Professional Documents
Culture Documents
Ellen v. Ellis v. Metropolitan Life Insurance Company, 126 F.3d 228, 4th Cir. (1997)
Ellen v. Ellis v. Metropolitan Life Insurance Company, 126 F.3d 228, 4th Cir. (1997)
Ellen v. Ellis v. Metropolitan Life Insurance Company, 126 F.3d 228, 4th Cir. (1997)
3d 228
ARGUED: John Bertram Mann, Levit & Mann, Richmond, VA, for
Appellant. Alvin Pasternak, New York City, for Appellee. ON BRIEF:
Gregory D. Zahs, New York City, for Appellee.
Before ERVIN, Circuit Judge, and BUTZNER and PHILLIPS, Senior
Circuit Judges.
Affirmed by published opinion. Judge ERVIN wrote the opinion, in which
Senior Judge BUTZNER and Senior Judge PHILLIPS joined.
OPINION
ERVIN, Circuit Judge:
I.
The Plan vests MetLife, a fiduciary under the Plan, with discretionary authority
to interpret the terms of the plan and to determine eligibility for and entitlement
to plan benefits in accordance with the terms of the plan.
J.A. at 101. The terms of the Plan provide, in pertinent part, that a participant is
"disabled" if
J.A. at 92.
In August 1993, Ellis submitted a long-term disability claim form in which she
declared that she suffered from blurred vision, balance problems, and chronic
pain which precluded her from driving, reading, sitting, or standing for any
length of time without rest. She indicated that she believed her disability arose
from a dental visit procedure that occurred in April 1992, five days after which
she admitted herself to a hospital. MetLife subsequently initiated its review
procedure.
10
11
In November 1993, MetLife referred Ellis's claim file to the Independent Board
Certified Physicians Roundtable (Roundtable), an independent medical
consulting group, for an assessment of Ellis's condition. The Roundtable
members who reviewed Ellis's file consisted of an internal medicine and
neurology specialist, an internal medicine and cardiology specialist, and an
orthopedic surgeon. This panel concluded that no medical diagnosis for her
condition could be confirmed. The panel suggested the possibility of an
underlying psychiatric disorder, but no such evidence had been submitted to
them. Functional ability on the basis of a psychiatric disorder could not be
assessed. Nonetheless, assuming that each of Ellis's symptoms were present, the
panel concluded that Ellis ought to be able to lift various weights, to walk or
stand for three to four hours a day in divided periods, and to sit for eight to ten
hours a day.
12
13
Ellis did seek further review, and Porvaznik compiled additional medical
reports and information. Porvaznik himself characterized Ellis's problem as
severe and disabling but admitted that the etiology remained unclear. Reports
by other providers, however, were again inconclusive. A neurobehavioral
profile revealed that Ellis possessed "considerable strengths in the majority of
skills assessed, including sensory-perceptual abilities, general intellectual
abilities, and executive functioning skills." J.A. at 167. That report concluded
that "[a]lthough her symptoms are very real, and do apparently preclude her
resumption of her previous lifestyle, it is difficult to pinpoint etiology of
symptoms with any degree of certainty." J.A. at 168. A further head and neck
examination, MRI, audiogram, and otoscopic examination yielded normal
results. A physical therapist reported that Ellis's performance on one test was
consistent with a patient who has sensory organization dysfunction. Another
report suggested that Ellis appears to have a predisposition to fibromyalgia and
recommended a treatment of progressive aerobic exercise. And yet another
report could find no evidence of neurological disease but admitted that the
reported symptoms were incapacitating.
14
Rather than continue to deny Ellis's claim based on this report, MetLife instead
provided copies of the report to Ellis's health care providers to seek their
comments. In particular, MetLife requested that they address whether Ellis was
totally disabled with respect to her occupation of bank branch manager and to
submit objective medical evidence of her continuing disability. Only a few of
the health care providers responded. Additional testing of Ellis was arranged,
however, and MetLife continued to accept and consider evidence through
January 1995. The new reports continued to give a wide variety of assessments.
One neuro-psychologist, for example, suggested that the environment of the
banking industry, especially NationsBank's merger with Sovran Bank and its
attendant layoffs, created the potential for "secondary gain" because of Ellis's
access to long-term disability benefits. See J.A. at 238. A clinical social
worker, however, discounted that hypothesis, believing that Ellis had been
earning more than $100,000 annually whereas her disability payments would
amount to only $28,000 annually. See J.A. at 245. A statement by NationsBank
placed Ellis's annual earnings at approximately $38,700. See J.A. at 107.
