Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_01-cv-00927/USCOURTS-azd-2_01-cv-00927-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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 This Opinion and Order is being entered pursuant to Fed.R.Civ.P. 52. 

The Court sincerely apologizes to the parties for its inordinate and unacceptable

 WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Nancy Perryman,

Plaintiff,

vs.

Provident Life and Accident

Insurance Company,

Defendant.

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No. CV-01-0927-PHX-PGR 

 

 OPINION and ORDER

Plaintiff Nancy Perryman (“Perryman”) brings this action to recover longterm disability benefits she alleges were wrongfully denied her by defendant

Provident Life and Accident Insurance Company (“Provident”). The action is

before the Court for its de novo review of Provident’s denial of benefits pursuant

to the Employment Retirement Security Income Act of 1974 (“ERISA”). Having

considered the parties’ memoranda, the evidence of record, and the oral

argument of counsel as presented at the bench trial of this action, the Court finds

that Perryman is entitled to recover long-term disability benefits from June 1,

1999 through the date of her 65th birthday.1

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delay in entering this opinion.

2 

 The Centers for Disease Control (“CDC”), in its revised guidelines for

CFS set forth in its website, states that 

chronic fatigue syndrome is a clinically defined condition ...

characterized by severe disabling fatigue and a combination of

symptoms that prominently features self-reported impairments in

concentration and short-term memory, sleep disturbances, and

musculoskeletal pain. Diagnosis of the chronic fatigue syndrome

can be made only after alternative medical and psychiatric causes of

chronic fatiguing illness have been excluded. No pathognomonic

signs or diagnostic tests for this condition have been validated in

scientific studies ...; moreover, no definitive treatments exist for the

- 2 -

General Background

Perryman stopped working on February 28, 1997 due to her illness; she

was then 55 years old. At that time, she was the Western Farm Bureau

Insurance Company’s agency manager for the metropolitan Phoenix and

Northern Arizona areas, supervising some 18-21 insurance agents working out of

12 offices. She was then licensed both as a Chartered Life Underwriter and

Chartered Life Financial Consultant. She was not paid a salary, but received

commissions of up to some $300,000 per year; her average monthly earnings for

the two years before she stopped working were $18,966. Perryman's whole

working career was with Western Farm Bureau, which she started working for in

the 1970s as a filed agent. She has a high school education with one year of

college. She stayed at home as a homemaker for 17 years before entering the

work force.

Perryman, alleging that she was disabled from working due to chronic

fatigue syndrome (“CFS”)2

 as of March 1, 1997, filed a claim for long-term

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chronic fatigue syndrome .... Recent longitudinal studies suggest

that some persons affected by the chronic fatigue syndrome improve

with time but that most remain functionally impaired for several

years[.] 

(www.cdc.gov/cfs/cfsfullcasedefinition.htm)

- 3 -

disability benefits in April, 1997. At that time, Perryman was insured under an

ERISA-governed group disability insurance policy, LTD Policy #120057, issued

by Provident to her employer. Provident determined in January, 1998 that

Perryman was unable to perform her former job due to her disability and began

paying her disability benefits, retroactive to June 1, 1997, pursuant to the policy’s

two-year “own occupation” provision. Provident terminated the payments as of

May 31, 1999, due to its determination that Perryman was not disabled from

working under the policy’s “any occupation” provision.

Pursuant to the parties’ stipulation, the Court has permitted the

administrative record to be supplemented by the depositions of Gwendolen

Alegre, Provident’s employee who made the original claims decision denying

“own occupation” benefits, and Darragh Ferranti, Provident’s appeal consultant

who affirmed the original decision. Pursuant to Provident’s request, to which

Perryman has not objected, the Court will also permit the administrative record to

be supplemented with the depositions of Dr. Pendergrass, Provident’s consulting

psychologist, and Joseph Randza, Provident’s senior disability consultant.

Relevant Insurance Policy Provisions

Perryman’s claim for long-term disability benefits is governed by the

insurance policy’s “any occupation” provision, which became effective as to

Perryman on June 1, 1999. 

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The policy states in relevant part:

You are Disabled from Any Occupation if due to Sickness or Injury

you:

1. are unable to earn at least the Any Occupation Income Level

shown in Section II- Schedule of Insurance;

2. are unable to perform each of the material duties of any

occupation for which you are reasonably fitted by education, training,

or experience; and

3. meet the requirements of the Any Occupation Period in this

section.

* * *

The Date of Disability is the date on which your Earnings are less

than the ... Any Occupation Income Level.

The "Any Occupation Income Level" is defined as "80% of Indexed Earnings from

any occupation you are reasonably fitted by education, training, or experience." 

The "Indexed Earnings" is defined as the claimant's earnings adjusted by the rate

of increase in the Department of Labor's CPI-W (the Consumer Price Index for

Urban Wage Earners and Clerical Workers). The "Any Occupation Period" is

defined as the period from the end of the Own Occupation Period until age 65 (in

Perryman's case).

The policy also provides that "Proof of Loss means written evidence

satisfactory to us that you are Disabled and entitled to LTD Monthly Benefits."

Highlights of Medical/Vocational Evidence and Related Procedural Matters in the

Supplemented Administrative Record

(1) Jerry M. Fioramonti, M.D.

 Dr. Fioramonti, a board-certified family practitioner who stated in October,

1997 that he had treated many CFS patients over the previous five years, was

Perryman's primary care physician in Arizona. He treated her from June, 1994

through early 1998, when she moved to Texas. Perryman states that Dr.

Fioramonti saw her 16 times.

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Perryman first went to Dr. Fioramonti in June, 1994; she then complained

in part of “vague, generalized symptoms of excessive fatigue” and was at that

time assessed as having a “[p]otpurri of generalized symptoms which remind one

certainly of viral infection.” (Administrative Record (“AR”) at 488). Dr.

Fioramonti’s medical notes first indicate the “purely speculative” possibility of

Perryman being infected with CFS on July 13, 1994, which was when Perryman

told him that she had a sister with CFS and wondered if she could also have it.

(AR at 487). His assessment of her in February, 1995 was that she had the

diagnosis of CFS, "waxing and waning ever since it first hit her back in June." (AR

at 486). His assessment of her in May, 1995 was that she had CFS "improved

with modification of lifestyle," which was that she went from working 10-12 hour

days to working four-six hour days and not working on weekends. (AR at 485). In

August, 1995, he noted that her CFS was "really improving in leaps and bounds."

(AR at 484). In January, 1997, he assessed her as having a history of CFS with

progressive memory loss. (AR at 482). 

On April 29, 1997, Dr. Fioramonti's notes state that Perryman had decided

that she was going to have to go on total disability and brought in a disability form

to be filled that, that he "went through it line and by line with her and filled it out"

and that he "fully support[s] her in this diagnosis." He also noted that "[h]er

symptoms are the same, which include severe and pervasive fatigue, short term

memory loss, mental confusion, myalgias, arthralgias and sleep disorder.” (AR at

49 and 481).

On May 15, 1997, Dr. Fioramonti, using a Provident-supplied form, filled

out a Mental Health Status Report on Perryman. (AR at 52-53). He stated in that

report that her specific symptoms were "frequent bouts of overwhelming fatigue &

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total body exhaustion; severe myalgias; short term memory loss and confusion &

flu-like symptoms." He noted on the report that her condition had deteriorated,

and that she was not able to perform either her own occupation or any occupation

because she "cannot sustain office or supervisory activities due to severe

exhaustion, poor memory & confusion." He stated that the estimated date of her

return to work was "unknown & indeterminable." He commented that "this illness

is not specifically treatable or responsive to rehab. Future course is

unpredictable."

On May 15, 1997, Dr. Fioramonti also filled out a Provident-supplied

Behavioral Capacities form (AR at 51) and a Physical Capacities form (AR at 50). 

In the Behavioral Capacities form he noted that Perryman "never" had the

capacity (1) to perform either simple or complex, repetitive tasks over a period of

time according to a set procedure or pace with minimal changes in work activity,

(2) to perform frequent changes in tasks and/or skill level without loss of

efficiency or composure, (3) to perform duties that are potentially dangerous to

self or others and/or make decisions that will affect the well-being of others, and 

(4) to engage in work where continued employment and earnings are based on

amount of goods produced, commission earnings, volume of work processed,

and adhering to frequent deadline changes. 

Dr. Fioramonti also noted that Perryman had the capacity "up to 1/3 of the

work day" (1) to provide direction to others, (2) to influence others in their

opinions, attitudes, judgments, (3) to engage in work that involves interpersonal

relationships in job situations beyond receiving work instructions, (4) to use sound

judgment and make decisions based on subjective/concrete information, and

(5) to make generalizations, evaluations, and decisions based on measurable or

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verifiable/objective criteria. 

In the Physical Capacities form, Dr. Fioramonti noted in part that Perryman

could at one time stand and walk for 1⁄2 hour, sit for three hours, and drive for one

hour, and that during an entire work day she could stand and walk for one hour,

sit for four hours, and drive for two hours. He also noted that Perryman could

occasionally lift and carry up to five pounds, and could occasionally bend, squat,

kneel, and reach.

On October 21, 1997, Dr. Fioramonti filled out another form (AR at 499-

500) related to Perryman's ability to do work-related physical activities on which

he noted in part that Perryman could, for a total at one time, sit for four hours,

stand for one hour, and walk for 1⁄2 hour, and could, for a total during an entire

eight hour day, sit for four hours, and stand and walk for one hour; he also noted

that Perryman occasionally could lift up to ten pounds, carry up to five pounds,

and bend, squat, and reach, and that she had a mild restriction in driving

automotive equipment. He further commented that Perryman was additionally

limited in her activities by fatigue, problems with concentration, and problems on

and off with memory, all of which affected her ability to function in a moderately

severe manner. He further commented that her fatigue, her memory loss, and

her loss in concentration were documented in records but that no objective tests

exist to quantify her impairments, and that the lab work findings done at the first

presentation of symptoms in 1994 were consistent with CFS.

In October, 1997, Dr. Fioramonti noted that Perryman, for the first time

since she had CFS, had developed symptoms suggestive of depression. (AR at

479-80). In December, 1997, he assessed her as having CFS with secondary

depression that was possibly starting to respond to Prozac. (AR at 478). In

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January, 1998, he assessed her as having CFS "with frequent relapses," and

secondary depression which was being helped by Prozac. (AR at 475).

On August 13, 1998, Dr. Fioramonti filled out an Attending Physician's

Statement of Disability form (AR at 210) in which he diagnosed Perryman as

having CFS with unimproved progress. He noted that she was disabled from

performing her own occupation and any other work since June 15, 1994, that

there were "no meaningful work activities" that she was capable of performing,

that her work capacity was "less than sedentary," and that she could not be

rehabilitated into her own occupation or any other work.

Dr. Fioramonti’s notes show that he had various blood work and other

clinical testing performed on Perryman during the course of his treatment of her:

he obtained a Dim I profile and ESR on June 27, 1994 (AR at 488); blood

laboratory work that included thyroid and TSH tests as done on July 8, 1994 (AR

at 487); he repeated “Dim 1 and ESR, TSH, EBV and a CMV titer just for

completeness’ sake” on July 13, 1994 (AR at 487); he ordered tests on “[u]rine for

heavy metal screen, Dim 1 profile, ESR, ANA, and VDR” and a brain MRI on

January 14, 1997 (AR at 482); a TSH blood test was done on February 27, 1997

(AR at 48); and he stated that he would do a “Dim 1 profile to recheck her TSH”

on October 17, 1997. (AR at 479).

(2) Clark Hansen, N.D.

Dr. Hansen, a naturopathic physician, treated Perryman from July, 1994

through March, 1997, which was during the same period of time she was seeing

Dr. Fioramonti. His office notes (AR at 179-91) show treatment or medicationrelated entries for some 39 different days during that period. Perryman states

that Dr. Hansen saw her 26 times. 

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On March 1, 1995, Dr. Hansen wrote a letter (AR at 25) to an attorney

regarding Perryman's medical condition in which he stated in part:

I have examined Ms. Perryman and diagnosed her as having 

(1) Chronic Fatigue & Immune Dysfunction Syndrome (CFIDS), 

(2) Anemia, and (3) Hashimoto's Thryoiditis [sic]. Ms. Perryman's

current condition is that of a weakened, easily fatigued, 53 year old

woman. She is severely limited by CFIDS, the chronic, relapsing,

persistent illness that renders her incapable of functioning several

hours per day. Everyone of the above three diagnoses causes

excessive fatigue, however, CFIDS causes the most profound

fatigue and limitations.

In addition to severe fatigue, Ms. Perryman suffers from joint pains,

soreness in the muscles, heaviness in the chest, mental dullness,

dizziness, and palpitations, all of which are related to CFIDS. She is

limited to approximately 40-50% of her original capacities.

Ms. Perryman's prognosis is good, but the course of her recovery is

usually lengthy. The average length of recovery is 5-10 years. I

have seen significant improvement in her condition since I first began

seeing her as a patient on 7-20-94. I have recommend [sic] that she

not work more than 30 hrs per week in order to allow her immune

system the time to heal.

On October 30, 1997, Dr. Hansen filled out a physical capacities form (AR

at 176-77; 501-02) in which he noted in part that Perryman could, for a total at

one time, sit for one hour, and stand and walk for 1⁄2 hour, and that during an eight

hour day she could sit for a total of three hours, stand for two hours, and walk for

one hour. He also noted that Perryman could occasionally bend, squat, and

reach; he made no findings regarding her ability to lift or carry. He further noted

that her pain, fatigue and dizziness additionally limited her activities, and that her

pain and fatigue affected her ability to function in a moderately severe manner,

and that her pain and fatigue resulted from documented objective or diagnostic

findings. He further commented that her "mental fatigue can be severe and very

unpredictable. Can black out, illness can be incapacitating for weeks @ a time

with short periods of improvement. No known cure."

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3 

 The CDC criteria listed on the form provided to Dr. Hansen by

Provident, which was apparently based on the CDC's 1988 CFS definition,

required a patient to have both major criteria plus two or more physical criteria, or

eight or more minor criteria in order to meet the case definition for CFS. 

