Blankenship v. Metropolitan Life Ins. Co.

• Decision Date: 11 February 2010
• Docket Number: Civil Action No. 08-AR-0639-S.
• Citation: 686 F. Supp.2d 1227
• Parties: Frank BLANKENSHIP, Plaintiff and counter-defendant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant and counterclaimant.
• Court: U.S. District Court — Northern District of Alabama

686 F.Supp.2d 1227

Frank BLANKENSHIP, Plaintiff and counter-defendant, v. METROPOLITAN LIFE INSURANCE COMPANY, Defendant and counterclaimant.

Civil Action No. 08-AR-0639-S.

United States District Court, N.D. Alabama, Southern Division.

December 30, 2009.

Order Amending Opinion January 21, 2010.

Order Denying Motion to Vacate Opinion February 11, 2010.

John M. Pennington, Pennington Law Firm LLC, Birmingham, AL, for Plaintiff and counter-defendant.

James S. Christie, Jr., Brian M. Vines, Bradley Arant Boult Cummings LLP, Birmingham, AL, for Defendant and counter-claimant.

MEMORANDUM OPINION

WILLIAM M. ACKER, JR., District Judge.

Plaintiff, Frank Blankenship ("Blankenship"), invoking 29 U.S.C. § 1132, the enforcement provision of the Employee Retirement Income Security Act of 1974 ("ERISA"), claims that he has been wrongfully denied long-term disability ("LTD") benefits by defendant, Metropolitan Life Insurance Company ("MetLife"). MetLife counterclaims, seeking to offset benefits paid to Blankenship by any Social Security Disability Income ("SSDI") received by him. Before the court are Blankenship's and MetLife's cross-motions for judgment as a matter of law. Based on the administrative record ("AR") (as expanded by the fact that the Social Security Administration granted Blankenship SSDI after MetLife's denial), the briefs and oral argument, and for the reasons given below, Blankenship's motion will be granted insofar as it seeks LTD benefits and denied insofar as it seeks to avoid any SSDI offset, and MetLife's motion will be denied insofar as it pertains to its denial of benefits, but granted insofar as it seeks an offset for SSDI.

The Pertinent Facts

Blankenship worked for Sears, Roebuck and Co. ("Sears") as a store manager, and was a participant in the Sears Group Long-Term Disability Plan ("the Plan"). The Plan is governed by ERISA, 29 U.S.C. §§ 1001-1461 (2006). MetLife is not only the administrator of claims but also the funding source. The Plan vests MetLife with discretionary authority both to interpret the Plan and to determine whether a claimant is disabled under the terms of the Plan. (AR-32). The Plan has two methods or standards for determining eligibility for benefits: (1) a claimant is disabled during the first two years after a claim is made if he is unable to perform the duties of his "Own Occupation", and as a result is unable to earn more than 80% of his pre-disability earnings; and (2) after the said two-year period a claimant is disabled if, due to his inability to perform "any gainful occupation for which he is reasonably qualified" ("Any Occupation"), he is unable to earn more than 60% of his pre-disability earnings. The Plan also provides that benefits will be reduced by "Other Income Benefits", including SSDI. (AR-14).

In May 2003, Blankenship was diagnosed with coronary artery disease, and it was discovered that he had a 99% blockage of one coronary artery and between 10% and 30% blockage of two others. (AR-804). The main blockage was treated with a stent on May 9, 2003 (AR-804). On August 23, 2003, Blankenship suffered a heart attack. (AR-826). After his attack, Blankenship was treated by several physicians. His primary physician was Dr. Frank Rudeseal, but he was also monitored by several cardiologists, including Drs. Michael McKinney, Michael Honan, and Paschal Redding. (AR-686, 486). Immediately following his attack, Blankenship was approved by MetLife for short-term disability benefits. (AR-170). When his short-term benefits expired in January 2004, he applied for LTD benefits under the Plan. (AR-691-92). In connection with his application, Blankenship submitted a report from Dr. Rudeseal stating that he should not return to work because he was "unable to tolerate stress and long hours." (AR-673). Blankenship also submitted a report from Dr. Redding stating that he was fit to work zero (0) hours per day, and "had angina with stressful situations and exercise." (AR-676). MetLife does not deny that managing a large Sears store is a stressful, if a well paid, occupation.

