Smith v. Metropolitan Life Insurance

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-1377
BYRON D. SMITH,
Plaintiff - Appellee,
v.
METROPOLITAN LIFE INSURANCE COMPANY,
Defendant - Appellant.
No. 07-1378
BYRON D. SMITH,
Plaintiff - Appellant,
v.
METROPOLITAN LIFE INSURANCE COMPANY,
Defendant - Appellee.
No. 07-1645
BYRON D. SMITH,
Plaintiff - Appellee,
v.
METROPOLITAN LIFE INSURANCE COMPANY,
Defendant - Appellant.
Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Malcolm J. Howard, Senior
District Judge. (5:05-cv-00633)
Argued: March 20, 2008 Decided: April 17, 2008
Before WILKINSON and KING, Circuit Judges, and C. Arlen BEAM,
Senior Circuit Judge of the United States Court of Appeals for the
Eighth Circuit, sitting by designation.
Affirmed and remanded with instructions by unpublished per curiam
opinion.
ARGUED: Stephen Alan Dunn, EMANUEL & DUNN, P.L.L.C., Raleigh, North
Carolina, for Metropolitan Life Insurance Company. Mark Stanton
Thomas, WILLIAMS MULLEN, Raleigh, North Carolina, for Byron D.
Smith. ON BRIEF: Robert W. Shaw, WILLIAMS MULLEN, Raleigh, North
Carolina, for Byron D. Smith.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Metropolitan Life (Met Life) appeals from a grant of summary
judgment in favor of Byron D. Smith on his claim that Met Life
improperly terminated his long-term disability benefits in
violation of the Employee Retirement Income Security Act of 1974
(ERISA). Met Life also appeals an award of attorney fees in
Smith's favor. Smith cross-appeals, asking that we amend a
clerical error in the district court's order, or remand to the
district court so it may do so. After reviewing the record, we
agree with the district court that Met Life abused its discretion
by terminating Smith's benefits. We therefore affirm the district
court's rulings in Smith's favor, but remand to the district court
so that it may amend the clerical error in its original order.
I.
Smith, a loan officer with CitiFinancial, sustained a gunshot
wound to his left eye in April 1988. Smith suffered a detached
retina and had corrective surgery later that same year. One year
later, Smith suffered a stroke that left him with abnormal visual
fields in both eyes and a pronounced weakness on his left side.
Smith returned to work as a loan officer in July 1989. Over the
next fourteen years, Smith had cataract removal and lens
implantation surgeries, and suffered from weakness on his left
side. Nonetheless, Smith continued to work as a loan officer and
3
was eventually promoted to assistant manager. In these capacities,
Smith had to produce and review lengthy, detailed loan documents,
perform computer work, do mathematical calculations, and drive to
real estate sites, the post office and the bank.
In late 2003, Smith's vision began to deteriorate rapidly and
he became legally blind in his left eye by December 2003. Smith's
job performance also declined, as he could no longer concentrate on
the long loan documents or perform the required arithmetic
calculations. CitiFinancial warned Smith he would be fired if he
continued to make errors in his work.
As a result of these medical problems, Smith stopped actively
working for CitiFinancial on February 26, 2004, at the age of
forty-seven, and sought short-term disability (STD) benefits
through CitiFinancial's disability plan. Met Life administers the
plan, which is funded through premiums paid to Met Life. Met Life
also has discretionary authority to determine entitlement to
benefits. On March 2, 2004, Smith's physician, Dr. Richard
Burdick, notified Met Life that Smith could not work because he had
"visual field cuts" and "left foot lag/drag," which caused falls.
Met Life contacted Smith, and he reported that he was having severe
visual and memory problems and increasing difficulty getting
around. Met Life approved Smith's STD claim, and requested medical
confirmation from Dr. Burdick. On March 14, 2004, Dr. Burdick sent
Met Life office notes from his examination of Smith on February 26,
4
2004. Dr. Burdick also sent a letter advising Met Life that he did
not expect Smith to return to work, as Smith's vision problems
rendered him unable to read or to perform the mathematical
calculations "that are an integral part of his job."
