Hislop v. CH2M Hill Companies Ltd. et al

WO IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
DENNIS HISLOP, )
)
Plaintiff, )
)
vs. )
)
CH2M HILL COMPANIES LTD; CH2M )
HILL COMPANIES LTD DISABILITY )
INCOME BENEFIT PLAN; and LIFE )
INSURANCE COMPANY OF NORTH )
AMERICA, )
) No. 3:19-cv-0073-HRH
Defendants. )
_______________________________________)
FINDINGS OF FACT and CONCLUSIONS OF LAW
This is an action for judicial review of the termination of ERISA benefits. Plaintiff
has timely filed his opening brief,1 to which defendants have timely responded.2 Defendants
have also filed a cross-motion for summary judgment.3 Defendants’ cross-motion is
opposed.4 Oral argument was not requested and is not deemed necessary.
1Docket No. 24.
2Docket No. 31.
3Docket No. 32. “In the ERISA context, summary judgment is merely a vehicle for
deciding the case[.]” Gilliam v. Nevada Power Co., 488 F.3d 1189, 1192 n.3 (9th Cir. 2007).
4Docket No. 35.
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Facts
Plaintiff is Dennis Hislop. Defendants are CH2M Hill Companies Ltd., CH2M Hill
Companies LTD Disability Income Benefit Plan (“the Plan”), and Life Insurance Company
of North American (“LINA”). Plaintiff worked for CH2M Hill as a heavy equipment
operator and laborer. CH2M Hill was the sponsor and administrator of the Plan, which
provided Long Term Disability (“LTD”) benefits to Plan participants.5 Plaintiff was a Plan
participant. Originally, Standard Insurance was the “Claims Administrator for the LTD
component of the Plan.”6 CH2M however “retain[ed] the right of final review and decision
on all claims and appeals.”7 In 2014, LINA became the claims administrator.8
The statement of coverage for the Plan provides that “[i]f you become Disabled while
covered under the Plan, we will pay LTD Benefits according to the terms of the Plan after
we receive Proof of Loss satisfactory to us.”9 “Proof of Loss” is defined as “written proof
that you are Disabled and entitled to LTD Benefits.”10
5Admin. Rec. at 1331.
6Admin. Rec. at 1331.
7Admin. Rec. at 1331.
8Admin. Rec. at 14.
9Admin. Rec. at 1339.
10Admin. Rec. at 1355.
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The Plan provides that
You are Disabled if you meet the following definitions during
the periods they apply:
A. Own Occupation Definition of Disability.
B. Any Occupation Definition of Disability.[11]
The “own occupation” definition of disability provides that
You are Disabled from your Own Occupation if, as a result of
Physical Disease, Injury, Pregnancy or Mental Disorder:
1. You are unable to perform with reasonable continuity the
Material Duties of your Own Occupation; and
2. You suffer a loss of at least 20% of your Indexed
Predisability Earnings when working in your own
Occupation.[12]
“Own Occupation means any employment, business, trade, profession, calling or vocation
that involves Material Duties of the same general character as the occupation you are
regularly performing for your Employer when Disability begins.”13 “Material Duties” are
defined as
the essential tasks, functions and operations, and the skills,
abilities, knowledge, training and experience, generally required
11Admin. Rec. at 1343.
12Admin. Rec. at 1343.
13Admin. Rec. at 1343.
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by employers from those engaged in a particular occupation that
cannot be reasonably modified or omitted.[14]
The “own occupation” period of disability is “[t]he first 24 months for which LTD Benefits
are payable.”15
The “any occupation” definition of disability provides that
You are Disabled from all occupations if, as a result of Physical
Disease, Injury, Pregnancy or Mental Disorder, you are unable
to perform with reasonable continuity the Material Duties of
Any Occupation.[16]
“Any Occupation” is defined to
mean[] any occupation or employment which you are able to
perform, whether due to education, training or experience,
which is available at one or more locations in the national
economy and in which you can be expected to earn at least 60%
of your Indexed Predisability Earnings within twelve months
following your return to work, regardless of whether you are
working in that or any other occupation.[17]
The “any occupation” period is “[f]rom the end of the Own Occupation Period to the end of
the Maximum Benefit Period.”18 The Maximum Benefit Period is “[d]etermined by your age
14Admin. Rec. at 1344.
15Admin. Rec. at 1338.
16Admin. Rec. at 1344.
17Admin. Rec. at 1344.
18Admin. Rec. at 1338.
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when Disability begins[.]”19 Plaintiff was 54 years old when his disability began, so his
Maximum Benefit Period would end at age 65.20
The Plan provides that
LTD benefits end automatically on the earliest of:
1. The date you are no longer Disabled.
2. The date your Maximum Benefit Period ends.
3. The date you die.
4. The date benefits become payable under any other LTD
plan under which you become covered through employ-
ment during a period of Temporary Recovery.
5. The date you fail to provide proof of continued Disability
and entitlement to LTD benefits.[21]
The Plan provides that the amount of LTD Benefits is “66 2/3% of the first $5000 of
your Predisability Earnings, reduced by Deductible Income.”22 “Predisability Earnings
means your monthly rate of earnings from your Employer[.]”23 Deductible Income includes
Social Security disability or retirement benefits and disability benefits received pursuant to
19Admin. Rec. at 1338.
20Admin. Rec. at 1338.
21Admin. Rec. at 1347-1348.
22Admin. Rec. at 1338.
23Admin. Rec. at 1348.
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any other insurance coverage.24 After the first year of disability, Predisability Earnings are
to be adjusted annually, “on each anniversary of your Disability[,]” based on the “Consumer
Price Index for Urban Wage Earners and Clerical Workers published by the United States
Department of Labor.”25
On January 14, 2013, plaintiff was injured on the job.26 Plaintiff “was on the back
of a truck and was opening the door with his right arm extended when the wind hit the door
and forcibly abducted his right arm.”27 Plaintiff continued to work until July 2013, when his
workers’ compensation claim was controverted.28 On August 23, 2013, plaintiff filed a claim
for STD benefits under the Plan, which was approved.29 The finding of disability was based
on a June 19, 2013 examination that “revealed that [plaintiff] was unable to flex or abduct
his right arm greater than 90 degrees (180 is normal)” and an MRI that “demonstrated a near
complete partial thickness tear of the rotator cuff, a non-displaced tear of the labrum,
arthritis, and bursitis.”30
24Admin. Rec. at 1349.
