Mead v. Reliastar Life Ins.Co

Mead v. Reliastar Life Ins.Co., 2010 U.S.Dist.LEXIS 134086 (D.Vermont December 17, 2010)(Issue: Pain). The plaintiff, Susan Mead, was an employee of ReliaStar Financial Corporation, the parent of Reliastar Life Insurance Company, and last worked as a Vice President of Strategic Marketing, responsible for external communications and community relations for the parent corporation. Mead reported directly to the CEO of ReliaStar Financial and she served on the boards of several key subsidiaries. Her job entailed substantial air travel, regular participation in meetings, and computer work. When ING took over ReliaStar in 2000, Mead's employment agreement allowed her the option to stop working and receive severance; and she was also entitled to continue participating in ReliaStar's health, life and disability insurance programs for three years following her termination or to age 65, whichever occurred earlier.

After her termination, in January 2003, Mead, then age 52, submitted a claim for LTD benefits due to significant degenerative cervical disc disease. Her claim was supported with medical records provided by several physicians who had treated the underlying condition and its resulting pain and discomfort. In April 2003, Mead treated at the Spine Institute of New England, which confirmed her diagnosis but also determined that Mead was not a candidate for surgery due to the multiple levels of damaged discs. In evaluating her claim, Reliastar utilized a vendor, Behavioral Management, Inc. (BMI), which hired Dr. Mark Johnson who found Mead had sedentary work capacity based on his file review and discussion with one of the treating doctors. He wrote in his report that there was nothing wrong with Mead, despite MRI's showing disc damage, and Johnson asserted Mead suffered from a somatoform disorder, a psychiatric illness. The treating doctor wrote a follow-up letter accusing Dr. Johnson of misstating her opinion. However, another reviewing BMI physician, Dr. Scott Yarosh, a psychiatrist, concurred with Dr. Johnson both from a psychiatric and physical perspective. Consequently, the claim was denied.

Mead appealed; and with her appeal, she submitted a comprehensive work evaluation and records from a work-hardening program. Although her stamina was improved by her participation in that program, on discharge, she was still deemed unable to sit for extended periods. The treating therapist thus concluded "that Mead might have a hard time re-entering the work force unless she could work in a non-sedentary occupation." Mead also underwent a formal functional capacity evaluation following discharge which found "Mead could sit for fifteen minutes at one time, stand for twenty minutes and walk for one hour, and that over an eight-hour day she could sit or stand for two hours, walk for two and one-half hours, and that she would need to lie down for pain management for one to one and one-half hours." In its summary, the FCE report concluded that at most Mead could work up to four hours per day, 3 to 5 days per week. Mead also underwent a vocational assessment that determined "Mead had the capacity to work part-time, with a limited tolerance for sitting, and that because of this limitation she cannot 'perform the vigorous, full-time responsibilities of her previous occupation.'" The insurer's own functional capacity evaluator concurred and found the test results valid.

Following Mead's submission of this additional evidence, the insurer hired Dr. Mitchell Nudelman to perform another file review. While Dr. Nudelman agreed with the diagnosis, he opined, relying on two unnamed doctors, that Mead was able to work on a full time basis at a sedentary occupation, deeming the FCE findings unsupportable. However, Nudelman was not provided with a Reliastar internal review of the work hardening program deeming the results valid. The benefit denial was therefore upheld.

Mead filed suit in 2005. In March 2008, the District Court found that Reliastar's decision was arbitrary and capricious and remanded the matter to ReliaStar for redetermination on the ground it was unclear "whether [it] rejected the findings that Mead cannot perform full-time sedentary work, or whether, and on what basis, it concluded that Mead enjoyed a particular type of sedentary occupation that afforded her the flexibility to sit only for limited periods of time."

Following the remand, the plaintiff submitted even more medical records and vocational reports which included an independent evaluation performed by a physiatrist who followed the disability assessment protocol set forth in the AMA Guides to the Evaluation of Permanent Impairment (5th ed.) and concluded that Mead could not perform her prior occupational duties. A follow-up vocational assessment concluded that Mead could not perform a full-time sedentary occupation. ReliaStar, however, obtained its own vocational assessment from an evaluator who performed a labor market survey where half of the responders reported that a similar position could be performed with accommodations of plaintiff's condition. ReliaStar also commissioned another file review from Dr. Neil McPhee who concluded that Mead should be able to perform a sedentary job.

