Spry v. Eaton Corporation Long Term Disability

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 08-1431

EVA SPRY,

Plaintiff - Appellee,

v.

EATON CORPORATION LONG TERM DISABILITY PLAN,

Defendant – Appellant,

and

BROADSPIRE SERVICES INCORPORATED,

Defendant.

Appeal from the United States District Court for the District of
South Carolina, at Charleston. Margaret B. Seymour, District
Judge. (2:07-cv-00156-MBS)

Argued: March 25, 2009 Decided: June 2, 2009

Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.

ARGUED: Anna K. Raske, BENESCH, FRIEDLANDER, COPLAN & ARONOFF,
LLP, Cleveland, Ohio, for Appellant. Robert Edward Hoskins,
FOSTER LAW FIRM, LLP, Greenville, South Carolina, for Appellee.
ON BRIEF: Jeffrey D. Zimon, BENESCH, FRIEDLANDER, COPLAN &
ARONOFF, LLP, Cleveland, Ohio, for Appellant.
Unpublished opinions are not binding precedent in this circuit.

2
PER CURIAM:

Eaton Corporation Long Term Disability Plan (“the Plan”)

appeals a district court judgment against it in an action

brought by Eva Spry alleging that the Plan wrongly terminated

her long-term disability benefits. We reverse and remand for

entry of judgment in favor of the Plan.

I.

Eaton Corporation is a multi-national company that offers

both short-term and long-term disability benefits for many of

its employees. It funds these plans and helps to administer

them.

To be eligible to receive long-term disability (“LTD”)

benefits under the Plan, a participant must show that she

“cannot work due to an illness or injury,” that she has a

“covered disability,” and that she is “under the continuous care

of a physician who verifies, to the satisfaction of the Claims

Administrator, that [she is] totally disabled.” J.A. 158. The

Claims Administrator is a “third party administrator retained by

Eaton to process and review disability claims and to rule on the

first level appeals from denials of claims.” J.A. 136.

Broadspire Services Incorporated (“Broadspire”) was the Plan’s

Claims Administrator. The Plan also allows for a final appeal

to Eaton as the Plan Administrator. For ease of reference, we

3
will refer to the Claims Administrator and the Plan

Administrator collectively as “the Administrator.”

As is relevant here, a claimant is considered to have a

“covered disability,” if she is “totally and continuously unable

to engage in any occupation or perform any work for compensation

or profit for which [she is], or may become, reasonably well

fitted by reason of education, training or experience.” J.A.

158. To determine whether a claimant has a covered disability,

the Administrator evaluates objective evidence of the claimed

disability, including

• Physical examination findings (functional
impairments/capacity);

• Diagnostic tests results/imaging studies;

• Diagnosis;

• X-ray results;

• Observation of anatomical, physiological or
psychological abnormalities; and

• Medications and/or treatment plan.

J.A. 162. For a claim that has been approved, the Plan requires

continued periodic certification of the disability, which can

include independent medical examinations, medical file and

record reviews, and functional capacity tests.

Spry is a 62-year-old woman who resides in Manning, South

Carolina. She began working for Eaton in 1980 and was a Plan

participant. In early 2000, she began complaining of numbness

4
in her hands. According to her primary care physician, Dr.

Joseph Williams, an MRI of her cervical spine revealed the

following:

Markedly severe spinal stenosis focally at C3-4 due to
large osteophytes compressing the cervical cord as
well as an accompanying disc protrusion that protrudes
along with the osteophytes. Moderate to severe spinal
stenosis also evident at C4-5 without disc herniation.
Herniated disc is also present at C6-7 postero-
rightward and impinging upon the exiting nerve root on
the right and effacing the neural foramen.

J.A. 516. Spry consequently ceased working on March 20, 2000,

and underwent surgery. Although she felt better afterwards, she

was not ready to return to work by July 2000. Because her six-

month waiting period for LTD benefits was coming to an end, she

submitted an LTD benefits claim.

In support of her claim, Dr. Joseph Williams and her other

primary care physician, Dr. Brenda Williams, signed statements

attesting that Spry suffered from cervical myelopathy and

cervical spondylosis. The statements reported that Spry

suffered weakness in her arms and shoulders, and hand tremors,

and that she had difficulty walking. They affirmed that Spry

was “[t]otally and [p]ermanently [d]isabled” and could not work

even with restrictions. J.A. 588-89.

On August 23, 2000, her LTD benefits claim was approved.

In late 2000, Spry also was awarded Social Security disability

5
income benefits, having been determined by the government to be

disabled as of March 17, 2000.

