United States District Court, N.D. California, San Jose Division
April 13, 2004.
DAVID DIGIACOMO, Plaintiff,
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON; ADOBE SYSTEMS INCORPORATED GROUP DISABILITY INCOME PLAN, et al., Defendants.
The opinion of the court was delivered by: JEREMY FOGEL, District Judge
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT
At issue in this dispute is whether Defendants properly denied
Plaintiff's claim to certain long-term disability insurance
benefits. The parties have filed cross-motions for summary
judgment. The Court has considered the moving and opposing papers
as well as the oral arguments presented at the hearing on April
12, 2004. For the reasons set forth below, Plaintiff's motion
will be granted and Defendants' motion will be denied.
Plaintiff David DiGiacomo alleges that Defendants improperly
denied his claim to long term disability benefits to which he was entitled under an
Employment Retirement Income Security Act ("ERISA") policy.
ERISA, 29 U.S.C. § 1001 et seq.; Declaration of Paula McGee
("McGee Decl."), Ex. A (Liberty Group Disability Income Policy
No. GF3-860-038747-01("the Policy")). Plaintiff was employed by
Adobe Systems, Inc. ("Adobe") as a "Senior Computer Scientist,"
with duties described as follows: "[w]orks on extremely complex
problems of wide scope in analysis, design, and programming,"
"[a]nalysis of situations or data requires an evaluation of
intangible variance factors," [i]nterfaces with marketing,"
"[e]xercises autonomous judgment," "[p]rovides leadership," and
"[a]cts as mentor to engineers." Declaration of Melvyn D. Silver
("Silver Decl."), Ex 17. Adobe obtained long term disability
coverage from Defendants. Plaintiff is entitled to receive
two-thirds of his basic monthly earnings or $7,510.78 per month
if he is found to be "disabled" under the following terms of
i. If the Covered Person is eligible for the 60 Month
Own Occupation benefit, "Disability" or "Disabled"
means during the Elimination Period and the next 60
months of Disability the Covered Person is unable to
perform all of the material and substantial duties of
his occupation on an Active Employment basis because
of an Injury or Sickness; and
ii. After 60 months of benefits have been paid, the
Covered Person is unable to perform, with reasonable
continuity, all of the material and substantial
duties of his own or any other occupation for which
he is or becomes reasonably fitted by training,
education, experience, age and physical and mental
McGee Decl., Ex. A (Policy, section 2, p. P-007).
Plaintiff has complained of abdominal pain, has seen physicians
for diagnosis and treatment, and asserts that he cannot
concentrate or perform his job as a result of the pain and the
effect of the medications that he takes for the pain. Defendants
argue that Plaintiff is capable of doing his job because there is
no objective data supporting his diagnosis and that he has been
able to perform his job duties on a part-time basis during
various periods since he developed the alleged disability. They
assert that the medical records suggest that Plaintiff's symptoms
are psychological in origin. However, Defendants identify no
evidence that indicates affirmatively that Plaintiff has not
experienced pain that prevents him from performing all of the
material and substantial duties of his occupation.
Gastroenterologist Dr. Michael S. Verhille examined Plaintiff
on May 12, 2000. Dr. Verhille initially noted that "[m]y impression is that most
likely this is GERD [gastroesophageal reflux disease], although
the symptoms are somewhat atypical." Silver Decl., Ex. 2. During
that particular examination, however, Dr. Verhille found no
physical abnormalities that may have caused the pain.
Gastroenterologist Dr. John C. Fletcher subsequently examined
Plaintiff and concluded that "[t]his certainly sounds like
irritable bowel syndrome or nonuclear dyspepsia." Silver Decl.,
Ex. 3. Dr. Fletcher also noted: "Of interest, his girlfriend does
say that he is more anxious" and that "this man would be a
candidate for a trial of tricyclic drugs, SSRI, or even buspirone
[antidepressants]." Id. It is unclear how these comments are
related to the pain experienced by Plaintiff. Plaintiff stopped
working full time on March 2, 2001. He applied for disability
benefits on July 5, 2001. On the disability benefits application
form, his doctor stated that his diagnosis was "recurrent severe
abd pain that prevents him from concentration & working as
computer programmer" and the history was "[p]ersistent epigastric
pain without clear cause." Silver Decl., Ex. 6.
Defendants' nurse, Mark Janousek, who reviewed the claim file,
concluded that there was no objective data supporting Plaintiff's
doctors' conclusions and that "[t]reatment for GI problems have
[sic] been appropriate, however excessive at this point. It does
not appear that Clmt is being treated for his stress
management. . . . Clmt may not be receiving appropriate treatment
for psychological issues." Silver Decl., Ex. 12. On July 24, 2001,
in a telephone conversation, Disability Case Manager, Melissa
Chavez, discussed her opinion of Plaintiff's case with him. She
stated that "all objective test results are normal" and that
Plaintiff "is capable of medium manual activity." Silver Decl.,
Ex. 14 (July 24, 2001 telephone conversation). Plaintiff
responded that his job required strong mental ability.
