United States District Court, N.D. California
January 20, 2004.
MARCELLA BONA, Plaintiff,
METLIFE DISABILITY INSURANCE COMPANY and BROADBASE SOFTWARE LONG TERM DISABILITY PLAN, Defendants
The opinion of the court was delivered by: JEREMY FOGEL, District Judge
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT
The parties have filed cross-motions for summary judgment. At issue
in this dispute is whether Defendants properly denied Plaintiff's claim
to certain disability insurance benefits. The Court has considered the
moving and opposing papers as well as the oral arguments presented at the
hearing on January 12, 2004. For the reasons set forth below, Plaintiff's
motion will be granted and Defendants' motion will be denied.
Plaintiff Marcella Bona alleges that Defendants improperly denied her
claim to long term disability benefits to which she was entitled under an
ERISA*fn1 plan. Sullivan Decl., Ex. 1 (MetLife Policy No. 5537023-G
("the Policy")). Plaintiff was employed by Broadbase Software, Inc. as
"Customer Community Program Manager," in which capacity she earned
approximately $130,000 per year. Plaintiffs Motion, p. 1; Silver Decl.,
Ex. 2. This position required travel, the "physical ability to lift and
transport packages that weigh a minimum of 35 pounds," the ability "to
work long hours," and exposure "to marked changes in temperature or
humidity." See Silver Decl., Exs. 3, 4, & 5; Sullivan Decl.,
On September 28, 2001, Plaintiff became unable to perform her job
duties due to alleged symptoms of multiple sclerosis ("MS"), see
Silver Decl., Ex. 8, the existence and cause of which the parties dispute
here. Neurologist Dr. Stasha Gominak diagnosed Plaintiff with chronic
relapsing MS on December 12, 2001. Silver Decl., Exs. 7 & 21.
Plaintiff previously had been diagnosed with MS when a brain magnetic
resonance imaging ("MRI") examination, which was performed in August
2000, revealed that there were "multiple periventricular white matter
changes consistent with demyelinating disease." Silver Decl., Ex. 30
(Jares letter, p.2). Defendants disputed that Plaintiff suffered from MS
and denied her claim to two-thirds of her earnings, as provided for in
the Policy. Silver Decl., Ex. 14. Defendants' stated reasons for the
denial included the following:
The medical on file does not substantiate a diagnosis
of multiple sclerosis. There are no test results or
findings on exam (such as MRI of Neuraxis,
Cerebrospinal Fluid Analysis, Intention Tremor,
Nystagmus, Scanning Speech, Urinary Incontinence,
Ataxia, Labile Affect) to support diagnosis of
Multiple Sclerosis. Also you are not being treated
with medications normally used to treat Multiple
Sclerosis (such as copazone, betaseron or avonex).
Generally patients that have Multiple Sclerosis are
treated with one of these medication agents in an
attempt to decrease progression of the disease.
. . .
After consideration of the available information, we
have concluded that your condition is not of the
severity to have precluded the performance of your
regular occupation as Marketing Director. Therefore,
you do not meet the plans [sic] definition of
disability cited above.
Silver Decl., Ex. 14. Defendants also appear to have based their
decision, at least in part, on the fact that Plaintiff became pregnant
following the onset of her alleged disability, on the ground either that
the pregnancy itself could have contributed to the symptoms that resulted
in her disability or that Plaintiff's ability to maintain a pregnancy
indicates that she does not suffer from MS.
Dr. Gominak thereafter wrote the following response to Defendants:
As you know Ms. Bona has well documented Multiple
Sclerosis. Her symptoms since onset have been
severe, uncomfortable sensory symptoms and severe
fatigue. Her diagnosis has been clearly confirmed
on MRI of the brain performed in 8/2000.
. . .
She had severe fatigue as well as worsening of her
sensory symptoms. She chose not to take steroids . .
. as do many of my patients, as steroid therapy has
never been shown to change the long term outcome of
MS. Ms Bona has also, since she has been seeing me,
been trying to get pregnant and has preferred to defer
long term preventative medications for MS until after
she has completed her pregnancy, which is a reasonable
choice on her part.
