United States District Court, N.D. Illinois
May 5, 2004.
ANGEL COSME, Plaintiff, V. AMERITECH C777, INC., AMERITECH CORPORATION, AMERITECH COMMUNICATIONS, INC., AMERITECH HEALTH CONNECTIONS, INC., AMERITECH SERVICES, INC., AMERITECH INTERNATIONAL, INC., Defendants
The opinion of the court was delivered by: WILLIAM J. HIBBLER, District Judge
MEMORANDUM OPINION AND ORDER
Between approximately 1977 and 1997, Plaintiff, Angel Cosme, had been
employed by Illinois Bell Telephone Company, a subsidiary of Ameritech
Corporation ("Ameritech"), as a Customer Systems Technician, a
non-salaried position. On April 26, 1997, Cosme suffered severe injuries
when a vehicle crashed into his home and pinned him between the vehicle
and the refrigerator. Cosme applied for and received fifty-two weeks of
short-term disability benefits under Ameritech's Sickness and Accident
Disability Plan following the incident. Cosme's short-term benefits
expired on May 7, 1998; and on June 12, 1998, the Ameritech Disability
Service Center informed Cosme that he might be eligible for long-term
disability benefits under the Ameritech Long Term Disability Benefit Plan
("LTD Plan") as of May 8, 1998. On July 1, 1998, Cosme submitted his
application for LTD benefits. During the time period at issue, Ameritech
was the plan sponsor and administrator of the LTD Plan.
A non-salaried employee is disabled under the LTD Plan and eligible for
benefits if, after the exhausting short term disability benefits, he has:
an illness or injury, other than accidental injury
arising out of and in the course of employment by
the Company, or Participating Company, supported
by objective medical documents, that prevents the
Eligible Employee from engaging in any occupation
or employment (with reasonable accommodation as
determined by the Company or its delegate), for
which the Eligible Employee is qualified, or may
reasonably become qualified, based on training,
education or experience. An employee shall
continue to be considered disabled if prevented by
reason of such illness or injury, supported by
objective medical documentation, from working at a
job which pays wages which, when combined with
benefits payable from the Plan, equal less than
75% of the Eligible Employee's Base Pay at the
time the Disability occurred.
If the eligible employee is found disabled beyond the period for
short-term disability, "the plan shall provide, for the period during
which benefits are provided by the Plan, an amount of monthly benefit
which when added to amounts paid or payable form the following sources
equals 50% of Base Pay . . ."
The eligibility of an employee for the LTD Plan is determined by the
Ameritech Employees' Benefit Committee ("EBC"). The EBC has the power to
"grant or deny claims for benefits under the Plan and authorize benefit
payments pursuant to the Plan;" to "serve as the final review committee,
under the Plan and ERISA, for the review of all appeals by individuals
whose claims for benefits have been denied in whole or part;" and has
"full discretionary authority to interpret the terms of the Plan and to
determine eligibility for an entitlement to Plan benefits in accordance
with Plan terms."
On July 16, 1998, shortly after Cosme applied for LTD benefits, the LTD
Supervisor, Debbie Reeder, contacted Cosme's treating physicians, Dr.
Stamelos and Dr. Chioros, requesting that they provide all "office notes, test results from all treatment at your
facility from the period of February 1998 to present," including any work
restrictions they imposed on Cosme. Reeder subsequently obtained a
transferable skills analysis ("TSA") for Cosme, which concluded that
Cosme was not able to perform his previous job as a Customer Systems
Technician. The analysis also found that based on Cosme's training,
education, and experience, he was capable of performing at least ten
alternative occupations, for which at least two employers in Cosme's
geographic vicinity would have paid Cosme $10.65 or more per hour, and
thus more than allowed to qualify for the LTD plan. Cosme's claim for LTD
benefits was thereafter denied on September 25, 1998.
Reeder advised Cosme that he had a right to appeal the denial of
benefits to the EBC, and Cosme timely submitted a written request for
reconsideration of the denial of his LTD claim, together with additional
medical records, on November 17, 1998. After receiving Cosme's appeal,
the EBC notified him that he had a final opportunity to submit any
additional clinical documentation to support his claim by December 15,
1998. After considering the evidence and obtaining an additional opinion
from an independent physician advisor, Dr. David Trotter, the EBC denied
Cosme's appeal on February 19, 1999. The EBC notified Cosme that under
the terms of the LTD Plan, the decision of the EBC was final.
Subsequently, on February 16, 2001, Cosme filed the instant action
against Ameritech C777, Inc., Ameritech Corporation, Ameritech
Communications, Inc., Ameritech Health Connections, Inc., Ameritech
Services, Inc., and Ameritech International, Inc. (collectively,
"Defendants"), claiming that he had been wrongfully denied disability
benefits under the LTD Plan. On August 27, 2002, Cosme requested that the
EBC reconsider the denial of his LTD benefits claim. In response, the LTD
plan administrator obtained a supplemental labor market survey that
revealed at least four service dispatcher jobs that Cosme could have performed that would
have earned him enough pre-disability base pay to exclude him from the
LTD plan. Defendants filed the summary judgment motion at issue on
December 11, 2003.
