The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge
ORDER: (1) GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND (2) DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (Doc. Nos. 50 & 51)
Presently before the Court are the parties' Cross motions for summary judgment. (Doc. Nos. 50 ("Def.'s MSJ") & 51 ("Pl.'s MSJ").) Also before the Court are the parties' responses in opposition and replies. (Doc. Nos. 54 ("Opp. to Pl.'s MSJ"), 61 ("Opp. to Def.'s MSJ"), 64 ("Reply to Def.'s MSJ"), & 66 ("Reply to Pl.'s MSJ").) Having reviewed the parties' arguments, the administrative record, and the underlying law, the Court GRANTS Plaintiff's motion for summary judgment and DENIES Defendant's motion for summary judgment.*fn1
Plaintiff Camilla Kochenderfer was a board certified anesthesiologist for twenty five years and employed by Anesthesia Services Medical Group from 1987 to 2000. (Administrative Record (AR) at 754.) Through her employment, Plaintiff was the beneficiary of a long term disability policy insured by Defendant. (Id. at 582--608.) She brings this case pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq, alleging that Defendant is not paying her the disability benefits to which she is entitled. (See, e.g., First Amended Complaint ¶¶ 1, 168.)
Plaintiff's policy provided benefits where she "(1) is Totally Disabled as the result of a Sickness or Injury covered by [the] Policy; (2) is under the regular care of a Physician; (3) has completed the Elimination Period; and (4) submits satisfactory proof of Total Disability." (Id. at 597.) For the first thirty six months of disability the policy applied the "own occupation" standard, defining "Totally Disabled" as unable to "perform the material duties of his/her regular occupation." (Id. at 589.) Subsequently, the analysis shifted to an "any occupation" standard, where the insured was totally disabled if she could not "perform the material duties of any occupation" "that [her] education, training or experience will reasonably allow." (Id.)
Plaintiff suffers from degenerative arthritis in both hips. (See, e.g., id. at 1163.) In November of 2000 Plaintiff had hip replacement surgery on her left hip.*fn2 (Id. at 751.) She filed for disability benefits following her surgery, which were awarded for the period of January 29, 2001 to May 4, 2001. (Id. at 634--35.) Defendant then decided that Plaintiff was not totally disabled. (Id. at 629--31.) It informed her of that decision on January 18, 2002. (Id.) Plaintiff appealed, providing additional documentary information which she believed bore on her ability to perform "the material duties of [her] regular occupation." (Id. at 568--74.) Defendant submitted these documents to Dr. Harold Markowitz, an orthopedic surgeon, for a "peer review." (AR at 948--72.) Dr. Markowitz concluded that Plaintiff was totally disabled under the "own occupation" standard. (Id. at 958.) Simultaneously, Defendant requested that Plaintiff submit to an "independent medical examination" (IME). (Id. at 547.) Plaintiff refused, offering several reasons, such as that the IME should have been conducted prior to the initial denial, and that her claim was closed. (Id. at 521--22.) Nonetheless, Plaintiff's benefits were reinstated on October 23, 2002. (Id. at 511.)
In 2004, Plaintiff exited the "own occupation" disability period and entered the "any occupation" period. Defendant "invited Plaintiff to submit any medical or vocational information and included a Disability Review Questionnaire for her to complete." (Def.'s MSJ at 8 (citing AR at 476--79).) Plaintiff completed and submitted the questionnaire. Her answers set forth her day-to-day activities and generally reflected her belief she could not perform any occupation given her physical limitations. (AR at 831--41.)
