United States District Court, District of New Jersey, D
September 19, 2000
LYNN O'SULLIVAN, PLAINTIFF,
METROPOLITAN LIFE INSURANCE COMPANY, DEFENDANT.
The opinion of the court was delivered by: Stanley S. Brotman, United States District Judge.
OPINION ON DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT AND PLAINTIFF'S CROSS MOTION FOR
Presently before this Court, pursuant to the Employee
Retirement Income Security Act of 1974 (hereinafter "ERISA"),
29 U.S.C. § 1132(e)(1), as well as 28 U.S.C. § 1446(a) (removal
statute) and 28 U.S.C. § 1331 (federal question jurisdiction), is
the Motion for Summary Judgment by Defendant Metropolitan Life
Insurance Company (hereinafter "MetLife"), Plaintiff Lynne
O'Sullivan's ("O'Sullivan") Opposition of Defendant's Motion for
Summary Judgment and Cross Motion for Summary Judgment,
Defendant's Opposition to Plaintiff's Cross Motion for Summary
Judgment, Plaintiff's letter-brief in lieu of a formal reply
brief, and Defendant's letter-brief in response. Both parties'
letter-briefs specifically argue their positions in light of Pinto
v. Reliance Std. Ins. Co., 214 F.3d 377 (3d Cir. 2000), decided
after initial pleadings were filed. Pursuant to Fed.R.Civ.Proc.
78, these motions are decided without oral argument. For the
reasons stated below, Defendant's Motion for Summary Judgment and
Plaintiff's Cross Motion for Summary Judgment will be denied.
I. FACTUAL AND PROCEDURAL BACKGROUND
O'Sullivan was employed with Medaphis Corporation
("Medaphis") as a computer
operator. (See Compl., dated December 15, 1998, at ¶ 2)
O'Sullivan was a participant of an employee welfare benefit plan
(the "plan") sponsored by Medaphis through a group policy issued
by MetLife. (See Affidavit of Guyton Daniels at ¶ 1 & Exh. A)
The benefits plan included short term disability ("STD") coverage
for disability up to a period of six months, and long term
disability ("LTD") coverage for disability which extended beyond
the six-month period. (See id.)
A. The Plan
MetLife acts as the claim fiduciary for the employee benefits
plan offered to Medaphis employees. (See Daniels Aff. at ¶ 2) It
processes all claims for payment of benefits under the plan, and
makes payment of any benefits that may be due to a beneficiary in
accordance with the terms of the plan. (See id.) MetLife is
thereby both the insurance provider and plan administrator. Under
the terms of the plan, it has specific discretionary authority to
interpret plan terms and to determine eligibility for plan
benefits. The plan provides that:
In carrying out their respective responsibilities under the
Plan, the Plan administrator and other Plan fiduciaries shall
have discretionary authority to interpret the terms of the
Plan and determine eligibility for and entitlement to Plan
benefits in accordance with the terms of the Plan. Any
interpretation or determination made pursuant to such
discretionary authority shall be given full force and effect,
unless it can be shown that the interpretation or
determination was arbitrary and capricious.
(See Daniels Aff. at Exh. A)
In reference to the LTD benefits policy, the Plan contains a
"Pre-Existing Condition Limitation" provision, which states: "This
plan does not provide benefits for any Disability that is caused
by, contributed to by, or resulting from a Pre- Existing
Condition, unless the Disability begins after you have been
covered under This Plan for 12 months in a row." (See Daniels
Aff. at Exh. A) A "Pre-Existing Condition" is defined in the
Plan's provisions as "a Sickness or Injury for which you received
medical Advice or Treatment during the 90 day period immediately
prior to your effective date of Personal Benefits." (See Daniels
Aff. at Exh. A) If a plan participant has a disability that
begins within 12 months of employment and that disability is a
pre-existing condition, that participant is ineligible for LTD
B. O'Sullivan's Disability Claim and MetLife's Decision
On or about August 31, 1997, or Labor Day weekend
O'Sullivan claims that she suffered an injury to her
thoracic spine after attempting to lift a pickup truck bed. (See
Compl. at ¶ 2; see also, O'Sullivan Aff. at ¶¶ 2-3) On September
4, 1997, she visited her family doctor at Sunset Road Medical
Associates ("SRMA") because her pain, resulting from the incident,
had worsened. (See Compl. at ¶ 2, O'Sullivan Aff. at ¶ 4) Since
this doctor's visit, O'Sullivan has been examined by several
physicians, who have diagnosed her condition as thoracic stretch
injury, intercostal neuritis which developed into reflex
sympathetic dystrophy (RSD). (See Compl. ¶ 2) Because of this
injury, O'Sullivan claims that she is disabled and unable to work.
