Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-00163/USCOURTS-cand-4_05-cv-00163-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

ELLEN THIVIERGE,

Plaintiff,

v.

HARTFORD LIFE AND ACCIDENT INSURANCE

COMPANY AS ADMINISTRATOR AND

FIDUCIARY OF THE MILLS PENINSULA

HOSPITALS GROUP WELFARE PLAN NUMBER

506, and THE MILLS PENINSULA

HOSPITALS GROUP WELFARE PLAN NUMBER

506,

Defendants.

 /

No. C 05-0163 CW

ORDER GRANTING

PLAINTIFF'S

MOTION FOR

JUDGMENT AND

DENYING

DEFENDANTS'

MOTION FOR

JUDGMENT

Plaintiff Ellen Thivierge filed this lawsuit against Hartford

Life and Accident Insurance Company (Hartford) and the Mills

Peninsula Hospitals Group Welfare Plan Number 506 (Plan)

(collectively, Defendants), after Defendants terminated her longterm disability benefits. Plaintiff now moves, pursuant to Federal

Rule of Civil Procedure 52, for judgment by the Court. Defendants

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oppose the motion, and cross-move for judgment in their favor. The

matter was heard on January 13, 2006. Having considered all of the

papers filed by the parties, the evidence cited therein and oral

argument on the motion, the Court grants Plaintiff's motion and

denies Defendants' motion.

BACKGROUND

Plaintiff worked as a director of organizational development

at Mills Peninsula Hospital for approximately sixteen years, from

August 20, 1970 until August 2, 1995. Her position is classified

as "medium work" requiring three hours of sitting, five hours of

standing and one hour of walking. The job description indicates

that the job requires good organization and verbal/written

communication skills, the ability to influence people and

supervisory skills. As an employee of the hospital, Plaintiff was

covered by its long-term disability plan (LTD Plan), which was

administered by Hartford. Under the LTD Plan, a person is deemed

to be totally disabled if, during the six-month elimination period

and the next twenty-four months, a disability prevents her "from

doing all the material and substantial duties" of her "own

occupation." Administrative Record (AR) 583. After that twentyfour month period, a person is considered totally disabled if a

disability prevents her "from doing any occupation or work" for

which she is, or could become, qualified by training, education or

experience. Id. 

On January 3, 1996, Dr. Donald Ho filled out Hartford's

Attending Physician's Statement of Disability for Plaintiff, noting

diagnoses of lupus arthralgia, chronic fatigue syndrome (CFS) and

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recurrent viral infections. Under the prognosis section of the

form, Dr. Ho marked the box indicating that Plaintiff was disabled

from her own job and any other job. Dr. Ho further noted that he

expected a "fundamental or marked change in the future," and wrote

"7/1/96" as the date when Plaintiff would recover sufficiently to

perform her duties and return to work. AR 379-80. 

A few days later, the hospital submitted a long-term

disability benefits claim to Hartford on Plaintiff's behalf,

attaching the Attending Physician's statement. The employer's

statement listed "fatigue" as the reason Plaintiff stopped working. 

AR 377. 

Plaintiff received a letter from Hartford dated January 19,

1996, stating that it had received her claim and had begun its

investigation. AR 368. The letter noted that it had ordered her

medical records from Dr. Ho and two doctors that Dr. Ho had

referred Plaintiff to see, Dr. Spencer T. Lowe and Dr. David

Klonoff.

In a claims division summary report dated February 27, 1996, a

Hartford examiner recommended approving Plaintiff's claim. AR 354. 

The report contained the following information: 

In 1994, Dr. Ho had referred Plaintiff to Dr. Lowe for a

rheumatology consultation and evaluation of systemic connective

tissue disorder, positive ANA, polyarthralgias and fatigue. Dr.

Lowe had observed that "she does have some sort of 'autoimmunity'

given the titer of the ANA observed. However, she does not fit

diagnostic criteria to be labeled as having systemic lupus

erythematosus." AR 353; see also AR 364-66, Dr. Lowe's Dec. 23,

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1In January, 1996, Hartford sent a Physical Capacities

Evaluation form to Dr. Lowe. The form includes such questions as,

"Please check the frequency that the patient can perform the

following activities" and, "Please check the exact degree of work

you feel this patient is capable of performing." He returned the

form, writing, "I'm sorry, but I don't have enough information to

complete this form. Please see my [word undecipherable] note from

Dec. 23, 1994." AR 1786-88. The note he refers to is his letter

to Dr. Ho. In January, 1996, Hartford also sent a Physical

Capacities Evaluation form to Dr. Ho. He did not fill out the

form, writing that it was not an appropriate measure of disability. 

AR 400.

4

1994 letter to Dr. Ho regarding Plaintiff ("My impression is that

this is a very pleasant, 43-year-old female with polyarthralgias

and a marked elevation in the ANA presenting with marked fatigue

who has some sort of undefined connective tissue disorder."). Dr.

