Lynd v. Reliance Standard Life Ins. Co.

• Decision Date: 30 August 1996
• Docket Number: No. 95-30588,95-30588
• Citation: 94 F.3d 979
• Parties: Edward Earl LYND, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY; Ford Bacon & Davis, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 979

94 F.3d 979

Edward Earl LYND, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY; Ford Bacon &

Davis, Inc., Defendants-Appellees.

No. 95-30588.

United States Court of Appeals, Fifth Circuit.

Aug. 30, 1996.

Travis M. Holley, Travis M. Holley & Associates, Bastrop, LA, Johnny Carl Parkerson, West Monroe, LA, for Edward Earl Lynd, plaintiff-appellant.

Peter F. Caviness, Dauzat, Falgoust, Caviness, Bienvenu & Stipe, Opelousas, LA, for Reliance Standard Life Insurance Company, defendant-appellee.

F. Drake Lee, Jr., S. Price Barker, Cook, Yancey, King & Galloway, Shreveport, LA, Tracy Ann Burch, Jones, Mitchell & Burch, Shreveport, LA, for defendants-appellees.

Appeal from the United States District Court for the Western District of Louisiana.

Before GARWOOD, EMILIO M. GARZA and DENNIS, Circuit Judges.

GARWOOD, Circuit Judge:

Bringing this action under ERISA, 29 U.S.C. § 1001, et seq., plaintiff-appellant Edward E. Lynd (Lynd) alleged in his complaint that the benefits he had been receiving pursuant to a long-term disability plan were wrongfully terminated. In his appeal of the district court's rulings on the parties' cross motions for summary judgment, Lynd presently contends that the district court reviewed the plan administrator's decision to terminate these benefits under an inappropriate standard of review, and that the grant of summary judgment dismissing his suit was erroneous.

Facts and Proceedings Below

Lynd was employed by defendant-appellee Ford, Bacon & Davis, Inc. (FBD) on December 18, 1989. In September of 1990, Lynd became unable to work and began receiving short-term disability benefits under FBD's Employee Welfare Benefit Plan (the plan). After six months, Lynd applied for and began receiving long-term disability benefits. The group policy associated with this long-term disability plan was issued by defendant-appellee Reliance Standard Life Insurance Company (Reliance).

Long-term disability payments were made to Lynd for twenty-four consecutive months. At the close of this two-year period, on March 9, 1993, the plan administrator terminated these payments to Lynd. The administrator made this decision to terminate benefits based on a limitation provision found in both the master policy and the certificate of insurance which stated that, "Monthly Benefits for Total Disability due to mental or nervous disorders will not be payable beyond twenty-four (24) months unless you are in a Hospital or Institution at the end of the twenty-four (24) month period."

Following the termination of these benefits, Lynd filed a petition in the Fourth Judicial District Court of Louisiana alleging that his disability did not result from a "mental or nervous disorder[ ]," and that his benefits under the plan were therefore wrongly terminated by defendants-appellees. The action was removed to federal district court pursuant to 28 U.S.C. § 1331, and the parties thereafter filed cross motions for summary judgment. The district court denied Lynd's motion and, in granting appellees' motion, held that the plan administrator had not abused its discretion in deciding to terminate benefits.

On appeal, Lynd contends that the district court erred by reviewing the plan administrator's decision under an abuse of discretion standard. Lynd argues that the district court should have reviewed the plan administrator's decision de novo. Furthermore, Lynd maintains that, regardless of the standard of review employed, his long-term disability benefits were wrongfully terminated.

Discussion

Whether the district court employed the appropriate standard in reviewing an eligibility determination made by an ERISA plan administrator is a question of law. See Chevron Chemical Co. v. Oil, Chemical and Atomic Workers Local Union 4-447, 47 F.3d 139, 142 (5th Cir.1995). Therefore, we review the district court's decision de novo.

