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Johnson v. Life Insurance Company of North America

United States District Court, D. Colorado

September 21, 2017

DESIREE JOHNSON, Plaintiff,
v.
LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant.

          ORDER REVERSING TERMINATION OF BENEFITS

          WILLIAM J. MARTIIEZ, UNITED STATES DISTRICT JUDGE

         In this case brought pursuant to 29 U.S.C. § 1132(a) of the Employee Retirement Income Security Act of 1974 (“ERISA”), Plaintiff Desiree Johnson (“Johnson”) challenges the decision of Defendant Life Insurance Company of North America (“LINA”) to terminate her long-term disability insurance benefits. (ECF No. 3.) The matter has now been fully briefed. For the reasons explained below, the Court finds that LINA's choice to terminate Johnson's disability benefits was arbitrary and capricious. Johnson will therefore be awarded past-due benefits and reinstatement of those benefits.

         I. BACKGROUND

         A. The Policy

         GEICO hired Johnson in September 1991. (Administrative Record (“R.”) (ECF No. 28) at 230.) Her last day of work at GEICO was December 13, 2010. (Id.) As of that date she was covered by the “GEICO Benefits Program, ” which included a Group Long Term Disability Policy, dated October 1, 2007 (“Policy”). (R. at 23-51.) GEICO designated LINA as the claims administrator and fiduciary for the Policy. (R. at 6, 11, 52.) Through that appointment, GEICO delegated to LINA “the authority, in [LINA's] discretion, to interpret the terms of the [Policy]; to decide questions of eligibility for coverage or benefits . . .; and to make any related findings of fact.” (R. at 52.) These decisions and findings are declared to be “final and binding on Participants and Beneficiaries of the [Policy] to the full extent permitted by law.” (Id.)

         As is typical for long-term disability policies, the Policy provides benefits in two phases. The first phase requires the covered individual to be “unable to perform the material duties of his or her Regular Occupation” and “unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation.” (R. at 26.) The second phase applies after benefits under the first phase have been paid for 24 months, and tightens the definition of disability by requiring more than just inability to perform the individual's regular occupation. Rather, the covered individual must be “unable to perform the material duties of any occupation for which he or she is, or may reasonably become, qualified, based on education, training or experience, ” and “unable to earn 80% or more of his or her Indexed Earnings.” (Id. (emphasis added).) If any benefits are owing, LINA pays those benefits directly to the covered individual. (R. at 52.)

         B. “Regular Occupation” Determination

         Johnson applied for long-term disability benefits from LINA on April 6, 2011. (R. at 229-35.) She had last worked for GEICO on December 13 of the preceding year, with the job title of auto damage field supervisor. (R. at 230.) Johnson explained to LINA that she had been battling trigeminal neuralgia for the previous two years. (R. at 221.)[1] The pain from that disorder had progressed to the point where the amount of pain medication she was taking made it difficult for her to function at work, and especially to drive-which she was required to do frequently, as a field supervisor. (Id.)

         LINA investigated and learned that Johnson had indeed been diagnosed with trigeminal neuralgia, as well as peripheral neuropathy; that she had been seeing a neurologist for “nerve block” procedures (steroid injections) in certain areas of her face; that she had been taking “class III narcotics” (presumably referring to Schedule III of the Controlled Substances Act) for pain control; that she sometimes exhibited slurred speech and a “clubbed” hand (i.e., uncontrollable finger curling); and that there had been “positive MRI findings” (otherwise unexplained) in Johnson's cervical spine. (R. at 209.)

         Based on this information and Johnson's self-reported symptoms, LINA approved Johnson for “regular occupation” disability benefits on May 18, 2011. (R. at 207, 941.)

