Nauss v. Sedgwick Claims Management Services, Inc.

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

KEVIN NAUSS, )

)

Plaintiff, )

)

vs. ) Case No. 4:20-CV-00304 JAR

)

SEDGWICK CLAIMS MANAGEMENT )

SERVICES, INC., )

)

Defendant. )

MEMORANDUM AND ORDER

Plaintiff filed this action under the Employee Retirement Income Security Act

(“ERISA”), 29 U.S.C. §§ 1132 (a)(1)(B), to overturn a denial of short-term disability benefits

under Charter Communications, Inc. (“Charter”)’s Welfare Benefit Plan (“the Plan”), which it

self-funds and independently administers. Plaintiff also asks the Court to impose a discretionary

penalty on Sedgwick for allegedly belatedly providing certain Plan documents requested by his

counsel. This matter is before the Court on Defendant Sedgwick Claims Management Services,

Inc. (“Sedgwick”)’s Motion for Summary Judgment. (Doc. No. 30). The motion is fully briefed

and ready for disposition. For the following reasons, the Court will grant summary judgment in

favor of Sedgwick.

Background

As the “Plan Administrator” of the Plan, Charter delegates authority to make benefit

determinations to independent “claims administrators.” (R-01516). Under the Plan, “[b]enefits

will be paid … only if the Claims Administrator (or the Administrator) determines in its

discretion that the applicant is entitled to them. Except as otherwise provided by applicable law,

decisions made by the Claims Administrator (or the Administrator) are final and binding.”

to determine benefit claims under the Plan. (R-1528, R-1564).

The Plan includes a Short-Term Disability (“STD”) program that provides up to 26

weeks of benefits to eligible employees. To qualify for STD benefits under the Plan, a claimant

must be “totally disabled,” i.e., unable to “perform the Essential Duties of your own occupation.”

(R-01559). “Essential Duty” means “the important tasks, functions and operations generally

required by employers from those engaged in their usual occupation that cannot be reasonably

omitted or modified.” (R-01577).

Charter is a telecommunications company that provides cable, television, telephone, and

internet services to customers throughout the United States. Plaintiff worked as a Systems

Analyst for Charter from November 2017 to October 8, 2019 and was a participant in the Plan.

His essential job functions included documenting systems requirements, assessing and

explaining impacts of systems changes or outages, maintaining a library of systems and technical

specifications, and interfacing with business analysts and technical support personnel.

In April 2019, Plaintiff was experiencing gastrointestinal problems. On April 8, 2019, he

applied for benefits under the STD program and submitted medical documentation in support of

his claim. On May 2, 2019, Sedgwick denied Plaintiff’s claim because he did not meet the

Short-Term Disability Program’s definition of “totally disabled.” (R-00891 to R-00897). The

determination to deny benefits was based on the absence of abnormal exam findings such as

noted abdominal pain with guarding that would prevent Plaintiff from performing his sedentary

job demands. (R-00893). In addition, no functional limitations were noted that would prevent

Plaintiff from sitting for long periods of time. (Id.). According to the medical documentation,

Plaintiff has been treated for irritable bowel syndrome (“IBS”) with abdominal pain and gastric

1 The administrative record created during the claims process is referenced herein as “R-”.

Plaintiff’s treatment plan, consisting of “labs and medication,” is not alone disabling. (Id.).

Sedgwick advised Plaintiff by letter that he could appeal the decision and that it would

consider any additional information submitted in support of his claim, including missing

documentation from recent healthcare provider visits. (Id.). The letter attached an appeal form

and a document explaining Sedgwick’s appeal procedures. (R-00895 to R-00897). On May 3,

2019, Plaintiff informed Sedgwick by email that he would appeal Sedgwick’s benefit

determination. (R-00886).

