Rekstad v. U.S. Bancorp, 05-1146.

• Decision Date: 21 June 2006
• Docket Number: No. 05-1146.,05-1146.
• Citation: 451 F.3d 1114
• Parties: Denise REKSTAD, Plaintiff-Appellee, v. U.S. BANCORP, formerly doing business as First Bank System, Inc., a Delaware corporation, and U.S. Bank Long Term Disability Plan, formerly known as First Bank System Long Term Disability Plan (Plan #509), Defendants-Appellants, and FBS Mortgage Corporation, a Nevada corporation doing business as Colorado National Mortgage Corporation; Knutson Mortgage Corporation, a Delaware Corporation, Defendants.
• Court: U.S. Court of Appeals — Tenth Circuit

451 F.3d 1114

Denise REKSTAD, Plaintiff-Appellee, v. U.S. BANCORP, formerly doing business as First Bank System, Inc., a Delaware corporation, and U.S. Bank Long Term Disability Plan, formerly known as First Bank System Long Term Disability Plan (Plan #509), Defendants-Appellants, and FBS Mortgage Corporation, a Nevada corporation doing business as Colorado National Mortgage Corporation; Knutson Mortgage Corporation, a Delaware Corporation, Defendants.

No. 05-1146.

United States Court of Appeals, Tenth Circuit.

June 21, 2006.

COPYRIGHT MATERIAL OMITTED

Carmen S. Danielson (and Peter C. Dietze, on the brief), Dietze and Davis, P.C., Boulder, CO, for Plaintiff-Appellee.

Steven J. Merker, (Van Aaron Hughes and Jason L. Johnson, with him on the briefs), Dorsey & Whitney, L.L.P., Denver, CO, for Defendants-Appellants U.S. Bancorp and U.S. Bank Long Term Disability Plan.

Before KELLY, SEYMOUR, and HARTZ, Circuit Judges.

KELLY, Circuit Judge.

Defendant-Appellants U.S. Bancorp and U.S. Bank Long Term Disability Plan, (the "Plan"), successors in interest to First Bank Systems, Inc. and First Bank Systems Long-Term Disability Plan, respectively, appeal from the district court's grant of summary judgment in favor of Plaintiff-Appellee Denise Rekstad on her claim for disability benefits under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. Our jurisdiction arises under 28 U.S.C. § 1291, and we reverse and remand.

Background

Ms. Rekstad worked for U.S. Bancorp¹ as a loan originator and took part in the Plan, which it administered and insured. After an ankle injury in November 1993, she could not work for a period of time and therefore received short-term and eventually long-term disability benefits pursuant to the Plan. In April 1995, Ms. Rekstad's physician, Dale Kaiser, M.D., determined that Ms. Rekstad's ankle had healed sufficiently so that she could return to work. He in turn informed ITT Hartford ("ITT")— U.S. Bancorp's agent with respect to the administration, management and payment of the benefits described in the Plan — that she was medically cleared.

In June 1995, U.S. Bancorp offered Ms. Rekstad her previous position of employment. In response, she informed U.S. Bancorp that, on June 9, 1995, she was involved in an automobile accident. She explained that injuries she suffered therefrom rendered her totally disabled and that she needed to continue her long-term disability benefits under the Plan. Ms. Rekstad continued to receive long-term disability benefits until February 1996 when ITT sent her a letter explaining that she no longer met the Plan's definition of "total disability." Aplt.App. at 1331. Ms. Rekstad administratively appealed that decision and was again denied further benefits.

In April 1996, U.S. Bancorp sold its Colorado mortgage offices to Knutson Mortgage ("Knutson"). In May 1996, after Ms. Rekstad exhausted her administrative appeals, U.S. Bancorp terminated her employment because she did not return to work. U.S. Bancorp did advise her, however, that Knutson had agreed to offer continued employment to all U.S. Bancorp loan originators and that she should therefore immediately contact Knutson. Ms. Rekstad contacted Knutson and represented that she desired to commence her employment as soon as possible as a loan originator, presenting herself as ready and willing to work. Knutson refused to hire her in any capacity.

Ms. Rekstad's post-accident medical condition has been extensively evaluated and treated. She has undergone several neuropsychological evaluations, and she continues to see a physician regarding her physical condition — namely in regards to chronic pain she allegedly continues to suffer as a result of the accident.

In June 1996, Dr. Thomas Bennett, Ph. D., a psychologist under whose care Ms. Rekstad was receiving neuropsychological treatment, released Ms. Rekstad for part-time work. This was the first time she had ever been released to do any type of work since her automobile accident. In a report documenting the release, Dr. Bennett explained that Ms. Rekstad would have residual deficits with fatigue, problems with memory and attention/concentration, and confusion with financial aspects.

