Avenoso v. Reliance Standard Life Ins. Co.

• Decision Date: 30 November 2021
• Docket Number: No. 21-1772,21-1772
• Citation: 19 F.4th 1020
• Parties: Michael AVENOSO, Plaintiff - Appellee v. RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant - Appellant
• Court: U.S. Court of Appeals — Eighth Circuit

19 F.4th 1020

Michael AVENOSO, Plaintiff - Appellee

v.RELIANCE STANDARD LIFE INSURANCE COMPANY, Defendant - Appellant

No. 21-1772

United States Court of Appeals, Eighth Circuit.

Submitted: October 20, 2021

Filed: November 30, 2021

Stephen J. Fields, Zachary David Schmoll, Fields Law Firm, Minnetonka, MN, for Plaintiff-Appellee.

Joshua Bachrach, Wilson & Elser, Philadelphia, PA, Terrance J. Wagener, Messerli & Kramer, Minneapolis, MN, for Defendant-Appellant.

Before GRUENDER, ERICKSON, and STRAS, Circuit Judges.

GRUENDER, Circuit Judge.

The Reliance Standard Life Insurance Company denied Michael Avenoso's claim for long-term disability benefits after concluding that he retained sedentary-work capacity. Avenoso sued, arguing that the denial violated the Employee Retirement Income Security Act of 1974 ("ERISA") § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). The district court¹ granted Avenoso's motion for summary judgment, and Reliance appeals. We conclude that although the district court erred by resolving factual disputes on summary judgment, the error was harmless. Accordingly, we affirm.

I.

Until July of 2016, Avenoso worked as a maintenance supervisor. Through his employer, he had long-term disability insurance under a policy issued by Reliance and governed by ERISA. The policy provided two years of benefits if the claimant showed that he was unable to perform the material duties of his current occupation. The policy provided continued benefits after two years if the claimant showed that he was unable to perform the material duties of any occupation.

In July of 2016, Avenoso left his job as a maintenance supervisor due to lower-back pain. Two months later, he underwent back surgery. In early 2017, Avenoso claimed and Reliance approved two years of benefits because Avenoso was disabled from his occupation as a maintenance supervisor. At the end of the two years, however, Reliance informed Avenoso that it would discontinue benefits payments because Avenoso had not shown that he was unable to perform the material duties of any occupation. According to Reliance, Avenoso retained "sedentary work function," defined as "the ability to exert up to 10 pounds of force occasionally and/or a negligible amount of force frequently to lift, carry, push, pull, or otherwise move objects" during a work day that "involves sitting most of the time, but may involve walking or standing for brief periods of time." See 20 C.F.R. § 404.1567(a).

Avenoso appealed within Reliance's claims department. He explained that he had been unable to submit proof of his condition in the form of an electromyogram ("EMG") or an MRI because an EMG would be too painful; he could not sit, stand, or lie still for the time required to perform an MRI; and in any case, he could not drive to a testing site more than fifteen minutes away "without the pain becoming intolerable." Ultimately, Avenoso did submit to an MRI, and the results appeared relatively mild. But Avenoso also sent Reliance a note from his physician, Dr. Cyrus Vosough, recommending that Avenoso "avoid lifting, bending and prolonged sitting" due to his lower-back condition. In addition, Avenoso sent Reliance letters describing his pain and photographs showing handrails in his living space to assist with mobility. He noted as well that he was receiving disability-insurance payments from the Social Security Administration. Social-security disability benefits are reserved for those whom the Social Security Administration deems unable "to engage in any substantial gainful activity." 42 U.S.C. § 423(a)(1)(E), (d)(1)(A).

Avenoso also drove thirty-five minutes each way to receive a "functional-capacity evaluation" ("FCE"). The physical therapist who performed the FCE noted that "Avenoso demonstrated ... movement and muscle recruitment patterns that were inconsistent when aware and unaware of observation." Accordingly, the physical therapist noted that "[t]he capabilities outlined [in her report] would be considered to be Michael Avenoso's minimal functional ability level." Nonetheless, the physical therapist concluded:

The results of this evaluation indicate that Michael Avenoso did not demonstrate an ability to tolerate an 8 hour work day .... His ability level would be 2-3 hours at this time. ... He did not demonstrate an ability to safely perform any lifting, carrying or pulling functional tasks due to impaired standing balance.

As part of its evaluation of Avenoso's appeal, Reliance contracted with Medical Consultants Network to arrange an independent medical evaluation. Medical Consultants Network hired Dr. Jeffrey S. Liva to perform the evaluation. Dr. Liva concluded that Avenoso retained sedentary-work capacity and was "able to work 8 hours a day, 40 hours a week." Furthermore, during the examination, Dr. Liva observed that Avenoso exhibited "uncontrolled shaking" which "completely stopped" after about fifteen minutes. Noting that "there is no physiological ... explanation for this," Dr. Liva concluded that Avenoso was engaging in "symptom magnification."