Lowe indicated that Plaintiff's prognosis was good.1

In June, 1995, Dr. Klonoff, a regional expert in CFS, had

found, "There is recently a marked increase in the demands of work

and home. The joints feel more painful when she is stressed." He

recommended that Plaintiff seek counseling. Based on Plaintiff's

July 27, 1995 visit, he had concluded that Plaintiff suffered from

"CFS w/ severe job stress (i.e. dx of anxiety) too busy or tired to

exercise. She needs time to heal . . . I feel patient is disabled

and cannot work and should not work." Dr. Klonoff indicated that

Plaintiff would be able to return to work, but at a different

occupation. 

On February 28, 1996, the claims division summary report was

approved. The next day, Hartford sent Plaintiff a letter informing

her that her claim for long-term disability benefits had been

approved. The letter stated that her disability date was

established to be August 3, 1995, and, following the end of the

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six-month elimination period, Plaintiff's benefits became effective

on February 3, 1996. Also explained in the letter, as noted above,

was that, for the first twenty-four months, total disability meant

the inability to perform the material and substantial duties of

one's own occupation. But to remain eligible for continued long

term disability benefits after twenty-four months, one must be

unable to work in any occupation. The letter stated that

Plaintiff's "test of disability will change on February 3, 1998." 

AR 350-51. 

A case management summary note from March 27, 1996, states

that Plaintiff "would like to work but unable due to disease--

unreliable as to when she will or will not feel good or bad. 

Hospital says would use her as a consultant but at present she's

too unreliable as her illness dictates when she feels good or bad." 

AR 341.

Dr. Ho sent a letter regarding Plaintiff to Hartford dated

April 3, 1996. He wrote, "Due to the persistent nature of her

difficulties and relapsing infections with associated protracted

recuperative periods, I have serious doubts that she will be able

to return to any gainful employment for the remainder of the year. 

I have extended her disability until January 1, 1997." AR 124. 

On June 6, 1996, a Hartford examiner filled out a Social

Security Assistance Referral form on behalf of Plaintiff. The

counselor's comments on the form noted that, based on Plaintiff's

age and education, getting Social Security benefits would be

challenging; however, based on the severity of her debilitating

diagnosis, Plaintiff should apply for benefits. AR 326. At first,

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Plaintiff was denied Social Security benefits. But, in a decision

dated May 21, 1997, an Administrative Law Judge determined that

Plaintiff was eligible, finding that Plaintiff "suffers from lupus

and chronic fatigue syndrome, which prevent her from performing

even the full range of sedentary work." The order further found

that Plaintiff's subjective complaints are credible and consistent

with the medical evidence of record, that she cannot lift ten

pounds on a frequent basis and that she cannot perform sustained

work activity for more than two to three hours in a workday. AR

289-93.

Plaintiff continued to receive benefits from Hartford, even

after the twenty-four months had elapsed and she was entitled to

benefits only if she was unable to perform "any occupation." 

Plaintiff submitted periodic statements from herself and her

attending physician, Dr. Ho, from February 3, 1996 through 2003,

when her benefits were terminated. Dr. Ho remained Plaintiff's

attending physician even after Plaintiff moved from the San

Francisco Bay Area to Ashland, Oregon in 1998. According to the

statements submitted by Plaintiff and Dr. Ho, her symptoms remained

essentially the same and her impairments depended largely on the

severity of her flu-like symptoms. See, e.g., AR 144, 150-154,

156-157, 174, 178-79, 198-201, 304. 

In 2002, for reasons unstated, Defendants began surveillance

of Plaintiff. AR 531-551. She was observed on two days in April,

two days in May and two days in November. In April, an

investigator observed Plaintiff leaving her home, driving to town

and running various errands. According to the investigator,

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Plaintiff at no time appeared lethargic or tired; instead her

movements "were always brisk and quick with no signs of discomfort

or fatigue." AR 545. But, during the two days, she was only

observed outside her home for a couple of hours each day. On both

days, she returned home by noon and the investigator reported no

"subject activity" after she returned home. In May, Plaintiff was

observed driving her children to school and going to the store. 

The investigator stated that Plaintiff "was filmed getting into her

vehicle twice, reaching in through her car window, reaching over

her left shoulder to grab her seat belt and standing with her hands

on her hips. During the recorded video period of the subject, no

sign of discomfort or fatigue was ever seen by the investigator." 

AR 538. Most of the day, however, Plaintiff spent inside her home. 

During the second day of observation in May, Plaintiff never left

her home and no subject activity was observed. In November, the

investigator stated that Plaintiff was observed away from her home

for one hour on the first day of surveillance and at least two and

a half hours on the second day of surveillance. On the first day,

the investigator observed Plaintiff and her husband taking a onehour walk, noting that they "walked briskly the whole time." 

AR 531.

