FMD,
however, even if the high blood pressure is not caused by FMD. An angioplasty is the
preferred and usual treatment for FMD patients. Hypertension may be treated, in part,
by stress reduction. Between 1992 and 2000, Bolton underwent four angioplasties to
treat her hypertension and FMD. She is not a candidate for further angioplasty, as
such a procedure would be dangerous to her health.
Bolton was covered under an employer-sponsored long-term disability plan
issued by Liberty. The plan provides that a claimant is eligible for long-term
disability benefits if she proves that she is “unable to perform all of the material and
substantial duties of [her] occupation on an Active Employment basis because of an
Injury or Sickness.” J.A. at 32. When applicable, the proof must cover the date,
cause, and degree of disability or partial disability. Further, the plan provides that
Liberty is entitled to periodically require proof of continued disability, and Liberty,
at its own expense, has the right and opportunity to have the claimant examined by a
physician or vocational expert of its choice.
2
Dr. Barg’s note actually stated that Bolton’s hypertensive crisis had
“exacerbated her fibromuscular dysphagia symptoms.” J.A. at 205 (emphasis added).
Because all parties agree that Dr. Barg took Bolton out of work because of
hypertension and FMD, we assume that this was a typographical error.
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On December 15, 2000, Bolton filed a claim for long-term disability benefits.
In support of her claim, Bolton provided Liberty with a statement from her
nephrologist, Gregory S. Bienvenu, M.D., who diagnosed her as suffering from
hypertension and FMD. He classified her physical impairment as Class 3, indicating
that Bolton had a slight limitation of functional capacity and that she was capable of
light work. He also classified her mental/nervous impairment as Class 3, indicating
that Bolton was capable of engaging in only limited stressful situations and limited
interpersonal relations.
Marianne Wicker, a nurse in Liberty’s managed disability services department,
initially reviewed Bolton’s claim. On February 28, 2001, Nurse Wicker noted that
Bolton had been diagnosed as having FMD for eight years, that Bolton stated that her
blood pressure was unstable, and that only since August 8, 2000—the alleged date of
disability—had Bolton’s symptoms allegedly become so severe that she was unable
to work. Nurse Wicker also noted that the medical information with which Bolton
provided her supported her off-work status, but that no medical documentation
indicated that this status was appropriate. For example, Bolton’s physicians had not
filled out restrictions or physical capacities forms to support her claim, and there was
no current treatment plan for Bolton. According to Nurse Wicker’s notes, Bolton’s
off-work status was also difficult to support because it was unclear what had caused
Bolton to suddenly become unable to continue in her position at Dillard’s.
In response to Nurse Wicker’s inquiry regarding the cause of Bolton’s sudden
inability to work, Bolton stated that there was no one precipitating event but that she
had reached a point at which she was constantly fatigued, and her blood pressure had
become more difficult to control. At this point, Nurse Wicker advised Edaleen
Luther, Liberty’s certified case manager, that Bolton’s file contained enough medical
evidence and subjective information to support Bolton’s off-work status. She also
stated that, for completeness, she would like to contact Bolton’s primary care
physicians to verify what Bolton had relayed to her.
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On March 5, 2001, Nurse Wicker noted that the objective information in
Bolton’s file supported her off-work status at that time. On that same day, Dr. Barg’s
nurse confirmed what Bolton had previously told Nurse Wicker. On March 6, 2001,
Dr. Barg sent a letter to Liberty stating that as of August 8, 2000, Bolton was taken
out of work because of severe fatigue and uncontrolled hypertension. Nurse Wicker
then concluded that Bolton’s condition was chronic and had the potential to be very
dangerous if left untreated. She stated that taking Bolton out of work helped to
control Bolton’s hypertension and fatigue and would allow Bolton to avoid having an
emergency angiogram. Further, she noted that it was becoming dangerous to continue
performing these procedures on Bolton.
Based on all of this information, Liberty’s disability case manager, Dawn
Ratliff, recommended that Liberty approve Bolton’s claim for one year and
recommended a follow-up review in eight months to examine new medical
documentation to determine whether further benefits were warranted. Ratliff’s
supervisor agreed, and on March 9, 2001, Liberty notified Bolton that her claim had
been approved.
A little over eight months later, Ratliff contacted Dr. Barg’s office to request
Bolton’s updated medical records. After receiving the requested records, Ratliff
referred Bolton’s file to Liberty’s managed care department for insight into Bolton’s
treatment and to assess whether a peer review of Bolton’s file would be appropriate.
On February 20, 2002, Nurse Wicker noted that the objective medical documentation
continued to show that Bolton did better when she did not have stress in her life and
when her blood pressure remained under control. She further stated that the barrier
to Bolton’s return to work continued to be the fact that Bolton had much better control
of her blood pressure and stress when she was not working. On February 21, 2002,
Nurse Wicker recorded Bolton’s statement that her doctor had told her that he was
primarily concerned about the diastolic number of her blood pressure and that it
should remain below ninety.
