The opinion of the court was delivered by: Ronald L. Buckwalter, S.J.
Currently pending before the Court are Defendant Provident Life and Accident Insurance Company's ("Provident") Motion for Summary Judgment and Plaintiff Stephen Eppley's Cross-Motion for Summary Judgment in the above referenced matter. For the following reasons, Defendant's Motion is granted and Plaintiff's Motion is denied.
The crux of the present case centers on a claim by Plaintiff Eppley, under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), for disability benefits pursuant to an insurance policy administered and funded by Defendant Provident. Although Provident, under a reservation of rights, paid Plaintiff disability benefits while it investigated the claim, it ceased paying those benefits following completion of that investigation. The present litigation ensued challenging the propriety of that decision.
In order to conduct the appropriate judicial review of the administrator's decision, a court must look to the record as a whole consisting of all evidence before the administrator when the decision was made. Doyle v. Nationwide Ins. Cos. & Affiliates Emp. Health Care Plan, 240 F. Supp. 2d 328, 335 (E.D. Pa. 2003). As such, the court must first review the administrative record relevant to the decision in this case.
In 1993, Plaintiff was an employee of American Insurance Administration, Inc. ("AIA"), and thus received employee benefits under an ERISA plan, including a Disability Income Policy ("Policy") issued by Defendant Provident and numbered 06-337-B-6091506, effective September 1, 1993. (Def.'s Mot. Summ. J., Ex. 3; id. Ex. 4, Decl. of William T. Bradley, ¶ 2 (Jan. 24, 2011) ("Bradley Decl.").) The Policy contained the following pertinent provisions:
Total Disability or totally disabled means that due to Injuries or Sickness:
1. you are not able to perform the substantial and material duties of your occupation; and
2. you are receiving care by a Physician which is appropriate for the condition causing the disability. We will waive this requirement when continued care would be of no benefit to you.
. . . your occupation means the occupation (or occupations, if more than one) in which you are regularly engaged at the time you become disabled. . . .
Residual Disability or residually disabled, during the Elimination Period,*fn1 means that due to Injuries or Sickness:
1. you are not able to do one or more of your substantial and material daily business duties or you are not able to do your usual daily business duties for as much time as it would normally take you to do them;
2. you have a Loss of Monthly Income in your occupation of at least 20%; and
3. you are receiving care by a Physician which is appropriate for the condition causing disability. We will waive this requirement when continued care would be of no benefit to you.
After the Elimination period has been satisfied, you are no longer required to have a loss of duties or time. Residual Disability or residually disabled then means that as a result of the same Injuries or Sickness:
1. you have a Loss of Monthly Income in your occupation of at least 20%; and
2. you are receiving care by a Physician which is appropriate for the condition causing the Loss of Monthly Income. We will waive this requirement when continued care would be of no benefit to you.
In addition to the exclusions contained herein, this policy does not cover loss caused by: ANY INJURY TO OR DISEASE OF THE SPINE, ITS MUSCLES, LIGAMENTS, DISCS OR NERVE ROOTS. (Def.'s Mot. Summ. J., Ex. 3.)
B. Plaintiff's Claim for Total Disability Benefits
On January 13, 2009, Provident received from Plaintiff a claim for benefits under the Policy, alleging total disability due to his "inability to walk without experiencing pain." (Def.'s Mot. Summ. J., Ex. 5.) He described the condition as follows:
About 10 years ago, I was diagnosed with advanced arthritis in both my big toes. I had successful surgery and was pain-free for approximately 7 years. The pain returned and increased. 1 1/2 years ago I had implant surgery. This was not successful. In October of 2008, the implants were removed from my toes; but the pain has not receded. (Id.) According to his claim form, dated December 20, 2008, Plaintiff was taking Celebrex "1 per day or as needed." (Id.) He purportedly had not worked over the last two years, except for some contract work. (Id.)
Attached to the claim form was Plaintiff's claimant statement, setting forth the following: The policy became effective in 1993 when I was the Vice President of American Insurance Administrators (AIA). As my income increased, I accepted some of your company's offers to increase my monthly disability amount. During my tenure with AIA I was mainly an outside salesman who wrote insurance for manufacturers, contractors, and wholesalers. In this capacity, I toured job sites and manufacturing plants. During my last years with AIA, I was earning in excess of $90,000 annually.
