Legal Summary: Satterwhite v. Metropolitan Life Insurance Company

803 F. Supp. 2d 803
2008 U.S. Dist. LEXIS 112854
2008 WL 2952473
2007 WL 2746886

Our client had long-term disability coverage through her employer, and MetLife was the plan administrator. Satterwhite v. Metro. Life Ins. Co., No. 1:06-CV-165, 2007 WL 2746886, at *1 (E.D. Tenn. Sept. 19, 2007). Our client eventually applied for benefits under her policy after becoming disabled. Id. With her application, she submitted a statement from her treating physician explaining her diagnosis and stating that she was not presently able to work. Id.

MetLife hired its own doctor to review our client’s medical record and interview her. Id. Their doctor likewise concluded that our client could not work for at least a few weeks, so MetLife approved our client for short-term disability benefits. Id. at *2-3.

Once the short-term benefits expired, our client applied for long-term benefits because she was still disabled. Id. at *3. The policy required our client to show that she was “unable to perform the duties of [her] regular job” in order to qualify for benefits. Id. at *2. To meet that requirement, her application included a statement from her treating physician saying that our client had a severe form of her disability and “could work zero hours a day.” Id.

MetLife approved our client’s claim for long term disability benefits, but explained that after 24 months her policy would require her to submit additional evidence showing that she met a new heightened standard of being “unable to work at any job for which [she] might be qualified…” Id. at *2-3. After 24 months, MetLife reviewed our client’s file and approved her claim under the heightened disability standard as well. Id. at *3-4.

About a year later, MetLife undertook yet another review of our client’s claim. Id. at *4. This time, MetLife concluded that our client was not sufficiently disabled to prevent her from working and thus terminated her benefits. Id. at *5. Our client appealed that decision, submitting in support a letter from her treating physician explaining the severity of her condition. Id.

MetLife upheld its denial decision, despite our client’s doctor’s opinion that she was still disabled. Id. at *6. Their denial letter relied upon a MetLife-hired doctor who reviewed our client’s file and concluded, without examining our client in person, that our client’s treatment plan was inadequate, and that she did not provide sufficient documentation showing her disability still existed. Id. at *5-6.

Following this second denial, we sued MetLife for wrongfully terminating our client’s benefits. Id. at *6. The court agreed with us, finding that both of MetLife’s denial decisions against our client were arbitrary and capricious and that MetLife would have to review our client’s claim again, but this time, using a fair decision-making process. Id. at *6, 8.

Regarding its first denial decision, the court explained that MetLife acted arbitrarily and capriciously in multiple ways. Id. at *7-8. To begin, the law requires plan administrators to “consider the entire record available in making its benefits determination,” but MetLife’s file reviewer failed to do so, because she only looked at three pieces of evidence from our client’s doctor before concluding that our client’s disability was not supported. Id. at *7.

The court found that MetLife’s first denial was also arbitrary and capricious because it faulted our client for not providing certain medical information. Id. This was unreasonable because our client’s policy only required her to provide information “if requested by [MetLife],” and our client and her doctor had complied with all of MetLife’s information requests. Id. Therefore, any lack of information was the fault of MetLife, not our client. To make matters worse, MetLife already had access to some of the information it faulted our client for not providing. Id. at *7. And according to the court, choosing “to ignore medical evidence readily available to [MetLife] in [our client’s] file was arbitrary and capricious.” Id.

Lastly, MetLife’s initial denial letter unreasonably claimed that our client was not receiving treatment frequently enough, which allegedly violated the policy’s requirement that a claimant “be under the ‘regular care of a licensed practicing physician’” in order to qualify for benefits. Id. at *8. The court found this conclusion to be arbitrary and capricious, because the policy did not define “regular care” and our client’s doctor explained that her treatment frequency was based upon the fact that our client’s condition did not respond well to treatment. Id. Furthermore, MetLife specifically argued that our client seeing her physician every three months was not regular enough, but the court easily rejected that argument because of precedent that considered six-month gaps between physician visits to be regular enough to meet a “regular care” requirement. Id. For all of those reasons, MetLife’s first denial was arbitrary and capricious. Id.

As with the first denial, the court held that MetLife’s second denial decision was also arbitrary and capricious. Id. MetLife had hired a physician to review our client’s file and relied almost entirely upon his opinion to deny our client’s appeal. Id. at *9-10. The court explained that even though, under the law, insurance companies are not required to believe a claimant’s treating physician over a company-hired reviewing physician, an insurance company nevertheless may not “arbitrarily refuse to credit [a treating physician’s] finding, diagnosis, and treatment plan,” without “a reasoned, rational basis” for doing so. Id. at *10-11. Here, MetLife did not provide “a reasoned, rational basis” for choosing to believe its physician over our client’s treating physician, who unequivocally stated “that she was completely and totally disabled.” Id. at *9, 11.

Next, we challenged the reviewing physician’s report itself for misconstruing the medical evidence and coming to unreasonable conclusions. Id. The court agreed with us that the record revealed “a significant amount of evidence that [MetLife’s reviewing physician] appear[ed] to have overlooked or misconstrued.” Id. The court even went so far as to state that “the bulk of the evidence in the record [was] contrary to [the reviewing physician’s] assertions.” Id

In a similar vein, we also criticized MetLife’s second denial decision for relying so heavily on its reviewing physician given that the physician did not conduct an in-person examination of our client. Id. at *12. The court agreed that the lack of an in-person examination was problematic, especially because our client’s condition was of a type that tends to require in-person examinations in order to accurately assess, and also because MetLife’s physician did not even contact our client’s treating physician to discuss her condition. Id. Thus, based on the weakness of the reviewing physician’s report and the absence of an in-person examination, the court concluded that MetLife should not have given much weight to its reviewing physician’s opinion on our client’s file. See id.

