Terry v. Bayer Corp.

Citation145 F.3d 28
Decision Date02 March 1998
Docket NumberNo. 97-2190,97-2190
PartiesMichael F. TERRY, Plaintiff, Appellant, v. BAYER CORPORATION and Bayer Corporation Disability Plan, Defendants, Appellees. . Heard
CourtU.S. Court of Appeals — First Circuit

James B. Krasnoo, with whom Richard Briansky and Law Offices of James B. Krasnoo, were on brief, for appellant.

William J. Klemick, with whom John J. Myers, Treazure R. Johnson, and Eckert Seamans Cherin & Mellott, LLC, were on brief, for appellees.

Before LYNCH, Circuit Judge, COFFIN and BOWNES, Senior Circuit Judges.

BOWNES, Senior Circuit Judge.

In this appeal under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C.A. §§ 1001--1461 (West Supp.1998)("ERISA"), appellant Michael F. Terry challenges the termination of his long-term disability benefits. The district court granted summary judgment to the defendants. We affirm.


As required under the summary judgment standard, we recite the following undisputed facts in the light most favorable to the non-movant Terry, drawing all reasonable inferences in his favor. August v. Offices Unlimited, Inc., 981 F.2d 576, 580 (1st Cir.1992).

Terry began working at Bayer Corporation ("Bayer") in 1982 as a computer software test auditor. 1 At some point during the course of the next several years, Terry was moved to a new position, involving the tracking of rejected computer materials, and reporting his findings to the Bayer engineering and purchasing departments.

On or about January 5, 1987, as he exited his apartment building on the way to work, Terry slipped on ice and fell down nine steps, injuring his knee. He continued on to work that day, but on arrival was sent to the hospital by Bayer's nurse. Over the course of the next several weeks, Terry was cared for by both his primary care physician, Dr Walter H. Jacobs, and an orthopedic surgeon, Dr. George Ousler. Dr. Ousler determined at the time that Terry most likely had suffered a "medial lateral collateral ligament injury strain or an internal derangement of the knee." While Dr. Ousler's treatment plan was originally conservative, in March, 1987, Terry underwent arthroscopic surgery in an attempt to remedy persistent soreness and slight swelling. Pain management and physical therapy ensued for the next several months.

Terry returned to work in August 1987. He was promoted in 1988 to a position maintaining desk-top computers. In January 1990, as a result of budget cuts, Bayer transferred Terry to the position of test technician. This position involved the assembly and testing of computer boards, and involved considerably more physical activity than his previous positions; Terry was now required to move containers of computer boards around the workplace. After having been in his new position for approximately one month, Terry's knee buckled and he fell to the ground. This incident occurred outside of the workplace.

As a result of this second injury, Terry did not return to work at Bayer. A second arthroscopic surgery was soon performed, and torn cartilage and bone chips were removed from his knee.

Terry's primary care physician, Dr. Jacobs, states that Terry suffers from a degenerative knee condition which results in bone-on-bone contact. As a result of the condition, Terry is in almost constant pain, and is unable to stand, sit, or otherwise maintain a single stationary position for any extended period of time. Dr. Jacobs treats Terry's pain with a variety of anti-inflammatories and painkillers.

In July, 1990, Bayer approved Terry's application for long-term disability benefits. The Summary Plan Description ("SPD") states that long-term disability benefits are provided under the Bayer Long-Term Disability Plan ("Plan") when a beneficiary is "unable to work at any job for which [they] are qualified by education, training, or experience."

As Plan Administrator, Bayer retained Northwestern National Life Insurance Company ("Northwestern") to process and manage claims made under the Plan. 2 As part of that service, Northwestern assigned Anne Tacl to Terry's case to serve as rehabilitation case manager. Tacl's job was to monitor Terry's medical condition in order to make sure that he continued to meet the Plan's definition of total disability. Tacl was also charged with attempting to rehabilitate Terry, with the goal of returning Terry to full-time employment. These responsibilities were consistent with Plan provisions. Because Tacl was based in Minnesota, Tacl hired Sandy Lowery to provide local rehabilitation services to Terry.

