Court: District Court, C.D. California; March 27, 2017; Federal District Court
In the case under the Employee Retirement Income Security Act (ERISA), Plaintiff John Doe claims that Prudential Insurance Company improperly terminated his long-term disability (LTD) benefits by enforcing a 24-month mental illness limitation. Although it is acknowledged that Plaintiff has significant cognitive issues, Prudential attributed his disability to mental health conditions—specifically depression and anxiety—while deeming his physical health issues unrelated to his disability. Consequently, Prudential terminated benefits after 24 months, applying the mental health limitation.
Plaintiff argues that his disability stems from a physiological cause, namely potential brain damage linked to HIV, and contends that the mental health limitation should not apply. Initial medical reports predominantly highlighted the psychological aspects of his condition, but subsequent neuropsychological evaluations indicated possible cognitive deficits resulting from brain damage. This situation complicates determining the etiology of his symptoms, which could be psychological, physical, or a mixture of both.
Ultimately, the Court, after evaluating the evidence, concluded that Plaintiff's disability is not "due in whole or part to mental illness," indicating that Prudential should not have applied the mental illness limitation. The legal standard for this determination stems from ERISA, where claims for benefits are adjudicated through a bench trial, allowing the Court to independently evaluate evidence and apply policy terms as it would in a breach of contract case. The Court reviewed the record de novo, enabling it to find facts and reach conclusions independently.
De novo review, as mandated by Firestone, entails an independent decision-making process rather than a mere review. The court examines evidence, particularly when disputes about material facts arise, and assesses the contract's application to these facts. It evaluates the credibility of conflicting testimonies to determine their likelihood of truth. The court reviews the administrative record, which includes materials considered by the administrator for benefit determination and may, under certain conditions, incorporate new evidence for comprehensive judgment. The plaintiff carries the burden of proof to establish entitlement to benefits by a preponderance of the evidence, including demonstrating that mental health limitations do not apply.
The court analyzed evidence in the Administrative Record (AR) and considered additional materials only when necessary for adequate de novo review. Notably, deposition excerpts from several doctors provided general insights but lacked specific utility regarding the plaintiff's condition, while a Social Security Disability Insurance (SSDI) award decision was deemed irrelevant to the crucial question of whether the plaintiff's disability was partially attributable to mental illness. Consequently, the court declined to admit both the deposition excerpts and the SSDI decision.
The findings indicate that Prudential provides long-term disability (LTD) benefits under the WME IMG Group Welfare Benefits Wrap Plan, governed by a group contract with WME. The plaintiff's claim, incurred in 2011, is subject to the 2009 Certificate, as amendments do not retroactively affect claims incurred prior to their enactment.
The 2009 Certificate of Long-Term Disability (LTD) Coverage became effective in 2009, entitling participants to monthly benefits for total disability, which is defined as the inability to perform essential job functions due to sickness or injury. "Substantial and material acts" refer to the key tasks required by employers that cannot be omitted or modified. The Certificate imposes a 24-month limitation on benefits for disabilities related to mental illness, which encompasses a range of psychiatric conditions, and excludes dementia resulting from viral infection. Coverage ceases when a claimant is no longer a full-time employee.
The plaintiff worked at the William Morris Agency and subsequently at WME until May 2011, holding the position of Head of Commercial Division, where he managed a department and was responsible for high-level tasks requiring advanced cognitive abilities. He took a leave of absence starting April 25, 2011, following medical advice. On April 12, 2011, he filed an LTD claim citing inability to work due to HIV infections, pain, fatigue, osteoporosis, and severe depression, which he stated significantly disrupted his focus and ability to perform essential job tasks reliably.
Plaintiff submitted Attending Physician Statements (APS) from three doctors to support his disability claim due to mental health issues, specifically depression and anxiety. Dr. Harvey Sternbach, Plaintiff's psychiatrist, reported on April 25, 2011, that Plaintiff had major depressive affective disorder and noted the need for inpatient care. Dr. Lauren Wittlin, a psychotherapist, confirmed on May 5, 2011, that Plaintiff suffered from major depression and anxiety, indicating suicidal ideation. Dr. Jay Gladstein, an internist, also on May 5, 2011, identified major depressive affective disorder as Plaintiff's primary diagnosis, alongside secondary diagnoses of HIV and bundle branch block, and highlighted issues with concentration and severe depression.
In a summary letter dated May 27, 2011, Dr. Sternbach detailed his long-term treatment of Plaintiff, stating that despite various antidepressant regimens, Plaintiff's condition worsened, impacting his ability to work and socialize. He recommended inpatient treatment and advised Plaintiff to take a leave of absence effective April 25, 2011.
