Hung v. Guardian Life Insurance ( 2002 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MEI-JONG HUNG, 
Plaintiff-Appellant,
v.
 No. 01-1696
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA,
Defendant-Appellee.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Frederic N. Smalkin, Chief District Judge.
(CA-99-104-S)
Argued: December 3, 2001
Decided: January 28, 2002
Before WILKINSON, Chief Judge, NIEMEYER, Circuit Judge,
and Joseph R. GOODWIN, United States District Judge for the
Southern District of West Virginia, sitting by designation.
Reversed and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: Mark John Hardcastle, BLAIR, HARDCASTLE &
ELLIS, P.A., Columbia, Maryland, for Appellant. Bryan David Bol-
ton, FUNK & BOLTON, P.A., Baltimore, Maryland, for Appellee.
ON BRIEF: Terry B. Blair, BLAIR, HARDCASTLE & ELLIS, P.A.,
Columbia, Maryland, for Appellant. Eric B. Myers, FUNK & BOL-
TON, P.A., Baltimore, Maryland, for Appellee.
2 HUNG v. GUARDIAN LIFE INSURANCE
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
When Mrs. Hung’s husband died in an accident, she filed a claim
under his accidental death policy with Guardian Life Insurance
(Guardian). Guardian reviewed the file and denied coverage. Mrs.
Hung sought review, and Guardian again denied her claim. On judi-
cial review, the district court granted summary judgment to Guardian.
Mrs. Hung appealed that decision to this court. We reversed and
remanded, concluding that the plan administrator abused her discre-
tion by failing to submit an adequate record to the reviewing physi-
cian. See Hung v. Guardian Life Ins. Co. of Am., 229 F.3d 1142 (4th
Cir. 2000) (per curiam) (table decision), No. 99-2117, 2000 U.S. App.
LEXIS 18970, at *2. The district court remanded to Guardian, which
again denied Mrs. Hung’s claim. She appealed to the district court,
which again granted summary judgment to Guardian. Mrs. Hung now
appeals. For the reasons that follow, we reverse.
I.
Because we discussed the underlying facts in our prior opinion, we
address here only those relevant to our present inquiry. See generally
id. After finding her husband unconscious on the floor, Mrs. Hung
says that she told the 911 operator and an attending physician that Dr.
Hung had suffered from occasional headaches in the past, which were
easily relieved with Ibuprofen. The resultant medical records indi-
cated, however, that he had suffered from headaches in the two to
four days before his accident. A CT scan revealed that Dr. Hung had
suffered a skull fracture and was bleeding internally. His skull injuries
led to a massive stroke, and he died on January 11, 1998.
In investigating Mrs. Hung’s accidental death benefits claim,
Guardian’s doctor, Dr. Dennison, reviewed Dr. Hung’s file. She con-
cluded that hypertension caused some of the brain hemorrhages found
HUNG v. GUARDIAN LIFE INSURANCE 3
on the CT scan; that these caused him to loose consciousness and fall;
that the fall fractured his skull; that the fracture caused more intra-
cranial bleeding; and that this bleeding led to the stroke that ulti-
mately killed him. Based on this opinion, Guardian denied Mrs.
Hung’s accidental death benefits claim.1
Mrs. Hung requested that Guardian reconsider its denial and pro-
vided Guardian with, among other things, affidavits from herself, her
daughter, and two doctors. The Hungs’ affidavits included their con-
clusion that Dr. Hung fell from a ladder in his basement while wear-
ing flip-flop sandals, as well as Mrs. Hung’s assertion that she told
the 911 operator and an attending physician that her husband had
sometimes experienced headaches that were relieved with Ibuprofen.
In their affidavits, Drs. Schindler and Mandava averred that hyperten-
sion could not have caused any of the brain hemorrhages found on the
CT scan.
In considering Mrs. Hung’s appeal, Dr. Dennison reviewed the
medical file again and the new information submitted by Mrs. Hung.
She concluded that Dr. Hung’s hypertension was the primary cause
of the fall, but recommended that Guardian seek an outside medical
review.
