Case Name: Ross Williams v. Standard Insurance Company
Court: U.S. District Court for the Eastern District of California.
Date of Decision: April 19, 2017.
Type of Claim: Long Term Disability under the Employee Retirement Insurance Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.
Insurance Company: Standard Insurance Company.
Claimant’s Employer: Rent-A-Center.
Claimant’s Occupation / Job Position: Overnight Driver.
Definition of Disability in the Plan/Policy: Under the policy, the eligibility for long term disability benefits changes depending on whether the individual has been collecting such benefits for more or less than twenty-four months. The “Own Occupation” period lasts for “[t]he first 24 months for which LTD Benefits are paid.” The “Any Occupation” period lasts “[f]rom the end of the Own Occupation Period to the end of the Maximum Benefit Period.”
Other Key Definitions in the Plan/Policy: In relevant part the “Own Occupation” provision of the policy defines a disability as follows:
During the Benefit Waiting Period and the Own Occupation Period, you are required to be Disabled only from your Own Occupation.
You are Disabled from your Own Occupation if, as a result of Physical Disease, Injury, Pregnancy or Mental Disorder:
1. You are unable to perform with reasonable continuity the Material Duties of your Own Occupation; and
2. You suffer a loss of at least 20% of your Indexed Predisability Earnings when working in your Own Occupation.
. . .
Own Occupation means the job you are regularly performing for your Employer when Disability begins.
During the Benefit Waiting Period and the Own Occupation Period, Material Duties means the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation, that cannot be reasonably modified or omitted. In no event will we consider working an average of more than 40 hours per week, or if longer, the regularly scheduled hours for your Own Occupation, to be a Material Duty.
In contrast, the “Any Occupation” provision of the policy is more preclusive and in relevant part defines disability as follows:
During the Any Occupation Period you are required to be Disabled from all occupations.
You are Disabled from all occupations if, as a result of Physical Disease, Injury, Pregnancy or Mental Disorder, you are unable to perform with reasonable continuity the Material Duties of Any Occupation.
Any Occupation means any occupation or employment which you are able to perform, whether due to education, training, or experience, which is available at one or more locations in the national economy and in which you can be expected to earn at least 60% of your Indexed Predisability Earnings within twelve months following your return to work, regardless of whether you are working in that or any other occupation.
Material Duties means the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation, that cannot be reasonably modified or omitted. In no event will we consider working an average of more than 40 hours per week or, if longer, the regularly scheduled hours for your own Occupation, to be a Material Duty.
Under the policy, the duration of eligibility for long term disability benefits also depends on the condition causing or contributing to the disability. Specifically, benefits for “Other Limited Conditions” are limited under the policy to twenty-four months unless the individual qualifies for an exception under the policy. The “Other Limited Conditions” provision states in relevant part:
A. Mental Disorders, Substance Abuse and Other Limited Conditions.
Payment of LTD Benefits is limited to 24 months during your entire lifetime for a Disability caused or contributed to by any one or more of the following, or medical or surgical treatment of one of more of the following:
. . .
3. Other Limited Conditions
. . .
Other Limited Conditions means . . . chronic pain conditions (such as fibromyalgia, reflex sympathetic dystrophy or myofascial pain), . . . arthritis, diseases or disorders of the cervical thoracic, or lumbosacral back and its surrounding soft tissue, and sprains or strains of joints or muscles.
However, Other Limited Conditions does not include. . . herniated discs with neurological abnormalities that are documented by electromyogram and computerized tomography or magnetic resonance imaging [“MRI”], scoliosis, radiculopathies that are documented by electromyogram, spondylolisthesis, grade II or higher, myelopathies and myelitis, traumatic spinal cord necrosis, osteoporosis, discitis, Paget’s disease.
The policy “Rules” for the application of the “Other Limited Conditions” provision state:
1. If you are Disabled as a result of a Mental Disorder or any Physical Disease or Injury for which payment of LTD Benefits is subject to a limited pay period, and at the same time are Disabled as a result of a Physical Disease, Injury, or Pregnancy that is not subject to such limitation, LTD Benefits will be payable first for conditions that are subject to the limitation.
