Opinion ID: 779931
Heading Depth: 2
Heading Rank: 1

Heading: Bad Faith and Relative Merits

Text: 28 We consider jointly the first and fourth Chambless factors, which in this case are intertwined. 29 In Salovaara v. Eckert, 222 F.3d 19 (2d Cir.2000), we ruled that a benefits claimant who has a reasonable belief that he is entitled to benefits ( i.e., a colorable claim) is not acting in bad faith, id. at 29-30, and reversed a finding of bad faith that heavily relied on the plaintiff's failure (by reason of a misunderstanding of the case law) to adduce evidence in support of his central arguments. Id. Also insufficient to show bad faith was the passing mention of a fact in the plaintiff's legal memorandum that plaintiff later contradicted. Id. at 30. 30 Along the lines of Salovaara, Dr. Seitzman contends that he had a reasonable belief that he was unable to perform the material and substantial duties of his own occupation (the insured risk) because he suffered from various medical problems that prevented him from performing his work-related tasks. He relies ( inter alia ) on the following evidence: 31 &#x2022; Dr. Seitzman's medical expert, Dr. Brooke, testified that Dr. Seitzman was disabled; 32 &#x2022; Dr. Felder, who treated Dr. Seitzman, testified and advised Sun Life by letter that Dr. Seitzman suffered from depression, peripheral neuropathy, asthma, high blood pressure, high blood sugar, high cholesterol and high triglycerides, and that the asthma attack on June 8, 1998 prevented Dr. Seitzman from performing the duties of his occupation as an internal medicine physician; 33 &#x2022; Dr. Seitzman testified that his health prevented him from performing his duties as a treating physician: inter alia, he could not draw blood or take spinal taps, because of tremors; he could not stand for prolonged periods to examine patients, because of peripheral neuropathy; and he was otherwise limited by memory loss, fatigue, and incontinence; 34 &#x2022; Dr. Seitzman also testified that his desk job reviewing disability claims did not require the skills or physical capabilities needed for him to function as a practicing physician; 35 &#x2022; Dr. Coblentz, an expert for Sun Life, testified that Dr. Seitzman's diabetes was poorly controlled; 36 &#x2022; Dr. Dalton testified that during the first three months of 1998, Dr. Seitzman worked less, visited his doctor often, and on occasion issued inappropriate prescriptions; and 37 &#x2022; Ms. Speck testified that Dr. Seitzman: told her in 1997 that he was using Stadol to treat the incredible pain in his feet caused by the peripheral neuropathy; spent a lot of time in bathroom; seemed fatigued, tremulous and forgetful; and had been scheduled to see patients on June 9, 1998. 38 The citation of this evidence does not compel the finding that Dr. Seitzman reasonably believed he was entitled to benefits. The district court declined to credit most, if not all, of Dr. Seitzman's testimony, citing his demeanor and false statements he made in employment applications, claim forms, and a sworn pleading filed in state court. The district court also declined to credit the opinions of Dr. Brook and Dr. Felder, which (as they conceded) were wholly based on Dr. Seitzman's own description of his symptoms. The testimony of Dr. Dalton and Ms. Speck showed that Dr. Seitzman had medical problems, not that he was disabled as a result. 39 The testimony and evidence credited by the district court established ( inter alia ) that: [1] Dr. Seitzman sold his medical practice in December 1996 when he was relatively healthy, as indicated by the questionnaire he filled out for TPS in 1996; [2] Dr. Seitzman agreed when he sold his practice that he would retire in mid-June 1998 after the clinical responsibilities were transferred to another physician; [3] when Dr. Dalton was hired in late 1997 to assume the clinical responsibilities of the practice, his employment contract provided that Dr. Seitzman would leave in June 1998; [4] prior to June 8, 1998, Dr. Seitzman did not miss work days; [5] throughout 1998, Dr. Dalton and Ms. Speck observed Dr. Seitzman performing his work without impairment; [6] Dr. Dalton did not know that Dr. Seitzman was ill until Dr. Seitzman failed to come to work on June 8; [7] Dr. Seitzman evidently did not suffer from disabling foot pain, because between February and May 1998 he traveled to medical conferences in Chicago, Puerto Rico, San Diego, Arizona, and Denver; [8] Dr. Seitzman did not take Stadol until after June 8, 1998; and [9] a board certified neurologist, Dr. Coblentz, opined that Dr. Seitzman was not disabled. 