Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-01373/USCOURTS-azd-2_04-cv-01373-1/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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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Mary Ellen Wilson, 

Plaintiff, 

vs.

Liberty Life Assurance Company of

Boston, 

Defendant. 

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No. CV-04-1373-PHX-NVW

ORDER

The court has before it Defendant's supplemental brief regarding the issue of remand

(Doc. # 61), Plaintiff’s supplemental brief regarding the issue of remand (Doc. # 62),

Defendant's response to Plaintiff’s supplemental brief (Doc. # 63), and Plaintiff’s response

to Defendant’s supplemental brief (Doc. # 64). The court has also considered the relevant

briefing in Plaintiff’s Motion for Attorney’s Fees (Doc. # 42), Defendant's Objections (Doc.

# 48), and Plaintiff’s Reply (Doc. # 51). 

On May 1, 2006, Plaintiff (“Wilson”) filed a motion for attorney’s fees. Upon reading

the initial motion, response, and reply, the court concluded that supplemental briefing on the

issue of the appropriate remedy would be helpful. On June 13, 2006, the court ordered the

parties to submit supplemental briefs on this issue. The issues presently before the court are

(1) whether the court erred by awarding benefits to Wilson rather than remanding the issue

to the plan administrators and (2) whether, assuming that an award of benefits was correct,

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the award period should be limited to twenty-four months because Liberty Life Assurance

Company of Boston’s (“Liberty”) definition of disability changed at that point. These

arguments are addressed in turn. 

I. Statement of the Case

The facts of the case are described at length in the court’s March 28, 2006 Order. In

that order, the court held that Liberty abused its discretion in denying Wilson’s disability

claim. The court articulated five grounds for why Liberty abused its discretion: (1) although

Liberty’s disability plan did not require claimants to establish disability through solely

objective medical evidence, Liberty required Wilson to do so; (2) Liberty’s letter

acknowledging that it should have physically examined Wilson; (3) Liberty’s reliance on a

file review; (4) Liberty’s improper reliance on the fact that Wilson did not demonstrate that

her condition substantially worsened immediately before she filed her disability claim; and

(5) Liberty’s cursory treatment of Wilson’s medical evidence. While the court awarded

Wilson benefits under the abuse of discretion standard, the court also stated that Wilson had

sufficiently demonstrated a conflict of interest, which would have resulted in de novo review

had the court not awarded benefits under the abuse of discretion standard. 

I. Decision to Remand

In its March 28, 2006 Order, the court awarded benefits to Wilson. The court stated

that although Saffle v. Sierra Pacific Power Co., 85 F.3d 455, 460-61 (9th Cir. 1996),

instructs a court to remand a claim determination to the plan administrator when the

administrator applies the wrong standard to a disability claim, this case involved more than

the administrator solely applying the wrong standard. See id. at 460 (“Here, the Committee

abused its discretion by erroneously factoring ‘accommodation’ into the criteria for total

disability for purposes of occupational disability benefits.”). While it is clear that Liberty

essentially wrote in a requirement that a claimant establish disability solely by objective

medical evidence–which the plan did not support–Liberty abused its discretion in other ways

as well. Liberty acknowledged that it should have physically examined Wilson, yet it chose

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Liberty, four years later, now asks for an opportunity to reopen the administrative

record and physically examine Wilson. 

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not to do so, admitting that this decision “prejudiced” its appeal review.1 Liberty also relied

upon reviewing doctors’ opinions, in which such doctors cursorily disregarded Wilson’s

extensive medical evidence. The court therefore followed the reasoning of Grosz-Salomon

v. Paul Revere Life Insurance Co., 237 F.3d 1154 (9th Cir. 2001), and award benefits, which

Liberty asserts was error.

In Grosz-Salomon, the district court awarded benefits under an abuse of discretion

standard. Id. at 1162. It then issued a post-judgment order acknowledging that it should

have applied de novo review. Id. Although the Ninth Circuit held that the district court erred

in applying an abuse of discretion standard, it did not remand. Id. Instead, it reviewed on

the merits the district court’s decision to award benefits. Id. at 1162-63. The court

concluded that “retroactive reinstatement of benefits is appropriate in ERISA cases where,

as here, but for the insurer’s arbitrary and capricious conduct, the insured would have

continued to receive the benefits or where there was no evidence in the record to support a

termination or denial of benefits. In other words, a plan administrator will not get a second

bite at the apple when its first decision was simply contrary to the facts.” Id. at 1163

(citations and internal quotation marks omitted). The court distinguished Saffle as standing

“for the proposition that ‘remand for reevaluation of the merits of a claim is the correct

course to follow when an ERISA plan administrator, with discretion to apply a plan, has

misconstrued the Plan and applied a wrong standard to a benefits determination.’” Id.

(quoting Saffle, 85 F.3d at 461). 

