Alexander v. Hartford Life & Accident Insurance , 347 F. App'x 123 ( 2009 )

AMENDED OCTOBER 16, 2009
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 09-10072 October 5, 2009
Charles R. Fulbruge III
PAMELA ALEXANDER Clerk
Plaintiff-Appellant
v.
HARTFORD LIFE & ACCIDENT INSURANCE COMPANY
Defendant-Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:07-CV-1486-M
Before BENAVIDES, DENNIS, and ELROD, Circuit Judges.
PER CURIAM:*
The plaintiff-appellant, Pamela Alexander, has been afflicted since 2002
by severe pain that, she contends, makes her unable to perform her job as a
transplant coordinator in a hospital. Alexander had long-term disability
insurance through her employer with the defendant, Hartford Life and Accident
Insurance Co. Hartford denied Alexander’s long-term disability claim in
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
No. 09-10072
September 2003, and reaffirmed its denial in two subsequent administrative
appeals in March and September 2004.
Alexander brought this suit in August 2007, arguing that Hartford had
wrongfully denied her claim. On cross-motions for summary judgment, the
district court granted summary judgment for Hartford. We reverse.
The parties dispute whether some additional medical records and other
information that Alexander submitted to Hartford before filing suit should be
treated as part of the administrative record under Vega v. National Life
Insurance Services, Inc., 188 F.3d 287 (5th Cir. 1999) (en banc), in which the
court held that “the administrative record consists of relevant information made
available to the administrator prior to the complainant’s filing of a lawsuit and
in a manner that gives the administrator a fair opportunity to consider it.” Id.
at 300. We do not reach this issue. On the basis of the administrative record as
it stood when Hartford issued its final denial letter, we conclude that Hartford
abused its discretion in denying Alexander’s long-term disability claim.
“This court reviews summary judgments de novo in ERISA cases, applying
the same standards as the district court.” Corry v. Liberty Life Assurance Co. of
Boston, 499 F.3d 389, 397 (5th Cir. 2007). “We review an administrator’s denial
of ERISA benefits for abuse of discretion if ‘an administrator has discretionary
authority with respect to the decision at issue.’” Id. (quoting Vega, 188 F.3d at
295). It is undisputed that Hartford had discretionary authority to determine
eligibility for benefits under the policy at issue in this case, so the abuse of
discretion standard applies.1
1
Hartford undisputedly had a financial conflict of interest because it was responsible
both for determining eligibility for benefits and for paying benefits. Under Metropolitan Life
Insurance Co. v. Glenn, 128 S. Ct. 2343 (2008), the presence of such a conflict of interest in an
ERISA case does not change the standard of review, but it is one factor that courts must
consider in deciding whether the administrator abused its discretion. Id. at 2346.
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No. 09-10072
A denial of benefits is not an abuse of discretion if it “is supported by
substantial evidence and is not arbitrary and capricious.” Ellis v. Liberty Life
Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004). “Substantial
evidence is ‘more than a scintilla, less than a preponderance, and is such
relevant evidence as a reasonable mind might accept as adequate to support a
conclusion.’” Id. (quoting Deters v. Sec’y of Health, Educ., & Welfare, 789 F.2d
1181, 1185 (5th Cir. 1986)). The question of whether there is substantial
evidence must be considered “in the light of all the evidence.” Corry, 499 F.3d
at 399. A decision is arbitrary if it is “made without a rational connection
between the known facts and the decision.” Meditrust Fin. Servs. Corp. v.
Sterling Chems., Inc., 168 F.3d 211, 215 (5th Cir. 1999) (quoting Bellaire Gen.
Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822, 828 (5th Cir. 1996))
(internal quotation mark omitted).
We hold that Hartford abused its discretion because there was not a
rational connection between its conclusion that Alexander was not disabled and
the information on which it relied to support that conclusion.
Under the policy at issue, a person is “disabled” if he or she is “prevented
. . . from performing one or more of the Essential Duties of Your Occupation.”2
“Your Occupation . . . means your occupation as it is recognized in the general
workplace[, not] the specific job you are performing for a specific employer or at
a specific location.” “Essential Duty means a duty that . . . is substantial, not
incidental; . . . is fundamental or inherent to the occupation; and . . . can not be
reasonably omitted or changed. To be at work for the number of hours in your
regularly scheduled workweek is also an Essential Duty.” Thus, whether
2
After 24 months pass, the definition of “disabled” changes so that the person must be
“prevented from performing one or more of the Essential Duties of Any Occupation,” but this
latter definition is not relevant here.
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No. 09-10072
Alexander was disabled depends on whether she was capable of fulfilling the
essential duties of her type of job, transplant coordinator, on a full-time basis.
The administrative record includes a “Functional Capacity Evaluation”
(FCE) which was performed on June 3, 2003, to determine Alexander’s physical
capabilities. There is no other FCE in the record. The FCE concluded that
Alexander was “Qualified” to lift 17 pounds occasionally and 9 pounds
frequently, but that “lifts over five times per day at this level would place the
individual at significant medical risk;” as a result, the “Safe Recommended”
levels of lifting were 13 pounds occasionally and 7 pounds frequently. The FCE
concluded, “Return to Work Status: NO.” The record also includes an
“Occupational Analysis” performed by Hartford on July 15, 2004, which stated,
“Job is classified as Light according to the National Economy as one is required
to lift 20 lbs occasionally and 10 lbs frequently.”
Hartford’s final letter denying Alexander’s administrative appeal, dated
September 1, 2004, relied significantly on the report of Dr. Elizabeth Roaf, who
had been hired by Hartford to independently review Alexander’s records (and
had not personally examined Alexander). The final denial letter stated that Dr.
Roaf “noted the results of your June 3, 2003 Functional Capacity Evaluation,
which indicated that you could function in a light duty capacity.” This statement
in the letter was factually incorrect, both about Dr. Roaf’s report and about the
FCE’s results. Dr. Roaf’s report did not mention the results of the FCE. And the
FCE stated that Alexander’s lifting ability was less than what Hartford’s
occupational analysis said that a “light” job, like Alexander’s, required.
Hartford’s final denial letter did nothing to rebut the FCE; all it did was
misstate its results. There was no rational connection between the known
information and the conclusion on this important issue.
The denial letter, quoting Dr. Roaf’s report, stated that Alexander was
limited to 15 pounds of pushing and pulling. This limit is lower than what
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No. 09-10072
Hartford’s own “Occupational Requirements” form stated was required for
Alexander’s job: “Lifting, Carrying, Pushing, Pulling 20 lbs. occasionally.”
Although the denial letter treated this information as if it supported Hartford’s
conclusion that Alexander was not disabled, it plainly supported the opposite
conclusion. Thus, there was no rational connection between the information
Hartford relied on and the conclusion it reached.
We therefore conclude that Hartford abused its discretion in denying
Alexander’s long-term disability claim. We REVERSE the district court’s grant
of summary judgment for Hartford; RENDER judgment for Alexander; and
REMAND the case to the district court to determine the amount of benefits to
award to Alexander. The district court should also determine whether
Alexander is entitled to other relief, including prejudgment interest, attorney’s
fees and expenses.
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