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Denial of Disability Claim by Self-Funded Plan Upheld as De Novo Correct and Reasonable

Denial of Disability Claim by Self-Funded Plan Upheld as De Novo Correct and Reasonable

Smith v. Cox Enterprises, Inc., 2015 WL 331116 (N.D. Ga. Jan. 27, 2015)

ERISA and Life Insurance News
(May 12, 2015)

Smith brought an action under ERISA to recover disability benefits from a self-funded employee benefit plan sponsored by her employer. She maintained she was totally disabled as the result of Meniere's disease, a condition affecting the inner ear, and complications therefrom, including vertigo. Smith was employed as an administrative assistant, a sedentary position.

During an earlier review of a claim for short term disability benefits, Smith's medical records were reviewed by a board certified otolaryngologist and a board certified neurologist, both of whom found a lack of support for a totally disabling condition.  In addition, the otolaryngologist spoke with Smith's treating physician who expressed the chief concern that she might suffer a vertigo episode while driving to work and be injured.  He added that she "would actually have no problem doing her work at home or at work if she could get a ride there."

On an attending physician's statement, Smith's doctor also indicated that she was capable of "sedentary work activity" and that she was capable of such work for eight hours a day, five days a week.  He identified only limitations of  no climbing, crawling, kneeling, pulling, pushing, bending, twisting, stooping, no neck and head movements, and no lifting more than 20 pounds.

Smith's claim was denied by Aetna, the plan's third-party claims administrator.  During the ensuing administrative appeal, Smith's records were reviewed by a third independent physician, a board-certified otolaryngologist.  This physician also spoke with Smith's treating physician, who indicated that there was no specific record regarding Smith's inability to drive.   The independent reviewer concluded that there was insufficient information to support a functional impairment and that Smith could perform sedentary to medium work.  The denial of Smith's claim was upheld.

In the ensuing litigation, under an arbitrary or capricious standard of review, the court granted summary judgment in favor of Cox Enterprises.  First, consistent with the methodology prescribed by the Eleventh Circuit, the court concluded that the denial was not de novo "wrong."  "While it is clear that Smith suffers from Meniere's disease, migraines, vertigo, and hypoactive labyrinth, she failed to provide sufficient medical evidence that these conditions prevent her from performing her job," the court wrote.  The court noted that Smith had been diagnosed with Meniere's disease in 2005 and had successfully worked full-time for six years.  "Diagnosis alone," the court reasoned, "cannot support a claim for long-term disability."

Finally, the court determined that – even assuming that the decision was "wrong"— it was not unreasonable, i.e., arbitrary or capricious.  Smith's physician himself had provided "documentation that is blatantly at odds with the contention that Smith is permanently disabled,"  the court noted.  Moreover, "multiple medical notes, diagnostic reports, and peer consultations comport with the assessment and opinion of three independent physicians and Aetna's in-house nurse: Smith is capable of performing full-time, sedentary work,"  the court wrote.  "These opinions were not baseless and Aetna's reliance on them was not misplaced," the court concluded.

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H. Sanders Carter
T (404) 962-1015
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Andrea K. Cataland
T (404) 962-1045
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Kenton J. Coppage
T (404) 962-1065
F (404) 962-1256

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