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KNOBLAUCH v. METROPOLITAN LIFE INSURANCE CO. INC.

April 27, 2004.

JAMES KNOBLAUCH, Plaintiff
v.
METROPOLITAN LIFE INSURANCE CO., INC., and SYNCHRONY INTEGRATED DISABILITIES SERVICES, INC., Defendants



The opinion of the court was delivered by: MALACHY MANNION, Magistrate Judge

MEMORANDUM

Before the court is the defendants' motion for summary judgment filed pursuant to Fed.R.Civ.P. 56(c).

I. PROCEDURAL HISTORY

  The documents submitted by the parties establish that Mr. Knoblauch was employed by co-defendant Metropolitan Life ("MetLife") as of August 23, 2000, at which time he stopped working as a result of a diagnosis of pancreatitis, with subsequent serious and prolonged complications. He applied for and received short term disability benefits under the Disability Insurance Plan ("plan") maintained by MetLife for the benefit of its employees. After the required period of short term disability benefits expired, the plaintiff applied for and received long term disability benefits under the plan. The plan is administered by co-defendant Synchrony Integrated Disability Services, Inc. ("Synchrony").*fn1 On May 7, 2002, the plaintiffs long term disability benefits were terminated retroactive to April 30, 2002. The benefits were terminated at that time because the defendants concluded, after reviewing the plaintiff's medical records, including a functional capacity examination ("FCE"), that the plaintiff had recovered sufficiently from his medical conditions so that he could return to his regular job duties as a sales representative, or another similar job in the local economy. (Doc. No. 20, pp. 111-112). The plaintiff filed an administrative appeal of this determination with the plan administrator which was denied on July 16, 2002. (Doc. No. 20, pp. 92-93).

  The plaintiff subsequently filed a complaint in the Schuylkill County Court of Common Pleas seeking a determination as to his ERISA rights under the MetLife long term disability plan. The matter was removed to this court on October 8, 2002. (Doc. No. 1). The defendants filed an answer to the complaint on December 6, 2002. (Doc. No. 9).

  The parties agreed to proceed before this Magistrate Judge. (Doc. Nos. 6, 8). The defendants filed a motion for summary judgment, supporting brief and Appendix ("Record") on March 24, 2003. (Doc. Nos. 18, 19, 20). After receiving an extension of time in which to do so, the plaintiff filed a response to the motion for summary judgment, and affidavits, on April 7, 2003; and a supporting brief and Appendix on April 18, 2003. (Doc. Nos. 24, 25, 26, 27). The defendants filed a reply brief on April 25, 2003. (Doc. No. 28). On June 19, 2003, the plaintiff filed a motion to supplement his brief in opposition, which was granted by Order dated June 26, 2003. The defendants' June 24, 2003 response to the motion was also admitted. (Doc. Nos. 32, 33, 34).

  It appears that the substance of the disagreement among the parties revolves around the nature and extent of the plaintiff's residual medical condition; the plaintiff's time of injury job description and its physical requirements, and whether the plaintiff was capable of returning to work, and performing those, or similar, job requirements as of April 30, 2002.