After the Administrator approved Spry’s LTD benefits claim,

her eligibility to continue to receive LTD benefits was reviewed

periodically, beginning in 2002. For the first review, Dr.

Brenda Williams opined that Spry continued to be totally

disabled and noted that Spry was “chronically in pain in the

shoulders, arms, hands, [and] knees and is significantly anxious

and depressed.” J.A. 537. The review resulted in Spry being

approved for continued benefits.

The next review occurred in 2004 and also resulted in the

continuation of Spry’s benefits. That review considered an

opinion of Dr. Joseph Williams that Spry continued to be unable

to work primarily as a result of her cervical problems. He

noted that her diabetes also contributed to her disability. He

reported limited motion in her neck and shoulders, decreased

strength in her right hand, and pain in her shoulder and neck.

He also noted that she suffered from headaches and balancing

problems and from a “[m]arked limitation” from a

“[m]ental/[n]ervous [i]mpairment.” J.A. 543.

The Administrator sent Spry’s records to two other

physicians. Dr. Tamara Bowman, an internal medicine specialist,

concluded, “[f]rom an internal medicine standpoint, there are

insufficient objective clinical findings documented to support a

6
level of functional impairment that would render [Spry] unable

to perform any occupation.” J.A. 566. However, Dr. Jaime

Wancier, a neurologist, found that Spry was totally disabled as

of May 5, 2004. He stated:

The presence of continued complaints of pain in the
neck down into the arms, decreased strength in the
upper extremities, etc. are most likely related to
chronic changes within the spinal cord secondary to
the severe stenosis that the claimant had as reported
in all of the x-rays. Most likely, the claimant
sustained chronic changes within the spinal cord
secondary to vascular compression. These changes are
most likely chronic in nature, irreversible and most
likely, permanent.

J.A. 563.

The next review of Spry’s claim began in 2005. Spry

submitted a detailed statement documenting her continued

problems as well as a statement from Dr. Joseph Williams noting

his continued view that she was totally disabled. Dr. Williams

also submitted his medical records through June 2005.

As with the prior review, the Administrator asked Dr.

Bowman to review Spry’s records. Dr. Bowman concluded again

that Spry was not totally disabled from an internal medicine

standpoint and also noted that in the records she was provided

“there is no documentation of a comprehensive neurologic,

musculoskeletal, or joint examination.” J.A. 656. On that

basis, Dr. Bowman stated that she could not “comment on any

7
restrictions or limitations based on [Spry’s] history of

cervical myelopathy.” J.A. 656.

The Administrator then referred Spry to neurologist Dr.

Charles Jervey on October 11, 2005, for an independent medical

examination (IME). Dr. Jervey examined Spry and concluded that

her surgery had corrected her cervical myelopathy. He noted

that her postoperative neurosurgeon’s exam was “relatively

normal . . . except for residual mild weakness which according

to [the neurosurgeon’s] report was much improved.” J.A. 671.

Dr. Jervey observed that Spry did not put forth full effort in

the strength tests he administered. He stated that although she

continued to express “subjective complaints,” because his

“objective findings [we]re relatively limited and seem[ed] to

[be] primarily . . . effort related,” he was “unable to

determine precisely how much, if any, disability exists.” J.A.

671. He continued, “My best opinion, however, is that she does

have the strength to return to work. The primary issue would be

one of pain and again that is a subjective complaint. . . . I

would think the patient could return to light duty work.” J.A.

671.

Accepting Dr. Bowman’s and Dr. Jervey’s opinions, the

Administrator had a vocational specialist prepare an

Employability Assessment Report (“EAR”) based on the functional

limitations derived from those opinions. After speaking with

8
Spry concerning her vocational background, interests, and

functioning level, the vocational specialist concluded that Spry

was employable and identified several sedentary jobs that she

could perform. A subsequent Labor Market Survey (“LMS”) found

that several jobs that she could perform existed in Manning and

surrounding areas. Accordingly, Spry’s benefits were terminated

on January 4, 2006, effective February 1, 2006.

Spry appealed the decision. She hired counsel, who

submitted results from a cervical myelogram and a CT scan

conducted on November 1, 2005, as well as physicians’ reports

from spinal surgeon Dr. Rakesh P. Chokshi--to whom Dr. Joseph

Williams had referred Spry--and radiologist Scott H. Allen. Dr.

Chokshi’s October 24, 2005, report notes that Spry complained of

significant pain but demonstrated motor strength of “5/5 in all

the major muscle groups in the upper extremities,” with “normal

and symmetrical” deep tendon reflexes, and “lumbar range of

motion [that] was reasonably well preserved.” J.A. 860.