In April 2004, Smith underwent surgery to repair a detached
retina. The day after Smith's surgery, Dr. Van Houten, Smith's
surgeon and a retina specialist, advised Met Life that Smith could
not return to work until his "retina is stable." On May 21, 2004,
Dr. Van Houten sent Met Life a Supplemental Attending Physician
Statement, stating that, as of May 7, 2004, Smith's eye had not yet
healed from surgery. Dr. Van Houten did not advise when Smith
could return to work, but informed Met Life in a follow-up phone
call that Smith needed to lie on his side continuously for at least
eight more weeks until his eye healed.
Based on this information, Met Life approved Smith's claim
through June 30, 2004, extending STD benefits through the maximum
period of May 26, 2004, and awarding long-term disability (LTD)
benefits from May 27, 2004, to June 30, 2004. Met Life
subsequently extended LTD benefits through July 8, 2004, the date
of Smith's next appointment with Dr. Van Houten.
On June 18, 2004, Met Life received an LTD claim packet from
Smith. Smith reported that he could not return to work due to his
vision problems and chronic weakness on his left side. He also
noted that he had not driven since his surgery. On June 20, Dr.
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Burdick completed a Supplemental Attending Physician Statement
indicating that, as of Smith's last exam, he was unable to work due
to his vision problems. Met Life then requested more information
on the status of Smith's condition from Dr. Van Houten. After
Smith's July 8, 2004, follow-up visit, Dr. Van Houten reported that
Smith's retina had healed from surgery, but that he still had
abnormal visual fields and, with correction, only 20/200 vision in
his left eye. Dr. Van Houten's report did not indicate any change
in his initial assessment that Smith could not return to work.
In a letter dated July 13, 2004, Met Life terminated Smith's
LTD benefits effective July 14, 2004, finding that his retina had
healed and that he had no other medical conditions that prevented
him from performing his job duties as an assistant manager. Smith
appealed, indicating that his vision problems rendered him unable
to drive or to decipher forms and documents at work. In support of
his appeal, Smith submitted an updated Attending Physician
Statement from Dr. Burdick dated August 8, 2004, indicating that,
as of July 15, 2004, Smith could not work because he could not
concentrate or perform the required mathematical calculations.
Smith also submitted a statement from Dr. Hoke Bullard of the North
Carolina Department of Health and Human Services, Disability
Determination Services. Dr. Bullard examined Smith on April 14,
2004, and concluded he could not continue working as a loan officer
due to severe vision problems, which Bullard found included, among
6
other things, left homonymous hemianopsia.1 Finally, Smith
submitted a statement from Dr. Lee Clark, also of the Disability
Determination Services, stating that Smith’s corrected vision in
his left eye was only 20/200 and that he probably had homonymous
hemianopsia.
Met Life referred Smith's file and appeal to Dr. Jane St.
Clair of the American Academy of Disability Evaluating Physicians.
Dr. St. Clair, who is certified in Occupational Medicine, reviewed
the information in Smith’s file and unsuccessfully tried to contact
several of his doctors. Ultimately, and without ever having spoken
to either Smith or to any of his treating physicians, Dr. St. Clair
determined that Smith could drive and work using only his right
eye, while wearing a patch over his blind left eye if necessary.
Based on Dr. St. Clair's recommendation, Met Life upheld its
decision to terminate Smith's LTD benefits.
Having exhausted his administrative remedies, Smith filed this
action on September 20, 2005, under Section 502(a)(1)(B) of ERISA,
29 U.S.C. § 1132(a)(1)(B), seeking to recover LTD benefits. On
cross-motions for summary judgment, the district court found that
Met Life's termination of Smith's benefits was unreasonable and not
supported by the record evidence. Accordingly, the district court
1
Homonymous hemianopsia is defined as "[p]artial or complete
loss of vision in one half of the visual field(s) of one or both
eyes." Medical Dictionary Online, http://www.online-medical-
dictionary.org (second alteration in original).
7
granted summary judgment to Smith and held that Met Life was liable
to Smith for benefits from July 14, 2005,2 through March 22, 2007,
the date of judgment. On June 7, 2007, the court granted Smith's
motion for fees and costs. This appeal by Met Life followed.