2. No LTD Benefits will be payable after the end of the limited pay period, unless on that date you continue to be Disabled as a result of a Physical Disease, Injury, or Pregnancy for which payment of LTD Benefits is not limited.
Finally, and also pertinent in this case, is the section of the policy entitled “Termination or Amendment of the Group Policy,” which states in relevant part:
We may change the Group Policy in whole or in part when any change or clarification in law or governmental regulation affects our obligations under the Group Policy, or with the Policyholder’s consent.
Any such change or amendment of the Group Policy may apply to current or future Members or to any separate classes or groups of Members.
Benefits Paid? Standard determined that plaintiff Williams suffered from lumbar and cervical disease and that he could not perform the duties of an Overnight Driver. Accordingly, in July of 2012 Standard approved plaintiff’s claim based upon its finding that he met the Plan’s test of disability under the “own occupation” standard set out in the Plan.
Basis For Denial / Termination of Benefits: Standard determined that plaintiff’s back injuries were subject to the “Other Limited Conditions” of the Plan, thereby limiting his benefits to a maximum of twenty-four months. Defendant Standard concluded that plaintiff Williams had not provided objective evidence proving that an exception to this provision of the Plan applied in his case and could not establish that he was unable to work at any occupation. Based upon that determination, in June of 2014 Standard informed plaintiff Williams that they would be terminating his benefits at the end of the twenty-four month period in July of 2014.
Procedural history: Plaintiff appealed the termination of benefits decision and in October of 2014 Standard denied his appeal. Plaintiff initiated this action challenging Standard’s decision on March 16, 2015.
Other important factors: The court concluded that the plan administrator’s decision to deny plaintiff benefits is subject to de novo review.
Key Physician Opinions: In a letter dated June 6, 2014, and received by defendant Standard on July 24, 2014, Dr. Farmer wrote “Mr. Williams was injured at work January 2012. He experiences excessive back spasms, and Sciatica due to Herniated Discs with neurological abnormalities, MRI 3/12/2012.” On July 16, 2014, Dr. Farmer listed a primary diagnosis of herniated disc, with a secondary diagnosis of “radioclitis sciatica.” Dr. Farmer at that time again stated that plaintiff has “herniated discs with neurological abnormalities as documented by 03/12/2012 MRI” with the symptoms “LBP w/ numbness extending l/r legs & feet. Painful with any movement. Cannot bend or move w/o sciatica spasms.” Dr. Farmer noted, as she previously had, that barriers to plaintiff returning to work were “[d]ecreased ROM, difficulty walking, standing, sitting, maintaining position, decreased flexibility.” Dr. Farmer again checked the box on the form indicating that plaintiff could only sit “34%–66%” of the time.
Consulting physician Dr. John Hart prepared a report dated September 25, 2014 after being retained by defendant to review plaintiff’s medical records. In that report, Dr. Hart states “[t]he MRI of the lumbar spine showed a possible encroachment of the SI root on the left.” Dr. Hart also observed that, “[t]he MRI notes that the L5-S1 disc ‘mildly impinges on the emerging left S1 root.’ The medical records document there is no evidence of radiculopathy. This finding would be considered within normal limits as there is no corresponding physical examination finding supporting an S1 radiculopathy.” He further explained that plaintiff’s herniated disc impinging on the S1 nerve root was not causing neurological abnormalities. In conclusion, consulting physician Dr. Hart opined that “the claimant is capable of doing a sedentary level of occupation without limitations or restrictions. Ergometric seating may be of value.”
On January 15, 2015, plaintiff’s treating physician at the VA, Dr. Farmer, wrote a letter to defendant stating that “[w]ith [plaintiff’s] diagnosis of Chronic Back Pain with Sciatica related to Disc Herniation it is impossible for him to tolerate any period greater than 33% of sitting, standing, walking and bending, as reflected in the rest of my assessment of his physical capacity.”