While Plaintiff was gathering additional documentary information, Defendant used her medical records to perform a residual employability analysis to identify "occupations suitable for Plaintiff based on her physical limitations, education and work history." (Def's MSJ at 11.) First, a nurse, Barbara Finnegan, performed a "Medical/Vocational Review" of Plaintiff's medical records to determine Plaintiff's restrictions and limitations. (AR at 1135.) She concluded, based on the records provided, that Plaintiff would be capable of full time sedentary work where she had the ability to change position. (Id.) Next, this report was given to Jody Barach in order to create a "Transferable Skills Analysis" report. (Id. at 1130--34.) Based solely on Ms. Finnegan's review, this report lists Plaintiff's education, training, and work history, states six "Transferable Skills and Abilities," and finally offers "a representative list of (five) occupations that the claimant can perform based on her transferable skills and in consideration of her education, vocational experiences and medical limitations." (Id.) The occupations listed are classified as "Sedentary," because they require "Exerting 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. Sedentary work involves sitting most of the time, but may involve walking or standing for brief periods of time. Jobs are sedentary if walking and standing are required only occasionally and all other sedentary criteria are met."*fn3 (Id. at 1131)
Plaintiff subsequently submitted additional documents, including four of particular note. The first was a report of an examination by Dr. Richard Santore, the doctor responsible for her hip replacement and follow-up care. (Id. at 914.) Dr. Santore noted that Plaintiff was "having pain at rest" and "having difficulty sleeping at night." (Id.) He also stated that "[s]he was active quite a bit out of town trying to take care of her mother with advancing stages of dementia in the Midwest." (Id.) Regarding recent x-rays, the doctor reported "no evidence of an accelerated arthritic process" but reiterated that Plaintiff "has unequivocal arthritis secondary to displasia manifested by subluxation and narrowed joint space." (Id.) He concluded:
There is no question that she will require a total hip replacement in the not too distant future. Given the relative stability, however, I am not recommending this at this time unless she were to insist upon it. She clearly has a disability which limits her to theoretical occupations that would include light work or semi-sedentary work only. Even working in an outpatient anesthesia environment would be too taxing for the hip. Executive type work could potentially be contemplated, as long as periods of standing and sitting could be modulated at her discretion. (Id.)
Plaintiff's second notable document was a vocational assessment by Roger Thrush, Ph.D. (Id. at 825--30.) Dr. Thrush's report discusses Plaintiff's restrictions and concludes that "Due to her functional limitations, Dr. Kochenderfer absolutely could not carry out the material duties of any full-time sedentary occupations and is certainly unable to perform the full range of sedentary work which requires the ability to sit for prolonged periods of time throughout the day." (Id. at 826--27, 829 (emphasis in original).)
Third, Plaintiff submitted the results of a "functional capacity evaluation." (Id. at 332--37.) The evaluation occurred over the course of two days and lasted three hours on each day. (Id. at 333.) Plaintiff was able to complete all of the tasks required of her for the evaluation. (Id. at 336.) However, the report noted that Plaintiff began the testing reporting a pain level of "2/10," but by the end of the second day her pain had risen to a reported "7/10." (Id. at 336.) Plaintiff also felt the need to subsequently take a Vicodin and spend the next day in bed. (Id.) Based on her substantial pain, the report concluded that Plaintiff "does not currently have the capacity to work on either a part or full time basis." (Id. at 337.)
The final document was a report by Dr. Santore from a February 17, 2004 examination. (Id. at 915.) It notes Plaintiff's "considerably greater difficulty walking," "more pronounced limp on the right side," and significant tendonitis of the right shoulder. (Id.) Further, Dr. Santore states that his "comments of January 20th were overly optimistic" and that Plaintiff's condition would limit her to jobs where she "could work from home or travel into an office at [her] discretion, could read reports and make decisions in a comfortable sitting and/or lying position, could occasionally travel to visit work sites, but could not stand or sit for prolonged uninterrupted periods of time." (Id.) He also notes his agreement with Dr. Thrush's conclusions and his own lack of "understanding of the legal implications of words that are used in medical reports." (Id.)
On March 12, 2004, Defendant informed Plaintiff that it was terminating her benefits based on non-disability. (Id. at 418--20.) Plaintiff appealed this decision, submitting more than 350 pages of additional records and information. As part of its consideration of this appeal, Defendant sent Plaintiff's records to Dr. William Hauptman for review. (Id. at 898--908.) Dr. Hauptman concluded that the medical records suggested that Plaintiff was capable of full time sedentary employment. (Id. at 907.) He also recommended that Plaintiff undergo an IME. Plaintiff, however, again refused. (Def's MSJ at 14--16.) Defendant also engaged a company to perform surveillance on Plaintiff. (Id. at 13--14.)
