Hughes v. Hartford Life and Accident Insurance Co.

          ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

          Jeffrey Alker Meyer United States District Judge

         This is an ERISA case about what it means for an insurance company to give a “full and fair” review of a claim for disability benefits. The defendant insurance company terminated plaintiff's disability benefits, once on an initial review and then again after plaintiff filed for an internal appeal review. But while the internal appeal was pending, the insurance company hired a doctor to examine plaintiff, and the doctor then sent the insurance company a report of his findings. Despite plaintiff's request, the insurance company did not give plaintiff a copy of the doctor's report, much less allow plaintiff to respond to the report. The company then denied plaintiff's appeal, while relying heavily on the doctor's report to do so.

         In similar factual contexts, federal courts nationwide have split on the issue of whether an ERISA plan or administrator may procure new medical evidence while it is considering a claimant's appeal and then in turn use that evidence to deny the appeal without first allowing the claimant to see or try to rebut it. The Second Circuit has yet to decide this issue.

         Based on my review of the somewhat complicated regulation that governs here as well as the precedent on both sides, I am left persuaded that the defendant insurance company denied plaintiff a full and fair review. Accordingly, I will grant plaintiff's motion for summary judgment and remand the case to the defendant insurance company to conduct a full and fair review.

         Background

         Plaintiff Patricia Hughes is a registered nurse who worked at Children's Healthcare of Atlanta. Doc. #50-1 at 3. Beginning in January 2011, she was treated by a specialist, Dr. Karen Hoffman, for vertigo and Meniere's disease (an inner ear disorder causing vertigo). Ibid. Hughes's condition progressively worsened as documented by Dr. Hoffman until late 2012, when she suffered constant dizziness and disequilibrium and was reported as unable to walk, drive, or work. Id. at 3-4.

         Defendant Hartford Life and Accident Insurance Company administers and insures the disability benefit plan under which Hughes received coverage through her employer. Id. at 2. Hartford Life approved Hughes's claim for disability and began paying benefits as of November 2012. Id. at 4.

         Hughes briefly returned to part-time work (two hours per day) in early 2013 but stopped by March 2013. She continued to experience setbacks including multiple migraine headaches for which she saw numerous medical specialists through 2013 and 2014. Id. at 5-8. In 2014, she got into two car accidents when she drove into the cars in front of her. Her doctors attributed the accidents to insomnia and vertigo. Ibid. That same year, she reported to Hartford Life that her headaches had decreased to approximately three per month. Ibid.

         Hartford Life decided to engage in covert video surveillance of Hughes in April 2016. She was seen walking her dog, engaging in yard work, and gardening for about an hour. Id. at 8-9. Hartford Life then interviewed Hughes in May 2016, and it forwarded the surveillance footage to Dr. Hoffman to seek a further opinion. Hartford Life also consulted Hughes's neurologist, psychiatrist, chiropractor, and vestibular therapist, and it sent the footage and Hughes's file to the Medical Consultants Network for an independent medical evaluation, which was conducted by neurologist Joseph Jares. Id. at 10-13; Doc. #39-10 at 3-12.

         When asked if Hughes was capable of “activity for 40 hours a week: primarily seated with some standing/walking throughout the day, ” along with some carrying limitations and the opportunity to change positions as needed, Dr. Hoffman responded that she was. However, she noted that Hughes “will not be able to drive when she is having vertigo, ” and that reading and using the computer for long periods of time continue to cause “disequilibrium and dizziness.” Doc. #50-1 at 11.

         Dr. Hoffman later clarified her response in an interview with Hughes's attorney, which was submitted to Hartford Life on appeal. Dr. Hoffman stated that while she had noted some improvement in Hughes's condition in 2016, she “didn't feel that [Hughes] was able to improve enough to go back to work.” Doc. #39-6 at 115.

         Hartford Life asked Hughes's other providers if they recommended any activity limitations stemming from the conditions they were treating. Doc. #39-2 at 6; Doc. #39-10 at 64-75. Hughes's neurologist checked the “no” box in response, adding that Hughes “can't bend over frequently” and needs breaks throughout the day. Doc. #50-1 at 12. Her psychiatrist also checked “no” and added that Hughes is “physically limited and secondarily limited” by the depression that stems from her physical problems. Id. at 13. Her chiropractor did not suggest any activity limitations, but he noted that he had not seen her in several months. Ibid. Her vestibular therapist checked “yes, ” noting that Hughes required the following limitations: “limited reaching, turning, lifting/carrying, head movements, bending, climbing, balancing, eye movements, pushing/pulling, walking on uneven surfaces, operating machinery.” Ibid.

         Hartford Life interviewed Hughes on May 12, 2016. Id. at 10; Doc. #39-10 at 33-36. According to the interviewer's notes, Hughes reported being able to shop at a large store, though she said that the noise sometimes exacerbates her symptoms and that her partner usually accompanies her to the store. She said she could walk up and down stairs but only at a slow pace using the rail. She reported traveling from Georgia to Indiana for a family event but said the noise and movement in the airport caused her symptoms to resurface, requiring the use of a wheelchair. She said she believed she would “be able to return to work at some time.” Id. at 35.

         Dr. Jares also issued a report. He did not dispute that Hughes suffered from a vestibular disorder, but he stated that, based on his observation of the surveillance footage, “she could sit without restriction; stand and walk for up to an hour per day; and use a computer for up to eight hours a day, but for no more than thirty minutes at a time with a two-to-three minute break.” Doc. #50-1 at 13-15.

