Ayers v. Life Insurance Company of North America et al, No. 6:2008cv06287 - Document 196 (D. Or. 2012)
Court Description: OPINION and ORDER: Granting Motion for Summary Judgment 127 ; Denying Motion for Summary Judgment 128 ; Denying Motion for Summary Judgment 131 ; Denying Motion for Summary Judgment 134 ; Denying Motion for Summary Judgment 166 . Accordi ngly, the parties' requests for oral argument are denied as unnecessary. Finally, the parties are directed to file a status report with this court within 3 weeks of the filing date of this opinion. Signed on 4/19/12 by Chief Judge Ann L. Aiken. (ljb)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON KENNETH AYERS, Plaintiff, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant. Megan E. Glor Robyn L. Stein Attorneys at Law, PC 621 SW Morrison St., Suite 900 Portland, Oregon 97205 Attorney for plaintiff William T. Patton Darin M. Sands Lane Powell, PC 601 SW 2nd Ave., Suite 2100 Portland, Oregon 97204 Attorneys for defendant Page 1 OPINION AND ORDER Case No. 6:08-cv-06287-AA OPINION AND ORDER AIKEN, Chief Judge: Kenneth Ayers ("Ayers") filed this action under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132 (a) (1) (B), against the Life Insurance Company of North America ("LINA"). Ayers alleges that LINA wrongfully denied his claim for long-term disability bene ts (the "benefits claim"). The parties filed cross-motions for summary judgment on Ayers' benefits claim. See Fed. R. Civ. P. 56. In addition, LINA filed a counterclaim to recover overpaid benefits (the "overpayment c im"). The parties also cross-moved for summary judgment on LINA's overpayment claim. Id. For the reasons set forth below, Ayers' motion is granted and LINA's motion is denied as to the benefits claim; and the parties' motions are denied as to the overpayment claim. BACKGROUND In 1990, Ayers was hired as an attorney at the law firm of Hancock, Rothert, California. and Bunshoft ("HRB") Administrative Record ("AR") in San 162, 471. Francisco, HRB holds a long-term disability ("LTD") plan (the "Policy") with LINA, under which disabled benefits. and AR 1 physical employees O. are entitled to monthly insurance While the Policy provides coverage for mental disabili ties, it contains a "Mental Illness Limitation" ("MIL"), under which coverage for mental disabilities is limited to twenty-four months of payments. On February 13, AR 9. 2002, Ayers filed a claim for LTD benefits under the Policy, alleging that he could no longer work because of Page 2 - OPINION AND ORDER chronic fatigue syndrome ("CFS"), fibromyalgia, and depression. 161-62. On March 20, 2002, LINA approved Ayers' claim; thereafter received LTD benefits in the amount of $5000 AR Ayers month. AR 196-97. On April 11, 2002, LINA informed Ayers that Allsup, Inc. ("Allsup") was available, free of charge, to assist him in applying for Social Security Disability Income ("SSDI"). AR 203-04. Ayers agreed to Allsup's assistance; on June 12, 2002, Allsup submitted an application for SSDI benefits on Ayers' behalf. In October 2002, the Soci Ayers' SSDI claim. AR 205, 209. Security Administration ("SSA") denied AR 261-64. On November 26, 2002, Allsup sought reconsideration of the SSA's unfavorable decision. AR 270. On May 9, 2003, the SSA denied Allsup's request for reconsideration. AR 305. On October 21, 2004, a hearing was held before Administrative Law Judge regarding Ayers' SSDI claim. an AR 536-72. On May 17, 2005, Ayers notified LINA that he was terminating his relationship with Allsup and retaining independent counsel. 785. AR On November 5, 2005, the Appeals Council denied Ayers' claim. AR 802. On December 20, 2005, Ayers filed a complaint in federal court to review the final decision of the SSA; on November 13, 2006, the court remanded Ayers' case for further proceedings. AR 1008-09. On September 5, 2007, LINA terminated Ayers' LTD benefits under the MIL, based on its determination that Ayers' disability resul ted Page 3 from depression OPINION AND ORDER rather than CFS. AR 1222-28. Accordingly, Ayers stopped receiving benefit payments on October 5, 2007. AR 1227. On March 6, 2008, Ayers appealed LINA's decision; on June 5, 2008, LINA upheld its termination of LTD benef s. AR 1815-17. On August 28, 2008, retroactive to March 2002. Ayers was awarded SSDI benefits, As such, Ayers received a $108,208.50 lump sum payment from the SSA. Answer to Third Am. Compl. ~~ C; see also Ayers' Answer to LINA's Countercl. ~ 87 Ex. 15-16. On September 11, 2008, Ayers filed a complaint in this Court to recover LTD benefits from October 6, 2007 through September 8, 2011.1 filed Compl. a ~~ 20-22; counterclaim, Third Am. Compl. seeking to recover subsequently cross-motions ~ Answer to Third Am. Compl. for 51-54. $ 99,885 overpaid benefits. filed ~~ summary in 92. LINA allegedly The parties judgment on both claims. STANDARD 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 dispute as to any material fact and that the [moving party] is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). law on an issue determines the materiality a fact. Substantive T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th lAyers turned sixty-five years old on September 11, 2011, at which point he was no longer eligible for benef s under the Policy. AR 5. Page 4 - OPINION AND ORDER Cir. 1987). Whether the evidence is such that a reasonable jury could return a verdict for authenticity of a dispute. the nonmoving party determined the Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party has the burden of establishing the absence of a genuine issue of material fact. U.S. 317, 323 (1986). Celotex Corp. v. Catrett, 477 If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. . at 324. Special rules of construction apply when evaluating a summary judgment motion: (1) all reasonable doubts as to the existence of genuine issues of material moving party; and (2) fact all should be resolved against the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 630. DISCUSSION The parties move for summary judgment on the application and interpretation of the Policy. I. Policy Terms An employee is disabled under the Policy "if, because of Injury or Sickness, he or she is unable to perform all the material duties of his or her regular occupation." AR 4. Under the MIL, LINA will only "pay Disability Benefits [for 24 months] during an Employee's Ii ime for a Disability caused by, or contributed to by" depression, anxiety, or a somatoform disorder. Page 5 - OPINION AND ORDER AR 9. Cigna 2 has administrators, guidel an internal policy such as LINA, which instructs its plan on how to utilize the MIL. These s explain that the MIL can be exercised in a CFS claim only where all physical symptoms have resolved: "[i]f a physical condition contributes to the total disability, or is either a cause or symptom of a mental condition, then the disability will not fall under the [MIL]." Regardless or Suppl. Decl. Ex. C, at 2. of the basis of the disability, the Policy stipulates that monthly LTD benefits must be "reduced by any Other Income Benefits." AR 4, 10-11. "Other Income defined as "benefits from other income sources, [SSDI] benefits the Employee . . . receives." Benefits" are [including] any AR 11. Under the Policy, LINA automatically assumes that the employee is receiving Other Income Benefits, and reduces its monthly payments accordingly, unless the Employee gives [LINA] proof of the following events: 1) application was made for these benefits; 2) a Reimbursement Agreement is signed; 3) any and all appeals were made for these benefits or the [LINA] determines further appeals will not be successful; 4) payments were denied. Specifically regarding SSDI, the Policy states that LINA "will, at its discretion, assist the Employee in applying [for such benefits] ." AR 12. If the employee, however, "refuses to participate in, or cooperate with, the Social Security Assistance 2 LINA is a wholly owned subsidiary of Cigna. Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011); see also AR 1222-28, 1815-17. Page 6 - OPINION AND ORDER Program, [LINA] Employee 11 assume receipt of SSDI benef gives us proof that all administrative s until the remedies are exhausted." In addition to Other Income Benefits, the wi th the right following to methods: recover 1) overpaid amount; 2) Policy." II. a icy provides LINA any overpayments request for lump "by either sum payment of the of the a reduction of any amounts payable under the Id. Benefits Claim Ayers contends that he is entitled to a continuation of LTD s because his physical and mental limitations, which prevent bene him from returning to his regular occupation as an attorney, are caused by CFS. LINA concedes that, due to his cognitive difficulties, Ayers is no longer able to practice law. Resp. to Ayers' however, Mot. Summ. on Benefits Claim 31,34. J. asserts that Ayers' LINA's cogn i ve difficulties LINA, arise from depression or a possible somatoform disorder and, as such, the MIL applies. In addition, LINA argues that Ayers has no physical limitations that prevent him from returning to work as an attorney. A. Standard of Review as to the Denial of Ayers' Appeal vil enforcement Ayers brings this claim pursuant to ERISA's provision. See 29 U.S.C. § 1132 (a) (1) (B). that a "civil action may be brought recover bene Section 1132 provides . by a participant s due to him under the terms of his plan enforce his rights under the terms of the plan." of benefits challenged under Page 7 OPINION AND ORDER § 1132 (a) (1) (B) Id. to [or] to "[A] denial is to be reviewed under a novo standard administrator the discretionary eligibility for benefits." 