- 10 -

In June, 1998, Dr. Hansen filled out Medical Assessment Form for CFS

supplied by Provident, wherein he stated that Perryman's signs and symptoms

were "[f]atigue, malaise, sore throats, low grade fevers, myalgia, arthralgia,

mental dullness, sleep disturb [sic], memory loss, exhaustion to point of collapse

some days, anterior cervical lymphodenopathy, temp +99.0 F on multiple visits."

(AR at 193). He also noted that Perryman's subjective complaints were

"exhaustion that leads to difficulty thinking, concentrating, slow reactions, poor

memory," and that her current cognitive functional problems were "exhaustion,

memory loss/weakness, confusion, mental dullness, slowness of

comprehension.") (AR at 193).

He further noted that the tests he used to rule out other conditions were

"Thyroid panel, CBC, SMAC 25, Tender point score for Fibromyalgia, ANA, AntiDS DNA, Anti SM, Anti RNP, Sjogrens, SSA & SSB, ESR, Thyroid Auto Ab,

Thyroid medication, Estrogen Replacement Therapy." (AR at 193). 

Dr. Hansen’s records show the results of various blood tests taken or done

on July 20, 1994 (AR at 159-60), November 15, 1994 (AR at 163), November 21,

1995 (AR at 165), December 9, 1995 (AR at 166-67), December 13, 1996 (AR at

171-72), March 3, 1997 (AR at 21 and 26), and December 9, 1995 (AR at 167-

68).

He attached to the CFS form a completed checklist (AR at 192) from the

CDC regarding CFS definitional criteria.3

 He noted that Perryman met both of the

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 The CDC subsequently revised its definition of CFS in part by

decreasing the list of symptoms from 11 to 8 and by decreasing the required

number of symptoms from 8 to 4.

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major criteria for CFS, i.e. persistent or relapsing fatigue or easy fatigability that

does not resolve with bed rest and is severe enough to reduce average daily

activity by at least 50%, and exclusion of other chronic clinical problems,

including psychiatric conditions. He also noted that she met nine of the eleven

minor criteria, i.e. low-grade fever, sore throat, painful lymph nodes, unexplained

generalized muscle weakness, muscle discomfort/myalgia, prolonged general

fatigue following levels of exercise that were previously well tolerated, migratory

arthralgia without objective signs of arthritis, neuropsychological symptoms, and

sleep disturbance. He further noted that she met all three of the physical criteria,

i.e. low-grade fever, nonexudative pharyngitis, and palpable or tender lymph

nodes.

(3) Christine Madsen, N.D. 

Dr. Madsen, a naturopathic physician working out of the same clinic as Dr.

Hansen, filled out an Attending Physician’s Statement of Disability form (AR at 6-

7) on May 1, 1997. Dr. Madsen stated on the form that she had treated

Perryman from July 20, 1994 through March 3, 1997. None of Dr. Madsen's

treatment or office notes are in the administrative record.

Dr. Madsen listed Perryman’s symptoms as being “[e]xtreme fatigue, short

term memory loss, mental confusion, sleep disorder, Fibromyalgia sxs, swollen

glands.” Her diagnosis was of chronic fatigue, and she noted that the diagnosis

was based on objective findings of “EBV panel, CMV Test”. She noted that

Perryman was disabled from both her regular occupation and any occupation

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since February 28, 1997, and that she was not a suitable candidate for a

rehabilitation program. Dr. Madsen remarked that

Mrs. Perryman has frequent periods of extreme fatigue - she is

unable to perform activities of daily living many days. She also

suffers short term memory loss which has been affecting her

performance at work. She has become somewhat isolated due to

her status. She is often bed-bound/house bound. She cannot do

her own shopping or meal preparation.

(4) Hal Breen, M.D.

 Dr. Breen, a psychiatrist, examined Perryman on August 28, 1997 at the

request of the Arizona Department of Economic Security as part of Perryman’s

application for Social Security disability benefits. Dr. Breen noted in his report

(AR at 505-13) that Perryman "did not present any clinical evidence of

depression." His summary of his conclusions stated in part:

She felt she had a short-term memory loss, slight confusion and

stated that she had some difficulty with words. None of these

situations or symptoms were present on clinical examination today.

...

* * *

The Mental Status Examination did not substantiate claims of shortterm memory loss or confusion. The patient was in good contact

with reality and her memory for immediate, intermediate and distant

recall was well within normal limits. ...

* * *

The prognosis for this patient is good, if she can obtain effective

treatment for the condition which is alleged.

* * *

The diagnosis of chronic fatigue syndrome cannot be ruled out, as

this is a somatic diagnosis, by this examiner. However, the

allegation of confusion and short-term memory loss is clearly untrue

in this case.

Dr. Breen also filled out a mental capacities form for work-related activities (AR at

503-04) in which he noted in part that Perryman had a "Fair: seriously limited, but

not precluded" ability to deal with work stresses, a "Good: limited, but

satisfactory" ability to deal with the public, an "Unlimited/very good" ability to

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follow work rules, relate to co-workers, use judgment, interact with supervisors,

function independently, and maintain attention and concentration. He also noted

that she had a "Good; limited but satisfactory" ability to understand, remember

and carry out complex job instructions, and an "Unlimited/very good" ability to

understand, remember and carry out simple and detailed job instructions. He

also commented on the form that "Patient's fatigue is unexplained by this exam. 

Not confused; no memory loss."

Dr. Fioramonti’s Rebuttal - On October 2, 1997, Dr. Fioramonti wrote a

letter (AR at 98-99), apparently to someone with the Social Security

Administration, responding to Dr. Breen’s report; Provident received a copy of the

letter on November 11, 1997. Dr. Fioramonti stated in part in his letter:

I feel confident that [Dr. Breen’s] mental status exam and

assessment of [Perryman’s] though[t] processes and functioning at

the time of his interview were indeed correct and accurate. 

However, the nature of this patient’s disease and the symptoms that

she suffers from are well known to be an intermittent and fluctuating

disorder, characterized by periods of remission and then

exacerbation.

The patient has never claimed to have permanent short term

memory loss, or constant clouding of sensorium. Quite to the

contrary, she has always complained of periods of feeling bright,

energetic, and being able to perform her duties interrupted by

frequent episodes of symptoms consistent with chronic fatigue

syndrome, whereby she can barely get out of bed, her sensorium

becomes very clouded, her short term memory is poor, and her

general overall level of functioning declines markedly.

As a family physician who has treated many patients over the

last five years with chronic fatigue syndrome, I certainly don’t feel

that the result of this psychological exam taken on one day, when the

patient was not having an exacerbation of her symptoms, in any way

should disqualify her from the disability that is well documented in

the literature, and in our practices suffered by patients who have

chronic fatigue syndrome.

(5) Thomas Pendergrass, RN, Ph.D 

Dr. Pendergrass, a psychologist and registered nurse employed by

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Provident, performed a review of Perryman’s file on August 4, 1997, and noted

that “[f]rom data available there is no clear suggestion of a nervous/mental

disorder.” (AR at 56).

Dr. Pendergrass testified at his deposition that he obtained additional

information about Perryman’s condition during a telephone conversation with Dr.

Fioramonti by telephone on January 13, 1998, and that Dr. Fioramonti told him at

that time that he had just seen Perryman that morning, that it was his opinion that

Perryman met the criteria for CFS, that there was no evidence of underlying

depression and that the depressive symptoms he had noted in Perryman were

reactive in nature to the CFS, that he summarized for Dr. Pendergrass the results

of the lab results that confirmed his diagnosis of CFS, that he informed Dr.

Pendergrass that Perryman was having frequent recurrence of her symptoms that

included fatigue, cognitive slowing and psycho-motor retardation, that Perryman

would generally have bouts of two week durations followed by a four week

improvement, and that there was no foreseeable time that a return-to-work could

be predicted. (AR at 46-49). Dr. Pendergrass also testified that he was not

qualified to diagnose CFS (AR at 63), and that there is no objective neuropsych

test that can quantify fatigue levels but that fatigue can be observed and

evaluated more thoroughly by a FCE. (AR at 54).

(6) Dr. Barton

Dr. Barton, a Provident medical advisor of unknown specialty, also

performed a file review on August 4, 1997. Dr. Barton noted that Perryman’s

diagnosis of chronic fatigue could not be objectively verified, that her condition

would not improve with treatment, that her expected recovery date was unknown,

and that “[a]t this point, no work [is] feasible.” (AR at 58).

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(7) Benjamin Harris, M.D. 

 Dr. Harris, a rheumatologist, performed an independent medical exam

(“IME”) on Perryman at Provident's request on October 17, 1997. He noted in his

report (AR at 86-88) that "the general physical examination, including neurologic

examination, was within normal limits." He stated that "I thought that Mrs.

Perryman, by history and physical examination, had features of both a chronic

fatigue syndrome and fibromyalgia." He noted that Perryman had “extensive

testing” done in January, 1997, including an MRI and various blood tests. He

also noted that Perryman had "improved significantly" since the onset of the

symptoms in 1994. As to Perryman’s then ability to work, Dr. Harris stated:

In reviewing the job description as agency manager, I do not think

the patient could at present keep up with the demands of such a fast

paced position. It is possible that if there is further improvement in

the next year or two that resumption of this work would be a

possibility. At present I do not think the patient is capable of more

than sedentary clerical work on a part-time basis.

Dr. Harris also filled out a physical capacities form (AR at 90) on October

20, 1997, in which he noted in part that Perryman could, for a total at one time,

stand, walk and drive for 1⁄2 hour and sit for two hours, and that in an eight hour

day she could stand, walk and drive for a total of one hour and sit for a total of

four hours. He also noted in part that Perryman could lift from the floor, knees,

waist, and chest, that she could occasionally lift and carry 25 pounds, and that

she could occasionally bend, twist, squat, and kneel, and moderately reach. 

(8) Provident Filed Reports

Provident employee Joseph Mauvais interviewed Perryman on February

12, 1998. Mauvais’ report (AR at 121-26) states in part:

[Perryman] did appear fatigued and as the interview proceeded,

appeared more tired. She talks in a very soft manner and moves

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around slowly. I observed her walking from the living room up the

stairs and back, to retrieve documents in a very slow manner. At

time[s] during the interview, she seemed to lose her train of thought

and had to ask where we were. ... At times she broke down and

began to cry when discussing her previous occupation, the income

she made and her current medical condition. ...

* * *

On the particular day of this interview, she said she was having a

good day and was coherent and clear headed. However, she said

she was ready for rest after being with the marriage counselor for

approximately 1 and 1⁄2 hours prior to the interview. The claimant

says that she has a goal each day of getting up and getting dressed

and doing something positive which could include reading, talking to

a friend on the telephone or trying to get out of the house. ...

* * *

Current Activities

The claimant is having a difficult time sleeping throughout the night

and usually finds herself awakened between 12:00 and 5:00 a.m. 

She eventually doses back off to sleep after 5:00 and wakes up

whenever she does. At that time, she tries to take care of her

personal hygiene, but if she has no appointments will not curl her

hair or do make-up. She said just doing her hair takes a lot of

energy out of her. On days that she has no personal appointments,

just a marriage counselor or doctor, she will stay in the home and

usually read and relax by mediation. She takes her medication and

cooks herself a light breakfast usually consisting of toast. She

dresses herself and will go out of her house for appointments, which

are usually scheduled in the mid-morning hours. By 1:00 in the

afternoon, she is usually totally exhausted and needs to come home

and sleep. She usually rests from 1:00 to 3:00 p.m. She is in the

house for the rest of the day. She does no cleaning in the house and

does not do her own laundry. Her daughter does all of the grocery

shopping and usually runs errands for her. Dinner at night for her

usually consists of soup.

Restrictions/Limitations

The claimant is restricted at this time from returning to work in any

capacity. Her doctor has recommended some light gentle exercising

in include short walks, but she is unable to do so on a consistent

basis. ... She suffers from memory loss, and describes her condition

sometimes, as a light case of Alzheimer’s disease. ... She said in the

mornings if she is exhausted, she suffers from anxiety and it is

followed by difficulty in decision making, planning, and concentration. 

Prior to her illness, she had a personal trainer and worked out on a

regular basis. Since the illness, she has lost all her muscle tone and

is not able to work out or walk on a light basis. She feels that she

has lost all strength in her muscles, yet they still ache. ... She has 11

to 14 days of good careful pace and then she will fall back into what

she describes as the pit, for 7 to 8 weeks, where she is constantly

trying to crawl out and gets sucked back in. ...

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Future Plans

... She has a strong desire and will to return back to work, if not in

her previous profession then to be rehabilitated in another. She

expressed interest in our rehabilitation unit and has expressed a

desire to have someone contact her. She desires to be self sufficient

and energetic again. ...

* * *

Claim Issues/Concerns

I have no particular concerns at this time. A surveillance may be

warranted in this case to verify her outside activities. Her condition

appears to be well documented from her attending physician, as well

as various tests taken. ... The claimant seems very motivated to

wants [sic] to return to [sic] back to work[.]

Provident employee Roy Middleton interviewed Michael Tousley, who was

Perryman's supervisor for the last four years she worked, on February 19, 1998.

Middleton’s filed referral report (AR at 130-31) states in part:

Mr. Tousley stated that the last 4 or 5 months of her employment

were sad because he had to continuously cover for her as she could

not remember anything that was going on. He gave an example of

calling her in the morning to discuss something and then he would

call her back in the afternoon and she would have no recollection of

the morning call. ... Mr. Tousley talked to Ms. Perryman about

reducing her responsibilities and they decided that reduced

responsibilities would not help the situation. Mr. Tousley said that in

retrospect he thinks Ms. Perryman stayed around a little longer that

she should have anyway.

Another Provident employee, Dan Christener, wrote a file memo on June

19, 1998 (AR at 145) in which he states that “[t]here is considerable medical

information which supports disability and the continuation of disability benefits at

this time.” Christener recommended that Perryman be asked to complete a 14-

day activity log and that a surveillance be done on her.