. . .
Despite the fact that Ms. Bona does not use a cane or
a wheelchair I have still made the determination that
her disease precludes her from working, even part
time. Your letter is phrased in such a way to suggest
that if the criteria you have established regarding
treatment and symptoms are not met then the patient
doesn't have MS and is not disabled. Neither of those
conclusions is true.
. . .
The fact that she has gotten pregnant while on
disability means that I have to be truthful in
answering that part of her fatigue may have to do with
pregnancy, but surely her pregnancy did not cause her
underlying, disabling condition, namely, MS. . . . I
also feel that you have purposefully dealt with her in
bad faith, using an inappropriate format for
questioning, and incomplete records in order to deny a
perfectly legitimate claim, which has not changed in
symptoms or status since the first time she went out
of work last August.
Silver Decl., Ex. 15. On June 17, 2002, Dr. Gominak found that Plaintiff
was unable to perform work of any kind. Silver Decl., Ex. 16.
After Defendants' denial, a second doctor, Dr. L. Neena Madireddi,
evaluated Plaintiff and her medical records and concluded that Plaintiff
"has well documented remitting/relapsing multiple sclerosis . . .
confirmed . . . by clinical examination, history and brain MRI study.
Multiple sclerosis is a very unpredictable disease and varies
significantly from time to time." Sullivan Decl., Ex. 11 (Madireddi
letter, p. 6). Dr. Madireddi also stated that it "is my medical
opinion that she is unable to perform even a sedentary work capacity at
this time," Sullivan Decl., Ex. 11 (Madireddi letter, p. 6), and that
Plaintiff "is definitely not a malinger [sic]," Sullivan Decl., Ex. 11
(Madireddi letter, p. 6).
Dr. Madireddi's findings were presented to Defendants in support of
Plaintiff's appeal of the denial of her claim. Defendants employed an
outside firm, NMR, to review all of Plaintiff's medical records. On
November 4, 2002, Dr. Joseph Jares, on behalf of NMR, concluded that the
"history is compelling for multiple sclerosis but is not uniquely
diagnostic of it. Also the MRI study is supportive of but not uniquely
diagnosis of multiple sclerosis." Silver Decl., Ex. 30 (Jares letter, p.
3). Dr. Jares also stated:
It is difficult to determine if Ms. Bona has
impairment due to objective findings as there has been
no neurologic examination submitted since the initial
examination of Dr. Gominak's in June 1999. In the
three years of progress notes that are submitted,
there is not one mention made of any abnormal or
positive or negative physical findings on neurologic
examination. The only positive abnormality is that of
the MRI of the brain, but this in and of itself is a
nonspecific abnormality and cannot be interpreted in
the absence of clinical findings to support or refute
. . .
As there has been no current neurologic examination
submitted, Ms. Bona retains the ability to work with
the only restriction being that of avoidance of heat
due to potential exacerbation of her MS symptoms. The
information submitted does not provide any evidence as
to an inability of Ms. Bona to work in at least a
seated sedentary to light capacity. The restrictions
and limitations placed by Dr. Gominak are unrealistic
for everyday life. They are not supported by any
positive or abnormal physical examination findings.
Silver Decl., Ex. 30 (Jares letter, p. 3). Dr. Jares concluded:
Ms. Bona retains the ability to work in at least a
seated sedentary to light full-time capacity from
09/28/01 through the present. This is based upon the
fact that there have been no abnormal neurological
findings submitted. This is also based upon the fact
that Ms. Bona has willingly decided to become
pregnant, even being aware of the fact that pregnancy
may place additional stress upon her body.
