Roig v. Ltd Long Term Disabi ( 2001 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
___________________________________
No. 00-31280
SUMMARY CALENDAR
___________________________________
DEBORA ROIG
Plaintiff - Appellant - Cross-Appellee
V.
THE LIMITED LONG-TERM DISABILITY PROGRAM; ET AL.
Defendants
THE LIMITED Long-term DISABILITY PROGRAM
Defendant - Appellee - Cross-Appellant
___________________________________________________
On Appeal from the United States District Court
for the Eastern District of Louisiana, New Orleans
(99-CV-2460)
___________________________________________________
October 9, 2001
Before REYNALDO G. GARZA, DAVIS, and DENNIS, Circuit Judges.
PER CURIAM:1
This case involves the denial of disability benefits under
an employee welfare benefit plan governed by the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§
1054, et seq. Appellant-Cross-Appellee, Debora Roig (“Roig”),
contends that Appellee-Cross-Appellant, The Limited Long-term
1
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this opinion should not be published and is not precedent except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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Disability Program (“the Program”), wrongfully denied her claim
for disability benefits.
Roig was a District Sales Manager for Victoria’s Secret
Stores, Inc. (“Victoria’s Secret”) in Louisiana from July 21,
1986 to July 14, 1998. Victoria’s Secret is a retailer of
women’s lingerie with stores throughout the country. As a
District Sales Manager, Roig oversaw the operation and
maintenance of several retail stores in and around New Orleans.
The job required Roig to work long hours, stand for extended
periods of time, drive extensively, and lift heavy objects.
As a Victoria’s Secret employee, Roig participated in an
employee welfare benefit plan that provided disability benefits.
The benefit plan was self-funded, but Metropolitan Life
Insurance, Co. (“Met Life”) served as the plan administrator.
Met Life had the responsibility and discretionary authority to
determine eligibility for disability benefits, construe plan
terms, and provide a full and fair review of benefit
determinations. Met Life did not insure and was not liable for
plan benefits.
The plan divides benefits into two categories: 1) those paid
during the first twelve months of disability (“initial
benefits”); and 2) those paid beyond the first twelve months
(“long-term benefits”). To qualify for initial benefits, the
employee must be “under a doctor’s care” and “unable to perform
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any and every duty related to her job.” An employee qualifies
for long-term benefits “after the first twelve months of benefit
payments . . . if [she] cannot work at any gainful occupation for
which [she] is reasonably qualified by education, experience, or
training.”
In September of 1995, Roig was involved in an automobile
accident. A year later, she sought treatment at a local medical
center for lower back pain and occasional leg pain and numbness.
The attending physician diagnosed her with a moderate disc
herniation and degenerative disc disease.
Roig was referred to Thomas P. Perone, M.D. for
neurosurgical evaluation. Dr. Perone ordered additional testing
and evaluation. A May 1, 1998 MRI revealed that Roig still had
disc degeneration but the herniation was only minimal, not
moderate as originally diagnosed. Despite the improvement in the
herniated disc, on June 1, 1998, Dr. Perone determined that Roig
could no longer fulfill the requirements of her job due to the
extensive travel it required.
On June 15, 1998, Roig visited Dr. Perone again and reported
that she had fallen at a mall that morning, striking her left
knee and further injuring her back. During this visit, Dr.
Perone noted that although the minor disc herniation had resolved
with conservative measures, Roig still suffered from “significant
degeneration of the bottom three discs in her lumbar spine.” As
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a result of this degeneration, Dr. Perone recommended that Roig
permanently avoid activities that were an integral part of her
job, such as lifting, bending, and driving.
On July 13, 1998, Roig stopped working at Victoria’s Secret.
She submitted an application to Met Life for disability benefits
on August 1, 1998. Roig attached Dr. Perone’s Attending
Physician’s Statement to the application. In the statement, Dr.
Perone reported that he had seen Roig for treatment on March 13,
1997, April 3, 1997, and June 1, 15, and 19, 1998. He concluded
that the degeneration of Roig’s lumbar spine, aggravated by the
fall at the mall, prevented her from performing the duties of a
Victoria’s Secret District Sales Manager.
On August 17, 1998, Met Life asked Dr. Perone for medical
documentation it could use to evaluate Roig’s claim. Apparently,
neither Roig nor Dr. Perone supplied any documentation for Met
Life’s initial review of her claim. However, the Smart
Corporation, a medical records correspondence service, sent a
letter to Met Life indicating that Dr. Perone had not seen Roig
after July 14, 1998.
Met Life denied Roig’s claims for benefits on August 27,
1998 because Roig was not under a doctor’s care as evidenced by
the absence of office visits.
On September 15, 1998, Roig made a written request for a
review of the denial of benefits. She attached a letter from Dr.