In April, 1991, Tacl received a report from a Dr. Zarins, an orthopedic surgeon whom Terry had consulted prior to the active involvement of Northwestern. That report opined that Terry's accounts of pain did not correspond to the pathology observed in his knee. Dr. Zarins stated that Terry could return to part-time work with certain significant restrictions. Northwestern, however, was unable to locate an appropriate job for Terry at Bayer. Dr. Zarins saw Terry again one year later, in April 1992, and again determined that Terry could perform sedentary work on a part-time basis. Dr. Jacobs, for his part, however, continued to insist that Terry was completely disabled.

In November of 1992, Tacl, as authorized by the Plan, scheduled an independent medical evaluation ("IME") in an attempt to resolve the conflicts in medical opinion. The IME was performed by Dr. Thomas King, who determined that Terry's pain was "out of proportion to all physical findings," but wanted to rule out "reflex sympathetic dystrophy" ("RSD"). 3 Terry was referred to another specialist, who determined that Terry was not suffering from RSD.

On the basis of these medical evaluations, Tacl decided that Terry should participate in a work-hardening rehabilitation program, with the goal of returning Terry to full-time employment. Terry was informed, pursuant to a Plan provision, that if he failed to attend a rehabilitation program, his benefits would be terminated. Terry was given a choice among three institutions, and he opted to attend Farnum Industrial Rehabilitation ("Farnum"). Dr. Jacobs eventually signed off on the referral to Farnum, but did not think the program would be helpful to Terry.

Dr. Robert Haile, the Medical Director at Farnum, examined Terry upon his entry to the program. Haile opined at the time that,

[Terry's] degree of disability ... appears to be out of proportion to the degree of findings in his knee. I believe the patient has developed chronic pain syndrome, which refers primarily to the whole person effect of a chronic painful injury. It involves in addition to local persistent pain the psychosocial effects of chronic pain. I think the patient would be a good candidate for Work Hardening.

Dr. Haile did not doubt that Terry's pain was genuine. Although Terry's Farnum experience started out well enough, in the end Terry had completed fourteen rehabilitation sessions and canceled thirteen. Terry states that the cancellations were due primarily to complaints of severe pain, caused by the effort required to attend and participate in the rehabilitation program.

At about the same time as he was participating in the Farnum program, Terry was referred by Tacl to Deborah Veatch, a local vocational rehabilitation consultant. Although Terry was initially receptive to Veatch's services, his interest and participation in her services quickly waned. Veatch eventually communicated to Tacl that "[b]ased on Mr. Terry's obvious lack of follow through with treatment and vocational activities, ... Mr. Terry is most likely not an appropriate candidate for vocational rehabilitation services." Veatch did conclude, however, that Terry possessed transferable skills in the computer field.

On January 20, 1994, Terry was discharged from the Farnum program. The Program Director, Cheryl Baldwin, reported in the discharge summary: "Mr. Terry is capable of working full time, although the amount of standing needs to be limited. He is able to sit for two to four hours with intermittent stretch breaks. Mr. Terry is currently at Sedentary-Light duty work capacity. He has full, unlimited use of his upper body." Tacl thereafter requested that Dr. Haile complete a Physical Capacities Evaluation. Dr. Haile did so, and released Terry to full-time work with restrictions on continuous time in a sitting or standing position, as well as lifting, bending, and crawling.

Terry received a letter dated February 24, 1994 from Tacl indicating that she was recommending that his benefits be terminated. The letter stated that "[b]ecause you have been released to work with restrictions, you no longer meet the [Plan's] definition of total disability." Shortly thereafter, Terry received a termination letter dated March 3, 1994. The letter stated that, "[d]isability is defined as your complete inability to work in any job for which you[ ] are reasonably fitted by education, training, or experience. Based on a review of the medical and vocational information in your file you are no longer totally disabled from performing 'any occupation.' " Terry was advised of certain of his appeal rights, and benefits were terminated retroactively to February 25, 1994. Terry's benefit checks were not continued during the pendency of his appeals.

Shortly after Terry's termination, Tacl received a letter from Dr. Haile. Dr. Haile apparently sent the letter after receiving a phone call from Dr. Jacobs. The Haile letter stated that Haile had only been a consultant in a work-hardening program, and if Tacl required a formal "work release," that release would have to come from Dr. Jacobs.

Terry requested an appeal from Northwestern's decision. The "Northwestern ERISA Committee" was convened, reviewed his entire file, and upheld the benefits termination. Terry was advised of this by letter dated March 25, 1994. That letter stated that "[a]lthough Dr. Jacobs provided us with a detailed...

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