Silver Decl., Ex. 30 (Jares letter, p. 4). Dr. Jares opined further
that Plaintiff, "[i]n an 8-hour workday . . . retains the ability to
lift, carry or exert force up to: 20 pounds . . . maximum and frequently
lift/carry up to 10 pounds." Silver Decl., Ex. 30 (Medical Consultant
Review-Estimation of Physical Capacities). Dr. Jares did not find that
Plaintiff could lift, carry, or exert force up to fifty pounds or
frequently carry or lift up to twenty-five pounds. Defendants nonetheless
denied Plaintiff's appeal based in part on Dr. Jares's conclusions.
In their notice to Plaintiff denying her appeal, Defendants stated: "On
an August 23, 2000 office note Dr. Gominak indicated that all of Ms.
Bona's symptoms had resolved and a one-year follow up was recommended."
In fact, Dr. Gominak had written: "all of her symptoms have resolved to
numbness between D2 and D3 on the right." Silver Decl., Ex. 21. Dr.
Gominak also wrote that "[Plaintiff's] MRI scan shows characteristic
periventricular lesions" and concluded that she had "MS, chronic
relapsing." Silver Decl., Ex. 21.
In an unrelated proceeding, an administrative law judge for the Social
Security Administration found that the "medical evidence establishes that
claimant has the severe impairment of multiple sclerosis, acute,
relapsing." Silver Decl., Ex. 33 (Decision, p. 4).
II. SUMMARY JUDGMENT STANDARD
A motion for summary judgment should be granted if there is no genuine
issue of material fact and the moving party is entitled to judgment as a
matter of law. FED. R. CIV. P. 56(c))); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986). The moving party bears the initial burden of
informing the Court of the basis for the motion, and identifying portions
of the pleadings, depositions, answers to interrogatories, admissions, or
affidavits which demonstrate the absence of a triable issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving
party meets its initial burden, the burden shifts to the non-moving party
to present specific facts showing that there is a genuine issue of
material fact for trial. FED. R. CIV. P. 56(e); Id. at 324. The evidence
and all reasonable inferences therefrom must be viewed in the light most
favorable to the non-moving party. T. W. Elec. Service, Inc. v. Pac.
Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). Summary
judgment is not appropriate if the nonmoving party presents evidence from
which a reasonable jury could resolve the material issue in his or her
favor. Barlow v. Ground, 943 F.2d 1132, 1136 (9th Cir. 1991).
A. Abuse of Discretion Is the Appropriate Standard of Judicial Review
This Court reviews the denial of benefits de novo unless the benefit
plan gives the
administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan. See
Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989). The
default is that the administrator has no discretion, and the
administrator must show that the plan gives it discretionary authority in
order to receive judicial deference to its decision. See Kearney v.
Standard Insurance Co., 175 F.3d 1084, 1089 (9th Cir. 1999). Where such
authority is given, a deferential standard of review is proper. See
Firestone, 489 U.S. at 109. Where a plan grants discretionary authority,
the Court applies the "arbitrary and capricious" standard of review. See
The policy at issue contains the following language: "Metlife in its
discretion has authority to interpret the terms, conditions, and
provisions of the entire contract." Sullivan Decl., Ex. 1 (MetLife
Certificate of Insurance, p. iii). Plaintiff concedes that the policy
gives Defendants discretionary authority. Plaintiff's motion, p. 11.
However, while the Court thus ordinarily would review Defendants'
decision under the deferential standard of review, Plaintiff argues that
Defendants ceded their entitlement to deference by (1) failing to meet
deadlines for responding to Plaintiff's claim and Plaintiff's appeal of
the denial of her claim and (2) resolving the claim and appeal under
conditions tantamount to a conflict of interest.
1. Procedural Deadlines
In the Ninth Circuit, failure to adhere to regulatory deadlines may
amount to a nondiscretionary denial of benefits, thus rendering review
under the abuse of discretion standard meaningless. Jebian v. Hewlett
Packard Co. Employee Benefits Organization Income Protection Plan,
349 F.3d 1098 (9th Cir. 2003). The district court should "not defer when
a decision is, under the Plan, necessarily the mechanical result of a
time expiration rather than an exercise of discretion." Id. at 1105.
However, "deference may be due to a plan administrator that is engaged in
a good faith attempt to comply with its deadlines when they lapse." Id.
