Kirkpatrick v. Liberty Mutual Group, Inc., 2012 U.S.Dist.LEXIS 29465 (S.D.Ind. March 6, 2012)(Issue: Selective Review; Unpredictable Flare-Ups). This ruling shows that Liberty treats its employees just as poorly as it treats its insureds. The plaintiff, Leona Kilpatrick, was a claim adjuster for Liberty and had worked for Liberty and its subsidiaries for more than fourteen years before becoming disabled due to systemic lupus erythematosus, along with kidney and other complications of that autoimmune disorder, along with diabetes and a history of pulmonary emboli. When her impairments reached a level of disabling severity, the plaintiff's rheumatologist completed an attending physician statement certifying the plaintiffâ??s disability due to lupus, soft tissue pain and nephritis. The physician completed a follow-up narrative report explaining that Kirkpatrickâ??s condition had worsened and so overwhelmed her that the symptoms were severe enough to warrant disability.
Despite that report, Liberty documented "[a]lthough a lupus diagnosis would support intermittent flares of condition, available medical information fails to support a significant change of condition around 3/29/10 which would support [restriction and limitations]." The short-term disability claim was subsequently denied. A subsequent appeal was also denied despite the submission of additional medical evidence. A "peer review" confirmed the lupus diagnosis but maintained that the plaintiff's condition was stable and that she was capable of performing a sedentary occupation. Likewise, the plaintiff's claim for long-term disability was denied based on a conclusion that she was not disabled throughout the elimination period. The long-term disability denial was also appealed and more than 100 pages of supporting documentation was submitted with the appeal. However, after further review by the same doctor who had initially evaluated the matter, as well as a review by a physician from MLS Peer Review Services, the claim denial was upheld. Litigation ensued.
Applying the arbitrary and capricious standard of review, the court nonetheless overturned Liberty's determination. The plaintiff maintained that Liberty failed to consider the totality of her medical condition and ignored her chronic pain; and that Liberty's inherent conflict was a factor in the denial decision. The court agreed.
As to the initial short-term disability denial, the court cited Love v. Nat'l City Corp. Welfare Benefits Plan, 574 F.3d 392, 397 (7th Cir. 2009) for the proposition that "Bare conclusions are not a rationale." Although Liberty did not ignore the treating doctor, the court found that in rejecting the treating doctorâ??s opinion, Liberty never explained the basis for its disagreement. Thus, the court concluded, "Liberty Life made a determination apparently devoid of reasoning, and in doing so, it acted arbitrarily." *36-*37. The court also pointed out in a footnote (n.9) that the issue is not whether Liberty performed a "thorough review;" instead, "the issue is whether it engaged in a rational analysis of the evidence, formed an opinion founded on a rational basis, and communicated the basis for its conclusions so as to permit effective appeal and review." The court also found error in Liberty's conclusion that there was inadequate evidence of a change in condition when the plaintiff stopped working despite the treating doctor's report that Kirkpatrick's illness had worsened. The court also pointed to Hawkins v. First Union Corp. Long-Term Disability Plan, which found:
The plan's bad argument is that because Hawkins worked between 1993 and 2000 despite his fibromyalgia and there is no indication that his condition worsened over this period, he cannot be disabled. This would be correct were there a logical incompatibility between working full time and being disabled from working full time, but there is not. A desperate person might force himself to work despite an illness that everyone agreed was totally disabling. . . . Yet even a desperate person might not be able to maintain the necessary level of effort indefinitely. . . . A disabled person should not be punished for heroic efforts to work by being held to have forfeited his entitlement to disability benefits should he stop working.
326 F.3d 914, 918 (7th Cir. 2003).
The court also criticized Liberty for failing to adequately address whether the plaintiff could meet the requirements of her occupation. The claim decision was that the plaintiff could perform a sedentary job, but the plan requirements focus on whether the claimant is capable of performing the "material and substantial duties" of her occupation. The record showed the claim was denied before the occupational description was even reviewed.
