Wanda J. Stup v. Unum Life Insurance Company of America
Docket: 03-2526
Court: Court of Appeals for the Fourth Circuit; December 1, 2004; Federal Appellate Court
UNUM Life Insurance Company appeals a district court ruling that granted summary judgment to Wanda Stup regarding her claim for long-term disability benefits, which UNUM denied under the Employee Retirement Income Security Act (ERISA). UNUM acknowledges Stup's conditions, including lupus and fibromyalgia, but contends it reasonably determined she could work in a job suited to her training. The district court found that UNUM abused its discretion in denying benefits.
Lupus is characterized as a chronic inflammatory disorder affecting various organ systems, with symptoms including extreme fatigue, joint pain, and skin rashes. Diagnosis involves blood tests for specific antibodies. Fibromyalgia, a rheumatic condition, presents symptoms such as significant pain, fatigue, and sleep disturbances, diagnosed through tenderness at specific trigger points.
Stup was diagnosed with lupus and fibromyalgia in the mid-1990s and was closely monitored by Dr. Nathan Wei, a rheumatologist. Medical records confirm her lupus diagnosis through a biopsy and consistent high antibody levels, alongside numerous symptoms such as rashes and chest pain. Stup's fibromyalgia was also well-documented, showing initial treatment responsiveness that later deteriorated, with Dr. Wei noting persistent tender points and significant fatigue.
Dr. Wei advised Stup to limit her activities and take daily naps while adhering to prescribed medications. Stup, however, continued to work as an administrative assistant at Frederick Underwriters, Inc., disregarding his recommendations. By March 16, 1998, her chronic pain and fatigue hindered her ability to work, prompting her to seek disability benefits under the company's ERISA plan, which is administered by UNUM. Stup, classified as a "Class 2" employee, was entitled to 24 months of benefits if she could not perform the material duties of her regular occupation. UNUM provided benefits from September 1998 until November 2000 but then terminated them, citing that Stup could return to a sedentary occupation based on the revised definition of disability.
Stup appealed the denial, presenting her extensive medical records and a form from Dr. Wei indicating her limited lifting capacity and inability to work even in sedentary roles for extended periods. UNUM reviewed her files with Dr. Parke, who noted evidence of a connective tissue disorder and suggested a comprehensive visual and medical examination to assess her work capabilities. Instead, UNUM opted for a Functional Capacity Evaluation (FCE), for which Dr. Wei wrote a prescription.
On April 3, 2001, a physical therapist conducted the FCE, finding Stup's flexibility and range of motion adequate but observing pain behaviors during the tests. Stup's strength could not be adequately assessed as she fatigued before testing completion. She walked for only 4.5 minutes on a treadmill at a speed of 1.2 mph before stopping due to pain. Strength tests indicated she could lift and carry limited weights, but her performance was inconsistent, suggesting a lack of consistent effort. The FCE was incomplete as Stup declined to continue after being informed of the remaining tests.
The Functional Capacity Evaluation (FCE) for Stup lasted two and a half hours, with the physical therapist concluding that she could perform sedentary work. However, the therapist cautioned that the results might not accurately reflect Stup's functional capabilities due to noted "inconsistencies" during the evaluation, such as stronger grip strength in her left hand despite being right-handed and a lower heart rate during reported severe pain compared to after thirty minutes of sitting. The therapist advised against making specific job recommendations based on unreliable information.
In contrast, UNUM doctor Burton McDaniel reviewed the FCE and deemed it thorough and valid, asserting that Stup was capable of sedentary work. He suggested that inconsistencies in Stup's effort during the FCE might indicate she could function at a higher level, such as light work. Consequently, UNUM upheld its initial decision to deny Stup's claim.
Stup appealed the decision, providing an affidavit detailing her daily activities, which included limited mobility and reliance on her daughter for household chores due to pain. She described her struggles with daily tasks and mentioned that she had offered to continue FCE tests but was advised against it by the physical therapist. Additionally, Stup submitted a letter from Dr. Wei, who diagnosed her with fibromyalgia and other conditions, asserting that her severe fatigue and pain precluded her from performing even sedentary work. Dr. Wei noted significant symptoms such as profound fatigue, short-term memory deficiency, and limited mobility due to her medical conditions.
Ms. Stup has been advised to limit her activities, take daily naps, and adhere to her medication and treatment plans to manage her symptoms. Despite these recommendations, she attempted to work beyond her physical limitations, leading to symptom flare-ups. The treating physician concludes that she is physically incapable of performing even sedentary work due to her need for frequent rest, daily naps, and limited ability to stand, sit, or walk for more than thirty minutes. She also faces restrictions on bending, kneeling, lifting over ten pounds, and using her hands beyond simple grasping. The physician asserts that Ms. Stup is not a malingerer and has been compliant with treatment, but she has been totally disabled from work since March 16, 1998, with no foreseeable improvement due to the chronic nature of her condition.
