Ms. Deal responds that these reports relate to treatment prior
to her most recent surgery, that the mental health issues “have
evidently been resolved” while the physical problems remain, and
that depression was secondary to the severe knee pain. (Pl.’s
Reply at 8.) The claim that depression was secondary to the
physical pain is irrelevant, because the mental disorder need only
cause “in part” the employee’s disability. There is no requirement
that it be the primary cause of the disability. With respect to
the argument that the psychological reports are old and the mental
health issues have been resolved, Ms. Deal cites no support from
the record and does not contest the contents of Dr. Feldman’s or
Dr. Aoki’s reports. At the very least, these reports create a
genuine issue as to whether Ms. Deal’s psychological issues caused
in part her disability. ,

Iil.

As an alternative to summary judgment, Ms. Deal asks that I
enter findings of fact and conclusions of law pursuant to Rule 52,
and enter judgment in her favor based on those findings. Rule 52
applies to bench trials. A ruling on cross-motions for summary
judgment may amount to a bench trial if I find that there are
disputed factual issues but decide them based on the fully
developed record. See Lac Courte Oreilles Band of Lake Superior
Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983).

Here, although Ms. Deal styled her reply as a response to a cross-

13


“Total Disability” exists when Prudential determines that all
of these conditions are met:

1. Due to Sickness or accidental injury, both of these are
true.

a. You are not able to perform, for wage or profit, the
material and substantial duties of your occupation.

b. After the Initial Duration of a period of Total
Disability, you are not able to perform for wage or
profit the material and substantial duties of any job for
which you are reasonably fitted by your education,
training or experience.
(R. at 00164.) This policy language does not include the “safe
harbor” language set out by the Seventh Circuit. The court noted,
however, that an absence of the “safe harbor” language does not
require plenary review if the plan indicates with the requisite
clarity that a discretionary determination is envisaged. See
Herzberger, 205 F.3d at 331.

Prudential argues. that the language “when Prudential
determines” followed by a list of elements to be determined clearly
indicates that Prudential shall exercise its discretion. However,
the fact that a plan requires a determination of eligibility by an
administrator does not give an employee adequate notice that the

administrator’s decision will be discretionary. Id. at 332. As

the Seventh Circuit notes:

least in part by a mental, psychoneurotic or personality disorder.”
(R. at 00167.) Neither party cites this provision in their
discussion of the standard of review, but my discussion applies to
this language as well.


sedentary capacity.” (R. at. 00416). Nonetheless, Prudential
points to a fax it received from Dr. Finn confirming to Prudential
that “Ms. Deal is capable of sedentary work for a full time, 8 hour
work day.” (R. at 00210.). Dr. Finn’s medical reports also
indicate that her x-rays “look fine” and that she is “much better.”
In another report, however, Dr. Finn indicated that he supported
Ms. Deal going on full disability because “her knee is so
problematic and her other knee is symptomatic.” (R. at 00960.)
This evidence presents a material issue of genuine fact as to
whether Ms. Deal falls within the definition of total disability
under the Plan. The issue here is whether Ms. Deal could perform
any job for which she is reasonably fitted, including sedentary
work, Dr. Finn at one time indicated that Ms. Deal could perform
sedentary work on a full-time basis. He later stated that he
supported Ms. Deal going on full disability and that she was
permanently disabled from work. Certainly one possible reading of
this evidence is that Dr. Finn changed his diagnosis, and feels
that Ms. Deal is no longer capable of performing sedentary work.
However, his later statements are not inconsistent with his
statement to Prudential that Ms. Deal was capable for performing
full time sedentary work. In fact, he admitted that it would be
feasible for Ms. Deal to perform such work out of her home. The

issue is whether Ms. Deal is totally disabled under the definition


“authority to construe and interpret the Plan, decide all questions
of eligibility and.determine the amount, manner and time of payment
of benefits”); White v. Employee Ret. Plan of Amoco Corp., No. 96
CV 4298, 2000 WL 1221635, at *3 (N.D. Ill. Aug. 21, 2000)
(Holderman, J.) (finding sufficient administrator discretion where
plan gave administrators authority “[t]o interpret the Plan, to
determine applicable facts, and to decide all matters arising under
the Plan, including the right to exercise discretion to remedy
possible ambiguities, inconsistencies, and omissions”); Quinn v.
Non-Contributory Nat’l Long Term Disability Program, 113 F. Supp.
2d 1216, 1221 (N.D. Ill. 2000) (Shadur, J.) (finding sufficient
administrator discretion where plan stated that the term
“*‘[d]isabled’ shall be based on medical evidence satisfactory to
the Committee in its sole discretion”) (emphasis added).