Guardian requested that Dr. Schuster, a neuroradiologist, review
the medical records. Guardian, however, failed to provide Dr.
Schuster with the additional materials submitted by Mrs. Hung. With-
out these materials, Dr. Schuster concluded that hypertension led to
brain hemorrhaging, which in turn caused Dr. Hung to loose con-
sciousness. Dr. Schuster’s chain of causation next linked Dr. Hung’s
fall and consequent skull fracture. He then concluded that the fracture
caused more intracranial bleeding and that this bleeding eventually
caused a fatal stroke.
On November 30, 1998, Guardian denied Mrs. Hung’s appeal
based primarily on Dr. Schuster’s opinion. Mrs. Hung filed suit in
1
It is undisputed that the accidental death policy did not cover acci-
dents precipitated by an underlying medical condition. The policy pro-
vides that "[t]he loss must be the direct result of an accident which
occurs while you are insured, Independent (sic) of all other causes."
4 HUNG v. GUARDIAN LIFE INSURANCE
Maryland state court. Guardian removed the action to federal court
under the Employment Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. § 1001 et seq. There, the district court concluded
that the administrator had not abused her discretion in denying the
claim, and granted Guardian’s motion for summary judgment. On
appeal, we reversed because Guardian principally relied on a medical
opinion that was based on incomplete information. See Hung, 2000
U.S. App. LEXIS 18970, at *14. We found that the record contained
inadequate information to support Guardian’s decision under the
modified abuse of discretion standard. We remanded the case to the
district court, which in turn remanded the case to Guardian for a new
determination based on a complete record, including the information
submitted by Mrs. Hung.2
Upon review of all materials, Dr. Schuster found a conflict between
the affidavits and the medical records as to whether Dr. Hung had
been suffering from headaches shortly before the accident. Because
of this conflict, Dr. Schuster stated that he could not determine
2
When the case was reopened, Mrs. Hung submitted additional infor-
mation. Thus, on remand, Dr. Schuster had the following evidence before
him in addition to that which Guardian had previously withheld from his
consideration:
1. Another affidavit from Mrs. Hung detailing indications of
good health (travel plans, high spirits, holiday party atten-
dance, article drafting) and maintaining that she was the sole
source of notations in the medical record regarding a history
of headaches, and that she never said that her husband had
experienced headaches two to four days prior to his fall.
2. An itinerary for the Hungs’ planned trip to China, which was
to have begun only a few days after the fall.
3. A draft article composed by Dr. Hung a few hours prior to
his fall.
4. A Christmas party photograph of Dr. Hung taken shortly
before his fall.
5. The report of Dr. Torey C. Brown, an expert retained by
Mrs. Hung, concluding that the fall had not been caused by
hypertension, and noting that initial mistakes in the patient’s
history are often repeated in emergency care situations.
HUNG v. GUARDIAN LIFE INSURANCE 5
whether the findings on the CT taken the day of the fall were due to
trauma or an underlying condition. That is, in view of the evidence
previously withheld from him — that Dr. Hung may not have suffered
headaches just prior to his fall — Dr. Schuster could no longer say
that trauma was not the likely cause of the hemorrhages.
Dissatisfied with this result, Guardian asked Dr. Schuster whether
his analysis would be different if he assumed that Dr. Hung had in
fact suffered headaches prior to his fall. Dr. Schuster replied that,
assuming
the patient did have a history of headaches in the days prior
to [his fall], there is a reasonable probability that the
patient’s findings on the initial CT are due to an underlying
medical condition that led to a brain hemorrhage than the
possibility that all the findings on the CT scan are totally
due to a traumatic fall.
After receiving this opinion, Guardian affirmed its November 30,
1998 denial of benefits. Guardian explained that making a determina-
tion on Mrs. Hung’s claim required it to resolve the conflict between
Dr. Hung’s medical records and Mrs. Hung’s affidavits.
Mrs. Hung filed a civil action regarding this denial to the district
court. After the court directed the filing of dispositive motions, Mrs.