(9) Award of Social Security Disability Benefits 

 A Social Security Administration administrative law judge (“ALJ”), in a

decision entered on August 26, 1998, found that Perryman was entitled to Title II

disability benefits; he determined that Perryman’s disability onset date was

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February 28, 1997. The ALJ concluded that Perryman’s combined impairments

of chronic fatigue syndrome and depression prevented her from “engaging in

work activity on a regular and consistent basis” (AR at 496), and that Perryman

did not have “transferable skills to perform other work within her physical and

mental residual functional capacity.” (AR at 495). The ALJ also stated that

“[g]iven the claimant’s residual functional capacity, and the vocational factors of

her age, education and past relevant work experience, there are no jobs existing

in significant numbers the claimant is capable of performing.” (AR at 496).

Provident was aware of the Social Security disability award by October of

1998, which was prior to its initial rejection of Perryman’s claim for “any

occupation” disability benefits, in that it reduced the amount of Perryman’s “own

occupation” benefits by the amount of her Social Security disability benefits. (AR

at 250).

(10) Clark Craig, M.D. 

After Perryman moved to Texas in 1998, she first saw Dr. Craig, speciality

unknown, for a short period of time. His office note from his examination of her

on April 6, 1998, which included a TSH blood test that came back within normal

limits, assesses her as having "chronic fatigue syndrome with features of

fibromyalgia." (AR at 491). On a follow-up visit on July 31, 1998, Dr. Craig again

assessed Perryman as having chronic fatigue syndrome. (AR at 489).

(11) Surveillance Report

Provident hired International Claims Specialists to conduct a surveillance of

Perryman in Texas. A three-day surveillance was conducted in July, 1998. The

summary section of the surveillance report (AR at 236-37) states that:

On Sunday, 7/26/98, the claimant and an elderly female companion

departed in a black Mercedes with Arizona plates at 9:09 a.m. and

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drove to church in Marble Falls, Texas. On the way they stopped for

gas. After church they stopped at a residence in Tendron, Texas for

a few minutes before returning home. In the early afternoon, they

departed the house again and drove to the same residential house. 

After about a two hour visit, they drove back home. No other

vehicles or any other people were observed at the claimant's

address.

On Monday, 7/27/98, the claimant and the elderly female were

observed at home at various times of the day for brief periods. The

first observation was at 7:56 a.m. and the last observation of the

claimant was at 8:02 p.m. The claimant did not go anywhere in her

vehicle. No other vehicle or any other people were observed at the

claimant's address.

On Tuesday, 7/28/98, the claimant was observed at 7:50 a.m. and at

1:25 p.m. very briefly at home. She did not go anywhere in her

vehicle. No other vehicles or any other people were observed

except for the elderly lady.

* * *

Videotape documentation shows the claimant walking, driving,

putting gas in her vehicle, carrying a potted plant and bending at the

waist to pick up an unknown object.

(12) Sidney Shinkawa, M.D. 

Dr. Shinkawa, an internist, became Perryman’s primary care physician in

July, 1998. Perryman states that Dr. Shinkawa saw her eight times.

Dr. Shinkawa filled out an Attending Physician’s Statement of Disability

form (AR at 277) on March 2, 1999, in which she noted that Perryman’s

subjective symptoms were "fatigue-unable to stay awake [and] decreased

concentration." She diagnosed Perryman as having chronic fatigue, and noted

that Perryman was disabled from March 1, 1997 from performing her own

occupation and any other work and that it was unknown when she could return to

work. She also noted that “Pt is unable to stay awake all day.”

Dr. Shinkawa wrote a letter (No Bates number; in AR vol. 3, Tab B) to

Gwendolen Alegre, Provident’s claim representative, on August 20, 1999, in

which she stated in part:

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... Nancy Perryman has carried the diagnosis of chronic fatigue

syndrome since 1994 according to our records under Dr. Fioramonti. 

She appears to be basically unchanged since the diagnosis was

made. Her symptoms are (1) Unexplained severe fatigue. (2) Postexertional malaise - out of proportion to physical activity. 

(3) Unrefreshing sleep - also worked up in sleep clinic in Temple. 

(4) Muscle aches and pains (fibromyalgia symptoms) also well

documented by Dr. Chune (endocrinologist) and Dr. Wilkinson

(neurologist) as well as Dr. Fioramonti. (5) Multiple joint pains

(6) Tension headaches (7) occasional sore throat in AM when she is

very fatigue[d]. (8) Impaired memory and concentration when her

fatigue is severe. Nancy’s major complaint - overwhelming fatigue

has rendered her unable to hold down an office job as documented

by Dr. Fioramonti.

She has had a battery of test[s] done - (which were normal) to

exclude other diseases which could mimic CFS. She has also been

evaluated by numerous specialists [:] Dr. Terry Wilkinson

(neurologist), Dr. Ga[r]y Chune (endocrinologist), and a sleep clinic

specialist, who have concurred with the diagnosis of CFS. She has

also had a normal MRI of the brain.

Nancy also developed severe orthostatic hypotension (probable

autonomic neurally medicated hypotension) which responded to

fludrocortisone and is related to CFS.

Nancy Perryman has also related to us - that under the suggestion of

Provident she was evaluated by a psychiatrist for possible

depression, and it has been my opinion as well as Dr. Fioramonti

that depression was not a major diagnosis, but secondary to CFS.

Dr. Shinkawa also provided an affidavit (AR at 527) on October 21, 1999,

wherein she stated in part:

3. Based on Ms. Perryman’s history as well as my examination of

her, I have concluded that she suffers from chronic fatigue

syndrome.

4. In 1998, I treated Ms. Perryman for complaints of orthostatic

hypotension. Orthostatic hypotension is a sudden drop in blood

pressure related to changes in body position. This condition cannot

be faked by a patient. Orthostatic hypotension is often associated

with chronic fatigue syndrome.

5. At the current time, Ms. Perryman is unable to work any job for 40

hours a week due to her chronic fatigue. Additionally, she is unable

to drive the 45 minutes drive from her home to town on a daily basis

because of her problem with concentration caused by her fatigue.

Dr. Shinkawa’s notes state on July 15, 1998 that Perryman recently had

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her “thyroid level and laboratory done” (AR at 370), that she had a holter heart

test performed on Perryman on October 5, 1998 (AR at 311), and a EEG done on

October 12, 1998. (AR at 312). 

(13) Gary Chune, M.D.

 Dr. Chune, an endocrinologist, treated Perryman for several months in the

last half of 1998 for her syncopal episodes (dizziness and blackouts) based on a

referral from Dr. Shinkawa. After examining Perryman and having various blood

tests done, Dr. Chune concluded on October 12, 1998 that Perryman did not

appear to have any problems with her adrenal glands, but that she did have

orthostatic hypotension. (AR at 329-30). Dr. Chune noted on November 24, 1998

that Perryman had "what appeared to be a possible chronic fatigue syndrome,"

that she had mild hypercalcemia, that she did not appear to have any known

endocrine disorder, and he ruled entities such as hyperparathyroidism. (AR at

327). Dr. Chune's assessment of Perryman on December 8, 1998 was that she

had orthostatic hypotension, that he could not find any other abnormalities, that

he was left with a possible diagnosis of pure autonomic failure/possible

sympathetic failure, and that she did not appear to have any Parkinsonian type

symptoms suggestive of Shy-Drager syndrome. (AR at 326).

Dr. Chune’s notes show that he performed a rapid cortrosyn simulation test

and adrenal and calcium blood workups, including SMA-12, ACTH, TSH, T4,

T3U, and CBC on October 12, 1998. (AR at 326, 329-30). They also show that

he evaluated Perryman for “any potential endocrine disorder” by doing laboratory

blood tests for ACTH and morning serum cortisol, thyroid function and TSH, and

SMA-12 on November 24, 1998. (AR at 314).

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4

 GENEX is a managed care service provider which was purchased in

1997 by Provident Companies, Inc., now UnumProvident. 

- 22 -

(14) GENEX Report

 Provident referred Perryman’s claim to GENEX Services, Inc. in March,

1999 for the purpose of addressing CFS treatment issues with Dr. Shinkawa.4

 A

GENEX representative, Judy Minter, interviewed Dr. Shinkawa on March 23,

1999. Minter’s report (AR at 334-37) states in part:

Dr. Shinkawa reported that at her appointments, Ms. Perryman is

complaining of headaches, problems sleeping, and waking up every

few hours through the night.

* * *

When asked to list the [CFS] criteria identified in formulating her

diagnosis of Ms. Perryman’s [CFS], Dr. Shinkawa reported that she

had not diagnosed Ms. Shinkawa as having [CFS]. That Ms.

Perryman had only reported to her that she had that condition.

As I went over the list of the CDC criteria provided to me by

Provident, Dr. Shinkawa stated that Ms. Perryman has no low grade

fevers. She has complained of a sore throat (a funny feeling). But

there has been no redness, no puss [sic]. There has been no

evidence of painful cervical or lymph nodes. Ms. Perryman does

complain of muscle weakness and there is a lack of muscle tone but

Dr. Shinkawa reports that this muscle tone has not been

documented. Dr. Shinkawa also reports Ms. Perryman does

complain of achiness, sleep disturbances, extreme forgetfulness and

loss of short term memory.

Dr. Shinkawa noted that she felt that Ms. Perryman’s worse problem

was her severe orthostatic hypotension which has caused her to faint

when she stood up quickly. Dr. Shinkawa has prescribed Florinet

[sic-Florinef] for this problem and the problem has resolved itself. 

* * *

When Dr. Shinkawa was asked to please site [sic] findings that

support Ms. Perryman’s functional loss, she reported that Ms.

Perryman has muscle atrophy but she also stated that she has not

measured this.

* * *

Dr. Shinkawa reports that since Ms. Perryman cannot perform any

type of duties for more than 2-3 hours without extreme fatigue and

since her muscles have atrophied that she is not able to perform any

type of work. She states her memory would also be a problem in her

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returning to work. Dr. Shinkawa notes that she has not tested this - it

is simply by claimant’s report. Ms. Perryman has never forgotten a

scheduled appointment. To address the issues of extreme fatigue

and muscle atrophy, Dr. Shinkawa has referred Ms. Perryman for an

FCE.

* * *

Barriers to Return to Work

1. A general practitioner physician who is not currently addressing

Ms. Perryman’s [CFS].

2. Ms. Perryman’s apparent total lack of or desire for meaningful

activities.

(15) HealthSouth’s Functional Capacity Evaluation 

A functional capacity evaluation (“FCE”) was performed on Perryman by

HealthSouth Industrial Rehabilitation Center on April 12, 1999 (No Bates

numbering on legible copy; is in AR vol.3, tab C). The examiner concluded that

the FCE showed that Perryman was functioning in the Department of Labor’s

sedentary work classification. 

The FCE states in part that “Ms. Perryman noted to be laboring by the end

of testing to complete activities. She completed test over the course of 4 hours.” 

It also states that Perryman “was unable to complete the frequent lift test in time

frame adequate to determine a frequent level,” and that the examiner “[n]oted

problems with blood pressure during [positional tolerance] testing showed rapid

changes up and down.” It also comments that positional tolerance “[a]ctivities

were evaluated in a sustained circuit for a total tolerance of 20 minutes prior to

needing a rest break. This was taken into consideration when establishing work

level for consistency.” It further comments that “[h]er aerobic capacity was

assessed as average for age and sex. She was able to walk a sustained pace of

2 mph for 12 minutes and covered a distance of .35 miles.”

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5

 The form is unsigned and undated but neither party disputes that the

FCE examiner completed it at the time of the FCE.

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The FCE examiner also filled out a physical capacities form on Perryman.5

(Exhibit/AR at 410A). The examiner stated in part that Perryman can stand, walk,

sit and drive for only 1⁄2 hour at a time, and that during an entire workday she can

stand, walk, and drive for a total of two hours and can sit for a total of four hours. 

He also stated in part that Perryman can lift from the floor to over her head, that

she can occasionally lift and carry up to 20 pounds, that she can occasionally

bend, twist, squat, and kneel, and can moderately reach.

Perryman’s Response to the FCE - Perryman submitted an affidavit dated

October 24, 1999 (AR at 35-36) in which she stated in part: “At Provident’s

request, I went to be evaluated at Healthsouth. I was only able to spend 13

minutes on the treadmill and then needed a 45 minute nap before I could

continue any other exercises. Even though I did less than one hour of exercises

while I was at Healthsouth, I was so exhausted that I spent the next four days in

bed.”

(16) J. Terry Wilkinson, M.D. 

Dr. Wilkinson, a neurologist, examined Perryman on June 16, 1999 on a

referral from Dr. Shinkawa. In his report (AR at 518-21), Dr. Wilkinson stated in

part that Perryman informed him that “[s]he has felt constantly tired since [1994],

although the degree of fatigue and feeling tired tends to wax and wane”; that her

placement on Florinef in October 1998 “has pretty much controlled the orthostatic

lightheaded-type sympomatology and she has not had any further episodes of

syncope”; that her “depressive symptoms resolved on Prozac and she also feels

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that her fatigue symptomatology improved on the Prozac”; that she “has had

problems with her ‘memory and thinking being cloudy’ whenever she is extremely

fatigued, but only when she is very tired”; and that she denied “any progressive

decline in memory or cognitive functioning.” 

In the “Impressions” section of his report, Dr. Wilkinson stated in part that

he could not find any “evidence of a primary neurological disorder” causing either

the CFS problem or the orthostatic hypotension, and, in regard to Perryman’s

complaints of difficulty with memory, cognitive functioning, and concentration

when she is fatigued, that he did not “feel that this represents a true organic

problem with memory or cognitive functioning. Her cognitive functioning and

memory are normal on examination. This is an inefficiency of thinking and

concentration when she is tired.” Dr. Wilkinson also stated that Perryman “has

actually symptomatically improved rather significantly with the combination of

Prozac and Florinef.”

(17) E.C. Curtis, M.D.

Dr. Curtis, a specialist in occupational medicine, was Provident’s main inhouse medical consultant on Perryman’s claim. Dr. Curtis submitted two reports

in this case based solely on his review of Perryman’s claim file.