Several other district courts examining identical Prudential
policy language have determined that the policy here does not
clearly indicate that discretion has been retained in the Plan
administrators (and administrator decisions are therefore subject
to plenary review). See Ehrman v. Henkel Corp. Long-Term
Disability Plan, 194 F. Supp. 2d 813, 818 (C.D. Ill. 2002) (citing
Herzberger); McDonald v. Timberland Co. Group Long Term Disability
Coverage Program, No. CIV 98-686-M, 2002 WL 122382, at *3 (D.N.H.
Jan. 23, 2002) (citing Herzberger); Rothstein v. Prudential Life

Ins. Co., No. CV0011329SVWAIJX, 2001 WL 793130, at *2-3 (C.D. Cal.



Obviously a plan will not--could not, consistent with its
fiduciary obligation to the other participants--pay benefits
without first making a determination that the applicant was
entitled to them. The statement of this truism in the plan
document implies nothing one way or the other about the scope
of judicial review of his determination.
Id. In Herzberger, the court remanded for plenary review a case in
which the plan documents indicated that “‘Total Disability’ exists
when [the plan administrator] determines that all of these
conditions are met” followed by a list of what the court called
objective elements. Id. at 333.

Nonetheless, if the elements that the administrator is to
determine are subjective elements “over which discretionary power
could be presumed,” the plan may give adequate notice of
discretionary authority. Id. Even if the elements that Prudential
is to consider in determining total disability can be called
subjective, they are not so clearly subjective as to create a
presumption that Prudential would exercise broad discretion in
determining whether an employee was totally disabled. If a plan
wishes “to reserve a broad, unchanneled discretion to deny claims,
the employees should be told about this, and told clearly.” fd.
The policy language here does not clearly notify employees that
Prudential retains broad discretion to deny their claims. cf.
Gerlib v. R.R. Donnelley & Sons Co., No. 95 C 7401, 2001 WL

1313794, at *6 (N.D. Ill. Oct. 26, 2001) (Kennelly, J.) (finding

sufficient administrator discretion where plan gave administrator


analysis of Ms. Deal’s position determined that her position was
“essentially a sedentary office position.’”* (R. at 00698.) Because
her former position was sedentary, if she is capable of performing
sedentary work following her injury, she is capable of performing
work for which she is reasonably fitted by her education, training,
or experience, and does not fall within the definition of total
disability under the Plan.

Ms. Deal points to testimony of Dr. Finn, one of her
physicians, in which he states that it would be difficult for her
to travel back and forth to work. (R. at 00804.) Dr. Finn
admitted that it would be feasible for her to do sedentary work out
of her home such as telemarketing; however, it was his opinion that

“anything she has to do other than the activities of daily

living to keep herself alive, go to the grocery store,

whatever you need to do to live, is all that she should be
asked to do because anything else to support herself adds
physical and psychological stress in my opinion. So I feel
she is permanently disabled from work.”

(R. at 00804-05.)
Additionally, the physician hired by Prudential to examine Ms.

Deal, Dr. Anthony Brown, reported that “[t]here would appear to be

no reasonable way to allow this patient to work, even in a

2? In her response to Prudential’s statement of facts, Ms. Deal
challenges the findings of the consultant’s analysis that her
position was sedentary (Pl.’s Resp. to Def.’s Statement of Facts
q 4.) However, in her own statement of facts, she describes her
job as “sedentary,” citing the same consultant’s report. (Pl.‘s
Statement of Facts 7 12). Regardless, reading disputed facts in
the light most favorable to Prudential, I assume her position was
sedentary.


Minofe Order Form (06997)

United States District Court, Northern District of Illinois

ay

sare Magra ude Blaine B. Bucklo “than Anieted Sue

CASE NUMBER 01 C 8703 DATE 9/30/2002

CASE Deal vs. Prudential Insurance

TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
DOCKET ENTRY:
q@ Q Filed motion of [ use listing in “Motion” box above.]
(2) Qa Brief in support of motion due
(3) im) Answer brief to motion due . Reply to answer brief due___.
(4) oO Ruling/Hearingon___—setfor___—_at
(5) Oo Status hearing[held/continued to] [set for/re-set for] on setfor at
(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on___——ssetfor__——sat_—
(7) im) Trial[set for/re-set for]on__—_at
(8) q [Bench/Jury trial] [Hearing] held/continuedto__—_at
(9) Qa This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}
CIFRCP4(m) Cl Local Rule 41.1 OOFRCP41(a)(1) [1 FRCP41(a)(2).

do [Other docket entry] Enter Memorandum Opinion and Order denying plaintiff's motion for

summary judgment. Pretrial order is due by]0/18/02. Pretrial conference set for 10/16/02 is reset for

10/24/02 at 2:30 p.m.

Q [For further detail see order (on reverse side of/attached to) the original minute order.}

No notices required, advised in open court.
No notices required.

Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices,

Mail AO 450 form.

Copy to judge/magistrate judge.

courtroom esd eg das
MPI deputy’s Lots
initials

Date/time received iq- i) 2 0 =

central Clerk's Office sailing deputy iti



for more than 24 months.‘ (R. at 00167.) Ms. Deal argues that
Prudential is precluded from raising this issue because it did not
refer to her psychological problems as the basis for terminating
benefits until this lawsuit. She correctly notes that ERISA and
accompanying regulations require plan administrators to set forth
specific reasons for the denial of benefits. See 29 U.S.C.
§ 1133(1); 29 C.F.R. § 2560.503-1(g). The purpose of these
requirements is to allow an employee who has been denied benefits
a “fair chance” to appeal and allow “meaningful review” of the
decision. See Halpin v. W.W. Granger, Inc., 962 F.2d 685, 689 (7th
Cir. 1992).

However, Prudential has raised the issue before now. In its
original termination of benefits, Prudential quoted the policy
language regarding mental disorders, and stated that “{w]ith
regards to your diagnosis of depression, the provision of [the
policy] that states there is a 24 month benefit limitation on
disability caused at least in part by a mental, psychoneurotic or
personality disorder is outlined above. This 24 month benefit
limitation ended on December 19, 2000.” {(R. at 00204-06.) Ms.
Deal appealed the decision, and in its first denial of her appeal,
Prudential again quoted the policy language regarding mental
disorders and stated “Ms. Deal has a diagnosis of depression. The

benefit limitation expired on December 19, 2000. She has already

‘4 The Plan goes on to give two exceptions not relevant here.

al



of the Plan, not whether Dr. Finn feels that Ms. Deal is totally
disabled or is entitled to disability benefits.? |

Dr. Brown’s statement that Ms. Deal is unable to perform even
sedentary work certainly supports her contention that she falls
within the Plan’s definition of total disability. On summary
judgment, however, I do not weigh evidence, but simply determine
whether a material question of fact exists. See Szymanski v. Rite~
Way Lawn Maint. Co., Inc., 231 F.3d 360, 364 (7th Cir. 2000). Dr.
Finn reported that Ms. Deal could perform sedentary work on a full-
time basis. If true, she is not disabled under the Plan
definition. Whether Dr. Finn no longer agrees with this statement
or whether these statements are simply wrong is a question for the
finder of fact.

2.

The Plan also contains a Benefit Limitation section that
applies “if [the employee’s] Disability, as determined by
Prudential, is caused at least in part by a mental, psychoneurotic

or personality disorder.” In that case, benefits are not payable

3 Nor is the issue whether Ms. Deal’s disability “prevent([s]
[her] from doing any gainful activity” under Social Security
regulations, 20 C.F.R. § 404.1525, despite Ms. Deal’s claims that
such regulations are “instructive” to ERISA cases under Halpin v.
W.W. Grainger, Inc., 962 F.2d 685, 695 n.11 (7th Cir. 1992).
Halpin simply noted that standards used in adjudicating social
security cases may be instructive in ERISA cases. See id. It said
nothing about the instructiveness of applying Social Security
Regulations to ERISA cases.

10


July 10, 2001); O’Sullivan v. Prudential Life Ins.’ Co., No. 00 Civ.
7915 (KNF), 2001 WL 727033, at *3-4 (S.D.N.Y. June 28, 2001) (citing
Herzberger).

De novo review requires me to determine whether the decision
of the administrator was “incorrect,” Herzberger 205 F.3d at 329,
and in doing so I am not limited to considering evidence that was
before the plan administrator, see Casey v. Uddeholm, 32 F.3d 1094,
1099 n.4 (7th Cir. 1994).

B.

Prudential makes two arguments for terminating Ms. Deal’s
benefits. First, it argues that she no longer falls within the
definition of total disability. Second, it argues that her
disability was caused at least in part by a mental condition,
allowing Prudential to terminate benefits after 24 months.

1.

According to the Plan documents, a total disability exists
where an employee is unable to perform the material and substantial
duties “of any job for which [she is] reasonably fitted by [her]
education, training or experience.” (R. at 00164.) Prudential
argues that Ms. Deal is able to perform sedentary work on a full-
time basis. Ms. Deal argues that looking at whether she could
perform sedentary work is the wrong standard to apply because total
disability under the Plan requires that she be unable to perform

any job for which she is reasonably fitted. A consultant’s job


party and draw all inferences in that party’s favor.” Popovits v.

Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999)

(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
A.