Hung filed a cross-motion for summary judgment and a motion enti-
tled "Motion to Amend Ad Damnum Clause of Second Amended
Complaint," which alleged that her husband’s annual earnings were
$332,043, rather than $169,000 as previously alleged. The district
court granted Guardian’s motion for summary judgment and denied
both of Mrs. Hung’s motions. She now appeals.
II.
The district court’s grant of summary judgment is reviewed de
novo, applying the same standards that the district court employed.
See Ellis v. Metro Life Ins. Co., 126 F.3d 228, 232 (4th Cir. 1997).
ERISA plans, as contractual documents, are reviewed de novo by the
court to determine the degree of discretion afforded to the plan
6 HUNG v. GUARDIAN LIFE INSURANCE
administrator. See Booth v. Wal-Mart Stores, Inc. Assocs. Health &
Welfare Plan, 201 F.3d 335, 341 (4th Cir. 2000). When the plan con-
fers discretion on a fiduciary and the fiduciary acts within the scope
of that conferred discretion, the principles of trust law apply, and a
fiduciary’s "exercise of power is not subject to control by the court
except to prevent an abuse by the trustee of his discretion." Id. (citing
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989)). It
is undisputed here that the Plan confers discretion. Thus, the fidu-
ciary’s "discretionary decision will not be disturbed if reasonable,
even if the court itself would have reached a different conclusion."
Booth, 201 F.3d at 341; Haley v. Paul Revere Life Ins. Co., 77 F.3d
84, 89 (4th Cir. 1996). In general, "a decision is reasonable if it is the
result of a deliberate, principled reasoning process and if it is sup-
ported by substantial evidence." Ellis, 126 F.3d at 233 (citations omit-
ted). As discussed in our previous review of this case, however,
because Guardian was acting under a conflict of interest, the court
must determine whether its decision is consistent with the decision of
a fiduciary acting free of a conflict of interest. Bedrick v. Travelers
Ins. Co., 93 F.3d 149, 152 (4th Cir. 1996) (citing Bruch, 489 U.S.
101, 109 (1989)).
III.
A. Requesting Dr. Schuster to Reconsider His Opinion
Upon remand, Guardian asked Dr. Schuster to ignore Mrs. Hung’s
evidence regarding headaches. The district court characterized this
instruction as a credibility determination within the plan administra-
tor’s discretionary powers. We disagree.
While a plan administrator may resolve conflicts between medical
reports, she may not withhold or edit inconsistencies within a
patient’s medical history to obtain a definitive medical report. Courts
have repeatedly held that a claim administrator’s resolution between
competing medical opinions is not an abuse of discretion so long as
the decision is reasonable. See, e.g., Booth, 201 F.3d at 345-46 (hold-
ing that the plan administrator did not abuse her discretion by denying
benefits when faced with conflicting medical reports); Elliot, 190
F.3d at 606 (same); Sheppard & Enoch Pratt Hosp., Inc. v. Travelers
Ins. Co., 32 F.3d 120, 125 (4th Cir. 1994) (same). But this case
HUNG v. GUARDIAN LIFE INSURANCE 7
involves a conflict concerning a claimant’s medical history, not a sim-
ple conflict in the proffered medical evidence.
This court previously found that shielding Dr. Schuster from Mrs.
Hung’s evidence rendered Guardian’s conclusions based on his opin-
ion unreliable. See Hung, 2000 U.S. App. LEXIS 18970, at *13-15.
The new opinion is no more reliable because Dr. Schuster was
shielded by hypothesis rather than ignorance.
B. Guardian’s Ultimate Decision
Under the modified abuse of discretion standard, the court must
determine, "based on its review of the administrative record before
the fiduciary at the time of its decision making, whether the adminis-
trator’s decision is consistent with a decision that might have been
made by a fiduciary acting free of the interests which conflict with
those of the fiduciary." See Ellis, 126 F.3d at 233. The greater the
incentive for the administrator or fiduciary to benefit himself by a cer-
tain interpretation of benefit eligibility, "the more objectively reason-
able the administrator or fiduciary’s decision must be and the more
substantial the evidence must be to support it." Id.Guardian cites Booth and Ellis as examples of this court refusing
to disturb a conflicted administrator’s resolution of conflicting evi-
dence because there was substantial evidence to support the ultimate
decision. "Substantial evidence," however, is not simply a mantra.
