Doyle v. Paul Revere Life

• Court: Court of Appeals for the First Circuit
• Decided: June 2, 1998
• Docket: 97-1275
• Status: Published

Opinion

USCA1 Opinion

                    United States Court of Appeals

                         For the First Circuit

                         ____________________



No. 97-1275



                             ROBERT DOYLE,



                         Plaintiff, Appellee,



                                  v.



                THE PAUL REVERE LIFE INSURANCE COMPANY,



                         Defendant, Appellant.



                         ____________________


APPEAL FROM THE UNITED STATES DISTRICT COURT



                   FOR THE DISTRICT OF MASSACHUSETTS



              [Hon. Patti B. Saris, U.S. District Judge]



                         ____________________



                                Before



                         Stahl, Circuit Judge,



              Aldrich and Coffin, Senior Circuit Judges.



                         ____________________


Joseph M. Hamilton with whom Mirick, O'Connell, DeMallie & Lougeewas on brief for appellant.

    Mark T. Collins for appellee.



                         ____________________



                            June 2, 1998

                         ____________________

   ALDRICH, Senior Circuit Judge.  Plaintiff-appellee

  Robert Doyle, as an engineer at Textron, Inc., was insured for

  long term total disability benefits under a group policy issued

  to Textron by defendant-appellant Paul Revere Life Insurance

  Company (Paul Revere) pursuant to an employee welfare benefit

  plan.  The plan is subject to the Employee Retirement and

  Income Security Act (ERISA), 29 U.S.C.  1001, et seq.; the

  policy was managed by Paul Revere.  After Doyle ceased work in

  December 1989, he applied for and received interim benefits. 

  Paul Revere discontinued them on March 27, 1991 when it found

  him not totally disabled, and therefore ineligible, and it

  rejected his later appeal.  The principal issue here is whether

  the district court erred in denying Paul Revere's motion for

  summary judgment and, instead, entering summary judgment for

 Doyle.   We reverse.

                               Review

      We review the district court's grant of summary

  judgment de novo.  See Grenier v. Cyanamid Plastics, Inc., 70

  F.3d 667, 671 (1st Cir. 1995); Allen v. Adage, Inc., 967 F.2d

  695, 699 (1st Cir. 1992).  Our first question is Paul Revere's

  authority to determine eligibility.  The parties agree that it

  had discretion.  Normally this means that its decision must be

  upheld unless "arbitrary, capricious, or an abuse of

  discretion."  Diaz v. Seafarers Int'l Union, 13 F.3d 454, 456

  (1st Cir. 1994); see also Firestone Tire & Rubber Co. v. Bruch,

  489 U.S. 101, 111-15 (1989); Recupero v. New England Tel. &

  Tel. Co., 118 F.3d 820, 828 (1st Cir. 1997).  This standard

  means that its decision will be upheld if it was within Paul

  Revere's authority, reasoned, and "supported by substantial

  evidence in the record."  Associated Fisheries of Maine, Inc.v. Daley, 127 F.3d 104, 109 (1st Cir. 1997) (Administrative

  Procedure Act).  Substantial evidence, in turn, means evidence

  reasonably sufficient to support a conclusion.  Sufficiency, of

  course, does not disappear merely by reason of contradictory

  evidence.  See Sprague v. Director, O.W.C.P., 688 F.2d 862,

  865-66 (1st Cir. 1982); see also Sandoval v. Aetna Life & Cas.

  Ins. Co., 967 F.2d 377, 382 (10th Cir. 1992); Jett v. Blue

  Cross & Blue Shield of Alabama, Inc., 890 F.2d 1137, 1140 (11thCir. 1989).

      This deferential standard may not be warranted,

  however, when a conflict of interest exists, such as when the

  policy manager has a personal interest contrary to the

  beneficiary's.  In this case, any award of benefits would come

  out of Paul Revere's own pocket.  Plaintiff notes, also, that

  Paul Revere was a Textron subsidiary.  However, here we suggest

  an important competing motive: having a benefit plan is to

  please employees, not to result in the employer's bad

  reputation.  See Van Boxel v. Journal Co. Employees' Pension

  Trust, 836 F.2d 1048, 1051 (7th Cir. 1987).  Indeed, we venture

  that an employer would not want to keep an overly tight-fisted

  insurer.  The conflict is not as serious as might appear at

  first blush.

