Opinion
Civil Action No. 00-4529
March 29, 2004
MEMORANDUM ORDER
Presently before the Court is Defendant's Motion for Summary Judgment (Doc. No. 18), and Plaintiffs cross motion for summary judgment (Doc. No. 20). Plaintiff Edward Glowitz brought this action against the Defendant, Fortis Insurance Company following the denial of his claim for temporary disability benefits. Because the insurance policy at issue is an employee benefit plan, this action is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Defendant contends that summary judgment should be granted because the facts of this case do not support the conclusion that Defendant's denial of benefits for Plaintiff was "arbitrary and capricious." Plaintiff contends that because of the existence of a conflict of interest among the plan administrator and the insurer, a less deferential standard of review is required. Plaintiff suggests that there is no factual dispute in this case and requests that we grant summary judgment in his favor. For the following reasons we will deny Defendant's Motion and we will grant summary judgment in favor of Plaintiff.
As hereafter discussed, we will treat Plaintiff's Reply to Defendant's Motion for Summary Judgment as a motion for summary judgment by Plaintiff.
I. Factual Background
A. The Plan
On August 7, 1997, Plaintiff purchased a disability insurance policy with the Defendant. (Am. Compl. ¶ 4.) Plaintiff's policy was purchased as part of a group plan through Plaintiff's company — Concise Construction, Inc. — of which Plaintiff is the owner and CEO. (Br. in Supp. of Mot. for Summ. J. at 1.) Plaintiff paid the premiums in a timely manner and satisfied all other conditions of the insurance policy. (Am. Compl. ¶ 4.) Under the terms of the policy, if he became totally disabled, Plaintiff would receive $500 a week for a maximum of fifty-two weeks. The plan defines "totally disabled" as:
You will be considered "totally disabled" if you are (a) totally and continuously unable to work at the substantial and material duties of Your occupation because of an illness, injury or pregnancy that began prior to your 65th birthday; (b) under the regular care of a Physician for the illness, injury or pregnancy; and (c) not engaged in any occupation for wage an profit. The Physician determining the Total Disability cannot be You, a member of the Extended Family, a person residing with You or Your employer.
(Am. Compl. Ex. A, Form 20825-H.) The plan gives Defendant sole discretion to "determine eligibility for benefits and to provide the final decision as to the validity of a claim relating to contractual provisions after such review has been completed." (Id. at Form 20825-M.)
B. Plaintiff's Application for Benefits
In February of 1999, Plaintiff began treatment for a debilitating kidney condition. (Am. Compl. ¶ 5.) Plaintiff, through his doctor, informed Defendant of his disability and requested that Defendant pay the disability insurance proceeds of $500 per week as contracted for under the terms of the policy. (Id. ¶¶ 6, 7.) On March 16, 1999, Defendant received a disability claim form from Plaintiff as well as an unsigned Physician statement which diagnosed Plaintiff with "Chronic Hepatitis C Virus". (Mot. for Summ. J. ¶ 13.) The next day, Defendant received correspondence from Plaintiff's Doctor (Dr. Conn, M.D.), advising that Plaintiff was being treated for chronic hepatitis C and "receiving a combination of interferon and ribavirin for approximately one year," prohibiting him from working. (Id. ¶ 15, Ex. 8.) Conn advised Defendant that Plaintiff would "need to be on temporary leave of absence and temporary disability during his treatment." (Id.)
On April 12, 1999, Defendant received another Physician Statement regarding Plaintiffs condition from a Dr. Levitt. (Id. ¶ 16.) While this report reiterated the general prognosis of the first report, it provided no opinion as to how long Plaintiff would be disabled. (Id. Ex. 9.) Defendant subsequently requested the relevant medical records from both doctors. (Id. ¶ 17, Ex. 10.) Over the next few months, Defendant received documents from all of Plaintiff's doctors discussing his prognosis and his treatment. On June 18, 1999, Defendant's Medical Director, Dr. Brumblay, determined that based on everything that had been received, "total disability had not been documented in this case." (Id. ¶ 26.) Brumblay noted in his report that "there is no documentation provided which objectively addresses ability or disability," that even though "use of an interferon and ribavirin protocol may create uncomfortable side effects, it is unlikely that disability would result," and that "there is no indication that liver disease has progressed to a point at which disability would be present." (Id. Ex. 18.) After receiving additional information, Defendant again found that Plaintiff had not established disability and denied him the benefits under the plan.
