Opinion ID: 158826
Heading Depth: 2
Heading Rank: 1

Heading: Application of the Mental Condition Cap

Text: 28 [I]n reviewing decisions of plan administrators under the arbitrary and capricious standard, the reviewing court may consider only the evidence that the administrators themselves considered on or before the final decision denying benefits. Chambers, 100 F.3d at 823, 824. See also Sandoval v. Aetna Life & Casualty Ins. Co, 967 F.3d 377, 380-81 (10th Cir. 1992); Woolsey, 934 F.2d at 1460. Mr. Kimber appealed from the letter denying his benefits on May 20, 1996 and the plan administrator issued a final decision denying reinstatement for physical disability on August 13, 1996. Aplee. App. at 80-81. Thus, our review is limited to evidence presented to Thiokol before August 13, 1996. 29 Mr. Kimber raises several issues to prove that the plan administrator's decision was arbitrary and capricious. First, Mr. Kimber argues that Thiokol has disavowed its October 1994 approval of his disability claim for an indefinite period based upon diabetes. Of course, this fact must be considered against a backdrop of the Plan's terms and the facts before the plan administrator. A one-time determination of eligibility for benefits under the Plan does not foreclose subsequent principled review. The Plan itself contemplated the ongoing review of all disability claims, see Aplt. App. at 12, 13 (requiring satisfactory medical evidence that you continue to be [disabled] and terminating benefits on the date you are not totally disabled.) (emphasis added), and John Hancock's letter in which Mr. Kimber was granted benefits indefinitely also specifically noted the possibility of a change in disability status. Aplt. App. at 70. (We will continue to update your file and if this status changes, you will be notified.). 30 Our decision in Sandoval is instructive on this issue. Sandoval had applied for and received long-term disability benefits beginning in 1977. Eleven years later as part of a routine review of claims, the plan administrator decided there was insufficient evidence to support a claim of total disability. 967 F.2d at 378. The administrator requested additional information from [Sandoval], and scheduled an independent medical evaluation. Id. Based on the resulting information, the administrator found that there was no total disability and terminated benefits. Id. at 380. Given our narrow standard of review, we upheld the administrator's decision even though the evidence conflicted on disability. 31 In arriving at the decision in this case, John Hancock reviewed Mr. Kimber's claim as part of a periodic review, determined that there was insufficient evidence of total disability in the file, and requested additional medical evidence. Aplee. App. at 43. After reviewing this evidence, John Hancock determined that Mr. Kimber was not totally disabled from performing his job as a Property Clerk and terminated his benefits. Id. at 46. Regardless of its initial determination, Thiokol had the right to review Mr. Kimber's file and request additional evidence of a continuing total disability. To do so was not arbitrary and capricious. 32 Second, Mr. Kimber argues that Thiokol acted arbitrarily by finding that there was a lack of objective evidence of total disability based upon diabetes. He points to a letter and two reports by Dr. Williams to support his claim. See Aplt. App. at 67, 69A & 69C. A rational plan administrator could find these documents insufficient because they do not contain supporting data for the conclusions reached; for example, the letter from Dr. Williams merely states that Mr. Kimber is totally disabled secondary to diabetes, hypertension and the problems associated with this, but does not include any reference to clinical data. See id. at 69. 33 Mr. Kimber also relies upon John Hancock's evaluation during the appeals process that his condition had worsened. See id. at 108. The reviewer, however, expressly noted that more information was yet to come, including that pertaining to psychological condition. See id. When the neuropsychological information was furnished, the overall assessment of permanent disability was based upon a combination of physical and psychological factors. See id. at 109. Although we might have come to a different conclusion, the plan administrator acted within his discretion in attributing the disability to Mr. Kimber's mental condition. 34 Third, Mr. Kimber asserts that the plan administrator failed to look at all the relevant medical records before terminating benefits. Specifically, he points to the twelve page neuropsychological evaluation report by Dr. Walsh which the administrator did not read. Aplt. App. at 73. However, such a description is misleading. The Plan specifically permits the administrator to employ one or more persons to render advice with regard to any responsibility [the administrator] has under the Plan. Id. at 5. Mr. Schelin employed John Hancock to review medical records and provide a professional opinion as to their contents. Schelin gave the lengthy, detailed neuropsychological report to John Hancock, had them review it, and relied upon their analysis of the report in making his final decision. Mr. Schelin was not a medical professional and had no duty to read every single piece of raw medical data. His reliance upon John Hancock's analysis and summary of the report was both reasonable and sufficient. 35 Fourth, Mr. Kimber argues that the plan administrator rejected John Hancock's recommendation to reinstate benefits. A review of the record reveals however that Mr. Kimber's benefits were, in fact, reinstated, although not based upon physical condition. After the John Hancock medical personnel had reviewed the neuropsychological report detailing Mr. Kimber's mental conditions, they recommended that benefits be reinstated since there now was objective evidence of significant impairment and progressive disease that is reasonably disabling, especially in the context of the multiple medical residuals which were not, by themselves, totally disabling. Aplee. App. at 106 (emphasis added). Based on the new evidence of mental conditions and John Hancock's recommendation, the plan administrator drafted a letter reinstating Mr. Kimber's disability benefits, subject to the mental condition cap, and sent it back to John Hancock for comments. The reviewing doctors made some slight grammatical corrections, sent it back to the administrator, who mailed it to Mr. Kimber. It is overstatement to claim that the John Hancock medical personnel recommended disability based upon physical impairment. 