Ronnie Layes v. Mead Corp. ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 97-1693
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Ronnie Layes, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Western District of Arkansas.
Mead Corporation; CNA Insurance *
Company; Mead Retirement Plan; *
Mead Benefit Programs, *
*
Appellees. *
___________
Submitted: November 19, 1997
Filed: January 5, 1998
___________
Before McMILLIAN and WOLLMAN, Circuit Judge, and STEVENS,1 District Judge.
___________
WOLLMAN, Circuit Judge.
Ronnie Layes (Layes) initiated this Employment Retirement Income Security Act
(ERISA) action alleging that he was wrongfully denied long-term disability benefits
1
The HONORABLE JOSEPH E. STEVENS, United States District Judge for the
Western District of Missouri, sitting by designation.
and salary continuation benefits under his employer’s ERISA plan. The district court2
granted summary judgment in favor of defendants Mead Corporation, Mead Retirement
Plan, and Mead Benefits Program (collectively referred to as “Mead”), and CNA
Insurance Companies (CNA). Layes now brings this timely appeal pursuant to 28
U.S.C. § 1291 (1993). We affirm.
I.
Layes began working for Mead in April of 1987 as a supervisor at Mead’s
containerboard plant in Fort Smith, Arkansas. During the summer of 1992, Layes began
experiencing pain in his legs and feet. He was referred to Dr. James Long, an
orthopaedic surgeon. Dr. Long concluded that Layes suffered from chronic foot and leg
pain caused by a developmental misalignment of the lower extremities.3 This condition
was aggravated by the prolonged periods of walking and standing that were a part of
Layes’ job.
Dr. Long performed minor surgery on Layes in an attempt to alleviate some of his
symptoms. Layes’ condition failed to improve, however, and sometime in December
1992 Layes orally notified Mead’s Fort Smith plant manager that he intended to take
“disability retirement” and would cease working in February 1993.
2
The Honorable Jimm Larry Hendren, Chief Judge, United States District Court
for the Western District of Arkansas.
3
Dr. Long’s precise diagnosis was “symptomatic genu varum and pes cavus with
calcaneoravus.” “Genu varum” is defined as “a deformity marked by medial angulation
of the leg in relation to the thigh; an outward bowing of the legs.” Stedman’s Medical
Dictionary 714-15 (26th ed. 1995). “Pes cavus” or “talipes cavus” refers to “an
exaggeration of the normal arch of the foot.” Id. at 1760. “Calcaneovarus” occurs
where “the foot is dorsiflexed, inverted, and adducted.” Id.
-2-
Aside from his communications to the plant manager, Layes took no other action toward
pursuing disability benefits at this time.
In January 1993, Dr. Long wrote to Mead to confirm Layes’ diagnosis and to
express his opinion about the physical limitations that accompanied Layes’ condition.
Dr. Long stated that excessive walking and standing significantly contributed to the
severity of Layes’ symptoms. In February, Mead requested further information from Dr.
Long. In addition, Mead expressed a desire to accommodate Layes’ medical needs so
that he might continue working at the Fort Smith plant. Subsequent communications
between Mead representatives and Dr. Long led Mead to inquire about the possibility
of providing Layes with a motorized cart that would enable him to remain seated while
performing most of his supervisory duties.4 Dr. Long expressed his opinion that such an
accommodation might allow Layes to continue working at the Fort Smith plant.5
In April 1993, Mead informed Layes of its willingness to provide him with a
motorized cart in order to accommodate his medical needs and requested that Layes
return to work under these conditions. Layes, who by this time had been away from
work for nearly two months, failed to respond to Mead’s offer. In May of 1993, Layes
informed CNA, the administrator of Mead’s long-term disability benefits plan, of his
intent to seek long-term disability benefits. Shortly thereafter, he was provided with a
claims form used by Mead employees seeking benefits under the terms of the plan.
Layes subsequently filed a formal request for long-term disability benefits in June 1993.