25Admin. Rec. at 1359.
26Admin. Rec. at 1245.
27Admin. Rec. at 1245.
28Admin. Rec. at 1045-46.
29Admin. Rec. at 1045, 1229.
30Admin. Rec. at 1228.
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On December 18, 2013, plaintiff’s claim for LTD benefits under the Plan was
approved.31 Plaintiff was determined to be disabled under the “own occupation” definition
of disability.32 Plaintiff’s LTD benefits were payable as of December 16, 2013.33 Plaintiff
was advised that his maximum benefit would be $2,883.48,34 which was 66 2/3% of his 2013
monthly income of $4235.35
In February 2014, plaintiff had right-sided rotator cuff repair, which was performed
by Dr. Eaton.36
On July 22, 2014, a case manager contacted plaintiff “for [an] update following his
7/21/14 orthopedic f/u appt.”37 The case manager noted that plaintiff “remains precluded
from his medium level work activity as he continues to experience pain and restricted
movement of the right shoulder s/p 2/27/14 rotator cuff repair.”38
31Admin. Rec. at 1020.
32Admin. Rec. at 1228.
33Admin. Rec. at 1016.
34Admin. Rec. at 1020.
35Admin. Rec. at 1283.
36Admin. Rec. at 1245.
37Admin. Rec. at 1233.
38Admin. Rec. at 1233.
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On October 11, 2014, Dr. Eaton diagnosed plaintiff with “failed right rotator cuff
repair” and stated that he “[a]nticipate[d] long term, possibly permanent loss of strength and
ROM in right shoulder.”39
On September 14, 2014, Dr. Purcell completed an independent medical exam ordered
by the Alaska Workers Compensation Board.40 Dr. Purcell opined that plaintiff had “the
present physical capacity to perform full-time work in a sedentary and light work fashion.
He does not have the capability based upon the near full-thickness rotator cuff tear in the
right shoulder to pursue either medium work, heavy work or very heavy work.”41
In April 2015, Dr. Scoggin, an orthopedic surgeon, completed an independent medical
exam ordered by the Alaska Workers Compensation Board.42 In his June 8, 2015 report, Dr.
Scoggin noted that “[a]t the time of my physical examination, [plaintiff] had limited range
of motion, weakness of the right shoulder, a positive lift-off test, and positive examination
findings for rotator cuff pain.”43 Dr. Scoggin also noted that plaintiff’s “MRI scan
demonstrated medial subluxation of the biceps tendon with a probable partial tear of the
subscapularis. These two findings often go together and explain his pain and need for
39Admin. Rec. at 1170.
40Admin. Rec. at 1103.
41Admin. Rec. at 1103.
42Admin. Rec. at 1244.
43Admin. Rec. at 1125.
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additional treatment.”44 Dr. Scoggin opined that plaintiff would “benefit from additional
medical care including an additional surgical procedure of the right shoulder.”45 Dr. Scoggin
recommended “a repeat right shoulder arthroscopy” and “[d]epending upon the arthroscopic
findings, a surgical biceps tenodesis with possible repair of the subscapularis would be
appropriate.”46 Dr. Scoggin also indicated that “[a] right shoulder distal clavicle resection
would . . . be appropriate and should be considered as a part of the repair. . . .”47 Dr. Scoggin
opined that plaintiff was “limited from heavy lifting with the right arm, overhead reaching,
and heavy tool use.”48 Dr. Scoggin opined that plaintiff was “not able to work as a
roustabout or truck driver at the present time” nor was he “capable of returning to work as
an operating engineer.”49 Dr. Scoggin opined that “Mr. Hislop is capable of self-employment
as a President of a company, according to the description provided.”50 Dr. Scoggin opined
that “[f]ollowing appropriate treatment including surgical care discussed above, it is probable
44Admin. Rec. at 1125.
45Admin. Rec. at 1115.
46Admin. Rec. at 1115.
47Admin. Rec. at 1115.
48Admin. Rec. at 1118.
49Admin. Rec. at 1118.
50Admin. Rec. at 1129. Plaintiff had reported at some point that he was the “COE of
his own company where he was inventing equipment for Golfing” but that “[t]his business
did not pan out due to the limited access to the market here in Alaska.” Admin. Rec. at 700.
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that Mr. Hislop should be able to return to full-duty work as an operating engineer or truck
driver, without restrictions[.]”51 Dr. Scoggin noted that he “would anticipate medical
stability approximately 8-10 months after the date of the right shoulder surgical procedure,
assuming a good outcome.”52
On July 2, 2015, LINA “completed [its] review” of plaintiff’s “ongoing benefits
beyond December 16, 2015” and based on that review, determined that plaintiff’s LTD
“benefits will continue at this time.”53
On October 16, 2015, plaintiff’s worker’s compensation claim was settled by way of
compromise and release, which provided a $95,000 payment to plaintiff, a withdrawal of the
controversion of benefits as to future medical expenses, and an authorization for Dr. Robert
Hall to perform right shoulder surgery.54
On June 7, 2016, plaintiff had right shoulder surgery performed by Dr. Hall,
consisting of a right shoulder open biceps tenodesis, a right shoulder open Mumford, and a
right shoulder arthroscopic limited debridement.55
51Admin. Rec. at 1118.
52Admin. Rec. at 1127.
53Admin. Rec. at 1364.
54Admin. Rec. at 955-956.
55Admin. Rec. at 935.
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On August 11, 2016, Dr. Hall noted that plaintiff was making “slow, gradual
progress” and was “able to demonstrate active forward flexion about 120 degrees, active
abduction about 100 degrees.”56 Dr. Hall noted that he thought plaintiff “will always have
some symptoms, but overall I think he is doing well for one month postop.”57
On September 8, 2016, plaintiff reported that he was “making reasonable progress”
and on exam by Dr. Hall, he was “able to demonstrate active forward flexion about 120 to
130 degrees, abduction about 100 degrees.”58
On October 6, 2016, plaintiff reported that “he has continued to make slow progress.
