Armani v. Northwestern Mutual Life Insurance Co.

Citations: 840 F.3d 1159; 2016 U.S. App. LEXIS 19925; 2016 WL 6543523Docket: 14-56866

Court: Court of Appeals for the Ninth Circuit; November 4, 2016; Federal Appellate Court

Original Court Document: View Document

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The Ninth Circuit Court of Appeals vacated part of the district court's judgment that denied Avery Armani long-term disability benefits under the Employee Retirement Income Security Act (ERISA). The court found that the administrative record demonstrated Armani was unable to sit for more than four hours a day, contradicting the district court's conclusion that he could perform 'sedentary' work, which requires sitting most of the time. The panel rejected the district court's dismissal of Armani's definition of 'sedentary' work as being derived from the Social Security context, aligning with other circuits that support the idea that an individual who cannot sit for extended periods is incapable of performing such work. The case has been remanded for further proceedings regarding Armani's claim for benefits. Armani’s injury occurred during his tenure as a full-time controller at Renaissance Insurance Agency, leading to a diagnosis of back issues that progressively worsened, ultimately resulting in his inability to work. Under the terms of the group long-term disability policy from Northwestern Mutual, the definition of disability shifts after 24 months, initially requiring the claimant to be unable to perform their own occupation.

To qualify for benefits beyond 24 months of disability payments, a claimant must prove they are "Disabled from all occupations," demonstrating an inability to perform the material duties of any gainful occupation for which they are qualified by education, training, or experience, or an inability to earn more than 80% of their Indexed Predisability Earnings. Armani, claiming disability due to a back injury, reported significant limitations on his ability to sit, stand, walk, drive, and concentrate. His job was classified as sedentary, requiring seven hours of sitting and one hour of standing or walking daily. Medical evaluations confirmed his restrictions, with treating physicians indicating he could only sit for four hours and stand or walk for two hours per day.

Despite this, Northwestern Mutual's reviewing physician concluded that Armani could work in a sedentary position. Subsequent assessments by another physician supported this view, indicating that he could engage in sedentary work without significant limitations. A vocational case manager identified three alternative sedentary positions Armani could perform based on his skills and training. On July 9, 2013, Northwestern Mutual closed his long-term disability claim, citing insufficient medical evidence to support ongoing disability under both the "own occupation" and "any occupation" tests. Following an appeal, a second review by Dr. Hans Carlson also found no support for the claim that Armani was unable to perform sedentary work, noting he could reasonably alternate between sitting and standing as needed.

On September 11, 2013, Northwestern Mutual upheld its claim decision regarding Armani, leading to a lawsuit filed by Armani on September 16, 2013, under the Employee Retirement Income Security Act (ERISA) for judicial review. After a bench trial, the district court conducted a de novo review of Northwestern Mutual's determination and awarded Armani benefits for the first 24 months of disability, citing insufficient change in circumstances to deny nine days of benefits at the end of the 'own occupation period.' However, the court determined that Armani failed to prove he was disabled from 'all occupations' after July 18, 2013, due to a lack of substantial evidence regarding his condition during that period.

Despite Armani's argument that he could not perform any 'sedentary' work, the court ruled that Northwestern Mutual was not obligated to adhere to the definition of sedentary work based on Social Security criteria. The court noted that Armani had not demonstrated how his disability impeded him from performing identified sedentary occupations. Additionally, the court excluded four documents that Armani attempted to submit, stating they were unnecessary for its review.

The standard of review established that the district court's factual findings are examined for clear error, while legal conclusions are reviewed de novo. The district court found that from July 25, 2011, to April 15, 2013, medical opinions consistently indicated Armani could not sit for more than four hours daily. Nevertheless, it upheld Northwestern Mutual's conclusion that he could perform sedentary work as of April 18, 2013, incorrectly asserting that Social Security definitions do not apply to ERISA cases. Other courts have indicated that an ability to sit for only four hours in an eight-hour workday does not meet sedentary work standards.

Sedentary work, as defined by the Department of Labor, requires the ability to sit for at least six hours during an eight-hour workday. Courts have consistently held that a sitting tolerance of four hours is insufficient for performing sedentary work. The recognized standard for such work includes up to two hours of standing or walking and a minimum of six hours of sitting. An employee unable to sit for over four hours in a workday does not meet the criteria for sedentary work, which is characterized by sitting for "most of the time." 

In the case of Armani, the district court erroneously interpreted the definition of sedentary work, believing it to be limited to the Social Security context, leading to the conclusion that Armani had not demonstrated an inability to perform four identified positions, all classified as sedentary, despite evidence of his restriction to sitting for no more than four hours daily. As a result, the court's denial of Armani's long-term disability benefits was deemed incorrect. The judgment denying these benefits has been vacated, and the case is remanded for further proceedings in line with this determination.