Case Name: Holmgren v. Sun Life and Health Insurance Company
Court: U.S. District Court for the Northern District of California
Date of Decision: December 5, 2018
Type of Claim: Long Term Disability
Insurance Company: Sun Life and Health Insurance Company
Claimant’s Employer: Hitachi America, Ltd.
Claimant’s Occupation / Job Position: Corporate Tax Director. The plaintiff’s job required a high cognitive ability, including critical thinking, decision-making, complex problem solving, processing information, evaluating information to determine compliance with standards, and high levels of concentration.
Disabilities: Through the course of the claimant’s medical treatments, various physicians diagnosed plaintiff with (1) degenerative disc disease at L5-S1 lumbar disc; (2) two crushed cervical spine discs(resolved by spinal surgery); (3) piriformis syndrome; (4) degenerative hip disease (partially resolved by hip replacement surgery); (5) lumbar spondylosis; unspecified myalgia and myositis; (6) lumbosacral radiculopathy; (7) sacroiliac dysfunction; and (8) lumbar spine instability. His medical treatment included: (1) visiting a chiropractor; (2) referral to orthopedic surgeons and pain specialists; (3) a number of MRIs, beginning around 2005-2008; (4) physical therapy; (5) a spinal surgery in February 2012; (6) a hip replacement surgery in May 2013; (7) spinal injections; and (8) pain relief medication, including prescription NSAIDs, MS Contin, and oxycodone.
Definition of Disability in the Plan/Policy: The Plan defines “Total Disability” as being, during the relevant elimination period and the following twenty-four months, “unable to perform” the Material and Substantial Duties of the Plan-holder’s Occupation due to Plan-holder’s Injury or Sickness.
Other Key Definitions in the Plan/Policy: The Plan defined Plan-holder’s Occupation as “the usual and customary employment, business, trade, profession or vocation” that he or she performed as it is generally recognized in the national economy immediately prior to the first date that Total or Partial Disability began. The Plan defines “Material and Substantial Duties” as including, but not limited to, the essential tasks, functions, skills, or responsibilities required by employers for the performance of Plan-holder’s Occupation. The Plan further defines “Injury” and “Sickness” as “bodily impairment resulting directly from an accident and independently of all other causes” and “illness, disease or pregnancy,” respectively.
Benefits Paid? No.
Basis For Denial / Termination of Benefits: In a letter dated May 26, 2016, Sun Life denied plaintiff’s long term disability claim on the basis of their determination that “the medical evidence does not support [that] [plaintiff] would be precluded from performing the Material and Substantial Duties of [plaintiff’s] Occupation as a Tax Director.”
Procedural history: The plaintiff stopped working on August 5, 2018. His application was denied. He filed an appeal. Sun Life upheld its denial of benefits in a letter dated May 19, 2017.
Key Treating Physician Opinions: On August 6, 2015, the plaintiff called Dr. Chen’s office and relayed that he was in a lot of pain and felt he could no longer work. In response, and consistent with his July 20 determination that it was reasonable for the plaintiff to refrain from working during the period before his surgery due to the plaintiff’s level of pain, Dr. Chen certified the plaintiff’s disability.
Opinions of Doctors Hired by Sun Life: Sun Life also hired Professional Disability Associates (“PDA”), a peer review company, to provide a paper-only assessment of the plaintiff’s claim. Dr. Stefan Muzin, a specialist in physical medicine and rehabilitation, issued his initial findings in a report dated April 15, 2016. In his initial report, Dr. Muzin found “no objective explanation to explain [plaintiff’s] subjective complaints.” Dr. Muzin concluded that “[b]ased on a review of available medical records, review of surveillance video, and discussion with attending physician, [plaintiff] should be able to work eight hours a day, forty hours a week” and that “there is no objective evidence to suggest why [plaintiff] would be unable to work these hours.” Following the plaintiff’s appeal, Sun Life hired PDA for an additional paper-only medical review and received two reports, one from Dr. Victor Lee, a pain management specialist, and another from Dr. Alfred Mitchel, an orthopedic surgeon. Dr. Lee determined that plaintiff’s pain was disabling and prevented the plaintiff from performing even sedentary work. Dr. Mitchell determined that plaintiff’s pain complaints were unreliable and there was no objective evidence supporting disability. Sun Life did not have the plaintiff examined at any point during this review process.