In 1997, I was experiencing a great deal of pain [in] both my "Big Toes". After reviewing my x-rays, an orthopedic surgeon said that I had advanced arthritis in both of my big toes. He didn't operate on toes so I had a surgery done by Dr. Dee Stelmach of Apple Hill Podiatry . . . . I was without pain for 7 years. Then, very slowly, it returned.
In 2002, I left AIA after 10 years of employment to join with my fiancee in our strategic marketing firm. In this capacity, we called on clients at their locations and toured their facilities. I functioned as an outside salesperson, collection agent, photographer, and delivery person. My income decreased geometrically from what I was earning at AIA. During my early years at BRIGHT IDEAS, I earned $10,000 -$14,000 annually.
I contacted UNUM Provident to inform them of my income decrease. I was told by a claims person that should I become disabled, my Disability Benefit of $4300/mo would be paid regardless of what I was currently earning. I elected not to reduce my disability premium.
By June of 2007, I had reduced or eliminated most activities that involved walking or standing. The arthritic pain in both my big toes continued to worsen. I did part time work but earned no appreciable income for 2007.
In December of 2007, implants were placed surgically in both my big toes. This procedure was not successful. I healed well, but the pain continued. In October of 2008, my implants were surgically removed and something else was done (my medical records are attached). I was told that the arthritis was gone. However, the pain continues. I was prescribed Celebrex for pain and I take over the counter medication as needed.
When I walk or stand, I experience pain. The longer I walk or stand, the worse the pain becomes. For many years, I was an outside insurance salesman. I can no longer be an outside insurance salesman of any kind.
Please consider this cover letter and the enclosed forms as my claim for full disability . . . (Def.'s Mot. Summ. J., Ex. 6.)
Also included with Plaintiff's Statement were reports by treating podiatrists David F. Baskwill, DPM and Dee Stelmach, DPM, both from Apple Hil Podiatry. (Def.'s Mot. Summ. J., Ex. 7.) The report from Dr. Baskwill indicated that he last examined Plaintiff on December 15, 2008, and he was to follow up with him on January 5, 2009. (Id.) Under the heading "Restrictions (activities patient should not do)," Dr. Baskwill wrote, "No standing or walking for work. Weight bearing causes pain." (Id.) Under the heading "Limitations (activities patient cannot do)," he wrote, "No standing or walking for work." (Id.) He further remarked that Plaintiff ceased working on October 17, 2008 because of the condition. (Id.) With respect to the current treatment program, Dr. Baskwill wrote, "Continue with f/u at Apple Hill Podiatry, possible new orthotics." (Id.)
Dr. Stelmach provided two separate statements. The first, dated December 29, 2008, was issued in connection with his 1997 outpatient surgery (bilateral hallux rigidus correction with cheilectomy, debridement and release of the first metatarsophalangeal joint). The doctor remarked that Plaintiff had decreased range of motion and a painful right foot, and was prescribed Vicodin taken as needed for post-operative pain. (Id.) This statement listed no restrictions or limitations and, in fact, indicated that, as of January 29, 1998, Plaintiff was discharged to activities of daily living. (Id.) The second statement, dated December 30, 2008, noted that Dr. Stelmach had last examined Plaintiff on May 13, 2008. (Id.) It opined that Plaintiff had no restrictions or limitations, and could sit, stand, and walk eight hours per work day. (Id.) As of three months after his December 2007 operation, Dr. Stelmach had advised Plaintiff to return to work. (Id.)
As further support for his claim, Plaintiff also provided an Employment Statement, which indicated that his last employment was with Bright Idea Marketing and Communications, Inc., a company in which he had a forty-nine percent ownership interest. (Id.) He remarked that he had not worked full time in two years due to his disability and that his "inability to walk and stand w/out pain detracts from or eliminates job performance." (Id.) Although his job required no lifting, carrying, pushing/pulling, climbing, balancing, bending/stooping, kneeling, squatting/crouching, crawling, reaching, use of foot control, twisting, or hand use, it did involve use of the computer, phone and fax, walking, standing, and wearing dress shoes. (Id.) Finally, Plaintiff explained that he had a bachelor of arts in sociology and was still "for a while longer, a licensed insurance agent." (Id.)