This action arises under the Employee Retirement Income Security Act of
1973, 29 U.S.C. § 1001, et seq., ("ERISA"), as Cosme claims
that he was wrongfully denied benefits provided by an employee welfare
benefit plan, the LTD Plan. 29 U.S.C. § 1132 (a)(1)(B).
II. Legal Standard
The Court will grant summary judgment if "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). A genuine issue of material fact
exists only if "the evidence is such that a reasonable jury could return
a verdict for the nonmoving party." Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). The initial burden is on the moving
party to demonstrate the absence of a genuine issue of material fact and
that judgment as a matter of law should be granted in the moving party's
favor. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). Once
the moving party has met the initial burden, the opposing party must "go
beyond the pleadings" and "designate specific facts showing that there is
a genuine [material] issue for trial" Anderson, 477 U.S. at 248.
In its summary judgment analysis, the court must construe the facts and
draw all reasonable inferences in the light most favorable to the
nonmoving party. Bombard v. Fort Wayne Newspapers, Inc.,
92 F.3d 560 (7th Cir. 1996).
The Court will grant summary judgment in this case only if there is no
genuine issue of material fact that the EBC's decision to deny LTD
benefits was not arbitrary and capricious. After separate briefing by the parties on the standard of review, on June
6, 2002, this Court ruled that the standard of review of the EBC's
administrative proceedings is arbitrary and capricious. See, e.g.,
Olander v. Bucyrus-Erie Co., 187 F.3d 599, 607 (7th Cir. 1999). In
explaining this standard, the Seventh Circuit held that a discretionary
benefit decision: "will be sustained if reasonable," id. at 604;
"will be overturned only if it constitutes abuse of discretion;"
id. at 606; and "will be reversed only if . . . [the
fiduciary's] determinations were not just clearly incorrect but downright
unreasonable." Id. at 607. On deferential review, the issue is
not whether the balance of evidence in the medical records favors the
plaintiff's position. Leipzigv. AIG Life lns. Co., 362 F.3d 406,
409 (7th Cir. 2004). "The insurer's decision prevails if it has rational
support in the record." Id. "ERISA does not require a
`full-blown' investigation, but it does demand a `reasonable inquiry'
into a claimant's medical condition and his vocational skills and
potential." O'Reilly v. Hartford Life & Accident Ins. Co.,
272 F.3d 955, 961 (7th Cir. 2001) (citing Quinn v. Blue Cross &
Blue Shield Assoc., 161 F.3d 472, 476-77 (7th Cir. 1998)).
Defendants state that their decision to deny LTD benefits to Cosme was
not arbitrary and capricious. Defendants claim they came to their
decision to deny LTD benefits after they reasonably relied upon reports
and restrictions from Dr. Stamelos, Cosme's orthopedic surgeon, and from
Dr. Chioros, Cosme's podiatrist. Based on this evidence, Defendants first
found that Cosme was capable of performing sedentary and light duty work.
Next, Reeder obtained a TSA, dated August 27, 1998; and a labor market
survey, dated September 10, 1998. Based on this, Reeder found that Cosme
had the training, education, or experience to perform at least ten
sedentary/light duty jobs that existed in the labor market; that were
within his medical and geographical restrictions; and that paid at least 50% of his pre-disability base pay. An employee is qualified for
the LTD Plan only if his illness or injury prevents him from engaging in
any occupation or employment for which he is qualified, or may
reasonably become qualified, based on training, education or experience.
Therefore, Reeder found that Cosme was not disabled as defined by the LTD
The reports and restrictions from Dr. Stamelos and Dr. Chioros, the
TSA, and the labor market survey, in addition to an opinion from an
independent orthopedic surgeon, were part of the administrative record
reviewed by the EBC in Cosme's appeal. After a review of the
administrative record, the EBC denied Cosme's appeal. In Cosme's
post-suit request for reconsideration, the LTD plan administrator
obtained a supplemental labor market survey and found that at the time
Cosme applied for LTD benefits, he could perform other jobs that would
have earned him 50% or more of his pre-disability pay.
Cosme, however, claims that the EBC's determination that Cosme was not
disabled as defined by the LTD Plan was arbitrary and capricious. Cosme
claims that Defendants: (1) failed to fully evaluate all medical evidence
and restrictions, including a report by Cosme's vocational expert, Judith
Sher, stating that Cosme would not be able to earn 50% of his pay with
his work restrictions; (2) ignored various recommendations from some of
Cosme's treating physicians and failed to investigate the findings of
others; and (3) failed to contact the neurologists treating Cosme for
First, Cosme asserts that Defendants unreasonably failed to contact Dr.
