Dennis Siegel v. Connecticut General Life Ins. , 702 F.3d 1044 ( 2013 )

United States Court of Appeals
For the Eighth Circuit
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No. 12-1897
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Dennis Siegel
lllllllllllllllllllll Plaintiff - Appellant
v.
Connecticut General Life Insurance Company; Group Long Term Disability for
Salaried Employees of Lockheed Martin Corporation
lllllllllllllllllllll Defendants - Appellees
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Appeal from United States District Court
for the Southern District of Iowa - Davenport
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Submitted: November 14, 2012
Filed: January 2, 2013
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Before MURPHY, BENTON, and SHEPHERD, Circuit Judges.
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MURPHY, Circuit Judge.
Dennis Siegel brought this action for judicial review after Connecticut General
Life Insurance Company terminated his disability benefits in 2007. The district court1
1
The Honorable Thomas J. Shields, Chief United States Magistrate Judge for
the Southern District of Iowa, presiding by consent of the parties pursuant to 28
denied discovery and granted judgment to Connecticut General after concluding that
it had not abused its discretion in terminating Siegel's benefits. Siegel appeals, and
we affirm.
Siegel worked as a software developer for Lockheed Martin Corporation
(previously Martin Marietta Corporation). Lockheed had a disability benefit plan
through Connecticut General which provided long term benefits to disabled
employees. Under the 1994 policy that governed the plan, an employee would
receive benefits if he became unable to perform the essential duties of his occupation
due to an illness or injury. If the employee's disability was due to mental illness, he
would stop receiving benefits after the first two years unless he was "totally
disabled." That was defined as being unable to perform the essential duties of any
occupation for which the employee was or could reasonably become qualified. A
totally disabled employee was entitled to collect benefits indefinitely. If at any time
an employee was found no longer eligible, he would stop receiving benefits.
According to the agreement between Lockheed and Connecticut General, changes to
the terms of the plan could be made only through an amendment signed by Lockheed
and an executive of Connecticut General.
Siegel first applied for benefits in 1995, stating that he had developed severe
depression in 1993 which had required him to take leaves of absence from Lockheed
in 1993 and 1995. Siegel also submitted a claim form filled out by his psychiatrist
indicating that his client had severe depression. Connecticut General approved
Siegel's claim in October 1995. In November 1997 it reapproved his claim for
continued benefits, concluding that he was incapable of employment in "any
occupation." Connecticut General requested and received periodic updates from
Siegel's doctors regarding his condition.
U.S.C. § 636(c).
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In 2002 Lockheed and Connecticut General executed an agreement entitled
"Employee Welfare Benefit Plan Appointment of Claim Fiduciary" (claim fiduciary
appointment). The agreement stated that Connecticut General's sister company Life
Insurance Company of America (LINA) would be appointed as "claim fiduciary" and
would have responsibility for adjudicating all claims and appeals for benefits under
the Lockheed plan. LINA was expressly given authority "in its discretion" to
"interpret the terms of the plan" and "decide questions of eligibility." Lockheed
advised plan beneficiaries in a summary plan description in 2005 that its insurance
carrier would have "full discretionary authority to interpret and construe the terms of
the Plan [and] to decide questions related to the payment of benefits."
Siegel sent a letter to LINA in 2006 asking whether he could obtain part time
employment without losing his disability benefits. Siegel described his family's
tightening budget and asked "the number of hours [he] could potentially work and/or
the amount of income allowed." LINA informed Siegel of the relevant provisions of
the plan which allowed totally disabled beneficiaries to pursue "rehabilitative work"
for a limited time.
LINA opened an investigation into Siegel's continued eligibility and requested
that he complete a questionnaire about his daily activities. Siegel reported that he
used a computer daily, watched television for five to six hours, did laundry, attended
religious services, volunteered two days a week for one hour, and could drive a
"couple hundred miles with breaks." Siegel explained that he was unable to return
to work due to a "lack of concentration and inability to plan and follow through."
LINA then sought records and questionnaires from each of Siegel's physicians
related to his ability to work. Dr. James Beeghly, Siegel's psychiatrist, indicated that
he suffered from "[p]ersistent and unremitting depressed mood and pessimistic
outlook," "poor ability to focus," "poor ability to maintain pace," and "poor ability to
apply self-discipline." Dr. Beeghly reported that Siegel's memory, thought process,
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and judgment were normal. In one of his office notes obtained by LINA, Dr. Beeghly
expressed frustration that Siegel had not been seeing a therapist as he had
recommended. Siegel's other physicians reported only minor conditions and either
declined to perform a disability assessment or did not report that he was disabled.
