United States District Court, S.D. New York
April 8, 2004.
DENNIS PAESE, Plaintiff, -against- HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant
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.
STATEMENT OF THE CASE
A. The Facts
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).
2. The Plan
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 broad thin herniated discs with thecal compression at C2/3
through C6/7. (Id.; See also A 02-409).
Paese commenced physical therapy with Peak Physical Therapy ("Peak") on
September 10, 1999. (A 02-438).
On November 16, 1999, an MRI on the right shoulder showed impingement
and diffuse tendinitis. (A 02-381). An MRI on the left shoulder the next
day showed mild impingement. (A 02-382).
Paese was examined by a neurosurgeon, Dr. Stephen Fromm, on December
16, 1999, some three-and-a-half months after the accident. (A 02-410).
Dr. Fromm concluded that Paese was suffering from cerebral concussion,
post-concussive syndrome headaches, cervical disc ridge syndrome with
thecal sac and nerve root compression, cervical radiculopathy, re-injury
low back, lumbosacral sprain, impingement syndrome in both shoulders, and
thoracic outlet syndrome. (A 02-411). Dr. Fromm concluded that the
accident was "a competent producing cause" of Paese's medical condition.
(Id.). He recommended physical and chiropractic therapy.
On December 22, 1999, Paese was examined by Dr. Sara Vicente in a
physical medicine and rehabilitation consultation. (A 02-413). Her
diagnosis was cervical muscle strain, cervical disc bulges, bilateral
shoulder impingement syndrome, and lumbosacral muscle strain. (A 02-414).
She recommended physical therapy and other tests. (Id.). On December 23, 1999, Dr. Vicente performed an upper extremity
electrodiagnostic study on Paese. (A 02-160). Dr. Vicente concluded that
this was "an abnormal electrodiagnostic study" and that the findings were
"consistent with bilateral carpal tunnel syndrome, mild to moderate on
the right and mild on the left." (A 02-162). She also concluded that
there was no evidence of peripheral neuropathy on both upper extremities.
Dr. Vicente saw Paese in a follow-up on February 2, 2000. (A 02-415).
Paese reported that his neck and shoulder pain had improved but the
numbness in both hands had gotten worse and that he was having difficulty
using his fingers and hands to hold tools. (Id.). Dr. Vicente
recommended the use of wrist splints at night, the continuation of
physical therapy, evaluation for possible carpal tunnel surgery,
continued chiropractic treatment, and further follow-up. (A 02-415-16).
Dr. Fromm saw Paese in a neurological follow-up on February 9, 2000. (A
02-417). Paese was "extremely depressed and discouraged" and reported
that he wais getting worse instead of better. Despite his physical
therapy, he reported severe neck pain, locking of the neck, and numbness
in both forearms, both hands, and all fingers. (Id.). Dr. Fromm
made an additional diagnosis of post-traumatic stress syndrome.
On February 10, 2000, Paese had an MRI of the lumbar spine. (A
02-408). The MRI showed degenerative disc disease and mild broad-base
disc bulging at L4/5, without evidence of spinal stenosis. (Id.). Small hemangiomas were seen in the LI
and S1 vertebral bodies. (Id.).
On February 25, 2000, Paese was examined by Dr. Vicente again. (A
02-418). He still complained of severe neck pain, bilateral shoulder
pain, and worsening of hand numbness bilaterally. (Id.). He had
not been able to work because his job involved a lot of traveling by car
and plane. (Id.). Dr. Vicente's impression was cervical muscle
strain, multi-level cervical disc herniation, bilateral shoulder
impingement syndrome, bilateral carpal tunnel syndrome, and lumbosacral
muscle strain. (A 02-419). She concluded that Paese suffered from a
partial, temporary, and moderate disability. (Id.).
Also on February 25, 2000, Dr. Vicente filled out and signed Paese's
application for long term disability benefits. (A 02-594-95). Dr. Vicente
reported that Paese suffered from cervical disc herniation, bilateral
shoulder impingement syndrome, and bilateral carpal tunnel syndrome. (A
02-594). She noted that no heavy lifting should be performed and that
reaching, working overhead, pushing, and pulling were not recommended. (A
02-595). She also noted that no keyboard use or repetitive hand motion
should be done. (Id.). She reported that Paese had become
unable to work on August 30, 1999, but left blank the question as to how
long the limitations would last. (Id.).
