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Bencivenga v. Unum Life Insurance Co.

United States District Court, E.D. Michigan, Southern Division

March 27, 2015



PATRICK J. DUGGAN, District Judge.

Plaintiff Dante J. Bencivenga seeks judicial review of the termination of long-term disability benefits under a group insurance policy (the "Policy") issued by Defendant Unum Life Insurance Company of America ("Unum"). Bencivenga received benefits under the Policy from 2007 through mid-2013, when Unum terminated his benefits upon concluding that Bencivenga no longer satisfied the Policy's disability standard. On January 13, 2014, after exhausting Unum's internal administrative procedures, Bencivenga filed this lawsuit pursuant to 29 U.S.C. ยง 1132(a)(1)(B), a provision of the Employee Retirement Income Security Act of 1974 ("ERISA"), seeking a declaration that he is entitled to reinstatement of his benefits and an award of back benefits.[1] Unum subsequently filed an answer, along with affirmative defenses, to Bencivenga's Complaint, as well as a counterclaim seeking reimbursement of funds it paid to Bencivenga in excess of the amount to which he was entitled.[2]

Presently before the Court is Unum's August 15, 2014 Motion for Judgment Based on the Administrative Record and Motion for Partial Summary Judgment on Defendant's Counterclaim. The Motion for Judgment Based on the Administrative Record asks this Court to determine that Unum properly terminated Bencivenga's benefits while the Motion for Partial Summary Judgment seeks a ruling on Bencivenga's liability to repay allegedly wrongfully dispersed benefits, but not on the issue of the amount he must remit. The matter has been fully briefed. Having determined that oral argument would not significantly aid the decisional process, the Court dispensed with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f)(2). For the reasons set forth herein, the Court will deny Unum's request for judgment on the administrative record and will remand the action to Unum for further factual development. However, the Court will grant Unum's request for partial summary judgment on its counterclaim.


A. The Policy, Bencivenga's Disability, and Medical Records

Unum issued a long-term disability policy to Bencivenga's employer, Bencivenga Insurance Agency, Inc., in July 1993. (ECF No. 15, Pg ID 54.) Bencivenga, the owner of the insurance agency, applied for benefits under the Policy in January of 2007, alleging a disability onset date of December 16, 2006. ( Id. at Pg ID 122-24.)

Bencivenga's claim for income protection benefits included an attending physician statement from James Carney, M.D., Bencivenga's primary care physician. ( Id. at Pg ID 129-31.) In this statement, Dr. Carney indicated that Bencivenga suffered from severe neck and arm pain due to degenerative disc disease, and that this pain precluded Bencivenga from performing even sedentary work.[3] ( Id. ) Specifically, Dr. Carney indicated that Bencivenga could "intermittently" sit, stand, and walk during an eight-hour workday, meaning that he could only perform each task for one hour per workday. ( Id. at Pg ID 130.) Dr. Carney further assessed Bencivenga as being unable to: climb, twist/bend/stoop; reach above shoulder level; push/pull; or operate heavy machinery. ( Id. ) However, Bencivenga was deemed able to "occasionally" (i.e., 1-33% of the time) lift up to ten pounds and to engage in tasks requiring fine finger movements. ( Id. )

On May 14, 2007, Unum sent Bencivenga a letter informing him that his request for long-term disability benefits had been approved under the Policy's "Disability, " as opposed to the "Partial disability, " provisions. ( Id. at Pg ID 420-22.) A Rider attached to the Policy provides the following definitions:

"Disability" and "disabled" mean that because of injury or sickness you cannot perform each of the material duties of your regular occupation.
"Partial disability" and "partially disabled" mean that because of injury or sickness you, while unable to perform all the material duties of your regular occupation on a full-time basis, are:
a. performing at least one of the material duties of your regular occupation or another occupation on a part-time basis or full-time basis; and
b. currently earning at least 20% less per month than your indexed pre-disability earnings due to that same injury or sickness.

( Id. at Pg ID 296.) By approving his claim, Unum acknowledged that the available medical evidence supported Bencivenga's contention that he could not engage in his regular occupation as an insurance agency owner. A vocational analysis requested by Unum and completed by consultant Betty D. Morris on May 22, 2013, indicates that the material and substantial duties of an insurance agency owner include those attendant with selling insurance to existing and potential customers, such as researching policies, calling prospective and current clients, and meeting with prospective and current clients.[4] (ECF No. 17-1, Pg ID 3878-79.)

