United States District Court, D. Nevada
LLOYD D. GEORGE, District Judge.
The plaintiff, Teresa Feldsher, appeals the decision of the defendant, Liberty Life Assurance Company of Boston ("Liberty"), to conclude her long-term disability benefits after 24 months of payments. Liberty refused to extend the benefits following its determination that Feldsher's impairments were due to mental illness. Liberty additionally determined that the impairments did not prevent Feldsher from working. Feldsher argues that Liberty made procedural mistakes in reaching its decision and substantively misinterpreted her medical records, and therefore was wrong to discontinue her benefits. Each party has moved for judgment on the administrative record, submitting opening briefs (#31, #32), opposing briefs (#34, #35) and reply briefs (#37, #38). The Court reviews Liberty's decision for abuse of discretion.
In October 2009, Feldsher was working as a claims representative for Farmers Group, Inc., when she sought and received short-term disability benefits through Farmers' insurance provider, Liberty. In May 2010, following the expiration of Feldsher's short-term benefits, Liberty granted Feldsher 24 months of long-term disability (LTD).
Feldsher's insurance plan defines a person as disabled, and therefore entitled to 24 months of benefits, if "the Covered Person is unable to perform all of the material and substantial duties of his occupation on an Active Employment basis because of an Injury or Sickness." After the 24-month period, a person is defined as disabled if "the Covered Person is unable to perform, with reasonable continuity all of the material and substantial duties of his own or any other occupation for which he is or becomes reasonably fitted by training, education, experience, age and physical and mental capacity" (AR 000005). Additionally, if Liberty determined that mental illness caused the disability, the person, though disabled, would not be entitled to receive any benefits beyond the initial 24-month period (AR 000015).
Informing Feldsher of its initial decision, Liberty wrote:
"We have determined you are disabled from seizures/tremors and are eligible to receive LTD benefits.
Our review also indicated that you have been diagnosed with major depressive disorder, bipolar and generalized anxiety disorder. We have requested additional information to assess your restrictions and limitations from this diagnosis. Please be advised that if your major depressive disorder, bipolar and generalized anxiety disorder is determined to be disabling, you will also be subject to the Mental/Illness provision in the policy...." (AR 000551).
Over the course of approximately 18 months, while receiving monthly benefit payments from Liberty, Feldsher continued to meet with a variety of doctors to better understand her condition, including visits to her primary care physician, Kimberly Adams, M.D., her neurologist, Venkat Veerappan, M.D., and her therapist, Nancy Clark, M.S., M.F.T.; a "neuropsychological consultation" with Minh-Thu T. Le, Ph.D.; and an independent neuropsychological examination with Ted Young, Ph.D. During this same time period, Liberty consultants Robert Millstein, M.D., James Taylor, Ph.D., and Elisa Fuller, M.D., reviewed Feldsher's file, including medical records from the above visits.
Among other early findings were the following conclusions: in October 2010, Dr. Le found that while "idiopathic seizure disorder" could be a cause, "multiple psychosocial stressors reported cannot be ruled out" (AR 000477); in January 2011, Dr. Fuller found that "the current records suggest that impairments are primarily in relation to the claimant's seizure disorder" and that "there is currently no medical basis upon which to support the presence of impairment secondary to a psychiatric illness (AR 000446, 000440); and in March 2011, Dr. Young found that there could be "a substantial or even dominant organic component to her symptoms, " although they were likely exacerbated by mental illness (AR 000404).
In November 2011, Liberty wrote to Feldsher, informing her that "the condition that disables you has a 24 month limitation" (AR 000341). The letter reprinted the mental illness provisions contained in Feldsher's insurance policy, but otherwise gave no information regarding its decision to conclude its coverage after 24 months.
Internally, however, Liberty continued to review Feldsher's file, seeking more conclusive analysis. In January, 2012, Choon Rim, M.D., conducted an "independent peer review" of Feldsher's medical records, as well as a phone consultation with Dr. Veerappan (AR 000244). Additionally, another independent neuropsychological examination was conducted by Dr. Young, one year after the first examination (AR 000223). This examination was again reviewed by Liberty's consulting neuropsychologist, Dr. Taylor (AR 000218). Also in this time period, Russell Graham, the case manager for Feldsher's file, recommended that a transferable skills analysis ("TSA") be conducted, although for reasons never addressed in the record, this recommendation was not acted upon (AR 000041).
