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BADAWY v. FIRST RELIANCE STANDARD LIFE INSURANCE COMPANY

September 28, 2005.

HANY BADAWY, Plaintiff,
v.
FIRST RELIANCE STANDARD LIFE INSURANCE COMPANY Defendant.



The opinion of the court was delivered by: RICHARD HOLWELL, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Hany Badawy ("Mr. Badawy") brings this action, pursuant to the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq., alleging that the defendant First Reliance Standard Life Insurance Company ("First Reliance Standard") improperly denied his claim for long-term disability benefits. Mr. Badawy has filed a motion for summary judgment; in its reply papers, First Reliance Standard requests summary judgment be entered in its favor. For the following reasons, both motions are denied, and this matter is remanded to First Reliance Standard for a determination in accordance with this opinion.

BACKGROUND

  The following facts are taken from the Administrative Record ("AR") in this matter, and, unless otherwise noted, are not rebutted or disputed. Mr. Badawy was first diagnosed with Familial Mediterranean Fever (FMF) in 1994. (AR 188, 212.) This inherited disorder is "characterized by recurrent fever and inflammation, often involving the abdomen or the lung." See National Library of Medicine and National Institute of Health, Medline Plus Medical Encyclopedia, Familial Mediterranean Fever, available at http://www.nlm.nih.gov/medlineplus/ency/article/000363.htm.*fn1 His symptoms of this condition reportedly began in the 1970s, when he began to suffer sudden and episodic attacks of high fever, abdominal pain and vomiting. (AR 212.) It does not appear, however, that this condition precluded his full-time employment at any time prior to his application for disability in 2000.

  Beginning in April 1995, Mr. Badawy was a manager at Marshall-Lasser, Inc., and continued on as the "Managing Director of Forward Foreign Exchange" when his company merged with Liberty Brokerage Investment, Inc. in January 1999. (AR 376.) During this period, he was hospitalized once, on September 29-30, 1999 at Valley Hospital in Ridgewood, New Jersey, apparently for "care and treatment for the diagnosis of Familial Mediterranean Fever." (AR 276, ¶ 6; AR 302-15.) Following a subsequent merger of Liberty with Tradition (North America) Inc. ("Tradition"), Mr. Badawy was hired as Tradition's "Director of Foreign Forward Exchange," beginning November 1, 1999. (Id.) Upon his employment at Tradition, Mr. Badawy became enrolled in Tradition's long-term disability benefit plan. (AR 320-24.) First Reliance Standard insured this plan under Policy number LSC 100326 (the "Plan"), which appears in the Administrative Record at AR 5-23. Mr. Badawy's last day of work at Tradition was January 28, 2000. His application for long-term disability benefits, dated February 28, 2000 and date-stamped by First Reliance Standard on May 5, 2000, consists of forms submitted by his employer, his physician, and himself. In his portion of the application, Mr. Badawy indicated that January 28, 2000 was the last full day he worked "before his disability" and that, before he stopped working, his condition did not require him to change his job or the way he did his job; he also listed that date as the date he was first unable to work on a full-time basis. (AR 366.)

  When asked to detail his job duties and list the physical and mental requirements, Mr. Badawy noted that he "worked 12-14 hours a day, five days a week . . . I have to entertain clients at nights and on weekends. Frequent travel to Europe and South America. Standing and walking all day from one department to another." He indicated that his position involved a lot of "tension, stress and pressure," as he oversaw thirty staff members, and was in an environment where "constant yelling and screaming occurs during every busy moment in order to execute business as a broker." (AR 382.)

  In response to the application question, "Why are you unable to work?" Mr. Badawy explained that he was "unable to perform" his "duties as a manager." (AR 382.) His attacks, with symptoms of abdominal pain, fever, joint pain, difficulty breathing, diarrhea, aching bones, and vomiting, were occurring "more often," and he could no longer "stay at work for a full day." (AR 382). Some days, Mr. Badawy apparently could not get out of bed, and, on others, he could not leave the house. (Id.) Mr. Badawy further submitted that he left Tradition because he could not work any longer due to "Chronic, Acute painful Abdominal Attacks, Weakness, Fatigue, Chest Pain" as well as "Slow Recovery periods after Frequent Attacks." (Id.) He checked "no" when asked whether he expected he would be able to return to work on either a part-time or full-time basis. (AR 366.)

  On the same application for benefits, however, the Human Resources Manager at Mr. Badawy's employer, Lyudmila Fayman, reported that plaintiff's last day was January 28, 2000 because he was laid off, and not because of the onset of disability. (AR 364.) According to First Reliance Standard's notes from a telephone interview between Ms. Fayman and a First Reliance Standard employee in November 2000, "she confirmed that [Mr. Badawy] was laid off for cause and his ceasing work had nothing to do with w/disability, per the Co." (AR 262.) In a letter, Ms. Fayman declined to comment further on whether Mr. Badawy was laid off for cause, upon the advice of counsel. (AR 258.) In a section in his reply brief entitled "Plaintiff was not discharged," Mr. Badawy appears to dispute that he was in fact terminated from his position at Tradition, or at least questions the sufficiency of the evidence First Reliance Standard has that he was terminated. (Plaintiff's Reply Memorandum of Law In Support of his Motion for Summary Judgment ("P. Reply Mem."), pp. 6-9.)

