Opinion ID: 620674
Heading Depth: 2
Heading Rank: 2

Heading: Jajuga's ability to work in May of 1997

Text: In our view, the plaintiffs have carried their burden of showing that when Jajuga stopped working on May 6, 1997, he was totally disabled under the terms of the Group Policy. That is, plaintiffs have sufficiently demonstrated that Jajuga was not able to perform for wage or profit, the material and substantial duties of any job for which [he was] reasonably fitted by [his] education, training or experience. The gaps in the record will not be read to benefit Prudential, which is primarily responsible for those gaps. The two attending physician statements of Dr. Klein, a board certified neurologist, attest to Jajuga's total disability at the time he stopped working. The form completed on October 23, 1997, in support of Jajuga's application for LTD benefits states that Jajuga was incapable of sedentary activity and was totally disabled for his own occupation and for any other work. Dr. Klein's assessment was based on objective evidence: the MRI performed on May 13, 1997, about a week after Jajuga stopped working. Neither the MRI films nor a first-hand account of the MRI results is in the administrative record, although Dr. Borowsky's second-hand description of the scan results is. Dr. Klein's attending physician statement of March 30, 1998, in support of Jajuga's application for a waiver of premiums under the Group Policy similarly supports a finding of total disability. Dr. Klein stated on the form that Jajuga was unable to perform the duties of his job or any other job and that he could not work while under treatment because he could not sit. Dr. Klein's two attending physician statements are the only direct assessments of Jajuga's physical health during this period. Notably, none of Prudential's three denial letters produced during the administrative appeals process discusses Dr. Klein's attending physician statements. On appeal, Prudential puts great weight on the only other piece of contemporaneous evidence in the administrative record: the record of Jajuga's hospitalization for detoxification and depression from May 24 to June 11, 1997. Prudential argues that Jajuga's hospitalization for detoxification on May 24, 1997, shows that he stopped working not because of disabling back pain but to undergo treatment for alcoholism. This is a brand new defense conjured up in litigation. At no point in the administrative appeals process did Prudential assert that Jajuga stopped working because of alcoholism rather than back pain. Of the three denial letters Prudential issued during the appeals process, only the second, dated October 28, 2008, even mentions his admission to the Valley Hospital for detoxification, and that denial letter states that Jajuga stopped working due to back pain and depression. Moreover, no evidence in the recordincluding the Valley Hospital records and the reviews of the administrative record by the outside physicians retained by Prudentialsupports the assertion Prudential now makes that Jajuga stopped working due to alcoholism rather than back pain. Prudential also relies on the report written by Dr. Semar upon Jajuga's discharge from the Valley Hospital on June 11, 1997. Prudential argues that Dr. Semar's discharge plan constituted a medical evaluation of Jajuga's ability to return to work sufficient to overcome Dr. Klein's evaluations. We disagree. The discharge plan states: [Jajuga] will continue with medical follow-up with Dr. Scham and return to work as soon as possible. Diet will be regular. Activities will be normal. Dr. Semar was a psychiatrist, and the discharge summary is concerned with Jajuga's psychiatric health, not his physical health. It is not even clear that this is a statement of Dr. Semar's opinion as opposed to a comment that the patient wished to return to work as soon as possible. Even if Jajuga was psychiatrically able to return to work as soon as possible, the report stated no opinion on whether he was then physically able to perform the duties of his or any other job. For the conclusion that Jajuga was totally disabled under the terms of the Group Policy, we also rely on the related decision by Prudential itself to grant Jajuga's claim for a waiver of premiums under his Individual Policy for being totally disabled. It is undisputed that Prudential waived Jajuga's premiums under the Individual Policy and they continued to be waived until his death. [7] Prudential has no adequate explanation for this difference in treatment. We reject its argument that the eligibility standards in the Group Policy and the Individual Policy substantially differ. The definition of total disability in the Group Policy is substantively indistinguishable from the definition of totally disabled in the Individual Policy. The Group Policy defines total disability as the inability to perform for wage or profit, the material and substantial duties of any job. The Individual Policy's definition of totally disabled is the inability to do any gainful work. Prudential argues, and the district court agreed, that the Group Policy definition's any job is broader than the other definition's any gainful work. We disagree and look to the entire definitions. If one is unable to do any gainful work (Individual Policy), one is also unable to perform for wage or profit, the material and substantial duties of any job (Group Policy). Gainful means profitable or providing an income. Webster's Third New International Dictionary 928 (1993). It is not a reasonable reading of the policies that a person could be so disabled as to be unable to do gainful work but could still perform a job for wage or profit. Indeed, ironically, Prudential's November 29, 1999, initial denial letter equated the two standards, referring to total disability under the Group Policy as an inability to engage in a gainful occupation. The determination of disability under the Individual Policy by Prudential itself is relevant evidence supporting the plaintiffs' claim that Jajuga was totally disabled on May 6, 1997, under the terms of the Group Policy. That the Social Security Administration found Jajuga eligible for SSDI benefits is not conclusive but tends to support our conclusion. See Bard v. Bos. Shipping Ass'n, 471 F.3d 229, 242 n. 17 (1st Cir. 2006) (Although a plan is not required to accept a Social Security adjudication of disability as binding on it where