Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-02512/USCOURTS-azd-2_13-cv-02512-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1331 Fed. Question

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Melissa Chavez, 

Plaintiff, 

v. 

Reliance Standard Life Insurance 

Company; Matrix Absence Management 

Employee Benefit Plan, 

Defendants.

No. CV-13-02512-PHX-GMS

ORDER 

 Pending before the Court is Melissa Chavez’s appeal of Defendant Reliance 

Standard Life Insurance’s (“Reliance”) determination that she does not qualify for longterm total disability benefits. (Docs. 25, 27, 28.) For the following reasons, the Court 

affirms the determination of Reliance. 

BACKGROUND 

Chavez worked as a Senior Long Term Disability Claims Manager for Defendant 

Matrix Absence Management, Inc. (“Matrix”), which provided disability benefits to its 

employees under its Absence Management Employee Benefit Plan (group policy number 

LTD 099765) (the “Plan”). According to the Plan, employees were eligible for short-term 

benefits for up to ninety days, long-term benefits for up to twenty four months if they 

could not perform the occupation for which they were hired (“own occupation benefits”), 

and long-term benefits past twenty four months if they could not perform any occupation 

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(“any occupation benefits”).1 

 Chavez first became disabled on July 8, 2008. She received both short-term and 

long-term own occupation benefits until she returned to work in October 2008. During 

this first period of disability, doctors discovered white matter lesions in Chavez’s brain. 

 In May 2010, she again applied for short-term disability benefits. Later that same 

year, she applied for long-term benefits, and on September 16, 2010, she began to receive 

long-term own occupation benefits with a monthly allocation of $2558.40. As part of the 

process for applying for and receiving disability benefits under the Plan, Chavez 

indicated that she was diagnosed with rheumatoid arthritis, Sjogren’s disease, and 

hypothyroidism. She also frequently complained of migraine headaches. 

 Chavez continued to receive long-term own occupation benefits until 2012. On 

March 12, 2012, Reliance sent a letter to Chavez informing her that the period for own 

occupation benefits was ending soon and that Reliance would be “gathering information 

concerning [her] medical condition, education, training and experience” and that this 

review “could potentially lead [Reliance] to conclude that” Chavez would not be eligible 

for any occupation benefits. (Doc. 23, Ex. 7.) 

 In August 2012, Reliance received an anonymous phone call, stating that Chavez 

 

1

 The plan specifically states that long-term disability is based on the following: 

(1) During the elimination period and for the first 24 months 

for which a Monthly Benefit is payable, an Insured cannot 

perform the material duties of his/her regular occupation; 

. . . . 

(2) after a Monthly Benefit has been paid for 24 months, an 

Insured cannot perform the material duties of any occupation. 

Any occupation is one that the Insured’s education, training or experience will reasonably allow. We consider the Insured 

to be Totally Disabled if due to an Injury or Sickness he or she is capable of only performing the material duties on a 

part-time basis or part of the material duties on a Full-time 

basis. 

 (Doc. 25, Ex. 1.) 

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was not disabled. In September and in October 2012, Reliance paid Chavez any 

occupation benefits under the Plan. On September 27, 2012, Dr. Debra Rowse performed 

an independent medical examination (“IME”) of Chavez in which Dr. Rowse physically 

examined Chavez and also reviewed Chavez’s medical history related to Chavez’s 2010 

disability claim. Dr. Rowse noted Chavez’s diagnosed illnesses, but noted that the 

rheumatoid arthritis “has been quiescent over the past few years,” that the Sjogren’s 

disease is “treated systematically,” and that the hypothyroidism is “controlled on 

medication.” (Doc. 23, Ex. 12, p. 4.) Dr. Rowse also noted that Chavez “may have 

migraine headaches,” but concluded that Chavez’s failure to receive treatment “raises 

many questions.” (Id.) Nevertheless, because Dr. Rowse did not review the medical 

records pertaining to Chavez’s 2008 claim, she did not review the MRI that showed white 

matter in Chavez’s brain. Dr. Rowse also opined that, although Chavez complained of 

other symptoms, there was no “objective evidence to support diagnoses of cervical 

radiculopathy, low back pain, multiple sclerosis, fibromyalgia or carpal tunnel syndrome” 

and that “[t]he level of pain and the severity of disease that Ms. Chavez alleges is not 

supported by the objective findings.” (Id.) 