While this case is not on all fours with Grosz-Salomon, it is also factually

distinguishable from Saffle for the reasons mentioned above. What is clear from these two

cases is that a remand to the plan administrators is not required every time a court concludes

that the plan administrators abused their discretion. Canseco v. Construction Laborers

Pension Trust for Southern California., 93 F.3d 600, 606 (9th Cir. 1996), supports this

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Although Canseco does not involve a plan administrator’s disability determination,

it is relevant because of its decision to award benefits after concluding that the plan

administrators abused their discretion. 

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conclusion.2

 Id. (distinguishing Saffle and awarding benefits instead of remanding to the

administrators because “no factual determinations remain to be made in this case”). District

court decisions within this circuit have reached the same conclusion. See, e.g., DeLeon v.

Bristol-Myers Squibb Co. Long Term Disability Plan, 203 F. Supp. 2d 1181, (D. Or. 2002)

(finding Saffle inapposite and awarding benefits when the questions before the court were

limited to evidentiary issues and whether the defendant abused its discretion in terminating

DeLeon’s long-term disability benefits); Rigg v. Cont’l Cas. Co., No. 03-296, 2004 U.S. Dist.

LEXIS 8009, *20 (N.D. Cal. 2004) (awarding benefits under abuse of discretion review

because “[t]he undisputed facts in the Administrative Record show that Rigg suffered from

fatigue and weakness associated with her medical condition to the extent that she could work

no more than 30 hours a week and required frequent rest periods throughout th day”);

Rosenthal v. Long-Term Disability Plan of Epstein, Becker & Green, P.C., No. 98-4246,

1999 U.S. Dist. LEXIS 21443, *42-43 (C.D. Cal. 1999) (awarding benefits under both abuse

of discretion and de novo review, stating that “Saffle does not require a remand where [] no

additional factual determinations need to be made and only one conclusion can be reached”).

Thus, the decision whether to remand is determined by the particular facts of the case.

If the case involves the plan administrator’s application of the wrong standard, then remand

is the proper remedy under Saffle. However, if the facts of a particular case demonstrate that

no purpose would be served by a remand, then the court may award benefits. Moreover,

courts have recognized the negative consequences of remanding a benefits determination to

plan administrators every time they abuse their discretion: “If [remand] were to become

routine, it would pose a serious risk of simply allowing ‘mulligans’ to sloppy plan

administrators–at the expense of both the courts and plan participants.” Fleet v. Indep. Credit

Union, No. 04-507, 2005 U.S. Dist. LEXIS 11778, *8 (S.D. Ind. 2005). In addition, the Fifth

Circuit has recognized the unfairness of allowing a remand to expand the record:

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Here, however, the only issue in dispute was whether a material

misrepresentation was made. We decline to remand to the administrator to

allow him to make a more complete record on this point. We want to

encourage each of the parties to make its record before the case comes to

federal court, and to allow the administrator another opportunity to make a

record discourages this effort. Second, allowing the case to oscillate between

the courts and the administrative process prolongs a relatively small matter

that, in the interest of both parties, should be quickly decided. Finally, we

have made plain in this opinion that the claimant only has an opportunity to

make his record before he files suit in federal court[;] it would be unfair to

allow the administrator greater opportunity at making a record than the

claimant enjoys.

Vega v. Nat’l Life Ins. Serv., 188 F.3d 287, 302 n. 14 (5th Cir. 1999) (en banc). 

Under the facts of this case, a remand is not proper even apart from Liberty’s

unauthorized requirement that Wilson prove by objective medical evidence alone that she

was disabled when the plan did not support such a requirement. Liberty independently

abused its discretion by requiring Wilson to show that her condition worsened at the time she

filed for disability and by relying on non-examining doctors’ opinions while admitting that

it should have had a doctor physically examine Wilson–as explicitly admitted in its denial

letter. These doctors either failed to evaluate all of the evidence or cursorily disregarded

Wilson’s evidence. Liberty now asks for a remand so that it can consider all of Wilson’s

evidence–not just the objective medical evidence–to determine if, four years later, she is

unable to perform her nursing occupation. Liberty chose to make a determination of no

disability on a record that could not reasonably support that conclusion. By awarding

benefits, this court is not making a first determination on a question that Liberty has not

before addressed; it is adjudicating the only reasonable answer to the question to which

Liberty already gave its answer. Remanding this determination would thus be improper

because no purpose would be served by the remand. 

II. “Any Occupation” Disability

Pursuant to Liberty’s plan, a claimant may file a long-term disability claim alleging

that she cannot perform her “own occupation.” A claimant is eligible to receive disability

benefits during the “own occupation” period for twenty-four months. At the end of this

twenty-four month period, in order to continue receiving benefits, the claimant must be unable

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to perform “any occupation.” Wilson filed a claim for long-term disability on July 25, 2002.

On October 22, 2002, Liberty denied Wilson’s claim, finding that Wilson could still perform

her nursing occupation. Wilson appealed Liberty’s initial denial on March 19, 2003, and

Liberty affirmed on July 23, 2003. On July 6, 2004, nearly a year later, Wilson filed a

complaint in this court. On July 25, 2004–twenty-four months after Wilson first filed her

claim for long-term disability and approximately twelve months after Liberty denied Wilson’s

disability claim–the standard which Wilson needed to establish disability changed from

demonstrating an inability to perform her “own occupation” to demonstrating an inability to

perform “any occupation.” 

