McDonald v. Western-Southern Life Ins. Co.
| Decision Date | 20 October 2003 |
| Docket Number | No. 02-3053.,02-3053. |
| Citation | 347 F.3d 161 |
| Parties | James McDONALD, Plaintiff-Appellee, v. WESTERN-SOUTHERN LIFE INSURANCE COMPANY; Western-Southern Life Disability Plan; Security Plan Committee of the Western-Southern Life Disability Plan, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Sixth Circuit |
ARGUED: Aaron P. Rosenfeld, (argued and briefed), David A. Campbell (briefed), VORYS, SATER, SEYMOUR & PEASE, Columbus, Ohio, for Defendants-Appellants.
Tony C. Merry, (argued and briefed), PALMER VOLKEMA THOMAS, Columbus, Ohio, for Plaintiff-Appellee.
Before: MOORE and GILMAN, Circuit Judges; MILLS, District Judge.*
James McDonald worked for Western-Southern Life Insurance Company for nearly twenty-one years before he began receiving long-term disability ("LTD") benefits from Western-Southern Life Insurance Company's Flexible Benefits Plan due to his severe depression and his aggressive personality disorder.1
After paying LTD benefits for over seven years, Western-Southern terminated McDonald's LTD benefits after it concluded that he was no longer disabled from performing any and every occupation, business, or employment for wages, compensation, or profit as was required by the terms of the plan in order to be considered disabled and in order to receive LTD benefits.
After the Appeals Committee affirmed Western-Southern's decision to terminate McDonald's LTD benefits, McDonald filed suit in federal district court seeking the reinstatement of his LTD benefits, which he claimed were denied in violation of his rights under the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C. § 1001 et seq. ERISA. After reviewing the administrative record, the district judge concluded that Western-Southern's decision to terminate McDonald's LTD benefits was arbitrary and capricious, and therefore, he ordered the reinstatement of McDonald's LTD benefits.
For the following reasons, we AFFIRM the judgment of the district court.
James McDonald began working for Western-Southern on October 11, 1976. His last position with the company was as a district sales manager in charge of the Columbus, Ohio, office. As an employee of Western-Southern, McDonald was a participant in the Western and Southern Life Insurance Company Flexible Benefits Plan. The Plan provided LTD benefits for covered employees who were determined to suffer from a long-term disability or who were determined to be long-term disabled. "Long-Term Disability or Long-Term Disabled" is defined by the terms of the plan as:
Long-Term Disability or Long-Term Disabled shall mean until the Covered Employee has completed 5 uninterrupted Years of Employment a disablement resulting from sickness or accidental bodily injury of such a nature that the disabled Covered Employee is receiving disability benefits under the Social Security Act. Once a Covered Employee is receiving such benefits his period of Long-Term Disability shall be deemed to include the waiting period for such benefits. After the covered Employee has completed 5 uninterrupted Years of Employment, Long-Term Disabled shall mean the complete and continuous incapacity of the Covered Employee to engage in any and every occupation, business or employment for wages, compensation or profit.
Pursuant to the terms of the plan, a covered employee has a continuing obligation to furnish proof of his long-term disability, to be examined in order to verify his long-term disability, and to provide any release required by the plan.
In the fall of 1988, McDonald began to experience severe depression. On October 26, 1988, Western-Southern awarded McDonald short-term disability benefits due to his depression. On August 23, 1989, the Social Security Administration determined that McDonald was totally and permanently disabled. On January 12, 1990, Western-Southern notified McDonald that it had approved his application for LTD benefits, to be effective January 26, 1990, based upon his severe depression and his aggressive personality disorder.
On October 30, 1996, pursuant to a periodic evaluation of his continued eligibility for LTD benefits, Western-Southern asked McDonald to provide information to it relating to his disability and to sign an authorization for the release of his medical records.2 Upon receipt of this material, Western-Southern's medical consultants believed that some of McDonald's activities which were noted in his medical records, were inconsistent with a diagnosis of major depression.3 Accordingly, Western-Southern asked McDonald to submit to an independent medical examination in order to determine whether he remained eligible to receive LTD benefits.
On May 2, 1997, Dr. Richard M. Clary, a psychiatrist, examined McDonald.4 Dr. Clary's examination consisted of a standard psychiatric evaluation, the MMPI-2 psychological test, and a clinical interview of McDonald. Thereafter, Dr. Clary submitted a report to Western-Southern which contained his evaluation of McDonald's condition and the results of McDonald's MMPI-2.
