Oliver v. Coca Cola Co.

• Decision Date: 29 August 2007
• Docket Number: No. 05-17072.,No. 05-16509.,05-16509.,05-17072.
• Citation: 497 F.3d 1181
• Parties: Theron OLIVER, Plaintiff-Appellee, v. COCA COLA COMPANY, Broadspire Services, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

497 F.3d 1181

Theron OLIVER, Plaintiff-Appellee, v. COCA COLA COMPANY, Broadspire Services, Inc., Defendants-Appellants.

No. 05-16509.

No. 05-17072.

United States Court of Appeals, Eleventh Circuit.

August 29, 2007.

Ryan J. Burt, Halleland, Lewis, Nilan & Johnson, Minneapolis, MN, Darren A. Shuler, David Tetrick, Jr., King & Spalding, LLP, Atlanta, GA, George W. Walker, III, Copeland, Franco, Screws & Gill, Montgomerey, AL, Henry T. Morrisette, Hand Arendall, L.L.C., Mobile, AL, John Stephen Johnson, Hand, Arendall, LLC, Birmingham, AL, for Defendantd-Appellants.

Myron K. Allenstein, Allenstein & Allenstein, LLC, Gadsden, AL, for Oliver.

Appeals from the United States District Court for the Northern District of Alabama.

Before BIRCH and BLACK, Circuit Judges, and PRESNELL,^* District Judge.

BIRCH, Circuit Judge:

Defendant-appellants The Coca-Cola Company ("Coca-Cola") and Broadspire Services, Inc. ("Broadspire") appeal the district court's entry of summary judgment, calculation of damages, and award of attorney's fees and expenses in favor of Plaintiff-appellee Theron Oliver.¹ Oliver sought benefits under Coca-Cola's long term disability plan, and brought suit after Broadspire and Coca-Cola denied his initial claim and subsequent appeals. We find that Broadspire, as a third-party claims administrator, was not the plan administrator, and accordingly, not a proper defendant. We also find that Coca-Cola acted arbitrarily and capriciously in denying Oliver's claim, no genuine issue of material fact remains for trial, and the district court therefore properly entered summary judgment in favor of Oliver. We affirm the district court's award of damages, and because the district court did not abuse its discretion, we affirm its award of attorney's fees and expenses in favor of Oliver.

I. BACKGROUND

A. The Benefit Plan

At issue in this case is the Long Term Disability Income Plan of the Coca-Cola Company (the "Plan"), an employee welfare benefit plan within the meaning of ERISA. See 29 U.S.C. § 1002(1). The Plan document designates Coca-Cola as the Plan Administrator. The Plan document also contains a delegation by Coca-Cola of some of its powers as Plan Administrator to The Coca-Cola Company Long Term Disability Income Plan Committee (the "Committee"). The Plan document delegates to the Committee "primary responsibility for the administration of the Plan, and all powers necessary to enable it to properly perform its duties," including "the discretionary authority to determine the eligibility of Participants to receive benefits and the amount of benefits to which any Participant may be entitled under the Plan." R1-24, Exh. 1 §§ F 7.2(b), (b)(3). The Plan also provides that the Committee "may delegate to the Administrative Services Provider" its discretionary authority to decide claims. Id. § 7.2(b)(3). Broadspire is the Administrative Services Provider.

Under the Plan, a claim for benefits involves an initial application, and, if the claimant is unsatisfied with the result of the initial application, two levels of appeals. Pursuant to § 7.2(b)(3) of the Plan, the Committee delegated to Broadspire responsibility for making initial determinations of claims for benefits under the Plan, as well as responsibility for resolving first-level appeals. The Committee is responsible for deciding second-level appeals, although in 1995 the Committee delegated to two Coca-Cola employees (the "Delegates") its function of reviewing final claims.

Under the Plan, a participant who suffers a "Disability," as that term is defined in the Plan, "will receive" benefits. R1-24, Exh. 1 § 4.1. The term "Disability" has two definitions under the Plan, one which applies during the first 24 months following the date the disability is incurred, and one which applies after the first 24 months. During the first 24 months, a Disability is defined as "a physical or mental illness or injury [that] continuously disables [the participant] from performing his normal duties for his Employer." Id. § 1.11. This is known as the "own occupation" standard. After the first 24 months, the Plan defines a Disability as "a physical or mental illness or injury [that] continuously disables [the participant] from engaging in any occupation for wage or profit, for which he is reasonably qualified by training, education or experience." Id. This definition is known as the "any occupation" standard.

B. Oliver's Claim

Oliver is a former Systems Support Specialist II at Coca-Cola, and a participant in the Plan. The responsibilities of a Systems Support Specialist II involve providing administrative and technical support for Coca-Cola's voice mail system. Most of Oliver's work was performed at a personal computer, although he was sometimes required to "[w]alk to telephone switch rooms to do system backups" and provide voice mail training to groups and individuals. R2-56, Exh. 3.