         Hartford Life terminated Hughes's benefits on October 6, 2016. Id. at 16. The letter stated that “[w]e have completed our review of your claim for benefits and have determined that you do not meet the policy definition of Disability beyond 10/05/2016.” Doc. #39-4 at 74. It further advised that “the Employee Retirement Income Security Act of 1974 (ERISA) gives you the right to appeal our decision and receive a full and fair review.” Id. at 78. The letter also stated that “[y]ou are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records[, ] and other information relevant to your claim.” Ibid.

         On March 28, 2017, Hughes filed an administrative appeal of the decision, arguing that Hartford Life had misconstrued her medical records and the surveillance footage and fundamentally misunderstood the nature of her disability. She wrote that her symptoms “frequently and unpredictably render her incapable of any productive activity, at work or at home, ” such that “it is impossible for her to reliably and consistently perform the tasks required of any full-time employee.” Doc. #39-6 at 126. While on some days she can engage in activities like walking her dog, gardening, or reading, on bad days she has “no tolerance for any activities and may be in bed all day.” Id. at 61-62.

         The appeals unit at Hartford Life forwarded almost all of the records in her file to the Medical Consultants Network for an independent medical evaluation, with directions for the reviewer to “comment on [Hughes's] overall functionality” and to consider her objective complaints, “the impact of her medications on her ability to function in the workplace, ” and her ability to sustain work on a consistent basis. Doc. #39-4 at 62. Dr. Arthur Schiff, a neurologist, was assigned to the case.

         On April 25, 2017, Hartford Life wrote a letter to Hughes advising her that it had scheduled an appointment for her to be examined by Dr. Schiff on May 11, 2017. Doc. #39-5 at 434. The letter advised that Dr. Schiff would send a report of his examination to Hartford Life. Ibid.

         After examining Hughes and reviewing her file, Dr. Schiff sent a report to Hartford Life on May 23, 2017. Doc. #39-5 at 425. On the basis of various neurological tests, Dr. Schiff concluded that the results were normal. He concluded that Hughes suffered from tinnitus, dizziness, and giddiness, and that her diagnosis of vestibular dysfunction was inconsistent with the normal results of her neurological examinations and the physical movements observed in person and in the surveillance footage. Doc. #50-1 at 21; Doc. #39-5 at 431.

         Hughes asked Hartford Life for a copy of Dr. Schiff's report so that she could respond to it before Hartford Life ruled on her claim. Doc. #41-2 at 2. But Hartford Life did not send her the report. Hughes asked again, and still Hartford Life did not send it. Ibid.

         Hartford Life then denied Hughes's appeal on June 29, 2017. The appeal denial letter devoted seven paragraphs to Dr. Schiff's report and repeatedly used it to refute Hughes's statements, such as her claim that turning her head side-to-side exacerbates her vertigo and that her migraines interfere with her ability to work. Doc. #39-4 at 62-63. Only after denying her appeal did Hartford Life give Hughes a copy of Dr. Schiff's report. Doc. #41-2 at 3.

         Hughes then filed an appeal to this Court pursuant to ERISA, 29 U.S.C. § 1001 et seq. The parties have cross-moved for summary judgment. They have agreed to my consideration of the Administrative Record but disagree about whether I may consider four post-appeal rebuttal affidavits that Hughes has submitted in response to Dr. Schiff's report. Doc. #54; see also Docs. #41-4 through 41-7 (copies of the affidavits). It is Hartford Life's position that the Court should not consider these affidavits because they are not part of the administrative record. Doc. #49 at 19.

         The affidavits are from Hughes herself, her long-time partner, her doctor, and her occupational therapist. Dr. Hoffman, who had treated Hughes since 2011, Doc. #50-1 at 3, states in her affidavit that the “inconsistencies” that Schiff noted in his report reflect precisely the variability in function she would expect from a patient with a serious vestibular disorder, Doc. #41-4 at 3. “The nature of the vestibular symptoms is that they are episodic-a patient could be feeling fine one day and the next day develop rotary vertigo so bad it causes the patient to hold onto the wall to walk.” Ibid. She states that a neurologist not trained in vestibular disorders was the wrong specialist to conduct the review, and that “Dr. Schiff did not perform any of the tests which actually have been historically abnormal for Ms. Hughes including audiogram, video ENG, or posturography, so he seems to have omitted the most relevant data from his examination.” Ibid. She concludes that “it remains my opinion that Ms. Hughes's vestibular symptoms are too frequent and too severe to allow her to be a reliably productive employee in any work setting, no matter how light, ” and that working would exacerbate Hughes's already debilitating symptoms. Id. at 4.

         Hughes's partner, Jeannie Johnson, was present during Dr. Schiff's examination. She states in her affidavit that the exam appeared “very elementary, ” “limited, ” and “rushed, ” compared to examinations she has observed over the course of her career as a nurse. Doc. #41-7 at 2.

         The affidavit of Gaye Cronin, Hughes's vestibular therapist, echoes Dr. Hoffman's statement that Dr. Schiff failed to conduct many tests that she would expect of a comprehensive examination of someone with Hughes's symptoms and that have consistently yielded abnormal results from Hughes in the past. Doc. #41-5 at 4-7. “The entire picture is consistent, ” she states, referring to Hughes's disability. Id. at 8. “For the last several years Ms. Hughes's symptoms have been so frequent and unpredictable as to prevent even reliable part time work.” Id. at 9. A job requiring transportation, exposure to movement, bright lighting, or computers would likely cause Hughes's “episodes of incapacitation [to be] much more frequent and severe.” Ibid.

         Hughes alleges that, had Hartford Life disclosed Dr. Schiff's report before making a final decision on the appeal, Hughes would have been able to submit these rebuttal affidavits for consideration as part of the appeal. Doc. #41-2 at 3; Doc. #41-4 at 2 (affidavit of Dr. Hoffman, stating that “if I had been given the opportunity in 2017 [to review and ...