Lucas v. Liberty Life Assurance Company

FILED
United States Court of Appeals
Tenth Circuit
October 14, 2011
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
STEVEN LUCAS, an individual,
Plaintiff!Appellant,
v. No. 11-6056
(D.C. No. 5:10-CV-00206-M)
LIBERTY LIFE ASSURANCE (W.D. Okla.)
COMPANY OF BOSTON, a foreign
insurance company,
Defendant!Appellee.
ORDER AND JUDGMENT *
Before KELLY, GORSUCH, and MATHESON, Circuit Judges.
Steven Lucas filed suit against Liberty Life Assurance Company of Boston,
asserting that the company violated the Employee Retirement Income Security
Act of 1974 (ERISA) when it denied his claim for long term disability benefits.
Finding that the denial of benefits was not arbitrary and capricious, the district
*
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 This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and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.
court entered judgment in favor of Liberty Life. Mr. Lucas now appeals, and we
affirm.
In 2004, Mr. Lucas was an employee of the Coca-Cola Company. He
suffered a work-related injury requiring spinal surgery and, after a short period
back on the job, stopped working. He filed a claim for long-term disability
benefits in August 2005.
Under Coca-Cola’s long-term disability plan, a plan participant is
considered disabled and is eligible for 24 months of benefits when he is “unable
to perform the Material and Substantial Duties of his Own Occupation.” Aplt.
App., Vol. 1 at 6 (emphasis added). Mr. Lucas received benefits under this
provision from August 2005 through August 2007. To be considered disabled and
eligible to receive benefits after this first 24 months, the participant must be
“unable to perform, with reasonable continuity, the Material and Substantial
Duties of Any Occupation.” Id. (emphasis added).
Liberty Life both administers and insures Coca-Cola’s long-term disability
benefits plan. Under the plan, it has discretionary authority to determine
eligibility for benefits. In September 2007, Liberty Life terminated Mr. Lucas’s
benefits after determining that he was not eligible for continued benefits under the
“any occupation” provision—while he might not be capable of performing his
own occupation, he was capable of performing some occupation comparable to his
former position. Mr. Lucas filed an administrative appeal with Liberty Life, but
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the company upheld the denial of benefits. In the fall of 2008, Mr. Lucas began
working as a teacher at a university. He held that position through the school
year.
Mr. Lucas filed suit against Liberty Life in October 2008. The district
court dismissed that suit after the parties determined that one of the medical
reports in the administrative record was not the final version of the report and
Liberty Life agreed to re-open the administrative appeal. On further review,
Liberty Life again upheld its denial of benefits and Mr. Lucas again filed suit.
The district court entered judgment in favor of Liberty Life and this appeal
followed.
Before this court, Mr. Lucas alleges multiple errors by the district court.
However, on an appeal from denial of disability benefits, “[w]e review a plan
administrator’s decision to deny benefits to a claimant, as opposed to reviewing
the district court’s ruling.” Holcomb v. Unum Life Ins. Co. of Am., 578 F.3d
1187, 1192 (10th Cir. 2009). Because Liberty Life has discretionary authority
under the plan, we review its determination for abuse of discretion—asking only
whether the decision is “arbitrary and capricious.” See id.; Weber v. GE Group
Life Assur. Co., 541 F.3d 1002, 1010 n.10 (10th Cir. 2008) (in the ERISA context,
the terms “abuse of discretion” and “arbitrary and capricious” are used
interchangeably).
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We agree with the district court that Liberty Life’s decision to deny
continued benefits to Mr. Lucas was not arbitrary and capricious. A decision is
“arbitrary and capricious” only if it lacks a “reasoned basis.” Adamson v. Unum
Life Ins. Co. of Am., 455 F.3d 1209, 1212 (10th Cir. 2006). And where there is
substantial evidence to support the decision we will generally uphold the denial of
benefits. See id. In this case, Liberty Life had a reasoned basis, supported by
substantial evidence, for denying the claim. Liberty Life reviewed Mr. Lucas’s
claim three times. Each time it issued a decision letter with extensive citation to
medical records and reports and its own investigative surveillance. These cited
facts adequately support its position that Mr. Lucas was able to engage in other
full-time work despite his impairment. See Aplt. App., Vol. 6 at 2073-2085; id.,
Vol. 1 at 103-110; id. at 95-101.
Liberty Life had reports from five physicians concluding that Mr. Lucas
had at least a sedentary, full-time work capacity. Additionally, Liberty Life
requested an independent neuropsychological review to address the possibility
that Mr. Lucas might suffer cognitive impairment due to his pain medication
regimen. Dr. Mickey Ozolins met with Mr. Lucas over the course of three days to
conduct this review. Dr. Ozolins reported that throughout the evaluation
Mr. Lucas showed clear signs of symptom exaggeration and feigning consistent
with malingering. Dr. Ozolins concluded that Mr. Lucas was capable of
performing sedentary to medium-duty work activities.
