Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-02471/USCOURTS-ca8-05-02471-0/pdf.json

Parties Involved:
Armstrong World Industries
Appellee
Clara Parkman
Appellant
Prudential Insurance Company of America
Appellee

Document Text:

1

The Honorable William R. Wilson, Jr., United States District Judge for the

Eastern District of Arkansas.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-2471

___________

Clara Parkman, *

*

Plaintiff-Appellant, *

* Appeal from the United States

v. * District Court for the

* Eastern District of Arkansas.

Prudential Insurance Company of *

America; Armstrong World Industries, * [PUBLISHED]

Inc., *

*

Defendants-Appellees. *

___________

Submitted: January 13, 2006

Filed: March 1, 2006

___________

Before WOLLMAN, LAY, and ARNOLD, Circuit Judges.

___________

PER CURIAM.

Clara Parkman appeals the district court’s1

 decision granting summary

judgment to Prudential Insurance Company of America (“Prudential”) and Armstrong

World Industries (“Armstrong”). Parkman argues, inter alia, that the district court

erred when it concluded Prudential properly denied her benefits under the Employee

Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132. We affirm.

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Parkman never returned to work after being admitted to the hospital on

December 23, 2002.

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I.

Parkman worked for Armstrong in a medium duty job. During 2002, Parkman

saw Kenneth Purvis, M.D., a number of times. Dr. Purvis diagnosed Parkman with

“a trigger thumb” and tennis elbow. On December 23, 2002, Parkman was admitted

to the hospital by Dr. Purvis because she was having acute lumbar spasms. Dr. Purvis

noted that Parkman should be able to return to work by mid-January and commented

that he doubted she would need further treatment other than physical therapy. In

January 2003, Parkman saw Dr. Purvis again, complaining of leg pain. The doctor

recommended physical therapy, and, on January 17, 2003, released Parkman to light

duty work.2

 When Parkman returned to see Dr. Purvis in February, 2003, he noted in

her chart that she had not returned to work because her employer had not been able

to accommodate her light duty restriction. In March 2003, Dr. Purvis ordered an MRI

and carotid doppler because Parkman had a family history of strokes. These tests

revealed “no evidence of acute ischemia.” Dr. Purvis noted that Parkman showed

signs of depression. When she returned to see him in March 2003, Dr. Purvis

observed that she “is beginning to really further give up” and recommended exercise.

He also referred Parkman to a rheumatologist and a neurologist.

Parkman saw Tamer Alsebai, M.D., a rheumatologist, on March 11, 2003 and

complained of back pain, noting that the pain caused her to have trouble riding her

horse. Dr. Alsebai noted Parkman’s condition was “probably” consistent with

fibromyalgia and carpal tunnel syndrome. He also observed that she had mechanical

lower back pain, fatigue, poor sleep, depressed mood, and multiple tender points. Dr.

Alsebai stated Parkman had a “fair range of motion in all joints” and “good grip

strength.” Parkman then saw a neurologist on March 24, 2003, complaining of two

dizzy spells and memory loss. The neurologist concluded Parkman’s overall health

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was unremarkable, noting she had small vessel disease. He ordered an

echocardiogram, which showed Parkman’s heart function to be normal.

In April, 2003, Parkman returned to Dr. Purvis because she was still having

back spasms. Parkman told Dr. Purvis she could not return to work and that she was

taking a muscle relaxant. Dr. Purvis stated he believed she was “using this as an

opportunity to state she cannot return back into the work force” and observed that

Parkman “certainly could hopefully be retrained to do some sort of other labor.” He

told Parkman that she would not be considered disabled for any occupation. Parkman

underwent a functional capacity evaluation (“FCE”), which indicated Parkman was

capable of only light duty work, as Parkman’s grip and pinch abilities were low,

limiting her “ability to use her hands for repetitive type work.” Parkman was deemed

“very consistent throughout the evaluation and passed all criteria for reliability.”

Parkman saw Hugh A. Nutt, M.D., on August 4, 2003. During August and

September of 2003, Parkman, Dr. Nutt, and Dr. Alsebai submitted information

statements to Prudential for use in evaluating her application for long-term disability

(“LTD”) benefits. Dr. Nutt completed the “Attending Physician’s Statement,” noting

that Parkman had been clinically diagnosed with fibromyalgia, back pain, and bilateral

carpal tunnel. Dr. Nutt observed Parkman has difficulty with repetitive low-level

lifting and that she should be limited to lifting twenty pounds or less, with “no

bending, no stooping, no lifting, no repetitive type work that include[s] these

activities.” Dr. Nutt added that Parkman has decreased grip and pinch strength and

stated Parkman should “never” return to work because she is “disabled.”

