Midgett v. Washington Group Intern. Long Term Dis.

• Decision Date: 15 April 2009
• Docket Number: No. 08-2523.,08-2523.
• Citation: 561 F.3d 887
• Parties: Mary MIDGETT, Plaintiff/Appellant, v. WASHINGTON GROUP INTERNATIONAL LONG TERM DISABILITY PLAN, Intervenor Defendant/Appellee, Aetna Life Insurance Company; Broadspire Services, Inc; Washington Group International, Inc.; Washington Group International Short Term Disability Plan, Defendants/Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

561 F.3d 887

Mary MIDGETT, Plaintiff/Appellant, v. WASHINGTON GROUP INTERNATIONAL LONG TERM DISABILITY PLAN, Intervenor Defendant/Appellee, Aetna Life Insurance Company; Broadspire Services, Inc; Washington Group International, Inc.; Washington Group International Short Term Disability Plan, Defendants/Appellees.

No. 08-2523.

United States Court of Appeals, Eighth Circuit.

Submitted: January 16, 2009.

Filed: April 15, 2009.

James G. Schulze, argued, Little Rock, AR, appellant.

Thomas L. Henderson, argued, Memphis, TN, David F. Rudolph, on the brief, for appellees, Aetna Life Insurance Company et al.

David F. Schmidt, argued, Chicago, IL, for appellee, Washington Group International Long Term Disability Plan.

Before MURPHY and SMITH, Circuit Judges, and LIMBAUGH, District Judge.¹

SMITH, Circuit Judge.

Mary Midgett appeals the district court's² grant of the motion for summary judgment brought by Aetna Life Insurance Company, Broadspire Services, Inc., Washington Group International, Inc., and Washington Group International Short Term Disability Plan (collectively "the defendants") on her claim for short-term disability benefits. Midgett argues that the district court erred in granting summary judgment to the defendants because she was denied a full and fair review of her short-term disability claim and because the plan administrator's denial of her claim was arbitrary and capricious. Midgett also appeals the district court's dismissal of her claim for long-term disability benefits for failure to exhaust administrative remedies, arguing that seeking long-term disability benefits would have been futile. We reject Midgett's arguments and affirm the judgment of the district court.

I. Background

Midgett worked as an assistant contract manager for Washington Group International, Inc. ("Washington Group"). Midgett participated in the company's short-term and long-term disability plans, which were governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. Broadspire Services, Inc., was the administrator for Washington Group's short-term disability plan when Midgett filed her short-term disability claim, but Aetna Life Insurance Company later replaced Broadspire as the plan administrator when it purchased Broadspire's disability unit. Pursuant to the Washington Group-Broadspire service agreement, Broadspire was "responsible for rendering all claim determinations regarding the terms" of the short-term disability plan and possessed the "discretionary authority to render initial, first and second level appeal claim determinations, including interpreting the terms of the Plan and otherwise making eligibility decisions consistent therewith."

The medical evidence in Midgett's case is extensive and conflicting. Dr. Ruben Tejada wrote a letter to Midgett's employer in December 2005, observing that Midgett had been under his care since 2002 and describing her condition as follows: "She suffers from various physical maladies, including avascular necrosis and fibromyalgia. During the past 5 years she has had two major surgeries and various minor surgeries.... She is on numerous medications to control her medical problems, but even with the medications will have episodes of fibromyalgia." Dr. Tejada stated that he had "known [Midgett] to work against better judgment in fear of losing her job if absent" and recommended that she "be accommodated in all ways to ensure she is not subjected to additional stressors."

On March 7, 2006, Dr. Michael Moore, a hand surgeon, opined that "Midgett's clinical history, physical examination, and x-ray studies are consistent with degenerative arthritis of the right long finger MP joint." Dr. Moore noted that "Midgett was fitted for a hand-based splint to wear as needed" and that "she will buddy tape the index, long, and ring fingers when she uses her right hand." That same day, Dr. Reginald Rutherford, a neurologist, administered a motor nerve conduction study, a sensory nerve conduction study, and a needle examination. The results of these tests were normal, and Dr. Rutherford stated that "[t]here is no evidence via electrodiagnostic parameters to suggest cervical radiculopathy, brachial plexopathy, ulnar neuropathy or median neuropathy right upper extremity." On March 8, 2006, and March 13, 2006, Midgett visited Dr. John Harris, who concluded that Midgett suffered from fatigue and fibromyalgia.

On March 13, 2006, Midgett filed a claim for short-term disability benefits, reporting her last day of work as March 3, 2006, and her first day of disability as March 6, 2006. Midgett's claims examiner informed Midgett that her medical information would be forwarded for a peer review.