He still has significant pain.”59 On exam by Dr. Hall’s PA, plaintiff was “able to demonstrate
active forward flexion to about 125E. Abduction is to about 110E. Internal rotation is to the
thoracic spine. External rotation is appropriate.”60
On November 8, 2016, Dr. Hall’s PA noted that plaintiff was “definitely improved
since my previous visit with him” and the plan was for plaintiff to “continue his physical
therapy for three times a week for an additional four weeks.”61
56Admin. Rec. at 920.
57Admin. Rec. at 920.
58Admin. Rec. at 918.
59Admin. Rec. at 916.
60Admin. Rec. at 916.
61Admin. Rec. at 914.
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On February 16, 2017, Dr. Hall noted that “I think full recovery will probably take
[plaintiff] at least a year from the procedure. For now, as long as he is making progress we
would have him continue with physical therapy. . . .”62
On April 14, 2017, on examination by Dr. Hall, plaintiff was
able to demonstrate active forward flexion about 140, abduction
about 130 may be a little more, internally rotates about L2 or 3.
Motor testing of his rotator cuff he has got good strength with
minimal tenderness. He has normal contour of the biceps
muscle with resisted elbow flexion and forearm supination.[63]
Dr. Hall noted that he thought
with both of [plaintiff’s] shoulders being a problem[64], it is very
likely that he would be unable to ever return to heavy physical
labor. I think job retraining, if its [sic] available to him, would
be his best route. As far as his [right] shoulder, I think it is
going to be a while yet before he reaches maximum medical
improvement and he can have an impairment rating. For now,
he will continue physical therapy.[65]
On July 27, 2017, Dr. Hall completed a Physical Ability Assessment.66 Dr. Hall
opined that plaintiff had no restrictions as to sitting, standing, walking, reaching below the
62Admin. Rec. at 912-913.
63Admin. Rec. at 910.
64Plaintiff had left shoulder surgery in 2000, 2006, and 2008. Admin. Rec. at 1059.
65Admin. Rec. at 911.
66Admin. Rec. at 899-900.
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waist level, fine manipulation, and simple grasping; could frequently reach at desk level; and
could occasionally reach overhead, grasp firmly, and lift/carry 10 pounds.67
On July 28, 2017, Dr. Hall’s PA noted that “Workmen’s Comp denied his PT the last
time he saw Dr. Hall on 4/14/2017, so he has taken a huge decline in range of motion and
pain.”68 The PA noted that she did not “think he is returning to physical labor.”69
On August 9, 2017, Dr. Seiferth, a specialist in Occupational Medicine, reviewed
plaintiff’s claim file.70 Dr. Seiferth agreed with Dr. Hall’s assessment of limitations, finding
that Dr. Hall’s opinion was “well supported by medically acceptable clinical or laboratory
diagnostic techniques and [was] consistent with the other substantial evidence in the claim
file.”71
On August 15, 2017, Darci Bakos, a Vocational Rehabilitation Specialist, completed
a Transferable Skills Analysis (TSA).72 On this TSA, plaintiff’s Predisability Earnings were
listed as $4325.22 per month, with the 60% requirement listed as $2595.13.73 Bakos
determined that a person with the limitations assessed by Dr. Hall could work as a gate guard,
67Admin. Rec. at 899-900.
68Admin. Rec. at 903.
69Admin. Rec. at 904.
70Admin. Rec. at 257-258.
71Admin. Rec. at 258.
72Admin. Rec. at 892-893.
73Admin. Rec. at 892.
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earning a monthly wage of $2698.33, or a small products assembler, earning a monthly wage
of $2940.74 Both positions were listed as sedentary jobs.75
On August 16, 2017, LINA advised plaintiff that “[a]fter completing our review of
your claim, we are unable to continue paying [LTD] benefits beyond August 16, 2017.”76
The denial was based on the “any occupation” definition of disability.77 Relying on Dr.
Hall’s July 27, 2017, physical abilities assessment and the “Transferable Skills Analysis
performed by” Bakos, LINA determined that there were other occupations that plaintiff
“could perform given your limitation[s], education, and training/experience[,]” including gate
guard and small products assembler.78
On October 23, 2017, plaintiff appealed the termination of his LTD benefits.79
Attached to this appeal was a September 22, 2017 note from Dr. Hall, stating that plaintiff
was “being referred to physical therapy for 1 more month then work hardening for an[]
74Admin. Rec. at 893.
75Admin. Rec. at 893.
76Admin. Rec. at 1512.
77Admin. Rec. at 1516.
78Admin. Rec. at 1516.
79Admin. Rec. at 888-889.
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additional six weeks.”80 Dr. Hall also stated that “[f]rom an orthopedic standpoint,” plaintiff
should “remain off work while attending work hardening.”81
As part of its consideration of plaintiff’s appeal, LINA had Dr. Frentz, a Board
Certified orthopedic surgeon, review plaintiff’s medical records.82 On February 21, 2018,
Dr. Frentz opined that plaintiff was not “functionally limited. The records do not support that
the claimant had ongoing post-operative issues which would be functionally limiting.”83 Dr.
Frentz found that “[t]here were no clinical records as of 08/17/17 to the present to suggest
the need for ongoing work restrictions and/or limitations.”84
LINA also had Dr. Smith, who was Board Certified in Occupational Medicine, review
plaintiff’s medical records.85 On February 28, 2018, Dr. Smith opined that plaintiff was
“mildly functionally limited by his right shoulder condition.”86 Dr. Smith opined that
plaintiff would have the following specific limitations:
Standing -- unrestricted
Walking -- unrestricted
80Admin. Rec. at 890.
81Admin. Rec. at 890.
82Admin. Rec. at 875.
83Admin. Rec. at 875.
84Admin. Rec. at 875.
85Admin. Rec. at 878.
86Admin. Rec. at 878.
