Evans v. Eaton Corp. Long Term Disability Plan

Decision Date08 January 2008
Docket NumberNo. 06-2252.,06-2252.
Citation514 F.3d 315
PartiesBrenda EVANS, Plaintiff-Appellee, v. EATON CORPORATION LONG TERM DISABILITY PLAN, Defendant-Appellant.
CourtU.S. Court of Appeals — Fourth Circuit

Jeffrey David Zimon, Benesch, Friedlander, Caplan & Aronoff, L.L.P., Cleveland, OH, for Appellant. Robert Edward Hoskins, Foster Law Firm, L.L.P., Greenville, SC, for Appellee. Anna K. Raske, Benesch, Friedlander, Coplan & Aronoff, L.L.P., Cleveland, OH, for Appellant.

Before WILKINSON and SHEDD, Circuit Judges, and CLAUDE M. HILTON, Senior United States District Judge for the Eastern District of Virginia, sitting by designation.

Reversed and remanded by published opinion. Judge WILKINSON wrote the opinion, in which Judge SHEDD and Senior Judge HILTON joined.

OPINION

WILKINSON, Circuit Judge:

Eaton Corporation, a multinational manufacturing company that funds and administers a long-term disability benefits plan for its employees, terminated Brenda Evans's benefits in 2004. She sued under ERISA to recover them, and the district court, faced with substantial conflicting medical evidence and a good case on both sides, concluded that Evans's position was the stronger one. But Eaton was entitled to an abuse of discretion standard of review, and the district court's judgment, though abuse of discretion in name, was de novo in fact. We therefore reverse the district court's award of benefits to Evans and remand with directions that judgment be granted to Eaton.

I.

Under, Eaton's disability plan, a claimant's illness or injury qualifies as a covered disability if "during the first 24 months of such disability . . . you are totally and continuously unable to perform the essential duties of your regular position" and thereafter "you are totally and continuously unable to engage in any occupation or perform any work for compensation or profit for which you are, or may become, reasonably well fitted by reason of education, training or experience—at Eaton Corporation or elsewhere."

Proving a claim requires "[o]bjective findings of a disability," such as "physical examination findings," "diagnostic test results/imaging studies," and "observation of anatomical, physiological or psychological abnormalities." As with so many ERISA plans today, Eaton reserves "discretionary authority to determine eligibility for benefits" and "the power and discretion to determine all questions of fact . . . arising in connection with the administration, interpretation and application of the Plan." A third-party, Broadspire Services, Inc., was Eaton's claims administrator.

In 1998, due to severe rheumatoid arthritis, Brenda Evans quit her job as an order processor at Eaton and filed for long-term disability benefits. Eaton paid without controversy through 2003. But that year, Evans's disability picture started to become cloudy. Her rheumatologist, Dr. Boyd, had prescribed a new arthritis medication, Enbrel, which did her some considerable good: "This is the best she has felt since I have been seeing her," Dr. Boyd's notes from the time report. "[The Enbrel] has helped her quite dramatically. She has very little joint pain now."

From that point forth, medical ambiguity would be the theme of Evans's story. To start with, arthritis was no longer her only problem: A car accident in 2002 had caused serious independent injuries to her back, and Dr. Boyd did not see improvement on that front. Evans's other treating physician, a general practitioner named Dr. Murphy, agreed both as to Evans's arthritic improvement and continuing back problems, and both doctors continued to certify that Evans was totally disabled. On the other hand, an MM and radiology exam from the period indicated that the injuries to Evans's back were not severe. And in a questionnaire, Evans stated that she could cook, shop, do laundry, wash dishes, and drive about seven miles a day.

In January 2004, two of Broadspire's in-house physicians reviewed Evans's 2003 medical records and concluded that she was no longer disabled—though neither did they regard her as fully able. One wrote, for instance, that Evans "would appear" to have "some use of her hands, although perhaps not full use." The other, likewise noting Evans's limited movement and chronic back pain, found that her "rheumatoid arthritis has stabilized" and her back pain did not "preclude the claimant from performing sedentary job duties." Both indicated that more information might be helpful, but on balance recommended ending Evans's benefits. That winter, Evans also took a "Functional Capacity Evaluation," which concluded that she was "capable of performing any job in the light category of work in an 8 hour period with occasional pushing, pulling, standing, walking, climbing stairs and ladders, balancing, stooping, crouching, overhead reaching, desk level reaching, and floor level reaching," and added that "[h]er actual abilities to lift, sit, stand, walk and carry are greater than her perceived abilities." Thus, on April 26, Broadspire sent Evans a benefits cancellation letter.

