Mark v. Aetna Life Insurance Co.

          ORDER VACATING DENIAL OF BENEFITS AND REMANDING FOR FURTHER PROCEEDINGS

          William J. Martinez 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 Julia Mark (“Mark”) challenges the decision of Defendant Aetna Life Insurance Company (“Aetna”) to terminate Mark's short-term disability benefits. After completion of briefing, the parties filed a Joint Motion for Determination. (ECF No. 38.) The Court referred the matter to United States Magistrate Judge Michael J. Watanabe (since retired) for a report and recommendation. (ECF No. 43.)

         Judge Watanabe issued his report and recommendation on April 25, 2018 (“Recommendation”), recommending that Aetna's decision be vacated and remanded for further consideration. (ECF No. 44.) Aetna timely objected (ECF No. 45) and Mark responded to that objection (ECF No. 46). The Court has now reviewed the Recommendation, Aetna's objection, Mark's response, as well as the parties' pre- Recommendation briefing (ECF Nos. 29, 33, 37) and many portions of the Administrative Record (ECF No. 25, cited below as “R.”).

         For the reasons explained below, the Court adopts the Judge Watanabe's recommended disposition, although for reasons somewhat different than those expressed by Judge Watanabe. Aetna's termination of benefits is therefore vacated and remanded for further consideration.

         I. RULE 72(b) STANDARD OF REVIEW

         When a magistrate judge issues a recommendation on a dispositive matter, Federal Rule of Civil Procedure 72(b)(3) requires that the district court judge “determine de novo any part of the magistrate judge's [recommendation] that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). In conducting its review, “[t]he district court judge may accept, reject, or modify the recommendation; receive further evidence; or return the matter to the magistrate judge with instructions.” Id. An objection is proper if it is filed within fourteen days of the magistrate judge's recommendations and is specific enough to enable the “district judge to focus attention on those issues-factual and legal-that are at the heart of the parties' dispute.” United States v. 2121 East 30th Street, 73 F.3d 1057, 1059 (10th Cir. 1996) (internal quotation marks omitted).

         Aetna timely objected to the Recommendation with sufficient specificity. (See ECF No. 45.) Accordingly, the Court reviews this matter de novo.

         II. BACKGROUND

         No party has objected to Judge Watanabe's factual summary (ECF No. 44 at 2- 7), and so the Court adopts it as if set forth herein. The Court repeats the following to provide context for its resolution.

         Mark fell on a sidewalk and injured her left knee, as well as one of her ankles, her neck, and back. (ECF No. 44 at 2; see also ECF No. 29 at 2; ECF No. 33 at 4.) The parties point to nothing in the record showing the precise date of the injury, but it happened on or before March 10, 2016, which was Mark's last day of work with her employer, FedEx Office. (ECF No. 44 at 2.) Mark's job required her to stand for her entire shift, move and lift 55 pounds, and consistently bend and twist at the waist and the knees. (Id. at 2-3.) Her injury prevented her from performing these tasks and so she was placed on leave. (Id.)

         On May 24, 2016, Mark applied for short-term disability benefits through the FedEx Office and Print Services, Inc. Short Term Disability Plan (“Plan”). (R. at 782.) The Plan applies where an injury prevents an employee “from performing the material and substantial duties of his or her regular occupation.” (R. at 5.) But the Plan requires, among other things, that the alleged disability be “substantiated by significant objective findings which are defined as signs which are noted on a test or medical exam and which are considered significant anatomical, physiological or psychological abnormalities which can be observed apart from the individual's symptoms.” (R. at 6.)

         Aetna, which administers the Plan for FedEx Office (R. at 4), decided on May 31, 2016 that Mark qualified for short-term disability payments from March 11 through May 26 of that year. (R. at 230-31.) The letter announcing the benefits award further stated, “If you need to stay out beyond May 26, 2016, send current medical information from your doctor to us for review.” (R. at 230.) The parties do not describe what Mark did in reaction to this letter. However, Aetna soon sent another letter, dated June 8, 2016, announcing that it was “no longer approving” short-term disability benefits “starting on May 27, 2016.” (R. at 245.) The letter stated that, on May 31, 2016 (the date Aetna initially approved benefits), Aetna had requested “[a]dditional medical information supporting your claim . . . from Dr. Chang [who was regularly treating Mark for her injuries], ” but the information received from Dr. Chang “provides a diagnosis only and fails to provide physical examination findings, diagnostic test results, or any evidence of your inability to perform the essential functions of your own occupation.” (Id.) Thus, said Aetna, “It has been determined that there are insufficient clinical exam findings to support your [disability claim].” (Id.)

         This letter provided instructions on how to appeal. (R. at 245-46.) Mark initiated a timely appeal on August 30, 2016. (R. at 312.) Aetna received numerous additional medical records from Mark and her treating providers, and affirmed its termination of benefits by letter dated November 16, 2016 (“Appeal Decision”). (R. at 391.) The Appeal Decision summarized the medical records, including the following:

• “PT [i.e., physical therapy] reevaluation on 06/21/16 . . . [included] a functional report of antalgic gait and an impaired ability to ambulate long distances. On exam, you had significant left knee swelling; an increased, rigid arch in your right foot and multilevel thoracic mechanical dysfunction. Range of motion was 95 percent bilaterally in the knees. Strength was within functional limits with pain inhibition in the left quadriceps. Reflexes and sensation were intact.”

• “PT reevaluation dated 07/20/16 advised of a functional report of antalgic gait and an impaired ability to ambulate long distances. On exam, you had significant left knee swelling; an increased rigid arch in your right foot and multilevel thoracic mechanical dysfunction. Range of motion was 95% bilaterally in the knees. Overall strength was improving. You ...