(2) The Decision to Terminate
Before applying the law to the facts of Ms. Rizk's condition, a few words are warranted regarding the procedural posture of the case. On a review to determine whether a decision of the Plan to terminate benefits was arbitrary and capricious, defendant here has moved for summary judgment under Fed. R. Civ. P. 56(c). Although it has been observed the standards for granting summary judgment "apply to ERISA actions to the same extent they do to other civil actions," see Ludwig v. NYNEX Service Co., 838 F. Supp. 769, 780 (S.D.N.Y. 1993), it is nonetheless also true that, "in an action brought under ERISA, the contours guiding the court's disposition of the summary judgment motion are necessarily shaped through the application of the substantive law of ERISA." Id.
Under Rule 56(c), summary judgment is proper if "viewing the record in the light most favorable to the nonmoving party, the evidence offered demonstrates that there is no genuine issue of fact and that the nonmoving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322-3, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Defendant thus contends that, as a matter of law, its decision to terminate plaintiffs benefits was not arbitrary and capricious and was supported by substantial evidence.
Defendant, however, supports this assertion with an analysis of Rule 56 focussing on the question of whether plaintiff has demonstrated that a material issue of fact has been raised, rather than on the question of whether defendant is entitled to judgment as a matter of law. This approach would make more sense in the context of de novo review, or in a proceeding where the parties had the opportunity to present additional evidence to the district court. In the present context, however, the district court sits in effect as an appellate court to determine whether the denial of ERISA benefits was arbitrary and capricious. Under the circumstances, while the distinction may be more a matter of form than of substance, the motion is more properly considered as one akin to a motion under Rule 12(c) for judgment on the basis of the pleadings and the transcript of the record before the Plan. Cf. Igonia v. Califano, 186 U.S. App. D.C. 161, 568 F.2d 1383, 1387 (D.C. Cir. 1977) (where court's review is limited to whether, on the record, there is substantial evidence to support an agency finding, and additional evidence is obtained by remand, the district court performs an essentially appellate function); Orlandini v. Weinberger, 421 F. Supp. 586, 589 (D. Wis. 1976) (motion for judgment affirming decision of administrator in Social Security cases is more akin to one for judgment on the pleadings under Rule 12(c) than for summary judgment under Rule 56, and court would treat it as such).
On the record as it stands, the evidence does not indicate that the Plan is entitled to judgment affirming the decision to terminate Ms. Rizk's benefits. Instead, an objective review of the evidence before the administrators, as informed by the Plan's apparent conflict of interest, demonstrates that the Plan's expressed reasons for terminating benefits did not support the action taken.
Dr. Nour's opinion, upon which the Plan relied, does not provide a rational basis for the administrator's decision to terminate benefits because he opined only that Ms. Rizk "ought to be trained" for any job which she might be able to perform under the remarkably limited conditions listed by him--not that she had been rehabilitated and would have been able to perform any such job. Moreover, Dr. Nour later clarified his opinion, and restated that he found the plaintiff to be totally disabled from any gainful occupation.
Dr. Horwitz's opinion, on which the administrator also initially relied, similarly cannot, without more, create a rational basis for the decision to terminate claimant's benefits. That opinion fails to address the claimant's functional limitations, that is the extent of her pain--which Dr. Horwitz himself observed--and does not make any medical determination as to their source (for example, whether they have a psychiatric basis or constitute malingering). Rather, Dr. Horwitz identifies the objective injuries documented thus far without himself conducting further diagnostic tests, and opines that, in view of the extent of the documented injuries, plaintiff's subjective disabilities (whose existence he does not explicitly question) "seem" excessive.
Dr. Bloom's opinion, cited by the administrator in its last decision to uphold the termination of benefits, also declines to identify any source of the plaintiff's apparent pain and disability, and adds that he cannot tell whether it is "malingering, hysteria, or some other form of functional problem," and refers to a psychological overlay to Ms. Rizk's condition. Moreover, Dr. Bloom specifically opines that he does not feel Ms. Rizk can be rehabilitated.