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Perone dated July 13, 1998. The letter stated “Ms. Roig is under
my care for her back condition and should remain off work until I
re-evaluate her in the next several weeks.” Dr. Perone also
wrote to Met Life on September 15. In his letter, he stated that
he had to reschedule a July 23, 1998 appointment with Roig due to
emergency surgery, but he saw her on September 14, 1998 and
concluded that “she is unable to return to her prior job on a
permanent basis . . . because of the degenerative condition of
her lumbar spine.” Dr. Perone then forwarded all treatment notes
and test results to Met Life.
After reviewing the medical records, Met Life denied Roig’s
claim again. Met Life did not interview Roig or conduct an
independent medical evaluation. Met Life’s communications with
Roig indicate that its denial was based on three factual
conclusions: 1) Roig had not seen Dr. Perone at all from June 19,
1998 to September 14, 1998; 2) Roig did not contact Dr. Perone in
the two weeks following her June 19, 1998 visit, despite his
recommendation that she call him if she had any problems with her
back; and 3) Roig’s condition must have improved by July 14, 1998
since the herniated disc had resolved itself.
On August 12, 1998, Roig filed a § 1132(a)(1)(B) suit in
district court against Met Life and the Plan for failure to pay
disability benefits. The district court found that Met Life was
not a proper party to the suit and dismissed it from the
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proceedings.2 The case was submitted on the record for a bench
trial. The district court awarded Roig initial benefits but
denied long-term benefits because the record lacked evidence to
support them. The court also awarded Roig prejudgment interest,
post judgment interest, attorney’s fees, and costs.
Roig appeals the district court’s denial of long-term
benefits. By way of cross appeal, the Program appeals the
district court’s award of initial benefits, pre-judgment
interest, and attorney’s fees and costs.
I.
Met Life, the plan administrator, denied Roig’s claim for
initial benefits, but the district court reversed Met Life’s
decision and awarded Roig benefits. We AFFIRM the decision of
the district court on this issue.
A. Standard of Review
In a § 1132(a)(1)(B) case, we review a “district court’s
determination of whether a plan administrator abused its
discretion–a mixed question of law and fact–de novo.” Meditrust
Fin. Serv. Corp. v. The Sterling Chem., Inc., 168 F.3d 211, 214
(5th Cir. 1999)(quoting Sweatman v. Commercial Union Ins. Co., 39
F.3d 594, 601 (5th Cir. 1994)). The de novo standard of review
grants us the freedom to review the plan administrator’s decision
2
Neither party appeals the district court’s dismissal of Met
Life.
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from the same perspective as did the district court. See id.Thus, we directly review the decision of the plan administrator
for an abuse of discretion. See id. Under this standard, we
will reverse the decision of the plan administrator if it is not
supported by substantial evidence. See Meditrust, 168 F.3d at
215.
B. Analysis
To qualify for initial benefits, the employee must “be under
a doctor’s care and be certified as being unable to perform any
and every duty related to [her] job.” The Program contends that
Roig fails to meet both components of this requirement–she was
neither under a doctor’s care nor unable to perform her job.
The record does not support Met Life’s conclusion that Roig
was not under a doctor’s care. Roig had been visiting Dr. Perone
for more than a year prior to leaving Victoria’s Secret. She
visited Dr. Perone at least three times in the two months
immediately prior to leaving work. She was scheduled to see him
again in late July, but the appointment was cancelled because Dr.
Perone had to perform emergency surgery. Roig rescheduled and
visited Dr. Perone on September 14, 1998.
Similarly, the record does not support the conclusion that
Roig was able to perform her job. In his September 15, 1998
letter, Dr. Perone stated that Roig is “unable to return to her
prior job on a permanent basis . . . because of the degenerative
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condition of her lumbar spine.” Met Life, in its capacity as the
plan administrator, did not interview Roig or order an
independent medical examination. Therefore, it has no evidence
to refute Dr. Perone’s conclusion.
Met Life based its conclusion on the fact that Roig’s
herniated disc had improved. However, according to Dr. Perone,
the degenerative disc disease, not the herniated disc, rendered
Roig unable to perform her job. Without evidence to refute this
opinion, the improvement in her herniated disc does not support a
conclusion that she was able to perform her job.
There is no substantial evidence in the record to support
the Plan’s conclusion that Roig was not under a doctor’s care and
able to perform her job. Therefore, we AFFIRM the district
court’s award of initial benefits.
II.
The district court refused to award Roig long-term benefits.
Because our decision in Schadler v. Anthem Life Insurance Co.
precluded the district court from deciding this issue, we VACATE
its judgment and REMAND the case to the district court with
instructions to REMAND to the plan administrator.
In Schadler, the defendants denied the plaintiff’s claim
that she was entitled to benefits under her husband’s accidental
death and dismemberment policy on the ground that her husband had
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never been issued a policy. 147 F.3d 388, 391 (5th Cir. 1998).
