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Mullaney v. The Paul Revere Life Insurance Co.

United States District Court, W.D. Washington, Seattle

July 6, 2018



          Honorable Richard A. Jones United States District Judge.


         This matter comes before the Court on the parties' Motions for Judgment on the Administrative Record. Dkt. ## 21, 22, 30, 31. The Motions are opposed. Dkt. ## 39, 42.

         Plaintiff seeks review of Defendants' denial of disability benefits under a group insurance policy and an individual insurance policy, both governed by the Employment Retirement Security Act of 1974 (ERISA) and administered by Defendants. Dkt. # 1 (Complaint). Plaintiff also seeks declaratory judgment to enforce Defendants' continuing obligation to him under his policies as well as attorney's fees and costs. Id.


         Before turning to the merits of the parties' arguments, the Court must determine whether it is appropriate to resolve this case on the parties' motions for judgment under Rule 52 as opposed to summary judgment under Rule 56. The answer depends on what standard of review the Court applies. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 (1989) (“ERISA does not set out the appropriate standard of review for actions under § 1132(a)(1)(B) challenging benefit eligibility determinations.”). The parties here have simplified the matter by agreeing that the Court should review Defendants' denial of coverage de novo. Dkt. ## 25 at pp. 18-19; 37 at p. 27. The Court accepts the parties' agreement and reviews the record de novo. See Rorabaugh v. Cont'l Cas. Co., 321 Fed.Appx. 708, 709 (9th Cir. 2009) (unpublished) (court may accept parties' stipulation to de novo review).

         Where review is under the de novo standard, the Ninth Circuit has not definitively stated the appropriate vehicle for resolution of an ERISA benefits claim. The de novo standard requires the Court to make findings of fact and weigh the evidence. See Walker v. Am. Home Shield Long Term Disability Plan, 180 F.3d 1065, 1069 (9th Cir. 1999) (de novo review applies to plan administrator's factual findings as well as plan interpretation). Typically, a request to reach judgment prior to trial would be made under a Rule 56 motion for summary judgment, however under such a motion the Court is forbidden to make factual findings or weigh evidence. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). Instead, the parties here propose that the Court essentially conduct a bench trial on the administrative record under Rule 52.

         This procedure is outlined in Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999) (noting that “the district court may try the case on the record that the administrator had before it”). In a trial on the administrative record:

The district judge will be asking a different question as he reads the evidence, not whether there is a genuine issue of material fact, but instead whether [the plaintiff] is disabled within the terms of the policy. In a trial on the record, but not on summary judgment, the judge can evaluate the persuasiveness of conflicting testimony and decide which is more likely true.

Id. Thus, when applying the de novo standard in an ERISA benefits case, a trial on the administrative record, which permits the Court to make factual findings, evaluate credibility, and weigh evidence, appears to be the appropriate proceeding to resolve the dispute. See Casey v. Uddeholm Corp., 32 F.3d 1094, 1099 (7th Cir. 1994) (on de novo review of an ERISA benefits claim, the “appropriate proceeding[] . . . is a bench trial and not the disposition of a summary judgment motion”); Lee v. Kaiser Found. Health Plan Long Term Disability Plan, 812 F.Supp.2d 1027, 1032 n.2 (N.D. Cal. 2011) (“De novo review on ERISA benefits claims is typically conducted as a bench trial under Rule 52”); but see Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir. 2005) (“When there is no dispute over plan interpretation, the use of summary judgment . . . is proper regardless of whether our review of the ERISA decision maker's decision is de novo or deferential.”).

         Given the above law and the consensus among the parties, the Court elects to resolve the parties' dispute on the administrative record rather than on summary judgment. Therefore, the Court issues the following findings and conclusions, pursuant to Rule 52.

