Filed: Jul. 06, 2010
Latest Update: Feb. 21, 2020
Summary: Case: 08-51106 Document: 00511163857 Page: 1 Date Filed: 07/06/2010 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED July 6, 2010 No. 08-51106 Lyle W. Cayce Clerk ROBERT SCHEUERMANN, Plaintiff-Appellant v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant-Appellee Appeal from the United States District Court for the Western District of Texas USDC No. 1:07-CV-00348 Before REAVLEY, SMITH, and DENNIS, Circuit Judges. PER CURIAM:* The pla
Summary: Case: 08-51106 Document: 00511163857 Page: 1 Date Filed: 07/06/2010 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED July 6, 2010 No. 08-51106 Lyle W. Cayce Clerk ROBERT SCHEUERMANN, Plaintiff-Appellant v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant-Appellee Appeal from the United States District Court for the Western District of Texas USDC No. 1:07-CV-00348 Before REAVLEY, SMITH, and DENNIS, Circuit Judges. PER CURIAM:* The plai..
More
Case: 08-51106 Document: 00511163857 Page: 1 Date Filed: 07/06/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 6, 2010
No. 08-51106 Lyle W. Cayce
Clerk
ROBERT SCHEUERMANN,
Plaintiff-Appellant
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA,
Defendant-Appellee
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:07-CV-00348
Before REAVLEY, SMITH, and DENNIS, Circuit Judges.
PER CURIAM:*
The plaintiff-appellant, Robert Scheuermann (Scheuermann) seeks long-
term disability benefits under a Group Disability Policy (Policy) his former
employer maintained with the defendant-appellee, Unum Life Insurance
Company of America (Unum). Unum denied his claim, and, after a bench trial,
the district court held that Unum had not abused its discretion. We VACATE
the district court’s judgment and REMAND.
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 08-51106 Document: 00511163857 Page: 2 Date Filed: 07/06/2010
No. 08-51106
I. PROCEDURAL AND FACTUAL BACKGROUND
Scheuermann worked as a carpenter for a builder of log homes from 1992
to September 3, 2003, the day before his first back surgery. After a work-related
back injury in the summer of 2003, his orthopedic surgeon, Dr. Tipton, diagnosed
Scheuermann as suffering from sciatica and performed three back surgeries in
a little over six months in 2003 and 2004, followed by another surgery by Dr.
Foreman, a rehabilitation specialist, in November 2004. Dr. Malone performed
a fifth surgery, in June 2005, and implanted a neurostimulator in
Scheuermann’s back in November 2006 in an attempt to control the pain.
Despite the six surgeries, Scheuermann claims he continues to have severe pain.
Prior to the fourth operation, in September 2004, Dr. Tipton stated in an
attending physician’s statement that Scheuermann was not released to work,
was unable to lift an object greater than 30 pounds, could not frequently carry
objects greater than 15 pounds, was unable to sit or stand for longer than one
hour without rests and could not bend repeatedly. Dr. Tipton also noted in a
subsequent report that Scheuermann was completely disabled. In his July 2005
attending physician statement, Dr. Malone opined that Scheuermann was
unable to sit or stand continually for more than one hour, could not lift more
than five pounds nor push, pull, stoop or climb.
In a review of Scheuermann’s claim for long-term disability–defined under
the Policy as a “sickness or injury” rendering the claimant “unable to perform
the duties of any gainful occupation for which [he is] reasonably fitted by
education, training or experience”–Dr. Sentef, an Unum physician, first reviewed
Scheuermann’s file in April 2006 and opined that he considered Dr. Malone’s
restrictions and limitations “overly restrictive.” In July 2006, Dr. Tsourmas, on
behalf of Unum, performed an independent medical evaluation (IME) and
determined that Scheuermann “should qualify after a rehabilitation of sorts in
a light duty capacity, as defined by the Department of Labor.” But Dr. Tsourmas
2
Case: 08-51106 Document: 00511163857 Page: 3 Date Filed: 07/06/2010
No. 08-51106
stated that before he would form a definitive opinion on Scheuermann’s
functionality he “would like to review the MRI [by Dr. Malone] of several months
back” and requested “extension x-rays to assess instability in a multiply-
operated back.” On the basis of the IME, Unum vocational consultant Waymire
opined that Scheuermann was capable of performing certain sedentary jobs that
existed in the Austin economy.
In August 2006, Unum advised Dr. Tsourmas that the MRI he requested
was unavailable (although it is undisputed that Unum, at that time of the letter,
had it in its files) and urged him to promptly assess Scheuermann’s present
functional level. Although he had not received any new medical evidence or seen
Scheuermann since the July IME, Dr. Tsourmas responded with an addendum
to his original report, opining that “this patient at present is both employable
and re-trainable. His avocational activities and home activities suggest he’s
light duty employable per DOL standards.”