Liberty argues that because it has not yet determined Wilson’s ability to perform “any

occupation,” Wilson should receive only twenty-four months of benefits, and the question of

whether Wilson is disabled from “any occupation” should be remanded to Liberty. Liberty

is correct in this assertion. 

First, the record on this issue is not complete. In her Complaint, Wilson does not

allege that she is disabled from “any occupation.” Doc. # 1 (other than quoting the Liberty’s

definition of total disability, which includes “own occupation” and “any occupation”

provisions, Wilson does not distinguish between the two). Moreover, the evidence that

Wilson submitted to Liberty was intended to establish that she was unable to perform her

regular occupation as a nurse. And that is the standard under which Liberty denied Wilson’s

disability claim. 

Second, case law supports this approach. In Saffle, 85 F.3d at 460, after concluding

that Sierra abused its discretion by misconstruing the plan and before stating that a remand

was appropriate in such a situation, the court addressed whether a claimant should receive

benefits beyond the initial twenty-four months when the plan’s definition of disability

changed at that point and the claimant never applied for disability under the second definition:

Sierra Pacific further argues that the district court erred by ordering benefit

payments beyond the initial 24-month disability period because Saffle never

applied for general disability payments and her eligibility for the second-tier

benefits has never been considered by the Benefit Committee. We agree that

there is nothing in the administrative record about general disability. Of course

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it is the case, as Saffle contends, that she could not have applied for general

disability since she first must have been awarded occupational disability

benefits; but that affords no basis upon which to uphold an order to pay benefits

from the date of onset to the present. Therefore, to the extent the district court

ordered payments beyond the initial 24-month period, it was error to do so.

Id. The only difference between the facts of Saffle and the facts of this case is that here it is

appropriate to award benefits for the first twenty-four months. This difference, however, does

not counsel a different result. 

 In Rigg, No. 03-296, 2004 U.S. Dist. LEXIS 8009, the district court addressed this

precise issue:

The complaint, filed January 22, 2003, fourteen months after the elimination

period expired, does not include a request for benefits based on Rigg’s total

disability from any occupation. Neither does the current record address Rigg’s

ability to engage in any occupation beyond the initial twenty-four months

period to the present. Because this court finds that Rigg is disabled from her

regular occupation, it is appropriate to remand Rigg’s claim for benefits beyond

twenty-four months to [Continental Casualty Company] to make a

determination as to whether Rigg is totally disabled from any occupation. 

Id. at *21. The Rigg court determined that Continental Casualty Company had abused its

discretion in denying Rigg’s disability request based on her inability to perform her regular

occupation, which resulted in an award of benefits for a twenty-four month period, and

remanded to Continental Casualty Company the issue of whether Rigg was disabled from all

occupations. Id. at *19-20. See also McLeod v. Hartford Life and Accident Ins. Co., No. 02-

4295, 2004 U.S. Dist. LEXIS 19242, *25 (E.D. Pa.) (awarding benefits for the twenty-four

months of own occupation disability but remanding to the plan administrators the issue of

whether McLeod could perform any occupation); Black v. Unum Life Ins. Co. of Am., 324 F.

Supp. 2d 206, 218 (D. Me. 2004) (same). 

Thus, it would be improper for the court to award benefits beyond the “own

occupation” disability period. 

III. Conclusion

The parties have stipulated that the amount of accrued and unpaid benefits during the

twenty-four month “own occupation” disability period is $16,060.56. The parties have also

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stipulated that the total pre-judgment interest on the twenty-four months of “own occupation”

disability, calculated at a rate of 3.9% and ending on May 25, 2006, amounts to $626.36. 

With respect to taxable costs, Wilson may submit a statement of costs for processing

in accordance with Rule 54(d)(1) and LRCiv 54.1. 

IT IS THEREFORE ORDERED that the clerk enter judgment in favor of Plaintiff

Mary Ellen Wilson against the Defendant Liberty Life Assurance Company of Boston as

follows:

1. For principal damages of $16,060.56 for the twenty-four month

period between July 26, 2002, and July 25, 2004;

2. For pre-judgment interest in the amount of $626.36 to May 25, 2006; 

3. For further pre-judgment and post-judgment interest at the rate of 3.9% per

annum on the principal sum of $16,060.56 from May 26, 2006, until paid; and

4. Remanding Plaintiff’s claim for disability benefits accruing after July 25, 2004,

to Defendant for determination.

IT IS FURTHER ORDERED that Plaintiff may supplement by July 31, 2006, her

claim for attorney's fees. Defendant may respond to the supplement within ten days of service

of the supplement. Plaintiff my reply to the response within five days of service of the

response. The parties need not duplicate the briefing or the supporting materials already

presented in Plaintiff’s Motion for Attorney’s Fees (Doc. # 42), Defendant’s Objections (Doc.

# 48), and Plaintiff’s Reply (Doc. # 51).

DATED this 20th day of July 2006.

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