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Myers v. Life Insurance Company of North America

March 19, 2009


The opinion of the court was delivered by: Robert M. Dow, Jr. United States District Judge

Judge Robert M. Dow, Jr.


Currently pending before the Court are cross motions for summary judgment filed by Plaintiff Sally Myers [21] and Defendant Life Insurance Company of North America [31]. For the following reasons, Plaintiff's motion for summary judgment [21] is denied and Defendant's motion for summary judgment [31] is granted in part and denied in part.

I. Background

Plaintiff Sally Myers ("Plaintiff" or "Myers") filed a complaint initiating this action against Defendant Life Insurance Company of North America ("Defendant" or "LINA").*fn1 The complaint, brought pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(e)(1), (f), seeks review of LINA's termination of Plaintiff's long term disability benefits and denial of her request for a waiver of life insurance premiums.

Plaintiff suggests that if the Court cannot decide this motion on summary judgment, a "paper trial" pursuant to Fed. R. Civ. P. 52 would be an appropriate alternative for resolution of the remaining issues. The Rule 52 procedure can be an efficient method of disposition in ERISA denial of benefit cases and has been utilized frequently in this district. See Juszysnki v. Life Ins. Co. of N. Am., 2008 WL 877977 (N.D. Ill. Mar. 28, 2008); Rudzinski v. Metro. Life Ins. Co., 2007 WL 2746630 (N.D. Ill. Sept. 14, 2007). As Magistrate Judge Denlow has summarized, "the summary judgment process has the potential for a non-decision, extra litigation, additional costs, and unnecessary delay," all of which can be "eliminated by proceeding by means of a trial on the papers." Crespo v. UNUM Life Ins. Co., 294 F. Supp. 2d 980, 991 (N.D. Ill. 2003). However, LINA requests a bench trial if the cross motions for summary judgment are denied, which is its right. See id. (observing that by "filing cross-motions for summary judgment, parties do not waive their right to a trial on the merits"). The Court therefore proceeds solely under Fed. R. Civ. P. 56.

II. Facts*fn2

Plaintiff Sally Myers ("Plaintiff" or "Myers") was employed full-time as a "Community Manager" with Belmont Village, a nursing home, from August 28, 2001 until February 13, 2006 when she ceased working as a result of an injury to the anterior cruciate ligament ("ACL") in her right knee. Def. SOF ¶¶ 8, 17; Pl. SOF ¶¶ 5-6. Upon examination, she was diagnosed with a torn right ACL and she underwent reconstructive surgery.*fn3 Pl. SOF ¶ 6.

The Plan

As a benefit of her employment with Belmont Village, Myers was insured under a long term disability insurance policy ("LTD Policy") and a life insurance policy ("Life Policy") (collectively "the Plan"). Pl. SOF ¶ 7. Both policies of The Plan were underwritten and insured by LINA. Id. After she stopped working at Belmont Village on account of her injury, Myers sought short-term disability ("STD") benefits, and when those expired, LTD benefits under the Plan, as well as a waiver of life insurance premium payments.

Under the STD Policy, "You are Disabled, if as a result of Physical Disease, Injury, Pregnancy or Mental Disorder, you are unable to perform with reasonable continuity the Material Duties of your Own Occupation."*fn4 The LTD Policy further states that "[w]e will pay Disability Benefits if you become Disabled while covered under this Policy. You must satisfy the Elimination Period, be under the Appropriate Care of a Physician, and meet all the other terms and conditions of the Policy. You must provide to us, at your own expense, satisfactory proof of Disability before benefits will be paid. The Disability Benefit is shown in the Schedule of Benefits. We will require continued proof of your Disability for benefits to continue." Def. SOF ¶ 13.

The Employee is considered Disabled pursuant to the LTD Policy for the first 24 months in which benefits are payable if, "solely because of Injury or Sickness, he or she is: 1. unable to perform all the material duties of his or her Regular Occupation; or 2. unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation." Pl. SOF ¶ 8; Def. SOF ¶ 11. "Regular Occupation" is defined for purposes of the LTD Policy as: "The occupation you routinely perform at the time the Disability begins. In evaluating the Disability, we will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. It is not work tasks that are performed for a specific employer or at a specific location." Def. SOF ¶12.

After Disability Benefits have been payable for 24 months, the Employee is considered Disabled under the LTD policy if, "solely due to Injury or Sickness, he or she is: 1. unable to perform all the material duties of any occupation for which he or she is, or may reasonably become, qualified based on education, training or experience; or 2. unable to earn 80% or more of his or her Indexed Earnings. We will require proof of earnings and continued disability." Pl. SOF ¶ 8; Def. SOF ¶ 11.

