Hughes v. Life Ins. Co. of North America

• Decision Date: 05 September 2000
• Docket Number: No. IP 99-1143-C-B/S.,IP 99-1143-C-B/S.
• Citation: 112 F.Supp.2d 780
• Parties: Mark HUGHES, Plaintiff, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.
• Court: U.S. District Court — Southern District of Indiana

112 F.Supp.2d 780

Mark HUGHES, Plaintiff, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

No. IP 99-1143-C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

September 5, 2000.

James D. Crum, Coots, Henke & Wheeler, Carmel, IN, for plaintiff.

Cynthia M. Locke, White & Raub, Indianapolis, IN, for defendant.

ENTRY GRANTING DEFENDANT'S MOTION TO STRIKE AND DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

BARKER, Chief Judge.

Plaintiff, Mark Hughes ("Hughes"), alleges that Defendant, Life Insurance Company of North America ("LINA"), in bad faith denied Hughes long-term disability benefits. In our Entry of February 29, 2000, we held that Hughes' claims were completely preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq., and that the factual allegations in plaintiff's complaint were sufficient to state a claim for benefits under ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)). LINA now moves for summary judgment, pursuant to Federal Rule of Civil Procedure 56, claiming that the administrative record, when examined under the proper standard of review, supports a judgment in its favor as a matter of law. LINA also moves to strike an affidavit Hughes relies on in opposition to the motion for summary judgment. For the reasons discussed below, we GRANT LINA's motion to strike and DENY its motion for summary judgment.

Background Facts

A. LINA'S Motion to Strike

As discussed below, we review LINA's motion for summary judgment under an "arbitrary and capricious" standard of review. See infra.¹ An arbitrary and capricious standard of review of a discretionary ERISA administrative decision is specifically limited to an examination of the administrative record generated by the plan administrator. See Perlman v. Swiss Bank Corp. Comprehensive Disability Protection Plan, 195 F.3d 975, 982 (7th Cir.1999) (adopting this position and collecting cases of other circuits in agreement); see also Trombetta v. Cragin Fed. Bank for Sav. Employee Stock Ownership Plan, 102 F.3d 1435, 1438 n. 1 (7th Cir. 1996). ("The only relevant materials at the time [a district court rules on summary judgment are] the materials that were before the [plan administrator] when it reached its decision."). Although the parties may be allowed to engage in further discovery and present new evidence in conjunction with a de novo review of the plan administrator's decision, we do not permit the parties to present such new evidence to us "where the question is whether a decision is supported by substantial evidence, or is arbitrary and capricious." Perlman, 195 F.3d at 982; see also Trombetta, 102 F.3d at 1438 n. 1 (affirming district court's decision to deny plaintiff's request for discovery to support its position that the ERISA plan administrator's denial of benefits was arbitrary and capricious).

In support of his position on summary judgment, Hughes attempts to rely on an affidavit of Dr. Keith Keener, one of his treating physicians. See Affidavit of Keith Keener, M.D. Hughes makes no claim that the affidavit was provided to LINA at any time during its review of his benefits request; rather, the affidavit is presented to us as additional evidence to support Hughes' position that LINA's decision was wrongly made. Since the Keener Affidavit is not a part of the administrative record generated by LINA during its review of Hughes' claims, we will not consider it. Accordingly, LINA's motion to strike is GRANTED.

B. Factual Record

Hughes was employed as a "Safety Manager" for Fluor Corporation ("Fluor").² See Plaintiff's Statement of Additional Material Facts ("Pl.'s Add'l Facts") ¶ 78. In this capacity, Hughes was stationed in Mexico in late 1996 to oversee the clean-up of a petroleum plant explosion. See Compl. ¶ 6; Affidavit of Rodney Stief, Ex. 3, Bates No. ("R.at") 0000144, April 21, 1997, Office Notes of Dr. Paul R. Becherer ("Dr.Becherer"). At the time, Hughes noted that some of his co-workers at the site were complaining of sinus symptoms. See R. at 0000144. After seven months in Mexico, Hughes returned to the United States in December, 1996, and, according to Fluor's records, his last day of work was January 7, 1997. See Compl. ¶ 6; Statement of Material Facts ("Mat.Facts") ¶ 9; R. at 000144.

LINA issued to Fluor a group long-term disability policy ("the policy") for its employees. See Mat. Facts ¶ 1. According to the policy, "[a]n employee will be considered Disabled if because of his Injury or Sickness he is unable to perform all the material duties of his regular occupation;...." Mat. Facts ¶ 4. Eligibility by Fluor employees for long-term disability insurance benefits ceases on:

. . . . .

(4) the date the Employee's Active Service ends except as set forth below.