The evidence in those cases was considerably greater than what is
before the court in the instant case.
In Booth, the claimant sought reimbursement from her employee
benefit plan for coronary angioplasty procedures. 201 F.3d at 338.
The plan administrator denied her claim after determining that her
condition was directly or indirectly related to a pre-existing condition.
Id. Booth appealed, asserting that she had not previously been treated
for heart disease. Id. According to the reviewing cardiologist, Booth’s
medical records revealed that she had been diagnosed with various
forms of heart disease, and that she had been given medication for
heart disease prior to the exclusionary period. Id. at 339. In that case,
we found the evidence substantial enough to support the plan admin-
8 HUNG v. GUARDIAN LIFE INSURANCE
istrator’s decision to overcome her general physician’s statement to
the contrary. Id. at 340.
In Ellis, the claimant sought total disability benefits for a mysteri-
ous set of symptoms she claimed prevented her from working. 126
F.3d at 230. Her experts came to conflicting conclusions about the
cause of her symptoms, and none of the experts came to a conclusive
diagnosis. Id. at 230-31. Three independent experts, however, all con-
cluded that even if the claimant suffered from all the symptoms of
which she complained, the symptoms would not have prevented her
from working. Id. at 231. Given the lack of evidence that anything
prevented the claimant from working, we found that the administrator
had substantial evidence to support his denial of her claim. Id. at 234.
This case differs from Booth and Ellis. Doctors Schindler, Man-
dava and Brown were provided with all the information and con-
cluded that hypertension did not lead to the fall. Guardian’s physician,
Dr. Dennison, concluded that hypertension likely caused the fall, but
recommended that Guardian consult another physician. When that
physician, Dr. Schuster, reviewed the case without the benefit of see-
ing Mrs. Hung’s evidence, he agreed with Dr. Dennison. However,
once Dr. Schuster saw Mrs. Hung’s evidence he changed his opinion.
He advised that he could no longer conclude that hypertension caused
the fall. Thus, because Guardian based its denial principally on Dr.
Schuster’s opinion, and because Dr. Schuster, when provided with all
the evidence, could not say that an underlying condition led to the
fall, we find that Guardian’s decision was not supported by substan-
tial evidence. See Ellis, 126 F.3d at 233; see also Hung, 2000 U.S.
App. LEXIS 18970, at *13-15.
Moreover, Guardian’s decision cannot be considered objectively
reasonable, as required under the modified abuse of discretion stan-
dard. See id. Guardian’s decision was based on the mere speculation
that the decedent may have had headaches, which may have indicated
hypertension, which may have caused him to lose consciousness and
fall. This evidence cannot overcome the common-sense notion that a
man who falls while wearing flip-flop sandals and balancing a six-
foot ladder on uneven steps has simply had an accident.
Finally, Mrs. Hung argues that the district court should have
allowed her to amend her ad damnum clause. The district court denied
HUNG v. GUARDIAN LIFE INSURANCE 9
this motion as moot because it found she was not entitled to benefits.
Upon remand, the district court should reconsider this motion. Mrs.
Hung’s other assignments of error are without merit.
IV.
We find that the district court erred in holding that Guardian did
not abuse its discretion in denying Mrs. Hung benefits. Since there are
no remaining disputes as to the terms of the Plan, and since we previ-
ously remanded this case for essentially the same reason, we conclude
that Mrs. Hung is entitled to accidental benefits allowable under the
Plan. We reverse the district court’s grant of summary judgment for
Guardian, denial of summary judgment for Mrs. Hung and denial of
her motion to amend, and remand to the district court with instruc-
tions to compute the award, enter judgment for Mrs. Hung, and deter-
mine appropriate attorney’s fees and costs, if any.
REVERSED AND REMANDED