C. The Beginning of Provident's Investigation of Plaintiff's Claim
On January 14, 2009, Defendant wrote to Plaintiff to acknowledge receipt of his request for Individual Disability benefits. (Def.'s Mot. Summ. J., Ex. 9.) The letter indicated that a Disability Benefits Specialist ("DBS") had been assigned to review Plaintiff's file and then contact him to discuss the claim. (Id.) Further, he would be required to provide requested medical, financial, and occupational documentation. (Id.) Finally, the letter advised Plaintiff that if he disagreed with Provident's determination of his medical restrictions and limitations, he would have the right to request an Independent Medical Examination ("IME"). (Id.)
Provident then obtained a Comprehensive Business Report on Bright Ideas, dated January 15, 2009. (Def.'s Mot. Summ. J., Ex. 10.) The address was identical to that listed for Eppley on his Claimant's Statement. (Id.) Plaintiff was listed as the vice-president and his fiancee, Karen Saxe, was listed as "Owner, President." (Id.) A Licensed Producer Search of the same date revealed that Eppley had a "Resident Producer Individual" license in Pennsylvania, which was due to expire on April 4, 2009, to sell various types of insurance. (Def.'s Mot. Summ. J., Ex. 11.)
The assigned DBS, Susan Watkins, conducted a telephone interview with Plaintiff on January 19, 2009. (Def.'s Mot. Summ. J., Ex. 12.) In that interview, he confirmed that he did not return to work at the level he was previously after his surgery in December of 2007 and, thus, he considered that to be the date he became disabled. (Id.) Plaintiff stated that he was a forty-nine percent owner of Bright Ideas with his fiancee -- a business they opened in 2002. (Id.) He acknowledged that the business, which was operated out of their home, had not taken off like they had hoped. (Id.) Although they originally intended to close it down in January 2008, they kept it open for a couple of clients. (Id.) While he was involved in sales, photography, editing, phone work, and odd jobs, he had not been doing sales work since his disability due to his pain when standing and walking. (Id.) His fiancee intended to get a "real job," but had yet to be successful. (Id.) Plaintiff also indicated that he unsuccessfully attempted day trading, and he continued to do photography for brochures. (Id.) As to his medical condition, Plaintiff commented that he was pain free for seven years until the pain returned in late 2007. (Id.) He had bilateral outpatient surgery for hallux rigidus on December 14, 2007, but his pain continued after the surgery and he was not able to do his job as he had prior to the surgery. (Id.) On October 17, 2008, he underwent surgical removal of his implants. (Id.) Thereafter, he experienced an inability to walk or stand due to pain, thus inhibiting his sales work which required him to stand. (Id.) Plaintiff explained that he wanted to find a job that involved sitting, with no standing or walking. (Id.) Walking now required his use of Celebrex and, although he had recently been a pall bearer, he did not carry the casket. (Id.) Plaintiff indicated that he had not made any money in his business and lost $16,000 the previous year. (Id.) Finally, Plaintiff admitted that he filed a late notice of claim "as he always thought the pain would abate, but it has not." (Id.)
Ms. Watkins then contacted Darrell Wilt, owner of Life Solution Center and a mental health therapist at a local college, on January 20, 2009. (Def.'s Mot. Summ. J., Ex. 13.) Mr. Wilt stated that he had known Plaintiff for about four years and was familiar with Plaintiff's business. Mr. Wilt remarked that Plaintiff's fiancee did more of the marketing business and that Plaintiff worked with him every other week at his business -- both before and after his surgeries -- consulting him on basic strategies and sales coaching. (Id.) Mr. Wilt further stated that Plaintiff had to travel to get there and would prop up his foot while working. He also noted that he knew Plaintiff was uncomfortable on his feet and that he was no longer able to do scuba diving, which was an important part of his life. (Id.) When asked if he knew of any group sales presentations that Plaintiff was doing that would have involved standing, Mr. Wilt indicated that he did not. (Id.) He also remarked that he did not know of any other clients of Plaintiff's business. (Id.)
