TENA CAMPBELL, U.S. District Court Judge.
In 2014, Plaintiff Don Foust started experiencing serious back problems. His insurer, Defendant Lincoln National Life Insurance Company, began paying Mr. Foust long-term disability benefits ("LTD benefits"). Two years later, Lincoln stopped paying LTD benefits. Lincoln also denied Mr. Foust's request to waive his life insurance premiums (a benefit known as "life waiver of premiums" or "LWOP"). After twice appealing those decisions internally, Mr. Foust filed this lawsuit to compel Lincoln to provide LWOP benefits and further LTD benefits.
Mr. Foust and Lincoln each filed a cross-motion for summary judgment. (ECF No. 40, 41.) Because the court concludes Lincoln's decision to deny LWOP and LTD benefits was arbitrary and capricious, Mr. Foust's motion is granted, and Lincoln's motion is denied.
Mr. Foust suffered a serious spinal injury in his youth and, as a result, had ongoing back problems as an adult. (Administrative Record (AR) 397, 1986, 1989.) Beginning in June 2014, his condition worsened. After recording that Mr. Foust was experiencing chronic pain and weakness, Dr. Arlan Henrie diagnosed Mr. Foust with "severe stenosis and myelomalacia." (AR 1497, 1502.) On June 18, Dr. Angelo Pugliano, Mr. Foust's primary physician, recorded that Mr. Foust was in significant pain. (AR 1503-04.) But on July 10, Mr. Foust obtained a neurosurgical review from Dr. Andrew Dailey, who concluded the problem was not yet severe enough to require surgery. (AR 1511.)
Mr. Foust, an engineer for DriverTech, Inc., stopped working on August 12, 2014. (AR 095.)
On August 29, Dr. Pugliano recorded that Mr. Foust was experiencing progressively longer and more severe headaches; that his hands were numb; and that vertigo was limiting his ability to walk. (AR 1513-14.) Dr. Pugliano reported this information to Lincoln in an Attending Physician Statement. When asked, "Date you believe patient was unable to work?" Dr. Pugliano wrote August 12, 2014. When asked "When do you think your patient
On September 12, Lincoln approved Mr. Foust's request for short-term disability benefits. (AR 1279.) On November 17, Lincoln informed Mr. Foust that, effective November 14, 2014, his short-term benefits would transition to LTD benefits. (AR 052.)
In September,
On April 1, the Social Security Administration (SSA) told Mr. Foust that he had been awarded Social Security Disability Income (SSDI) effective January 2015. (AR 535.) The SSA also concluded that Mr. Foust had become disabled in July 2014. (AR 535.)
On April 23, Mr. Foust underwent surgery to try to repair his back. (AR 1038.) At two follow-up visits on May 20 and July 28, Dr. Dailey indicated the surgery had led to significant improvements for Mr. Foust. (AR 1046, 1048.)
On June 9, 2015, Lincoln told Mr. Foust that he was ineligible for LWOP benefits because he could have worked part-time in a sedentary job in the six months after he left his job (meaning between August 12, 2014, and February 12, 2015). (AR 1925-28.)
On November 4, Mr. Foust filed an appeal of the denial of LWOP benefits. (AR 1471.)
Lincoln then retained Dr. Jacqueline Hess to review Mr. Foust's file. Dr. Hess concluded that from August 12, 2014, to September 24, 2014, Mr. Foust could have worked at a sedentary level. She concluded that from September 24, 2014, to October 4, 2015, Mr. Foust was unable to function in any capacity. And she concluded that from October 4, 2015 onward, Mr. Foust could again function at a sedentary level. (AR 920.)
Dr. Hess also called Dr. Dailey to discuss Mr. Foust's status and recorded that Dr. Dailey "agreed that the claimant was capable of sedentary work activities as of 10/4/15." (AR 930.) Dr. Dailey confirmed by letter that this was an accurate summary of their conversation. (AR 931.)
On December 21, 2015, Lincoln upheld its denial of the LWOP benefits. (AR 381-85.)
On January 11, 2016, Nurse Jennifer Scarborough reviewed Mr. Foust's records for Lincoln. She wrote, "I am in agreement
On April 6, Lincoln wrote Mr. Foust and informed him that they had preliminarily concluded that he was capable of sedentary work, so they would be ending his LTD benefits. Lincoln gave Mr. Foust 45 days to provide medical records that challenged this determination. On June 2, having received no additional records, Lincoln informed Mr. Foust that his LTD benefits would be discontinued beginning November 11, 2016. (AR 516-17.)