On June 21, 2011, Prudential employee Mashelle Krier, RN, reviewed Plaintiff's medical records and determined that there was reasonable evidence of a reduction in functional capacity due to behavioral health issues, while finding no support for impairment related to Plaintiff's physical conditions. Subsequently, on July 8, 2011, Prudential approved Plaintiff's claim for long-term disability (LTD) benefits from July 11, 2011, through August 31, 2011, based solely on his mental health conditions, explicitly noting that his other medical issues were not considered disabling and that a 24-month limitation for mental illness applied.
Plaintiff's ongoing medical evaluations reveal a consistent substantiation of his mental health disability claim. Dr. Wittlin, a psychotherapist, documented that Plaintiff has experienced lifelong depression, diagnosed as "major depression, recurrent, severe without psychotic symptoms," alongside "anxiety disorder NOS." Her notes indicated that feelings of hopelessness and immobilization impacted his decision-making, particularly regarding his job at WME, which he contemplated leaving due to mental health struggles. After delaying his decision, Plaintiff reported giving notice on April 4, 2011, leading to severe anxiety and what Dr. Wittlin described as "total psychic disintegration" by May 1, 2011, following the loss of his career.
Subsequent evaluations included a February 1, 2012 visit with Dr. Gladstein, who noted normal cognitive function and controlled hypertension, while Dr. Sternbach later confirmed that the severity of Plaintiff's depression necessitated his departure from work as of April 25, 2011. Dr. Sternbach also recommended inpatient treatment and various advanced therapies for Plaintiff’s severe depression. An independent review by Dr. Omowunmi Osinubi in May 2012 indicated that Plaintiff's reported physical conditions did not align with the medical records, highlighting a lack of neuropsychological evaluation despite claims of cognitive difficulties. Dr. Osinubi suggested neuropsychological testing to clarify inconsistencies in Plaintiff's clinical presentation and concluded that the claim was primarily behavioral health-related, with any functional impairment stemming from mental health issues rather than physical conditions.
Dr. Mark Alfano's July 2012 neuropsychological evaluation of the Plaintiff revealed psychological impairments but no evidence of cognitive impairments. The independent medical examination included neurocognitive testing, which indicated that the Plaintiff's estimated premorbid IQ was in the superior range, while his measured intellectual ability was average, suggesting a discrepancy. Testing on attention and processing speed yielded results in the average to high average range, indicating intact simple attention, working memory, and complex attention. Variability in verbal and visual learning and memory results was attributed to the Plaintiff's emotional state during the evaluation. Executive functioning scores ranged from average to very superior, with five aspects scoring in the average to high-average range and one aspect achieving very superior results.
Dr. Alfano concluded that there was no significant cognitive impairment and noted that the Plaintiff's complaints of cognitive difficulties were inconsistent with the evaluation findings. He attributed the Plaintiff's perceived cognitive deficits to depression and anxiety, suggesting these emotional states distorted his self-assessment of cognitive abilities. Alfano emphasized that the Plaintiff's HIV condition was well controlled and stable, and his performance did not align with typical patterns of HIV-related neuropsychological impairment, leading to the conclusion that he did not meet the criteria for HIV-Associated Neurocognitive Disorder (HAND).
Dr. Alfano indicated no cognitive restrictions for the Plaintiff, but acknowledged that psychiatric symptoms could impair cognitive functioning, suggesting that treating anxiety and depression might improve this. On August 24, 2012, Dr. Alfano confirmed the presence of psychological/emotional impairments due to the Plaintiff's history of depression and anxiety, with tests showing severe depressive and moderate to severe anxious symptoms. Observations during evaluation revealed significant anxiety, including crying episodes.
Prudential continued to classify the Plaintiff as totally disabled and paid benefits until the 24-month limit, which was set to end on July 10, 2013, due to the policy's mental illness benefit limitation. On July 9, 2013, Prudential notified the Plaintiff's counsel that benefits would cease, citing a lack of supporting medical records for a physical condition that impaired the Plaintiff's ability to perform his occupation or any significant cognitive impairment linked to neurological issues. The Plaintiff appealed Prudential's decision twice, asserting that his declining mental health and cognitive issues were caused by his HIV and related conditions, but Prudential upheld its termination of benefits as of January 23, 2015.