         A. Motion to Strike

         As a preliminary matter, Defendants move to strike Exhibits 1 and 2 to Mr. Langer's Declaration (Dkt. ## 49, 50), Plaintiff's Declaration (Dkt. # 44), Mr. Osborn's Declaration (Dkt. # 45), and a physical capacity report issued by Theodore J. Becker, Ph.D (Dkt. # 23). These materials were not part of the administrative record. When reviewing a plan administrator's decision de novo, “new evidence may be considered under certain circumstances to enable the full exercise of informed and independent judgment.” Mongeluzo v. Baxter Travenol Long Term Disability Ben. Plan, 46 F.3d 938, 943 (9th Cir. 1995). It is within the district court's discretion to allow evidence that was not before the plan administrator. However, such discretion should only be exercised when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision. Id. “[A] district court should not take additional evidence merely because someone at a later time comes up with new evidence that was not presented to the plan administrator.” Id. at 944.

         Exhibits 1 and 2 to Mr. Langer's Declaration are Plaintiff's medical records from the University of Washington's Chronic Fatigue Clinic at Harborview Medical Center. Plaintiff argues that these exhibits should be admitted because Defendants argue that Plaintiff was not diagnosed with fibromyalgia until 2014 and these documents are relevant to refute this argument. Defendants contend that such evidence is unnecessary because they acknowledge that Plaintiff was “tentatively diagnosed” with fibromyalgia in 2011. However, Defendants make the argument in both their Motion and Response that Plaintiff cannot support his contention that he was “residually disabled” because he “has not always met the diagnostic criteria” for fibromyalgia. Dkt. # 30 at 18; Dkt. # 39 at 5. First noting that “FMS was initially raised as a possible diagnosis” in September 2011, Defendants argue that “the evidence does not support the conclusion that [Plaintiff] had FMS throughout 2011 based on the absence of ‘trigger points' - whose presence are required to establish the FMS diagnosis.” The Court disagrees that additional evidence on this issue would be cumulative or unnecessary as Defendants clearly question whether Plaintiff suffered from fibromyalgia in 2011. Where additional evidence is necessary to assist in the understanding of a “complex medical issue, ” such as the diagnosis of a condition has largely subjective symptoms, the circumstances warrant admission of such evidence. See Opeta v. Nw. Airlines Pension Plan for Contract Employees, 484 F.3d 1211, 1217 (9th Cir. 2007). Therefore, Exhibits 1 and 2 will be considered for the purposes of these Motions.

         Plaintiff argues that his Declaration should be admitted because “it corrects the record” with regards to the “nature and character of Plaintiff's physical activities.” Plaintiff's contention is that the record contains errors regarding these activities. However, his Declaration appears to be responsive to Defendants' characterization of those physical activities and not a correction of the record itself. Plaintiff makes no persuasive argument that the descriptions of his physical activities during the time period in question in the record are inaccurate, or that these circumstances qualify as “exceptional” such that introduction of Plaintiff's Declaration would be necessary. Defendants' Motion to Strike Plaintiff's Declaration is GRANTED. Dkt. # 44.

         Plaintiff submits Mr. Osborn's Declaration to clarify the compensation system at Foster Pepper PLLC (“Foster Pepper”), the law firm where Plaintiff works. Plaintiff states that the data in the Declaration is included in the claim file and that the Declaration is “merely added to the record to ease understanding” of Foster Pepper's payment scheme. Clarification of data that is already in the record is not evidence necessary to conduct an adequate de novo review of the benefit decision. Further, Plaintiff's assertion mischaracterizes Mr. Osborn's Declaration. The administrative record in this case only includes data from 2011-2013. LTD-310. Therefore, Mr. Osborn's Declaration cannot be a clarification of data that is already contained within Plaintiff's claim file. Mr. Osborn's Declaration contains additional data regarding Plaintiff's billable hours from 2014-2016, among other things. Despite this mischaracterization, the Court finds that this evidence is necessary to conduct an adequate de novo review of the benefit decision.

         Under Plaintiff's long term disability policy, the definition of “disability” includes consideration of Plaintiff's loss in monthly earnings due to the alleged sickness or injury. As knowledge of Plaintiff's income is necessary to determine whether he meets the definition of “disabled” pursuant to his long term disability policy, Defendants' Motion to Strike Mr. Osborn's Declaration is DENIED. Dkt. # 45. The Court notes that Mr. Osborn's Declaration contains several statements that are not relevant to this consideration or are otherwise cumulative. Therefore, only statements and other information relevant to Plaintiff's alleged loss in income will be considered for the purposes of determining whether Plaintiff meets the requirements of his insurance policies.

