The opinion of the court was delivered by: BUCKLO
The plaintiff, Judith Perlman, left her position as business manager with Swiss Bank Corp. ("SBC") on September 12, 1994. She claimed to be taking a disability leave, and shortly thereafter she filed a claim for short-term disability benefits. The claim was processed by defendant First UNUM Life Insurance Company ("UNUM").
After an initial review and an appeal, Ms. Perlman's claim was denied. She filed this suit under Section 502(a)(1)(B) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), to recover short and long-term disability benefits allegedly due to her under the terms of her coverage from SBC. Both parties have moved for summary judgment. For the following reasons, both motions are denied.
On March 22, 1988, Ms. Perlman was involved in a serious automobile accident. As a result, she had several surgical procedures to repair damage done to her gastrointestinal tract. Ms. Perlman also suffered from several mental problems related to the trauma of the accident, including migraine headaches and post-traumatic stress disorder. On April 15, 1992, Ms. Perlman again was involved in a car accident, but she suffered no physical injuries on that occasion.
Following the 1988 accident, Ms. Perlman entered the regular care of Dr. Carl Jackson. Dr. Jackson is a psychiatrist who has been seeing Ms. Perlman twice a week in therapy sessions since April 1988. Ms. Perlman also has sought treatment periodically from Drs. Henry Ruder and Robert Craig who both specialize in gastroenterology and from Dr. Frederick Freitag at the Diamond Headache Clinic.
The 1988 accident affected Ms. Perlman's work. Immediately following the accident, Ms. Perlman was on long-term disability leave for almost a year. She subsequently went on disability leave two more times, once in 1991 and again in 1992. These leave periods all were prompted by recurring conditions traceable to the injuries and resulting mental trauma Ms. Perlman suffered in the 1988 accident. She returned from her last leave on September 1, 1992, and had no extended absences due to sickness or illness prior to her departure on September 12, 1994.
Following her departure, Ms. Perlman filed a claim for short-term disability benefits with UNUM. Under the terms of her coverage, short-term disability benefits, which could last up to 26 weeks, were paid by SBC but administered
by UNUM. After the expiration of the 26 week short-term disability benefit period, an eligible insured could receive long-term disability benefits which were administered and paid by UNUM. An insured who had been receiving short-term disability benefits for 26 weeks would be switched over automatically to long-term disability benefits if the disability continued to persist.
Ms. Perlman's short-term disability claim was assigned to Robert D'Antonio. Mr. D'Antonio reviewed the "Attending Physician's Statement" filed by Dr. Jackson on October 4, 1994. In that form, Dr. Jackson listed her diagnosis as recurrent intestinal obstruction with impaired gastrointestinal function, post-traumatic non-classical migraine, and post-traumatic stress disorder. He described these problems as "chronic disorders with downhill course" and that she had a "poor prognosis." Dr. Jackson further stated that Ms. Perlman was "unable to work at this time" and that her absence would be "very extended." Following his receipt of this statement, Mr. D'Antonio requested additional medical records to support Ms. Perlman's claim. After a short delay, Dr. Jackson sent UNUM records of his entire treatment of Ms. Perlman as well as records from some other care providers including the Diamond Headache Clinic.
Mr. D'Antonio sent these records to Kathleen Dolan, a nurse who works for UNUM. Based on her review of the records and her belief that this was a "M&N [mental and nervous] claim" with a history of medical complications from the 1988 accident, Ms. Dolan recommended an independent medical examination for Ms. Perlman's headaches, chronic depression, and post-traumatic stress disorder. Ms. Dolan also suggested that Ms. Perlman undergo a CAT scan and an MRI of her brain. These recommendations were written down in a memorandum and sent to Mr. D'Antonio.
Despite these recommendations, Mr. D'Antonio did not request any tests or an independent medical examination of Ms. Perlman. In late December 1994, he did request and review the records of Dr. Craig, one of Ms. Perlman's gastroenterologists, and he spoke with Dr. Jackson on the phone concerning her condition. After completing his review of the medical records which had been submitted, he denied her claim for short-term disability benefits. On January 4, 1995, Mr. D'Antonio wrote that although the "medical documentation received does indicate a recurrent intestinal condition as well as Post Traumatic Stress Disorder . . . based on the information in our claim file, these conditions do not prevent you from performing the material duties of your occupation." In response to a letter from Ms. Perlman's attorney, Mr. D'Antonio provided further clarification concerning the materials he reviewed to reach his decision and the rationale for that decision. In that letter of January 30, 1995, Mr. D'Antonio stated that "the information received doesn't clearly show how these conditions are disabling. The medical information from Dr. Jackson . . . does not show that the frequency and severity of the migraines are such that the claimant cannot work."
Ms. Perlman appealed this decision through the UNUM appeals process. Carol Stanton, an appeals analyst, reviewed Ms. Perlman's claim as well as additional medical records which she provided in support of the appeal. Ms. Stanton discussed certain issues concerning the appeal with two UNUM nurses, Diana Martin and Christine Shanahan, but neither of these nurses actually reviewed the file. On July 21, 1995, Ms. Stanton denied the appeal, and in a written letter she explained that "we do not see a change in your medical condition which necessitated you to stop work. The records do not show a level of impairment which would restrict or limit you from performing the duties of your regular job given that you have worked with these conditions in the past." Following this denial, Ms. Perlman filed suit seeking to recover disability benefits.
Ordinarily, the denial of benefits to a participant in an ERISA plan is subject to de novo review. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989). If, however, the plan delegates authority to interpret its terms to the plan administrator or fiduciary, a court will review those interpretations under an arbitrary and capricious standard. Id.; Petrilli v. Drechsel, 94 F.3d 325, 329 (7th Cir. 1996). A plan does not have to use any specific language or "magic words" to have discretion. Chojnacki v. Georgia-Pacific Corp., 108 F.3d 810, 815 (7th Cir. 1997). The Seventh Circuit has held that language in a plan requiring "such due proof as shall be from time to time required" of a disability is enough to invoke the arbitrary and capricious standard. Patterson v. Caterpillar, Inc., 70 F.3d 503, 505 (7th Cir. 1995).
In the instant case, UNUM's plan states that "the insurance company will determine whether you are disabled for Plan purposes. In order for the payments to continue, you may be required to furnish proof of your continuing disability and show that you are under the direct care of a licensed physician." UNUM argues that this language is sufficient to grant it discretion and bring review of its decision within the arbitrary and capricious standard. Ms. Perlman contends that this language does nothing more than state the obvious: an insured claiming disability benefits must provide proof of a disability. Although Ms. Perlman's argument is a sensible reading of the language, other cases interpreting this language have held that this plan language gives discretion to UNUM and invokes the arbitrary and capricious standard of review. In Infantino v. Waste Management, Inc., 980 F. Supp. 262, 1997 WL 30992 (N.D. Ill. 1997), Judge Holderman found the Patterson decision to be "binding precedent" and refused to distinguish between the language in Patterson and the language in UNUM's plan. Id. at *4; accord Bollenbacher v. Helena Chem. Co., 926 F. Supp. 781, 786-87 (N.D. Ind. 1996); but see Lehmann v. UNUM Life Ins. Co., 916 F. Supp. 897, 900 (E.D. Wis. 1996) (holding that UNUM did not identify any language granting it discretion to determine eligibility for benefits).