Spanos v. Tjx Companies, Inc.

220 F.Supp.2d 67

George SPANOS, Plaintiff, v. The TJX COMPANIES, INC., Continental Casualty Company, Defendants.

No. CIV.A. 00-12570-RBC.¹

United States District Court, D. Massachusetts.

September 19, 2002.

Margaret A. O'Reilly, Belmont, MA, for Plaintiff.

Jean M. Kelley, Morrison, Mahoney & Miller, Boston, MA, for Defendants.

MEMORANDUM AND ORDER ON MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS, THE TJX COMPANIES, INC. AND CONTINENTAL CASUALTY COMPANY (# 16) AND PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (# 22)

COLLINGS, United States Magistrate Judge.

I. Introduction

Plaintiff George Spanos ("Spanos"or the "plaintiff"), a former employee of The TJX Companies, Inc. ("TJX"), filed a complaint against TJX and Continental Casualty Company ("Continental Casualty")(collectively, the "defendants") alleging that the defendants denied him long-term disability ("LTD") benefits, in violation of the Employee Retirement Income Security Act of 1974 ("ERISA").

On March 8, 2002, the defendants filed a motion for summary judgment (# 16) and a supporting memorandum of law with a statement of undisputed facts (## 18, 19)² . In response, on April 2, 2002, the plaintiff submitted the following pleadings: his own motion for summary judgment (# 22), a supporting memorandum (# 23), a "Statement Controverting Defendant's [sic] Statement of Undisputed Facts", and his own statement of undisputed facts (# 25). On April 19, 2002, the defendants filed a response to the plaintiff's statement of undisputed facts (# 27), a response to the plaintiff's motion for summary judgment (# 28) and a motion to strike the exhibits attached to the plaintiff's statement of undisputed facts. Defendants then filed a reply memorandum to plaintiff's opposition to defendants' motion for summary judgment (# 45). For the reasons stated below, the defendants' motion for summary judgment is denied and the plaintiff's motion is also denied, and I will remand this case in its entirety.

II. The Facts³

From 1975 to April 3, 1999, the plaintiff was employed by TJX as a quality inspector clerk. (R. 27, 83)⁴ The plaintiff's job involved using a telephone, entering information into a computer, writing information on forms, attaching paperwork to garments and moving trolleys that ride on rails. (R. 105)

On or about April 3, 1999, the plaintiff stopped working and filed for short-term disability benefits through a Medical Disability Claim Form, dated April 7, 1999. (R. 36-37) The plaintiff was approved for and was paid short-term disability benefits under the FlexPlus Plan (the "Plan") for the period April 4, 1999 to October 9, 1999. (R. 83) The Plan is an employee welfare benefit plan as defined by ERISA. (SPD at 1, 5) Moreover, the SPD is written to conform with ERISA. (SPD at 1) The plaintiff received weekly benefits in the amount of $301. (R. 83)

The Plan provides, inter alia, that all "Disability benefits are paid weekly, biweekly, semi-monthly, or monthly, whichever applies, immediately after We [Continental Casualty Company] receive due written proof of loss." (R. 15, 18) The Plan has two phases of LTD benefits. (R. 164) Under the first phase, which lasts for the first 24 months of long term disability, benefits are payable if the employee "is unable to do the essential duties of [his] own occupation, due to sickness or accidental injury." (R. 164)(emphasis in original) Benefits are payable in the second phase, beyond 24 months, if the employee is "unable to work at any occupation, [he is] or could reasonably become qualified to do by education, training or experience." (R. 164)(emphasis in original) No benefits will be paid if a participant fails to provide "due written proof" of disability in the form of an application for LTD benefits that includes a LTD Employee's Statement and a Physician's Statement within 90 days after the end of the benefit elimination period. (R. 18, 163) In the SPD, it states that CNA⁵, on behalf of TJX, administers the Plan vis-à-vis long term disability benefits. (SPD at 3)

Between April 7, 1999 and August 10, 1999, the plaintiff submitted seven claim forms in connection with his short term disability benefits. (R. 36, 38, 48, 53, 56-58) One of plaintiff's doctors, a Dr. Jonathan Adler, provided TJX with updates on the plaintiff's condition through numerous Medical Claim Form Extension filings. (R. 40, 48, 53, 56-58, 60) On May 28, 1999, Dr. Adler prepared a report in which he stated that the plaintiff suffered not only from chronic fatigue and sero negative rheumatoid arthritis, but also from ankylosing spondylitis.⁶ (R. 40) Dr. Adler further reported that the plaintiff was "unable to function presently." (R. 40) In each of the Claim Form Extensions, Dr. Adler stated that the plaintiff suffered from chronic fatigue and sero negative rheumatoid arthritis. (R. 48, 53, 56-58)

