Orndorf v. Paul Revere Life Ins. Co.

• Decision Date: 15 April 2005
• Docket Number: No. 04-1520.,04-1520.
• Citation: Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510 (1st Cir. 2005)
• Parties: Jacob M. ORNDORF, Plaintiff, Appellant, v. PAUL REVERE LIFE INSURANCE COMPANY, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

404 F.3d 510

Jacob M. ORNDORF, Plaintiff, Appellant, v. PAUL REVERE LIFE INSURANCE COMPANY, Defendant, Appellee.

No. 04-1520.

United States Court of Appeals, First Circuit.

Heard January 5, 2005.

Decided April 15, 2005.

COPYRIGHT MATERIAL OMITTED

Charles Leonard Mitchell for Appellant.

Joan O. Vorster, with whom Elizabeth L.B. Greene and Mirick, O'Connell, DeMallie & Lougee, LLP were on brief, for Appellee.

Before TORRUELLA, Circuit Judge, CAMPBELL, Senior Circuit Judge, and LYNCH, Circuit Judge.

LYNCH, Circuit Judge.

This case requires us to address what is meant by de novo judicial review under ERISA of a denial of benefits when the ERISA plan does not preserve discretion in the plan administrator. That raises concomitant questions of whether the claimant is entitled to trial in the district court and what, if any, evidence may be admitted that is not in the administrative record before the ERISA administrative decision maker. Our conclusion is that given the nature of the claimant's challenge here — that he did in fact establish his eligibility to benefits before the ERISA decision maker — the claimant was not entitled to trial or to admit desired new evidence outside the administrative record or to discovery. Having defined the standards, we apply them to the facts, and uphold the denial of benefits.

I.

Jacob Orndorf worked as a perfusionist, a person who operates a heart-lung machine, for Jersey Shore Cardiac Associates Inc. ("Jersey Shore") from January 1, 1992 until March 29, 1995. Defendant Paul Revere Life Insurance Company ("Revere") provides group long-term disability insurance coverage to Jersey Shore; this plan is an employee welfare benefit plan as defined by ERISA.

In June 1995, Orndorf started receiving disability benefits for his drug dependency; under the policy, these benefits would last only until June 26, 2000. In 1998, Orndorf first informed Revere that he claimed a continuation of the disability payments beyond June of 2000 based on purported back problems. There was considerable exchange of medical information between Orndorf and Revere. Revere determined that Orndorf was not disabled due to pain from his back, neck, ankle or hypertension. On January 10, 2002, Revere issued a final denial of benefits and informed Orndorf that he had exhausted all of his appellate administrative remedies and that Revere would review no further information; the administrative record was closed.

In February of 2002, Orndorf¹ filed suit against Revere² in federal district court pursuant to 29 U.S.C. § 1132(a)(1)(B), alleging that Revere unlawfully denied his claim for long-term disability benefits due to physical limitations. Both parties filed motions for summary judgment.

The district court extensively reviewed the evidence in the administrative record, the duties of someone in Orndorf's occupation, Orndorf's first claim (drug dependency) and second claim (back pain) for disability, his treatment for back pain, his capacity to work, Revere's conclusion, and Orndorf's arguments on appeal. The court concluded that Orndorf was not disabled due to back, neck, or ankle pain or hypertension under the terms of the plan;³ "Orndorf's claim collapsed under the weight of the Record." The court granted summary judgment to Revere on March 17, 2004. Orndorf v. Paul Revere Life Ins. Co., No. 02-30024 (D.Mass. Mar. 17, 2004).

II.

A. The Policy

The Revere long-term disability policy at issue provides benefits in certain situations, including when an individual is totally disabled from performing the duties of his or her own occupation. Total disability for the purposes of Orndorf's policy means:

a. that because of injury or sickness the employee cannot perform the important duties of his own occupation; and b. the employee is under the regular care of a doctor; and c. the employee does not work at all.

The policy also defines Revere's obligation to pay benefits to the employee:

[Revere] pay[s] monthly total disability benefits to an employee if he becomes totally disabled while insured due to injury or sickness. The employee must be under the care of a doctor while totally disabled.... During any continuous period of disability immediately following completion of the employee's elimination period, but before the end of his benefit period, [Revere] pay[s] the employee a monthly total disability benefit for each whole month in which he is totally disabled from his own occupation. If the employee works other than full-time at his own job, he may qualify for monthly residual disability benefits.