(a) If the Employee's Active Service ends due to Disability for which Monthly Benefits are or may become payable, the insurance will continue while that Disability continues during the Benefit Waiting Period and thereafter but only for as long as monthly Benefits are payable for Disability or Residual Disability.

Mat. Facts ¶ 2 (emphasis added). "Active Service" is further defined to mean that:

the Employee is in active employement [sic]. You will be considered in active employment with the Employer on a day which is one of the Employer's scheduled work days if he is performing in the usual way all of the regular duties of his work for the Employer on a full time basis on that day, either at one of the Employer's usual places of business or at some location to which the Employer's business requires him to travel. An Employee will be deemed in Active Service on a day which is not one of the Employer's scheduled work days only if he was in Active Service on the preceding scheduled work day.

Id. ¶ 3.

Fluor, the plan administrator of the policy, delegated to LINA, as claim administrator:

[t]he discretionary authority to interpret and apply plan terms and to make factual determinations in connection with its review of claims under the plan. Such discretionary authority is intended to include but is not limited to, the determination of the eligibility of persons desiring to enroll in or claim benefits under the plan, the determination of whether a person is entitled to benefits under the plan and the computation of any and all benefits under the plan. The plan administrator [Fluor] has also delegated to [LINA] as claim administrator the discretionary authority to perform a full and fair review, as required by [ERISA] of each claim denial which has been appealed by the claimant or his/her duly authorized representative.

Mat. Facts ¶ 5.

Hughes submitted a claim for long-term disability benefits to LINA on October 27, 1997, stating that he became disabled on January 1, 1997, as a result of "complications caused by inhalation of toxic substance while on fire rebuild job in Mexico [which] led to nephrotic syndrome and atrill [sic] fibrillation and atrill [sic] flutter." Mat. Facts ¶ 8. The parties agree that Hughes' "Active Service" ended on January 7, 1997. See id. ¶ 9. Thus, under the terms of the long-term disability policy, Hughes qualified for benefits only if his "Active Service" ended on January 7, 1997, "due to Disability." See id. ¶ 2.

1. Medical History

During LINA's investigation of Hughes' claim for long-term disability benefits, the following medical history was developed and documented.³ On January 20, 1997, Hughes first sought medical treatment from Dr. Martin van Cleeff ("Dr. van Cleeff") complaining of sinus congestion, chest congestion, occasional chill, chest tightness and wheezing. See Mat. Facts ¶ 46; Pl.'s Add'l Facts ¶ 79. Dr. van Cleeff diagnosed Hughes with sinusitis and bronchitis and prescribed a course of antibiotics. See Mat. Facts. ¶ 46; Pl.'s Add'l Facts ¶ 79. Dr. van Cleeff made no mention at this time that he believed Hughes was or should be kept away from work because of his symptoms. See Mat. Facts. ¶ 46. Hughes' next documented contact with a doctor was a January 31, 1997, phone call to Dr. van Cleeff in which Hughes reported that he had improved slightly, but that the symptoms persisted; in response, Dr. van Cleeff authorized further antibiotics but did not consider the problem severe enough to warrant an office visit. See id. ¶ 47.

The record is devoid of any reference to further contact between Hughes and a doctor until a March 10, 1997, visit to Dr. van Cleeff. See id. ¶ 48. Hughes continued to complain of a sinus infection, and further noted recent swelling in his feet; Dr. van Cleeff diagnosed Hughes with chronic sinusitis, found "1 + pitting edema," and prescribed more antibiotics. See id.; R. at 000173. Once again, there is no indication that Dr. van Cleeff considered the diagnosis to require Hughes to remain off work, or that he recommended to Hughes that he not work. See id.

On March 20, 1997, Hughes had a final appointment with Dr. van Cleeff, this time receiving a complete physical. See id. ¶ 49. Dr. van Cleeff listed Hughes' problems as obesity, chronic sinusitis, and edema (noting however, that the edema was "much improved);" according to Dr. van Cleeff's notes of this visit, Hughes denied suffering from any other significant symptoms. See id. Upon examination, Dr. van Cleeff found "2 + edema" in Hughes' extremities, significant proteinuria — protein in the urine — and diagnosed Hughes with nephrosis. See id. ¶¶ 22, 50; Pl.'s Add'l Facts ¶ 81. Dr. van Cleeff prescribed further antibiotics for the chronic sinusitis and prescribed Lasix and potassium chloride for the edema and referred Hughes to Dr. J. Keith Keener ("Dr.Keener"), a nephrologist, for a follow-up visit. See Mat. Facts ¶ 50; Pl.'s Add'l Facts ¶ 82. Dr. van Cleeff's notes do not indicate that at any time during his visit he recommended to Hughes that he remain off work. See Mat. Facts ¶ 51.

Dr. Keener first saw Hughes in his office on March 27, 1997. See id. ¶ 23. In a letter written to...