Tebo v. Sedgwick Claims Mgmt. Servs., Inc.

• Decision Date: 24 January 2012
• Docket Number: Civil Action No. 09–40068–FDS.
• Citation: 848 F.Supp.2d 39
• Parties: Kristin TEBO, Plaintiff, v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.; PNC Financial Services, Inc.; The PNC Financial Services Group, Inc.; and Affiliates Long Term Disability Plan, Defendants.
• Court: U.S. District Court — District of Massachusetts

848 F.Supp.2d 39

Kristin TEBO, Plaintiff,
v.
SEDGWICK CLAIMS MANAGEMENT SERVICES, INC.; PNC Financial Services, Inc.; The PNC Financial Services Group, Inc.; and Affiliates Long Term Disability Plan, Defendants.

Civil Action No. 09–40068–FDS.

United States District Court,
D. Massachusetts.

Jan. 24, 2012.

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George M. Thompson, Jr., The Law Office of George Thompson, Westborough, MA, for Plaintiff.

Gina DeSantis Wodarski, Edwards Wildman Palmer LLP, Boston, MA, for Defendants.

MEMORANDUM AND ORDER ON CROSS–MOTIONS FOR SUMMARY JUDGMENT AND DEFENDANTS' MOTION TO STRIKE
SAYLOR, District Judge.

This is a dispute concerning the denial of continued long-term disability benefits. The matter arises under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. The benefits at issue were provided to plaintiff Kristin Tebo under a disability plan provided

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to her as part of her employment with defendant PNC Financial Services, Inc. The plan at issue is the PNC Bank Corp. and Affiliates Long Term Disability Plan (the “Plan”). Defendant Sedgwick Management Services, Inc. is the administrator of claims for the Plan.

Tebo has a variety of eye conditions that resulted, among other things, in surgery in May 2004. She did not return to work until after the surgery. Sedgwick originally determined that she was unable to perform each of the material duties of her regular occupation, and was thus “totally disabled” under the terms of the Plan. Under the terms of the Plan, after 24 months, she could continue to receive benefits only if she was unable to perform each of the material duties of any gainful occupation for which he or she was reasonably fitted by training, education, or experience. Sedgwick determined that she did not meet the “any occupation” standard of the Plan and formally terminated her benefits. She unsuccessfully appealed the denial within Sedgwick, and now seeks judicial review of the denial.

The parties have cross-moved for summary judgment. Defendants have also moved to strike certain documents conditionally added to the administrative record. For the reasons set forth below, defendants' motion to strike will be denied, plaintiff's motion for summary judgment will be denied, and defendant's motion for summary judgment will be granted.

I. Background

Kristin Tebo was employed by PNC Financial Services, Inc., as an Investment Accounting Manager from 2000 to May 19, 2004. (AR at 389). As a full-time employee, she participated in the PNC Bank Corp. and Affiliates Long Term Disability Plan. The Plan is governed by ERISA, and provides full-time, salaried employees with certain disability benefits. ( Id. at 406, 518). Benefits pursuant to the Plan are paid out of a trust, called the Group Benefits Trust. ( Id. at 439–74, 518). PNC makes periodic, irrevocable payments to the trust, and all money paid into the trust must be used at all times for the exclusive benefit of Plan participants or beneficiaries. ( Id. at 470, 518).

PNC is the administrator of the Plan. ( Id. at 409). The Plan grants the administrator “complete and sole discretion with regard to the [administration of the Plan],” and provides that “no decision of the Administrator shall be overturned unless the decision is arbitrary and capricious.” ( Id. at 421). Under the Plan, PNC has discretion “to appoint or employ individuals or firms to assist in the administration of the Plan and any other agent or agents it deems advisable.” ( Id. at 421). In accordance with that provision, PNC and Sedgwick entered into a Service Agreement that provided, among other things, that Sedgwick would be responsible for determining eligibility of all LTD claims in return for a fixed quarterly fee. ( See Id. at 496, 498–503).

The Plan provides for the payment of benefits to employees who are “totally disabled.” It includes the following definitions:

“Totally Disabled” and “Total Disability” mean that because of injury or sickness:

a. The Participant cannot perform each of the material duties of his or her regular occupation; and

b. After benefits have been paid for 24 months, the Participant cannot perform each of the material duties of any gainful occupation for which he or she is reasonably fitted by training, education or experience.

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( Id. at 410). In other words, a participant in the Plan is entitled to disability benefits for up to 24 months if the administrator determines that she is unable to perform the substantial and material duties of her own occupation. After 24 months, she is entitled to benefits if the administrator determines that she is unable to engage in any gainful occupation.