On March 8, 2000, Paese saw Dr. Fromm for a neurological follow-up. (A
02-420). Dr. Fromm noted that a determination would be made as to whether surgery would be
On March 10, 2000, Paese consulted with Dr. Keith Raskin of the
orthopedic surgery department at N.Y.U. Medical Center. (A 02-364).
After examining Paese, Dr. Raskin concluded that Paese "does indeed have
peripheral neuropathies, which appear to be related to the date of the
accident." (Id.). Dr. Raskin also believed that "some of
[Paese's] pain and sensory loss is also due to the cervical complaints."
(Id.). He suggested certain out-patient surgery, followed by
physical therapy, and further surgery at a later date if warranted. (A
In mid-March 2000, Paese consulted with Dr Joseph Dryer. (A 02-369).
Dr. Dryer examined Paese and concluded that Paese was "suffering neck
pain and radiculopathy from multi-level disc herniation." (A 02-370). He
suggested another MRI before further recommendations could be made.
An additional MRI was taken of Paese's cervical spine on March 27,
2000. (A 02-159). It showed "[d] iffuse cervical Spondylosis most severe
at C5-6 and C6-7." (Id.).
On April 12, 2000, Paese saw Dr. Vicente for a follow-up. (A 02-421).
He was still complaining of neck pain and bilateral hand numbness.
(Id.). Dr. Vicente recommended continued therapy and follow-up,
and noted that she needed to See the results of the recent MRI.
(Id.). On April 26, 2000, Paese had surgery, consisting of right elbow ulnar
nerve decompression, anterior subcutaneous transposition, forearm
fasciotomy, median nerve decompression, and neurolysis. (See A
02-295, 02-322). On May 4, 2000, when he was examined post-operatively,
he was doing very well. (Id.). He continued to do very well in
the follow-ups to the surgery. (A 02-296 (5/11/00), 02-297 (5/19/00),
On May 24, 2000, Paese saw Dr. Vicente for a follow-up, post-surgery.
(A 02-322). Paese reported that the numbness on the first three fingers
of his right hand had resolved and that the numbness in the remaining two
fingers had improved since the surgery. (Id.). He reported
that he had also received an injection in his cervical spine from Dr.
Salaze of the Pain Management unit at N.Y.U. and the pain in his neck had
improved significantly. (Id.). He was still undergoing physical
therapy, (Id.). After examining Paese, Dr. Vicente recommended
that he continue physical therapy and follow-up with both his hand
surgeon and Dr. Salaze. (A 02-323).
On July 5, 2000, Paese was seen for follow-up by Dr. Sioban
McDermott, one of Dr. Vicente's colleagues. (A 02-321). Paese was still
complaining of right fourth and fifth digit and elbow numbness, although
it was improving, with continuous aching of the right hand.
(Id.). He also reported continued grip weakness with some
improvement in strength as well as persistent neck and bilateral shoulder
pain. (Id.). On August 2, 2000, Paese was seen for follow-up by Dr.
Mohammad Rahman, who was also in Dr. Vicente's office. (A 02-319-20).
Paese complained of neck pain on and off, radiating to the right
shoulder, and occasional numbness in the fourth and fifth fingers of the
right hand. (Id.). He reported some improvement in the numbness
of both hands and continued to complain of bilateral shoulder pain.
On August 3, 2000, Paese saw Dr. Dryer for follow-up. (A 02-289). Dr.
Dryer noted that Paese had recovered from the surgery the carpal
tunnel release and release of the ulnar nerve in the right elbow.
(Id.). Paese also reported that although the epidural injection
given to him by Dr. Selassie (apparently Salaze) had provided temporary
relief, the pain had returned. (Id.). Dr. Dryer concluded that
because Paese's pain had not improved with nonoperative treatment, "it
was reasonable to consider surgery at [that] time." (Id.). He
discussed anterior cervical discectomy and fusion at C5/6 with Paese, and
decided to schedule the surgery for September 2000. (Id.).