(See O'Sullivan Aff. at ¶¶ 6 & 10)
On September 29, 1997, O'Sullivan submitted a Statement of
Claim ("claim form") seeking STD and LTD benefits under the plan
policy. (See Daniels Aff. at ¶ 6, O'Sullivan Aff. at ¶ 14) The
claim form, signed by O'Sullivan, states that her treatment for
her disability began September 4, 1997, and that she was first
disabled by her injury on September 11, 1997. (See Daniels Aff.
at Exh. B, Affidavit of Kristin L. Wynne at Exh. B) The signature
Albert Talone, of SRMA, is on the "Attending Physician's
Statement" portion of the claim form. Under the heading,
"Diagnoses/Analysis," is written "low back pain, DJD,
osteoporosis." (See id.)
O'Sullivan and her treating physicians submitted numerous
documents to MetLife in consideration of her disability claims.
(See Daniels Aff. at ¶ 8 & Exhs. C-E, Wynne Aff. at Exh. B)
These documents include, but are not limited to, various
physicians' reports, medical office notes, and x-ray reports.
(See Wynne Aff. at Exh. B)
MetLife denied O'Sullivan's LTD claim in a letter dated
October 27, 1998 from Renay Bryant, STD/LTD Case Manager.*fn2
(See O'Sullivan Aff. at 62, Wynne Aff. at B) The proffered reason
for denying O'Sullivan's LTD claim was that her condition causing
her to be disabled was a pre-existing condition.*fn3 (See id.)
On November 25, 1998, O'Sullivan requested an appeal of
MetLife's decision denying her claim through her attorney. (See
Wynne Aff. at Exh. B) She also submitted two additional
physicians' reports along with her appeal.
On December 7, 1998, in a letter from Guyton Daniels, Unit
Manager at MetLife, MetLife again denied O'Sullivan's claim.
Pre-existing condition was the sole reason for the denial of
O'Sullivan's LTD claim. (See Wynne Aff. at Exh. B) The
determination that her condition was pre-existing made O'Sullivan
ineligible for LTD benefits. Because she was ineligible, MetLife
did not perform an investigation as to whether O'Sullivan would
meet the definition of "disabled" under the terms of the plan.
On December 17, 1998, O'Sullivan filed a complaint against
MetLife in the Superior Court, Burlington County, New Jersey for
wrongfully denying LTD payments under the provisions of the
employee welfare benefit plan. (See Compl. at ¶¶ 5-6) MetLife
filed a Notice of Removal to the United States District Court,
District of New Jersey. The Court construes O'Sullivan's claim as
a denial of employee benefits governed by ERISA.*fn4
O'Sullivan does not dispute that she was treated for back
pain in November 1996, during the pre-existing period. (See
O'Sullivan Aff. at ¶ 19) O'Sullivan contends, however, that the
back pain for which she received treatment in November 1996 is a
different condition from the one she now suffers. O'Sullivan
claims that in 1996, she was treated for lower back pain, near the
belt line, and received medication with no follow-up treatment.
The present condition that O'Sullivan alleges renders her disabled
is described by O'Sullivan and various physicians' reports as
mid-thoracic tenderness, thoracic stretch injury, and/or
mid-thoracic pain.*fn5 (See Daniels Aff. Exhs C & D, Wynne
Aff. at Exh. B) O'Sullivan asserts that the current pain arises
from her mid-back, left shoulder blade, and upper
rib area, not the lower back area. (See O'Sullivan Aff. at
O'Sullivan represents and MetLife does not dispute that while
her claim was pending, no one at MetLife asked O'Sullivan
questions regarding previous injuries, and had never requested
that she provide any information regarding a possible pre-existing
injury. (See O'Sullivan Aff. at 15 & 18) MetLife did not request
that O'Sullivan undergo an independent medical exam. (See Daniels
Dep. T96.18-.21) Nor has MetLife ever performed an internal or
independent medical review of O'Sullivan's records. (See Daniels
Dep. T96.13-.21, 97.13-.19, 103.4-.11)
II. STANDARD FOR SUMMARY JUDGMENT
Fed.R.Civ.P. 56 provides that summary judgment may be
granted only when materials of record "show that there is no
genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law." Serbin v. Bora Corp.,
96 F.3d 66, 69 n. 2 (3d Cir. 1996). In deciding whether there is a
disputed issue of material fact, the court must grant all
reasonable inferences from the evidence to the non-moving party.
The threshold inquiry is whether there are "any genuine factual
issues that properly can be resolved only by a finder of fact
because they may reasonably be resolved in favor of either party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
Supreme Court decisions mandate that a summary judgment
motion must be granted unless the party opposing the motion
"provides evidence `such that a reasonable jury could return a
verdict for the nonmoving party.'" Lawrence v. National
Westminster Bank New Jersey, 98 F.3d 61, 65 (3d Cir. 1996)
(quoting Anderson, 477 U.S. at 248). Once the moving party has
carried its burden of establishing the absence of a genuine issue
of material fact, "its opponent must do more than simply show that
there is some metaphysical doubt as to material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986). The non- moving party must "make a showing sufficient
to establish the existence of [every] element essential to that
party's case, and on which that party will bear the burden of
proof at trial." Serbin, 96 F.3d at 69 n. 2 (quoting Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986)); see also Quiroga v. Hasbro,
Inc., 934 F.2d 497, 500 (3d Cir. 1991) (declaring that non-movant
may not "rest upon mere allegations, general denials, or . . .
vague statements"). Thus, if the non-movant's evidence is merely
"colorable" or is "not significantly probative," the court may
grant summary judgment. Anderson, 477 U.S. at 249-50.
