Te'o v. Morgan Stanley & Co.

FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
February 11, 2009
FOR THE TENTH CIRCUIT
Elisabeth A. Shumaker
Clerk of Court
KELLY TE’O, as Personal
Representative of the Estate of
Marvin Anderson,
Plaintiff-Appellant,
v. No. 07-4277
(D.C. No. 2:07-CV-00184-DS)
MORGAN STANLEY & CO., INC.; (D. Utah)
DISCOVER FINANCIAL SERVICES;
MORGAN STANLEY DIRECTOR OF
GLOBAL HUMAN RESOURCES,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before KELLY, PORFILIO, and O’BRIEN, Circuit Judges.
Kelly Te’O, as personal representative of the estate of Marvin Anderson,
appeals from the district court’s entry of judgment in favor of defendants on
Mr. Anderson’s claims under the Employee Retirement Income Security Act of
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
1974, as amended (ERISA). See 29 U.S.C. §§ 1001-1461. Exercising jurisdiction
under 28 U.S.C. § 1291, we affirm.
I. Background
Mr. Anderson worked for defendant Discover Financial Services until
May 31, 2006. Based on congestive heart failure, he filed a claim for short-term
disability (STD) benefits as of that date under the Morgan Stanley Disability Plan
(Plan). 1 The Summary Plan Description (SPD) defines “disability” as follows:
You are considered disabled if, based on medical information
provided by your physician, the claims administrator determines that
as a result of illness, injury or pregnancy you are not working in any
occupation and you are:
• Unable to perform the essential functions of your
regularly scheduled occupation, or
• Unable to perform any other job Morgan Stanley offers
you for which you are qualified[.]
Aplt. App. at 11. Another document titled “Disability Plan Highlights” informs
the prospective claimant that “[a]lthough you do not need to be confined to a
hospital to receive STD benefits, you must be under the regular care of a
physician who provides medical information to support the determination that you
are disabled and who is qualified to treat the type of injury or illness for which
your claim is made.” Id. at 40. 2
1
At all times relevant to this appeal, Discover Financial was a subsidiary of
Morgan Stanley.
2
Appellant has provided only a copy of the SPD, see Aplt. App. at 7-38, and
(continued...)
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Reed Group, the third-party claim administrator, issued an initial denial of
Mr. Anderson’s claim on June 30, 2006. The basis for the decision was that
contrary to the Plan’s requirements, Mr. Anderson had not provided sufficient
objective medical information to support a finding that he was disabled within the
meaning of the Plan. The denial letter recited the definition of disability from the
Plan, as well as the requirement that he be under the regular care of a physician
qualified to treat his type of illness. The medical evidence on which the initial
denial was based consisted of a report dated May 3, 2006, prepared by
Mr. Anderson’s primary care physician, Dr. James Coy, and discharge
instructions related to a May 7, 2006, visit to an emergency center. In the May 3
report, Dr. Coy diagnosed a variety of ailments, including acute myocardial
infarction, congestive heart failure, chronic obstructive pulmonary disease, and
coronary artery disease. Supp. App. at 119. 3 He recommended that Mr. Anderson
2
(...continued)
an excerpt of the “Disability Plan Highlights,” see id. at 39-42. The parties
appear to agree that the provisions in these documents are controlling, and we
proceed under that framework.
3
Like many of the documents relevant to the issues raised in this appeal,
defendants have provided Dr. Coy’s May 3 report. In our discretion, we have
overlooked a number of serious deficiencies in Mr. Anderson’s appendix, such as
his failure to include copies of (1) the complaint; (2) the motions for judgment on
the administrative record together with supporting documentation; and (3) any
responses or replies to those motions, as required by 10th Cir. R. 10.3(C), (D)(2),
and 31.1(A)(1). See Been v. O.K. Indus., Inc., 495 F.3d 1217, 1235 n.13
(10th Cir. 2007); Steele v. Thiokol Corp., 241 F.3d 1248, 1250 n.1 (10th Cir.
2001); 10th Cir. R. 10.3(B), 30.1(A)(3). We remind litigants that “[a]n appellant
(continued...)
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immediately go by ambulance to the nearest emergency room because the
myocardial infarction was likely exacerbating his congestive heart failure and
delay in treatment could lead to death. Id. Mr. Anderson refused, stating that he
would take himself to a hospital after he went home and called his wife, who was
on vacation. Id.Mr. Anderson apparently took himself to an emergency center on May 7.
Reed Group received discharge instructions from this visit prior to its June 30
denial, but did not obtain the treating physician’s report until July 3, 2006. See
id. at 141 (second entry dated 7/3/06). The emergency center report was signed
by Celeste Raffin, M.D., who stated that she felt “very strongly [that
Mr. Anderson] needs to come into the hospital and get studied, and most likely
have a cath [4] done. The patient however is adamantly against this.” Id. at 130.