In his first report (AR at 417-19) dated May 12, 1999, Dr. Curtis stated in

part:

This patient sees herself as completely unable to function

occupationally. Although she claims that she must sleep 12-14

hours a day, she appears to be quite capable of performing basic

ADL’s [activities of daily living] at this time. While she does meet the

few loose, vague criteria for CFS, she appears to have been so

labeled based almost entirely on her self reports. Unfortunately

there are no truly objective findings to establish presence or absence

of this disorder. The fact that she reportedly has such findings as

low grade fevers, intermittent occurrence of small nodes, and has

had non-febrile exudative pharyngitis, etc. is not convincing. None of

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these, nor the combination of them, is pathognomic for CFS.

Her complaints of incapacitating fatigue seem to be exaggerated in

light of the FCE findings ..., albeit she and her AP [attending

physician] will no doubt say that those findings represent what she

could do on one of her “good days” and that she was “wiped out” for

hours or days thereafter.

* * *

In addition, she says that she has problems with concentration and

with short term memory. Nothing further in the chart substantiates

that these are significant problems for her. ... Besides this, Ms.

Perryman claims that she has fainting spells. These are not

independently verified, and there seem to be no objective findings in

the record consistent with what her AP called orthostatic

hypotension.

The few physical findings which are recorded in the chart, are

generally unremarkable. The same is true of most of the lab results,

there being no definitive findings in support of her alleged disability.

Indeed a variety of laboratory tests have been done, and while there

is some indication of hypothyroidism, even this is not extreme and

should be readily responsive to medication.

It should be noted that many of her complaints are consistent with

explanations other than by attribution to [CFS]. For instance, fatigue

is often a manifestation of depressed mood. It can also be a result of

hypothyroidism. 

Likewise, complaints about sleep are often related to depressed

mood. They are not infrequently a function of poor sleep hygiene as

well. ...

The reported problems with concentration and short term memory

are also consistent with depressed mood. In her case they may well

be a function of distraction secondary to her apparent rather severe

problems related to issues involving marriage and divorce.

* * *

A recent FCE indicates that Ms. Perryman is capable of sedentary

work despite suggestions of deconditioning effects. These effects

could account for some of the seeming weakness in her lower

extremities and also might very well explain variability in blood

pressure readings.

* * *

However, a careful review of the records at hand seems to support

the view that two other underlying factors are at work here and are at

least in part probably causal. These two, particularly in combination,

could go a long way toward explaining most of her symptoms. 

Neither appears to have been adequately addressed thus far.

One is depressed mood/probable reactive depression, indicators of

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which have been noted above. ...

The other is a set of closely interwoven psychosocial issues,

including: a perception of near exhaustion from reported long hours

and stressful aspects of her previous job (apparently seen as “too

much” for someone in her mid-50's who might understandably be

tired of the struggle). Also there is the perception of feeling

overwhelmed by the process of marital separation and divorce[.] ...

Besides this, there is apparently growing perception on her part of invalidity, that is to say, development of a disabled mind set.

All of these factors are present in the context of caregivers who

seem less than inclined to encourage and facilitate abilities and

instead support disability, and of a claimant who reportedly has

limited economic incentive to resume work.

Recent FCE findings give the impression that the claimant is capable

of doing considerably more than her self reports might indicate. That

is to say, she is capable of not only performing basic ADL’s, but also

seems very likely able to perform sedentary work. In view of her

protracted relative inactivity and of consequent deconditioning

effects, she would probably need to start off working part time for

some weeks. Then she could gradually progress toward working 8

hour days.

Although it seems that the individual may not really wish to return to

work, and that she has many (albeit poorly substantiated)

complaints, the few objective indicators available in the record seem

not to support her contention that she is totally incapable of

occupational involvement. There does appear to be a need for more

serious attention being given to her mood disorder and to assuring

that she has adequate psychological and social support in the midst

of her marital struggles. While she may indeed believe that she is

incapable, that assessment seems to be an exaggeration. Ms.

Perryman would very likely benefit significantly from the socialization

and disciplines involved in at least a gradual return to the work place.

Provident used Dr. Curtis’ report as a primary basis for discontinuing

Perryman’s disability benefits. After Perryman filed her administrative appeal,

which was supported by a letter from her attorney raising issues concerning the

validity of Dr. Curtis’ report, Provident had Dr. Curtis reexamine the file. Dr.

Curtis issued a second report (AR at 547-51) on November 24, 1999. Dr. Curtis’

post-appeal report states in part:

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A careful reexamination of Dr. Fioramonti’s clinical notes since 1994

fails to uncover any systematic listing of items accepted as criteria

for chronic fatigue syndrome. ... However, at different times the

record does record complaints of low grade fevers and sore throat,

plus reputed muscle and joint pain, plus alleged

concentration/memory problems, which in company with then new

complaints about the onset of unexplained, persistent, chronic

fatigue not due to ongoing exertion or alleviated by rest, and which

substantially reduces operational et al activities, are documented.

Relative to ability to perform ADL’s and alleged problems with

concentration/short term memory, Ms. Perryman’s attorney refers to

a number of statements by Dr. Hansen et al. in supposed support of

the view that Ms. Perryman is impaired in these areas. For the most

part, these individuals seem to be voicing essentially recitations or

paraphrases of what Ms. Perryman has told them about her

functioning. These seem not to be of observations which they

themselves have made.

(The same type of thing is reflected in most of the testimonials which

were written on her behalf by family, friends, et al.[)] ...

* * *

Relative to alleged problems with concentration and short term

memory, my report does indeed conclude that these are not

substantiated by information in the records. As of this date, they still

have not been thoroughly substantiated. This is despite statements

by Doctors Hansen and Fioramonti who generally seem to be

reciting what the patient has told them about such, rather than

supplying what are clearly their own objective observations or

assessments based on testing.

Not only has no neuropsych testing been done, it appears that these

physicians have not even used simple measures which are quite

amenable to office administration. In fact, it seems that only two

physicians have utilized even such basic measures and have

reported on them. On of these is Dr. Breen who went on to conclude

that “the allegation of confusion and short term memory loss, is

clearly untrue in this case."

In addition, neurologist Wilkinson, having conducted such testing,

reports that Ms. Perryman’s cognitive function and memory are

normal on examination. He expressed his belief that the alleged

difficulties do not represent a true organic problem, but instead “an

inefficiency of thinking and concentration when she is tired”.

* * *

Relative to the number of doctors who have supposedly confirmed

the diagnosis of CFS, it is well known that once labels have been

applied, subsequent examiners frequently simply list them as part of

the problem list (sometimes adding “by history” or “by report) as if

they were confirmed.

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 The log sheets asked the following questions: hour of rising, any sleep

disturbances prior night, breakfast prepared by, breakfast consisted of, [morning]

activities, lunch prepared by, lunch consisted of, [afternoon] activities, dinner

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That does not necessarily mean concurrence, but that due to time

constraints and other considerations they seldom controvert such

labels unless there is some unusual circumstance or finding.

However, my report acknowledges up front that she does meet the

few loose, vague criteria for CFS. At the same time, that report

legitimately queries whether, in view of the fact that many who are so

labeled either remain functional, or improve and become more

functional, this individual is truly significantly dysfunctional. Also,

there is a seeming contradiction between asserted and

demonstrated ability, e.g., based on FCE findings that seem to show

residual functional capacity well beyond what this claimant claims to

be able to do.

* * *

Regarding “estimates of ability to do work related activities”,

completed by Dr. Fioromonti [sic], these two documents (done about

one week apart) exhibit some inconsistencies with one another. In

addition, they appear to be based on assessments absent any actual

testing. Despite that, they can be interpreted as suggesting that

part-time work is a possibility for this individual.

* * *

[CFS] has essentially no objective clinical findings, but individuals so

labeled are still subject to assessment in terms of functional

parameters. In this case, the scant objective evidence available

relative to functional impairment suggests that, even if this label is

accurately applied, Ms. Perryman has enough residual functional

capacity to allow for sedentary to light tasks much of the time.

Thus, given a reasonably accommodating work setting, with even a

modicum of worker determination to embrace validity (vs in-validity),

successful return to work can be accomplished. While return to work

after a worker has been out for over five years is statistically

exceedingly rare, there appears to be no objective functional basis to

justify this particular individual’s continuing absence from the

workplace.

(Emphases in original).

(18) Nancy Perryman

Perryman completed a 14-day daily activity log (AR at 196-209) in July,

1998, wherein she noted her functional ability to perform only limited daily tasks.6

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prepared by, dinner consisted of, [evening] activities, hour of retiring, misc. notes.

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Perryman submitted an affidavit (AR at 535-36) dated October 24, 1999,

wherein she states in part:

1. Since 1994, I have been suffering from [CFS]. After I first became

sick, I tried to continue working part-time, but this caused my

symptoms to get worse. I have been unable to work since March 1,

1997.

2. In 1998, I moved to a small town in Texas to try to rest and

recover from my illness.

3. Since I have been sick, if I try to do too much, I get extremely

exhausted to the point I spend an entire day or more resting or

sleeping. In the last six months, there have been many occasions

where I have been unable to do anything all day because of

exhaustion. For example, one time I decided to walk the four blocks

to town and back in order to build up my strength. As a result of

walking that far, the next day I was in bed all day. On another

occasion, I tried to do some leg exercises in order to strengthen my

legs. I bent my knees and contracted my thigh and butt muscles

three times. As a result of this activity, I was in bed for two days. 

Just recently, while I was visiting one of my daughters in Arizona, I

flew to Las Vegas to spend the weekend with my daughter and sonin-law. On Friday, I took the plane flight to Las Vegas and then went

out to dinner with my daughter and her husband. As a result, I was

so exhausted that I spent Saturday, Sunday and Monday in bed.

4. Since I have been sick, I have had problems with my memory and

concentration. For example, sometimes when I’m in my car, I can’t

remember where I am going. One time, I pulled up to a stop sign

and knew I was supposed to stop. However, I forgot that I needed to

remain stopped until the traffic had cleared and almost got into an

accident.

5. Before I got sick, I used to drive approximately 30,000 miles per

year. Now, just driving 20 minutes to see my doctor and then driving

home is all I can do in one day. Many days I am too exhausted even

to drive the four blocks to town in order to pick up my mail.

* * *

7. I am not currently able to work 40 hours a week. I cannot even

work two hours a day.

(19) Evidence From Friends and Co-Workers

Lucinda Jensen, who was Perryman's administrative assistant for

approximately two years starting in the spring of 1994, provided an affidavit (AR

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at 529), dated October 25, 1999, in which she stated in part:

2. During the time that I was working for Nancy, she was already

sick. During that time, she had problems with a lack of energy as

well as problems with her memory. 

3. As Nancy became more ill, she moved her office into her home. 

There were some days when she was too ill to even get out of bed. 

This was very much unlike her. There were some days that she was

so sick that it took her all morning just to fix her hair and get her

makeup on.

4. During the time I worked for Nancy Perryman, there were days

when she was too fatigued to work.

Bobbi Moore, a Texas friend of Perryman who saw her nearly very day

between March and December of 1998, provided an affidavit (AR at 533), dated

October 15, 1999, in which she stated in part:

2. In 1998, Nancy had good days and bad days. When Nancy was

having a good day, we would go for a walk in the morning. We

would generally walk between one half and one miles [sic].

3. When Nancy was having a bad day, she could hardly walk. On bad 

days, Nancy would spend a great deal of time in bed.

4. When Nancy first moved to Texas, she was having bad days

nearly all of the time. Later in 1998, she was having bad days only

about one half of the time.

Carl Osterman, Perryman’s certified public accountant for eight or nine

years, provided an affidavit (AR at 530), dated October 14, 1999, in which he

stated in part:

2. Since Nancy became sick, she has had problems with her

concentration. There are times when she will be conversing

normally and then loses her concentration. During these times, she

has a spaced-out look and is unable to follow our conversation.

3. Nancy’s problems with concentration are completely unlike how

she was before she got sick.

4. Nancy was still having problems with concentration during the last

two years.

Janis Ware, a Texas clinical aesthetician, who provided some eighteen

muscle toning treatments to Perryman, three times a week for approximately six

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weeks, provided an affidavit (AR at 532), dated October 22, 1999, in which she

stated in part:

4. Approximately 25% of the time I have seen Ms. Perryman, she

appeared totally exhausted. Additionally, she canceled two

appointments because she was too exhausted to drive to the therapy

session. Ms. Perryman falls asleep during nearly all of her therapy

sessions as a result of exhaustion from the thirty minutes drive from

her home.

(20) Pam Perdue 

Pam Perdue, an in-house vocational rehabilitation consultant for Provident,

sent two transferable skills analysis (“TSA”) reports to Provident regarding jobs

Perryman could perform; nothing in her reports states what records she reviewed

before making her recommendations. 

In her first report (AR at 422), dated May 26, 1999, Perdue stated in part:

Claimant appears to have the capacity to perform a sedentary job. 

Based on her vocational training and experience, the following jobs

would appear feasible. The wages attached to the following jobs are

a beginning point. Most of these positions also include commission

pay which can make the earning capacity unlimited depending on the

motivation and skill of the person performing the job.

Special Agent 166.167-046 $615/week

Risk and Insurance Manager 186.117-066 $672.00/week

Insurance Office Manager 186.167-034 $536.00/week

Closer 186.167-074 $559.00/week

Brokerage Office Manager 186.117-034 Salary varies and may 

 include commission.

All inhouse sales type work could also be appropriate as long as the

job is sedentary. These jobs are mainly paid by commission.

In her second report (AR at 555), dated December 28, 1999, Perdue stated

that she conducted a three stage investigation in order to produce information for

executive/management type positions that would allow Perryman to use her

insurance, sales, and management experience and travel minimally. First, she 

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contacted a headhunter in the insurance industry who gave “salary ranges of

$65-$90 thousand for claims type management and $85-$105 thousand for

marketing management. However, his [sic] did not include bonus material.” 

