McKeldin v. Reliance Standard Life Insurance , 254 F. App'x 964 ( 2007 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1743
GENEESE MCKELDIN,
Plaintiff - Appellant,
versus
RELIANCE STANDARD LIFE INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. J. Frederick Motz, District Judge.
(1:05-cv-02563-JFM)
Submitted: September 17, 2007 Decided: October 17, 2007
Before SHEDD, Circuit Judge, HAMILTON, Senior Circuit Judge, and
Samuel G. WILSON, United States District Judge for the Western
District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
Eric Wexler, MCCHESNEY & DALE, P.C., Bowie, Maryland, for
Appellant. Joshua Bachrach, RAWLE & HENDERSON, L.L.P.,
Philadelphia, Pennsylvania, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Plaintiff Geneese McKeldin (McKeldin), a registered nurse, has
brought this civil action against Reliance Standard Life Insurance
Company (Reliance), claiming wrongful denial of long-term
disability benefits in violation of the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. The
district court granted Reliance’s motion for summary judgment. We
affirm on the reasoning of the district court.
I.
Reliance is the insurer and claims review fiduciary of the
group long-term disability plan (the Plan) under which McKeldin is
seeking benefits as a plan participant. The parties agree the Plan
is governed by ERISA.
On January 4, 2001, McKeldin was hospitalized with complaints
of left calf pain and recurrent deep vein thrombosis (DVT), a
problem that McKeldin had experienced for approximately twenty
years. The hospital admission report also noted that McKeldin “has
a history of fibromyalgia and fatigue and has been on
antidepressants and anticipated work leave because of this.” (J.A.
776).
At the time of McKeldin’s hospitalization, she worked for Marc
L. Chaiken, M.D., P.A., as a nurse manager, which position required
her to be able to stand for the entire eight-hour work day.
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Standing for this long caused McKeldin to suffer pain and swelling
in her left calf. Following her hospitalization, McKeldin did not
work for the next three months. In addition to her physical
ailments, McKeldin suffered from depression.
On April 3, 2001, McKeldin applied for long-term disability
benefits under the Plan’s total disability provision, claiming that
she was incapable of working due to DVT, as well as fibromyalgia
and chronic fatigue. Relevant to the present appeal, the Plan
provides long-term disability benefits when a claimant can
demonstrate total disability, defined as follows:
“Totally Disabled” and “Total Disability” mean, that as
a result of an Injury or Sickness:
(1) during the Elimination Period, an Insured
cannot perform each and every material duty of
his/her regular occupation; and
(2) for the first 36 months for which a Monthly
Benefit is payable, an Insured cannot perform the
material duties of his/her regular occupation;
(a) “Partially Disabled” and “Partial
Disability” mean that as a result of an
Injury or Sickness an Insured is capable
of performing the material duties of
his/her regular occupation on a part-time
basis or some of the material duties on a
full-time basis. An Insured who is
Partially Disabled will be considered
Totally Disabled, except during the
Elimination Period; and
(3) after a Monthly Benefit has been paid for 36
months, an Insured cannot perform each and every
material duty of any occupation. Any occupation is
one that the Insured’s education, training or
experience will reasonably allow.
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(J.A. 475).
Based upon the information submitted, Reliance approved
McKeldin’s application for long-term disability benefits and began
paying such benefits on April 5, 2001. Of relevance on appeal,
Reliance paid McKeldin long-term disability benefits for thirty-six
months. The record indicates that for a large portion of this
time, McKeldin worked two part-time jobs. One job required her to
administer flu shots to hospital employees. The other job required
her to perform victim sexual-assault examinations as a forensic
nurse. For both jobs, McKeldin stated that she could only work
three to four hours at a time and that each shift required her to
recuperate for between eighteen and thirty-six hours.
Reliance notified McKeldin that she did not qualify for long-
term disability benefits under the Plan beyond thirty-six months
because she could perform some material duties of occupations that
her education, training or experience would reasonably allow.
Reliance also asserted that benefits were properly discontinued
under a twenty-four month limitation on the receipt of long-term
disability benefits for total disability caused by or contributed
to by mental disorders.
After exhausting her administrative remedies, McKeldin
initiated this ERISA action, pursuant to 29 U.S.C. § 1132(a), to
challenge Reliance’s denial of her claim for long-term disability
benefits beyond thirty-six months. After Reliance moved for
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summary judgment, McKeldin moved to take discovery in addition to
the administrative record and moved for summary judgment herself.