Reviewing Spry’s November 1 tests, Dr. Chokshi noted that they

did “not show any significant stenosis.” J.A. 861. He also

opined that Spry did not need any further surgery and advised

her to stay active, including by doing her neck and back

exercises. Dr. Allen, reviewing the same tests, concluded that

Spry had a “mild degree of canal stenosis through the area of

fusion [that] appears to be due to diffuse bulge of the disc

9
along with spondylosis.” J.A. 864. His report added, “There is

facet arthritis as well. There is no evidence of disc

herniation and there does not appear to be significant foraminal

narrowing.” J.A. 864.

Spry also submitted updated medical records from Dr. Joseph

Williams, including the report from a January 11, 2006,

neurological exam. Dr. Williams noted that Spry still had “a

residual right cervical radiculopathy” and “some myelopathy” and

that she had been advised to undergo more surgery. J.A. 471.

Dr. Williams reported that his exam revealed strength of only “3

out of 5 on the right side” and unsteadiness on her feet and

left leg. J.A. 471. He stated that Spry suffered from the

following ailments: “[c]ervical disc disease S/P cervical disc

surgery with residual weakness in right arm,” “[h]erniated

lumbar disc or left lumbar radiculopathy,” diabetes mellitus

with “diabetic neuropathy,” hypertension, hyperlipidemia,

history of “depression and chronic pain syndrome,” and history

of “gouty arthritis involving left great toe.” J.A. 471.

The Administrator asked neurologist Dr. Vaughn Cohan to

review Spry’s records. Dr. Vaughn concluded that the records

did not indicate that Spry was totally disabled and explained

why he disagreed with Dr. Wancier and Dr. Joseph Williams. The

Administrator subsequently upheld its decision to terminate

Spry’s benefits, notifying her by a letter dated July 13, 2006.

10
 Spry then initiated a final appeal, prompting the

Administrator to seek additional physicians to review Spry’s

records. Osteopath Dr. Michael Goldman concluded that the

records contained no evidence that Spry was unable to work.

Psychologist Dr. Lawrence Burnstein found no documentation that

Spry was totally disabled from a psychological perspective.

Internist Dr. Dennis Mazal determined that no internal medical

issues would prevent Spry from working. And neurologist Dr.

Henry Spira found that no neurological condition precluded

employment for Spry. On September 20, 2006, the Administrator

also requested neurological and orthopedic opinions from Medical

Review Institute of America, Inc. (“MRIoA”). Both MRIoA

reviewers concluded that there was no documentation indicating

that Spry could not work. By a letter dated November 3, 2006,

the Administrator notified Spry that her final appeal had been

denied.

Spry subsequently brought suit in federal district court

under 29 U.S.C.A. § 1132(a)(1)(B) (West 2009) of the Employee

Retirement Income Security Act of 1974 (“ERISA”), claiming that

her LTD benefits had been improperly terminated. 1

1
Although Broadspire and the Plan were both originally
named as defendants, Broadspire was later dismissed from the
action.

11
 Deciding the case based on the administrative record, the

parties’ legal memoranda, and counsels’ oral arguments, the

district court granted judgment to Spry. The court found that

because the Plan grants the Administrator discretion to

interpret and apply the Plan provisions, the termination

decision would be reviewed for abuse of discretion. At the time

of the district court’s decision, proof of facts warranting

imputation of improper motives to a plan administrator required

application of a modified-abuse-of-discretion standard, thereby

reducing the deference given to the benefits decision. See

Colucci v. Agfa Corp. Severance Pay Plan, 431 F.3d 170, 179-80

(4th Cir. 2005); Johannssen v. District No. 1-Pac. Coast Dist.,

MEBA Pension Plan, 292 F.3d 159, 176 (4th Cir. 2002). Although

Eaton funds, sponsors, and administers the Plan, Spry conceded

that there was no basis for reducing the deference afforded to

the Plan’s decision. The district court therefore concluded

that it would defer to the Administrator’s decision so long as

it was reasonable and supported by substantial evidence. The

district court found, however, that the decision did not meet

that standard, for reasons that we will discuss. The court

therefore issued a judgment requiring the Plan to pay Spry LTD

benefits.

12
 II.

Since the district court issued its decision, the Supreme

Court decided Metropolitan Life Insurance Co. v. Glenn, 128 S.