40 Credibility determinations are within the province of the trial court and are entitled to considerable deference. See Cosme v. Henderson, 287 F.3d 152, 158 (2d Cir. 2002). Where a court chooses between two permissible views, the reviewing court will not second guess the trial court so long as its view of the evidence is plausible in light of the entire record. Id. Here, the trial court's credibility findings treat the evidence in a way that is more than plausible. Without Dr. Seitzman's testimony, there is no independent evidence to support a reasonable belief that Dr. Seitzman was unable perform the material and substantial duties of his occupation. We therefore find no abuse of discretion in the finding of bad faith. 41 As to the relative merits of the parties' positions, (the fourth Chambless factor), we conclude for reasons that are obvious from the discussion above that the district court did not abuse its discretion in deciding that the merits weigh in favor of Sun Life. 42 Dr. Seitzman challenges on appeal several points that together could have had bearing on the district court's fact finding. 43 &#x2022; As to the submission of false information, Dr. Seitzman contends that he did not lie in stating (in his John Hancock claim form) that he was unable to work part-time or full-time, because the work contemplated by that form was work in his prior occupation, which he could not do (he also forgot that he resided in New York). The court was entitled to reject Dr. Seitzman's explanation as to how he understood the form, and the conclusion that the claim was inaccurate and misleading is a fair inference. 44 &#x2022; The district court noted that Dr. Seitzman inquired into his entitlement to disability benefits a month prior to his alleged disability. While we agree with Dr. Seitzman that employees are entitled to inquire about benefits, it was not error for the court to consider this event in the suggestive factual context of the case; in any event, the court did not place undue weight on the inquiry. 45 &#x2022; The court emphasized that Dr. Seitzman had long planned to retire on or about the date of the claimed onset of total disability. Dr. Seitzman argues that the planned retirement has no bearing on whether he was disabled. We disagree: the fact is arresting, suggestive, and fuel for a devastating inference. 46 &#x2022; The district court found that Dr. Seitzman lied about treating his peripheral neuropathy with Stadol, and he argues on appeal that he presented post-trial evidence that he did take Stadol prior to June 8, 1998. The issue is beside the point. Whether or not he took Stadol before June 8, 1998, there is no proof that he suffered from side effects that affected his ability to perform his job. 47 We reaffirm our warning in Salovaara that ERISA's purpose of promot[ing] the interests of plan beneficiaries and allow[ing] them to enforce their statutory rights ... often counsels against charging fees against ERISA beneficiaries since private actions by beneficiaries seeking in good faith to secure their rights under employee benefit plans are important mechanisms for furthering ERISA's remedial purpose. Salovaara v. Eckert, 222 F.3d 19, 28 (2d Cir.2000)(internal quotation marks and citations omitted). Unlike the plaintiff in Salovaara, however, Dr. Seitzman was fully aware of his burden to demonstrate entitlement to total disability benefits. And in attempting to do so, he presented testimony that was found to be deliberately false as to the most material points, in a trial context that reflected other statements by him on material matters that were at best misleading. See Owen v. Soundview Financial Group, 54 F.Supp.2d 305, 326-27 (S.D.N.Y.1999) (where plaintiff, a plan fiduciary, acted in bad faith by making a material misstatement of fact, an award of attorneys' fees against the plaintiff was appropriate), aff'd, 208 F.3d 203 (2d Cir.2000)(Table). 48 For essentially the same reason, Dr. Seitzman's reliance on Gibbs v. Gibbs, 210 F.3d 491 (5th Cir.2000), is inapposite. The ERISA claim in Gibbs was denied on the ground that the claimant may have arranged her husband's murder to collect his life insurance. Citing the district court's acknowledgement that it was a close case, Gibbs, 210 F.3d at 505, the Fifth Circuit concluded that the claimant's position could hardly be deemed to be so disproportionately meritless as to justify the imposition of an award of attorneys' fees. Id. Here, the case cannot be deemed close because (among other things) the district court discredited Dr. Seitzman's testimony largely, if not totally, leaving no independent evidence supporting Dr. Seitzman's claim.