Opinion ID: 2790080
Heading Depth: 3
Heading Rank: 3

Heading: Post-Hoc Rationalization

Text: As a final salvo, Dutkewych mistakenly argues that Standard's broad interpretation of the Mental Disability Limitation was never raised during the internal appeals process and stands in direct contradiction to Standard's interpretation of the provision at that time. Dutkewych urges us to reject [Standard's] analysis as a post-hoc rationalization undeserving of deference under our -30- logic in Glista v. Unum Life Insurance Co. of America, 378 F.3d 113 (1st Cir. 2004). In Glista, we held an insurer to its explanation for denying benefits articulated during its internal claims review process. 378 F.3d at 132. There, the insurer had raised two bases for its denial of relief in litigation -- the Treatment Clause and the Symptoms Clause. Id. at 126. Our review of the record revealed that the insurer had never relied on the Symptoms Clause during its internal review process, and that a reasonable participant would have understood the denial to rest on the Treatment Clause alone. Id. at 129. We held that reviewing courts have a range of options available in such circumstances. Id. at 116. In that case, we barred the insurer's argument on the Symptoms Clause as a post-hoc rationalization. Id. at 128, 131. According to Dutkewych, the same result is warranted here. Dutkewych contends that, [p]rior to litigation, Standard's sole defense was that chronic Lyme does not exist as a disease. Moreover, [t]he only inquiry during the internal appeals process was the cause of Mr. Dutkewych's disabling symptoms, and not whether a limited condition caused or contributed to his disability; in fact, this analysis was never once cited by Standard during its review. This claim is contradicted by the administrative record. -31- Standard has repeatedly stressed that Dutkewych's Plan limits payment of LTD Benefits to 24 months during [the claimant]'s entire lifetime for a Disability caused or contributed to by Mental Disorders, Substance Abuse or Other Limited Conditions. In both its April 26, 2011, termination letter, and its May 4, 2012, review letter, Standard explicitly premised its decision on the Limited Conditions Provision. In its original termination letter to Dutkewych, Standard clearly explained the operation of the Limited Conditions Provision and its reliance on the same. Standard wrote in the opening paragraph: Because the [Plan] limits payments for Disability caused or contributed to by a Mental Disorder, in order to continue to receive LTD Benefits, Mr. [Dutkewych] must be Disabled by a Physical Disease or Injury. The Physical Disease(s) or Injury(ies) must be so severe as to cause Disability in the absence of Substance Abuse, a Mental Disorder or Other Limited Condition. (Emphasis added). In its analysis, Standard rejected Dutkeywch's diagnosis of Lyme disease, but identified mental disorders as an alternative basis for rejection of his disability claim in any case: Based on the information in the claim file, we cannot conclude that a Physical Disease has been identified as defined by the policy. Even if we were to accept the diagnosis of Lyme disease, the consulting physician noted that the claimant may be able to work at this -32- time if his psychiatric issues were appropriately dealt with. Because Standard concluded that Dutkewych was not disabled as a result of a physical disease, and because LTD Benefits are limited for a Disability caused or contributed to by limited conditions, Standard closed his claim on June 1, 2011. In its subsequent review letter, Standard again rejected Dutkewych's claim that he was disabled as a result of Lyme disease and stressed the evidence of limited conditions in the record. Standard wrote: Based on a comprehensive review of all of the information in Mr. Dutkewych's claim file, we find that the available evidence does not support that Mr. Dutkewych has been precluded from performing his Own Occupation as a result [of] Lyme disease. Rather the available medical evidence supports that your client's mental health conditions in combination with his chronic pain condition (fibromyalgia) and substance abuse are the most likely cause of his reported symptoms. That Standard's language suggested that limited conditions caused, rather than merely contributed to, Dutkewych's disability is of no moment since its reliance on the Limited Conditions Provision is unassailable. In the very next sentence, Standard reiterated the application of the Limited Conditions Provision to Dutkewych's case: Because we do not find evidence to support that Mr. Dutkewych was impaired from performing his Own Occupation as of June 1, 2011 by a physical disease or injury (which was independent from his mental disorders, -33- substance abuse and fibromyalgia with possible chronic fatigue), we have determined that Mr. Dutkewych does not qualify for additional LTD benefits from The Standard, and that his claim must remain closed. (Emphasis added). Standard's reliance on and interpretation of the Limited Conditions Provision took place before there was any litigation and Dutkewych had adequate notice during the administrative process. Indeed, when Standard offered to pursue additional neuropsychological testing during the administrative review process, Dutkewych's counsel refused specifically because the results of such testing would support the already-imposed Limited Conditions Provision, and, thus, would not change the prior determination on Mr. Dutkewych's claim. This case is a far cry from Glista, in which the insurer articulated an entirely new basis for the denial of benefits for the first time in litigation. See 378 F.3d at 129.