16
MetLife submitted all of this data for a third time to the Roundtable. In place of
the specialist in internal medicine and cardiology, a specialist in internal
medicine and rheumatology was substituted; the three other panel members
remained the same as on the second panel. In a report of February 4, 1995, the
panel concluded that a diagnosis of fibrositis remained probable. But again,
assuming that diagnosis, as well as symptoms of muscle tightness, pain, and
ocular convergence, the panel determined that Ellis ought to be able to lift even
greater weights than indicated before, walk and stand six to eight hours a day,
and sit for eight to ten hours a day. This functional capacity was yet again
found not to be medically incompatible with Ellis's work requirements.
17
Following this review of its earlier denial, MetLife informed Ellis on March 28,
1995, that its decision remained the same and that her file was closed.
18
Ellis filed this action on October 12, 1995, alleging (1) that MetLife had failed
to give her adequate written notice of the reasons for its denial of her claim, (2)
that she was not given a full and fair review, and (3) that the denial violated the
terms of the Plan and ERISA. Following cross-motions for summary judgment,
the district court granted MetLife's motion and denied Ellis's. The court
determined that, considering the inconclusive evidence of the conflicting
reports of Ellis's own health care providers as well as the three determinations
of the Roundtable, substantial evidence supported MetLife's denial decision.
MetLife, therefore, had not abused the discretion vested in it by the Plan,
notwithstanding the slight possibility of a financial conflict of interest. The
court also concluded that MetLife had substantially complied with the
applicable regulations interpreting ERISA in its denial letters and that, because
MetLife had done more than was required to permit Ellis to present her claim,
there was no question that she had received a full and fair review.
19
II.
20
Over the last few years, we have developed a well-settled framework for
review of the denial of benefits under ERISA plans. Where a plaintiff is
appealing the grant of summary judgment, we engage in a de novo review,
applying the same standards that the district court employed. See Brogan v.
Holland, 105 F.3d 158, 161 (4th Cir.1997). In cases where the benefit plan
grants the administrator or fiduciary discretionary authority to determine
eligibility or to construe the terms of the plan, the denial decision must be
reviewed for abuse of discretion. See Firestone Tire and Rubber Co. v. Bruch,
489 U.S. 101, 111, 115, 109 S.Ct. 948, 954-55, 956-57, 103 L.Ed.2d 80 (1989);
Brogan, 105 F.3d at 161; Bedrick v. Travelers Ins. Co., 93 F.3d 149, 152 (4th
Cir.1996); Bernstein v. CapitalCare, Inc., 70 F.3d 783, 787 (4th Cir.1995); Doe
v. Group Hospitalization & Medical Servs., 3 F.3d 80, 85 (4th Cir.1993). Under
this deferential standard, the administrator or fiduciary's decision will not be
disturbed if it is reasonable, even if this court would have come to a different
conclusion independently. See Bruch, 489 U.S. at 115, 109 S.Ct. at 954-55;
Brogan, 105 F.3d at 161; Haley v. Paul Revere Life Ins. Co., 77 F.3d 84, 89
(4th Cir.1996); Bernstein, 70 F.3d at 787; Fagan v. National Stabilization
Agreement of Sheet Metal Indus. Trust Fund, 60 F.3d 175, 180 (4th Cir.1995);
Doe, 3 F.3d at 85. Such a decision is reasonable if it is "the result of a
deliberate, principled reasoning process and if it is supported by substantial
evidence." Brogan, 105 F.3d at 161 (quoting Bernstein, 70 F.3d at 788).
21
Ellis argues, however, that we should determine her eligibility for benefits de
novo because MetLife, as both fiduciary of the Plan's beneficiaries and the
Plan's insurer, suffers from a conflict of interest. Again, we have established a
well-developed framework for considering such conflicts of interest in a court's
reviewing calculus. The Supreme Court has recognized that where a plan
administrator or fiduciary is vested with discretionary authority and is
"operating under a conflict of interest, that conflict must be weighed as a
'factor[ ] in determining whether there is an abuse of discretion.' " Bruch, 489
U.S. at 115, 109 S.Ct. at 954-55 (quoting Restatement (Second) of Trusts 187
cmt. d (1959)). Because ERISA plans are governed by trust principles, this
factor is just one of several that a court should consider in determining whether
an administrator or fiduciary has abused the discretion vested in it. We have
recently stated that a reviewing court should consider, to the extent relevant,
23 the scope of the discretion conferred; (2) the purpose of the plan provision in
(1)
which the discretion is granted; (3) any external standard relevant to the exercise of
that discretion; (4) the administrator's motives; and (5) any conflict of interest under
which the administrator operates in making its decision.
