Darland v. Fortis Benefits Ins. Co.

• Decision Date: 22 January 2003
• Docket Number: No. 01-5387.,01-5387.
• Citation: 317 F.3d 516
• Parties: Carollton B. DARLAND, Plaintiff-Appellant, v. FORTIS BENEFITS INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

317 F.3d 516

Carollton B. DARLAND, Plaintiff-Appellant, v. FORTIS BENEFITS INSURANCE COMPANY, Defendant-Appellee.

No. 01-5387.

United States Court of Appeals, Sixth Circuit.

Argued: July 31, 2002.

Decided and Filed: January 22, 2003.

Lee E. Sitlinger (argued and briefed), Sitlinger, McGlincy, Steiner, Theiler & Karem, Louisville, KY, for Plaintiff-Appellant.

Patrick W. Michael (briefed), Angela Logan Edwards (argued and briefed), Woodward, Hobson & Fulton, Louisville, KY, for Defendant-Appellee.

Before SILER, COLE, and CLAY, Circuit Judges.

CLAY, J., delivered the opinion of the court, in which COLE, J., joined. SILER, J. (p. 534), delivered a separate concurring opinion.

OPINION

CLAY, Circuit Judge.

Plaintiff, Carollton B. Darland ("Darland"), appeals from the district court's judgment granting Defendant, Fortis Benefits Insurance Company's ("Fortis"), motion for affirmation of its decision denying continued long term-disability ("LTD") benefits for Darland; granting summary judgment on Fortis' counterclaim against Darland for reimbursement of an overpayment of LTD benefits; and denying Darland's motion for summary judgment seeking to recover LTD benefits and dismissing his claim under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. Specifically, the district court concluded that Fortis did not abuse its discretion in determining that Darland's LTD benefits under its policy were limited to a period of twenty-four months, finding that Darland's disabling condition did not prevent him from performing all the material duties of his job so as to qualify for continued LTD benefits. For the reasons set forth below, we AFFIRM the district court's order granting Fortis' counterclaim for reimbursement, REVERSE that portion of the district court's order affirming Fortis' denial of continued LTD benefits to Darland and denying summary judgment to Darland for the same, and REMAND this case to the district court for further proceedings consistent with this opinion.

BACKGROUND

A. Procedural History

This action arises from Darland's claim that he was entitled to recover continued LTD benefits, pursuant to an employee welfare benefit plan, maintained by his employer, Market Finders Insurance Corporation ("Market Finders"). While employed by Market Finders, Darland elected to participate in its employee welfare benefit plan, which is governed by ERISA, and the LTD policy available as part of the plan. Fortis, as the plan administrator/disability insurance carrier for Market Finders, provides the plan's LTD benefits.¹ Darland claims that he is totally and permanently disabled due to degenerative disc disease and osteoarthritis in his back. From October 17, 1996 through August 16, 1998, Fortis paid Darland monthly disability benefits. However, the LTD policy contained a "Special Conditions" provision limiting the payment of LTD benefits to a maximum period of twenty-four months for certain disabling conditions. While Fortis eventually conceded that Darland was exempt from the Special Conditions provision of the policy because his disabling condition resulted from arthritis, it denied Darland's claim for continued disability benefits on the ground that he failed to satisfy the "Occupation Test" as defined in the policy because his disability did not prevent him from performing the "material duties of his regular occupation." Consequently, Darland filed a complaint in Jefferson Circuit Court in Kentucky on June 10, 1999, including a claim for benefits under ERISA. Fortis timely removed the action to federal court. After the parties exchanged initial disclosures, Fortis filed its motion for affirmation and for summary judgment. Darland countered with his own motion for summary judgment. On March 13, 2001, the district court entered a memorandum opinion and order granting Fortis' motion for affirmation and summary judgment and denying Darland's cross-motion for summary judgment. On the same date, the district court entered a judgment in favor of Fortis, dismissing Darland's case with prejudice and assessing costs against him. From this judgment, Darland filed a timely appeal on June 10, 1999. Thereafter, in an order of clarification issued on July 27, 2001, the district court stated that its March 13, 2001 memorandum opinion and order also granted summary judgment in favor of Fortis on its counterclaim for reimbursement of an overpayment of insurance benefits and that the total award on its counterclaim is $14,306.22.