Throughout the first half of 2016, Mr. Foust repeatedly met with Dr. Rajiv Shah, who treated him with steroid injections, lumbar medial branch blocks, and lumbar radiofrequency rhizotomies. In each instance, Dr. Shah indicated that the procedures were necessary because Mr. Foust was "experiencing a significant flare-up of [his] baseline pain which is not controlled with the current regimen or treatment plan." (AR 0447-49, 457, 474, 489, 493-96.)
On July 20, 2016, Dr. Dailey completed a new assessment of Mr. Foust. He wrote:
(AR 390.)
On August 6, 2016, Ms. Dina Galli, M.Ed., L.V.R.C., C.R.C., C.C.M., conducted a vocational examination with Mr. Foust. In her report, Ms. Galli wrote:
(AR 400.) In particular, Ms. Galli was concerned Mr. Foust would not be able to obtain a job given his difficulty typing or engaging in other tasks requiring fine motor skills. (
Ms. Galli also warned that Mr. Foust would not be able to attend work on a
(AR 401.) Based on all these issues, Ms. Galli concluded "that Mr. Foust has been and continues to be incapable of gainful employment of any kind." (AR 402.)
On August 16, 2016, Dr. Dailey completed an Assessment of Restrictions for Purposes of Determining Disability. It states that in a full-time job, Mr. Foust would be able to sit or stand for only 15-20 minutes at a time, and that Mr. Foust could "occasionally" lift 1-5 pounds, "infrequently" lift 5-10 pounds, and "never" lift anything greater. (AR 392.) Dr. Dailey reported that, in a typical workday, Mr. Foust would require bedrest twice a day for 30 to 60 minutes, and that he would need to take a one-hour break for every two-to-three hours of work. Dr. Dailey warned that Mr. Foust would be expected to have "lapses in concentration or memory ... for several hours per day" while at work, and that Mr. Foust would "constantly" struggle with fine manipulation, typing, writing, and grasping small objects. Finally, when asked "Please estimate, to the best of your ability and expertise, how many absences could be reasonably medically expected in any week," Dr. Dailey wrote "3x/week if he is lucky." (AR 393-94.)
On August 16, 2016, Mr. Foust appealed, for the second time, the denial of his LWOP benefits. (AR 1379.) On September 12, Lincoln again denied the appeal. (AR 1363.)
On September 14, Nurse Lynn Sucha conducted a review of Mr. Foust's file for Lincoln. As others had done, she noted that the apparent discrepancy in Dr. Dailey's first disability form, where he simultaneously indicated Mr. Foust was capable and incapable of sedentary work. (AR 1295-96.) The record does not disclose whether she made any effort to follow up on this issue.
Throughout the fall of 2016, Mr. Foust continued to obtain treatments from Dr. Shah for his pain. (AR 148-170, 837, 846.)
On November 29, 2016, Mr. Foust appealed the denial of his LTD benefits. (AR 521.)
(AR 206.)
Regarding the claim that Mr. Foust struggled with fine motor skills, Dr. Kaplan wrote, "[r]eports of difficulty with dexterity... appear to be largely subjective by patient report, but not confirmed objectively on neurological examination or objective functional testing." (AR 205.) Dr. Kaplan also warned that it was possible Mr. Foust's opioid medication could cause "cognitive impairment." But Dr. Kaplan concluded that if these medications had side effects, Mr. Foust could simply stop taking them, as they were not medically necessary. (AR 206.)
On January 10, 2017, Ms. Stacey Nidositko, M.S., C.R.C., completed a vocation review for Lincoln. She was asked whether the three occupations previously identified by Ms. Thomas—project director, specification writer, or consultant—remained viable options for Mr. Foust. She concluded they were. (AR 013-14.) She was then asked to review Ms. Galli's vocational report. She found there was "no indication that there is disagreement [in Ms. Galli's report] with the occupations identified from a skills standpoint perspective." (AR 014.) Lincoln questioned this conclusion, noting that Ms. Galli's report indicated Mr. Foust was "incapable of gainful employment of any kind." Ms. Nidositko reiterated that, regardless of Ms. Galli's conclusion, her vocational exam had not, "from a skills standpoint perspective," shown that Mr. Foust could not perform the identified jobs. (AR 014.)
On January 11, 2017, Mr. Foust's appeal of his LTD benefits was denied. (AR 231-235.)
Mr. Foust then asked Mr. Mark Anderson, P.T., M.P.T., O.C.S., to conduct a three-hour functional capacity evaluation. Mr. Anderson concluded:
(AR 211.) Regarding sitting in one position for long periods of time, Mr. Anderson indicated Mr. Foust would need a break every thirty minutes. Regarding fingering, Mr. Anderson noted, "Looking down in seated position tolerated but with poor performance, looking down from standing caused severe symptoms." (AR 214.)