Dr. Raffin argued with Mr. Anderson “for at least 20 minutes” about this, and
concluded that he “has a morbid fear of hospitals [and] is [in] huge denial about
his health problems, and unfortunately he just does not want to participate in his
health care, although he has been given numerous chances.” Id. According to
Dr. Raffin, Mr. Anderson stated that he would follow up with the Veteran’s
3
(...continued)
who provides an inadequate record does so at his peril.” Dikeman v. Nat’l
Educators, Inc., 81 F.3d 949, 955 (10th Cir. 1996).
4
Dr. Raffin apparently was referring to a cardiac catheterization.
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Administration (VA) and, in response to her warning that his life was in danger,
stated that he would be “around ‘forever’ and feels that he should go home.” Id.In addition to Dr. Raffin’s report, Reed Group received additional medical
records from the VA dated between December 2003 and April 2006. Based on
the new medical evidence, Reed Group sent a letter dated July 6, 2006, that
updated the reasons for denying Mr. Anderson’s claim. Reed Group stated that
because all of the medical records Mr. Anderson had provided predated the date
of his application, he had not “provide[d] sufficient current objective medical
evidence to support disability.” Id. at 62. 5 Like the first letter, the second letter
recited the definition of disability from the Plan and the requirement that he be
under the regular care of a physician qualified to treat his type of illness.
After receiving the second letter denying his claim, Mr. Anderson requested
a claim review. As part of this review, Reed Group received additional medical
records, including two documents from Dr. Coy relating to a July 7, 2006,
examination. In an attending physician’s statement, Dr. Coy opined that
Mr. Anderson was to remain out of work “until cleared by cardiology.” Id.
5
Reed Group’s notes of telephone communications with Mr. Anderson
reflect that he was told of the need for medical records post-dating the effective
date of his claim on at least two occasions before the July 6 denial, see Supp.
App. at 140 (entry dated 6/29/06); 141 (third entry dated 6/30/06), as well as on
July 6, see id. at 142 (second entry dated 7/6/06). In relevant part, the SPD
informs a claimant that “[y]ou must see your physician prior to the seventh
consecutive calendar day following your last day worked in order to receive full
benefits under the Plan. Failure to receive prompt treatment from your physician
may delay or reduce your benefits.” Aplt. App. at 13.
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at 131. In a letter dated July 19, 2006, Dr. Coy stated that Mr. Anderson has
“Class III congestive heart failure. He has not seen cardiology since 2002. I have
attempted to coordinate/facilitate cardiology follow up. Patient is unable to work
at all due to CHF symptoms.” Aplt. App. at 45.
In an August 16 letter, Reed Group noted Dr. Coy’s recommendation that
Mr. Anderson be cleared by a cardiologist and observed that Mr. Anderson had
not provided any information from a cardiologist. See Supp. App. at 64.
Accordingly, Reed Group again denied his claim, once again setting forth the
same Plan provisions that supported its earlier denials.
Mr. Anderson then appealed to the Reed Group. It appears that he
submitted one additional piece of evidence in support of his appeal, an
echocardiogram report dated September 7, 2006. That report was signed by an
“echo tech” and co-signed by Dr. Sheldon Litwin as “attending physician
cardiology.” Id. at 133 (typeface altered). The report indicates moderate to
severe problems suggesting ischemic heart disease and concludes that “[i]f
clinically appropriate, patient might be considered for ventricular reconstructive
surgery.” Id.
In processing the appeal, Reed Group obtained the opinion of Dr. David
Richardson, a board-certified physician in cardiovascular disease and internal
medicine. Dr. Richardson noted that the records he reviewed did not contain a
note from a cardiologist and stated that there was no medical reason preventing
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Mr. Anderson from seeking appropriate care and treatment for his condition.
Based on his review of the medical records provided to him, Dr. Richardson
concluded that Mr. Anderson “was totally disabled and unable to work from
[May 31, 2006,] forward.” Aplt. App. at 47. Dr. Richardson further stated that
Mr. Anderson “is unlikely to improve with any treatment short of a mechanical
ventricular assist device or cardiac transplantation[,]” and he “agree[d] with
Mr. Anderson’s reluctance to undertake such treatment and believe[d] that
Mr. Anderson should not work.” Id.
Reed Group denied the appeal on November 22, 2006, informing
Mr. Anderson that, despite the results of the echocardiogram, which supported a
finding of disability, he was “not in appropriate treatment for [his] health
condition.” Aplt. App. at 49. Mr. Anderson then filed this action, and the parties
filed cross-motions for judgment on the administrative record. The district court
granted defendants’ motion and denied Mr. Anderson’s motion. This appeal
ensued, taken by the personal representative of Mr. Anderson’s estate.
II. Standard of Review
The parties agree that Reed Group, as the claim administrator, had
discretion to determine eligibility for benefits. Therefore, we review the
“decision to deny benefits under the arbitrary and capricious standard.” Finley v.
Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 379 F.3d 1168,
1173 (10th Cir. 2004). Under that standard, “we consider only the arguments and
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evidence before the administrator at the time it made that decision and decide . . .
whether substantial evidence supported [the administrator’s] decision.” 6 Id.
at 1176 (quotation omitted). A claims “decision need not be the only logical one
nor even the best one. It need only be sufficiently supported by facts within [the
administrator’s] knowledge to counter a claim that it was arbitrary or capricious.
The decision will be upheld unless it is not grounded on any reasonable basis.”
Id. (quotation omitted).
III. Discussion
Appellant argues that it was arbitrary and capricious for Reed Group to
deny Mr. Anderson’s claim for STD benefits because
(1) he was under the care of his primary physician [Dr. Coy],
(2) short of major surgery there was no treatment that would restore
his health so that he could work, (3) the Plan did not require him to
undergo major surgery, (4) [defendants’] expert[, Dr. Richardson,]
agreed with Mr. Anderson’s decision not to undergo surgery, [and]
(5) [Dr. Richardson] opined that without surgery no treatment would
restore Mr. Anderson’s health so that he could work.
Aplt. Br. at 18. These points largely skirt the basis for Reed Group’s denial of
the claim. The issue is whether Mr. Anderson complied with the Plan
requirement that he be “under the regular care of a physician who provides
medical information to support the determination that [he is] disabled and who is
6
Appellant does not argue, nor do we perceive, that Reed Group “based its
decision on a mistake of law [or] conducted its review in bad faith or under a
conflict of interest,” either of which also would properly support a conclusion that
the claims decision was arbitrary and capricious. See Finley, 379 F.3d at 1176(quotation omitted).
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qualified to treat the type of injury or illness for which [his] claim is made.”
Aplt. App. at 40. In Mr. Anderson’s case, as recommended by both Dr. Coy and
Dr. Raffin, that physician was a cardiologist. While not explicitly mentioning a
cardiologist in its first two claim-denial letters, Reed Group’s August 16 letter
informed Mr. Anderson specifically that his failure to submit any information
from a cardiologist contravened Dr. Coy’s recommendation as well as the Plan’s
requirement. Further, there is no indication that he was in the regular care of
Dr. Litwin, the attending cardiologist who co-signed his echocardiogram report.
Rather, Dr. Litwin’s own conclusion, that “[i]f clinically appropriate,
[Mr. Anderson] might be considered for ventricular reconstructive surgery,”
Supp. App. at 133 (emphasis added), is consistent with the opinions of Dr. Coy
and Dr. Raffin that Mr. Anderson needed further examination by a cardiologist to
determine possible treatment options.
Appellant seems to miss the point, which is that Reed Group required
Mr. Anderson only to see a cardiologist who could examine him and provide
information regarding his condition, not to complete any particular form of
treatment for his condition. Thus, the bulk of appellant’s reliance on ERISA case
law, as well as on social-security case law and regulations, that discuss a
claimant’s decision to refuse treatment is misplaced. To be clear, the problem is
not that Mr. Anderson refused to follow recommended treatment, but that he
refused to submit to the regular care of a physician qualified to treat his
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illness—in this case, a cardiologist—so that Reed Group could have the opinion
of a treating specialist on which to base an informed disability determination.
Nor do we find any merit in the contention that defendants’ expert,
Dr. Richardson, “conclusively indicated to the [defendants] that no treatment was
available to ameliorate [Mr. Anderson’s] condition short of a mechanical
ventricular assist device or cardiac transplantation.” Aplt. Br. at 12.
Dr. Richardson noted in his report that the medical records provided for his
review did not include a note from a cardiologist. Supp. App. at 66. Although
Mr. Anderson correctly notes that Dr. Richardson himself never stated that the
medical evidence was insufficient for purposes of his opinion, it was not arbitrary
or capricious for Reed Group to disregard his opinion on the ground that there
were no medical records from an examining cardiologist. In fact, Reed Group’s
insistence that Mr. Anderson be in the care of a cardiologist is consistent with his
treating physicians’ recommendations that he do so.
IV. Conclusion
Based on the foregoing, we conclude that because substantial evidence
supports the denial of Mr. Anderson’s claim and Reed Group had a reasonable
basis for its decision, the denial of benefits was not arbitrary or capricious. See
Finley, 379 F.3d at 1176. Contrary to appellant’s contentions, the claim does not
have substantial merit, nor is it one of great public importance, so we deny the
request for an award of attorney fees under 29 U.S.C. § 1132(g). See Gordon v.
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U.S. Steel Corp., 724 F.2d 106, 109 (10th Cir. 1983) (setting forth factors
relevant to attorney-fee decisions in ERISA cases).
The judgment of the district court is AFFIRMED.
Entered for the Court
Terrence L. O’Brien
Circuit Judge
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