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Lapidus v. Life Insurance Company of North America

United States District Court, E.D. Missouri, Eastern Division

August 29, 2019




         This matter is before the Court on Defendant Life Insurance Company of North America (“LINA”)'s Motion for Summary Judgement (ECF No. 30), and Plaintiff Melanie Lapidus' Motion for Summary Judgement (ECF No. 31). The Court will take up both motions together. The motions are fully briefed and ready for disposition.


         Plaintiff was employed by BJC Healthcare as Vice-President of Medical Benefits. (ECF No. 37, ¶ 1, Defendant's Statement of Uncontroverted Material Facts (“Defendant Facts”)). As Vice-President of Medical Benefits, the Plaintiff “[p]lans, develops, and executes strategic initiatives related to the development and growth of a managed care provider network for the system.” Id. ¶ 2, citing AR LINA0308. Defendant asserts that the job is sedentary, involving sitting, brief periods of standing and/or walking and lifting, carrying pushing and pulling 10 pounds occasionally. Id. ¶ 3, citing AR LINA0310.[2]

         I. The Terms of the Policy

         On January 1, 2013, Defendant issued Group Policy FLK-980126 (“the Policy”) to BJC. Defendant evaluated Plaintiff's claim for short-term disability (STD) and long-term disability (LTD) benefits and her subsequent appeals. Id. ¶ 5. The Policy is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1001 et seq. (“ERISA”) and provides disability benefits to qualifying BJC employees. Id. ¶¶ 6-7. Under the Policy, Plaintiff was designated as a Class 7 employee. Id. ¶ 9. Class 7 employees are defined as “[a]ll active, fulltime employees classified as Vice President level or above with one or more years of service, regularly scheduled to work a minimum of 35 hours per week or 70 hours per pay period.” Id. ¶ 8.

         Under the “Schedule for Benefits for Class 7” disability is defined as:

[T]he employee is considered disabled if, solely because of Injury[3] or Sickness, [4] he or she is: (1) unable to perform the material and substantial duties of his or her Regular Occupation; and (2) unable to earn 80% or more of his or her Indexed Earnings from working in his or her Regular Occupation.[5]
The Insurance Company will require proof of earnings and continued Disability.

Id. ¶ 10 (citing AR LINA0028). The Policy also provides:

An Employee's coverage will end on the earliest of the following dates:…(3) the date the Employee is no longer in an eligible class…[or] (5) the last day of the month the Employee is no longer in Active Service[6]… Disability benefits will be payable to an Employee who is entitled to receive Disability Benefits when the Policy terminates if he or she remains disabled and meets the requirements of the Policy.

Id. ¶14 (citing AR LINA0041). The Policy further permits Defendant to offset the monthly disability payment by any “Other Income Benefits” an employee receives, which include but are not limited to social security disability benefits. Id. ¶16 (citing AR LINA0043-44). The Policy also contains a provision called “Assumed Receipt of Benefits.” Id. ¶17. The provision states:

The Insurance Company will assume the Employee … [is] receiving benefits for which they are eligible from Other Income Benefits. The Insurance Company will reduce the Employee's Disability Benefits by the amount from Other Income benefits it estimates are payable to the Employee… The insurance company will waive Assumed Receipt of Benefits … if the Employee: (1) provides satisfactory proof of application for Other Income Benefits; (2) signs a Reimbursement Agreement; Provides satisfactory proof that all appeals for Other Income benefits have been made unless insurance company determines that further appeals are not likely to succeed; and (4) submits satisfactory proof that Other Income Benefits were denied.

Id. ¶ 17 (citing AR LINA0044-45).

         II. Plaintiff's Claim for Short-term Disability Benefits.

         In 2002, Plaintiff ruptured two discs in her lumbar spine. Id. ¶ 18. Plaintiff sought medical treatment and was advised that she could either have surgery or attempt to manage her condition through physical therapy and exercise. (Plaintiff Facts ¶ 17). Plaintiff declined to have surgery for her condition and instead utilized physical therapy, exercise, steroid injections and chiropractor visits to manage her condition. (Defendant Facts ¶ 19). In 2013, Plaintiff began seeking treatment from Dr. Jacob Buchowski, an orthopedist. (Plaintiff Facts ¶ 19). Plaintiff was diagnosed with degenerative lumbar scoliosis, and in 2015, the Plaintiff began experiencing numbness in her left leg.[7] (Defendant Facts ¶ 20). Dr. Buchowski advised Plaintiff that the feeling in her legs would, at some point, not return and that the nerves involved controlled more than just her ability to walk. (Plaintiff's Facts ¶ 24).