Following the surveillance, a Hartford employee interviewed

Plaintiff at her home on February 27, 2003. AR 512-22. During the

interview, Plaintiff explained why Dr. Ho was still her attending

physician: "The reason I go to California for treatment is because

my husband is still employed by the policyholder, Mills Peninsula

Hospital and Dr. Ho has been my longtime physician and I really

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trust him. He is an unbelievably good physician." AR 512. 

Plaintiff visited Dr. Ho "usually bi-annually." In Oregon, she saw

a certified Reiki Healer for energy treatment and a homeopathic

healer for nausea, but declined to provide their names, although

she later gave the name of the Reiki Healer. 

During the interview, Plaintiff stated that, on good days, she

can walk twenty to twenty-five minutes, stand, sit, kneel, squat,

cook, do light housework and carry light items. But on bad days

she experiences weakness and feels sick if she gets up, has severe

diarrhea and cannot do anything but lie down. On a good day her

pain level is zero, but on a bad day it is ten. On the day of the

interview her pain level was two and she stated that it was a bad

day. She noted that she can start out having a good day and then

it will suddenly be a bad day, where she is weak and ill, which can

last up to three weeks; she can have several days when she feels

normal, but then wake up the next day feeling like she has a severe

case of the flu, which can last two days or three weeks. According

to Plaintiff, her good days occur approximately three to eight days

a month on average, the rest are bad days; it's impossible to

predict when she will have a good day. Even on the bad days,

however, she will still have to take her children places if her

husband is out of town and a friend is unable to take them. 

Plaintiff stated that she does not have enough good days to be able

to hold down a job and that she cannot function when she

experiences the weakness and flu-like symptoms. Plaintiff stated

that she did volunteer to be on a committee to develop a criterion

for closing a local school. The committee met ten times for two

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2

Plaintiff's medical note from July 7, 2003, states, "Ran for

local school board in her city and won. Unfortunately, there is

going to be some added stress to her life and it may make her

chronic fatigue problem worse." AR 684. Although Defendants note

that they discovered this through medical records after the

interview, Plaintiff does not address her work as a member of the

school board in her reply brief. At the hearing, Plaintiff's

counsel provided the Court with Plaintiff's declaration describing

her work as a member of the school board. Plaintiff filed the

declaration after the hearing. 

9

hours a week from September, 2002, to November, 2002. Although she

sometimes felt unwell, Plaintiff stated, she still attended the

meetings because she very much wanted to stay on the committee. 

She became the informal leader of the group and gave the

presentation to the community and the school board. But when it

was over, Plaintiff stated that she crashed hard and went to bed

for a week.2

 

Near the end of the interview, the Hartford employee showed

Plaintiff the surveillance videos. According to the Hartford

employee, "Mrs. Thivierge watched the surveillance films

attentively. Mrs. Thivierge stated that the activity check

surveillance video films accurately depict her level of

functionality and her level of restrictions and limitations." AR

520. She stated that she could tell she was having a good day on

the day she went for the walk in November because she was walking

well and that she was having a good day in all the films because

she was out of the house. If she was having a bad day, she would

not be out of the house. 

After the approximately four hour interview, the Hartford

employee observed the following: 

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Mrs. Thivierge was an active participant in the

interview process. Mrs. Thivierge was attentive and was

able to provide cogent responses and answers. Mrs.

Thivierge seemed to be able to concentrate and focus. I

noted that Mrs. Thivierge was able to edit and amend her

first statement. Mrs. Thivierge was able to correct

spelling and grammatical errors. Mrs. Thivierge spent

45 minutes in this process . . . . Mrs. Thivierge cried

on two occasions during the interview. The first one

was when she was describing her typical day. She stated

that the reason she was crying is because she remembers

what she used to be able to do. The second time was

when she was describing her vertigo . . . . Mrs.

Thivierge remained seated during the entire interview. 

Only at the end of the surveillance video did Mrs.

Thivierge excuse herself to use the restroom.

AR 522. The Hartford employee also noted that the interview was

not yet complete when Plaintiff had to leave to accompany a friend

to a doctor's appointment. 

Following the interview, Hartford arranged for Dr. Alan

Kimelman, a Board-Certified Physical Medicine and Rehabilitation

Specialist, to examine Plaintiff. Based on an interview and

examination of Plaintiff, her medical records and the surveillance

tape, Dr. Kimelman prepared a Long-Term Disability Evaluation dated

August 14, 2003. AR 119-139. Dr. Kimelman diagnosed Plaintiff

with recurrent chronic fatigue symptoms, finding that she did not

meet the criteria for establishing the presence of CFS set by the

Center for Disease Control. He noted, "The severity of the

condition is episodic with flu-like symptoms, fatigue, muscle pain,

nerve pain, diarrhea, nausea, and occasional weight loss occurring

paroxysmally and at other times remitting. Mrs. Ellen Thivierge

appears very believable and her medical records corroborate

symptoms such as she claims. Nonetheless, on today's examination,

symptoms and findings are minimal." AR 137. Dr. Kimelman

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concluded that, although Plaintiff was believable, "her objective

factors noted today" show that "Mrs. Ellen Thivierge is able to

perform at a sedentary occupation." Id. He checked "Yes" in

response to the question, "Has the patient reached maximum medical

improvement." 