Issues: Plaintiff was examined and his medical records were reviewed by numerous doctors over roughly the three years following that fall. This was done at first to diagnosis and treat plaintiff and subsequently to determine: (a) whether a herniated disc with neurological abnormalities was documented by MRIs administered to plaintiff on March 12, 2012, such that he would qualify for an exception to the “Other Limited Conditions” provision of the policy; and (b) whether he was disabled from all occupations, such that he would receive benefits during the “Any Occupation” period under the terms of that same policy.
Defendant advances two grounds for its termination of plaintiff’s long term disability benefits. First, defendant contends plaintiff does not qualify for an exception to the “Other Limited Conditions” provision under the Plan because he does not have a herniated disc with documented neurological abnormalities. Second, defendant claims plaintiff is not disabled from all occupations, and thus does not qualify for benefits during the “Any Occupation” period of his policy. Either one of these grounds, if established, would provide a recognized justification for the termination of plaintiff’s benefits under the terms of the Plan.
Holdings: Reviewing the decision de novo and for the reasons explained below, the court concluded that the plan administrator’s decision was supported on both grounds.
A. The Exception to the “Other Limited Conditions” Exclusion Under the Plan.
… Rather, the dispute in this case centers on whether with that condition plaintiff suffers from “neurological abnormalities” as required for him to qualify for an exception to the “Other Limited Conditions” of the policy. Accordingly, plaintiff bears the burden of establishing the applicability of this exception recognized in the policy. Specifically, the exception at issue here provides that the Other Limited Conditions exclusion does not include “herniated discs with neurological abnormalities that are documented by electromyogram and computerized tomography or magnetic resonance imaging.”
Thus, the ordinary meaning of the term “neurological abnormalities” is a manifested impairment to either motor functions, sensory functions, reflexes, or cognitive functions. Contrary to plaintiff’s contention, a mild nerve root impingement is not per se a “neurological abnormality,” but rather also requires some manifestation of impairment to one of the above listed areas. This meaning is consistent with the manner in which courts have applied the term in somewhat similar contexts as that presented here. …
Application of such a definition is also consistent with the findings of defendant’s consulting doctors, Dr. Hart and Dr. Kopacz, that plaintiff’s medical records do not reflect any impairment of his motor functions, sensory functions, reflexes, or cognitive functions. … Dr. Farmer’s stated conclusion that plaintiff suffers from “neurological abnormalities,” however, is inconsistent with all of the other medical evidence of record in that Dr. Phan and Dr. Alegre, as well as consulting physicians Dr. Hart and Dr. Kopacz, all concluded that plaintiff was neurologically intact and unimpaired.
Thus, this is not a case where there is an absence of evidence upon which the plan administrator could have relied in reaching the decision to deny or terminate benefits. Rather, here there is significant affirmative evidence in the record indicating that plaintiff did not suffer from “neurological abnormalities” and the plan administrator simply credited that reliable evidence over the statement made by one of plaintiff’s treating physicians.
Here, plaintiff did not meet his burden of proving he qualifies for an exception to the “Other Limited Conditions” exclusion provision of the policy and the plan administrator was, therefore, justified in denying him continuing benefits under the policy on this basis.
B. Plaintiff’s Disability From All Occupations Precluding Benefits During the “Any Occupation” Period.
Plaintiff also bears the burden of showing that he is disabled from all occupations during the “Any Occupation” period of the long term disability policy.
Here, defendant Standard relied upon a vocational analysis who rendered an opinion that plaintiff failed to meet this standard because there were qualifying jobs he was capable of performing with his limitations. (AR at 742–54.) The only evidence submitted on behalf of plaintiff addressing this issue was plaintiff’s own self-assessment of his inability to perform any work in light of his condition and the limitations it imposed on him.
The court has fully reviewed the record. The weight of the evidence reflected therein indicates plaintiff is capable of performing sedentary work. … Accordingly, the court also concludes that in light of the evidence of record the Plan administrator was justified in denying plaintiff long term disability benefits during the “Any Occupation” period under the Plan.
Summary: For all of the reasons set forth above:
1) The court finds that defendant Standard Insurance Company is entitled to judgment in its favor; and
2) The Clerk of the Court is directed to enter judgment in favor of defendant Standard Insurance Company and to close this case.