The letter approving Bencivenga's claim goes on to state that "[a]lthough we are approving benefits at this time, you must continue to meet the definition of disability in your policy in order to qualify for ongoing benefits." (ECF No. 15, Pg ID 421.) This is consistent with the Policy language, which provides: "You must give us proof of continued disability and regular attendance of a physician within 30 days of the date we request the proof." ( Id. at Pg ID 316.) From the time of the initial claim approval through mid-2013 (when Bencivenga's benefits were terminated), Unum paid to Bencivenga disability benefits at a rate of approximately $6, 000 per month "due Cervical Radiculitis with reported exacerbations of arm and neck pain."[5] ( See, e.g., ECF No. 17-1, Pg ID 3867.)

A sampling of treatment notes beginning in 2009 provides greater insight into Bencivenga's physical and psychological condition. In January 2009, Dr. Carney examined Bencivenga, noting that "neck range of motion remains severely limited with severe limitation and pain in the upper extremity with range of motion." (ECF No. 16, Pg ID 2058.) Although Bencivenga reported "reasonable relief from his current complicated medical regimen' of methadone, oxycodone, and ibuprofen, as well as [other prescriptions relating to Bencivenga's mental health, ]" Dr. Carney concluded that Bencivenga had "significant physical disability" from cervical pain and radiculopathy. ( Id. ) Bencivenga had undergone nerve root blocks and received epidural injections in the past to relieve his pain, but these provided minimal relief.

In a letter dated February 18, 2009, Christopher Y. Chang, M.D., a pain management specialist, explained that he had been treating Bencivenga for neck pain and fibromyalgia for roughly one year.[6] The letter states:

The patient has developed debilitating right shoulder and arm pain and numbness, as well as paresthesias and dysesthesias.... A MRI scan showed degenerative disease at C5/C6, C6/C7, and C7/T1. He underwent two diagnostic selective nerve blocks which confirmed the presence of a C7 radiculopathy on the right. He is being treated with physical therapy and medications.

(ECF No. 16, Pg ID 2124.) Magnetic Resonance Imaging ("MRI") of Bencivenga's cervical spine taken approximately six months after Dr. Chang's letter revealed moderate to marked degenerative changes greatest at C5-6 and C6-7, which had progressed since Bencivenga's last MRI in 2005. ( Id. at Pg ID 2060.) "Specific findings included endplate degenerate signal changes and mild to moderate bilateral neural foraminal narrowing at C5-6 and C6-7, but no evidence of a herniated disc or spinal stenosis, and no abnormal signal intensity changes in the cervical spinal cord." ( Id. )

In February 2010, a full record review by Unum deemed Dr. Carney's restrictions and limitations to be "reasonably supported although a greater level of functional ability was noted as being possible." ( Id. at Pg ID 2003.) Sometime thereafter, Unum learned that Bencivenga was receiving benefits in the amount of $1, 200-1, 400 per month under a second group disability policy issued by Union Security d/b/a Assurant. Upon acquiring this information, it appears that Unum began to more closely scrutinize Bencivenga's disability claim. In addition, Unum began exploring whether the income from the second policy could offset Unum's payments.[7] Unum ultimately concluded that it could not. See note 1, supra .

An MRI of Bencivenga's cervical spine in September 2010 revealed "[l]oss of normal cervical lordosis with bilateral spondylotic disc displacements at C5-C6 and C6-C[7]... resulting in borderline mild central canal stenosis without cord compression." (ECF No. 16-4, Pg ID 2926.) During Bencivenga's 2010 office visits with Dr. Chang, he "continued to be treated... for his neck and upper back pain and Fibromyalgia with methadone and oxycodone.... He had tingling in both arms... his neck was stiff and [his range of motion] was decreased." ( Id. at Pg ID 2928.) In October 2010, he "had decreased cervical lordosis, spasm, tenderness and stiffness as well as decreased [range of motion]." ( Id. )

In September of 2010, the Social Security Administration ("SSA") denied Bencivenga's request for social security disability insurance benefits ("DIB") benefits following a hearing before an Administrative Law Judge ("ALJ"). (ECF No. 17-1, Pg ID 3698-3708.) The ALJ concluded that Bencivenga was not disabled within the meaning of the Social Security Act. The SSA's Appeals Council upheld the ALJ's decision in April of 2012. ( Id. at Pg ID 3690.) While Unum continued to pay Bencivenga's disability benefits despite the adverse SSA ruling, it continued to engage in periodic reviews seeking information regarding whether the restrictions and limitations recommended by Dr. Carney were objectively verifiable.