4
Dr. Long informed Mead that the only accommodation that might enable Layes
to continue working would be to ensure that he could remain seated at least 75 percent
of the time. The motorized cart proposal was designed to meet this requirement.
5
In a letter dated March 26, 1993, Dr. Long stated that “the use of a motorized
cart decreasing the amount of time that this patient has to stand and walk may well
affect his symptoms and thereby allow him to continue at his present job” and “should
be of considerable benefit.”
-3-
Mead’s long-term disability benefits plan provides for the payment of benefits for
24 months so long as the applicant is “continuously unable to perform the substantial and
material duties of [his] regular occupation.” Beyond that time frame, disability benefits
are payable to any individual who is “continuously unable to engage in any occupation.”
In November of 1993, CNA, acting as the administrator of the plan, determined that
Layes was not totally disabled under the terms of the plan and was therefore not entitled
to long-term disability benefits. CNA notified Layes of its decision to deny the
requested benefits in November 1993. In addition, CNA apprised Layes of his right to
request review by CNA’s appeals committee within sixty days and advised him that any
request for appeal “should explain why you are in disagreement with our decision” and
should also “include supporting documentation and/or objective medical information
which you feel would alter our decision.” Layes made a timely request for appeal of
CNA’s initial decision. He included no additional documentation, however, and cited
Dr. Long’s letter of January 22, 1993, as his sole basis for objecting to CNA’s decision.6
In January 1994, CNA’s appeals committee denied Layes’ request for benefits.
Layes thereafter filed this ERISA action pursuant to 29 U.S.C. § 1332(1)(B)
(1985 & 1997 Supp.) seeking to recover long-term disability benefits allegedly due from
CNA and Mead. In addition, Layes sought salary continuation benefits allegedly due
from Mead.
II.
We first address Layes’ contention that the district court erred in granting
summary judgment in favor of CNA and Mead on Layes’ long-term disability claim.
6
In his January 22 letter, Dr. Long informed Mead that Layes could not perform
the extensive walking and standing associated with his work but that he “might be able
to function if his job allowed him to sit most all the time.”
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“We review a district court’s grant of summary judgment de novo, viewing the record
in the light most favorable to the non-moving party.” Wald v. Southwestern Bell Corp.
Customcare Medical Plan, 83 F.3d 1002, 1006 (8th Cir. 1996).
With regard to Layes’ claim for long-term disability benefits, the district court
properly granted summary judgment in favor of Mead. CNA was at all relevant times
the sole administrator of the long-term disability plan offered by Mead. Thus, Mead was
not a proper party defendant. See Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d
186, 187 (11th Cir. 1997) (“The proper party defendant in an action concerning ERISA
benefits is the party that controls administration of the plan”). See also Daniel v. Eaton
Corp., 839 F.2d 263, 266 (6th Cir. 1988) (“Unless an employer is shown to control
administration of a plan, it is not a proper party defendant in an action concerning
benefits”). Layes argues that a series of communications between Mead’s corporate
counsel and CNA reveal an attempt by Mead to improperly exert its influence over the
handling of Layes’ claim, thus rendering Mead the administrator of the plan. For the
most part, these communications occurred prior to Layes’ filing of a claim, and in any
event they do not establish that Mead influenced CNA’s decision on Layes’ disability
claim.7
III.
We turn, then, to Layes’ action against CNA for long-term disability benefits.
The district court reviewed CNA’s decision to deny benefits for an abuse of discretion.
Layes maintains that the court should have reviewed CNA’s decision de novo.
7
The letters, memos, and other correspondence that Layes considers
demonstrative of Mead’s control over the administration of his claim occurred primarily
in May 1993. Layes did not file a formal request for benefits until June 1993. He
accuses CNA of unreasonably failing to provide him with a claim form. This claim is
meritless. Layes first informed CNA of his desire to seek benefits on May 6, 1993, and
he was sent a claim form on May 25, 1993.
