Hogan v. Life Ins. Co. of N. Am.

Violet M. Hogan, Plaintiff-Appellant, v. Life Insurance Company of North America Defendant-Appellee.

No. 12-5902

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED: April 3, 2013

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 13a0331n.06

ON APPEAL FROM THE

UNITED STATES DISTRICT

COURT FOR THE WESTERN

DISTRICT OF KENTUCKY

BEFORE: DAUGHTREY, ROGERS, and MCKEAGUE, Circuit Judges.

ROGERS, Circuit Judge. Violet Hogan appeals the district court's grant of judgment on the administrative record in this disability suit. A former employee of SHPS, Inc., she seeks short-term disability ("STD") and long-term disability ("LTD") benefits under insurance polices provided by Life Insurance Company of North America ("LINA"). Because, contrary to Hogan's claims, LINA had discretionary authority to review her application for benefits, its decision is reviewed under the arbitrary-and-capricious standard. The district court properly concluded that LINA's decision met this standard.

On September 16, 2008, Hogan visited her primary care doctor, Dr. Thomas Schurfranz, complaining of anxiety, trouble thinking, and back pain. R.15, at 197, PageID #860. During this visit—just two days prior to her stopping work—she told Dr. Schurfranz that she couldn't "seem to function," that she didn't like her job, and that she had become "anxious, dwelling on things [at]work." R.15, at 197, 164. She also stated that she was having panic attacks. Id. Dr. Schurfranz diagnosed her with depression with anxiety and prescribed medications. Id. Two days later, on September 18, Hogan stopped working as a Leave Processor for her employer, SHPS, Inc. Shortly thereafter, she applied for short term disability benefits, claiming depression, anxiety, and panic attacks. See R.15, at 79-81, PageID #736-38.

Although Hogan had a follow-up visit scheduled approximately 6 weeks after her first appointment with Dr. Schurfranz, she returned to his office on September 22 again complaining of "anxiety, much of which stems from work-related stress." R.15 at 197, PageID #860. At that visit, Dr. Schurfranz noted that he agreed with Hogan's decision to take a "short-term leave" until her medications took effect. Id.

Hogan returned to Dr. Schurfranz's office about one month later, reporting that she was "sometimes better, sometimes not." R.15, at 170, PageID #827. She also reported that she could not return to work because of stressors and that she was having several anxious episodes per week. Id. She told Dr. Schurfranz that she was paralyzed by emotions three to six hours per day, five days per week, with symptoms persisting even though she was no longer working. Id. At that time, Dr. Schurfranz referred Hogan to a psychiatrist. Id. LINA received no evidence that she followed up with that provider.

She received another psychiatric referral at the final medical appointment she attended through an employee assistance program ("EAP") on December 1, 2008. R.15, at 172-73, PageID #829-30. She attended only one such meeting. According to the visit notes, Hogan reported thatshe could not concentrate or remember how to do things she had always been able to do. Id. The notes further stated that she was referred to Dr. Gupta, a psychiatrist, and suggested that her medical providers rule out Alzheimer's/dementia versus anxiety. Id. The EAP placed no limitations or restrictions on her work or daily activities. Id.

LINA served as the disability-claims processor for SHPS, Inc. Although the parties contest the extent of LINA's discretion in disability determinations, the STD Group Disability Insurance Certificate ("STD Certificate") stated:

The Plan Administrator [SHPS] has appointed the Insurance Company [LINA] as the named fiduciary for adjudicating claims for benefits under the Plan, and for deciding any appeals of denied claims. The Insurance Company shall have the authority, in its discretion, to interpret the terms of the Plan, to decide questions of eligibility for coverage or benefits under the Plan, and to make any related findings of fact.

R.15, at 122. The STD Policy provided:

The Employee is considered Disabled if, solely because of Injury or Sickness, he or she is:

1. unable to perform the material duties of his or her Regular Occupation; and

2. unable to earn 60% or more of his or her Covered Earnings from working in his or her Regular Occupation.

The Insurance Company will require proof of earnings and continued Disability. R.15, at 88, PageID #745. The standard of proof was further elaborated elsewhere in the policy, which stated that the employee "must provide the Insurance Company, at his or her own expense, satisfactory proof of Disability." R.15, at 92, PageID #749. The term "satisfactory proof" appeared several other times in the policy. See, e.g., R.15, at 99, PageID #756.

