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Zaeske v. Liberty Life Assurance Co. of Boston

United States District Court, W.D. Arkansas, Fayetteville Division

June 5, 2017




         This case comes before the Court following Defendant Liberty Life Assurance Company of Boston's ("Liberty Life") decision to terminate Plaintiff Damon Zaeske's long-term disability benefits. The dispute arises under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§1001 et seq., which gives participants in an employee welfare benefit plan a cause of action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).

         Before the Court are the Administrative Record (Doc. 12), Plaintiffs Brief (Doc. 13), and Defendant's Brief and Affidavit (Docs. 18, 18-1). The Court also received a letter from Mr. Zaeske, (Doc. 19), on April 19, 2017, after the Administrative Record had been submitted and the parties' had submitted their briefs. Because the letter came directly from Mr. Zaeske, rather than his attorney, and was not part of the Administrative Record on appeal, the Court gave it no consideration. For the reasons explained herein, the Court finds that Liberty Life's decision to deny long-term benefits to Mr. Zaeske is REVERSED and the claim REMANDED to Liberty Life for the correct calculation of past-due benefits.

         I. BACKGROUND

         At the time counsel briefed this ERISA appeal, Mr. Zaeske was a 52-year-old man formerly employed by Wal-Mart Stores, Inc. ("Walmart") in the position of Project Manager I, Systems Strategy-Risks Manager ("Risk Manager"). His duties included observing associate, customer, and supplier behavior first-hand; making group presentations; using a computer to locate information; creating documents using a computer or writing instrument; visually verifying information, often in small print; safely operating a motor vehicle; and traveling both domestically and internationally to multiple facilities, requiring consecutive or extended overnight stays. (Doc. 12-3, p. 397). As an employee of Walmart, Mr. Zaeske was a member of its Associate Health and Welfare Plan (the "Plan"), which is insured by a Group Disability Income Insurance Policy issued by Liberty Life (the "Policy"). In addition to issuing the Policy and paying benefits, Liberty Life also serves as Policy Administrator.

         Mr. Zaeske's medical condition that gives rise to his claim for benefits was first documented in 2010. In August of that year, Mr. Zaeske visited Dr. David Garrett, a physician practicing at Mercy Clinic in Lowell, Arkansas ("Mercy Clinic"), and complained of depression and chronic pain, including back pain. (Doc. 12-3, p. 79). Dr. Garrett prescribed Darvocet, a pain medication used to treat mild to moderate pain, for his "occasional use." Id. On August 25, 2010, Mr. Zaeske had a follow-up appointment with Dr. Garrett, and during that examination, Dr. Garrett noted tenderness in the L5-S1 area of his lumbar spine. Id. at 80. Also during that visit, Mr. Zaeske complained that "he [could not] sit for very long" when his back pain struck, and he "ha[d] to constantly move." Id. Dr. Garrett prescribed him a steroid injection for his back and refilled his pain medication prescription. Id.

         Sometime later, on October 7, 2011, Mr. Zaeske returned to Dr. Garrett, complaining again of back pain and tenderness, anxiety, depression, restless leg syndrome, and fatigue. Id. at 82. Dr. Garrett prescribed oxycodone for pain and Celexa for depression. Id. at 83. Mr. Zaeske's back exam "demonstrated tenderness on the right paravertebral muscle group." Id. He returned to Dr. Garrett on May 4, 2012, complaining of chronic pain, and refilling his medications. Id. at 84. It appears that his back pain worsened in the ensuing months, as during the next check-up on January 2, 2013, Mr. Zaeske reported to Dr. Garrett that the oxycodone was not working well, and that the Darvocet he had been taking for pain was now off the market. Id. at 85. Dr. Garrett stopped his prescription for oxycodone, but prescribed Voltaren, a non-steroidal antiinflammatory drug, and Flexeril, a muscle relaxant. Id. at 86.

         On October 29, 2013, Mr. Zaeske had an appointment with Dr. Janelle Potts, another physician at Mercy Clinic. During that visit, Mr. Zaeske complained primarily of lower back pain. He explained to Dr. Potts that he had experienced "low back pain for many years off and on, " but only recently had "a flair up [sic]" that caused his "[r]ight leg . . . [to] go numb and tingly at times when laying in bed." Id. at 87. Dr. Potts conducted a physical examination that revealed lumbar tenderness, so she scheduled a lumbar MRI and planned to perform two injections, one of methylprednisolone acetate and one of dexamethasone-both corticosteroids used to treat inflammation. Id. The MRI, performed on November 6, 2013, revealed "chronic appearing disc protrusion with severe stenosis at L4-5." Id. at 282. Dr. Potts subsequently submitted a Certificate of Health Care Provider for Associate's Serious Heath Condition Form (an "FMLA form") on November 15, 2013, in which she stated that Mr. Zaeske would be incapacitated for three days per month due to back pain and the effects of pain medication, and that these restrictions would apply for six months. She also noted that he had been "sent for [an] MRI and referred to [a] back surgeon." Id. at 41-42. She further explained that "when incapacitated with back pain [he] cannot perform any task, " id. at 41, and emphasized that the medication he was currently taking for back pain "can cause somnolence, decreased concentration, [and] inability to drive make decisions, " id. at 42.