During the course of the appeal, Plaintiff continued to submit further documentation to Defendant, including statements by Dr. Santore and Dr. Thrush criticizing Dr. Hauptman's analysis and conclusions. (AR at 316--24.) Dr. Hauptman reviewed these further submissions, but his opinion remained unchanged. (Id. at 897.)
On March 7, 2005, Defendant denied Plaintiff's appeal, stating that Plaintiff had failed to meet her burden of proof. (Id. at 2.) This suit was filed on March 21, 2006.
Summary judgment motions allow courts to identify and dispose of factually unsupported claims. Celotex Corp. v. Cattrett, 477 U.S. 317, 323--24 (1986). Generally, such a motion may be granted when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).
In ERISA cases, however, the summary judgment analysis proceeds in a slightly different manner. In reviewing these motions the Court must determine the appropriate standard of review, either de novo or deferential. This determination "should be 'guided by principles of trust law.'" Metro. Life Ins. Co. v. Glenn, - U.S. -, 128 S.Ct. 2343, 2347 (2008) (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111--13 (1989)). That is, the Court "should analogize a plan administrator to the trustee of a common-law trust; and it should consider a benefit determination to be a fiduciary act (i.e., an act in which the administrator owes a special duty of loyalty to the plan beneficiaries)." Id. According to the Supreme Court, "[p]rinciples of trust law require courts to review a denial of plan benefits 'under a de novo standard' unless the plan provides to the contrary." Id. at 2348 (citing Firestone, 489 U.S. at 115). However, if the plan grants the administrator discretion in determining eligibility, "'[t]rust principles make a deferential standard of review appropriate.'" Id. (citing Firestone 489 U.S. at 111).
"[W]here the abuse of discretion standard applies in an ERISA benefits denial case, 'a motion for summary judgment is merely the conduit to bring the legal question before the district court and the usual tests of summary judgment, such as whether a genuine dispute of material fact exists, do not apply.'" Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009) (quoting Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 1999)). "An ERISA administrator abuses its discretion only if it (1) renders a decision without explanation, (2) construes provisions of the plan in a way that conflicts with the plain language of the plan, or (3) relies on clearly erroneous findings of fact." Boyd v. Bert Bell/Pete Rozelle NFL Players Retirement Plan, 410 F.3d 1173, 1178 (9th Cir. 2005) (citing Bendixen, 185 F.3d at 944). "A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing [body] on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Id. (quoting Concrete Pipe and Prods. of Cal., Inc. v. Constr. Laborers Pension Trust for S. Cal., 508 U.S. 602, 622 (1993)). Courts should "uphold the decision of an ERISA plan administrator 'if it is based upon a reasonable interpretation of the plan's terms and was made in good faith.'" Id. (quoting Estate of Shockley v. Alyeska Pipeline Serv. Co., 130 F.3d 403, 405 (9th Cir.1997)).
Where deferential review is appropriate, if the administrator "is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion." Glenn, 128 S.Ct. at 2357 (quoting Firestone, 489 U.S. at 115) (internal quotation marks omitted). The Ninth Circuit has made clear that this weighing process is mandatory. Nolan, 551 F.3d at 1154. In evaluating a conflict, the Court may consider evidence outside of the administrative record. See id. at 1150. If the Plaintiff submits such evidence and raises the question of a conflict of interest, the Court must "apply the traditional rules of summary judgment" to the conflict analysis. Id. If there is a genuine dispute of material fact with regard to the issue of bias, the Court may not weigh that evidence to determine the question of bias. Id. at 1154. A Court may resolve such issues through an evidentiary hearing or a bench trial. Id.
I. Whether The Plan Afforded Defendant ...