         Plaintiff also submitted a physical capacity evaluation report from Becker. In the accompanying declaration, Plaintiff's counsel represents that this report is dated March 12, 2015. Dkt. # 46 at 3. The submitted report is dated June 6, 2017. Dkt. # 46 Ex. 1. This date is over one year after this lawsuit was filed and almost two years after Defendants' denied Plaintiff's appeal of his claims. This report was not part of the administrative record and will not be considered by the Court for the purpose of these Motions. Defendants' Motion is GRANTED as to this report. Dkt. # 46 Ex. 1.


         1. Plaintiff Patrick J. Mullaney asserted claims for disability benefits under two policies: an individual policy underwritten by Defendant Paul Revere Life Insurance Company of America (“Paul Revere”), and a group policy underwritten by Defendant UNUM Life Insurance Company of America (“UNUM”). LTD-000003. Paul Revere was acquired by UNUM. Both plans and Plaintiffs' claims herein are governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §1001 et seq. Dkt. # 1 (Complaint).

         2. The claim period at issue in this case is January 1, 2011, when Plaintiff alleges his symptoms began, through February 22, 2016, the date he filed this case.

         3. Plaintiff was born in 1961. He has worked as an attorney at Foster Pepper PLLC, a law firm, since 1997. He became a partner of the law firm in 2002. At some point he became an equity partner. On January 1, 2014, Plaintiff became an “income member” and was no longer an equity partner. LTD-000068-69. One year after becoming an “income member, ” Foster Pepper began compensating Plaintiff at an hourly rate. Dkt. # 45.

         4. As a land use litigation attorney, Plaintiff is frequently required to attend court hearings or participate in other litigation-related activities. His practice includes managing the structuring of real estate deals, utilizing scientific experts, and dealing with technical information in order to ensure the feasibility of property or land development under existing law. Plaintiff is also required to negotiate with various governmental agencies and resolve land rights disputes. LTD-296-230; LTD-1660.

         5. Foster Pepper's compensation system is based on a three-year average of performance. An attorney's compensation for a calendar year is based on his or her performance in the three previous years. An attorney may also receive a bonus based on his performance the previous year. Dkt. # 45. Plaintiff's budgeted compensation for 2011 was $220, 000. He received $284, 812 in compensation that year. Plaintiff's budgeted compensation for 2012 was $225, 000. Plaintiff received $236, 449 in compensation in 2012. In 2013, Plaintiff's budgeted compensation was $225, 000. He received $210, 000 in compensation for that year. Plaintiff's budgeted compensation for 2014 was $140, 000. He received $134, 000 in compensation in 2014. LTD-310; Dkt. # 21 at 2. Plaintiff provides no information regarding his budgeted compensation for 2015 and 2016. Plaintiff's compensation for 2015 and 2016 was $146, 000 and $104, 642.33, respectively. Dkt. # 45 Ex. A.

         6. Plaintiff first began experiencing muscle pain in January of 2011. LTD-000151. On February 10, 2011, Plaintiff saw Dr. Smith, complaining of sinus symptoms and swollen glands. IDI-431. Dr. Smith diagnosed Plaintiff with sinusitis and insomnia and suggested he consult a sleep specialist. After this visit, Plaintiff went backcountry skiing and experienced pain in his left posterior shoulder and armpit. He was concerned he was having a heart attack but a cardiology visit ruled this out. IDI-484.