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Lifting -- occasional up to 25 pounds, and frequent up to 15
pounds
Carrying -- occasional up to 25 pounds, and frequent up to 15
pounds
Pushing -- occasional up to 25 pounds, and frequent up to 15
pounds
Pulling -- occasional up to 25 pounds, and frequent up to 15
pounds
Climbing stairs -- unrestricted
Stooping -- unrestricted
Kneeling -- unrestricted
Crouching -- unrestricted
Crawling -- unrestricted
Sitting -- unrestricted
Reaching at waist/desk level -- frequent
Reach above shoulder level -- occasional
Reach below waist level -- occasional
Use lower extremities for foot controls -- unrestricted
Fine manipulation -- frequent
Simple and firm grasping -- frequent[87]
On March 8, 2018, William Boyd IV, a rehabilitation specialist, completed a
Transferable Skills Analysis.88 On this TSA, plaintiff’s Predisability Earnings were listed
as $4420.81 per month, and the 60% requirement was listed as $2652.49 per month.89 Boyd
determined that a person with the limitations assessed by Dr. Smith could work as a small
87Admin. Rec. at 878.
88Admin. Rec. at 871.
89Admin. Rec. at 871.
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products assembler, with earnings of $2940 per month, or a route delivery clerk, with
earnings of $3139.17 per month.90 Both of these jobs were listed as light work.91
On March 21, 2018, LINA denied plaintiff’s appeal.92 LINA noted that plaintiff’s
benefit start date was December 16, 2013, with benefits paid
through August 16, 2017. Please note that the definition of
disability changed on December 16, 2015, and to remain eligible
for ongoing benefits, we must have medical information that
clearly supports restrictions and limitations that would prevent
you from performing any occupation.[93]
LINA explained that on appeal, plaintiff’s file was reviewed by “Dr. Bryan Frentz, Board
Certified in Orthopedic Surgery and Dr. Kevin Smith, Board Certified in Occupational
Medicine.”94 “Dr. Frentz opined that review of the medical information did not demonstrate
measured weakness or loss of range of motion. He noted tenderness to palpation at the
shoulder, however Dr. Frentz did not feel your post-operative conditions were functionally
limiting, requiring restrictions or limitations.”95 “Dr. Smith noted you are mildly functionally
impaired, limited by your right shoulder condition. []Dr. Smith noted decreased range of
motion and tenderness to both palpation and movement which would limit your ability to
90Admin. Rec. at 872.
91Admin. Rec. at 872.
92Admin. Rec. at 1479.
93Admin. Rec. at 1481.
94Admin. Rec. at 1483.
95Admin. Rec. at 1483.
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handle materials.”96 LINA further explained that it had “requested [its] vocational
department . . . review the supported restrictions and limitations provided by Dr. Smith to
complete a Transferable Skills Assessment. As a result of this review, Light occupations
were identified in the Houston, AK labor market. The occupations identified include
Assembler, Small Products I [and] Route-Delivery Clerk.”97 LINA stated that these jobs
“satisfy the earnings requirement of your Indexed Covered Earnings under the contract.”98
“In summary,” LINA wrote that “following review of your claim, it was determined that you
are able to perform the duties of a sedentary level occupation and no longer meet the
definition of disability beyond August 16, 2017.”99 LINA noted that it was
aware that [plaintiff had] been awarded Social Security Disabil-
ity Insurance (SSDI) benefits . . . and [had] considered that fact
in our claim review. [But,] we are in receipt of more recent
information than the SSA had to consider at the time of its
decision. The updated medical information we have received
indicates restrictions are not supported because you are able to
function at a level which shows little to no impairment.[100]
96Admin. Rec. at 1483.
97Admin. Rec. at 1485.
98Admin. Rec. at 1485.
99Admin. Rec. at 1485. Somewhat inconsistently, LINA concluded that plaintiff could
perform sedentary work but in its explanation, it stated that plaintiff could do light work. But
presumably if plaintiff were capable of light work, he was also capable of sedentary work.
100Admin. Rec. at 1485.
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LINA advised plaintiff that he had 180 days in which to file a second appeal, if he wished.101
Plaintiff filed his second appeal on September 15, 2018.102 In his appeal letter,
plaintiff stated that his “physicians have found him to be disabled from anything other than
sedentary work, which [he] has no training or experience doing successfully.”103 This was
presumably in response to the fact that the two jobs that LINA relied on in denying his first
appeal were classified as light work. Plaintiff included with his second appeal updated
medical records, including Dr. Hall’s treatment notes from a May 14, 2018 visit.104 At that
visit, plaintiff told Dr. Hall that he thought he had re-injured his left shoulder in a motor
vehicle accident in May 2016.105 Plaintiff’s physical exam that day showed
a fit, pleasant 59-year-old male, in no apparent distress. He is
able to demonstrate active forward flexion, about 140 on the
left, which is about 20 degrees less than the right. His active
abduction again about 130-140, again lacking maybe 20 degrees
compared to the right. He internally rotates about L5 on the left,
about L1 on the right. With motor testing of the rotator cuff, he
has got good strength throughout, but has significant tenderness
with resisted external rotation and supraspinatus testing.
Impingement sign is positive.[106]
101Admin. Rec. at 1485.
102Admin. Rec. at 657.
103Admin. Rec. at 658.
104Admin. Rec. at 855.
105Admin. Rec. at 855.
106Admin. Rec. at 856.
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Dr. Hall’s impression was “[r]e-tear rotator cuff left shoulder.”107 Dr. Hall indicated that
surgical options for the left shoulder “would include superior capsular reconstruction . . . or
a reverse total shoulder.”108
Plaintiff also included an August 2018 Functional Capacity Evaluation (FCE), which
had been completed by physical therapist, Jeff LePage.109 Plaintiff reported to LePage that
in addition to surgery on both his shoulders, he had “low back herniated discs, cervical
fractures, right ankle fracture in the military in 1977, bilateral foot diabetic neuropathy for
years, . . . thoracic disc bulges lower 5 vertebrae, high blood pressure . . . , and high
cholesterol . . . , right knee torn meniscus and patella injury. . . .”110 Based on two days of
testing, LePage opined that plaintiff should limit waist to floor lifting to 5 pounds, shoulder-
level lifting to 7.5 pounds, high lifting to less than shoulder height and no more than 10
pounds, and front carry to no more than 10 pounds; could not do elevated work; could
occasionally forward bend, do standing work, climb stairs, and walk; had slight to no
limitations as to crouching, kneeling, using a ladder, and sitting; should be allowed to self-
limit pushing/pulling to avoid pain; had no limitations as to hand gripping; and should be
107Admin. Rec. at 856.