III. STANDARD OF REVIEW IN A DENIAL OF BENEFITS CLAIM
Ordinarily, a court applies a de novo standard of review to a
plan administrator's denial of ERISA benefits. See _Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948,
956-57, 103 L.Ed.2d 80 (1989), Abnathya v. Hoffmann- LaRoche,
Inc., 2 F.3d 40, 44-45 (3d Cir. 1993). Where the plan grants the
administrator discretionary authority to construe the terms of the
plan or to determine eligibility for benefits, however, the courts
may reverse the denial of benefits only if the administrator's
decision was "arbitrary and capricious." See Firestone, 489 U.S.
at 115, Orvosh v. Program of Group Ins. For Salaried Employees of
Volkswagen of America, 2000 WL 1036466 at *4 (3d Cir. July 28,
2000). The "arbitrary and capricious" standard is essentially the
same as the "abuse of discretion" standard. Abnathya, 2 F.3d at
45, n. 4. The "arbitrary and capricious" or "abuse of discretion"
standards of review apply whether the administrator's decision was
based on the interpretation of the plan or on factual
determinations. Mitchell v. Eastman Kodak Co., 113 F.3d 433, 438
(3d Cir. 1997).
Where an insurance company both determines eligibility for
benefits and pays benefits out of its own funds, the law within
this Circuit is to review the denial of benefits under
"heightened" arbitrary and capricious review. Pinto v. Reliance
Std. Life Ins. Co., 214 F.3d 377, 378 (3d Cir. 2000). Heightened
arbitrary and capricious review adheres to the Supreme Court
mandate that where a benefit plan grants discretion to the
administrator who is operating under a conflict of interest, that
conflict must be weighed as a "factor" in determining whether
there is an abuse of discretion. See Firestone 489 U.S. at 115.
Under Pinto, a conflict of interest is assumed where insurance
companies both determine eligibility for benefits and pay out
those benefits from their own funds because there exists "an
active incentive to deny close claims in order to keep costs down
and keep themselves competitive so that companies will choose to
use them as insurers. . . ." 214 F.3d at 388. Such "potential
self- dealing warrants that fiduciary insurer's decisions be
closely inspected." Id. at 387-88. Applying a more highly
deferential standard of review, particularly in these cases where
"smoking gun" direct evidence of purposeful bias is rare, would
allow benefits decisions to be virtually immunized. See id. at
In Pinto, the Third Circuit explicitly adopted the "sliding
scale approach" of arbitrary and capricious review, allowing "each
case to be examined on its facts." See id. at 392. Under this
approach, the degree of judicial scrutiny intensifies to match the
degree of conflict. Id. at 379 & 392. District courts are
directed to "consider the nature and degree of apparent conflicts"
when determining whether a plan administrator may have abused its
discretion in rendering a benefits decision. See id. at 393.
In Pinto, the defendant insurer had concluded that the
plaintiff was not totally disabled by a cardiac condition and thus
denied her claim for LTD benefits. The district court had granted
summary judgment in favor of the insurer on the grounds that the
insurer's decision was discretionary and not arbitrary and
capricious. See id. at 382. On appeal, the Third Circuit did not
dispute that under the arbitrary and capricious standard, the
insurer's decision would likely pass judicial review. Rather, the
Third Circuit determined that a different standard of review
applied, based on the fact that the defendant insurer both
determined eligibility for benefits, and paid those benefits out
of its own funds.
The Pinto Court examined both the process by which the
insurer's result was achieved as well as the insurer's decision
itself in its determination of whether summary judgment was
proper. In its review of the insurer's process, the Court noted
several procedural anomalies. See id. at 393-94. First, the
insurer had initially decided that the plaintiff was totally
disabled, then changed this determination without receiving any
additional medical information. See id. at 393. The only change
that had occurred was that the plaintiff's Social Security
Administration (SSA) application was rejected. Further, while the
SSA rejection appeared to have caused the insurer to decide that
the plaintiff was not totally disabled, the SSA reversal did not
have the same effect of reversing the insurer's decision.
Secondly, the insurer selectively credited the expertise of one
physician, while rejecting other opinions. See id. Finally, the
insurer had ignored the recommendation of its own staff worker,
who suggested that Pinto's benefits be reestablished pending
further testing. See id. at 394.
In examining the insurer's actual decision, the Pinto Court
noted that the administrator had "some credible evidence" to make
the determination that the plaintiff was not totally disabled.
