United States District Court, N.D. Illinois
March 23, 2004.
SUSAN KAZENAS, Plaintiff
ORACLE CORPORATION'S LONG TERM DISABILITY PLAN And HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendants
The opinion of the court was delivered by: WAYNE ANDERSEN, District Judge
MEMORANDUM, OPINION AND ORDER
Plaintiff Susan Kazenas comes before the Court on a motion for summary
judgment to recover long-term disability benefits from Defendants Oracle
Corporation's Long Term Disability Plan and Hartford Life and Accident
Insurance Company under § 502(a)(1)(B) of the Employee Retirement Income
and Security Act. Defendants have filed a cross-motion for summary
judgment. The Court holds that the arbitrary and capricious standard of
review applies in this case. Under this deferential standard, the issue
is whether Hartford, acting as plan administrator, had a reasonable basis
for denying Plaintiff's claim for benefits. For the reasons set forth
below, the Court concludes that Defendants' denial of benefits was not
arbitrary or capricious. Thus, Plaintiff's motion for summary judgment is
denied and Defendants' motion for summary judgment is granted. In
addition, Plaintiff's motion for leave to file her favorable Social
Security decision is denied.
Plaintiff Susan Kazenas ("Plaintiff") was employed by Defendant Oracle
Corporation ("Oracle") as a senior software consultant from May 2, 1996
until December 4, 2000, when she took a medical leave of absence.
Plaintiff was a participant in the Oracle Corporation Long Term
Disability Plan ("Plan"), which is an employee welfare benefit plan that
Oracle established through its purchase of group insurance issued by
Defendant Hartford Life and Accident Insurance Company ("Hartford").
The Plan provides long-term disability benefits for employees it deems
totally disabled. Under the Plan, total disability "means that: (1)
during the elimination period; and (2) for the next 24 months, you are
prevented by: (a) accidental bodily injury; (b) sickness; (c) mental
illness; (d) substance abuse; or (e) pregnancy, from performing the
essential duties of your occupation. . . ." The elimination period
is the period of time the insured must be disabled before benefits become
payable. Under this Plan, the elimination period is the first three
consecutive months of any one period of disability. The parties agree
that the elimination period ran from December 4, 2000, the date Plaintiff
became unable to work as a result of her alleged disability, through
March 3, 2001.
On April 3, 2001, Plaintiff filed an application for disability
benefits with Hartford, In her application, Plaintiff stated that chronic
headaches prevented her from performing the essential duties of her
employment, including travel. She noted in her application that travel
caused her stress and fatigue, resulting in severe headaches. In support
of her claim, Plaintiff's physician, Dr. McNamara, submitted an
application on her behalf that listed a primary diagnosis of "chronic
fatigue syndrome, fatigue." In
addition, Oracle filed documentation that listed Plaintiff's reason
for stopping work as headaches that precluded travel and concentration.
In reviewing the claim, Hartford referred Plaintiff's file to Dr. F.B.
Dibble, an associate medical director for Hartford. Because he had found
inconsistencies in the record, Dr. Dibble contacted Dr. McNamara for
clarification of the Plaintiff's condition and learned that Dr. McNamara
had changed his diagnosis from fatigue to depression. In addition, there
was documentation from Pamela Rak, a social worker, and from Dr. Cary
Haywood, a doctor of osteopathy, that Plaintiff was being treated for an
anxiety disorder and depression.
Further, Dr. McNamara's treatment records from an office visit with
Plaintiff on December 1, 2000 indicated that personal problems may have
contributed to her condition. During another office visit on January 26,
2001, Dr. McNamara noted that Plaintiff was having headaches but was
stable and was considering alternative employment. Also considered by
Hartford was the fact that Dr. McNamara granted Plaintiff permission to
return to work during the elimination period. He had signed a work
release form giving Plaintiff permission to return to work as of February
26, 2001. On July 9, 2001, Hartford denied Plaintiff's application for
benefits, having determined the medical evidence submitted on her behalf
was insufficient to establish a physical or psychiatric disability.
On July 28, 2001, Plaintiff appealed Hartford's decision and reasserted
her claim of disability due to headaches. In support of her appeal, Dr.
McNamara revised his diagnosis to migraine headaches and depression.
Hartford submitted this information to Dr. Dibble, but he concluded more
substantiation of the migraine diagnosis would be
needed to establish a physical disability. On November 5, 2001, Hartford
upheld its denial of benefits.
On January 21, 2002, Plaintiff again appealed Hartford's decision. This
time Hartford referred Plaintiff's claim to an internal appeals
specialist, who placed significant weight on Dr. McNamara's actual
treatment notes as first-hand representations of the Plaintiff's
condition during the elimination period. Due to the perceived
inconsistencies and unreliability of Dr. McNamara's treatment notes and
the conclusions of Dr. Dibble, the appeals specialist concluded that
Plaintiff was not totally disabled under the Plan. On April 26, 2002,
Hartford maintained its decision to deny Plaintiff's claim. Plaintiff
filed this lawsuit on November 6, 2002.
Summary judgment is appropriate "if the pleadings, depositions, answers
to interrogatories, and admissions of file, together with affidavits, if
any, show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law." Fed. R,
Civ. P. 56(c). The party seeking summary judgment carries the initial
burden of demonstrating an absence of evidence to support the position of
the nonmoving party. Doe v. R.R. Donnelley & Sons Co., 42 F.3d 439, 443
(7th Cir. 1994). The nonmoving party must then set forth specific facts
showing there is a genuine issue of material fact and that the moving
party is not entitled to judgment as a matter of law. Anderson v. Liberty
Lobby, 477 U.S. 242, 252 (1986). On cross-motions for summary judgment,
the Court "considers the merits of each cross-motion separately and draws
all reasonable inferences and resolves all factual
uncertainties against the party whose motion is under consideration."
