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August 29, 2003


The opinion of the court was delivered by: Charles Breyer, District Judge


This is an Employment Retirement Income Security Act (ERISA) lawsuit for long-term disability benefits. Now pending before the Court are the parties' cross-motions for summary judgment. After carefully considering the administrative record, and the pleadings filed by the parties, and having had the benefit of oral argument, defendant's motion for summary judgment is GRANTED and plaintiffs motion is DENIED. The Court concludes that an abuse of discretion standard of review applies and that defendant did not abuse its discretion in finding that plaintiff is not disabled from working in "any occupation" for which she is "reasonably fitted by education, training, or experience."


Plaintiff was employed by Parker Hannifin Corporation. Parker Hannifin sponsors a self-funded Group Insurance Plan, which includes long-term disability benefits. The Plan pays benefits for up to two years if the claimant is unable to perform the duties of her own [ Page 2]

occupation. After two years the Plan pays benefits only if the participant is "not able to do each of the material duties of any job for gain or profit for which [the participant is] reasonably fitted by education, training, or experience."

The Plan pays a third-party administrator ("TPA") to assist in claims administration. The TPA makes an initial claim decision. If benefits are denied, the claimant may appeal. The TPA reviews the appeal and any new information relating to the appeal, and then makes a recommendation to the Plan to approve or deny the appeal. An internal Parker Hannifin committee reviews the recommendation and decides whether to accept, reject, or modify the recommendation. Until January 1999, UnumProvident ("Unum") was the Plan's TPA. In January 2002, GatesMcDonald ("Gates") replaced Unum.

Plaintiff worked at Parker Hannifin as a cost accountant. She applied for and received long-term disability benefits beginning in January 1999 under the "own occupation" standard. Those benefits were scheduled to end in January 2001 unless she met the higher "any occupation" standard.

In November 2000, Unum had plaintiff submit to a Functional Capacity Evaluation ("FCE") to determine her ability to perform the demands of a financial analyst or any occupation. The physical therapist performing the evaluation found that plaintiff could not engage in "fingering," but that she had other functional abilities, such as being able to perform constant walking, occasional reach, handling, fingering, feeling, and standing as well as frequent sitting. The evaluator concluded that plaintiff could work at the sedentary level for eight hours a day, as long as certain restrictions are observed and plaintiff could frequently change her posture and take frequent breaks. The evaluator also suggested that plaintiff use her left hand where possible to avoid overusing her right arm.

Unum also asked plaintiff to provide updated medical reports. In January 2001 she submitted a report, on a form prepared by Unum, from her Orthopedic Surgeon, Dr. Barlas. Dr. Barlas reported that plaintiffs condition was unimproved and checked boxes that indicated she is disabled from her occupation and any other work. As to the question of when she will be able to return to work, he wrote that she is "permanently disabled." He also [ Page 3]

wrote that plaintiff is incapable of performing repetitive lifting, reaching, carrying, pushing, pulling, bending or squatting. In a question as to work capacity, he checked a box indicating that plaintiff is capable of sedentary work with a 10 pound lifting maximum. As to plaintiffs range of motion, he checked the box for "moderate impairment." The form also asked if plaintiff could be rehabilitated into her occupation or any other work. Dr. Barlas checked the "no" box for both of these questions.

Unum also had Genex, occupational consultants, conduct a Transferable Skills Analysis and Labor Market Survey to determine whether there were positions available in the San Francisco Bay Area that plaintiff could perform. Genex reviewed plaintiffs medical file, the FCE report, and plaintiffs education and work history, and identified four sedentary occupations that plaintiff could perform consistent with her physical limitations.

In May 2001, Unum advised plaintiff that she was not eligible for continued benefits under the "any occupation" standard. It based its decision on the results of the FCE and the Transferable Skills Analysis. It also noted: "Dr. Barlas indicated that you were capable of Sedentary work" and were incapable of performing "strenuous or repetitive lifting, reaching, carrying, pushing, pulling, bending, and squatting."

Plaintiff appealed Unum's decision. She claimed that the FCE and labor market survey failed to take into account that she is "unable to perform work related activities on a regular continuing basis in a competitive environment" and that it took her a month to recover from the activities she performed for the FCE. She submitted a narrative from Dr. Barlas and records from her rheumatologist, Dr. Jack Waxman. Dr. Barlas reported that plaintiff is restricted from continuous sitting for more than 15 minutes and keyboarding more than 15 minutes, and that she is precluded from lifting more than five pounds, prolonged walking and also precluded from reaching, lifting, pushing, pulling and torquing with either upper extremity, and that she is unable to do any work above shoulder level. Dr. Barlas also criticized the FCE, noting that it was done under artificial circumstances and "should not be extrapolated to assume that [plaintiff] would be able to perform these activities repeatedly and continuously over an eight-hour worked ay in a competitive work situation." He also [ Page 4]

opined that plaintiff could not perform any of the jobs identified by Genex.

While plaintiffs appeal was pending, Gates succeeded Unum as the Plan's TPA. Gates retained Dr. Bodor, a Diagnostic and Rehabilitation specialist, to review plaintiffs medical file. Based on his review, Dr. Bodor concluded that plaintiff does not meet the "any occupation" standard of disability. He found that the restrictions Dr. Barlas noted in his September 2001 report would not preclude plaintiff from performing the occupations identified by the labor market survey. He also noted that "[i]t could be argued on the patient's behalf that her multiple pains are sufficiently draining of energy and disabling that she simply does not have the energy to work, and that her flare ups are sufficiently disabling that during these times she would even be unable to do sedentary work." He explained that it would be hard for him to determine the extent of plaintiff s pain even if he met plaintiff. He suggested that "[v]ideo surveillance might help in providing objective evidence of whether the patient is indeed suffering as much as she states she is, and is similarly disabled. If video surveillance did not show much evidence of disability at home and in the community, it would further corroborate my opinion that she does not file the `any occupation' definition of disability.'"

Gates subsequently engaged a company to perform surveillance of plaintiff. On the first day of surveillance plaintiff did not leave her house, although it was confirmed that she was at home. On the third day neighbors confirmed that plaintiff was away on vacation. On the second day, plaintiff left her home, drove to an ATM machine, and then met a woman and child for lunch at a restaurant. Plaintiff subsequently went to a "Mail Boxes, Etc." store and emerged carrying a box in both her hands and arms. She bent over ...

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