II.
We review the district court's grant of summary judgment de
novo. Donovan v. Eaton Corp., 462 F.3d 321, 326 (4th Cir. 2006).
Because the plan language grants Met Life discretionary authority
to determine entitlement to benefits, we review Met Life's decision
to deny benefits for an abuse of discretion. Id.Nonetheless, "an administrator is required to use a
deliberate, principled reasoning process and to support its
decision with substantial evidence." McKoy v. Int'l Paper Co., 488
F.3d 221, 223 (4th Cir. 2007). And our deference to Met Life is
tempered by the fact Met Life acted under some conflict of
interest. Stup v. UNUM Life Ins. Co., 390 F.3d 301, 307 (4th Cir.
2004). Because Met Life is both the insurer and a fiduciary of the
plan, and stands to benefit financially from a denial of benefits
to Smith, we lessen our deference to Met Life's discretionary
authority to the degree necessary to neutralize any untoward
influence resulting from that conflict. See id.2
This date is the error Smith seeks to amend in his cross-
appeal. Both parties agree that Met Life actually terminated
Smith's LTD benefits on July 14, 2004.
8
III.
On appeal, Met Life contends the district court erred in the
following ways: (1) by subjecting Met Life's claim decision to de
novo review, rather than determining whether its decision was
reasonable; (2) by finding Met Life's decision to terminate
benefits was unsupported by substantial record evidence; (3) by
reinstating benefits through the date of judgment; and (4) by
granting Smith's motion for attorney fees. We address each
contention in turn.
A.
Met Life first argues the district court did not properly
review its decision for an abuse of discretion, and instead
subjected its claim decision to de novo review. After reviewing
the district court's opinion, however, we are satisfied that the
district court applied the correct standard.
In its opinion, the court specifically recognized the
applicable standard of review as abuse of discretion, tempered by
consideration of Met Life's inherent conflict of interest.
Moreover, the district court characterized the evidence Met Life
relied upon in terms that reflect the appropriate standard,
labeling it "a far cry from the 'substantial evidence' required in
the Fourth Circuit." The district court went on to discuss the
unreasonableness of Met Life's reliance on Dr. St. Clair's opinion
and the dearth of other evidence supportive of its position. Thus,
9
a thorough reading of the opinion reveals that the district court
examined Met Life's decision for an abuse of discretion, but simply
found the decision unreasonable and unsupported by substantial
evidence.
B.
Met Life next contends the district court erred in finding its
decision to terminate Smith's LTD benefits was unreasonable and
unsupported by substantial evidence. After reviewing the record
and the reasoning Met Life used to deny benefits, we affirm the
conclusions reached by the district court.
As an initial matter, we reject Met Life's contention that
Smith failed to satisfy his initial burden of supplying documented
proof of disability. See id. at 308. Indeed, as set forth above,
Smith submitted abundant evidence of severe medical conditions that
prevent him from working in his field. First, Smith himself
indicated he cannot drive, concentrate on the details in documents
or perform mathematical calculations because of his poor vision.
See Donovan, 462 F.3d at 327 (indicating that an insured’s
subjective assessment of symptoms is relevant and cannot be totally
disregarded by the insurer). Moreover, Smith submitted numerous
statements from his treating physicians confirming that his
conditions prevent him from working. On March 14, 2004, Dr.
Burdick wrote that he did not expect Smith to return to work
because of his severe vision problems, and he reiterated that
10
opinion on June 20, 2004, and August 8, 2004. On April 14, 2004,
Dr. Bullard opined that, "I do not think [Smith] would be able to
return to his life's work, because of the visual impairment which
has occurred due to his stroke, and to the gunshot wound to the
periorbital tissues of the left eye." On May 7, 2004, Dr. Van
Houten advised that Smith could not currently work in any
occupation, and his report from Smith's July 8, 2004, follow-up
examination does not indicate a change in that assessment. On this
record, we find Smith amply carried his initial burden of supplying
documented proof of disability.