The medical records from 2011 are consistent with the earlier records. On March 16, 2011, Dr. Carney diagnosed Bencivenga with a host of issues, including "Chronic pain syndrome - cervical degenerative/stenosis[.]" (ECF No. 16-4, Pg ID 2929.) In April 2011, Dr. Chang's notes from a physical examination "showed his neck was stiff and tender with his [range of motion] moderately limited...." ( Id. at Pg ID 2929.) An examination on June 3, 2011 "showed a stiff neck with tenderness, decreased [range of motion] and paresthesia of right finger. The Spurling's was positive indicating nerve impingement or irritation. An MRI was ordered."[8] ( Id. ) On June 22, 2011, a "3 Tesla MRI"[9] of the cervical spine revealed "[s]evere degenerative disc disease at the C5-C6 and C6-C7 (severe narrowing with bony edema/fat marrow replacement involving the end plate of C5 C6 which may represent Modic types I and II) levels, stable."[10] ( Id. at Pg ID 2926-27.) A subsequent Spurling's test was negative.

The administrative record reveals that through 2011, Bencivenga continued to fill prescriptions for a variety of medications, some for pain relief. For instance, from January through September 2011, Bencivenga filled prescriptions for oxycodone (a pain medication) seven times. ( Id. at Pg ID 2930.)

What did change in 2011, at least to a limited degree, were Bencivenga's conversations with his psychiatrist, Elliot Luby, M.D. Bencivenga, who "has a long history of depression and panic disorders" dating back to "at least" April 1999, met with Dr. Luby roughly once every month. ( Id. at Pg ID 2951.) Bencivenga's psychiatric treatment records are discussed in greater detail in the analysis portion of this Opinion and Order. For now, it suffices to say that Bencivenga was not claiming disability as a result of his mental health issues. As such, Dr. Luby did not recommend any restrictions and limitations to accommodate Bencivenga's psychological conditions. Unum discusses Dr. Luby's treatment notes because Bencivenga made various statements to him about his physical condition as well as his involvement with the insurance agency.

A note in the administrative record dated March 30, 2011 indicates that the restrictions and limitations "remain supported and [Bencivenga] would be unable to perform his own occupational duties due to the ongoing chronic pain and methadone use." ( Id. at Pg ID 2959.) However, by late October 2011, Unum employee Nora K. Gregory, R.N., conducted a review of the medical records in Bencivenga's file (a "file review"[11]), specifically the treatment records of Dr. Carney (internal medicine), Dr. Chang (pain specialist), and Dr. Luby (psychiatrist), concluding that Dr. Carney's restrictions and limitations - that Bencivenga was unable to sit, type, stand, or walk for extended periods of time - were "overly restrictive[.]" ( Id. at Pg ID 2930.) Nurse Gregory explained this conclusion as being based on her opinion that the restrictions "do not have exam findings to support and the radiological findings are questionable as to the level of functional impairment they support."[12] ( Id. )

In December of 2011, Bencivenga attended an appointment with Paul Park, M.D., a neurosurgeon at the University of Michigan Hospital and Health Centers to discuss potential surgical interventions to ease his cervical pain. Dr. Park's notes indicate that "On physical examination, Mr. Bencivenga... is in minor discomfort due to pain.... On examination, he is neurologically intact[.]" (ECF No. 17-1, Pg ID 3656-57.) "Patient's MRI of the C-spine performed at an outside facility was reviewed and demonstrated arthritic change throughout his cervical spine. This degenerative change is not associated with any significant central canal or neural foraminal stenosis." ( Id. at Pg ID 3657.) "There is no acute neurosurgical intervention indicated at this time." ( Id. ) Dr. Park told Bencivenga about his degenerative disc disease in his spine "and the fact that it does not appear to be causing any significant encroachment on his spinal cord or nerves. We did not recommend surgery." ( Id. ) Bencivenga did inquire about other options, and was therefore given a referral to Michigan's Spine Clinic.

B. Unum Terminates Bencivenga's Disability Benefits

In 2013, as part of its continuing review of Bencivenga's claim, Unum solicited three medical practitioners to conduct file reviews of the medical information in Bencivenga's file to determine whether the objective medical evidence substantiated the restrictions and limitations suggested by Dr. Carney.[13] As with Nurse Gregory, none of these reviewers personally examined Bencivenga. Two of the three reviewers were employed by Unum.

