Opinion ID: 796545
Heading Depth: 2
Heading Rank: 1

Heading: Rescission Claim—The Effect of Conger's Response to Question 5

Text: 36 As noted above, Conger's response to Question 5 is the sole basis for MetLife's rescission claim. MetLife argues that Conger's medical history supports its conclusion that he had a progressive neurological disorder when he applied for insurance in July 2002. On this basis, it contends that Conger's answer to Question 5 was inaccurate, and that it was justified in rescinding Conger's policy for an unlimited coverage period. The parties dispute the standard of review that we should apply in evaluating MetLife's conclusion. MetLife claims that the policy vests it with discretion to make determinations as to whether Conger's application was inconsistent with his medical records and whether rescission of his coverage was appropriate. MetLife Br. at 22. Accordingly, it maintains that we should review for abuse of discretion its conclusions regarding Conger's condition when he filled out his application, as the district court did. Conger avers that we should review MetLife's conclusions de novo. Because the policy proclaims that MetLife has discretion regarding only the terms, conditions and provisions of the policy documents, J.A. at 92, 218, and not discretion to interpret insureds' medical records, we express some doubt that MetLife's discretion stretches as far as MetLife now urges. See Perez v. Aetna Life Ins. Co., 150 F.3d 550, 555 (6th Cir. 1998) (en banc) (requiring ERISA disability insurance plan to contain a clear grant of discretion for insurer to benefit from abuse-of-discretion review), cert. denied, 531 U.S. 814, 121 S.Ct. 49, 148 L.Ed.2d 18 (2000). 2 We need not decide this issue, however, as we conclude that even under the more-deferential abuse-of-discretion standard, Conger's responses to Question 5 do not justify MetLife's decision to terminate his coverage. 37 In the similar context of ERISA cases, we have held that applying the abuse-of-discretion standard of review requires us to determine whether the insurer's decision was arbitrary or capricious. Gismondi v. United Techs. Corp., 408 F.3d 295, 298 (6th Cir.2005). When the evidence supports a reasoned explanation ... for a particular outcome, that outcome is not arbitrary or capricious. Id. (quoting Davis v. Ky. Fin. Co. Ret. Plan, 887 F.2d 689, 693 (6th Cir.1989)). Ultimately, we must determine whether the insurer's decision is the result of a deliberate, principled reasoning process and [whether] it is supported by substantial evidence. Glenn v. MetLife, 461 F.3d 660, 666 (6th Cir.2006) (quoting Baker v. United Mine Workers of Am. Health & Ret. Funds, 929 F.2d 1140, 1144 (6th Cir.1991)). Accordingly, we review not only the insurer's conclusion, but also its reasoning. 38 MetLife has not clarified which prong of Question 5—had, had been diagnosed with, or had been treated for—it believes Conger answered inaccurately. The record is clear, however, that Conger was never diagnosed with a progressive neurological disorder, and MetLife provides no indication that he received any treatment for such a condition. Accordingly, no deliberate, principled reasoning process, Glenn, 461 F.3d at 666, could support the conclusion that Conger was diagnosed with or treated for a progressive neurological disorder. 39 Whether Conger had a progressive neurological disorder in July 2002 is a thornier issue. Conger had visited multiple doctors, none of whom diagnosed him with any such disorder. Nonetheless, MetLife concluded that Conger had a progressive neurological disorder in July 2002. To support such a conclusion, we would expect the administrative record to document clearly a progressive neurological disorder that was undiagnosed due to the doctors' negligence or nonfeasance. However, our examination of the record makes clear that MetLife's determination that Conger had a progressive neurological disorder was not the result of a deliberate, principled reasoning process. 40 MetLife reached its conclusion only by ignoring substantial contrary evidence in Conger's medical records. For instance, MetLife did not address the doctor's December 20, 1998 conclusion that Conger's [b]rain demonstrate[d] no significant abnormality, [and was] essentially normal for patient's age, or the doctor's statement that he saw no cerebellar abnormality. J.A. at 138. Similarly, MetLife ignored Conger's multiple brain MRIs that revealed no problems. MetLife's communications to Conger (through LTCP) do not acknowledge these MRIs or even attempt to explain why they do not negate its conclusion regarding Conger's condition. The same is true of the internal communications between LTCP and MetLife's claim-review physician. MetLife also ignored multiple neurologists' failure to diagnose Conger with a progressive neurological disorder or even to note an impression in their charts that he had such a disorder. Further, MetLife ignored Dr. Tillett's impression that Conger's ataxia was not cerebellar, which indicates that Conger's symptoms were not caused by a neurological disorder. 41 Our previous decisions make clear that an administrator abuses its discretion when it refuses to consider additional evidence presented in an insured's appeal of a coverage denial, Killian v. Healthsource Provident Adm'rs, Inc., 152 F.3d 514, 521 (6th Cir.1998), or when it engages in a selective review of the administrative record to justify a decision to terminate coverage. Moon v. Unum Provident Corp., 405 F.3d 373, 381 (6th Cir.2005). Here, the administrator, in reviewing the insured's medical records, focused on slivers of information that could be read to support a denial of coverage and ignored—without explanation—a wealth of evidence that directly contradicted its basis for denying coverage. Such a decision-making process is not deliberate or principled, and the explanation provided was far from reasoned, as it failed to address any of the contrary evidence. McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 170-71 (6th Cir.2003) ([t]he mere possibility of a particular conclusion, notwithstanding overwhelming evidence to the contrary, is an insufficient basis upon which to support a plan administrator's decision to deny a claim); Calvert v. Firstar Fin., Inc., 409 F.3d 286, 296 (6th Cir.2005) (abuse of discretion when administrator relies on opinion of physician who fails to explain basis for rejecting other physicians' conclusions). Instead, MetLife supported its decision to rescind only by its cherry-picking symptoms from Conger's medical records, and then reverse-engineering a diagnosis. This is not the hallmark of a reasoned explanation. Moon, 405 F.3d at 381 (requiring a reasoned explanation consistent with the quantity and quality of the medical evidence (internal quotation omitted)). For these reasons, we conclude that MetLife abused its discretion by concluding that Conger's answer to Question 5 was inaccurate, and MetLife's claim for rescission fails. 42 Although the foregoing, by itself, reveals that MetLife's rescission was arbitrary and capricious, we note that MetLife's conflict of interest further supports this conclusion. In the related context of ERISA cases, we have noted that courts must be aware of a possible conflict of interest and consider it as a factor in determining whether the decision to deny benefits was arbitrary and capricious. Gismondi, 408 F.3d at 298. A situation in which the party paying the benefits also decides whether to pay involves an actual, readily apparent conflict. Id. (quoting Killian, 152 F.3d at 521). 43 Here, such a conflict exists. LTCP, the administrator, is a joint venture between MetLife and another insurance company and was formed for the sole purpose of administering policies under the FLTCIP. Although the record regarding the ultimate corporate separateness of MetLife and LTCP is not well-developed, the record reveals that LTCP sought review of its dispute with Conger from a MetLife physician. Thus, an employee of the party paying the benefits also made the final decision regarding whether to pay the claim, and in such a situation, we must view the explanation with some skepticism. Moon, 405 F.3d at 381-82; Kalish v. Liberty Mut./Liberty Life Assurance Co. of Boston, 419 F.3d 501, 507 (6th Cir.2005) (same, quoting Moon). 3 44