108Admin. Rec. at 857.
109Admin. Rec. at 662.
110Admin. Rec. at 671.
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allowed to self-pace fine motor skills.111 LePage recommended that plaintiff be allowed to
self-select his walking pace and to change position as needed when sitting.112 LePage opined
that plaintiff was not “capable of gainful employment at this time.”113 LePage explained this
opinion as follows: “I think the physiologic response of his elevated heart rate substantiates
his report of right upper extremity pain. He reports having a diagnosed tear in the rotator
cuff of the right shoulder. He demonstrated pain behavior just sitting to perform the round
block screen.”114
Plaintiff also included an opinion from Daniel LaBrosse, a rehabilitation specialist and
vocational expert, dated September 13, 2018.115 LaBrosse opined that, based on LePage’s
limitations, plaintiff would be “limited to sedentary work only with no overhead reaching at
all.”116 LaBrosse noted that from his review of plaintiff’s medical and physical therapy
records, “it [was] clear that the claimant suffers from Chronic Right Shoulder pain,
limitations in Range of Movement, and Ability to stay focused and on task throughout a
111Admin. Rec. at 665-667.
112Admin. Rec. at 666.
113Admin. Rec. at 664.
114Admin. Rec. at 664.
115Admin. Rec. at 699.
116Admin. Rec. at 700.
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normal 8 hour workday.”117 LaBrosse also noted that plaintiff “report[ed] not being able to
sit, stand, or stay in one position for very long and says he must constantly move around to
[relieve] his chronic shoulder pain.”118 Although LaBrosse concluded that plaintiff was able
to do sedentary work based on the limitations assessed by LePage, LaBrosse opined that
plaintiff was
unable to perform the material duties of his Regular Occupation
as well as earn 60% or more of his Indexed Earnings with an
occupation that he may reasonably become qualified based on
education, training or experience. Given the physical and
mental limitations noted above it is highly unlikely that Mr.
Hislop will ever again be able to maintain any type of full time
employment in any occupation, including unskilled or semi-
skilled occupations. . . .[119]
LaBrosse opined that plaintiff, who has a GED, had “no education, work experience and/or
training in [his] background that would qualify him” to work as a “President” of a
company,120 as opined by Dr. Scoggin. LaBrosse did not expressly analyze whether plaintiff
could perform the jobs of small products assembler or route delivery clerk, the two jobs
identified in LINA’s initial denial of plaintiff’s appeal, presumably because these were
classified as light jobs, and LaBrosse opined that plaintiff was limited to sedentary work.
117Admin. Rec. at 701.
118Admin. Rec. at 701.
119Admin. Rec. at 701.
120Admin. Rec. at 700.
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LaBrosse also did not expressly analyze whether plaintiff could work as a gate guard, one
of the jobs identified in LINA’s initial termination of plaintiff’s LTD benefits.
As part of its review of plaintiff’s second appeal, LINA had Dr. Krouse, a Board
Certified orthopedic surgeon, review plaintiff’s medical records.121 In a report dated October
22, 2018, Dr. Krouse opined that plaintiff could sit, stand, and walk constantly; could
lift/carry 20 pounds on a constant basis; could push/pull 30 pounds on a constant basis; could
reach overhead occasionally; had no restrictions as to reaching at shoulder and desk level;
had no restrictions as to fingering, handling, feeling, and keyboarding; had no restrictions as
to crouching, crawling, or climbing stairs; should not climb ladders; and could perform
driving activities on a constant basis.122
As part of its review, LINA also had another Transferable Skills Analysis done. This
TSA was completed on October 26, 2018 by Glenna Taylor, a Vocational Rehabilitation
Specialist.123 On this TSA, the 60% requirement was listed as $2652.49 per month, based
on adjusted Predisability Earnings of $4,420.81.124 Based on the limitations assessed by Dr.
Krouse, Taylor determined that plaintiff could work as a small products assembler, with
121Admin. Rec. at 442.
122Admin. Rec. at 447.
123Admin. Rec. at 439-440.
124Admin. Rec. at 439.
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monthly earnings of $3017, or a routing clerk, with monthly earnings of $3054.125 The small
products assembler position was listed as light work and the routing clerk position was listed
as sedentary work.126
On November 1, 2018, LINA denied plaintiff’s second appeal, stating that “[a]fter
completing our review, we are unable to continue paying benefits beyond August 16,
2017.”127 LINA’s denial was based, in part, on Dr. Krouse’s report. LINA explained that
[b]ased on the review of the medical records, Dr. Krouse
determined that Mr. Hislop would require the following
medically necessary work activity restrictions: sit, stand, and
walk constantly; lift and carry up to 20 pounds . . . constantly;
pushing and pulling up to 30 pounds constantly; reaching
overhead occasionally; non load-bearing reaching at shoulder
level and desk level constantly; constant fingering, handling,
feeling, and keyboarding; constant crouching, crawling, or
climbing activities; no climbing ladders.[128]
LINA explained that based on Dr. Krouse’s limitations,
a Vocational Rehabilitation Counselor reviewed the supported
restrictions and determined that Mr. Hislop’s functional ability
would be consistent with sedentary and light levels of physical
demand. The vocational specialist performed a Transferable
Skills Analysis (TSA) that identified suitable occupations that
125Admin. Rec. at 439.
126Admin. Rec. at 439.
127Admin. Rec. at 1456.
128Admin. Rec. at 1460.