Hartford sent Dr. Kimelman's report to Dr. Ho, along with the

video surveillance report and the personal interview report dated

February 27, 2005. AR 110-12. Dr. Ho wrote back to Hartford that

Plaintiff "has ongoing difficulties with an ill-defined auto-immuno

disorder associated with chronic fatigue syndrome and fibromyalgia. 

She is incapable of performing steady/consistent occupation of any

variety for any duration. She continues to require long-term

disability." AR 110. 

In Hartford's claim log for October 16, 2003, a Hartford

employee noted that he "reviewed information with Team Leader L.

Torres and he states that there is not enough to terminate claim at

this time based on IME by Dr. Kimelman, suggests that we move

forward and refer to UDC for review by Internal Medicine physician

with a specialty in fibromyalgia and chronic fatigue syndrome." AR

144. 

Hartford sent Plaintiff's medical records to the University

Disability Consortium (UDC), where Dr. Jerome Siegel, who is

certified in Occupational and Internal Medicine, reviewed them. 

Dr. Siegel also talked with Dr. Ho. In his medical record review

of Plaintiff, dated November 23, 2004, Dr. Siegel concluded:

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Based on a review of the medical records,

discussion with Dr. Ho and a review of the video

surveillance, Ellen Thivierge is a 52-year-old woman

with multiple medical problems including chronic fatigue

syndrome, fibromyalgia, and a possible undefined

connective tissue disease. Ms. Thivierge has been out

of work since 8/2/95 and has previously worked as

director of organizational development. The medical

records support that Ms. Thivierge has had many years of

multiple somatic complaints and constitutional symptoms

including chronic fatigue, general malaise, diffuse

weakness, chronic pain, palpitations, nausea, anxiety,

depression, and flu-like symptoms. She has had

difficulties with headaches, abdominal cramping,

diarrhea, and intermittent cognitive complaints. 

The medical records do not clarify what specific

functional limitations, if any, Ms. Thivierge has on a

regular basis. Dr. Ho indicates that from Ms.

Thivierge's self-report, she indicates that she is

unable to perform various activities of daily living and

instrumental activities of daily living. Despite this,

however, he has not been asked to order any visiting

nurse or homecare services . . . . He is unaware if she

takes regular walks or participates in a gym or health

club program. He is unaware if she has had any recent

cardiac stress test to give a quantitative estimate of

her level of conditioning or fitness. She is seen at

regular intervals such as every two to four months, and

she travels with her husband five to six hours to

continue to follow with Dr. Ho because of the

restrictions of her Health Maintenance Organization

(HMO). The medical records do not contain any

correspondence with the HMO by Dr. Ho recommending Ms.

Thivierge be followed closer to her home or be seen by

other specialists or therapists in her local area.

Dr. Ho indicates that he is unaware of what Ms.

Thivierge does on a typical day. He notes that all of

her limitations have been based on her self-report and

he himself has not witnessed her being physically unable

to perform specific activities. In addition, there is

no other information from a physical therapist,

occupational therapist, or visiting nurse to corroborate

her self-reported problems with diminished activity 

. . . . The video surveillance does not demonstrate any

specific problems with physical functions, difficulties

with transfers, mobility, or the use of an assistive

device. Although the medical record supports that she

has had fluctuating and intermittent levels of fatigue

throughout the last eight years, there is no information

that Ms. Thivierge has returned to any type of work

activities. The independent medical evaluation of

9/4/03, supports that Ms. Thivierge is physically

capable of at least sedentary work activities.

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From the review of the video surveillance and

medical records, however, it is my opinion that Ms.

Thivierge should be physically capable of performing

full time sedentary to light duty work activities. The

physical restrictions would include 10-20-lb lifting

restriction, alternating sitting and standing, and

rotation of job tasks and activities.

Ms. Thivierge has an unclear prognosis.

AR 95-7.

In Hartford's claim log for November 26, 2003, a Hartford

employee noted that he received Dr. Siegel's report finding

Plaintiff capable of sedentary work and that "Physician, Dr. Ho,

was contacted, and still disagrees that claimant is able to hold

down a full-time job, however does not provide any current evidence

that supports his opinion. Claimant lives 6 hours away from

physician and only sees him 2-3 times a year." AR 444. The

employee further noted that he was referring Plaintiff's case to

the rehabilitation department for an employability analysis.

A Rehabilitation Clinical Case Manager prepared an

employability analysis report based on Plaintiff's physical

capacities as determined by Dr. Siegel and Dr. Kimelman, and her

education and work history. The report determined that there were

seven suitable occupations for Plaintiff, including her previous

occupation. AR 76-92.

