Sun Life

Gross v. Sun Life Assur. Co. of Canada, 880 F.3d 1 (1st Cir. 2018). 

Appeal of district court’s de novo granting of plaintiff’s summary judgment motion for benefits, where the case originally went up to the first circuit but was remanded for additional administrative proceedings relating to the significance of surveillance evidence.   The court found that plaintiff had already met her burden of showing disability and that on remand the surveillance video did not undermine the court’s prior assessment of the medical evidence. 

Multiple examining doctors found plaintiff disabled due to chronic pain, inability to sit, severely diminished use of her right arm, due to reflex sympathetic dystrophy (RSD), fibromyalgia, complex regional pain syndrome (CRPS) or the like.  The PT who performed the FCE found her credible, as did her doctors and her co-workers, who wrote letters of support.  Several doctors speculated she had psychological factors contributing, and diagnostic tests were negative.  There were nine days of surveillance.  Most days showed little activity, but on three days she acted in ways inconsistent with her restrictions and limitations, including driving longer than expected, using her right hand to pump gas, going into a store and bending, kneeling and reaching.  She stopped to rest on both drives, and video showed her having effects from these activities, including limping and being taken to her car in a wheelchair after visiting her mother in the hospital.  The only doctor who both examined plaintiff and reviewed the video was an IME for the insurer.  He originally found her disabled, but after reviewing the video he changed his mind, but added that she should be reevaluated.  On remand the insurer got two more paper reviews and plaintiff got two more supportive letters, from a pain specialist and from the PT who did the FCE. 

Standard of review.  The court made it de novo in Gross I for plans that require proof ‘satisfactory’ to the reviewer.  As to the standard on appeal, since the court upheld the district court even on de novo review, it did not have to address whether the appeal should be de novo or for clear error.

Evaluating the evidence.  The video surveillance and reviews of it did not dislodge the finding that plaintiff met her burden of showing she’s disabled.  The questionable activities on surveillance were not far from the limitations established.  Pain medication and the nature of the diseases could account for the activities.  The insurer and the two IME reviewers failed to assess the questionable activities in the context of the nine days, during which the investigator saw little activity on most days.  Fluctuation in physical abilities is predictable and the new assessments failed to account for that.  This was true even though the record reflected some exaggeration by the plaintiff. 

Weight of reports by treating physicians and paper reviewers.  Where the determination of disability depends on an assessment of largely subjective, self-reported symptoms, those who have had in person exposure, whether treating physician or not, have access to information not available to non-examining doctors.  Where the claimant’s credibility is a central factor, and particularly where a claimant’s in person presentation of symptoms was credited by the IME, the impressions of examining doctors may be given more weight than those who only did paper reviews.

The court addressed sanctions for plaintiff’s attorney for threatening to sue the IME if he did not “correct” his medical opinions, then lied to the first circuit about it, where he had already been sanctioned in the past.  No sanctions given, but did direct that his actions be reported to his professional conduct counsel in Kentucky. 

Prejudgment interest.  Prejudgment interest is not in the ERISA statute but a court has discretion to grant it and its discretion extends to the rate to be applied.  The two primary factors are the remedial objectives of ERISA, which are served by making a participant whole and to prevent unjust enrichment.  The complexity in setting a rate is the ever-changing relationship between statutory interest rates and the actual cost of money.  In determining the rate, the court’s task is to identify a fair percentage reflecting both the rationale of full compensation and ERISA’s underlying goals.  Citing Cottrill v. Sparrow, Johnson & Ursillo, Inc, 100 F.3d 220 (1st Cir. 1996).  The court set it at the federal statutory rate (§ 1961(a)).  The first circuit said that was too low and the court did not give reasons for the rate, so it was vacated for a reassessment.

Attorney’s Fees.ERISA provides for attorney’s fees at 29 U.S.C. § 1132(g)(1).The district court used the loadstar analysis, which is an assessment of hours reasonably spent and a determination of a reasonable hourly rate. Matalon v. Hynnes, 806 F.3d 627, 638 (1st Cir. 2015).The district court awarded $96,243.50, a reduction of more than $188,000 from the requested fees.Reduction of out of state counsel’s rate based on his local area did not exceed the court’s authority.As to hours, 105.5 attorney hours for summary judgment motions was cut in half by the court below based on discounting time spent on losing arguments.The first circuit said that was in error.But as to total hours, the court found no abuse in finding that unreasonable and concluded a 25% reduction would reflect the success of plaintiff and the view that the hours were excessive.