After the denial, the plaintiff sued the defendants in district
court to recover the unpaid benefits. Id. The defendants
abandoned the lack of coverage defense in district court. Id. at
392. Nevertheless, the district court pointed to an exclusion in
the policy for intentionally self-inflicted injury and refused to
award the plaintiff benefits because her husband had died from
such an injury. Id.We held that the district court could not decide for itself
whether the self-inflicted injury exclusion precluded benefits.
Id. at 398. We said that “the job of a district court is to
review the administrator’s fact-finding and its interpretation of
an employee benefit plan’s provisions.” Id. at 397 (emphasis
added). A district court may not make initial benefits decisions
for itself. Id. at 398. By denying benefits based upon the
self-inflicted injury exclusion, the district court passed upon
an issue the plan administrator never reached. Id. In short,
the district court was making a benefits decision rather than
reviewing one. Id. We decided that the district court should
have remanded the case to the plan administrator when it became
clear that the initial ground for denial was no longer at issue.
Id.Just as in Schadler, the district court in this case made an
initial benefits decision. Met Life denied Roig initial
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benefits. Consequently, it never reached the issue of whether
she was entitled to long-term benefits because they are only
available after the payment of initial benefits. After deciding
that Met Life abused its discretion by denying initial benefits,
the district court turned to the issue of whether Roig was
entitled to long-term benefits and denied them on the ground that
the record did not contain evidence to support such an award. In
so doing, the district court was no longer reviewing a plan
administrator’s benefits decision, but making one of its own.
Once the district court reached the long-term benefits issue, one
that had not been passed upon by the plan administrator, Schadler
required it to remand the case to the plan administrator. Since
it did not, we VACATE the district court’s judgment that Roig is
not entitled to long-term benefits. We REMAND to the district
court with instructions that it REMAND the case to the plan
administrator to determine whether Roig is entitled to long-term
benefits.
III.
The district court awarded Roig pre-judgment interest on her
award of disability benefits. A district court may award
prejudgment interest if: 1) the federal act creating the cause of
action does not preclude prejudgment interest; and 2) the award
of prejudgment interest furthers the congressional policies
underlying the act. Carpenters Dist. Council of New Orleans v.
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Dillard Dept. Stores, Inc., 15 F.3d 1275, 1288 (5th Cir. 1994).
Whether prejudgment interest is actually awarded in a particular
case is within the district court’s discretion. Id.ERISA does not preclude an award of prejudgment interest,
and we have recognized that “an award of prejudgment interest
under ERISA furthers the purposes of that statute by encouraging
plan providers to settle disputes quickly and fairly.” Hansen v.
Continental Ins. Co., 940 F.2d 971, 984 (5th Cir. 1991). Since
both prerequisites were met, the district had discretion to award
prejudgment interest, and, given that the Plan wrongfully denied
Roig benefits, we do not think the district court abused its
discretion.
IV.
The district court awarded Roig attorneys’ fees and costs.
We review this decision only for an abuse of discretion. Salley
v. E.I. DuPont de Nemours & Co., 966 F.2d 1011, 1016 (5th Cir.
1992). Having found no such abuse, we AFFIRM.
ERISA allows courts to award “a reasonable attorneys’ fee
and costs of action to either party.” 29 U.S.C. § 1132(g)(1).
This award is purely discretionary. Bellaire Gen. Hosp. V. Blue
Cross Blue Shield of Mich., 97 F.3d 822, 832-33 (5th Cir. 1996).
When exercising this discretion, the court should consider the
following factors:
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1) the degree of the opposing parties’ culpability or
bad faith; 2) the ability of the opposing parties to
satisfy an award of attorneys’ fees; 3) whether an
award of attorneys’ fees against the opposing party
would deter other persons acting under similar
circumstances; 4) whether the parties requesting
attorneys’ fees sought to benefit all participants and
beneficiaries of an ERISA plan or to resolve a
significant legal question regarding ERISA itself; and
5) the relative merits of the parties position.
Todd v. AIG Life Ins. Co., 47 F.3d 1448, 1458 (5th Cir.
1995)(quoting Iron Workers Local #272 v. Bowen, 624 F.2d 1255,
1266 (5th Cir. 1980). No single factor is decisive, but these
factors are “the nuclei of concerns that a court should address.”
Bowen, 624 F.2d at 1266.
On balance, the factors favor an award of attorneys’ fees
and costs. Though Roig did not bring suit to benefit all
participants or resolve a significant legal question, the Program
can pay the fees, an award will serve as a deterrent to future
delays and wrongful denials, and, as evidenced by our opinion,
the merits of the case favor Roig. For these reasons, we AFFIRM
the district court’s award of attorneys’ fees and costs.
IV.
In conclusion, we AFFIRM the district court in all respects
except that we VACATE its judgment denying Roig benefits beyond
the initial twelve months of her disability. We REMAND to the
district court with instructions to REMAND to the plan
administrator for further proceedings consistent with this
opinion.
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