This matter is before the court on the parties' cross-motions for judgment on the administrative record, pursuant to Federal Rule of Civil Procedure 52, arising out of defendant Life Insurance Company of North America's ("defendant" or "LICNA") termination of plaintiff Richard Hawley's ("plaintiff") long-term disability ("LTD") benefits.*fn1
For the reasons set forth below, the court finds that the proper standard of review is de novo, and thereunder, the court finds that plaintiff has not met his burden to show that he is totally disabled from engaging in "any occupation" as defined in the subject policy. As such, the court DENIES plaintiff's motion for judgment in his favor and HEREBY GRANTS judgment in favor of defendant.
Plaintiff, as an employee of Tandem Computers ("Tandem"), was a participant in Tandem's Group Long Term Disability Plan*fn3 insured by LICNA. (Compl., filed Jan. 11, 2008, ¶s 3-10.) The policy issued by LICNA to Tandem defined total disability for the first two years with reference to an employee's "own occupation." The policy provides: "An Employee will be considered Disabled if because of Injury or Sickness: 1. he is unable to perform all the material duties of his regular occupation . . . ." (AR 5.)
It is undisputed that plaintiff received benefits under that provision of the policy for two years. "After Monthly Benefits have been payable for 24 months," the policy provides that an employee is considered totally disabled if he is "unable to perform all the material duties of any occupation for which he is or may reasonably become qualified based on his education, training, and experience" (hereinafter referred to as the "any occupation" standard or provision). (Id.)
B. Initial Claim/Grant of Benefits
At the time of the subject accident which gave rise to plaintiff's disability claim, plaintiff was employed by Tandem as a Project Design Engineer. (AR 1008, 1138.) Previously, plaintiff obtained an electrical engineering degree from San Jose State. (Id.) He was a Data Systems Technician in the Navy from January 1977 to December 1980. (AR 1578.) Thereafter, he was an Engineer/Analyst for Sperry Univac from December 1980 through November 1983 and held a Senior Technical position at Daisy Systems from November 1983 to October 1986. (Id.) He began working for Tandem in October 1986 as a design engineer. (Id.)
The Department of Labor's occupational description for a "Design Engineer" states that such an occupation is driven by intellect, not physical capabilities. (AR 1012-14.) It involves conducting analytical studies, analyzing data, research, developing plans, analyzing systems, and numerous other job duties that are not physical in nature. (Id.) Tandem's job description for plaintiff's position is in accord, indicating that plaintiff's position involved virtually no physical requirements. (AR 1595.) According to Tandem, plaintiff's position involved "[e]valuation and testing of vender supplied software and work stations." (Id.) It required 95% sitting, 3% stooping, and 2% walking; the only physical activity identified is carrying 3 pound manuals, documents and tapes occasionally. (Id.)
On August 21, 1990, plaintiff was in a motor vehicle accident. (AR 1568.) On February 26, 1991, plaintiff was diagnosed with Reflex Sympathic Dystrophy ("RSD") by Dr. Amy Ladd, a condition in which plaintiff suffers severe pain and a burning sensation in his left upper extremity. (AR 1584-88.) Plaintiff applied for LTD beneifts on April 9, 1991. (AR 1606-09.) Dr. Vivek Pai ("Pai"), a neurologist and plaintiff's primary treating physician, submitted a report, dated June 6, 1991, in which he concluded plaintiff was totally disabled based on RSD, effecting his left upper extremity, and due to chronic pain therefrom. (AR 1560-61.) LICNA awarded plaintiff LTD benefits on June 24, 1991. (AR 1556-57.) Thereafter, on November 23, 1991, Dr. Michael Rowbotham of the UCSF Pain Management Center provided an additional opinion, concluding that plaintiff was totally disabled based on RSD.