Second, she spoke with a UNUM/Provident sales recruiter and “discussed

executive type occupations such as VP National Accounts, VP Marketing, and VP

Market Management in a home office type environment. Base salary would be

$90-$150 Thousand with a bonus potential of 20-25%.” Third, she conducted

“Internet research regarding the national economy wage data” concerning jobs

which would allow Perryman to use her expertise in insurance, sales and

management. The information she collected, which was from the Wall Street

Journal, based on a PricewaterhouseCoopers report, included:

Top marketing and sales-Median Salary $183,500 + Median Bonus $65,350 = $248,850.

Top administration-Median Salary $156,917 + Median Bonus $64,574 = $221,491.

Top claims-Median Salary $150,000 + Media Bonus $50,000 = $200,500.

Top underwriting-Median Salary $115,000 + Median Bonus $22,500= $137,500.

Perdue noted that the executive positions correlated directly with the occupations

identified in her previous TSA.

(21) Provident’s Denial Letters

Provident initially denied Perryman’s “any occupation” disability claim in a

letter dated May 27, 1999. That letter (AR at 426-28), written by claims examiner

Gwendolen Alegre, stated in part:

We have completed a thorough review of your LTD claim file. 

Included in this review were medical records from Drs. Fioramonti,

Hansen, Madsen, Harris, Shinkawa, and from [FCE] physical

therapist Manuel Vielma. In this review, we noted that laboratory test

results were within normal limits except for indication of some

possible hypothyroidism. Your reported complaints of fatigue, shortCase 2:01-cv-00927-PGR Document 113 Filed 02/18/10 Page 33 of 66
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7

 

 In January, 2003, the Court ordered this document to be produced to

Perryman notwithstanding that it was an attorney-client privileged document, and

stated that it would be considered part of the administrative record.

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term memory loss, and sleeplessness are subjective and indicative

of depressed mood rather than Chronic Fatigue Syndrome.

Medical records indicate that your orthostatic hypotension has been

controlled with appropriate medication. The functional capacity

evaluation indicates that you at least [are] capable of sedentary work

and possibly more after exercise and work hardening offsets your

deconditioning due to inactivity. There is no documentation that you

meet the Center for Disease Control criteria for CFS, and no

objective documentation which indicates you experience any

ongoing symptomolgy which would render you disabled from all

types of employment.

We are concerned with your return to gainful employment. What

follows is a list of some of the types of jobs you may be able to

perform:

1. Insurance Office Manager

2. In-House Sales Consultant

3. Brokerage Office Manager (title of previous position with Western Farm Bureau)

4. Agent for Insurance Sales

Many of these positions include commission and bonus incentives

which make the earning potential unlimited. Please note that this list

is not intended to be comprehensive, but is only a partial list of

examples of some of the types of jobs you may be able to perform.

As a result of Perryman’s administrative appeal, her file was reviewed by

Darragh Ferranti, a Provident appeals consultant. In December, 1999, Ferranti

submitted an Appeal Recommendation (attached to Perryman’s trial brief7

) to

various Provident personnel that recommended that Provident resume paying

benefits to Perryman. Ferranti’s report stated in part:

With regard to questioning the diagnosis of chronic fatigue, Dr. Curtis

did a thorough and detailed review of the complete medical records. 

However, we have paid this claim since 1997 without contesting the

diagnosis of CFS, in fact, our own IME in 1997 supports the

diagnosis. The insured’s condition has not been reported to have

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improved significantly since 1997. There likely is support for our

conclusion that the insured may now have sedentary work capacity

and a TSA concluded that there were occupations that the insured

could perform, such as special agent, risk and insurance manager,

insurance office manager, closer, and brokerage office manager. 

Please note that the starting pay for the highest paid of these

positions is $615/week or app. $32,000.00 per year. According to

the contract, under the any occ provision the insured will be

considered to be disabled if she is unable to earn at least 80% of

indexed earnings. While these positions offer a possibility of

commission income, the 80% level is based on the insured’s prior

earnings would be $160,000.00.

I spoke with Dan Christner [a Provident employee] about this file and

left it to him to review. We agree that the insured’s high level of predisability income makes it difficult to support that she could earn the

contractual requirement with sedentary work capacity, given that the

majority of the income is commission based and depends upon the

motivation and energy of the individual.

I do not feel we have a strong basis for denial of this claim given the

two issues outlined above, at least at this time.

Notwithstanding her earlier recommendation, Ferranti wrote a letter (AR at

556-58) on December 29, 1999 to Perryman’s attorney wherein she denied

Perryman’s appeal. Ferranti stated at her deposition that she changed her

position on the appeal after obtaining a clarification from HealthSouth that the

FCE results pertained to an eight hour work day, and based on the results of Pam

Perdue's second TSA. (Ferranti's deposition at 28-29 and 52-53).

Provident's final denial letter, written by Ferranti, stated in part:

Based upon the medical review, it appeared to us that the diagnosis

of [CFS] had been based upon Ms. Perryman’s self-report to her

attending physicians. We felt there may be a question regarding the

accuracy of this diagnosis, or there may be other conditions to

consider which could be causing her symptoms of fatigue, memory

loss and sleep dysfunction, such as depression, a sleep disorder or

hypothyroidism. As Ms. Perryman experienced improvement of

symptoms with the use of psychotropic medications, it would appear

there is support for depression as an underlying condition. It also

appears from your letter and the records that Ms. Perryman suffers

from a sleep disorder - she relates this as insomnia and states that

she was told by the sleep clinic that they could do nothing for it. No

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records from this evaluation have been supplied, however, in order

for CFS to be diagnosed, a sleep disorder must be excluded as the

cause of the fatigue. Sleep dysfunction can also occur as a result of

Ms. Perryman’s daytime naps which would interfere with nighttime

sleep patterns.

Ms. Perryman’s allegations of problems with memory loss and

concentration have not been substantiated. Reports by Doctors

Hansen and Fairmont [sic - Fioramonti] appear to be reciting what

Ms. Perryman has related to them rather than providing their own

objective observations or assessments based on testing. Dr. Breen,

who did an evaluation of Ms. Perryman, concluded “the allegations of

confusion and short-term memory loss, is clearly untrue in this case.”

Dr. Wilkinson also reported that Ms. Perryman’s cognitive function

and memory are normal on examination. He related that the

difficulties Ms. Perryman alleges could be the result of “insufficiency

of thinking and concentration when she is tired.”

It also appears that Ms. Perryman had a source of great stress prior

to stopping work. The July 1994 records of Dr. Hansen mention

extreme stress times 3 years with regard to her divorce and the

same complaints (including memory loss, loss of concentration,

dizziness, blackouts, arthralgias, sleep problems, anxiety) that she

claims disabled her in 1997. During the course of her claim she

apparently continued to be involved with the divorce from her

husband, it appeared to be ongoing in 1998 and may reasonably

have affected her function, including concentration and overall

feeling of wellbeing. We also note that Ms. Perryman told Dr. Breen

in August of 1997 that her marriage was “very good”. This appears

to contradict her statements made to Dr. Hansen in 1994 and also

her subsequent divorce proceedings which appear to have begun in

late 1997 or early 1998.

Dr. Fiormonti [sic] in his records dated April 29, 1997 indicated that

Ms. Perryman found her work to be stressful as well.

There are a number of discrepancies in the medical records

regarding treatment. For example, Ms. Perryman’s last day worked

was February 28, 1997 per her claim form, however, there are no

treatment records from January 1997 to April 1997 when Ms.

Perryman filed her claim. We also note that Ms. Perryman stated to

Dr. Breen that she was totally bedridden for 110 days when first

affected by CFS, however we find no records that support this.

Our determination of disability is not based upon the diagnosis of a

condition. In other words, whether Ms. Perryman is diagnosed with

chronic fatigue, depression or some other condition, the degree of

disability is based on restrictions and limitations from a mental and/or

physical standpoint.

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As a result of the FCE, it appeared reasonable that Ms. Perryman,

with a short period of work hardening to increase stamina caused by

lack of use, could perform the duties of a sedentary occupation for

an 8 hour workday. Therefore, benefits were paid to May 31, 1999.

We completed a wage review for executive/management type

positions which would allow Ms. Perryman to use her insurance,

sales and management experience and to travel minimally.

Included in these findings were positions such as VP National

Accounts, VP Marketing, VP Market Management in a home office

type environment. Base Salary range would be $90,000-$150,000

with bonus potential of 20-25% of salary. Additional opportunities

gathered from "Compensation in the Financial Services Industry,

1999", PricewaterhouseCoopers, Global HR Solutions Survey Unit,

Westport, Conn. Include: Top marketing and Sales - Median Salary

$183,500 plus median bonus, $65,350; Top Administration - Median

Salary $156,917 plus median bonus $64,574; Top Claims - Median

salary $150,000 plus median bonus $50,500.

You included with your appeal testimonials from relatives, friends

and associates of Ms. Perryman. Of note, based upon this

information which includes reports by these persons of Ms.

Perryman’s complaints of fatigue, it is clear that Ms. Perryman

continues to drive despite her self report of concentration and

memory problems which would place her and others on the road at

risk. We have observed her activities out and about in public,

including driving with 95 year old mother in the car with her. It also

appears that Ms. Perryman is able to care not only for herself but

also for her essentially blind mother, dressing, feeding her etc. She

is also able to travel to visit friends and family out of state.

While there may not be a financial incentive for Ms. Perryman to

return to an occupation, since she receives approximately $5,000.00

per month while on claim and has moved to Texas to live with her

mother during the course of her claim, it is Ms. Perryman’s ability to

work that determines whether or not she continues to receive

benefits.

Based upon the information in Ms. Perryman’s file, we believe it is

reasonable to conclude that she has at least sedentary work capacity

of an 8 hour day and there are occupations for which she is wellqualified that would provide her with the 80% indexed income as

outlined by her policy.

Therefore, we are upholding our prior decision to close her claim. ...

(Emphasis in original).

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 The Court notes that it has intentionally not discussed every argument

raised by the parties and that those arguments not discussed are considered by

the Court to be unpersuasive, cumulative, not relevant, or otherwise not

necessary to the resolution of this action.

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Discussion

In light of the parties’ stipulation that the Court's review is de novo, the

Court’s function is to “evaluate whether the plan administrator correctly or

incorrectly denied benefits[.]” Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955,

963 (9th Cir. 2006). Under this standard, Provident's evaluation of the evidence is

not accorded any deference or presumption of correctness. Hoover v. Provident

Life and Accident Ins. Co., 290 F.3d 801, 809 (6th Cir. 2002); accord, Locher v.

UNUM Life Ins. Co. of America, 389 F.3d 288, 296 (2nd Cir. 2004). 

The operative issue before the Court is whether Perryman has met her

burden of establishing by a preponderance of the evidence that she is disabled

within the meaning of the insurance policy’s “any occupation” disability provision

during the operative time period. While the parties have raised various areas of

dispute, the Court concludes that it need only discuss several main issues in

order to determine Perryman’s eligibility for benefits: whether Perryman retained

the ability to work notwithstanding her impairments; whether Perryman can meet

the earnings and vocational requirements of the policy; and whether the mental

limitations provision of the policy bars Perryman's claim.8

A. Perryman’s Ability to Work

(1) Medical evidence of CFS

Although Provident would have this Court make the factual finding that

Perryman does not have CFS, the Court declines to make such a finding based

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on the record before it. Given that Drs. Fioramonti, Hansen, and Shinkawa,

Perryman’s treating physicians, diagnosed Perryman has having CFS based on

her subjective history and their physical examinations of her, that Dr. Harris, the

rheumatologist who performed an IME on Perryman at Provident’s request,

concluded that she had features of CFS, and that Dr. Curtis, Provident’s in-house

medical consultant, conceded that Perryman meets the vague criteria for CFS,

the Court assumes for purposes of this opinion that Perryman is afflicted with

CFS.

But since a mere diagnosis of a condition such as CFS is not determinative

of disability for purposes of ERISA disability benefits, Jordan v. Northrop

Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 880 (9th Cir. 2004) (“That a

person has a true medical diagnosis does not by itself establish disability[,]”) the

initial issue that the Court must resolve is whether Provident correctly denied

long-term disability benefits to Perryman in part because it concluded that she

has the capacity to perform at least sedentary work for an eight-hour day even

with her impairments. The Court concludes that the record, viewed as a whole,

does not support Provident’s contention; rather, the evidence supports

Perryman’s contention that her impairments render her incapable of performing 

even sedentary work on a full-time, consistent basis.

(2) Perryman’s subjective complaints as evidence of disability

Perryman’s testimony that she is so disabled by her impairments that she

is incapable of working at any job on a sustained basis constitutes evidence that

the Court must consider. The Court is not, however, required to blindly accept

Perryman’s subjective reports of disabling fatigue and related symptoms. 

Because the Court concludes that it is entirely appropriate to require that

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9 

 To the extent that it is an issue, the Court concludes that Perryman

cannot be denied benefits merely based on any failure on her part to produce

objective medical evidence of the etiology of her CFS because Provident’s policy

has no such requirement. See Canseco v. Construction Laborers Pension Trust

of Southern California, 93 F.3d 600, 608 (9th Cir.1996) (Court noted that the

principle that an ERISA plan administrator may not impose a condition for

eligibility not imposed by the plan language has been extended to disability

benefits.), cert. denied, 520 U.S. 1118 (1997); Maronde v. Sumco USA Group

Long-Term Disability Plan, 322 F.Supp.2d 1132, 1139 (D.Or.2004) ("Unless a

plan contains specific requirements for objective medical evidence, a plan

administrator cannot deny a claim for CFS simply because the plaintiff presents

no such evidence.") While the policy provides that Provident can require

evidence of disability “satisfactory” to it, that is insufficient to require that

Perryman submit objective medical evidence establishing the etiology of her CFS.

See Rochow v. Life Ins. Co. of North America, 482 F.3d 860, 865-66 (6th

Cir.2007) (Court noted that a policy that required “satisfactory proof” of disability

did not even require medical evidence of disability.); see also, House v. Paul

Revere Life Ins. Co., 241 F.3d 1045, 1048 (8th Cir. 2001) (Court, in concluding

that the evidence did not support the denial of disability benefits, noted that the

insurer could not reject the claimant's evidence of disability as subjective and

insist upon objective medical evidence because nothing in the terms of the plan,

which merely reserved the insurer's right to demand that a claim be supported by

a medical examination or written proof, supported its demand for objective

medical evidence.); Creel v. Wachovia Corp., 2009 WL 179584, at *8 (11th Cir.