On October 3, 2003, a physical therapist who reviews claims for Prudential

determined that “[a]lthough [Parkman] reports she cannot work due to pain, the

medical records do not support [a] condition of such a severity that should totally

preclude [her] from performing her job duties.” Prudential notified Parkman on

October 6, 2003 that she was not entitled to benefits. Parkman appealed on January

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It appears from the record that Parkman’s counsel received at least two of these

letters, as counsel stated in a letter to the district court that “[b]y the grace of the Post

Office” he received two misaddressed letters from Prudential.

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10, 2004. She submitted two letters from Dr. Nutt in which he asserted Parkman was

“totally disabled” and “physically unable to work” due to severe fibromyalgia,

paresthesias of both hands, chronic mechanical low back pain, “GERD” and

depression. Parkman also submitted a summary of a November 2003 visit to Dr.

Alsebai in which he noted the diagnosed conditions Dr. Nutt had listed.

Prudential’s Medical Director, Dr. Fegan, reviewed Parkman’s claim in its

entirety and concluded that “there is insufficient medical evidence of impairments that

would preclude medium duty work.” Dr. Fegan wrote a ten-page report summarizing

Parkman’s medical records and reviewing her alleged symptoms and limitations. He

also commented on Parkman’s test results, observing that the results of Parkman’s

FCE were “inconsistent with any of her claimed diagnoses.” Dr. Fegan pointed out

that Parkman scored “in the bottom percentiles of performance,” a result that was

inconsistent with Parkman’s ability to drive. Dr. Fegan further noted that the disc

degeneration on Parkman’s MRI “can be found in persons without pain at work” and

that the test did not “provide evidence of impairments that would preclude medium

duty work.” Based on Dr. Fegan’s report, Prudential affirmed its initial decision

denying Parkman benefits, notifying her by letter on March 15, 2004.3

On June 25, 2004, Parkman filed suit pursuant to ERISA. In January 2005, she

amended her complaint to include a state law fraud claim. Parkman also moved for

a new scheduling order, arguing her fraud claim entitled her to a jury trial. The

district court denied Parkman’s scheduling order motion, stating Parkman’s state law

fraud claim was preempted by ERISA. The district court then granted Prudential’s

motion for summary judgment. Parkman filed a Motion to Alter or Amend the district

court’s order, arguing the court erred by not reviewing her claim de novo. On April

27, 2005, the district court issued an order stating it had reviewed the record

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The elements of common law fraud in Arkansas, see Morris v. Valley Forge

Ins. Co., 805 S.W.2d 948, 951 (Ark. 1991), do not contain a “reference to” ERISA.

See Wilson, 114 F.3d at 716-17 (concluding Missouri state common law tort of

negligent misrepresentation did not actually or implicitly refer to ERISA).

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again—this time de novo—and reached the same result. Parkman now appeals to this

court, arguing that the district court failed to perform a proper de novo review and

therefore erred in upholding Prudential’s denial of LTD benefits. Parkman also argues

the court erred in concluding ERISA preempts her state law fraud claim.

II.

We review a district court’s decision regarding ERISA preemption de novo.

Wilson v. Zoellner, 114 F.3d 713, 715 (8th Cir. 1997). ERISA supercedes “any and

all State laws insofar as they . . . relate to any employee benefit plan.” 29 U.S.C.

§ 1144(a). The Supreme Court has observed this preemption language is

“conspicuous for its breadth.” FMC Corp. v. Holliday, 498 U.S. 52, 58 (1990). The

Court has acknowledged, however, that “[s]ome state actions may affect employee

benefit plans in too tenuous, remote, or peripheral a manner to warrant a finding that

the law ‘relates to’ the plan.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 100 n.21

(1983). In determining whether a state action “relates to” an employee benefit plan

covered by ERISA, we employ a two-part test. Wilson, 114 F.3d at 716. A law

relates to a covered employee benefit plan for purposes of ERISA if it has (1) “a

connection with” or (2) “reference to such a plan.” California Div. of Labor Standards

Enforcement v. Dillingham Constr., Inc., 519 U.S. 316, 324 (1997).

In determining whether a state law has a forbidden connection to an ERISA

plan, we “‘look both to the objectives of the ERISA statute as a guide to the scope of

the state law that Congress understood would survive, as well as to the nature of the

effect of the state law on ERISA plans.’”4

 Wilson, 114 F.3d at 717 (quoting

Dillingham, 519 U.S. at 325). Parkman’s state law claim for fraud is founded on her

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assertion that Prudential mishandled her claim by directly communicating with

Parkman after she had retained an attorney and by indicating to Parkman that she did

not need an attorney. We have stated, however, that ERISA preempts “‘state common

law tort and contract actions asserting improper processing of a claim for benefits’

under an ERISA plan.” Thompson v. Gencare Health Sys., Inc., 202 F.3d 1072, 1073

(8th Cir. 2000) (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 43 (1987)); see

also Hull v. Fallon, 188 F.3d 939, 943 (8th Cir. 1999) (stating where the essence of

state claims for medical malpractice relates to the administration of plan benefits,

those claims “fall squarely within the scope” of ERISA). Here, because the essence

of Parkman’s claim relates to the administration of plan benefits, it falls within the

scope of ERISA. Accordingly, we hold the district court properly concluded that

Parkman’s state law fraud claim is preempted by ERISA.