Id. at 393. "Two doctors, one of whom is a specialist in
cardiology, stated that they did not believe that she was totally
disabled." See id. The Third Circuit thus recognized that if it
had applied the extremely deferential arbitrary and capricious
review, it would
have likely affirmed the judgment of the district court. Id.
Instead, the Pinto court continued to evaluate the record in its
entirety. The plaintiff too, had some "credible evidence" of total
disability, both from her long time treating cardiologist, as
well as another cardiologist. See id. Although the evidence
for the insurer and the evidence for the plaintiff was "two-to-two,"
as there were two doctors on either side of the "disability debate,"
the Court determined that because neither of the doctors retained
by the insurer had the same contact with the plaintiff that her
long-time physician did, and because one of the doctors on which
the insurer relied was a pulmonologist, and not a cardiologist,
the plaintiff had the stronger case. See id. at 394. Based on
the evidence, the Third Circuit determined that, "a factfinder
could conclude that [the insurer's] decision to credit its doctors
over [the plaintiff's] was the result of self-dealing instead of
the result of a trustee carefully exercising its fiduciary duties
to grant [plaintiff] the benefits due her under the insurance plan."
See id. at 394. The Third Circuit therefore overturned the
district court's grant of summary judgment in favor of the
Evidence Available For Judicial Review
When reviewing a plan fiduciary's decision under the
arbitrary and capricious standard, the Court is limited to "that
evidence that was before the administrator when [it] made the
decision being reviewed." Mitchell v. Eastman Kodak Co.,
113 F.3d 433, 440 (3d Cir. 1997) (citations omitted); see also Stout v.
Bethlehem Steel Corp. 957 F. Supp. 673, 691 (E.D.Pa. 1997);
Teeter v. Supplemental Pension Plan of Consolidated Rail Corp.,
705 F. Supp. 1089, 1095 (E.D.Pa. 1989).*fn6 O'Sullivan has
argued in her brief that the Court should review evidence beyond
the administrative record in its review of MetLife's decision, and
points to several cases where courts have looked to additional
evidence in reviewing a plan administrator's decision. (See Pl.
Br. in Opp. at 14-18)
The cases upon which O'Sullivan relies, however, involve de
novo review of ERISA claims. See e.g., DeFelice v. American Int'l
Life, 112 F.3d 61 (2d Cir. 1997), Jones v. United States Life Ins.
Co, 112 F. Supp.2d (D.N.J. 1998), Warshaw v. Continental Casualty
Co., 972 F. Supp. 432 (N.D.Ohio. 1997). As discussed above,
MetLife's discretionary authority to construe the terms of the
plan and determine eligibility require that the Court apply the
arbitrary and capricious standard of review, albeit a heightened
one. The Court and the parties have found no applicable authority
that would support looking beyond the administrative record when
deferentially reviewing a plan administrator's factual
determination that a claimant is ineligible for benefits. The
purpose in limiting the evidentiary scope of judicial review is to
encourage the parties to resolve their disputes at the
administrator's level. See Vega v. National Life Ins. Servs.,
Inc., 188 F.3d 287, 300 (5th Cir. 1999). If district courts
permitted claimants to present additional evidence in reviewing
benefits determinations, "the administrator's review of claims
[would] be circumvented." Id. ERISA's goal of providing plan
participants and beneficiaries an expeditious and inexpensive
method of resolving their disputes would be seriously impaired.
See Perry v. Simplicity Eng'g., 900 F.2d 963, 967 (6th Cir.
While plan administrators could potentially manipulate the
process of judicial review by excluding from its record evidence
harmful to their positions, certain safeguards do exist to achieve
both fairness and efficiency. A claimant can gain access to the
materials in the plan administrator's
claim file, and simply supplement the file with additional evidence
that weighs in the claimant's favor. If a claimant submits additional
evidence and requests the plan administrator to reconsider the previous
decision, that additional evidence would be included as part of
the administrative record. See Mitchell, 113 F.3d at 440, Vega,
188 F.3d at 300. Limiting the review of evidence to that which
was before the plan administrator at the time of its decision is
thus not overly burdensome to claimants, minus exceptional
Exceptions to this general rule are appropriate where the
evidence outside the administrative record is related to
interpreting the plan or explaining medical terms and procedures
relating to the claim. See Vega, 188 F.3d at 299. For instance,
"evidence, including expert opinion, that assists the district
court in understanding the medical terminology or practice
relating to a claim would be admissible," as such information
would not be beyond the scope of evidence before the administrator
at the time of its decision. Id. The Court is only precluded
from receiving evidence to resolve disputed material facts, for
instance, "a fact the administrator relied on to resolve the
merits of the claim itself." Id.
In this case, MetLife notified O'Sullivan by a letter dated
December 7, 1998, that it was continuing to deny her claim for LTD
benefits upon appeal. The Court may therefore only review the
evidence before MetLife at the time of its final denial of
O'Sullivan's claim on December 7, 1998 in determining whether
MetLife acted arbitrarily and capriciously under the heightened
standard of review.