Plaintiff was examined by Dr. Kenneth J. Hammerman on July 24,
2001. Dr. Hammerman discovered some objective evidence of a
possible source of Plaintiff's pain. Specifically, Plaintiff had
"an upper GI series which showed a small hiatus hernia and
reflux." Silver Decl., Ex. 16. The other tests were negative. Dr.
Hammerman also noted that Plaintiff "is now working 20 hours per
week" and "has lost about 20 pounds." Id. Dr. Hammerman
concluded that Plaintiff had "[e]pigastric pain, etiology
unknown. . . . This may well be psychophysiologic." Id. He also concluded that Plaintiff "is
not capable of returning to work at the current time." Id.
On August 10, 2001, Defendants denied Plaintiff's claim,
stating that the "[m]edical records do not support total
disability from all the material and substantial duties of your
occupation" and "treatment notes from your office visits with
[Dr. Verhille] all indicate subjective complaints of abdominal
pain. However, all objective diagnostic testing performed to date
has been normal." Silver Decl., Ex. 18. Nothing in Defendants'
denial indicates that they considered Plaintiff's claim that the
pain reduced his mental acuity, which resulted in his inability
to perform his job duties. Dr. Verhille wrote a letter in
response explaining that Plaintiff's "symptoms are consistent
with a diagnosis of functional dyspepsia" and that it "is common
and expected in patients with functional GI disorders to not have
extensive abnormalities on medical testing," yet "in addition to
[Plaintiff's] reported pain, he had an upper GI performed on
05-26-00 which did show gastoresophageal reflux disease, . . . an
esophagogastroduodenoscopy on 08-07-00 . . ., which showed a
small hiatal hernia," and "a gastric emptying test done in the
last two weeks which showed a borderline delay in gastric
emptying." Silver Decl., Ex. 23. Dr. Verhille stated that "[a]ll
of these are consistent with functional disease of the GI tract."
Id. Dr. Verhille further noted that Plaintiff "displays signs
of fatigue and discomfort and has had difficulty functioning,
which is correlated with his report of pain symptoms." Id.
After reviewing Plaintiff's job responsibilities, Dr. Verhille
concluded that "because of his symptoms . . . of chronic pain,
[Plaintiff] is not able to perform all the duties of his
occupation of Senior Computer Scientist at the current time."
On September 25, 2001, Defendants reviewed his records again
and concluded that Plaintiff "has had multiple tests for cause of
pain with no objective findings. . . . Findings of
gastroesophageal reflex disease and small hiatal hernia would not
preclude [Plaintiff] from being able to perform the material and
substantial duties of his occupation." Silver Decl., Ex. 25. On
December 12, 2001, Defendants rejected Plaintiff's appeal,
stating that the
objective medical documentation we have been provided
does not support your condition is [sic] of such
severity that it would prevent you from performing
the material and substantial duties of your
occupation as a Computer Scientist, throughout the elimination period. All testing
submitted has been essentially within normal limits
and your reported symptoms are mainly subjective.
Silver Decl., Ex. 30.
II. LEGAL 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 nonmoving 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. The Court Will Review Defendants' Decision for Abuse of
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 id. The policy at issue contains the
following language: "Liberty shall possess the authority, in its
sole discretion, to construe the terms of this policy and to
determine benefit eligibility hereunder." McGee Decl., Ex. A
(Policy, section 7, p. P-027). Plaintiff concedes that the policy
gives Defendants discretionary authority. Plaintiff's motion, p.
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 failing to meet deadlines for responding to
Plaintiff's claim and Plaintiff's appeal of the denial of her
claim. 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
Org. 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. at 1103.
Defendants represent that, during their review of Plaintiff's
claim, which was completed within seventy-nine days, they were in
contact with Plaintiff, his pharmacy, and his doctor, were
attempting obtain additional documents from his doctor, and that,
after obtaining the necessary documents, Plaintiff's entire file
was referred to Defendants MDS unit for medical review. See
Defendants' Opposition, pp. 8-10. Defendants thus appear to have
attempted to resolve Plaintiff's claim in good faith prior to the
deadline. Defendants also informed Plaintiff that they might need
additional time in view of the required correspondence. Although
Defendants offer no explanation as to why they did not formally
request an additional sixty days for review of the appeal prior
to the deadline, there is no indication that Defendants did not
make a good-faith determination of the merits of Plaintiff's
appeal. Defendants did not merely deny Plaintiff's claim in
reliance on a procedural deadline. Defendants exercised
discretion in their review of Plaintiff's claim and appeal, and this Court will accord
deference to their determination.*fn1
B. Defendants Abused Their Discretion in Denying Plaintiff's
Claim and His Appeal
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). Plaintiff's appeal was denied on the ground
that the "objective medical documentation we have been provided
does not support your condition is [sic] of such severity that it
would prevent you from performing the material and substantial
duties of your occupation as a Computer Scientist. . . . and your
reported symptoms are mainly subjective." Silver Decl., Ex. 30.
