Doe v. Standard Ins. Co.

• Citation: 852 F.3d 118
• Decision Date: 24 March 2017
• Docket Number: No. 16-2085,16-2085
• Parties: Jane DOE, Plaintiff, Appellant, v. STANDARD INSURANCE COMPANY, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

852 F.3d 118

Jane DOE, Plaintiff, Appellant,

v.STANDARD INSURANCE COMPANY, Defendant, Appellee.

No. 16-2085

United States Court of Appeals, First Circuit.

March 24, 2017

Geraldine G. Sanchez , with whom Roach Hewitt Ruprecht Sanchez & Bischoff PC , Portland, ME, was on brief, for appellant.

Brooks R. Magratten , with whom Scott K. Pomeroy and Pierce Atwood LLP , Providence, RI, were on brief, for appellee.

Before Lynch, Circuit Judge, Souter,^* Associate Justice, and Baldock,^** Circuit Judge.

LYNCH, Circuit Judge.

In this ERISA benefits suit for long term disability ("LTD") payments, the sum owed to the plaintiff, "Jane Doe," turns on the year of disability onset, as the prior year's earnings determine the monthly benefit amount. The parties disagree on whether Doe's disability began in 2011 or in 2012: the insurer has paid Doe the benefits owed using a January 2012 onset date, but not the benefits owed if the onset date is in November 2011. The difference, we are told, amounts to over $100,000 in payments.

The wrinkle in the case is that the disability insurance involved is "Own Occupation" insurance, for which an additional premium is charged. Doe's Own Occupation was "environmental lawyer." Yet when the insurer assessed whether and when Doe became disabled, it chose not to use the material duties of an environmental lawyer, but rather those of a lawyer. In doing so, it eviscerated the Own Occupation coverage, and its evaluation as to Doe's disability onset date was based on the wrong standards. Its denial of benefits from an onset date no later than November 2011 was arbitrary and capricious. The district court entered judgment on the record for the insurer. We reverse.

I.

A. Background

Doe worked at a Maine law firm for more than 25 years, and for many years she was an equity partner. In August 2011, Doe became a non-equity partner and remained employed in that capacity for about six months thereafter. Over the course of 2011, Doe billed far fewer hours than she had in previous years.

Defendant Standard Insurance Company ("Standard") is the claim administrator and insurer of the employee welfare benefit plan ("the Plan") offered by Doe's law firm to its employees. The Plan was insured by an LTD policy ("the Policy"), which was also issued by Standard and which covered Doe. The Policy provides that a claimant is "Disabled" if she is "unable to perform with reasonable continuity the Material Duties of [her] Own Occupation." The Policy also promises lawyers with at least five years' experience that "[their] Own Occupation [is] the one legal subject matter area or type of legal practice in which [they] specialize, provided [they] have earned at least 85% of [their] gross professional service fee income in that area or type of practice" during the 24 months before disability onset. There is no dispute that Doe met these criteria for specialty coverage. The Policy defines "Material Duties" as "the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation that cannot be reasonably modified or omitted."

Under the Policy, those who become disabled due to a "Mental Disorder" may receive LTD benefits for, at most, 24 months. The monthly benefit amount depends on the claimant's "Predisability Earnings." The Predisability Earnings depend in turn on the claimant's income during the "prior tax year"—that is, the calendar year before the year of disability onset. Doe's income in 2011 was only one-third of what it had been in 2010, and so whether she became disabled in 2011 or in 2012 significantly affects the calculation of her monthly benefit payments.

For context, we recite briefly some of the medical evidence relevant to Doe's LTD claim. On November 30, 2011, during her regular appointment with her gynecologist, Dr. Kathleen Petersen, Doe confessed that she had become "bone crushingly exhausted" in the preceding year and had lost "any interest in life," among other symptoms. Dr. Petersen suspected that Doe was afflicted with a mental health problem. She recommended that Doe seek counseling—advice that Doe resisted—and also doubled Doe's prescribed daily dose of citalopram

, an antidepressant, which Doe had been taking for roughly four years.

On December 9, 2011, Doe met for the first time with Dr. Frederick White, a clinical psychologist. Dr. White's notes from that visit state that Doe exhibited numerous symptoms consistent with Major Depressive Disorder

—including suicidal ideation and diminished attention, concentration, and memory—and he diagnosed her with that disorder. In two follow-up appointments that same month, Dr. White observed that Doe "was having continuing mental disorder with suicidal ideation."