      The question comes as to how this should be handled. 

  The circuits have varied from giving the manager no deference,

  see Armstrong v. Aetna Life Ins. Co., 128 F.3d 1263, 1265 (8thCir. 1997) (2-1 decision; reh'g and suggestion for reh'g en

  banc denied), to shifting the burden of exoneration to the

  insurer, see Brown v. Blue Cross & Blue Shield of Alabama, 898

  F.2d 1556, 1566 (11th Cir. 1990), cert. denied, 498 U.S. 1040

  (1991), to applying a sliding scale involving "careful judicial

  scrutiny to make sure the[] action was reasonable," Van Boxel,

  836 F.2d at 1053.

      There are advantages in having a simple procedure, cf.Sandoval, 967 F.2d at 380, which the Armstrong approach

  forecloses despite the parties' agreement to accept the

  insurer's discretion.  The Massachusetts district court has

  prophesied that in case of conflict our court would merely

  "giv[e] 'more bite' to the arbitrary and capricious standard." 

  Doe v. Travelers Ins. Co., 971 F. Supp. 623, 630 (D. Mass.

  1997).  We so do, interpreting "more bite" as adhering to the

  arbitrary and capricious principle, with special emphasis on

  reasonableness, but with the burden on the claimant to show

  that the decision was improperly motivated.  Cf. Sullivan v.

  LTV Aerospace & Defense Co., 82 F.3d 1251, 1255 (2d Cir. 1996). 

  To do more would sacrifice the advantages of the offered

  arrangement.  Doyle has made no showing except to point out the

  subsidiary relationship and the fact that Paul Revere decided

  which claims it would pay, which is not enough.

      This leaves our question not which side we believe is

  right, but whether Paul Revere had substantial evidentiary

  grounds for a reasonable decision in its favor.  We first

  review the policy, and after, the evidence.

                             The Policy

      An employee is eligible for benefits under the policy

  if "totally disabled from any occupation."

      Totally disabled from any occupation, or total

      disability from any occupation means:

  

      1.   because of injury or sickness, the

           employee is completely prevented from

           engaging in any occupation for which he

           is or may become suited by education,

           training or experience . . . .

           (emphasis added).

  

  We, of course, agree that such "'general' disability provisions

  should not be construed so literally that an individual must be

  utterly helpless to be considered disabled."  Hammond v.

  Fidelity & Guar. Life Ins. Co., 965 F.2d 428, 431 (7th Cir.

  1992).  How far from that has been variously, and perhaps even

  irreconcilably, described.  See, e.g., id. (unable to "perform

  all the substantial and material acts necessary to the

  prosecution of some gainful business or occupation");

  Vanderklok v. Provident Life & Accident Ins. Co., 956 F.2d 610,

  615 (6th Cir. 1992) (unable to "pursue 'gainful employment in

  light of all the circumstances.'" (citation omitted)); Torix v.

  Ball Corp., 862 F.2d 1428, 1431 (10th Cir. 1988) ("inability to

  follow any occupation from which [the claimant] can earn a

  reasonably substantial income rising to the dignity of an

  income or livelihood"); Helms v. Monsanto Co., 728 F.2d 1416,

  1420 (11th Cir. 1984) (same); Boss v. Travelers Inc., 4 N.E.2d

  468, 296 Mass. 18, 22 (1936) (unable to "perform[] remunerative

  work of a substantial and not merely trifling character"

  (quotations and citation omitted)).  In addition to "totally

  disabled," we note the policy reads "completely prevented," a

  further emphasis.  Within reason, Paul Revere's discretionary

  power includes not only factual findings as to plaintiff's

  condition, but interpretation of policy terms.  See Allen, 967

  F.3d at 697; cf. Marecek v. BellSouth Servs., Inc., 49 F.3d

  702, 705 (11th Cir. 1995).