36 Fifth, Mr. Kimber argues that the administrator acted arbitrarily by interpreting the phrase due to to mean due, at least in significant part, to. Mr. Kimber claims that due to requires that the mental condition be the sole cause of the disability before benefits can be limited. We disagree. The phrase due to is ambiguous. The words do not speak clearly and unambiguously for themselves. The causal nexus of 'due to' has been given a broad variety of meanings in the law ranging from sole and proximate cause at one end of the spectrum to contributing cause at the other. Adams v. Director, OWCP, 886 F.2d 818, 821 (6th Cir. 1989) (interpreting Department of Labor regulations). When a plan administrator is given authority to interpret the plan language, and more than one interpretation is rational, the administrator can choose any rational alternative. Naugle v. O'Connell, 833 F.2d 1391, 1396 (10th Cir. 1987). Requiring a significant relationship between the condition and the disability is a rational interpretation. 37 Sixth, Mr. Kimber argues that given the nature of the plan language the doctrine of contra proferentem requires this court to resolve all ambiguities against Thiokol as drafter of the Plan. In Semtner v. Group Health Services, 129 F.3d 1390, 1393 (10th Cir. 1997) and McGee v. Equicor- Equitable HCA Corp., 953 F.2d 1192, 1200 & n.11 (10th Cir. 1992), we left undecided the issue of whether contra proferentem applies to the review of an ERISA plan. We now hold that when a plan administrator has discretion to interpret the plan and the standard of review is arbitrary and capricious, the doctrine of contra proferentem is inapplicable. In doing so, we adopt the reasoning of the Seventh Circuit in Morton v. Smith, 91 F.3d 867 (7th Cir. 1996). 38 Courts invoke [contra proferentem] when they have the authority to construe the terms of a plan, but this authority arises only when the administrators of the plan lack the discretion to construe it themselves. Therefore, it is only used when courts undertake a de novo review of plan interpretations. When the administrators of a plan have discretionary authority to construe the plan, they have the discretion to determine the intended meaning of the plan's terms. In making a deferential review of such determinations, courts have no occasion to employ the rule of contra proferentem. Deferential review does not involve a construction of the terms of the plan; it involves a more abstract inquiry--the construction of someone else's construction. Because this case engages us in this more abstract exercise, we will not apply the rule. 39 Id. at 871 n.1 (citations omitted); see also Ross v. Indiana State Teachers Assoc. Ins. Trust, 159 F.3d 1001, 1011 (7th Cir. 1998) (contra proferentem inapplicable when judicial review of adminstrator's interpretation is other than de novo); Cagle v. Bruner, 112 F.3d 1510, 1519 (11th Cir. 1997) (holding that district court erred in construing ambiguities against drafter under arbitrary and capricious review); Pagan v. Nynex Pension Plan, 52 F.3d 438, 443 (2d Cir. 1995) (limiting the use of contra proferentem to cases in which court reviews ERISA plan de novo); Winters v. Costco Wholesale, 49 F.3d 550, 554 (9th Cir. 1995) (holding that the rule of contra proferentem is not applicable to self-funded ERISA plans that bestow explicit discretionary authority upon an administrator to determine eligibility for benefits or to construe the terms of the plan.). 40 Other courts have held contra proferentem applicable to review of ERISA plans but have done so only in the context of de novo review. See Hughes v. Boston Mutual Life Ins. Co., 26 F.3d 264, 268 (1st Cir. 1994) (applying contra proferentem to ERISA plan reviewed de novo); Heasley v. Heldon & Blake Corp., 2 F.3d 1249, 1257-58 (3d Cir. 1993) (holding contra proferentem applicable to ERISA plan reviewed de novo); Delk v. Durham Life Ins. Co., 959 F.2d 104, 105-06 (8th Cir. 1992) (applying contra proferentem to ERISA plan reviewed de novo). This is a separate question which we do not address here. 41 The Fifth Circuit is the sole court to apply contra proferentem in cases involving discretionary plans but has done so only in ERISA cases construing insurance policies and then as a part of its unique two-step approach to apply[ing] the abuse of discretion standard. Spacek v. Maritime Assoc., 134 F.3d 283, 298 n.14 (5th Cir. 1998) (noting that Fifth Circuit has only applied contra proferentem to ERISA cases construing insurance policies); Rhorer v. Raytheon Engineers & Constructers Inc., 181 F.3d 634, 642 (5th Cir. 1999) (discussing Fifth Circuit two step approach). Since this approach merely melds contra proferentem into the required discretionary review, we do not view it as conflicting with our decision today. 42 Finally, Mr. Kimber argues that the doctrine of reasonable expectations requires that the plan be interpreted in his favor. It is doubtful whether this doctrine has any application to ERISA disability benefit plans at all. See Hightsue v. AIG Life Ins. Co., 135 F.3d 1144, 1150 n.3 (7th Cir. 1998) (noting that the reasonable expectation doctrine may not even be applicable in ERISA cases.); see also Estate of Shockley v. Alyeska Pipeline Serv. Co., 130 F.3d 403, 407 (9th Cir. 1997) (limiting the application of the doctrine to insurance contracts). Allowing a beneficiary's expectations under the plan to dominate an administrator's interpretation would obliterate the discretionary review required by Firestone. See Estate of Shockley, 130 F.3d at 407 (noting that extending the doctrine to ERISA pension plans would be inconsistent with circuit and Supreme Court precedent requiring abuse of discretion review of a retirement committee's actions.). Accordingly, the reasonable expectation doctrine is inapplicable to the review of an ERISA disability benefits plan under the arbitrary and capricious standard. 43