The district court subsequently granted Reliance’s motion for
summary judgment, denied McKeldin’s motion for summary judgment,
and denied her motion to take additional discovery on the ground
that case law required that judicial review of Reliance’s claim
denial is limited to the administrative record.
In its Memorandum Opinion, the district court noted that
Reliance had asserted two independent bases for its decision to
deny McKeldin long-term disability benefits beyond thirty-six
months: (1) “that despite her disability she is capable of
performing some of the material duties of other suitable
occupations,” and (2) “that mental disorders have contributed to
her disability.” (J.A. 115). Because the district court ruled in
favor of Reliance with respect to the first basis, it expressly did
not address the second basis for its denial.
The crux of the district court’s analysis in ruling in favor
of Reliance is that when the phrase “each and every,” as found in
subparagraph three of the Plan’s definition of “Totally Disabled,”
is read in conjunction with the other definitions of “Totally
Disabled” in the two preceding subparagraphs, “it becomes
unmistakably clear that,” (J.A. 116), the phrase “each and every,”
as found in subparagraph three, means that an insured would be
considered totally disabled only if she was unable to perform all
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material duties of any occupation that the insured’s education,
training or experience will reasonably allow. In reaching this
holding, the district court relied heavily upon our decision in
Gallagher v. Reliance Standard Life Ins. Co., 305 F.3d 264 (4th
Cir. 2002). In Gallagher, we read language materially
indistinguishable from subparagraph three’s definition of totally
disabled as unambiguously providing that an employee is totally
disabled if he is unable to perform all duties of his regular
occupation. Id. at 270.
The district court went on to hold that Reliance did not abuse
its discretion in applying this plain language reading of the Plan
to deny McKeldin long-term disability benefits beyond thirty-six
months. Specifically, the district court held that even putting
aside the physician’s report by Dr. William Hauptman favorable to
Reliance, which report McKeldin challenged as the biased report of
a hired gun, other evidence in the administrative record including
two other physician reports, the report of a vocational expert, and
the denial of McKeldin’s claim for disability benefits from the
Social Security Administration, provided a credible and proper
basis for Reliance’s conclusion that McKeldin was capable of
performing at least one of the material duties of a suitable
occupation. Notably, the district court expressly observed that
McKeldin never even attempted to refute the respective conclusions
of Drs. Robert Frieman and Scott Brown, the Social Security
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Administration, and the vocational expert that she was capable of
performing at least one of the material duties of a suitable
occupation.
McKeldin subsequently moved to amend the judgment on the basis
that the district court allegedly misread the relevant Plan
language. The district court denied the motion and this timely
appeal followed.
II.
We review the district court’s grant of summary judgment in
favor of Reliance de novo, applying the same standards as the
district court employed. Evans v. Metropolitan Life Ins. Co., 358
F.3d 307, 310 (4th Cir. 2004). Because the Plan gives Reliance
discretion to determine McKeldin’s eligibility for Plan benefits,
and since Reliance is also the Plan’s insurer, we review Reliance’s
decision to deny McKeldin long-term disability benefits beyond
thirty-six months under the modified abuse of discretion standard.
Id. at 311. Under the modified abuse of discretion standard, the
denial of benefits will be upheld if the decision is reasonable,
Carolina Care Plan Inc. v. McKenzie, 467 F.3d 383, 387 (4th Cir.
2006), and Reliance’s conflict of interest “must be weighed as a
factor in determining whether an abuse of discretion occurred.”
Evans, 358 F.3d 311.
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Moreover, when, as here, an ERISA plan vests discretion in the
decision-maker, who also insures the plan, reasonable exercise of
that discretion requires that the decision-maker/insurer “construe
plan ambiguities against the party who drafted the plan.” Carolina
Care Plan, Inc. v. McKenzie, 467 F.3d 383, 389 (4th Cir. 2006).
The automatic construction of ambiguous language against the
drafter is known as the doctrine of contra proferentem. Id. In
Carolina Care Plan, we carefully explained that application of the
doctrine of contra proferentem in the ERISA plan context does not
deprive a decision-maker/insurer of its discretion under an ERISA
plan. Id. Rather, we explained, when a decision-maker/insurer
“applies un ambiguous plan terms to the facts of a particular
claim, courts will defer to every judgment the [decision-
maker/insurer] makes that is supported by substantial evidence and
a reasoned decisionmaking process.” Id.