 Reliance concluded, based on Dr. Rowse’s findings, that Chavez was capable of 

performing sedentary level work, performed a Residual Employability Analysis (“REA”) 

on Chavez, and concluded that she could perform her prior work as a claims examiner, as 

well as other occupations, such as a contract representative, a customer complaint clerk, 

or a policyholder-information clerk. Reliance discontinued benefits to Chavez on 

November 8, 2012. 

 Chavez appealed Reliance’s decision on November 20, 2012, and Reliance 

requested a review of Chavez’s medical record by Dr. Manoj Moholkar as part of the 

appeals process. Dr. Moholkar made findings, similar to Dr. Rowse, that all of Chavez’s 

diagnosed illnesses were either stable or treatable and that Chavez’s non-compliance with 

treatment contributed to many of her symptoms. Dr. Moholkar concluded that Chavez 

could perform work at a sedentary level. 

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 On June 13, 2013, Chavez submitted additional medical records, which Reliance 

forwarded to Dr. Moholkar for review. The additional records included the information 

about the white matter lesions that doctors had discovered when Chavez had initially 

applied for short-term benefits in 2008, updated reports from two doctors who examined 

Chavez in 2013, including an MRI of the lesions, more information about Chavez’s 

migraines, and claims of memory problems. Dr. Moholkar stated that the new medical 

evidence did not change his earlier conclusion because the migraines did not appear to be 

debilitating, Chavez’s claims of memory problems were not supported by objective 

evidence, and there was no diagnosis of demyelinating disease, a serious disease 

associated with white matter lesions, from the MRI taken in 2013. Reliance conducted a 

second REA, which confirmed the results of the earlier REA based on Dr. Rowse’s 

findings, and on July 12, 2013, Reliance upheld its decision to discontinue benefits. 

 On December 11, 2013, Chavez filed the present action under section 502 of 

ERISA, claiming that Reliance committed several procedural errors and incorrectly 

interpreted the Plan in denying her benefits. 

DISCUSSION 

I. Legal Standard 

The Employee Retirement Income Security Act (“ERISA”) “governs the 

administration of employer-provided benefit pension plans.” Metro. Life Ins. Co. v. 

Parker, 436 F.3d 1109, 1111 (9th Cir. 2006). ERISA requires plan administrators, who 

are fiduciaries, to administer their plans “in accordance with the documents and 

instruments governing the plan insofar as such documents and instruments are consistent 

with the provisions of [ERISA].” 29 U.S.C. § 1104(a)(1)(D). 

 An ERISA plan administrator’s denial of benefits challenge “is to be reviewed 

under a de novo standard unless the benefit plan gives the administrator or fiduciary 

discretionary authority to determine eligibility for benefits or to construe the terms of the 

plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Under de novo 

review, no deference is given to the administrator’s decision to deny benefits. Kearney v. 

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Standard Ins. Co., 175 F.3d 1084, 1090 n.2 (9th Cir. 2010). See also Firestone, 489 U.S. 

at 115. “[T]he standard of review shifts to abuse of discretion,” however, when discretion 

has been granted to the administrator or fiduciary. Abatie v. Alta Health and Life Ins. Co., 

458 F.3d 955, 963 (9th Cir. 2006) (en banc) (citing Firestone, 489 U.S. at 115); see also, 

Met. Life Ins. Co. v. Glenn, 554 U.S. 105, 110–11 (2008). “[F]or a plan to alter the 

standard of review from the default of de novo to the more lenient abuse of discretion, the 

plan must unambiguously provide discretion to the administrator.” Id. at 963. (citing 

Kearney, 175 F.3d at 1090). 

 “Under the deferential abuse of discretion standard of review, ‘the plan 

administrator’s interpretation of the plan will not be disturbed if reasonable.” Day v. AT 

& T Disability Income Plan, 698 F.3d 1091, 1096 (9th Cir. 2012) (quoting Conkright v. 