Nonetheless, Met Life could still deny benefits if the record
also contains substantial evidence that Smith can continue to work
as a loan officer. See Stup, 390 F.3d at 308. We agree with the
district court, however, that the current record cannot reasonably
be read to support such a finding. To be sure, "an administrator
does not act unreasonably by denying benefits if the record
contains conflicting medical reports." Id. (quotation omitted).
But "the conflicting evidence on which the administrator relies in
denying coverage must be 'substantial'–especially when . . . the
administrator has an economic incentive to deny benefits." Id. In
this case, Met Life relies on three pieces of evidence as
supportive of its decision to terminate Smith's benefits: (1) a
statement in Dr. Clark's report that Smith's vision fields are
"normal;" (2) Dr. Clark's inability to definitively diagnose
11
homonymous hemianopsia; and (3) Dr. St. Clair's finding that Smith
can adequately perform his loan officer duties because he has 20/20
vision in his right eye. We conclude that this evidence is neither
substantial nor, in some cases, even supportive of Met Life's
position.
First, Dr. Clark's statement that Smith's vision fields are
normal was surely a clerical error. The full sentence reads, "His
visual fields are normal, that probably represent[s] a homon[y]mous
hemianopsia." As homonymous hemianopsia is defined as blindness or
defective vision in the right or left halves of the visual fields
of one or both eyes, Dr. Clark surely intended to say Smith's
visual fields are "abnormal." And, indeed, Met Life might have
suspected as much, since Dr. St. Clair specifically noted in her
own report that Smith's "vision fields are abnormal, but this
homonymous hemianopsia is not a new finding for him." Thus, we
reject Met Life’s contention that this statement, which is taken
wholly out of context and is ambiguous at best, constitutes
substantial evidence supporting its claim decision. Myers v.
Hercules, Inc., 253 F.3d 761, 768 (4th Cir. 2001)(finding
administrator could not rely on bits and pieces of evidence taken
out of context as substantial evidence supporting termination of
benefits).
We also reject Met Life's reliance on the fact that Dr. Clark
could not definitively diagnose homonymous hemianopsia. We think
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it is fair to characterize Dr. Clark's report as somewhat equivocal
on the subject of whether Smith actually suffers from that
condition. That characterization does not make the report
particularly helpful to Met Life because we have previously
recognized that "[a]n equivocal opinion . . . simply does not
provide 'substantial evidence.'" Stup, 390 F.3d at 310.
Finally, we find Met Life's reliance on the determination of
Dr. St. Clair–who neither examined Smith nor spoke to him or to any
of his treating physicians–unreasonable. "To be sure, ERISA does
not impose a treating physician rule, under which a plan must
credit the conclusions of those who examined or treated a patient
over the conclusions of those who did not." White v. Sun Life
Assurance Co., 488 F.3d 240, 254 (4th Cir.), cert. denied, 128 S.
Ct. 619 (2007). Nonetheless, an insurer must present "a basis a
reasoning mind would accept as sufficient to support its decision."
Id. (quotation omitted). And here, we find such a basis lacking.
Dr. St. Clair's report notes that Smith is legally blind in his
left eye, has severely reduced peripheral vision in both eyes and
has balance problems due to his poor peripheral vision. She
nonetheless concludes, without explanation, that he would have
adjusted to his reduced visual fields years ago and that he can
adequately drive and work with one eye, while wearing a patch over
his blind left eye if necessary. We agree with the district court
that, in light of the objective medical evidence, these conclusions
13
are, at best, difficult to believe. What is more, they are belied
by uncontradicted facts in the record. For example, it is
undisputed that, after Smith became blind in his left eye,
CitiFinancial threatened to fire him for making errors resulting
from his poor vision. This fact totally undermines Dr. St. Clair's
conclusion that Smith can adequately perform his duties with
monocular vision.
In sum, after reviewing the record, we find that the evidence
relied upon by Met Life in support of its decision falls far short
of the substantial evidence required by our precedent.
Accordingly, Met Life abused its discretion by terminating Smith's
LTD benefits and the grant of summary judgment in Smith's favor is
affirmed.
C.