 II. FACTUAL BACKGROUND

  On May 7, 2002, MetLife via Synchrony sent the plaintiff a letter advising him that he no longer continued to meet the plan's definitional requirements for long term disability benefits beyond April 30, 2002. The letter is quoted herein at length as it sets forth with particularity the facts of the matter, even though there is some dispute as to the proper interpretation of the medical record as put forth by the defendants. The letter states in pertinent part:
According to your plan, "disabled means that, due to sickness, pregnancy or accidental injury, you are unable to earn more than 80% of your predisability earnings at your own or any occupation for any employer in your local economy." Your disability must also be continuous, and you must be under a doctor's care and receiving active treatment for the disabling condition. Proof of disability must be submitted in order to receive benefits under the plan . . .
Review of the evidence in the file shows that you have not worked since August 23, 2000 due to pancreatitis and drainage of a pancreatic abscess on October 27, 2000. Subsequently you underwent a laproscopic assisted endileostomy on December 12, 2000. You were then treated for a fistula in your colon, you underwent a partial colectomy*fn2 on June 18, 2001 with a closure of your colostomy. On July 16, 2001, your provider stated that you were able to perform light duty work, no strenuous activity, and no heavy lifting. You had foot surgery to remove two toe nails; you had problems with bleeding in the back of your right eye both related to diabetic changes. You underwent physical therapy to your right shoulder for adhesive capsulitis. You were released to unrestricted activity for the right shoulder on October 16, 2001. On December 12, 2001 your toes were better. A 2 day functional capacity examination was done on April 3, 2002 and April 4, 2002 to assess your level of functioning. The test showed that you gave maximum consistent effort. You showed no overt pain behavior on either day of testing. You did complain of dizziness and throbbing in your head during floor to waist and unweighted rotation standing. You[r] blood pressure was elevated to 160/90 and 152/98. Dr. Brislin [the plaintiff's primary care physician] was contacted with regard to your elevated blood pressure. Dr. Brislin stated that you had recently undergone a stress test with negative findings therefore the testing was continued. According to the results of the functional capacity exam your general work capabilities fall into the medium work category as per the definition in the dictionary of occupational titles. Since your own occupation is classified as light duty work and you are able to perform medium work, you no longer continue to meet the definition of disability.
After consideration of the above findings, it is concluded that there is no medical evidence to support continued functional impairment resulting in your inability to perform work-related functions of your own or any occupation. Accordingly, no additional benefits are due or payable in conjunction with this claim beyond April 30, 2002 . . .
(Doc. No. 20, pp. 114-115)(emphasis added). The letter goes on to advise the plaintiff of his appeal rights. After the plaintiff appealed the determination, the defendants had a physician consultant, Joseph M. Nesta, M.D., review the record. (Doc. No. 20, pp. 94-95). No independent medical examination was performed.
  The plaintiff's response to this letter is that portions of the alleged medical record are incomplete in some cases, simply incorrect in other instances, and certainly overly optimistic regarding the plaintiff's functional capacities as of April 30, 2002. The plaintiff notes that, prior to the FCE done in April 2002, Dr. Brislin explained to Synchrony that, despite the plaintiff's progress, he still suffered from severe peripheral neuropathy, ongoing chronic pancreatic insufficiency described as very difficult to control despite medication therapy, and that he also had an unexplained myopathy with severe upper arm muscle pain. He was noted as having loss of hand strength. Dr. Brislin summarized as follows:
From a physical capacity, his arm and leg strength and function are severely diminished. His progressive foot and leg neuropathy is controlled with medication but it is unlikely to improve. From my perspective, it is unlikely that he will be able to return to work in the near future . . .
(Doc. No. 20, p. 131). The plaintiff was required under the terms of the long term disability plan to apply for Social Security disability benefits, which he did, successfully.

 III. ERISA STANDARD OF REVIEW

  A denial of benefits challenged under Section 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 eligibility for benefits or to construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan vests such discretion in the administrator, the decision is to be reviewed under the more deferential arbitrary and capricious standard of review. Id.; Luby v. Teamsters Health, Welfare and Pension Trust Funds, 944 F.2d 1176, 1180 (3d Cir. 1991); Heaslev v. Belden & Blake Corp., 2 F.3d 1249, 1256 (3d Cir. 1993).

  Where the plan itself confers discretion on the administrator to determine eligibility for benefits, the district court may reverse the administrator's decision only if it was arbitrary and capricious, or it was inconsistent with the applicable plan provisions. The arbitrary and capricious standard is essentially the same as the "abuse of discretion" standard. Abnathya v. Hoffman-La Roche, 2 F.3d 40, 45 (3d Cir. 1993). The scope of review is narrow and the court is not free to substitute its own judgment for that of the defendant in determining eligibility for plan benefits. Abnathya, 2 F.3d at 45. Thus, the Firestone standard is applicable in cases where the controlling plan documents give the plan administrator discretion over the payment of benefits. MetLife's plan provides, in pertinent part:
MetLife in its discretion has authority to interpret the terms, conditions, and provisions of the entire contract. This includes the Group Policy, Certificate and any Amendments . . .
In carrying out their respective responsibilities under the Plan, the Plan administrator and other Plan fiduciaries shall have discretionary authority to interpret the terms of the Plan and to determine eligibility for and entitlement to plan benefits in accordance with the terms of the Plan. Any interpretation or determination made pursuant to such authority shall be given full force and effect, unless it can be shown that the interpretation was arbitrary and capricious . . .
(Doc. No. 20, pp. 206, 231). This language clearly gives the plan administrator discretion over the payment of benefits, and as such, the arbitrary and capricious standard applies in this case.

  The court notes that plaintiff suggests that this court's standard of review more appropriately should be de novo. The plaintiff appears to argue that de novo review is required for two reasons. First, because the defendants originally approved long term benefits; and, second, because the plaintiff was required to apply for, and received, Social Security Disability benefits. These facts do not require a change in the standard of review to be applied. Firestone, 489 U.S. at 115; Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377 (3d Cir. 2000)(discussing an apparent conflict of interest where an insurer both decides the claim and pays benefits from its own assets; facts not allegedly present in this case).

  The court further notes that the plaintiff has also alleged a suspect relationship between MetLife and Isernhagen Quality Providers ("Isernhagen"), the company which performed the FCE. As a result the plaintiff requests this court to apply a heightened standard of review. The defendants argue that whatever standard this court chooses to apply, either arbitrary and capricious, or a heightened standard, this court must conclude that the termination of benefits was reasonably based upon the evidence before the plan administrator at the time the decision to terminate ...


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