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Liberty Life also relied on records from Mr. Lucas’s primary treating
physician, Dr. Bruce Mackey. Though Dr. Mackey stated that Mr. Lucas was
permanently and totally disabled, his records included notes indicating that
Mr. Lucas was not as restricted as he claimed. Liberty Life further noted that
Dr. Mackey often refused to respond to requests from its independent physicians
to discuss Mr. Lucas’s condition. On these facts, Liberty Life concluded that
there was insufficient objective medical evidence to establish that Mr. Lucas’s
condition precluded him from performing jobs consistent with his skills.
Liberty Life acknowledged that Mr. Lucas had been approved for Social
Security disability income benefits and noted that it had fully considered that
ruling. But, as Liberty Life explained, the Social Security decision “does not
determine entitlement to benefits under the terms and conditions of the [long-term
disability] policy.” Aplt. App., Vol. 1 at 101. Liberty Life went on to note that it
had
obtained and considered Dr. Smith’s Independent Medical
Examination, Dr. Ozolins’ Neuropsychological Evaluation, the
medical review by Dr. Klein and multiple additional evaluators, as
well as surveillance reports and video, and deposition transcripts that
were not considered by the Social Security Administration in its
determination process.
Id.
Finally, Liberty Life noted that Mr. Lucas had actively applied for full-time
teaching positions and, during the same time, was taking doctoral classes in
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Business Management. He ultimately secured a university teaching position.
Liberty Life admitted that it was “unclear” whether Mr. Lucas was laid off or
resigned from his position at the university, but emphasized that Mr. Lucas “did
hold a full time teaching position from August 2008 through [May 2009].” Id. at
100.
Because Liberty Life is both administrator and insurer of the plan, we
recognize that it has an inherent conflict of interest. See Pitman v. Blue Cross &
Blue Shield of Okla., 217 F.3d 1291, 1296 and n.4 (10th Cir. 2000). This conflict
is one factor we consider in determining whether Liberty Life’s decision was
arbitrary and capricious. See Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105,
115-117 (2008). However, we agree with the district court that this conflict
should be given limited weight in this case.
As the Supreme Court explained in Glenn, the conflict-of-interest factor
“should prove less important (perhaps to the vanishing point) where the
administrator has taken active steps to reduce potential bias and to promote
accuracy.” 554 U.S. at 117. Here, Liberty Life undertook extensive measures to
investigate whether Mr. Lucas was able to perform the duties of a gainful
occupation for which he was reasonably suited. Liberty Life repeatedly requested
and reviewed the medical records from Mr. Lucas’s healthcare providers. It also
took steps to reduce its inherent bias by requesting five independent physician
reviews of Mr. Lucas’s medical records and two independent physician
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examinations of Mr. Lucas. See Holcomb, 578 F.3d at 1193 (recognizing that an
administrator can reduce its bias by using independent physicians). Moreover,
Liberty Life had its independent physicians contact Dr. Mackey in an effort to
discuss Mr. Lucas’s condition.
The fact that Mr. Lucas’s treating physician drew a conclusion contrary to
Liberty Life’s determination does not mean that Liberty Life’s decision was
unreasonable. Liberty Life has no obligation “to accord special weight to the
opinions of a claimant’s physician; nor may courts impose on plan administrators
a discrete burden of explanation when they credit reliable evidence that conflicts
with a treating physician’s evaluation.” Black & Decker Disability Plan v. Nord,
538 U.S. 822, 834 (2003). Liberty Life’s decision is supported by substantial
evidence, and Mr. Lucas has failed to show that it was arbitrary and capricious.
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Accordingly, the judgment of the district court is affirmed. 1
Entered for the Court
Neil M. Gorsuch
Circuit Judge
1
Mr. Lucas contends that the district court erred in not ruling on his claim that
his benefits should be reinstated during the time he was pursuing administrative
appeals of the initial denial. In his complaint before the district court Mr. Lucas
made this claim in a two-sentence paragraph with no citation to legal authority or
to any language in the long-term disability plan authorizing payment of benefits
while a claim is under review. Aplt. App., Vol. 10 at 3338. Accordingly, he
failed to make this claim adequately before the district court. See Fed. R. Civ. P.
8(a). Even if he had, on appeal he offers no authority to support his position that
he is entitled to benefits while his claim was under review, particularly when his
claim was ultimately unsuccessful. We decline to consider the issue. See United
States v. Banks, 451 F.3d 721, 728 (10th Cir. 2006) (declining to consider
argument not supported by pertinent authority).
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