Carol A. Post v. Hartford Insurance Company

Carol Post believes that she is entitled to long term

disability benefits under her former employer's disability plan.

Her treating physicians maintain that she is disabled. On the

other hand, Hartford Insurance Company, the plan administrator

(who also happens to fund the plan), has hired reviewing

physicians who maintain that Post is not disabled. In other

words, the central issue in this case - whether Post is

disabled - is a "battle of the experts."

"Battle-of-the-experts" cases are often easy for a

reviewing court. If the trial court's standard of review is

arbitrary and capricious, then Hartford usually wins when it has

produced sufficient evidence supporting its position. It cannot

be said to have acted arbitrarily, and summary judgment in its

favor is appropriate. On the other hand, if the standard is de

novo, then summary judgment for either party must be vacated

because there is credible evidence on both sides of the key fact

question.

But this case, a claim that ERISA benefits were

improperly denied, is anything but easy, for the trial court's

standard of review is neither arbitrary and capricious (at least in

its traditional form) nor de novo. In these cases, district courts

must select a standard of review that accords with the extent to

which the plan administrator operates under a conflict of

interest. Here we conclude that the District Court did not select

the proper standard of review, and so we vacate and remand for

consideration under the standard we deem to apply.

We affirm, however, the Court's grant of summary judgment on Post's claim for breach of fiduciary duty because

it is barred by res judicata.

I. Facts and Procedural History

Carol Post was in a serious car accident in November

1993, just a few days after having major dental surgery. At the

time, she was employed as a dentist by Overlook Hospital in

Summit, New Jersey. She sustained a whiplash injury in the

accident, but she nonetheless attempted to return to work soon

afterward. After six days of working, she was forced to stop

because of intractable pain. Overlook, however, offered for her

to try working as a pharmacist for a while (as she has both

dentistry and pharmacy degrees), and she accepted. She

returned to work in December 1993, but was forced to take

nearly a day off each week because of pain. After nine months

of off-and-on working, she resigned due to pain in September

1994. During this period, she tried numerous physical therapy

treatments, none of which significantly improved her condition.

She returned to work again in January 1995, but resigned four

months later because of continuing pain. She has not worked

since.

Post's medical record is voluminous. Between 1993 and

2003, she visited 14 doctors. Her pain management regimens

ranged from traditional treatments like prescription drug

combinations, trigger-point injections, and various forms of

physical therapy, to more exotic treatments like acupuncture and biofeedback. She reports that none has given her significant

relief. Her primary treating physician is currently Dr. Carolyn

Britton, a professor of neurology at Columbia University.

According to Dr. Britton, Post suffers from chronic posttraumatic

pain syndrome characterized by severe myofacial

pain; regular, debilitating headaches accompanied by sensitivity

to light, nausea, and vomiting; irritable bowel syndrome; and

insomnia. Dr. Britton believes that this syndrome is directly

attributable to Post's car accident and that it renders her disabled

from any sustained employment.

In keeping with Dr. Britton's determination, Post's view

of the record is that it indicates that she sustained a traumatic

whiplash injury that sensitized her central nervous system, thus

triggering the development of chronic pain syndrome. This is

Dr. Britton's diagnosis, and it is supported by a number of other

evaluations in the record.

Hartford, on the other hand, believes that the record

indicates that Post suffered no more than a whiplash injury that

has now healed. While it concedes that Post continues to report

pain, it contends that the record contains no reliable diagnosis of

a recognized debilitating condition. In support of its view,

Hartford primarily relies on the reports of Dr. Ekaterina

Malievskaia, its reviewing physician, and Dr. Christopher

Lynch, who performed an independent medical examination.

Hartford also cites the opinions of Drs. Michael John Fiore and Joel Harris,1 who evaluated Post in 1994 and 1996, respectively.

This case is governed by the Employee Retirement

Income Security Act ("ERISA"), 29 U.S.C. �� 1001�1461,

because Overlook Hosiptal's disability plan (the "Plan") is an

"employee welfare benefit plan" as defined by 29 U.S.C.

� 1002(1). Post filed a disability claim with Hartford,

Overlook's disability carrier, soon after she ceased working in

1995. Hartford approved her claim, subject to periodic renewal.

To be considered "totally disabled" under the Plan after

December 6, 1997, she had to be "prevented by [d]isability from

doing any occupation or work for which [she was] or could

become qualified."