489 U.S. unless 101, 115 (1989) benefit authority as here, gives to the determine Firestone Tire & Rubber Co. v. Brunch, Opeta v. NW Airlines Pension Plan for i Contract Emps., 484 F.3d 1211, 1217 (9th C Where, plan . 2007). the plan does not grant such scretionary authority, "'[t]he court simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits.'" Opeta, 484 F.3d at 1217 (quoting Abitie v. Alta Health & Life Ins. Co., 458 F.3d 955,963 (9th Cir. 2006)). The party seeking to recover benefits under the terms of a LTD plan bears the burden proving his entitlement to such benefits. Muniz v. Amec Const. Mgmt., 623 F.3d 1290, 1294 (9th Cir. 2010). B. Chronic Fatigue Syndrome Because this case hinges on whether Ayers has introduced enough evidence to establish that he has CFS, a basic understanding of the condition is critical to evaluating the benefits CFS is a somewhat controversial disorder; im. there are no objective diagnostic criteria for CFS, which has prompted a segment the medical community to question its medical condition. Salomaa, 642 F.3d at 677. extensive research, Therefore, because accept the "the etiology condition of [CFS] 'does Further, "[d] is not unknown." have a te Id. generally dipstick test,'" "[tJhe standard diagnosis technique for [CFS gene Centers stence as a bonafide for lyJ ludes testing, comparing symptoms to a Disease Control Page 8 - OPINION AND ORDER list of symptoms, ailed excluding other , possible disorders, and reviewing thoroughly the patient's medical history." (quoting Friedrich v. Intel Corp., 181 F.3d 1105, 1112 (9th Cir. 1999)). Here, LINA's plan expressly incorporates the Centers Disease Control's ("CDC") diagnostic criterion for CFS. 46. Accordingly, following cr er for AR 1445 in addition to ruling out other causes, the must be met in order to receive a diagnosis of CFS: 1) [tJ he patient· must have clinically evaluated, unexplained persistent or relapsing chronic fatigue that is of new or definite onset (i.e., not lifelong), is not the result of ongoing exertion, is not substanti ly alleviated by rest, and results in substantial reduction in previous levels of occupational, educational, social, or personal activities; and 2) [tJ he patient must have concurrent occurrence of four or more of the following symptoms: substantial impairment in short-term memory or concentration; sore throat: tender lymph nodes: muscle pain: multi-joint pain without swelling or redness; headaches of a new type, pattern, or severity; unre shing sleep; and post-exertional malaise lasting more than 24 hours. AR 1445-46, 1015-16; Stip. Re Exs. Submitted with Ayers' Admin. Appeal Ex. 17, at 2; see also Salomaa, 642 F.3d at 677. C. Summary of the Medical Evidence The administrative record contains hundreds medical reports relating to Ayers' condition. of pages of Because the record is so extensive, the Court will focus on summarizing those relevant reports that disabil y. i. occurred on or after the alleged onset date of Onset of Symptoms Ayers began having fatigue-related health problems in June 1999. AR 31, 34. He underwent a number of tests, including an HIV Page 9 - OPINION AND ORDER test, blood work, and an EKG, in order to exclude potenti AR 25, 31, 32. All test results were normal. causes. AR 33. By July 1999, Ayers' symptoms had increased; he was suffering from chronic fatigue, stress, sore throat, headaches, muscle pain, unrefreshing sleep, a cough, and chest pain. AR 34, 62. Ayers engaged in a battery of additional tests in order to rule out other potential causes, including a treadmill test and chest x-rays, as well as blood, stool, and urine tests diseases; these test results were also 59-61, 63-67, 71-76. to rule out in AR 36-37, no~mal. ious 40-53, Despite these problems, Ayers "denie[d] any symptoms of depression or anxiety" at that time. AR 34. In the beginning of 2000, Ayers began experiencing cognitive difficul ties, problems. such as AR unremarkable speculate 63, test that short-term memory loss and concentration 71. results, Ayers had These symptoms, prompted CFS. AR Dr. 71. combined Frierson, the M.D., to Nevertheless, continued to work at HRB until September 25, 2001. ii. with Ayers AR 78. Dr. Bartz Ayers began seeing Robert Bartz, M.D., a physician, in 1999. Around the time Ayers took medical leave in 2001, Dr. Bartz noted that Ayers was depressed and "crying" because he was no longer able to work. was noted AR 81. in This was the first time that Ayers' depression the record. Dr. Bartz referred Ayers to a radiologist, an ophthalmologist, a neurologist, a rheumatologist, and a psychotherapist. AR 82-83, 101-04, 111. additional tests but reported no abnormalit Page 10 - OPINION AND ORDER s. These doctors ran AR 114, 437. iii. Mr. Robinett In October 2001, Ayers began weekly psychotherapy sessions with Mark Robinett, a marriage and family therapist. Mr. Robinett prescribed Paxil in December 2001; Ayers discontinued the Paxil, with Mr. Robinett's consent, in' December 2002. Whi Paxil alleviated Ayers' impact on his cognitive AR 112, 150, 335. anxiety and depression, fficulties. AR 147, 491. it had no Ayers stopped seeing Mr. Robinnett in 2002 when he moved to Oregon. AR 320. On March 25, 2002, at LINA's request, Mr. Robinett provided a psychological assessment of Ayers. AR 198-200. He opined that Ayers suffered from "maj or depression," and identified CFS and fibromyalgia as "significant stressors." that, pr AR 199. He confirmed to 2001, Ayers "ha[d] never experienced any previous depressions or anxiety problems. This is the first time [he] has been in psychotherapy for any reason." On May 15, 2002, Mr. Robinett psychological assessment to LINA. provided AR 241. Mr. an additional Robinett list Ayers' current symptoms as "depression, sleep problems, cognitive dysfunction, observations anxiety, and weight clinical gain." findings AR 242. included Mr. Robinett's \\ low energy, discouragement, slow progress, scattered/difficulty in focusing on one topic or issue." When asked to approximate a return to work, Mr. Robinett estimated eight to sixteen months, due to Ayers' "very slow recovery from depression and poor cognitive function." AR 243. At that time, Mr. Robinett diagnosed Ayers with CFS and fibromyalg Id. Page 11 - OPINION AND ORDER On July 23, report. 2003, AR 320-21. remarks [were] Mr. Mr. Robinett provided LINA with a third Robinett explained, however, based on sessions from 2002." that "all AR 321. At that time, Mr. Robinett listed Ayers' symptoms as "low energy, anxiety, brain confusion & fatigue, chronic fatigue, 320. Accordingly, Mr. [and] muscle pa Robinett opined that Ayers was "ab function for about 1 to 1.5 hours per day, 321. work. "AR then exhausted." to AR Mr. Robinett concluded that Ayers "was not able to return to Id. II Consistent with his previous reports, continued to diagnose Ayers with CFS. iv. Mr. Robinett AR 320. Dr. Bastien In November and December 2001, HRB commissioned an independent neuropsychological Ph.D., to determine whether Ayers could return to work as an attorney. AR 113-27. that examination from Sheila Bastien, Dr. Bastien is the only professional specializing in CFS examined Ayers or reviewed his medical records; she has evaluated close to 1800 CFS patients and has published numerous scientific articles on CFS. AR 126, 88 100. After interviewing Ayers and conducting four days of testing, Dr. Bast 126. concluded that Ayers could no longer practice law. AR Her testing revealed cognitive slippage, a drop in IQ, motor functioning problems in the hands, and deficits in verbal fluency, sequencing, abstract set shifting, reasoning, Regardless, Ayers' and executive function, math calculations, information full-sca There was a disparity, AR IQ remained high at 126. however, Page 12 - OPINION AND ORDER processing. between his sub-scores: 118-26. AR 118. Ayers' verbal IQ was 130, yet his performance IQ was only 116. Id. Dr. Bastien specifically remarked upon the "split" in Ayers' verbal and performance scores, noting that this pattern was very common in CFS patients. AR 118, 93. Dr. Bastien also found that Ayers was severely depressed, with a score of Assessment 43 on the Beck Functioning Depression ("GAF") score Bastien, however, expressly stat account for these test Inventory of 45. and AR a Global 125 27. Dr. that "[d]epression alone cannot results, particularly the lateralized findings on motor and sensory tests" because they did "not [follow] the usual pattern for depression"; as such, Dr. Bast explained that, even though depression can effect cognitive functioning, that was not true in Ayers' case: "[i]t is my opinion that all of [the test scores] are not [influenced by Ayers' particular pattern of [CFS] . " AR "Cognitive 126. impairments As Disorder, such, Dr. secondary to secondary depression and anxiety." is depression]. typical in patients Bastien diagnos [CFS], Ayers Fibromyalgia, AR 127. This with with with Accordingly, a Dr. Bastien recommended that Ayers "[p]ursue diagnosis and treatment with a [CFS] specialist" and "[c]onsider a brain SPECT scan. to further elucidate his problems and treatment options." AR 127. HRB terminated Ayers' employment based on Dr. Bastien's findings. AR 78. v. Dr. Johnson Ronald Johnson, M.D., conducted a psychiatric examination of Ayers on September 5, 2002. Page 13 - OPINION AND ORDER AR 149-52. Dr. Johnson noted that Ayers' lifestyle had changed markedly since the onset of symptoms. AR 150. Dr. Johnson also noted that Ayers does have difficulty flexibly interacting, and that he has to strain to organize the features of my questions, and to assemble his responses. Considering his past work as an attorney, it seems likely that he is having difficulty fluently expressing himself in a comparative way to his past stated functioning. AR 151. Accordingly, Dr. Johnson concluded that Ayers "presents the general picture of depression in the adult years as he faces his stated physical symptoms which appear to have been described and documented in prior medical and psychological testing reports"; thus diagnosed Ayers with a "[m] ood disorder due to stated physical condition of [CFS] and fibromyalgia (with features of both depression and anxious tension)." vi. Id. Dr. Ravuri On March 26, 2003, Ayers established care with Rajesh Ravuri, M. D., an internist, in order depression and hypertension." to receive AR 300. treatment for At that time, "[CFS], Dr. Ravuri reported that Ayers' depression had resolved: "[t]he patient denies any problems with depression at this time so he will just continue with exercise and relaxation and [remain] now." AR 302. Regarding CFS, off of medications for Dr. Ravuri recommended that Ayers "[c]ontinue with exercise and conservative management." Id. In a follow-up report dated May 5, 2003, Dr. Ravuri noted that Ayers "had no specific complaints." indicated that, AR 303. while Ayers was "feeling a lot better," he was still suffering from "some cognitive problems." Page 14 - OPINION AND ORDER The doctor also Id. Accordingly, Dr. Ravuri recommended that Ayers continue with "[ c] onservati ve management and exercise and proper diet" to treat his CFS. On July 3, 2003, Dr. Ravuri assessment at LINA's request. provided AR 322. Ayers suffered from "memory problems, cogni ti ve problems. Id. /I a Id. psychological Dr. Ravuri reported that tiredness, Based on fatigue, Dr. [and] Bastien's neuropsychological report, Dr. Ravuri listed CFS as Ayers' primary diagnosis. LINA, Dr. because Id. On the same day that he submitted his report to Ravuri referred Ayers to another health care provider he did not" 1 confident progression or regression of [CFS]." vii. enough evaluate the AR 330. Dr. Nolan On April 5, 2003, Nick Nolan, M.D., time to examination on Ayers. AR 147-48. Ph.D., performed a one Dr. Nolan noted that "depression no longer seems to be an issue" for Ayers. AR 147. The doctor also remarked that Ayers "gives a good history for the cyclic problem of flulike illness associated with the vague entity of [CFS]." AR 148. As a general propos ion, however, Dr. Nolan stated that he does not believe in CFS as a legitimate medical condition. Id. As such, Dr. Nolan diagnosed Ayers with "possible dementia" due to the cognitive def testing. iencies he displayed during Id. viii. Dr. Oelke In October 2003, Ayers began seeing David Oelke, M.D., Page 15 - OPINION AND ORDER and continues to see him every two to four months. 3 AR 33 5 , 137 1. During his intake interview, Dr. Oelke noted that Ayers "has had depression and problems with cognitive activities. told that he has AR 336. [CFS]." diagnose CFS at that time. Dr. Oelke, He has been however, did not AR 335-37. On December 23, 2003, Dr. Oelke saw Ayers "for follow up of his [CFS]." AR 362. The doctor reported that Ayers was "better in some respects" but was still suffering from igue, which requires him to "take naps many times in the afternoon." also noted that Ayers reported "[mJentally somewhat better." On January 14, 2004, assessment ("PAA") some muscle Dr. Oelke aches but was Id. Dr. Oelke completed a physical abil at LINA's request. AR 360. In the PAA, y Dr. Oelke opined that Ayers could perform fine manipulation and simple grasping "frequently" (between two-and-a-half and five-and-a-half hours per eight hour period); however, most other physical activities, including standing, sitting, walking, reaching, lifting and carrying, could only be performed "occasionally" two-and-a-half hours per eight hour period). Id. (less than Dr. Oelke also stated that Ayers was completely unable to work extended shi overtime. Id. On March 25, 2004, Dr. s or Dr. Oelke again examined Ayers. AR 385. ke noted that Ayers "had a little bit of a setback" because 3 Ayers was unable to find a CFS specialist in the Bandon, Oregon area per Dr. Ravuri's referral; as such, he began seeing Dr. Oelke, an internist, to treat his CFS and hypertension. AR 335-37. Page 16 - OPINION AND ORDER he had more trouble fevers. Dr. Oelke also remarked that Ayers' "[c]ognit Id. sleeping, more frequent mental capacity [was] still quite limited." sore throats, Id. and and Accordingly, Dr. Oelke concluded that Ayers "still has very marked limitations in how much he can do in a day." Dr. Oelke's "doing about t AR 406. June 3, Id. 2004 report indicates that Ayers was same" and his CFS was "still quite signi In the September 2, 2004 report, Ayers was "doing somewhat better." Dr. AR 450. cant." Oelke noted that As such, Dr. Oel reported that Ayers was "thinking of trying to get a part-time job. He can function for maybe three hours, even sometimes four hours, without having to take a nap or lose his ability to concentrate and solve problems, etc." Id. By December 12, 2004, however, Dr. Oelke remarked that Ayers' condition had once again deteriorated: "[Ayers' basically gotten much worse since last summer." symptoms have] AR 659. Dr. Oelke noted that Ayers was having increased problems with concentration and memory, but opined that some of these symptoms may be related to recent stressors, such as his SSA hearing. Id. Dr. Oelke's regular reports from February 2005 through April 2006 indicate that Ayers continued to suffer from fatigue cognitive difficulties, but that his condition was stable. 787, 791, 796, 797, 810, 885, 889. that Ayers remained "total and AR 764, Nevertheless, Dr. Oelke opined disabled from [CFS]." AR 810. By July 2006, Dr. Oelke remarked that Ayers began having "a lot more problems with his [CFS]." Page 17 - OPINION AND ORDER AR 844. Dr. Oelke's reports from July 2006 though December 2007 note persisting CFS symptoms. 1363-71. AR 1182, Specifically, Ayers continued to report problems with night sweats, coordination and balance, hand movements, muscular pain, cough, memory, concentration, headaches, and sleep. AR 1365-71. fatigue, comprehension, As such, Dr, Oelke reiterated that Ayers "is totally disabled with his [CFS].u ix. AR 1182. Dr. Villanueva On October 6, 2004, Michael Villanueva, Psy.D., examined Ayers at LINA's request; in addition to performing an examination, Dr. Villanueva reviewed Ayers' medical records, including reports from Drs. Bartz, Bastien, Oel ,and Mr. Robinett. At the examination, AR 468-76. Ayers reported symptoms of "fatigue, a feeling of 'foggy brain,' difficulties with eyesight, pain, flulike symptoms, sore throat, night sweats, and sleep problems. Ayers indicat since 1999. AR 470. that some variation of these symptoms had persisted Id. The doctor also reported that Ayers "did not have treatment for depression. Dr. u Villanueva went on until around October 2001. to note that, at the u time AR 472. of his examination, Ayers was not seeing a counselor or taking any anti depressant medication. Id. Regarding the test results, findings are somewhat indicated that he was increasing amounts Dr. Villanueva stated that "the surprising. u AR no longer depress of activity,U his Al though 473. and was IQ scale IQ was 126. Verbal Page 18 - OPINION AND ORDER IQ declined from "engaged in scores substantially: "[h]is present full-scale IQ is 98. 