On December 16, 2003, Hartford terminated Plaintiff's longterm disability benefits. AR 66. The ten-page termination letter

concluded that the weight of the medical evidence in Plaintiff's

file supports that Plaintiff is capable of full-time sedentary

level work. It noted that, although she may have some limitations

regarding her physical abilities, those limitations are not to a

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degree that prevents her from gainful employment. The letter cited

the Independent Medical Examination performed by Dr. Kimelman and

the medical records review performed by Dr. Siegel, both of which

found that Plaintiff should be able to perform a sedentary level

occupation, and then stated, "Dr. Ho does not provide us with

sufficient rationale to support your inability return [sic] to work

in a sedentary level occupation." 

Plaintiff appealed the denial of her claim. AR 609-617. She

submitted additional medical records and reports from Dr. Ho and

Dr. Lowe, articles regarding chronic fatigue syndrome and

declarations from her friends and family attesting to her

disability. AR 618-806. In support of her appeal, Dr. Ho wrote:

The nature of Ellie's condition is that of an

unpredictable and uncontrollable relapse into a

severely weakened, debilitated and exhausted state that

often times renders her bedbound or housebound. Such a

condition usually lasts at least 1-2 weeks. No

employer can tolerate that type of inconsistent

attendance and loss of productivity. The only

predictable aspect of her condition is that whenever

she overextends her capabilities and endurance, she

will be extremely weakened and afflicted for a number

of days. These innumerable episodes of affliction are

well documented in my records. As even Dr. Kimmelman

[sic] concludes, her condition is "very believable and

her medical records corroborate the symptoms such as

she claims."

AR 620. 

Hartford again sent Plaintiff's files, including documents

Plaintiff submitted on appeal, to the UDC, which arranged for Dr.

Thomas Cuevas, who is Board-Certified in Internal Medicine, to

review them. AR 1201. Dr. Cuevas was instructed to review medical

records, surveillance evidence, accompanying reports and the

Claimant Interview and to contact Drs. Ho and Lowe to discuss

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Plaintiff's condition and level of functionality. Dr. Ho, however,

would not speak to Dr. Cuevas about his patient's medical condition

without her lawyer present. AR 1202. Dr. Cuevas spoke with Dr.

Lowe, who stated that Plaintiff "had more than just fibromyalgia." 

AR 1219. Dr. Lowe described Plaintiff's condition as a "lupus-like

syndrome" that manifests polyarthralgias and elevated ANA, and

stated that he would expect Plaintiff to have a difficult time

working. When asked about specific restrictions and limitations,

Dr. Lowe indicated that was a controversial issue in conditions,

like Plaintiff's, involving chronic fatigue and fibromyalgia. Dr.

Lowe stated that "it was very difficult to prescribe restrictions

and limitations and he stated that he had no opinion regarding her

restrictions and limitations." AR 1219. 

In his September 14, 2004 report, Dr. Cuevas concluded that

the medical findings supported the diagnostic classification of

chronic fatigue syndrome. AR 1220. But he also concluded that

"the medical findings do not support impairment in the ability to

perform sedentary work on a full-time basis." AR 1221. Before

reaching his conclusion regarding Plaintiff's ability to work, Dr.

Cuevas noted:

In this case, although there is very little information

to establish her activity level as far as any

information that can be gained from the medical

findings, there is a consistent report of difficulty

with activity on a consistent basis to provide support

for an initial period of impairment. . . . Although it

is repeatedly reported that her condition is fluctuating

and unpredictable, the claimant was reported to have

"run for a local school board in her city and won." 

Thus, she elected to involve herself in activities which

required future planning and commitments. Thus, the

records of medical encounters and office visits offer no

information with which to measure her activity level. 

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In such situations where the activity level cannot

reasonably be determined from the clinical information,

non-medical surveillance may be of value. In this case,

non-medical evaluation conducted on six different days

showed her actively performing activities of daily

living without any observable impairment and showed her

walking for one hour without any visible impairment

during the entire time that she walked for that reported

hour. To the extent that the time she was placed under

surveillance are [sic] a representative example of her

activity level and as she reported that she only goes

out on good days, the medical findings support her

ability to engage in activities of daily living without

impairment and supports [sic] the ability to work

without restrictions at least at a sedentary level on a

full-time basis.

AR 1220-21.

On September 17, 2004, Hartford completed its review of

Plaintiff's appeal. It upheld its former determination that

effective December 16, 2003, Plaintiff "no longer satisfies the

policy's definition of disability." AR 1131-35.