Dr. Michael Courtney, a chiropractor, examined Midgett on March 20, 2006, and opined that Midgett was disabled. Dr. Yvonne Sherrer, a rheumatologist, completed a peer review of Midgett's medical record on March 27, 2006. Dr. Sherrer reviewed medical information received from Dr. Harris, including office notes from Midgett's March 8 and March 13 appointments and a March 13 lab report. Dr. Sherrer noted that although Midgett had "a history of fibromyalgia," the March 8 and March 13 progress notes did "not document significant abnormalities on musculoskeletal exam or objective functional limitation." Dr. Sherrer also spoke with Dr. Harris, who stated that he had been treating Midgett for approximately three weeks and did not feel comfortable making a disability determination. Dr Sherrer concluded that the record did not support a functional impairment that would prevent Midgett from performing her sedentary duties as an assistant contract manager.

Following a new patient consultation on April 4, 2006, Dr. Tamer Alsebai, a rheumatologist, stated that he was unsure whether Midgett would be able to return to work because of "her multiple conditions and ... medications." MRIs of Midgett's lumbar and cervical spine performed that day revealed "evidence of grade I degenerative anterior spondylolisthesis" and "[m]ultilevel spondyloarthropathic changes."

Dr. Sherrer reviewed Midgett's chiropractic records and an additional job description as part of a second peer review completed on April 10, 2006. Dr. Sherrer concluded that this additional information did not alter her previous determination, noting that although the chiropractic report indicated that Midgett suffered from "degenerative changes," it failed to "document functional abnormalities that would be expected to prevent [Midgett] from doing sedentary or light work." A bone densitometry study conducted on April 10 revealed "[o]steoporosis involving the right hip."

On April 12, 2006, Midgett's claims examiner informed Midgett that Broadspire had denied her short-term disability claim but that she was entitled to appeal that decision. Midgett appealed Broadspire's decision on May 9, 2006, submitting additional medical records for review.

Following the denial of her short-term disability claim, Midgett was examined by a number of other doctors. On April 17, 2006, she was examined by Dr. David Silas, a neurologist, whose impression was that Midgett suffered from lumbar disc disease, cervical degenerative disc disease, essential tremor, and fibromyalgia. In May 2006, Dr. Harold Chakales diagnosed Midgett with cervical degenerative disc disease, grade I spondylolisthesis, fibromyalgia, and osteoporosis. He opined that Midgett had suffered from total disability since March 3, 2006, and might not be able to return to work. A nerve conduction study conducted on May 24, 2006, revealed normal nerve conduction velocity in Midgett's left leg and "[p]robable mild chronic bilateral S1 radiculopathies, right worse than left."

Four additional peer reviews were completed in July 2006. First, Dr. Wendy Weinstein, an internal medicine specialist, acknowledged Midgett's fibromyalgia diagnosis but found no functional impairment that precluded Midgett from performing her sedentary job duties. Second, Dr. Vaughn Cohan, a neurologist, concluded that there was no evidence that Midgett could not perform her sedentary job duties despite her fibromyalgia, musculoskeletal pain, and degenerative arthritis. Dr. Cohan also noted that "[i]t is stated in the literature that patients with fibromyalgia syndrome do much better by remaining active than by allowing themselves to avoid normal activities of daily living and work-related activities." Third, Dr. Lawrence Burstein, a psychologist, found that Midgett's medical record did not support the presence of psychological impairments that would prevent her from performing the core functions of her job. Fourth, Dr. Jacques Caldwell, a rheumatologist, concluded that Midgett's medical record did not reflect the existence of a rheumatologic condition that would prevent her from performing her job duties and that there was no evidence that her medications affected her ability to work.

In a letter dated August 6, 2006, Dr. Chakales stated that Midgett was "permanently totally disabled and unable to work," explaining that she was unable to work 40 hours per week, required periods of rest, and must avoid prolonged sitting, stooping, and bending. On August 14, 2006, Midgett visited Dr. Bruce Safman, who observed that (1) Midgett's "examination did not demonstrate any significant pathology in the upper or lower extremities or trunk," (2) "her pain is under fairly good control," and (3) "[i]t was difficult to discern whether anxiety is playing a role in her symptoms." Following an exam on August 17, 2006, Dr. Tracy Phillips reported that Midgett (1) could sit for two hours and stand or walk for two hours in an eight-hour workday and (2) could lift up to ten pounds occasionally and never lift more than ten pounds. Broadspire denied Midgett's first-level appeal on August 21, 2006, and Aetna received Midgett's second-level appeal on October 24, 2006.³ Midgett was awarded Social Security disability benefits on September...