LINA informed Siegel in September 2007 that his benefits would be
terminated, explaining that it had concluded he was no longer incapable of
employment. Siegel was invited to provide additional medical opinions and
supporting documentation if he disagreed with LINA's conclusion. Siegel responded
with additional documentation in March 2008. A form filled out by his primary care
physician indicated that Siegel was disabled, but it did not give any further
information as to his medical history, diagnosis, or treatment. Several sections were
left blank. A report by a neuropsychologist who had examined Siegel concluded that
he likely had "relatively severe, presumably treatment-resistant depression" but that
there was "no evidence for neuropsychologically based intellectual or memory
impairment."
Two experts retained by LINA conducted an independent review of Siegel's
file. After reviewing Siegel's medical documentation, psychologist Dr. Nick
DeFilippis concluded that he retained several functional capabilities. These included
"ability to focus and concentrate," "higher level executive functioning,"2 and social
skills. Based on Dr. DeFilippis' findings, vocational rehabilitation specialist Ginny
Schmidt identified three entry level occupations in which Siegel could work: repair
order clerk, production clerk, and mail sorter. LINA informed Siegel in September
2
Executive function "describes a set of cognitive abilities that control and
regulate other abilities and behaviors," including "the ability to initiate and stop
actions, to monitor and change behavior as needed, and to plan future behavior when
faced with novel tasks and situations." 1 The Gale Encyclopedia of Mental Health
592 (Kristen Key ed., 3d ed. 2012).
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2008 that after reviewing his entire file, it had concluded he was capable of
employment and therefore no longer disabled.
Siegel filed an administrative appeal with LINA in June 2009. Siegel
submitted additional reports from his psychiatrist Dr. Beeghly, his neuropsychologist
Dr. John Bayless, and two other physicians who had subsequently examined him.
LINA then retained another psychiatrist, Dr. Jack Greener, to review Siegel's records.
Dr. Greener concluded that the reports from Drs. Beeghly and Bayless did not
objectively support a finding of total disability. In October 2009 LINA affirmed its
decision to terminate Siegel's benefits, and it ceased payments to him.
Siegel filed an ERISA action in the district court on April 1, 2010, seeking
review of LINA's decision. See 29 U.S.C. § 1132(a)(1)(B). Siegel sought discovery
from LINA, including a subpoena to depose Dr. Greener, but the district court granted
LINA a protective order. The parties then agreed to have a court trial limited to the
administrative record. Each side then moved for judgment in its favor. The district
court granted LINA's motion for judgment, concluding that LINA had not abused its
discretion because it had conducted a full and fair review and there was substantial
evidence to support its decision. Siegel appeals, arguing that the district court should
have applied de novo review, but that even under an abuse of discretion standard
LINA's decision should be overturned. Siegel also appeals the district court's
decision granting LINA a protective order related to his discovery requests.
Siegel first contends in his appeal that the district court erred in applying an
abuse of discretion standard. He argues that the court should have reviewed LINA's
decision de novo because the plan documents did not grant LINA discretionary
authority to adjudicate claims. We review de novo whether the district court applied
the correct standard of review. Clapp v. Citibank, N.A. Disability Plan, 262 F.3d 820,
826 (8th Cir. 2001).
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The standard of review for a denial of benefits when challenged under
§ 1132(a)(1)(B) is de novo, "unless the benefit plan gives the administrator or
fiduciary discretionary authority to determine eligibility for benefits or to construe the
terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
If there has been a valid grant of discretionary authority, the administrator or the
fiduciary's decision is reviewed for abuse of discretion. Jobe v. Medical Life Ins. Co.,
598 F.3d 478, 481 (8th Cir. 2010).
When Siegel first filed this action, the case was presided over by a district
judge.3 Prior to the reassignment to a magistrate judge, the district judge ordered the
parties to file memoranda regarding the appropriate standard of review. Connecticut
General argued that abuse of discretion review was appropriate because the 2002
claim fiduciary appointment had given LINA discretionary authority to interpret the
plan and decide questions of eligibility. Siegel argued that de novo review was
appropriate because the original policy did not grant LINA discretionary authority.
Citing a 1988 version of the policy document which provided that amendments had
to be "endorsed on or attached to" the policy, Siegel contended the claim fiduciary
appointment had been invalid. Siegel did not reference the 1994 version of the
policy, however. The district judge concluded that the claim fiduciary appointment
had been invalid and that LINA's decision would be reviewed de novo.