130 Ayers dropped Previous full to 105, and performance IQ went from 116, to 89." Other "score test on results arithmetic also AR 474. revealed seems a t cognitive low difficulties: compared to academic achievement," "[p] erformance on Trials A and B are both below normal limits, visual motor suggesting general motor slowing, integration, and decreased problems with executive function," "[v]isual memory is mildly below normal limits," "Continuous Visual Memory Test is low expectations," "[l]anguage fluency is below normal limits - both lexical fluency as well as semantic fluency," "demonstrates some slowing with dominant hand on the Grooved Pegboard," and "[s]et shifting remains a significant difficulty." AR 474. Despite these "somewhat surprising results," Dr. Villanueva opined that Ayers was not malingering and that he put forth good effort on testing. Dr. Villanueva AR 473. diagnosed indicating mild depression. Ayers a with AR 475-76, GAF 652. score 65, Regardless, the doctor listed depression as Ayers' primary condition and the cause of his cognitive Villanueva support impairments. concluded [Ayers'] "[c]urrent contention cognitive ability x. that AR that he 475. Nevertheless, cognitive does not test have Dr. findings sufficient . to perform work as an attorney." AR 476. Dr. Benincasa After receiving Dr. Villanueva's report, LINA determined that it was unclear whether Ayers' depression or [CFS]." AR 1934. "cognitive dysfunction is due to Accordingly, November 2004, LINA hired Daniel Benincasa, Psy.D., an in-house psychologist, to Page 19 OPINION AND ORDER review Dr. Villanueva's report and perform a "Peer Review tie breaker to determine if cognitive dysfunction is due to depression or physical/chronic fatigue."4 Dr. AR 1928, 1931-32, 651-53. Benincasa noted that the reduction in Ayers' IQ scores were "an odd finding given the higher previous test scores and no indication of a progressive neurological detract from cognitive function." condition which would AR 651. The scores were also "odd" because Ayers "present [ed] without any notab behaviors on interview [with Dr. Villanueva]." Regardless, Dr. Benincasa opined that psychiatric Id. Dr. Villanueva's diagnosis was "a reasonable appraisal of the data obtained." 652. AR However, because the "data obtained does not make sense with the previous testing and [Ayers'] presently high and higher level of functioning," involve himself Dr. Benincasa full effort."s concluded AR 652. that Speci Ayers about a third, neuropschological functional lives." not cally regarding Ayers' depression, Dr. Benincasa noted that "a number patients, "did depressed continue to have cognitive weakness on tests despite being in remission and leading Id. 4 LINA also sent Dr. Villanueva's report to Dr. Oelke for his opinion. AR 672. Dr. Oelke disagreed with Dr. Villanueva's assessment, but the only explanation he provided was a brief handwritten note stating that Ayers' "depression is mild but [secondary] to reFS] which has worsened over the last 4-5 months." AR 672. In a follow-up note addressed to LINA from March 25, 2005, Dr. Benincasa interpreted test results generated by Dr. Villanueva that were missing at the time of his initial review. Based on these test results, Dr. Benincasa opined, and contrary to his previous report, Ayers was not malingering and his cognitive test results were valid. AR 1931. Page 20 - OPINION AND ORDER LINA later "[v]erified verbally" with Dr. Benincasa that it "would not be able to make a distinction to verify 100 percent if cognitive 1928. ficits were either due to depression or [CFS]." AR As such, Ayers' claim was "de-escalated" and LINA continued to pay monthly LTD benefits. xi. Physical Ability Assessments and Functional Capacity Evaluations from 2005 Through 2007 From 2005 through 2007, the only medical treatment that Ayers received was from Dr. Oelke. and in order to ter Unsatisfied with Dr. Oelke's opinion assess Ayers' claim, LINA ordered two additional PAAs and two additional Functional Capacity Evaluations ("FCE") . LINA's Memo. in Supp. of Mot. Summ. J. on Benef s Claim 19-20. a. 2005 FCE In February 2005, performed an FCE. Miriam Zomerschoe, AR 699-725, 760-63. a physical therapist, The FCE revealed that, while Ayers was physically capable of performing some of the job demands of an attorney, his limitations in reaching, handling, and fingering ultimately prevented him from working in that capacity. AR 699. Ms. Zomerschoe also noted that Ayers "did seem to through the activity." examination, especially when testing more igue physical Id. b. 2006 PAA Dr. Oelke performed a second PAA on August 9, 2006. Dr. Oel opined that Ayers was capable of sitting, reaching at desk level, fine manipulation, simple grasping, and lifting and carrying under Page 21 - OPINION AND ORDER ten pounds "frequently" (between two-and-a-half and five-and-a-half hours per eight hour period). Ayers was capable AR 926. Dr. Oelke also noted that standing, walking, reaching overhead and below waist, firm grasping, lifting and carrying between eleven and twenty pounds, pushing and pulling up to twenty pounds, climbing stairs and "occasionally" period). ladders, (less balancing, than AR 926-27. stooping, two-and-a-half hours and per kneeling eight hour Finally, Dr. Oelke opined that Ayers could not work extended shifts or overtime because his endurance was "very variable from day to day." AR 927. Based on Dr. Oelke's PAA, LINA performed a transferable skills analysis ("TSA") on August 11, 2006; the TSA indicated that Ayers was physically capable of working as an attorney. On November 1, 2006, AR 892-93. Dr. Oelke sent a letter of correction Despi te the fact regarding his 2006 PAA to LINA. that he had already used the same PAA form in 2004, Dr. Oelke explained that he "misrepresented the [2006 PAA]" due to mistakenly assessing Ayers' abilities over a twenty-four hour, rather than eight hour, period. AR 959. As such, Dr. Oelke corrected his findings so that "the things I marked frequently should be occasionally at best." Id. Dr. Oelke concluded that Ayers was "totally incapable of going back to his occupation as a lawyer." Id. LINA did not perform another TSA based on Dr. Oelke's updated PAA. c. After 2007 FeE and PAA reviewing misrepresented Ayers' Dr. Oelke's letter physical abilities Page 22 - OPINION AND ORDER stating that in the 2006 PAA, had LINA requested another FCE "because it was unclear what Ayers' physical abilities were at that time./I J. on Benefits Claim 20; see also AR 1004. performed by Karen Rohlf, AR 1064-80. results. Ms. Rohlf LINA's Memo. in Supp. of Mot. Summ. The second FCE was a physical therapist, also generated a in January 2007. PAA based on the FCE AR 1079-80. Ms. Rohlf's FCE indicated that Ayers "was able to perform all physical tests with continuously./l6 AR some 1064. limitations She noted [and] was that able Ayers to sit demonstrated "increased symptoms of pain and fatigue upon presenting for day 2 testing including both lower extremities second day is more reflective of repeating on a day to day basis./I what [and, as a result, [Ayers] AR 1064, is 1068, the] capable 1070-72. of Ms. Rohlf also noted "increased concentration and cognitive problems wi th increased physical acti vi ty. AR 1065. /I Ayers became so fatigued during testing that he had to lie down periodically. 1064. AR Ms. Rohlf, however, was unable to assess whether Ayers could perform the job functions description [was] provided./I In the PAA, Ms. of an attorney because "[n]o job Ayers could sit AR 1065. Rohlf opined that 6 Ms. Rohlf later testified that her remark regarding Ayers' abil y to sit was changed by her employer WellWorks; she originally noted that "client was ab to sit for 55 minutes with one interruption. Glor Decl. Ex. 105, at 6-7. In clarifying her original notes, Ms. Rohlf stated that "[Ayers] is not able to sit for more than 30 minutes and [has] problems concentrating. Id. at 9. 1I 1I Page 23 - OPINION AND ORDER "continuously,,7 period). (more than fi ve-and-a-half hours per eight hour She also remarked that Ayers could "frequently" (between two-and-a-half and five-and-a-half hours per eight hour period) stand, reach, simple grasp, li up to twenty pounds, carry up to thirty pounds, climb stairs, balance, stoop, and crawl. AR 1079 80. able In addition, "occasionally" period) walk, twenty pounds, Ms. (less Rohlf than found that two-and-a-half perform fine manipulation, carry up to sixty pounds, Ayers hours was per firm grip, eight and hour lift up to push and pull between sixty-three and seventy-seven pounds, kneel, and crouch. 80. to AR 1079 The PAA notes, however, that Ayers "showed signs of fatigue concentration/ cogni ti ve activit s." xii. difficulties with ongoing physical AR 1080. Dr. DeFilippis On May 29, 2007, LINA informed Ayers that it was still unclear whether he was eligible for benefits under the terms of the Policy. AR 1155-59. Specifically, information regarding your LINA noted that limitations "[uJntil we acquire and restrictions from a neurological standpoint, we are uncertain as to what precludes you from performing the duties of your own occupation." AR 1158. Thus, LINA requested that Ayers submit to another evaluation; on June 15, 2007, Ayers declined LINA's request, stating that it was "not appropriate" and "unreasonable." AR 1171 77. 