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[plaintiff] could perform, which considered his education, work
history, and salary requirements. . . .[129]
LINA further explained that “[t]he occupations identified by the TSA include[d]” small
products assembler ($3017 per month) and sedentary routing clerk ($3054 per month).130
LINA noted that it was
aware Mr. Hislop has been awarded Social Security Disability
(SSDI) benefits by the Social Security Administration (SSA)
and this decision is considered and given significant weight
during our appeal review. Our office confirmed on October 3,
2018 that we were in receipt of all medical information to be
considered on appeal and that we were not to request a complete
copy of Mr. Hislop’s SSA file.[131]
Plaintiff was advised that he had exhausted his administrative appeals and that he had the
right to now bring an ERISA action.132
Plaintiff timely commenced this ERISA action on March 14, 2019.
Legal Standards
“In the Ninth Circuit, ERISA claims for benefits are adjudicated by a bench trial under
Federal Rule of Civil Procedure Rule (‘Rule’) 52(a).” Doe v. Prudential Ins. Co. of Amer.,
245 F. Supp. 3d 1172, 1174 (C.D. Cal. 2017) (citing Kearney v. Standard Ins. Co., 175 F.3d
1084, 1095 (9th Cir. 1999)). “Under Rule 52(a), the court can resolve factual issues in favor
129Admin. Rec. at 1460.
130Admin. Rec. at 1460.
131Admin. Rec. at 1460-1462.
132Admin. Rec. at 1462.
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of either party, and it must ‘find the facts specially and state its conclusions of law
separately.” Id. (quoting Fed. R. Civ. Proc. 52(a)).
The parties have stipulated that the standard of review in this case will be de novo.133
Under a de novo review, the court “simply proceeds to evaluate whether the plan
administrator correctly or incorrectly denied benefits, without reference to whether the
administrator operated under a conflict of interest.”134 Abatie v. Alta Health & Life Ins. Co.,
458 F.3d 955, 963 (9th Cir. 2006). “When conducting a de novo review of the record, the
court does not give deference to the claim administrator’s decision, but rather determines in
the first instance if the claimant has adequately established that he or she is disabled under
the terms of the plan.” Muniz v. Amec Const. Management, Inc., 623 F.3d 1290, 1295–96
(9th Cir. 2010).
“[W]hen the court reviews a plan administrator’s decision under the de novo standard
of review, the burden of proof is placed on the claimant.” Id. at 1294. “A claimant must
prove he is entitled to the benefits under his plan by a preponderance of the evidence.”
Filarsky v. Life Ins. Co. of N. Amer., 391 F. Supp. 3d 928, 938 (N.D. Cal. 2019). If,
however, “the defending entity solely controls the information that determines entitlement”
133Docket No. 23.
134Plaintiff contends that LINA has a structural conflict of interest but even if that
contention is correct, such a conflict of interest would have no bearing because a de novo
standard of review applies in this case.
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to benefits, the burden shifts to that entity. Estate of Barton v. ADT Sec. Services Pension
Plan, 820 F.3d 1060, 1066-67 (9th Cir. 2016).
Discussion
Plaintiff first argues that LINA incorrectly terminated his LTD benefits because the
Functional Capacity Evaluation (FCE) completed by LePage and LePage’s and LaBrosse’s
opinions establish that he was not capable of doing even sedentary work. As set out above,
LePage opined that plaintiff was not “capable of gainful employment at this time135 and
LaBrosse opined that plaintiff was “unable to perform the material duties of his Regular
Occupation as well as earn 60% or more of his Indexed Earnings with an occupation that he
may reasonably become qualified based on education, training or experience.”136 Plaintiff
argues that these opinions, which were supported by LePage’s FCE findings, are the best
objective evidence of his impairments and their effect on his ability to work. Plaintiff argues
that if LINA disagreed with these findings and opinions it could have conducted its own FCE
or asked Dr. Krouse to comment on why he disagreed with LePage’s FCE. But, plaintiff
argues that it was not sufficient for LINA to simply have Dr. Krouse conduct a paper review
and rely on that instead of an actual FCE.
135Admin. Rec. at 664.
136Admin. Rec. at 701.
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Plaintiff contends that LePage’s FCE findings call into question his ability to perform
the “material duties” of any occupation” with “reasonable continuity[.]”137 The Plan defines
“Material Duties” as “the essential tasks, functions and operations, and the skills, abilities,
knowledge, training and experience, generally required by employers from those engaged in
a particular occupation that cannot be reasonably modified or omitted.”138 Plaintiff argues
that LePage’s FCE findings demonstrate that he has significant additional impairments
beyond the upper extremity impairments which flowed from his shoulder injuries. Plaintiff
contends that the FCE findings show that he has significant impairments as to standing,
walking and sitting and doing fine motor tasks. LePage opined that plaintiff’s “standing
work is limited to his walking limitation” and that plaintiff should be allowed to “self-select
his walking pace” because of “[r]eport of leg and back discomfort.”139 As for sitting, LePage
opined that plaintiff should be allowed “to change position as needed for comfort” because
of “report of low back pain.”140 LePage indicated that plaintiff may need to change position
every 30 minutes.141 In terms of fine motor tasks, LePage opined that plaintiff should be
allowed “to self-pace fine motor tasks at waist level” because of discomfort and pain in his
137Admin. Rec. at 1344.
138Admin. Rec. at 1344.
139Admin. Rec. at 666.
140Admin. Rec. at 666.
141Admin. Rec. at 674.
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shoulder and elbow.142 Plaintiff argues that these FCE findings are the most significant
evidence in this case because LePage considered all of plaintiff’s limitations, rather than
focusing only on limitations related to his right shoulder injury. Plaintiff argues that Dr.
Krouse ignored the limitations that LePage assessed as to walking, sitting, and standing.
And, plaintiff argues that LePage’s assessed limitations, in particular the sitting limitation,
establish that he is unable to perform sedentary work.
Plaintiff seems to interpret LePage’s opinion and the FCE findings as limiting his
sitting to 30 minutes per day, which would preclude even sedentary work. See Armani v.