the definitions of disability are different[,] . . . that does not mean that the Social Security determination provides no relevant evidence.); cf. Pari-Fasano v. ITT Hartford Life & Accident Ins. Co., 230 F.3d 415, 420 (1st Cir.2000). The administrative record shows that Jajuga was entitled to SSDI benefits beginning in November 1997. Because entitlement to benefits only begins after the lapse of a five-month waiting period, during which the claimant must be disabled under the terms of the statute, the Social Security Administration evidently determined that Jajuga's disability began in May 1997. [8] See 42 U.S.C. § 423(a)(1), (c)(2). The SSDI statute defines disability as the inability to engage in any . . . kind of substantial gainful work. Id. § 423(d)(2). The Group Policy itself refers to an inability to perform the material and substantial duties of any job. We turn to Prudential's argument that the paucity of relevant evidence from the period around Jajuga's last day of work is reason to hold that the plaintiffs have not carried their burden in this case. That paucity is attributable to Prudential's failure to give Jajuga timely notice of its decision to deny his claim for a waiver of premiums under the Group Policy, as required by the ERISA regulations. We reject the argument because Prudential should not benefit from its own misdeeds. Under the ERISA regulations in effect at the time Jajuga made his claim, employee benefit plans had to establish and maintain reasonable claims procedures. 29 C.F.R. § 2560.503-1(b) (1998). [9] A claims procedure would be reasonable only if, among other things, notice of a decision to wholly or partially deny a claim was furnished to the claimant within a reasonable period of time after receipt of the claim by the plan. Id. § 2560.503-1(e)(1); see also id. § 2560.503-1(b)(1)(i). These regulations state that a period of time beyond ninety days is per se unreasonable. Id. § 2560.503-1(e)(3). Here, MBUSA sent Jajuga's waiver of premiums claim to Prudential on September 10, 1998. However, Prudential evidently did not send any notification that it had denied the claim until November 29, 1999, over a year later, thus in violation of regulations. Further, that notification was sent to MBUSA, not to Jajuga, the claimant, as was required by the regulations. See id. § 2560.503-1(f) (A plan administrator . . . shall provide to every claimant who is denied a claim for benefits written notice. . . . (emphasis added)); id. § 2560.503-1(e)(1). There is no evidence whatsoever that Jajuga received notice of the denial of his Group Policy premium-waiver claim until September 2005. Indeed, his attorney had to pursue MBUSA to find out the status of the claim. This seven-year delay hindered Jajuga's (and after his death, the executor of his estate's) ability to gather proof of his disability in 1997, and matters were made worse by Prudential's evident failure to follow through on obtaining his medical records. After saying in early 2006 that it would obtain Jajuga's medical records directly from his past providers, Prudential evidently did not do so and has provided no evidence that it did. In April and August 2007, Prudential requested medical records from Jajuga while not responding to the statement of Jajuga's attorney that she understood that Prudential already had all of Jajuga's medical records and would request any it did not have from Jajuga's physicians directly. Jajuga's attorney sought those records in mid-2007 from the providers, and in October 2007 she informed Prudential that she was not able to obtain copies of all of Jajuga's medical records dating back to 1997 because some of his providers did not retain records for more than seven years, so that by the time Jajuga was informed of the denial of his claim, those records had been destroyed. Had Jajuga been informed within ninety days of the denial of his September 1998 claim, the additional records of his medical condition as of May 1997 would not have been routinely destroyed. We reject Prudential's unseemly argument that Jajuga's claim was insufficiently supported when Prudential's own failure to maintain reasonable claims procedures as required by the ERISA regulations made obtaining further supporting medical records impossible. [10] To be sure, irregularities and non-compliance do not themselves automatically entitle the plaintiffs to the benefits they seek, and our result does not depend on Prudential's failure to comply with the law. See Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 130 n. 13 (1st Cir.2004); Terry v. Bayer Corp., 145 F.3d 28, 39 (1st Cir.1998); 29 C.F.R. § 2560.503-1(e)(2) (1998) (If notice of the denial of a claim is not furnished . . . within a reasonable period of time, the claim shall be deemed denied and the claimant shall be permitted to proceed to the review stage. . . .). In Recupero v. New England Telephone & Telegraph Co., 118 F.3d 820 (1st Cir.1997), we held that allowing a claim for relief because of inadequacy of formal notice without any showing that a precisely correct form of notice would have made a difference would result in benefit claims outcomes inconsistent with ERISA aims of providing secure funding of employee benefit plans. Id. at 840. Recupero dealt with notices of denial that were insufficient as a matter of law because they failed to include specific reasons why the claim was denied or to cite to any specific plan provisions upon which the denial was based. Id. at 825. We there concluded that the plaintiff had not shown that these procedural deficiencies had prejudiced her. Id. at 840. Here, however, for the reasons stated, plaintiffs have been prejudiced by Prudential's seven-year delay in giving Jajuga notice that his claim had been denied. Nor does our conclusion that plaintiffs are entitled to benefits turn on invoking the equitable powers of federal courts in ERISA cases under 29 U.S.C. § 1132(a)(3). See Glista, 378 F.3d at 131. We hold that, based on the relevant evidence in the administrative record, the Group Policy language, and the unexplained inconsistency in Prudential's award of benefits under the Individual Policy but denial of benefits under the Group Policy, Jajuga was totally disabled under the terms of the Group Policy when he stopped working on May 6, 1997. We do not need to reach the question of whether Prudential has also been arbitrary in its handling of Jajuga's claim.