Robyns v. Reliance Standard Life Ins. Co., 97-1058

• Citation: 130 F.3d 1231
• Decision Date: 25 November 1997
• Docket Number: No. 97-1058,97-1058
• Parties: Sarah ROBYNS, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY and Community Centers of Indianapolis, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1231

130 F.3d 1231

Sarah ROBYNS, Plaintiff-Appellant, v. RELIANCE STANDARD LIFE INSURANCE COMPANY and Community Centers of Indianapolis, Inc., Defendants-Appellees.

No. 97-1058.

United States Court of Appeals Seventh Circuit.

Argued Sept. 12, 1997.

Decided Nov. 25, 1997.

Eric C. Redman, Debra M. Law (argued), Cohen & Malad, Diane M. Moore, Indianapolis, IN, for Plaintiff-Appellant.

Thomas J. Grau, Cynthia M. Locke, White & Raub, Indianapolis, IN, Michael J. Burns (argued), James A. Young, Christie, Pabarue, Mortensen and Young, Philadelphia, PA, for Reliance Standard Life Insurance Company.

John W. Purcell, Cynthia P. Purvis (argued), Baker & Daniels, Indianapolis, IN, for Community Centers of Indianapolis, Inc.

Before CUMMINGS, EASTERBROOK, and KANNE, Circuit Judges.

KANNE, Circuit Judge.

In a classic case of jumping the gun, Sarah Robyns sued her ERISA plan administrator, Reliance Standard Life Insurance Company ("Reliance") and plan provider, Community Centers of Indianapolis, Inc. ("CCI"), for denying her total disability claim before Reliance had decided to deny her claims permanently. She claims that the plan's demands for additional medical examinations were pretextual attempts to obtain a diagnosis consistent with an earlier decision to deny her claim. The district court granted the defendants' summary judgment motion as Robyns failed to exhaust her administrative remedies. We affirm.

I. HISTORY

Robyns began working as a clinical supervisor for CCI in April 1991. This position is primarily a sedentary one requiring Robyns to sit for seven of her eight working hours each day. Robyns oversaw the provision of treatment services to adolescents involved in substance abuse and counseled their families. She enrolled in an employee welfare benefit plan offered by CCI, administered and funded by Reliance, and governed by ERISA, 29 U.S.C. § 1001 et seq. On September 26, 1991, CCI placed Robyns on short-term disability leave due to several ailments, including fatigue syndrome and fibromialgia. During this leave, she received benefits from CCI's employee welfare benefit plan.

In March 1992, Robyns applied for long-term disability benefits. Reliance approved this claim on July 20, 1992 retroactive to March 25, 1992. Its decision was based in part on a June 30, 1992 certification by Robyns' physician, Dr. Steven H. Neucks, who diagnosed Robyns as having fibromialgia with a "very low prognosis" for returning to work. Reliance also had a diagnosis on June 5, 1992 from Dr. Wayne Pribble, a clinical psychologist, which concluded that Robyns was suffering from major depression that would "exacerbate and complicate" her physical condition.

On August 6, 1992, as part of a standard followup procedure, Robyns informed Reliance that she hoped to return to work on a part time basis in November 1992. She also mentioned that she had been making and selling jewelry. This information prompted Reliance to request further medical records from Robyns. It received a diagnosis of fibromialgia from Dr. Linda Huck.

In early 1993, Reliance re-examined Robyns' disability status in accordance with its long term disability policy. ¹ Reliance's Susan Dioguardi, R.N., performed the medical review of Robyns' case file. Claims examiner Janice Harrison examined other parts of the file to ensure Robyns was unable to work. Harrison requested that Robyns submit her 1992 tax return and that Robyns' treating psychologist (Dr. Pribble) evaluate her prognosis for returning to work as a clinical supervisor.

Dr. Pribble responded by stating he did not "feel competent to comment on the medical severity of the conditions." He suggested that Reliance contact Robyns' treating physician to confirm that she was totally disabled. Reliance then wrote Robyns on February 23, 1993 and March 24, 1993, requesting the name of her treating physician, Dr. Linda Huck.

Reliance wrote Dr. Huck on April 30, 1993, asking her help in "clarifying the claimant's current medical status." It did not receive a response. On June 15, 1993, Reliance wrote Robyns, notifying her that her benefits would be suspended if it did not receive Dr. Huck's reply within thirty days. On July 1, 1993, Dr. Huck responded. She stated that there were intervals of time when Robyns' pain "is such that she would be able to carry on duties as described for a social worker" but that frequent exacerbations prevented her from sustaining a steady job. Thus, Dr. Huck concluded Robyns was disabled.

