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Alvis v. AT&T Integrated Disability Service Center

April 14, 2009


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Plaintiff brought this action, arising under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., for the wrongful denial of short-term disability ("STD") benefits. Presently before the Court are Plaintiff's Motion to Amend or Clarify the Pretrial Scheduling Order and Defendants' Motion for Summary Judgment. For the following reasons, Plaintiff's Motion is denied, and Defendants' Motion is granted.*fn1


1. AT&T Disability Income Plan

Plaintiff is a former employee of Pacific Bell Telephone Company, where he was a manager with sedentary job duties. While employed, Plaintiff participated in an employee welfare benefit plan known as the "AT&T Income Disability Plan" (the "Plan").

The Plan was self-insured and administered by a third-party claims administrator ("TPA"). It contained the following terms relevant to the disposition of the parties' instant Motions:

"Total Disability" or "Totally Disabled" means, with regard to Short Term Disability, that because of Illness or Injury, an Employee is unable to perform all of the essential functions of his job or another available job assigned by the Participating Company with the same full- or part-time classification for which the Employee is qualified. Plan § 2.26. "Injury" shall mean job and non-job related trauma or damage to the physical person of an Employee medically substantiated and treated by a Physician which renders an Employee incapacitated from performing the duties of any job assigned by the Participating Company. Plan § 2.12.

Upon the written request of a claimant or his duly authorized representative, received by the Committee or the Claims Administrator or the subcommittee to whom claim review authority has been assigned not more than sixty (60) days after the date of mailing or delivery of written notice of denial of such claim, the Committee or the Claims Administrator or the delegated subcommittee, as applicable, is required to give such claimant or his authorized representative a full and fair review of the claim, the opportunity to review pertinent documents, and the opportunity to submit to the Committee or the Claims Administrator or the delegated subcommittee, as applicable, issues and comments in writing. Id. § 5.5.2(a).

Claim Decision-Making Authority: The Committee and each Claims Administrator and each subcommittee to whom claim determination or review authority has been delegated shall have full and exclusive authority and discretion to grant and deny claims under the Plan, including the power to interpret the Plan and determine the eligibility of any individual to participate in and receive benefits under the Plan. The decision of the Committee or a Claims Administrator or any subcommittee, as applicable, on any claim, in accordance with the claim procedures set forth in this Subsection 5.5, shall be final and conclusive and shall not be subject to further review. Id., § 5.5.4. Information to be Furnished: Employees shall provide the Claims Administrator, the Plan Administrator, and/or the Participating Company with such information and evidence, and shall sign such documents, as reasonably may be requested from time to time, for the purpose of administration of the Plan. Id. § 7.1.

Sedgwick Claims Management Services, Inc. ("Sedgwick"), was the TPA for the Plan and had no role in the Plan's funding. Sedgwick was not financially associated with the Plan and received a flat fee for its services, without regard to whether it approved or denied claims. Employees of Sedgwick compromised both the AT&T Integrated Disability Service Center ("IDSC"), a unit of Sedgwick, and the Quality Review Unit ("QRU") of IDSC.

Once a claim for STD benefits was initiated, Sedgwick assigned to the claim a case manager responsible for determining initial eligibility and for contacting the employee and/or his treating doctors for necessary information. Sedgwick also notified the employee as to whether his claim has been approved or denied, and, if approved, for what period of time.

Based on the language of Plan § 7.1, Defendants contend it was the employee's responsibility to ensure additional medical information was provided, as necessary, to allow the case manager to continue evaluating the STD benefits claim to determine whether to authorize STD benefits for an extended period of time.

Participants that disagreed with the TPA's initial decision regarding benefits had the option to file an appeal pursuant to the methods and procedures provided in the Plan. Upon a written appeal from denial of benefits, the Plan provided that the Claims Administrator must give the claimant a full and fair review of the claim, the opportunity to review pertinent documents, and the opportunity to submit issues and comments in writing.

