Spry v. Eaton Corporation Long Term Disability

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 08-1431
EVA SPRY,
Plaintiff - Appellee,
v.
EATON CORPORATION LONG TERM DISABILITY PLAN,
Defendant – Appellant,
and
BROADSPIRE SERVICES INCORPORATED,
Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. Margaret B. Seymour, District
Judge. (2:07-cv-00156-MBS)
Argued: March 25, 2009 Decided: June 2, 2009
Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.
Reversed and remanded by unpublished per curiam opinion.
ARGUED: Anna K. Raske, BENESCH, FRIEDLANDER, COPLAN & ARONOFF,
LLP, Cleveland, Ohio, for Appellant. Robert Edward Hoskins,
FOSTER LAW FIRM, LLP, Greenville, South Carolina, for Appellee.
ON BRIEF: Jeffrey D. Zimon, BENESCH, FRIEDLANDER, COPLAN &
ARONOFF, LLP, Cleveland, Ohio, for Appellant.
Unpublished opinions are not binding precedent in this circuit.
2
PER CURIAM:
Eaton Corporation Long Term Disability Plan (“the Plan”)
appeals a district court judgment against it in an action
brought by Eva Spry alleging that the Plan wrongly terminated
her long-term disability benefits. We reverse and remand for
entry of judgment in favor of the Plan.
I.
Eaton Corporation is a multi-national company that offers
both short-term and long-term disability benefits for many of
its employees. It funds these plans and helps to administer
them.
To be eligible to receive long-term disability (“LTD”)
benefits under the Plan, a participant must show that she
“cannot work due to an illness or injury,” that she has a
“covered disability,” and that she is “under the continuous care
of a physician who verifies, to the satisfaction of the Claims
Administrator, that [she is] totally disabled.” J.A. 158. The
Claims Administrator is a “third party administrator retained by
Eaton to process and review disability claims and to rule on the
first level appeals from denials of claims.” J.A. 136.
Broadspire Services Incorporated (“Broadspire”) was the Plan’s
Claims Administrator. The Plan also allows for a final appeal
to Eaton as the Plan Administrator. For ease of reference, we
3
will refer to the Claims Administrator and the Plan
Administrator collectively as “the Administrator.”
As is relevant here, a claimant is considered to have a
“covered disability,” if she is “totally and continuously unable
to engage in any occupation or perform any work for compensation
or profit for which [she is], or may become, reasonably well
fitted by reason of education, training or experience.” J.A.
158. To determine whether a claimant has a covered disability,
the Administrator evaluates objective evidence of the claimed
disability, including
• Physical examination findings (functional
impairments/capacity);
• Diagnostic tests results/imaging studies;
• Diagnosis;
• X-ray results;
• Observation of anatomical, physiological or
psychological abnormalities; and
• Medications and/or treatment plan.
J.A. 162. For a claim that has been approved, the Plan requires
continued periodic certification of the disability, which can
include independent medical examinations, medical file and
record reviews, and functional capacity tests.
Spry is a 62-year-old woman who resides in Manning, South
Carolina. She began working for Eaton in 1980 and was a Plan
participant. In early 2000, she began complaining of numbness
4
in her hands. According to her primary care physician, Dr.
Joseph Williams, an MRI of her cervical spine revealed the
following:
Markedly severe spinal stenosis focally at C3-4 due to
large osteophytes compressing the cervical cord as
well as an accompanying disc protrusion that protrudes
along with the osteophytes. Moderate to severe spinal
stenosis also evident at C4-5 without disc herniation.
Herniated disc is also present at C6-7 postero-
rightward and impinging upon the exiting nerve root on
the right and effacing the neural foramen.
J.A. 516. Spry consequently ceased working on March 20, 2000,
and underwent surgery. Although she felt better afterwards, she
was not ready to return to work by July 2000. Because her six-
month waiting period for LTD benefits was coming to an end, she
submitted an LTD benefits claim.
In support of her claim, Dr. Joseph Williams and her other
primary care physician, Dr. Brenda Williams, signed statements
attesting that Spry suffered from cervical myelopathy and
cervical spondylosis. The statements reported that Spry
suffered weakness in her arms and shoulders, and hand tremors,
and that she had difficulty walking. They affirmed that Spry
was “[t]otally and [p]ermanently [d]isabled” and could not work
even with restrictions. J.A. 588-89.
On August 23, 2000, her LTD benefits claim was approved.