After this second denial, Plaintiff's attorney contacted Defendant to appeal the denial of benefits. The appeal was referred to Defendant's "Benefit Supervisor" who ultimately decided to uphold the denial as there was "no new information which supports disability as defined by his policy, review of medical records by the medical director did not support a total disability." (Id. 131, Ex. 23.) Four months later, Plaintiff's attorney sent Defendant correspondence from Plaintiff's doctor supporting the claim that his client was unable to work and was disabled. Defendant sent the file for review to Barbara Delgadillo, R.N. who responded that since there was no new history there was nothing further to be reviewed. (Id. 1 33, Ex. 26.) After receiving another letter from Dr. Conn, the claim for disability was reviewed by Defendant two more times and each time it was denied. After the final rejection, Defendant advised Plaintiff's attorney that it was maintaining its original benefit determination denying disability benefits, as the records from Dr. Conn did not substantiate a "total disability" as defined by the insurance policy. (Id. 1 42.)
C. Procedural History
After this final rejection, Plaintiff filed suit in the Court of Common Pleas of Delaware County, Pennsylvania, seeking review of Defendant's determination. Defendant properly removed the case to this Court and Plaintiff filed his Amended Complaint. (Doc. No. 7.) We denied Defendant's first Motion for Summary Judgment (Doc. No. 12), ordering Defendant to produce relevant personnel for deposition, for the purpose of discovering evidence related to determining the appropriate standard of review that should be applied in this case. (Doc. No. 15.) As Plaintiff has now had the opportunity to conduct this discovery, the matter is now properly before the Court.
II. Discussion
A. Summary Judgment Standard of Review
Plaintiff's Reply to Defendant's Motion for Summary Judgment is not styled as a motion for summary judgment. However, Plaintiff did specifically request such relief in his reply. Pursuant to Fed.R.Civ.P. 56, a district court may not grant summary judgment sua sponte unless it first provides the party notice and an opportunity to oppose summary judgment. See Otis Elevator Co. v. George Washington Hotel Corp., 27 F.3d 903, 910 (3d Cir. 1994). Since Plaintiff twice asked for summary judgment in his Reply and Brief, Defendant was properly put on notice and had ample opportunity to respond to this request. Moreover, Defendant did in fact respond. (See Reply Br. of Def. Fortis Insurance Company, In Supp. of its Mot. for Summ. J.) The record in this case is complete. The parties have had full opportunity to marshall evidence and arguments on the issue of summary judgment. Moreover, both parties agree that summary judgment is appropriate because there is no genuine issue of material fact. See Gibson v. Mayor and Council of the City of Wilmington, 355 F.3d 215, 223-24 (3d Cir. 2004) (establishing an exception to the notice requirement for granting summary judgment sua sponte where "the targeted party had reason to believe that the court might reach the issue and received a fair opportunity to put its best foot forwards") (quoting Leyva v. On the Beach. Inc., 171 F.3d 717, 720 (1st Cir. 1989)) (internal quotation omitted).
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The party moving for summary judgment bears the initial burden of demonstrating that there are no facts supporting the non-moving party's legal position. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). The burden then shifts to the nonmoving party who "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "The nonmoving party . . . cannot rely merely upon bare assertions, conclusory allegations or suspicions to support its claim." Townes v. City of Phila., No. Civ. A. 00-138, 2001 WL 503400, at *2 (E.D. Pa. May 11, 2001) (quoting Fireman's Ins. Co. v. DeFresne, 676 F.2d 965, 969 (3d Cir. 1982) (internal quotations omitted). Rather, the party opposing summary judgment must go beyond the pleadings and present evidence through affidavits, depositions, or admissions on file to show that there is a genuine issue for trial. See Celotex, 477 U.S. at 324. When deciding a motion for summary judgment, the court must construe the evidence and any reasonable inferences therefrom in the non-movant's favor. See Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 255 (1986). A genuine issue of material fact exists only where "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson, 477 U.S. at 248.