The QRU reviewed appeals filed under the Plan. It evaluated those appeals based upon the information before the IDSC in making the initial decision to deny the claim, the issues and comments submitted by the participant employee, and such other evidence as the QRU may independently have discovered. The QRU was permitted to, and did, seek assistance from independent medical advisors in analyzing medical evidence.

2. Plaintiff's Original Claim

On March 6, 2006, Plaintiff stopped reporting to work after allegedly experiencing numbness in his feet. On March 13, 2006, he submitted a claim to Sedgwick for STD benefits. IDSC acknowledged receipt of his claim via written correspondence.

The initial letter to Plaintiff provided the paperwork required for his claim and informed him that it was his responsibility to provide the necessary medical documentation substantiating his medical condition.

On March 21, 2006, IDSC sent Plaintiff a letter approving his benefits request from March 13, 2006, through April 2, 2006. However, on April 7, 2006, because no additional information had been received to support continued benefits, IDSC notified Plaintiff that his claim was denied effective April 3.

Subsequently, on April 11, 2006, IDSC received a faxed "Initial Physician Statement," dated March 27, and completed by Randall W. Armstrong, M.D., of Sacramento Knee & Sports Medicine, describing Plaintiff's then-current functional limitations as "can't bend/lift/stand." That same day, IDSC received a faxed copy of an "Initial Consultation" letter, also dated March 27, in which Dr. Armstrong recommended that Plaintiff undergo a CT mylegram to determine whether he had a disc herniation. Accordingly, on April 18, IDSC approved Plaintiff's claim for an extension of STD benefits through April 23. Plaintiff was subsequently approved for further extensions through July 23, 2006.

During the interim, Plaintiff had back surgery and, on July 27, 2006, Greg Rountree, an IDSC Disability Specialist, received from Plaintiff's treating physician, Dr. Gary A. Schneiderman, a fax containing progress notes dated July 6 and stating that Plaintiff's "pain has remitted, although he gets some occasional pain in his back. His leg pain has remitted completely.

He does have some persistent numbness that seems to radiate down the posterior aspect of the leg, like his leg is dead." The doctor elaborated, "He has excellent strength. Straight leg raise is negative to 60 degrees. He has decreased sensation over the dorsum of the left foot. The wound shows eschar in the midline. No inflammation."

On July 28, 2006, Mr. Rountree sent Plaintiff a letter notifying him that his claim for an extension of STD benefits had been approved through August 27, 2006. In that letter, Mr. Rountree explained to Plaintiff that if he was not sufficiently recovered to resume his job duties at the end of the approved period, updated medical information was due by August 22, 2006.

On August 24, having received no further medical information regarding Plaintiff's condition, Mr. Rountree called Dr. Schneiderman's office and left a message requesting updated work status, including any restrictions and exam findings to support those restrictions. That same day, Mr. Rountree left a message for Plaintiff stating that his benefits approval would expire on August 27, and that updated medical information was needed to support an extension.

On August 25, Mr. Rountree received a voicemail from Dr. Schneiderman's office stating that Plaintiff's last visit with Dr. Schneiderman had been on August 22, and that, on August 28 or 29, a dictation would be available, but would have to be requested from the medical records department.

Plaintiff also left a message for Mr. Rountree indicating that medical records from Dr. Schneiderman's office would not be available until August 30.

On August 28, Mr. Rountree called Dr. Schneiderman's medical records department and left a message requesting the dictation from August 22. The next day, Mr. Rountree called Plaintiff to advise that no medical records had been received.

Finally, on August 30, 2006, Mr. Rountree sent Plaintiff a letter notifying him that "after a careful and thorough review of [his] request for further payment of short term disability benefits..., it ha[d] been determined that [his] claim [did] not qualify for payment." Mr. Rountree provided those portions of the plan defining "total disability" and requiring employees to provide information and evidence as requested. The IDSC employee then stated that, because "[n]o additional information ha[d] been received to support continued disability benefits beyond August 26, 2006," STD benefits were denied effective August 28.

Mr. Rountree advised Plaintiff that if he disagreed with the determination, he could appeal to the QRU. He also provided Plaintiff with the procedures to do so.