Dr. Dryer performed the surgery on Paese on September 27, 2000. (A
02-286). He performed an anterior cervical microdiscectomy and spinal
cord decompression at C5/6 and anterior cervical interbody fusion with
allograft at C5/6. (Id.). The disc at C5/6 was removed and
Paese was given a bone graft. (A 02-287).
On October 17, 2000, Dr. Dryer saw Paese for post-operative follow-up and concluded that the bone graft was "healing quite nicely."
(A 02-276). The cervical collar was removed and the wound was well
healed. (Id.). Paese reported "excellent relief."
(Id.). Physical therapy was prescribed. (A 02-237).
On December 20, 2000, Dr. Dryer saw Paese for further follow-up. (A
02-274). X-rays showed the fusion had become solid and Paese reported
significant reduction in pain. (Id.). The "usual activity
restrictions" were discussed with Paese. (Id.). Physical
therapy was to continue. (Id.).
On March 20, 2001, nerve conduction studies and an electromyograph
indicated the presence of "median nerve compression at the wrists
consistent with bilateral carpal tunnel syndrome." (A 02-141, 02-142).
On July 19, 2001, Dr. George Kazda issued a written report after
reviewing Paese's medical records. (A 02-229). Although he agreed that
Paese developed "a multitude of neck, shoulder, and upper extremity
symptoms" as a result of the August 30, 1999, accident, he opined that
"Paese retains the physical functional capacity for work at the sedentary
level on a full-time basis." (A 02-232, 02-234). Dr. Kazda did not
actually examine Paese, but based his conclusions solely on a review of
the records. (A 02-229-34). Dr. Kazda relied on, among other things, an
entry in the Peak progress notes stating that in physical therapy on
February 1, 2001, Paese had swung a golf club 20 times. (A 02-232;
see A 02-222 ("Pt. swung golf club 20X & had no pain")).*fn2 Dr. Kazda also based his conclusions on his
belief that Paese's job was "a very sedentary type of position with
lifting of less than ten pounds and a quiet environment." (A 02-233). Dr.
Kazda, who listed his title as "Associate Medical Director for The
Hartford," wrote the report for Hartford. (A 02-229, 02-234). He noted
that he had "been asked to review Mr. Denise [sic] Pease's [sic] medical
record and render an opinion regarding his functional capacity for
sedentary occupation." (A 02-229).
On October 19, 2001, another MRI was obtained for Paese. (A 02-041).
The MRI was compared to the MRI that had been obtained on March 27, 2000.
(Id.). The report concluded that there had been "no
significant change in the size of the large disc herniation at the C6/7
level," (A 02-042). It also reported "more pronounced central disc
herniations at the C3/4 and C4/5 levels." (Id.).
In a report dated February 1, 2002, to the Office of Hearings and
Appeals of the Social Security Administration (the "SSA") of the United
States Department of Health and Human Services, Dr. Dryer reviewed Paese's history and treatment and
opined that "Paese is permanently disabled from any occupation." (A
In a report dated March 5, 2002, prepared for Hartford on a Physical
Capacities Evaluation Form, Dr. Dryer reported that in an eight-hour work
day Paese could sit for six hours, stand for two hours, walk for two
hours, and drive for two hours. (A 02-127, 02-128). He reported that
Paese could never lift 21 or more pounds, that he could occasionally lift
11 to 20 pounds, and that he could frequently lift 1 to 10 pounds. (A
02-128). He reported that Paese could only occasionally reach above his
shoulder and could frequently reach to at or below waist level. Dr. Dryer
also reported that Paese had reached maximum medical improvement and was
permanently disabled, that is, he could not return to work at his regular
occupation. (A 02-129).
