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Mead v. Reliastar Life Insurance Co.

United States District Court, D. Vermont

July 10, 2015

SUSAN MEAD, Plaintiff.



Plaintiff Susan Mead suffers from degenerative cervical disc disease. She left her job as a corporate executive in 2000 at age 50, and filed a claim for disability benefits in 2003. Having been initially denied such benefits, she commenced this action in 2005 under the Employment Retirement Income Security Act of 1974 ("ERISA") against Defendant ReliaStar Life Insurance Company ("ReliaStar Life").

Over the approximately ten years that this case has been litigated, there have been two remands to the plan administrator: first for a more complete explanation of the substantial evidence supporting the denial of benefits, and again because the denial of "own occupation" benefits was an abuse of discretion. The current issues before the Court are: (1) the amount of "own occupation" benefits due, and (2) whether the denial of "any occupation" was warranted. For the reasons set forth below, Mead's Motion for Summary Judgment on those issues is denied, ReliaStar Life's Motion for Summary Judgment is granted in part and denied in part, and this matter is remanded to the plan administrator.

I. Factual and Procedural Background

A. Employment and Disability Plan

Mead worked for ReliaStar Financial Corp. ("ReliaStar Financial") from August 1978 through December 2000. At the time of her departure on December 31, 2000, she held an executive position as a Vice President of Brand Marketing and Strategic Planning.[1] Her position reported to the company CEO, and she served on the boards of subsidiaries located in Minneapolis, Seattle, and Jericho, New York.

Mead's job involved participating in meetings for a substantial part of her day and extensive work at a computer. She was also required to travel by airplane one to two times per month, with such trips regularly taking three to four hours. Her work day often extended beyond eight hours.

Mead's employment was governed by a written employment contract dated November 20, 1999, entitled Management Employment Agreement ("MEA"). The MEA was intended to protect Mead in the event of a change of control at ReliaStar Financial. Specifically, if Mead were to leave the company, the MEA entitled her to participate in any health, disability or life insurance plan as though she continued to be an executive of the company for three years following her departure or until her 65th birthday, whichever occurred first.

During 2000, ReliaStar Financial agreed to merge with ING Groep, N.V. ("ING"), a financial services company located in the Netherlands. In connection with the corporate acquisition of ReliaStar Financial, Mead exercised her option to stop working for the company as of the end of 2000 and to receive payment under the terms of the MEA. She received a lump sum severance payment of $819, 783.33 in 2001, as well as additional sums as deferred compensation or bonuses. Mead's total compensation in 2000 was $283, 734.38, reflecting a salary of $192, 450.00 plus a bonus of $91, 284.38. There is no dispute that under the MEA, she was entitled to disability coverage for three years after her departure. Mead was 50 years old when she left ReliaStar Financial.

ReliaStar Life provided a Long Term Disability ("LTD") Plan (the "Plan") to ReliaStar Financial's employees. The Plan provided that for the first 24 months of an employee's disability, "Total Disability" would be defined as the inability to perform the essential duties of the employee's "own occupation" due to sickness or accidental injury. After 24 months, "Total Disability" was defined as the inability to work at "any occupation" for which the employee was "or could reasonably become qualified to do by education, training or experience." ECF No. 165-1 at 16.

The Plan's Schedule of Benefits provided that for Total Disability, an individual would ordinarily be covered under a Base Plan which provided a Monthly Income Benefit of "[t]he lesser of 40% of your Basic Monthly Earnings or $15, 000.00, minus Other Income." Id. at 5. Basic Monthly Earnings was defined as the "salary or wage you receive for work done for the Policyholder." Id. Basic Monthly Earnings included bonuses "for those employees with a written bonus agreement that is specifically based on sales of ReliaStar Financial... products and/or products of a ReliaStar Financial... subsidiary, " but did not include, among other things, incentive compensation.[2] Id.

B. Claim for Benefits

Mead has not engaged in any work, aside from volunteering at an art gallery, since her departure from ReliaStar Financial in December 2000. A magnetic resonance imaging ("MRI") test in January 2001 showed moderately severe degenerative disc disease at multiple levels of Mead's cervical spine. On January 28, 2003, she submitted a claim for LTD benefits based on fibromyalgia and degenerative cervical disc disease. As part of her claims, she submitted an Activities of Daily Living Statement in which she stated that she suffered from constant back and neck pain and had experienced no improvement in her condition over the previous two years. Mead explained that she did aerobics four to five times per week, weights two to three times per week, and yoga. Her daily activities included driving, laundry, garden work, washing dishes, preparing meals, shopping, helping her child, reading, watching TV and movies, and doing crafts. Mead also reported that she could not sit for longer than an hour without a substantial increase in pain.

In February 2003 Mead's attending physician, Dr. Hannah Rabin, completed a statement in connection with the claim identifying the primary diagnosis as degenerative disc disease. Dr. Rabin opined that Mead could tolerate sitting for three to four hours, standing for one to two hours, and walking for one to two hours. Mead received no reduction in pain from an epidural steroid injection in February 2003, while a medial branch nerve block in April 2003 gave her limited relief. In May 2003, Dr. Michael Borrello performed a selective nerve root injection.