On that basis, Unum informed Scheuermann in a September 15, 2006
letter that it was terminating his benefits because, based on “the objective
medical evidence,”he was “both employable and re-trainable,” and “no longer
me[]t the contractual definition of disability” under the Policy. Up to that point,
Unum had paid Scheuermann short-term benefits for eleven weeks and long-
term benefits for 33 months pursuant to the Policy.
On administrative appeal, Unum physician Dr. Pons was the first to
review Scheuermann’s record, including his April 2006 MRI. He noted the
following restrictions and limitations: “no excessive bending, standing or
stooping, lifting is limited from 10-15 pounds. Sit or stand alternately during an
8 hour work day. Sitting and standing, alternating between these positions
hourly.” Dr. Pons further opined that “Dr. Tsourmas and Tipton suggest the
most reasonable R[estrictions] and L[imitation]s while Dr. Malone’s
R[estrictions] and L[imitation]s appear overly restrictive.” Next, Unum
3
Case: 08-51106 Document: 00511163857 Page: 4 Date Filed: 07/06/2010
No. 08-51106
neurosurgeon Dr. Sternbergh reviewed the file and concluded that Dr. Malone’s
restrictions and limitations were “overly restrictive and d[id] not correlate with
the available medical information,” while the restrictions and limitations by Drs.
Tipton and Tsourmas supported that he was capable of performing sedentary
work. Dr. Sternbergh’s suggested permanent limitations and restrictions
included an “accommodation to change positions or activities as needed for
comfort, with no requirement for repetitive bending or lifting[,]” with a lifting
limitation of 15 to 20 pounds occasionally.
After the administrative review by Drs. Pons and Sternberg, Unum Senior
Vocational Rehabilitation Consultant Shannon O’Kelley reviewed
Scheuermann’s record and concluded that Waymire’s July 2006 vocational
assessment of Scheuermann remained accurate.
In a January 31, 2007 letter, Unum informed Scheuermann that it was
upholding its original denial of long-term benefits. The letter referenced the
opinions of Drs. Tsourmas, Pons and Sternbergh and O’Kelley’s vocational
assessment and explained that “[w]ith the above medical and vocational
analyses available and based on the totality of documentation in your files, we
have no recourse but to find the original decision to deny Long Term Disability
Benefits . . . to be contractually and factually supported. . . .”
Scheuermann initially filed suit against Unum in Texas state court,
challenging its decision to terminate his benefits. Unum removed the case to the
district court in May 2007. After a bench trial, the district court upheld Unum’s
denial of benefits.
II. STANDARD OF REVIEW
“On appeal from a bench trial, we review the factual findings of the trial
court for clear error. We review conclusions of law de novo, including the trial
court’s determination of its own standard of review of an ERISA administrator’s
determination of eligibility for benefits.” LeTourneau Lifelinke Orthotics &
4
Case: 08-51106 Document: 00511163857 Page: 5 Date Filed: 07/06/2010
No. 08-51106
Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348, 350-51 (5th Cir. 2002)
(citing Kona Tech. Crop. v. S. Pac. Transp. Co.,
225 F.3d 595, 601 (5th Cir. 2000);
Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc.,
168 F.3d 211, 213 (5th Cir.
1999)). See also Jenkins v. Cleco Power, LLC,
487 F.3d 309, 314 (5th Cir. 2007).
Where, as here, “the Plan undisputedly gives the Plan Administrator the
discretionary authority to construe the Plan’s terms and to render benefit
decisions, we reverse the Plan Administrator’s denial of benefits . . . only if it
abused its discretion.” Holland v. International Paper Co. Retirement Plan, 576
F.3d 240, 246 (5th Cir. 2009) (citing Stone v. UNOCAL Termination Allowance
Plan,
570 F.3d 252, 257-58 (5th Cir. 2009)). See also Firestone Tire & Rubber Co.
v. Bruch,
489 U.S. 101, 115 (1989); Sanders v. Unum Life Ins. Co. of America,
553 F.3d 922, 925 (5th Cir. 2008).1 “Under the abuse of discretion standard, ‘[i]f
the plan fiduciary’s decision is supported by substantial evidence and is not
arbitrary and capricious, it must prevail.” Corry v. Liberty Life Assurance Co.
of Boston,
499 F.3d 389, 397-98 (5th Cir. 2007) (quoting Ellis v. Liberty Life
Assurance Co. of Boston,
394 F.3d 262, 273 (5th Cir. 2004)). “‘Substantial
evidence is more than a scintilla, less than a preponderance, and is such relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.’”