Jan. 27, 2009) (Court noted that the plan administrator’s decision to deny a

disability claim based on a lack of objective medical evidence was both “wrong

and unreasonable” because the plan, while noting various types of evidence that

the administrator could require a claimant to produce, including a catch-all

category of “other forms of objective medical evidence,” did not “mandate that

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Perryman meet her burden of establishing that she is disabled by providing

sufficient objective evidence of her functional limitations or restrictions that render

her disabled from working, Perryman’s subjective evidence is persuasive only to

the extent it is corroborated by other evidence of medically documented

impairments showing that she has functional limitations or restrictions that render

her disabled from working.9 See e.g., Williams v. Aetna Life Ins. Co., 509 F.3d

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claimants produce any specific kind of evidence to establish a successful

disability claim.”) Cf. Merrick v. Paul Revere Life Ins. Co., 500 F.3d 1007, 1013

(9th Cir. 2007) (In a CFS disability case in which Provident was a defendant, the

court affirmed in part a decision for the plaintiff, noting that the jury “could have

found that the insurers misrepresented the terms of the policy by requiring [the

plaintiff] to present ‘objective medical evidence’ of his disability.”) 

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317, 322-23 (7th Cir.2007) (Court noted in a CFS disability case that a distinction

exists between the amount of fatigue an individual experiences, which is entirely

subjective, “and how much an individual’s degree of ... fatigue limits his functional

capacities, which can be objectively measured. Other circuits have drawn this

same distinction.”); Linich v. Broadspire Services, Inc., 2009 WL 775471, at *14

(D.Ariz. March 23, 2009) (“There is a world of difference between requiring Linich

to prove the accuracy of her CFS or Fibromyalgia diagnosis with something like a

simple blood test, which does not exist, and requiring Linich to submit additional

evidence, objective or otherwise, in order to verify the severity of her symptoms. 

The latter would be [a proper] request, while the former would not.”)

(3) Treating physicians’ opinions as corroborating evidence of disability

There is no dispute that the opinions of Perryman’s treating physicians, if

taken at face value, fully support Perryman’s disability claim. Provident, relying

largely on the opinion of Dr. Curtis, its in-house medical consultant, argues that

the opinions of Perryman’s treating physicians do not constitute credible evidence

supporting Perryman’s alleged CFS-based disabling restrictions and limitations

because their opinions are in effect memorializations of her self-reported

complaints rather than opinions formed from the results of objective clinical

evidence stemming from standard diagnostic tests. While the often conclusory

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nature of the medical reports in the record is of concern to the Court, the Court is

unpersuaded by Provident’s contention it should discount virtually all of the

medical evidence provided by Perryman’s treating physicians.

First, while a finding that Perryman is disabled from working is clearly not

mandated merely because her treating physicians have so opined since the Court

is not required under ERISA to accord special deference to the opinions of her

treating physicians, Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834,

123 S.Ct. 1965, 1972 (2003), the Court may nevertheless give significant weight

to the opinions of Perryman’s treating physicians to the extent that they merit it in

light of such factors as the length and nature of the doctor-patient relationship,

the level of the doctor’s expertise, and the compatibility of the doctor’s opinion

with the other evidence. Jebian v. Hewlett-Packard Co. Employee Benefits

Organization Income Protection Plan, 349 F.3d 1098, 1109 n.8 (9th Cir. 2003)

(The court noted post-Nord that “[o]n 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 greater opportunity to know and observe the

patient than a physician retained by the plan administrator.”) (internal quotation

marks omitted), cert. denied, 545 U.S. 1139 (2005); accord, Paese v. Hartford

Life & Accident Ins. Co., 449 F.3d 435, 449 (2nd Cir.2006) (“[W]hile Black &

Decker holds that no special deference [to the opinions of the claimant’s treating

physicians] is required, this does not mean that a district court, engaging in a de

novo review, cannot evaluate and give appropriate weight to a treating

physician’s conclusions, if it finds these opinions reliable and probative.”) In

weighing the evidence of non-disability rendered by Dr. Curtis, Provident’s inCase 2:01-cv-00927-PGR Document 113 Filed 02/18/10 Page 42 of 66
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10

 The Court notes that it has placed no reliance on the opinions of Dr.

Christine Madsen, one of Perryman’s treating physicians who diagnosed her as

having disabling CFS, because none of her treatment or office notes are part of

the record.

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house medical consultant, the Court has taken into account the fact that Dr.

Curtis’ opinion was based only on a review of Provident’s claim file on Perryman

whereas Perryman’s treating physicians collectively saw her literally dozens of

times over the course of several years and all concluded that she is disabled from

working. See Boyles v. Unum Life Ins. Co. of America, 2006 WL 3405011, *6

(C.D.Cal. November 20, 2006) (Court stated in an ERISA de novo review case

that “[t]he Court gives greater weight to the conclusions of plaintiff’s treating

physicians, who repeatedly saw and examined plaintiff, than the conclusions of

Unum’s nurses and doctors, who never examine plaintiff personally.”)

Second, the Court cannot discount the opinions of Perryman’s treating

physicians because they considered Perryman’s subjective complaints. They

necessarily had to do so in reaching their conclusions regarding the nature and

extent of her impairments because it is both medically and legally accepted that

CFS is largely a self-reported illness that cannot be diagnosed through any

objective medical test. See Reddick v. Chater, 157 F.3d 715, 726 (9th Cir.1998)

(Court noted that the presence of the persistent or relapsing fatigue underlying

CFS “is necessarily self-reported.”); Friedrich v. Intel Corp., 181 F.3d 1105, 1112

(9th Cir. 1999) (“CFS does not have a generally accepted ‘dipstick’ test.”)

Third, while Provident is correct that the reliability of the opinions of 

treating physicians are suspect to the extent that they lack underlying factual

support10, see Magallanes v. Bowen, 881 F.2d 747, 751 (9th Cir.1989) (Court

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11

 For example, clinical testing is referenced in Dr. Fioramonti’s records

at AR 48, 479, 482, 487, and 488, in Dr. Hansen’s records at AR 21, 26, 159-60,

163, 165, 166-68, 171-72, and 193, in Dr. Chune’s records at AR 314, 326, and

329-30, in Dr. Harris’ records at AR 87, in Dr. Craig’s records at AR 490, and in

Dr. Shinkawa’s records at AR 311-12, 336, and 370.

 Also, an article in the record on CFS from the American Association for

Chronic Fatigue Syndrome that was given to Dr. Curtis, Provident's in-house

medical consultant, by Provident's claims department when he was asked to do a

file review on Perryman's claim, supports the view that certain of the tests that

Provident now argues were not performed by Perryman's treating physicians,

including SPECT scans, are not very valuable in diagnosing CFS. (AR at 397).

12

 For example, Dr. Fiormonti consistently noted Perryman’s symptoms of

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noted that a treating physician’s opinion need not be accepted if it is brief and

conclusory in form with little in the way of supporting clinical findings), Provident’s

argument that there is no objective evidentiary support for the opinions of

Perryman’s treating physicians based on appropriate clinical testing goes too far. 

The record is in fact replete with evidence of physical examinations and various

clinical testing done on Perryman by her treating and examining physicians.11 

The objective testing by treating physicians, however, was limited to physical

impairments and not mental impairments. As Provident correctly notes,

neuropsychological testing for cognitive deficits and memory loss was not done

by anyone other than Dr. Breen, an examining psychiatrist, who found no clinical

basis for Perryman’s allegations of confusion and short-term memory loss. But

the Court is unpersuaded that the lack of objective mental testing requires it to

totally discount the observations of Perryman’s treating physicians who noted the

existence of various neuropsychological problems during their treatment of her.12

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short-term memory loss and confusion, and Dr. Hansen’s office notes refer

several times to memory problems, confusion, and anxiety. Furthermore, Dr.

Wilkinson, an examining neurologist, reported that Perryman’s memory and

cognitive functioning-related problems were related to her fatigue, not organicbased, and Perryman’s memory and concentration-related problems were

reported by people who worked with her, such as her supervisor, her

administrative assistant, and her accountant.

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Fourth, while the medical evidence is sparse in the sense that the notes of

Perryman’s treating physicians generally do not explain how the results of their

clinical testing support their conclusions that Perryman is unable to work, the

subjective judgments of Perryman’s treating physicians formed from their overall

experiences with her must be considered in evaluating their opinions of the extent

and effect of her impairments. Embrey v. Bowen, 849 F.2d 418, 422 (9th Cir.1988)

(“The subjective judgments of treating physicians are important, and properly play

a role in their medical evaluations.”); Lester v. Chater, 81 F.3d 821, 832-33 (9th

Cir.1995) (Court noted that the determination of disability requires giving “weight

not only to the treating physician’s clinical findings and interpretations of test

results, but also to his subjective judgments.”) The treating physicians’ subjective

judgments are especially important in this case given the subjective nature of

CFS, the fact that its symptoms are sporadical inasmuch as they fluctuate in

frequency and severity, and the fact that it can exist even though physical

examinations may be within normal limits. Cf. Reddick v. Chater, 157 F.3d at 728.

Furthermore, the consistent diagnosis of CFS by Perryman’s physicians

and consistent observations of the manifestations of her impairments by those

physicians can be viewed as objective medical evidence of her condition. See

Lee v. Bellsouth Telecommunications, Inc., 318 Fed.Appx. 829, 837-38 (11th

Cir.2009) (In ordering the payment of ERISA disability benefits to a claimant

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suffering from chronic pain syndrome notwithstanding the insurer’s defense that

the claimant had not submitted the required objective medical evidence of her

disability, the court noted that “the consistent diagnosis of chronic pain syndrome

by Lee’s physicians along with the consistent observations of physical

manifestations of her condition do in fact constitute objective medical evidence. ...

Indeed, the only evidence of a qualifying disability may sometimes be the sort of

evidence ... characterize[d] as ‘subjective,’ such as physical examinations and

medical reports by physicians, as well as the patient’s own reports of his

symptoms.”)

(4) Other medically-related evidence regarding Perryman’s ability to work

Other evidence in the record supports the opinions of Perryman’s treating

physicians that she is incapable of working full time on a sustained basis. For

example, Dr. Barton, a Provident medical advisor, noted after a file review on

August 4, 1997 that no work was feasible for Perryman at that time; Dr. Harris,

who performed an IME on Perryman on October 17, 1997 at Provident’s request,

confirmed that Perryman was by then not capable of more than part-time

sedentary clerical work; and Provident employee Joseph Mauvais stated in

February, 1998 after conducting a filed investigation of Perryman that she was

restricted at that time “from returning to work in any capacity.” 

In addition, the Social Security Administration determined in August, 1998,

which was prior to the start of the “any occupation” disability requirement in

Provident’s policy, that Perryman’s CFS and depression completely disabled her

from engaging in any substantial gainful activity in the national economy. While

that determination in no way mandates a finding that Perryman is disabled under

the “any occupation” provision, Pari-Fasano v. ITT Hartford Life and Accident Ins.

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13 

 The Court notes that the FCE is important as it played a prominent role

in Provident's decision to terminate Perryman’s benefits. For example, Dr. Curtis,

Provident's in-house physician, repeatedly referred to the FCE as indicating that

Perryman is capable of sedentary work, that her complaints of incapacitating

fatigue seemed to be exaggerated in light of the FCE findings, and that the FCE

findings give the impression that Perryman is capable of doing considerably more

that her self-reports might indicate; Pam Perdue's TSA reports were based on

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Co., 230 F.3d 415, 420 (1st Cir. 2000), it nevertheless constitutes evidence in

Perryman’s favor which the Court has considered in conjunction with all of the

other evidence. Calvert v. Firstar Finance, Inc., 409 F.3d 286, 294 (6th Cir.2005)

(Court noted in an ERISA disability case that “the SSA determination [of total

disability], though certainly not binding, is far from meaningless.”) The SSA

determination is clearly relevant in this case given that the standard used by the

SSA for determining that Perryman is disabled is more strict than that required by

the insurance plan at issue. See Montour v. Hartford Life & Accident Ins. Co., 588

F.3d 623, 635-36 (9th Cir.2009) (“Unlike the SSA, Hartford was not bound by the

treating physician rule, which accords ‘special weight’ to the opinions of a

claimant’s treating physician. ... However, this distinction alone does not provide

a basis for disregarding the SSA’s determination altogether, because in some

cases, such as this one, the SSA deploys a more stringent standard for

determining disability than does the governing ERISA plan.”)

(5) The FCE

Provident argues that Perryman is not disabled from working under the

“any occupation” provision notwithstanding her complaints of CFS-related

impairments because the results of the FCE performed on Perryman in April,

1999 establish that she can perform sedentary work.13 While the FCE report

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Perryman having the capacity to perform a sedentary job, which she based on

the FCE finding; and Provident's final denial letter stated that Perryman could

perform the duties of a sedentary occupation for an eight hour workday based on

the results of the FCE.

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constitutes relevant objective evidence of Perryman’s functional capacity, the

Court is not persuaded that the FCE sufficiently demonstrates that Perryman can

perform sedentary work on a consistent, full time occupational basis.

First, the value of the FCE examiner’s conclusion regarding Perryman’s

ability to perform sedentary work is diminished to some degree because the

Court cannot determine from the record how long Perryman was actually tested -

while the FCE report states that the testing took place over the “course” of four

hours, Perryman states in an affidavit that she did less than one hour of exercises

during that four-hour period due to her need to rest. Although the FCE report

states that Perryman’s need for rest breaks was “taken into consideration when

establishing work level for consistency,” it does not explain how the results of the

testing translate into the ability to work at a sedentary level on a sustained basis. 

See e.g., Stup v. UNUM Life Ins. Co. of America, 390 F.3d 301, 309 (4th Cir.

