Smith v. Metropolitan Life Insurance

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 07-1377

BYRON D. SMITH,

Plaintiff - Appellee,

v.

METROPOLITAN LIFE INSURANCE COMPANY,

Defendant - Appellant.

No. 07-1378

BYRON D. SMITH,

Plaintiff - Appellant,

v.

METROPOLITAN LIFE INSURANCE COMPANY,

Defendant - Appellee.

No. 07-1645

BYRON D. SMITH,

Plaintiff - Appellee,

v.
METROPOLITAN LIFE INSURANCE COMPANY,

Defendant - Appellant.

Appeals from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Malcolm J. Howard, Senior
District Judge. (5:05-cv-00633)

Argued: March 20, 2008 Decided: April 17, 2008

Before WILKINSON and KING, Circuit Judges, and C. Arlen BEAM,
Senior Circuit Judge of the United States Court of Appeals for the
Eighth Circuit, sitting by designation.

Affirmed and remanded with instructions by unpublished per curiam
opinion.

ARGUED: Stephen Alan Dunn, EMANUEL & DUNN, P.L.L.C., Raleigh, North
Carolina, for Metropolitan Life Insurance Company. Mark Stanton
Thomas, WILLIAMS MULLEN, Raleigh, North Carolina, for Byron D.
Smith. ON BRIEF: Robert W. Shaw, WILLIAMS MULLEN, Raleigh, North
Carolina, for Byron D. Smith.

Unpublished opinions are not binding precedent in this circuit.

2
PER CURIAM:

Metropolitan Life (Met Life) appeals from a grant of summary

judgment in favor of Byron D. Smith on his claim that Met Life

improperly terminated his long-term disability benefits in

violation of the Employee Retirement Income Security Act of 1974

(ERISA). Met Life also appeals an award of attorney fees in

Smith's favor. Smith cross-appeals, asking that we amend a

clerical error in the district court's order, or remand to the

district court so it may do so. After reviewing the record, we

agree with the district court that Met Life abused its discretion

by terminating Smith's benefits. We therefore affirm the district

court's rulings in Smith's favor, but remand to the district court

so that it may amend the clerical error in its original order.

I.

Smith, a loan officer with CitiFinancial, sustained a gunshot

wound to his left eye in April 1988. Smith suffered a detached

retina and had corrective surgery later that same year. One year

later, Smith suffered a stroke that left him with abnormal visual

fields in both eyes and a pronounced weakness on his left side.

Smith returned to work as a loan officer in July 1989. Over the

next fourteen years, Smith had cataract removal and lens

implantation surgeries, and suffered from weakness on his left

side. Nonetheless, Smith continued to work as a loan officer and

3
was eventually promoted to assistant manager. In these capacities,

Smith had to produce and review lengthy, detailed loan documents,

perform computer work, do mathematical calculations, and drive to

real estate sites, the post office and the bank.

In late 2003, Smith's vision began to deteriorate rapidly and

he became legally blind in his left eye by December 2003. Smith's

job performance also declined, as he could no longer concentrate on

the long loan documents or perform the required arithmetic

calculations. CitiFinancial warned Smith he would be fired if he

continued to make errors in his work.

As a result of these medical problems, Smith stopped actively

working for CitiFinancial on February 26, 2004, at the age of

forty-seven, and sought short-term disability (STD) benefits

through CitiFinancial's disability plan. Met Life administers the

plan, which is funded through premiums paid to Met Life. Met Life

also has discretionary authority to determine entitlement to

benefits. On March 2, 2004, Smith's physician, Dr. Richard

Burdick, notified Met Life that Smith could not work because he had

"visual field cuts" and "left foot lag/drag," which caused falls.

Met Life contacted Smith, and he reported that he was having severe

visual and memory problems and increasing difficulty getting

around. Met Life approved Smith's STD claim, and requested medical

confirmation from Dr. Burdick. On March 14, 2004, Dr. Burdick sent

Met Life office notes from his examination of Smith on February 26,

4
2004. Dr. Burdick also sent a letter advising Met Life that he did

not expect Smith to return to work, as Smith's vision problems

rendered him unable to read or to perform the mathematical

calculations "that are an integral part of his job."

