United States District Court, D. Colorado
CARA R. DENNEY, Plaintiff,
UNUM LIFE INSURANCE COMPANY OF AMERICA, Defendant.
RECOMMENDATION OF UNITED STATES MAGISTRATE
Y. Wang Magistrate Judge.
civil action comes before the court on the Administrative
Record, [#16, filed April 28, 2017], and the Parties'
Joint Motion for Determination on the Record (“Joint
Motion”). [#38, filed November 27, 2017]. The Joint
Motion was referred to the undersigned Magistrate Judge
pursuant to the Order Referring Case dated February 6, 2017,
[#12], and the memorandum dated November 27, 2017, [#39]. The
undersigned Magistrate Judge has reviewed the Administrative
Record, the associated briefing, the case file, and the
applicable law, and, for the reasons stated below,
respectfully RECOMMENDS that the court
REMAND the decision to the Plan
December 13, 2016, Plaintiff Cara Denney
(“Plaintiff” or “Ms. Denney”)
initiated this action pursuant to the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C. §
1101, et seq., seeking long-term disability benefits
pursuant to a Group Long Term Disability Plan
(“Plan”), administered by Defendant Unum Life
Insurance Company of America (“Unum”), and made
available through Plaintiff's employer, Wagner Equipment
Company (“Wagner”). The Parties agree that
Plaintiff's claim is governed by ERISA, and the court
exercises subject matter jurisdiction pursuant to 29 U.S.C.
previously worked full-time for Wagner as a Computer and
Technology Instructor. [#1 at 3]. She asserts that the
position “required extensive computer use” and
“the ability to instruct employees on the use of
various computer systems, ” [id.], and further
required that she travel up to 50 percent of the time, stand
and/or walk more than one third of the workday, and lift up
to twenty-five pounds. [#23 at 2; #16-5 at
was 37 years old in 2015 when she underwent bilateral
reconstructive surgery on her feet. June 22, 2015 marked
Plaintiff's last day of full-time work; she underwent
surgery on her left foot the following day, and underwent
surgery on her right foot on July 20, 2015. [#1 at 3; #16-1
at 12-15; #16-28 at 848-851; #16-46 at 1567-1568]. During
this time, Plaintiff sought and received short-term
disability benefits under the Plan. [#1 at 3]. Her surgeon,
Joseph Mechanik, D.P.M., predicted that Plaintiff would
require an extended recovery period of up to six months, and
that she could return to work on December 31, 2015. [#16-5 at
67-69, 73; #16-1 at 13-14; #16-4 at 53; #16-17 at 464; #16-28
at 848-851]. With Dr. Mechanik's approval, Plaintiff
began working part-time beginning October 5, 2015. [#16-1 at
12-14; #16-4 at 51-55; #16-5 at 68, 73].
has a history of lower back pain dating to the occurrence of
two herniated disks, for which she underwent an L4-S1 lumbar
fusion in October 2001. See, e.g., [#16-16 at 435].
While she reported to her physicians that she had experienced
intermittent “flareups, ” since having the lumbar
fusion, and that she had been diagnosed with “failed
back surgery syndrome, ” she stated that she had had
good results from the lumbar fusion “and overall
improvement of her severe pain from the surgery.”
[Id.] While participating in physical therapy
following the bilateral reconstructive surgery on her feet,
Plaintiff began to experience severe neck and back pain.
See [#16-1 at 13-15]. Dr. Mechanik referred
Plaintiff to Michael Gesquiere, M.D., a Pain Management
Specialist, whom Plaintiff first saw on September 10, 2015.
[#16-16 at 433-434]. Plaintiff received care from Dr.
Gesquiere for chronic low back pain related to the lumbar
fusion and for neck pain. Dr. Gesquiere subsequently referred
Plaintiff to Christopher LaFontano, D.O., a neuromuscular
specialist, for evaluation and osteopathic manipulation
treatment for her neck and back pain, and she was initially
evaluated and treated by Dr. LaFontano on October 19, 2015.
an exam on December 14, 2015, Dr. Mechanik restricted
Plaintiff to no more than fifteen minutes of standing per
hour, for a total of forty-five minutes per day, and
maintained Plaintiff's restriction of part-time work,
extended through February 2016. [#16-1 at 13-15; #16-4 at
54-55; #16-5 at 74-75; #16-28 at 848-851; #16-30 at 941]. Due
to the neck and back pain that Plaintiff was experiencing,
Dr. Mechanik restricted Plaintiff from lifting weight over
ten pounds and from bending or stooping. [#16-43 at 1446];
see [#16-16 at 412-414]. Plaintiff continued working
part-time until January 11, 2016, when, following a medical
exam, Dr. LaFontano recommended that she stop working
entirely. He wrote that he had treated Plaintiff on five
occasions since October 19, 2015, which he identified as the
onset of her back condition, and that she was unable to sit
or stand for prolonged periods of time, could not lift more
than ten pounds, and should not extend her arms for more than
ten to twenty minutes. [#16-5 at 77; #16-39 at 1302-1303].