2004) (Court concluded in a fibromyalgia-based disability case that the FCE

results did not provide substantial evidence of an ability to do sedentary work

because "the FCE lasted only two and a half hours, so the FCE test results do

not necessarily indicate Stup's ability to perform sedentary work for an eight (or

even four) hour workday, five days a week. Even if the results of the FCE had

shown conclusively that Stup could perform sedentary tasks for the duration of

the test, ...those results provide no evidence as to her abilities for a longer

period.")

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14 

 The FCE examiner’s conclusion regarding the total amount of time that

Perryman is able to sit during an eight-hour day is consistent with the opinions of

Dr. Fioramonti, who twice opined that she could only sit for a total of four hours a

day, and Dr. Harris, who also opined that she could only sit for four hours a day. 

Dr. Hansen opined that she could only sit for three hours a day. No medical

professional who completed a physical capacities report opined that Perryman

could sit for a total of more than four hours during an eight-hour day.

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Second, the FCE examiner’s conclusion that Perryman can function in the

Department of Labor’s sedentary work classification is not supported by the

results of the FCE given that the FCE examiner concluded in part that Perryman

could only sit for a total of four hours during an entire workday.14 Since sedentary

work, as defined by the DOL’s Dictionary of Occupational Titles, “involves sitting

most of the time,” see Brigham v. Sun Life of Canada, 317 F.3d 72, 78 (1st

Cir.2003) (setting forth the definition of sedentary work in the Dictionary of

Occupational Titles), courts have concluded that a four-hour sitting tolerance is

insufficient to render one capable of performing sedentary work. See Connors v.

Connecticut General Life Ins. Co., 272 F.3d 127, 136 n.5 (2nd Cir. 2001) (Court, in

vacating a judgment denying ERISA disability benefits under an “any occupation”

policy, noted that the “ability to sit for a total of four hours does not generally

satisfy the standard for sedentary work.”); accord, Brooking v. Hartford Life &

Accident Ins. Co., 167 Fed.Appx. 544, 548-49 (6th Cir.2006) (Court, in concluding

in an ERISA disability case that the plaintiff was entitled to long-term disability

benefits, determined that the plaintiff’s inability to sit for more than four hours

during an eight-hour day rendered her incapable of performing sedentary work.);

Alfano v. Cigna Life Ins. Co. of New York, 2009 WL 222351, at *18 (S.D.N.Y. Jan.

30, 2009) (Court noted in an ERISA disability case that a sitting tolerance of “6

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15 

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concluded that she could stand, walk, drive and sit for only 1⁄2 hour at a time,

which is more limited in duration than her treating physicians, Dr. Fiormonti and

Dr. Hansen, and the IME examiner, Dr. Harris, had previously found.

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hours per day [is] generally recognized as the minimum tolerance required for

sedentary work” under the DOL’s definition.)

Third, the FCE results do not contradict in any significant way the

contention advanced by Perryman and her treating physicians that physical

exertion causes her to be very fatigued. For example, the FCE report states that

Perryman “was noted to be laboring by the end of the testing to complete

activities," that "[s]he was unable to complete frequent lift tests in time frame to

determine a frequent level[,]" and that her positional tolerance tests (sitting,

walking, standing, bending, etc.) lasted 20 minutes prior to her needing a rest

break.15 The FCE report also does not contradict Perryman's statements in her

affidavit that she did less than one hour of exercises during that four-hour period,

and that she had to have a 45 minute nap after she completed 13 minutes on the

treadmill before continuing with the FCE, and Provident has not controverted

Perryman’s statement that she was so exhausted by the end of the FCE testing

that she had to spend the next four days in bed. 

Fourth, the persuasiveness of the opinions of Provident's consultants who

relied on the FCE to determine that Perryman can do sedentary work, i.e. Dr.

Curtis on the medical side and Pam Perdue on the vocational side, are

diminished by the fact that both were provided with inaccurate material

information about the FCE results. For example, the cover letter that Provident's

claims department sent to Dr. Curtis requesting that he perform a file review

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16 

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Perryman could sit for a total of 4 hours a day but someone crossed out the “4"

and handwrote “6" in its place. Provident has not provided an explanation for the

change.

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incorrectly stated that the FCE found that Perryman had the ability to sit for six

hours during an entire workday (AR at 544 and 546), and Pam Perdue's first

vocational report also stated that the FCE found that Perryman could sit for six

hours during an entire workday.16 (AR at 422).

(6) Other evidence related to Perryman’s ability to work

(a) Surveillance evidence

Provident argues that the videotaped surveillance evidence of Perryman

taken in July, 1998 constitutes compelling support for a denial of benefits

because it revealed that Perryman was engaging in daily activities inconsistent

with her self-reported complaints of disabling fatigue. The Court does not view

the limited surveillance evidence as constituting significant evidence of nondisability inasmuch as Provident has not sufficiently identified the allegedly

suspect activities it observed on the surveillance videotape or explained how

those activities contradict either Perryman’s own reported limitations or those

noted by her treating physicians, and the Court is not aware of anything in the

videotape, or in the investigator’s written report, that is significantly inconsistent

with the other evidence of record regarding Perryman’s functional capacity. For

example, while the surveillance videotape shows Perryman driving and picking up

and moving some potted plants, neither she nor any of her physicians have

stated that she could not drive for short distances or bend or lift at all. In any

case, Perryman’s ability to perform limited and sporadic activities of daily living

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are consistent with CFS and do not establish that Perryman can perform

sedentary work on a sustained basis. See Blau v. Astrue, 263 Fed.Appx. 635,

637 (9th Cir.2008) (Court noted that a claimant’s ability to perform such activities

as driving, paying bills, doing taxes, shopping, doing laundry, and successfully

completing real estate school were “generally consistent with the sporadic nature

of CFS” as none of the activities consumed a substantial part of her day or

required extended periods of concentration.); Leick v. Hartford Life & Accident

Ins. Co., 2008 WL 1882850, at *7-8 (E.D.Cal. April 24, 2008) (Court noted in an

ERISA disability case that surveillance evidence showing the plaintiff’s ability to

undertake limited errands for a few hours during one of her “good days,” such as

driving to the store, visiting a friend, carrying a small bag, and sitting through an

interview while taking numerous breaks, did not contradict evidence of total

disability because it was consistent with the sporadic nature of CFS and because

the ability to do sedentary work for short periods of time does not establish the

ability to perform full-time consistent work.); Thivierge v. Hartford Life & Accident

Ins. Co., 2006 WL 823751, at *11 (N.D.Cal. March 28, 2006) (Court noted in an

ERISA disability case based on CFS that evidence showing the plaintiff walking,

driving, and doing errands for a couple of hours a day during five of the six days

that she was under surveillance did not mean that the plaintiff was able to work

an eight-hour a day job.) 

(b) Perryman’s previous ability to work

In arguing that Perryman is not disabled under the “any occupation”

provision of the policy, Provident emphasizes that Perryman worked between

1994 and 1997 and earned hundreds of thousands of dollars despite her

contention that she has been suffering from CFS since June, 1994. While the

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basis for this argument is factually true, and thus of concern to the Court, it is not

so persuasive as to make Perryman’s subjective complaints or the opinions of her

treating physicians significantly unreliable.

First, Provident’s argument overlooks significant evidence in the record

about the serious problems Perryman had working in the post-June 1994 time

frame. For example, Dr. Fioramonti's medical notes for February 23, 1995 refer

to Perryman's CFS as "waxing and waning," that her work schedule of 10-12

hours a day was "clearly beyond her capability at this point in time and is going to

be detrimental to her physical and emotional health[,]" and his notes for May 25,

1995 refer to her CFS as being improved due to "modification of lifestyle" that

resulted from her being able to delegate some of her responsibilities to managers

and cut her work down to 4-6 hours per day. 

Evidence from Perryman's co-workers also shows that she was struggling

at work as a result of her illness. For example, Michael Tousley, Perryman’s

supervisor, stated that Perryman stayed around longer than she should have

because he had to continuously cover for her during her last four or five months

of work as she could not remember anything that was going on, and Lucinda

Jensen, Perryman’s administrative assistant, stated that Perryman attempted to

work from home as she became sicker but that there were days when she was

too fatigued or sick to get out of bed, and that she was having memory problems

during that time.

 Second, Provident’s argument regarding the amount of money Perryman

was earning after first being diagnosed with CFS overlooks the fact that

Perryman’s commissions-only income was based in part on a percentage of the

sales made by the sales staff she supervised, not just her own sales efforts, and

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it was also based in part on deferred compensation.

Third, the fact that Perryman continued to work after being diagnosed with

CFS is not determinative since numerous courts have recognized that a disability

claimant can still be found to be disabled even if he or she worked for some

period after the onset of disability. See e.g., Hawkins v. First Union Corp. LongTerm Disability Plan, 326 F.3d 914, 918 (7th Cir.2003) (Court noted in an ERISA

fibromyalgia case that there is no “logical incompatibility between working full

time and being disabled from working full time” because “[a] desperate person

might force himself to work despite an illness that everyone agreed was totally

disabling. Yet even a desperate person might not be able to maintain the

necessary level of effort indefinitely. ... A disabled person should not be punished

for heroic efforts to work by being held to have forfeited his entitlement to

disability benefits should he stop working.”) (citations omitted); Rochow v. Life

Ins. Co. of North America, 482 F.3d 860, 865 (6th Cir.2007) (Court concluded that

the fact that a disability claimant remained on the payroll subsequent to the

alleged disability onset date is not determinative as to whether he was disabled

during that time.); Wilson v. John C. Lincoln Health Network Group Disability

Income Plan, 2006 WL 798703, at *8 (D.Ariz. March 28, 2006) (In determining

that the plaintiff was entitled to long-term disability benefits, court noted that it “is

not true” that one can never work while disabled.)

B. Whether Perryman Can Meet the Policy’s Vocational Requirements

Provident concluded that Perryman was not disabled under the terms of

the policy not only because it believed that she could do sedentary work for eight

hours a day, but also because it believed that there are occupations for which she

is well-qualified that would provide her with the 80% of indexed income as

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required by the policy. The Court concludes that Provident’s determination on

this issue is not supported by the record.

(1) Interpretation of “80% of Indexed Earnings” provision

Perryman argues, and the Court concurs, that she can be found to be

disabled under Provident’s policy even if it is assumed that she can perform

sedentary work because the policy’s definition of disability also includes a

vocational requirement, i.e., the policy’s requirements for “any occupation”

disability include in part the inability of the claimant to earn at least “80% of

Indexed Earnings from any occupation [the claimant is] reasonably fitted by

education, training, or experience.” See Volynskaya v. Epicentric, Inc. Health &

Welfare Plan, 2007 WL 3036110, at *10 (N.D.Cal. Oct. 16, 2007) (Court noted in

an ERISA disability case that even if the plaintiff could perform sedentary work

notwithstanding her fibromyalgia and CFS, such a finding was not equivalent to a

finding that she could perform her own occupation and earn more than 80% of

her pre-disability earnings.); Crider v. Highmark Life Ins. Co., 458 F.Supp.2d 487

(W.D.Mich. 2006) (Court found that the plaintiff was entitled to ERISA disability

benefits notwithstanding that he could do sedentary work because he was unable

to earn 80% of his indexed pre-disability earnings as required by the policy.) The

parties disagree as to whether this income-related provision is based on a

claimant’s pre-disability income. The Court agrees with Perryman that it is so

based.

In the Ninth Circuit, under the de novo standard of review, ERISA

insurance policy provisions are to be construed in accordance with the rules

normally applied to insurance policies, Lang v. Long-Term Disability Plan of

Sponsor Applied Remote Technology, Inc., 125 F.3d 794, 799 (9th Cir.1997), e.g.

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provisions must be interpreted in an "ordinary and popular sense as would a

person of average intelligence and experience," and ambiguous language is

construed against the insurer and in favor of the insured. McClure v. Life Ins. Co.

of North America, 84 F.3d 1129, 1134 (9th Cir.1996) (brackets omitted); accord,

Feibusch v. Integrated Device Technology, Inc. Employee Benefit Plan, 463 F.3d

880, 886 (9th Cir.2006); Raithaus v. UNUM Life Ins. Co. of America, 335

F.Supp.2d 1098, 1123 (D.Haw.2004). This latter doctrine of contra proferentem

requires courts to adopt the reasonable interpretation of a policy provision

advanced by the claimant. Lang, 125 F.3d at 799.

The Court interprets the “80% of Indexed Earnings” provision to mean that

Perryman is disabled under the “any occupation” provision if her impairments

restrict her from earning more than 80% of her averaged pre-disability earnings,

as adjusted for inflation, in any job for which she is reasonably fitted by education,

training, or experience. This interpretation is based on the following pertinent

policy definitions:

 "Any Occupation Income Level" is defined in relevant part as being: 

80% of Indexed Earnings from any occupation you

are reasonably fitted by education, training, or

experience.

"Indexed Earnings" is defined in relevant part as being:

[Y]our Earnings adjusted by the rate of increase in the

CPI-W. During the first year of Disability, your Indexed

Earnings are the same as your Earnings. After that, the

Indexed Earnings are determined on each anniversary of your

Date of Disability by increasing the previous year's Indexed

Earnings by the rate of increase in the CPI-W for the prior

calendar year. ...

"Earnings" is defined in relevant part as being:

[Y]our base rate of monthly pay from the Employer

Participant ... in effect just prior to the date of disability. 

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Such pay includes commissions and cash bonuses, but

excludes overtime pay or any other special pay.

If all or part of the [sic] your pay is from commissions or cash

bonuses, such compensation received from the Employer

Participant will be averaged over the lesser of the two prior

calendar years worked just prior to the date you became

Disabled, or the number of months worked just prior to the

date you became Disabled.

(Emphases added). Provident’s contention that the “any occupation” provision

means that a claimant who can earn 80% of the earnings from any occupation for

which she is reasonably qualified is not entitled to disability benefits under the

policy cannot be reconciled with the plain meaning of the policy’s defined terms. 

