Scarpulla v. Bayer Corp. Disability Plan
| Decision Date | 27 September 2007 |
| Docket Number | No. CV-05-BE-1324-W.,CV-05-BE-1324-W. |
| Citation | 514 F.Supp.2d 1262 |
| Parties | Teresa SCARPULLA, Plaintiffs, v. BAYER CORPORATION DISABILITY PLAN, et al., Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
Jeffrey S. Daniel, Birmingham, AL, for Plaintiffs.
James S. Christie, Jr., Amelia Tait Driscoll, Bradley Arant Rose & White, Birmingham, AL, for Defendants.
This case came before the court on Defendants' motion for summary judgment (doc. 24). The parties fully briefed the issues in connection with the, motion. Because trial in this case would be conducted as a non jury trial, the court suggested to the parties that acceleration to a trial based on the briefs presented in connection with the motion for summary judgment may be appropriate. In their last joint status report (doc. 39), "Wile parties agree[d] to submit the case for a decision on liability based on written submissions, rather than having a trial with oral testimony." Consequently, the court reviewed the parties' submissions as the trier of fact and now reaches a final decision on the merits.
Plaintiff Teresa Scarpulla brings this lawsuit under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. 1132(a)(1)(B),1 seeking a determination from this court that the Defendants, the Bayer Corporation Disability Plan and Broadspire Administrator Services, Inc., denied her claim for long-term disability ("LTD") benefits on May 7, 2003 and October 1, 2003, in contravention of an employee welfare benefit plan2 provided by her former employer, Bayer Corporation. The court has federal question jurisdiction over Plaintiff's ERISA claim under 29 U.S.C. § 1132(e)(1). For the reasons stated below, the court concludes that Defendants' denial of Plaintiffs request for LTD benefits was arbitrary and capricious. Plaintiff is entitled to LTD benefits for the initial six-month disability period, but the court will remand the case to Bayer for determination of whether Scarpulla is "totally disabled" and, therefore, entitled to continuing LTD benefits. Although Broadspire makes no effort to distinguish itself from Bayer in this case, the court nonetheless concludes that Broadspire is not a proper defendant to this action and will dismiss all claims against Broadspire.
The Bayer Corporation Disability Plans ("Plan") are governed by ERISA. Bayer Corporation is the "administrator" as defined by section 3(16)(A) of ERISA. According to Plan documents, Bayer Corporation is a fiduciary within the meaning of sections (3)(21)(A)(i) and (iii) of ERISA, and a named fiduciary under section 402 of ERISA. Although Bayer Corporation is the "Plan Administrator," it may employ third parties to perform services in connection with the administration of the Plan.
Bayer Corporation has "the exclusive right to make any finding of fact necessary or appropriate for any purpose under the Plans, including, but not limited to, the determination of eligibility for and the amount of any benefit payable under the Plans." The Plan vests "exclusive discretionary" authority in Bayer Corporation to interpret the Plan and determine all questions arising under the Plan. Bayer, however, may delegate these responsibilities to third parties.
At the times relevant to this lawsuit, Bayer Corporation employed Defendant Broadspire (formerly Kemper National Services) as the claims administrator to provide administrative and claims processing services to the Plan for LTD benefits. Broadspire was the "Initial Claim Reviewer" to which Bayer Corporation delegated "the discretionary authority to act on [Bayer Corporation]'s behalf in making initial claim benefit determinations ... and ... otherwise interpret[ing] the terms of the Plan with respect to benefits under the Plan." Bayer Corporation, however, retained "final discretionary authority to determine what benefits shall be paid under the Plan, to interpret Plan provisions, and to otherwise determine the merits of any appeal."
Bayer Corporation created the Bayer Corporation Benefit Administration Committee ("Committee") to assist it in fulfilling its administrative duties under the Plan. If an employee appeals a claim denied by Broadspire, the Committee, or its delegate, becomes the claim appeal reviewer.
LTD benefits are paid out of a dedicated trust known as the Bayer USA Incorporated Welfare Benefits Trust (the "Trust"). The Trust is funded by contributions from Bayer Corporation and its affiliates to which the Bayer Corporation has extended the Plan, and by participating employees' salary reduction contributions. The Trust is used exclusively to pay welfare benefits. To the extent that the Trust is inadequate to pay benefits, benefits are paid from Bayer's general assets.