In order to evaluate Hogan's claim, LINA reviewed Dr. Schurfranz's visit notes as well as a questionnaire completed by the doctor at LINA's request. These records amounted to three pages of visit notes and the brief questionnaire, called the Medical Request Form. Dr. Schurfranz was unable to provide additional documentation. Dr. Schurfranz noted that "significant stressors at work exacerbate [Hogan's] condition," R.15, at 188, but did not connect any specific work activity to her condition, nor did he provide any evidence of objective testing or further evaluation. And while he noted restrictions on her work activities, he did not initially place any restrictions on any other activities of Hogan's daily life.

LINA denied Hogan's claim on October 23, 2008. In its letter to Hogan, LINA cited a lack of clinical evidence of functional deficiencies and added "we cannot conclude from the records we received a physical or mental inability to function at work other than your current dislike for your position." R.15, at 11. LINA went further in describing the type of evidence that was problematically missing. It wrote:

Disability is determined by medically supported functional limitations and restrictions which preclude ability in performing your occupation.

We do not dispute you may have been somewhat limited or restricted due to your diagnosis, however an explanation of your functionality and how your functional capacity prevented you from performing the requirements of a Leave Processor was not clinically supported as we were not provided with physical exam findings, physical limitations, and severity of symptoms.

R.15, at 10-11. LINA suggested that its determination would be affected if Hogan could submit documentation such as "physician's office notes, hospital records, consultations, test result reports, therapy notes, physical and/or mental limitations, etc." Id.

Hogan appealed this determination. As part of Hogan's appeal, Dr. Schurfranz submitted a second completed questionnaire along with the final visit note from his practice. R.15, at 179, PageID #836. In the questionnaire, Dr. Schurfranz wrote that Hogan's primary diagnosis was "major depressive episode with anxiety" and noted that her condition was not work related. Id. "Stressors at work exacerbate her condition. Patient is unable to cope with these (and other) stressors, severely impairing her ability to exercise good judgement [sic]." Id. In terms of specific restrictions, Dr. Schurfranz wrote that Hogan was to "avoid work until symptoms are better controlled and patient can focus on tasks" and to "avoid going out in public alone until able to cope with stressful situations more effectively." Id. He denied that Hogan could be able to work with accommodations, stating that her "condition prevents her from being able to cope." Id. He wrote that "'accommodations' would not prevent her condition from worsening, as evidenced by her persistent exacerbations despite being off work several weeks." Id. He concluded that Hogan could only return to work "after therapy (counseling and medication) have improved her control of her symptoms." Id.

This second questionnaire was submitted to LINA along with a letter written by Hogan in which she further explained her condition and contested LINA's interpretation of her records. She informed LINA that it was "not completely informed as to the many ongoing problems or the full extent of [her] disabilities" and wrote that her condition made her "unable to focus [her] attention and concentrate making it nearly impossible to perform [her] duties at work or at home." R.15, at 180, PageID #837. She also noted that she suffers from "bi-lateral knee arthritis, degenerative disc disease and cervical spine disease, all of which are chronic ailments" as well as "coronary arterydisease, high blood pressure and high cholesterol." Id. Neither she nor Dr. Schurfranz suggested that these ailments restricted her work activities, although Hogan stated in her letter that she had "serious concerns about how the depression, anxiety and panic attacks will affect my heart problems." Id. Hogan submitted no information linking these conditions.

LINA assigned two nurse case managers to review Hogan's file on appeal. R.15, at 44, 176, PageID #701, 833. The first reviewer, Kem Lockhart, concluded that LINA's first decision should not be overturned, noting "no degree of severity documented . . . lack of actual office visit recvd . . . no note of change to meds." Id. at 176, PageID #833. The second reviewer agreed, noting that "there is a lack of clinical evidence such as mental status exam or observations to support [Hogan's] reported symptoms." Id. at 44, PageID #701.

LINA denied Hogan's appeal on December 8, 2008. In a letter to Hogan, LINA reiterated its need to have documented evidence supporting "functional limitations/restrictions which preclude ability in performing [Hogan's] occupation." R.15, at 165, PageID #822. It concluded that the records it reviewed did "not provide physical or mental exam findings regarding a measured decrease in [Hogan's] functionality and how [her] functional capacity prevented [her] from performing ...