Id. at 398 (quoting
Ellis, 394 F.3d at 273).
“We apply a two-step process when conducting this abuse of discretion
review. First, we determine whether the Administrator[’s] . . . determination
was legally correct. If so, the inquiry ends and there is no abuse of discretion.
Alternatively, if the court finds the administrator’s interpretation was legally
incorrect, the court must then determine whether the administrator’s decision
was an abuse of discretion.” Stone, 570 F.3d at 257 (citing Crowell v. Shell Oil
Co.,
541 F.3d 295, 312 (5th Cir. 2008)). However, where, as here, “[t]he parties
1
The parties do not dispute that Unum had discretionary authority to construe the
terms of the Policy and to determine eligibility for benefits under the Policy.
5
Case: 08-51106 Document: 00511163857 Page: 6 Date Filed: 07/06/2010
No. 08-51106
. . . have not conformed their arguments to our traditional two-step analysis . .
. we bypass, without deciding, whether the Plan Administrator’s denial was
legally correct, reviewing only whether the Plan Administrator abused its
discretion in denying the claim.” Holland, 576 F.3d at 246 n.2.2
Additionally, where the claim administrator had a financial conflict of
interest because it was responsible for both determining eligibility for benefits
and for paying benefits, as is the case here, we take into account the conflict of
interest–though, without changing the standard of review–as one factor in
deciding whether the administrator abused its discretion under the second step
of the analysis. Metropolitan Life Insurance Co. v. Glenn, 128 S. Ct. 2343, 2346
(2008);
Holland, 576 F.3d at 247;
Stone, 570 F.3d at 257.
III. DISCUSSION
Scheuermann argues that the district court clearly erred when it found
that Unum’s decision to terminate Scheuermann’s long-term benefits was based
on concrete evidence supporting the denial of his claim. We agree.
In its initial denial of long-term benefits, Unum relied on the opinions of
its own physician, Dr. Sentef, and independent medical examiner Dr. Tsourmas.
Neither physician’s report, however, provides the concrete evidence required.
The district court concluded that “Sentef’s report [wa]s concrete evidence . . .
supporting Unum’s decision to deny benefits, because Sentef determined the
Malone restrictions and limitations were overly restrictive, based on his review
of Scheuermann’s medical records. . . .” But nowhere in his report does Dr.
Sentef state that Scheuermann was not disabled under the Policy. Instead Dr.
Sentef requested that Dr. Malone provide a clearer assessment of
2
Here, the parties do not dispute the district court’s determination that
“Scheuermann’s arguments implicate only Unum’s factual determinations, not its Policy
interpretation.”
6
Case: 08-51106 Document: 00511163857 Page: 7 Date Filed: 07/06/2010
No. 08-51106
Scheuermann’s functional capabilities. Such a vague and incomplete medical
opinion is an insufficient basis for Unum’s denial of long-term benefits.
Further, Unum and the district court erroneously relied on Dr. Tsourmas’
addendum to his original report as concrete evidence supporting the denial of
benefits. After his initial IME report did not give a definitive opinion on
Scheuermann’s functional capacities and requested additional records, Dr.
Tsourmas, upon Unum’s urgent request, sent the following addendum:
Per letter 8/11/006 from Unum, I would offer this patient at present
is both employable and re-trainable. His avocational activities and
home activities suggest he’s light duty employable per DOL
standards.
The district court held that “Unum did not abuse its discretion in relying on [Dr.
Tsourmas’ amended report].” It explained that, “[a]lthough the Tsourmas-
addendum conclusion differs from the conclusion in the original report . . .
Tsourmas apparently changed his mind about Scheuermann’s abilities between
July 6, 2006, and September 8, 2006.” The district court further conjectured that
Dr. “Tsourmas was presumably aware of Scheuermann’s condition from the
examination two months prior, and aware of the conclusion of the original report
on which he added the addendum.” The district court then reconciled the fact
that Dr. Tsourmas had not received any further information after his initial
report to justify his significantly changed opinion two months later: “Although
Tsourmas believed, at the time he wrote the addendum, that the information he
requested was unavailable, it does not mean his addendum was inaccurate.
Upon learning such information was unavailable, Tsourmas did not repeat his
request for such information or ask how he could obtain it; he instead responded
to Unum’s August 11, 2006 question by changing his earlier assessment. . . .”
Therefore, the district court reasoned, “[i]t was rational for Unum to rely on the
Tsourmas addendum to deny benefits. . . .”
7
Case: 08-51106 Document: 00511163857 Page: 8 Date Filed: 07/06/2010
No. 08-51106
While a plan administrator need not defer to the opinion of a treating
physician over that of a reviewing physician, who, based on the medical evidence
in the record, reaches a different conclusion, Gothard v. Metropolitan Life Ins.