         C. Social Security Disability Application

         As with many other long-term disability plans, the Policy requires approved claimants to apply for Social Security disability income benefits, which, if awarded, offset LINA's obligations to the extent of the award. (R. at 32, 33.) Johnson applied for Social Security benefits but was initially denied in a decision dated September 19, 2011. (R. at 931.) Johnson appealed that denial and eventually had a hearing before an administrative law judge in December 2012. (R. at 161; see also R. at 137.) On January 12, 2013, the Social Security Administration (“SSA”) reversed its initial denial and awarded disability benefits to Johnson. (R. at 645.)

         D. “Any Occupation” Determination

         On December 11, 2012-about a month before the Social Security award-LINA informed Johnson by letter that the 24 months of her “regular occupation” benefits would expire in June 2013. (R. at 298.) Therefore, LINA wrote, it was beginning its “any occupation” investigation to determine whether Johnson would remain eligible to receive disability payments under the Policy after those 24 months. (R. at 298-99.) LINA also issued requests for Johnson's most recent medical records, and any medical records in her Social Security file. (R. at 128.)

         LINA followed up with Johnson through a telephone call on December 20, 2012. (R. at 161.) During that call, Johnson reported “constant headaches, ” “excruciating pain that goes through [her] ears, ” and “dizziness spells.” (Id.) She further reported that she “usually stays at home” and “can't do anything.” (Id.)

         LINA spent the next couple of months gathering Johnson's most up-to-date medical records and a list of her prescriptions, and also continued to request Johnson's medical records “from January 1, 2012 to present” in the SSA's possession. (R. at 128, 289.) LINA also contacted GEICO to verify that Johnson's job required driving. (R. at 125.)

         LINA's efforts to obtain Johnson's Social Security medical records continued into May 2013. (R. at 141-43.) Finally, on June 7, 2013, the SSA faxed to LINA the report of a September 3, 2011 consultative examination of Johnson performed by Ryan Otten, M.D. (R. at 636-42.) Obviously, this report pre-dated the SSA's initial denial of Johnson's disability claim.[2] In any event, as of September 3, 2011, Dr. Otten reported that Johnson complained of

pain 24/7 with no relief. Her pain is 10/10 on a 0 to 10 pain scale. She says it never goes below 8/10. . . . She says she has been undergoing nerve blocks to the face and these only provide benefit for 3 to 4 days. She says she does not sleep well due to this pain. [She] also reports that she has a history of numbness and weakness in her left arm, which has been going on for a couple [of] years. She has a history of cervical spine problems. . . . Lastly, [she] says she suffers from occasional hand cramps, which she has been told is related to hypokalemia [low potassium levels], which is in turn related to her use of hydrochlorothiazide [a prescription drug].

(R. at 637.) As for the exam itself, Dr. Otten noted “mild tenderness” in the trigeminal area on the left side of Johnson's face, “mild discernible discomfort” when he tested her range of motion in her neck and back, “moderate discernible discomfort” when testing range of motion in Johnson's left shoulder, “moderate tenderness” in her cervical spine, and “decreased sensation to light touch diffusely in the left arm.” (R. at 639, 640, 641.)

         Dr. Otten diagnosed trigeminal neuralgia, disequilibrium of unknown etiology, chronic neck pain (suspected cervical spine degenerative disc disease), insomnia, and suspected depression. (R. at 641.) He also stated that his “[f]indings were commensurate with [Johnson's] complaints, ” and that “[t]here were no obvious discrepancies between [her] complaints and the physical examination findings.” (R. at 639, 641.) He nonetheless offered

no recommended limitations on the number of hours [Johnson] should be able to stand, walk, or sit during a normal eight-hour workday. There are no postural limitations recommended at this time. There are no assistive devices recommended at this time. The amount of weight [Johnson] should be able to lift or carry with her left [arm] is limited to less than 10 pounds frequently or 20 pounds occasionally. There are no recommended weight limitations for her right [arm]. It is expected [Johnson] will only rarely be able to perform the activities of reaching, pushing, or pulling with her left arm as well as grasping, gripping, fingering, handling, and feeling with her left hand. . . . Due to disequilibrium, [Johnson] should not have any exposure to unprotected heights or ladders. There are no other relevant visual, communicative, or workplace environmental limitations recommended at this time.

