Osbun v. Auburn Foundry, Inc.

The casenote of the month is from the Disability E-News Alert! a monthly newsletter describing new disability insurance developments.  For subscription information, e-mail Mark DeBofsky or visit www.disabilityenewsalert.com .

Osbun v. Auburn Foundry, Inc., 293 F.Supp.2d 862 (N.D.Ind. 10/27/2003)(Issue: Surveillance).  The plaintiff, who suffered from multiple physical and mental impairments, became disabled after performing more than 20 years of heavy labor when he injured his back in 1990.  After benefits were paid for several years, the disability benefit plan had the plaintiff reexamined by a physician who found that Osbun’s disability was continuing.  However, two months later, the examining doctor called the plan’s benefits coordinator to report she had seen the plaintiff at a gas station and was concerned that Osbun may have misrepresented his physical condition to her.  As a result, the claimant was placed under surveillance for two days, which showed him engaging in some physical activities over the course of a 1.5 hour videotape.  As a result, benefits were terminated. Despite an appeal supported by medical evidence and Osbun’s own video showing his infirmities, the plan denied his appeal, citing surveillance as the strongest indicator of the plaintiff’s ability to work.  In court, despite the application of an arbitrary and capricious standard of review, the court overturned the plan’s determination.

The court pointed out that all of the medical evidence was one-sided and supported ongoing disability – Osbun had been examined three times during the course of his claim; and all of the examiners concurred that he remained disabled.  Balanced against the medical evidence was the video surveillance and a memo of the doctor’s telephone call about seeing Osbun at a gas station.  However, the court characterized the plan’s evidence as “utterly insufficient to show that Osbun is capable of maintaining employment.” *15.  Further, the doctor who ran into Osbun never retracted her earlier opinion of Osbun’s disability.  Moreover, there was no evidence as to how long the plaintiff could perform the tasks observed or whether he could sustain a job.  Nor did Auburn make any effort to determine what jobs the plaintiff could perform, whether he had the skills and abilities to perform any particular jobs, or to correlate the surveillance video to the ability to perform and sustain employment.

Although the defendant catalogued several cases in which video surveillance supported termination of disability benefits (Patterson v. Caterpillar, Inc., 70 F.3d 503, 506 (7th Cir. 1995); see also Delta Family-Care Disability and Survivorship Plan v. Marshall, 258 F.3d 834, 842-43 (8th Cir. 2001); Vlass v. Raytheon Employees Disability Trust, 244 F.3d 27, 31 (1st Cir. 2001); McGarrah v. Hartford Life Ins. Co., 234 F.3d 1026, 1032 (8th Cir. 2000); Turner v. Delta Family-Care Disability and Survivorship Plan, 291 F.3d 1270 (11th Cir. 2002); Armstrong v. Liberty Mut. Life Assurance Co. of Boston, 273 F. Supp.2d 395 (S.D.N.Y. 2003); Billinger v. Bell Atlantic, 240 F. Supp.2d 274 (S.D.N.Y. 2003); Bekiroglu v. Paul Revere Life Ins. Co., 223 F. Supp.2d 361 (D. Mass. 2002); Conti v. Equitable Life Assurance Soc'y of the United States, 227 F. Supp.2d 282 (D.N.J. 2002); Schindler v. Metro. Life Ins. Co., 141 F. Supp. 2d 1073 (M.D. Fla. 2001); Davis v. Am. Gen. Life & Accident Ins. Co., 906 F. Supp. 1302 (E.D. Mo. 1995)), in each of those cases, there was additional evidence beyond the surveillance that the plaintiff was capable of working.

Thus, the court ruled, “In short, Auburn reached the conclusion that a mentally retarded, illiterate, partially blind, partially deaf, arthritic man with arteriosclerotic heart disease, thyroid insufficiency, and high blood pressure is capable of gainful employment, simply because he performed 1.5 hours of light physical tasks over the course of two days, and in spite of three medical reports finding total disability. This conclusion is "downright unreasonable," Fuller, 905 F.2d at 1058, and Auburn has offered nothing by which this Court can find otherwise.” *20-*21.

The court also rejected defendant’s contention that the surveillance evidence raises questions about credibility which provides enough evidence to terminate benefits regardless of whether Osbun is capable of employment.  The court found the argument a distortion of dictum in Hawkins v. First Union, 326 F.3d 914 (7th Cir. 4/22/03) that was unsupported by any other ruling; and the argument was also deemed unpersuasive: “In short, even a liar can be totally disabled.” *24.  The court accordingly ordered benefits reinstated.

Discussion: This case is reminiscent of other cases on which we have reported: Marziale v. Hartford, 2002 U.S.Dist.LEXIS 11321 (E.D.La. 2002)(July 2002), which held that surveillance cannot outweigh medical opinions, and  Cunningham v. Paul Revere, 235 F. Supp. 2d 746 (W.D.Mich. 11/18/02)(December 2002), which ruled that surveillance cannot overcome objective medical evidence.  Another useful decision, which was cited in Osbun, is Clausen v. Standard Ins. Co., 961 F. Supp. 1446, 1457 (D. Colo. 1997), which found surveillance that was not indicative of the ability to work on a sustained basis could not support a benefit denial.  Also see, Grosz-Salomon v. Paul Revere Life Ins. Co., No. CV 98-7020, 1999 WL 33244979 (C.D. Cal. Feb. 4 1999) ("Relying on videotapes showing the plaintiff engaging in activities that are significantly less taxing than working ... when all of the other objective evidence of treating physicians and therapists confirms that the plaintiff is totally disabled ... is an abuse of discretion." *20-*21).

This note appeared in the Disability E-News Alert! For subscription information, please go to www.disabilityenewsalert.com .

Back