Chioros after being made aware in June 1999 that he diagnosed Cosme with
reflex sympathy dystrophy ("RSD") and opined to the permanency of that
condition. Defendants actions here, however, were not unreasonable.
Reeder's notes indicated that she spoke with Dr. Chioros, and that he
felt there were no restrictions based on his treatment of the patient. Although Dr.
Chioros states in his deposition that he never had any contact with
Cosme's "employer," Dr. Chioros' deposition was not part of the
administrative record reviewed by the EBC. Furthermore, the EBC denied
Cosme's appeal on February 19, 1999, and therefore, the June 1999
diagnosis was also not part of the record reviewed by the EBC.
"Deferential review of an administrative decision means review on the
administrative record." Perlman v. Swiss Bank Corp. Comprehensive
Disability Prot. Plan, 195 F.3d 975, 982 (7th Cir. 1999). The
Seventh Circuit has never allowed parties to take discovery and present
new evidence in ERISA cases where the question is whether a decision is
arbitrary and capricious. Id. "[W]hen review under ERISA is
deferential, courts are limited to the information submitted to the
plan's administrator." Id. Moreover, Defendants reviewed Dr.
Chioros' report, and Cosine had several opportunities to supplement the
administrative record with further reports. Defendants were not required
to request further examination. See, e.g., Garg v. Employee Benefits
Admin. Comm., No. 01-1484, 2002 WL 31769473, at *3 (7th Cir. 2002)
("Where, as here, apian administrator has sufficient evidence from the
claimant in the record to make a reasonable decision to deny disability
benefits, there is no further obligation to inquire.")
Second, Defendants' decision not to contact Cosme's neurologist with
regard to his alleged post-concussion syndrome was not arbitrary and
capricious. Dr. Stamelos referred to the post-concussion syndrome in his
reports, and he decided that Cosme should have certain light duty
restrictions based on that. Although Dr. Stamelos stated that he will
defer to Cosme's neurologist for future prognosis and treatment of the
post-concussion syndrome, Dr. Stamelos' opinion was based on Cosme's
status at the time he applied for LTD benefits. Not only were future
neurologist reports not part of the administrative record, Cosme had
ample opportunity to provide the Plan administrator with reports from his neurologist, but he did not do
so. When his claim was denied, Cosme was advised that he could appeal the
denial to the EBC and submit "any medical records or written statements
which [he] or [his] health care provider [felt] support[ed] the presence
of a totally disabling medical condition." When the LTD Plan received
Cosme's appeal, it again advised him that he had a final opportunity to
submit additional medical documentation to support his claim. However,
Cosme never submitted any additional records or reports from Dr. Chioros
or his neurologist.
Third, Judith Sher's vocational evaluation was prepared on May 25,
2000, more than a year after the denial of Cosme's appeal, and thus it is
also not part of the administrative record reviewed by the EBC. Although
Cosme filed a motion for reconsideration in August 2002, this motion
necessarily asks for reconsideration of the EBC's prior decision, based
on the administrative record as it stood before the EBC at that time, in
February 1999. Cosme cannot repeatedly supplement the administrative
record with motions for reconsideration. Cosme's condition may change
over time, and it likely did in the two and a half years between the
EBC's decision on appeal and the motion for reconsideration. Therefore,
reports and evaluations obtained by Cosme after the EBC's decision are
not part of the administrative record, and it was not arbitrary and
capricious for Defendants not to review them.
Thus, Defendants have shown that they conducted a reasonable inquiry
into Cosme's medical condition and his vocational skills.
O'Reilly, 272 F.3d at 962. In Quinn, the benefits plan
administrator's decision was arbitrary and capricious because he made no
inquiry into the requirements of plaintiff's job or the jobs he assumed
plaintiff could transfer to. 161 F.3d at 476-77. In O `Reilly,
in contrast, the Seventh Circuit found the plan administrator's decision
was reasonable even though he did not conduct a TSA, and he relied on a
vocational/rehabilitation consultant. O `Reilly, 272 F.3d at
962. The court held that it is sufficient that the administrator
"identified the skills necessary to obtain another job and whether [the
claimant] possessed those skills." Id. at 963. Defendants, in
conducting a TSA and other market analyses and reviewing all the medical
reports submitted on Cosme, did just that. "Where, as here, a plan
administrator has sufficient evidence from the claimant in the record to
make a reasonable decision to deny disability benefits, there is no
further obligation to inquire." Garg., 2002 WL 31769473, at *3.
Therefore, Defendants' Motion for Summary Judgment is GRANTED, as Cosme
has failed to show that Defendants' decision to deny him LTD benefits was
arbitrary and capricious.
IT IS SO ORDERED.
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