Hamburg v. Life Insurance Co. of North America , 470 F. App'x 382 ( 2012 )

Case: 11-30874 Document: 00511855581 Page: 1 Date Filed: 05/15/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 15, 2012
No. 11-30874 Lyle W. Cayce
Summary Calendar Clerk
KAI HAMBURG,
Plaintiff – Appellant,
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA,
Defendant – Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:10-CV-3071
Before HIGGINBOTHAM, DAVIS, and ELROD, Circuit Judges.
PER CURIAM:*
Kai Hamburg appeals the district court’s grant of summary judgment in
favor of Life Insurance Company of North America (LINA). For the following
reasons, we AFFIRM.
I.
On February 16, 2007, Hamburg was injured in a work-related car
accident. Hamburg continued to work after the accident, despite complaining
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
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of constant and accelerating pain in his neck, back and shoulder. Between
February 16, 2007 and November 16, 2007, several doctors examined and
treated Hamburg, and the results of objective medical measurements supported
Hamburg’s diagnosis of cervical and lumbar disc disease. On November 16,
2007, Hamburg stopped working and applied for long-term disability (LTD)
benefits under the LINA policy that was provided though his employer, Tulane
University.
The LINA policy required Hamburg to show continuous disability
throughout a ninety-day elimination period—from November 16, 2007 to
February 16, 2008—before LINA would begin paying his LTD benefits. After
reviewing Hamburg’s claim, LINA determined that the medical documentation
Hamburg submitted lacked “positive clinical measurements to support a degree
of functional impairment that would prevent [Hamburg] from returning to work
in [his] regular occupation.” On January 30, 2008, LINA denied Hamburg’s
claim.
Around June 9, 2008, with the assistance of attorney William R. Mustian,
Hamburg applied to the Social Security Administration (SSA) for disability
benefits. On July 29, 2008, Mustian notified LINA that Hamburg wished to
appeal the denial of his LTD claim. LINA and Mustian corresponded
approximately a dozen times regarding the appeal. Throughout the
correspondence, LINA requested that Hamburg “submit [any additional
information] . . . relevant to [the] appeal,” including “new additional medical
evidence to support [the] claim from November 16, 2007 forward.” On January
23, 2009, LINA received all the documentation Mustian intended to submit in
support of Hamburg’s appeal. The medical records submitted from the requested
time period contained results from only one objective clinical measurement of
Hamburg’s functional ability. Mustian never informed LINA of the pending SSA
benefits application.
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On March 30, 2009, the SSA found that Hamburg had been disabled under
the Social Security Act since November 15, 2007. The SSA mailed a copy of the
letter to both Hamburg and Mustian.
On April 4, 2009, LINA denied Hamburg’s appeal due to the lack of
objective medical evidence of Hamburg’s disability. In reviewing Hamburg’s
appeal, LINA did not consider the SSA decision.
In a letter to LINA on May 6, 2010, Mustian stated that he had not been
notified of any final decision on Hamburg’s appeal. After LINA sent Mustian a
copy of the appeal denial letter, Mustian requested an additional review of the
decision in order to “exhaust all administrative remedies before having to file
suit.” LINA informed Mustian that Hamburg had exhausted his administrative
remedies under the ERISA requirements and could file suit if he wished. LINA
also told Mustian that it would allow a voluntary second appeal as a courtesy if
Hamburg provided new documentation for LINA to consider. Declining to
pursue the second appeal, neither Hamburg nor Mustian sent LINA any
additional medical documentation; thus LINA never received notice of the SSA
decision.
On September 15, 2010, Hamburg filed this lawsuit, alleging that LINA’s
denial of Hamburg’s LTD benefits was arbitrary and capricious. Over nine
months later, in June 2011, while preparing to mediate the case, Mustian
realized that LINA never received a copy of the SSA decision. Subsequently,
Mustian supplemented Hamburg’s trial exhibit list to include the SSA decision,
and requested that the court remand the case for administrative review in light
of the SSA decision. The district court denied Hamburg’s request for remand
and ruled that the SSA decision was not part of the administrative record.
Both parties subsequently filed motions for summary judgment and the
district court granted LINA’s motion for summary judgment. Hamburg v. Life
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Ins. Co. of N. Am., 2011 WL 3841720 (E.D. La. Aug 29, 2011). This appeal
followed.