B. Orndorf's First Claim for Disability

In May of 1995, Orndorf submitted his first claim to Revere for disability benefits for a "drug related" sickness, following hospitalization for a drug overdose.

Revere evaluated Orndorf's records to determine whether he was totally disabled due to drug disability under the plan, and on August 24, 1995, Revere informed Orndorf that it had approved his claim under the "Other Limitations" provision of the Policy and that his benefits period would expire on June 26, 2000.⁴

Although Orndorf is no longer receiving payments for this disability, his drug and psychiatric illnesses continue to preclude him from returning to his job as a perfusionist.⁵ One might ask why, if Orndorf is disabled anyway from doing his job as a perfusionist, there is any issue about whether he is also disabled by his back condition. There are two answers. The first is that Revere's statement of reasons as to why it denied benefits is that (1) the benefit period for the drug dependency disability had expired and (2) the information provided did not support eligibility for disability under any other provision of the plan. Revere is limited to the grounds of denial it articulates to the claimant. See Glista v. Unum Life Ins. Co., 378 F.3d 113, 128-29 (1st Cir.2004). Second, Orndorf cites to a provision in the policy that provides for circumstances where an employee is disabled by more than one injury or sickness:

If a Disability is caused by more than one Injury or Sickness, or from both, We will pay benefits as if the Disability was caused by one Injury or Sickness.... We will pay the larger benefit.

Revere has not disputed the applicability of this provision to Orndorf's case.

There is no real dispute that Orndorf was paid the benefits owed for his first disability claim due to drug dependency.⁶ The question is whether he was disabled within the meaning of the policy for his alleged back condition, his second claim for disability.

C. Orndorf's Second Claim for Disability

Although Orndorf says his history of back pain dates back to 1976, Orndorf first claimed disability on account of his back pain in June of 1998, when a Revere field representative met with Orndorf at his home on an unannounced visit. During this visit, Orndorf claimed that his chief disabling condition was his back and that therefore the disability payments should continue beyond June of 2000. Soon thereafter, Revere obtained Orndorf's complete Social Security Disability Insurance Appeal decision and his medical records.

In December of 1999, the insurer issued its original decision on this second claim, and Orndorf was told that his benefits were denied:

In the regular course of administering your claim, we conducted a review of all of your medical records. As a result of this review, it is our opinion that you are not precluded from performing the duties of your job or one similar in nature.

You alleged that you could not work due to chronic low back pain and advised your doctor on June 23, 1998 that your activities were limited and you remained indoors most of the time. However, on June 11, 1998, you reported you had been on a long bike ride. There seems to be some discrepancy between your related history and limitations and your actual level of activities and your performance.

We found no evidence of back problems or hypertensive care during the year 1998. Consequently, it is our opinion that your only disabling condition has been depression and substance abuse. Therefore, your claim has been administered and paid under the Other Limitations provision of the policy.

In October of 2000, on the first review of its denial, the insurer advised Orndorf:

We have received your letter dated October 3, 2000 including a letter from Dr. Gilbert. Your entire claim file was sent to our medical department for review, the review included the following records: medical review from Dr. Bianchi, medical packet from you backdated 8/31/00, letter from Dr. Rund dated 11/1/97, a functional capacity form completed by Dr. Gilbert, CT lumbar spine dated 3/8/00 and x-rays of spine and cervical dated 5/12/00.

At this time it is our opinion that in order to fully evaluate your physical limitations and restrictions we need additional objective information. This information should include reports of your last examination from the reported date of your illness and updated physical examinations.

On August 23, 2001, the insurer affirmed its denial of benefits on the basis that:

These records were reviewed by one of our in-house physicians. This physician is Board-Certified in Internal Medicine. We have determined that based on [ ] Mr. Orndorf's medical records that there was no basis for hypertensive impairment, and no evidence of persistent impairment producing limitations or necessitating restrictions from Mr. Orndorf's maxillary sinusitis and cervical spine complaints.

Thereafter, at Ordnorf's request, the insurer considered additional evidence and on January 10, 2002, reaffirmed its denial in a final review:

Since additional information was submitted, Mr. Orndorf's file was forwarded to the medical department for review. According to the Board-Certified Physician in Internal Medicine, he concludes the following:

a) Primary psychiatric impairment at the date of disability with persistence demonstrated through much of the claim period without...