24
25
[W]hen
a fiduciary exercises discretion in interpreting a disputed term of the
contract where one interpretation will further the financial interests of the fiduciary,
we will not act as deferentially as would otherwise be appropriate. Rather, we will
review the merits of the interpretation to determine whether it is consistent with an
exercise of discretion by a fiduciary acting free of the interests that conflict with
those of the beneficiaries. In short, the fiduciary decision will be entitled to some
deference, but this deference will be lessened to the degree necessary to neutralize
any untoward influence resulting from the conflict.
26
Bedrick, 93 F.3d at 152 (harmonizing Bruch and circuit law and quoting Bailey
v. Blue Cross & Blue Shield, 67 F.3d 53, 56 (4th Cir.1995) (quoting Doe, 3
F.3d at 87), cert. denied, --- U.S. ----, 116 S.Ct. 1043, 134 L.Ed.2d 190 (1996));
see also Martin v. Blue Cross & Blue Shield of Va., Inc., 115 F.3d 1201, 1206
(4th Cir.1997).
27
It therefore appears that in no case does the court deviate from the abuse of
discretion standard. Instead, the court modifies that abuse of discretion standard
according to a sliding scale. The more incentive for the administrator or
fiduciary to benefit itself by a certain interpretation of benefit eligibility or other
plan terms, the more objectively reasonable the administrator or fiduciary's
decision must be and the more substantial the evidence must be to support it.
28
29
But MetLife had before it not just these reports by the Roundtable specialists
but also all the data submitted by Ellis and her health care providers. Although
Ellis's osteopath, Porvaznik, as well as several other health care providers,
opined that Ellis was, in fact, disabled, there was no consensus on a diagnosis
of Ellis's condition or even on whether there was a medical cause for her
symptoms. Indeed, a number of her examiners indicated that she retained
"executive functioning skills," that she could engage in various forms of
physical exercise, and that she could return to work on a reduced schedule. One
report even suggested that the possibility that Ellis was embellishing her
symptoms for potential secondary gain warranted serious consideration. Based
on this conflicting data, but supported by the independent medical assessment
of the Roundtable, MetLife determined that Ellis was not "unable to perform
each of the material duties of [her] regular job" "due to an injury or sickness"
and thus that she was not disabled within the meaning of the Plan.4 Despite
MetLife's conflict of interest, which, as the district court noted, was greatly
mitigated by its substantial reliance on the evaluations of the independent
Roundtable, we conclude that MetLife did not abuse its discretion in denying
Ellis benefits. MetLife's decision was based on substantial evidence, and its
As fiduciary, MetLife must serve the best interests of all Plan beneficiaries, not
just the best interest of one potential beneficiary. Faced with conflicting
evaluations by the claimant's own health care providers, no conclusive
diagnosis, and three separate reports of an independent panel of medical
specialists finding no incompatibility between her functional limitations and her
job requirements, a fiduciary free of any conflict of interest would have been
more than reasonable in rejecting Ellis's claim and preserving the Plan's funds
for those beneficiaries who satisfy the Plan's definition of "disabled."
III.
31
A.
32
see also Sheppard & Enoch Pratt Hosp., Inc. v. Travelers Ins. Co., 32 F.3d 120,
127 (4th Cir.1994). Substantial compliance exists where the claimant is
provided with "a statement of reasons that, under the circumstances of the case,
permitted a sufficiently clear understanding of the administrator's position to
permit effective review." Brogan, 105 F.3d at 165 (internal quotation marks and
citations omitted).
38
In the instant case, MetLife's denial letter of December 9, 1993, explained that
Ellis's claim was denied because her functional limitations did not adversely
impact her ability to perform the duties of her job, quoted the relevant Plan
language defining "totally disabled," informed her of the Roundtable's
conclusions, notified her that she could request further review within 60 days,
and explained that additional documentation could be submitted for review.5 In
all material respects, MetLife substantially complied with each of the ERISA
regulation's requirements.