                          The Evidence

                                    In favor of Paul Revere is the following.  Paul Revere

  sent Doyle to a neurosurgeon, Dr. Bruce Cook, in October 1990

  for an Independent Medical Examination.  It provided Dr. Cook

  with medical information from its files and a description of

  Doyle's job, and also asked Doyle to provide Dr. Cook with "any

  other information that pertains to your condition."  Asked to

  determine Doyle's medical restrictions and assess their effect

  on his ability to do his job at Textron, Dr. Cook said, "I do

  not think that the mild residual myelopathy impairs him from

  either the written or verbal description that I was given." 

  Acknowledging Doyle's "pain syndrome," he offered that

  treatment should focus on adjusting Doyle's physical position

  at work to reduce strain on his neck, and he recommended

  supervision by an occupational therapist.  He concluded, "His

  restrictions in work would be predominantly in the physical

  realm where he should not do any lifting, bending or stretching

  and should be able to change positions on a frequent basis."

      Apparently on Dr. Cook's advice, Paul Revere had Doyle

  meet with Brian Delahanty, a rehabilitation consultant, in

  January 1991.  Delahanty had information about Doyle's previous

  work history, education (college degrees in engineering and

  business management), medical history, and "expressed current

  functioning levels."  Delahanty concluded that, although Doyle

  was pessimistic, "Various job modifications are available that

  would allow Mr. Doyle to perform computer related employment

  utilizing his engineering skills," and he contemplated Doyle

  returning to work at Textron in a modified position.

      On Delahanty's recommendation, Paul Revere had Doyle

  undergo a Physical Capacity Evaluation in February 1991 at the

  New England Rehabilitation Center of Southern New Hampshire

  (NERC).  A physical therapist and an occupational therapist,

  asked to determine his ability to do his former job, assessed

  Doyle over the course of three hours.  Among other details,

  they documented his expressed functional tolerances: 30-60

  minutes for sitting (45 observed); 10 minutes for standing (15

  observed); one third mile for walking; 15 miles for driving;

  and 15-20 miles for car riding.  After describing other

  limitations, many due to pain, they concluded that Doyle had a

  "sedentary work capacity" at that time and recommended a

  "comprehensive pain program" involving various therapies in

  order to "facilitate a gradual return to work" in his former

  position.  They also recommended that Doyle have a "job site

  visit to alter or adjust the environment to facilitate proper

  body positioning thus decreasing [his] pain and allowing [him]

  to return to work part time."

      Following up the NERC report, Delahanty contacted Doyle

  to discuss work and rehabilitation options, including the

  recommended "pain program."  (Paul Revere previously had agreed

  to continue benefits for six months while Doyle participated in

  rehabilitation.)  Doyle repeatedly expressed resolute pessimism

  as to his ability to work or even to attempt rehabilitation. 

  Although it is true, as Doyle said much later, that he never

  expressly declined it, both Delahanty and Paul Revere

  understood him to refuse to participate.  The record, on the

  whole, supports them.  Although the policy did not require Paul

  Revere to rehabilitate Doyle, its willingness to do so bolsters

  its overall reasonableness.

      On the basis of this evidence, Paul Revere found Doyle

  not totally disabled and discontinued benefits in March 1991. 

  We accept that the evidence sufficiently supports the

  conclusion that Doyle, fifty-four years old, college educated

  in both engineering and business management, and most recently

  working as a senior engineer for a major defense contractor,

  was not "totally disabled from any occupation" because he

  retained a "sedentary" work capacity and a potential for

  further rehabilitation that Paul Revere was willing to pursue

  with a combination of jobsite restructuring, further therapy,

  and decreased hours.  That his capacity, initially at least,

  may have been limited to part-time work does not require

 concluding otherwise.   Cf. August v. Offices Unlimited, Inc.,

  981 F.2d 576, 582 (1st Cir. 1992) (implying that total

  disability means inability to work either part-time or full-

  time); Marecek, 49 F.3d at 705 (finding that part-time work

  capacity precluded total disability status); Simari's Case, 414

  N.E.2d 629 (Mass. App. Ct. 1981) (workmen's compensation)

  (noting that one who was capable of "light part-time sedentary

  work" and who could, with treatment, resume full-time work was

  not permanently and totally disabled).