1. Dr. Gerald Hayken's November 20, 1997 Report
The Court may not consider the report by Dr. Gerald Hayken,
dated November 20, 1997, in this disposition, as Dr. Hayken's
November report was not before MetLife at the time it rendered its
decision denying O'Sullivan's LTD claim.
O'Sullivan had the opportunity to admit this report to
MetLife. On June 4, 1998, following the initial denial of
O'Sullivan's STD claim, O'Sullivan's attorney requested a copy of
all medical reports in the possession of MetLife regarding
O'Sullivan's benefits claim. (See Wynne Aff. at Exh. B) MetLife
obliged. On June 30, 1998, O'Sullivan's attorney forwarded a
January 15, 1998 report of Dr. Hayken, as well as a June 23, 1998
report of Dr. Post to supplement MetLife's claim file regarding
O'Sullivan. O'Sullivan could have submitted Dr. Hayken's November
1997 report as well, but did not. Based on these circumstances,
the Court will not consider the report or its contents in its
review of MetLife's decision to deny LTD benefits.
2. Dr. Andrew Blank's Deposition Testimony
MetLife argues that the entire testimony of Dr. Andrew Blank
is inadmissible and may not be considered by the Court in
reviewing MetLife's decision because his testimony was not before
MetLife at the time of its review of O'Sullivan's claim. (See
Def. Opp. Br. at 17) The Court disagrees.
Portions of Dr. Blank's deposition testimony were certainly
within the knowledge of MetLife during its review of O'Sullivan's
claim. For example, testimony that MetLife did not contact Dr.
Blank regarding his contradicting reports, testimony translating
medical notes in the claim file, or testimony explaining medical
terms used in documents within the file, would aid the Court in
interpreting the documents before MetLife at the time of its
decision, and may be considered by the Court.
Other portions of Dr. Blank's testimony extend beyond the
scope of the administrative record and may not be considered by
the Court. Such testimony involving medical opinions not within
the claim file, Dr. Blank's opinion as to whether O'Sullivan's
condition was pre-existing in 1996, or explanations by Dr. Blank
supplementing his earlier reports may not be considered by
this Court in its review of MetLife's decision.
B. Review of MetLife's Decision Denying LTD Benefits
MetLife's sole reason for denying O'Sullivan's claim for LTD
benefits was that her condition was pre-existing. The Court will
review the evidence before MetLife to determine if there is a
genuine issue of fact as to whether MetLife was arbitrary and
capricious under the heightened standard of review.
1. The Evidence Before MetLife
a. Dr. Blank's Two Reports
In the October 27, 1998 denial letter from Renay Bryant,
MetLife stated that it had relied on Dr. Blank's August 6, 1998
report in determining that O'Sullivan's condition was the same as
her injury treated in November 1996. Relevant portions of the
A letter dated August 6, 1998 . . . from Dr. Andrew J. Blank
revealed that you were first treated for the condition of
exacerbation of severe mid-back pain that began November
1996. It further states that you have been seen multiple and
numerous times since 1996 with continued left thoracic
tenderness. . . . Per our conversation with Dr. Blank's
office on October 27, 1998, your initial office visit for the
condition of severe mid-back pain was November 11, 1996.
This is the same condition causing you to be out of work on
September 12, 1997.
(See Wynne Aff. at Exh. B, Pl. Aff. at 62) The denial letter
refers to no other evidence upon which it relied for its finding
of pre-existing condition.
Indeed, Dr. Blank's August 1998 letter supports MetLife's
determination that O'Sullivan's condition was pre-existing. Dr.
Blank writes that he had been seeing O'Sullivan "on a fairly
frequent basis for exacerbation of severe mid-back pain" and that
this pain "began approximately [November 1996] for the first
time." (See Daniels Aff. Exh D, Pl. Aff. at 54) This document
clearly provided MetLife a basis for believing that O'Sullivan's
alleged disability was a pre-existing condition, previously
treated in 1996.
Dr. Blank's November 1998 letter, however, completely refutes
his August 1998 statements regarding onset of injury. This
November 1998 report states that O'Sullivan has had "excruciating
mid-thoracic pain" since Labor Day, 1997, not November 1996:
"[Ms. O'Sullivan] had been treated by our practice in
numerous times in the past few years before 1997, but never
for the extent of this injury specific to this area. I feel
that her most recent injury of 1997, which lead [sic] to the
diagnosis of RSD [reflex sympathetic dystrophy*fn7], is
specific to this thoracic area and is a direct consequence of
her injury from 1997."
(See Wynne Aff. Exh. B)
O'Sullivan submitted Dr. Blank's November 1998 letter with
her appeal letter along with another physician's report by a Dr.
