United States District Court, D. New Jersey
HAGNER & ZOHLMAN, LLC Thomas Joseph Hagner, Esq., Cherry Hill, NJ, Counsel for Plaintiff.
EDWARDS WILDMAN PALMER LLP Stephanie Beth Underwood, Esq., Morristown, NJ, Counsel for Liberty.
JOSEPH E. IRENAS, Senior District Judge.
John Morrison ("Plaintiff"), a Human Resources manager at PNC Financial Services ("PNC"), brought this ERISA action to reverse the denial of his long-term disability benefits claim by Liberty Life Assurance Company of Boston ("Liberty"), the administrator for PNC's long-term disability plan. Presently before the Court are cross-motions for summary judgment from Plaintiff and PNC Financial Services Group, Inc. and Affiliates Long Term Disability Plan ("Defendant" or the "Plan"). For the reasons set forth below, the Court will DENY Defendant's motion and GRANT Plaintiff's motion in part.
I. Relevant Facts
In reviewing the administrative decision at issue, the Court limits itself to the facts in the Administrative Record ("AR").
Plaintiff underwent successful treatment for coronary artery disease ("CAD") in 2009 with heart catheterization and the placement of a stent. (AR 429) On June 3, 2011, Plaintiff visited his cardiologist Dr. Asoka Balaratna ("Dr. Balaratna") for follow-up regarding his CAD, hypertension, and dyslipidemia and complained during the visit of "chest fullness under situations of stress at work or at home with his father who had been sick recently." (Id.) Dr. Balaratna noted that Plaintiff presented as "stable from a cardiovascular standpoint" but that he and Plaintiff "would consider a stress test especially if his symptoms of chest discomfort were to become more typical or more frequent." (Id.) Plaintiff returned to work after this visit.
On August 17, 2011, Plaintiff "felt suddenly in distress" at work during lunch and thought he was "going to pass out." (AR 9, Phone Note 3) He went home early and visited his primary care physician Dr. Anthony R. Rodriguez ("Dr. Rodriguez") the following morning. (Id.) He was then hospitalized with a very low heart rate, initially thought to be caused by a problem related to his stent, though his EKG was normal. (Id.) His cardiologist Dr. Balaratna noted that on August 19, 2011, Plaintiff had "noticed increased fatigue over the past week and half." (AR 216)
Plaintiff wore a heart monitor for the next two weeks. (AR 9, Phone Note 3) When the monitor flagged ventricular tachycardia, Plaintiff was readmitted to the hospital on September 26, 2011, where doctors confirmed that his stent was operating fine and officially diagnosed his condition as nonsustained ventricular tachycardia ("NSVT"). (Id.) Based on this diagnosis, Plaintiff received the surgical installment of a pacemaker on October 6, 2011, and was placed on beta blockers to suppress his arrhythmia. (Id.)
Plaintiff's participation in the Plan began on July 1, 2011. (AR 13) Under the Plan, a participant qualifies as disabled during the first 24 months from the date benefits begin if the "disability makes [the participant] unable to perform the material or essential duties of [his] own occupation as it is normally performed in the national economy." (AR 488)
Plaintiff did not return to work after his pacemaker surgery, and he filed a claim for long-term disability benefits on December 13, 2011. (AR 36-49) Based on reports from vocational analyst Rhonda Randolph (AR 310-12) and consulting physician Dr. Donna Gallik (AR 313-21), Liberty determined that Plaintiff's job was sedentary and that its material or essential duties were within his functional capabilities. (AR 322-25) Ms. Randolph acknowledged that Plaintiff described his particular job as one that "would require driving, walking, and standing at multiple locations" but found that "[a]s defined in the national economy, this occupation requires work at a sedentary physical demand level, " meaning that even if Plaintiff could not do his particular job, he was "not disabled from performing [his] occupation with a different employer." (AR 323) To reach this conclusion, Ms. Randolph categorized Plaintiff's job as "Personnel Recruiter" within the occupation "Human Resources Specialist, O*Net Code 13-701.00." (AR 311) On February 2, 2012, Liberty denied Plaintiff's claim on the grounds that his condition did not meet the definition of disability under the Plan. (Id.)
Plaintiff appealed this denial, arguing that Liberty had mischaracterized his occupation (which Plaintiff had claimed was "Recruiting Manager") and understated its stress level by failing to account for his management responsibilities. (AR 332-33) In support of this appeal, Plaintiff provided two additional medical documents from Dr. Rodriguez dated January 31, 2012 (AR 334-41) and an O*Net job description for Human Resource Managers (AR 342-59).