Disability has a different definition under the Life Policy (which is applicable to the waiver of premium benefit): "An employee is Disabled if, because of Injury or Sickness, he or she is unable to perform all the material duties of any occupation for which he or she may reasonably become qualified based on education, training or experience." Def. SOF ¶ 15; Pl. SOF ¶ 9. The Life Policy also contains the following language: "For plans subject to the Employee Retirement Income Security Act (ERISA), the Plan Administrator of the Employer's employee welfare benefit plan (the Plan) has selected the Insurance Company as the Plan fiduciary under federal law for the review of claims for benefits provided by this Policy and for deciding appeals of denied claims. In this role the Insurance Company shall have the authority, in its discretion, to interpret the terms of the Plan documents, to decide questions of eligibility for coverage or benefits under the Plan, and to make any related findings of fact. All decisions made by the Insurance Company in this capacity shall be final and binding on Participants and Beneficiaries of The Plan to the full extent permitted by law." Def. SOF ¶ 16.

Under the "Continuation of Service" heading of the Life Policy, and the subheading "Waiver of Premium," the policy states, "If an Employee is under age 60 and his or her Active Service ends due to Disability, Life Insurance Benefits as shown in the Schedule of Benefits will continue until the end of the earliest of the following dates: 1. The date of the Employee is no longer Disabled; 2. The date he or she no longer qualifies for Waiver of Premium; 3. The day after the period for which premiums are paid; 4. The date the Maximum Benefit Period for this benefit, if any, ends." Pl. SOF at ¶ 9.

Claim History

On February 13, 2006 orthopedist Dr. Christ Pavlatos stated that Myers had been "followed" at the Illinois Bone and Joint Institute for her right knee, which had been doing fine but had recently given out while she was walking down stairs. Pl. SOF ¶ 12. On March 28, 2006, Myers was evaluated by Dr. Roger Collins regarding her right knee. Id. ¶ 13. The physical examination revealed that "she has pain anterolaterally," "she is tender anteromedially and anterolaterally," "she has tenderness at the lateral and anterolateral joint line," but "there is no tenderness at the medial joint line." Id. Dr. Collins' assessment noted the failed ACL reconstruction in 2004. Id. Myers requested that Dr. Collins proceed with another ACL reconstruction surgery. Id. On April 18, 2006 LINA approved Plaintiff's claim for STD benefits through May 13, 2006. Def. SOF ¶ 18; Pl. SOF ¶ 40.

On May 8, 2006 Dr. Luis I. Salazar wrote a letter stating that Myers was under his care for multiple issues, including hypertension, anxiety, and insomnia. Pl. SOF ¶ 14. On May 9, 2006, Dr. Collins wrote a letter answering questions posed by Mr. William J. Provenzano. Pl. SOF ¶ 15; Def. SOF ¶ 20. The letter noted that Myers had sustained an injury to her right knee in July 2004 and had undergone reconstructive surgery on her right ACL on August 2, 2004. Id. According to the letter, Myers reported that she continued to experience pain, swelling and soreness in the knee since the initial surgery and that the knee got progressively worse over the previous six months. Id. The letter also notes that Myers saw her original surgeon in January of 2006 and that he obtained an MRI and confirmed that the original ACL reconstruction surgery had failed. Id. The letter went on to say that "Ms. Myers job normally involves a fair amount of standing and walking" and that she "has been off of work secondary to the uncontrolled instability of her right knee in addition to hypertension and other medical issues which have precluded her from returning to work." Id. Finally, Dr. Collins noted that following surgery, "it is anticipated that she will be off work for a minimum of four weeks. At that time she could probably resume light duty, in a sitting capacity without extended walking or standing. The earliest that I envision her returning to a job that involves a fair amount of standing or walking will be two months from the surgery." Id. Dr. Collins performed Myers' ACL reconstruction surgery on May 12, 2006. Pl. SOF ¶ 16.

After the STD period ended, Myers was approved for LTD benefits effective May 14, 2006. Pl. SOF ¶ 40. She was awarded a monthly benefit in the amount of $3,659.00. Id. On or about May 17, 2006, LINA began investigating Myers' claim for LTD benefits by, inter alia, requesting medical records from Dr. Collins and Dr. Pavlatos and forwarding forms to Plaintiff for completion. Def. SOF ¶ 19.

In a treatment note, dated June 7, 2006, Dr. Collins stated he did not think Plaintiff would be able to return to the activities of her job as described by her employer for three months from the time of surgery. Def. SOF ¶ 21; Pl. SOF ¶ 19. However, Dr. Collins also wrote a letter on June 7, 2006 to Mr. Provenzano updating Myers' status. Pl. SOF ¶ 18; Def. SOF ¶ 21. He noted that Myers was attending physical therapy three times a week, which he anticipated would continue for another three months. Pl. SOF ¶ 18. Dr. Collins also stated that Plaintiff still was having discomfort, pain and swelling in the right knee. Id. However, he allowed Myers, at her request, to return to work effective June 12, 2006, if she was able to procure transportation. Id.; Def. SOF ¶ 21. If she did return to work, he recommended a sitting job that would permit Myers to elevate her leg. Id. The earliest that Dr. Collins envisioned Myers returning to a job that involved walking or standing, in a limited capacity, would be around July 12, 2006. Id. He also stated Myers "would not be able to meet the physical and mental requirements of her normal job for at least 4-6 months from the date of surgery." Pl. SOF ¶ 18. Dr. Collins concluded that he was unable at that time to state with any degree of medical certainty whether or not Myers would end up with permanent restrictions and/or disabilities as a result of her condition. Def. SOF ¶ 22.

