Tippitt v. Reliance Standard Life Ins. Co., No. 05-14005.

• Decision Date: 31 July 2006
• Docket Number: No. 05-14005.
• Citation: 457 F.3d 1227
• Parties: Gregory L. TIPPITT, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY, Munich American Reassurance Company Group Long Term Disability Insurance Plan, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

457 F.3d 1227

Gregory L. TIPPITT, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY, Munich American Reassurance Company Group Long Term Disability Insurance Plan, Defendants-Appellees.

No. 05-14005.

United States Court of Appeals, Eleventh Circuit.

July 31, 2006.

Jeffrey Scott Warncke, Dietrick, Evans, Scholz & Williams, Atlanta, GA, for Plaintiff-Appellant.

Joshua Bachrach, Rawle & Henderson, LLP, Philadelphia, PA, Paul T. Ryan, Bridget Bobick, Daniel S. Reinhardt, Troutman Sanders, Alfred L. Evans, III, John B. Austin, Austin & Sparks, P.C., Atlanta, GA, for Defendants-Appellees.

Jay E. Sushelsky, AARP Foundation Litigation, Washington, DC, for AARP, Amicus Curiae.

Appeal from the United States District Court for the Northern District of Georgia.

Before BIRCH and CARNES, Circuit Judges, and TRAGER^*, District Judge.

CARNES, Circuit Judge:

Gregory L. Tippitt appeals the district court's entry of judgment in favor of Reliance Standard Life Insurance Company and Munich American Reassurance Company Group Long Term Disability Insurance Plan in his action for wrongful denial of benefits under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq.

I.

In July 1982 Tippitt began working as a senior systems programmer at Munich American Reassurance Company. He enrolled in the Munich American Reassurance Company Group Long Term Disability Insurance Plan ("MARC Plan"), a benefit that was made available to him as an employee. The MARC Plan is an "employee welfare benefit plan," see 29 U.S.C. § 1002(1), as well as a "group health plan," see id. § 1191b(a)(1), governed by ERISA. Tippitt is a "participant" in the plan. See id. § 1002(7).

The MARC Plan is insured by a policy that Munich purchased from Reliance. Reliance administers the plan and pays all benefits from its own assets. See 29 U.S.C. § 1002(21)(A)(i), (iii). To the extent that it exercises any discretionary control or authority respecting management of the plan or its assets, Reliance is a fiduciary under ERISA. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113, 109 S.Ct. 948, 955-56, 103 L.Ed.2d 80 (1989); Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1277 (11th Cir.2005). As a fiduciary, Reliance must administer the plan "for the exclusive purpose of . . . providing benefits to participants and their beneficiaries" and "in accordance with the documents and instruments governing the plan...." 29 U.S.C. § 1104(a)(1)(A)(i), (D). Reliance must also provide a "full and fair review" of claim denials. Id. § 1133(2).

The MARC Plan states that an insured is entitled to monthly benefits if he "(1) is Totally Disabled as the result of a Sickness or Injury covered by this Policy; (2) is under the regular care of a Physician; (3) has completed the Elimination Period; and (4) submits satisfactory proof of Total Disability to us." An insured is "totally disabled" if "during the Elimination Period, an Insured cannot perform each and every material duty of his/her regular occupation." The plan does not define the term "regular occupation." An insured completes the elimination period by being totally disabled for 180 consecutive days. After 180 days of total disability have elapsed, the insured may begin receiving benefits.

The MARC Plan states that an insured is "partially disabled" if "as a result of an Injury or Sickness [the] Insured is capable of performing the material duties of his/her regular occupation on a part-time basis or some of the material duties on a full-time basis." The plan notes that "[a]n Insured who is Partially Disabled will be considered Totally Disabled, except during the Elimination Period." In other words, an insured who is only partially disabled, as opposed to totally disabled, during the first 180 days of his disability is not entitled to any benefits under the plan. However, an insured who is totally disabled for the first 180 days of his disability, and who later improves to the point of being partially disabled, is entitled to benefits.

While employed at Munich, Tippitt suffered from joint pain, back pain, cluster headaches, and fatigue. Between December 1997 and September 1999, he regularly visited his primary care physician for treatment. On November 30, 1999, that physician referred Tippitt to a second physician, who is a board certified immunologist and rheumatologist. Tippitt visited that specialist several times over the course of the following year and complained to him about pain in multiple joints, particularly in his hips, and reported that his activity levels were increasingly restricted.