7 During her deposition, Ms. Rohlf explained that Ayers' was actually able to sit "frequently" (between two-and-a-half and five-and-a-half hours per eight hour period) rather than "continuously" (more than five-and-a-half hours per eight hour period). Glor Decl. Ex. 105, at 8. Page 24 - OPINION AND ORDER Accordingly, LINA referred Ayers' records to Nick DeFilippis, Ph.D., an in-house psychologist, for a peer review. In August 2007, Dr. DeFilippis issued a report, that Ayers' cognitive dif which concluded culties were related to depression and a possible somatoform disorder. Dr. AR 1191-1200. AR 1999. DeFilippis opined that CFS was not implicated because "psychiatric problems need to be ruled out U before such a diagnosis is made. not Id. evident Specifically, Dr. DeFilippis explained that "it is from applied before the there records was an that the adequate presence of a psychological issue. u noted that "the most diagnosis attempt Id. parsimonious of to [CFS] was out the rule As such, Dr. DeFilippis explanation for [Ayers'] cognitive difficulties identified by Dr. Villanueva is that emotional factor DeFilippis opined cause [d] that them. these II cognitive Ayers' employment as an attorney. findings and the 2007 FCE, AR 1200. Nevertheless, difficult AR 1199. Dr. precluded Based on these LINA concluded that ability to perform the regular physical dut s [an] Ayers had the s of an attorney; LINA also determined that Ayers' cognitive difficulties were related to depression and therefore result, Ayers' LTD bene D. the MIL applied. ts were terminated. AR 1224-26. As a AR 1227. Analysis Because the Policy defines disability broadly impairment that prevents an employee from "perform [ing] as any all the material duties of his or her regular occupation,u the issue before the Court is not whether Ayers qualifies for LTD benefits; it is in Page 25 OPINION AND ORDER fact undisputed that his cognitive difficulties prevent him from practicing law. Further, it is undisputed that, under the terms of the Policy and Ninth Circuit precedent, CFS is a physical condition to which the MIL does not apply. AR 9; see also Glor Decl. Ex. C., at 2; Mongeluzo v. Baxter Long Term Disability Benefits Plan, F.3d 938, Court 942-44 (9th r. 1995). 46 As such, the issue before the whether Ayers met his burden in proving that his disabling cognitive difficulties are cau LINA asserts that by CFS. the medi records outlined above are sufficient to establish that Ayers' cognitive impairments stem from a psychiatric condit Conversely, Ayers argues that his fatigue and other physical symptoms began two years before his depression; further, he contends that, while he was depressed over the loss of his job and other life events 2001, his depression resolved self by 2003, yet his disabling symptoms persisted. Accordingly, Ayers asserts that CFS is the genesis of his disability. As a preliminary matter, it should be noted that Ayers meets the diagnost criteria, as outlined in section II(B), CFS. The record reveals that, since 1999, Ayers has undergone a battery of tests to rule out potent 1 causes of his symptoms. As discussed above, Ayers has undergone an HIV test, blood work, an EKG, a treadmill test, chest x-ra MRI. ,stool and urine tests, and an AR 25, 31-33, 36-37, 40-53, 59-61, 63-67, 71-76. consulted a rheumatologist, possible causes. radiologist, and ophthalmologist, psychotherapist in AR 82-83, 101-04, 111. Page 26 - OPINION AND ORDER order to He has also neurologist, exclude other Ayers' test results were unremarkable. Reports from Mr. Ravuri, as well Robinett, as the Dr. Bastien, PAAs and FCEs, Dr. Oel and Dr. document Ayers' ongoing chronic fatigue, which was not alleviated by rest and resulted in substantially limited daily functioning. AR 243, 321, 126-27, 303, 322, 360, 385, 1182, 699, 959, 1064, 1068, 1070-72. Moreover, the record reveals that this fatigue was not Ii Rather, Ayers long. enj oyed acti vi ties such as boogie boarding, roller-blading, tennis, racquet ball, swimming, bike riding, and hiking, as well as going out to dinner, onset movies, plays, and art receptions, these symptoms in 1999. evidence that Ayers' future. symptoms are AR 1016, 1445 only Further, likely to remit there is no in the near (CDC guidelines stipulate that "those who have CFS for two years or less nevertheless, AR 275. prior to the "5-10% [are] sustai [n] more likely to improve" i complete remission"), 1462 (Cigna's CFS guidelines are consistent with the CDC, noting that "most [CFS patients] remain functionally impaired for years"). In addition, Ayers has consistently reported, and his medical examiners have observed, symptoms of poor memory, impairments in concentration, sore throat, muscle and joint pain without swelling or redness, headaches, unrefreshing sleep, and increased fatigue and discomfort after exertion. AR 34, 62, 118-26, 148, 151, 242, 302-03, 322, 336, 363, 385, 406, 470-74, 659, 699, 927, 959, 1064 65, 1182, 1199, 1363-71. Ayers has exhibited additional CFS symptomology as well; he has suffered a significant drop in IQ with a "split" between his verbal and performance scores. Page 27 - OPINION AND ORDER AR 118, 474. He has also exhibited cognitive difficulties over a wide variety of tests; every doctor opined that Ayers was not malingering and that his test results were valid. As such, Ayers meets the CDC's and LINA's diagnostic criteria for CFS. Moreover, it is undisputed that Ayers' symptoms have remained the same, or worsened, since he applied for benefits under HRB's Policy. It is also undisputed that LINA initially construed these symptoms as both disabling and falling outside of the MIL. LINA's Resp. to Ayers' ("LINA paid [Ayers] more than five Mot. J. In addition, LINA knew that fy 100 percent [whether] cognitive def either due to depression or [CFS]." Regardless, on Benefits Claim 15 n.6 for benefits based on a diagnosis of CFS for years"). impossible "to ve Summ. the Court it was its were AR 1928. acknowledges that there is some disparity in the opinion evidence; while all of the medical sources describe relatively the same symptoms and limitations, they vary in their conclusions regarding the cause of these impairments. Dr. Bastien, the only CFS specialist on record, explicitly stated that "depression alone cannot account for" Ayers' disabling cognitive difficulties. AR 126. She further opined that, whi depression can impact an individual's cogn i ve functioning, in Ayers' case that was not true; rather, ba on her four days of testing, she concluded that CFS was the cause of both his cognitive impairments and his depression. AR 126 27. Dr. Oelke, Ayers' treating phys Ayers was disabled by CFS. Page 28 - OPINION AND ORDER AR ian, repeatedly opined that 810, 959, 1182. Dr. Oelke tracked Ayers' symptoms over a five year period. During this time, Dr. Oelke never noted that Ayers appeared depressed or anxious; Ayers also never reported feeling depressed or anxious. Oelke did not refer Ayers to a mental As such, health spec list Dr. or prescribe anti-depressants. Conversely, Drs. construed Ayers' difficul ties Villanueva, and DeFilippis depression as the cause of both his cognitive and physical Villanueva, the only disabil was caused y Benincasa, symptoms. 8 examining by AR 4 7 5 , source who depression, 65 2 , opined reported 1192 . that Dr. Ayers' considerable cognitive impairments; most notably, he recorded a drop in Ayers' IQ from 126 to 98. Dr. AR 474. Villanueva's report also established that Ayers was no longer suffering from disabling depression. assessed Ayers with a GAF score of 45, debilitating depression. had ceased treatment AR 126. In 2001, Dr. Bastien indicating significantly Three years later, a his depression and report er Ayers that it was in LINA also relies on the opinions of Drs. Ravuri and Bargalow in support of s denial of benefits. See LINA's Resp. to Ayers' Mot. Summ. J. on Benefits Claim 17-20. LINA's reliance, however, is misplaced. There are no reports from Dr. Bargalow in the administrative record. His name is only mentioned once in a handwritten note from Ayers. AR 157. According to Ayers, Dr. Bargalow opined that he was suf ing from "depression disorder, anxiety disorder, pain disorder, somatization disorder, and fibromyalg ," but not CFS. Id. Like Dr. Nolan, Dr. Bargalow "does not believe in [CFS]"; accordingly, the opinions of Drs. Bargalow and Nolan are of little value. AR 148, 157. Further, contrary to LINA's assertion, Dr. Ravuri never diagnosed Ayers with depression. AR 300, 302, 303, 322. In fact, Dr. Ravuri's reports reflect that Ayers' depression was remission by 2003. AR 302. In addition, Dr. Ravuri listed CFS as Ayers' primary diagnosis; as such, his opinion supports, rather than detracts from, Ayers' benefits claim. AR 322. Page 29 - OPINION AND ORDER remission, Dr. Villanueva assessed him with a GAF score of 65, indicating nominal limitations. AR 652. Dr. Villanueva does not attempt to explain how Ayers' depression markedly improved while his cognitive impairments substant lly worsened. This discrepancy does not appear to factor into his diagnosis. Drs. Benincasa and DeFilippis did not examine Ayers; instead, they were LINA doctors retained to review Ayers' Villanueva's examination. reiterated Ayers' noted that symptoms, objective impairments. AR 11 91 , 1 92 8 , file after Dr. 1 93 1 - 3 2 . Both doctors which are consistent with CFS, tests revealed significant and cognitive AR 651, 1195-99. Nevertheless, Dr. Benincasa concluded that depression was the correct diagnosis because Ayers failed to effectively rule out other causes: "[o]ne would not consider CFS or Fibromyalgia given the early presentation of depressive symptoms at about the same time. If AR 652. The record reveals, however, that Ayers was reporting fatigue and other CFS symptoms in 1999, whereas he did not become depressed until 2001, when he was no longer able to work because of his disability. Dr. Benincasa's report actually substantiates Ayers' assertion that his depression was in remission by 2003. Dr. Benincasa reiterated that Ayers had only "mild symptoms [of depression] with a GAF of 65. II AR 652. Later parts of the report confirm that Ayers was no longer actively suffering from depression, as Dr. Benincasa expressly noted that some patients who have recovered from depression, like Ayers, still show cognitive slippage while in Page 30 - OPINION AND ORDER remission. Dr. AR 652. DeFilippis opined that Ayers' symptoms were depression for the same reason as Dr. Benincasa; caused by CFS was not a viable diagnosis because "it is not evident from the records that the diagnosis of [CFS] was applied before there was an adequate attempt to rule out the presence of psychological issues." 