During the appeals process, additional medical evidence was gathered, including reports from Dr. Gary Cohan, Dr. Richard Perrillo, and Dr. Kristin Fiano. Dr. Cohan, an HIV specialist and the Plaintiff's treating physician since May 2012, indicated in an August 6, 2013 letter that the Plaintiff was disabled due to multiple factors related to his HIV, including chronic fatigue and cognitive dysfunction, which were aggravated by lumbar disc disease and radiculopathy. He noted the Plaintiff's cognitive impairment hindered his ability to focus and concentrate throughout the day, attributing these issues to HIV, fatigue, chronic pain, and nausea. Dr. Cohan highlighted that long-term exposure to HIV can lead to cognitive decline, supported by objective laboratory data, although no MRI imaging was provided in the record to substantiate his claims.
In June 2014, Dr. Perrillo performed a neuropsychological evaluation of the Plaintiff, revealing cognitive decline linked to brain damage from HIV disease. This evaluation included two days of extensive testing and a review of Dr. Alfano's 2012 test results. Dr. Perrillo noted that both evaluations indicated the Plaintiff's neuropsychological results were "globally moderately abnormal" with significant deviations from his expected cognitive abilities. Specifically, the Plaintiff's IQ was found to be 9 points lower than anticipated, with marked deficiencies in verbal comprehension, cognitive proficiency, and immediate memory.
Dr. Perrillo diagnosed the Plaintiff with moderate organic brain dysfunction, predicting it would interfere with his occupational and social functioning. Both the 2012 and 2014 tests were deemed valid, as the Plaintiff passed embedded validity assessments and exhibited no signs of malingering. The Plaintiff had a prior cognitive performance level categorized as "superior/very superior," but in 2014, his scores fell significantly, with fifteen tests placing him in the 15th percentile and eight tests below the 5th percentile.
Particular impairments included profoundly impaired attention, significant deficits in executive functioning, and severe difficulties in short-term memory, specifically in single-trial learning and immediate recall of information. Dr. Perrillo concluded that the Plaintiff is completely disabled and unable to work at his previous capacity or adapt to new learning environments. He emphasized that depression and anxiety did not significantly impact the cognitive test results, despite the Plaintiff's long-standing major depression. The primary diagnosis was "Moderate Brain Dysfunction," attributed to chronic HIV and its associated toxic treatments, with specific impairments noted in various brain regions.
Dr. Perrillo criticized the neuropsychological testing performed by Dr. Alfano, stating that the WAIS-III and WMS-III tests used were outdated and replaced by WAIS-IV and WMS-IV in 2008-2009. Perrillo asserted that these obsolete tests overestimate individual capabilities and violate ethical standards as outlined in the American Psychological Ethics Code 9.08, which discourages reliance on outdated tests. He referenced a Social Security Administration memo indicating that tests with outdated norms may yield inflated IQ scores and lead to misdiagnosis. Consequently, Perrillo deemed Dr. Alfano's conclusions invalid due to reliance on unreliable data.
Perrillo's report included citations from scientific literature supporting the assertion that HIV can lead to cognitive decline, highlighting studies that demonstrate significant brain changes associated with HIV, such as reduced cortical thickness and impairments in motor function, executive function, attention, visual memory, and visuospatial abilities. He noted that up to 52% of individuals with HIV experience cognitive impairments, emphasizing the importance of addressing cognitive dysfunction in treatment strategies.
Dr. Fiano, a neuropsychologist, reviewed the relevant medical reports, including Dr. Alfano's 2012 report and Dr. Perrillo's 2014 data. Fiano concluded that the Plaintiff exhibited cognitive impairments from July 11, 2013, and identified necessary restrictions based on these symptoms. While Fiano acknowledged some limitations impacting the Plaintiff’s work capabilities, she found no strong evidence of total inability to work. Although Perrillo claimed that average scores indicated impairments, Fiano noted that the Plaintiff's scores were average or above, suggesting the ability to perform tasks typical of the general population.
Fiano provided an analysis regarding the origins of the Plaintiff's cognitive complaints, suggesting there is support for cognitive impairments linked to neurological factors associated with his HIV status and medications. Recent testing indicated that Plaintiff's cognitive performance scores were predominantly average or below average, which is unexpected given his prior superior baselines, thus indicating cognitive impairment. Although Fiano acknowledged some evidence for a cognitive disorder potentially connected to neurological or organic factors, including HIV, she expressed skepticism regarding a diagnosis of HIV dementia due to the atypical variability in his scores. Fiano noted that psychological factors might exacerbate organically based deficits.