On May 9, 2019, Plaintiff requested through counsel “a copy of the Short-Term

Disability Policy or at least the Summary Plan Description of it.” (R-00863). Sedgwick

responded on May 14, 2019, attaching a copy of the 2017 Summary Plan Description for the

Short-Term Disability Program.2

On May 13, 2019, Plaintiff’s primary attending physician, Dr. Mark Novack, wrote a

note stating:

This man has chronic abdominal pain associated with poor control of defecation.

He is under the care of a psychiatrist and a gastroenterologist. He has been unable

to work since 4/5/2019 and will not be able to return to work through the end of

July, 2019.

(R-00205).

On May 16, 2019, Plaintiff’s treating physician psychiatrist, Dr. J. Paul Rutledge,

completed an attending physician statement excusing Plaintiff from work from April 5, 2019 to

July 31, 2019. Dr. Rutledge noted Plaintiff’s gastrointestinal symptoms and diagnosed him with

post-traumatic stress disorder, gastric ulcers with bleeding, and IBS with diarrhea. He further

2 This Summary Plan Description was no longer in effect at the time of Plaintiff’s alleged disability on

April 5, 2019; a January 1, 2019 Summary Plan Description was provided to Plaintiff in April 2020, after

he filed the instant lawsuit.

opined that Plaintiff would be unable to stay on task without interruption due to his

gastrointestinal symptoms and episodic anxiety. (R-00202 to R-00204).

On May 17, 2019, Plaintiff’s counsel submitted 328 pages of medical records to

Sedgwick for review, including the physician statements from Drs. Novack and Rutledge.

(R-00847 to R-00849; R-01008 to R-01347). Thereafter, on June 3, 2019, Plaintiff’s counsel

emailed Sedgwick advising that he would not be submitting any additional information and that

Sedgwick could proceed in evaluating Plaintiff’s appeal. (R-00115).

Sedgwick commissioned a board-certified gastroenterologist, Dr. Muhammad Khokhar,

and a board-certified psychiatrist, Dr. Mark Schroeder, to conduct an independent review of the

record to determine whether Plaintiff was disabled. Dr. Khokhar reviewed Plaintiff’s medical

documentation and noted his several unsuccessful attempts to make contact with Dr. Novak and

Plaintiff’s gastroenterologist Dr. Ghadah Ismail. Dr. Khokhar ultimately determined that a

gastroenterological impairment was not supported by the clinical evidence for the time frame of

April 5, 2019 through Plaintiff’s return to work. He noted that Plaintiff appeared to have

abdominal pain and diarrhea secondary to IBS, but that the diarrhea had improved with Welchol

and that several other medications were used to control abdominal pain. (R-00021 to R-00025).

Dr. Khokhar also noted that Plaintiff’s documented pain was not severe enough to cause a

functional impairment and single gastric erosion cannot cause functional impairment. (Id.).

Lastly, Dr. Khokhar observed that while Plaintiff had fatty liver disease, his blood tests were

normal and thus did not support a finding of functional impairment. (Id.).

Dr. Schroeder also reviewed Plaintiff’s medical documentation, held a teleconference

with Dr. Novack, and noted his several unsuccessful attempts to make contact with Dr. Rutledge.

Dr. Schroeder ultimately determined that a psychiatric impairment was not supported by the

abnormalities.” (R-00013 to R-00020). He acknowledged Dr. Rutledge’s observations of

Plaintiff’s affect and opinion that Plaintiff would not be able to stay on task due to his symptoms

but noted the absence of detailed clinical information suggesting cognitive issues or “severe and

widespread abnormalities” or referral to a higher level of care such as a partial hospital program

that one would expect to see in a case of “severe psychiatric impairment.” Dr. Schroeder

disagreed with Dr. Rutledge’s diagnosis of post-traumatic stress disorder because there was no

evidence beyond Plaintiff’s gastrointestinal symptoms to support that diagnosis. Dr. Schroeder

also disagreed with Dr. Rutledge’s assessment that Plaintiff was unable to work due to anxiety,

depression, and gastrointestinal problems, concluding that the evidence did not establish that

Plaintiff was impaired from performing the regular duties of his job. The teleconference with Dr.