B. Denial of Benefits Standard of Review
The ERISA statute does not dictate a standard of review. Defendant suggests that we should use the deferential "arbitrary and capricious" standard of review when analyzing the decision made by the plan administrator. In Firestone Tire and Rubber Co. v. Bruch, the Supreme Court held that, "a denial of benefits challenged under 29 U.S.C. § 1132(a)(1)(B) [of ERISA] is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine the eligibility for benefits or to construe the terms of the plan." 489 U.S. 101, 115 (1989). If the plan provides for discretionary authority by a plan administrator, the decision to deny benefits is to be reviewed under the "arbitrary and capricious" standard. Abnathy v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 (3d Cir. 1993); see also Stoetzner v. United States Steel Corp., 897 F.2d 115, 119 (3d Cir. 1990) (holding that application of deferential arbitrary and capricious standard of review is appropriate when benefit plan gives administrator discretionary authority to determine eligibility for benefits).
The "Glowitz policy" gives discretionary authority to the plan administrator. (Pl.'s Br. in Opp. to Deft.'s Mot. for Summ. J. at unnumbered 4.) We will therefore use the arbitrary and capricious standard of review.
Though the arbitrary and capricious standard is the baseline for examining denial of benefits decisions under a discretionary policy, where there is a conflict of interest among the administrator and the insurer, a more heightened standard of review may be necessary. InFirestone, the Court instructed "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a `factor in determining whether there is an abuse of discretion.'" 489 U.S. at 115 (quoting RESTATEMENT (SECOND) OF TRUSTS § 187, cmt.'d (1959)). The Third Circuit recognized and analyzed the possible conflict of interest that arises when an employer pays an independent insurance company to fund, interpret, and administer a plan in Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3d Cir. 2000). The conflict arises where the decision to grant or deny benefits has a direct effect on the insurance company's bottom line. In Pinto the court held that in such situations, the "potential self-dealing warrants that fiduciary insurer's decisions be closely inspected." Id. at 388.
In finding that a per se rule of heightened scrutiny was appropriate in these situations, the court dismissed the requirement of consequential evidence of a conflict, finding that though "some level of conflict may be unavoidable. . . . direct evidence of a conflict is rarely likely to appear in any plan administrator's decision." Id. at 389. Rather than articulating a new standard to apply in cases where conflicts exist, the Third Circuit instructed the district courts to "consider the nature and degree of apparent conflicts with a view to shaping their arbitrary and capricious review." Id. at 393. This "sliding scale" approach is "more penetrating the greater is the suspicion of partiality, less penetrating the smaller the suspicion is." Lasser v. Reliance Standard Life Ins. Co., 344 F.3d 381, 385 (3d Cir. 2003) (quoting Pinto, 214 F.3d at 392-93).
One of the assumption the court makes in Pinto is that employees will have little ability to control their employers' decisions with regard to choosing a benefits plan. 214 F.3d at 388. As a result, an insurance company can act in its own self-interest and deny some deserving claims to the detriment of its client's employees without suffering a loss in business because of the attenuated relationship between the individual employee and the benefits provider. Id. In the present case this theory is somewhat less persuasive since Plaintiff is the owner of his company and could ultimately choose to take the company's business to a different provider. Despite this fact, we find that strong motivation to deny claims warrants greater scrutiny even where the entire economic theory does not hold true.
C. The Degree of the Conflict of Interest
Since we have determined that a conflict of interest exists in this case, we must apply the Pinto analysis to first determine what the proper level of the "arbitrary and capricious" review should be. Under a standard arbitrary and capricious standard or review, "a court must defer to the administrator's decision unless the decision `is not clearly supported by the evidence in the record or the administrator has failed to comply with the procedures required by the plan.'" Freiss v. Reliance Standard Life Ins. Co., 122 F. Supp.2d 566, 572 (E.D. Pa. 2000) (quotingAbnathya, 2 F.3d at 44-45); see also Pinto, 214 F.3d at 387 ("Under the arbitrary and capricious standard, an administrator's decision will only be overturned if it is without reason, unsupported by substantial evidence or erroneous as a matter of law [and] the court is not free to substitute its own judgment for that of the defendants in determining eligibility for plan benefits.") (internal quotations omitted).
It is beyond dispute that Defendant is both the insurer and the administrator of this policy. Furthermore, evidence shows that Defendant's employees receive a yearly bonus based on the overall profitability of the company. (Pl's Reply to Def.'s Mot. for Summ. J. at Ex. F, H.) Since profitability is directly tied to the amount of benefits paid out in a year, it is reasonable to infer a conflict of interest.
