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.