Rowan v. Unum Life Ins. Co. of America

• Decision Date: 16 July 1997
• Docket Number: No. 96-5918,96-5918
• Citation: 119 F.3d 433
• Parties: Marcy M. ROWAN, Plaintiff-Appellee, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 433

119 F.3d 433

Marcy M. ROWAN, Plaintiff-Appellee, v. UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant-Appellant.

No. 96-5918.

United States Court of Appeals, Sixth Circuit.

Argued April 21, 1997.

Decided July 16, 1997.

John D. Schwalb (argued and briefed), Brewer, Krause, Brooks & Mills, Nashville, TN, for Plaintiff-Appellee.

W. Kyle Carpenter (argued), Tony R. Dalton (briefed), Woolf, McClane, Bright, Allen & Carpenter, Knoxville, TN, for Defendant-Appellant.

Before: MERRITT, RYAN, and HILL, ^* Circuit Judges.

MERRITT, J., delivered the opinion of the court, in which RYAN, J., joined. HILL, J. (p. 438), delivered a separate concurring opinion.

OPINION

MERRITT, Circuit Judge.

The plaintiff in this ERISA action challenges the discontinuation of her long-term disability insurance benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). The district court granted summary judgment for the plaintiff. We find, however, that there are disputed issues of material fact regarding whether or not the plaintiff meets the policy's definition of disability and whether she was under the regular attendance of a physician, as required to receive benefits under the group insurance policy. Therefore, we REVERSE and REMAND for further proceedings.

I. FACTS

Plaintiff Marcy Rowan was injured in an automobile accident in July 1991. Prior to and for a few months after the accident, the plaintiff was an executive vice president for FISI-Madison International. The plaintiff's work consisted primarily of traveling and conducting seminars throughout the United States. She stopped working in October 1991 due to severe back and leg pain. In February 1992 she was diagnosed with lumbar disc herniation and underwent back surgery. She submitted a disability insurance claim to the defendant, from whom her employer had purchased a group long-term disability insurance policy. The defendant approved the claim and paid long-term disability benefits until April 1995. The defendant terminated benefits at that point, based on its conclusions that the plaintiff was no longer disabled and that she was not under the regular attendance of a physician because she had not been treated by a physician in over eleven months.

The benefits section of the disability insurance policy provides:

When the Company receives proof that an insured is disabled due to sickness or injury and requires the regular attendance of a physician, the Company will pay the insured a monthly benefit.... The benefit will be paid for the period of disability if the insured gives to the Company proof of continued:

1. disability; and

2. regular attendance of a physician.

The proof must be given upon request and at the insured's expense.

A later subsection of the benefits section titled "TERMINATION OF DISABILITY BENEFITS" provides:

Disability benefits will cease on the earliest of:

1. the date the insured is no longer disabled;

2. the date the insured dies;

3. the end of the maximum benefit period;

4. the date the insured's current earnings exceed 80% of his indexed pre-disability earnings.

The policy defines "disabled" as follows:

"Disability" and "disabled" mean that because of injury or sickness:

1. the insured cannot perform each of the material duties of his regular occupation; or

2. the insured, while unable to perform all of the material duties of his regular occupation on a full-time basis, is:

a. performing at least one of the material duties of his regular occupation or another occupation on a part-time or full-time basis; and

b. earning currently at least 20% less per month than his indexed pre-disability earnings due to that same injury or sickness.

According to a job analysis form that the plaintiff's former employer completed, the plaintiff's job required five hours per week preparing speeches, seventeen and one half hours of on-site preparation, ten hours of travel, seven and one half hours coordinating efforts with other company representatives, and ten hours speaking at conferences, training meetings and conventions. According to the employer, in an eight-hour work day, the plaintiff's job required her to sit two to five hours, stand two to six hours continuously, walk two to three hours with breaks, and lift and carry luggage and materials two to three hours with breaks. The employer reported that in an eight-hour workday, the plaintiff would lift or carry up to twenty pounds up to thirty-three per cent of the time, but would not lift or carry more than twenty pounds. The plaintiff, however, has submitted an affidavit stating that her job required her to travel for periods of a week at a time. As a result she stated that she was required to carry a suitcase that routinely weighed between thirty and fifty pounds, a garment bag that routinely weighed between thirty and forty pounds, and seminar materials weighing forty pounds or more.