In applying the "sliding scale" to this base model of review, "[t]he court may take into account the sophistication of the parties, the information accessible to the parties, and the exact financial arrangement between the insurer and the company." Pinto, 214 F.3d at 392. This allows the court to consider the individual facts of each relationship that may give rise to greater conflict. "Another factor to be considered is the current status of the fiduciary." Id. The logic behind considering this factor in the analysis is that the less stable the fiduciary, the greater the motivation it has to act in its own self-interest.
Turning first to the exact financial arrangement between the Defendant and Plaintiff's company, it is apparent that there was a direct incentive for the insurer to deny Plaintiffs claim. Plaintiff purchased this policy for his secretary and himself. Because the plan was already funded, any payment to Plaintiff would cut directly into Defendant's revenue. This in itself is prima facie evidence of a conflict. In addition, Defendant's doctors never conducted an in-person examination of Plaintiff, nor referred him for an independent examination. Though Defendant was not required to conduct an independent investigation to gather more information, "suspicious events raise the likelihood of self-dealing, and move toward the stricter extreme of the arbitrary and capricious range."Freiss, 122 F. Supp.2d at 573 (internal quotations omitted); see also Pinto, 214 F.3d at 394 n. 8. Some courts have found that a conflict played a role in the decision making process where defendant's physicians "based their opinions on cold test results contained in plaintiff's medical files" in light of the contrary opinion of plaintiff's treating physicians. Cohen v. Standard Ins. Co., 155 F. Supp.2d 346, 352 (E.D. Pa. 2001); see also Freiss, 122 F. Supp.2d at 574 ("[T]he failure to examine may indicate an inattentive process."); but cf. Leonardo-Barone v. Fortis Benefits Ins. Co., No. 99-6256, 2000 WL 33666891, at *13 (E.D. Pa. Dec. 28, 2000) (suggesting that "[t]he decision to rely only upon a review of the written submissions does not render the denial arbitrary" where the policy allows the administrator to do so). Finally, Defendant appeared to treat Plaintiff like an adversary, seeking to find reasons to deny the claim rather than to trying to determine if Plaintiff was really disabled. This treatment suggests the Court should view the decision to deny benefits in a less than deferential manner, moving towards the middle of the Pinto sliding scale. Under the circumstances we will subject Defendant's decision to heightened arbitrary and capricious scrutiny, under a "deferential, but not absolutely deferential standard." Cimino v. Reliance Standard Life Ins. Co., No. Civ. A. 00-2088, 2001 WL 253791, at *3 (E.D. Pa. Mar. 12, 2001). "The defining feature of such a review, is that the court looks not only at the result — whether it is supported by reason — but at the process by which the result was achieved." Id.
As further evidence of a conflict of interest, Plaintiff directs our attention to a Referral Form sent by Jill Koslo on May 26, 1999. (Pl's Reply to Def.'s Mot. for Summ. J. Ex. J.) That referral letter contains a line stating "POSSIBLE EIABIEITY $26,000." (Id.) Though there may be a proper reason for this information to be included on a referral form, Jill Koslo could provide no explanation as to why this piece of information would be needed by a medical reviewer. (Id. Ex. J "Koslo Dep." at 23.)
Though we have decided that the conflict of interest tainted some of Defendant's procedures in reviewing Plaintiff's claim, the facts of this case do not merit a move to the high end of the Pinto scale. There is no evidence of the most "suspicious" tactics in this case. See Holzschuh v. Unum Eife Ins. Co. of Am., No. Civ. A. 02-1035, 2002 WL 1609983, at *7 (E.D. Pa. July 18, 2002); cf. Lasser, 344 F.3d at 386 ("Because the Court found no evidence of conflict other than the inherent structural conflict, it held that the correct standard of review was `at the mild end of the heightened arbitrary and capricious scale,' and thus afforded a `moderate degree of deference.'"). We note, however, that the facts of the instant case are not so different from those facts inFreiss, which as that court suggested could "push a court to the far end of the arbitrary and capricious range, causing the court to examine the administrative record with great skepticism." 122 F. Supp. at 575 (quoting Pinto, 214 F.3d at 393) (internal quotation omitted).