Defendants have provided evidence that, during their review of
Plaintiff's claim, they were in contact with Plaintiff and her doctors
and were attempting to resolve her claim in good faith prior to the
deadline. See Sullivan Decl., Ex. 16. Although Defendants offer no
explanation as to why they did not respond to Plaintiff's appeal prior to
the deadline, there is no
indication that Defendants did not make a good-faith determination of the
merits of Plaintiffs appeal. Defendants did not merely deny Plaintiff's
claim in reliance on a procedural deadline. Instead, they presented a
reasoned opinion-after requesting further review of Plaintiff's records
by new experts-explaining the basis of their decision.*fn2,*fn3
Defendants exercised discretion in their review of Plaintiff's claim and
appeal, and this Court will accord deference to their determination.
2. Conflict of Interest
"The degree of judicial deference associated with [the abuse of
discretion] standard of review may, however, be affected" when there is a
"conflicting interest [that caused] a serious breach of the plan
administrator's fiduciary duty to . . . the plan beneficiary." Lang v.
Long-Term Disability Plan of Sponsor Applied Remote Technology, Inc.,
125 F.3d 794, 797, 798 (9th Cir. 1997). The "affected beneficiary must
come forward with material, probative evidence, beyond the mere fact of
the apparent conflict, tending to show that the fiduciary's self interest
caused a breach of the administrator's fiduciary obligations to the
beneficiary." Id. at 798 (internal citation omitted). If that burden is
satisfied the Court continues its review for abuse of discretion. Id.
However, that review becomes "less deferential." Id.
The Court will not alter the standard of review here. Plaintiff has not
satisfied her burden of showing material, probative evidence of
self-interest that caused Defendants to breach their fiduciary duty to
her. The record does not support Plaintiff's argument that Defendants'
reasons for denying her claim and her appeal are inconsistent, thereby
satisfying her burden of showing a conflict of interest. See id. at 799.
The record indicates that Defendants denied Plaintiff's claim and appeal
because they were not persuaded as to the validity of her MS diagnosis,
either with or without the MRI evidence. It is true that, initially,
Defendants noted the lack of MRI evidence,
which they did not possess. However, they also denied Plaintiff's claim
on the basis of the lack of other indications that MS was the root of her
symptoms. See Silver Decl., Ex. 14. Later, they acknowledged the
existence of the MRI, but found it inconclusive in light of other
evidence pertaining to Plaintiffs medical condition. See Silver Decl.,
B. Defendants Abused Their Discretion in Denying Plaintiff's Claim and
1. Plaintiff's Employment Classification
It is an abuse of discretion for Defendants to construe provisions of
the Policy in a way that "conflicts with the plain meaning of the plan."
Taft v. Equitable Life Assur. Soc., 9 F.3d 1469 (9th Cir. 1993).
Defendants' interpretation of the plan must not be "unreasonable."
Saffle v. Sierra Pacific Power Co. Bargaining Unit Long Term Disability
Income Plan, 85 F.3d 455, 458 (9th Cir. 1996). The Policy defines
disability in part as an inability "to earn more than 80% of your
Predisability Earnings or Indexed Predisability Earnings at your Own
Occupation for any employer in your Local Economy." Silver Decl., Ex. A
(Policy, p. 9). "`Own Occupation' means the activity that you regularly
perform and that serves as your source of income. It is not limited to the
specific position you held with your Employer. It may be a similar
activity that could be performed with your Employer or any other
employer." Silver Decl., Ex. A (Policy, p. 8). The parties dispute the
definition of Plaintiff's "own occupation." Defendants argue that (1)
Plaintiff's employment position is best characterized as light or
sedentary work and (2) that the Court should consider only the position
she held as modified after she became disabled, and not her predisability
The record shows that Plaintiff's job title was "Customer Community
Program Manager." Silver Decl., Ex. 2. In this position, she was an
"instrumental member of [her employers's] Corporate Marketing team" and
was required to "work onsite at customer locations to build strategic
relationships," "work long hours when necessary," have the "physical
ability to lift and transport packages that weight [sic] a minimum of 35
pounds," travel, including internationally, fifty percent of the time,
and "[b]e exposed to marked changes in temperature or humidity." Silver
Decl., Exs. 3 & 4. A job requirement, among others, was "Manager 5
years/Director 10 years of marcom, corp comm or product marketing
experience." Silver Decl., Ex. 3.