Novack did not change Dr. Schroeder’s assessment because Dr. Novack said he was only

supporting medical leave, not psychiatric disability leave. (Id.).

On June 17, 2019, Sedgwick mailed the independent physician advisor reports of Drs.

Khokhar and Schroeder to Plaintiff with a letter explaining it would take those reports into

consideration in determining his appeal. In addition, Sedgwick explained it would consider any

further information submitted and allow Plaintiff additional time to submit that information if he

so chose. (R-00026 to 00028). Sedgwick sent the same letter and independent physician reports

to Plaintiff’s counsel on July 8, 2019 and noted an August 10, 2019 deadline to render a decision.

(R-01357). Plaintiff’s counsel did not send any additional information to Sedgwick.

On July 26, 2019, Sedgwick emailed Plaintiff a letter informing him that it had upheld

the denial of his STD benefits claim because he did not meet the Short-Term Disability

Program’s definition of “totally disabled.” In its letter, Sedgwick referenced the plan provisions

on which it based its decision, listed the various documents Sedgwick reviewed in Plaintiff’s

Sedgwick also noted that Plaintiff submitted no additional documents for review after receiving

the independent physician reports. (R-01350, R-00004 to R-00009). Plaintiff admits receiving

Sedgwick’s email and denial letter but alleges the email was routed to his email spam filter and

discovered only after he filed his complaint.

The parties dispute whether and when Plaintiff’s counsel was informed of Sedgwick’s

claim denial. Sedgwick maintains it contacted Plaintiff’s counsel by phone on July 29, 2019 to

inform him of its claims decision and that Plaintiff’s counsel advised he would be filing suit.

(R-01349). Plaintiff asserts that Sedgwick’s agent informed his counsel it was considering

denying Plaintiff’s appeal, and that his counsel requested that in the event of a denial, the written

denial be sent to him. Plaintiff’s counsel then emailed Sedgwick on September 18, 2019 to

inquire about the status of a decision on Plaintiff’s appeal for STD benefits (R-00002) but

according to Plaintiff never received a response. Plaintiff filed this action on February 24, 2020.

Legal standard

Summary judgment is appropriate when no genuine issue of material fact exists in the

case and the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett,

477 U.S. 317, 322-23 (1986). The initial burden is placed on the moving party. City of Mt.

Pleasant, Iowa v. Associated Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir. 1988). If the record

demonstrates that no genuine issue of fact is in dispute, the burden then shifts to the non-moving

party, who must set forth affirmative evidence and specific facts showing a genuine dispute on

that issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In determining whether

summary judgment is appropriate in a particular case, the evidence must be viewed in the light

most favorable to the nonmoving party. Osborn v. E.F. Hutton & Co., Inc., 853 F.2d 616, 619

(8th Cir. 1988).

As a threshold matter, the parties disagree on the standard of review this Court is to

apply in reviewing Sedgwick’s benefit determination. Generally, a plan administrator’s decision

to deny benefits is reviewed de novo. Roebuck v. USAble Life, 992 F.3d 732, 736 (8th Cir.

2021) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). Under de novo

review, no deference is given to the administrator’s decision. Davidson v. Prudential Ins. Co. of

Am., 953 F.2d 1093, 1095 (8th Cir. 1992). If, however, an ERISA plan expressly grants

discretionary authority to the administrator or fiduciary to make benefits determinations and

interpret plan terms, the Court reviews the administrator’s benefits determination for an abuse

of discretion. Roebuck, 992 F.3d at 736; see also Cooper v. Metro. Life Ins. Co., 862 F.3d 654,

660 (8th Cir. 2017) (same).