(R. at 641-42.)

         Dr. Otten's report was not what LINA had been expecting to receive. After reviewing it, LINA soon called Johnson to report that it had received the document “but it was dated 9/2011” as opposed to something from 2012 or later. (R. at 137.) LINA's representative clarified with Johnson the nature of the Social Security proceeding she had mentioned on the phone in December 2012, specifically, that it was an ALJ hearing only and that “[n]o further SSA exams are pending.” (Id.)

         On June 11, 2013, LINA chose to arrange for an independent medical examination (“IME”) of Johnson. (R. at 134-35.) Lloyd J. Thurston, D.O., conducted the IME on July 24, 2013. (R. at 631.) Dr. Thurston's written report of the exam portrays Johnson as evasive:

When I attempted to discuss the specific symptoms and problems from trigeminal neuralgia she simply repeated that it was terrible, she's had multiple injections, and the injections really aren't worth repeating because they don't seem to help and they are costly. And she simply can't work because of this terrible diagnosis and debilitating pain she has experienced. She states she has not received further nerve injections since May 2013. She would not directly answer my question regarding how the history of trigeminal neuralgia currently prevents her from working.
During the examination she was at times tearful and appeared quite anxious. When I asked specifically why she was on “disability” and unable to work she repeated the story about the onset of her trigeminal neuralgia and how all of the doctors that saw her before she was evaluated at the University of Colorado basically indicated that this was a terrible diagnosis and there was nothing they could offer.
She talked almost constantly and repeated herself frequently. She did not answer direct questions regarding her abilities and present symptoms. She repeatedly stressed past symptoms and past diagnoses.

(R. at 627, 628, 629.)

         Dr. Thurston noted that Johnson

drove herself to the exam and used no assistive devices. She demonstrated no difficulty pulling the office door open when she arrived or pushing the door open when she left the office.
Cervical range of motion appeared normal with no complaint of pain or pain behavior in flexion, extension, side flexion right and left, and rotation right and left. . . . Bilateral shoulder range of motion was normal without complaint of pain, pain behavior or hesitation. Her gait was normal and her balance appeared normal. She was able to easily sit and arise from a chair without difficulty; she was able to climb onto the exam table without apparent difficulty which included lying down and sitting back up on the exam table. She demonstrated no objective evidence of dizziness and no complaint of, or evidence of vertigo.
I did not identify any weakness or limitation in motion of the left shoulder or left [arm]. I found no objective evidence of left [arm] radiculopathy which had previously been diagnosed.

(R. at 627-28.)

         Dr. Thurston ultimately concluded, among other things, that “Johnson's pain complaints are not supported by the objective physical examination findings” and “Johnson is significantly exaggerating her physical symptoms and limitations.” (R. at 628, 629.)

         Dr. Thurston also filled out a LINA-provided Physical Ability Assessment form. On it, he diagnosed chronic pain syndrome, anxiety, fatigue, and “history of trigeminal neuralgia.” (R. at 631.) He opined that Johnson could “constantly” (more than two-thirds of the workday) sit, see, and hear; and that she could “frequently” (one-third to two-thirds of the workday) stand, walk, reach, manipulate, grasp, lift and carry 10 pounds, balance, and use foot controls. (R. at 631-32.) He also opined that she could “occasionally” (zero to one-third of the workday) lift and carry 20 pounds, climb stairs, stoop, kneel, and crouch. (R. at 632.)

         LINA sent Dr. Thurston's report and Physical Ability Assessment to a rehabilitation specialist for a “transferable skills analysis, ” i.e., an inquiry into the sorts of jobs Johnson could perform in light of Dr. Thurston's opinions. (R. at 622.) The rehabilitation specialist concluded that Johnson could return to her previous occupation of “Supervisor, Claims, ” and could also perform satisfactorily as a “Customer Service Representative Supervisor.” (R. at 623.)