Frommert, 559 U.S. 506, 512 (2010)). “ERISA plan administrators abuse their discretion 

if they render decisions without any explanation, . . . construe provisions of the plan in a 

way that conflicts with the plain language of the plan or rely on clearly erroneous 

findings of fact.” Day, 698 F.3d at 1096. A court examines for abuse of discretion by 

considering “whether application of a correct legal standard was ‘(1) illogical, (2) 

implausible, or (3) without support in inferences that may be drawn from the facts in the 

record.’” Salomaa, 642 F.3d at 676. Where an administrator acts “arbitrarily and 

capriciously,” it “thereby abuse[s] its discretion.” Id. at 680. 

 A reviewing court should weigh any conflict of interest as a factor in its review. 

Glenn, 554 U.S. at 108. Similarly, “[p]rocedural errors by the administrator are also 

weighed in deciding whether the administrator’s decision was an abuse of discretion,” but 

“‘a single honest mistake in plan interpretation’ administration does not deprive the plan 

of the abuse of discretion standard.” Salomaa, 642 F.3d at 674, (quoting Conkright, 559 

U.S. at 509). “When an administrator can show that it has engaged in an “‘ongoing, good 

faith exchange of information between the administrator and the claimant,’” the court 

should give the administrator’s decision broad deference notwithstanding a minor 

irregularity.” Abatie, 458 F.3d at 972. 

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II. Analysis 

 A. Establishing Disability 

Because plan administrators are required to administer their plans “in accordance 

with the documents and instruments governing the plan,” so far as the plan comports with 

ERISA, the plain language of the plan establishes a claimant’s burden in establishing 

disability. 29 U.S.C. § 1104(a)(1)(D). In the present case, the Plan plainly states that a 

claimant is required to provide “written proof” for any claim of total disability. (Doc. 25, 

Ex. 1.) Chavez does not contend that this written proof requirement violates ERISA. And 

although Chavez raises several arguments about the procedures through which Reliance 

handled her claim, she does not point to any opinion from her medical providers that she 

is unable to perform any work. Chavez seeks to offer Reliance’s payments of any 

occupation benefits for the months of September and October 2012 as proof of her 

disability, but the payments provide no such evidence of disability because they were sent 

before Reliance finalized its initial review on November 8, 2012.2

 Thus, even if, as 

Chavez contends, Reliance performed some procedural irregularity in processing 

Chavez’s claim, Chavez’s failure to provide written proof of total disability provides 

sufficient grounds to uphold Reliance’s decision to deny benefits. 

 B. Conflict of Interest and Standard of Review 

Both parties concede that the abuse of discretion standard applies to this court’s 

review of Reliance’s actions. Id. at 963. In addition, both parties concede that Reliance 

has a structural conflict of interest, in that it both funds and administers the Plan. Id. at 

966. Although this conflict does not change the standard of review, it does require a 

 

2

Although this line of reasoning hints at an estoppel argument, Chavez denies raising an estoppel claim. To the extent that she has raised an estoppel claim, it lacks merit because Chavez does not claim that she relied on representations from Reliance. See Pisciotta v. Teledyne Indus., Inc., 91 F.3d 1326, 1331 (9th Cir. 1996) 

(“[R]epresentations must be made to the employee involving an oral interpretation of the plan.”). 

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“review informed by the nature, extent, and effect on the decision-making process of any 

conflict of interest that may appear in the record.” Id. at 967. 

 C. Procedural Claims 

Chavez claims that Reliance abused its discretion by committing several 

procedural mistakes in handling Chavez’s claims, including withholding relevant 

documents from Dr. Rowse, failing to consider the cumulative effect of Chavez’s 

symptoms on her ability to work, using the same examiner, Dr. Moholkar, twice in the 

appeals process, failing to allow Chavez to respond to Dr. Moholkar’s second evaluation, 

and improperly relying on surveillance information and the anonymous phone call. 

 Chavez does not provide evidence to substantiate her claim that Reliance 

purposely withheld information from Dr. Rowse regarding the white matter lesions that 

doctors discovered in 2008, but Chavez does provide evidence that Dr. Rowse did not 

have this information when completing the IME. With this objective evidence, it is 

certainly possible that Dr. Rowse would have given more credence to Chavez’s 

complaints regarding her migraines. However, even without this evidence, Dr. Rowse did 

not completely discount Chavez’s account of the migraines. She stated that Chavez “may 

have migraines” but that “her failure to follow up with a neurologist and seek treatment 

for her headaches raises many questions.” (Doc. 23, Ex. 12, p. 4.) And Dr. Moholkar, 

who was given the medical evidence regarding the white matter lesions, similarly 

concluded that the migraines did not restrict Chavez from working at least at a sedentary 

level. 