On March 19, 2002, just one day before Hartford issued its final
decision, Dr. Barry Turner issued a report to Hartford based on his
review of Paese's medical records. (A 02-068-094). He apparently also
spoke to some of the medical providers. (A 02-068-69). Dr. Turner
concluded that although "there may have been a possible strain to the
cervical spine at the time of the motor vehicle accident on 8/30/99,
. . . it [was] very unlikely that this was significant. . . ." (A
02-086). He also concluded that any impingement syndrome of the shoulder,
carpal tunnel syndrome, and ulnar neuritis at the elbow would not have
been caused by the accident. (A 02-087). He likewise concluded that it was unlikely that Paese re-injured his lumbosacral spine.
(Id.). Dr. Turner also relied on the apparent fact that in
February 2001 Paese was purportedly able to swing a golf club 20 times in
one day without pain, although he does not note that this was part of
physical therapy. (A 02-089). In the end, Dr. Turner concluded that no
restrictions on Paese's ability to work were supported "by the records,"
as long as Paese engaged in light duty work only. (A 02-091).
5. Additional Medical Evidence
Paese has presented two additional pieces of medical evidence. The
first, a decision of the SSA, was presented to Hartford before it
rendered its final decision and thus this decision is in the
administrative record.*fn3 The second, the conclusions of Dr. Robert
Stoller, who examined Paese for the defendants in the personal injury
action arising out of the motor vehicle accident in question, was not
submitted to Hartford during the administrative process, and thus is not
part of the administrative record.*fn4 a. The SSA Decision
On April 7, 2000, Paese filed an application for disability benefits
with the SSA. (A 02-132). In a decision dated February 22, 2002 (A
02-138), the SSA concluded that Paese suffered from "a serious orthopedic
disorder which has not been fully resolved." (A 02-136). The SSA also
concluded as follows:
[C]onsidering [Paese]'s age, educational
background, work experience, and residual
functional capacity, he is incapable of making a
successful adjustment to work that exists in
significant numbers in the national economy. A
finding of "disabled" is therefore reached within
the framework of the medical-vocational
(Id.). The SSA concluded that Paese was disabled within
the meaning of the Social Security Act and awarded him benefits
commencing September 8, 1999. (A 02-138).
Stoller's examination was an "independent orthopedic exam." (Compl.,
Ex. 2 at 1). b. Dr. Stoller's Report
Dr. Stoller conducted a physical examination of Paese on January 28,
2002, and wrote a report summarizing his findings and the medical records
he had reviewed. (Compl., Ex. 2). Dr. Stoller diagnosed Paese as having:
(1) cervical strain, with herniated disks at C3/C4, C4/C5, and C6/C7, and
interval fusion of C5/C6 disc; (2) lumbosacral strain with disc bulging
at level L4/5; (3) severe osteoarthritis of the left A-C joint causing
mild impingement syndrome reference the supraspinatus muscle; (4) severe
osteoarthritis of the acromioclavicular joint caused by osteohytic spur
formation of the right shoulder; and (5) bilateral carpal tunnel
syndrome. Dr. Stoller also concluded:
The patient is not able to do any work at this
time due to his disability. The accident of
08/30/99 is the competent producing cause for the
above listed diagnoses. He needs continued
treatment and . . . he may need surgery on both
shoulders and also re-exploration of the cervical
(Id.. Ex. 2 at 4).
B. Prior Proceedings
Paese commenced this action pursuant to § 502(a)(1)(B) of ERISA,
29 U.S.C. § 1132 (a)(1)(B), on December 11, 2002. The Court has
jurisdiction over this action under § 502(e)(1) of ERISA,
29 U.S.C. § 1132 (e)(1).
The parties engaged in discovery. At a pretrial conference on August
27, 2003, the parties agreed to a summary trial on the papers, waiving
their right to present witnesses. See Acuff-Rose Music Inc. v. Jostens, Inc.,
155 F.3d 140, 142-43 (2d Cir. 1998) ("[A] district court may decide a case by
summary bench trial upon stipulation of the parties as long as the
parties have willingly forgone their right to a full trial."). I issued
an order memorializing the parties' agreement and setting forth a
Paese also seeks attorneys' fees and costs under § 502(g) of ERISA,
29 U.S.C. § 1132(g)(1).
A. Standard of Review and Burden of Proof
The parties agree that Hartford's denial of long term disability
benefits is subject to de novo review by this Court. (Pl. Mem.
at 22-23; Def. Mem. at 1). As the Supreme Court has held, a de
novo standard applies unless a plan gives a plan administrator
"discretionary authority to determine eligibility for benefits."
