Court Opinion

ID: 148023
Source: CourtListenerOpinion
Date Created: 2010-06-07 23:29:05+00
Date Added: 2024-06-11T17:24:06.263367
License: Public Domain

Case: 09-30668         Document: 00511134205         Page: 1     Date Filed: 06/07/2010

              IN THE UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                       Fifth Circuit

                                                    FILED
                                                                                   June 7, 2010

                                           No. 09-30668                        Lyle W. Cayce
                                                                                    Clerk

OCTAVE FOERSTER SCHULLY, III,

                  Plaintiff - Appellee

v.

CONTINENTAL CASUALTY COMPANY; HARTFORD FINANCIAL
SERVICES GROUP INC; HARTFORD LIFE GROUP INSURANCE
COMPANY,

                  Defendants - Appellants

                       Appeal from the United States District Court
                           for the Eastern District of Louisiana
                                 USDC No. 2:07-CV-1456

Before JOLLY and GARZA, Circuit Judges, and MILLER, District Judge.*
PER CURIAM:**
        In this dispute over long-term disability benefits, the defendants,
collectively “the Hartford,” appeal the district court’s conclusion that the
Hartford abused its discretion in denying physical disability benefits to the
plaintiff, Octave Foerster Schully, III. The Hartford also asks us to overturn the

        *
             District Judge, Southern District of Texas, sitting by designation.
        **
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
   Case: 09-30668   Document: 00511134205     Page: 2    Date Filed: 06/07/2010

                                 No. 09-30668

district court’s discretionary grant of attorney’s fees under 29 U.S.C.
§ 1132(g)(1). For the following reasons, we AFFIRM the district court in both
respects.
      Schully has been suffering from degenerative back disease and mental
disorders for over ten years.    These problems interfere with his ability to
function as an attorney and, in 2003, he applied for disability benefits through
his firm’s long-term disability plan. His initial claim was granted with respect
to his mental disability, but denied with respect to his physical disability. For
two years—the maximum time available under his policy—Schully received
mental disability benefits.   After these benefits terminated he renewed an
earlier claim for physical disability benefits. That claim was denied and that
denial was maintained through a lengthy administrative appeal process.
      In its final administrative review, the Hartford relied on the opinions of
three independent experts, each of whom concluded that Schully had not
supported his physical limitations and accounts of pain with objective medical
evidence, as required under the policy. On the basis of these opinions, the
Hartford rejected Schully’s treating physicians’ conclusions that Schully was
disabled, as well as the results of a Functional Capacity Evaluation that
concluded Schully was not fit for sedentary work. In making its determination,
the Hartford also noted that Schully remained listed as an attorney on his firm
website, indicating that he was capable of performing the duties of an attorney.
Following this final denial, Schully brought the instant action in federal court.
      After reviewing the administrative record, the district court, in an
extensive and thoughtful opinion, concluded that the Hartford abused its
discretion in denying Schully physical disability benefits. In so concluding, the
district court noted that Schully’s alleged functional limitations and subjective
accounts of pain had been repeatedly corroborated by objective medical evidence.
The court found this evidence “overwhelming,” and reasoned that both the

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                                  No. 09-30668

Hartford and its independent physicians concluded otherwise only by crediting
arbitrary or inconclusive evidence. The district court also observed that the
Hartford was operating under a conflict of interest that could have had some
effect on its decision, and that Schully had qualified for disability benefits from
the Social Security Administration, a point that the Hartford had failed to
address.    Because the Hartford “deliberately ignored overwhelming objective
medical evidence” supporting Schully’s claims, the district court also saw fit to
award Schully attorney’s fees.
      On appeal, the Hartford has challenged both the conclusion that the
Hartford abused its discretion and the award of attorney’s fees.
                                        A.
      We review the district court’s conclusion that the Hartford abused its
discretion de novo, applying the same standard as the district court. Crowell v.
Shell Oil Co., 541 F.3d 295, 312 (5th Cir. 2008). After reviewing the record and
the district court’s lengthy but careful and cogent opinion, we find no reversible
error in the district court’s holdings and its conclusions that reversed the
Hartford’s denial of benefits to Schully. The district court correctly reasoned
that it was an abuse of discretion for the Hartford to base its denial of benefits
on the conclusion that Schully’s claim was not supported by objective medical
evidence.
      To be sure, there were lacunas in the Hartford’s experts’ reports
concerning relevant matters to which the plaintiffs’ experts opined, which were
not explained by the Hartford when denying the plaintiff’s claims, as detailed in
the district court’s opinion.    The Hartford also failed to consider Schully’s
longstanding subjective complaints of pain, which were repeatedly corroborated
by the physicians most familiar with his condition and which were consistent
with the medical evidence. As we have often explained, there is no treating
physician preference in the context of ERISA, but neither may an administrator

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                                  No. 09-30668

arbitrarily refuse to credit reliable evidence. See Black & Decker Disability Plan
v. Nord, 538 U.S. 822, 834 (2003). It surely should not effectively ignore it. Nor
may an administrator rely on an expert opinion without considering its basis or
whether, as was the case here, it is in plain conflict with the medical records.
Gothard v. Metro. Life Ins. Co., 491 F.3d 246, 250 (5th Cir. 2007).
      The remainder of the Hartford’s challenges to the district court’s
conclusion are likewise unavailing. To the extent that the district court may
have improperly relied on the determination by the Social Security
Administration’s ALJ that the plaintiff qualified for disability benefits on the
basis of his mental disability, that error was harmless in the light of the
extensive medical evidence demonstrating a physical disability within the
meaning of the policy. Moreover, we believe the district court properly took note
of the Hartford’s conflict of interest and used it as a factor in its analysis in a
manner consistent with Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105
(2008). But even if the district court did err by relying on the conflict to apply
a less deferential standard of review, that error was harmless.
                                        B.
      We review the district court’s award of attorney’s fees for abuse of
discretion. See Donovan v. Cunningham, 716 F.2d 1455, 1475 (5th Cir. 1983).
After reviewing the district court’s opinion, we conclude that the court did not
abuse its discretion in awarding attorney’s fees. According to the district court,
the Hartford “deliberately ignored” Schully’s medical evidence in order to
support its “preferential and predetermined conclusions.” There is significant
evidence that supports this finding and such a finding is not clearly erroneous.
In such circumstances, a district court does not abuse its discretion by awarding
fees under 29 U.S.C. § 1132(g)(1).
      For the foregoing reasons, the district court’s judgment is AFFIRMED.

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