 This distinguishes the present case from another case, Booton v. Lockheed Medical 

Benefit Plan, in which the court held that an administrator of an ERISA plan abused its 

discretion when it denied coverage based on lack of objective information. 110 F.3d 1461 

(9th Cir. 1997). In Booton, the plan administrator refused to request “necessary-and 

easily obtainable-information” about the plaintiff’s medical history, failed to offer to the 

plaintiff “a rational reason for its denial” of the plaintiff’s claims, and allowed this error 

to taint its decision to deny benefits. Id. at 1463. In the present case, Reliance based its 

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original decision to deny benefits on lack of objective evidence of some of Chavez’s 

ailments and on the stability and treatability of her other ailments. When Chavez raised 

the issue of the MRI showing white matter brain lesions, Reliance addressed this 

additional medical evidence as well by giving it to Dr. Moholkar to review as part of the 

appeals process. Dr. Moholkar addressed the medical evidence and concluded that, even 

with the evidence of white matter lesions, Chavez would still be able to perform work at 

a sedentary level. Thus, although evidence in the record indicates Dr. Rowse did not 

review a full record of Chavez’s medical history that arose from her previous disability 

application, the error, if any, was excusable. Unlike the administrator in Boonton, 

Reliance took the medical records into account before issuing their ultimate denial, 

provided an explanation for denying Chavez’s claims, and did not allow this error to 

affect the ultimate determination of Chavez’s disability. 

 Chavez next claims that Reliance failed to consider the cumulative effect of all of 

Chavez’s symptoms, including her cognitive impairments, to determine whether she was 

disabled. Again, however, Chavez on appeal does not point to a single opinion from any 

of her medical providers that she is unable to perform any work. It is, pursuant to the 

Plan, Chavez’s obligation to provide “written proof” for any claim of total disability. 

(Doc. 25, Ex. 1.) To the extent that she alleges that she did so without any summary 

supporting opinion by any physician, her claim fails. Reliance provided a comprehensive 

review of all of Chavez’s medical history. For example, one of the cognitive impairments 

that Chavez claims was excluded from review by the independent examiners was 

memory problems, which Dr. Moholkar considered and dismissed as not supported by 

objective evidence. In addition, Chavez has not provided any medical evidence of either 

confusion or fatigue, the other two conditions that she claims were ignored by the 

independent examiners. See Madden v. ITT Long Term Disability Plan for Salaried 

Employees, 914 F.2d 1279, 1286 (9th Cir. 1990) (holding that ERISA plan administrator 

did not abuse its discretion in denying benefits, in part, because the plaintiff failed to 

provide medical information to support his claim). To the extent that Dr. Rowse and/or 

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Dr. Moholkar opined that a condition either did not exist, or was under control with the 

use of appropriate medical treatment, they were not obliged to calculate the cumulative 

effects of such conditions which did not factor into Ms. Cruz’s ability to work, especially 

when the burden of proof belonged to Ms. Chavez. 

 Chavez raises two claims with respect to Reliance’s use of Dr. Moholkar in the 

appeals process. First, Chavez claims that it was procedurally irregular for Reliance to 

use the same physician twice in the appeals process. Second, Chavez claims that Reliance 

did not allow her a chance to respond to Dr. Moholkar after he submitted his second 

report. These claims ignore that it was Chavez’s submission of supplemental medical 

records that caused Reliance to employ Dr. Moholkar a second time in the appeals 

process. Rather than an attempt to create new medical evidence that could not be 

contested by Chavez, these actions by Reliance are more akin to an “ongoing, good faith 

exchange of information between the administrator and the claimant.” Abatie, 458 F.3d at 

972 (quoting Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 635 (10th Cir. 2003)). In 

addition, the Ninth Circuit has noted that an administrator of an ERISA plan is not 

required to continually allow new evidence during appeal. See Silver v. Executive Car 

Leasing Long-Term Disability Plan, 466 F.3d 727, 732 (9th Cir. 2006) (stating that such 

a system would “lead to an interminable back-and-forth between the plan administrator 

and the claimant”). 