Northwestern Mutual Life Ins. Co., 840 F.3d 1159, 1163 (9th Cir. 2016) (holding “that an
employee who cannot sit for more than four hours in an eight-hour workday cannot perform
‘sedentary’ work that requires ‘sitting most of the time’”). But LePage did not opine and the
FCE findings did not show that plaintiff could only sit for 30 minutes per day. What the FCE
testing showed is that when plaintiff sat for 30 minutes he would shift his weight during that
time.143 The first day of testing he did so occasionally; the second day, he did so frequently
and complained of low back discomfort.144 As a result of this testing, LePage opined that
plaintiff had slight to no limitations as to sitting and recommended that plaintiff be allowed
142Admin. Rec. at 673.
143Admin. Rec. at 674.
144Admin. Rec. at 674.
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to change position as needed.145 LePage did not opine that plaintiff could not sit for more
than four hours in day. He opined that plaintiff would need to change his position every 30
minutes, which is a very different matter.
That said, plaintiff is correct that LePage and LaBrosse both opined that he would be
unable to maintain gainful employment, even at a sedentary level of work. These opinions,
however, are contrary to the other medical evidence. Dr. Purcell, Dr. Scoggin, and Dr. Hall,
all of whom examined plaintiff, opined that plaintiff was capable of at least sedentary
work.146 In addition, Dr. Seiferth, Dr. Smith, and Dr. Krouse, three of LINA’s medical
experts who reviewed plaintiff’s medical records, opined that plaintiff was capable of
performing sedentary work.147 While LePage was the only one who did an FCE, the
limitations he assessed, according to LaBrosse, were consistent with sedentary work.148 And
even plaintiff acknowledged that he was capable of sedentary work when he filed his second
appeal, stating that his “physicians have found him to be disabled from anything other than
sedentary work[.]”149
145Admin. Rec. at 666.
146Admin. Rec. at 899-900, 1103, 1129.
147Admin. Rec. at 258, 447, 878.
148Admin. Rec. at 700.
149Admin. Rec. at 655.
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On de novo review, the court finds that plaintiff has not shown by a preponderance
of the evidence that he could not perform sedentary work. The court finds that the record
clearly establishes that plaintiff had the functional capacity to perform sedentary work.
But even if the record establishes that he had the functional capacity to perform
sedentary work, which it does, plaintiff argues that LINA’s termination of his LTD benefits
was still incorrect because it is not clear that there were sedentary jobs that he could perform
that would allow him to earn at least 60% of his Predisability Earnings. First of all, plaintiff
contends that LINA never adjusted his Predisability Earnings. The Plan provides that after
the first year of disability, Predisability Earnings are to be adjusted annually based on the
“Consumer Price Index for Urban Wage Earners and Clerical Workers published by the
United States Department of Labor.”150 Plaintiff contends that there is no evidence in the
claims file that his Predisability Earnings were ever adjusted.
Plaintiff’s contention is wrong. LINA did adjust plaintiff’s Predisability Earnings.
On both the March 8, 2018 TSA and the October 26, 2018 TSA, plaintiff’s monthly earnings
were adjusted to $4420.81.151 According to the referral form completed for the October 26,
2018 TSA, this represented a 2.21% CPI increase “for 2013 through 2015.”152
150Admin. Rec. at 1359.
151Admin. Rec. at 439 and 871.
152Admin. Rec. at 441.
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Plaintiff next argues that his Predisability Earnings should have been adjusted through
2018, which is when LINA’s termination of his LTD benefits became final. Plaintiff
contends that between 2013 and 2018, the CPI-W showed a 6% increase in wages.153 Thus,
plaintiff contends that his adjusted for wage inflation Predisability Earnings for 2018 would
have been $4584, 60% of which is $2750.154
The Plan provides that Predisability Earnings are to be adjusted “on each anniversary
of your Disability[.]”155 Plaintiff’s LTD benefits began on December 18, 2013 and were
terminated as of August 16, 2017. Thus, his Predisability Earnings only had to be adjusted
through that date. Defendants contend, and plaintiff does not dispute, that the 2017 CPI
adjustment had not taken effect by August 16, 2017; so LINA only had to adjust plaintiff’s
earnings for 2014, 2015, and 2016 (1.5%, .3%, and .4% respectively).156 On de novo review,
the court finds that LINA correctly adjusted plaintiff’s Predisability Earnings by 2.21%.157
But even if his Predisability Earnings were correctly adjusted, which they were,
plaintiff argues that it is not clear whether there were sedentary jobs that he could perform
that would meet the 60% requirement of $2652.49. In the three TSAs, there were four jobs
153Plaintiff’s Opening Brief at 4, Docket No. 24.
154Id. at 4 and 11 n.26.
155Admin. Rec. at 1359.
156Defendants’ Combined Brief [etc.] at 16, Docket No. 32.
157Admin. Rec. at 441.
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identified: 1) gate guard, 2) small products assembler, 3) route delivery clerk, and routing
clerk. The route delivery clerk job was listed as light work, so it has no application here
because plaintiff is limited to sedentary work. The small products assembler job was listed
twice as light work and once as sedentary work. It is in fact light work. The Code given for
this job in all three TSAs was 706.684-022. This is the Dictionary of Occupational Title
code and the DOT lists the small products assembler job as light work, not sedentary work.
That leaves the gate guard job and the routing clerk jobs, both of which were correctly
identified as sedentary jobs.
The gate guard job was listed in the August 15, 2017 TSA with monthly earnings of
$2698.33.158 The routing clerk job was listed in the October 26, 2018 TSA with monthly
earnings of $3054.159 Both of these would appear to meet the 60% requirement of $2652.49,
but plaintiff contends that there are several problems with these wage figures.
First, plaintiff argues that LINA did not provide the sources of this wage information.
But, the August 15, 2017 TSA lists the source of the wage data as the 2016 Occupational
Employment Statistics (OES)160 and the October 26, 2018 TSA lists the 2018 Economic
Research Institute (ERI) as the source for the wage data.161
158Admin. Rec. at 893.
159Admin. Rec. at 439.
160Admin. Rec. at 439.
161Admin. Rec. at 893.
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Second, plaintiff argues that LINA improperly used Alaska wage averages in
calculating whether the 60% requirement had been met rather than national wage averages.
Defendants do not dispute that LINA used Alaska wage averages when determining the
monthly wages for the gate guard and routing clerk jobs.