1199. Dr. likely explanation DeFilippis also for found that Ayers' depression was symptoms because AR the most he "has a significant family history of depression, which would support his presenting with that condition." Id. As discussed above, however, Ayers' fatigue, muscle pain, sore throats, cough, headaches, unrefreshing sleep, and predate the onset of his depression by two years. chest pain Compare AR 34 (onset of CFS symptoms in 1999), with AR 199 (onset of depression in 2001). Furt contrary to Dr. Bastien expressly stated that account for Ayers' De lippis' conclusion, Dr. even severe depression could not substantial cognitive impairments. AR 126. Thus, Ayers' family history of depression is irrelevant because the record reveals that ychological issues were properly ruled out at the time the CFS diagnosis was applied. As such, the Court finds that the opinions of Drs. Villanueva, Benincasa, and DeFilippis do not provide convincing evidence that depression, rather than CFS, These doctors all failed to iminated depression as a caused Ayers' address potential Ayers' depression was in remission whi Page 31 - OPINION AND ORDER the cognitive disability. fact cause that Dr. and that, Bastien by 2003, his cognitive difficult s continued to worsen. psychological issues Thus, were by the cursorily cause of concluding Ayers' that cognitive impairments, Drs. Villanueva, Benincasa, and DeFilippis committed the very error that they purport to avoid; namely, by applying the diagnosis of depression without considering other potential causes or Ayers' significant medical history. Nonetheless, LINA asserts that its principal reliance on the opinions of Drs. Villanueva, Benincasa, and DeFilippis was proper for two reasons. First, LINA asserts that it was not bound by Dr. Oelke's opinion because the Supreme Court rejected the "treating physician rule" for ERISA cases, which required that special deference be given to the opinion of a treating physician. Black and Decker v. Nord, 538 U.S. 822, 834 The Ninth Circuit has held, however, See (2003). following the Supreme Court's decision in Nord, that "a district court may, in conducting its independent evaluation of the evidence in the administrative record [on de novo review], take cognizance of the fact . . . that a given treating physician has a greater opportunity to know and observe the patient administrator." Income than a physician retained by the plan Jebian v. Hewlett-Packard Co. Emp. Benefits Org. Protection Plan, 349 F.3d 1098, 1109 (ci tations and internal quotations omitted). (9th Cir. 2003) Ayers has been a patient of Dr. Oelke for over five years; Dr. Oelke examined Ayers over dozens of appointments and observed him at regular monthly intervals. The Court is not convinced that, because Dr. Oelke is a general practitioner with no specialization in mental illness, Page 32 - OPINION AND ORDER his observations of Ayers and his medical opinion are any less valid than those opinions of LINA's examining and reviewing psychologists. Second, LINA argues that the opinions of Dr. Bastien and Mr. Robinett are not binding because they failed to rule out depression as an underlying cause and more recent doctors reached opposite conclusions regarding the origination of Ayers' disabling symptoms. See LINA's Resp. to Ayers' Mot. Summ. J. on Benefits Claim 26. As discussed above, however, Dr. Bastien did rule out depression as a potential cause; she explicitly stated that depression, could not account for Ayers' cognitive difficulties. alone, AR 126. Dr. Bastien is also the only CFS expert involved in this case. Given the as inherent challenges in diagnosing CFS, specialist is entitled to more deference. her opinion a See Friedrich, 181 F.3d at 1111-12 (construing Dr. Bastien's report as objective evidence of CFS and relying heavily on her opinion, even though there were conflicting reports in the record, to determine that the claimant was entitled to LTD benefits). LINA was free to re its own CFS specialist to examine Ayers or review his file, but chose not to. Therefore, it was improper for LINA to disregard Dr. Bastien's opinion. Mr. Robinett, Ayer's therapist from 2001 to 2002, did not diagnose Ayers with CFS; rather, Mr. Robinett indicated that Ayers' medical history reflected a CFS diagnosis. health specialist, Mr. Robinett was AR 199. retained to As a mental aid Ayers resolving his depression and anxiety, not for CFS treatment. Page 33 - OPINION AND ORDER in Id. As such, contrary to LINA's assertion, Mr. Robinett was never tasked with excluding potential causes of Ayers' symptoms. It is significant, however, that Mr. Robinett reported that Ayers was not suffering from a psychological or emotional problem prior to 2001 and that his CFS symptomology predated the onset impairments by two years. Id. these mental Thus, it was similarly improper for LINA to disregard Mr. Robinett's opinion. Additional application evidence t supports Ayers' contention MIL was improper in this case. that the Contrary to LINA's conclusion, the most recent PAAs and FCEs reveal that Ayers had physical attorney. limitations that prohibit his employment The Dictionary of Occupational Titles ("DOT") that an attorney must be physically able to reach, finger "frequently" y to "mostly sit requirement. Here, reaching, to sit 2005 fingering, AR 699. for states handle, and II AR 228-29. The DOT also lists the during the workday as an occupational AR 229. the attorney. an (between two-and-a-half and five-and-a-half hours per eight hour period). abil as more FCE reveals that Ayers' deficiencies in and handling prevent him from working as an The 2007 FCE stipulated that Ayers was unab than thirty minutes at a time; confirmed that Ayers could not sit for more than hours in an eight hour period. the 2007 PAA ve-and-a-half Glor Decl. Ex. 105, at 6-9. Thus, Ayers' limitations in sitting also preclude the practice of law. Accordingly, because Ayers contribute[d] to the tot Page 34 - OPINION AND ORDER had "a physical condition [that] disability, or [was] either a cause or symptom of a mental disability," it was improper for LINA to apply the MIL, even if depression was the underlying cause of Ayers' cognitive difficulties. Finally, the SSA determined that Ayers was unable to work at any job in the national economy due to his CFS and awarded SSDI benefits. AR 1301, 1371. plan administrators, disability. While SSA decisions are not binding on they are nonetheless persuasive evidence of Salomaa, 642 F.3d at 679 (citing Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009)) _ Because Ayers was awarded SSDI benefits after LINA denied his appeal, the favorable SSA decision was not available for plan administrators to review; regardless, the Court finds this evidence compelling. Mongeluzo, 46 F.3d at 943-44 administrator] ("new evidence (not before the plan may be considered [by the district court] under circumstances to enable the full exercise of informed and certa independent judgment"). Therefore, because Ayers' impairments and inability to work as an attorney are well-documented in the administrative record, and because Ayers met his burden in proving that these limitations were caused by CFS, the continuation of benef Court finds that Ayers s under the Policy_ is entitled to a As such, Ayers' motion for summary judgment on the benefits claim is granted and LINA's motion is denied. III. Overpayment Claim It is undisputed that the Policy authorizes LINA to recover any amounts, as overpaid benefits, that the insured receives as a Page 35 - OPINION AND ORDER retroactive lump sum SSDI award. AR 11-12. In addition, it is undisputed that Ayers received over a hundred thousand dollars in SSDI benefits. however, Answer to LINA's Countercl. asserts that LINA is amounts due to its bad faith. 