In late 2000, Spry also was awarded Social Security disability
5
income benefits, having been determined by the government to be
disabled as of March 17, 2000.
After the Administrator approved Spry’s LTD benefits claim,
her eligibility to continue to receive LTD benefits was reviewed
periodically, beginning in 2002. For the first review, Dr.
Brenda Williams opined that Spry continued to be totally
disabled and noted that Spry was “chronically in pain in the
shoulders, arms, hands, [and] knees and is significantly anxious
and depressed.” J.A. 537. The review resulted in Spry being
approved for continued benefits.
The next review occurred in 2004 and also resulted in the
continuation of Spry’s benefits. That review considered an
opinion of Dr. Joseph Williams that Spry continued to be unable
to work primarily as a result of her cervical problems. He
noted that her diabetes also contributed to her disability. He
reported limited motion in her neck and shoulders, decreased
strength in her right hand, and pain in her shoulder and neck.
He also noted that she suffered from headaches and balancing
problems and from a “[m]arked limitation” from a
“[m]ental/[n]ervous [i]mpairment.” J.A. 543.
The Administrator sent Spry’s records to two other
physicians. Dr. Tamara Bowman, an internal medicine specialist,
concluded, “[f]rom an internal medicine standpoint, there are
insufficient objective clinical findings documented to support a
6
level of functional impairment that would render [Spry] unable
to perform any occupation.” J.A. 566. However, Dr. Jaime
Wancier, a neurologist, found that Spry was totally disabled as
of May 5, 2004. He stated:
The presence of continued complaints of pain in the
neck down into the arms, decreased strength in the
upper extremities, etc. are most likely related to
chronic changes within the spinal cord secondary to
the severe stenosis that the claimant had as reported
in all of the x-rays. Most likely, the claimant
sustained chronic changes within the spinal cord
secondary to vascular compression. These changes are
most likely chronic in nature, irreversible and most
likely, permanent.
J.A. 563.
The next review of Spry’s claim began in 2005. Spry
submitted a detailed statement documenting her continued
problems as well as a statement from Dr. Joseph Williams noting
his continued view that she was totally disabled. Dr. Williams
also submitted his medical records through June 2005.
As with the prior review, the Administrator asked Dr.
Bowman to review Spry’s records. Dr. Bowman concluded again
that Spry was not totally disabled from an internal medicine
standpoint and also noted that in the records she was provided
“there is no documentation of a comprehensive neurologic,
musculoskeletal, or joint examination.” J.A. 656. On that
basis, Dr. Bowman stated that she could not “comment on any
7
restrictions or limitations based on [Spry’s] history of
cervical myelopathy.” J.A. 656.
The Administrator then referred Spry to neurologist Dr.
Charles Jervey on October 11, 2005, for an independent medical
examination (IME). Dr. Jervey examined Spry and concluded that
her surgery had corrected her cervical myelopathy. He noted
that her postoperative neurosurgeon’s exam was “relatively
normal . . . except for residual mild weakness which according
to [the neurosurgeon’s] report was much improved.” J.A. 671.
Dr. Jervey observed that Spry did not put forth full effort in
the strength tests he administered. He stated that although she
continued to express “subjective complaints,” because his
“objective findings [we]re relatively limited and seem[ed] to
[be] primarily . . . effort related,” he was “unable to
determine precisely how much, if any, disability exists.” J.A.
671. He continued, “My best opinion, however, is that she does
have the strength to return to work. The primary issue would be
one of pain and again that is a subjective complaint. . . . I
would think the patient could return to light duty work.” J.A.
671.
Accepting Dr. Bowman’s and Dr. Jervey’s opinions, the
Administrator had a vocational specialist prepare an
Employability Assessment Report (“EAR”) based on the functional
limitations derived from those opinions. After speaking with
8
Spry concerning her vocational background, interests, and
functioning level, the vocational specialist concluded that Spry
was employable and identified several sedentary jobs that she
could perform. A subsequent Labor Market Survey (“LMS”) found
that several jobs that she could perform existed in Manning and
surrounding areas. Accordingly, Spry’s benefits were terminated
on January 4, 2006, effective February 1, 2006.
Spry appealed the decision. She hired counsel, who
submitted results from a cervical myelogram and a CT scan
conducted on November 1, 2005, as well as physicians’ reports
from spinal surgeon Dr. Rakesh P. Chokshi--to whom Dr. Joseph
Williams had referred Spry--and radiologist Scott H. Allen. Dr.