Jeff Beeman, a vocational expert, reviewed Plaintiff's employment
duties and determined that her "position could be defined as a hybrid or
a mixture of sales, marketing, field work, technical support and customer
service," and that her position is "medium exertional according to the
Dept. of Labor standards." Silver Decl., Ex. 27 (Beeman letter, pp. 7
& 10). Mr. Beeman also concluded that her occupation description,
including the key worker traits outlined by the DOT of
directing others, influencing people, making
judgments, and dealing with people in user support,
marketing customer service, an on-site analysis
capacity, would seemingly be taken totally out of the
realm of possibility as far as Ms. Bona's ability to
perform her own occupation.
Silver Decl., Ex. 27 (Beeman letter, p. 9).
Defendants attempt to classify Plaintiff's job as "Marketing Manager"
according to the DICTIONARY OF OCCUPATIONAL TITLES VOL. I. ("DOT ").
Sullivan Decl., Ex. 35. However, although the DOT is helpful in
determining the duties of various occupations, in this case it is
improper to rely on a classification that omits a major part of the
claimant's actual duties. Defendants concede that the Policy "clearly
allows MetLife to look at the activities that Plaintiff performed in her
occupation." Defendant's Opposition, p. 12. Defendants' proposed
classification does not include business travel, the same weight
requirements or the management responsibilities, and it also would reduce
Plaintiff's salary by seventy-five percent. Ignoring Plaintiff's actual
employment activities and descriptions when determining whether Plaintiff
was qualified for disability benefits was an abuse of discretion.
Although Defendants state in their denial of Plaintiff's appeal that
"[o]ur vocational counselor who is a Certified Rehabilitation Coordinator
felt that Ms. Bona's occupation was in the light level capacity," Silver
Decl., Ex. 32 (Appeal denial, p. 2), Plaintiff argues persuasively that
her position qualifies as "medium exertional" according to the DOT,
Sullivan Decl., Ex. 35. "Medium Work" includes "[e]xerting 20 to 50
pounds of force occasionally, and/or 10 to 25 pounds of force frequently,
and/or greater than negligible up to 10 pounds of force constantly to
move objects." DOT, p. 1013. "Light Work" includes "[e]xerting up to 20
pounds of force occasionally, and/or up to 10 pounds of force frequently,
and/or a negligible amount of force constantly . . . to move objects."
Id. "Sedentary Work" includes "[e]xerting up to 10 pounds of
force occasionally . . . and/or a negligible amount of force frequently
. . . to lift, carry, push, pull, or otherwise move objects, including
the human body." Id. Plaintiff's job description and the actual duties
that she performed indicate that her position is more accurately
characterized as medium, not light, work. Defendants provide no
explanation for disregarding Plaintiff's predisability job duties.
Instead, they rely on the conclusory opinion of Joe Atkonson, who "felt
[Plaintiff's] occupation as a marketing manager/customer community
program manager position would be in the light duty category." Sullivan
Decl., Ex 13. As a matter of law, the duties that Plaintiff actually was
expected to perform prior to the onset of her disability properly are
characterized as medium, not light, work.
Defendants argue, however, that the Court should only consider
Plaintiff's post-disability accommodated employment position, noting that
in that position Plaintiff had ceased traveling and reduced the number of
days per week that she worked. Defendants also appear to argue that
Plaintiff's pregnancy would have prevented her from performing her
duties. Defendants thus attempt to reclassify Plaintiff's job to the
level of performance of which Plaintiff was capable while suffering from
symptoms of MS or pregnancy. This argument is inconsistent with
applicable law. See Saffle, 85 F.3d at 459. Defendants point to no
language in the Policy that permits Defendants to reclassify Plaintiff's
position to reflect accommodations made as a direct result of her
disability, and the Court can find none. Defendants merely argue that the
Policy's "definition of `own occupation' is `not limited to the specific
position you held with your Employer. It may be a similar activity that
could be performed with your Employer or with any other employer.'"
