Burk v. Broadspire Services, Inc.

Citation: 342 F. App'x 732Docket: No. 07-3729

Court: Court of Appeals for the Third Circuit; August 18, 2009; Federal Appellate Court

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Plaintiff Judy L. Burk initiated a lawsuit under the Employee Retirement Income Security Act (ERISA) against Highmark Life Insurance Company and Broadspire Services, Inc., seeking reinstatement of Long Term Disability (LTD) benefits. The defendants argued that Burk was capable of performing multiple occupations within her geographic area, justifying the termination of her benefits. The District Court ruled in favor of the defendants, granting summary judgment. Burk began her employment with Utz Quality Foods, Inc. in 2000 but had a history of severe back issues dating back to 1995. Following her employment, she reported worsening pain and subsequently applied for short-term disability, which was approved. Burk was covered for LTD benefits under a group policy that required her to be Totally Disabled from her own occupation for the first 39 months and from all occupations thereafter. In September 2001, Burk applied for LTD benefits, claiming significant physical limitations, which were supported by her physician's reports. Highmark initially determined Burk was Totally Disabled for the first 39 months, but subsequent evaluations revealed potential for vocational rehabilitation, despite ongoing severe limitations. Ultimately, the Court affirmed the decision of the District Court.

In January 2004, Broadspire performed a Field Care Management Assessment of Burk, conducted by R.N. William Cromwell, who noted Burk's frequent repositioning due to pain but could not assess her pain level. Cromwell indicated that Burk possessed friendly and verbal skills that could qualify her for customer service or sales roles with training. Burk's long-term disability (LTD) benefits, based on her inability to perform her occupation, were set to expire on August 19, 2004, unless she was deemed Totally Disabled from any occupation. Broadspire informed Burk that further evaluations, including a vocational consultant review, would occur during the transition review process. 

In July 2004, Broadspire commissioned Debbie Kauterman, an occupational therapist, to conduct a Functional Capacity Evaluation (FCE) to assess Burk's abilities for any occupation. Kauterman reported significant difficulties for Burk in various physical tasks and attributed her limited performance to back pain. On August 6, 2004, based on the FCE, Broadspire determined that Burk was Totally Disabled from any occupation, allowing her benefits to continue beyond the initial period, while indicating ongoing monitoring of her disability status.

In October 2004, Broadspire initiated video surveillance of Burk, which they claimed did not influence their claims decisions but acknowledged it prompted further monitoring and another FCE. Dr. Crane submitted an updated Attending Physician Statement, reiterating Burk's chronic conditions, including a herniated disc and severe limitations in functional capacity. In February 2005, following Dr. Crane's report and the surveillance findings, Broadspire planned a second FCE for March 2005. This evaluation revealed Burk faced limitations due to pain but could perform activities within the Sedentary Physical Demand Classification, albeit likely remaining symptomatic. Subsequently, Broadspire conducted an Employability Assessment, reviewing her medical and work history alongside the March 2005 FCE results and Dr. Crane's statements.

Burk was deemed employable for several occupations consistent with her pre-disability salary, leading Broadspire to notify her on April 27, 2005, that her long-term disability (LTD) benefits would end on May 1, 2005. Burk appealed this decision in May 2005, submitting a letter from Dr. Gerald Dworkin, her treating physician, who noted significant pain, mobility difficulties, and MRI-confirmed disc herniations. Despite some improvement after treatment, Dr. Dworkin indicated Burk had ongoing functional capacity limitations and had been unable to perform her job since January 2005. Broadspire then consulted Dr. Lucy Cohen, who, after reviewing Burk's medical records, concluded that she could perform a sedentary job with accommodations. Highmark further reviewed her case, with Dr. Andrea Carabello agreeing that there was no objective evidence to support Burk's inability to work in a sedentary capacity. Consequently, Broadspire upheld the termination of benefits in September 2005, prompting Burk to file a lawsuit. 

The District Court ruled that Broadspire's decision was subject to deferential arbitrary and capricious review due to the discretionary authority granted in Highmark’s LTD policy. Even under heightened scrutiny, the court found sufficient evidence to justify the denial of benefits. Burk appealed, and the appellate court indicated that review would be under the same standards as the District Court applied. The Supreme Court has established that if a plan grants discretionary authority to an administrator, the review standard is for abuse of discretion, with any conflicts of interest being a factor in the assessment. The District Court concluded there was ample evidence supporting Broadspire's denial of Burk’s LTD benefits.

The heightened arbitrary and capricious standard is deemed more favorable to Burk than the Glenn standard, yet there is no prejudice in applying the Glenn standard without remanding. Prior case law defined the standard as 'arbitrary and capricious,' while Glenn refers to it as 'abuse of discretion,' both of which are essentially identical in the ERISA context. Burk contends that Broadspire’s review was flawed due to procedural irregularities, including ignoring her treating doctors' findings and assessments from early 2004, as well as not considering her Social Security Disability benefits. However, ERISA does not mandate that treating physicians' opinions receive special weight, and Burk's claims lack support in the record. Broadspire's physicians agreed with Burk's treating doctors on her functional impairments but determined these did not preclude her from any occupation, which is necessary for continued long-term disability (LTD) benefits past 39 months.

Burk argues Broadspire disregarded the January 2004 FCM Assessment and July 2004 FCE in declaring her capable of sedentary work. However, the FCM Assessment was part of the initial review for her disability claim and did not determine she was unable to perform sedentary work. After granting benefits, Broadspire conducted further assessments, including a vocational analysis and a Physician Peer Review, leading them to conclude that Burk was not "Totally Disabled," justifying the cessation of her LTD benefits. Broadspire maintained the discretion to conduct ongoing reviews of Burk’s disability status.

Moreover, the Social Security Administration’s disability determination is not binding in this case, as the plan terms govern the decision rather than statutory provisions. While such determinations may influence an administrator's decision, ignoring them does not constitute an abuse of discretion. After reviewing all arguments, it was concluded that the District Court did not err, and Broadspire’s denial of benefits was not an abuse of discretion. The District Court noted surveillance video showing Burk engaging in activities inconsistent with her claimed disability, further supporting the decision to affirm the judgment.

Surveillance footage indicates the Plaintiff, Burk, entered a large Chevrolet SUV without difficulty. Dr. Dworkin's July 1, 2005 letter highlighted Burk’s limitations, specifically regarding her ability to perform secretarial tasks. Although the District Court noted discrepancies in the medical evaluations, these did not affect the appeal's outcome. Physicians and vocational consultants for Broadspire agreed on Burk’s functional limitations but determined she could perform sedentary work. The District Court's jurisdiction was established under 29 U.S.C. 1132(e) and 28 U.S.C. 1331, while appellate jurisdiction fell under 28 U.S.C. 1291. Burk claimed Broadspire's actions constituted procedural irregularities, meriting a heightened review under Pinto and amounted to an abuse of discretion. Burk referred to a January 2004 examination as an FCE, but it was actually an FCM Assessment without a medical examination. She alleged that Broadspire's consultants lacked complete information from her file; however, the vocational consultant based their assessment on an FCE and Dr. Crane’s statements, which were consistent. Broadspire maintained that Dr. Cohen reviewed Burk’s entire file before denying her appeals, and after Burk's appeal, Highmark’s medical team, including Dr. Carabello, also reviewed all relevant reports.