39
Ellis argues that the denial notice was deficient because it failed to inform her
of the information she needed to provide in order to perfect her claim. In
particular, she asserts that the Roundtable's report, which was not provided to
her with the denial letter, but which she later obtained, apparently during
discovery, states that "additional diagnosis and evaluations would be of merit or
merit consideration." Br. of Appellant at 41. Her argument is that, had she
known this information, she would have known what medical proof she needed
in order to prove her disability. Ellis's argument is fundamentally flawed in two
respects.
40
First, Ellis entirely misconstrues what the Roundtable report says. That report
actually states:
41 above functional capacities do not assume that any major improvement has
The
occurred with treatment. However, such might be obtainable with additional
diagnosis. As noted above, the fluctuating visual field loss may be due to migraine
phenomena, which have specific treatments for prevention that have not been used.
Evaluation for significant postural hypotension, and its treatment if found, may also
be of merit. The other alternative, of psychiatric cause, also may merit consideration.
42
J.A. at 146. The report does not say that if Ellis were diagnosed or evaluated for
certain conditions that such conditions would prove her disability. Instead, the
report states that, were her diagnosis known, then improvement in her
functional capacities might be obtained through appropriate, directed treatment.
What Ellis fails to understand is that, even without such diagnosis, treatment, or
improvement, her functional capacities are such that she was deemed able to
43
Second, and more importantly, MetLife, in its denial letter, informed Ellis of
what she needed to do in order to obtain a review of her claim pursuant to 29
C.F.R. 2560.503-1(f)(4). MetLife was not requiring any further information
from Ellis to perfect her claim under 29 C.F.R. 2560.503-1(f)(3). Her claim
was already complete and perfected; no additional information was necessary
for MetLife to process it and render a decision in her case. These two
provisions of the content of notice regulation are distinct and operate
independently. Subsection (f)(3) is only implicated when there remain
unresolved, material factual questions about which a plan administrator or
fiduciary must have information in order to review the denial of a claim. See
Brehmer v. Inland Steel Indus. Pension Plan, 114 F.3d 656, 661-62 (7th
Cir.1997). Ellis has somehow conflated these purposes and come to the
erroneous belief that MetLife is under an obligation to inform her of what she
needs to tell MetLife in order to obtain disability benefits. That is not MetLife's
role as a fiduciary. MetLife must treat each claimant with procedural fairness,
but, because it must also guard against improper claims, it is not its duty to
affirmatively aid claimants in proving their claims. MetLife's denial letter of
December 9, 1993, substantially complies with the applicable ERISA
regulations in all material respects.
B.
44
Ellis also alleged that the review she obtained was not full and fair. The
applicable regulation provides that every ERISA plan must establish
procedures under which a full and fair review may be obtained. These
procedures must, at a minimum, permit the claimant to
49 decision on review shall be in writing and shall include specific reasons for the
[t]he
decision, written in a manner calculated to be understood by the claimant, as well as
specific references to the pertinent plan provisions on which the decision is based.
50
29 C.F.R. 2560.503-1(h)(3).
50
29 C.F.R. 2560.503-1(h)(3).
51
It appears that neither party really comprehends what these regulations require.
MetLife argues, and the district court agreed, that the review of Ellis's claim
that it provided was more than eminently full and fair. MetLife, for example,
sent the Roundtable's second report to Ellis's health care providers and allowed
them the opportunity to critique it. It subsequently repeatedly extended the
deadline for Ellis's providers to submit evidence on her behalf, and then
submitted all the data to the Roundtable yet a third time before it finally
decided to uphold its original denial and close Ellis's case. Ellis for her part
argues that she never received any of the Roundtable's reports and that the third
report in particular was crucial since she claims the Roundtable specifically
requested that Ellis be psychiatrically evaluated according to a list of questions
it prepared. Both miss the point.
52
The full and fair review procedural requirements serve two complementary
purposes. They are designed to permit a plan's administrators to resolve
disputes in an efficient, streamlined, non-adversarial manner. At the same time,
the procedures ensure that a plan participant is protected from arbitrary or
unprincipled decision-making. See Weaver v. Phoenix Home Life Mut. Ins.
Co., 990 F.2d 154, 157 (4th Cir.1993). Both the specific minimum procedural
review requirements of subsection (g)(1) and the notice requirements of the
decision on review of subsection (h)(3) have been read as ensuring that a full
and fair review is conducted by the administrator, that a claimant is enabled to
prepare an appeal for further administrative review or recourse to the federal
courts, and that the courts can perform the task, entrusted to them by ERISA, of
reviewing a claim denial. See Wilczynski v. Lumbermens Mut. Cas. Co., 93
F.3d 397, 402 n. 3 (7th Cir.1996) (interpreting 29 C.F.R. 2560.503-1(g)(1)
(ii)); Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 693 (7th Cir.1992)
(interpreting 29 C.F.R. 2560.503-1(h)(3)). Compliance that substantially
fulfills these goals suffices.