On September 13, 1999, CNA received the plaintiff's LTD application. (R. 70) That application included TJX's LTD Employer's Statement (R. 83), the plaintiff's Physician's Statement (R. 86-87), and the plaintiff's LTD Employee's Statement (R. 84-85). In the Physician's Statement dated August 25, 1999, Dr. Adler described the plaintiff's symptoms as "fatigue" and "back pain" and under the section marked "Diagnosis" Dr. Adler wrote "Seronegative Rheumatoid arthritis Chronic Fatigue."⁷ (R. 86) With respect to physical limitations, Dr. Adler stated that "lifting should be avoided; prolonged standing should be avoided." (R. 87)

By letter dated October 29, 1999, CNA informed the plaintiff that his claim for LTD benefits was denied on the grounds that there was no objective medical information in the medical records provided by the plaintiff to demonstrate that his condition prevented him from performing his job as a quality inspector. (R. 113) On or about December 17, 1999, the plaintiff appealed CNA's decision. (R. 125)

The plaintiff sent his appeal to a Mr. Frank Martinko of CNA. (R. 125) On December 27, 1999, Mr. Martinko wrote to the plaintiff's attorney acknowledging receipt of the letters from the various doctors and informing him that "no additional medical information was received along with [the] letters to allow for a review of this claim." (R. 131) On February 10, 2000, CNA, through Cheryl Sauerhoff, a CNA Appeals Committee Member, again wrote to the plaintiff's attorney, stating that it was upholding the previous denial of benefits because:

the medical record documentation does not support the severity of any condition that would continue to preclude work activity throughout the elimination period and thereafter....[W]e must have documentation that enables us to determine functional impairments in the activities of daily living and job related activities. There is no detail of any functional impairments or detail of how this discomfort prevents [the plaintiff] from performing his activities of daily living or his occupational duties. There is no continuous detail of the "pain" symptomology as to the duration, frequency or intensity.... There is a "paucity of findings on physical examinations" as stated by Dr. Adler on 11/10/99.

(R. 133)

By letter dated May 10, 2000, the plaintiff requested a reconsideration of the CNA Appeals Committee's determination to uphold the denial of LTD benefits. (R. 135) Enclosed with that letter was a Notice of Award from the Social Security Administration ("SSA") dated December 26, 1999 stating that the plaintiff became disabled under the rules of the Social Security Disability program on April 4, 1999 and was therefore eligible for disability benefits beginning in October, 1999. (R. 138)

III. The Claims

Both the plaintiff and the defendants, claiming that they are entitled to judgment as a matter of law, have moved for summary judgment based on the purported lack of any genuine issue of material fact. The parties dispute, however, what legal standard the Court should apply in reviewing CNA's denial of LTD benefits to the plaintiffa de novo standard or an "arbitrary and capricious" standard. The plaintiff argues that CNA's decision should be reviewed de novo but that even if the Court uses the arbitrary and capricious standard, CNA's decision denying the plaintiff long term disability benefits should be overturned. The defendants assert that the correct standard is the arbitrary and capricious one and that CNA's decision must stand because CNA's decision was neither arbitrary nor capricious. Because the parties' motions are intertwined and are premised on the same legal basis, I rule on both motions in this Memorandum and Order.

IV. Discussion

As stated above, this case is governed by ERISA because the Plan is an employee benefit plan as defined and governed by ERISA. Title 29 U.S.C. § 1002(1) & (3), Title 29 U.S.C. § 1003(a). In deciding the instant motions, I must first determine the applicable standard to use in reviewing CNA's denial of LTD benefits to the plaintiff. In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court addressed the issue of the applicable standard of review in a denial of benefits case, holding that "a denial of benefits under § 1132(a)(1)(B) must be reviewed under a de novo standard unless the benefit plan expressly gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the plan's terms." 489 U.S. at 115, 109 S.Ct. 948.

Thus, under Firestone, it appears that I must first determine whether the Plan in this case gave the administrator discretionary authority to determine eligibility for benefits or construe the terms of the plan. If so, then I must review CNA's decision "only to determine whether that decision was arbitrary and capricious." Recupero v. New England Telephone and Telegraph Co., 118 F.3d 820, 828 (1st Cir.1997). That is, the First Circuit "has interpreted the Firestone rule `to mean that a benefits plan must clearly grant discretionary authority to the...