On February 17, 2004, MetLife denied Blankenship's application for LTD benefits without giving much of an explanation. (AR-181). However, MetLife continued to review Blankenship's application, and an entry in MetLife's Diary Review Reports dated March 5, 2004, notes that Blankenship "cannot work due to angina with stressful situations and exercise, ... is limited due to the severity of his cardiac condition," and that MetLife "would refer to SS Social Security." (AR-181, 183). This internal note, not shared with Blankenship, could only be interpreted as a precautionary note anticipating the real possibility that Blankenship was, in fact, entitled to LTD benefits, in which event MetLife would be entitled to set-off SSDI against its obligation. In an entry of March 10, 2004 in its Diary Review, Met-Life found that because of Blankenship's "significant cardiac history" it was "unlikely that Blankenship will be able to RTW return to work." (AR-183). On March 11, 2004, MetLife, for some then unarticulated reason, perhaps a tinge of conscience, reversed its earlier decision and approved Blankenship for LTD benefits as of January 12, 2004 under the Plan's "Own Occupation" standard. (AR-231-233). On June 14, 2004, as he was required to do under the Plan in order to avoid having his LTD benefits reduced by the amount MetLife estimated he might have received had he applied for SSDI, Blankenship did, in fact, apply for SSDI and so notified MetLife. (AR-186). On October 7, 2004, Blankenship's application for SSDI was denied. (AR-605-611).

On December 22, 2004, MetLife informed Blankenship that it was terminating his benefits under the "Own Occupation" standard based on the records available. (AR-582-85). One of these records, conspicuously not referenced by MetLife, was the SSDI denial. MetLife's denial letter to Blankenship stated, inter alia, that "there is no objective medical evidence on file to support a disability." (AR-584)(emphasis added).

In compliance with the Plan's procedure, Blankenship appealed MetLife's decision, and in connection with his appeal submitted letters from Drs. Redding and Rudeseal. Dr. Rudeseal therein stated that "any stress related situation could cause Mr. Blankenship's cardiac symptoms to worsen," and that Blankenship "cannot return to work." (AR-560). Dr. Redding wrote that Blankenship "is unable to return to a situation of stressful management," and that "he is approaching 100% disability because of his inability to function... in stressful situations." (AR-577-78). As part of the appeal process, MetLife submitted Blankenship's file to an "independent" internist and cardiologist, Dr. Mark J. Friedman, for review. Dr. Friedman did not conduct a physical exam. Based only on the file, he concluded that Blankenship's "moderate coronary artery disease should allow Mr. Blankenship to perform a light duty work situation." (AR-569). Acting on Dr. Friedman's finding, MetLife denied Blankenship's appeal on February 11, 2005. (AR-564).

On February 21, 2005, Blankenship had knee surgery to repair a left knee meniscus that had been torn approximately three weeks earlier. (AR-437-38). On April 1, 2005, MetLife reinstated Blankenship's LTD benefits under the "Own Occupation" standard based on his knee surgery and his expected period of rehabilitation. (AR-195-99). On July 29, 2005, MetLife sent Blankenship a letter informing him that as of January 12, 2006, he must be disabled under the second, "Any Occupation" standard in order to be eligible for further LTD benefits. (AR-450-51). Although the April 1, 2005, grant of benefits was purportedly based only on Blankenship's knee surgery, Met-Life continued to seek information about Blankenship's heart condition. In response to a request from MetLife sent on July 29, 2005, Dr. Rudeseal submitted a form in which he reiterated that Blankenship was permanently disabled and would never be capable of engaging in a gainful occupation because he "can't handle stress with his heart condition." (AR-452-54). In response to another MetLife request sent the same day, Dr. Michael Honan, another Blankenship cardiologist, filled out a form for MetLife in which he stated that Blankenship's condition was permanent and that he was not capable of performing any gainful employment due to "CAD coronary artery disease precipitated by stressful situations". (AR-468) from the vocational expert, received by MetLife on December 9, 2005, did not mention or evaluate Blankenship's heart condition or speak to any relation that stress has upon his ability to work or earn. Id. Based solely on potential work restrictions related to the knee problems, the paid consultant identified three occupations, all arguably stressful, in which, in the consultant's opinion, Blankenship could earn more than 60% of his pre-disability earnings. Id. at 348. The vocational expert was working with the 60% figure when she concluded, without considering stress, that Blankenship could earn more than that with his knee problem.

In an elaborate letter of January 5, 2006, MetLife informed Blankenship that as of January 12, 2006, he would no longer be eligible for LTD benefits. (AR-343-45). Blankenship again appealed. As part of the new appeals process, MetLife employed yet another cardiologist, this time Dr. Michael Rosenberg, to conduct a review of Blankenship's file. (AR-310-14). Like the earlier review by Dr. Friedman, Dr. Rosenberg conducted only a file review, performing no physical exam. Id. Unlike the vocational rehabilitation report, Dr. Rosenberg's report did mention Blankenship's cardiac condition. Id. However, Dr. Rosenberg was not asked about, and did not discuss, the relationship, if any, between Blankenship's condition and stress in the workplace. Id. Based only on his file review, and in response to specific and carefully worded questions by MetLife, Dr. Rosenberg found that...