Dr. LaFontano opined that Plaintiff's neck and back pain
was disabling and he restricted her from working altogether.
[#16-5 at 78]. See [#16-1 at 12-15; #16-3 at 45;
#16-4 at 46-47]. In the following months, Dr. LaFontano
opined that these restrictions were likely permanent, and
that another surgery may be required. [#16-4 at 45-47; #16-37
at 1226-1229; #16-38 at 1231-1234, 1239-1243; #16-39 at
1302-1307]. On January 26, 2016, Dr. Gesquiere opined that
Plaintiff suffered from a chronic pain syndrome, lumbar
postlaminectomy syndrome, cervicalgia with myofascial pain,
and a C5-6 right side para-central disc protrusion. [#16-16
filed a claim for long-term disability (“LTD”)
benefits, based on the condition of her feet and back. [#23
at 19]. Plaintiff represented in the Disability Claim Form
dated January 12, 2016 that her medical condition was
“back pain, pinched nerve (2), radiating pain, ”
and she described first experiencing the symptoms after the
bilateral foot surgery, “I had bilateral foot
surgery…while I was recuperating I started having
excessive back pain, radiating pain and numbness.”
[#16-3 at 40]. On April 22, 2016, Defendant denied the claim,
finding that Plaintiff was disabled from June 23, 2015
through December 14, 2015, and thus for only 175 days of the
180-day elimination period, which ended December 19, 2015.
The denial notice stated, “We have determined you are
able to perform the duties of your occupation on a full-time
basis prior to the end of the 180 day elimination period and
benefits are not payable.” [#16-29 at 910-915]. The
Parties agree that Plaintiff's disability extended 175
days, [#23 at 10; #16-1 at 13-15], but disagree as to whether
she was thereafter disabled.
1, 2016, Plaintiff provided Unum with updated medical records
from Dr. LaFontano and Dr. Mechanik. See [#16-32 at
1034]. She appealed Unum's decision the following day.
[#16-42 at 1413-1415]. Unum asserts in its Response Brief
that Plaintiff's appeal focused on Dr. Mechanik's
opinion that she was restricted to part-time work on and
after December 14, 2015, and the assertion that her feet and
back issues were interrelated. [#29 at 16]. See
[#16-42 at 1414]. Unum framed the appeal as follows:
Does the available information support a loss of functional
capacity relating to established medical conditions noted
above and the insured's reports of symptoms including
(chronic back, neck and foot pain), so as to prevent reliable
sustained functional activity (as noted below) as of
6/23/15-12/19/15 (EP) and beyond?
[#29 at 17; #16-45 at 1546-47]. Unum denied the appeal by
letter dated August 19, 2016, and states in its Response
Brief that it found that Plaintiff “was able to perform
the duties of her occupation as of December 14, 2015, prior
to the date that LTD benefits begin.” [#29 at 20;
#16-47 at 1589-96]. Plaintiff filed a second, voluntary
appeal, see [#16-48 at 1620-1622, 1625, 1636-1637],
and Unum issued its final decision denying the claim on
November 21, 2016. See [#16-48 at 1649].
issued Group Policy No. 418405 002 (the “Policy”)
to Wagner to fund the LTD benefits under the Plan. [#16-7 at
128; #16-8 at 163]. The “summary plan description and
the policy constitute the Plan.” [#16-8 at 162].
Policy requires a claimant to submit proof of loss showing
that he or she is disabled under the Policy's terms and
conditions. [#16-7 at 133]. Unum asserts that “[t]he
test of the Plan's definition of disability initially is
whether a claimant is able to perform the duties of her own
occupation.” [#29 at 1-2]. The Policy defines Own
Occupation Disability as follows:
- you are limited from performing the material and
substantial duties of your regular
occupation due to your sickness or
- you have a 20% or more loss in your indexed monthly
earnings due to the same sickness or injury.
After 36 months of payments, you are disabled when Unum
determines that due to the same sickness or injury, you are
unable to perform the duties of any gainful occupation for
which you are reasonably fitted by education, training or
You must be under the regular care of a physician in order to
be considered disabled.
The loss of a professional or occupational license or
certification does not, in itself, constitute disability.
[#16-7 at 142] (emphasis in original).
Policy specifies duration of disability as follows:
You must be continuously disabled through your
elimination period. The days that you are
not disabled will not count toward your elimination period.
Your elimination period is 180 days.
In addition, if you return to work while satisfying your
elimination period, and are no longer disabled, you may
satisfy your elimination period within the
accumulation period. You do not need to be
continuously disabled through your elimination period if you
are satisfying your elimination period under this provision.
If you do not satisfy the elimination period within the
accumulation period, a new period of disability will begin.
