Herbert A. Ferrari v. Teachers Insurance

Since 1974, Dr. Ferrari, a trained anesthesiologist who has also earned a juris
doctor degree, has suffered from numerous hydrops of the cochlea, a form of
Meniere’s Disease that can cause episodic or permanent hearing loss. In 1984, while
employed as an anesthesiologist at the University of Missouri-Columbia Hospital, Dr.
Ferrari experienced an episode of hearing loss. Following that event, his supervisor
decided that the hearing loss made it inappropriate for the doctor to continue
practicing as an anesthesiologist. He then appointed Dr. Ferrari to serve as the
hospital’s director of respiratory therapy. From 1984 until 1992, Dr. Ferrari remained
at the University of Missouri-Columbia Hospital serving as the Director of
Respiratory Therapy and as Chairman of the Department of Anesthesiology. Hearing
tests conducted on Dr. Ferrari between November 1984 and April 1992 showed
stable, normal hearing.

In May 1992, Dr. Ferrari accepted an anesthesiology faculty position at St.
Louis University. There, despite the earlier problem of episodic hearing loss, he
spent about 90% of his time providing patient care as an anesthesiologist and 10% of
his time in related faculty teaching duties. In April 1995, Dr. Ferrari suffered a
sudden and permanent loss of hearing in his left ear. He sought medical care for the
condition, but continued to perform his anesthesiology duties until February 13, 1996 when he was suspended from further duties in the department of anesthesiology. At
that time his annual salary was $89,999.

As a benefit of his employment at St. Louis University, Dr. Ferrari was
enrolled in TIAA’s group long-term disability benefits plan (the “Plan”), an ERISA-governed
employee welfare benefit plan that provides benefits to employees who
prove they are disabled under its terms. Determination of availability of benefits is
made by TIAA based on the employee’s claim file, which serves as the administrative
record. At the time Dr. Ferrari applied for disability benefits, the Plan defined
disability in three sections. Part (A)(1) specified that an employee who was
completely unable, due to a disability, to perform his normal occupation would be
considered "totally disabled" during the first thirty months following the incident
causing the disability. Part (A)(2) provided that an individual would be considered
"totally disabled" after the first thirty months only if he could not perform any
occupation for which the employee was reasonably suited by education, training or
experience. Part (B) contained a definition of "partial disability," which stated that after six or more months of continuous total disability, as defined in part (A), a
beneficiary would be considered partially disabled if he was able to perform some
occupation for which he was reasonably suited by education, training or experience,
but was unable to earn more than 80% of his previous monthly wage base.

On April 2, 1996, the date Dr. Ferrari applied for disability benefits, his
application indicated that he did not expect to return to work. TIAA determined that
Dr. Ferrari had become totally disabled on February 14, 1996 and began making
payments to the doctor, initially totaling $4,499.96 per month, on May 15, 1996.
TIAA also conducted an occupational evaluation to determine the implications of his
hearing loss on his work ability. The evaluator concluded that, while he was not able
to perform the essential duties of an anesthesiologist, Dr. Ferrari could pursue work
in other fields such as medical administration and legal work. On September 19,
1996, TIAA notified Dr. Ferrari that, based on the information in his file, his benefits would continue for only thirty months through August 31, 1998, since the
administrative record did not support a finding of disability under the part of the
definition that required that he be unable to perform not just his “normal” occupation,
but any occupation for which he was qualified by reason of education, training or
experience. The letter indicated TIAA would be reviewing Dr. Ferrari’s file on a
regular basis to determine continuance of benefits and to assess his potential
eligibility for benefits after the first thirty months.

On February 13, 1997, TIAA wrote to Dr. Ferrari asking him to complete a
form titled "Certification of Continuing Disability" and requesting that he forward
another form for completion by his attending physician. Both Dr. Ferrari and his
physician returned the requested documents. On his form, Dr. Ferrari indicated that
he had not worked in the past twelve months but refused to authorize TIAA to obtain
corroborating financial data from his financial institutions. Letters sent by TIAA on
February 10, 1998 and on July 27, 1998 again notified Dr. Ferrari in writing that as
of August 31, 1998, his benefits under part (A)(1) would end unless the Plan received
documentation supporting continuing disability under the second part of the
definition indicating that he was incapable of performing any other occupation for
which he was suited by education, training, or experience. Dr. Ferrari was directed
to call a group benefits analyst if he had any questions about his benefit status. Dr.
Ferrari did not respond to the July 27, 1998 letter and as of August 31, 1998, TIAA
stopped paying Dr. Ferrari benefits.

On September 24, 1998, Dr. Ferrari’s attorney submitted a written request to
TIAA demanding reconsideration of its termination of his benefits. The letter
asserted that Dr. Ferrari’s condition continued to fall within the definition of total
disability and alleged that due to his disability he was unable to engage in any
occupation for which he was reasonably fitted by education, training, or experience.
On October 5, 1998, TIAA informed Dr. Ferrari that it would evaluate his request to
reconsider its decision and on November 16, 1998 TIAA notified Dr. Ferrari that it had determined that he was not disabled under the Plan and refused to reinstate
disability payments. In the same letter, however, TIAA stated that it would schedule
an independent vocational assessment to reevaluate whether Dr. Ferrari still met the
definition of disability. On December 16, 1998, TIAA informed Dr. Ferrari that the
certified vocational rehabilitation counselor had completed the employability
assessment, which included a transferrable skills/labor market study. The counselor
determined that, despite his hearing loss, there were several occupations available for
Dr. Ferrari in the St. Louis area based on his education, skills, and background,
including that of attorney, medical reviewer, and medical writer. On March 26, 1999,
TIAA again notified Dr. Ferrari that it would not continue his disability payments.
Dr. Ferrari filed suit against TIAA. Both sides filed summary judgment motions. The
district court granted TIAA’s summary judgment motion finding TIAA’s decision not
to continue benefits was reasonable and not an abuse of discretion. This appeal
ensued.

* * *

Because we review TIAA’s decision under an abuse of discretion standard, we
must affirm if a “reasonable person could have reached a similar decision, given the
evidence before him, not that a reasonable person would have reached that decision.”
Cash v. Wal-Mart Group Health Plan, 107 F.3d 637, 641 (8th Cir. 1997) (internal
quotation omitted). Under the abuse of discretion standard, the TIAA plan
administrator’s decision will stand if a reasonable person could have reached a similar
decision. Id. In evaluating reasonableness, the court determines “whether the
decision is supported by substantial evidence which is more than a scintilla, but less
than a preponderance.” Woo, 144 F.3d at 1126 (internal quotation omitted). As we
determined in Part III, supra, we consider only the evidence that was before the plan
administrator when the decision to deny continuing benefits was made. We do not,
however, substitute our own weighing of the evidence for that of the administrator.
See Cash, 107 F.3d at 641.

* * *

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text of the Court's opinion.

Affirmed

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