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989). Hartford has not argued that the Plan here gives it such
discretionary authority, and thus de novo review applies.
See Lauder v. First Unum Life Ins. Co.,
284 F.3d 375, 379 (2d Cir. 2002).
As a plaintiff seeking to recover benefits under an ERISA plan that
requires him to submit proof of his disability (A 052, 056), Paese has
the burden of proving by a preponderance of the evidence that he is
totally disabled within the meaning of the Plan. See
Piscottano v. Metropolitan Life Ins. Co., 118 F. Supp.2d 200, 215
(D. Conn. 2000); Barnable v. First Fortis Life Ins. Co., 44 F. Supp.2d 196, 204 (E.D.N.Y. 1999);
See generally Mario v. P & C Food Mkts., Inc.,
313 F.3d 758, 765 (2d Cir. 2002) ("[A]s a matter of general insurance
law, the insured has the burden of proving that a benefit is covered,
while the insurer has the burden of proving that an exclusion
B. The Merits
The issue presented is whether, on the record before the Court, Paese
has proven that he was "Totally Disabled" within the meaning of the Plan
on October 11, 2001, when Hartford terminated his benefits, and on March
20, 2002, when Hartford denied his appeal from the October llth decision.
I conclude that Paese has met his burden of proof, and that he has shown
by a preponderance of the evidence that he was prevented by the bodily
injuries he sustained in the August 30, 1999, accident from performing
the essential duties of his occupation through March 8, 2002 (24 months
after 180 days after the accident), and from thereafter performing the
essential duties of any occupation for which he was qualified.*fn5 I
reach this conclusion for the following reasons:
First, Paese has presented convincing evidence that he Was Totally
Disabled. His treating physicians, who are most familiar with Paese's
medical condition, concluded as much. For example, Dr. Vicente, who
treated Paese for quite some time, opined on February 25, 2000, that Paese was disabled and
unable to work. (A 02-594-95). In a report dated March 5, 2002, Dr.
Dryer, who performed surgery on Paese, concluded that Paese was
permanently disabled. (A 02-129). Other treating physicians made
contemporaneous findings, as they were treating Paese, that he suffered
from cervical spine injuries, impingement syndrome, and carpal tunnel
Moreover, the physicians' impressions were supported by MRIs and other
objective tests and studies, which confirmed the existence of significant
injuries. Indeed, Paese had two surgeries, including a disc removal and
bone graft on his spine, and he was in physical therapy for years.
Finally, Paese's work as Director of Labor Relations required long hours,
working with labor unions and governmental agencies, and extensive
traveling, including on plane trips throughout the United States and
Europe (which undoubtedly required him to carry luggage). Surely his
medical condition prevented him from engaging in these activities.*fn7
The record shows that Paese was not a malingerer he worked for Sequa for more than 22 years and even went to work
immediately after his accident.
Second, Hartford's evidence that Paese was not Totally Disabled is not
credible. It consists largely of the reports of Dr. Kazda and Dr.
Turner.*fn8 Neither Dr. Kazda nor Dr. Turner actually examined Paese,
and it is apparent from a reading of their reports that they were
straining to reach a conclusion to Hartford's liking. Dr. Kazda even
spelled both of Paese's names wrong, and he pulled statements from the
medical records out of context and concluded that Paese's job was "a very
sedentary type of position." (A 02-233). Moreover, Dr. Kazda was hardly
disinterested, as he described himself as "Associate Medical Director for
The Hartford." (A 02-234). Dr. Turner, who was paid $2,430 by Hartford
for his report (A 02-067), clearly was straining against Paese as he
concluded, in essence, that there were no serious injuries, even though
Paese ultimately had to have spinal surgery and a bone graft. Finally, of
course, Hartford itself decided, on May 4, 2000, that Paese was
Totally Disabled, and it has simply not demonstrated that Paese's condition
had improved by October 11, 2001, to the point that he was no longer
disabled. Indeed, if anything, Paese's condition worsened after May 4,
2000, to the point where he was required to have spinal surgery on
September 27, 2000. In fact, nothing significant happened between
September 27, 2000, and October 11, 2001, to support Hartford's apparent
conclusion that Paese had improved to the point that he was no longer
Third, additional, independent medical evidence confirms that Paese was
Totally Disabled. Based on largely the same evidence presented to
Hartford, the SSA concluded on February 22, 2002, that Paese suffered
from a serious orthopedic disorder that rendered him disabled not only
for his own job but for any available work. (A 02-136). Likewise, Dr.
