Larson v. Old Dominion Freight Line, Inc. , 277 F. App'x 318 ( 2008 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-1390
ELLSWORTH LARSON,
Plaintiff - Appellant,
v.
OLD DOMINION FREIGHT LINE, INC., Employee Benefit Plan;
BENEFIT MANAGEMENT SERVICES, INCORPORATED,
Defendants - Appellees.
Appeal from the United States District Court for the Middle
District of North Carolina, at Durham. James A. Beaty, Jr., Chief
District Judge. (1:06-cv-00328-JAB)
Argued: March 20, 2008 Decided: May 13, 2008
Before WILKINSON and KING, Circuit Judges, and C. Arlen BEAM,
Senior Circuit Judge of the United States Court of Appeals for the
Eighth Circuit, sitting by designation.
Affirmed by unpublished per curiam opinion.
John Kenneth Koontz, LEWIS & DAGGETT, P.A., Winston-Salem, North
Carolina, for Appellant. Andrew Sampson Lasine, KEZIAH, GATES &
SAMET, High Point, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
In this ERISA case, the district court dismissed Ellsworth
Larson’s claim challenging Old Dominion Freight Line’s termination
of Larson’s long-term disability benefits. After careful
consideration, we affirm the district court.
I.
Old Dominion Freight Line, Inc., (“Old Dominion”) provides
long-term disability benefits to qualified participants through its
employee benefit plan (the “Plan”). Plan participants are eligible
for long-term disability benefits if they are “totally disabled.”
The Plan defines total disability as follows:
Total disability, as it applies to this benefit, shall
mean that you are prevented solely by an illness or
injury from performing the regular and customary duties
of your employment. You do not have to be confined to
your home, but must be under the regular and continuing
care of a physician. Beginning 24 months after the
disability began, to be considered to be totally
disabled, you must not be able to engage in any gainful
occupation for which you are reasonably qualified by
education, training or experience.
In addition, the Plan gives the plan administrator, in this case,
Old Dominion, “sole discretionary authority to determine
eligibility for plan benefits.”
Ellsworth Larson was an Old Dominion truck driver for over
twenty years, and thus a Plan participant. In December 2001,
Larson reported experiencing significant lower back and right leg
pain. An MRI showed a herniated disc and epidural fibrosis (scar
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tissue around the nerves in the back), and Larson subsequently
filed a disability claim. Larson thus started to receive long-term
disability benefits under the Plan.
In early 2004, because two years had passed since Larson first
reported his back injury, the requirements for receiving long-term
disability benefits under the Plan changed. Benefit Management
Services, Inc. (“BMS”), hired by Old Dominion as the Plan’s claims
administrator, thus decided to reevaluate Larson’s level of
disability. Although Larson’s treating physician continued to
believe that Larson was unable to perform any work, partly because
of Larson’s self-reported levels of pain, a functional capacity
evaluation (“FCE”) and an independent medical examiner both found
that Larson was capable of sedentary employment. BMS therefore
notified Larson via letter that his benefits were being terminated
effective September 30, 2004.
Larson, through counsel, subsequently requested the
documentation supporting the benefit termination, and BMS sent
Larson a copy of his FCE and the independent medical examiner’s
report. Larson then appealed the termination decision. At this
time, Larson supplemented the record with a sworn affidavit in
which he claimed that he does not do “any bending or stooping” and
that the “only thing” he was able to carry at the grocery store was
“something light like a loaf of bread.”
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In the course of considering this appeal, BMS arranged for
video surveillance of Larson. In March 2005, three weeks after
Larson filed his affidavit, Larson was taped picking up large,
heavy bags of fertilizer at Lowe’s, loading them into his vehicle,
unloading and carrying them, pouring the contents into a spreader,
walking behind the spreader for two hours, and stooping to move
objects as needed. Larson did not limp or otherwise show limited
mobility while performing this yard work.
In April 2005, BMS sent Larson a letter notifying him that his
appeal had been denied. Larson’s counsel requested the
documentation relied upon to deny the appeal, and thus learned
about the video. Larson then filed a second appeal, supplementing
his file was a second sworn affidavit and a note from his treating
physician. Both Larson’s affidavit and his physician’s note
emphasized that Larson’s back pain ebbed and flowed, and that, even
if he was at times able to engage in strenuous work for a couple of
hours, he was still unfit for any form of meaningful employment.
In December 2005, Larson’s second appeal was denied. Unlike
Larson’s two previous denial letters, which came from BMS, this
letter came from Old Dominion’s Director of Employee Benefits. The
letter lays out in detail the basis for the benefits termination:
Larson’s performance on the FCE, the independent medical expert’s
opinion, and the surveillance video. The letter also considers the
opinion of Larson’s treating physician, stating that Old Dominion
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did not find the treating physician’s assessment dispositive, since
it was at least partly based on Larson’s self-reports of pain --
self-reports that were brought into question by the surveillance
video.
In April 2006, Larson filed a complaint against Old Dominion
and BMS (collectively, “the defendants”) in the Middle District of
North Carolina pursuant to the Employee Retirement Income Security
Act (“ERISA”). Larson argued that the defendants failed to provide
a full and fair review of his claim on appeal, and that the
defendant’s denial of his benefits was unreasonable.
The parties filed cross-motions for summary judgment, and, in
February 2007, a magistrate judge issued a lengthy opinion
recommending that the defendants’ motion be granted and Larson’s
motion be denied. Larson filed several objections to the
magistrate’s report, and, after reviewing Larson’s objections and
the magistrate’s recommendations, the district court made a de novo
determination to dismiss Larson’s claim with prejudice. Larson
subsequently filed a timely appeal, which we now review.