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Liberty determined that a peer review was appropriate and requested that
Elizabeth M. Gallup, M.D., review Bolton’s file and issue a report. Dr. Gallup
concluded that there was no documented medical evidence that supported a degree of
impairment precluding Bolton from continuing as vice president of corporate
advertising at Dillard’s. Although Dr. Gallup did not question whether Bolton had
FMD and recognized that Bolton had undergone several angioplasties and was not a
candidate for further angioplasty, she stated that she could find no medical
documentation indicating that Bolton was in fact disabled by hypertension at the time
of her alleged date of disability or during the year prior to or following that date. She
also stated that Bolton’s renal functions were stable and that her underlying renal
disease had been stable for the past eight years.
Liberty then opted to obtain an independent physician review of Bolton’s claim
by Sorin Vainer, M.D., F.A.C.P., assistant clinical professor of medicine at the
Medical College of Georgia. Dr. Vainer determined that Bolton’s records
demonstrated that Bolton’s renal functions had been stable for the past eight years and
that her blood pressure was well controlled on angiosensitive inhibitors. He noted that
Bolton had claimed that her blood pressure became elevated at work, but he
determined that no documentation was available to support this claim. Dr. Vainer
advised that Bolton could return to work, at least on a partial basis, and that she could
tolerate at least a mild to moderate level of stress, provided that she was carefully
monitored.
Based on Dr. Gallup’s and Dr. Vainer’s recommendations, Liberty denied
Bolton’s claim on April 5, 2002. Bolton was advised of Liberty’s grounds for denial,
including the fact that her blood pressure had remained normal, that her kidney
functions were nonprogressive and stable, and that she had normal renin levels.
Bolton was also advised of her appeal rights, including her right to include with her
appeal documentation supporting her claim.
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Bolton appealed on or about April 10, 2002, but she did not submit any
additional documentation in support of her claim. Liberty denied the appeal on April
19, 2002, and advised Bolton that she had exhausted her administrative rights of
review.
Liberty had advised Bolton throughout its review of her claim that she might
be eligible to receive social security disability benefits. Liberty assisted Bolton with
this process, which was in Liberty’s interest because social security disability benefits
constituted “other income” deducted from the amount of disability to which Bolton
was entitled under the plan. On August 28, 2002, the Social Security Administration
determined that Bolton was entitled to social security disability benefits and
commenced paying her accordingly.
Subsequently, Dillard’s, on behalf of itself and as assignee of Bolton, filed a
claim under ERISA, seeking judicial review of Liberty’s decision to terminate
payment of Bolton’s long-term disability benefits. Liberty then moved for judgment
on the pleadings. Applying an abuse of discretion standard of review, the district
court concluded that no medical records indicated that Bolton would not be exposed
to the same risks that necessitated her leaving Dillard’s if she returned to her position
as vice president of corporate advertising. Accordingly, the district court determined
that Liberty’s decision to terminate Bolton’s benefits was arbitrary and capricious.
The district court found in favor of Liberty on its third-party complaint against Bolton
for equitable relief in the form of reimbursement of overpayments resulting from
Bolton’s receipt of social security disability benefits.
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II.
We review de novo the district court's grant of judgment on the pleadings.
Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002). Judgment on the
pleadings is proper if there are no disputed issues of material fact and the moving
party is entitled to judgment as a matter of law.
Id. We accept as true all facts
pleaded by the nonmoving party, and we grant all reasonable inferences from the
pleadings in favor of the nonmoving party.
Id.
The parties agree that the abuse of discretion standard applies in determining
whether Liberty erroneously terminated Bolton’s long-term disability benefits. Under
this standard, Liberty’s decision need be only reasonable, meaning that it must be
supported by substantial evidence. Jackson v. Metro. Life Ins. Co.,
303 F.3d 884, 887
(8th Cir. 2002). A court, however, may not substitute its own judgment for that of the
decisionmaker. Ferrari v. Teachers Ins. & Annuity Ass’n,
278 F.3d 801, 807 (8th Cir.
2002). We reverse the plan administrator's decision only if it was arbitrary and
capricious. Groves v. Metro. Life Ins. Co.,
438 F.3d 872, 874 (8th Cir. 2006).
Liberty did not abuse its discretion in terminating Bolton’s benefits, because
substantial evidence supported its determination that Bolton was not disabled. First,
medical evidence reveals that Bolton’s renal disease had remained stable for eight
years prior to her departure from Dillard’s and that her blood pressure readings prior
to her departure were within her doctor’s recommended range. This evidence fails to
indicate that Bolton was at a greater risk at the time of her departure than she had been
during her previous eight years as vice president of corporate advertising. Second,
although Dr. Barg recommended that Bolton cease working at Dillard’s, Dr. Gallup
concluded that no objective medical evidence supported Bolton’s claim and that her
FMD and hypertension did not preclude her from continuing in her position. Dillard’s
claims that Liberty should not have credited Dr. Gallup’s analysis over Dr. Barg’s
conclusions because Dr. Gallup did not physically examine Bolton. We have held,
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however, that a plan administrator has discretion to deny benefits based upon its
acceptance of the opinions of reviewing physicians over the conflicting opinions of
the claimant’s treating physicians unless the record does not support the denial.