Stoller, who was examining Paese for the defendants in the personal
injury action in New Jersey, concluded on January 28, 2002, that Paese
was disabled. (Compl., Ex. 2).
In short, based on Paese's convincing medical evidence, corroborated by
the SSA decision and Dr. Stoller's findings, and in the absence of
substantial contrary evidence to support Hartford's position, I conclude
that Paese was Totally Disabled within the meaning of the Plan.
C. Attorneys' Fees and Costs
Section 502(g) of ERISA provides that "the court in its discretion may
allow a reasonable attorney's fee and costs of action to either party."
29 U.S.C. § 1132(g)(1). In exercising its discretion to allow fees, a district court is to consider the
five factors set out in Chambless v. Masters, Mates & Pilots
Pension Plan, 815 F.2d 869 (2d Cir. 1987):
(1) the degree of the offending party's
culpability or bad faith, (2) the ability of the
offending party to satisfy an award of attorney's
fees, (3) whether an award of fees would deter
other persons from acting similarly under like
circumstances, (4) the relative merits of the
parties' positions, and (5) whether the action
conferred a common benefit on a group of pension
815 F.2d at 871; accord, Lauder, 284 F.3d at 383.
Considering these factors, I conclude that Paese is entitled to
attorneys' fees and costs. First, although I do not reach the issue of
whether Hartford acted in bad faith, I do believe that Hartford failed to
engage in a fair and open-minded consideration of Paese's claim. Rather,
it largely disregarded substantial evidence of his serious injuries and
relied instead on snippets pulled out of context from the medical
records. Indeed, one of the health care providers commented that Hartford
had engaged in a "manipulation" of the facts. (A 02-217). *fn9 Hartford
also largely ignored substantial evidence that Paese's position was not a
sedentary one and its conclusion that a position that requires negotiating collective bargaining agreements
and maintaining relationships with unions is a sedentary position makes
no sense. Moreover, by terminating Paese's benefits and forcing him to
sue, Hartford has managed to avoid paying Paese $6,862.70 per month since
October 11, 2001 some two-and-a-half years.
Second, Hartford has the financial ability to satisfy an award of
attorneys' fees. Third, an award of attorneys' fees will deter other
insurers from terminating benefits unjustifiably, for insurers will be
put on notice that if they deny benefits to plan participants without
engaging in a fair consideration of their claims, they will be subject to
an award of attorneys' fees and costs. Fourth, not only is Paese the
prevailing party, but his position in this lawsuit is far more
meritorious than Hartford's. Finally, although this is an individual
action that will not confer a common benefit on a group of pension plan
participants, a benefit is conferred, in a general sense, on group
employee benefit plan participants in that insurers will be deterred from
terminating benefits without reason.
Accordingly, Paese will be awarded his reasonable attorneys' fees and
costs incurred in this action.
For the reasons set forth above, judgment will be entered in favor of
Paese against Hartford awarding him long term disability benefits of $6,862.70 per month from October 11, 2001,
to date, with pre-judgment interest, together with any adjustments and
other benefits required by the Plan, as well as reasonable attorneys'
fees and costs. Counsel for Paese shall submit a proposed judgment on
notice within seven business days hereof. The parties shall endeavor to
agree on the amount of reasonable attorneys' fees and costs (without
prejudice to Hartford's right to appeal). If the parties are unable to
agree on the amount of fees and costs, Paese shall promptly submit a fee
application, Hartford may oppose within seven business days thereafter,
and the Court will enter a supplemental judgment awarding fees and costs
following a review of the papers. SO ORDERED.