A medical record, dated June 12, 2006 from Dr. Salazar included the line, "Diagnoses difficulty [sic] walking, headache, insomnia." Pl. SOF ¶ 21. On June 19, 2006, Dr. Pavlatos completed a LINA medical request form. Pl. SOF ¶ 20; Def. SOF ¶ 23. It stated that Plaintiff's recurrent right knee injury with ACL tear was preventing her from returning to work and the instability in the same knee was a factor impacting return to work. Id. The treatment plan included surgery "if patient chooses." Id. Dr. Pavlatos placed the following work restriction: "No work above ground level, work on level surfaces, brace to R [right] knee if knee is unstable." Id.

A LINA claim staffing form dated June 26, 2006 reflected a notation that Myers' occupational requirements were "light" and that LTD benefits were "ok to approve for now." Def. SOF ¶ 24. LINA then referred the file to its vocational rehabilitation unit. Id.

On July 3, 2006, Myers filled out a form for LINA in which she stated that she could not work in her own or any occupation because "I cannot walk or stand for more than a few minutes without experiencing severe pain in my right knee." Pl. SOF ¶ 22. In the same form, when asked if she had to use special equipment, she listed "crutches, shower chair, hand shower." Id.

Dr. Collins saw Myers on July 5, 2006. Pl. SOF ¶ 23; Def. SOF ¶ 25. Dr. Collins' noted: "She is now getting around without crutches"; "She still has a fair amount of pain and inflammation along the medial aspect of the knee. The knee feels stable."; "Exam today shows remarkably no effusion, but there is swelling over the anteromedial aspect of the knee at the point of the washer-lock-washer and tibial tunnel. There is minimal swelling or fullness laterally. Lachmans is negative. Anterior/posterior drawer and pivots are negative. She has good quad set and tone."; "I think that Sally is doing very well now status post ACL reconstruction, right knee."; "I think she can go back to working on her feet, although not continuously. She should avoid any impact activities but can do light walking and closed-chain exercises including cycling and swimming."; "She has tenderness and inflammation at the tibial tunnel site. I bone grafted this area and also she has a large washer-lock-washer. If this continues to be problematic we can remove it but I would wait another 3-4 months before removing hardware to allow the graft to heal."; "She is doing well enough now that I think we can transition her to a program primarily on her own for therapy. She will go to therapy once a week and then workout at the health club on her own the other days." Id.

On July 8, 2006 LINA's Vocational and Rehabilitation Department provided the Dictionary of Occupational Titles ("DOT") Definition No. 187.117-010 "Administrator, Health Care Facility, a light duty profession." Def. SOF ¶ 26. That job requires "Lifting, Carrying, Pushing, Pulling 20 lbs. occasionally, frequently up to 10 lbs., or negligible amount constantly. Can include walking or standing frequently even though weight is negligible. Can include pushing and or pulling of arm and or leg controls." Id. ¶ 27. The work situations listed under that definition include "Performing a Variety of Duties; Directing, Controlling, or Planning Activities of Others; Dealing with People (Beyond receiving work instruction); Making Judgments and Decisions." Id. ¶ 28.

On July 12, 2006, Dr. Salazar diagnosed Myers with anxiety, panic, insomnia, and hormonal imbalance and noted that he would consider adding welbutrin if her fatigue continued to her next visit in four weeks. Pl. SOF ¶ 24. Myers was treated by Dr. Salazar on a near monthly basis from May 2006 to March 2007 for a variety of conditions. Id.

Also on July 12, 2006, Myers talked to a LINA vocational rehabilitation counselor ("VRC"). Pl. SOF ¶ 25. In that conversation, Myers noted that her return to work date had been extended three months, that she was unable to walk without assistance of a cane, and that she had a lot of pain and swelling. Id. The VRC commented that "barriers preventing return to work at this time are walking, standing, etc." Id.

On July 17, 2006 LINA approved Plaintiff's claim for LTD benefits as of May 14, 2006. Def. SOF ¶ 29. On August 8, 2006 Myers visited Dr. Collins. Pl. SOF ¶ 26. The report from that visit notes that Myers "thinks the hardware is bothering her and was hoping we could remove it"; and there was "some popping and ...

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