Ct. 2343 (2008), altering the effect of a conflict of interest

on the applicable standard of review regarding an ERISA benefits

denial. Under Glenn, proof of facts warranting imputation of

improper motives to a plan administrator still aids claimants

challenging adverse benefits decisions; however, the form of

that aid has changed. Such evidence no longer reduces the

deference the district court must give the benefits decision.

See Champion v. Black & Decker (U.S.) Inc., 550 F.3d 353, 358

(4th Cir. 2008). Rather, a simple abuse-of-discretion standard

is applied and the conflict of interest is taken into account as

a factor affecting whether the administrator abused its

discretion. 2 See id. Such a conflict is “‘more important

2
We have identified eight nonexclusive factors that a court
may consider:

(1) the language of the plan; (2) the purposes and
goals of the plan; (3) the adequacy of the materials
considered to make the decision and the degree to
which they support it; (4) whether the fiduciary's
interpretation was consistent with other provisions in
the plan and with earlier interpretations of the plan;
(5) whether the decisionmaking process was reasoned
and principled; (6) whether the decision was
consistent with the procedural and substantive
requirements of ERISA; (7) any external standard
relevant to the exercise of discretion; and (8) the
(Continued)
13
(perhaps of great importance) where circumstances suggest a

higher likelihood that it affected the benefits decision.’” Id.

(quoting Glenn, 128 S. Ct. at 2351).

The Plan maintains that the district court erred in failing

to uphold the termination of Spry’s benefits. We review the

district court’s decision de novo, utilizing the same standard

applicable to the district court’s review. See id. at 359;

Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315,

321 (4th Cir. 2008). We conclude that the decision to terminate

Spry’s benefits was within the Administrator’s discretion. 3

Clearly, the evidence before the Administrator was

conflicting on the question of whether objective evidence

demonstrated that Spry was unable to work. Resolving this

conflict was the Administrator’s responsibility, and there was

nothing inherently unreasonable in the decision not to adopt the

opinions of Spry’s primary care physicians. See Black & Decker

fiduciary's motives and any conflict of interest it
may have.

Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan,
201 F.3d 335, 342-43 (4th Cir. 2000).
3
On appeal to us, Spry, for the first time, raises a number
of arguments that the Administrator manipulated the decision
process in an attempt to terminate Spry’s benefits. However, in
light of Spry’s concession in the district court that there was
no basis for reducing the deference afforded to the Plan’s
decision, Spry has waived those arguments.

14
Disability Plan v. Nord, 538 U.S. 822, 831-34 (2003) (holding

that ERISA does not require plan administrators to give special

deference to treating physicians’ opinions). However, the

district court provided several reasons for concluding that the

termination of Spry’s benefits was unreasonable, and we will

address those seriatim, along with some arguments that Spry

advances.

The district court first concluded that there was no

substantial evidence of any improvement or change in Spry’s

condition after May 5, 2004—the date Spry was last determined by

the Administrator to be unable to work—and that there was

substantial evidence that Spry had been unable to work prior to

that date. Indeed, the district court also determined that

since there was no evidence that Spry’s condition had changed,

the Plan had no basis for not continuing to rely on Dr.

Wancier’s opinion. We conclude that the district court’s

premise that no new evidence showed significant improvement in

Spry’s condition was incorrect. Such evidence included (1) Dr.

Chokshi’s report concerning his October 2005 examination in

which he observed motor strength of 5/5, reasonably well

preserved lumbar strength, and no need for further surgical

intervention; (2) Dr. Jervey’s October 2005 IME concluding that

Spry was capable of light duty work; and (3) the November 1,

2005 cervical myelogram and CT scan showing only a mild degree

15
of stenosis, no disc herniation, no cord deformity, and no

foraminal narrowing. The determination that Spry was no longer

eligible for benefits was also supported by the medical file

reviews of Drs. Cohan, Goldman, Spira, Mazal, and Burnstein.

The district court also concluded that the Administrator’s

decision to terminate Spry’s benefits “did not give adequate

consideration to the fact that [Spry] had been approved for

Social Security benefits” in November 2000. J.A. 1053. There

is no basis for that conclusion, however. The Plan’s letter

denying Spry’s appeal specifically noted that the Administrator

had considered the Social Security decision. The government’s

determination that Spry was disabled in November 2000 certainly

did not require the Administrator to decide, based on updated

information and additional medical opinions, that Spry remained

unable to work more than five years later.