An in-house doctor for UNUM, Maureen Lee, reviewed the treating physician’s letter but concluded it did not alter UNUM's prior determination of Ms. Stup’s capacity for sedentary work, leading to another denial of her disability claim. After exhausting administrative appeals, Ms. Stup filed a lawsuit against UNUM, alleging a violation of ERISA for the wrongful denial of long-term disability benefits. The district court granted summary judgment in her favor, prompting UNUM's appeal. The appellate review is de novo and considers whether UNUM's denial of benefits was reasonable given its discretionary authority under the ERISA plan, which requires assessing if the decision was made through a deliberate process and supported by substantial evidence.
In denying benefits, UNUM faced a conflict of interest as it both administered the plan and paid for benefits. This conflict necessitates a less deferential standard of judicial review, where the degree of deference is reduced to offset any bias. The more the administrator stands to gain from a particular interpretation of eligibility, the stronger the evidence must be to support its decision.
UNUM's decision to deny benefits was found lacking in substantial evidence and principled reasoning. Stup provided extensive, uncontradicted medical evidence, including a detailed assessment from Dr. Nathan Wei, a rheumatologist, who noted that her conditions—lupus and fibromyalgia—significantly impaired her ability to perform daily activities and work. Dr. Wei asserted that Stup is totally disabled and cannot perform even sedentary work, advising her to limit activities and manage her energy levels.
The evidence presented by Stup clearly met her burden of proof for entitlement to long-term benefits under the ERISA plan. Although UNUM could deny benefits if it had substantial evidence proving Stup could perform sedentary work, it failed to provide such evidence, particularly in light of the conflicting medical reports it referenced.
UNUM asserts it reasonably denied benefits based on conflicting medical evidence regarding Stup's ability to work. However, an administrator must rely on "substantial" evidence when denying benefits, especially when there is an economic incentive to do so. In this case, UNUM faces significant evidence indicating Stup's disability against ambiguous evidence that might support denial.
UNUM claims the Functional Capacity Evaluation (FCE) contradicts Dr. Wei's assessment, which states Stup cannot perform sedentary work. However, the FCE results are not unequivocal; the physical therapist noted inconsistencies in the results and ultimately presented a negative interpretation. The FCE lasted only two and a half hours, insufficient to determine Stup's ability to sustain sedentary work for a full workday. Dr. Parke, the first UNUM doctor to review Stup's case, suggested observing her daily activities to assess her work capacity.
Moreover, Stup's FCE performance may actually align with Dr. Wei’s diagnosis, which indicates she could only sustain work for limited periods due to pain and fatigue. During the FCE, Stup displayed pain, could not walk fast enough for a proper assessment, and was unable to complete the tests, which supports her claims of disability rather than contradicting them. UNUM's reliance on the equivocal interpretation of the FCE results by the physical therapist and Dr. McDaniel does not constitute substantial evidence or a reasonable determination.
An equivocal opinion, particularly one derived from ambiguous test results, fails to meet the standard of "substantial evidence." The physical therapist acknowledged the ambiguity of the Functional Capacity Evaluation (FCE) results, indicating that they "may not be truly indicative" of the client's functional capabilities and advised against making job duty recommendations based on inconsistent information. Dr. McDaniel, UNUM's in-house doctor, reviewed the FCE without examining Stup or considering the therapist's caution regarding the unreliability of the results. He stated the results suggested Stup was capable of sedentary work, disregarding their potential interpretation consistent with her physician's conclusion of disability. UNUM's reliance on this evidence, which conflicted with substantial medical documentation from Stup's long-time physician, does not constitute a "deliberate, principled reasoning process," especially given UNUM's conflict of interest. The district court correctly found that UNUM abused its discretion in denying Stup's long-term disability benefits.
Stup provided extensive medical evidence supporting her disability diagnosis, which UNUM did not contest. UNUM argued it acted reasonably by relying on conflicting evidence; however, this evidence actually supports Stup's rheumatologist's opinion or is too ambiguous to be a reliable basis for assessing her job capabilities. Therefore, the evidence relied upon by UNUM lacks substantiality and conflict. The district court's judgment is affirmed. Additionally, Stup contended she should be classified as a Class 1 employee due to her salary and position, which would grant her longer disability benefits. However, the district court did not need to address this classification issue.
A court reviewing UNUM's decision is limited to evidence available at the time of that decision. Stup's request to consider Dr. McDaniel's deposition, where he admitted limited review of her file and acknowledged that findings of inconsistent effort could indicate a flare-up, was not considered by either the court or UNUM. Stup argues that the medical review process by UNUM was biased, citing a former medical director's testimony that UNUM's policy was to deny claims. However, the district court did not rely on this evidence. UNUM incorrectly interprets the substantiality requirement, conflating it with the "treating physician" rule from Black & Decker Disability Plan v. Nord. The district court found that UNUM arbitrarily disregarded credible evidence from Stup, including her treating physician's opinion, favoring ambiguous evidence that served its economic interests. UNUM's assertion that it based its conclusion on opinions from four physicians is misleading, as three of those physicians did not assess Stup’s ability to perform sedentary work. Notably, Dr. Parke recommended further assessments rather than making a determination. The claim of malingering based on inconsistent test results is challenged by evidence of Stup’s medical condition, which could explain such discrepancies. This situation contrasts with cases cited by UNUM, where contradictions between physicians' assessments were evident.