15 16. <JI<JI Ayers, foreclosed from recovering these Thus, the issue before the Court is whether the equitable defense of unclean hands bars LINA's receipt of such benefits. A. Application of Eguitable Defenses to Claims Brought Under 29 U.S.C. § 1132(a) (3) As a preliminary matter, LINA contends that common law equi table theories do not apply to ERISA claims where the plan unambiguously grants the overpayments. Conversely, Ayers asserts that equitable defenses, such as unclean hands, insurer the right to recover apply to any equitable claim, any even those brought under ERISA. ERISA authorizes fiduciaries to bring suit in federal court to obtain "appropriate provisions of equitable its LTD plan. relief" 29 in U.S.C. order § to enforce 1132 (a) (3) (B). the The Supreme Court explained that "equitable relief," as referred to this portion of the statute, "mean [s] something less than all relief." Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, (2002) 209 such, t (internal quotation and emphasis omitted). As term "equitable relief" refers only to "those categories of relief that were typically available in equity." Id. at 210 (internal quotation and emphasis omitted). Here, LINA asserts that, under the terms of the Policy, Page 36 - OPINION AND ORDER is entitled to an equitable lien by agreement on Ayers' SSDI benefits. See LINA's Memo. in Supp. of Mot. Summ. J. on Overpayment Claim 8 9. Imposition of an equitable lien is an allowable remedy under section 1132 (a) (3) (B). LINA's claim I Great-West, 534 U.S. at 213. Accordingly, s "in equity.u LINA cites to a plethora of authorities in support of its contention that equitable theories do not apply to ERISA claims. See LINA's Reply to Mot. Summ. J. on Overpayment Claim 3 (citing Cinelli v. Security Pac. Corp., 61 F.3d 1437, 1444 (9th Parker v. BankAmerica Corp., 50 F.3d 757, 769 r. 1995); (9th Cir. 1995); Aetna Life Ins. Co. v. Kohler, 2011 WL 5321005, *6-7 (N.D. Cal. Nov. 2, 2011); and authorities from the Fourth, Eighth, and Eleventh Circuits). fth, Sixth, Seventh, Ayers merely cites to a single case in support of his contention that "an insurer's unclean hands may bar its claim under . health insurance benefits." on Overpayment Claim 5-6 § 1132 (a) (3) to recover overpaid Ayers' Memo. in Supp. of Mot. Summ. J. (citing Providence Health Plan v. Charriere, 666 F.Supp.2d 1169, 1182 (D.Or. 2009)). The Court agrees with Ayers. The authorities that LINA relies on are not applicable in the present case; these cases hold that the "federal common law rulers] of contract interpretation u cannot be applied to override the express terms of an ERISA plan. See Cinelli, 61 F.3d at 1444; Parker, 50 F.3d at 769; Aetna Life, 2011 WL 5321005 at *6-7. These cases, however, do not address whether equitable defenses, such as unclean hands, are applicable to claims brought under section 1132(a)(3). Page 37 - OPINION AND ORDER Id. While the Court acknowledges the general proposition that common law contract principles do not apply where the terms of a written insurance policy are unambiguous, this issue does not res equ ve whether LINA's able claim may be precluded by an equitable defense. The only relevant authority from this District is Providence Health Plan v. Charriere. In Providence, the LTD insurer brought an overpayment claim pursuant to section 1132(a) (3). Providence, 666 raised F.Supp.2d at 1182. The plan's affirmative defense of unclean hands, beneficiary the alleging that the insurer wrongfully terminated benefits owed under the LTD plan; the court held that the defense applied to ERISA claims brought under 29 U.S.C. § 1132 (a) (3) because the claim and the defense were both equitable in nature. (citing Del Monte Fresh Produce, N.A., Inc. v. H.J. Heinz Co., 2008 WL 607415, *1 (D.Or. Feb. 29, 2008); Thompson v. Coughlin, 329 Or. 630, 633, 997 P.2d 191 (2000); and Cal. Dep't of Toxic Substances Control v. Neville Chern. Co., 358 F.3d 661, 672 72 (9th Cir. 2004)); see also Admin. Comm. for Wal Mart Stores, Inc. Assocs.' Welfare Plan v. Salazar, 525 F.Supp.2d 1103, 1114 (D.Ariz. 2007) (applying unclean hands as an affirmative defense to a claim brought under section 1132(a) (3)}. where, as here, defenses apply. the claim is brought "in equity," Therefore, equitable As such, LINA cannot recover any overpaid amounts pursuant to section 1132(a) (3) if Ayers can demonstrate that it was acting with unclean hands. Page 38 OPINION AND ORDER B. Unclean Hands To establish unclean hands, the party asserting the defense must demonstrate that "'the plaintiff's conduct is inequitable and that the conduct relates to the subject matter of its claims.'" Providence, 666 F.Supp.2d at 1182 (quoting Brother Records, Inc. v. Jardine, 318 F.3d 900, omitted)). 909 (9th Cir. 2003) (internal quotations "'[E]quity requires that those seeking its protection shall have acted fairly and without controversy in issue.'" 763 F.2d 1091, 1097 Id. fraud or deceit as to the (quoting Ellenburg v. Brockway, Inc., (9th Cir. 1985)). The doctrine, however, is not without limitations: "[i]n quantitative terms, the misconduct must be serious enough to justify a court's denying relief on an otherwise valid claim. Even equity does not require saintliness." Malbco Holdings, LLC v. Amco Ins. Co., 2010 WL 143778, *5 (D.Or. Jan. 11, 2010) (citations omitted). Here, Ayers contends that LINA sabotaged his application for SSDI benefits. Specifically, Ayers argues that LINA brought its overpayment claim in bad faith because it knew that its interest in any overpaid amounts "expired when the [SSA] Appeals Council upheld the ALJ's claim denial in May 2005."9 Ayers' Memo. in Supp. of 9 Regarding LINA's unclean hands, Ayers also asserts that he would not have applied for SSDI "but for" LINA's misrepresentations and "wrong[ful] withholding [of] LTD benefits." Ayers' Memo. in Supp. of Mot. Summ. J. on Overpayment Claim 14. As discussed in section I, however, the terms of the Policy allow LINA to offset monthly benefits by the assumed receipt of other income, including SSDI benefits. AR 11 12. Therefore, LINA had the right to withhold LTD benefits regardless of whether Ayers applied for or received SSDIi as such, Ayers cannot sustain an affirmative defense on this basis. Page 39 - OPINION AND ORDER Mot. J. on Overpayment Claim 14. Summ. LINA engaged in a vast justification, and Ayers also asserts that conspiracy contravention to unfairly, without the Policy, terminate his LTD benefits. i. Ayers Expiration of LINA's Interest in Ayers' SSDI contends that LINA is not entitled to receive any portion of his SSDI benefits for three reasons: 1) Ayers' exhausted his administrative appeals his SSDI claim in 2005, further interest" th the SSA; 2) LINA stopped tracking "confirming that in those benefits; notice of its overpayment c [LINA] and 3) knew it had no LINA did not give im until this action. Ayers' Memo. Mot. Summ. J. on Overpayment Claim 15-30. Supp. rst, asserting that LINA's interest "expired" when he exhausted his administrative appeals with the SSA, Ayers confuses LINA's ght to recover an overpayment with its right to assume receipt of Other Income Benefits. As discussed Benefits" provision benefits be sources, receives." in section requires I, that "reduced by any [including] AR 4, 11. any the [SSDI] an Policy's employee's benefits benefits the "Other Income monthly from other LTD income Employee LINA's interest in Ayers' income from other sources is so broad that it can reduce monthly LTD payments simply by "assum[ing]" that Ayers is eligible for other benefits, even if he was not actually receiving them. AR 11. The Policy's "Social Security Assistance" provision, which is a subset of Other Income Benefits, is also relevant; it states that LINA "will assume the Page 40 - OPINION AND ORDER receipt of SSDI benefits until the Employee gives us proof that all administrative remedies are exhausted." In addition, Overpayment" the Policy contains provision, which provides AR 12. a separate that, if "Recovery of benefits are overpaid for any reason, LINA "has the right to recover the amount overpaid by [a] overpaid amount." Moreover, request for a lump sum payment of the AR 11. Ayers signed a Reimbursement Agreement, which states: If I later receive [SSDI] benefits I agree to reimburse the full amount of the overpayment within 30 days of receiving my [SSD1] award. I understand that [LINA] will recover an overpayment that occurs by reducing future LTD Monthly Bene t s . . . I acknowledge that if I obtain a [SSDI] award, all or a portion of any retroactive [SSDI award] must be repaid to [LINA] in accordance with the terms of my [Policy]. AR 163, 11. Thus, LINA's interest in the assumed receipt of SSDI benefits "expires" when "the Employee provides proof that all administrative remedies are exhausted." AR 11. Other provisions of the Policy, however, make clear that L1NA is ent any other benefits that an led to recover overpayment of Employee actually receives: L1NA expressly has the right, at any time, "to recover [any] amount[s] overpaid"; further, by signing the Reimbursement Agreement, Ayers explicitly agreed that if "I later receive [SSD1] benefits [will] reimburse the full amount of the overpayment Accordingly, . . I [to L1NA]. II the unambiguous terms of the Policy establish that L1NA's interest in any overpaid benefits never expires. AR 163. Page 41 - OPINION AND ORDER AR 11-12, Second, the fact that LINA stopped tracking Ayers' SSDI claim in 2005 is not evidence that its interest in that award expired. When