II.
As a threshold matter, the parties disagree as to the
appropriate standard of review. We need not resolve this question
because, for the reasons stated, the administrator’s rejection of
Larson’s claim would be sustained under any standard.
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A.
First, Larson contends that the process underlying the
defendants’ termination decision was flawed. As evidence of this,
Larson points to the fact that the defendants failed to comply with
ERISA’s procedural requirements. In particular, Larson argues that
the defendants failed to disclose information related to his claim,
see 29 C.F.R. § 2560.503-1(h) (2007), and to provide sufficient
notification of the reasons for the denial of his appeal, see id.
§ 2560.503-1(j). In addition, Larson also argues that the
defendants improperly “afford[ed] deference to the initial adverse
benefit determination” in denying his appeals. Id. § 2560.503-
1(h)(3)(ii).
We reject Larson’s arguments. As the magistrate judge
recognized in his opinion, it is well-established that failure to
technically comply with all of ERISA’s procedural requirements does
not automatically invalidate an otherwise sound denial of benefits.
See, e.g., Ellis v. Metropolitan Life Ins. Co., 126 F.3d 228, 238
(4th Cir. 1997); Brogan v. Holland, 105 F.3d 158, 165 (4th Cir.
1997). “Substantial compliance” is typically sufficient. Sheppard
& Enoch Pratt Hosp., Inc. v. Travelers Ins. Co., 32 F.3d 120, 127
(4th Cir. 1994) (internal quotation marks omitted). To
substantially comply with ERISA’s regulations, an administrator
must supply the claimant “with a statement of reasons that, under
the circumstances of the case, permitted a sufficiently clear
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understanding of the administrator’s position to permit effective
review.” Brogan, 105 F.3d at 165 (internal quotation marks
omitted).
In this case, the defendants complied with this standard.
Even if BMS’s letters terminating Larson’s benefits and denying
Larson’s first appeal were insufficient, Larson was provided with
all information relevant to his claim on request. Furthermore, Old
Dominion’s letter denying Larson’s second appeal thoroughly
outlined Old Dominion’s reasons for affirming the prior termination
decision.
We thus conclude that Larson possessed a “sufficiently clear
understanding of the administrator’s position,” and that he was
therefore able to effectively appeal his benefits termination.
Indeed, Larson filed two lengthy administrative appeals, and does
not bring to our attention any information that he would add to the
administrative record before us.
Likewise, there is nothing in the record other than Larson’s
conclusory assertion indicating that the defendants improperly
“defer[red] to the initial adverse benefit determination.” Rather,
Old Dominion’s analysis and statements in the letter denying
Larson’s second appeal indicate that Larson’s claims were given a
fresh look. Larson has simply not shown that the defendants
committed any procedural errors that warrant even a remand.
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B.
Second, Larson also claims that the defendants substantively
erred in terminating his benefits. To support his claim, Larson
contends that the defendants both undervalued the evidence
supporting his claim -- chiefly, the MRI results, the opinion of
his treating physician, and his self-reports -- and overestimated
the importance of the FCE and the surveillance video. In
particular, Larson argues that the FCE and the surveillance video
only provided a “snapshot” of his true abilities, and that this is
insufficient to terminate his benefits. See Stup v. Unum Life Ins.
Co., 390 F.3d 301, 309-11 (4th Cir. 2004) (FCE); Hines v. Unum Life
Ins. Co., 110 F. Supp. 2d 458, 463-64 (W.D. Va. 2000) (surveillance
video).
We again disagree. It is not error for a plan administrator
to deny benefits when conflicting evidence is presented. See
Elliott v. Sara Lee Corp., 190 F.3d 601, 606 (4th Cir. 1999).
While Larson’s MRI results support the opinion of his treating
physician, an independent medical examiner looked at the same MRI
results and concluded that Larson could perform sedentary work, and
an ERISA plan administrator is not required to show a treating
physician any special deference. See Black & Decker Disability
Plan v. Nord, 538 U.S. 822, 834 (2003). Moreover, the other
evidence in the record -- specifically, the FCE and the
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surveillance video -- strongly supports Old Dominion’s
determination.
As the magistrate judge emphasized, the surveillance video is
particularly damaging to Larson’s claim.* As noted, the video
showed Larson carrying heavy bags, performing two hours of yard
work without a limp, and stooping to move objects as needed. Not
only does this video demonstrate that Larson can engage in physical
activity far more strenuous than sedentary employment, but it also
directly contradicts Larson’s sworn affidavit submitted with his
first appeal. This calls into question the credibility of Larson’s
self-reports of pain. Given this video, and the other evidence in
the record, we conclude that Old Dominion’s position is soundly
based, and that Old Dominion therefore did not err in denying
Larson’s claim.
III.
For the foregoing reasons, we find that Old Dominion’s
decision to terminate Larson’s benefits was both procedurally and
*
Larson argues that the defendants initiated surveillance
without sufficient justification. We disagree. As defendants
argue in their brief, Larson’s affidavit accompanying his first
administrative appeal contained strong statements about his level
of disability (unable to lift anything more than a loaf of bread,
cannot stoop, etc.). It cannot be unreasonable for an
administrator to want verification before taking such statements at
face value, particularly when they are a vital part of the
claimant’s evidence of disability.
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substantively proper. We thus dismiss Larson’s claim with
prejudice. The judgment of the district court is
AFFIRMED.
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