Shaw v. Life Ins. Co. of N. Am.

• Decision Date: 04 November 2015
• Docket Number: CASE NO. CV 14-07955 MMM (FFMx)
• Parties: Stephanie Shaw, Plaintiff, v. Life Insurance Company of North America, a Pennsylvania corporation; and Does 1 through 10, inclusive Defendant.
• Court: U.S. District Court — Central District of California

144 F.Supp.3d 1114

Stephanie Shaw, Plaintiff,

v.Life Insurance Company of North America, a Pennsylvania corporation; and Does 1 through 10, inclusive Defendant.

CASE NO. CV 14-07955 MMM (FFMx)

United States District Court, C.D. California.

Signed November 4, 2015

Iris F. Chou, Robert J. McKennon, Scott E. Calvert, McKennon Law Group PC, Newport Beach, CA, for Plaintiff.

Daniel W. Maguire, Burke Williams and Sorensen LLP, Los Angeles, CA, for Defendant.

FINDING OF FACT AND CONCLUSIONS OF LAW

MARGARET M. MORROW

, UNITED STATES DISTRICT JUDGE

Plaintiff Stephanie Shaw filed this action on October 14, 2014, against Life Insurance Company of North America (“LINA”).¹ Shaw alleges that she was denied long-term disability benefits to which she was entitled under a disability benefit plan (the “Plan”) established by her former employer, Colony Advisors, LLC (“Colony Advisors”). After reviewing the administrative record and considering the parties' trial briefs, the court makes the following findings of fact and conclusions of law.

I. FINDINGS OF FACT

A. The Plan

1. The Plan is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.

(“ERISA”), because it is an employee benefit plan funded by Shaw's employer.²

2. Colony Advisors, LLC and U.S. Affiliates are the Plan Administrators.³

3. Under the Plan, an employee is considered disabled and entitled to payments if, “solely because of Injury or Sickness, he or she is (1) unable to perform the material duties of his or her Regular Occupation; and (2) unable to earn 80% or more of his or her indexed earnings from working in his or her Regular Occupation.”⁴ An employee's “Regular Occupation” is “[t]he occupation the Employee routinely performs at the time the Disability begins. In evaluating the Disability, the Insurance Company will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. It is not work tasks that are performed for a specific employer or at a specific location.”

4. The Plan also provides that, “[a]fter Disability benefits have been payable for 24 months, the Employee is considered Disabled if, solely due to Injury or Sickness, he or she is: (1) unable to perform the material duties of any occupation for which he or she is, or may reasonably become, qualified based on education, training or experience; and (2) unable to earn 60% or more of his or her Indexed Earnings.”⁵

5. In order to receive benefits, the employee must “provid[e] any information or documents needed to determine whether benefits are payable.”⁶

6. The Plan contains a mental illness limitation, under which LINA will pay a maximum of 24 months of benefits due to disability caused by: “(1) Anxiety disorders; (2) Delusional (paranoid) disorders; (3) Depressive disorders

; (4) Eating disorders; (5) Mental illness; [or] (6) Somatoform disorders (psychosomatic illness ).”⁷

7. The benefits that are payable to Class 2 employees until age 65 equal “[t]he lesser of 60% of an Employee's monthly Covered Earnings rounded to the nearest dollar or the Maximum Disability Benefit.”⁸ Monthly disability benefits are calculated by deducting “Other Income Benefits” from “Gross Disability Benefits.”⁹ “Other Income Benefits” include “any amounts paid because of loss of earnings or earning capacity through settlement, judgment, arbitration or otherwise, where a third party may be liable, regardless of whether liability is determined.”¹⁰

B. Shaw's Employment

8. Shaw was employed as a legal assistant.¹¹ Her responsibilities included “managing various company databases, tracking legal documents, and supporting the legal department in all capacities.”¹² Skills and attributes required for success as a legal assistant include critical thinking; the ability to exercise good judgment in identifying problems, discrepancies and concerns; the ability to prioritize and multi-task to meet deadlines in an atmosphere with frequent interruptions; and high attention to detail.¹³

C. Onset of Shaw's Mental Illness

9. Shaw's disability claim is based on symptoms of mental illness that began or worsened after she was sexually assaulted by a supervisor at work.¹⁴ The situation was aggravated when she reported the incident to her employer's human resources department, and some co-workers ridiculed her about the assault.¹⁵

10. Shaw stopped working as a legal assistant at Colony Advisors on or about April 11, 2012.¹⁶

D. Shaw's Medical Treatment

11. Shaw was treated by Dr. Maurice Levy, an internal medicine and family practice physician, from June 5, 2011 to October 1, 2013. On April 24, 2012, he placed Shaw on Total Temporary Disability (“TTD”) from April 30 to June 4, 2012.¹⁷ Thereafter, he repeatedly extended her disability status.¹⁸ His notes indicate that as a result of the incident at work, Shaw suffered severe anxiety, depression, sleeping problems, tachycardia