         Based on Dr. Thurston's opinions and the transferable skills analysis, LINA decided on August 8, 2013 that Johnson did not qualify for “any occupation” disability benefits. (R. at 125.) LINA called Johnson on August 15, 2013 to explain as much. (R. at 118.) On that phone call, Johnson complained that, “in her opinion[, ] [Dr. Thurston] was not professional.” (Id.) LINA's representative apologized and advised Johnson that her formal termination letter would soon be arriving in the mail. (Id.)

         That letter, dated August 21, 2013, announced that LINA's review had “specifically included” Dr. Thurston's report and physical abilities assessment, the subsequent transferable skills analysis, and Johnson's “Social Security Disability Award Decision.” (R. at 275.) “Based on [this] information, ” said LINA, “it was determined that you are capable of performing” at the level specified by Dr. Thurston, and therefore capable of holding down the jobs identified in the transferable skills analysis. (Id.) Specifically concerning the Social Security award, LINA stated that it had “considered [the] fact [of that award] in [its] claim review, ” but that there was “no new information in [Johnson's] SSA file.” (R. at 276.)

         E. Johnson's First Appeal

         Through an attorney, Johnson invoked LINA's administrative appeals process. (R. at 605.) As part of that appeal, Johnson submitted evidence that she continued to obtain frequent nerve block injections in her face, and continued to visit the doctor frequently, all on account of her trigeminal neuralgia. (R. at 454-61, 464-73, 476-574, 600-04.) Johnson also submitted a “Physician Questionnaire on Functional Abilities” filled out on March 10, 2014 by her primary care physician, Egle Bakanauskas, M.D. (R. at 594-99.) Among Dr. Bakanauskas's opinions are that Johnson should rarely be required to operate a motor vehicle, that pain would “[c]onstantly” interfere with her attention and concentration, and that her symptoms would likely cause her to miss work three or more times per month. (R. at 597-98.)

         As part of the appeals process, LINA sent Johnson's medical records (including all records received on appeal) to Medical Consultants Network (“MCN”), an independent peer review agency that assigned the file to Todd Graham, M.D., who is board certified in physical medicine and rehabilitation, and in pain medicine. (R. at 450.) Dr. Graham issued a written report dated July 24, 2014. (R. at 442.) Dr. Graham noted his review of Johnson's medical records, including the records of twenty-four visits for nerve block procedures between March 2010 and April 2014. (R. at 442-44.) Dr. Graham also summarized the notes from twenty-three physician visits between November 2010 and May 2014 (a few of these visits appear to overlap with visits for nerve block procedures). (R. at 445-47.) This summary included Dr. Thurston's IME. (R. at 447.)

         Dr. Graham further reported that he had attempted to speak by telephone with three of Johnson's physicians three times each, but was unable to reach them. (R. at 448.) Finally, Dr. Graham provided his opinions:

Based on review of the provided medical records, there are no objective findings either on exam or on diagnostics that would indicate the need for any type of restrictions. Patient underwent an Independent Medical Exam [referring to Dr. Thurston's exam] which also noted pain complaints were not supported by objective findings. There are no findings [since that exam] that would indicate the need for any type of restrictions.
Patient complained of side effects with almost every medication attempted which made compliance with medication regiment [sic] very difficult. There were no side effects noted though that would alter her activities.

(R. at 449.)

         By letter dated August 4, 2014, LINA announced to Johnson that it was “reaffirming [its] previous denial of benefits.” (R. at 254.) It made this decision relying upon Dr. Graham's report. (R. at 255.) It also noted that it still found her Social Security award irrelevant because “[n]o new information from the Social Security file has been provided since the initial Social Security Award. As a result, we are in receipt of ...


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