When reviewing for abuse of discretion, the Court will uphold the administrator’s

decision if it is reasonable, meaning it is supported by substantial evidence. See Green v. Union

Security Ins. Co., 646 F.3d 1042, 1050 (8th Cir. 2011) (quoting Midgett v. Wash. Group Int’l

Long Term Disability Plan, 561 F.3d 887, 893 (8th Cir. 2009)). “Substantial evidence is more

than a scintilla but less than a preponderance.” Id. A decision is reasonable “if a reasonable

person could have reached a similar decision, given the evidence before him, not that a

reasonable person would have reached that decision.” Cooper, 862 F.3d at 660 (emphasis in

original) (citation and quotation omitted).

Here, the Plan confers discretionary authority on the Claims Administrator, in this case

Sedgwick, to determine benefit claims under the terms of the STD Program, (R-01517,

R-01528, R-01564), which ordinarily invokes the abuse of discretion standard. See Phillips v.

Charter Commc’ns, Inc. Welfare Benefit Plan, No. 4:18-CV-686, 2019 WL 1001553, at *4

(E.D. Mo. Feb. 28, 2019) (finding identical language triggered abuse of discretion review of

“forfeited” abuse-of-discretion review because (1) it sent an outdated Summary Plan

Description to Plaintiff’s counsel in May 2019; and (2) failed to properly deliver its claim denial

letter. (Doc. No. 39 at 10). Plaintiff cites Fessenden v. Reliance Standard Life Ins. Co., 927 F.

3d 998, 999-1000 (7th Cir. 2019), in support of his position that the failure of a plan

administrator to follow required claims procedures – such as deadlines for issuing decisions –

triggers de novo review.

Under controlling Eighth Circuit caselaw, “the mere presence of a procedural

irregularity is not enough to strip a plan administrator of the deferential standard of review.”

Menz v. Procter & Gamble Health Care Plan, 520 F.3d 865, 869 (8th Cir. 2008) (quoting

McGarrah v. Hartford Life Ins. Co., 234 F.3d 1026, 1031 (8th Cir. 2000)). A procedural

irregularity only triggers de novo review when the administrator wholly fails “to act on an

appeal” and that failure “raises serious doubts about the result reached by the plan

administrator” in its initial denial. McIntyre v. Reliance Standard Life Ins. Co., 972 F.3d 955,

963-65 (8th Cir. 2020) (citation omitted). See also Neumann v. AT & T Commc’ns, Inc., 376

F.3d 773, 781 (8th Cir. 2004). (A less deferential standard is only warranted when a beneficiary

shows that the plan administrator, “in the exercise of its power, acted dishonestly, acted from an

improper motive, or failed to use judgment in reaching its decision.”); Buttram v. Cent. States,

Se. & Sw. Areas Health & Welfare Fund, 76 F.3d 896, 901 (8th Cir. 1996) (“[I]t is not the

existence of procedural irregularities per se that will cause a court to employ a heightened

standard of review when evaluating a plan administrator’s decision. Rather, those irregularities

must have some connection to the substantive decision reached, i.e., they must cause the actual

decision to be a breach of the plan trustee’s fiduciary obligations.”).

does not identify any relevant changes between the SPD he was initially sent and the current

SPD subsequently provided to him, or explain how this affected the substantive decision

reached. Menz, 520 F.3d at 869; Wade v. Aetna Life Ins. Co., 684 F.3d 1360 (8th Cir. 2012)

(abuse of discretion, rather than de novo standard of review, applied despite former employee’s

contention that the plan administrator failed to provide former employee’s attorney the

operative plan documents for over two years, and later introduced the correct documents to the

district court, where the alleged procedural irregularities had no connection to the substantive

decision reached).