Chokshi’s October 24, 2005, report notes that Spry complained of
significant pain but demonstrated motor strength of “5/5 in all
the major muscle groups in the upper extremities,” with “normal
and symmetrical” deep tendon reflexes, and “lumbar range of
motion [that] was reasonably well preserved.” J.A. 860.
Reviewing Spry’s November 1 tests, Dr. Chokshi noted that they
did “not show any significant stenosis.” J.A. 861. He also
opined that Spry did not need any further surgery and advised
her to stay active, including by doing her neck and back
exercises. Dr. Allen, reviewing the same tests, concluded that
Spry had a “mild degree of canal stenosis through the area of
fusion [that] appears to be due to diffuse bulge of the disc
9
along with spondylosis.” J.A. 864. His report added, “There is
facet arthritis as well. There is no evidence of disc
herniation and there does not appear to be significant foraminal
narrowing.” J.A. 864.
Spry also submitted updated medical records from Dr. Joseph
Williams, including the report from a January 11, 2006,
neurological exam. Dr. Williams noted that Spry still had “a
residual right cervical radiculopathy” and “some myelopathy” and
that she had been advised to undergo more surgery. J.A. 471.
Dr. Williams reported that his exam revealed strength of only “3
out of 5 on the right side” and unsteadiness on her feet and
left leg. J.A. 471. He stated that Spry suffered from the
following ailments: “[c]ervical disc disease S/P cervical disc
surgery with residual weakness in right arm,” “[h]erniated
lumbar disc or left lumbar radiculopathy,” diabetes mellitus
with “diabetic neuropathy,” hypertension, hyperlipidemia,
history of “depression and chronic pain syndrome,” and history
of “gouty arthritis involving left great toe.” J.A. 471.
The Administrator asked neurologist Dr. Vaughn Cohan to
review Spry’s records. Dr. Vaughn concluded that the records
did not indicate that Spry was totally disabled and explained
why he disagreed with Dr. Wancier and Dr. Joseph Williams. The
Administrator subsequently upheld its decision to terminate
Spry’s benefits, notifying her by a letter dated July 13, 2006.
10
Spry then initiated a final appeal, prompting the
Administrator to seek additional physicians to review Spry’s
records. Osteopath Dr. Michael Goldman concluded that the
records contained no evidence that Spry was unable to work.
Psychologist Dr. Lawrence Burnstein found no documentation that
Spry was totally disabled from a psychological perspective.
Internist Dr. Dennis Mazal determined that no internal medical
issues would prevent Spry from working. And neurologist Dr.
Henry Spira found that no neurological condition precluded
employment for Spry. On September 20, 2006, the Administrator
also requested neurological and orthopedic opinions from Medical
Review Institute of America, Inc. (“MRIoA”). Both MRIoA
reviewers concluded that there was no documentation indicating
that Spry could not work. By a letter dated November 3, 2006,
the Administrator notified Spry that her final appeal had been
denied.
Spry subsequently brought suit in federal district court
under 29 U.S.C.A. § 1132(a)(1)(B) (West 2009) of the Employee
Retirement Income Security Act of 1974 (“ERISA”), claiming that
her LTD benefits had been improperly terminated. 1
1
Although Broadspire and the Plan were both originally
named as defendants, Broadspire was later dismissed from the
action.
11
Deciding the case based on the administrative record, the
parties’ legal memoranda, and counsels’ oral arguments, the
district court granted judgment to Spry. The court found that
because the Plan grants the Administrator discretion to
interpret and apply the Plan provisions, the termination
decision would be reviewed for abuse of discretion. At the time
of the district court’s decision, proof of facts warranting
imputation of improper motives to a plan administrator required
application of a modified-abuse-of-discretion standard, thereby
reducing the deference given to the benefits decision. See
Colucci v. Agfa Corp. Severance Pay Plan, 431 F.3d 170, 179-80
(4th Cir. 2005); Johannssen v. District No. 1-Pac. Coast Dist.,
MEBA Pension Plan, 292 F.3d 159, 176 (4th Cir. 2002). Although
Eaton funds, sponsors, and administers the Plan, Spry conceded
that there was no basis for reducing the deference afforded to
the Plan’s decision. The district court therefore concluded
that it would defer to the Administrator’s decision so long as
it was reasonable and supported by substantial evidence. The
district court found, however, that the decision did not meet
that standard, for reasons that we will discuss. The court
therefore issued a judgment requiring the Plan to pay Spry LTD
benefits.