What changes in the policy between “own occupation” disability and “any

occupation” disability is not the definition of “80% of Indexed Earnings” - that

definition is the same for both “own occupation” and “any occupation” benefits

and is based on pre-disability earnings. What changes is the occupation to which

the amount constituting 80% of pre-disability earnings is applied - for “any

occupation” benefits that amount is applied to any job for which the claimant is

reasonably qualified.

(2) Perryman’s earnings potential

Perryman argues that the evidence of record does not support Provident’s

contention that she can meet the “80%” earnings requirement for non-disability

notwithstanding her impairments. The Court concurs. 

There is no dispute that Perryman’s average monthly commissions-based

income for the two years prior to her disability was $18,966 per month, for a total

of pre-disability annual income of $227,592, or that 80% of that amount is

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17 

 While neither party cites to any evidence in the record as to the

relevant CPI-W figures, the CPI-W figures available from the DOL's Bureau of

Labor Statistics website show that the CPI-W for the "not seasonally adjusted,

U.S. city average for all items" increased 1.5% between May, 1997 and May,

1998, and 2.1% from May, 1998 to May, 1999.

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$182,073 (prior to being adjusted for inflation).17 There is also no dispute that the

first TSA submitted to Provident by its in-house vocational consultant, Pam

Perdue, noted that jobs available to Perryman paid between $27,872 and

$34,944 per year, which is less than 15% of Perryman’s pre-disability income. It

is further undisputed that Provident's appeals consultant Darragh Ferranti used

the 80% of pre-disability earnings formulation in her December, 1999

recommendation that Provident resume paying Perryman benefits under the "any

occupation" provision; Ferranti noted in that recommendation that Perryman's

"high level of pre-disability income makes it difficult to support that she could earn

the contractual requirement with sedentary work capacity[.]" 

The only vocational information in the record that provides any support for

Provident's position regarding Perryman’s earnings potential is Perdue’s second

TSA, which noted for the first time the existence of executive marketing and

insurance jobs the median pay for which (with bonuses) was between $137,500

and $248,850. While Provident specifically relied on this vocational information in

determining that Perryman was not disabled as defined by the policy, the Court is

not persuaded that this second TSA constitutes sufficiently reliable evidence on

which to support a denial of benefits.

First, the second TSA, like the first one, is based on a mistaken belief that

the FCE validly concluded that Perryman meets the requirements for sedentary

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18 

 The Court notes that the Social Security Administration, in granting

disability benefits, concluded that Perryman did not have “transferable skills to

perform other work within her physical and mental residual functional capacity.” 

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work.

Second, there is no sufficiently reliable explanation in the record as to what

changed in the seven months between the two TSAs that caused Perdue to so

drastically change her opinion regarding Perryman’s earning capacity, i.e., from

the $28,000 to $35,000 range to the $137,000 to $249,000 range.

Third, as argued by Perryman and not controverted by Provident, the

methodology employed by Perdue to generate the second TSA is suspect. 

Rather than basing it on her analysis of Perryman’s transferable skills, Perdue

wrote it based on Provident asking her “to produce wage information for

executive/management type positions that would allow claimant to use the

insurance, sales, and management experience and travel minimally." (AR at

555). The report contains no discussion as to whether Perryman's education,

training, or experience reasonably fitted her for any of the types of jobs noted

therein.18 

Fourth, there is no sufficient evidence in the record that Perryman is in fact

reasonably qualified for any of the jobs mentioned in the second TSA that meet

the compensation-level requirement pertinent to the “any occupation” aspect of

the policy. For example, even if the employment information that an

UNUM/Provident sales recruiter provided to Perdue, i.e., "executive type

occupations such as VP National Accounts, VP Marketing, and VP Market

Management in a home office type environment" which would have a base salary

range of "$90-$150 thousand with bonus potential of 20-25%", was sufficient to

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19 

 Section V of the policy, entitled "Exclusions and Limitations," contains

a limitation for Mental and Nervous Disorders which states in relevant part:

Payment of LTD Monthly Benefits is limited to the duration shown in

Section II- Schedule of Insurance [i.e. 24 months of benefits] for

each Disability caused or contributed to, directly or indirectly, by a

Mental or Nervous Disorder. ...

Mental and Nervous Disorders mean physical, mental, emotional,

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meet the 80% of pre-disability income requirement, which the cited jobs would do

only if the highest bonuses were paid, there is no evidence that Perryman is

reasonably fitted for any of these VP positions given her limited occupational

background, i.e., someone with no college degree and with managerial

experience limited to being a district manager supervising some 20 insurance

agents. As noted by GENEX in a December, 1998 report to Provident, one of the

barriers to Perryman's return to work was that she "has limited education,

training, and a very limited employment history." Furthermore, the relevance of

other higher-paid positions referred to in the second TSA is questionable in that

they are the result of an Internet search using a Wall Street Journal source that

was based on a survey of median salaries in the financial services industry, a

different industry from that in which Perryman has had any training and

experience. 

C. Mental/Nervous Disorders Limitation

Provident briefly argues that the policy’s 24-month benefit cap for

disabilities caused by mental or nervous disorders constitutes a “stand-alone,

independent, mutually exclusive basis” on which to deny disability benefits to

Perryman.19 The gist of Provident’s contention is that Perryman is not in any

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behavioral, or stress-related disorders caused or contributed to,

directly or indirectly, by a mental or nervous condition, as classified

in the Diagnostic and Statistical Manual of the American Psychiatric

Association (DSM) in effect as of the Date of Disability.

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case entitled to any further disability benefits because there is medical evidence

in the record that she suffers from a mental disorder and she has already been

paid 24 months of benefits under the policy’s “own occupation” provision. The

Court rejects this argument as being contrary to the policy’s language and the

medical evidence.

First, the Court notes that Provident did not rely on this provision to deny

benefits to Perryman. Provident’s letter denying Perryman’s appeal does not

refer to the mental disorder limitation, and while the limitation is mentioned in the

initial claim denial letter, it was not invoked as a basis for denying the claim. This

was made clear by Gwendolen Alegre, Provident's disability claims

representative who authored the initial claim denial letter, who specifically

testified at her deposition that the mental and nervous disorder limitation was not

one of the bases Provident used for terminating Perryman's benefits. (Alegre's

depo. at 128). Furthermore, Joseph Randza, a Provident employee who advised

claims representatives on managing and evaluating disability claims, testified at

his deposition that the May, 1999 denial letter referred to the mental and nervous

disorders limitation not because a decision had been made that the limitation

applied to Perryman but rather to ensure that Provident "stated all of the

particulars of the contract" whether or not they applied specifically to Perryman.

(Randza depo. at 37-38). See 29 C.F.R. § 2650.503-1(g) (Requiring an ERISA

plan administrator to provide a written notification of a claim denial that includes

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the specific reasons for the denial and to reference the specific plan provision on

which the denial is based.); Jebian v. Hewlett-Packard Co. Employee Benefits

Organization Income Protection Plan, 349 F.3d at 1104 (Court noted that its

refusal to allow disability claimants to be "sandbagged" by a rationale that the

plan administrator adduced only after suit was commenced "parallels the general

rule that an agency's order must be upheld, if at all, on the same basis articulated

in the order by the agency itself, not a subsequent rationale articulated by

counsel.") (Internal quotation marks omitted).

Second, Provident’s argument is bereft of any discussion of the proper

interpretation of the policy’s mental/nervous disorder limitation. The Court

interprets the provision as not being applicable to mental/nervous impairments

that are secondary to a physical impairment. See Friedrich v, Intel Corp., 181

F.3d at 1112 (In a case involving a plan that excluded from coverage any

disability that "arises out of, relates to, is caused by or results from ... mental,

emotional or psychiatric illness or disorder of any type[,]” the court rejected the

insurer’s argument, which was that the plaintiff was barred from obtaining

disability benefits for his CFS because he had a psychiatric condition and not a

physical disability, on the ground that the evidence from the plaintiff's treating

physicians was that the plaintiff's psychiatric problems were secondary to his

physical problem of CFS, i.e. that CFS caused his psychiatric symptoms.); Lang

v. Long-Term Disability Plan of Sponsor Applied Remote Technology, Inc., 125

F.3d at 799 (In a case in which the plan administrator terminated disability

benefits based on its conclusion that the plaintiff’s depression and anxiety

associated with her fibromyalgia triggered the plan’s two-year benefits limitation

on disabilities that were “caused or contributed to” by a “mental disorder,” the

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court, concluding that the provision was ambiguous and construing it against the

insurer under the doctrine of contra proferentem, found that the benefits had been

improperly terminated because "the phrase 'mental disorder' did not include

'mental' conditions resulting from 'physical' disorders."); accord, Gemmel v.

Systemhouse, Inc., 2009 WL 3157263, at *17 (D.Ariz. Sept. 28, 2009) (“The

[ERISA] Plan does not specify what is to happen if a disorder is only partially

attributable to mental illness. Therefore, the Plan must be construed to mean

that, if there is a verifiable physical component to the impairment, the Plan’s 24-

month limitation [for mental health-based disabilities] does not apply and benefits

are payable.”); Lamarco v. CIGNA Corp., 2000 WL 1456949, at *7 (N.D.Cal.

Sept. 25, 2000) (Court concluded that disability benefits were improperly

terminated after 24 months based on a mental disorder limitation provision

because the record established that the plaintiff's mental impairments were a

result of her physical disorders, which included fibromyalgia.)

Third, the medical evidence does not support Provident’s argument

inasmuch as it shows that Perryman’s depression-related symptoms have been

secondary to her CFS. For example, both Dr. Fioramonti and Dr. Shinkawa

expressly so stated, and the Social Security Administration’s ALJ so found. 

Furthermore, Dr. Wilkinson concluded that Perryman's memory and cognitiverelated problems were not organic based, but were the result of her fatigue, and

Provident's in-house psychologist, Dr. Pendergrass, concluded that there was no

evidence that Perryman suffered from any identifiable psychiatric condition, as

did Dr. Breen, the psychiatrist who examined Perryman for the SSA. While Dr.

Curtis, Provident's in-house occupational health medical reviewer, suggested that

Perryman's symptoms could possibly be caused by her depressed mood, he

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expressly stated that he was not presuming to offer a mental health diagnosis.

D. Attorney’s Fees and Costs and Pre-judgment Interest

Perryman has requested that she be awarded her attorney’s fees and costs

pursuant to 29 U.S.C. § 1132(g)(1). Ordinarily, an ERISA plaintiff who prevails in

her litigation to recover wrongfully withheld benefits is entitled to attorney’s fees

unless special circumstances would render such an award unjust. Honolulu Joint

Apprenticeship and Training Committee of United Ass’n Local Union No. 675 v.

Foster, 332 F.3d 1234, 1239 (9th Cir.2003). Since Perryman is the prevailing

party on her ERISA claim and there are no special circumstances known to the

Court that make an award of fees and costs to her unjust, the Court concludes

that Perryman is entitled to such an award. The attorney’s fees to be awarded to

Perryman shall be limited to those reasonably incurred during the litigation of this

action. Dishman v. Unum Life Ins. Co. of America, 269 F.3d 974, 987 (9th

Cir.2001) (ERISA does not allow for reimbursement of attorney’s fees incurred

during administrative claim proceedings prior to suit.)

Perryman has also requested that she be awarded pre-judgment interest

on all benefits owing her pursuant to A.R.S. § 20-462. The Court may award prejudgment interest on an award of ERISA benefits at its discretion. Blankenship v.

Liberty Life Assurance Co. of Boston, 486 F.3d 620, 627 (9th Cir. 2007). Having

considered the equities of this action, the Court concludes that pre-judgment

interest is necessary to fully compensate Perryman. The Court cannot conclude,

however, that any such award should be at the Arizona statutory rate and the

Court will instead award pre-judgment interest at the rate prescribed by 28 U.S.C.

§ 1961. Id. at 628 (Generally, the interest rate prescribed for post-judgment

interest by 28 U.S.C. § 1961 is the proper rate for pre-judgment interest unless

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 If the parties cannot agree as to the amount of attorney’s fees and nontaxable expenses due Perryman, the matter will be resolved post-judgment

pursuant to the procedure set forth in LRCiv 54.2.

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the Court finds by substantial evidence that the equities of this action require a

different rate.); accord, Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d

1154, 1164 (9th Cir.2001). 

Summary

The Court concludes that the evidence of record establishes that Provident

erred in denying long-term disability benefits to Perryman under the “any

occupation” provision of Provident’s policy and that Perryman is entitled to the

payment of such benefits from the commencement of the “any occupation”

requirement through the date of her 65th birthday.

Because the Court is not in a position at this time to determine the exact

amount of those benefits, the Court will require the parties to confer regarding the

wording of a proposed judgment. In addition to discussing the amount of

benefits, the parties shall confer regarding the amount of the reasonable

attorney’s fees and non-taxable expenses to be awarded to Perryman.20 The

parties shall also confer regarding the appropriate pre-judgment interest rate and

start date. While the Court expects the parties to make every reasonable effort to

resolve all remaining issues through the joint submission of a proposed judgment,

if the parties, after a good faith effort to do so, cannot agree on the wording of a

proposed judgment, the parties may separately submit a proposed form of

judgment, accompanied by a memorandum of points and authorities that sets

forth the party’s position regarding the amount of benefits and the pre-judgment

interest issue. Therefore,

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IT IS ORDERED that plaintiff Nancy Perryman is awarded long-term

disability insurance benefits pursuant to the “any occupation” provisions of

defendant Provident Life and Accident Insurance Company’s LTD Policy #120057

from June 1, 1999 through the date of her 65th birthday.

IT IS FURTHER ORDERED that plaintiff Nancy Perryman is awarded her

reasonable attorney’s fees and non-taxable expenses pursuant to 29 U.S.C. 

§ 1132(g)(1).

IT IS FURTHER ORDERED that plaintiff Nancy Perryman is awarded prejudgment interest at the appropriate rate prescribed by 28 U.S.C. § 1961.

IT IS FURTHER ORDERED that the parties shall submit a proposed form 

of judgment and any accompanying memoranda no later than March 31, 2010.

DATED this 18th day of February, 2010.

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