With the consent of the parties the case was subsequently assigned to a
magistrate judge who determined that the 1994 policy governed Siegel's claim. Since
the 1994 policy did not require that amendments be "endorsed on or attached to" it,
the magistrate judge concluded that the claim fiduciary appointment had been a valid
amendment and that LINA's decision would be reviewed for abuse of discretion.
3
The Honorable Charles R. Wolle, United States District Judge for the Southern
District of Iowa.
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Siegel now concedes that the 1994 policy governs this case. While that policy
is silent on the question of discretionary authority, it provides that the terms of the
plan may be altered "by amendment signed by the Policyholder and by the Insurance
Company acting through its President, Vice President, Secretary, or Assistant
Secretary." The 2002 claim fiduciary appointment was signed by vice presidents of
Lockheed and LINA. It provided that LINA would have authority "in its discretion"
to "interpret the terms of the Plan" and "decide questions of eligibility," effective
immediately. Thus, the plan as amended grants LINA discretionary authority. We
conclude that the magistrate judge correctly reviewed LINA's decision for abuse of
discretion. See Jobe, 598 F.3d at 481; Raybourne v. Cigna Life Ins. Co., 576 F.3d
444, 448–49 (7th Cir. 2009).
Siegel contends that the claim fiduciary appointment also failed to comply with
the amendment procedure of the 1994 plan because it was signed by an executive of
LINA rather than by an executive of Connecticut General. LINA and Connecticut
General are both wholly owned subsidiaries of CIGNA Life Insurance Company, and
there is no evidence that this procedure was irregular or objectionable to either
Lockheed or Connecticut General. Siegel also contends that the claim fiduciary
appointment was merely an application for an amendment because it stated that the
"Plan Administrator hereby applies to the Claim Fiduciary for amendments to its
Policies to recognize its appointment of the Claim Fiduciary." Although there is
some ambiguous wording, the document clearly states that it "hereby appoints" LINA
as claim fiduciary, effective immediately, and that LINA "hereby accepts this
appointment." This was an effective grant of discretionary authority, and the
magistrate judge appropriately reviewed for abuse of discretion.
Siegel next argues that LINA's decision should have been overturned even
under a deferential abuse of discretion review. We review the district court's
application of the abuse of discretion standard de novo and will affirm LINA's
decision if it was reasonable and supported by substantial evidence. Clapp, 262 F.3d
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at 828. Substantial evidence is "more than a scintilla, but less than a preponderance."
Id. (quoting Sahulka v. Lucent Techs, Inc., 206 F.3d 763, 767–68 (8th Cir. 2000)) .
Since LINA is both insurer and decision maker, "we take that conflict [of interest]
into account and give it some weight in the abuse-of-discretion calculation." Carrow
v. Standard Ins. Co., 664 F.3d 1254, 1258–59 (8th Cir. 2012).
We agree with the district court that LINA did not abuse its discretion in
terminating Siegel's benefits. To be "totally disabled" under the plan's definition,
Siegel must have been unable to perform the essential duties of "any occupation for
which [he is] or may reasonably become qualified." There was substantial evidence
from which LINA could reasonably conclude that Siegel was able to work. Siegel
expressed an interest in part time work and had asked LINA how much he could work
and earn without losing his disability benefits. Although Siegel's treating physicians
indicated that he suffered from depression and lack of motivation, they did not
identify any specific impairments or deficiencies. Only Dr. Beeghly was willing to
certify that Siegel was disabled, and even he expressed some doubt on the subject.
The experts retained by LINA all agreed that while Siegel exhibited symptoms of
severe depression, he was not totally incapable of employment. We conclude that on
this record, it was not an abuse of discretion to terminate Siegel's benefits.
Siegel's final argument is that the district court erred in denying him the
opportunity to depose LINA's expert. We review the district court's ruling for abuse
of discretion. Jones v. ReliaStar Life Ins. Co., 615 F.3d 941, 945 (8th Cir. 2010).
When an administrator's decision is reviewed for abuse of discretion, the scope of
review is limited to the evidence before the administrator. Willcox v. Liberty Life
Assur. Co., 552 F.3d 693, 698 (8th Cir. 2009). The magistrate judge determined there
was no "material evidence of bias" and that a deposition would "unduly delay" review
of the case. This was not an abuse of discretion.
Accordingly, we affirm the judgment of the district court.
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