12
II.
Since the district court issued its decision, the Supreme
Court decided Metropolitan Life Insurance Co. v. Glenn, 128 S.
Ct. 2343 (2008), altering the effect of a conflict of interest
on the applicable standard of review regarding an ERISA benefits
denial. Under Glenn, proof of facts warranting imputation of
improper motives to a plan administrator still aids claimants
challenging adverse benefits decisions; however, the form of
that aid has changed. Such evidence no longer reduces the
deference the district court must give the benefits decision.
See Champion v. Black & Decker (U.S.) Inc., 550 F.3d 353, 358
(4th Cir. 2008). Rather, a simple abuse-of-discretion standard
is applied and the conflict of interest is taken into account as
a factor affecting whether the administrator abused its
discretion. 2 See id. Such a conflict is “‘more important
2
We have identified eight nonexclusive factors that a court
may consider:
(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary's
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
(Continued)
13
(perhaps of great importance) where circumstances suggest a
higher likelihood that it affected the benefits decision.’” Id.(quoting Glenn, 128 S. Ct. at 2351).
The Plan maintains that the district court erred in failing
to uphold the termination of Spry’s benefits. We review the
district court’s decision de novo, utilizing the same standard
applicable to the district court’s review. See id. at 359;
Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315,
321 (4th Cir. 2008). We conclude that the decision to terminate
Spry’s benefits was within the Administrator’s discretion. 3
Clearly, the evidence before the Administrator was
conflicting on the question of whether objective evidence
demonstrated that Spry was unable to work. Resolving this
conflict was the Administrator’s responsibility, and there was
nothing inherently unreasonable in the decision not to adopt the
opinions of Spry’s primary care physicians. See Black & Decker
fiduciary's motives and any conflict of interest it
may have.
Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan,
201 F.3d 335, 342-43 (4th Cir. 2000).
3
On appeal to us, Spry, for the first time, raises a number
of arguments that the Administrator manipulated the decision
process in an attempt to terminate Spry’s benefits. However, in
light of Spry’s concession in the district court that there was
no basis for reducing the deference afforded to the Plan’s
decision, Spry has waived those arguments.
14
Disability Plan v. Nord, 538 U.S. 822, 831-34 (2003) (holding
that ERISA does not require plan administrators to give special
deference to treating physicians’ opinions). However, the
district court provided several reasons for concluding that the
termination of Spry’s benefits was unreasonable, and we will
address those seriatim, along with some arguments that Spry
advances.
The district court first concluded that there was no
substantial evidence of any improvement or change in Spry’s
condition after May 5, 2004—the date Spry was last determined by
the Administrator to be unable to work—and that there was
substantial evidence that Spry had been unable to work prior to
that date. Indeed, the district court also determined that
since there was no evidence that Spry’s condition had changed,
the Plan had no basis for not continuing to rely on Dr.
Wancier’s opinion. We conclude that the district court’s
premise that no new evidence showed significant improvement in
Spry’s condition was incorrect. Such evidence included (1) Dr.
Chokshi’s report concerning his October 2005 examination in
which he observed motor strength of 5/5, reasonably well
preserved lumbar strength, and no need for further surgical
intervention; (2) Dr. Jervey’s October 2005 IME concluding that
Spry was capable of light duty work; and (3) the November 1,
2005 cervical myelogram and CT scan showing only a mild degree
15
of stenosis, no disc herniation, no cord deformity, and no
foraminal narrowing. The determination that Spry was no longer
eligible for benefits was also supported by the medical file
reviews of Drs. Cohan, Goldman, Spira, Mazal, and Burnstein.
The district court also concluded that the Administrator’s
decision to terminate Spry’s benefits “did not give adequate
consideration to the fact that [Spry] had been approved for
Social Security benefits” in November 2000. J.A. 1053. There
is no basis for that conclusion, however. The Plan’s letter
denying Spry’s appeal specifically noted that the Administrator
had considered the Social Security decision. The government’s
determination that Spry was disabled in November 2000 certainly
did not require the Administrator to decide, based on updated
information and additional medical opinions, that Spry remained
unable to work more than five years later.
The district court finally concluded that the Plan “relied
upon equivocal opinions in denying benefits.” J.A. 1053. The
district court first noted that Dr. Bowman, an internal medical
specialist, opined only that Spry was not disabled based upon
her internal medical conditions but did not give an opinion on
Spry’s neurologic condition. This criticism misses the mark,
however, as there is no indication that the Administrator relied
on Dr. Bowman’s opinion for any neurological proposition. The
district court next concluded that Dr. Jervey’s opinion was
16
equivocal because he stated that he was “‘unable to determine
precisely how much, if any disability exists.’” J.A. 1053.