On May 1, 2012, Feldsher received a letter, confirming that her benefits had concluded as of April 27, 2012, after 24 months of receiving long-term disability benefits. Rather than relying on the opinions of Dr. Le, Dr. Fuller, or Dr. Young, all from March 2011 or earlier, the letter specifically relied on the work of Dr. Veerappan, Dr. Rim, Dr. Young, and Dr. Taylor, all from January 2012 or later (AR 000211-000218). Quoting Dr. Veerappan from January 2012, the letter noted that although Feldsher experienced both "genuine seizures" and "non-epileptic pseudoseizures, " these "were under fairly good control, " and "the main reason [she] would not be able to function on the job would by [sic] [her] cognitive difficulties." Quoting Dr. Rim from January 2012, the letter noted that "her cognitive difficulties are the main impairment, " that working would likely be possible as long as "climbing ladders or working at unprotected heights and working around open machinery and driving a motor vehicle" were restricted, and that "[t]he claimant also has non-epileptic psychogenic seizures which may or may not cause impairments, but purely from the neurological perspective, this should not cause any impairment." Quoting Dr. Young from March 2012, the letter noted that there were no "findings... of stable physical brain injury, " that "he was able to identify not [sic] stable cognitive deficits that would prevent employment, " and that "no test findings obtained by [Dr. Young] attest to disability." Finally, quoting Dr. Taylor from a report dated the same day as the letter, the letter noted, "I would concur that findings from [Dr. Young's] standardized assessment did not support limitations in work capacity, " and "it is my opinion that many limitations on work capacity are thought to be due to psychological factors." Thereafter, the letter concluded:
Based on findings from your medical records, evaluations, and reports, the supported restrictions and limitations are of a mental-nervous origin. In addition, a consulting physician reviewed your claim and opined that from a purely neurological perspective, this condition should not cause any impairment. As you have been approved for 24 months of benefits... no further benefits are payable.
In October 2012, Feldsher sent an appeal letter to Liberty, which included additional records from Dr. Veerappan, as well as letters from two previous co-workers indicating their belief that Feldsher was too disabled to work (AR 000146-163). In response, Liberty submitted Feldsher's file to Sherry Withiam-Leitch, M.D., for an additional review of all medical records, including a phone conversation with Dr. Veerappan (AR 000104). According to Dr. Withiam-Leitch, Dr. Veerappan suggested that "[Feldsher] is able to work with precautions." Dr. Withiam-Letich further reported that Feldsher had an "ongoing seizure disorder, " and that she therefore should not drive, swim or bathe alone, and should avoid heights and heavy machinery. Dr. Withiam-Leitch further noted that Feldsher's previous employment at Farmers Group required her to climb, drive, and be exposed to moving mechanical parts. However, Dr. Withiam-Leitch ultimately concluded that Feldsher "has the capacity for full-time work" (AR 000110).
This report was subsequently submitted to Bernadette Cook for a TSA. Cook relied on Dr. Withiam-Leitch's comprehensive review of Feldsher's records, along with documents submitted by Feldsher to Liberty, such as an "Activities Questionnaire, " to complete the TSA. The documents consulted included a description of her employment duties, as described by her employer (AR 000100). The "Essential Job Functions" category included the following requirements:
"Investigates, confirms coverage, determines liability, establishes damages, reports status and negotiates the settlement of assigned cases (has authority to make payment of assigned claims within prescribed limits). Adjusts all types of claims. Inspects damaged property and vehicles, and determines claims-related damage. Estimates the cost of repair or replacement of damaged or stolen property and vehicles. Determines and reports on subrogation potential. Initiates the sale of salvage vehicles, personal property, and miscellaneous salvage items. Reports theft, fraud, and arson losses as required to state and industry agencies. Performs most duties on an individual basis, and work has a direct bearing on Management results. Represents the Company from a public relations standpoint and must conduct oneself as a member of Management at all times. Personal contacts are a major part of activity and include policyholders, claimants, agents, witnesses, repair facilities, contractors, police and fire departments, state and county fraud and arson personnel, special investigators, attorneys, expert witnesses, members of the medical profession and all other persons incident to the investigation and processing of claims. Promotes safety at all times and complies with safety/ergonomic standards as outlined in relevant company published manuals. Performs other duties as assigned. (AR 000707-708)
Cook made no reference to separate sections of the document, entitled "Physical Demands" and "Special Skills Requirements, " which described the job as requiring "climbing [and] reaching, " warning that employees may be exposed to "uncontrolled outside environmental conditions [and] moving mechanical parts, " and requiring employees to maintain a "valid driver's license." Notwithstanding the limitations recommended by Dr. Withiam-Leitch, Cook concluded that "Ms. Feldsher would be able to perform the essential functions of her own occupation as well as the essential functions of the [five] alternative occupations identified. With a reasonable degree of vocational certainty, Ms. Feldsher would be able to earn the wages noted" (AR 00102).
In January 2013, Liberty responded to Feldsher's appeal by upholding its decision to deny future benefits. In a letter, Liberty wrote:
The claim file does not support Ms. Feldsher's claim that cognitive impairment is a result of her genuine seizure disorder and/or a physical brain injury, rather the data suggest her cognitive complaints arise from psychological factors.
The policy limits Mental Illness, Substance Abuse and Non-Verifiable Symptoms claims to a period of 24 months. Ms. Feldsher exhausted that period on April 27, 2012. The supported physical restrictions and limitations arising from Ms. Feldsher's diagnosis of genuine seizure ...