Cooper v. Life Insurance Company of North America

486 F.3d 157 (6th Cir. 2007).

Our client, an insurance claims adjuster for ACE Insurance, became disabled from a back injury after working for ACE for twenty-one years. Cooper v. Life Ins. Co. of North America, 486 F.3d 157, 159 (6th Cir. 2007).  Mrs. Cooper had back surgery in May 2002 and filed for benefits under her long-term disability plan in October 2002. Id. at 160.  On October 23, 2002, Life Insurance Company of America (LINA), ACE’s claims administrator, sent Mrs. Cooper a letter saying that LINA needed medical information regarding Mrs. Cooper’s functional abilities from her treating neurosurgeon, Dr. Boehm, by December 6, 2002. Id.  Despite Dr. Boehm returning LINA’s Physical Abilities Assessment the week after December 6th and Dr. Boehm’s multiple record notes saying that Mrs. Cooper was unable to work, LINA denied Mrs. Cooper’s application on December 5, 2002. Id.

Mrs. Cooper appealed this denial according to the Plan’s administrative appeals process. Id. at 161.  Mrs. Cooper submitted additional records from Dr. Boehm prohibiting her from work and records from Dr. Brown, a physical medicine and rehabilitation specialist, asserting that Mrs. Cooper was unable to work in her present condition. Id.

LINA then hired Dr. Graulich, a neurologist, to conduct an independent peer evaluation of Mrs. Cooper’s claim file. Id. at 161-62.  On two separate occasion, LINA told Dr. Graulich to  discuss Mrs. Cooper’s condition with her treating physicians, Drs. Boehm and Brown. Id. at 168.  Dr. Graulich called Dr. Boehm and Dr. Brown on March 14th and March 17th but submitted his report on March 18th before either doctor had returned his call. Id. at 168.

In addition to failing to follow explicit orders, Dr. Graulich’s report was internally contradictory.  He agreed with Mrs. Cooper’s treating physicians that it was reasonable to restrict Mrs. Cooper to two to three hours of work and thirty minutes of driving per day. Id. at 168-69.  However, he then contradicted himself and declared that the medical evidence did not support Mrs. Cooper’s disability. Id. at 169.  Finally, Dr. Graulich mischaracterized Mrs. Cooper’s job as “sedentary” rather than “light-duty”, an error that significantly decreased the abilities Mrs. Cooper would need to be able to perform that job. Id.  LINA denied Mrs. Cooper’s appeal on March 27, 2003, based on Dr. Graulich’s report. Id.  The court declared:

In sum, Dr. Graulich failed to interview Cooper’s treating physicians despite his explicit instructions to do so, misstated the exertional level of Cooper’s job and contradicted himself as to her ability to engage in full-time work.  We thus conclude that LINA acted arbitrarily and capriciously when it relied on Dr. Graulich’s report in denying Cooper’s first appeal on the basis that the record lacked sufficient evidence to establish disability.


After the Social Security Administration deemed Mrs. Cooper to be totally disabled and awarded her benefits, Mrs. Cooper filed a second administrative appeal in July of 2004. Id. at 162-63.  She submitted additional medical records, including the report of Dr. Johnson, an orthopedist hired by the Social Security Administration to examine Mrs. Cooper, that declared that she would have “difficulty maintaining active employment” and “could not work an 8-hour day or a 40-hour week.” Id. at 163.

In September of 2004, LINA had Dr. Sassoon, a physical medicine and rehabilitation specialist, review Mrs. Cooper’s file. Id.  The court noted that Dr. Sassoon’s report ignored the opinions of multiple doctors that Mrs. Cooper could only work for two to three hours per day and instead focused on portions of the medical records that supported LINA’s position with out any explanation for discounting other evidence. Id. at 169.  Like Dr. Graulich, LINA’s first independent medical examiner, Dr. Sassoon did not speak with Mrs. Cooper’s treating physicians, despite LINA providing him with a list of their names and contact information and directing him to discuss Mrs. Cooper’s condition with them. Id. at 169-70.  Based on Dr. Sassoon’s report, LINA denied Mrs. Cooper’s second appeal on September 28, 2004. Id. at 163.  The court asserted:

The failure of the independent-review physicians to comply with LINA’s instructions or to explain why they had disregarded the opinions of the doctors who had in fact treated Cooper was arbitrary…LINA’s reliance on the reports of Drs. Graulich and Sassoon in denying Cooper’s two administrative appeals constitutes capricious decision-making.

Id. at 170.

LINA also acted arbitrary and capriciously when it continued to declare that Mrs. Cooper’s claim lacked evidence of her functional limitations even though there were office-visit notes, MRIs, test results, and reports from examining physicians describing her functional limitations. Id.  LINA had arbitrarily taken the position that only a Functional Capacity Evaluation would provide sufficient evidence of Mrs. Cooper’s functional limitations but had never told Mrs. Cooper this. Id.

Finally, the court explained that remanding the claim to the plan administrator is the appropriate remedy when there were issues with the administrator’s decision-making process but that the court could award benefits to the claimant without a remand when the claimant is “clearly entitled” to benefits. Id. at 171 (quoting Elliot v. Metro Life Ins. Co., 473 F.3d 613, 622 (6th Cir. 2006); citing Kalish v. Liberty Mutual/Liberty Life Ass. Co., 419 F.3d 501, 513 (6th Cir. 2005)).  The court declared:

Plan administrators should not be given two bites at the proverbial apple where the claimant is clearly entitled to disability benefits.  They need to properly and fairly evaluate the claim the first time around; otherwise they take the risk of not getting a second chance, except in cases where the adequacy of claimant’s proof is reasonably debatable.  That is not the case here.

Id. at 172.  Therefore, the court awarded Mrs. Cooper benefits from the date she originally filed her claim. Id. at 172-73.