The court determined that Libertyâ??s evaluation of Kirkpatrick's claim appeal was also arbitrary. Liberty relied entirely on a record review and failed to address the contrary evidence presented by the plaintiff. The insurer also ignored the portions of the reviewerâ??s report that were favorable to the plaintiff such as his acknowledgement that flare-ups of the lupus symptoms could be totally disabling and that lupus is "very unpredictable." Hence, the court concluded: "Liberty Life's selective readings of the evidence, even evidence submitted by its own reviewing physician, indeed indicates that its decision on appeal was arbitrary and capricious." The court further noted errors in the reviewing doctorâ??s report such as complaints about the absence of key records which had, in fact, been provided; and the failure of the reviewing doctor to address the plaintiffâ??s job duties. Although the report acknowledged receipt of a statement of job duties, the doctor failed to engage in any discussion of those duties and simply concluded the plaintiff appeared capable of performing a sedentary occupation. The report was also described as "inconsistent" since the reviewing doctor in one part of his report acknowledged the plaintiff "may have a problem with sustained capacity to perform a sedentary job because of her lupus," because "Lupus is a highly variable and unpredictable disease, and therefore [Kirkpatrick] may have periods of time where she is incapable of working due to flare-ups in her autoimmune disease process." However, the reportâ??s ultimate conclusion found â??no evidence to support total disability." The doctorâ??s addendum finding "nothing new" in later-submitted evidence was also criticized because it disregarded much new information provided by the treating rheumatologist. Accordingly, the court concluded, "Liberty Life's reliance on a record review report filled with errors and inconsistencies cannot pass muster even on deferential abuse of discretion review."
The court was equally critical of Liberty's evaluation of the long-term disability benefit claim. The court described Liberty's rejection letter "as a play-by-play of Kirkpatrick's short-term benefit claim and appeal and offers no more explanation for its benefit determination than Kirkpatrick's initial short-term benefit denial letter does." *52. The court further pointed out that since the long-term disability denial was based on the same reviewerâ??s opinion as the short-term disability denial, the deficiencies in that reviewer's opinion also invalidated reliance on that opinion for the LTD denial. The court was also dismissive of Libertyâ??s denial of the long-term disability claim appeal. Although Liberty utilized a new reviewing doctor, his report suffered from the same deficiencies as the first doctorâ??s report. Although the second reviewing doctorâ??s report was more thorough, the court found it, too, displayed evidence of "selective decision making." Although the reviewing doctor summarized opinions of doctors who were not treating lupus, his report "neither summarizes, analyzes, nor provides a basis for his rejection of the contrary evidence presented" by the treating rheumatologist and was therefore deemed "evidence of selective and arbitrary decision making." *55.
Finally, although the court disagreed with the plaintiff that Liberty showed arbitrariness by failing to consider the totality of the plaintiffâ??s condition and the comorbidity of her disparate impairments, the court accepted the plaintiffâ??s criticism that Liberty failed to evaluation how "pain might interfere with her ability to perform her job." *60.
Disappointingly, despite the courtâ??s finding that "Liberty Life engaged in arbitrary and capricious decision making at nearly every turn," the court remanded the case to Liberty to perform a "more reasoned inquiry" that "considers and addresses Kirkpatrick's physical condition as a whole, including her chronic pain."
Discussion: This ruling exemplified what the Supreme Court appeared to be getting at in Metro.Life Ins.Co. v. Glenn, 554 U.S. 105 (2008) in its citation of Universal Camera Corp. v. NLRB, 340 U.S. 474 (1951) as a guide for review of ERISA factfinding. That ruling admonished courts to "assume more responsibility for the reasonableness and fairness of [administrative] decisions than some courts have shown in the past." The court clearly questioned why Liberty would not believe a claimant who had been a valued employee for fourteen years and who suffered from a condition that is well-known to cause unpredictable flares that could preclude work for indeterminate lengths of time. Although the court here addressed the unpredictable nature of the plaintiffâ??s condition, it could have added citations to several other cases that have elaborated on that issue even further such as Ruggerio v. Fedex, 2003 U.S.Dist.LEXIS 14048 (D.Mass. August 14, 2003) where the court recognized that plaintiff was an "unreliable worker [because her symptoms] do not manifest in a linear fashion and, at worst, totally disable her for unspecified and unpredictable periods of time." Likewise, although the ruling was vacated following a settlement, a district judge in Hawaii ruled in Bright v. Life Insur.Co. of North America, 327 F.Supp.2d 1230 (D.Hawaii 2004) that periodic flare-ups of plaintiffâ??s rheumatoid arthritis would prevent her from holding a job.