Under the Summary Plan Description ("SPD"), short term disability ("STD") coverage continues a Plan participant's weekly base salary when a disability forces the participant to miss work. STD benefits continue from the participant's first day of absence up to twenty-six weeks. To qualify for STD benefits, a Plan participant must be "disabled," which means: "you are under the care of a physician and, based on medical evidence of your illness or injury, you are unable to do the essential functions of your job."
When a disability continues for more than twenty-six weeks, LTD coverage begins, and the benefits replace a portion of the Plan participant's monthly base salary while she is disabled. The benefit amount is determined in part by income the Plan participant receives from other sources. To receive LTD benefits, a Plan participant (1) "must be unable to perform the essential duties of [he]r regular occupation;" (2) "must provide the company and claims administrator periodically with proof of [he]r disability;" and (3) "must medically verify [he]r disability." To continue LTD benefits after six months, a Plan participant must be "totally disabled," which means that she is "unable to work at any job for which [she is] ... or could become qualified by education, training, or experience."
According to the SPD, the Plan also provides benefits for partial disability and participation in a rehabilitation program where the participant works part-time during recovery. The rehabilitation program must be approved by Broadspire "before it can be considered rehabilitative."
Plaintiff Teresa Scarpulla began employment with Bayer Corporation as a Diabetes Specialist III on February 2, 1998. As a Diabetes Specialist III, Scarpulla was responsible for the development and implementation of Bayer's strategy for the marketing of its diabetic-support products. Because the position entailed movement of supplies and sales binders, Scarpulla was required to frequently lift one to ten pounds; to occasionally lift eleven to twenty-five pounds; and to engage in frequent pushing, pulling, and reaching. The Diabetes Specialist III position required Plaintiff to utilize her far, near, and peripheral vision; to utilize depth perception; to hear; and to drive a motor vehicle.
On April 30, 2002, Scarpulla fell down a flight of stairs in her home. On the day of her fall, Scarpulla was treated at the Brookwood Hospital Emergency Room for dizziness, loss of consciousness, blurred vision, injury to her head and neck, and general body soreness. Several days later on May 3, 2002, a CT scan of the head performed by Scarpulla's primary physician showed no abnormality. Similarly, on May 7, 2002, Dr. Emily Riser, a neurologist, performed an MRI of the brain, which revealed no abnormality. Given Scarpulla's continued complaints of headaches and dizziness, however, Dr. Riser diagnosed Scarpulla with post concussive syndrome and recommended that she receive STD benefits until August 1, 2002. Pursuant to Dr. Riser's recommendation, Scarpulla received STD benefits effective May 1, 2002.
In the months following her initial treatment by Dr. Riser, Plaintiff was evaluated by an ophthalmologist, Dr. Douglass Witherspoon, and a neuropsychologist, Dr. Thomas Boll. Dr. Witherspoon's medical records indicated that, although Scarpulla complained of various abnormalities in the temporal vision field and intermittent torsion of image in her right eye, he detected no anatomical basis for these visual symptoms. Nevertheless, Witherspoon speculated that Scarpulla may have experienced a "mild traumatic paralysis of [the] muscle by trauma." Ultimately, Dr. Witherspoon opined that he could offer Plaintiff no therapeutic treatment, but hoped that Scarpulla's symptoms would resolve themselves in the subsequent couple of months.
Approximately one month later on August 16, 2002, Dr. Boll performed a neuropsychological evaluation on Scarpulla. His records indicated that Scarpulla complained of noise sensitivity, significant headaches, dizziness, balance problems, poor short-term memory, and difficulties with comprehension and complex problem solving. According to Dr. Boll, Scarpulla was most concerned about her memory difficulties, a change in personality, and headaches.
After conducting various psychological tests, Dr. Boll noted that Plaintiff experienced obvious difficulties in arithmetic processing, tasks requiring cognitive speed, and difficulty performing executive tasks under time constraints; because of these symptoms, Scarpulla was not driving at that time. Based on Plaintiff's test results, Dr. Boll detected a decline in the areas of the brain "sensitive to the effects of a very mild brain injury or concussion." He suggested that the duration of Scarpulla's symptoms, which he conceded were of a more prolonged duration than usually experienced, might be...
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