Regarding the validity of Dr. Perrillo's neuropsychological testing, Fiano confirmed that all validity measures were passed but critiqued Perrillo for overstating the conclusions about Plaintiff's cognitive weaknesses and focusing too narrowly on one cause rather than considering multiple influencing factors. While she recognized the potential impact of mood symptoms, she did not assert that they played a definitive role in the test results, instead highlighting Perrillo's failure to discuss the Plaintiff's psychological state adequately. Fiano criticized Perrillo for not ordering an MRI to assess white matter changes, neglecting Plaintiff's long-standing attention issues, and failing to explore other potential causes for cognitive changes, such as vascular conditions, drug use, or sleep apnea.
Fiano concluded that multiple factors are likely influencing Plaintiff's cognitive functioning, noting that while mood symptoms could impact cognitive performance, they alone do not account for the overall score patterns. She emphasized a stronger correlation with neurological etiologies compared to depression. Fiano stated that a combination of neurological and psychological factors likely contributed to the Plaintiff's cognitive symptoms as reflected in the 2014 test data.
Fiano indicated that the Plaintiff's psychological condition partially contributes to cognitive functioning, with somatic focus and significant depression impacting performance, particularly during past examinations by Dr. Alfano and Dr. Perrillo. The Court finds the Plaintiff to be "totally disabled" due to severe cognitive difficulties that hinder his ability to perform essential tasks required in his role as a talent agent and Head of Commercial Division at WME. The cognitive demands of these positions necessitate reliable processing and management of client interactions, which the Plaintiff can no longer fulfill.
The core dispute involves the applicability of the mental health limitation in the Plaintiff's claim. The Court determines that this limitation does not apply, as the 2009 Certificate defines disability "due in whole or part to mental illness," with depression classified as such. The interpretation of this phrase must align with state contract principles while considering congressional intent under ERISA. Courts typically interpret ERISA plan terms based on their ordinary meaning and resolve ambiguities against the insurer. The phrase "due in whole or part to mental illness" lacks a clear definition, but precedents suggest that the limitation applies only if the mental health condition is a "but-for" cause of the disability, meaning it must be a necessary factor in the claimant’s inability to work.
A physical condition qualifies as independently disabling, negating the applicability of a mental health limitation. In Krolnik v. Prudential Ins. Co. of America, the Seventh Circuit clarified that if a claimant's limitations are entirely physical, benefits are accessible under the policy, even if mental issues exist. In George v. Reliance Standard Life Ins. Co., the court interpreted the phrase "caused by or contributed to by" to mean that coverage is only excluded if the claimant’s physical disability alone is inadequate for total disability; if a mental disability is a necessary cause of total disability, benefits are available. Applying the doctrine of contra preferentum, the court construes limitations to apply only when a mental illness is a but-for cause of disability.
The legal standard for evaluating physician opinions under ERISA involves resolving conflicting evidence, as courts must determine which medical opinion to credit. ERISA does not mandate that plan administrators favor treating physicians' opinions, and courts recognize potential biases on both sides. Relevant factors for assessing conflicting medical opinions include the patient's treatment history, the physician's specialization, and the detail provided in their conclusions.
In the case at hand, the plaintiff’s long-term disability (LTD) benefits were not subject to the mental illness limitation because his disability was not due in whole or part to mental illness. The plaintiff claimed that both physical (HIV, osteoporosis) and mental (depression) conditions contributed to his inability to focus. Prudential's initial decision to grant LTD benefits was based solely on mental health issues, supported by the consensus of the plaintiff's treating physicians, who found his depression to be disabling without asserting that his physical conditions were disabling. This support continued until the termination of benefits in July 2013, which was based on the mental health limitation.
Dr. Cohan, the only treating physician to attribute the Plaintiff's disability to his physical condition, stated in August 2013 that Plaintiff's cognitive impairment was linked to his HIV, fatigue, chronic pain, and nausea. However, Dr. Cohan began treating Plaintiff in May 2012, after the onset of cognitive issues that led to the Plaintiff seeking long-term disability (LTD) benefits in April 2011, limiting his insight into the Plaintiff's pre-disability condition. Consequently, the Court finds Dr. Cohan's opinion unpersuasive due to his lack of first-hand knowledge of the Plaintiff's earlier health status and the short duration of his treatment.
The Court considers the Plaintiff's neuropsychological evaluations as the most relevant medical evidence, noting that these tests are valid for assessing cognitive abilities and no evidence was provided to dispute their reliability. Evaluations by Dr. Afano (July 2012) and Dr. Perrillo (2014) indicated differing causes for the cognitive difficulties: Dr. Afano attributed them to psychological impairments, while Dr. Perrillo linked them to brain damage from HIV. The Court finds Dr. Perrillo's conclusions more credible, particularly regarding crucial cognitive functions affecting the Plaintiff's job performance.