-5-
Generally, where a benefits plan “gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to construe the terms of the
plan,” we review the plan administrator’s decision for abuse of discretion. See Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). See also Wald, 83 F.3d at
1006; Donaho v. FMC Corp., 74 F.3d 894, 898 (8th Cir. 1996); Collins v. Central
States, S.E. & S.W. Areas Health & Welfare Fund, 18 F.3d 556, 559 (8th Cir. 1996);
Cox v. Mid-America Dairymen, Inc., 13 F.3d 272, 274 (8th Cir. 1991). This deferential
standard reflects our general hesitancy to interfere with the administration of a benefits
plan. See Cox, 13 F.3d at 274 (citing Buneman v. Central States, S.E. & S.W. Areas
Pension Fund, 572 F.2d 1208, 1209 (8th Cir. 1978)). Layes does not dispute that the
language of the plan grants CNA discretionary authority to administer and interpret the
long-term disability plan. He nevertheless argues that the existence of procedural
irregularities in the claims process mandates our application of de novo review rather
than the deferential abuse of discretion standard. For this proposition, he relies upon
Buttram v. Central States, S.E. & S.W. Areas Health & Welfare Fund, 76 F.3d 896, 899-
900 (8th Cir. 1996).
We disagree with Layes’ contention that Buttram requires us to conduct a de novo
review in this case. In Buttram, we contemplated the application of a less stringent
standard of review in situations involving substantial procedural irregularities. We did
not suggest, however, that a de novo standard was appropriate. See id. Indeed, we held
that “[i]n certain situations, factors external to the actual decision on the merits can
mandate the application of a less deferential abuse of discretion standard.” Id. at 899.
Thus, even assuming that some form of heightened review is appropriate, the standard
is not de novo.8
8
In Armstrong v. Aetna Life Insurance Co., No. 97-1712, 1997 WL702914 (8th
Cir. Nov. 13, 1997), we indicated that de novo review of a plan administrator’s
decision is required in those cases in which the plan administrator is also the insurer.
See id. at 5. Layes does not make this argument, but instead relies upon the
“procedural irregularities” approach. Although not entirely clear, the record indicates
that CNA is both the insurer and the plan administrator. We need not resolve this
question, however, in part because Layes has not raised the issue, and in part because
we believe that CNA’s decision is so clearly supported by the evidence before it that
-6-
We conclude that no form of heightened review is appropriate in this case. We
apply heightened review only where the beneficiary can show (1) that a serious
procedural irregularity existed; and (2) that the irregularity caused a serious breach of
the plan trustee’s fiduciary duty to the plan beneficiary. See id. at 900. The mere
assertion of an apparent irregularity, without more, is insufficient to give rise to
heightened review. See id. at 901. A beneficiary must show that the irregularities are
connected to the actual decision reached; that is, that they caused “the actual decision
to be a breach of the plan trustee’s fiduciary obligations.” Id. Unless a beneficiary can
offer material, probative evidence that gives rise to “serious doubts as to whether the
result reached was the product of an arbitrary decision or the plan administrator’s
whim,” we will apply the traditional abuse of discretion standard to discretionary trustee
decisions. Id. at 900.
Layes has presented no evidence illustrating that the processing of his claim was
marred by serious procedural irregularities. The irregularities he cites consist primarily
of correspondence between Mead’s corporate counsel and CNA during May of 1993.9
Although Layes draws sinister implications from these communications, as noted above
this correspondence largely predated the processing of Layes’ claim.
it would survive de novo review.
9
Additionally, Layes makes vague assertions that he was not properly apprised
of his rights and duties in filing for benefits under the long-term disability plan.
However, the record shows that Layes had ample opportunity to submit additional
evidence in support of his claim and simply failed to do so. Indeed, CNA requested
additional information from Layes and received no response. Thus, Layes’ assertion
that he was not afforded a fair opportunity to demonstrate the validity of his claim is
without merit.
-7-
Layes argues that the claims process began months earlier, when he first notified
Mead’s Fort Smith plant manager of his intent to seek disability benefits. The
processing of Layes’ claim did not begin, however, until he filed a formal request with
CNA for long-term disability benefits. To hold otherwise would be to ignore the clear
procedural requirements for seeking benefits under the plan. Furthermore, even
assuming, arguendo, that the alleged procedural irregularities occurred during the
processing of Layes’ claim, the abuse of discretion standard is nonetheless proper.