In April 1992, the plaintiff's physician, Dr. Howell, completed a physical capacities evaluation form indicating that the plaintiff could sit for up to two hours, stand for up to one hour, walk for up to two hours, and lift up to ten pounds. In an independent medical examination conducted at the defendant's request in August 1993, Dr. Lamb concluded that the plaintiff would have "significant restrictions" in her ability to bend, squat, twist, or lift more than twenty-five pounds and would be unable to perform the tasks that the plaintiff described as being encompassed within her former job duties.

In January 1995, a physician employed by the defendant conducted a review of the plaintiff's file and concluded that she should be able to return to her former work, since Dr. Lamb reported that the plaintiff could lift up to twenty-five pounds and the plaintiff's employer reported that her job did not require lifting more than twenty pounds. In March 1995, the defendant requested updated medical records from the plaintiff. The plaintiff responded that she was not seeing any physician because she was trying to remain treatment-free for one year in order to qualify for health insurance without a pre-existing back condition. The plaintiff's last visit with her treating physician had been in March 1994. At that time, her physician indicated that she was to be seen again in three months.

The defendant conducted surveillance of the plaintiff in March and April 1995 and videotaped her engaging in various activities including walking her dog, sitting at the beach, driving, bending deeply from the waist, and lifting and carrying various small objects. In April 1995, the defendant terminated the plaintiff's disability benefits on the basis of her current activity level and the fact that she had not seen her doctor in over eleven months.

The district court granted summary judgment to the plaintiff, finding that all of the medical evidence indicated that the plaintiff could not lift more than twenty-five pounds and that an average suitcase weighs more than that. The district court dealt with the defendant's claim that the plaintiff had not been under the regular attendance of a physician in summary fashion, stating only that "the policy's definition of disability does not require a specific regimen of doctor's care."

II. ANALYSIS

A. Standard of Review of ERISA Plan Administrators' Factual Determinations

In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that plan administrators' interpretations of plan terms are subject to de novo review unless a plan gives the administrator discretionary authority to interpret the plan terms. The defendant concedes that the plan at issue does not confer discretionary authority on the plan administrator with respect to either interpretation of plan terms or factual findings. Relying on the Fifth Circuit's opinion in Pierre v. Connecticut General Life Insurance Co., 932 F.2d 1552 (5th Cir.1991), however, the defendant argues that Firestone does not explicitly apply to a plan administrator's factual determinations and that such determinations should be reviewed under an abuse of discretion standard.

Several other circuits, as well as an earlier panel of this Circuit, have rejected the defendant's argument and concluded that factual determinations by plan administrators are subject to de novo review. See Perez v. Aetna Life Insurance Co., 96 F.3d 813 (6th Cir.1996), vacated for rehearing en banc, 106 F.3d 146 (6th Cir.1997); Ramsey v. Hercules Inc., 77 F.3d 199 (7th Cir.1996); Luby v. Teamsters Health, Welfare, and Pension Trust Funds, 944 F.2d 1176 (3d Cir.1991); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d 1210 (4th Cir.1990). Although the Sixth Circuit has vacated the Perez opinion and granted en banc review of that case on a different ERISA issue, we find the Perez court's analysis of this issue to be compelling. We thus join every other circuit that has considered this issue in rejecting Pierre. We hold that factual determinations of plan administrators in actions brought under 29 U.S.C. § 1132(a)(1)(B) are subject to de novo review.

In Bruch, the Supreme Court expressly limited its discussion to the issue of "the appropriate standard of review in [29 U.S.C.] § 1132(a)(1)(B) actions challenging denials of benefits based on plan interpretations." Bruch, 489 U.S. at 108, 109 S.Ct. at 953 (emphasis added). Thus, the Court, arguably, left open the question of the appropriate standard of review of factual determinations by plan administrators. But see Luby, 944 F.2d at 1183 (finding that the Supreme Court's limitation of its holding was intended only to distinguish actions pursuant to § 1132(a)(1)(B) from actions brought under other sections of ERISA). In Pierre, the Fifth Circuit correctly looked to principles of trust law to answer this question, see Bruch, 489 U.S. at 111, 109 S.Ct. at 954-55, but applied those principles incorrectly.

The Pierre court based its holding primarily on sections 186(b) and 187 of the...