Your accumulation period is 360 days.
Id. (emphasis in original). The Policy defines
elimination period to mean “a period of continuous
disability which must be satisfied before you are eligible to
receive benefits from Unum, ” and accumulation period
to mean “the period of time from the date disability
begins during which you must satisfy the elimination
period.” [#16-8 at 158]. The Policy provides that if a
person works while disabled, “the days you are disabled
will count toward your elimination period.” [#16-7 at
has discretionary authority to determine claims for benefits
under the Policy, including the discretionary authority to
determine whether a claimant meets the definition of
disability. [#16-7 at 142, 133; #16-8 at 162-164].
Ordinarily, the fact that the Plan delegates discretionary
authority to Unum would result in review of the
administrator's decision by the court pursuant to an
abuse of discretion standard. Murphy v. Deloitte &
Touche Group Ins. Plan, 619 F.3d 1151, 1157 (2010)
(citations omitted); see Weber v. GE Group Life Assurance
Co., 541 F.3d 1002, 1011 (10th Cir. 2008) (describing
terms “arbitrary and capricious” and “abuse
of discretion” as interchangeable in this context).
Under such a standard, the court will uphold the
administrator's determination “so long as it was
made on a reasoned basis and supported by substantial
evidence, ” Van Steen v. Life Ins. Co. of N.
Am., 878 F.3d 994, 997 (10th Cir. 2018).
“Substantial evidence is such evidence that a
reasonable mind might accept as adequate to support the
conclusion reached by the decisionmaker, ” Caldwell
v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1282 (10th
Cir. 2002) (alteration, quotations omitted), and “[t]he
substantiality of the evidence is evaluated against the
backdrop of the administrative record as a whole.”
Adamson v. Unum Life Insurance Co. of America, 455
F.3d 1209, 1212 (10th Cir. 2006) (citations omitted).
Interpretation of the terms in a plan is arbitrary and
capricious if it is unreasonable based on the plain language
in the plan, made in bad faith, or severely undermines the
policy concerns underlying ERISA. Torix v. Ball
Corp., 862 F.2d 1428, 1429 (10th Cir. 1988). So long as
the basis for the administrator's decision is reasonable,
the decision “need not be the only logical one nor even
the best one.” Nance v. Sun Life Assur. Co.,
294 F.3d 1263, 1269 (10th Cir. 2002). In applying this
standard of review, the court considers the evidence before
the plan administrator at the time it made the decision to
deny benefits. See Id. Indicia of arbitrary and
capricious decisions include lack of substantial evidence,
mistake of law, bad faith, and conflict of interest by the
fiduciary. Caldwell, 287 F.3d at 1282. There are
also instances where the court must exercise de novo
review, even when the plan administrator is vested with
discretionary authority. See Gilbertson v. Allied Signal,
Inc., 328 F.3d 625, 631 (10th Cir. 2003). “[T]o be
entitled to deferential review, not only must the
administrator be given discretion by the plan, but the
administrator's decision in a given case must be a valid
exercise of that discretion.” Id.
Defendant contends that the Parties agree that the arbitrary
and capricious standard applies. [#29 at 2]. Plaintiff argues
in her Opening Brief that “the policy language is not
entirely clear, ” but that it is “at least
arguable” that Defendant has such discretion. [#23 at
22]. On Reply, Plaintiff does not respond to Defendant's
arguments regarding the applicable standard of review. [#37].
In any event, it is clear the Parties do not agree as to the
amount of deference owed to Unum's decision, and
Plaintiff argues that Unum's decision “should be
given little, if any, deference.” [#23 at 25].
insurance company's dual role as both the claim
administrator and the source funding the benefits of an ERISA
plan constitutes a conflict of interest for ERISA purposes.
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 114,
128 S.Ct. 2343 (2008) (holding an insurer's dual role as
administrator and payer of benefits “creates a conflict
of interest [such that] a reviewing court should consider
that conflict as a factor in determining whether the plan
administrator has abused its discretion in denying
benefits.”). The conflict is given more weight
“when circumstances suggest a likelihood that it
affected the benefits decision, ” and less weight
“when the conflicted party has taken active steps to
reduce potential bias and to promote accuracy.”
Cardoza v. United of Omaha Life Ins. Co., 708 F.3d
1196, 1202 (10th Cir. 2013). Put another way, “the
reviewing court ‘must decrease the level of deference
given to the conflicted administrator's decision in
proportion to the seriousness of the conflict.”
Caldwell, 287 F.3d at 1282.
it finds that the Plan vests discretionary authority in Unum,
and there is no argument that Unum acted outside of that
discretion (rather than simply exercising its discretion
incorrectly), this court applies the arbitrary and
capricious. But like in Caldwell, this court finds
that it need not address the issue of deference because it
concludes that the Plan Administrator's decision must be
remanded, without regard to any conflict. For the reasons