B. Substantive History

Darland, an employee of Market Finders since 1979, was an executive vice-president of the company at the time of his disability. The job description for Darland states as follows:

Responsibilities for this position include the following:

Overseeing all activities of the transportation department, the aviation department, the claims department, all underwriting departments, and the branch offices located in Dayton, Ohio; Pittsburgh, Pa; Greenville, S.C., Houston, Tx; and St. Petersburg, Fl. This encompasses developing and monitoring markets and business that relate to insuring the success and profitability of all divisions and departments.

Selection and training of staff to fill various duties within the transportation division, claims department, policy typing department and all branch operations.

Develop objectives, plan and execute incentives; conduct monthly meetings with the different departments, and travel to branch offices for same.

Supervise and direct growth and expansion of transportation division.

Advise, review and regulate all claims business.

Convey corporate policy to all departments and branch offices.

Attend and participate in industry related meetings and conventions. This involves substantial travel, both by auto and air. Meetings, seminars and conventions involve long hours of standing, and attending continuous individual appointments during annual conventions.

Track losses and loss development to properly assess underwriting guidelines. Construct lengthy report charts and figures.

Considerable telephone contact with industry and agency personnel. This requires many hours of remaining seated.

As Executive Vice-President of an ever-growing company, the responsibilities increase daily. This job also requires knowledge of labor laws, conducting performance interviews, and maintaining a rigorous schedule on a daily basis.

(J.A. at 526 (emphasis added).)

Darland complained of chronic back problems for many years. On February 15, 1996, he was treated by Dr. Raymond Shea, an orthopedic surgeon in Louisville, Kentucky. Since then, Darland has continued under Dr. Shea's care. On his initial visit, Dr. Shea obtained X-rays, which revealed degenerative disc disease in Darland's low back at levels "L5/S1 and at L3-4 and L4-5." (J.A. at 700.) Upon Dr. Shea's advice, Darland underwent epidural injections by Dr. Elmer Dunbar at Columbia Audubon Hospital in Louisville, Kentucky on February 21, 1996, February 29, 1996 and March 7, 1996. During this time, Darland was unable to work for approximately one month, although he attempted to return to work, despite Dr. Shea's observation that his prognosis was poor.

Darland continued to be seen by Dr. Shea on March 18, 1996, April 15, 1996 and July 17, 1996, and was referred to a neurological surgeon, Dr. John Guarnaschelli of Louisville Imaging Services, for a second opinion. After obtaining a Magnetic Resonance Imaging ("MRI") of Darland's lumbar spine, Dr. David A. Petruska of Louisville Imaging Services met with him on August 9, 1996 to report that based upon the results of his MRI scan, there was "evidence of multilevel lumbar degenerative disc disease," thus confirming Dr. Shea's diagnosis regarding Darland's low back problems. (J.A. at 127.)

After July 15, 1996, Darland was not able to return to work at Market Finders because of his continued low back problems. Following Dr. Shea's recommendation, Darland applied for LTD benefits on September 18, 1996, claiming that he was disabled due to degenerative disc disease. In support of Darland's claim, Dr. Shea completed and submitted to Fortis an Attending Physician's Statement. According to Dr. Shea's records, Darland's back problem extended throughout his spine and caused him severe pain, stiffness and limited movement of his neck and back. Darland also suffered from dizziness and drowsiness from taking many powerful medications. Thus, according to Dr. Shea, Darland could not perform in his position as an executive vice-president due to his physical limitations and to his inability to think and concentrate as a result of the physical pain and the effect of his medications.

From October 17, 1996 through August 16, 1998, Fortis, as the disability insurance carrier for Market Finders, paid Darland monthly disability benefits in the amount of $3,473.00. While Fortis was paying the monthly LTD benefits to Darland, it also continued to gather information about Darland to assess his medical condition and his eligibility for continued LTD benefits based upon the policy. At Fortis' request, Darland appeared for an independent medical evaluation performed by Dr. Ellen Ballard of Rehabilitation Associates, P.S.C. of Louisville, Kentucky in February of 1997. In her evaluation, Dr. Ballard states in part:

At the present time, I feel that the patient has had appropriate treatment to date and I do feel that Mr. Darland's current condition is one that would be aggravated by prolonged sitting and standing. I do think that it is somewhat unusual that Mr. Darland has the amount of difficulty he does given that he is an executive and people with similar conditions often do not have difficulty continuing to be employed....

I feel that it is possible that he might benefit from a pain program, but it is obvious from some of his questions that there is a possible issue of motivation in terms of his return to work. He has not been maintaining...