II.
Hamburg contends that the district court erred in: (1) denying his motion
for remand in order for the administrator to review the SSA decision; and
(2) finding that LINA’s denial of Hamburg’s benefits claim was not arbitrary and
capricious.
We review a district court’s decision to grant a motion for summary
judgment de novo, applying the same standard as the district court. Cedyco
Corp. v. PetroQuest Energy, LLC, 497 F.3d 485, 488 (5th Cir. 2007). Summary
judgment is appropriate if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a).
In ERISA cases, when, as here, “the language of the plan grants discretion
to an administrator to interpret the plan and determine eligibility for benefits,
a court will reverse an administrator’s decision only for abuse of discretion.”1
High v. E-Systems, Inc., 459 F.3d 573, 576 (5th Cir. 2006). “A plan
administrator abuses its discretion where the decision is not based on evidence,
even if disputable, that clearly supports the basis for its denial.” Holland, 576
F.3d at 246 (internal quotation marks omitted). Likewise, “[w]e reach a finding
1
Typically, we perform a two-step inquiry when evaluating a plan administrator’s
denial of benefits. Holland v. Int’l Paper Co. Ret. Plan, 576 F.3d 240, 246 n.2 (5th Cir. 2009).
First, we evaluate whether the administrator’s decision was legally correct. Id. If the decision
was legally correct, our inquiry is complete as there is no abuse of discretion. Id. We proceed
to the second step, however, if the decision was legally incorrect, analyzing it for an abuse of
discretion. Id. “Nonetheless, we are not confined to this test; we may skip the first step if we
can more readily determine that the decision was not an abuse of discretion.” Id.; see also
High v. E-Systems, Inc., 459 F.3d, 573, 577 (5th Cir. 2006) (“This court, however, is not
confined to this [two-step] test; we may skip the first step if we can determine the decision was
not an abuse of discretion.”). In this case, we do not consider whether the decision was legally
correct and instead proceed to the abuse of discretion inquiry.
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of abuse of discretion only where ‘the plan administrator acted arbitrarily or
capriciously.’” Id. (quoting Meditrust Fin. Servs. Corp. v. Sterling Chems., Inc.,
168 F.3d 211, 214 (5th Cir. 1999)). A plan administrator’s decision to deny
benefits is arbitrary and capricious when it is made without a rational
connection to the facts and evidence. Id. Moreover, “[o]ur ‘review of the
administrator’s decision need not be particularly complex or technical; it need
only assure that the administrator’s decision fall[s] somewhere on a continuum
of reasonableness—even if on the low end.’” Id. at 247 (quoting Corry v. Liberty
Life Assurance Co. of Boston, 499 F.3d 389, 398 (5th Cir. 2007)).
A.
Hamburg claims that the district court erred in denying Hamburg’s motion
to remand his case back to the plan administrator so that the administrator
could consider the SSA’s disability determination. In support of his claim,
Hamburg relies primarily on our statement in Offutt that “[i]f new evidence is
presented to the reviewing court on the merits of the claim for benefits, the court
should, as a general rule, remand the matter to the plan administrator for
further assessment.” Offutt v. Prudential Ins. Co. of Am., 735 F.2d 948, 950 (5th
Cir. 1984). Based on our decision in Vega, we reject Hamburg’s theory. Vega v.
Nat’l Life Ins. Servs., Inc., 188 F.3d 287 (5th Cir. 1999) (en banc), abrogated on
other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008).
In Vega, we underscored the importance of submitting additional evidence
to the administrator before filing a lawsuit:
Before filing suit, the claimant’s lawyer can add additional
evidence to the administrative record simply by submitting it to the
administrator in a manner that gives the administrator a fair
opportunity to consider it. In Moore, we said that “we may consider
only the evidence that was available to the plan administrator in
evaluating whether he abused his discretion in making the factual
determination.” [S. Farm Bureau Life Ins. Co. v. Moore, 993 F.2d 98,
102 (5th Cir. 1993)]. If the claimant submits additional information
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to the administrator, however, and requests the administrator to
reconsider his decision, that additional information should be
treated as part of the administrative record. See, e.g., Wildbur [v.