LEGAL STANDARD

ERISA provides Plaintiff with a federal cause of action to

recover the benefits she claims are due under the LTD Plan. 29

U.S.C. § 1132(a)(1)(B). The standard of review of a plan

administrator's denial of ERISA benefits depends upon the terms of

the benefit plan. Absent contrary language in the plan, the denial

is reviewed under a de novo standard. Firestone Tire & Rubber Co.

v. Bruch, 489 U.S. 101, 115 (1989). However, if "the benefit plan

expressly gives the plan administrator or fiduciary discretionary

authority to determine eligibility for benefits or to construe the

plan’s terms," an abuse of discretion standard is applied. Id. at

102; Taft v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1471 (9th

Cir. 1993). The Ninth Circuit has also referred to this as an

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"arbitrary and capricious" standard. McKenzie v. Gen. Tel. Co. of

Cal., 41 F.3d 1310, 1314 & n.3 (9th Cir. 1994); Taft, 9 F.3d at

1471 n.2 (use of the term "arbitrary and capricious" versus "abuse

of discretion" is a "distinction without a difference").

DISCUSSION

I. Standard of Review

Plaintiff argues that, because the LTD Plan did not explicitly

reserve discretion to Defendants, the Court should review de novo

Defendants' denial of her benefits. Defendants respond that the

LTD Plan did confer discretionary authority on them, and their

determination should be reviewed for abuse of discretion.

The General Provisions in Section VI of the Group Benefits

Plan include the following: "Hartford has full discretion and

authority to determine eligibility for benefits and to construe and

interpret all terms and provisions of the Group Insurance Policy." 

AR 599. There is no question that this language confers

discretionary authority. But, as Plaintiff notes, this language is

not found in the section for long-term disability benefits;

instead, it is contained in the life insurance benefits section. 

Plaintiff asserts that this language conferring discretionary

authority applies to life insurance claims only, and not to longterm disability claims. According to Plaintiff, the language that

applies to long-term disability claims, and is appropriately found

in the long-term disability benefits section, provides, "Hartford

reserves the right to determine if proof of loss is satisfactory." 

AR 587.

Defendants respond that the "General Provisions" language

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applies to all claims for long-term disability benefits as well as

life insurance benefits. They note that the Group Benefits Plan

covers both disability claims and life insurance claims and

contains only one General Provisions section. The Group Benefits

Plan likewise contains only one ERISA section setting forth

Plaintiff's rights and, because that applies to both long-term

disability benefits and life insurance benefits, Defendants argue

that the General Provisions section applies to both long-term

disability benefits and life insurance benefits as well. 

These arguments, however, are unpersuasive. As Defendants

note, under the federal common law of ERISA, terms in ERISA

insurance polices must be interpreted "in an ordinary and popular

sense," as they would be interpreted by "a person of average

intelligence and experience." Padfield v. AIG Life Ins. Co., 290

F.3d 1121, 1125 (9th Cir. 2002). A person of average intelligence

and experience would not think that the General Provisions

language, found only in the section discussing life insurance

benefits, applies to long-term disability benefits. First, longterm benefits and life insurance benefits are separate sections of

the Group Benefits Plan, and each has its own separate, and

different, table of contents. AR 578, 589. The language in the

claims section of the life insurance plan is completely different

from the language in the claims section of the LTD Plan. AR 587,

599. There is no "Exclusions" section in the life insurance

benefits portion, but the LTD Plan contains a section for

"Exclusions" that clearly applies only to the LTD Plan, and not to

the life insurance plan. See AR 587 ("EXCLUSIONS: This plan does

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not cover and no benefit shall be paid for any Disability which 

. . . ." ). As Plaintiff notes, the "General Provisions" section

appears just above the section entitled "Changing your

Beneficiary," which has nothing to do with a disability claim. And

the ERISA statement is clearly marked as its own separate section

of the Group Benefits Plan; a person of reasonable intelligence and

experience would not think that the ERISA statement applies only to

the life insurance plan. Thus, it would be reasonable to interpret

the General Provisions section as applying only to the life

insurance plan. 

The Ninth Circuit has made clear that an administrator has

discretion only where discretion is "unambiguously retained." 

Kearney v. Standard Ins. Co., 175 F.3d 1084, 1090 (9th Cir.

1999)(en banc); see also Sandy v. Reliance Standard Life Ins. Co.,

222 F.3d 1202, 1207 (9th Cir. 2000). The Court finds that the

administrator has not unambiguously retained discretion over the

LTD plan based on the discretionary language located in the life

insurance section.

Thus, the Court now turns to the language found in the LTD

Plan itself to determine whether that language is unambiguous. 

Plaintiff argues that the language, "Hartford reserves the right to

determine if proof of loss is satisfactory," is similar to language

the court reviewed in Sandy. In Sandy, the court held that a plan

provision requiring a participant to "submit satisfactory proof of

total disability" to the plan administrator did not unambiguously

confer discretion under Kearney. 222 F.3d at 1204. The court

stated that "unlike other plan provisions we have held conferred

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discretion," the plan in question provided "no language conferring

authority on Reliance to determine eligibility, to construe the

terms of the Plan, or to make a final and binding decision." Id.

at 1205. 