After an internal audit of her claim left the insurer with unanswered questions, Reliance wrote Robyns on August 6, 1993 to request: 1) a copy of 1992 tax returns (for the second time); 2) a completed disability statement form from an attending physician; 3) the names and addresses of all physicians who treated her in 1993 and the conditions for which she was treated; and 4) a listing of all jewelry shows she attended that year. It did not receive a response. Reliance repeated this request on September 7, 1993. On October 9, 1993, Reliance again wrote Robyns with this same request. Finally, Reliance spoke with Robyns on October 12, 1993. At this time, she informed Reliance that she had retained an attorney and that the attorney had previously sent the information and had repeatedly called Reliance. Reliance has no record of these contacts.

Unable to contact Robyns' lawyer, Reliance wrote her on October 19, 1993 to ask for the same information initially requested in August 1993. It then received some of the requested information, including a list of jewelry shows Robyns attended in Illinois, Ohio, and Kentucky. These materials did not include a completed disability form from an attending physician. Reliance contacted Dr. Huck's office. Her staff explained that there would be a delay because they only received the request to complete the form on October 19 and the doctor was on vacation.

On October 25, 1993, Reliance wrote Robyns' attorney requesting additional information as Robyns had not yet satisfied Reliance's earlier requests. Reliance did not receive a response. It resent this letter on November 11, 1993. At this time, Dioguardi reviewed these latest events and the entire case file to date. She recommended that Reliance deny the claim. Robyns, however, received her monthly disability check on November 28.

On December 1, 1993, Reliance received Robyns' attorney's reply to its October 25 letter. This reply did not explain how Robyns could travel through the Midwest to sell her jewelry and yet not perform the sedentary duties associated with her former position as a social worker. To resolve this issue, Reliance elected to conduct an independent medical examination of Robyns. It scheduled this examination through a third party vendor, General Rehabilitation Services, Inc. During this same time period, opposition to Robyns' claims was building within Reliance. By early December, a collection of handwritten notes establish that at least two employees at Reliance wished to deny her claims. There is no evidence in the record to suggest that either of these employees has final decision-making authority. In December, Robyns did not receive a disability check from Reliance. Robyns believes that these handwritten notes confirm that Reliance had effectively denied her claim and that any subsequent action was simply pretextual.

In early January 1994, Reliance notified Robyns by mail of her scheduled medical examination. Robyns canceled the appointment because her attorney was unable to attend at the scheduled time and she wished her attorney to be present at the appointment. Reliance rescheduled the appointment and notified Robyns and her attorney in writing on January 24, 1994 that Reliance would interpret a failure to attend this appointment as an indication that Robyns was not interested in cooperating with Reliance.

The January 24 letter also informed Robyns that "[y]our benefits ceased because your medical condition was not consistent with the physical activities involved with the selling of your jewelry. It was felt you were not totally disabled from performing sedentary duties." The letter continued, stating that "[o]ur decision to have you examined is not an attempt to stall benefit payment, but to determine if you are capable of performing sedentary work.... Upon receipt of the results [of the individual medical examination] and our review, we will notify your attorney of our decision." The letter did not inform Robyns of Reliance's internal appeals procedure.

In response, Robyns filed suit against Reliance and CCI on January 28, 1994. On February 4, 1994, she did submit to Reliance's independent medical examination. The examining physician, Dr. Kern, then requested a functional capacity evaluation. This testing was performed on February 14, 1994. Dr. Kern reported the results of this testing to Reliance on February 21, 1994. He stressed that the testing evinced "a high degree of symptom magnification and inappropriate illness behavior. In addition, the patient did not display a bell-shaped curve on the handheld grip strength testing. This indicated a submaximal effort." Dr. Kern admitted that he had "several questions regarding the patient's permanent and total disability status." Yet, even though he had "difficulty understanding why she cannot return to her previous occupation," he recommended a vocational rehabilitation referral to a certified rehabilitation counselor to allow for a final determination.

Meanwhile, the pending litigation ensued. In Autumn 1996, the parties filed motions for summary judgment. On October 2, 1996, the district court granted summary judgment in favor of the defendants. In denying Robyns' claims under 29 U.S.C. § 1132, the court exercised its discretionary ability to require a plaintiff to exhaust her administrative remedies before filing a claim for wrongful denial of benefits in federal court. Robyns appealed.

II. ANALYSIS

Robyns raises three...