D. Scope of Review
In reviewing the decision to deny benefits, the court is limited to review of the evidence that was before the plan administrator at the time of the decision to deny benefits. See Mitchell v. Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir. 1997) ("Under the arbitrary and capricious standard of review, the `whole' record consists of that evidence that was before the administrator when he made the decision being reviewed.") (citing Luby v. Teamsters Health. Welfare Pension Trust Funds, 944 F.2d 1176, 1184 n. 8 (3d Cir. 1991)). The Third Circuit determined that while there may be good reason to look at additional evidence when reviewing a denial of benefits de novo, the same logic did not apply in cases where a deferential standard of review was applied. See Luby, 944 F.2d at 1184 n. 8 ("Limiting the review of an ERISA benefit decision to evidence before the administrator was appropriate in those pre-Firestone cases where a deferential standard of review was applied."). Thus, evidence or information not presented to the administrator at the time the decision was will not be reviewed by this Court. See, e.g. Stout v. Bethlehem Steel Corp., 957 F. Supp. 673, 691 (E.D.Pa. 1997).
III. Review of Administrator's Decision
Plaintiff suggests two reasons why Defendant's decision was arbitrary and capricious. First, Plaintiff contends that Defendant unreasonably applied the wrong standard of "total disability" throughout the claims process. Second, Plaintiff argues that the internal review process was flawed, suspicious, and contained elements of self-dealing. Turning to the first argument, ERISA requires that "[e]very employee benefit plan . . . be established and maintained pursuant to a written instrument." 29 U.S.C. § 1102(a)(1). It is undisputed that the terms of the plan were governed by the Certificate of Group Insurance issued to Plaintiff. (Am. Compl. Ex. A.) Defendant claims that under this plan, Plaintiff did not meet the definition of "totally disabled" and thus the denial of benefits was proper. Moreover, Defendant contends that because its interpretation of the plan was rationally related to the purpose of the plan and not contrary to the plain language of the plan, we should not find it to be an arbitrary and capricious application of the plan. See Gaines v. Amalgamated Ins. Fund, 753 F.2d 288, 89 (3d Cir. 1985).
As noted above, the applicable section of the insurance plan defines "totally disabled" as being "totally and continuously unable to work at the substantial and material duties of Your occupation because of an illness." (Am. Compl. Ex. A, Form 20825-H.) Despite this definition of total disability, Defendant in its correspondence with Plaintiff described the standard as "unable to engage in any type of business or labor." (Pl's Reply to Def.'s Mot. for Summ. J. Ex. A "Brumbay letter of June 24, 1999," Ex. C "Koslo letter of June 23, 1999" (emphasis supplied).) Clearly, not being able to engage in any type of business or labor is a much more stringent definition of total disability. When Defendant's reviewing physician was asked why different language was used in correspondence with Plaintiff than was included in the policy, he had no explanation. (Pl's Reply to Def.'s Mot. for Summ. J. Ex. I ("Brumblay Dep.") at 21.)
Defendant still has not provided any explanation for this use of the different standard. Rather, Defendant simply contends that the proper definition of "totally disabled" governed the decision making process. In support of this contention, Defendant cites its correspondence of August 19, 1999. (Def.'s Mot. for Summ. J. Ex. 24.) Though this letter does cite the correct definition, we find it troubling that use of the correct definition occurred only after Plaintiffs claims had already been denied twice and Plaintiff had hired legal representation. While Defendant attempts to point to evidence that the correct standard was used, and to Plaintiffs deficiencies in making a case for "total disability," it provides no reason why all the correspondence relating to the first two denials of Plaintiff's claim contained the wrong definition. (Def.'s Mot. for Summ. J. Ex. 19, 21 (FOR 00171).)
Turning now to Plaintiff's argument that Defendant's review process was flawed and tainted with self-dealing, Plaintiffs main objections to the process are based on the fact that it was conducted solely by employees of Defendant, and by a medical director who was not properly prepared to render an opinion on Plaintiff's condition or the effects of the treatment for Hepatitis C. Plaintiff was being treated by Dr. Conn (Director of Biliary Endoscopy at Thomas Jefferson University) and Dr. Levitt (Gastroenterologist at Bryn Mawr Hospital). Both doctors saw Plaintiff and forwarded reports and letters confirming the Plaintiff's inability to work while undergoing the Inteferon-Ribavirin therapy. Despite these reports from well-qualified physicians, Defendant rejected Plaintiff's claims several times stating that "the evidence presented did not establish that Glowitz was disabled under the terms of the plan from performing the substantial and material duties of his occupation or that he was under the regular care of a physician." (Br. in Supp. of Mot. for Summ. J. at 31.)
