FINDINGS OF FACT AND CONCLUSIONS OF LAW [JS-6]
Plaintiff James Cushman ("Plaintiff") brings this action pursuant to 29 U.S.C. § 1132(a)(1)(B), to recover benefits under the terms of an ERISA plan. In July of 2005, Plaintiff left his job at a car dealership and began receiving disability benefits from Defendant American Fidelity Assurance Company ("Defendant").*fn1 In March of 2008, Defendant decided that Plaintiff no longer qualified for benefits because Plaintiff could perform sedentary work. As a result, Defendant terminated Plaintiff's benefits under the long-term benefit plan (the "Plan"). Having conducted a bench trial on February 10, 2009, the Court now makes the following findings of facts and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. For the reasons that follow, the Court finds that Defendant abused its discretion by deciding to terminate Plaintiff's long-term benefits under the Plan.
On July 26, 2005, Plaintiff filled out and submitted to Defendant a disability application, which stated that Plaintiff was experiencing "pain in feet [and] lower back." (Administrative Record ("AR"), at 311.) Plaintiff wrote in the application that he had been injured moving some suitcases and, ever since, had been experiencing pain in his back and his feet. (Id.)
Upon receipt of Plaintiff's disability application, Defendant began paying Plaintiff's benefits nearly immediately. (See id. at 25.) Over the next two and a half years, Defendant paid Plaintiff for his disability benefits in the amount of approximately $6,000.00 per month. (Id.)
In July of 2007, Defendant arranged for Plaintiff to be examined by a doctor in order to determine whether Plaintiff could return to work. (Id. at 454.) On August 7, 2007, Plaintiff met with Dr. Robert Shorr. (Id.) Dr. Shorr noted that Plaintiff's chief complaints were for "bilateral foot pain and edema." (Id.) Dr. Shorr noted that Plaintiff's main symptoms were constant pins and needles sensations in both feet, and that his feet were often cold, making sleep difficult. (Id. at 455.) Plaintiff also reported bilateral foot pain and pain in his left hip while ambulating. (Id.) Dr. Shorr noted that Plaintiff was walking with a cane. (Id.)
Dr. Shorr performed a physical examination of Plaintiff, which noted no tenderness in Plaintiff's back, and full range of motion in the lumbar spine. (Id. at 456.) Dr. Shorr found edema in both ankles and a "mild tremor" in the outstretched upper extremities. (Id.) Dr. Shorr also noted that Plaintiff's posture was normal in both sitting and standing positions, and that, although he walked with a cane, he rose easily from a chair. (Id. at 458.)
Dr. Shorr's report surveyed Plaintiff's past medical history at length. (Id.) Dr. Shorr noted Plaintiff's visits with Dr. Kuhlman in 2005, who reported that Plaintiff was having trouble ambulating, and who requested that x-rays be taken of Plaintiff's lower back, as well as a neurological consultation and referral to a physical therapist. (Id. at 459.) Dr. Kuhlman also noted that Plaintiff "needs to take a lot of pain medications," apparently to treat Plaintiff's low back pain and "bilateral foot pain." (Id.) Dr. Shorr's report also noted a visit to Dr. Verpukhovskiy in 2005, who reported that Plaintiff had "pain in his feet and forelegs, with numbness, and pins and needles sensations." (Id. at 460.) In January of 2006, Plaintiff was seen by Dr. Javaherian, who reported that Plaintiff suffered from "lower extremity edema and pain." (Id. at 462.) Dr. Javaherian referred Plaintiff to orthopedics for evaluation of Plaintiff's back and foot pain. (Id. at 463.) Dr. Shorr also noted a 2006 visit to Dr. Cordero, who stated that Plaintiff had "back and lower extremity pain." (Id. at 464.) Later in 2006, Dr. Cordero had reported that Plaintiff responded well to some medication, but that Plaintiff "continues to have pain in his legs." (Id. at 465.)