         On January 18, 2016, Plaintiff had spinal fusion surgery. (Defendant Facts ¶ 21). Plaintiff applied for STD benefits through the Defendant on January 25, 2016. Id. ¶ 36. On January 26, 2016, Defendant approved Plaintiffs claim for STD benefits, with benefits payable as of January 23, 2016. (Defendant Facts ¶ 22, citing AR LINA0964-965). On January 29, 2016, Plaintiff underwent a second spinal surgery. Id. ¶ 23. The second surgery was to irrigate and debride a portion of the Plaintiff's spine. (Plaintiff Facts ¶ 30). On February 15, 2016, Plaintiff had a follow up appointment with Dr. Buchowski. Id. ¶ 34. He recommended that Plaintiff continue with physical therapy and recommended adjusting the Plaintiffs pain medication. Id.

         Defendant extended Plaintiff's STD benefits until April 3, 2016, for “time for [additional] healing”. (Plaintiff Facts ¶¶ 40-41). Defendant again extended Plaintiff's STD benefits through April 26, 2016. Id. ¶ 45. Defendant noted that Plaintiff's “job required her to have ‘prolonged standing, walking, and sitting' that she was ‘currently ambulating with a walker and need[ed] to take many Oxycodone per day to keep up with the pain' and she was ‘[u]nable to tolerate anything regarding sitting, standing'”[8] Id. ¶ 46, citing AR LINA0882. Defendant then extended Plaintiff's STD benefits through May 3, 2016, due to Plaintiff's “femoral nerve damage” and need to be “in a wheelchair” inability “to walk at all, [and] taking oxycodone” and Id. ¶¶ 47-48, citing AR LINA0884.

         On April 21, 2016, Plaintiff saw Dr. Chi-Tsai Tang who performed an EMG/Nerve Conduction Study on the Plaintiff and found “[a]cute/subacute left-sided femoral neuropathy.” Id. ¶ 51, citing AR LINA0286-87. On April 27, 2016, the Plaintiff was seen by Dr. David Rubin and Dr. John Nay for an MRI. They further requested “[a] study of the left femur and thigh … but the patient was unable to tolerate further imaging.”[9] (Id. ¶ 52; Defendant Response, at 13, citing AR LINA0293).

         On May 2, 2016, Plaintiff called Defendant to report her condition and that she had been to the hospital on May 1, 2016 due to her inability to walk and the pain worsening and radiating from left leg to right leg. (Plaintiff Facts ¶49). Defendant subsequently extended Plaintiff's STD benefits through May 20, 2016. Id. ¶ 54. On May 4, 2016, Plaintiff began treatment at Washington University's Pain Management Center under the care of Dr. Michael Bottros for her “left lower extremity pain post spine fusion.” Id. ¶ 57, quoting AR LINA0136. On May 9, 2016, Defendant extended Plaintiffs STD benefits through June 30, 2016. (Defendant Facts ¶ 24, citing AR LINA1046-1047). On May 31, 2016, Plaintiff underwent a spine radiography.[10] (Plaintiff Facts ¶ 61).

         A June 2, 2016 treatment note from Dr. Bottros stated:

[Plaintiff] returns to [Pain Management Clinic] today for follow up of left knee/leg and low back pain. She previously underwent bilateral sacroiliac joint injections as well as left saphenous nerve injection. She states that these injections provided her with some significant relief. However, she believes that the injections are starting to wear off. She has weaned herself off oxycodone completely. Her only opioid currently is OxyContin regimen which we have her wean off as indicated below. Overall, she believes that her overall improvement in pain relief continues to proceed well, waiting about 50% improvement in pain since her initial visit with us. She denied any new numbness, weakness, bowel or bladder incontinence.