Co., 491 F.3d 246, 249 (5th Cir. 2007) (citing Black & Decker Disability Plan v.
Nord,
538 U.S. 822, 831 (2003)); see also
Corry, 499 F.3d at 401-02 (“In this
‘battle of experts’ the administrator is vested with discretion to choose one side
over the other.”), the situation we face here is different. Scheuermann’s
contention is that Unum abused its discretion “when it relied on the addendum
from Dr. Tsourmas that was in plain conflict, not only with the opinion of [his]
treating physicians but with Dr. Tsourmas’ own, original report.” We agree. Dr.
Tsourmas’ revised conclusion, in his addendum, that Scheuermann “is both
employable and re-trainable” lacks a reasonable basis for departing from his
earlier diagnosis, in his original report, based on the identical medical record,
that Scheuermann had “a failed surgical spine” and that, with “a rehabilitation
program of sorts,” he may only qualify for light duty work. Dr. Tsourmas’
original report’s prediction that Scheuermann would be “functional” in the future
was premised on a “rehabilitation program” and “pain management,” neither of
which was initiated between the period of the original report and its addendum.
Additionally, at the end of his original report, Dr. Tsourmas responded to
Unum’s question as to whether “there [were] any diagnostics that you feel are
necessary before formulating an accurate opinion” (emphasis added): “Yes. I
would like to review the MRI of several months prior. Also, this patient needs
flexion, extension x-rays to assess instability in a multiply-operated back. None
of the recent studies accompany the patient today.”3 However, Dr. Tsourmas
3
Unum’s internal notes confirm that Dr. Tsourmas’ original report did not provide a
definitive opinion on Scheuermann’s functionality: “[T]he IME has responded with
questions/requests rather than providing answers. The IME did not provide immediate
information on Mr. Scheuermann’s present functional capacity . . . .” (emphasis added)
8
Case: 08-51106 Document: 00511163857 Page: 9 Date Filed: 07/06/2010
No. 08-51106
never reviewed the requested materials because Unum advised him that “the
additional materials . . . [were] not available,” while at the same time urging him
to “[p]lease respond to our questions as to what the claimant’s functional level
is at the present.” Only in response to Unum’s urgent request did Dr. Tsourmas
change his mind. Because Dr. Tsourmas’ own original report concedes that the
medical evidence did not support a conclusion that Scheuermann was functional,
his addendum, based on the identical medical evidence as the original report, is
“in plain conflict with the medical records.”4 Gothard, 491 F.3d at 250.
Neither do the reports by Drs. Pons and Sternbergh, relied on by Unum
at the administrative review as additional evidence, provide concrete evidence
supporting its denial of benefits. Dr. Pons, on two occasions in his report,
misinterprets Scheuermann’s April 19, 2006 MRI. As Unum conceded, he states
that “there is a broad based central and left paramedian disc herniation which
does not abut the descending left S1 nerve root,” when in fact it does. Further,
Dr. Pons’ report references Dr. Tsourmas’ opinion that Scheuermann “could be
much improved and be much more functional” but doesn’t state that
Scheuermann is not disabled under the Policy at the present time. Dr.
Sternbergh, in turn, is under the wrong impression that Scheuermann had only
three back surgeries (when he in fact had six), and he repeats Dr. Pons’ mistake
that Scheuermann’s “broad based central and left paramedian disc herniation
. . . [did] not abut the descending left S1 nerve root” when in fact it does.
Against this background we cannot say that Unum’s decision on
Scheuermann’s long-term disability benefits was “based on evidence, even if
disputable, that clearly supports the basis for its denial.” Holland, 576 F.3d at
4
Unum does not dispute that Dr. Tsourmas’ addendum is based on the identical
medical record, and that the conclusions in his original report would not have justified its
denial of Scheuermann’s long-term disability benefits. Unum further does not dispute
Scheuermann’s contention that the MRI that it withheld from Dr. Tsourmas showed a
deterioration of Scheuermann’s medical condition.
9
Case: 08-51106 Document: 00511163857 Page: 10 Date Filed: 07/06/2010
No. 08-51106
246 (citation and quotation marks omitted). See also Gothard, 492 F.3d at 450
(“We do not hold that a plan fiduciary has no obligation to consider the basis of
the expert opinion on which they are relying. . . .”). Accordingly, we conclude
that Unum abused its discretion in denying long-term benefits, and that the
district court clearly erred in holding that Unum’s denial was supported by
concrete evidence.
IV. CONCLUSION
For the above reasons, we VACATE the district court’s judgment in favor
of Unum and REMAND the case to the district court for proceedings consistent
with this opinion.
10