Met Life also contends the district court erred by reinstating
Smith's LTD benefits through the date of its judgment. Under the
terms of the plan, Smith is entitled to LTD benefits for an initial
twenty-four-month period if he is unable to earn more than eighty
percent of his predisability earnings at his "Own Occupation" for
any employer in the local economy. After that initial period,
Smith is only entitled to continue receiving LTD benefits if he is
unable to earn more than sixty percent of his predisability
earnings at "Any Gainful Occupation" commensurate with his training
and experience.
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Here, Smith began receiving LTD benefits on May 27, 2004, so
the twenty-four-month "Own Occupation" period commenced on that date
and ended on May 27, 2006. Thus, when the district court rendered
its decision on March 22, 2007, and reinstated Smith's benefits
through the date of judgment, it extended LTD benefits under both
the "Own Occupation" and the "Any Gainful Occupation" standards.
And, Met Life claims the district court erred by doing so, because
Smith never submitted, and Met Life never considered, a claim for
benefits under the "Any Gainful Occupation" standard. Thus, Met
Life says Smith has not exhausted his administrative remedies with
respect to benefits under that standard, and there was neither an
administrative record nor an administrative decision for the court
to review.
We disagree. First, to the extent Met Life contends Smith has
not exhausted his administrative remedies under the "Any Gainful
Occupation" standard, Met Life has pointed to nothing in the record
indicating Smith bore the burden of coming forward on his own
initiative, and without a request from Met Life, with additional
evidence of his inability to work at any gainful occupation once the
"Own Occupation" period ended.3 And we can understand why Smith
might have thought it futile to do so: Met Life had already
3
In fact, the only applicable language in the record suggests
otherwise. The initial letter Met Life sent to Smith approving his
LTD claim from May 27, 2004, through June 30, 2004, states that
"[Met Life] will periodically require updated medical information
and will contact you and/or your physician."
15
explained to Smith on several occasions that he could perform his
own occupation. This determination "necessarily precluded [Smith]
from arguing with a straight face to the same insurance company that
he was unable to perform . . . any occupation." Dozier v. Sun Life
Assurance Co., 466 F.3d 532, 535 (6th Cir. 2006). See also Paese
v. Hartford Life Accident Ins. Co., 449 F.3d 435, 449 (2d Cir.
2006)(noting that plan's decision that insured was not disabled from
his own occupation "necessarily implies a decision that he was not
totally disabled from 'any occupation'"). Moreover, we think the
current record supports the district court's determination. When
the district court rendered its opinion, Smith, a then-fifty-year-
old man who had spent the last fourteen years of his career doing
work that requires visual acuity and attention to minute details,
was legally blind in one eye, had severely reduced peripheral vision
in the other eye, and was unable to drive. On these facts, we think
it self-evident that Smith could not, as of March 22, 2007, return
to either his own occupation or to any other occupation commensurate
with his training and experience. Accordingly, we affirm the award
of LTD benefits through the date of judgment.4
D.
Finally, Met Life challenges the district court's discretionary
award of attorney fees to Smith. See Quesinberry v. Life Ins. Co.,
4
Nothing in this opinion should be construed as precluding Met
Life from requesting proof of Smith's continuing inability to work
at any gainful occupation at any future date.
16
987 F.2d 1017, 1029 (4th Cir. 1993) (en banc). We review an
attorney fee award for abuse of discretion, and review the findings
of fact underlying that award for clear error. Carolina Care Plan,
Inc. v. McKenzie, 467 F.3d 383, 390 (4th Cir. 2006). In this case,
having reviewed the record and considered the arguments advanced by
the parties, we find that the district court acted within its
discretion.
IV.
Smith cross-appeals, seeking to amend a clerical error in the
district court's judgment. In its March 22, 2007, order, the
district court held that Met Life was liable to Smith for benefits
under the plan from July 14, 2005, through the date of judgment.
It is undisputed, however, that Met Life terminated Smith's LTD
benefits as of July 14, 2004. As a result, we remand to the
district court with directions to amend its order to reflect that
Smith's benefits are reinstated as of that date.
AFFIRMED AND
REMANDED WITH INSTRUCTIONS
17