         After a follow-up appointment on December 2, 2013, Dr. Potts wrote in her progress notes that "hydrocodone [was] not really controlling [Mr. Zaeske's] pain, " and that he was "[f]inding it difficult to work due to pain." Id. at 88. During that same visit, she prescribed him Dilaudid, an opioid pain medication, to be used in conjunction with hydrocodone in order to control any breakthrough pain, and she instructed that he should not work for two weeks. Id. at 89. Then, on December 9, 2013, she completed another FMLA form, advising that Mr. Zaeske would be unable to work from December 2, 2013, through December 25, 2013, because he was "taking strong narcotics for pain" and was "unable to work while under the influence" of these medications. Id. at 43.

         Dr. Potts' progress notes from February 10, 2014 reveal that on January 14, 2014, Mr. Zaeske underwent a lumbar medial bilateral branch nerve block at the Springfield Pain Management Center, which provided "good results." Id. at 302, 305. However, Mr. Zaeske's pain recurred shortly thereafter, due to effects of "spinal stenosis and bulging discs, " and he was instructed to take Tizanidine-a muscle relaxant-and hydrocodone for pain. Id. at 302-03. Mr. Zaeske then visited Dr. Jonathan Nunley at Mercy Clinic on February 17, 2014. Dr. Nunley noted that Mr. Zaeske's back pain worsened with extension, standing, and walking. Id. at 57. Dr. Nunley then made plans to perform a second lumbar medial branch nerve block on Mr. Zaeske's lumbar spine. Id. at 60. On February 26, 2014, Dr. Nunley successfully performed that procedure and then scheduled a follow-up appointment. Id. at 60-61. Because the second medial branch nerve block also achieved good results, Dr. Nunley performed two radiofrequency neurotomies on Mr. Zaeske, one on March 13, 2014, and the other on April 2, 2014. Id. at 62-65. But, on April 2, 2014, Dr. Nunley concluded that the radiofrequency neurotomies had not resulted in "much relief of back pain to this point, " and that Mr. Zaeske suffered "[c]ontinued pain worse with extension and with standing for long periods." Id. at 65.

         Mr. Zaeske had an appointment with Dr. Potts on April 7, 2014. She noted that, although he was "[t]aking medications as directed, " his "[b]ack pain [was] not well controlled, " and he "had to miss work due to back pain and the effects of pain medications." Id. at 94. This was true despite the fact that he "had injections with Mercy pain management." Id. She also observed that his job was "in jeopardy." Id. The record reflects that the very next day, April 8, 2014, Mr. Zaeske made a claim for long-term disability benefits under the Policy, and indicated that April 7, 2014, was the date his disability began. In support of his claim, Dr. Potts completed two FMLA forms, one on April 18, 2014, id. at 47-48, and the other on May 29, 2014, id. at 45-46. The April 18 form stated Dr. Potts' medical opinion that the "strong narcotics" Mr. Zaeske was taking for back pain, leg pain, and weakness made him "unable to work under the influence" from April 7, 2014, until May 9, 2014. Id. at 47-48. In the May 29 form, she wrote that Mr. Zaeske was "unable to perform any function when incapacitated due to pain" caused by "intervertebral disc protrusion, lumbar degenerative disc disease ... [and] radiculopathy of [the] leg." Id. at 45-46. She estimated he would be unable to work at his regular job from May 20, 2014, through November 20, 2014. Id. at 46.

         Also on April 8, 2014, Mr. Zaeske called Liberty Life and had a conversation with his case manager, June Arrington, as reflected in the claim notes of the Administrative Record. Ms. Arrington documented in the file that Mr. Zaeske talked with her about his claim and informed her that he was not a candidate for back surgery and had recently undergone ablation therapy. He also told her that Walmart had recently warned him that "he must find another job within Walmart[, ] as he cannot do his job." Id. at 13.

         On May 23, 2014, Ms. Arrington referred Mr. Zaeske's disability claim to Dr. Patricia Shannon for an independent medical assessment. The referral sheet pertaining to the assessment noted that Mr. Zaeske's job as Risk Manager for Walmart involved "[l]ighf physical demands, and therefore was not a sedentary position. Id. at 282. Dr. Shannon reviewed the medical documents submitted by Drs. Garrett, Potts, and Nunley, including the lumbar MRI from November 6, 2013, and concurred with the treating doctors' collective diagnosis of "[c]hronic low back pain with recently increased back and leg pain." Id. She found that Mr. Zaeske's MRI "showed chronic appearing disc protrusion with severe stenosis at ¶ 4-5 . . . ." Id. In addition, she identified several "co-morbid conditions potentially impacting [his] capacity, " namely, "[m]orbid obesity, anxiety, [and] sleep disorder." Id. In determining whether Mr. Zaeske met the definition of "disability" under the Policy, Dr. Shannon found that his current estimated work capacity was "sedentary, " rather than the "light" level of activity needed to perform his current job. Id. She declined to assess whether any potential accommodations existed that would facilitate a return to work, but observed that Mr. Zaeske was currently limited in his ability to sit, stand, walk, bend, stoop, squat, climb ladders, or lift objects weighing more than ten pounds. Id. at 283. She concluded her report by opining that the limitations on his mobility would likely last "an additional 3 months"-for a total of six months-but that his overall prognosis was "depedent [sic] on response to treatment." Id.