In April 2004, Smith underwent surgery to repair a detached

retina. The day after Smith's surgery, Dr. Van Houten, Smith's

surgeon and a retina specialist, advised Met Life that Smith could

not return to work until his "retina is stable." On May 21, 2004,

Dr. Van Houten sent Met Life a Supplemental Attending Physician

Statement, stating that, as of May 7, 2004, Smith's eye had not yet

healed from surgery. Dr. Van Houten did not advise when Smith

could return to work, but informed Met Life in a follow-up phone

call that Smith needed to lie on his side continuously for at least

eight more weeks until his eye healed.

Based on this information, Met Life approved Smith's claim

through June 30, 2004, extending STD benefits through the maximum

period of May 26, 2004, and awarding long-term disability (LTD)

benefits from May 27, 2004, to June 30, 2004. Met Life

subsequently extended LTD benefits through July 8, 2004, the date

of Smith's next appointment with Dr. Van Houten.

On June 18, 2004, Met Life received an LTD claim packet from

Smith. Smith reported that he could not return to work due to his

vision problems and chronic weakness on his left side. He also

noted that he had not driven since his surgery. On June 20, Dr.

5
Burdick completed a Supplemental Attending Physician Statement

indicating that, as of Smith's last exam, he was unable to work due

to his vision problems. Met Life then requested more information

on the status of Smith's condition from Dr. Van Houten. After

Smith's July 8, 2004, follow-up visit, Dr. Van Houten reported that

Smith's retina had healed from surgery, but that he still had

abnormal visual fields and, with correction, only 20/200 vision in

his left eye. Dr. Van Houten's report did not indicate any change

in his initial assessment that Smith could not return to work.

In a letter dated July 13, 2004, Met Life terminated Smith's

LTD benefits effective July 14, 2004, finding that his retina had

healed and that he had no other medical conditions that prevented

him from performing his job duties as an assistant manager. Smith

appealed, indicating that his vision problems rendered him unable

to drive or to decipher forms and documents at work. In support of

his appeal, Smith submitted an updated Attending Physician

Statement from Dr. Burdick dated August 8, 2004, indicating that,

as of July 15, 2004, Smith could not work because he could not

concentrate or perform the required mathematical calculations.

Smith also submitted a statement from Dr. Hoke Bullard of the North

Carolina Department of Health and Human Services, Disability

Determination Services. Dr. Bullard examined Smith on April 14,

2004, and concluded he could not continue working as a loan officer

due to severe vision problems, which Bullard found included, among

6
other things, left homonymous hemianopsia.1 Finally, Smith

submitted a statement from Dr. Lee Clark, also of the Disability

Determination Services, stating that Smith’s corrected vision in

his left eye was only 20/200 and that he probably had homonymous

hemianopsia.

Met Life referred Smith's file and appeal to Dr. Jane St.

Clair of the American Academy of Disability Evaluating Physicians.

Dr. St. Clair, who is certified in Occupational Medicine, reviewed

the information in Smith’s file and unsuccessfully tried to contact

several of his doctors. Ultimately, and without ever having spoken

to either Smith or to any of his treating physicians, Dr. St. Clair

determined that Smith could drive and work using only his right

eye, while wearing a patch over his blind left eye if necessary.

Based on Dr. St. Clair's recommendation, Met Life upheld its

decision to terminate Smith's LTD benefits.

Having exhausted his administrative remedies, Smith filed this

action on September 20, 2005, under Section 502(a)(1)(B) of ERISA,

29 U.S.C. § 1132(a)(1)(B), seeking to recover LTD benefits. On

cross-motions for summary judgment, the district court found that

Met Life's termination of Smith's benefits was unreasonable and not

supported by the record evidence. Accordingly, the district court

1
Homonymous hemianopsia is defined as "[p]artial or complete
loss of vision in one half of the visual field(s) of one or both
eyes." Medical Dictionary Online, http://www.online-medical-
dictionary.org (second alteration in original).