Notably, Disability Case Manager, Melissa Chavez, told Plaintiff
that his claim was problematic because "all objective test
results are normal" and Plaintiff "is capable of medium manual
activity." Silver Decl., Ex. 14.
In their notice of denial of the claim, Defendants emphasize
the lack of "objective data" supporting Plaintiff's diagnosis of
abdominal pain. In a case addressing a similar issue, the Seventh
Circuit stated: "the gravest problem with [the doctor's] report
is the weight he places on the difference between subjective and
objective evidence of pain. Pain often and in the case of
fibromyalgia cannot be detected by laboratory tests." Similarly,
here, Dr. Verhille concluded that Plaintiff's "symptoms are
consistent with a diagnosis of functional dyspepsia" and that it
"is common and expected in patients with functional GI disorders
to not have extensive abnormalities on medical testing."
Defendants have not pointed to any doctors' or nurses' findings
or conclusions that contradict Plaintiff's complaint of severe
pain. Their only basis for disregarding his complaint is that it
is not supported by objective data. However, the Policy at issue
does not require objective data. 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, 9 F.3d 1469.
Additionally, Defendants ignored the available "objective data"
in denial of the appeal. Dr. Vehille reminded them during the
appeal process that, "in addition to [Plaintiff's] reported pain,
he had an upper GI performed on 05-26-00 which did show
gastoresophageal reflux disease, . . . an
esophagogastroduodenoscopy on 08-07-00 . . ., which showed a
small hiatal hernia," and "a gastric emptying test done in the
last two weeks which showed a borderline delay in gastric
emptying." Silver Decl., Ex. 23. Defendants denied the appeal
even with this objective data in mind. Defendants have not
indicated what objective evidence they would require. In fact,
the Policy requires none, and Dr. Verhille has stated that there
often is no objective data consistent with pain due to GI
disease. It appears, instead, that Defendants denied benefits to
Plaintiff because Defendants do not believe that Plaintiff really
suffers from abdominal pain.*fn2 However, Plaintiffs have
not provided any facts contradicting, or even argument disputing,
the three examining doctors' diagnosis of pain.
Finally, Defendants do not specifically address whether
Plaintiff is able to concentrate to the full extent required by
his job description.*fn3 The Policy defines disabled in part
as "unable to perform all of the material and substantial duties
of his occupation on an Active Employment basis because of an
Injury or Sickness." McGee Decl., Ex. A (Policy, section 2, p.
P-007). It is undisputed that Plaintiff's job title was "Senior
Computer Scientist," Silver Decl., Ex. 2, which required an ability to work on extremely complex problems of wide
scope, analyze situations or data, evaluate intangible variance
factors, communicate with other departments, exercise autonomous
judgment, and to be a leader and a mentor. See Silver Decl., Ex
17. Nothing in this job description relates to "manual" activity.
Moreover, even assuming that Defendants also considered "mental"
activity, they have provided no explanation supporting their
conclusion that Plaintiff's ability to perform such activity is
not impaired. In contrast, Plaintiff and his doctors have
provided evidence that Plaintiff has difficulty concentrating and
performing at the requisite mental level required by the job
description, due both to his pain and his medication. "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 (2003). Defendants did not address the doctors' opinions
with respect to Plaintiff's ability to perform his job duties.
Such a failure only could have occurred in the context of a
review that was arbitrary and capricious.
In summary, in denying the claim and appeal, Defendants provide
only a conclusory statement that a lack of objective findings
indicates that Plaintiff is able to perform his job duties.
Defendants ignore Plaintiff's complaints of pain and the doctors'
conclusions and instead focus on a purported absence of objective
findings. Yet it is undisputed that Dr. Verhille concluded that
Plaintiff did show some objective basis for his symptoms and,
even if he had not, it would not be unusual for there to be a
lack of objective data. Nothing in the Policy requires objective
data supporting the existence of pain. There is no genuine issue
of material fact that Defendants' conclusion that Plaintiff can
perform his job duties not only was arbitrary but also ignored
the mental aspects of Plaintiff's job description. Defendants
thus failed to adhere to the language of the Policy, which
clearly defines "disabled" as someone who is "unable to perform
all of the material and substantial duties of his occupation on
an Active Employment basis because of an Injury or Sickness."
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 such evidence, it need not rule on the merits of Defendants' objections.
Good cause therefore appearing, IT IS HEREBY ORDERED that:
(1) Plaintiff's motion for summary judgment is GRANTED;
(2) Defendants' motion for summary judgment is DENIED;
(3) Counsel shall meet and confer concerning the
proper calculation of accrued benefits due to
(4) The time within which Plaintiff must file a
motion for attorney's fees and costs is extended to
June 14, 2004.