         7. Plaintiff saw Dr. Smith two more times in February of 2011. Once on February 17, 2011, complaining of left axillary pain down the side of his chest wall with minimal right bicep pain. Dr. Smith noted in his report that the pain was “[p]robably not cardiac pain” but due to a previous indication of some areas of disease on Plaintiff's CT angiogram, he felt that a “stress echo test would be prudent.” IDI-430. Plaintiff saw Dr. Smith again on February 25, 2011 due to continued pain in his left axilla which he described as a burning-type of skin sensation along the lateral chest wall and sometimes on his right chest. Plaintiff also complained of occasional achiness in his neck. He noted that the symptoms tended to wax and wane and had been going on since February 10, 2011. Dr. Smith decided to expand Plaintiff's metabolic workup to look for any cause of paresthesias, dysesthesias, or muscle inflammation. IDI-429.

         8. On March 10, 2011, Plaintiff went to see Dr. Smith again. He reported having numbness down his middle two fingers in his right hand, and continued chest wall pain. Dr. Smith's assessment was that it was cervical radiculopathy and referred Plaintiff to University of Washington for further assessment. IDI-428.

         9. Plaintiff saw Dr. Shu-Ching Ho at the University of Washington in March of 2011. He described a “deep aching pain, like ‘lactic acid building up' in his muscles, ” mostly in his arms under his armpits and in his calves. He also reported feeling numbness and tingling mostly in his fingers but that these symptoms had disappeared after several weeks. His diagnostic workup at that time was “unremarkable” and his neurological examination was normal. IDI-489.

         10. On April 7, 2011, Plaintiff saw Dr. Smith for a sore throat but mentioned that his muscle pain had worsened after early March and that he had seen a neurologist who told him that it might be a viral muscular response to some viral syndrome that would slowly go away. At the time, Plaintiff reported that he had gradually started improving the week before. IDI-426.

         11. Plaintiff next saw Dr. Smith on May 25, 2011 due to continued muscle pain. He requested that that his bloodwork be redone and a Lyme's titer because he felt the symptoms had begun after his travel in Arizona. IDI-423. Dr. Smith assessed muscle pain, prediabetes, and recommended a colon cancer screening. Id.

         12. On June 8, 2011, Plaintiff saw Dr. Smith to have a tick on his back removed. The medical report does not mention any muscle pain and indicated that his Lyme's titer was still pending. IDI-422.

         13. Plaintiff saw Dr. Hu again on June 24, 2011. Plaintiff noted that his pain had slightly improved with medication and that his finger numbness had disappeared. At that time Plaintiff's pain was mostly in his legs, “in the attachment of the muscles to the bones.” Plaintiff had no muscle weakness and his neurological examination was normal. Dr. Hu referred Plaintiff to a neuromuscular specialist for a second opinion. IDI-489.

         14. On July 11, 2011, Plaintiff was seen by Dr. Dina Thyerlei at the University of Washington pain clinic for a neuromuscular evaluation. Plaintiff described his paid as “diffuse bee stings in his triceps.” Dr. Thyerlei's report also notes that “[s]ome of his providers are wondering, if he could have fibromyalgia.” Plaintiff's neurological exam showed that he had “no focal weakness or fatiguable weakness, numbness or positive fibromyalgia trigger points.” Plaintiff showed no worsening of symptoms with exertion. Dr. Thyerlei concluded that “[f]ibromyalgia seems less likely without positive trigger points.” IDI-1641-43.

         15. On July 25, 2011, Plaintiff was examined by Lynn Schaefer-Alfonse, ARNP and Dr. Philip Mease of Seattle Rheumatology Associates, PLLC. Plaintiff's neurovascular exam showed intact cranial nerves. Plaintiff's sensation and reflexes were normal and showed extremity strength of 5/5 in all extremities. Plaintiff's fibromyalgia tender points were not tender, however Plaintiff exhibited tenderness over the lateral epicondyles bilaterally, triceps bilaterally, as well as his in his calves and in the arches of his feet. The report indicates that “[w]e are doubtful that this is fibromyalgia as he has no major tender points.” IDI-1467.

         16. Plaintiff returned to see Dr. Thyerlei on August 9, 2011 in order to rule out myopathy. Plaintiff reported pain in his calves and thighs that improved with exercise and occasional calf cramping. The results of the nerve conduction studies and EMG studies showed possible mild chronic right S1 or S2 ...

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