Luis Cervantes. MetLife's response to O'Sullivan's appeal
revealed that it gave no credence to Dr. Blank's November 1998
letter. A December 1998 denial letter from Guyton Daniels, Unit
Manager at MetLife, stated, "It appears from [Dr. Blank's November
1998 and Dr. Cervantes' reports] that the Thoracic back that
[O'Sullivan] has been treated for since November 11, 1996 has
finally been diagnosed as Reflex Sympathetic Dystrophy (rsd)."
(See Wynne Aff. at B)
MetLife states that it did not act unreasonably by giving
greater weight to Dr. Blank's earlier statement over his
subsequent explanation and cites to
Marsteller v. Life Ins. Co. of N. American, 24 F. Supp.2d 593,
596-97 (W.D.Va. 1998) as support for this proposition. (See
Def. Opp. Br. at 19)
The dispute in Marsteller was whether the claimant's date of
disability was March 3, 1994, which would entitle him to benefits,
or March 25th, in which case he would not be so entitled. One of
the plaintiff's treating psychiatrists, Dr. Nelson, had written in
her treatment notes that the plaintiff could work during the time
period of March 3, 1994 to early April 1994. Id. at 598.
According to the notes, Dr. Nelson believed that working would
help the plaintiff with his condition. Id. at 598. After the
plaintiff's benefits were denied, Dr. Nelson supplemented her
treatment notes with an affidavit stating that the plaintiff did
have the same condition on March 3, 1994 as he did on March 24.
The defendant insurer in Marsteller credited Dr. Nelson's
earlier treatment notes, but not the statements in her affidavit,
and thus denied the plaintiff's claim. The district court
affirmed the administrator's decision, stating that "[t]he fact
that the Plan administrator gave greater weight to the plain
meaning of [one of plaintiff's treating psychiatrist's] notes than
her subsequent explanations made long after the relevant treatment
and in an effort to help her patient obtain benefits does not lead
this court to overrule that determination under a deferential
standard of review." 24 F. Supp.2d at 596.
The evidence involved in Marsteller, however, was
substantially more favorable to the defendant insurer than is the
evidence upon which MetLife claims to rely here. Two other
physicians, one who was also a treating psychiatrist of the
plaintiff, and another who was a medical consultant commissioned
by the insurer, agreed with the conclusions of Dr. Nelson's
treatment notes regarding the time of disability. See id. at
596-98. Based on that evidence, the Marsteller court determined
that it was "not unreasonable for Plan administrators to accept
the opinion of one treating physician and consultant Dr. Peck" and
discount the findings in Dr. Nelson's affidavit. See id. at 598.
Here, the statements in Dr. Blank's November 1998 report were
not substantiated by any other conclusive evidence. No other
physicians' report offered a 1996 date as the onset of
O'Sullivan's condition. MetLife brought forward no medical expert
or physician supporting the pre-existing injury determination.
Finally, MetLife contends that it gave greater weight to Dr.
Blank's opinion because he was O'Sullivan's treating physician and
had examined her prior to her alleged 1997 disability-sustaining
incident. (See Def. Opp. Br. at 8) It is quite suspect then,
that MetLife did not even attempt to clarify the position of the
doctor, upon whose opinion it claims to most rely. MetLife's
willingness to accept the August 1998 statements over the November
1998 statements without further inquiry appears more self-serving
In its briefs, MetLife contends that it did not merely rely
on Dr. Blank's August 1998 letter when it denied plaintiff's LTD
claim. "Ms. Daniels found other evidence that plaintiff's alleged
disability was pre-existing in a number of documents." (See Def.
Br. in Opp. at 8) In its brief, MetLife refers to "Dr. Blank's
office notes from November 1996," O'Sullivan's "initial claim
form," and an "x-ray report dated September 26, 1997," as other
evidence on which MetLife relied in its determination that
O'Sullivan's condition was pre-existing. See id. The Court will
now turn to discuss these documents.
b. November 1996 Medical Notes
MetLife's December 1998 denial letter refers to "medical
records" received from Dr. Blank's office, which "indicated that
[O'Sullivan] was treated for Thoracic back pain November 11th and
15th of 1996." Id. The Court interprets the records referred to
in this letter as copies of office notes dated November 11, 1996
and November 15, 1996, detailing visits O'Sullivan made to a
physician at SRMA.
The medical notes, however, do not "indicate that
O'Sullivan was treated for Thoracic back pain" as Ms. Daniels
states in the denial letter. There is no mention of "thoracic
back" in the notes at all. The notes' legible portions refer to
"severe back pain" and "L3-L5." (See Wynne Aff. at Exh. B) The
"L" designation most likely refers to the lumbar vertebra.*fn8
Lumbar refers to the area "between the thorax and the pelvis," or,
what a layperson might call the lower back region. See Dorland's
Illustrated Med. Dictionary, p. 961 (Philadelphia: W.B. Saunders
Co., 28th ed. 1994). Instead of supporting MetLife's position in
the December 1998 denial letter, the 1996 November 11th and 15th
medical notes appear to support O'Sullivan's contention that her
November 1996 condition involved low back pain, in a different
area of the back than the alleged thoracic pain causing her to be
disabled beginning Labor Day weekend 1997.Certainly, the medical
notes provide an indication to MetLife that O'Sullivan has a
history of back pain. Assuming that the post-August 1997
physicians' reports are correct, and O'Sullivan's condition
involves thoracic back pain, the question remains whether the
November 1996 notes refer to treatment for the same condition as
that which O'Sullivan currently suffers.
c. Claim Form
Though not mentioned by MetLife in either of its letters
denying O'Sullivan's LTD claim, in its briefs to the Court,
MetLife points to selective portions of O'Sullivan's claim form to
support its determination. (See Def. Opp. Br. at 19) On the
form, O'Sullivan's condition is described as "low back pain."
