United States District Court, W.D. Michigan
[Copyrighted Material Omitted]
For Kandise Schnoor, plaintiff: Troy W. Haney, Haney Law Office PC, Grand Rapids, MI.
For Walgreen Income Protection Plan for Pharmacists and Registered Nurses, defendant: Eric P. Mathisen, Ogletree Deakins Nash Smoak & Stewart PC (Valparaiso), Valparaiso, IN.
HON. GORDON J. QUIST, UNITED STATES DISTRICT JUDGE.
Plaintiff, Kandise Schnoor, sued Defendant, Walgreen Income Protection Plan for Pharmacists and Registered Nurses, under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., alleging tat Defendant improperly denied her short-term and long-term disability benefits. The parties have filed cross motions for judgment on the administrative record (docket nos. 18 & 19).  After review of the administrative record, for the reasons set forth below, the Court will grant Schnoor's motion for short-term and long-term disability benefits.
Walgreen Co. (Walgreens) sponsors a self-funded employee benefit plan--the Walgreen Income Protection Plan for Pharmacists and Registered Nurses (Plan)--for eligible employees. (Docket no. 1, Page ID 46.) The Plan provides short-term and long-term disability benefits. ( Id. at 44.) Benefits available during the first 180 days of a disability are defined as short-term benefits, and benefits available after 180 days are long-term benefits. ( Id. at 47.) For purposes of short-term benefits:
[T]he words 'disabled' or 'disability' mean that, due to sickness, pregnancy or accidental injury, [an employee is] receiving appropriate care and treatment
from a doctor on a continuing basis and [an employee is] prevented from performing one or more of the essential duties of [the employee's] Walgreens occupation.
( Id. ) For long-term disability benefits,
'disabled' or 'disability' means that, due to sickness, pregnancy, or accidental injury, [an employee is] prevented from performing one or more of the essential duties of [the employee's] own occupation and [is] receiving appropriate care and treatment from a doctor on a continuing basis; and for the first 18 months of long-term benefits [an employee is] unable to earn more than 80% of her pre-disability earnings or indexed pre-disability earnings at her own occupation from any employer in [her] local economy; or following that 18-month period, [she is] unable to earn more than 60% of [her] indexed pre-disability earnings from any employer in [her] local economy at any gainful occupation for which [she is] reasonably qualified, taking into account [her] training, education, experience, and pre-disability earnings.
(Docket no. 10, Page ID 47.) The Plan grants to Sedgwick, as claim administrator, the authority to construe and interpret the Plan and make benefit determinations, including claims and appeals determinations as Sedgwick deems " appropriate" in its " sole discretion." ( See id . at 58.) The parties agree that the Plan is governed by ERISA.
Beginning on August 2, 2001, Schnoor worked as a pharmacist for Walgreens. ( Id. at 130.) On April 22, 2011, Schnoor submitted a short-term disability claim. ( Id. ) Sedgwick approved one week of short-term disability benefits for April 29, 2011 to May 5, 5011. ( Id. at 75.) Thereafter, Sedgwick denied Schnoor's claim on the basis that Schnoor did not qualify for continuing benefits because she failed to provide " objective medical documentation of clinical findings . . . which would [have] prevent[ed] [her] from performing [her] job functions as of May 6, 2011." ( Id. at 1337.) On October 19, 2011, the Social Security Administration awarded Schnoor Social Security Disability benefits. ( Id. at 171-74.)
A. First Appeal
On November 16, 2011, Schnoor appealed Sedgwick's denial of short-term disability benefits and submitted a written document supporting her appeal and attached supporting medical records. ( Id. at 207-56.) Sedgwick retained Insurance Appeals, Ltd. to conduct two " peer reviews" of Schnoor's medical records. ( See id. at 1204.) Dr. Siva Ayyar, M.D., conducted the first review. ( Id. at 1204-10.) Dr. Ayyar is a board certified specialist in occupational medicine. ( Id. at 1210.) Dr. Penny Chow, M.D., a board certified psychiatrist, conducted the second review. ( Id. at 1211-23.) On or about December 22, 2011, Sedgwick notified Schnoor that it had affirmed the denial of short-term benefits on appeal because Schnoor did not meet the Plan's definition of disability. ( Id. at 1224-27.) The denial letter stated that if Schnoor wished to request a second formal appeal, Schnoor could do so by written request for review within 90 days of receipt of the letter. ( Id. at 1226.)
B. Second Appeal
On March 14, 2012, Schnoor submitted a second appeal of Sedgwick's denial of her short-term benefits claim and attached additional, updated medical records. (Docket no. 10, Page ID 178-92.) Sedgwick retained Reliable Review Services to conduct two additional " peer reviews" of Schnoor's medical records. (Docket no. 15, Page ID 1678-96.) Dr. Leonard Sonne, M.D., a board certified internist and pulmonary specialist, conducted the first review. ( Id.
at 1678-85.) Dr. Marcus Goldman, M.D., a board certified psychiatrist, conducted the second review. ( Id. at 1686-96.) On the basis of these reviews, Sedgwick again affirmed the denial of Schnoor's disability benefits on May 22, 2012. Schnoor filed this lawsuit on June 26, 2012, to recover short-term and long-term benefits due to her under the terms of the Plan, pursuant to ERISA, 29 U.S.C. § 1132(a)(1)(B).
II. STANDARD OF REVIEW
The threshold issue is the applicable standard of review.  Generally, in an ERISA case, a court reviews a denial of benefits de novo " unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989); see also Perez v. Aetna Life Ins. Co., 150 F.3d 550, 555 (6th Cir. 1998). " When the plan administrator has discretionary authority to determine benefits . . . the court reviews a denial of benefits under the 'highly deferential arbitrary and capricious standard of review.'"  Smith v. Cont'l Casualty Co., 450 F.3d 253, 259 (6th Cir. 2006) (quoting Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir. 1996)). " The arbitrary and capricious standard is the least demanding form of judicial review of administrative action." Farhner v. United Transp. Union Discipline Income Protection Program, 645 F.3d 338, 342 (6th Cir. 2011) (internal quotation marks and citation omitted). " Therefore, if the Plan Administrator's decision is supported by substantial evidence, then it should be upheld." Id. " In other words, the Plan Administrator's decision should be rational in light of the Plan's provisions." Id. (internal quotation marks and alterations omitted). " [T]he deferential standard of review does not mean courts should " rubber stamp" a plan administrator's decision--a court must review the quantity and quality of the medical evidence on each side." Schwalm v. Guardian Life Ins. Co. of Am., 626 F.3d 299, 308 (6th Cir. 2010). A decision reviewed under the arbitrary and capricious standard " must be upheld if it results from a 'deliberate principled reasoning process' and is supported by 'substantial evidence.'" Id. (quoting Baker v. United Mine Workers of Am. Health & Ret. Funds, 929 F.2d 1140, 1144 (6th Cir. 1991)). " A court may consider only that evidence presented to the plan administrator at the time he or she determined the employee's eligibility in accordance with the plan's terms. The court's review is thus limited to the administrative record." Id.
In this case, Schnoor argues that Defendant failed to conduct a deliberate and principled review of Schnoor's claim, and the medical evidence " strongly preponderates in her favor." (Pl.'s Br. for J. on Merits, Docket no. 18, Page ID 2484.) She argues that because Defendant's only stated reason for denying her disability claims is that she lacked objective medical evidence to corroborate her subjective claims of cognitive dysfunction--in addition
to Chronic Fatigue Syndrome and Fibromyalgia--and that Defendant did not adequately consider Schnoor's objective evidence, Defendant's denial was not supported by substantial ...