Evans filed an appeal with Broadspire, and the steady current of conflicting medical evidence and opinion continued. Three more Broadspire physicians, one a rheumatologist, reviewed her file during the appeal process; all three wrote substantial analyses of her condition and concluded that her infirmity was serious but not totally disabling. In July, Broadspire denied the appeal, and Evans filed a second, final appeal (the third review of her condition). This time she supplemented her file with a recent x-ray and x-ray report documenting serious spinal problems, as well as a letter from Dr. Boyd: "[T]here have been notes in my medical reports that have shown that she has been better at times. Saying that she is better is not to say that she is nearly normal or not to say that she is not disabled. One can have a severe arthritic problem and get some improvement with medications and still be incapable functionally of working in a job . . . I do not think her situation will ever change and I think she will be disabled long term."

Two new Broadspire physicians (one a rheumatologist) reviewed the file, including the new materials, and after careful study concluded that Evans could work: "Noteworthy is [the new] letter from Dr. Boyd," the Broadspire rheumatologist remarked. "However, his notes describe dramatic improvement and almost no synovitis. That is not to say that the claimant is simply better but that she has very low levels of disease. Thus there seems to be a contradiction between the information being relayed in Dr. Boyd's [letter] and what is being relayed in his notes." In addition, Broadspire sent Evans's file to an anonymous rheumatologist from the Medical Review Institute of America, who concurred with Broadspire's in-house reviewers that Evans could work. At the end of 2004, Eaton issued its final denial letter.

Evans filed a complaint in the U.S. District Court for South Carolina in September 2005. See Employee Retirement Income Security Act of 1974 (ERISA) § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (2000). But, presumably with a view to settlement, the parties agreed to a stay of litigation. As the consent order explains, "[t]he Plaintiff and the LTD Plan . . . have agreed to stay litigation to permit a reconsideration of the final appeal by the Plan. Administrator. . . . Plaintiff has indicated that she intends to undertake certain neurological/orthopedic evaluations which she plans to submit to the Plan Administrator for this final determination reconsideration." Thus Dr. Michael Bucci, a neurosurgeon and the third doctor to examine Evans in person, met with her in April 2006. He found "joint deformity . . . significantly painful to touch," "joint swelling," "diffuse [spinal] tenderness," "difficulty with toe and heel walking," and in sum, severe rheumatoid arthritis and severe spinal stenosis: "I concur with her rheumatologist that the lady is permanently and totally disabled at this time."

Even at this stage, however, the medical opinion was not univocal. Eaton forwarded Evans's file to an independent medical reviewer, Dr. Trangle, who took issue with Dr. Bucci's report and concluded that Evans was not disabled. Dr. Trangle found that, as of "the relevant date of 5/31/04 . . . review of the records indicates that she had barely detectable elevated rheumatoid factor markers." And "[i]n regards to her lower back," the MRI scans and other records from 2003 and 2004 indicate "some spinal stenosis and some radiculopathy," but "it was mild in nature." In July 2006, Eaton rejected Evans's remanded appeal, stating that the records given to Dr. Bucci were incomplete; that Dr. Bucci incorrectly focused on Evans's current medical condition ("I concur . . . that the lady is permanently and totally disabled at this time.") rather than her condition when benefits were cut off in 2004; and that his view conflicted with Dr. Trangle's. Litigation resumed, and the parties agreed to have the court resolve the matter on the basis of memoranda and a joint stipulation, with relevant documents attached.

The district court's opinion of October 2006, after reciting the abuse of discretion standard of review, examined the evidence on both sides in great detail. Most important to the district court, "the only physicians who physically examined Evans . . . concluded that she was totally disabled," and "[t]hese doctors' conclusions," unlike those of the reviewing physicians, "are substantial objective evidence of disability under the Plan." Evans v. Eaton Corp., C.A. No. 8:05-2575-HMH, 2006 WL 2997153, at *9-10 (D.S.C. Oct. 18, 2006). By contrast, in the district court's view, the reviewing physicians' opinions rested on weak foundations, such as Dr. Boyd's notes recording Evans's improvement (which, Dr. Boyd explained, were never meant to indicate that Evans was well enough to work), the functional capacity...

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