                             Conclusion

      The collection of conflicting expert opinions is on the

  whole equivocal, the fault of Paul Revere, whose practice was

  to ask about limitations on claimant's ability to do his

  present job, not "any occupation."  Nevertheless, we believe we

  have recited an ample basis within a reasonable interpretation

  of the policy terms.  One interesting circumstance is the

  opinions, given prior to termination of benefits, in which Dr.

  Donald Pettit (Doyle's treating physician) maintained the

  totality of Doyle's disability, coupled with assurances that he

  saw no hope for the future, contrasted with his finding in

  September 1993 effectively conceding at least half-time work

 capacity.   It is true, of course, that Paul Revere did not have

  the latter information in March 1991, and that this described

  Doyle's condition two and a half years later, but, by

  confirming, it does lend color to the earlier appraisals relied

  upon by Paul Revere.

      It is a matter of judgment, but we have given much

  thought to the record appertaining to Doyle's submissions

  before termination of benefits in March 1991, including the

  careful opinion of the district court, as to which, however,

  see Review, supra, and we conclude in favor of defendant.  Paul

  Revere's denial was reasonably supported by substantial

  evidence.  The court erred by not granting summary judgment on

  Count I in its favor.  This, automatically, ends the case for

 later years. 

      The summary judgment for Doyle is reversed; judgment to

  be ordered for Paul Revere.

  

                        - Dissent follows -

             COFFIN, Senior Circuit Judge, dissenting.  My problem

  with the court's resolution lies not in its choice of standard

  of review but in its reading of the evidence from which it

  concludes that "Paul Revere's denial was reasonably supported

  by substantial evidence."

           I begin with the court's reading of the report of Dr.

  Cook, a neurosurgeon.  The essence of the doctor's conclusions

  is the following:

           It is my feeling that the decompressive

           surgery in his neck has been successful in

           relieving pressure of the spinal cord and

           allowing a partial though incomplete recovery

           of spinal cord function.  Mr. Doyle now has a

           chronic pain problem associated with

           immobility in the neck.  I do not think that

           the mild residual myelopathy impairs him from

           either the written or verbal description that

           I was given.  I think that his disability

           centers around a chronic pain syndrome.  The

           only measurable aspect of this is the

           associated immobility in the neck which is

           rather severe and detailed above.  I do not

           think that any further testing is required to

           better elucidate the problem.

  

                The various positions required of Mr.

           Doyle in order to perform his work, especially

           at the computer terminal, seem to exacerbate

           the pain that he has been having and, by his

           description, have made work intolerable to

           him.  I think that any attempt at treatment

           would have to revolve around addressing these

           issues and seeing if there is any adjustment

           that can be made in his position of work to

           diminish the strain on the neck.

  

  Appendix p. 127.  My reading of these conclusions is that (1)

  Doyle has two sources of disability: residual myelopathy [or

  constriction of the spinal cord] and chronic pain syndrome; (2)

  the former does not impair him from the written or verbal

  description of his work; (3) but his disability "centers around

  a chronic pain syndrome," of which a measurable aspect was his

  rather severe neck immobility; and (4) any treatment would have

  to address the pain problem and see if any adjustment in work

  position can diminish the strain on his neck.

           The court, in my view, downplays the impact of pain by

  saying that the pain syndrome was acknowledged, rather than

  that Doyle's disability "centers" around it.  The doctor's

  conclusion based on the residual myelopathy is not a conclusion

  as to his total disability.  In addition, I read the doctor's

  recommendations as to treatment as essential steps to the

  diminishment of pain, the center of his disability.  I further

  see no suggestion in the record that the doctor, or in fact any

  other doctor, felt that Doyle was fabricating or exaggerating

  his pain.  Dr. Cook's conclusion that work restrictions would

  be in the realm of lifting, etc., was necessarily contingent on

  the amelioration of pain.

           I also have a different understanding of what

  rehabilitation consultant Delahanty said in his first letter in

  January, 1991.  Doyle, he acknowledged, had been "an outstanding

  employee."  He also wrote that Doyle "present[ed]" to him "an

  extremely disabled state with limited insight as to returning

  to competitive employment."  Delahanty passed no present

  judgment on Doyle's disability.  Delahanty recognized that all

  his information had come from Doyle and that a Physical

  Capacities Evaluation was needed to establish "some base line

  functionary levels."