In October 1999, Oliver was involved in an automobile accident. Shortly after the accident, he began to complain of pain, "stiff[ness] and ach[es] in his neck and upper back," and severe headaches. R1-24, Exh. 11 at CCCID0192. Oliver applied for and received 26 weeks of short term disability benefits from Coca-Cola under a separate benefit program that is not part of an ERISA-governed plan. In April 2000, after the short term disability benefits terminated, Oliver timely applied for long term disability ("LTD") benefits under the Plan. Because Oliver's application was filed during the first 24 months following the date of his automobile accident, the "own occupation" standard applied.

In support of his claim for LTD benefits, Oliver submitted statements from two attending physicians, and one physician who had examined Oliver but did not consider herself an "attending physician" and declined to complete Broadspire's evaluation form regarding Oliver's prognosis and limitations. One of Oliver's attending physicians, Dr. Scott Arrowsmith, indicated that Oliver suffered "fibromyalgia of neck/shoulders (post-traumatic)." Id. at CCCID0040. On the line on Broadspire's form labeled "Objective Findings," Dr. Arrowsmith wrote: "[p]ositive EMG for chronic [illegible] radiculopathy and cervical [illegible]; unremarkable cervical MRI."² Id. In response to a question asking him to list activities Oliver should not do, Dr. Arrowsmith wrote: "[d]oes not tolerate cervical motion or prolonged sitting — limited tolerance to driving." Id. at CCCID0041. The form then asked Dr. Arrowsmith to list "activities your patient cannot do." Id. Dr. Arrowsmith wrote: "cannot lift over 10 [pounds], cannot sit for over 1 hour." Id. Under a section of the form asking the doctor to indicate level of impairment, Dr. Arrowsmith checked a box labeled "marked limitation of functional capacity/capable of sedentary work," but drew a question mark next to the check box. Id. Dr. Arrowsmith then completed a section of the form labled "Estimated Physical Abilities," and indicated that Oliver could sit for no more than three hours per day, "in short episodes," could stand no more than four hours per day, and could walk no more than three hours per day. Id. at CCCID0042. In response to the question, "[c]an patient now work?," Dr. Arrowsmith responded: "[n]ot when last seen on 1-3-00." Id. at CCCID0043.

Oliver's other attending physician, Dr. James Fugedy, diagnosed Oliver with "[c]hronic pain syndrome, headaches secondary to neck injury; insomnia." Id. at CCCID0044. On the form provided by Broadspire, Dr. Fugedy also wrote: "the patient continues to have serious headaches, neck pain and right arm pain requiring narcotic analgesics and developing tolerance. Cannot function due to pain." Id. at CCCID0045. Dr. Fugedy also wrote: "Mr. Oliver is incapacitated due to continuous headaches, neck pain and right arm pain, which no longer responds to medications." Id. Under the section of the form labeled "Estimated Physical Abilities," Dr. Fugedy indicated that Oliver could "[n]ever" lift, carry, "bend/stoop," squat, crawl, climb, or "[r]each above shoulder level." Id. He further indicated that Oliver could not crouch, kneel, balance, "[p]ush/[p]ull," or "[d]rive automobile." Id. Nor, according to Dr. Fugedy, could Oliver "use [his right] hand[ ] for repetitive actions such as . . . [s]imple [g]rasping[,] [p]ushing & [p]ulling[,] [or] [f]ine [m]anipulating," or "use his right hand and neck in the `[s]tatic [p]osition,' for frequent flexing, or for frequent rotating." Id. In response to the question, "Can patient now work?," Dr. Fugedy wrote: "No." Id. at CCCID0046.

On 15 June 2000, Dr. Norman Moskowitz conducted a peer review, on behalf of Broadspire, of the evaluation forms submitted by Oliver's attending physicians. Dr. Moskowitz did not examine Oliver. Dr. Moskowitz concluded, in relevant part:

[T]here is no objective evidence to determine any kind of disability in this person's own specialty and job description. There is no evidence that a prolonged limited disability is documented. There are arbitrary checkpoints by a physician without any concrete objective evidence of any physical capacity limitations. There are no medicals to support any disability at this time. This is a medical certainty.

Id. at CCCID0039. On 19 June 2000, Broadspire sent Oliver a letter denying his claim. After receiving Broadspire's denial of his claim, Oliver filed a written appeal with Broadspire.

On 7 July 2000, Oliver began visiting Dr. Husham Mishu, a neurologist. Dr. Mishu examined Oliver, performed an EMG and a nerve conduction test, prescribed Oxycontin and Celebrex, ordered "an epidural injection with nerve root sleeve injection," and recommended that Oliver "strongly consider long term disability."³ R3-59, Exh. 15 at TOL000106-107. According to Dr. Mishu, Oliver's EMG "revealed a C5 active and chronic radiculopathy on the right." Id. at TOL000106. Dr. Mishu also examined the results of Oliver's earlier MRI, and found that it "showed ligamentum...