Reliance also arranged for a vocational-rehabilitation specialist to perform a residual-employability analysis based on Avenoso's medical records, educational background, work history, and other information.

The specialist identified five "viable sedentary occupational alternatives" consistent with "Avenoso's physical capacities."

On August 8, 2019, Reliance upheld its denial of long-term disability benefits. Avenoso sued, claiming that the denial violated ERISA. Both parties moved for summary judgment. The district court granted Avenoso's motion and denied Reliance's motion. Reliance appeals.

II.

"We review de novo a district court's grant of summary judgment." Riedl v. Gen. Am. Life Ins. , 248 F.3d 753, 756 (8th Cir. 2001). Summary judgment is proper only if "there is no genuine issue as to any material fact" and "the moving party is entitled to judgment as a matter of law." Id. This means that a district court should "not weigh the evidence, make credibility determinations, or attempt to discern the truth of any factual issue." Great Plains Real Est. Dev., L.L.C. v. Union Cent. Life Ins. , 536 F.3d 939, 943-44 (8th Cir. 2008). Although the district court must determine whether there is a "genuine issue as to any material fact," Riedl , 248 F.3d at 756, this is a legal determination, Hoyt v. Lane Constr. Corp. , 927 F.3d 287, 299 n.5 (5th Cir. 2019).

Here, the district court recited the familiar rules governing summary-judgment proceedings. See Avenoso v. Reliance Standard Life Ins. , No. 19-cv-2488, 2021 WL 1140205, at *1 (D. Minn. Mar. 25, 2021) (acknowledging that summary judgment is reserved for cases where the movant is entitled to "judgment as a matter of law" because there is "no genuine dispute as to any material fact"). But it did not follow them. Instead, it weighed the evidence, id. at *2-6, made a determination as to the credibility of Avenoso's accounts of his condition, id. at *5, and made findings on disputed factual questions, id. at *2-6. In short, the district court adjudicated the parties’ summary-judgment motions as if it were ruling in a bench trial.

Avenoso defends this procedure by arguing that, in ERISA-benefits cases, summary judgment is merely a vehicle for submitting the case to the district court for decision on the administrative record. That is the law in the First Circuit, which has created an exception from ordinary summary-judgment procedures for challenges to the denial of ERISA benefits. See, e.g. , Doe v. Harvard Pilgrim Health Care, Inc. , 974 F.3d 69, 72 (1st Cir. 2020) (holding that "a summary judgment motion in a lawsuit contesting the denial of benefits under ERISA is simply a vehicle for teeing up the case for decision on the administrative record" and thus "the district court ... may weigh the facts" and "resolve conflicts in evidence"). But that is not the law in this circuit. See Riedl , 248 F.3d at 754, 756 (holding in an ERISA-benefits case that "summary judgment is inappropriate when the record permits reasonable minds to draw conflicting inferences about a material fact"); accord O'Hara v. Nat'l Union Fire Ins. Co. of Pittsburgh , 642 F.3d 110, 116 (2d Cir. 2011) ; Patton v. MFS/Sun Life Fin. Distribs., Inc. , 480 F.3d 478, 484 n.3 (7th Cir. 2007) ; Shaw v. Conn. Gen. Life Ins. , 353 F.3d 1276, 1282, 1286 (11th Cir. 2003) ; Kearney v. Standard Ins. , 175 F.3d 1084, 1096 (9th Cir. 1999) (en banc); Wilkins v. Baptist Healthcare Sys., Inc. , 150 F.3d 609, 619 (6th Cir. 1998).

To be sure, in cases where the ERISA plan confers discretionary authority on the administrator, we have likened bench trials on the administrative record to summary judgment. E.g. , Riddell v. Unum Life Ins. Co. of Am. , 457 F.3d 861, 864 (8th Cir. 2006). But this is because the court of appeals treats a bench trial in such a case like summary judgment by reviewing the district court's judgment de novo , see id. , not because the district court may treat summary judgment in such a case like a bench trial by resolving factual disputes, see Werdehausen v. Benicorp Ins. , 487 F.3d 660, 664-65 (8th Cir. 2007) (reiterating in a case where the administrator had discretionary authority that "a genuine issue of disputed fact" precludes summary judgment).

Furthermore, our treatment of bench trials like summary judgment is limited to cases where the administrator had discretionary authority. Normally, if the administrator had discretionary authority, then the district court must uphold its decision if it is one that "a reasonable person could have reached" on the administrative record. Cash v. Wal-Mart Grp. Health Plan , 107 F.3d 637, 641 (8th Cir. 1997) (emphasis omitted). Thus, a bench trial where the administrator had discretionary authority normally involves the same kind of purely legal inquiry that summary judgment does—an inquiry that asks whether, on the applicable record, a reasonable factfinder could reach a certain outcome. Compare i...