Rigg v. Continental Casualty Co.

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Rigg v. Continental Casualty Co., 2004 U.S.Dist.LEXIS 8009 (N.D.Cal. 5/5/2004)( Issues: Scope of Review, Surveillance) . CNA relied on surveillance to reject the plaintiff's claim alleging disability due to Guillain-Barre Syndrome with resulting hypotension and neuropathy. The plaintiff, a project manager, was initially hospitalized following the onset of her condition, but when she tried to gradually ease into a return to work, her manager told her that the employer would not allow reduced hours and work from home to continue. After submitting a claim for benefits, CNA collected records and reports from Rigg and her treating doctors which confirmed an autonomic neuropathy relating to her condition.

Despite that evidence, CNA denied the claim, asserting that Rigg could work as a project manager. Rigg appealed and submitted additional documentation from her primary doctor and from her neurologist which diagnosed chronic inflammatory demyelinating polyneuropathy, reported on laboratory anomalies, and limited Rigg's ability to work to no more than 30 hours per week.

The court first discussed the appropriate standard of review since the claim fell under the ERISA law. Although the policy contained language that would accord discretion to CNA's determination, the plaintiff argued for a de novo standard of review based on Jebian v. Hewlett-Packard, 349 F.3d 1098 (9 th Cir. 2003), which eliminates a deferential standard of review when the plan fails to comply with the deadlines for adjudicating claims. However, because CNA substantially complied with the regulations, the court applied an arbitrary and capricious standard of review.

Nonetheless, the court ruled in plaintiff's favor. The court found that CNA's finding that Rigg's occupation could be performed from home after her employer removed the accommodations that had been temporarily provided was clearly erroneous and an abuse of discretion. Likewise, CNA's finding that the ability to engage in some activities of daily living meant she could perform her job was without basis. The court compared Rigg's stated activities to the surveillance that was undertaken and found the activities surveilled could not be correlated to "the ability to work at least 45-50 hours per week as a project manager, facilitating business requirements and the implementation of accounting software on a global scale." *15-*16. The court added, by citing to a Social Security decision, Carroll v. Secretary of Health and Human Services, 705 F.2d 638, 643 (2d Cir. 1983), that the ability to perform activities of daily living cannot be used to deny benefits unless the claimant could engage in such activities "for sustained periods comparable to those required to hold a sedentary job." The court explained that Social Security cases are instructive in ERISA claims, citing Duncan v. Continental Casualty Co., 1997 WL 88374 *5 (N.D.Cal. 1997).

The court also explained that CNA could not rely on the accommodations that were temporarily provided, citing Saffle v. Sierra Pacific Power Co., 85 F.3d 455 (9 th Cir. 1996). Saffle held that a plan administrator abuses its discretion by considering hypothetical accommodations that were outside of the claimant's normal job requirements and which were never actually offered. Rejecting the applicability of the Seventh Circuit's decision in Ross v. Indiana Teachers Assn., 159 F.3d 1001 (7 th Cir. 1998), which held that it was not an abuse of discretion to consider an actual accommodation that was offered to the claimant and refused, the court explained that Rigg's employer discontinued the temporary accommodation, and "it is an abuse of discretion to consider accommodations which are not actually available to the employee."

With respect to remedies, the court ordered the payment of benefits since the evidentiary record was complete:

The undisputed facts in the Administrative Record show that Rigg suffered from fatigue and weakness associated with her medical condition to the extent that she could work no more than 30 hours a week and required frequent rest periods throughout the day. The unrefuted record further shows that Rigg's job required her to work 45-50 hours per week. Based on this record, Rigg is entitled to benefits. *20

The court did, however, remand the case to determine eligibility for benefits following the "own occupation" period of disability since the determination was based solely on Rigg's ability to perform her own occupation.

Discussion: This case clearly turned on the evidence that Rigg's occupation required her to work at least 45 hours per week, and her physician limited her to no more than 30 hours per week. In the absence of any conflicting medical evidence, all CNA was left with was questionable surveillance. It is clear that surveillance has its limits, as illustrated by Clausen v. Standard Ins. Co., 961 F. Supp. 1446, 1457 (D. Colo. 1997) and Grosz-Salomon v. Paul Revere Life Ins. Co., No. CV 98-7020, 1999 WL 33244979 (C.D. Cal. Feb. 4 1999), aff'd 237 F.3d 1154 (9 th Cir. 2001) ("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."). Moreover, CNA's analysis finding that the ability to engage in normal, everyday activities shows that a claimant can work has been previously rejected. See, Hillock v. Continental Casualty Co., 2004 U.S.Dist.LEXIS 3907 (N.D.Ill. 3/1/2004)( April 2004 ), Pelchat v. Unum Life Insur.Co. of America, 2003 U.S.Dist.LEXIS 8095 (N.D.Ohio 3/25/03)( June 2003 ). Fundamentally, though, CNA never should have considered the "accommodated" position as Rigg's own occupation based on a prior CNA ruling, Peterson v. Continental Casualty Corp., 77 F.Supp.2d 420 (S.D.N.Y. 1999); rev'd in part 282 F.3d 112 (2d Cir. 2002). Moreover, another victory won by the plaintiff's lawyers in this case, Mel Silver and Ruth Silver Taube,, Bona v. MetLife Disability Company, 2004 U.S.Dist.LEXIS 754 (N.D.Cal. 1/20/04), also supports the outcome in this ruling.

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