In February 1993, at LICNA's request, Dr. Allen Bott ("Bott") performed an independent medical examination ("IME") on plaintiff. Dr. Bott concurred with the diagnosis of RSD, placing plaintiff in Stage II of the disease, but concluded that plaintiff "should be able to return to work full-time in the near future, particularly after his depression improves with appropriate anti-depressant medication therapy." (AR 1495.) Dr. Bott stated that while plaintiff cannot use his left upper extremity due to the RSD, he can still use his mind, his lower extremities and his upper right extremity. (Id.) He specified that plaintiff's future employers will need to accommodate breaks. (Id.)
Despite Dr. Bott's conclusions, on August 22, 1993, LICNA concluded that plaintiff was entitled to LTD benefits under the "any occupation" provision of the policy. (AR 1466.)
C. Interim Claims Processing
Over the years leading to LICNA's decision in 2007 to terminate plaintiff's benefits, defendant's handling of plaintiff's claim was largely routine. Dr. Pai provided numerous interim standardized form reports (including Attending Physician Statements ["APS"], Physical Capacities Forms ["PCF"], Physical Ability Assessments ["PAA"], letters and progress notes) regarding plaintiff's condition, covering the period of March 1991 to June 2006. (AR 1609 [APS], 1570-71 [Ltr.], 1560-61 [Ltr.], 1551 [PCF], 1552-1553 [APS], 1539 [PCF], 1534-35 [APS], 1533 [PCF], 1522 [PCF], 1512 [PCF], 1478-79 [APS], 1445 [APS], 1594 [APS], 1358-59 [APS], 1360 [PCF], 1297-1300 [APS], 1293-94 [APS], 1271-72 [APS], 1018-19 [PAA], 1232-33 [APS], 1205-06 [Ltr.], 1022 [Note], 1006-09 [APS], 1027-28 [Note], 1114-17 [APS], 955 [Note], 1082-83 [PAA], 959-60 [APS].) In each of these reports, Dr. Pai indicated that plaintiff's condition remained unchanged, and that he continues to suffer from RSD and chronic pain syndrome, which preclude him from working in any capacity. (Id.)
Plaintiff described his condition similarly over the years. Near the time of his initial diagnosis, plaintiff described that the pain on his left side is so severe that even air blowing over his left hand and arm causes a very uncomfortable sensation, and that his left hand cannot be moved or even straightened. (AR 1030.) In June 1999, plaintiff informed defendant that he could not attend a functional capacity evaluation because his left arm has a burning pain continuously. (AR 1236.) He stated that he hits people if they touch his left arm. (Id.) Plaintiff also complained of depression from not being able to have a normal life. (AR 1130-33.) He explained that his concentration and memory is "awful due to chronic pain" and that his sleeping pattern is "very irregular." (AR 965-970.) Thereafter, on Daily Activity questionnaires, from 2003-2005, plaintiff described his limitations and restrictions in an identical manner. (AR 1190-92, 965-70, 1087-92.) He stated that he has "constant chronic burning pain . . . [which] radiates through [his] left shoulder down through my left hand." (AR 1190, 966, 1087.) He stated that he cannot "concentrate or focus and become[s] frustrated and irritated and upset." (Id.) As for his activities during these years, plaintiff stated that he never uses a computer, and that he is only able to read or watch TV for 1 to 2 hours daily. (Id.) He stated he only drives in an "emergency." (AR 1190, 969, 1087.) He indicated that he walks daily "around [the] house" for 10 to 15 minutes. (AR 1191, 969, 1087.) He stated that while he does some physical therapy daily "with sponge balls in movement to stop atrophy of [his] left limb," his wife has to help him with all his personal needs. (AR 1191, 966, 969, 1087, 1091.) He asserted his limitations are so severe, that even though he is right handed, his wife had to help him fill out the questionnaires. (AR 965, 1088.)