Defendants correctly note that the language in Sandy is

different because, here, Hartford states that it "reserves the

right to determine if proof is satisfactory." In Sandy, the plan

only required the claimant to submit satisfactory proof. 

Defendants argue that the language here makes clear to the reader

that Hartford will have the right to determine whether a claim is

payable. But they cite no case where a court found similar

language in a plan to confer discretion. As in Sandy, the language

here could mean that Hartford reserves the right to determine the

forms and supporting documents required for a proof of loss

submission.

 The language here does not confer discretion to determine

eligibility and construe the terms of the plan as clearly as did

the language in cases where abuse of discretion review was found. 

See, e.g., Jordan v. Northrop Grumman Corp. Welfare Benefit Plan,

370 F.3d 869, 875 (9th Cir. 2004) (“Travelers has the discretion to

construe and interpret the terms of the Plan and the authority and

responsibility to make factual determinations.”); Friedrich v.

Intel Corp., 181 F.3d 1105, 1110 n.5 (9th Cir. 1999) (finding

language providing Intel “shall have the sole discretion to

interpret the terms of the Plan and to determine eligibility for

benefits” sufficient to retain discretion). And, as the Ninth

Circuit has ruled, "Merely using the word 'determine' in the policy

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does not insure that the denial of benefits will be reviewed for

abuse of discretion." Newcomb v. Standard Ins. Co., 187 F.3d 1004,

1006 (9th Cir. 1999).

Here, the language arguably confers discretion; but if

"language only 'arguably' confers discretion, then by definition,

it does not confer discretion 'unambiguously,' the requirement for

deferential review." Green v. Sun Life Assur. Co. of Canada, 383

F. Supp. 2d 1224, 1227 (C.D. Cal. 2005). As the court noted in

Sandy, "Neither the parties nor the courts should have to divine

whether discretion is conferred. It either is, in so many words,

or it isn't." 222 F.3d at 1207. Because the language does not

unambiguously "say in sum or substance" that Hartford "has

authority, power, or discretion to determine eligibility or to

construe the terms of the Plan, the standard of review will be de

novo." Id. 

II. De Novo Review

Defendants argue that, even under a de novo standard, their

decision to terminate Plaintiff's benefits must be upheld, because

Plaintiff's claim of total disability from any occupation is not

supported by the record. Of the three doctors Defendants rely upon

to support their termination of benefits, however, only one, Dr.

Kimelman, actually examined Plaintiff. As noted above, Dr.

Kimelman found Plaintiff to be believable. He further found that

Plaintiff's symptoms on the day he examined her were minimal, and

that her objective factors noted on the day he examined her would

allow her to perform a sedentary occupation. Dr. Kimelman's report

was clear that his finding, that Plaintiff could return to work in

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a sedentary occupation, was based on how Plaintiff was feeling and

performing on that day. See AR 137 ("on today's examination"; "her

objective factors noted today"). But, as explained by the Third

Circuit, "CFS does not disable an individual afflicted with it from

performing particular, isolated activities, but rather prevents him

from performing all activities for any prolonged period of time." 

Mitchell v. Eastman Kodak Co., 113 F.3d 433, 441 n.7 (3d Cir. 1997)

(emphasis in original). Dr. Kimelman was silent regarding whether

Plaintiff could perform any of the objective functions over a

prolonged period of time, as were the other two doctors Defendants

hired to review Plaintiff's records.

The doctors noted that Plaintiff was observed on the video

surveillance walking, driving and doing errands; however, doing

those activities for a couple of hours on five out of the six days

she was under surveillance does not mean that Plaintiff is able to

work an eight-hour a day job. Attending a two-hour weekly

committee meeting for ten consecutive weeks is not equal to working

eight-hours a day, five days a week, week after week, month after

month. Nor is sitting attentively for four hours while being

interviewed and then going with a friend to the doctor the

equivalent of working on a full-time basis. 

Defendants acknowledged at the hearing that Plaintiff would

still be "totally disabled" under the LTD Plan if she could work

four hours a day; Plaintiff is totally disabled unless she is able

to work full-time in "any occupation," for which she is, or could

be, qualified. But the two doctors who reviewed Plaintiff's

records, and did not examine Plaintiff, offered no convincing

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evidence to show that Plaintiff could work an eight-hour day, even

at a sedentary job. Dr. Siegel stated that Dr. Kimelman's medical

evaluation of Plaintiff supports that she is capable of sedentary

work; however, as discussed above, that report was based only on

Plaintiff's symptoms on that particular day and did not discuss

Plaintiff's abilities to perform objective functions for any

prolonged period of time. Based on his review of the medical

records and the surveillance video, Dr. Seigel further concluded

Plaintiff should be physically capable of performing full-time

sedentary to light duty work activities. Reviewing the Plaintiff's

medical record and watching the surveillance tape, the Court did

not reach the same conclusion. 