Dr. Afano's evaluation is deemed less credible due to reliance on outdated tests for assessing the Plaintiff's pre-morbid IQ and intellectual ability, which Dr. Perrillo argued violates professional standards and yields unreliable results. Discrepancies in Dr. Afano's findings, such as asserting that the Plaintiff's performance was "at or above expectations" despite scores significantly below the superior range in multiple cognitive areas, further undermine his reliability. Overall, Dr. Perrillo's assessment is favored, as it aligns more closely with the test results and professional guidelines.
Plaintiffs' cognitive assessment indicates significant impairments compared to his pre-morbid superior abilities, despite average scores relative to the general population. Dr. Alfano's conclusions, which claim no cognitive impairment or that any impairments stem from mental health issues, rely on flawed premises regarding the Plaintiff's executive function and learning abilities that are unsupported by test results. In contrast, Dr. Perrillo's findings are more convincing, identifying deficits in attention, executive function, and memory, with test results showing the Plaintiff ranked in the fifteenth percentile in cognitive ability, far below the expected superior range. Perrillo attributes these deficits to brain damage linked to HIV, supported by scholarly literature indicating that HIV can cause cognitive decline in various domains. Dr. Fiano, while questioning some aspects of Perrillo's report regarding psychological impacts, largely agrees that the Plaintiff's cognitive impairments are physically based, acknowledging a connection to neurological factors, including HIV and its treatment.
Mood symptoms do not explain the pattern of the Plaintiff's scores, which are more consistent with neurological issues than with depression. While psychological factors influence the Plaintiff's cognitive functioning, their extent in causing his disability remains unaddressed. Two neuropsychological evaluations reveal that the Plaintiff suffers from cognitive impairments with a physical origin, unrelated to mental health issues. Despite coping with major depression until 2011, the Plaintiff functioned at a high cognitive level until he reported cognitive deficits alongside other health problems.
Doctors initially focused on the Plaintiff's longstanding depression, which appeared to cause acute distress, leading to mental health-based reports of his disability. However, the extent of his cognitive deficits could not be confirmed by these doctors alone, necessitating neuropsychological evaluations. Dr. Osinubi noted in March 2012 that the medical records did not prove a disabling physical condition and emphasized the need for further neuropsychological testing.
The subsequent tests indicated cognitive deficits attributed to brain damage, specifically affecting the brain's white matter likely due to HIV, as per Drs. Perrillo and Fiano. They confirmed that psychological factors did not impact the neuropsychological testing results and that the tests were valid, ruling out malingering or poor effort. The Court concurs with the doctors' assessments that the Plaintiff's cognitive deficits stem from HIV-related brain damage, which is identified as the primary cause of his disability.
Despite a history of severe depression, the Plaintiff was able to function effectively until the onset of cognitive difficulties in 2011, which is distinct from his mental health issues. The Court concludes that the cognitive deficits are the direct cause of the Plaintiff's disability, asserting that if his mental health issues were resolved, he would still experience cognitive impairments. Therefore, the Plaintiff's disability is not attributable to mental illness.
The Court determined that Prudential wrongfully terminated Plaintiff John Doe's long-term disability (LTD) benefits, rejecting Prudential's claims regarding the mental illness limitation. The Court found that Plaintiff was not able to appeal Prudential's initial decision to award benefits, as it was not considered an "adverse benefit determination" that would trigger an appeal right under 29 C.F.R. 2560.503-1(m)(4). The Court noted that while the specific causes of Plaintiff's cognitive impairments were diagnosed only after the termination of benefits, evidence indicated that these impairments existed prior to that termination. As a result, the Court concluded that Plaintiff met the disability criteria set forth in the Plan and that Prudential had improperly applied the mental illness limitation.
The Court ruled in favor of Plaintiff, declaring that Prudential violated the Plan's terms by denying his claim and ordered Prudential to pay owed benefits from July 10, 2013, until judgment, including prejudgment interest. Additionally, the Court declared that Plaintiff is entitled to future monthly benefit payments until reaching the maximum benefit duration and prohibited Prudential from imposing further claims procedures on Plaintiff's benefits. The parties are required to meet to discuss any remaining issues, with a proposed judgment due within ten days if they reach an agreement, or a Joint Report if court intervention is needed. All findings of fact are incorporated as conclusions of law where applicable.