Defendant's Opposition, p. 12 (citing the Policy). There is no basis,
other than an arbitrary and capricious one, for construing this language
to permit Defendants to compare Plaintiff's present ability to the
requirements of her employment position after it was modified. The Policy
requires Defendants to determine whether Plaintiff is capable of
performing her job or "a similar activity" in such a way as to earn more
than 80% of predisability earnings. There is no reasonable basis for
including a modified activity or an accommodation in the definition of
"own occupation." Finally, if Defendants mean to argue that Plaintiff's
travel duties may have been limited in the short term by her pregnancy,
such temporary limitation does not provide a basis for
reducing Plaintiff's job classification to a lower category for the
purposes of disability analysis.
2. There Is No Genuine Issue of Material Fact as to Whether Defendants
Abused Their Discretion in Finding that Plaintiff Did Not Suffer from a
Disability that Rendered Her Incapable of Performing Work at the Level of
Her Own Occupation
According to the Policy, Plaintiff is disabled if it is determined that
she "unable to earn more than 80% of [her] Prediability Earnings . . . at
[her] Own Occupation," Silver Decl., Ex. A (Policy, p. 9), which the
Court has determined is best classified as "medium work" as defined in
the DOT. It is uncontroverted that Plaintiff's disability prevented her
from conducting medium work. Even Defendants' medical record reviewer,
Dr. Jares, upon whose report Defendants relied in denying Plaintiff's
appeal, did not find that Plaintiff could lift, carry, or exert force up
to fifty pounds or frequently carry or lift up to twenty-five pounds.
Defendants do not dispute that Plaintiff cannot perform her traveling,
marketing, and on-site sales duties as before.
Additionally, Defendants' determination that Plaintiff does not suffer
from MS was arbitrary and capricious. The determination appears to have
been based upon conclusory statements that there was the possibility that
Plaintiff's symptoms might have some etiology other than MS, a conclusion
unsupported by the findings and conclusions of two doctors who examined
and performed tests on Plaintiff. At most, Defendants' experts opined
that there is no conclusive diagnosis of MS.*fn4 In contrast, there
clearly is physical, objective evidence supporting a diagnosis of MS:
Dr. Gominak performed an MRI and concluded that it was consistent with a
diagnosis of MS. Dr. Gominak and Dr. Madireddi corroborated this physical
evidence with clinical observations. In particular, Dr. Gominak noted
that Plaintiff displayed other symptoms of MS, such as severe fatigue,
lack of coordination, depression, apathy, poor attention, and hand
tingling. He also found that Plaintiff was not capable of lifting or
carrying more than ten pounds
or working. Silver Decl., Exs. 7 & 8. Dr. Madireddi formed similar
conclusions. Sullivan Decl., Ex. 11. Finally, Defendants appear to have
misread Dr. Gominak's statement that Plaintiff's symptoms had resolved to
numbness between D2 and D3. In their denial letter, Defendants stated
that Plaintiffs symptoms had resolved completely. Dr. Gominak noted that
Plaintiff suffered from relapsing MS, so it is not surprising that her
symptoms might decrease and increase in severity over time. Overlooking
such observations could only have occurred under a review that was
arbitrary and capricious. "Plan administrators . . . may not arbitrarily
refuse to credit a claimant's reliable evidence, including the opinions
of a treating physician." Black and Decker v. Nord, 123 S.Ct. 1965, 1972
C. Defendants' Objections to Evidence
Defendants argue that the Court should not review evidence that was not
in the record during the claim review and appeal period. Because the
Court has not considered this evidence, it need not rule on the merits of