As for Plaintiff’s contention that Sedgwick failed to “adequately and properly” deliver

its denial letter to him, the Court previously noted that Plaintiff’s allegations that a notice of

denial, dated “July 25, 2019,” was e-mailed to him the following day, “July 26, 2019,” but that

“he was not aware of it” because “it had been delivered to his Spam Email,” (Am. Compl. at ¶¶

11-15), appear to concede that a timely denial was made. (Doc. No. 29 at 4). The fact that

Sedgewick’s denial letter was routed to Plaintiff’s spam folder is not indicative of a “wholesale

failure to act” or raises “serious doubts” about Sedgewick’s claims determination. McIntyre,

972 F.3d at 965.

Under ERISA, adequate notice in writing must be provided to any participant whose

benefit claim has been denied. 29 U.S.C. § 1133(1). The purpose behind § 1133 is to ensure that

claimants receive adequate notice of denial of benefits and have a full and fair opportunity to

present their case to the plan administrator. Edens v. Cent. Benefits Nat. Life Ins. Co., 900 F.

Supp. 928, 932 (W.D. Tenn. 1995). Here, the purpose of the statute was satisfied. Plaintiff

clearly received adequate notice of the denial of benefits and pursued his appeal of Sedgwick’s

decision. Since Plaintiff has presented no evidence indicating that Sedgwick’s alleged violations

the standard of review from abuse of discretion to de novo. C.f. VanderKlok v. Provident Life

and Accident Ins. Co., Inc., 956 F.2d 610 (6th Cir. 1992), where the defendant insurer sent

plaintiff’s initial denial notice to an incorrect address, and the notice was never forwarded to the

plaintiff. Because the plaintiff had no notice that his claim was denied, the Sixth Circuit found

he had been deprived of the opportunity to present his claim during the administrative appeal,

and thus remanded the case to the district court for a de novo review of the record. Here, the

Court finds there are no procedural irregularities and, therefore, the abuse of discretion standard

applies.

Discussion

Sedgwick argues that based on the record before it, its determination that Plaintiff could

perform the “essential duties” of his job as a Systems Analyst for Charter was reasonable and

supported by substantial evidence. Sedgwick further argues its benefit determination was proper

even under de novo review. Based on its review of the record, the Court agrees. Sedgwick

properly considered all medical records, and other information submitted by Plaintiff and his

physicians. On appeal of its initial decision, Sedgwick consulted two neutral, independent

doctors – with the same specialties as Plaintiff’s treating physicians – to review the record and

make a recommendation and gave Plaintiff’s physicians an opportunity to respond. This

evidence substantially supports Sedgwick’s determination.

Plaintiff’s treatment notes indicated that his abdominal pain and diarrhea secondary to

IBS had improved with diet and medication. Blood tests and stool studies were unremarkable,

as were CT scans of the abdomen and pelvis, including the bowel, with no acute findings. A

stomach biopsy revealed mild chronic inflammation and reactive gastropathy with focal

erosion; a colon biopsy revealed no histopathologic abnormality and no evidence of

any type of gastroenterological impairment of disabling severity. Likewise, Plaintiff’s treatment

records did not document severe mental status abnormalities or referrals to a higher level of

psychiatric care and lacked clinical evidence supporting a diagnosis of post-traumatic stress

disorder.

Two independent physician advisors reviewed the full medical record and determined

that a disabling gastroenterological or psychiatric impairment was not supported from April 5,

2019 through Plaintiff’s return to work. As to the gastroenterological finding, Dr. Khokhar

pointed to treatment notes indicating that Plaintiff’s gastrointestinal issues had improved with

diet and medication and noted that single gastric erosion cannot cause functional impairment.

As to the psychiatric finding, Dr. Schroeder noted the absence of detailed clinical information

suggesting cognitive issues, “severe and widespread abnormalities,” or referral to a higher level

of care, as well as the lack of specific examples of psychiatric impairment on Plaintiff’s daily

life.

In opposition to Sedgwick’s motion, Plaintiff argues that Sedgwick interpreted the

relevant terms of the Plan inconsistently and contradicted the Plan’s clear language (Doc. No.