On the first document, the Medical Source Statement of Ability to do Work-Related Activities (Physical), Dr. Rodriguez listed Plaintiff's diagnoses as "ventricular tachycardia & pacemaker"; identified his symptoms as "fatigue, shortness of breath [illegible] exertion"; and noted that Plaintiff should sit for no more than two hours a day and stand or walk for no more than one hour a day. (AR 334) On the second document, the Cardiac Residual Functional Capacity Questionnaire, Dr. Rodriguez noted the "significant role of stress" in yielding Plaintiff's shortness of breath and fatigue and marked Plaintiff as "[i]ncapable of even low stress' jobs'" because "[Plaintiff] cannot work a full day even at low stress." (AR 337) Liberty referred Plaintiff's appeal to its Appeals Unit on July 31, 2012. (AR 360-61)
On August 1, 3, and 23, 2012, Plaintiff provided additional reports in support of his appeal from Drs. Rodriguez and Balaratna, as well as his psychologist Dr. Jay Segal. (AR 362-69). Dr. Balaratna noted in his August 3, 2012, report that Plaintiff "was started on a Beta Blocker for the ventricular tachycardia, but developed significant side effects of fatigue due to bradycardia." (AR 363) The pacemaker did not improve the fatigue, and "[i]t was necessary to continue the Beta Blocker medication" despite the fatigue "to suppress his ventricular tachycardia." (Id.) Dr. Balaratna added that Plaintiff "was unable to continue working at his previous job due to the side effects of the Beta Blocker, Lopressor, with fatigue and the inability to concentrate on his job." (Id.) Dr. Rodriguez stated in his August 1, 2012, letter that Plaintiff's "type of occupation, which at a senior management position, entails a great deal of stress would be harmful to [Plaintiff's] health" and that "the stress of working in any senior or management position would create additional risks and additional harm to his health." (AR 364) In his August 23, 2012, letter, Dr. Segal stated that "[c]ontinued stress from any management position would be seriously deleterious to his overall health" and "[i]t is not in [Plaintiff's] best interests to return to a stressful management or any other work situation." (AR 366)
On September 24, 2012, Liberty requested more time to determine Plaintiff's appeal. (AR 370-72) On September 28, 2012, Liberty stated that Liberty had "completed our review and determined that additional information is needed." (AR 375). Without rendering an explicit decision on the appeal, Liberty ordered further investigation on Plaintiff's claim. (Id.) This additional investigation involved a second evaluation of Plaintiff's occupation by Bernadette S. Cook (AR 382-86) and a second review of his medical records by Dr. Robert Morrison (AR 391-95). On November 15, 2012, Liberty denied Plaintiff's claim a second time, again on the grounds that Plaintiff did not qualify for benefits under the definition of disability but also on the additional new grounds that even if he did qualify, Plaintiff's disability was a pre-existing condition that the Plan did not cover. (AR 396-409)
The Plan defines a pre-existing condition as one that "results from an injury or sickness that was diagnosed, or for which you have received medical treatment, consultation or care, or have taken a prescribed medication, within three months prior to the LTD coverage effective date." (AR 495) The relevant time period to evaluate whether Plaintiff had a pre-existing condition therefore ran from April 1, 2011, to July 1, 2011.
Plaintiff appealed this second determination on April 17, 2013 (AR 437), and Liberty denied the appeal on July 25, 2013 (AR 474-83). Plaintiff brought this instant suit against Liberty (he later amended the Complaint to name the Plan as Defendant) alleging only one count pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), which empowers a plan participant to bring a civil action to "recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. 1132(a)(1)(B).
Plaintiff now seeks summary judgment on the grounds that Liberty's decision to deny him benefits for failure to qualify as disabled was arbitrary and capricious, as evidenced by various procedural irregularities, including Liberty's unexpected remand of Plaintiff's appeal for a second determination; addition of new grounds for denial during that second determination; "cherry-picking" among its various consulting physicians' medical reports for favorable findings; and refusal to appropriately characterize Plaintiff's occupation. (Pl.'s Br. in Support of Mot. Summ. J. ("PMSJ"), Dkt. No. 48-1)
Defendant opposes Plaintiff's motion and brings its own cross-motion for summary judgment arguing that the arbitrary and capricious standard of review is highly deferential to an administrator's decision and that the denial of benefits here was reasonable based on the evidence. (Def.'s Br. in Support of its Mot. Summ. J. ("DMSJ"), Dkt. No. 49-1 at 22-25) Defendant points to medical and vocational expert reports in the AR that it argues support the reasonableness of Liberty's determination that Plaintiff was not disabled as defined by the Plan (id. at 13-15) and even if he were, that his disability was a pre-existing condition not covered by the Plan (id. at 25-29). In addition, Defendant denies that it engaged in any procedural irregularities. (Def.'s Opp. to PMSJ, Dkt. No. 72 at 27-30)
For the reasons set forth below, the Court will DENY Defendant's motion for summary judgment on the grounds that Liberty engaged in procedural irregularities that render its denial of Plaintiff's claim arbitrary and capricious. The Court will GRANT Plaintiff's motion for summary judgment in part and will REMAND the matter in part to Liberty for re-evaluation with reasonable discretion.
II. Legal Standard
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).
In deciding a motion for summary judgment, the court must construe all facts and inferences in the light most favorable to the nonmoving party. See Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1304 (Fed. Cir. 1999); Boyle v. Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears the burden of establishing that no genuine issue of material fact remains. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Novartis Corp. v. Ben Venue Labs., Inc., 271 F.3d 1043, 1046 (Fed Cir. 2001). A fact is material only if it will affect the outcome of a lawsuit under the applicable law, and a dispute of a material fact is genuine if the evidence is such that a reasonable fact finder could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 249, 252 (1986). The court's role in deciding the merits of a summary judgment motion is to determine whether there is a genuine issue for trial, not to determine the credibility of the evidence or the truth of the matter. Anderson, 477 U.S. at 249.
The insurance policy at issue is covered by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Plaintiff has filed suit to recover benefits pursuant to Section 502(a)(1)(B) and (g)(1) of ERISA, 29 U.S.C. §1132(a)(1)(B) and (g)(1), and this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331.
IV. ERISA Standard of Review
Where a plan gives an administrator discretionary authority to determine eligibility for benefits and construe the terms of the plan, federal courts must review an administrator's denial of an ERISA claim ...