The opinion of the court was delivered by: DENNY CHIN, District Judge
In this case, plaintiff Dennis Paese sues under the Employee
Retirement Income and Security Act of 1974 ("ERISA"),
29 U.S.C. § 1001 et seq., to challenge the decision of defendant Hartford
Life and Accident Insurance Company ("Hartford") to terminate his long
term disability benefits under his former employer's group disability
insurance plan. The parties agreed to submit this dispute to the Court
for a summary trial on the documentary evidence and written submissions,
waiving their right to call witnesses.
As discussed more fully below, the record shows unequivocally that
Paese was totally disabled when Hartford decided to terminate his long term disability benefits. The numerous
physicians who examined and treated Paese concluded that he suffered
serious spine, shoulder, and hand injuries as the result of a motor
vehicle accident. MRIs and other tests and studies objectively confirmed
the existence of significant injuries. Indeed, Paese had two surgeries
first on his elbow and forearm, and second, months later, on his
cervical spine as a disc was removed and bone was engrafted. Even the
Social Security Administration determined that Paese was totally disabled
and awarded him Social Security benefits. Instead of evaluating Paese's
claim in a fair and open-minded manner, Hartford largely ignored this
evidence and relied instead on entries taken out of context from the
medical records and the opinions of two physicians who never even
examined Paese and who were hardly unbiased.
Accordingly, judgment will be entered in favor of Paese. My findings of
fact and conclusions of law follow.
Paese is a 53-year old, 300-pound, 6'l" man. (A 02-229,
02-410).*fn1 He was employed by Sequa Corporation ("Sequa") from March 7, 1977, until September 21, 1999, when his department
was reorganized, his position was eliminated, and his employment was
terminated. (A 02-503, 02-503A).
From January 5, 1987, until the termination of his employment, Paese
was Sequa's Director of Labor Relations in Hackensack, New Jersey. (A
02-503). Paese was responsible for labor relations at Sequa, including
formulating and implementing labor and employee relations policies,
serving as the chief negotiator for collective bargaining agreements and
labor contracts, and maintaining relations with unions. (A 02-501). His
position required extensive traveling, throughout the United States and
Europe, and he often had to travel to plant and division locations and
various government agency offices throughout the United States, at times
working long and odd hours. (A 02-209-10; see A 02-395 (Sequa
human resources manager reporting that Paese's position "required
extensive travel" and that travelling was "definitely considered an
essential function of the occupation")).
On August 30, 1999, Paese was involved in an automobile accident. He
sustained injuries, but was not hospitalized. (A 02-364, 02-594-95). He
returned to work until September 8, 1999, when he stopped working and
applied for disability benefits. (See A 02-503). As of September 8, 1999, Paese's salary was $137,254 per annum and he
had earned $151,822 for the year, consisting of $93,006 in base pay and
$58,816 in bonus. (A 02-018, 04-081).
As of January 1, 1998, Paese was covered, as a Sequa employee, under
Sequa's employee benefit plans, which included a group "plan of Long Term
Disability Insurance" under Group Insurance Policy GLT-208141 (the
"Plan"), issued by Hartford as insurer. (A 001, 041, 0043). Under the
Plan, claims and appeals from the denial of claims were to be submitted
to Hartford. (See A 056-57).
The Plan provides "income protection" for Sequa employees who "become
disabled from a covered accidental bodily injury, sickness or pregnancy."
(A 043). "Disabled" means "Totally or Residually Disabled." (A 045). A
"Residual Disability" is a partial disability (A 047) and is not at issue
here, as Paese applied for Total Disability benefits only. "Total
Disability" and "Totally Disabled" are defined to mean:
(1) during the Elimination Period; and
(2) for the next 24 months, you are prevented by:
(a) accidental bodily injury;
(c) mental illness;
(d) substance abuse; or
(e) pregnancy, from performing the essential duties of your
occupation, and as a result you are earning less
than 20% of your Pre-Disability Earnings, unless
engaged in a program of Rehabilitative
Employment approved by us.