On January 22, 2009, Ms. Watkins wrote another letter to Plaintiff updating him as to the progress on his claim. (Def.'s Mot. Summ. J., Ex. 16.) First, she advised him that, under the terms of the Policy, he was required to provide written notification within twenty days of the onset of disability, which, in his case, was December 14, 2007. (Id.) Yet, he did not provide any notification of his claim until December 1, 2008, which he claimed was due to hope that the pain in his foot would improve. (Id.) She then set out the important provisions of his Policy that he would be required to satisfy prior to receiving Total Disability benefits. (Id.) According to her calculations, he met his elimination period on March 13, 2008, so long as he continued to be disabled as defined by the Policy. (Id.) She advised him of what records Provident had already received, and asked that he provide information regarding other clients and individuals with whom he worked. (Id.) She also requested that he: (1) complete blank Job Description forms for the duties he was performing prior to and after his disability date; (2) provide tax returns and monthly profit and loss statements; and (3) provide a Supplemental Statement. (Id.)
At the end of January 2009, Provident obtained Plaintiff's records from Apple Hill Podiatry. (Def.'s Mot. Summ. J., Ex. 14.) A post-operative report from December 14, 2007 revealed that Plaintiff underwent a cheilectomy and hallux limitus revision with utilizing of titanium great toe hemi implant, performed by Dr. Stelmach. (Id.) He tolerated the procedure well and left the operating room in good condition, with a prescription for Vicodin. (Id.) Thereafter, Plaintiff returned to Apple Hill for fourteen additional visits, through January 15, 2009. (Id.) As of a post-operative visit on December 31, 2007, Plaintiff had good range of motion. (Id.) On April 9, 2008, Plaintiff stated that his feet were no better. (Id.) An October 23, 2008 note stated that Plaintiff was "doing good" with decreased pain, and on October 29, 2008, he was "doing great" with "minimal pain on [range of motion]." (Id.) On November 11, 2008, Plaintiff reported mowing the lawn and doing some walking. (Id.) During the last three visits, Plaintiff continued to complain of pain, but physical examinations and x-rays were fairly unremarkable. (Id.)
E. January 2009 Surveillance Video
Provident referred Plaintiff's claim for preparation of a surveillance report. An investigator conducted surveillance over a three-day period on January 29 through January 31, 2009. (Def.'s Mot. Summ. J., Ex. 19.) On January 30, 2009, Plaintiff was observed driving and walking in smooth and fluid manner with no signs of physical limitation or walking devices. (Id.) On January 31, 2009, the investigator observed Plaintiff going out his front door, walking to the mailbox at the curb, and then jogging back to his house, with no sign of physical limitation. (Id.) A more detailed report of the surveillance revealed that Plaintiff was driving at high rates of speed, shopping at a local grocery store where he pushed a shopping cart and loaded bags into his car, "moving in a playful manner" with his dog in the driveway, bending over, walking in a fluid manner with no clear physical limitation, picking up his dog, and going out with the dog in the car. (Def.'s Mot. Summ. J., Ex. 20; Surveillance Video CD-R marked PLA-CL-000880.)
F. Medical Consultant Reviews
On February 16, 2009, Patricia Clermont, R.N. completed a consultant review for Provident. (Def.'s Mot. Summ. J., Ex. 21.) Upon review of the medical records and surveillance report, Ms. Clermont noted that "[t]he medical records support the claimant's reports of a history of pain to his great toes." (Id.) She went on, however, to note that, "That said, there is little, if any documentation to explain any functional restrictions or limitations during the period of 12/07-10/08 (the period that the claimant has the implants). Therefore, I could not support any [restrictions/limitations] during this period, except for a possible reasonable recovery period from the surgery in December of 2007 of approximately three weeks." (Id.) She indicated that she would also expect some standing and walking limitations after Plaintiff had the implants removed in 2008.
(Id.) "However, other than these two time periods noted, the medical records do not explain any other periods of functional R/L's (in my opinion)." (Id.) Ms. Clermont also remarked that the surveillance video revealed activity "in excess of what [she] would expect based upon claimant's reports." (Id.)
Thereafter, on February 20, 2009, Jerry D. Beavers, M.D. performed a doctoral review of Mr. Eppley's file. (Def.'s Mot. Summ. J., Ex. 22.) He considered the Claimant Statement, the reports from Drs. Stelmach and Baskwill, the surveillance report, and the treatment notes. (Id.) He concluded that restrictions and limitations on standing and walking would be supported from the date of Plaintiff's surgery on December 12, 2007 to the discharge on January 16, 2008, and from the date of his surgery on October 17, 2008 to at least his visit on January 5, 2009, but that current and ongoing restrictions and limitations were ...