Case Name: Miguel Mendez v. Federal Express and Aetna Life Insurance Company
Court: United States District Court for the Eastern District of Michigan
Type of Claim: Long Term Disability
Insurance Company: Aetna Life Insurance Company
Claimant’s Employer: FedEx Express
Claimant’s Occupation / Job Position: Delivery Driver
Disabilities: On July 14, 2012, Plaintiff was involved in a catastrophic accident which caused several severe orthopedic injuries, including a splintering of his pelvis. Plaintiff suffered from a traumatic brain injury as a result of his on the job accident. Plaintiff also suffered from chronic daily pain in the neck, back, pelvis, right leg, shoulders and groin areas. Despite undergoing two significant orthopedic surgeries, Plaintiff suffered from headaches, muscle spasms in his back, and decreased sensation in both lower extremities at L5-S1 and in bilateral sacroiliac joints and right acromioclavicular joint. The Review Committee’s report stated Plaintiff had “sustained a fractured pelvis, acetabular fractures, is status post open reduction and internal fixation, has a diagnosis of traumatic brain injury and late effects of traumatic brain injury, right AC joint separation, left first rib fracture, neuropathic pain of the bilateral lower extremities, chronic back pain and insomnia.”
Definition of Disability: The Plan defines Total Disability as:
“the complete inability . . ., because of a medically-determinable physical or functional impairment (other than an impairment caused by a mental or nervous condition or a Chemical Dependency), to engage in any compensable employment for twenty-five hours per week.”
Benefits Paid? Plaintiff received short-term disability benefits from July 23, 2012, to January 20, 2013. On January 20, 2013, Plaintiff began receiving long term disability benefits based on his inability to work in his previous position. Aetna paid Plaintiff long-term Occupational Disability benefits for the full available time period, two years, from January 21, 2013 to January 20, 2015. Under the Plan, Aetna required Plaintiff to apply for Social Security Disability Income, and in May 2013, the Plaintiff was rendered totally disabled and awarded SSDI.
Procedural history: The claimant was denied coverage on January 21, 2015, after Aetna determined that that he did not meet the definition of Totally Disabled. Plaintiff appealed the decision to the Aetna Appeal Review Committee. In March 2014, the Review Committee upheld the denial of Plaintiff’s Total Disability claim.
Key Physician Opinions: Dr. James Wallquist, an orthopedic surgeon, concluded that there was insufficient objective medical evidence to show that Plaintiff could not work at least twenty-five hours per week. Dr. John P. Shallcross, a neuropsychologist, concluded the same finding that there was no documentation of Plaintiff’s “mental and nervous condition from 5/3/13 forward,” and “no assessment of [Plaintiff’s] psychiatric state sufficient to diagnose an Adjustment Disorder.” Dr Martin Mendelssohn, a retired orthopedic surgeon, concluded that there were insufficient objective findings that Plaintiff could not work at least twenty five hours per week, based on his review of Plaintiff’s file.
After an MRI was conducted, his treating physician made the following conclusions:
-Plaintiff “clearly cannot stand for more than [thirty] minutes or sit more than [one] hour.”
-Plaintiff had “severe derangement of the pelvic musculature, hip joints, and sacral iliac joints.”
-Plaintiff suffers from a “TBI,” has balance problems, walks with assistive devices, and “has limited ambulation endurance.”
-Plaintiff has “frequent muscle spasms in his back that last for several days,” causing him to be on Percocet.
-Plaintiff is on gabapentin for “burning pain in his left thigh.”
-Plaintiff suffers from “hip arthritis,” and suffers from “injury of lumbar, sacral, and pelvic sympathetic nerves.
Issues: The Court addressed several issues within Aetna’s determination that the Court found were arbitrary and capricious.
(1) First, Aetna conducted no in-person evaluation of Plaintiff at any level throughout the claims process, instead relying wholly on file reviews. The Court noted that it was especially troubling due to the fact that the physicians hired by Aetna noted but then disregarded the extensive and constant complaints of severe pain recognized by Plaintiff’s own treating physicians. Aetna could not ignore Plaintiff’s extensive complaints of pain, regardless of the fact that they are “subjective.”
(2) Secondly, the Court stated that Aetna’s reviewing physicians were repeat players that have a material, if not necessarily disabling, conflict of interest. Dr. Martin Mendelssohn, Dr. James Wallquist, and Dr. John P. Shallcross were all deeply intertwined in the Plaintiff’s claims process, and were repeat players among ERISA’s benefit plan administrators. While the Court noted that such entanglement does not automatically render Aetna’s decision arbitrary and capricious, but it is a factor that carries weight in favor of the Plaintiff and against Aetna.
(3) Third, the Court noted that Aetna failed to properly explain why the Social Security Administration’s decision awarding Plaintiff SSDI benefits should be distinguished. Aetna provided only conclusory observations at best, and was not sufficient to meet the requirement that the administrator’s decision must be supported by substantial evidence.
(4) Fourth, the Aetna Appeal Review Committee did not conduct an in-person medical examination of the Plaintiff.
Holdings: The Court concluded that Plaintiff was denied benefits “to which he is clearly entitled.” Aetna’s decision to deny Plaintiff’s claim for long-term disability was arbitrary and capricious, and incorrectly cut off Plaintiff’s long-term disability benefits.
(1) Aetna’s failure to provide an in-person evaluation at any time during the process, and subsequent reliance on the file reviews, was improper.
(2) The deep entanglement between Aetna and the reviewing physicians was a material, if not necessarily disabling, conflict of interest.
(3) Aetna’s “cavalier treatment of [Plaintiff’s] SSA determination weighs in favor of finding [Aetna’s] denial of benefits to be arbitrary and capricious.”
The Court noted that the repeat physicians discounted extensive medical documentation of chronic pain and a myriad of other ailments as stated by Plaintiff’s treating physicians. In conclusion, the Court ordered Aetna to pay Plaintiff the long-term disability benefits he qualifies for, and ordered Plaintiff to submit briefing regarding back-due benefits, applicable interest, and any other costs and fees that are appropriate.
Summary: The Court granted Plaintiff’s Motion for Summary Judgment, and denied Aetna’s Motion for Summary Judgment. The Court found Aetna’s denial of Plaintiff’s claim for Long-Term Disability to be arbitrary and capricious, and ordered Aetna to pay Plaintiff the long-term disability benefits for which he is qualified for under the Plan. Specifically, the Court stated, “without ever examining [Plaintiff], the Plan should not have made a credibility determination about his continuous reports of pain.” Coupled with Aetna’s lack of adequately explaining why the Plaintiff’s award of SSDI was not distinguished and the conflict of interest that arose due to the reviewing physicians’ deep entanglement with Aetna, the Court concluded that Aetna’s denial of long-term disability benefits was incorrect.
Disclaimer: This was not a case handled by disability attorney Nick A. Ortiz. The court case is summarized here to give readers a better understanding of how Federal Courts decide long term disability ERISA claims.
Here is a PDF copy of the decision: Mendez v. FedEx & Aetna