Dr. Cuevas relied, in part, upon a note in Plaintiff's medical

record that Plaintiff ran for the local school board and won, to

support his conclusion that Plaintiff has the ability to work

without restrictions at a sedentary level on a full-time basis. 

Dr. Cuevas surmised that because Plaintiff was on the local school

board, "she elected to involve herself in activities which required

future planning and commitments." Campaigning for and working on

the local school board, however, is not a forty-hour a week job. 

Before deciding to run for the local school board, Plaintiff

learned that there would be three to four meetings a month and

reading/studying at home. Her campaign consisted of sending by

email a flyer made by a friend. Plaintiff thought that she could

read and study while lying down at home and could physically handle

one meeting a week. But sometimes she could not, and had to

reschedule meetings. Other times, she would be in bed all day

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3 Defendants object to Plaintiff's declaration, which contains

this information regarding Plaintiff's work on the local school

board. They argue that the declaration is inadmissible because the

Court's review should be limited to a review of the administrative

record. The Ninth Circuit instructs that a district court should

exercise its discretion to consider information not in the

administrative record "only when circumstances clearly establish

that additional evidence is necessary to conduct an adequate de

novo review of the benefit decision." Mongeluzo v. Baxter Travenol

Long Term Disability Ben. Plan, 46 F.3d 938, 944 (9th Cir. 1995). 

Here, it is necessary to consider Plaintiff's declaration. 

Defendants never investigated Plaintiff's work on the school board. 

Nor did they ask her about it. Instead, as Plaintiff notes,

Defendants denied her appeal, based in part on a single line in Dr.

Ho's medical notes, and then closed her file. Plaintiff was never

given an opportunity to explain and thus the record is devoid of

any information regarding Plaintiff's work on the school board. 

Defendants' objection is overruled. 

24

before a meeting, go to the meeting, and then come home and go

right back to bed. After a year, Plaintiff resigned from the

school board because she could no longer physically do the job.3

 

The Court does not find Drs. Kimelman, Siegel and Cuevas'

conclusions that Plaintiff is capable of working full-time

persuasive; Dr. Ho's conclusion that Plaintiff cannot work fulltime, however, is persuasive, as are Dr. Lowe's conclusion that

Plaintiff would have a difficult time working and Dr. Kimelman's

conclusion that Plaintiff is believable. Defendants correctly note

that the Supreme Court rejected the "treating physician rule,"

which required that special deference be given to the opinion of a

treating physician. See Black and Decker v. Nord, 538 U.S. 822

(2003). However, the Ninth Circuit has held, following the Supreme

Court's decision in Nord: "On de novo review, a district court may,

in conducting its independent evaluation of the evidence in the

administrative record, take cognizance of the fact (if it is a fact

in the particular case) that a given treating physician has a

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greater opportunity to know and observe the patient than a

physician retained by the plan administrator." Jebian v.

Hewlett-Packard Co. Employee Benefits Org. Income Protection Plan,

349 F.3d 1098, 1109 (9th Cir. 2003)(quotations omitted). Plaintiff

has been a patient of Dr. Ho for over twenty-years. The Court is

not convinced that, because Plaintiff lives in Oregon and Dr. Ho

practices in California and does not know what Plaintiff does every

day, Dr. Ho's assessment of Plaintiff should be discounted. 

Plaintiff provided to Hartford and Dr. Kimelman valid reasons for

traveling to California to see Dr. Ho. 

Plaintiff's affliction and inability to work in any occupation

is well-documented in Dr. Ho's records and the administrative

record. Approximately three month before Defendants terminated

Plaintiff's benefits, even Hartford agreed with Dr. Ho's

assessment. A September 12, 2003 note from Hartford's Summary

Detail Report states: "Med info supports that EE continues to

remain TD any occ due to chronic fatigue syndrome. AP has

indicated that on a good day, EE has cap. for physical act, and too

much act. results in worsening of sx." AR 46. And, a month after

that note, Hartford employees concluded that, even with Dr.

Kimelman's report, there was not enough to terminate Plaintiff's

claim. 

As Plaintiff notes, there has been no significant change in

her condition. She still has good days, when she can function, and

bad days, when she cannot function. It is unpredictable whether

Plaintiff will have a good day or a bad day, and, as Dr. Ho notes,

the bad days can continue for up to two weeks. A full-time

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employer cannot handle such inconsistent attendance and

unpredictability. 

 In reviewing all of the evidence in the administrative record,

as well as Plaintiff's declaration, the Court finds that Plaintiff

is entitled to an award of benefits.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiff's motion

for judgment by the Court (Docket No. 22) and DENIES Defendants'

cross-motion for judgment (Docket No. 26). Plaintiff shall recover

her costs of action from Defendants. Judgment shall enter

accordingly.

IT IS SO ORDERED.

Dated: 3/28/06

 

CLAUDIA WILKEN

United States District Judge

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