In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 113-17, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989), the Supreme Court established that a denial of ERISA benefits by a plan administrator should be reviewed de novo by the courts unless the plan gives the administrator "discretionary authority to determine eligibility for benefits or to construe the terms of the plan." However, it remains unclear precisely what language must be employed in the plan to confer such discretionary authority upon the plan administrator. In Duhon v. Texaco, Inc., 15 F.3d 1302 (5th Cir.1994), this Court applied the analysis from Bruch to the language of an ERISA plan and held that de novo review was inappropriate because:

"[I]t is clear that the plan administrator has the discretionary authority to make a final and conclusive determination of the claim. This court has not imposed a linguistic template to satisfy this requirement ... but in this case the plan's plain language provides that the administrator may make an independent and final determination of eligibility." Id. at 1305-06 (citations omitted). ¹

Additionally, we have observed that the requisite grant of discretionary authority cannot be inferred from the language of an ERISA plan. In Chevron Chemical Co., supra, in the course of holding abuse of discretion was the proper standard of review, we stated that:

"[T]he Supreme Court 'surely did not suggest [in Bruch ] that 'discretionary authority' hinges on incantation of the word 'discretion' or any other 'magic word.' Rather, the Supreme Court directed lower courts to focus on the breadth of the administrators' power--their 'authority to determine eligibility for benefits or to construe the terms of the plan'....' On the other hand, discretionary authority cannot be implied ... 'an administrator has no discretion to determine eligibility or interpret the plan unless the plan language expressly confers such authority on the administrator.' " 47 F.3d at 142 (citations omitted).

In the present case, however, we pretermit the issue regarding which standard of review the district court should have employed in reviewing the plan administrator's eligibility determination. We do so because, regardless of whether the district court reviewed the administrator's eligibility determination for abuse of discretion or de novo, the nature of Lynd's disability compelled the district court to conclude that Lynd's long-term benefits under the plan were properly terminated. ²

Section 8.0 of the instant plan includes the limitation that "Monthly Benefits for Total Disability due to mental or nervous disorders will not be payable beyond twenty-four (24) months unless you are in a Hospital or Institution at the end of the twenty-four (24) month period." The parties do not dispute that Lynd remains disabled. Neither, however, is there any suggestion that Lynd was hospitalized or institutionalized on March 9, 1993, at the end of the two-year period during which he received long-term disability benefits. Therefore, this dispute turns on the proper characterization of Lynd's disability; specifically, it must be determined whether or not his disability constituted a "mental or nervous disorder" within the meaning of this plan. We hold that the district court correctly affirmed the plan administrator's determination that Lynd's disability was due to a "mental or nervous disorder"; therefore, the district court's holding is affirmed regardless of the standard of review employed by the district court in reviewing the plan administrator's eligibility determination.

The undisputed evidence before the district court was that Lynd was diagnosed on September 19, 1990, as suffering from "major depressive disorder." This diagnosis, documented on Lynd's benefits claims form, has remained static since that time. ³

However, Lynd contends that this general diagnosis of his disability--as a "major depressive disorder"--comports with his claim that his condition is physical in nature. In support of this position, Lynd presented to the district court the deposition (taken well after benefits were denied) of his treating physician, psychiatrist Dr. Dumont, in which Dr. Dumont asserted his belief that depression is a "physical" disorder:

"Q: All right, sir. But I guess the question I am driving at is, depression itself, that is not something caused from a physical disorder itself?

A: Yes, it is. Yes, it is. We think of depression as being a chemical imbalance. It is a malfunction in the part of the brain that controls mood regulation. And we see it as usually an inefficiency of the neurotransmitters or a relative deficit of certain neurotransmitters and we try to treat that by utilization of medications that can help elevate or increase the efficiency of the neurotransmitters.

... Q: All right, sir. So depression in essence results from a nervous disorder as I understand?

A: From a disorder of the central nervous system."

Dr. Dumont further testified that:

"Major depression is a disease and it has a physiologic basis every bit as much as diabetes, hypertension, cardiomyopathy or any other"

and that in his opinion "every major depressive disorder implicate[s] inefficiency of neurotransmitters in the central nervous system."

Dr. Dumont testified regarding the symptoms experienced by Lynd as a consequence of his "major depressive disorder":

"[Lynd] reported symptoms of lack of physical stamina, loss of energy and interest, unable to deal with pressure, unable to make decisions, he had sleep disturbance, he would wake up in a cold sweat with apprehension. He had to leave the office early one day or went to the office early one day and found anxiety so great he had to leave. He has been very anergic meaning no energy and ahdonia [sic] meaning unable to experience pleasure. He thus contacted Dr. Nichols who then referred him to me."

Dr. Dumont expressed the view that "resolution of Mr. Lynd's major depressive disorder would remove his disability."

Dr. Dumont described himself as "a physician who specializes in the practice of...