Arco Chem. Co., 974 F.2d 631, 634–35 (5th Cir. 1992)]. Thus, we
have not in the past, nor do we now, set a particularly high bar to a
party’s seeking to introduce evidence into the administrative record.
We hold today 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. Thus, if the
information in the doctors’ affidavits had been presented to National
Life before filing this lawsuit in time for their fair consideration,
they could be treated as part of the record. Furthermore, in
restricting the district court’s review to evidence in the record, we
are merely encouraging attorneys for claimants to make a good faith
effort to resolve the claim with the administrator before filing suit
in district court; we are not establishing a rule that will adversely
affect the rights of claimants.
Vega, 188 F.3d at 300 (footnote omitted).
We further explained that:
We want to encourage each of the parties to make its record before the
case comes to federal court, and to allow the administrator another
opportunity to make a record discourages this effort. Second,
allowing the case to oscillate between the courts and the
administrative process prolongs a relatively small matter that, in
the interest of both parties, should be quickly decided. Finally, we
have made plain in this opinion that the claimant only has an
opportunity to make his record before he files suit in federal court, it
would be unfair to allow the administrator greater opportunity at
making a record than the claimant enjoys.
Id. at 302 n.13 (emphasis added).
In this case, Hamburg had ample opportunity to supplement the
administrative record with the SSA’s decision. The SSA made its decision on
March 30, 2009. Hamburg filed this lawsuit nearly eighteen months later on
September 15, 2010. In the meantime, Hamburg pursued an administrative
appeal of LINA’s decision and was also asked by LINA on at least two occasions
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to provide additional documentation for LINA to consider. Given this history,
Hamburg’s failure to provide LINA with the SSA decision before filing this
lawsuit is simply inexcusable. Moreover, because the evidence was far from new
by the time this case was filed, the district court was correct to decline
Hamburg’s request for remand under Offutt.
Accordingly, based on Vega, we reject Hamburg’s contention that the
district court erred in denying his request for remand.
B.
Hamburg next contends that the district court erred in concluding that
LINA’s denial of benefits was not arbitrary and capricious. Based on our review
of the record and the district court’s detailed memorandum opinion, Hamburg,
2011 WL 3841720, we conclude that sufficient evidence supports LINA’s decision
to deny benefits to Hamburg.
The plan at issue defines “disabled” as being: “1) unable to perform the
material duties of his or her Regular Occupation or a Qualified Alternative; or
2) unable to earn 80% or more of his or her Indexed Earnings.”2 Id. at *1. LINA
presented sufficient evidence indicating that Hamburg’s injury failed to meet
this definition. Specifically, the evidence showed that Hamburg’s job largely
entailed sedentary tasks, requiring minimal physical exertion, and that
Hamburg remained able to perform his duties. For example, Dr. Billings
determined on January 3, 2008 that Hamburg was capable of performing “light
sedentary type work.” Id. at *2. On November 19, 2008, Dr. Glynn, opined that
“it is important that [Hamburg] continue to be allowed to work, even if it is four
hours per day.” Id. at *3. And Dr. Sukhov later concluded that Hamburg was
“functionally capable of performing full time sedentary work from 2/16/08
forward.” Id. at *4.
2
For the definitions of the capitalized terms, see id. at *1.
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Although there is some contrary evidence indicating that Hamburg’s
condition may have been more severe, that evidence is insufficient to justify the
conclusion that LINA’s denial of benefits was unreasonable.3 See Holland, 576
F.3d at 247 (our review “need only assure that the administrator’s decision fall[s]
somewhere on a continuum of reasonableness—even if on the low end”); Clapp
v. Citibank, N.A. Disability Plan (501), 262 F.3d 820, 828 (8th Cir. 2001) (“We
will not disturb a decision supported by a reasonable explanation even though
a different reasonable interpretation could have been made.” (internal quotation
marks omitted)).
III.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
3
We recognize that LINA’s conflict of interest—based on LINA’s role as both the
insurer and plan administrator—is a factor that must be weighed in determining whether
LINA abused its discretion. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115–16 (2008);
Holland, 576 F.3d at 247–48. This factor does not undermine our conclusion that LINA
reasonably exercised its discretion in denying the benefits sought by Hamburg.
8