         Meanwhile, as the claim-review process progressed, Mr. Zaeske continued to receive further treatment for his back pain from his primary physicians. Dr. Potts submitted another FMLA form to Liberty Life on May 30, 2014. Id. at 50. That same day, Dr. Nunley performed another steroid injection on Mr. Zaeske's lumbar spine. Id. at 71. It was not until June 4, 2014, that Liberty Life sent Mr. Zaeske a letter notifying him that his long-term disability claim had been approved. See Id. at 264. In the letter, Liberty Life concluded that Mr. Zaeske met the Plan's definition of "disabled, " with respect to his ability to perform "the Material and Subtantial Duties of his Own Occupation." Id. at 264. His date of disability onset was found to be April 7, 2014, and he was deemed eligible to receive benefits as of July 6, 2014. The letter from Liberty Life also informed Mr. Zaeske that it would evaluate his claim "periodically to determine ongoing disability." Id.

         Throughout the month of June 2014, Mr. Zaeske continued to see Drs. Potts and Nunley. In an appointment with Mr. Zaeske on June 10, 2014, Dr. Potts noted that his back pain had worsened and was "uncontrolled, " that he was unable to work while taking pain medications, and that he should continue taking oxycodone and Dilaudid for pain, and Robaxin, a muscle relaxant. Id. at 97-99. After a visit with Mr. Zaeske on June 17, 2014, Dr. Nunley noted that both previous lumbar steroid injections had been unsuccessful in reducing Mr. Zaeske's pain levels, and that he continued to have "[c]onstant" low back pain that worsened with standing or walking, such that he was now sleeping in a recliner at night. Id. at 73. Dr. Nunley gave him yet another steroid injection on September 12, 2014, and noted Mr. Zaeske's continued low back pain in his notes. Id. at 76. On October 8, 2014, a different physician at Mercy Clinic, Dr. Gannon Randolph, examined Mr. Zaeske and noted he "[c]ontinues to have low back pain. All axial, midline and band of pain." Id. at 159.

         At this point, Mr. Zaeske had been receiving long-term disability benefit checks for only a few months. On October 12, 2014, Ms. Arrington of Liberty Life wrote a letter to Mr. Zaeske, requesting that he obtain updated medical information on his condition from his treating physicians, Drs. Potts, Nunley, and Randolph. See Id. at 253. When Liberty Life received no immediate response from the doctors, it sent another request on October 27, 2014. See Id. at 211, 219, 227. Two days later, Dr. Randolph sent a summary of his notes from his visit with Mr. Zaeske on October 8, 2014. The notes listed Mr. Zaeske's current medications for pain and inflammation, which included Gabapentin, Robaxin, oxycodone, and Dilaudid, and observed that the reason why he was seen that day was for "[p]ain." Id. at 208. The notes also included an order that Mr. Zaeske submit to another lumbar MRI. Id. On November 7, 2014, Dr. Potts faxed a "Restrictions Form" to Liberty Life, in which she identified Mr. Zaeske's continuing diagnosis as "lumbar degenerative disc disease, " and noted that his "back pain, intervertebral disc protrusion . . . [and] abnormal MRI of lumbar spine." Id. at 203. She confirmed that he was still receiving spinal injections, and she opined that his return-to-work date was "yet to be determined." Id.

         Liberty Life apparently viewed these submissions by Drs. Randolph and Potts as insufficient to document Mr. Zaeske's continuing disability. On November 14, 2014, Ms. Arrington wrote a letter to Mr. Zaeske, informing him that his benefits were suspended, and that unless further medical records were provided by December 11, 2014, his claim would be terminated. See Doc. 196. One day after the deadline, on December 12, 2014, Ms. Arrington wrote another letter to Mr. Zaeske, letting him know that since Liberty Life "did not receive all the necessary information to investigate your claim, your claim has been denied effective December 11, 2014." Id. at 185.

         A few days later, on December 15, 2014, Liberty Life received additional medical documentation from Drs. Potts, Nunley, and Randolph. See Id. at 136-37. The documents included reports of medial branch nerve block procedures performed in February of 2014; a radiofrequency neurotomy performed in March of 2014; notes regarding physical exams, epidural steroid injections, and radiofrequency ablation procedures in April of 2014; reports of further steroid ...

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