On July 10, 2017, Mr. Foust submitted Mr. Anderson's report to Lincoln as part
Dr. Eric Kerstman then reviewed Mr. Foust's records. Dr. Kerstman indicated that he had been unable to reach Dr. Dailey, but that he had spoken with Dr. Dailey's nurse practitioner, Nurse Daniel Hovey, who relayed that Mr. Foust "has permanent sedentary work restrictions from a neurosurgical perspective." (AR 110.) Dr. Kerstman also spoke with Dr. Shah, who summarized Mr. Foust's medical history, including the fact that, although much of his pain had been remedied, Mr. Foust still had "persistent numbness of the right hand." Additionally, Dr. Kerstman recorded that in Dr. Shah's opinion "the claimant's maximum work capacity is sedentary level work." (AR 110-11.) Finally, Dr. Kerstman spoke with Mr. Anderson, who indicated Mr. Foust had a "maximum capacity of occasional sitting, standing, walking, bending, and reaching, and no kneeling and crouching." (AR 111.)
Dr. Kerstman identified the following permanent limitations for Mr. Foust: "Lifting, carrying, pushing, and pulling a maximum of 10 pounds occasionally. Occasional standing and walking. Occasional bending, kneeling, and squatting. Occasional use of the upper extremities to perform grasping, handling, fingering, and typing. No exposure to unprotected heights." (AR 111-12.) Based on these limitations, Dr. Kerstman concluded Mr. Foust could work at a sedentary level. (AR 113.)
Lincoln informed Mr. Foust of Dr. Kerstman's conclusions and provided Mr. Foust an opportunity to respond. On September 13, Ms. Galli completed a supplemental vocational report, which was then conveyed to Lincoln. She warned:
(AR 129 (emphasis in original).)
On September 27, Lincoln asked Ms. Heili S. Randall, A.B.D., M.A., C.R.C., to conduct a vocational review of Mr. Foust's file. Ms. Randall concluded that Mr. Foust could work as an engineering drawings checker, specification writer, or consultant. (AR 121.)
On October 3, 2017, Lincoln denied Mr. Foust's second LTD benefits appeal. (AR 114.) Mr. Foust then brought this action under 29 U.S.C. § 1132.
A court reviews claims under 29 U.S.C. § 1132(a)(1)(B)
Under the arbitrary and capricious standard of review, the court considers both the terms of the plan and the evidence in the record. The court must determine whether the plan administrator's interpretation of the plan was "reasonable and made in good faith."
Lincoln argues the court should apply the arbitrary and capricious standard because the text of the relevant insurance policies provides it with discretion in awarding or denying benefits. (AR 068, 1342, 2384.) Mr. Foust responds that, because of irregularities in the processing of his claim, the court should review Lincoln's decision
Under Mr. Foust's life insurance policy, Lincoln agreed to continue to provide Mr. Foust life insurance, without requiring that he pay any premiums, if:
(AR 1333.)
"Total Disabled" means that Mr. Foust was "unable, due to sickness or injury, to engage in any employment or occupation for which [Mr. Foust] is or becomes qualified by reason of education, training, or experience." (AR 1333.) Accordingly, in order to qualify for LWOP benefits, Mr. Foust had to be unable to work at any job between August 12, 2014 (his last day of work) through at least the next six months, to February 12, 2015.
In its letter denying Mr. Foust's second appeal, Lincoln wrote, "from [Mr. Foust's] date of disability of 8/12/2014 to his surgery date [4/23/2015], he did not have restrictions or limitations that would have prevented him from performing sedentary duties on at least a part-time basis." (AR 1363.) This statement is directly contradicted by Lincoln's own reviewer. Dr. Hess, the first of three doctors to review Mr. Foust's medical records on Lincoln's behalf, concluded that "for the time period between 9/24/14 and 10/4/15 ... the claimant was unable to function reliably in any capacity." (AR 920.) Neither Dr. Kaplan nor Dr. Kerstman, the other Lincoln reviewers, addressed this time period in their reports, as they were focused solely on Mr. Foust's post-November 2016 condition. (AR 108-113, 199-207.) No evidence contradicts Dr. Hess's conclusion that for
The only question, then, is whether Mr. Foust would also be considered totally disabled for the period immediately following his departure from work, between August 12, 2014, and September 24, 2014. Dr. Hess believed that, during this period, Mr. Foust would have been able to work at a sedentary job. (AR 924.) But her conclusion is not supported by the record. On August 29, 2014, Dr. Pugliano completed an Attending Physician Statement, in which he stated that, in his view, Mr. Foust was no longer able to continue working as of August 12, 2014, and that it was unknown when, if ever, he would be able to work again. (AR 1279.) Dr. Hess never addresses this document. On the contrary, she states that "Dr. Pugliano makes no statement regarding the claimant's functional capacity. Therefore, he was not contacted." (AR 924.) But given Dr. Pugliano's August 29, 2014 conclusions, Dr. Hess's statement was incorrect.