III.
The Plan’s definition of “Totally Disabled” is at the heart of
the dispute in this case. McKeldin argues that the language
stating “an Insured cannot perform each and every material duty of
any occupation” in subparagraph three of the Plan’s definition of
“Totally Disabled” is ambiguous, and therefore, should be construed
in her favor. Reliance defends the district court’s plain-language
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reading of the language at issue in subparagraph three by relying
on our decision in Gallagher, 305 F.3d at 270.
We hold the district court correctly determined that the
language stating “an Insured cannot perform each and every material
duty of any occupation” in subparagraph three of the Plan’s
definition of “Totally Disabled” unambiguously means that a Plan
participant does not qualify for long-term disability benefits
beyond thirty-six months unless such participant is unable to
perform all of the material duties of any occupation that such
participant’s education, training or experience will reasonably
allow. In so holding, we fully agree with the district court’s
plain-language analysis of the Plan language at issue. In the
words of the district court:
While partial disability is sufficient to establish
eligibility for receipt of total disability benefits
during the 36-month period, it does not suffice to
qualify an insured as “totally disabled” as defined in
subparagraph one for the Elimination Period. Thus, a
fortiori, the phrase “each and every,” at least as used
in subparagraph one, must mean that an insured who can
perform one or more of the material duties of her job,
but not all, is not “totally disabled.”
Because “it is logical to assume that the words were
intended to convey the same meaning both times they were
used,” the court adopts the same interpretation of “each
and every” for subparagraph three.
(J.A. 117-18) (internal quotation marks, citations, and alteration
marks omitted). In short, when the language at issue in
subparagraph three is read in context with the language of
subparagraphs one and two, the language at issue in subparagraph
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three is only reasonably susceptible of the district court’s
interpretation.
Reliance is also correct that our decision in Gallagher
supports the district court’s plain-language analysis. In
Gallagher, we read language identical to subparagraph three’s
definition of totally disabled as unambiguously providing that an
employee is totally disabled if he is unable to perform all the
duties of his regular occupation. Id. at 270. This reading is
wholly consistent with reading the “each and every material duty”
language of subparagraph three as unambiguously providing that in
order to qualify for long-term disability benefits beyond the
thirty-six month period, the plan participant applying for such
benefits must be unable to perform all of the material duties of
any occupation that such plan participant’s education, training or
experience will reasonably allow.
We also agree with the district court’s holding that even
putting aside Dr. Hauptman’s report favorable to Reliance, other
evidence in the administrative record including two other physician
reports, the report of a vocational expert, and the denial of
McKeldin’s claim for disability benefits from the Social Security
Administration, provided a credible and proper basis for Reliance’s
conclusion that McKeldin was capable of performing at least one of
the material duties of a suitable occupation. For example, the
record contains the assessment of a vocational expert who concluded
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that McKeldin could perform some of the material duties of various
occupations that matched her education and training, for example,
Holter Scanning Technician and Optometric Assistant, and that she
could perform all of the material duties of a Cardiac Monitor
Technician. Notably, McKeldin points us to nothing in the record
which contradicts these conclusions of the vocational expert
despite the fact that she bears the burden of proof. See
Gallagher, 305 F.3d at 270 (ERISA plan participant bears burden of
proof that he qualifies for long-term disability benefits).
In sum, because substantial evidence supports Reliance’s
denial of McKeldin’s claim for long-term disability benefits based
upon its straightforward application of the unambiguous terms of
the Plan, we affirm on the reasoning of the district court.1
1
Given our disposition, we do not reach Reliance’s alternative
argument that, even if the language at issue in subparagraph three
is ambiguous, it still wins because the Plan expressly gave it the
discretionary authority to resolve ambiguities in the Plan.
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We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and oral argument would not aid the decisional process.2
AFFIRMED
2
Finally, we note that McKeldin argues the district court
committed reversible error by denying her request for discovery of
evidence of Reliance’s conduct in handling her claim that is not in
the claim file. She speculates that such evidence has the
potential to support her allegation that Reliance’s denial of her
claim for long-term disability benefits beyond thirty-six months
was simply the result of its conflict of interest. Her argument is
mooted by the fact that the district court’s analysis already took
into account Reliance’s conflict of interest as the Plan’s
decision-maker/insurer.
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