To determine whether LINA correctly used Alaska wage averages requires the court
to construe the terms of the Plan. “[T]erms in a pension plan should be interpreted in an
ordinary and popular sense as would a [person] of average intelligence and experience.”
McDaniel v. Chevron Corp., 203 F.3d 1099, 1110 (9th Cir. 2000) (citation omitted). “When
disputes arise as to the meaning of one or more terms, [the court] first looks to the explicit
language of the agreement to determine the clear intent of the parties.” Id. “An ambiguity
exists when the terms or words of a pension plan are subject to more than one reasonable
interpretation.” Id. “Ambiguities in the Plan are to be resolved in [plaintiff’s] favor.”
Patterson v. Hughes Aircraft Co., 11 F.3d 948, 950 (9th Cir. 1993).
Plaintiff argues that the Plan language suggests that national wage averages should
be used. Plaintiff relies on the “any occupation” definition of disability. The Plan defines
“any occupation” as
any occupation or employment which you are able to perform,
whether due to education, training, or experience, which is
available at one or more locations in the national economy and
in which you can be expected to earn at least 60% of your
Indexed Predisability Earnings within twelve months following
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your return to work, regardless of whether you are working in
that or any other occupation.[162]
Plaintiff argues that this definition indicates that the focus is on the availability of jobs in the
national economy, which means that in determining the 60% requirement, LINA should have
looked to national wage averages, not Alaska wage averages. Plaintiff argues that this would
be consistent with LINA’s use of the national CPI-W to adjust Predisability Earnings. When
LINA adjusted plaintiff’s Predisability Earnings in 2017, plaintiff contends, and LINA does
not dispute, that it used the national CPI-W percentages.163 Thus, plaintiff argues that it is
unfair to adjust his Predisability Earnings based on national figures but use local wages to
calculate whether he could earn more than 60% of his Predisability Earnings. Plaintiff insists
that national figures must be used to both adjust Predisability Earnings and determine
whether the 60% requirement has been met.
The language in the Plan is not ambiguous. The Plan states that the 60% requirement
is determined based on what the claimant “can be expected to earn” doing a job that the
claimant is “able to perform[.]”164 The focus is on the claimant and his situation. The
reference in the “any occupation” definition to the national economy does not change this
focus. In this case, the claimant is located in Alaska and he could be expected to earn what
others doing the same jobs in Alaska earn. And, the TSAs focused on jobs which were
162Admin. Rec. at 1344.
163Admin. Rec. at 441.
164Admin. Rec. at 1344.
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available in plaintiff’s local area, not on jobs that were generally available in the national
economy. More specifically, in the August 15, 2017 TSA, the labor market considered was
Wasilla, Alaska;165 and in the October 26, 2018 TSA, the labor market considered was
Houston, Alaska.166 As for plaintiff’s argument that it is unfair to use national CPI-W
percentages to adjust Predisability Earnings and then use local wage averages to calculate the
60% requirement, it may have been more consistent for LINA to use local averages in both
instances. But LINA’s failure to do so in this case would not have changed the result
because the CPI-W percentages for Alaska for 2014, 2015, and 2016 do not appear to be
significantly different from the national CPI-W percentages LINA used.167
If Alaska wage averages are used to determine whether the 60% requirement was met,
LINA identified at least one sedentary job, the gate guard job, that plaintiff could perform
that would allow him to earn at least 60% of his adjusted Predisability Earnings.168 Using
Alaska wage averages, it was determined that a gate guard could earn $2698.33 per month,
165Admin. Rec. at 892.
166Admin. Rec. at 439.
167The annual CPI-W percentages of urban Alaska were 1.7%, .3%, and .1% for 2014,
2015, and 2016 respectively. See https://data.bls.gov/timeseries/CWURS49GSA0&output_
view=pct_12mths (last visited May 14, 2020).
168Because the court has concluded that the gate guard position would allow plaintiff
to earn at least 60% of his adjusted Presdisability Earnings, the court need not consider
whether the routing clerk job would also meet the 60% requirement.
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which is more than the $2595.13 required in plaintiff’s case.169 Plaintiff makes much of the
fact that defendants stated that they could not produce the 2016 OES wage data which was
the basis of the wage calculation for the gate guard job.170 Plaintiff argues that this is
information that is solely within LINA’s control and that defendants’ failure to produce it
means that defendants have failed to show that he could earn more than 60% of his adjusted
Predisability Earnings. And that means, according to plaintiff, that the court should rule
against defendants and in his favor.
This argument fails, primarily because the OES wage data is readily available online.
This is not information solely in LINA’s control. The burden of proof in this case did not
shift to LINA. The burden remained with plaintiff to show, by a preponderance of the
evidence, that he was entitled to continue receiving LTD benefits after August 16, 2017.
Conclusion
On de novo review, the court concludes that plaintiff has not shown, by a
preponderance of the evidence, that he was disabled under the terms of the Plan after August
16, 2017. The court concludes that plaintiff was limited to sedentary work but that, using
169Admin. Rec. at 892-893. The court would note that even if plaintiff were correct
that his Predisability Earnings should have been adjusted through 2018, this job would meet
the 60% requirement using Alaska wage averages. Plaintiff contends that if his Predisability
Earnings were adjusted through 2018, he would need to earn $2750 per month to meet the
60% requirement. The 2018 OES Alaska-specific data for gate guards shows a mean hourly
salary of $23.75. Docket No. 30-1 at 1. This would translate into monthly earnings of
$3800, which would meet the 60% requirement of $2750, if that were the correct number.
170Defendants’ Combined Brief [etc.] at 16, n.5, Docket No. 32.
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Alaska wage averages, there was at least one sedentary job that plaintiff could perform that
would allow him to earn at least 60% of his adjusted Predisability Earnings. The court
concludes that LINA correctly terminated plaintiff’s LTD benefits as of August 16, 2017.
The clerk of court shall enter judgment dismissing plaintiff’s complaint with
prejudice.
DATED at Anchorage, Alaska, this 18th day of May, 2020.
/s/ H. Russel Holland
United States District Judge
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