Dr. Conn's letter of March 17, 1999 states that, "[Plaintiff] will be receiving a combination of interferon and ribavirin for approximately one year. He has had significant side effects from this treatment which prohibits him from working. He will need to be on temporary leave of absence and temporary disability during his treatment." (Pl.'s Reply to Def.'s Mot. for Summ. J. Ex. C (FOR00043).) Dr. Conn's letter of September 24, 1999, states that, "[Plaintiff] will be on interferon/ribavirin for approximately one year. The side effects that he can expect include fatigue, malaise, fever, general joint pains, and depression. These side effects could seriously interfere with his ability to work. In light of this, a temporary leave of absence is reasonable." (Pl's Reply to Def.'s Mot. for Summ. J. Ex. C (FOR00204).) Dr. Conn's letter of November 15, 1999, states that "[Plaintiff] has had serious side effects from the treatment, characterized by severe fatigue, malaise, fevers, and headaches, which do not allow him to work at this time. In light of this, he will be medically disabled from working while he is on therapy." (Pl's Reply to Def.'s Mot. for Summ. J. Ex. C (FOR00189).)
It is not the function of this Court to make medical determinations as to Plaintiff's disability status. However, we can look to whether the process used in Plaintiff's case comported with the terms of the policy and was not arbitrary and capricious. See Cimino, 2001 WL 253791, at *3. Initially, we observe that courts have recognized that the fact that a claim is examined exclusively by non-examining medical professionals does not immediately render the decision arbitrary and capricious. See Leonardo-Barone, 2000 WL 33666891, at *13 ("The decision to rely only upon a review of the written submissions does not render the denial arbitrary since by doing so Fortis violated no provision of the policy."); see also Marstellar v. Life Ins. Co. of N. Am., 24 F. Supp.2d 593, 596 (W.D. Va. 1998) ("It is not unreasonable . . . for a plan administrator to give greater weight to its own consultant's determination than to the recommendations of the beneficiary's own doctor. . . . Deference is due even if the plan administrator's medical consultant `relied exclusively on `cold' records and reports' rather than opinions of the physicians who treated the beneficiary firsthand."). Furthermore, the absence of an independent medical review is also not solely indicative of an arbitrary and capricious decision. Id.; but see Freiss, 122 F. Supp.2d at 574. However, in this case, Defendant denied Plaintiff's claim without offering any conflicting medical evidence to support the denial. This is problematic. See Skretvedt v. E.I. Dupont de Nemours Co., 268 F.3d 167, 184 (3d Cir. 2001) (finding that where plaintiff provides medical evidence that "he meets the eligibility standards for incapability, and the Board can point to no conflicting medical evidence," a court can find that the administrator's decision was arbitrary and capricious because it was "unsupported by substantial evidence . . .") (quoting Pinto, 214 F.3d at 393) (internal quotation omitted). The facts in Skretvedt are similar to those in the instant case. In Skretvedt, plaintiff sought incapability benefits under his employer's benefit plan. 268 F.3d at 171-72. In support of his claim, he provided the review board with the opinions of his three treating doctors, all stating in some way that plaintiff was incapable of performing his job at the present time. Id. at 178-79. In denying this claim, the board responded with a one-page letter stating that plaintiff had failed to show his incapability, and that he would need to submit additional objective evidence. Though plaintiff submitted additional materials from his treating physicians, the review board denied the appeal "arguing that the medical documents are as a whole equivocal or inconclusive with respect to either the severity or the permanence of Skretvedt's disability." Id. at 181. While applying an arbitrary and capricious standard of review, the Third Circuit reversed the district court and directed that summary judgment be entered for plaintiff because, notwithstanding defendant's arguments to the contrary, the medical evidence made it clear that the plaintiff met the eligibility standards. Id. at 184.
In Skretvedt there was no conflict of interest that warranted application of the Pinto sliding scale for heightened arbitrary and capricious review. 268 F.3d at 174-75.