Under the terms of the Plan, if the administrator denies a claim, the participant must file a written request for an appeal within 60 days after receipt of a written denial of benefits. ( Id. at 422).

A. Initial Decision Granting Disability Benefits

Tebo had surgery on her left eye on May 20, 2004. She did not return to work thereafter. ( Id. at 382–84). At the time of her surgery, she lacked stereoscopic vision, because the vision in her right eye was significantly diminished by a congenital hamartoma (a benign tumor on the optic nerve). ( Id. at 193). As a result of that condition, she had no practical vision in her right eye. ( Id.).

Tebo submitted an “Employee Application for Benefits” form on August 16, 2004, seeking long-term disability (“LTD”) benefits. ( Id. at 377–80). She listed Dr. Marvin Defrin and Dr. Willard Rice as her treating physicians, and explained that she could only drive in daylight and was unable to read or view a computer without pain. ( Id. at 377–78).

On September 24, 2004, Sedgwick sent Dr. Defrin a questionnaire concerning Tebo's disability. It also requested copies of her medical records from May 19, 2004, “to the present.” ( Id. at 366, 372). Dr. Defrin completed the questionnaire on October 18, 2004. He stated that Tebo's vision had not returned to normal and that she had “persistent difficulty with small print and numbers.” ( Id. at 366). However, his prognosis was “good” that she would be able to return to work on a full- or part-time basis. ( Id.). A Sedgwick representative also spoke with Tebo on the telephone on September 24, 2004. ( Id. at 59). She stated at the time that she was still healing from the surgery, but believed she would be able to return to work in October. ( Id.).

On November 23, 2004, Sedgwick concluded that Tebo's medical conditions prevented her from performing the material duties of her regular occupation and therefore awarded her disability benefits. ( Id. at 362–63). That conclusion was based on its review of the medical records and its communications with Tebo and Dr. Defrin. Sedgwick advised her that it would periodically verify her ongoing eligibility for benefits, and closely monitor her medical condition, to determine when it would be possible for her to return to work. ( Id. at 363). During that period, Tebo was required to apply for Social Security Disability (“SSD”) benefits. ( Id. at 363).

Sedgwick regularly monitored Tebo's condition and paid benefits for the full 24 months. ( See id. at 49–55, 110, 322–23, 333–41). Tebo applied for SSD benefits; on February 24, 2006, the SSA granted her those benefits for the period from May 19, 2004, through July 13, 2005. The SSA concluded, however, that “[o]n July 13, 2005, medical improvement occurred that was related to her ability to work, and [Tebo] has been able to perform substantial gainful activity from that date through the date of this decision.” ( Id. at 313).

B. Denial of LTD Benefits

On March 1, 2006, Sedgwick advised Tebo that beginning on August 18, 2006, she would only receive benefits if it found that she was not able to engage in any gainful occupation. ( Id. at 270–71). To

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assist in making that determination, Sedgwick provided her several forms to be completed by her and her attending physician, including an Attending Physician Statement, a Physical Capacities Form, a Claimant's Statement, and a Training, Education and Experience Statement. ( Id. at 270).

Dr. Defrin completed the “LTD Report of Disability” on March 9, 2006. In that report, he stated that Tebo had reached her maximum level of medical improvement, that she was legally blind in her right eye due to a congenital condition, and that she had 20/25 vision in her left eye. ( Id. at 256–58). On March 22, 2006, Tebo completed the Training, Education and Experience form, in which she outlined her education and work experience. She also indicated that her condition had not changed since July 2005, and that she had been awarded a closed period of SSD benefits. ( Id. at 266–68).

Sedgwick received a copy of the full SSA decision on April 7, 2006. ( Id. at 276–78). After reviewing the decision, it decided to ask Dr. Defrin to confirm Tebo's current restrictions and limitations and indicated it may need to conduct a Transferable Skills Analysis (“TSA”) to determine whether she could perform any alternative occupations. ( Id. at 45–47). Sedgwick also received additional medical records from Dr. Defrin outlining his treatment. ( See id. at 325–26, 336–41).

On August 15, 2006, Sedgwick informed Tebo that her disability benefits would be suspended effective August 18, 2006, “based on a lack of current treatment information on file supportive of continuing total disability.” It asked for all medical documentation supporting her LTD claim by September 5, 2006. ( Id. at 251–53). Sedgwick also sent Dr. Defrin a letter requesting additional information, including a request for medical records after October 1, 2005. ( Id. at 250, 254). Dr. Defrin responded that Tebo had no depth perception, poor night vision, and was unable to read for more than 10 minutes. ( Id. at 250). Thus, according to Dr. Defrin, she was unable to perform any work requiring extended reading, binocular vision, or working at night. ( Id.). Dr....