During this period, while he was receiving LTD benefits from defendant, plaintiff applied for Social Security Disability Insurance ("SSDI") benefits as well. His application was denied in July 1991. (AR 1549.) In December 1993, defendant hired an attorney to represent plaintiff in his appeal of the denial of his SSDI benefits. (AR 1314.) Ultimately, plaintiff prevailed and was awarded SSDI benefits on January 31, 1994. (AR 1310.) The Social Security Administration ("SSA") found that plaintiff suffers from RSD and other related conditions and is incapable of performing his past relevant work or any other work. (AR 1310-13.) Based on the SSDI award, defendant reduced plaintiff's LTD benefits and demanded and received repayment from SSA of $77,186.90 for overpaid benefits. (AR 1303-06, 1329-32, 1343-44.) Plaintiff continued to receive SSDI benefits at the time defendant terminated his LTD benefits in February 2007. (Pl.'s Trial Brief, filed Feb. 17, 2009, at 5, ¶s 25-28.)
D. LICNA's Investigation Leading to the Termination of Plaintiff's LTD Benefits
On May 17, 2005, plaintiff's file was referred to LICNA's Special Investigation Unit ("SIU") on the basis that
(1) plaintiff did not wish to complete an FCE; (2) it was difficult to acquire medical information from plaintiff's doctor; and (3) plaintiff complained of severe pain but only saw his doctor once a year. (AR 963, 1086).*fn4 SIU accepted the file on October 4, 2005. (AR 1085.) As part of its investigation, in November 2005, plaintiff was placed under surveillance by defendant. (AR 1067.) The video surveillance, submitted as part of the administrative record, shows plaintiff at 9:24 a.m. on November 7, 2005, leaving his house and walking in his neighborhood. (Id.) He is carrying a water bottle in his right hand and is moving his left arm freely. (Id.) The surveillance report indicates that plaintiff arrived back home from his walk at 10:55 a.m. (Id.)*fn5 The investigator drove the route plaintiff walked and estimated the distance as roughly 5 miles. (Id.) Again, on November 9, 2005, plaintiff is seen on the videotape leaving his residence to go for a walk at 9:30 a.m., carrying a water bottle in his right hand; the surveillance report indicates plaintiff returned home at 11:00 a.m. (Id.) Plaintiff also went for a shorter walk on November 10, 2005. (Id.)
Plaintiff is also seen on the videotape, on November 7, 2005 at 9:24 a.m., using his left hand to reach into his front shirt pocket. (Id.; Ex. D to Def.'s Trial Brief, filed Feb. 12, 2009.) His movement is voluntary and without hesitation. That same day at 10:54 a.m., plaintiff, again voluntarily and without hesitation, uses his left hand and arm to open a garbage can lid. (Id.; Ex. C to Def.'s Trial Brief.)
Finally, on November 8, 2005, defendant's investigator observed plaintiff departing the area of his residence driving a black four door BMW at 11:43 a.m. (AR 1069.) He drove to a gas station where his wife got out of the car and went into the store for a brief period. Plaintiff returned home, driving the car, at 12:00 p.m. (Id.)
Also, as part of its investigation of plaintiff's file, defendant sent plaintiff for a functional capacity evaluation ("FCE") on August 23 and 24, 2006, by physical therapist, Stacey Pittman ("Pittman"). (AR 944-58.) Pittman observed plaintiff arriving at her clinic; she states that plaintiff's wife drove, and that plaintiff had difficulty getting out of the car and had difficulty walking 105 feet from the car to the clinic. (AR 953.) She states plaintiff: "began to walk very slowly towards the clinic. His left arm was hanging at his side. His gait appeared shuffled with wide base of support. There was a curb prior to entering the clinic. Plaintiff paused briefly before lifting his leg to step up the curb." (Id.) Pittman describes plaintiff's "Chief Complaints/Symptoms" as follows: Plaintiff has "burning pain in left upper extremity, most painful in left shoulder joint and left hand, very hypersensitive to touch, unable to tolerate any superficial touch, or even air blowing on arm . . . any movement of left shoulder, elbow, or hand increases pain symptoms. Can move fingers slightly but even this movement increases pain." (AR 944.) Pittman also describes plaintiff's functional limitations as he reported them to her: Plaintiff states he has to sleep in a recliner; his wife has to help him pull his zipper up and down and pull his pants up and down to go to the restroom; she has to ...