April 18, 2013
By Mark D. DeBofsky
Mark D. DeBofsky is a name partner of Daley, DeBofsky & Bryant. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage, and Social Security law.
Woody Allen is quoted as saying that 80 percent of life is just showing up.
That was the lesson taught by Neaton v. Hartford Life and Acc.Ins.Co., 2013 U.S.App.LEXIS 5814 (6th Cir. March 21, 2013)(non-precedential) which focused on James Neaton's absences from work while recovering from multiple surgeries.
Neaton, who worked as a debt collector, suffered from Gorlin's syndrome, a rare genetic disorder that causes the development of multiple basal-cell carcinomas, cysts and lesions requiring frequent and extensive surgical procedures to remove them.
Following the insurer's initial approval of Neaton's claim, his employer notified Hartford it would consider allowing him to work from home. However, in assessing whether Neaton could even manage such an accommodation, the treating physician reported he was seeing Neaton frequently and, on a typical visit, he would discover between five to 50 new skin cancers that needed to be removed.
Each procedure required several days to a week or more of recovery time at home. Hartford concluded that even under such circumstances, Neaton could perform his job from home and terminated the benefit payments.
Neaton appealed, and in the course of the appeal, Hartford obtained an opinion from a dermatologist who agreed that Neaton would "most certainly" require multiple surgeries, and that if surgeries were performed once a month or every two months, a week off would be reasonable following each procedure.
Following a further inquiry from Hartford, the consultant modified his opinion and concluded that if Neaton were working at home, he would need three to four days off for reasonable healing after each surgical procedure. Following receipt of that report, Hartford upheld its decision.
Neaton's main argument was that the frequency of surgeries and the time needed to recover would cause him to miss so much work that he would be effectively prevented from performing any occupation.
The court of appeals agreed. The court found that Hartford's reliance on a file review, rather than requesting an independent examination, was a significant failure because recovery time is variable and depends on pain and other idiosyncratic responses, thus making the "length of the patient's recovery is in large part a credibility determination." The 6th U.S. Circuit Court of Appeals has been particularly critical in its review of disability benefit claims on the issue of non-examining consultants in cases involving credibility determinations. See, Kalish v. Liberty Mut., 419 F.3d 501, 506 (6th Cir. 2005); Smith v. Cont'l Cas. Co., 450 F.3d 253, 260 (6th Cir. 2006); Calvert v. Firstar Finance, Inc., 409 F.3d 286 (6th Cir. 2005).
The court also concluded that Hartford's vocational evaluation was deficient because it failed to consider that the frequency of Neaton's surgeries had increased. The court offered a timeline showing the number of surgeries Neaton underwent in the period leading up to his disability and thereafter. Based on that timeline, the court found:
"The vocational expert's opinion here, based upon calculating the average frequency of Neaton's surgeries over a timeline beginning prior to the time he claimed to be disabled, results in an artificially low assumption as to the frequency of his surgeries and work absences, and does not constitute substantial evidence to support Hartford's denial of benefits. Moreover, regardless of which time period the [c]ourt considers, any one of the periods shows a number of absences greater than what government statistics suggest could be accommodated."
The court also disagreed with Hartford's analysis of the vocational impact of the level of absenteeism Neaton experienced, focusing on key statistics that were missing from the vocational report assembled by Hartford:
"Average paid sick leave for 'professional, technical and related employees' in 1996 was 8.5 days for individuals with one year of service and up to 10.6 days for individuals with over 25 years of service. A subsequent March 2010 publication from the Bureau of Labor Statistics shows that full-time workers with one year of service are now, on average, allowed eight days of paid sick leave."
Based on Neaton's record of absenteeism, the court faulted Hartford for failing to even call Neaton's employer to determine whether his absenteeism would have been acceptable. The court cited Douglas v. Bowen, 836 F.2d 392, 396 (8th Cir. 1987), a Social Security case, which quoted vocational testimony that an absentee rate in excess of one to two days per month would be unacceptable to most employers. Hence, based on the multitude of errors, the court ordered benefits reinstated.
It is unfortunate that this case is non-precedential because it emphasizes two key points that are not found in any other ruling.
First, the court issued a reminder that a fiduciary is obligated to insure that its consultant's opinion is based on valid methodology. Simply because a report appears valid on its face is no guarantee of reliability.
Second, that excessive absenteeism is a basis for a finding of disability even if the insured is capable of working on other occasions. That conclusion is also consistent with rulings from the 7th Circuit, which has acknowledged that no employer would tolerate an employee who would have frequent, unpredictable absences.
In Oates v. Discovery Zone, 116 F.3d 1161, 1171 (7th Cir. 1997), the 7th Circuit remarked: "It almost goes without saying that an employer has a legitimate interest in insuring that each employee's work continues at a steady pace. ... Reliability and promptness are important considerations in maintaining a work force." The 7th Circuit also recognized that most employers are reluctant to hire an employee who is only sporadically available to work. Rush v. McDonald's Corp., 966 F.2d 1104, 1115 (7th Cir. 1992).
Therefore, the 6th Circuit's conclusion - that in view of the frequency of Neaton's surgeries and recuperation, he would not be a candidate for employment - is a sensible conclusion, even if Neaton could otherwise perform his job at home.