The district court finally concluded that the Plan “relied

upon equivocal opinions in denying benefits.” J.A. 1053. The

district court first noted that Dr. Bowman, an internal medical

specialist, opined only that Spry was not disabled based upon

her internal medical conditions but did not give an opinion on

Spry’s neurologic condition. This criticism misses the mark,

however, as there is no indication that the Administrator relied

on Dr. Bowman’s opinion for any neurological proposition. The

district court next concluded that Dr. Jervey’s opinion was

16
equivocal because he stated that he was “‘unable to determine

precisely how much, if any disability exists.’” J.A. 1053.

But, while Dr. Jervey’s opinion was equivocal regarding

precisely to what degree Spry is disabled, it was not equivocal

on the proposition for which the Plan relied on the opinion,

namely, that Spry “could return to light duty work.” J.A. 671.

Whether Spry could perform an even more difficult level of work

was immaterial. 4

4
The district court also added that “the MRIoA peer review
speculated that Dr. Jervey’s examination suggested
‘pseudoweakness,’ despite Dr. Jervey’s tentative opinion, four
years of recognized disability by Eaton, six years of disability
recognized by the Social Security Administration, and unchanged
medical findings during the entire period.” J.A. 1053-54. As
we have explained, Dr. Jervey’s opinion was not tentative on the
question of whether Spry could perform light duty work, and the
record contained substantial evidence that Spry’s condition had
improved since the benefits determinations referred to by the
district court. Moreover, Dr. Jervey’s report clearly did
suggest that Spry’s “weakness” was effort-related. He stated,

Postoperatively . . . her [neurosurgeon’s] exam
indicates a relatively normal exam except for residual
mild weakness which according to his report was much
improved (it was only a 4-4+ weakness to begin with).
This indicates to me that at that point in time her
weakness was not to the point where it should have
impaired her ability to return to her work. On my
exam today, her validity score is relatively low. She
continues to have subjective complaints and the
objective findings are relatively limited and seem to
primarily be effort related.

J.A. 671.

17
 The district court also concluded that Dr. Cohan’s opinion

was equivocal because he “indicated that ‘a current

comprehensive description of [Spry’s] neurologic and orthopaedic

examination signs would be helpful in further consideration of

[Spry’s] claim.’” J.A. 1053. Although we cannot find this

statement by Dr. Cohan in the record, we believe that the

district court intended to reference Dr. Cohan’s statement in

his June 2006 report that “[a]dditional clinical documentation

which would be helpful in further consideration of this claim

would be a current comprehensive description of the claimant’s

neurologic and orthopedic examination signs, as there has been

no such report since the Fall of 2005.” J.A. 872. This

statement did not render equivocal Dr. Cohan’s opinion that Spry

was not totally disabled. He specifically stated, “In summary,

it is my opinion, upon review of the extensive medical

documentation submitted that it is not indicative of a

functional impairment for ‘any occupation’ effective February 1,

2006.” J.A. 872. He did not suggest that he could not draw

that conclusion from the records he reviewed. He stated only

that more recent reports would be helpful in the event of

“further consideration” of Spry’s claim.

In addition to the points raised by the district court,

Spry also identifies what she contends are other deficiencies in

the Administrator’s decision to terminate her benefits. Spry

18
maintains that the Administrator acted unreasonably in not

placing more emphasis on Dr. Wancier’s 2004 opinion. As we have

already explained, however, significant new evidence concerning

Spry’s condition emerged after Dr. Wancier submitted his

opinion. The Administrator reasonably chose to rely on the

opinions of doctors who had reviewed this new information.

Spry also contends that each of the medical opinions the

Administrator relied on in deciding to terminate her LTD

benefits are flawed because they did not assess all of Spry’s

conditions. See McKoy v. International Paper Co., 488 F.3d 221,

224 (4th Cir. 2007). But the Administrator was not limited to

considering the opinions of physicians who addressed all of

Spry’s conditions. The critical point is that the Administrator

considered all of the conditions. And, nothing in the record

suggests that the Administrator relied on any physician’s

opinion for a proposition broader than the opinion that the

physician rendered.

Spry also argues that the Administrator acted unreasonably

in not considering whether Spry’s various medical conditions

were cumulatively disabling. However, except diabetes, which

Dr. Joseph Williams added as a secondary disabling condition

beginning in 2004, no other condition was ever listed by Spry’s

primary care physicians as being disabling. And, Dr. Mazal

opined in his September 2006 review that there was no evidence

19
that Spry’s diabetes would prevent her from performing the

duties of any occupation.

III.

In sum, we conclude that the Administrator acted within its

discretion in terminating Spry’s LTD benefits. We therefore

reverse the judgment in Spry’s favor and remand to the district

court for entry of judgment in favor of the Plan.

REVERSED AND REMANDED

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