After recounting Plaintiff's extensive medical history, Dr. Shorr made his findings. Dr. Shorr found that Plaintiff had "developed what appears to be a polyneuropathy of unknown etiology." (Id. at 466.) Dr. Shorr wrote that he did not know the reason for Plaintiff's lower extremity edema and polyneuropathy. (Id.) Moreover, he noted:
It is not clear whether the condition is stable or worsening. From a medical standpoint, the patient definitely has not been fully evaluated or treated for his condition and this limits my ability to comment on disability issues. A thorough neurological evaluation with EMG and nerve conduction studies, CSF analysis, and other laboratory work would be necessary. At this point, there still is no diagnosis and my comments are based only on the physical findings and record review. (Id.) Despite this somewhat inconclusive finding, Dr. Shorr opined in the very next sentence that "[a]t this time, the patient can do only sedentary work, that is, work in a sitting position, requiring the use only of his upper extremities." (Id. at 467.)
Defendant also sent Plaintiff's medical files to Dr. Caroline Mason for review. (Id. at 470.) Dr. Mason did not perform a physical examination of Plaintiff, but she submitted a report dated February 19, 2008. (Id.) As part of Dr. Mason's evaluation, she attempted to contact Plaintiff's treating doctors. (Id.) She was unable to contact Dr. Javaherian, who was apparently no longer with the practice. (Id.) Dr. Mason did talk to Dr. Cordero, however, who was Plaintiff's current treating physician at the time. (Id. at 471.) Dr. Cordero reported that he had seen Plaintiff about a week earlier and that his physical condition had not changed. (Id.) Dr. Cordero informed Dr. Mason that Plaintiff continued to report bilateral foot pain and "3-4 pitting edema in both ankles." (Id.) Dr. Cordero further reported that Plaintiff appeared sedated, and Dr. Cordero expressed his concern with Plaintiff's use of pain medication. (Id.) Dr. Cordero said that Plaintiff reported too much pain to work even at a sedentary job. (Id.)
After reviewing Plaintiff's medical history, Dr. Mason found that Plaintiff was positive for leg edema. (Id. at 473.) Dr. Mason also noted that Plaintiff reported too much foot pain to work at a sedentary job. (Id.) Nonetheless, Dr. Mason stated that, in her opinion, Plaintiff could work in a sedentary position. (Id.) Dr. Mason went on to opine that Plaintiff could "start work in a sedentary position at four hours a day increasing two hours a day every two weeks until he is working at eight hours a day." (Id.) Dr. Mason said that he would not be able to stand or walk for more than 20 to 30 minutes without resting, and would be able to lift up to 25 pounds up to two times per hour. (Id.)
Based on the opinions of Dr. Shorr and Dr. Mason, Defendant terminated Plaintiff's long-term benefits on March 12, 2008. (Id. at 388.) In the letter, Defendant stated that, based on the independent medical reviews, Plaintiff could work in a sedentary position and was thus not unable to perform "any occupation." (Id.) Defendant provided Plaintiff with one final benefit check for $12,000.00. (Id.)
On April 16, 2008, Plaintiff's counsel notified Defendant that Plaintiff was appealing Defendant's decision to terminate his benefits. (Id. at 321.) A few weeks later, however, on May 23, 2008, Plaintiff's counsel sent Defendant another letter asking Defendant to "[p]lease wait a few more weeks before you make a decision in this matter so we can see what is happening with the sleep apnea issue." (Id. at 314.) Plaintiff apparently thought he might obtain results from further testing that could affect the outcome of the appeal. (Id.) Then, on June 12, 2008, Plaintiff's counsel sent Defendant another letter stating that, rather than waiting for the sleep apnea results, Plaintiff would like Defendant to begin reviewing his termination immediately. (Id. at 312.) Plaintiff's counsel warned that Defendant only had forty-five days under ERISA regulations to make a determination. (Id.) Sixty days later, on August 12, 2008, Plaintiff filed this lawsuit alleging a violation of ERISA. Defendant still has not made a decision on Plaintiff's appeal.
As an initial matter, the Court must determine what standard of review should be applied to Defendant's decision to terminate Plaintiff's benefits. The default standard of review applicable to a plan administrator's decision to deny benefits is de novo. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006). If the plan unambiguously gives the plan administrator discretion to determine a plan ...