(Defendant Facts ¶ 26, citing AR LINA0927). On June 9, 2016, a ClaimManager for Defendant, spoke with the Plaintiff over the phone. Plaintiff explained that she was “feeling the pain more than she was previously' and that she was ‘unable to sit comfortably.'” (Plaintiff Facts ¶ 66).

         On June 21, 2016, Dr. Bottros reported:

Patient had left thermal radiofrequency ablation of sacral lateral branch nerves at left L5, S1, S2, S3 on June 2, 2016. She reports since that procedure she has experienced significant relief of pain, but the location of her pain has shifted. She states she has begun to experience pain the posterior aspect of the knee. Her pain is basically more than 50% reduced from her initial consult while she is 80% reduced from her initial opioids.

(Defendant Facts, citing AR LINA0136-137).Dr. Bottoros gave the Plaintiff a steroid injection. (Plaintiff Facts ¶ 69). On June 23, 2016, the Claim Manager spoke to the Plaintiff. Id. Facts ¶ 70. Plaintiff stated that the steroid injection had “made her pain worse” and was “unable to walk.” Id. Plaintiff further stated that she was “‘experiencing pain in her knee [and] her leg' and that her ‘[w]alking problems [had] quadrupled, or more'” and that she was “‘unable to do anything at home' and had to ‘put ice at least once every hours [sic] in her sacroiliac joint due to pain.'” Id., (quoting AR LINA01236-1238). Plaintiff reported that she “cannot work at all as her job requires her to have meetings all day and speak to providers.” Id. ¶ 71 citing AR LINA01238. The Claims Manager also spoke with a member of Dr. Buchowski's staff who stated that Plaintiff was “‘not doing well at all' and was ‘not released to [return to work]…' as her ‘condition is worsening.'” Id. ¶ 72, citing AR LINA01232.

         On June 29, 2016, Defendant extended Plaintiff's STD benefits through July 15, 2016, which was the last day on which she was eligible to receive STD benefits, and transitioned Plaintiff's claim to the LTD disability unit. Id. ¶ 73, citing AR LINA0890, 1121-22. A nurse case manager for the Defendant noted that Plaintiff had “‘significant back history including 9 level fusion' ‘pain posterior knee,' ‘antalgic gait, significant tenderness sacroiliac joint, [and] positive faber/ganseln bilaterally;' that she had ‘severe limitations to ADL [activities of daily living] due to ongoing pain/ limits to function;' and that the ‘[m]edical [records] on file demonstrate[d] a function loss thru BTD [benefits termination date] as evidenced by gait deficits/ continued pain/treatments limiting ADL's post 9 level fusion.'” Id. ¶ 75, citing AR LINA0890; LINA001221-22). On July 11, 2016, Defendant reaffirmed its decision to extend STD benefits through the July 15, 2-16, benefits termination date. Id. ¶ 76.

         III. Plaintiff's LTD Claim

         Defendant received Plaintiff's application for LTD benefits on July 6, 2016. Id. ¶ 78. Plaintiff's claim for LTD benefits was assigned to Claims Manager Marquicha Ladell. Id. ¶ 79. Claims Manager Ladell requested information from BJC including copies of her pay stubs prior to Plaintiff's last day worked. Id. ¶ 80. In determining whether to grant LTD benefits, Case Manager Ladell reviewed the medical information in Plaintiff's STD claims file and the terms and conditions of the Policy. (Defendant Response, at 21).

         On July 12, 2016, Plaintiff completed a “Disability Questionnaire & Activities of Daily Living” (ADL) form from the Defendant. (Defendant Facts ¶ 28). The ADL form asked the Plaintiff whether she was working, to which she responded “yes” and stated that she was working for BJC “10 hours per week in the office [and] 10 from home.” Id. ¶ 29, quoting AR LINA0121-123. Plaintiff further answered that she expected to return to work July 18, 2016 but noted she would be performing a modified job.[11] Id. Plaintiff also indicated that she was receiving and would continue to receive 100% of her salary through July 15, 2016. Id. ¶ 31.