7
granted summary judgment to Smith and held that Met Life was liable

to Smith for benefits from July 14, 2005,2 through March 22, 2007,

the date of judgment. On June 7, 2007, the court granted Smith's

motion for fees and costs. This appeal by Met Life followed.

II.

We review the district court's grant of summary judgment de

novo. Donovan v. Eaton Corp., 462 F.3d 321, 326 (4th Cir. 2006).

Because the plan language grants Met Life discretionary authority

to determine entitlement to benefits, we review Met Life's decision

to deny benefits for an abuse of discretion. Id.

Nonetheless, "an administrator is required to use a

deliberate, principled reasoning process and to support its

decision with substantial evidence." McKoy v. Int'l Paper Co., 488

F.3d 221, 223 (4th Cir. 2007). And our deference to Met Life is

tempered by the fact Met Life acted under some conflict of

interest. Stup v. UNUM Life Ins. Co., 390 F.3d 301, 307 (4th Cir.

2004). Because Met Life is both the insurer and a fiduciary of the

plan, and stands to benefit financially from a denial of benefits

to Smith, we lessen our deference to Met Life's discretionary

authority to the degree necessary to neutralize any untoward

influence resulting from that conflict. See id.

2
This date is the error Smith seeks to amend in his cross-
appeal. Both parties agree that Met Life actually terminated
Smith's LTD benefits on July 14, 2004.

8
 III.

On appeal, Met Life contends the district court erred in the

following ways: (1) by subjecting Met Life's claim decision to de

novo review, rather than determining whether its decision was

reasonable; (2) by finding Met Life's decision to terminate

benefits was unsupported by substantial record evidence; (3) by

reinstating benefits through the date of judgment; and (4) by

granting Smith's motion for attorney fees. We address each

contention in turn.

A.

Met Life first argues the district court did not properly

review its decision for an abuse of discretion, and instead

subjected its claim decision to de novo review. After reviewing

the district court's opinion, however, we are satisfied that the

district court applied the correct standard.

In its opinion, the court specifically recognized the

applicable standard of review as abuse of discretion, tempered by

consideration of Met Life's inherent conflict of interest.

Moreover, the district court characterized the evidence Met Life

relied upon in terms that reflect the appropriate standard,

labeling it "a far cry from the 'substantial evidence' required in

the Fourth Circuit." The district court went on to discuss the

unreasonableness of Met Life's reliance on Dr. St. Clair's opinion

and the dearth of other evidence supportive of its position. Thus,

9
a thorough reading of the opinion reveals that the district court

examined Met Life's decision for an abuse of discretion, but simply

found the decision unreasonable and unsupported by substantial

evidence.

B.

Met Life next contends the district court erred in finding its

decision to terminate Smith's LTD benefits was unreasonable and

unsupported by substantial evidence. After reviewing the record

and the reasoning Met Life used to deny benefits, we affirm the

conclusions reached by the district court.

As an initial matter, we reject Met Life's contention that

Smith failed to satisfy his initial burden of supplying documented

proof of disability. See id. at 308. Indeed, as set forth above,

Smith submitted abundant evidence of severe medical conditions that

prevent him from working in his field. First, Smith himself

indicated he cannot drive, concentrate on the details in documents

or perform mathematical calculations because of his poor vision.

See Donovan, 462 F.3d at 327 (indicating that an insured’s

subjective assessment of symptoms is relevant and cannot be totally

disregarded by the insurer). Moreover, Smith submitted numerous

statements from his treating physicians confirming that his

conditions prevent him from working. On March 14, 2004, Dr.

Burdick wrote that he did not expect Smith to return to work

because of his severe vision problems, and he reiterated that

10
opinion on June 20, 2004, and August 8, 2004. On April 14, 2004,

Dr. Bullard opined that, "I do not think [Smith] would be able to

return to his life's work, because of the visual impairment which

has occurred due to his stroke, and to the gunshot wound to the

periorbital tissues of the left eye." On May 7, 2004, Dr. Van

Houten advised that Smith could not currently work in any

occupation, and his report from Smith's July 8, 2004, follow-up

examination does not indicate a change in that assessment. On this

record, we find Smith amply carried his initial burden of supplying

documented proof of disability.