           In other words, I read Delahanty's conclusion that

  "various job modifications are available . . ." to depend on

  some ascertainment of what Doyle could really do.  I see

  nothing to suggest that Delahanty "contemplated Doyle returning

  to work at Textron in a modified position" in the sense that he

  thought Doyle was at that time able to return to work.

           The third piece of evidence relied on by the court was

  the Physical Capacity Evaluation of the New England

  Rehabilitation Center.  After stating that, during the three-

  hour evaluation, Doyle "was limited in his activities due to

  poor endurance, pain, pain behaviors and decreased tolerance,"

  its concluding paragraph stated:

                At this time, [patient] presents with a

           sedentary work capacity.  To facilitate a

           gradual return to work, [patient] may benefit

           from a comprehensive pain program involving  

           Psychology, Occupational Therapy, Physical

           Therapy and Biofeedback for symptom control,

           pain management strategies and reeducation as

           well as to increase functional status.  If

           [patient] were to do well with the above, it

           is recommended that [patient] have a job site

           visit to alter or adjust the environment to

           facilitate proper body positioning thus

           decreasing [patient's] pain and allowing

           [patient] to return to work part time.

  

  Appendix p. 168.

  

           The court's summary gave, in my view, short shrift to

  the report of pain, with no suggestion of contrivance on the

  part of Doyle, and again overlooked the conditional nature of

  the Center's assessment of "a sedentary work capacity."  The

  "comprehensive pain program" was not merely to facilitate a

  "gradual return to work" in the sense of easing the return, but

  its success was a precondition.  "If [patient] were to do well

  with the above," then a job site visit to help body positioning

  would be the next step to "decreas[e] [patient's] pain and

  allow[] [patient] to return to work part time."

           My reading of these three reports supports the

  conclusion that Doyle's spinal cord was not damaged such that

  it constituted a barrier to his being able to do part time,

  sedentary work of a nature suited to his background.  But there

  was no discounting of the obstacle of pain as a barrier which

  would have to be surmounted.  A comprehensive many-faceted pain

  program involving psychology, therapy, pain management

  strategies, and reeducation was recommended.  Only if this had

  some success was even a return to part time work envisaged. 

  This, in my opinion, is not substantial evidence supporting

  Paul Revere's denial.

           I would add two other pieces of evidence bearing on

  arbitrariness, or failure to act rationally.  On March 27,

  1991, the rehabilitation consultant Delahanty wrote Paul Revere

  about discussing with Doyle the possibility of pursuing the

  Center's recommendation of what he referred to as "therapeutic

  options, including work hardening."  He reported Doyle's

  statement that his physician felt that he was "not a vocational

  rehabilitation candidate," and that "it would be necessary for

  him to further discuss with his physician the possibility of

  any therapeutic options . . . ."

           Notwithstanding this statement, the consultant made no

  recommendation to follow up the Center's suggestion or in any

  other way to address the pain problem.  On the same day that

  Delahanty made his written report, Paul Revere wrote its letter

  denying Long Term Disability Benefits.  There was no mention of

  discussing the details of a comprehensive pain program with

  Doyle's treating physician.  It referred to the reports of both

  Dr. Cook and the Center as "support[ing] your ability to perform

  sedentary work," with no mention of a precondition that the pain

  barrier must first be surmounted.

           I make one final observation.  I recognize, as does the

  court in its footnote 4, that Social Security Administration

  awards of disability benefits based on an inability to engage

  in substantial gainful employment are not of binding effect on

  disability insurers.  But, in Doyle's Social Security decision,

  the evidence of his "non-exertional limitations" (i.e., pain-

  related limitations) was found to trump what would otherwise be

  a capacity to engage in sedentary work.  It was consistent with

  and supportive of my reading of the Cook and Center reports. 

  Ignoring it in this case seems to me another indication of

  arbitrariness.

           If indeed the court's conclusion, affirming the denial

  of benefits, is commanded by law, an insurer may not only

  choose between doctors but may selectively read medical reports

  from the same doctors or evaluators, selecting those parts

  which support its action and ignoring those which do not.  If

  this can be equated with "substantial evidence," I think that

  the administration of total disability policies is very

  substantially review-free.

           I respectfully dissent.