Layes offers no evidence tending to show that the alleged irregularities caused a serious
breach of CNA’s fiduciary duties. In fact, he does not demonstrate that they affected
CNA’s decision whatsoever. Any alleged irregularities were not so egregious that they
might trigger a “total lack of faith in the integrity of the decision making process.” See
Buttram, 76 F.3d at 900.
IV.
Turning to the merits of Layes’ claim against CNA, and viewing the record in the
light most favorable to Layes, we conclude that CNA did not abuse its discretion as plan
administrator and that summary judgment was proper. See Wald, 83 F.3d at 1006.
Under the abuse of discretion standard, the reviewing court should consider only
evidence that was before the plan administrator when the claim was denied. See
Ravenscraft v. Hy-Vee Employee Benefit Plan & Trust, 85 F.3d 398, 402 (8th Cir.
1996); Oldenburger v. Central States, S.E. & S.W. Areas Teamster Pension Fund, 934
F.2d 171, 174 (8th Cir. 1991); Short v. Central States, S.E. & S.W. Areas Pension
Fund, 729 F.2d 567, 571-72 (8th Cir. 1984). Layes submitted no evidence to CNA in
support of his claim that he was totally disabled. Layes chose instead to rely exclusively
on letters written by Dr. Long to Mead. Although Dr. Long stated that Layes could not
continue to perform the extensive walking and standing associated with his position, he
also stated that Layes “might be able to function if his job allowed him
-8-
to sit down most all the time.” When Mead inquired of Dr. Long about the possibility
of using a motorized cart to accommodate Layes’ medical needs, Dr. Long stated that
this “may well affect his symptoms and thereby allow him to continue at his present
job.” Rather than indicating that Layes was totally disabled, then, Long’s letters indicate
that Layes was still able to work.
Furthermore, an independent rehabilitation analyst consulted by CNA concluded
that the cart was a feasible accommodation at the Fort Smith plant. Layes never
responded to Mead’s offer to provide a cart and submitted no evidence indicating that
he could not continue working if the cart was utilized. He now asserts that the cart is
neither feasible nor safe and that CNA is using the cart as a belated attempt to justify its
improper denial of benefits. The record reveals, however, that Layes was aware of the
offered accommodation before he ever submitted a claim to CNA. In addition, he was
aware that his own treating physician was of the opinion that the accommodation would
be of “considerable benefit” to him and would allow him to continue working.
Layes also asserts that CNA should have ordered an independent medical
examination. The medical opinion relied upon by CNA, however, was that of Layes’
own treating physician. This was the very opinion relied upon exclusively by Layes in
submitting his claim. CNA was not obligated to seek independent medical examination
when the medical evidence relied upon by Layes was on its face insufficient to support
a conclusion that he was totally disabled. Thus, the evidence submitted by Layes does
not support his contention that he is entitled to benefits, and the district court did not err
in entering summary judgment against Layes.
V.
Finally, we address Layes’ contention that the district court erred in granting
summary judgment in favor of Mead on his salary continuation benefit claim.10 The
10
The salary continuation plan is self-administered by Mead.
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terms of Mead’s salary continuation plan provide that the right to salary continuation
benefits expires upon the termination of the employment relationship. Layes admits that
his employment at Mead ended in February of 1993. He had made no attempt to apply
for salary continuation benefits before that time, nor had he done so much as to request
an application form for those benefits. Where a claimant fails to pursue and exhaust
administrative remedies that are clearly required under a particular ERISA plan, his
claim for relief is barred. See Conley v. Pitney Bowes, 34 F.3d 714, 716 (8th Cir. 1994)
(“We have required exhaustion in ERISA cases only when it was required by the
particular plan involved”). Accordingly, we find that the district court’s grant of
summary judgment in favor of Mead was proper.
The judgment is affirmed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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