Rawell v. Life Ins. Co, of N. Am., 1998 WL 708805, at *3 (N.D. Ill. Sept
I. The Arbitrary and Capricious Standard of Review Applies
Benefit determinations under ERISA are reviewed de novo unless the
trustees of the plan have been given discretion to determine benefit
eligibility, in which case the Court reviews benefit determinations under
the arbitrary and capricious standard of review. Trombetta v. Cragin
Federal Bank for Savings Employee Stock Ownership Plan, 102 F.3d 1435,
1437 (7th Cir. 1997). In this case, the Plan gave Hartford full
discretion to make factual benefit determinations: "The Hartford has full
discretion and authority to determine eligibility for benefits and to
construe and interpret all terms and provisions of the Group Insurance
Policy." The Plan's language is unambiguous and Plaintiff's assertion
that it is an insufficient grant of authority is conclusory and without
Plaintiff contends that Hartford has an inherent conflict of interest
as both payor of claims and adjudicator of claim eligibility. However,
the Seventh Circuit presumes a fiduciary acted neutrally unless specific
evidence of conflict or bias can be presented. Mers v. Marriott Int'l
Group Accidental Death and Dismemberment Plan, 144 F.3d 1014, 1020 (7th
Cir. 1998). "The existence of a potential conflict is not enough." Id
Even if actual bias can be shown, the standard of review does not
change. Chojnacki v. Georgia-Pacific Corp., 108 F.3d 810, 815 (7th Cir.
1997) (holding that such a conflict would only cause the Court to "give
the arbitrary and capricious standard more bite"). Absent specific
evidence of actual bias in this case, we decline to apply heightened
scrutiny to Hartford's benefit determination.
II. Hartford's Denial of Benefits was Reasonable
The question for the Court under the arbitrary and capricious standard
is whether the plan administrator's decision to deny benefits was
reasonable. Hess v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461
(7th Cir. 2001), As explained by the Seventh Circuit in Hess, the "plan
administrator's decision should not be overturned as long as (1) it is
possible to offer a reasoned explanation, based on the evidence, for a
particular outcome, (2) the decision is based on a reasonable explanation
of relevant plan documents, or (3) the administrator has based its
decision on a consideration of the relevant factors that encompass the
important aspects of the problem." Hess v. Hartford Life & Accident
Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001).
The documentation submitted as part of the Plaintiff's application for
benefits provides a reasonable basis for denying Plaintiff's claim. In
reviewing the claim, Hartford placed the most weight on Dr. McNamara's
treatment notes, which were found to be inconsistent and unreliable to
establish her disability based on headaches. In addition, other evidence
suggested that an anxiety disorder and depression were the true causes of
her condition, although Plaintiff listed headaches as the basis of her
claim. Furthermore, Dr. McNamara gave Plaintiff permission to return to
work as of February 26, 2001, which occurred during the three-month
elimination period. In fact, she returned to work for two days in March
2001. Dr. McNamara's signing of the work release alone establishes a
reasonable basis for Hartford to have concluded that the Plaintiff was
not totally disabled during the three-month elimination period.
Plaintiff urges the Court to consider other evidence of her disability
that was produced after Hartford had denied her second appeal. Dr.
Charles Hillenbrand, a
psychiatrist, wrote Dr. McNamara on September 29, 2002 concluding that the
Plaintiff has been totally disabled since November 2000. In addition,
Dr. McNamara responded to Hartford's denial of Plaintiff s second appeal
by giving his opinion that Plaintiff has been unable to sustain work
activity since December 1, 2000. Plaintiff believes these findings are
sufficient to establish her disability during the elimination period.
Even if these medical opinions should be given weight, the Court is not
persuaded that it would be unreasonable for Hartford to rely on Dr.
McNamara's treatment notes from office visits during the elimination
period, as well as the findings of Dr. Dibble. Furthermore, the Seventh
Circuit has held that in evaluating a plan administrator's decision under
an arbitrary and capricious standard of review, the Court should only
consider evidence that was before the administrator when it made its
decision. Hess, 274 F.3d at 462. Thus, because Drs. Hillenbrand's and
McNamara's statements were not before Hartford in making its decision,
these reports should have no bearing on a determination of whether
Hartford's denial of benefits was arbitrary and capricious.
III. Plaintiff's Favorable Social Security Decision Will Not Be
On January 12, 2004, the Social Security Administration ("SSA") issued
a favorable decision finding Kazenas disabled due to depression and
migraine headaches. Plaintiff asks the Court to grant leave to file a
motion to consider this favorable decision. The Seventh Circuit has held
that an SSA finding of disability is irrelevant when the SSA file was not
part of the materials before the plan administrators. Donato v. Metro.
Life Ins. Co., 19 F.3d 375, 380 (7th Cir. 1994). The SSA's favorable
decision in this case was made after the filing of this lawsuit and was
not a part of the record before Hartford. The
SSA decision is thus irrelevant to the question of whether Hartford
acted arbitrarily or capriciously when it denied Plaintiff's claim. Thus,
the Plaintiff's motion is denied.
The Defendants have carried their burden of demonstrating an absence of
evidence to support Plaintiff's claim that Hartford's denial of benefits
was arbitrary and capricious. For the foregoing reasons, Plaintiff's
motion for summary judgment # 7-1 is denied and Defendants' motion for
summary judgment # 10-1 is granted. Plaintiff's motion for leave to file
her favorable Social Security decision # 22 is also denied. This is a
final and appealable order, terminating the case.
It is so ordered.
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