Moreover, in September 2014, Dr. Dailey completed a disability form that asserted both that Mr. Foust was capable of sedentary work and that Mr. Foust was incapable of any work. Lincoln's records note this discrepancy at least twice in the period before Dr. Hess conducted her review. (
After Dr. Hess completed her report, Ms. Galli's vocational exam further bolstered Mr. Foust's claim. Ms. Galli wrote, "My review of the record is not consistent with Mr. Foust having reached a point of medical stability or functional improvement at
In sum, when Lincoln first denied Mr. Foust's request for LWOP benefits in June 2015, Lincoln had only two pieces of evidence to consider: Dr. Pugliano's conclusion that Mr. Foust was totally disabled; and Dr. Dailey's contradictory report that Mr. Foust could or could not perform sedentary work, a contradiction Lincoln had flagged but not resolved. When Lincoln denied Mr. Foust's first appeal, it had received a third piece of evidence: Dr. Hess's report, in which Dr. Hess failed to speak to Dr. Pugliano at all and failed to ask Dr. Dailey about his view of Mr. Foust's pre-September 2014 condition. Finally, when it denied Mr. Foust's second appeal, the only additional evidence it had received was Ms. Galli's unrebutted report that Mr. Foust had been unable to work in any capacity beginning the day he left his job.
Because Lincoln failed to consider these records, the court concludes Lincoln's denial of LWOP benefits was arbitrary and capricious.
Mr. Foust was entitled to LTD benefits if he became "totally disabled" while covered by the insurance plan.
(AR 075.)
"Partial Disability Employment" is defined as being able to work at your own job (with reasonable accommodations if necessary) in the 27 months after becoming disabled, or being able to work at any job, considering your training, education, and experience (with accommodations if necessary), after those initial 27 months. (AR 003, 062.) Mr. Foust received disability benefits for the duration of the initial 27-month period. (AR 052, 1279.) Accordingly,
Significant evidence submitted by Mr. Foust indicates he was unable to do so. Although Mr. Foust's condition had improved after surgery in 2015, by mid-2016, it had worsened considerably. For example, Dr. Dailey's July 20, 2016, assessment concluded "it would be very hard for [Mr. Foust] to work given his weakness that is progressing." (AR 390.) Dr. Dailey's August 16, 2016, assessment concluded Mr. Foust could only sit for 15 to 20 minutes at a time; that he would need bedrest twice a day for 30 to 60 minutes; that he would need a break of one hour for every two to three hours worked; that he would likely have "lapses in concentration or memory... daily for several hours per day;" that he would "constantly" struggle with fine manipulation, typing, writing, and grasping small objects; and that he would be "lucky" if he only had three medical absences per week. (AR 393-94.)
Ms. Galli's vocational exam warned that even if Mr. Foust were capable of the physical aspects of sedentary work (such as lifting up to 10 pounds occasionally), he was unable to do other things necessary for most sedentary jobs. (AR 400.) She believed he would be mostly unable to type, would be mostly unable to focus or complete specific tasks while at work, and would frequently miss work. (AR 401-02.) She concluded that "Mr. Foust has been and continues to be incapable of gainful employment of any kind." (AR 402.) After reviewing additional records, she completed a supplemental report that concluded "the more recent records ... serve only to bolster the opinions set forth in my previous report." (AR 129.)
Finally, Mr. Anderson's functional capacity evaluation concluded Mr. Foust could work no more than three hours per day at a "below-sedentary physical demand level;" that he could sit for no more than thirty minutes at a time; and that typing while sitting "was tolerated but with poor performance." (AR 211-214.)
Each of these records strongly supports the conclusion that Mr. Foust was unable to work in any capacity after November 11, 2016. The question, then, is whether Lincoln had "more than a scintilla of [other] evidence that a reasonable mind could accept as sufficient" to justify concluding that Mr. Foust actually could work.
Reviewing the records relied on by Lincoln, the court concludes Lincoln's decision lacked such support.
First, Dr. Kaplan does not address several issues in the records. Dr. Kaplan never discusses Dr. Dailey's conclusions that Mr. Foust would need bedrest twice a day and would be absent from work three times a week. Nor does he mention Ms. Galli's concerns about attendance. Instead, Dr. Kaplan focuses only on the amount of time Mr. Foust can walk, stand, or sit, and the amount of weight he can lift. (AR 205-06.)