Dr. Petersen saw Doe on January 5, 2012, after having discussed Doe's condition with Dr. White earlier that day. In her notes, Dr. Petersen observed that Doe did not appear to be an imminent suicide risk, but that Doe was "severely depressed." When Dr. Petersen asked Doe about hospitalization for Doe's depression, Doe responded that "she [could not], that it would be a severe detriment to her [law] practice." At appointments later in January 2012, Dr. White and Dr. Petersen continued to observe that Doe was "dealing with ... significant depression."

On February 8, 2012, Doe met with her primary care physician, Dr. Donna Conkling, for the first time since April 2011. Dr. Conkling postponed Doe's scheduled physical exam because Doe was "close to tears" and "appear[ed] anxious, depressed, and exhausted." Doe continued to report problems with severe depression and thoughts of self-harm or suicide. Doe also relayed that "[h]er husband was not completely supportive of her stopping work." Doe's last day of logging hours of work at the firm was January 27, 2012.

B. Doe's Claim

Doe filed an LTD claim with Standard "on or about March 22, 2012." She reported that "she had suffered depression for approximately five years but became 'unable to work' ... in October 2011." As symptoms stemming from her "mental health [and] related [psychological] disorders," she listed, inter alia, "unable to process or think clearly while at work," "chronic fatigue," "migraine headaches," and "inability to function."

In February 2012, Dr. Petersen, Dr. Conkling, and Dr. White had independently completed Attending Physician's Statements in connection with Doe's LTD claim. Each physician diagnosed Doe with severe depression. Each also stated that he or she recommended Doe stop working.

On April 13, 2012, Doe's former law firm sent Standard a job description for Doe's specific occupation, environmental lawyer. Standard had requested the description from the law firm two days earlier, along with Doe's payroll history and timesheets. The firm also sent Doe's biography, which outlined Doe's career accomplishments and specific areas of expertise. Standard never told Doe or her representatives that the provided description was incomplete or inadequate.

Standard asked Jan Cottrell, one of its "vocational case manager[s]," to evaluate Doe's claim of disability. On April 12, 2012, Cottrell identified Doe's Own Occupation under the Policy as "lawyer," not "environmental lawyer." Having chosen "lawyer," Cottrell concluded that the material duties of a lawyer were "most reasonably represented by the Dictionary of Occupational Titles (DOT) occupation of Lawyer." The DOT is a compendium of job descriptions and requirements, formerly published by the U.S. Department of Labor, which aims to define jobs as they are performed in the national economy and is commonly used by insurers. See McDonough v. Aetna Life Ins. Co. , 783 F.3d 374, 380–81 (1st Cir. 2015) ; see also, e.g. , Armani v. Nw. Mut. Life Ins. Co. , 840 F.3d 1159, 1162 (9th Cir. 2016). There is no separate DOT job description for an environmental lawyer, and Standard did not look elsewhere for a definition.

Doe's claim specialist at Standard next asked Cottrell to respond to the job description received from Doe's law firm. On April 23, 2012, Cottrell responded that Doe did not meet the Policy's definition of "trial attorney" but that Doe's "own occupation would be the one legal subject matter area of environmental law." In spite of that conclusion, Cottrell reiterated that the DOT "lawyer" description "most reasonably represented" Doe's "own occupation."

On June 29, 2012, Standard denied Doe's claim. The claim specialist explained that Standard, having used the generic "lawyer" job description, had found Doe to be disabled from January 18, 2012 onward but not disabled beyond the Policy's "90 day Benefit Waiting Period." On January 25, 2013, Doe took her first formal appeal and submitted additional information from Dr. White and Dr. Petersen.¹

On March 27, 2013, Standard told Doe that it would approve her claim and that it would use January 28, 2012 as the disability onset date. On May 14, 2013, Doe took her second appeal and submitted additional statements from Dr. White, who wrote in support of a 2011 onset date.

Christopher Powers, another senior benefits review specialist at Standard, sought another "vocational review" from Karol Paquette, a vocational case manager at Standard. In a memo to Powers, dated July 23, 2013, Paquette stated that "the information in [Doe's] file document[ed] a significant change in the character of [Doe's] work activity around November 2011, such as area of specialization or subject matter, or in the type of work activity performed." "In my professional opinion," Paquette further explained, "[Doe] was not working in her own legal specialty or area of expertise on a reasonably continuous basis from 8/1/11 [to] 11/30/11." However, Paquette continued, "[al]though [Doe] was not performing her own specialty area of expertise on a reasonably continuous basis prior to ceasing work, it would be my professional opinion[ ] that she was performing the work of a lawyer on a...