Nonetheless, Met Life could still deny benefits if the record

also contains substantial evidence that Smith can continue to work

as a loan officer. See Stup, 390 F.3d at 308. We agree with the

district court, however, that the current record cannot reasonably

be read to support such a finding. To be sure, "an administrator

does not act unreasonably by denying benefits if the record

contains conflicting medical reports." Id. (quotation omitted).

But "the conflicting evidence on which the administrator relies in

denying coverage must be 'substantial'–especially when . . . the

administrator has an economic incentive to deny benefits." Id. In

this case, Met Life relies on three pieces of evidence as

supportive of its decision to terminate Smith's benefits: (1) a

statement in Dr. Clark's report that Smith's vision fields are

"normal;" (2) Dr. Clark's inability to definitively diagnose

11
homonymous hemianopsia; and (3) Dr. St. Clair's finding that Smith

can adequately perform his loan officer duties because he has 20/20

vision in his right eye. We conclude that this evidence is neither

substantial nor, in some cases, even supportive of Met Life's

position.

First, Dr. Clark's statement that Smith's vision fields are

normal was surely a clerical error. The full sentence reads, "His

visual fields are normal, that probably represent[s] a homon[y]mous

hemianopsia." As homonymous hemianopsia is defined as blindness or

defective vision in the right or left halves of the visual fields

of one or both eyes, Dr. Clark surely intended to say Smith's

visual fields are "abnormal." And, indeed, Met Life might have

suspected as much, since Dr. St. Clair specifically noted in her

own report that Smith's "vision fields are abnormal, but this

homonymous hemianopsia is not a new finding for him." Thus, we

reject Met Life’s contention that this statement, which is taken

wholly out of context and is ambiguous at best, constitutes

substantial evidence supporting its claim decision. Myers v.

Hercules, Inc., 253 F.3d 761, 768 (4th Cir. 2001)(finding

administrator could not rely on bits and pieces of evidence taken

out of context as substantial evidence supporting termination of

benefits).

We also reject Met Life's reliance on the fact that Dr. Clark

could not definitively diagnose homonymous hemianopsia. We think

12
it is fair to characterize Dr. Clark's report as somewhat equivocal

on the subject of whether Smith actually suffers from that

condition. That characterization does not make the report

particularly helpful to Met Life because we have previously

recognized that "[a]n equivocal opinion . . . simply does not

provide 'substantial evidence.'" Stup, 390 F.3d at 310.

Finally, we find Met Life's reliance on the determination of

Dr. St. Clair–who neither examined Smith nor spoke to him or to any

of his treating physicians–unreasonable. "To be sure, ERISA does

not impose a treating physician rule, under which a plan must

credit the conclusions of those who examined or treated a patient

over the conclusions of those who did not." White v. Sun Life

Assurance Co., 488 F.3d 240, 254 (4th Cir.), cert. denied, 128 S.

Ct. 619 (2007). Nonetheless, an insurer must present "a basis a

reasoning mind would accept as sufficient to support its decision."

Id. (quotation omitted). And here, we find such a basis lacking.

Dr. St. Clair's report notes that Smith is legally blind in his

left eye, has severely reduced peripheral vision in both eyes and

has balance problems due to his poor peripheral vision. She

nonetheless concludes, without explanation, that he would have

adjusted to his reduced visual fields years ago and that he can

adequately drive and work with one eye, while wearing a patch over

his blind left eye if necessary. We agree with the district court

that, in light of the objective medical evidence, these conclusions

13
are, at best, difficult to believe. What is more, they are belied

by uncontradicted facts in the record. For example, it is

undisputed that, after Smith became blind in his left eye,

CitiFinancial threatened to fire him for making errors resulting

from his poor vision. This fact totally undermines Dr. St. Clair's

conclusion that Smith can adequately perform his duties with

monocular vision.

In sum, after reviewing the record, we find that the evidence

relied upon by Met Life in support of its decision falls far short

of the substantial evidence required by our precedent.

Accordingly, Met Life abused its discretion by terminating Smith's

LTD benefits and the grant of summary judgment in Smith's favor is

affirmed.

C.