Thus, the decision to terminate plaintiff's benefits appears to based on an assumption unsupported by any evidence in the record. The administrator (and the vocational specialist), both of whom apparently never spoke to or saw the plaintiff, seem to have speculated that, because there was no extensive "objective" medical correlation to plaintiff's disability currently in the file, she must be malingering, that is her pain must not be as extensive as she claims (and the doctors observed) it to be. In making this assumption, however, the administrator ignored the actual substance of Dr. Horwitz's and Dr. Bloom's opinion: that plaintiff's subjective pain and disability were more extensive than the objective accounts thus far received of her medical condition would warrant. Dr. Kane, the only Plan doctor who explicitly considered how much pain the plaintiff was in, and whether that pain was disabling, in fact found the evidence of extensive subjective pain to be credible, and therefore grounds for disability. Obviously, however, even a "functional" or psychological problem based on pain which incapacitated plaintiff (like the one opined by Dr. Horwitz and Dr. Bloom to perhaps exist) would have still have constituted an incapacitating disability--and have rendered termination of benefits inappropriate.
In addition, although defendant was given the opportunity to conduct a psychiatric exam of the plaintiff to determine whether a diagnosable mental disorder, either dependent on or independent of her physical injury, contributed to her disability, and whether treatment would have potentially alleviated her disability, the administrator chose not to do so. Thus, the administrator appears to have skipped over the possibility that Ms. Rizk had a functional or psychiatric disability aggravating her physical condition, and settled on the conclusion that plaintiff was malingering, in whole or in part, without any factual basis.
Such speculation by the administrator does not and cannot amount to a reasonable basis in this case for the decision to terminate benefits as a matter of law. It is unsupported by either medical testimony or objective observation that confirms plaintiff is actually malingering (that is, that her pain is not as extensive as she claims). Although Dr. Nour indicated that he did not feel Ms. Rizk's condition had a psychological overlay independent of her physical injury, he clearly stated that in his opinion her psychological difficulties were caused by physical pain. No other medical explanation for her subjective accounts of pain and disability appears in the record. Aside from that one telephone call to Dr. Nour, there is no evidence of any attempt in the record to rule out or address a psychological or functional cause contributing to the extent of plaintiff's disability. See Cutignola v. New York Tel. Co., 1984 WL 1324, *5 (S.D.N.Y.) (administrator, as fiduciary, has duty of developing the reasonably available evidence bearing upon the claim).
Moreover, defendant's own investigator found the plaintiff, at a functional level, to be "obviously disabled." Id. at *5 (disregard of persuasive evidence tending to support entitlement, notwithstanding substantial evidence supporting denial, constitutes arbitrary and capricious action). See also Brown v. Blue Cross & Blue Shield, 898 F.2d at 1566 n. 11 ("an improper motive sufficient to set aside a fiduciary's decision may be inferred from the fiduciary's failure to investigate or to interpret honestly evidence that greatly preponderates in one direction").
In the face of six years of consistent and undisputed medical evidence of extensive functional limitations on plaintiff's ability to sit, move, carry, and operate under varying temperature conditions, as well as substantial subjective evidence relating to plaintiff's pain, discomfort and psychological distress, I find that the termination of plaintiff's benefits cannot be sustained on the present record. Because reexamination or further development of the record is necessary to a final determination of plaintiff's entitlement to benefits, the appropriate remedy here is to remand the case to the Plan for investigation and reconsideration in light of this opinion. See Duhon v. Texaco, Inc., 15 F.3d 1302, 1309 n.7 (5th Cir. 1994) (remand rather than reversal is proper remedy when administrator's decision is arbitrary and capricious) ; Catania v. NYSA-ILA Severance Ben. Fund, 1992 U.S. Dist. LEXIS 10985, 1992 WL 176502, *9 (S.D.N.Y.) (where decision was arbitrary and capricious because of trustees' reliance on irrelevant personal experience in making determination, case would be remanded).
Edward R. Korman, United States District Judge
Dated: Brooklyn, New York
August 8, 1994