39 at 11) yet does not identify any inconsistency or facts in support of his contention. Plaintiff

further argues that Sedgwick used its own “hired gun” physicians and disregarded the opinions

of his two treating physicians. However, treating physician opinions are not accorded greater

weight than reviewing physician opinions in ERISA claims. When a claims administrator is

confronted with conflicting medical opinions, denial of benefits is not an abuse of discretion.

See Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003) (“[C]ourts have no

warrant to require administrators automatically to accord special weight to the opinions of a

claimant’s physician; nor may courts impose on plan administrators a discrete burden of

evaluation.”); see also Zaeske v. Liberty Life Assurance Co. of Bos., 901 F.3d 944, 950 (8th

Cir. 2018) (citations omitted) (“As a general rule, a plan administrator has discretion to choose

between two reliable but conflicting medical opinions … A plan administrator may even prefer

the opinion of its own consulting physician over that of an applicant’s treating physician.”);

Cooper v. Metro. Life Ins. Co., 862 F.3d 654, 662 (8th Cir. 2017) (same); Whitley v. Standard

Ins. Co., 815 F.3d 1134, 1142 (8th Cir. 2016) (holding that a plan administrator “was not

required to give special deference to the opinions of [claimant’s] treating physicians”) (citing

Black & Decker, 538 U.S. at 825); Anyanwu v. Ascension Health, No. 4:17-CV-02722-NCC,

2019 WL 2211057, at *17 (E.D. Mo. May 22, 2019).

Furthermore, both reviewing physicians attempted to contact Plaintiff’s treating

physicians, gastroenterologist Dr. Ismail and psychiatrist Dr. Rutledge, four times by sending

faxes and leaving voicemail messages, prior to rendering their opinions. (R-00015, R-00022).

The Court finds it was particularly appropriate for Sedgwick to rely on the independent

physician advisors considering the lack of participation by Plaintiff’s treating physicians in the

appeals process. See Cooper, 862 F.3d at 659 (taking note of treating physicians’ failure to

respond to independent reviewers in affirming denial of benefits).

Lastly, Sedgwick asserts it cannot be penalized for its response to Plaintiff’s request for

Plan documents because the requirement to provide plan documents applies only to plan

administrators, not claims administrators like Sedgwick. See Ibson v. United Healthcare Servs.,

Inc., 877 F.3d 384, 390 (8th Cir. 2017); Dunivin v. Life Ins. Co. of N. Am., No. 4:17CV1530

HEA, 2018 WL 1455861, at *2 (E.D. Mo. Mar. 23, 2018). Section 1132(c) authorizes the

district court to impose statutory penalties upon a plan administrator if the plan administrator

“fails or refuses to comply with a request for any information which such administrator is

required by this subchapter to furnish to a participant.” 29 U.S.C. § 1132(c)(1)(B). Plaintiff cites

no authority to the contrary. In any event, his timely administrative appeal and commencement

of this action indicate that no prejudice resulted from initially receiving an outdated SPD.

Conclusion

This Court’s duty is to determine whether Sedgwick’s decision was supported by

substantial evidence, not to weigh the evidence anew. See Green v. Union Sec. Ins. Co., 646

F.3d 1042, 1053 (8th Cir. 2011). Based on the record as a whole, the Court concludes that

substantial evidence supports Sedgwick’s decision to deny Plaintiff's claim for STD benefits

and that “‘a reasonable person could have reached a similar decision.” Id. at 1050. As a result,

Sedgwick did not abuse its discretion in denying Plaintiffs claim. Even under de novo review,

the Court upholds Sedgwick’s decision. The Court will, therefore, grant Sedgwick’s motion for

summary judgment on Plaintiff's ERISA claim.

Accordingly,

IT IS HEREBY ORDERED that Defendant Sedgwick Claims Management Services,

Inc.’s Motion for Summary Judgment [30] is GRANTED.

An appropriate Judgment will accompany this Memorandum and Order.

Dated this 9th day of November, 2021.

Rare

ITED STATES DISTRICT JUDGE

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