To the extent he does disagree with their conclusions, rather than merely ignore them, his disagreement is generally not based on a legitimate review of the
Similarly, Dr. Dailey and Ms. Galli warn that Mr. Foust is likely to struggle with memory and concentration while at work. Dr. Kaplan addresses these concerns only in the context of opioids, writing that although he did not believe the medication prescribed to Mr. Foust had caused cognitive defects, Mr. Foust could simply stop taking them if they had. (AR 206.) But Dr. Dailey and Ms. Galli's concerns were not solely due to medication: they also blamed his pain and other symptoms.
Ms. Nidositko, who was asked to review Ms. Galli's vocational exam, also fails to address the substance of Ms. Galli's conclusions. Ms. Nidositko indicated that "from a skills standpoint perspective," Ms. Galli's exam showed that Mr. Foust could work in sedentary jobs. (AR 13-14.) This conclusion makes sense only if things like attendance, memory, focus, and typing do not count as "skills" necessary for work. (AR 13-14.) As with Dr. Kaplan, Ms. Nidositko's review provides no substantive explanation for why she disagreed with Ms. Galli. Rather, her response strongly suggests she simply disregarded portions of Ms. Galli's findings.
Finally, as with the other reviewers, Dr. Kerstman ignores key parts of Mr. Foust's records. For example, Dr. Kerstman makes recommendations regarding how long Mr. Foust can stand or walk, and how much weight he can lift, but makes no recommendations regarding how long he can sit, even though Dr. Dailey and Mr. Anderson found Mr. Foust could only sit for between 15 and 30 minutes at one time. (AR 111-12.) This is a particularly egregious omission, because many courts have indicated that the amount of time a person can sit is a key inquiry in determining whether that person is fit for sedentary work.
Additionally, because Dr. Kaplan indicated Mr. Foust lacked objective testing of his typing ability, Mr. Foust underwent further objective tests with Mr. Anderson regarding that issue. (AR 214.) Dr. Kerstman apparently found these tests persuasive, as he indicated in his report that Mr. Foust would only have "[o]ccasional use of the upper extremities to perform grasping, handling, fingering, and typing." (AR 111-12.) As Ms. Galli persuasively argued upon reviewing Dr. Kerstman's report, "individuals that are limited to predominantly seated work activities
In sum, even if it was reasonable for Lincoln to accept the more favorable conclusions made by its reviewers regarding the amount of time Mr. Foust could stand or lift weight, the unrebutted evidence from Dr. Dailey, Ms. Galli, and Mr. Anderson outweighs any finding that Mr. Foust was employable. Their conclusions indicate Mr. Foust was severely limited in the amount of time he could work each day and the number of days he could work each week. While at work, he could not sit for long periods of time and could type only occasionally, and he would frequently be unable to focus and would have memory lapses. Because Lincoln never explained why these findings either were incorrect or would not prevent Mr. Foust from working, Lincoln had no basis to discontinue Mr. Foust's LTD benefits.
The Tenth Circuit has been clear that insurance companies cannot simply ignore inconvenient evidence.
Lincoln argues that its review of the record was analogous to the reviews conducted in
The court here is conducting the same inquiry as the
In
Regarding Mr. Foust's entitlement to LWOP benefits between August 12, 2014, and October 4, 2015, the court concludes the matter is so clear cut that Lincoln must be ordered to pay the benefits. But whether Mr. Foust should obtain additional benefits beginning in July 2016 is returned to Lincoln for further review.
The court also concludes that "it would be unreasonable" for Lincoln to deny further LTD benefits "on any ground." (
Lincoln argues that under the insurance policy, Mr. Foust's LTD benefits are supposed to be reduced by the amount of SSDI he receives. Lincoln argues Mr. Foust did not timely inform it of his SSDI benefits, leading to an overpayment of LTD benefits. The parties dispute whether Mr. Foust has fully repaid this amount. (
In its motion, Lincoln states, "To the extent the Court denies Lincoln's Motion for Summary Judgment, Lincoln is entitled to offset the amount of benefits overpaid to Plaintiff as a result of SSDI payments and reserves the right to brief the Court on the amount of benefits due to Plaintiff." (ECF No. 40 at 27 n.10.)
The court agrees that, to the extent the parties are unable to resolve this dispute without court intervention, Lincoln may file a motion regarding this issue.
Lincoln's motion for summary judgment (ECF No. 40) is DENIED.
Mr. Foust's motion for summary judgment (ECF No. 41) is GRANTED.