From 1995 until 2002, Hartford paid out benefits. In

August 1998, the Social Security Administration approved

Post's application for disability benefits, citing intractable

cervical pain, chronic pain syndrome, and fibromyalgia2 as the

relevant diagnoses. Soon after Post was approved for Social

Security benefits, Hartford asked her to submit a copy of the

administrative decision so that it could offset her benefits. She

responded through counsel that Hartford was not entitled to an

offset under the plain language of the Plan, but she did provide

Hartford with a copy of the decision. Hartford eventually

relented and accepted Post's reading of the Plan.

For reasons not apparent from the record, sometime in late 1999 Hartford took a renewed interest in Post's claim. The

company surveilled her and reported in its claim notes that

surveillance was unsuccessful, as she was not seen leaving her

house. Hartford also began requesting copies of Post's tax

records, ostensibly to take a non-Social Security income offset,

as the Plan allowed. It provides that "Hartford has the right to

require, as part of Proof of Loss: (1) your [Post's] signed

statement identifying all Other Income Benefits, and (2)

[s]atisfactory proof to the Hartford that you and your

Dependents have duly applied for all Other Income Benefits

which are available. The Hartford reserves the right to

determine if proof of loss is satisfactory." Hartford contends

that the "proof . . . that you . . . have duly applied for all Other

Income Benefits" language gives it the right to demand tax

returns, though it is not clear how a tax return would reflect

whether Post had applied for other income benefits. The plain

language of this provision does not authorize the review of tax

returns. (Incidentally, the tax returns confirm that Post was not

receiving any income during the disputed period.)

In June 2001, Hartford determined that Post should

submit to an independent functional capacity evaluation to

confirm her disability. This was permissible under the Plan.

Hartford hired a third-party service to notify Post of its request

and to set up the evaluation. Because Post had requested that all

communication go through counsel, the service's operator

phoned her attorney to schedule the evaluation. Here, the

confusion began. As Hartford's counsel explained at oral argument, apparently the service's operator told Post's attorney

that Post had requested that he be phoned to schedule the

evaluation - meaning simply that Post had requested that all

communication go through him. Post's attorney took the

statement to mean that Post had requested the evaluation; thus,

when he spoke with Post and found that she knew nothing about

it, he relayed to the service that she had not requested it. It then

reported to Hartford that Post had refused an evaluation in

violation of the Plan. No written request was ever made.

In lieu of a functional capacity evaluation, Hartford

referred Post's file to its medical director, Dr. Malievskaia. She

conducted a paper review and concluded that Post was not

disabled because of a lack of objective findings, specifically the

absence of 11 of 18 potential trigger points that would support

a diagnosis of fibromyalgia.

In January 2002, Hartford terminated Post's benefits. In

its termination letter, Hartford quoted the Plan's termination

triggers, putting the following in bold font: "the date you refuse

to be examined, if The Hartford requires an examination." The

letter went on to cite as the bases for termination Post's alleged

failure to submit to an evaluation at Hartford's request and Dr.

Malievskaia's conclusion that Post was not disabled. The letter

also invited Post to file an appeal within 60 days and to send any

documents that she believed relevant. In March 2002, Hartford

denied Post's appeal. Hartford, however, recognized the

confusion over scheduling the evaluation and offered to revisit its decision if she agreed to one. In the meantime, Post had sued

Hartford for wrongful denial of benefits, and undergoing an

evaluation became part of a settlement agreement. The

settlement fully resolved that lawsuit.

Because Post's treating physicians refused to write a

prescription for a full-scale functional capacity evaluation, citing

the damage it might cause given Post's condition, Hartford

agreed to a less strenuous examination. To perform the exam,

Hartford hired Dr. Christopher Lynch. The record does not

reflect any board certifications or specialties, only that he is a

physician. His examination consisted primarily of testing Post

for the 18 trigger points for fibromyalgia. Finding tenderness

but no definite trigger points, Dr. Lynch concluded that she did

not have fibromyalgia or any other disabling condition. After he

submitted his report, Hartford issued a final denial of Post's

claim. Hartford specifically directed Dr. Lynch not to submit

his report to Post, so she had no opportunity to respond to it.

Post then filed this suit in the District Court. In it, she

claims that Hartford violated 29 U.S.C. � 1132(a)(1) and (2).

Subparagraph 1132(a)(1)(B) allows an ERISA plan beneficiary

to sue "to recover benefits due to him under the terms of his

plan, to enforce his rights under the terms of the plan, or to

clarify his rights to future benefits under the terms of the plan."

Paragraph 1132(a)(2) allows a beneficiary to sue for breaches of

fiduciary duties that cause losses to the plan.

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