Dr. Rabin referred Mead to the Spine Institute of New England, where Mead saw Dr. S. Elizabeth Ames in May of 2003. Dr. Ames reviewed the 2001 MRI and x-ray films, obtained new cervical spine films, and confirmed a diagnosis of multilevel degenerative cervical discs with pain resulting from the disc degeneration. Dr. Ames discussed surgical fusions with Mead, but felt that this would not provide complete relief because of the multiple levels of discs involved.

After receiving Mead's claim, ReliaStar Life contracted with an outside medical consultant from Behavioral Management, Inc. ("BMI"). Dr. Mark Johnson, an internist, reviewed Mead's medical records and her application for LTD benefits. Dr. Johnson concluded, after speaking with Dr. Rabin, [3] that Mead's reported inability to tolerate periods of sitting, standing, or walking was unsupported by the medical evidence. Dr. Scott M. Yarosh, a physician and psychiatrist also affiliated with BMI, reviewed Mead's records from a psychiatric and medical perspective and concluded that there was a psychological component to her chronic pain.

On August 28, 2003, ReliaStar Life denied Mead's claim for LTD benefits. The benefits specialist who handled her claim concluded that Mead's medical records did not support a finding of total disability from performing her own occupation. No determination was made at that time with regard to "any occupation" benefits.

On October 29, 2004, Mead appealed the denial. The appeal committee permitted Mead to submit additional information. Accordingly, Mead provided a supplemental report from Dr. Rabin, the results of a Functional Capacity Evaluation ("FCE") conducted in October 2003, and a Vocational Analysis Report. Mead also provided additional medical records from Drs. Ames and Borrello in support of her claims.

In July 2003, Mead underwent a work rehabilitation evaluation at the Fletcher Allen Work Enhancement Rehabilitation Center ("WERC"). On July 22, 2003, WERC's occupational therapist reported that Mead was "currently unable to work due to significantly decreased positional tolerances of sitting, standing and walking, stooping, reporting all of these cause increased pain just after a short time of being in this position." In August 2003, Mead participated in a three-week "work hardening" program at WERC that included physical therapy, occupational therapy, and counseling. On August 21, 2003, she reported that her tolerance for sitting, standing, walking and driving had improved as a result of participation in the program.[4] One month after leaving the program, Mead returned to WERC for an FCE. The FCE indicated that Mead's tolerances had deteriorated since leaving the program.

In April 2004, Mead had another MRI which confirmed multilevel degenerative disc disease, involving the C3-4, 4-5, 5-6 and 6-7 levels.

As part of its review of Mead's appeal, the appeal committee retained physician and attorney Dr. Mitchell Nudelman to perform a medical records review. Dr. Nudelman, a primary care physician, consulted with unnamed specialists and found insufficient information to support Mead's claim of disability. In a letter dated August 13, 2004, the appeal committee upheld the initial decision denying "own occupation" benefits.

C. Mead's Lawsuit and the Court's First Ruling

Mead filed suit against ReliaStar Life on December 29, 2005, seeking recovery for LTD benefits pursuant to Section 502(a)(1)(B) of ERISA. See 29 U.S.C. ยง 1132(a)(1)(B). Magistrate Judge Niedermeier issued a Report and Recommendation ("R&R") on January 29, 2008, recommending that ReliaStar Life's motion for summary judgment be denied, that Mead's motion for summary judgment be granted and her claim remanded to the plan administrator. Both parties objected to the R&R.

On March 27, 2008, this Court issued a Memorandum and Order accepting the R&R in part. The Court found that it was unclear "whether [ReliaStar Life had] rejected the findings that Mead cannot perform full-time sedentary work, or whether, and on what basis, it concluded that Mead enjoyed a particular type of sedentary occupation that afforded her the flexibility to sit only for limited periods of time." ECF No. 54 at 8. The Court similarly found it "impossible to tell what evidence was credited and what evidence rejected in order to arrive at the decision to deny long-term disability benefits." Id. at 10. Consequently, the Court was unable to find substantial evidence supporting the denial of benefits, and remanded the case to the plan administrator.

D. The First Remand

Following remand, Mead's counsel submitted additional medical records and vocational reports to ReliaStar Life. These included records from Dr. Rabin; records from Dr. Mark Bucksbaum; an Independent Medical Examination ("IME") by a physical medicine and rehabilitation specialist; and a vocational assessment report. In 2005, Dr. Rabin had completed a Residual Functional Capacity Questionnaire for Mead's Social Security Disability Income ("SSDI") claim. In that questionnaire, Dr. Rabin concluded that Mead could only sit and stand for 20 minutes at a time, and could not sit for more than two hours in an eight hour work day. Dr. Rabin further indicated that Mead would need to a take a break every 30 to 60 minutes, that breaks would last from five to fifteen minutes, and that Mead would likely miss three days of work per month due to her pain issues.

Dr. Bucksbaum completed a disability evaluation for Mead on April 3, 2008. In the course of doing so, he reviewed her medical records between 2000 and 2008. He also administered a total pain impairment instrument and concluded that Mead's score indicated moderately severe pain. Based upon his evaluation and the records review, Dr. Bucksbaum opined that Mead was unable to meet the essential elements of her prior employment as a strategic marketing executive.

Vocational consultant James Parker completed a vocational assessment report for Mead on May 22, 2008. Parker observed that Mead's records documented the fact that she was unable to sustain a regular eight-hour, five-day work schedule in a sedentary occupation. He further noted that a self-paced and self-scheduled exercise program had no bearing on an individual's ability to work at a sedentary ...

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