Ayers retained private counsel in 2005, LINA could no longer receive direct Instead, updates from Allsup regarding the SSDI LINA became reliant on Ayers for such updates. claim. Ayers, however, was not diligent in providing this information to LINA; as such, LINA did not have any SSDI claim updates to record. the fact that LINA stopped tracking Ayers' SSDI Thus, claim is immaterial. Third, LINA's failure to seek compensation for these overpaid amounts until this action commenced is inconsequent 1. Ayers had an independent contractual duty to reimburse LINA for overpayments out of his SSDI award, which he failed to do. As such, LINA did not learn of Ayers' SSDI award until he filed his benefits claim in this Court. As such, LINA had no opportunity prior to this action to pursue reimbursement for its overpayment. Accordingly, SSDI award, exhausted LINA had an equitable lien on any retroactive even his if such an administrative relationship with Isup. award was remedies received and after Ayers' terminated his Thus, LINA's overpayment claim is not, alone, evidence of bad faith. ii. Other Evidence of Unclean Hands Ayers also contends that LINA has unclean hands because: 1) it sabotaged his SSDI claim; and 2) it made fraudulent statements and commissioned false medical reports to facilitate termination of his Page 42 - OPINION AND ORDER LTD bene s under the MIL.Io See generally Ayers' Memo. in Supp. of Mot. Summ. J. on Overpayment Claim. a. SSDI Benefits Claim Ayers cites to copious portions of the administrative record in support of his contention that Allsup intentionally sabotaged his SSDI claim. 1371, 1923, AR 536 - 72 , 1951; 664 , 78 5 , Glor Decl. 7 90, Ex. 835 - 3 6 , 75 82. 1018 , 1022 , LINA contends that "there is no evidence that LINA played any role in [Ayers'] SSDI claim or that it participated in the [alleged] conduct." LINA's Resp. to Ayers' Mot. Summ. J. on Overpayment Claim 9. In addition, motive to LINA notes sabotage Ayers' that SSDI nei ther claim: it nor Allsup had a "[if Ayers'] SSDI fails, LINA must pay full benefits without any offset. claim But if he succeeds, then . . . LINA is entitled to offset its LTD payments by the amount contract, of [Ayers'] SSDI award"; simi rly, under their Allsup is only compensated by LINA if it successfully obtains SSDI benefits. Id.; see also Patton Decl. Ex. Accordingly, LINA argues that both it and Allsup" incentive to do what [they] could to help [Ayers'] 1, at 4. early had an SSDI claim Ayers also asserts that LINA has unclean hands because it "required that he satisfy an 'any occupation' definition of disability." Ayers' Memo. in Supp. of Mot. Summ. J. on Overpayment Claim 40. LINA "acknowledges that in some of its correspondences it stated that the 'any occupation' standard applied. . This was a mistake." LINA's Resp. to Ayers' Mot. Summ. J. on Overpayment Claim 7. The Court finds that this mistake was not indicative of bad faith and, moreover, ultimat y harmless, as LINA paid over $300,000 in monthly benefits based on the determination that Ayers could no longer practice law. Therefore, t s contention will not be addressed furt as part of Ayers' equitable defense. to Page 43 - OPINION AND ORDER succeed." Id. at 9-10. Here, most of the documents that Ayers cites to are that he sent to LINA regarding representation or chart notes dissatis noting ction with Allsup. that Ayers represented"), 785 "has from Dr. in Allsup's ke reflecting Ayers' See AR 664 (chart note from Dr. Oelke been (letter inadequacies ters very upset notifying LINA about that how Ayers he was retained independent counsel), 835-36 (letter to LINA detailing how Allsup sabotaged his SSDI claim), 1018 (letter to LINA with SSDI update), 1022 (letter reporting "Allsup's sabotage of the [SSDI] appeal" to LINA) , 1371 prevailed (chart in his note SSDI from Dr. claim). Oelke These reflecting portions of that the Ayers record, however, only reflect Ayers' personal belief that Allsup mishandled the claim and, accordingly, are not, alone, evidence of unclean hands. The other portions of the record to which Ayers cites are LINA's internal notes or documents generally reflecting the SSDI application process. AR 536-72 (ALJ hearing transcript), 790 (SSA form SSDI request reflecting for that a Ayers hearing), "was not 1923 impressed (LINA's with internal note Allsup"), 1951 (LINA's internal note indicating that Ayers was "upset regarding [Allsup's] representation"). Thus, these documents are also not direct evidence of bad faith. When viewed in its entirety, the evidence that Ayers relies on merely suggests differently. that Allsup could have handled his These excerpts of Page 44 - OPINION AND ORDER record, however, SSDI claim il to link LINA to the allegedly wrongful conduct. is insufficient to establi that LINA was acting affirmatively with "fraud or dece "as to Ayers' F. Supp. 2d at Therefore, 1182. Accordingly, this evidence SSDI claim. Providence, 666 Ayers cannot sustain an unclean hands defense based on Allsup's representation. b. LTD Benefits Claim Ayers next asserts that "[t]here is extensive evidence that [LINA] conspired to set up a bad faith termination" of his LTD benefits. Ayers' Memo. in Supp. of Mot. Summ. J. 31. Conversely, LINA contends that "there is no competent evidence to support" Ayers' conspiracy theory. LINA's Resp. to Ayers' Mot. Summ. J. on Overpayment Claim 8. Ayers again cites to numerous portions of the administrative record in support of his contention. 82, 192, 224-27, 233-34, 238, AR 84, 113-27, 173, 178, 181 241-43, 373-74, 411, 644, 699-725, 727-30, 1002-04, 1089, 1144, 1183, 1212, 1332, 1844; see also Glor Decl. Ex. 105, at 6-9. The majority of se documents are medical reports and LINA's internal notes regarding Ayers' LTD claim; these reports are generally vorable to Ayers and reflect that cognitive difficulties prevent him from working as an attorney. 84, 113-27, 411, 644. 173, 178, 181-82, Accordingly, 192, these 233-34, portions of 238, the 241-43, record his AR 373-74, do not evidence bad intent; rather, they reflect a typical claim analysis and, as such, are largely benign. Ayers does, however, cite to evidence which indicates that LINA may have misrepresented his physical capabilities or falsified Page 45 - OPINION AND ORDER his psychological record. AR 224-25, 1183, 1212. For example, the internal notes that directly preceded LINA's termination of Ayers' benef s do not reflect his deficiency in sitting, which, discussed above, precludes his employment as an attorney. 1212. and AR 1183, There is also evidence that the reports from Ayers' 2005 FCE PAA and 2007 FCE physically capable. lOS, as at (Ms. 6-9 were changed AR 701-02, Rohlf, to 727 30; who rmed ma Ayers appear more see also Glor Decl. Ex. the 2007 PAA and FCE, testified that her employer changed her remarks, such that Ayers' reports reflected fewer physical limitations). In addition, shortly after Ayers applied r LTD benefits, LINA made an internal notation indicating that Ayers was suicidal. AR 224-35. 1351. ct Ayers informed LINA that this statement was Regardless, LINA never removed t that there is no evidence suicidal at any point. In ct, in lse. AR s notation, despite the the record that Ayers was LINA repeatedly stated in its internal notes that Ayers had a "history of depression w/suicidal ideations." These AR 1001 04, 1089, 1144, 1183, 1212, 1332, 1844. documents are circumstantial evidence that LINA falsified, concealed, or changed medical records on which it relied to terminate Ayers' LTD benefits under the MIL. raised the inference t LINA was acting in bad As such, Ayers has ith, especi ly since LINA knew that it could not "verify 100 percent" whether Ayers' disability was cau by CFS and, accordingly, would have to pay benefits indefinitely. There is no direct evidence, however, that LINA cau or directed these omissions. Page 46 - OPINION AND ORDER As such, whether LINA terminated Ayers' bene s in intent and the parties' credibility. bad faith hinges on LINA's Thus, it is inappropriate for this Court to resolve the overpayment claim at this stage in the proceedings. Reeves v. Sanderson Plumbing Prods. Inc., 530 U.S. 133, 150 (court may not make "[c]redibility determinations or weigh the evidence" on summary judgment). Therefore, because a genuine issue material fact exists as to whether LINA made fraudulent statements and commissioned medical reports to ilitate termination of Ayers' se LTD benefits under the MIL, the parties' cross-motions for summary judgment are denied. CONCLUSION LINA's DENIED. (doc. motions for summary judgment (docs. 131, 134) Ayers' motion for summary judgment on the benefits c 127) is GRANTED; his motions are im summary judgment on the overpayment claim (doc. 128) and for "unclean hands" (doc. 166) are DENIED. Accordingly, the parties' requests DENIED as unnecessary. r oral argument are Finally, the parties are directed to file a status report with this Court within three weeks of the filing date of this opinion. IT IS SO ORDERED. Dated this ~ of April 2012. Ann Aiken United States Distr Page 47 - OPINION AND ORDER Judge
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