Crist v. Liberty Life Assur.Co. of Boston, 2006 U.S.Dist.LEXIS 26326 (S.D. Ohio 5/4/2006)(Issue: Fibromyalgia, Functional Capacity Evaluations, Surveillance, Social Security).  After paying the plaintiff for two years based on fibromyalgia, Liberty terminated her payments under the any occupation definition of disability.  Despite applying an arbitrary and capricious standard of review, the court ruled in Crist’s favor.

The court identified a number of issues in the overly long opinion.  First, the court was troubled by Liberty’s “predetermination” of the claim.  Documents in the claim file showed that Liberty decided before investigating ongoing disability that Crist would not qualify for benefits beyond the initial two year period.  Citing Hawkins v. First Union Corp. Long-Term Disability Plan, 326 F.3d 914 (7th Cir. 2003), the court found the nature of fibromyalgia is known in some cases to preclude all work.  Hence, the court found:

Due to the nature of fibromyalgia, it was presumptuous of Liberty to conclude that Crist would be able to perform certain occupations and would not be entitled to long-term disability benefits under the "any occupation" definition without further examination, including the FCE which was later conducted. This presumption is an indication that Liberty's decision-making process regarding benefits under the "any occupation" definition was not rational.

*45-*46.  The court was equally troubled by the insurer’s insistence on “objective” medical evidence when the policy contained no requirement of such proof.  The court also made it clear it was unimpressed by the surveillance Liberty amassed.  Despite compiling 19 days of surveillance over an eleven month period, the court pointed out that the claimant was only affirmatively seen six times, and that there were substantial flaws in the surveillance, raising doubts as to whether Crist was the party seen in the video on some occasions.  Thus, since Liberty’s consultants made medical judgments based on what was depicted in the videos, the court was critical of Liberty’s conclusions.

The court’s litany went on to complain about Liberty’s departure from its own management plan regarding ongoing claim management, the insurer’s disregard of the responses from the treating doctors to the reports from the consultants, and evidence that Crist’s condition was worsening as shown in sleep studies.  What really disturbed the court, though, was Liberty’s disregard of a key provision in its disability definition.  The any occupation definition allowed for benefits to continue if the insured "is unable to perform, with reasonable continuity, all of the material and substantial duties of his own or any other occupation for which he is or becomes reasonably fitted by training, education, experience, age, and physical and mental capacity." (Emphasis added in court opinion.).  The court found that Liberty failed to show that Crist had the capability of working with reasonable continuity – neither the FCE or a transferable skills analysis provided evidence demonstrating that Crist could maintain continuous employment.  The court therefore found the following argument persuasive:

Crist now argues that Liberty knew that it is not the pain measured during the actual participation in a functional capacity evaluation that is most relevant. Instead, it is the effect upon the person in the hours and days that follow physical exertion that is most relevant, particularly where, as with Crist, the disability is characterized by chronic pain and fatigue. This is why, according to Crist, that Liberty commissioned the surveillance of Crist the day before and the two days of the FCE, surveillance that showed inactivity except for traveling to and from the FCE. This argument has merit, particularly since the plan requires that Crist be unable to perform, with reasonable continuity, all of the material and substantial duties of her own or any other occupation. *67.

In addition, the court found that because the FCE, based on the Healthsouth protocol, lasted only three and one half hours over a two day period, the exam “does not reflect Crist’s disability that is characterized by chronic pain and fatigue.” *68.  Likewise, the transferable skills analysis failed to consider that due to unpredictable flare-ups of fibromyalgia, Crist would need to be able to work at home as needed.  Hence, because the jobs identified by the TSA required full-time work on a regular basis, Crist could not meet the “reasonable continuity” requirement of the policy.

The court also found the IME Liberty obtained was vulnerable to attack because while the examiner found no “objective evidence of musculoskeletal pathology,” he did not perform a trigger point test for fibromyalgia; and his opinion was influenced by the defective surveillance.

Thus, the court summarized its findings by concluding that Liberty’s decision “was based upon unreliable and incomplete evidence” (*77) which included flawed surveillance that showed someone other than the claimant jogging and because the initial reviewing doctor was only provided with selected medical records.  The FCE was found flawed because “Performing for two hours one day and one and one half hours the next day is not performing with reasonable continuity, particularly the reasonable continuity that an employer would expect.” *78.  The court also commented,

Liberty says Crist's argument that the effect on the person in the hours and days that follow physical exertion is most relevant is "Hogwash." Perhaps what is really "Hogwash" is a two-day FCE that turns out to be a total of three and one half hours and surveillance alleged to be on the two days of the FCE and the day after that is really conducted on the day before and the two days of the FCE with no surveillance on the day after. *78.

The court’s comment about the Social Security determination is also instructive.  The court explained:

While the Social Security determination is not binding, it is also not meaningless, particularly where the definition of disability used by the Social Security Administration is nearly the same as that used by the Policy and where Liberty required Crist to apply for Social Security disability benefits and even asked for a partial return of prior payments that it had made to Crist when she received the Social Security benefits. Since the Social Security determination is not meaningless, it is medical evidence that should have been addressed by Liberty. *81. 

After finding Liberty’s determination was not rational and failed to apply a “deliberate principled reasoning process,” the court turned to the appropriate remedy.  Finding that the evidence supported Crist’s claim, the court ordered the payment of benefits plus interest from the date the benefit payments terminated until the date Crist is no longer disabled under the terms of the policy. 

Discussion:      This opinion provides a number of useful lessons because it exposes the weaknesses inherent in three tools that are frequently used by insurers as a means of limiting claims exposure: functional capacity evaluations, surveillance, and independent medical evaluations.  Kudos are due to the judge in this case, as well as to plaintiff’s able counsel who successfully pointed out to the court the flaws in each piece of evidence Liberty relied on – both the FCE and surveillance were deficient because they failed to show the claimant’s ability to sustain employment on a regular and continuous basis.  The IME was debunked because it was an incomplete exam and was itself based on flawed evidence.  Accordingly, the court’s judgment in this case, unlike Liberty’s denial of benefits, was based on a deliberate principled reasoning process.