III.

The district court initially applied a deferential standard of review in evaluating

the plan administrator’s decision denying Parkman benefits. However, after the court

granted summary judgment to Prudential, Parkman filed a Motion to Alter or Amend

the court’s order, arguing de novo review was required. The court then issued an

order stating that it had reconsidered Parkman’s claim de novo and that its conclusion

had not changed. Parkman now argues that the court erred in concluding that, under

a de novo standard of review, Prudential properly denied her benefits. 

If a plan reserves discretionary authority to the plan administrator, we apply a

deferential standard of review. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

115 (1989); McKeehan v. Cigna Life Ins. Co., 344 F.3d 789, 792 (8th Cir. 2003). A

plan gives the administrator or fiduciary discretionary authority if it contains explicit

discretion-granting language. Bounds v. Bell Atl. Enters. F.L.R.D. Plan, 32 F.3d 337,

339 (8th Cir. 1994). Armstrong’s “Summary Plan Description” contains the following

provision:

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A less deferential standard of review would apply if Parkman could

demonstrate “a palpable conflict of interest or a serious procedural irregularity

existed” that caused a “serious breach of the plan administrator’s fiduciary duty.”

Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998). In determining whether

“procedural irregularities”occurred, we consider whether the plan administrator’s

decision “was made without reflection or judgment, such that it was ‘the product of

an arbitrary decision or the plan administrator’s whim.’” Pralutsky, __F.3d at __,

2006 WL 130935, at *5 (quotation and citation omitted). Parkman argues a number

of procedural irregularities transpired, including Prudential’s failure to correctly

address a number of letters to her counsel. Parkman also asserts Prudential

mishandled her claim by directly communicating with Parkman after she had retained

an attorney and by indicating to Parkman that she did not need an attorney. However,

the record does not lead us to conclude the plan administrator committed irregularities

so severe that we have “a total lack of faith in the integrity of the decision making

process.” Id. Thus, Parkman is not entitled to have her claim reviewed de novo. We

note, however, that we agree with the district court that, even under a de novo review,

Parkman’s claim fails.

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[Armstrong] . . . has delegated to the Claims Administrator the full and

exclusive discretionary authority to interpret and construe the terms of

the Plan, to determine all benefits and to resolve all questions arising

from the claims administration, interpretation, and application of the

Plan’s provisions . . . including determinations as to whether a claimant

is eligible for benefits, the amount and timing of benefits, and any other

matter . . . about a claim raised by a claimant or identified by the Plan

Administrator.

There can be no question that this provision contains express language granting

discretionary authority to the plan administrator. Thus, a deferential standard of

review applies.5

When a plan administrator offers a reasonable explanation for its decision,

supported by substantial evidence, it should not be disturbed. Fletcher-Merrit v.

NorAm Energy Corp., 250 F.3d 1174, 1180-81 (8th Cir. 2001); McGee v. Reliance

Standard Life Ins. Co., 360 F.3d 921, 924 (8th Cir. 2004). “Substantial evidence

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means such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion.” McGee, 360 F.3d at 924 (quotation and citation omitted). A

plan administrator’s discretionary decision is not unreasonable merely because “a

different, reasonable interpretation could have been made.” Id.

Parkman argues the district court abused its discretion by requiring her to

provide objective evidence of her disability and by refusing to credit her consistent

complaints of pain. She also asserts that the district court improperly disregarded her

FCE and the opinions of her treating physicians. We have stated, however, that “[i]t

is not unreasonable for a plan administrator to deny benefits based upon a lack of

objective evidence.” Id. at 925; see also Pralutsky v. Met. Life Ins. Co., __F.3d__,

2006 WL 130935, at *4-5 (8th Cir. Jan. 19, 2006). Here, the plan administrator

referred Parkman’s claim to a physician employed by Prudential for review. The

physician, Dr. Fegan, issued a ten-page summary of Parkman’s medical history and

observed that her treating physicians disagreed regarding the extent of Parkman’s

disability. In light of this disagreement, Dr. Fegan carefully reviewed Parkman’s

medical records and the various tests administered to gauge Parkman’s condition. He

concluded that the tests did not provide evidence of impairments that precluded

Parkman from performing her job. Because this conclusion was reasonable and was

supported by substantial evidence, we hold that the plan administrator did not abuse

his discretion in denying Parkman’s claim for LTD benefits.

Affirmed.

______________________________

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