Tate V Champion Intl Corp

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Tate v. Long Term Disability Plan for Salaried Employees of Champion Intl. Corp., 2008 U.S.App.LEXIS 20052 (7th Cir. September 19, 2008)(Issues: Scope of Review; Remand versus Reinstate; Attorneys' Fees). The plaintiff, Jo Ann Tate, worked as a sales representative for a paper company until she became disabled in 1998 on account of depression and anxiety. She qualified initially for short-term disability benefits, and then she began receiving long-term disability payments which continued for several years including two years after the "own occupation" benefits period ended. Although her psychiatrist and psychologist supported her ongoing claim, and despite the plan's use of an independent examining psychiatrist earlier in the claim, the benefits were terminated based on a report from a psychiatrist who merely reviewed the records. Tate appealed, submitting a report from her psychiatrist which documented the severity of her bipolar disorder and commented on Tate's lack of sufficient mood stability to be able to maintain and sustain employment. The plan had a second psychiatrist review the file, and that doctor also concluded Tate was capable of working which led to an affirmance of the termination decision. Tate then brought suit.

In the district court, Tate won a summary judgment ruling finding the plan's termination was arbitrary and capricious. The court found the reviewing doctors' opinions were conclusory and unsupported by the medical evidence. The court also ruled the plan's decision was arbitrary due to its failure to perform a vocational evaluation to determine what jobs Tate was capable of performing. However, instead of ordering benefits reinstated, the court remanded the case to the plan administrator. The court of appeals affirmed.

Although the benefit plan conferred discretionary authority on the plan administrator, the court ruled there were limits to that authority. The court thus framed the standard and issue under review as follows:

The issue in this case is whether the Plan offered a reasonable explanation, based on the evidence, for its determination that Tate was not "totally disabled" as defined by the terms of the plan. In determining Tate's eligibility for long-term disability benefits, the Plan had to determine whether Tate was "incapable of performing any occupation or employment for which [she was] qualified by education, training, or experience." So as a matter of logic, this means the Plan needed to consider (at minimum) Tate's qualifications in determining whether her impairment affects her ability to work. *10.

The court of appeals agreed with the district court that the benefit termination was arbitrary and capricious. The first reviewer was faulted because there was no basis for discerning how that psychiatrist would even have known anything about Tate's education and experience. The court also pointed out

Dr. Tasch states that though Tate "appears to meet the criteria for a diagnosis of Major Depressive Disorder," she is not unable to perform any occupation. In lieu of an explanation for this conclusion, Dr. Tasch states (and this is the full extent of her analysis) that because Tate was "working in a high stress position previously [she] may benefit from a job that is not so intense." We do not know what she means by jobs that are not "intense" or whether Tate is qualified for those jobs. The Plan's letter informing Tate that her benefits were being denied contains no reasons for the denial other than stating that a physician found that Tate was not totally disabled from any occupation so there is nothing further in the initial denial letter for the court to review. *11-*12.

The court found the second psychiatric review equally deficient. The psychiatrist had noted the plaintiff's difficulties with interpersonal relationships, and she also reported that the plaintiff would have ongoing psychiatric issues, but nonetheless concluded she was not totally disabled from any occupation because she could maintain her home and complies with treatment. The court found:

Dr. Center's report is just as defective as Dr. Tasch's because nowhere in the report does Dr. Center connect her conclusion that Tate is not totally disabled to something that is relevant to Tate's ability to work. Similarly, Dr. Center's general conclusion that medication has provided "significant benefit" to Tate does not prove anything unless the improvement is shown to be connected in some rational way to her ability to work. See Elliott v. Metropolitan Life Ins. Co., 473 F.3d 613, 620 (6th Cir. 2006) ("'Getting better,' without more, does not equal 'able to work.'"). *13-*14.

The court added to that conclusion that being able to clean one's home and care for pets "does not support a conclusion that she is capable of employment unless the Plan believes she is qualified to care for animals as a living." *14. Nor was the lack of suicidal ideation a relevant consideration according to the court. *15. Although the court reiterated that there was no ERISA requirement that the plan had to hire a vocational expert, the court further noted,

[L]ogically, the Plan could have made a reasoned determination that Tate was not 'totally disabled' only if it relied on evidence that assessed her ability to perform a job for which she is qualified by education, training, or experience. This means the Plan must have made a reasonable inquiry into Tate's medical condition as well as her vocational skills and qualifications for its decision denying benefits to be upheld. *15. (citation omitted)

The plan tried to argue the obverse; i.e., that Tate was required to prove through a vocational expert that she was unable to work. That argument was rejected, though, with the court finding that Tate met her burden of demonstrating, through her physicians' reports which contained a detailed explanation, that she was incapable of working. The court found that although the plan could have rejected the treating doctors' findings, "it must do so with some explanation, especially in light of the fact that Tate was awarded disability benefits for nearly four years on the basis of those doctors' opinions." *18. The court added:

For the Plan to make a reasonable determination that Tate was able to work in an occupation for which she was qualified despite her impairments, the Plan was required, at minimum, to assess her qualifications and how they comport with jobs that Tate might be able to perform in spite of her impairments. By not performing this assessment before determining that Tate was not totally disabled, the Plan acted arbitrarily and capriciously. *18.

Despite the foregoing conclusion, though, the court remanded the case to the plan administrator. The court reiterated the normal circumstance that benefits are awarded when there is a termination or the entitlement to benefits is clear cut, but that a remand is more appropriate when there are inadequate findings or insufficient reasoning. Further, the usual circumstance is to reinstate benefits when the claimant is entitled to continued benefits at the time of the plan's determination. However, the court found that despite the payment of benefits to Tate for two years into the "any occupation" period there was no proof that the plan had determined Tate qualified for benefits under that standard. The court remarked, "Although it is odd that the Plan would continue to award benefits to Tate for two years without holding her to the more stringent "any occupation" standard, this fact alone does not necessarily mean Tate was entitled to continue receiving benefits under the terms of the plan." *21.

Consequently, the court found that an award of attorneys' fees was premature. The court ruled that a claimant who receives a remand is not considered a "prevailing party" entitled to fees despite other circuits' contrary conclusion.tate-v-champion-intl-corp