Debra Maeder, R.N., reviewed the medical records from 2010 through the date of her opinion (May 2013), noting that "[b]ased on the whole person analysis, ... the insured has continued to have complaints of chronic pain in excess of the physical findings and diagnostic results.... Diagnostics revealed no evidence of herniated disc or significant spinal stenosis to support the insured's chronic pain complaints." (ECF No. 17-1, Pg ID 3864.) Nurse Maeder concluded her analysis by opining that "[t]he current medical information does not support the inability to perform most seated functionality." ( Id. )

Unum's in-house physician, Tony Smith, D.O., offered a second opinion upon reviewing the available medical records. Dr. Smith's report echoed Nurse Maeder's, finding that the restrictions and limitations recommended by Dr. Carney were "not supported[, ]" even when assigning "appropriate weight to the certifying physician's opinion[.]"[14] ( Id. at Pg ID 3871.) Dr. Smith noted that "imaging studies document no worsening of the" spine "since 2009."[15] ( Id. ) He also noted treatment records revealed no new physical deficits and that no surgery had been performed. ( Id. ) In Dr. Smith's opinion, the objective medical evidence did "not support a complete lack of functionality." ( Id. )

In the interest of reconciling the disability finding by Dr. Carney with the two internal reviews concluding the opposite, Unum sent the medical records to medical consultant Susan Council, M.D. Consistent with Dr. Smith's opinion, Dr. Council determined that Bencivenga could perform sedentary work. According to Dr. Council, "Dr. Carney's opinion appears to be based on Mr. Bencivenga's complaints of pain combined with his Behavioral Health conditions (which are not considered in this review due to policy limitations)."[16] ( Id. at Pg ID 3876.)

Equipped with these three file reviews, Unum terminated Bencivenga's disability benefits on May 29, 2013.

Just prior to terminating Bencivenga's benefits, Unum sent Bencivenga a letter indicating that based on a review of available tax returns, it determined that Bencivenga had been overpaid by approximately $90, 000 due to his receipt of income from the insurance agency. (ECF No. 17-1, Pg ID 3855 (May 2, 2013 Letter).) In July 2013, Unum requested repayment in the amount of $87, 202.68, which it requested once again on November 6, 2013. (ECF No.17-2, Pg ID 4086.) To date, Bencivenga has not repaid Unum for these allegedly wrongfully dispersed disability benefits.

C. Bencivenga's Internal Administrative Appeal

By way of a letter dated August 21, 2014, Bencivenga's legal counsel requested an internal appellate review of the termination decision. (ECF No. 17-2, Pg ID 4069.) As part of the appellate review, Unum referred Bencivenga's file to Charles Sternbergh, M.D., "our physician who is board certified in neurological surgery[.]" ( Id. at Pg ID 4069.) In his report, Dr. Sternbergh noted a conversation occurring in March 2013 (before Bencivenga's benefits were terminated) between an employee of Unum and Dr. Carney in which Dr. Carney said that Bencivenga's "pain complaints are intertwined with his [behavioral health] condition." ( Id. at Pg ID 4055.) During that conversation, Dr. Carney also conveyed his belief that Bencivenga was not capable of performing his own occupation. ( Id. ; see also ECF No. 17-1, Pg ID 3860 (noting that in March 2013, Dr. Carney indicated that Bencivenga was "unable to sustain the physical activity required of his previous full-time occupation").) Dr. Sternbergh also noted that in July 2013, after Bencivenga's benefits had been terminated, Dr. Carney indicated that he was misquoted in his contact with Unum in March 2013. (ECF No. 17-2, Pg ID 4069.) He indicated that Bencivenga suffers from chronic pain syndrome that "significantly affected his life and prevents him from working to the fullest capacity in his previous position as an insurance agent. Minimal activities, minimal lifting and long periods of inactivity, such as desk work or phone work, cause him intermittent significant pain." ( Id. ) Dr. Carney also emphasized "the fact that surgery was not completed, was not evidence of a lack of disease." ( Id. at Pg ID 4070.)

Despite the acknowledgement of restrictions and limitations, Dr. Sternbergh opined that Bencivenga "could sustain full time sedentary physical demand activities, " including his own occupation. ( Id. at Pg ID 4058.) As support, he explained that Bencivenga often traveled between Florida and Michigan, continued to operate a motor vehicle, played golf on occasion, and at times assisted his wife with household chores.

Addressing the March and July conversations with Dr. Carney, Dr. Sternbergh's report notes:

Although claimant's internist and attorney have opined he has behavioral health issues because of cervical pain, claimant's long time psychiatrist... has stated the opposite. Cervical symptoms were ...

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