After that, you must be so prevented from
performing the essential duties of any
occupation for which you are qualified by
education, training, or experience.
(Id.). For Paese, the "Elimination Period" was 180 days.
(A 044; A 02-390). " [Y] our occupation" refers to the defined term "Your
(Own) Occupation," and means the employee's occupation as recognized in
the "general workplace" rather than his or her specific job for a
specific employer or at a specific location. (A 048).
Monthly benefits under the Plan are payable if an employee becomes
"Disabled" while insured under the Plan, remains Disabled throughout and
beyond the Elimination Period, is and has been under the regular care of
a physician, and "submit [s] proof of loss satisfactory to . . .
Hartford." (A 052; See also A 056 (discussing "proof
of Disability")). Payments are to be adjusted for inflation. (A 045
(applying a formula based on a consumer price index)). An employee who
became disabled was also entitled to a waiver of life insurance premium
benefits. (A 3-031).
3. Paese'S Disability Benefits
Paese applied for and was granted short term disability benefits, which
he received until March 8, 2000. (Def. Mem. at 2; see A
02-500). On March 10, 2000, Sequa submitted to Hartford on Paese's
behalf an application for long term total disability benefits. (A 02-500-06). On April 12, 2000, a Hartford
representative noted in an internal worksheet that Paese was engaging in
physical therapy, was scheduled for hand and elbow surgery, and was
hoping to avoid spinal surgery. (A 02-486). Noting that Paese's job
required travel, the representative recommended approval of the
application. (A 02-485-86).
On May 4, 2000, Hartford advised Paese that his claim for long term
disability benefits had been approved and he began receiving long term
disability benefits, at the rate of $6,862.70 per month, or 60% of his
base earnings. (A 02-49, 02-390). On October 11, 2001, however, Hartford
advised Paese that it was terminating his benefits, writing:
We have completed our review of your claim for
benefits and have determined medical documentation
no longer establishes a total disability beyond
October 11, 2001 from Your Own Occupation as a
Director of Labor Relations. Accordingly, LTD
[long term disability] benefits are not payable to
you beyond October 11, 2001.
On November 7, 2001, Paese wrote to Hartford, challenging its decision
to terminate his benefits. (A 02-207). By letter dated November 19, 2001,
Hartford responded, stating that it had received Paese's "appeal," as set
forth in his November 7, 2001, letter, and advising that it was referring
the claim to its Appeals Unit. (A 02-205). Paese and Hartford thereafter
engaged in an extended exchange of correspondence. (See, e.g.,
A 02-179 (Paese letter dated 12/6/01); A 02-59 (Hartford letter dated
12/13/01); A 02-204 (Hartford letter dated 1/9/02); A 02-51 (Paese letter dated 1/27/02); A 02-54 (Paese
letter dated 2/16/02); A 02-131 (Paese letter dated 2/28/02)).
By letter dated March 20, 2002, Hartford rejected Paese's appeal and
adhered to its decision to terminate his benefits, writing:
Our determination has remained that the
documentation on file, taken as a whole, supports
our original decision. Therefore, we must uphold
our decision to terminate your claim for LTD
4. Plaintiff's Medical Condition
In the accident on August 30, 1999, Paese was driving when his car was
rear-ended by another vehicle. He was wearing his seatbelt (A 02-410),
but both hands impacted into the steering wheel. (A 02-364). He went to
work after the accident, but later in the day he began to experience
severe neck pain, shoulder pain, headache, and tingling in the arms. (A
Paese was seen by Dr. Gudimal, an orthopedic surgeon at N.Y.U., and
began physical therapy. He had severe pain and limitation of both
shoulders and was unable to internally rotate either shoulder without
severe pain and limitation. (A 02-410).
Paese had an MRI on September 9, 1999, just ten days after the
accident. (A 02-400). The clinical diagnosis was "[c]ervical spine injury
sustained in a motor vehicle accident." (Id.). The MRI
showed anterior bulging of the discs at all levels from C4/5 through
C6/7, straightening of the normal cervical lordosis, paravertebral muscle spasm, dessiccation of the
C5/6 disc, and ...