Ms. Rekstad subsequently sought and obtained employment three different times. Beginning in August 1996, she worked as a full-time straight-commissioned loan originator with the Norwest Corporation ("Norwest"). Ms. Rekstad was terminated by Norwest in February 1997, but soon thereafter, she began working for Cherry Creek Mortgage ("Cherry Creek"). She was terminated from that position in May 1997 but was again quickly employed by Chase Manhattan Mortgage ("Chase"). While working at Chase from May 1997 to July 1998, Ms. Rekstad earned $58,395.79. During this period, she also enrolled in Regis University's masters of non-profit management program.

In July 1998, Ms. Rekstad took a leave of absence from Chase. Her supervisor at Chase informed her that her performance was unsatisfactory but that Chase proposed placing her on disability instead of terminating her. Ms. Rekstad was approved for and received short-term and then long-term disability benefits through Chase's long-term disability carrier, Liberty Mutual. Liberty Mutual has been issuing disability benefits to Ms. Rekstad since January 12, 1999, based on a disability date of July 16, 1998.

On January 20, 2000, Ms. Rekstad filed a claim for social security benefits, alleging that she became disabled on July 20, 1998. Though she claimed she became disabled as of that date, she explained that her disability was the result of her June 9, 1995 automobile accident. On June 29, 2001, the Social Security Administration ("SSA") found her disabled. The Administrative Law Judge ("ALJ") determined that she is unable to perform any work on a sustained basis, including sedentary unskilled work. See Aplt.App. at 1758. The ALJ also concluded that Ms. Rekstad has not engaged in substantial gainful activity since July 10, 1998, and that she has been under a disability since July 10, 1998.² See id.

Ms. Rekstad filed the current civil action on June 24, 1997, seeking, inter alia, a judicial review of U.S. Bancorp's denial of disability benefits under ERISA. On March 10, 1999, the district court concluded that U.S. Bancorp's denial of Ms. Rekstad's benefits was arbitrary and capricious.³ The district court then remanded to U.S. Bancorp the issue of Ms. Rekstad's eligibility for disability benefits after January 31, 1996. U.S. Bancorp appealed from the remand order, but this court found that it was not an appealable final decision. See Rekstad v. First Bank Sys., Inc., 238 F.3d 1259, 1261-62 (10th Cir.2001). As such, pursuant to the remand order, U.S. Bancorp was required to ascertain Ms. Rekstad's eligibility for long-term disability benefits after January 31, 1996.

In accordance with the remand order, Ms. Rekstad served her claim for long-term disability benefits on U.S. Bancorp. In it, she made available her post-accident employment information and all of her medical records — including those of her treating physicians whom concluded Ms. Rekstad was totally disabled due to her physical and cognitive impairments. Upon receipt, U.S. Bancorp charged a benefit claim subcommittee (the "Committee") with the responsibility of dealing with Ms. Rekstad's claim. In turn, the Committee asked ITT to analyze whether Ms. Rekstad ceased to be disabled at any time on or after January 31, 1996 for "any occupation."

ITT utilized the Medical Advisory Group ("MAG")⁴ to review and analyze the medical findings associated with Ms. Rekstad's claims. ITT asked Todd Lyon, M.D., a practicing physician and member of MAG, to determine whether Ms. Rekstad had the capacity to work after January 31, 1996. Martin Zelman, M.D., a psychiatrist and another member of MAG, was asked by ITT to review Ms. Rekstad's medical file regarding her neuropsychological condition to determine if she was capable of working. Neither physician treated or examined Ms. Rekstad, but based on their review of her medical records determined, in essence, that the medical evidence submitted by Ms. Rekstad in support of her disability was mostly subjective and inconsistent with the objective medical findings and that such objective medical findings do not support limitations that would preclude her from performing her job or any job due to a physical or cognitive impairment.

In July 2001, ITT submitted a report to the Committee concluding that Ms. Rekstad was not disabled beyond January 31, 1996. ITT stated that this conclusion was based upon (1) Ms. Rekstad's employment history with Norwest, Cherry Creek, and Chase; (2) her representations that she was not disabled; (3) her attendance at educational courses while working at Chase; (4) the SSA's decision that Ms. Rekstad was disabled as of July 20, 1998; and (5) the conclusions of Drs. Lyon and Zelman. See Aplt.App. at 1425.

On August 2, 2001, the Committee met to review ITT's determination that Ms. Rekstad's claim should be denied. Based on this review, the Committee asked ITT to clarify a couple issues, which it did to the Committee's satisfaction. On August 15, 2001, U.S. Bancorp denied Ms. Rekstad's long-term disability benefits claim.

On October 15, 2001, Ms. Rekstad administratively appealed U.S. Bancorp's decision. In so doing, she supplied further documentation to U.S. Bancorp, including additional medical records from her treating physicians and affidavits from herself her husband, and her sister regarding her post-accident employment. The Committee sent the additional information submitted by Ms. Rekstad to ITT for its review. ITT in turn requested that Dr. Lyon review this information as well. Dr. Lyon submitted four addenda to his initial report after reviewing the additional information provided by Ms. Rekstad. In each, he concluded by explaining that despite the new information, he found that his...