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Kelly v. Reliance Standard Life Ins.Co., 2011 U.S.Dist.LEXIS 147133 (D.N.J. December 22, 2011)(Issue: Selective Review of Evidence)..
Following a court remand, Reliance Standard again denied benefits. This time, the court awarded benefits. The plaintiff, who had worked as a management employee of Penn Mutual Insurance Company, suffered a spinal cord injury in a 2005 car accident that exacerbated an earlier injury and rendered him incapable of working. Reliance Standard denied the ensuing long-term disability benefit claim, asserting that while Kelly may have been disabled from his job, his occupation as performed in the national economy was sedentary; and Reliance determined he was capable of sedentary employment. Kelly's pre-suit appeal was unsuccessful; however, the district court found Reliance had based its decision on an incorrect job description and remanded the case for Reliance to re-determine the claim based on the correct job description.
On remand, Reliance was provided with the correct job description and additional medical documentation showing that in addition to the spinal impairment, Kelly also suffered from a cardiac impairment. Despite the new evidence, Reliance denied the claim again based on reports from two reviewing doctors and an in-house vocational specialist. Reliance also obtained a letter from Kelly's former supervisor who critiqued Kelly's description of his job.
The court applied the arbitrary and capricious standard of review. While deferential, the court explained its "assessment involves evaluating 'the quality and quantity of the medical evidence and the opinions on both sides of the issues. Otherwise, courts would be rendered to nothing more than rubber stamps.'" *12 (citing Glenn v. MetLife, 461 F.3d 660, 674 (6th Cir. 2006), aff'd by Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)). The court also took Reliance's conflict into consideration. Applying those standards, the court found three problems with Reliance's decision: "(1) an inappropriately selective evaluation of the evidence, (2) the rejection of self-reported and subjective evidence while relying on a claimed lack of objective evidence, and (3) an absence of any substantive evaluation of material job duties and the claimant's ability to perform them."
On the first issue, although the court acknowledged it did not have to give discretion to the treating doctor, the court questioned the insurer's heavy reliance on the reviewing doctors and disregard of the treating physicians. The court summarized a number of recent decisions on this issue:
Reported decisions reflect that courts are troubled where a plan administrator denies a claim by relying on the paper-review reports of consultants that oppose the conclusions of treating physicians. Schwarzwaelder, 606 F. Supp. 2d. at 559 [Schwarzwaelder v. Merrill Lynch & Co., Inc., 606 F. Supp. 2d 546 (W.D.Pa. March 9, 2009)]. See e.g., Elms v. Prudential Ins. Co. of Am., 2008 WL 4444269 at *15 (E.D. Pa. Oct. 2, 2008) (It is "important to note that no doctor who has actually treated [plaintiff] or examined her in person, as opposed to performing a 'file review' has found her to be capable . . . of performing work-related tasks."); Winkler v. Met. Life Ins. Co., 170 Fed. App'x 167 (2d Cir. 2006) (vacating denial as arbitrary where it was based "entirely on the opinions of three independent consultants who never personally examined [plaintiff], while discounting the opinions" of the treating physicians.); Glenn, 461 F.3d at 671 (finding it "perplexing" that the plan administrator disregarded the opinion of the "only physician to have personally treated or observed" the claimant); Kinser v. Plans Admin. Comm. of Citigroup, Inc., 488 F. Supp. 2d 1369, 1382-83 (M.D. Ga. 2007) (concluding it was unreasonable for the plan administrator to ignore the treating physician's "clearly stated and supported opinion" and rely instead on "a cold record file-review by a non-examining" consultant.).
The court found the problem even more acute because the insurer had the discretion to require an independent medical examination but chose not to obtain one. According to Schwarzwaelder, the "decision to forgo an IME and conduct only a paper review, while not rendering a denial of benefits arbitrary per se, is another factor to consider in the Court's overall assessment of the reasonableness of the administrator's decision-making process." Id. at 559 (citing Glenn, 461 F.3d at 671). The court also cited Post v. Hartford Ins. Co., 501 F.3d 154, 166 (3d Cir. 2007), abrogated on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008) and Elliot v. Metro. Life Ins. Co., 473 F.3d 613, 621 (6th Cir. 2006) on this point as well.
Reliance's consultants simply rejected the treating doctors' findings without explanation; and their reports selectively ignored information in the treating doctors' notes that supported the claimant, leading the court to conclude that the opinion presented by Dr. Robert Green, an orthopedic consultant, was "at best, speculation" that led to an unsupported conclusion about what the treating physician believed about his patient's condition. The court thus found "no medical basis" for the conclusions reached by Dr. Green and his dismissal of pain complaints as "subjective in nature." Hence, the court was troubled by the insurer's reliance on its consultant's report while giving no independent weight" to the treating doctor's findings. Consequently, the court ruled that "while it is acceptable for the administrator to credit the contrary evidence of a non-treating physician, where a non-treating physician's opinion simply cites to an absence of information it does not serve to refute the treating physician's conclusions, and in and of itself is not a reasonable explanation for denying benefits." *22-*23 (citing Mishler v. Met. Life Ins. Co., 2007 WL 518875 at *9 (E.D. Mich. Feb. 15, 2007)).
The court also ruled that Reliance unreasonably rejected Kelly's pain reports as "self-reported" and "subjective." On that issue, the court again relied heavily on Schwarzwaelder, along with Gellerman v. Jefferson Pilot Financial Ins. Co., 376 F. Supp. 2d 724, 734, 376 n.9 (S.D. Tex. 2005), which remarked:
The defendants are not free to ignore the plaintiff's chronic and severe pain under the apparent theory that MRIs or EMGs must demonstrate some structural deformity for a person to be disabled because of back pain. Unfortunately for all parties involved, back pain, even severe pain, is not so simple.
The court determined that Defendant's consultants ignored the pain complaints. The court pointed out that the plan did not limit proof to "objective evidence;" and the insurer's "decision to accept the conclusions of one physician's paper review, and to discount Kelly's account of his pain which is supported by the observations of the treating physician and physical therapist, further demonstrates that its exercise of discretion in deciding Kelly's claim was arbitrary and capricious."
Finally, the court criticized Reliance for failing to evaluate Kelly's job duties and investigate whether his impairments prevented him from performing his material job duties. The court found the insurer's vocational evaluation inadequate because it offered "conclusory remarks" and misstated Kelly's job title and job duties. Other deficiencies in the vocational report included the vocational specialist's failure to "determine[ ] which duties were material duties of Kelly's job, which duties could be delegated, what degree of physical exertion was required to complete the material duties and whether Kelly could, during the Elimination Period, complete those tasks." The court was also critical of how Reliance credited the former supervisor's critique of Kelly's statement of his job duties. Although some of the duties could be delegated, the question was whether the claimant was incapable of performing the duties he was "actually performing" prior to the onset of disability. Therefore, the court concluded that "Reliance's failure to consider the duties Kelly was actually performing prior to the accident and whether Kelly was physically capable of performing those duties after the accident was unreasonable and demonstrates Reliance's exercise of discretion in denying Kelly's claim was arbitrary and capricious."
Discussion: This court highlights tactics frequently utilized by insurers as the basis for denying benefits. The court relied heavily on the Schwarzwaelder decision in concluding that just saying no is not enough to justify a benefit denial and that reviewing doctors' findings have inherent weaknesses that lead courts to be skeptical of such evidence.