Since O'Sullivan had undisputedly received treatment for low back
pain in November 1996, MetLife contends that her current pain must
be the same "low back pain" for which she was treated in 1996.
However, all of the post-August 1997 physicians' reports
describing O'Sullivan's current condition state that O'Sullivan is
experiencing thoracic or mid-back pain. No post-1997 document
characterizes her condition as low back pain.
Other portions of the claim form support O'Sullivan's
proposition that her condition was not pre-existing. The claim
form states that the first date of treatment for O'Sullivan's
injury was September 4, 1997 and the first date of disability was
September 11, 1997. MetLife's decision to credit one phrase in
the claim form, while rejecting other portions of the claim form
that would undermine its determination, supports the inference
that MetLife may have had more than its fiduciary obligations in
mind when it rejected O'Sullivan's claim.
d. September 26, 1997 X-Ray Report
Although MetLife did not mention an x-ray report in either of
its denial letters to O'Sullivan, it asserts in its briefs to the
Court that an x-ray report, dated September 26, 1997, supports the
determination that O'Sullivan's condition was pre- existing. (See
Def. Opp. Br. at 20) While the x-ray report indicates
"demineralization and scoliosis of the thoracolumbar spine,"
MetLife has offered no information as to how this report supports
the conclusion of pre-existing injury, or bears on O'Sullivan's
claim at all. The Court will not simply accept a blanket
statement that the September 26, 1997 x-ray report indicates
pre-existing condition without any explanation or medical
information as to how. (See id.)
e. Other Physicians' Reports
MetLife had in its possession several reports from
O'Sullivan's treating physicians giving the date of injury as
August 31, 1997 or Labor Day weekend 1997. Two reports by Dr.
Post, one report by Dr. Cervantes, and Dr. Blank's November 1998
report refer to an injury in the "thoracic" or "mid-back" area
with an onset of injury in 1997.
Two reports from Dr. Elisabeth Post, a neurosurgeon who had
evaluated O'Sullivan upon referral by Dr. Blank, support
O'Sullivan's contention that her injury is in her thoracic area,
and arose from a Labor Day weekend 1997 incident. A report, dated
April 16, 1998, states that O'Sullivan "dates her difficulties to
August 1997, when she was helping her husband lift something out
of his pick-up truck and felt something snap in her back." (See
Wynne Aff. at Exh. B) A report, dated June 23, 1998, states that
O'Sullivan "complained of terrible pain to the left of her mid
scapular area. She dated this pain to August of 1997, when she
was helping her husband lift something out of his pick-up truck. . . ."
MetLife also had the October 14, 1998 report of Dr.
Cervantes, a neurosurgeon who evaluated O'Sullivan upon referral.
The report states that "Mrs. O'Sullivan was in my office to be
evaluated because of thoracic pain. . . . Last Memorial Day,
[Mrs. O'Sullivan] was helping her husband move a liner from a pick
up truck and she felt something break in her interscapular area on
the left side. . . ." Since this is the only report in the claim
file that refers to "Memorial Day" as the day of injury, it is
likely that Dr. Cervantes confused the holidays. Even if he did
not, an injury occurring Memorial Day 1997 would not fall within
the pre-existing condition exclusion under the terms of the plan.
MetLife states that it gave these physicians' reports less
weight because these physicians had not treated O'Sullivan prior
to 1997. In fact, MetLife claims these reports are "irrelevant
regarding the determination as to whether plaintiff's disability
was `caused by, contributed to by, or resulted from a prior
condition.'" (See Def. Br. at 21) MetLife offers no explanation
or expertise dictating the conclusion that these physicians are
unable to provide medical causation information, or an estimation
as to length of injury. Indeed, there is no evidence that MetLife
even questioned these physicians regarding the length of
O'Sullivan's injury or the possibility that her condition was
2. No Medical Review by MetLife
MetLife did not seek the opinions of internal or independent
medical experts in reviewing O'Sullivan's claim. MetLife's
decision to refrain from seeking any medical review — in light of
Dr. Blank's conflicting statements, no other physician providing
an injury date prior to 1997, and ambiguous documents — is
baffling. When asked by O'Sullivan's counsel, "[i]n Ms.