Met Life also contends the district court erred by reinstating

Smith's LTD benefits through the date of its judgment. Under the

terms of the plan, Smith is entitled to LTD benefits for an initial

twenty-four-month period if he is unable to earn more than eighty

percent of his predisability earnings at his "Own Occupation" for

any employer in the local economy. After that initial period,

Smith is only entitled to continue receiving LTD benefits if he is

unable to earn more than sixty percent of his predisability

earnings at "Any Gainful Occupation" commensurate with his training

and experience.

14
 Here, Smith began receiving LTD benefits on May 27, 2004, so

the twenty-four-month "Own Occupation" period commenced on that date

and ended on May 27, 2006. Thus, when the district court rendered

its decision on March 22, 2007, and reinstated Smith's benefits

through the date of judgment, it extended LTD benefits under both

the "Own Occupation" and the "Any Gainful Occupation" standards.

And, Met Life claims the district court erred by doing so, because

Smith never submitted, and Met Life never considered, a claim for

benefits under the "Any Gainful Occupation" standard. Thus, Met

Life says Smith has not exhausted his administrative remedies with

respect to benefits under that standard, and there was neither an

administrative record nor an administrative decision for the court

to review.

We disagree. First, to the extent Met Life contends Smith has

not exhausted his administrative remedies under the "Any Gainful

Occupation" standard, Met Life has pointed to nothing in the record

indicating Smith bore the burden of coming forward on his own

initiative, and without a request from Met Life, with additional

evidence of his inability to work at any gainful occupation once the

"Own Occupation" period ended.3 And we can understand why Smith

might have thought it futile to do so: Met Life had already

3
In fact, the only applicable language in the record suggests
otherwise. The initial letter Met Life sent to Smith approving his
LTD claim from May 27, 2004, through June 30, 2004, states that
"[Met Life] will periodically require updated medical information
and will contact you and/or your physician."

15
explained to Smith on several occasions that he could perform his

own occupation. This determination "necessarily precluded [Smith]

from arguing with a straight face to the same insurance company that

he was unable to perform . . . any occupation." Dozier v. Sun Life

Assurance Co., 466 F.3d 532, 535 (6th Cir. 2006). See also Paese

v. Hartford Life Accident Ins. Co., 449 F.3d 435, 449 (2d Cir.

2006)(noting that plan's decision that insured was not disabled from

his own occupation "necessarily implies a decision that he was not

totally disabled from 'any occupation'"). Moreover, we think the

current record supports the district court's determination. When

the district court rendered its opinion, Smith, a then-fifty-year-

old man who had spent the last fourteen years of his career doing

work that requires visual acuity and attention to minute details,

was legally blind in one eye, had severely reduced peripheral vision

in the other eye, and was unable to drive. On these facts, we think

it self-evident that Smith could not, as of March 22, 2007, return

to either his own occupation or to any other occupation commensurate

with his training and experience. Accordingly, we affirm the award

of LTD benefits through the date of judgment.4

D.

Finally, Met Life challenges the district court's discretionary

award of attorney fees to Smith. See Quesinberry v. Life Ins. Co.,

4
Nothing in this opinion should be construed as precluding Met
Life from requesting proof of Smith's continuing inability to work
at any gainful occupation at any future date.

16
987 F.2d 1017, 1029 (4th Cir. 1993) (en banc). We review an

attorney fee award for abuse of discretion, and review the findings

of fact underlying that award for clear error. Carolina Care Plan,

Inc. v. McKenzie, 467 F.3d 383, 390 (4th Cir. 2006). In this case,

having reviewed the record and considered the arguments advanced by

the parties, we find that the district court acted within its

discretion.

IV.

Smith cross-appeals, seeking to amend a clerical error in the

district court's judgment. In its March 22, 2007, order, the

district court held that Met Life was liable to Smith for benefits

under the plan from July 14, 2005, through the date of judgment.

It is undisputed, however, that Met Life terminated Smith's LTD

benefits as of July 14, 2004. As a result, we remand to the

district court with directions to amend its order to reflect that

Smith's benefits are reinstated as of that date.

AFFIRMED AND
REMANDED WITH INSTRUCTIONS

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