Standard of Review: The parties agreed that the standard of review was de novo. On such a review, the Court conducts a bench trial on the record and makes findings of fact and conclusions of law based upon that record. The plaintiff, therefore, had the burden of establishing that he was disabled under the terms of the plan during the claim period by a preponderance of the evidence.
Holdings: “Based upon an exhaustive review of the administrative record here, the Court finds that plaintiff has established that he was disabled under the Plan’s definition of disability. Plaintiff was, “during [his] Elimination Period and the next 24 months . . . because of [his] Injury or Sickness[,] . . . unable to perform the Material and Substantial Duties of [his] Own Occupation.” Each of the doctors who examined plaintiff determined that he was unable to perform the duties of his sedentary job as a tax director. They based their opinions on functional testing, MRIs, results of surgeries, and their own physical examinations of plaintiff. His condition was degenerative and did not show substantial improvement prior to May 2017, when Sun Life upheld its denial of plaintiff’s appeal for LTD benefits.” (emphasis in original).
Noteworthy court comments:
Re: Pain. Sun Life’s proffered reason for denying plaintiff LTD benefits is that the objective evidence does not support the severity of the plaintiff’s pain complaints. The Court stated, “First, Sun Life relies heavily on the conclusions of Drs. Muzin and Mitchell “that the objective evidence, meaning the diagnostic studies, the surveillance, and the physical examination results, does not support the severity of plaintiff’s pain complaints” to support its argument that plaintiff is not disabled. However, “a disability insurer cannot condition coverage on proof by objective indicators where the condition is recognized yet no such proof is possible.” Cruz-Baca v. Edison International Long Term Disability Plan, 708 Fed.Appx. 313, 315 (9th Cir. 2017)”.
Favoring Consultant’s Opinions Over Examining Physicians’ Opinions: “Second, Sun Life’s decision relied on the opinions of third-party consultants rather than the physicians who examined and treated plaintiff. PDA’s consultants, Drs. Muzin, Lee, and Mitchell, only reviewed the records of other doctors and medical testing.6 While ERISA does not accord special deference to the opinions of a treating physician, Black & Decker Disability Plan v. Nord, 538 U.S. 822, 831 (2003) (ERISA does not import treating physician rule from Social Security regulations), courts generally give greater weight to doctors who have actually examined the claimant versus those who only review the file.” … “Every specialist who examined plaintiff, and whose chart notes can be found in the administrative record, determined that he suffers from severe pain which his ability to engage in even sedentary activity.”
Reliance on Surveillance Video: “Finally, Sun Life argues that plaintiff is physically and cognitively able to do his job and is therefore not disabled within the meaning of the Plan. Sun Life points to the surveillance video as evidence that “plaintiff can sit, stand, and walk as he sees fit, the functional capacity he needs to perform his job duties.” Specifically, Sun Life characterizes plaintiff’s activity in the surveillance video as (1) sitting for thirty minutes with no sign of discomfort or impairment; (2) standing and smoking with no apparent distress; and (3) walking at a brisk pace, without a cane, and with no problems with gate or other apparent distress. As a preliminary matter, the Court does not agree with Sun Life’s characterization of the surveillance footage. Moreover, even accepting as correct, arguendo, Sun Life’s characterization, the surveillance footage does not “establish,” as Sun Life asserts, that “plaintiff can sit, stand, and walk as he sees fit” and therefore has “the functional capacity he needs to perform his job duties.” At most, the surveillance footage establishes that plaintiff can sit for 30 minutes, stand for 10 minutes or less, and walk short distances. This does not establish that he can perform the functions of his job as a tax director.”
Noteworthy behavior by the insurance company: Following plaintiff’s application for long term disability insurance benefits, Sun Life received a background investigation report and surveillance report regarding plaintiff’s activity. The background investigation report included plaintiff’s ownership of rental properties in Illinois, membership at an athletic club in Burlingame, CA, and social media activity. The report reflected that plaintiff is very active on social media and often discusses his pain and treatment.
Summary: Upon de novo review of the record, the Court finds that plaintiff has established by a preponderance of the evidence that he was disabled under the terms of the Plan during the relevant period.[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]
Here is a copy of the decision in PDF: Holmgren v. Sun Life