On January 10, 2000, shortly after Tippitt was promoted to assistant manager of computer information systems, he resigned from his job. On June 20, 2000, he filed an application for benefits, claiming that he became totally disabled on January 7, 2000. Tippitt's primary care physician, specialist, physical therapist, and ophthal-mologist submitted reports about his medical condition to Reliance.

In support of his application for benefits, Tippitt sent Reliance a Position Questionnaire which had been prepared by him and approved by Munich's assistant vice president of information services. The questionnaire stated that Tippitt's duties included implementing and maintaining all computer hardware and software systems, providing technical assistance to staff, conducting research and development, and performing administrative tasks. Munich also submitted to Reliance a Job Analysis form, which reported that Tippitt was "frequently" required to stand, walk, and sit while performing his job. The form also indicated that Tippitt's job required him to use both of his hands and did not allow him to alternate between sitting and standing.

On October 24, 2000, Reliance notified Tippitt that he was ineligible for benefits because, under the terms of the plan, he was not "`Totally Disabled' from each and every material duty of [his] occupation." Reliance found that Tippitt's job most closely resembled the job description for "manager, computer operations" from the Department of Labor's Dictionary of Job Titles, and Reliance used that job description, instead of the actual duties of Tippitt's job, to define his regular occupation. Reliance determined that Tippitt was "capable of sedentary level activity with limited repetitive use of [his] upper extremities and the ability to alternate position as needed." It concluded that he was "capable of performing a majority of the material duties of [his] occupation."

On November 17, 2000, Tippitt asked Reliance to review its denial of his claim. In support of his request for review, Tippitt provided Reliance with updated medical records from his treating physicians.

In a letter dated April 2, 2001, Reliance stated that it had affirmed its decision to deny benefits. The letter explained that: "In order to meet the definition of `Total Disability,' an Insured must suffer a condition so severe, it renders him or her unable to perform the material duties of his or her regular occupation," and that he had not shown that. Reliance acknowledged that Tippitt complained of pain with prolonged sitting, but it said that the pain "should not limit his ability to perform his occupation as this occupation would allow for ample opportunity for position changes." The letter informed Tippitt that Reliance's decision was "now final" because he had exhausted all of the administrative remedies available under the plan.

On April 3, 2002, Tippitt filed suit under ERISA against Reliance, and also against the MARC Plan as an "entity," see 29 U.S.C. § 1132(d)(1), alleging that he had been wrongfully denied benefits. The relief Tippitt sought was all benefits due him under the plan, an order enforcing and clarifying his right to future benefits, declaratory and injunctive relief, and interest, costs, and attorney's fees. In the alternative, Tippitt sought reversal of the denial of benefits or an order remanding the claim to the MARC Plan and requiring additional administrative review, along with interest, costs, and attorney's fees.

Following a bench trial, the district court issued an order on June 22, 2005, denying Tippitt any relief and entering judgment in favor of Reliance and the MARC Plan. The order explained in some detail the district court's reasoning. That reasoning and our discussion of it will be easier to follow if we precede them with an explanation of the applicable legal framework.

II.

A court must follow a well-defined series of steps in reviewing a denial of benefits decision in an ERISA case. See HCA Health Servs. of Ga., Inc., v. Employers Health Ins. Co., 240 F.3d 982, 993-95 (11th Cir.2001). "At each step, the court makes a determination that results in either the progression to the next step or the end of the inquiry." Id. at 993.

In step one, a court must determine which standard to apply in reviewing the claims administrator's benefits decision. Hunt v. Hawthorne Assocs., Inc., 119 F.3d 888, 912 (11th Cir.1997). ERISA itself does not provide the appropriate standard. Firestone, 489 U.S. at 108-09, 109 S.Ct. at 953 (1989); Marecek v. BellSouth Telecomms., Inc., 49 F.3d 702, 705 (11th Cir. 1995). A court chooses the appropriate standard after examining the plan documents to determine whether they grant the administrator discretion to interpret disputed terms. HCA, 240 F.3d at 993. If the court finds that the documents do not grant the administrator discretion, it applies de novo review to the administrator's benefits determination and does not proceed to the remaining steps. Firestone, 489 U.S. at 115, 109 S.Ct. at 956-57; Buckley v. Metro. Life, 115 F.3d 936, 939 (11th Cir.1997). "If the court finds that the documents grant the claims administrator discretion, then at a minimum, the court applies arbitrary and capricious review and possibly heightened arbitrary and capricious review" and proceeds to the second step. HCA, 240 F.3d at 993.

In step...