Johnson v. Metro. Life Ins. Co., 437 F.3d 809, 814 (8th Cir. 2006); Coker v. Metro.
Life Ins. Co.,
281 F.3d 793, 799 (8th Cir. 2002).
Further, reasonable minds could conclude that Dr. Bienvenu’s and Dr. Vainer’s
conclusions do not support Bolton’s claim for benefits. As recounted above, Dr.
Bienvenu opined that Bolton had only a slight limitation of functional capacity and
could engage in limited stressful situations. First, there is no evidence that Bolton’s
occupation was physically demanding. Second, because Dr. Bienvenu did not
speculate as to whether Bolton’s job was so stressful such that she could not perform
all of the material and substantial duties of her position, his opinion does not
unequivocally support the conclusion that Bolton was disabled within the meaning of
her benefits plan. Additionally, as recounted above, Dr. Vainer concluded that Bolton
could return to work, but suggested that this might be only on a partial basis. He, too,
concluded that Bolton could tolerate a moderate level of stress, but did not opine
whether this would preclude her from performing all of the material and substantial
duties of her position. Dr. Vainer’s opinion, then, also does not compel the conclusion
that Bolton was disabled.
Dillard’s emphasizes the fact that Nurse Wicker noted that Bolton’s file
supported her off-work status and that Liberty initially granted Bolton’s claim for
benefits. Indeed, in the absence of a significant change in the information available
to it, a plan administrator’s “previous payment of benefits is a circumstance that must
weigh against the propriety of an [administrator’s] decision to discontinue those
payments.” McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 589 (8th Cir. 2002).
The information available to Liberty changed significantly between the time it granted
benefits to Bolton and when it discontinued those benefits. Liberty’s initial grant of
benefits was based only on Dr. Bienvenu’s diagnosis that Bolton suffered from FMD
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and hypertension, Dr. Barg’s letter stating that Bolton was taken out of work because
of severe fatigue and uncontrolled hypertension, and other information provided by
Bolton, herself. Further, Liberty conditioned the continuation of benefits on its
receiving updated medical reports in eight months. Between the time it granted
benefits and when it terminated them, Liberty had requested that two consulting
physicians review Bolton’s medical records. One of these physicians determined that
Bolton was not disabled and that she could return to her previous position. This
determination constituted a significant change in the information available to Liberty
and supported a determination that Bolton was not disabled. Accordingly, Liberty’s
initial grant of benefits did not preclude it from later terminating Bolton’s benefits.
III.
In her cross-appeal, Bolton contends that the district court erred in awarding
Liberty reimbursement of overpayments resulting from her receipt of social security
disability benefits. She argues that the only assessment that the district court should
have made was a set-off against the award for unpaid disability benefits. Because we
have determined that Liberty is not responsible for further payment of benefits,
Bolton’s argument fails.
Additionally, in a letter submitted to us under Federal Rule of Appellate
Procedure 28(j), Bolton also argues that the district court lacked subject matter
jurisdiction to award Liberty reimbursement for overpayments made to Bolton.
Specifically, Bolton contends that Liberty did not seek equitable relief but instead
sought monetary damages, which are disallowed in a civil action by a plan
administrator under ERISA. We disagree.
The Supreme Court addressed a similar issue in Sereboff v. Mid Atlantic
Medical Services, Inc., 126 S. Ct. 1869 (2006). In that case, an ERISA fiduciary
brought suit against plan beneficiaries, seeking reimbursement under the plan’s third-
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party reimbursement provision for amounts paid by the health insurance plan and
subsequently recovered by the beneficiaries in their settlement with third-party
tortfeasors. Id. at 1872-73. The beneficiaries argued that the fiduciary’s claim for
relief was not equitable and thus disallowed under ERISA. See
id. at 1873-77. The
Supreme Court disagreed, holding that the fiduciary’s action to enforce the third-party
reimbursement provision “qualifie[d] as an equitable remedy because it [was]
indistinguishable from an action to enforce an equitable lien established by
agreement.”
Id. at 1877. Central to its holding was the Supreme Court’s
determination that the third-party reimbursement provision “specifically identified a
particular fund, distinct from the [beneficiaries’] general assets—all recoveries from
a third party . . . —and a particular share of that fund to which [the fiduciary] was
entitled—that portion of the total recovery which [was] due [the fiduciary] for
benefits paid.”
Id. at 1875 (internal quotations, citations, and alterations omitted).
The present case is analogous to Sereboff in that Liberty seeks reimbursement
for amounts paid to Bolton from a third-party source, the Social Security
Administration. Liberty’s complaint states that it is a request for equitable relief, and
Liberty seeks a particular share of a specifically identified fund—all overpayments
resulting from the payment of social security benefits. Accordingly, Liberty’s
complaint constitutes a request for equitable relief, and the district court did not err
in exercising subject matter jurisdiction over Liberty’s third-party complaint.
We affirm the district court’s judgment on reimbursement for overpayments
resulting from the receipt of social security benefits. We reverse the district court’s
judgment that Liberty abused its discretion in terminating Bolton’s disability benefits
and remand the case to the district court with directions that Dillard’s complaint be
dismissed.
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