, and headaches.¹⁹ On July 13, 2012, Dr. Levy observed that Shaw could not be placed in stressful situations.²⁰

12. Shaw was treated by Karen Bryan, a therapist, twenty-six times between April 12 and August 2, 2012.²¹ Bryan advised LINA that she had diagnosed Shaw with depression, and referred her to Dr. Gartin for eye movement desensitization and reprocessing therapy (“EMDR”) to treat PTSD and depression.²² Ultimately, Shaw discontinued therapy with Bryan because therapy seemed to be too traumatizing at the time.²³ She did not authorize Bryan to release her records to LINA.²⁴

13. Shaw was treated by Dr. Lana Milton, a psychiatrist, from May 2012 to January 2013.²⁵ In their nearly monthly sessions, Dr. Milton observed that Shaw was emotional, tearful, depressed, anxious, and irritable.²⁶ She reported GAF scores ranging from 45-58,²⁷ with the lowest GAF of 45 on Shaw's first, May 16, 2012, visit.²⁸

14. Shaw continued her psychiatric treatment with psychiatrist Khristine Eroshevich, whom she saw from August 5 to September 30, 2013, and again on December 16, 2013.²⁹ Dr. Eroshevich noted severe anxiety, lack of sleep, headaches, and paranoia.³⁰ She also noted that Shaw began to refuse psychiatric medication in August and September 2013, and instead requested referrals to alternative and holistic treatments, including EMDR therapy, acupuncture

, and massage therapy.³¹ Dr. Eroshevich consistently opined that Shaw exhibited a depressed and anxious affect and thought process, but otherwise demonstrated normal levels of intellectual processing and other manifestations of normal functioning.³²

15. Shaw began treatment with Dr. Sandy Gartin, an EDMR therapist, in May 2012, but did not provide LINA with clinical records to review.³³

E. Shaw's Disability Applications

16. On April 11, 2012, Shaw applied for California State Disability Insurance (“CADSI”) benefits.³⁴ In her application, Shaw stated that she was unable to walk or concentrate.³⁵ Dr. Levy provided a certification stating that Shaw was unable to work, but provided no details regarding the tasks she was or was not able to perform.³⁶ His request for continued benefits on January 16, 2013, stated that Shaw was emotionally unable to engage in social relationships or to concentrate on work.³⁷ Based on Dr. Levy's certification and independent examinations by psychiatrist Dr. Davud O. Bedrub, internist Dr. Rocely Q. Ella-Tamayo, and psychiatrist Dr. Norma R. Aguilar, Shaw was approved for CADSI benefits from April 2012 to April 2013.³⁸

Shaw did not submit any of Drs. Bedrub's, Ella-Tamayo's or Aguilar's records to LINA.

17. On December 4, 2013, the Social Security Administration (“SSA”) found that Shaw did not qualify for benefits because she was not disabled under SSA regulations.³⁹

18. In August 2013, Shaw submitted a claim for long term disability benefits to LINA.⁴⁰ On her claim form, she asserted that she was unable to perform the duties of her occupation due to PTSD, anxiety, shortness of breath, and depression.⁴¹

F. LINA's Initial Review

19. On October 10 and 29, 2013, Behavior Health Specialist Cynthia Doyle reviewed Shaw's medical records and concluded that the “clinical information, frequency, intensity and modalities of treatment are inconsistent with a severe mental illness causing a global functional mental impairment

.”⁴² She based this conclusion on the fact that Dr. Levy did not “document the frequency, intensity and duration of specific symptoms of depression and panic which are indicators of the severity of the mental conditions.”⁴³ Doyle also relied on the fact that Dr. Levy did not “identif[y] specific psychological or cognitive impairments” or “measure[d] deficits in cognitive functioning” as evidence that Shaw was incapable of working.⁴⁴

20. Dr. Carol Flippen, M.D., who is board certified in adult and forensic psychiatry, reviewed Shaw's claim on October 21 and 30, 2013. She noted that Dr. Milton's records did not document the frequency, intensity, and duration of specific symptoms of PTSD, anxiety, or depression.⁴⁵ She also noted that there were no diagnoses of functional mental impairment

, nor any documented referral to acute and intensive treatment “consistent with management of severe symptoms of mental illness significantly affecting global functioning.”⁴⁶

21. Dr. Flippen similarly found that Dr. Eroshevic's records did not support the existence of cognitive defects or “document symptoms of illness to a severity requiring referral [to] ... [an intensive outpatient program], [partial hospitalization], or psychiatric hospitalization.”⁴⁷ Dr. Flippen ultimately opined that Dr. Eroshevic's records did not reflect that Shaw was suffering “severe symptoms of mental illness causing global functional mental impairments

.”⁴⁸

22. As for Dr. Levy's records, Dr. Flippen noted that they were brief, contained minimal clinical information, provided no measured clinical assessment of cognitive functioning, and did not document the frequency, intensity or duration of Shaw's symptoms of anxiety or depression.⁴⁹

23. Relying on Doyle's and Dr. Flippen's...