But, while Dr. Jervey’s opinion was equivocal regarding
precisely to what degree Spry is disabled, it was not equivocal
on the proposition for which the Plan relied on the opinion,
namely, that Spry “could return to light duty work.” J.A. 671.
Whether Spry could perform an even more difficult level of work
was immaterial. 4
4
The district court also added that “the MRIoA peer review
speculated that Dr. Jervey’s examination suggested
‘pseudoweakness,’ despite Dr. Jervey’s tentative opinion, four
years of recognized disability by Eaton, six years of disability
recognized by the Social Security Administration, and unchanged
medical findings during the entire period.” J.A. 1053-54. As
we have explained, Dr. Jervey’s opinion was not tentative on the
question of whether Spry could perform light duty work, and the
record contained substantial evidence that Spry’s condition had
improved since the benefits determinations referred to by the
district court. Moreover, Dr. Jervey’s report clearly did
suggest that Spry’s “weakness” was effort-related. He stated,
Postoperatively . . . her [neurosurgeon’s] exam
indicates a relatively normal exam except for residual
mild weakness which according to his report was much
improved (it was only a 4-4+ weakness to begin with).
This indicates to me that at that point in time her
weakness was not to the point where it should have
impaired her ability to return to her work. On my
exam today, her validity score is relatively low. She
continues to have subjective complaints and the
objective findings are relatively limited and seem to
primarily be effort related.
J.A. 671.
17
The district court also concluded that Dr. Cohan’s opinion
was equivocal because he “indicated that ‘a current
comprehensive description of [Spry’s] neurologic and orthopaedic
examination signs would be helpful in further consideration of
[Spry’s] claim.’” J.A. 1053. Although we cannot find this
statement by Dr. Cohan in the record, we believe that the
district court intended to reference Dr. Cohan’s statement in
his June 2006 report that “[a]dditional clinical documentation
which would be helpful in further consideration of this claim
would be a current comprehensive description of the claimant’s
neurologic and orthopedic examination signs, as there has been
no such report since the Fall of 2005.” J.A. 872. This
statement did not render equivocal Dr. Cohan’s opinion that Spry
was not totally disabled. He specifically stated, “In summary,
it is my opinion, upon review of the extensive medical
documentation submitted that it is not indicative of a
functional impairment for ‘any occupation’ effective February 1,
2006.” J.A. 872. He did not suggest that he could not draw
that conclusion from the records he reviewed. He stated only
that more recent reports would be helpful in the event of
“further consideration” of Spry’s claim.
In addition to the points raised by the district court,
Spry also identifies what she contends are other deficiencies in
the Administrator’s decision to terminate her benefits. Spry
18
maintains that the Administrator acted unreasonably in not
placing more emphasis on Dr. Wancier’s 2004 opinion. As we have
already explained, however, significant new evidence concerning
Spry’s condition emerged after Dr. Wancier submitted his
opinion. The Administrator reasonably chose to rely on the
opinions of doctors who had reviewed this new information.
Spry also contends that each of the medical opinions the
Administrator relied on in deciding to terminate her LTD
benefits are flawed because they did not assess all of Spry’s
conditions. See McKoy v. International Paper Co., 488 F.3d 221,
224 (4th Cir. 2007). But the Administrator was not limited to
considering the opinions of physicians who addressed all of
Spry’s conditions. The critical point is that the Administrator
considered all of the conditions. And, nothing in the record
suggests that the Administrator relied on any physician’s
opinion for a proposition broader than the opinion that the
physician rendered.
Spry also argues that the Administrator acted unreasonably
in not considering whether Spry’s various medical conditions
were cumulatively disabling. However, except diabetes, which
Dr. Joseph Williams added as a secondary disabling condition
beginning in 2004, no other condition was ever listed by Spry’s
primary care physicians as being disabling. And, Dr. Mazal
opined in his September 2006 review that there was no evidence
19
that Spry’s diabetes would prevent her from performing the
duties of any occupation.
III.
In sum, we conclude that the Administrator acted within its
discretion in terminating Spry’s LTD benefits. We therefore
reverse the judgment in Spry’s favor and remand to the district
court for entry of judgment in favor of the Plan.
REVERSED AND REMANDED
20