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Very Plaintiff Friendly Decision – E.D. NC

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  • Very Plaintiff Friendly Decision – E.D. NC

    Here’s a new case out of the Eastern District of North Carolina, Fredrick E. Smith and Beth Smith v. Reliance Standard Life Insurance Company. The court first finds that the defendant’s reviewing physician relied upon clearly incorrect and flawed information.

    Further, on 16 October 2016, Fredrick Smith requested a reconsideration of the appeal denial and attempted to supplement the Administrative Record. Part of his supplemental materials included a copy of a letter from Dr. Klang indicating that there was a mistake made involving his voice recognition software on the 22 January 2016 visit. (Admin. Rec. (DE # 30-16) at 12.) Instead of “can do 7 a half miles” the phrase should have been “can ambulate about a half mile,” and Dr. Klang clarified that Fredrick Smith could walk 8 miles “a week.” (Id.) That is consistent with how Dr. DePaola reported Fredrick Smith’s ability to ambulate in terms of degree, and if her report is accurate, would indicate that his ability to walk had declined significantly from 13 April 2015 (when he saw Dr. DePaola) to 22 January 2016 (when he saw Dr. Klang).

    In response to Dr. Klang’s supplemented information, defendant indicated that its administrative determination on 1 September 2016 was final and that this information would not be considered part of the claim file because the Administrative Record was closed. (Admin. Rec. (DE # 30-10) at 25.) Defendant further asserts that such information is not admissible evidence before the court because it was not part of the Administrative Record when the ERISA determination was made. However, the Fourth Circuit noted in Helton v. AT & T Inc., an ERISA case, that,

    a district court in many cases may not be able to adequately assess a number of the Booth factors in the absence of evidence from outside the administrative record. For example, the fourth factor requires a court to consider whether the coverage determination at issue is consistent with earlier interpretations of the plan. Because the administrative record focuses on the coverage determination at hand, courts would have to look at extrinsic evidence concerning the plan administrator's prior coverage determinations to assess this factor. See Gooden v. Provident Life & Acc. Ins. Co., 250 F.3d 329, 333 (5th Cir. 2001) (explaining extrinsic evidence is necessary to determine “how an administrator has interpreted terms of the plan in other instances” (quotation omitted)). Similarly, one can envision many circumstances in which a court would need to look to extrinsic evidence to evaluate the adequacy of the administrative record, as is required by the third factor, or the impact of a plan fiduciary’s conflict of interest, as is required by the eighth factor. See Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1158 (10th Cir. 2010) (“[W]ithout discovery, a claimant may not have access to the information necessary to establish the seriousness of the conflict [of interest].”).
    709 F.3d 343, 354 (4th Cir. 2013). The third factor, reviewing the adequacy of the materials considered and the degree to which they support the administrator’s decision, is at issue in this case. Such evidence, specifically the typographical errors in Dr. Klang’s medical notes, are extrinsic evidence for the court to consider in determining whether defendant abused its direction in determining Fredrick Smith was not “totally disabled” under the Disability Policy, and as a result, under the Life Policies.
    The court considers the extrinsic evidence demonstrating that the records were flawed. The court concludes:

    Reviewing the Administrative Record as a whole, defendant ignored a vast number of Fredrick Smith’s records when performing its analysis. Further, the court cannot find an example where a court upheld an administrator’s decision to deny benefits based upon an inaccurate independent physician report and its own opinion as a non-medical provider with a conflict of interest, while all treating physicians of the insured recommended a different course of action. Cf. Elliott, 190 F.3d at 606 (finding an administrator’s decision based upon “a combination of [four virtually unanimous] medical opinion[s] . . . indicating that [the insured] was not ‘totally disabled’ under the terms of the Plan” reasonable); Spry v. Eaton Corp. Long Term Disability Plan, 326 F. App’x 674, 679-80 (4th Cir. 2009) (finding that it is not unreasonable per se for an administrator not to adopt the treating physician’s opinions when presented with numerous other physician opinions with the opposite conclusion); Piepenhagen, 395 F. App’x at 955–56 (finding that when an administrator discontinued benefits after disregarding some portion of a physician’s opinion that was favorable to the employee’s claim and “seizing upon” the adverse portion to the employee’s claim unreasonable). This is particularly concerning because of the inaccuracy of the record as applied. See White, 308 F. App’x at 717 (finding an administrator’s reliance on a flawed medical evaluation as evidenced by a party’s affidavit in the case unreasonable); Donovan, 462 F.3d at 329 (finding that the plan administrator’s disregard of new information, namely a doctor’s affidavit correcting an earlier statement because it was based on incomplete information, in favor of the earlier statement, unreasonable).

    Accordingly, the court finds that defendant abused its discretion when determining that Fredrick Smith did not meet the definition of totally disabled under the Disability Policy and under the Life Policies because defendant did not rely upon substantial evidence.2 Rather, defendant relied upon an inaccurate medical report, demonstrated by the incoherent language in the report as well as Dr. Klang’s supplemented statement, over the unanimous opinion of Fredrick Smith’s treating physicians. It cannot be said that defendant’s own medical determinations, given its conflict of interest and the overwhelming evidence to the contrary, was the result of a deliberate, principled reasoning process. Plaintiff’s motion for summary judgment will be granted.
    The opinion is attached below.
    Attached Files