         A July 19, 2016 treatment note from Dr. Buchowski states:

[Plaintiff] has returned to work part-time (10 hours a week at work and 10 hours per week at home). She is no longer on oxycodone and is taking tramadol instead. She states that she is able to ambulate for relatively long distances without substantial leg pain or any significant leg numbness (which she could not do for approximately 2 years prior to surgery) … On physical examination, the patient is well-developed, well-nourished woman appearing her stated age. She is alert, oriented, and is in no acute distress. She ambulates with a normal gait. She is able to stand on her toes, stand on her heels, and is able to stand on each leg independently. She does not need to use any assistive devices. She is able to squat down and rise back up. She stands in normal coronal and sagittal alignment. Motor strength examination demonstrates normal motor strength throughout the lower extremities. Reflexes are normal and are symmetric throughout. Babinski sign is negative. There is no clonus, Her incision is healed… Plain radiographs demonstrate evidence of a posterior spinal fusion with instrumentation from T10 to S1/illium with a decompression from L3 to L5 and TLIFs at ¶ 4-L5 and L5-S1. Overall alignment looks excellent…

Id. ¶ 32, citing AR LINA0198-199.

         On August 15, 2016, Dr. Bottros reported:

[Plaintiff] returns to PMC [pain management clinic] today for continuing low back pain and LLE pain. On her last visit on 7/25/16 she had thermal RF performed on the genicular nerves of the left knee. She states that she is no longer experiencing pain directly over the knee, but she has begun to experience pain superior and inferior to the knee which she states wraps all around the leg. She states she had continued to experience some relief with naltrexone.
She reports she recently purchased Quell pain relief devise to use on her left knee. She states it has been providing great relied. She states her pain can be as high as an 8/10 in the L knee, but with the Quell devise it goes down to 2/10. She rates the pain 5-6/10 in her low back and states that although in the past it was located primarily on the left side, she has begun to experience more main on the right as well recently which has been gradually worsening. Her last bilateral SI injection was three months ago. She states her pain is exacerbated by movement and relieved by ice.

Id. ¶ 33, citing AR LINA0212-213.

         Defendant approved Plaintiff's LTD claim on August 18, 2016.[12] (Defendant Response, at 22). Defendant's rationale for approving Plaintiff's LTD benefits was stored in Workbench. (Plaintiff Facts ¶ 86). The Workbench entry states:

8/17/16 CM recommends approving claim based on STD staffing on 7/11/16, which states medical on file demonstrates a functional loss through BTD (7/15/16) as evidenced by gait deficits/continued pain/treatments limiting ADL's post nine-level fusion.”

Id. ¶ 87, citing AR LINA001113.

         A. Defendant Stops Payment of LTD Benefits

         On August 18, 2016, Defendant requested Plaintiff's last two paystubs from BJC to calculate her LTD benefit amount. (Defendant Facts ¶ 38, citing AR LINA0171). Defendant received those paystubs on September 7, 2016. Id. ¶ 39, citing AR LINA0231. Defendant then followed up with BJC because Plaintiff had been receiving her full time pay through 8/26/16. Id. ¶ 40. BJC alerted Defendant that Plaintiff was an exempt employee who receives full time pay even when working part time. Id. ¶ 41, citing AR LINA0229.

         The Policy's definition of Disability requires the employee to be unable to earn 80% of her indexed earnings. On September 20, 2016, Defendant notified Plaintiff that her benefits were not payable. Id. ¶¶ 41-42. Plaintiff states that the modified work arrangement was not satisfactory to BJC and that she was terminated on September 18, 2016 effective December 31, 2016. (Plaintiff Facts ¶108, citing AR LINA0205).[13] In a letter dated November 9, 2016, the Plaintiff reported to Defendant that she ceased work for BJC effective on December 31, 2016. (Plaintiff Facts ¶117). Plaintiff contends that while Defendant never paid any LTD benefits to Plaintiff it would have done so upon confirmation of Plaintiff's salary. (Plaintiff Facts ¶ 91).

         B. Defendant Denies Plaintiffs LTD Claim

         On December 1, 2016, Defendant denied Plaintiffs LTD benefits claim. (Plaintiff Facts ¶ 134). On April 20, 2017, Plaintiff submitted an appeal of Defendant's denial of her LTD benefit claim. On May 22, 2017, Defendant again denied Plaintiff's claim. Id. ¶ 191. On November 17, 2017, Plaintiff filed a second appeal. Id. ΒΆ 203. On February 7, 2018, Defendant denied the Plaintiff's ...

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