The court noted multiple other flaws in MetLife’s appeal process. Id. at *14-16. First, MetLife considered but ultimately rejected the idea of conducting an in-person examination of our client, despite the fact that MetLife terminated our client’s benefits based on lack of information which it could have gathered through an in-person examination. Id. at *14.

Another flaw was that MetLife terminated our client’s benefits, while at the same time, the Social Security Administration still considered her to be disabled. Id. at *15. This was problematic because MetLife was the one who instructed our client to seek social security disability benefits in the first place so that it could save money by decreasing her MetLife benefits based upon the amount of disability benefits she received from social security. Id. at *16. Therefore, when the Administration found her to be disabled, MetLife allowed itself to benefit from that determination, but then when MetLife wanted to terminate our client’s benefits, it no longer cared that she was still disabled under Social Security standards. Id.

The final flaw in MetLife’s decision-making process was that it terminated our client’s benefits even though “not a single doctor opined that she could return to work,” not even MetLife’s own reviewing physicians. Id. This, in combination with the other failures identified above, led the court to conclude that MetLife’s termination decision was “self-serving” and “arbitrary and capricious.” Id. at *15-16. Accordingly, the court remanded our client’s case back to MetLife with instructions to seek out appropriate medical information and provide her “a full and fair review.” See id. at *16.

We requested attorney’s fees for our work on the case. MetLife objected, but the court agreed with us and awarded $16,933.00, the full amount of our request. Satterwhite v. Metro. Life Ins. Co., No. 1:06-cv-165, 2008 WL 2952473, at *1 (E.D. Tenn. July 29, 2008). MetLife’s first objection to our request was that we were not “prevailing parties,” which is required in order to receive attorney’s fees. Id. at *1-2. This was incorrect, because the relevant statute does not, in fact, include a “prevailing parties” requirement. Id. at *3. Instead, courts have discretion to award attorney’s fees to any party that had at least some “success on the merits.” Id. The court in our case concluded that we “clearly had a substantial level of success on the merits even if benefits were not granted,” since we successfully forced MetLife to review our client’s claim again. See id.

MetLife also argued that even if we met the threshold requirements for receiving attorney’s fees, we did not qualify under the balancing test that the court must apply. See id. at *1. The court rejected that argument. Id. at *12. We qualified for attorney’s fees under the test, because we showed that “the culpability or blame lies heavily at the door of MetLife,” that MetLife as a large insurance company had the capacity to pay our fees, that forcing MetLife to reconsider its denial decision had a deterrent effect on MetLife and other insurance companies, and that our position in the lawsuit “was clearly more meritorious” than MetLife’s. Id. at *8-13.

As required by the court, MetLife reviewed our client’s claim again. Satterwhite v. Metro. Life Ins. Co., 803 F. Supp. 2d 803, 804 (E.D. Tenn. 2011). It approved her benefits for a few months but then terminated them once more. We sued MetLife again, arguing that MetLife’s newest decision was also arbitrary and capricious. Id. at 804-05. The court agreed with us yet again. Id. at 805.

A magistrate judge first reviewed our case and recommended that the reviewing court rule in our favor. Id. MetLife however objected to the magistrate’s recommendation for two broad reasons, which were both inadequate according to the reviewing court. Id. at 806. First, MetLife argued that its newest denial decision was reasonable, and the magistrate was wrong to hold otherwise. Id. And secondly, MetLife asserted that the magistrate incorrectly placed the burden on MetLife instead of us to affirmatively prove our client’s disability. Id.

In rejecting MetLife’s first set of arguments, the court criticized MetLife for multiple failures throughout its review process, principally, that MetLife did not conduct an independent examination of our client before denying her claim again, despite the previous court’s strong suggestions that it do so. Id. at 806-07. The court further noted that our firm got additional testing to support our client’s claim, yet MetLife did not do the same and still tried to fault our client for failing to provide “objective evidence” of her disability. Id. at 807. In other words, MetLife did not correct its mistakes from its first arbitrary-and-capricious review process, so the magistrate was correct to hold that its newest review process was also arbitrary and capricious. Id. at 807-08.

On top of those failures, MetLife also unreasonably relied upon a doctor’s statement that our client “likely could do some type of work,” id. at 806, even though the doctor who made that statement was focused on our client’s medications, not her ability to return to work. Id. at 807. Furthermore, MetLife’s other reviewers relied upon this doctor’s unconvincing statement and ignored other notes from that doctor which indicated our client was actually disabled. See id. at 810.

Additionally, despite the fact that MetLife lacked in-person evidence, MetLife had four new “non-examining, consulting physicians” review our client’s claim, two of which were not specialists in the type of condition our client had and thus could not give educated opinions. See id. at 810. On the whole, the court concluded that MetLife’s newest denial decision was arbitrary and capricious. Id. at 811-12.

Next, the court addressed MetLife’s second argument, which was that the magistrate judge wrongly placed the burden on MetLife to affirmatively prove that our client was disabled. Id. at 812. The court rejected that argument, explaining that the magistrate judge was actually just enforcing the fact “that the Plan language [did] not give [MetLife] license to determine that [our client was] ineligible for benefits on the basis of one statement, without thorough review of the medical record…” Id. Moreover, the policy only required our client “to provide evidence of her disability ‘if requested by the Company,’” and MetLife never “outlined or requested in any documentation” the means by which it wanted our client to prove her disability. Id. at 813-14.

Lastly, the Court emphasized that the magistrate judge was correct to recommend an award of benefits rather than giving MetLife yet another chance to review our client’s claim, because according to the court, “[i]t [was] now abundantly clear that [MetLife would] disregard any further guidance or instruction from the Court.” Id. at 814.