Specifically, Dr. Clary's report indicated that the results of McDonald's MMPI-2: (1) were consistent with symptoms of depression and showed an over-sensitivity to criticism; (2) displayed an underlying hostility as well as evidence of anger and resentment; and (3) indicated paranoid tendencies but did not show any paranoid delusions or psychotic thinking. Dr. Clary diagnosed McDonald as having dysthymic disorder, a dependent personality, possible paranoid personality, macular degeneration of the left eye, decreased vision in his right eye, and high frequency hearing loss. Based upon his examination and interview of McDonald, Dr. Clary rendered the following conclusion:
Mr. McDonald would be able to relate satisfactorily with supervisors and co-workers. He would be able to understand and follow instructions in a competitive setting. He would be able to maintain attention and attendance for a reasonable period of time and would perform routine repetitive tasks without undue supervision. He would be able to exercise acceptable judgment concerning work functions and would have some difficulty understanding the stress and pressure associated with day to day work activities. He might be able to return to work in a very low stress environment on a limited trial basis.
On May 19, 1997, Western-Southern sent McDonald a letter informing him that his LTD benefits would be terminated effective June 30, 1997. In this letter, Western-Southern advised McDonald that, based upon Dr. Goodman's medical records and Dr. Clary's conclusions, it was terminating his LTD benefits because it now appeared that he could engage in an occupation for wages, and thus, he no longer met the definition of "Long-Term Disability or Long-Term Disabled" as defined by the terms of the plan.5 Thereafter Western-Southern offered McDonald a position, but he refused it.6
On June 4, 1997, McDonald, through counsel, filed an administrative appeal of Western-Southern's decision to terminate his LTD benefits. As part of his appeal, McDonald presented new evidence which included affidavits from Dr. Goodman, Dr. Hamdorf, and Mr. Eichenbaum, McDonald's bridge coach. Therein, both Dr. Goodman and Dr. Hamdorf opined that McDonald is totally disabled from engaging in any work for profit. In his affidavit, Mr. Eichenbaum testified that McDonald is a poor bridge player and that, based upon his observations of McDonald's bridge playing skills, he believes that McDonald is totally disabled from working.7
Upon receipt and review of the evidence which McDonald submitted as part of his administrative appeal, Western-Southern telephonically contacted Dr. Clary in order to discuss the issues raised by McDonald's new evidence and in order to have Dr. Clary clarify his previous findings and conclusions. Participating in this telephone call with Dr. Clary were Don Wuebbling (who was Western-Southern's chief legal counsel and a member of the Appeals Committee), Dean Vonderheide (who was Western-Southern's director of benefits), and Megan Ratchford (who was Western-Southern's nurse coordinator). This telephone conversation was audio taped.8 At the end of this telephone conversation, Wuebbling asked Dr. Clary to submit a second letter discussing the issues raised during their telephone conversation.
On December 17, 1997, Dr. Clary submitted an addendum to his initial report. In this addendum, Dr. Clary found that, contrary to Dr. Goodman's and Dr. Hamdorf's opinions and despite McDonald's poor bridge playing skills, McDonald was capable of returning to work. Specifically, Dr. Clary found:
In my opinion, Mr. McDonald is not suffering from any psychiatric or psychological impairment that is severe enough to prevent him from returning to work but he, in fact, does not want to return to work.
On January 2, 1998, Western-Southern informed McDonald that his administrative appeal was denied.
On April 17, 1998, McDonald filed a Complaint (which he later amended) in federal district court against Western-Southern, alleging that it had wrongfully terminated his LTD benefits in violation of his rights under ERISA. Specifically, McDonald alleged three causes of action against Western-Southern: (1) a claim to recover benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B); (2) a claim for breach of fiduciary duty under ERISA, 29 U.S.C. § 1109 and § 1132(a)(3); and (3) a claim for intentional denial of benefits under ERISA, 29 U.S.C. § 1140 and 1132(a)(3). At the conclusion of the discovery period established by the district court, McDonald and Western-Southern filed cross-motions for summary judgment.
On December 14, 2001, the district court entered an order granting in part and denying in part both parties' motions for summary judgment. Specifically, the district court held that Western-Southern's decision to terminate ...
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