 Finally, as part of her argument that Reliance’s reasons for initiating its review of 

her benefits was pretextual, Chavez claims that Reliance improperly relied upon the 

anonymous phone call and also improperly used surveillance. The Ninth Circuit has held 

use of surveillance may be improper if the examining physicians assign the surveillance 

more weight than it deserves, see Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 

623, 633 (9th Cir. 2009), but this is not alleged here, and in any case, is not supported by 

the record. Chavez points to no authority suggesting that either of these two methods of 

obtaining information are improper per se in determining whether an individual is 

disabled or that Reliance’s use of these methods in the present case was improper on its 

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own account. 

 D. Plan Interpretation 

 Chavez claims that Reliance required her to provide objective medical evidence to 

prove disability when this was not required by the Plan and that she was not required to 

seek regular treatment for all of her diagnosed ailments under the Plan. As noted above, 

under the abuse of discretion standard, “the plan administrator’s interpretation of the plan 

‘will not be disturbed if reasonable.’” Conkright, 559 U.S. at 521 (quoting Firestone, 489 

U.S. at 111). 

 It was reasonable for Dr. Rowse and Dr. Moholkar to base their conclusions on the 

objective medical evidence, or lack thereof, presented to them, and it was reasonable for 

Reliance to base its decision to deny benefits on the doctors’ reports. The Plan requires 

claimants to provide “written proof” for any claim of total disability and reserves the 

right for the administrator to examine applicants “(1) physically; (2) psychologically; 

and/or (3) psychiatrically” for such claims as well. (Doc. 25, Ex. 1.) Thus, the plan 

anticipates that objective proof of an applicant’s disability is required for benefits. See 

Leon v. Quintiles Transnational Corp., 300 F. App’x 558, 561 (9th Cir. 2008) (“The plan 

gave [defendant] discretion to determine whether ‘proof . . . [was] satisfactory for receipt 

of benefit payments.’ That provision fairly contemplates a requirement of objective 

evidence where, as here, tests to confirm a diagnosis are available.”) 

 In addition, the Plan specifically required Chavez to show that she was “under the 

regular care of a physician.” It was, therefore, reasonable for Reliance to base its decision 

to deny benefits, in part, on Chavez’s lack of treatment for migraines. See Hoskins v. 

Bayer Corp. & Bus. Servs. Long Term Disability Plan, 362 F. App’x 750, 752 (9th Cir. 

2010) (holding that it was reasonable for ERISA administrator to conclude that the 

applicant was not receiving regular medical treatment because “there [was] no medical 

documentation in the record that establishes she received any treatment for her disabling 

condition during the 11-month period preceding the termination of benefits”); Hoskins v. 

Bayer Corp. & Bus. Servs. Long Term Disability Plan, 564 F. Supp. 2d 1097, 1107 (N.D. 

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Cal. 2008) (“[T]he record does not reflect that plaintiff received any, let alone ‘regular’, 

medical care for her disabling condition after July 29, 2004, a full year before defendant 

terminated her benefits, and, indeed, plaintiff does not identify herein any medical care 

she received beyond that discussed above.”).

CONCLUSION 

Chavez has provided no written proof that she was totally disabled. In addition, 

she concedes that the Plan gives Reliance discretion in interpreting it and administering 

it. Although Reliance was working under a structural conflict of interest and Dr. Rowse 

was initially unaware of the medical records of the white matter lesions from 2008, it 

remedied this error by providing the information to Dr. Moholkar during the appeals 

process. Neither this nor any of the other procedural errors alleged by Chavez arise to the 

level of an abuse of discretion. In addition, Reliance’s interpretation of the Plan was 

reasonable and, thus, not an abuse of discretion. 

IT IS THEREFORE ORDERED that Plaintiff’s request for relief in her Opening 

Brief Re: ERISA Long-term Disability Benefits (Doc. 25.) is DENIED. 

IT IS FURTHER ORDERED directing the Clerk of Court to terminate this 

action and enter judgment accordingly. 

 Dated this 19th day of February, 2015. 

Honorable G. Murray Snow

United States District Judge

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