In the case before us, the applicable standard for total disability is the inability to work at the substantial and material duties of your occupation because of injury. This standard can be reduced to two elements that must be established to be deemed totally disabled: inability to work at your occupation, and an injury that caused this inability. Plaintiff's medical evidence addressed both of these elements. (Dr. Conn's Letters, supra at n. 8.) Despite the fact that the Plaintiff's medical treatment was at the time "new and experimental," Defendant's examining doctor did not think that an independent medical exam was warranted. (Pl.'s Reply to Def.'s Mot. for Summ. J. Ex. E "Brumblay Dep." at 34.) Rather, on the basis of Plaintiff's evidence alone, Defendant concluded that disability was not demonstrated despite Dr. Conn's opinion that, "[Plaintiff] has had significant side effects from this treatment which prohibits him from working." After receiving Dr. Conn's treatment notes, Defendant again rejected the claim.
In Dr. Brumblay's review of the additional medical records, he refers to the incorrect standard for "total disability". (Br. in Supp. of Mot. for Summ. J. Ex. 21.)
Plaintiff's claim was denied again by Defendant's Benefit Supervisor, Diane Winkowski. We do not know Winkowski's qualifications, however, we note that courts have found troubling the use of nurses and non-treating/examining physicians to deny a plaintiff's claim. See, e.g. Holzschuh, 2002 WL 1609983, at *7; Cohen, 115 F. Supp.2d at 352.
More than four months after denial by the Benefits Supervisor, Plaintiff sent Defendant additional medical evidence from Dr. Conn explaining in detail the serious side effects that he actually was experiencing. (Br. in Supp. of Mot. for Summ. J. Ex. 25.) Notwithstanding this additional evidence, Defendant again rejected the claim, responding that since "there was no new history there was nothing additional to be reviewed." (Id. at 13.) After this review, Defendant requested additional medical records, and referred the file for another review. This time the file was reviewed by Barbara Delgadillo, R.N., and R. Scott Brumblay, M.D., who again rejected the claim. In doing so, they focused on one letter from Plaintiff's physician that indicated that Plaintiff may experience side effects, while disregarding a subsequent letter that stated Plaintiff was experiencing severe side effects.
It appears that the primary objective evidence that Defendant uses to reject Plaintiffs claim is Dr. Brumblay's statement that, "[t]his regimen of treatment does not normally produce disability. Rather, it is intended to prevent progression of the liver injury process and control the asymptomatic infection. (I know of no other insureds on this treatment who have tried to obtain total and complete disability classification in the absence of complicated liver disease.)" (Br. in Supp. of Mot. for Summ. J. Ex. 35.) This justification for rejection is not compelling for a number of reasons. First, Dr. Brumblay admitted that the combination of interferon and ribavirin was a new treatment. (Brumblay Dep. at 34-35.) Thus, it is completely reasonable that Dr. Brumblay knew of no other insureds who attempted to obtain a total disability classification based on this treatment. Second, Dr. Brumblay dismisses the claim because he felt that this regiment of treatment does not usually produce disability. However, in this case, there is medical evidence from treating physicians that the treatment did, in fact, produce disability. The rejection of Plaintiff's claim based upon contradictory clinical evidence, the source of which Dr. Brumblay does not remember, is also troubling.
We have fully reviewed the administrative record under a heightened arbitrary and capricious standard and after giving Defendant's decision limited deference, we conclude that Defendant's decision to deny Plaintiffs claim was arbitrary and capricious. Defendant disregarded the objective medical evidence of Plaintiff's condition without conducting an independent medical exam and without providing credible objective evidence to rebut Plaintiff's claim. During much of the claims process Defendant appeared to be using the wrong standard for determining disability. Moreover, one concludes when reviewing the record that Defendant was acting as an adversary throughout the claims process rather than a impartial arbiter. Under the circumstances, we will deny Defendant's Motion for Summary Judgment and will grant summary judgment in favor of Plaintiff.
An appropriate Order follows.
ORDER
AND NOW, this 29th day of March, 2004, upon consideration of Defendant's Motion for Summary Judgment (Doc. No. 18), Plaintiff's cross motion for summary judgment (Doc. No. 20), and all papers filed in support thereof, and opposition thereto, it is ORDERED that Defendant's Motion is DENIED and Plaintiff's motion is GRANTED.IT IS SO ORDERED.