  Ms. Fayman's portion of the application indicated that Mr. Badawy's condition caused no changes to his job responsibilities before he claimed disability. (AR 364.) She noted that the physical requirements of plaintiff's position demanded continuous standing and occasional walking and sitting. (AR 362). Contrary to Mr. Badawy's report, when asked if plaintiff was required to travel, Ms. Fayman responded "no." (AR 362).

  In the physician's portion of Mr. Badawy's application for benefits, Alan Hecht, M.D., completed an undated statement, noting that he had been caring for Mr. Badawy since 1994, and that his primary diagnosis was FMF, featuring symptoms that included "abdominal pain, diffuse musculoskeletal and joint pain, [and] nausea and vomiting, diarrhea, [and] fever." (AR 378.) He noted, and the records support, that Mr. Badawy visited his office about once a year. (Id.) Dr. Hecht indicated Mr. Badawy was prescribed 0.6 milligrams, twice daily, of Colchicine, a medication "used to both prevent acute attacks of FMF and treat acute attacks."*fn2 (Id.) Dr. Hecht, in commenting on Mr. Badawy's restrictions and limitations, noted that he had "near total incapacitation with attacks of few day [sic] duration several times monthly." (AR 379.) He considered his patient to have a "permanent condition/disability." (Id.)

  Upon receipt of Mr. Badawy's application and review of his medical records which indicated that plaintiff had a long history of FMF, First Reliance Standard initially notified Mr. Badawy that his claim could not be approved because of a Plan provision which precludes benefits for pre-existing conditions. (AR 276-77.) Following notification from Mr. Badawy's attorney that the provision did not apply to his client (AR 265-66), First Reliance Standard reviewed and reversed its decision in January 2001, because Mr. Badawy had been covered under the long-term disability policy in effect before his former employer was acquired by Tradition, Inc. (AR 236-37.)

  First Reliance Standard then reviewed Mr. Badawy's claim on its merits. Bozena M. Irish, R.N. examined Mr. Badawy's medical records. These included Dr. Hecht's notes on office visits from 1994 until February of 2000 (AR 331-48); a February 27, 2000 letter to Mr. Badawy from Avi Livneh, M.D. of the Heller Institute of Medical Research in Tel Aviv, Israel (which appears to be a response to general inquires on developments in FMF study, its treatment and its inheritability) (AR 201); and an October 6, 2000 report and accompanying records from Mark D. Horowitz, M.D., a doctor to whom Dr. Hecht apparently gave Mr. Badawy a referral. (AR 190-200,*fn3 202-04.) Upon examining these records, Ms. Irish indicated in her report of March 12, 2001 that "there was no documentation available on file reflecting that [Mr. Badawy] has frequent and ongoing attacks" — she noted that the only evidence of an "acute process" were December 2000 lab reports showing "elevated ESR and C-reactive protein," and that the five documented visits Mr. Badawy made to his physicians in 2000 and 2001 had no record of fever (the "cardinal manifestation" of FMF),*fn4 no joint pain, and only mild abdominal tenderness (AR 187.) She concluded that, on the basis of the records and the fact he was taking Colchicine prophylactically, Mr. Badawy was "free of any debilitation [sic] intervals between" acute attacks of FMF. (Id.)

  First Reliance Standard wrote to Mr. Badawy to deny his claim on March 14, 2001, on the grounds that he had "not satisfied the policy definition of Total Disability as defined in the policy." (AR 183-84.) Examiner Robert Rose referenced the lack of documentation of frequent and ongoing attacks that Ms. Irish noted in her report, despite Dr. Hecht's description of Mr. Badawy's "near total incapacitation with attacks," and Mr. Badawy's visit to Dr. Hecht in February of 2000 showed "normal lab results except for elevated cholesterol and LDL." (Id.) Mr. Rose informed Mr. Badawy that he should "be aware that our determination regarding whether you meet the policy's definition of Total Disability is, and must be, based on the objective documentation in your claim file. We have no basis on which to measure subjective complaints or medical opinions that are not substantiated by objective medical findings." (Id.)

  Mr. Badawy's attorney wrote to request an appeal of this determination on March 19, 2001. (AR 166-67.) Thereafter, William Scott Hauptman, M.D. undertook a second review of Mr. Badawy's records. In addition to the materials reviewed by Mr. Irish, Dr. Hauptman reviewed the medical records relating to Mr. Badawy's September 29, 1999 hospitalization (AR 302-15); additional records from Dr. Horowitz, including a March 21, 2001 report which notes that "9-10 days of each month he is immobile and incapacitated due to pain and fever," and that "his laboratory evaluation shows very high inflammation markers" (AR 169-174, AR 176-81); and, the April 9, 2001 report of Lloyd Ross, PhD, Mr. Badawy's psychotherapist, who notes Mr. Badawy's diagnosis of posttraumatic stress disorder, depressive disorder, panic disorder, and intermittent explosive disorder and finds that these disorders are linked to the debilitating attacks of FMF he suffers (AR 163).

  Dr. Hauptman issued a report recommending that the claim be denied on October 19, 2001. (AR 153-58.) He concluded that "the diagnosis of [FMF] is not demonstrated definitively in the currently available medical records." He could not find any documentation of any specific incident of elevated temperature in Mr. Badawy's records, despite the fact that "the clinical diagnosis of FMF required the documentation of fever," and indicated that the December 2000 lab work that was "consistent with an underlying inflammatory process" was not specific for FMF. (AR 156.) He challenged Mr. Badawy's compliance with the recommended dosage of Colchicine,*fn5 and also noted that the frequency of the indicated ...


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