Ms. Deal asks me to overturn Prudential’s determination to
terminate her benefits. A denial of benefits challenged under
ERISA is subject to plenary (de novo) review when the plan
documents contain no indication of the scope of judicial review.
See Herzberger v. Standard Ins. Co., 205 F.3d 327, 330 (7th Cir.
2000) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101
(1989)). When plan documents confer discretionary judgment on an
administrator, decisions of the administrator are reviewed under an
“arbitrary and capricious” standard. See Postma v. Paul Revere
Life Ins. Co., 223 F.3d 533, 538 (7th Cir. 2000). A plan can
specify that the administrator has discretion in interpreting or
applying ‘it, but that specification must be “ma[de] clear.”
Herzberger, 205 F.3d at 331. The Seventh Circuit has suggested
“safe harbor” language to be used in plans that wish to retain
discretion in their administrators: “Benefits under this plan will
be paid only if the plan administrator decides in his discretion
that the applicant is entitled to them.” Id. Here, the relevant

policy language’ states:

1

+ The other policy provision relevant to my decision involves
a limitation on total disability benefits that applies “if (the
employee’s] Disability, as determined by Prudential, is caused at

3



motion, Prudential has not filed a cross-motion for summary
judgment. Because I find disputed factual issues, Prudential is
entitled to a trial on the merits, and I cannot at this time make
Rule 52 findings and enter a judgment.
Iv.
Ms. Deal’s motion for summary judgment, or in the alternative

for judgment based on findings of fact and conclusions of law made

nn C Burkle

Elaine E. Bucklo
United States District Judge

pursuant to Rule 52, is DENIED

Dated: September 3g _, 2002

14



filed a claim for long term disability payments based on her knee
injury. Her claim was approved by Prudential, and in May 2000 she
began receiving benefits, including retroactive payments from
December 1998 onward.

Ms. Deal saw a host of medical professionals for both physical
and psychological conditions arising out of her knee injury and
associated pain. She was diagnosed with Moderate Major Depressive
Disorder. In October 2000, Prudential notified Ms. Deal that her
initial period of benefits would expire in December, and that it
would conduct an evaluation to determine Ms. Deal’s eligibility for
continued benefits.

In April 2001, Prudential determined that Ms. Deal was no
longer eligible for benefits under the Plan. Ms. Deal appealed
this decision, submitting additional medical reports with her
appeal. Her appeal was denied in September 2001. “She submitted an
appeal to this decision in October 2001, which again was denied by

Prudential. In November 2001, Ms. Deal initiated this lawsuit.

II.

I may grant summary judgment only where “there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c).
“In determining whether a genuine issue of material fact exists,

{I] construe all facts in the light most favorable to the nonmoving



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

CATHI DEAL,
Plaintiff,
No. 01 C 8703

Vv.

PRUDENTIAL INSURANCE COMPANY OF
AMERICA,

DOCKETED
OCT 0 1 2002

Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiff Cathi Deal sued defendant Prudential Insurance
Company of America (“Prudential”) under section 1132(a) (1) (B) of
ERISA, 29 U.S.C. § 1001 et seq., to recover benefits due under an
employee benefit plan (“Plan”) underwritten and insured by
Prudential. Ms. Deal now moves for summary judgment or, in the
alternative, judgment based on findings of fact and conclusions of
law in her favor made pursuant to Fed. R. Civ. P. 52. I deny the

motion.

I.

Ms. Deal was employed. as a human resources director,
administrative assistant, and office manager by Telephone & Data
Systems, Inc. until June 1998 when she suffered an injury to her
left knee in an elevator accident. Ms. Deal returned to work

briefly until the end of November 1998. In February 2000, Ms. Deal

S'o-



been paid through the maximum duration of benefits eligible under
that diagnosis.” (R. at 00129-30.)

These statements in Prudential’s denials of benefits put Ms.
Deal on notice that Prudential was relying at least in part on the
benefits limitation language regarding mental disorders when making
its decision to terminate benefits. This is not simply a case of
Prudential presenting a post hoc rationale in order to avoid
reversal upon judicial review, see Halpin, 962 F.2d at 696, and
Prudential is thus not precluded from arguing this issue.

Prudential cites numerous doctors’ reports explaining Ms.
Deal’s psychological problems. Evidence of a mental disorder is
not enough, however, to trigger the benefit limitation clause. In
order for the benefit limitation to apply, the mental disorder must
cause, at least in part, the physical disability. Two of the
reports cited by Prudential could support a finding of causation.

First, Dr. Caryn Feldman, a psychologist, reported after
examining Ms. Deal that “Ms. Deal appears caught in a vicious cycle
where pain and depression lead to decreased activity which serves
to increase deconditioning and depression, which may aggravate
physical symptoms further.” (R. at 00523.) Second, after a health
psychology evaluation with Ms. Deal, Dr. Melanie Aoki reported that
unless her depression and anxiety were directly addressed, her
response to medical treatment for her knee pain would likely be

compromised. (R. at 00233.)

12