53
What Ellis fails to understand is that the initial decisional process and the
subsequent review process are distinct. While it appears that Ellis did request a
review in writing and submit her disputed issues in writing in accordance with
29 C.F.R. 2560.530-1(g)(1)(i) & (iii), it is unclear from the record before us
whether she ever requested, either in writing or in verba, to review the pertinent
documents pursuant to 29 C.F.R. 2560.530-1(g)(1)(ii). On the other hand,
MetLife did not provide these documents on its own initiative, in particular the
first report of the Roundtable on which it so heavily relied in its initial denial of
Ellis's claim. The opportunity to review the pertinent documents is critical to a
full and fair review, for by that mechanism the claimant has access to the
evidence upon which the decision-maker relied in denying the claim and thus
The notice requirement for the decision on review must be every bit as explicit
as an initial denial notice in terms of providing specific reasons for the
continued denial and specific references to the pertinent plan provisions.
Compare 29 C.F.R. 2560.503-1(h)(3) with id. 2560.503-1(f)(1) & (2). What
is not required, because not relevant at this stage of the administrative review,
is notice regarding how to perfect a claim or how to seek review. Cf. 29 C.F.R.
2560.503-1(f)(3) & (4).
55
J.A. at 269. On its face, this letter is baldly deficient in specific references to
the reasons for the decision and contains no references to the pertinent Plan
provisions.
62
It is plain that MetLife has not followed the letter of the applicable ERISA
regulations concerning its review of Ellis's claim denial. In the first place,
MetLife ought to have informed Ellis that she could review the documentary
evidence that MetLife relied upon in reaching its initial decision. In this
particular case, the most critical document was the Roundtable's first report. In
the second place, MetLife also failed to provide its rationale for its continued
denial with the requisite specificity. On the other hand, Ellis also complains
that she was never provided with the second and third Roundtable reports.
Although it was incumbent upon MetLife to describe the Roundtable's analysis
to the extent MetLife based its decision on that analysis, MetLife was under no
duty to provide these latter two reports to Ellis as part of the review procedures.
63
64
those courts to properly review the decision. See Wilczynski, 93 F.3d at 402 n.
3; Collins v. Central States, Southeast and Southwest Areas Health and Welfare
Fund, 18 F.3d 556, 561 (8th Cir.1994); Halpin, 962 F.2d at 693. Because the
record before us, as before the lower court, contains all of the documentary
evidence that MetLife relied upon in reaching its decision, and it is clear, as
discussed above, that MetLife did not abuse its discretion in denying Ellis's
claim based upon that evidence, Ellis has in no way been prejudiced by the
deficiencies in MetLife's "decision on review" letter. Indeed, the district court
interpreted the conclusion that MetLife's "decision remain[ed] the same" as
making it plain to Ellis that the lack of medical documentation of her affliction
was the cause of the denial. Whether this be so, these deficiencies obviously are
not causally related to MetLife's ultimate denial, and Ellis has been able to
effectively prosecute her appeal in the federal courts. Moreover, it would be
pointless for us to vacate the decision below and remand with instructions to
the lower court that it should, in turn, remand this matter to MetLife with
instructions that it provide Ellis with the specific reasons for its continued
denial, since those reasons are now apparent to all. Lex non praecipit inutilia,
quia inutilis labor stultus.
65
IV.
66
Based on the foregoing analysis of Ellis's three allegations, we affirm the grant
of summary judgment to MetLife and its denial to Ellis.
67
AFFIRMED.
It is worth noting that Ellis presented no evidence that the Roundtable is not
independent of MetLife or that MetLife somehow unduly influences the
Roundtable's evaluation
Ellis argues that the Roundtable's evaluation of her functional capacity should
be discounted in light of her health care providers' determination of her
disability. That is, the treating provider's conclusion should trump that of the
reviewing physician, since the former had the opportunity to examine the
patient while the latter had only the cold paper record to go by. We need not,
and do not, reach this issue, as it is evident that Ellis's own providers had not
reached a consensus that she was disabled in any sense of the word (vis-a-vis
the meaning within the Plan), let alone that she could not perform the material
duties of her job