In that communication, Mr. Rountree made clear that "[i]n order to determine ongoing disability, AT&T Integrated Disability Service Center [would] need clear medical evidence that support[ed] a severe functional impairment or limitation that would give credence to [Plaintiff's] functional inability to perform [his] job or alternative job duties available to [him]."

Mr. Rountree advised that "[t]his information may be included in the following: chart or progress notes, specialist's evaluations, physical therapy notes, diagnostic test results, operative report(s), or any other medical information [Plaintiff felt] support[ed] [his] inability to work."

Lastly, Mr. Rountree explained, "You shall be provided, upon written request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for benefits. ¶ 'Please note that your file may be supplemented after we respond to your request for relevant documents and such further information will be provided to you upon your future request(s).'"

Plaintiff subsequently submitted additional medical information to Mr. Rountree, including Dr. Schneiderman's August 22, 2006, progress notes, which stated, "His exam shows wound is well-healed. Straight leg raise is negative. Good strength...Follow-up in six weeks after concluding therapy. He remains temporary disabled until October 15, 2006." Plaintiff later faxed a "Physical Capacities Evaluation - Sedentary" form completed by Dr. Schneiderman, as well as the doctor's progress notes from September 21, 2006, which stated that "[o]n exam today, he appears to have good strength. Straight leg raise causes back pain, but no radicular symptoms...The patient has had a substantial flare in his back pain after undergoing physical therapy. He does not have radicular symptoms at this time."

After each communication, Mr. Rountree sent Plaintiff a letter informing him that the information received did not alter the previous denial decision, and that, to have such information considered, Plaintiff was required to submit an appeal to the QRU.

3. Plaintiff's Appeal to the QRU

On November 15, 2006, Plaintiff filed a written appeal with the QRU, and, on November 19, 2006, Mr. Rountree received a letter dated November 3, from Phillip A. Cooke, Plaintiff's counsel, requesting Plaintiff's entire disability file.

On December 1, 2006, after at least two unsuccessful attempts to contact Mr. Cooke, Stephen Austin, an IDSC Disability Specialist, reached Plaintiff's counsel by phone and informed him regarding the appeal process and the finality of any decision. Mr. Austin also inquired as to whether all medical information had been submitted. Mr. Cooke responded that he intended to review Plaintiff's file "before stating whether all medical has been submitted," but that he "[did] believe all medical has been submitted up to this point."

Several days later, on December 6, Mr. Austin spoke to Valerie at Mr. Cooke's office to follow-up as to whether Plaintiff planned to submit any additional medical information and to inquire as to whether Plaintiff wished to toll his appeal.

That same day, Mr. Austin received a fax from Mr. Cooke stating that Plaintiff had seen Dr. Schneiderman on November 14, and was waiting to be scheduled for a functional capacity evaluation ("FCE"). Nevertheless, according to Mr. Cooke, Plaintiff did not wish to delay the appeal by waiting for the results of that FCE.

On December 8, 2006, Valerie at Mr. Cooke's office again confirmed in a telephone conversation with Mr. Austin that "they [were] not submitting any additional medical documentation," that the QRU has all the information relating to Plaintiff, and that the QRU could proceed with the appeal.

On December 14, 2006, IDSC sent Mr. Cooke the requested copy of Plaintiff's claim file.

On December 28, 2006, Mr. Austin left a message for Valerie at Mr. Cooke's office to confirm once again that Plaintiff did not want to toll his appeal in order to include Plaintiff's "op report." Later that same day, Mr. Austin spoke with Valerie, who informed him not to toll the appeal, but that she would contact him the following day if she learned otherwise. Neither party alleges Plaintiff made any later attempts to toll the appeal or to submit additional medical information.

The QRU subsequently sought medical evaluations of Plaintiff's claim from independent physician advisors.

On January 3, 2007, a physician board certified in Physical Medicine and Rehabilitation, Dr. Saad M. Al-Shathir, M.D., completed a report for QRU, in which he concluded that "Mr. Alvis is not disabled ...

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