O'Sullivan's case, there was never an investigation with regard to
her long-term disability claim as to what her present disability
was?" Ms. Daniels responded: "That question bothers me. I guess
it bothers me because there has to be some knowledge of medical
[sic] in order to determine a preexisting condition. So there was
no knowledge of the medical [sic]." (See Daniels Dep. T36.8-.21)
The Court too, is unclear how one determines pre-existing
condition without medical expertise.
Ms. Daniels is the same person who concluded in the December
7, 1998 denial letter that: "It appears from [Dr. Cervantes'
October 1998 report and Dr. Blank's November 1998 report] that the
Thoracic back pain that [O'Sullivan] has been treated for since
November 11, 1996 has finally been diagnosed as Reflex Sympathetic
Dystrophy (rsd)." This conclusion was made wholly without any
support in either of those reports. Rather, Dr. Cervantes' report
gives a 1997 date of injury, and Dr. Blank's report explicitly
states that her current condition is a direct result of the 1997
incident. It is unclear how Ms. Daniels was able to make this
medical determination without having any training in medical
diagnoses, particularly where the documents before her suggested
3. Procedural Anomalies
Finally, there remains a question as to whether MetLife
adhered to its own internal procedures when it re-reviewed
O'Sullivan's claim. Procedural anomalies can be considered by the
Court in determining
whether MetLife abused its discretion when it denied O'Sullivan's
claim. See Pinto, 214 F.3d at 393-94. In Ms. Daniels deposition,
she testified that upon appeal of a claim, if Ms. Daniels believes
that the claim should continue to be denied, she would hand the
appeal off to Ms. Sanzari, the ERISA procedural analyst, for re-review.
(See Daniels Dep. T16.16-16.24) In O'Sullivan's case, Ms. Sanzari
never re-reviewed O'Sullivan's claim after Ms. Daniels decided
to deny the claim upon appeal. MetLife claims in its brief, however,
that review by Ms. Daniels without a re-review by Ms. Sanzari is
allowable under MetLife's procedure. (See Def. Opp. Br. at 20)
Whether MetLife failed to follow its own internal procedures
is not dispositive as to whether MetLife's decision was arbitrary
and capricious. A failure by MetLife to follow its own procedure
would, however, serve as strong evidence in favor of showing an
abuse of discretion. Based on the evidence currently before the
Court, that determination is properly left for the finder of fact.
4. A Reasonable Factfinder Could Conclude That
MetLife's Decision Was Arbitrary and Capricious
Upon the Court's review of the documents within the claim
file, the evidence in support of MetLife's decision that
O'Sullivan's allegedly disabling condition was pre-existing
consisted of the later-retracted statements of Dr. Blank, the
November 1996 medical notes indicating "severe back pain," and one
phrase in the claim form indicating "low back pain" as the cause
of O'Sullivan's current disability. MetLife also had in its
possession several reports that indicated the onset of
O'Sullivan's injury as August 31, 1997 or Labor Day weekend 1997.
While it is true that Pinto does not require an "additional duty
to conduct a good faith, reasonable investigation," 214 F.3d at
394 n. 8, in this instance, where the record contains only
ambiguous and inconclusive evidence, MetLife may have acted
unreasonably by not seeking additional information or clarifying
the record. It appears, as was the case in Pinto, that "whenever
[the insurer] was at a crossroads, [it] chose the decision
disfavorable to [the Plaintiff]. The default position was that
benefits were not granted." See Pinto, 214 F.3d at 394.
Ample evidence supports the possibility that MetLife suffered
from the similar "self-serving" use of evidence that the defendant
insurer suffered in Pinto. A reasonable factfinder could conclude
that MetLife's decision to credit certain statements and documents
while discounting others without a more thorough review was a
result of self-dealing rather than the result of a trustee
carefully exercising its fiduciary obligations. Summary Judgment
is therefore inappropriate, as there exists a genuine issue of
material fact as to whether MetLife acted arbitrarily and
capriciously under the heightened standard of review when it
rendered O'Sullivan's condition pre-existing. For these reasons,
both MetLife's Motion for Summary Judgment and O'Sullivan's Cross
Motion for Summary Judgment will be denied. The Court need not
address the other issues in the parties' briefs at this time.
For the reasons stated above, both Defendant's Motion for
Summary Judgment and Plaintiff's Cross Motion for Summary Judgment
will be denied. The Court will enter an appropriate order.
THIS MATTER having come before the Court on Defendant
Metropolitan Life Insurance Company's Motion for Summary Judgment
and on Plaintiff Lynn O'Sullivan's Cross Motion for Summary
The Court having considered the record and the submissions of
the parties; and
For the reasons set forth in the Court's opinion of this
IT IS on this 19th day of September, 2000, HEREBY
ORDERED that Defendant's Motion for Summary Judgment against
Plaintiff is DENIED; AND IT IS FURTHER
ORDERED that Plaintiff's Cross Motion for Summary Judgment
against Defendant is DENIED.