There was also evidence before the court of an unsuccessful Social Security claim - which was twice denied at the ALJ level, and twice successfully appealed to the Appeals Council. As of the date of the court's opinion, the Social Security appeals remained unresolved.

In addition, Mead attended two examinations at ReliaStar's request, the first in late April 2009, and the other on June 26, 2009. The first evaluation focused on Mead's condition in 2003; and the examining doctor found no basis for precluding her from performing a sedentary occupation. A second evaluation with a neurologist from massachusetts General Hospital in Boston who was brought to Burlington, Vermont to perform an evaluation at a cost of over $5000 to Reliastar, found the pain symptoms were consistent with the imaging findings and that prolonged sitting would exacerbate the disease and symptoms; and he concluded that "Mead would have been restricted to performing sedentary tasks for limited periods in the 30 to 60 minute range, with opportunities to take 30 to 60 minute breaks." However, ReliaStar pressed that doctor to revise his opinion, which he did. The neurologist subsequently reported that he was "'optimistic' that if Mead were provided with work site accommodations such as a sit-stand workstation, a telephone headset, and the ability to take breaks, she could work a full-time sedentary job." So once again, the claim denial was upheld.

The court reversed. Despite the applicability of a deferential standard of review, the court noted ReliaStar's conflict of interest. However, without even utilizing the conflict, the court found ReliaStar's decision arbitrary and capricious. The court first determined the insurer's assessment of Mead's "own occupation" was arbitrary because it failed to consider her travel duties and need to participate for up to eight hours per day in structured meetings. The court also found the imposition of workplace accommodations arbitrary since there was no provision in the plan allowing accommodations to be considered. The court further determined: "Shifting position and standing up for brief periods is not comparable to performing one's work while alternating between sitting and standing throughout the course of a day." *49.

The court also took issue with ReliaStar's assessment of Mead's pain. The court explained:

The appeal committee cited the evidence that Mead takes little or no pain medication, is active, can knit and crochet, and has not demonstrated to her doctors overt signs that she is in pain. The problem with this evidence is that it doesn't challenge the conclusion that Mead experiences severe pain when performing the functions of a full-time sedentary job. Her level of physical activity has little to do with the essential duties of a sedentary occupation. There is evidence that Mead did not receive enough benefit from a variety of medications to be willing to cope with their side effects. Winces and grimaces may not be an individual's preferred method of communicating to her doctors that she is in pain. The record certainly reflects that she communicated in words that she suffered from pain. And unless there is some evidence that knitting and crocheting occupy several hours of Mead's days several days a week, the fact that she was able to undertake these activities does not supply evidence that her complaints of severe pain from full-time sedentary work lack credibility. *51-52.

The court ruled that ReliaStar lacked an adequate basis for rejecting Mead's pain complaints which were corroborated by multiple sources, including the neurologist who had examined her at Reliastar's behest. ReliaStar's assessment of functionality was also overturned. Despite the objective evidence, including an examination performed by a doctor who had examined Mead, the appeal committee rejected that evidence and credited the file reviews; however, the court noted:

Dr. Johnson based his opinion largely on his misrepresentation of a telephone conversation with Mead's treating physician, and he did not have the benefit of the data from the work hardening program Mead attended in the summer of 2003. Dr. Yarosh did not review Mead's entire medical file. Dr. Nudelman simply presented the views of his anonymous consultants. In 2008 Dr. McPhee reviewed Mead's entire claim file, not just the medical records from 2003, just as Dr. Sheth did in 2009. The appeal committee neglected to explain the basis for finding Dr. Sheth's record review unreliable, stating only that Dr. Sheth's examination of Mead took place six years after her claimed date of disability. *58

Hence, the court concluded: "In this case however the appeal committee gave obviously false or misleading reasons to discredit the record review of its neurologist and to justify its reliance on its non-examining file reviewers. This is a paradigm of arbitrary and capricious decision making." *58-59. The court further criticized ReliaStar for its selective and inaccurate summary of the work assessment Mead had undergone. The court ruled, "This selective if not distorted treatment of the file reviews and the WERC program evidence not only undermines the rationality of the appeal committee's determination; it lends support to the argument that ReliaStar Life's structural conflict of interest should weigh more heavily in the Court's arbitrary-and-capricious review." The court likewise concluded the insurer mischaracterized the Social Security findings. Therefore, the court awarded benefits due plus prejudgment interest under the Vermont statutory rate, as well as fees and costs. However, the court remanded the case for determination of "any occupation" benefits following the expiration of the "own occupation" benefits.

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