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Sadler v. United of Omaha Life Insurance Co.

United States District Court, D. Utah, Central Division

October 8, 2018

JON E. SADLER, Plaintiff,


          Honorable Dustin B. Pead United States District Court Magistrate Judge

          This matter comes before the court on Plaintiff Jon E. Sadler (“Mr. Sadler”) and Defendant United of Omaha Life Insurance Co.'s (“United of Omaha”) cross motions for summary judgment.[1] The parties in this case consented to United States Magistrate Judge Dustin B. Pead conducting all proceedings, including entry of final judgment.[2] The court, having carefully considered the parties' submissions, relevant legal authorities and oral argument of counsel, concludes as follows and grants United of Omaha's motion for summary judgment and denies Mr. Saddler's cross motion for summary judgment.


         1. As part of his employment as a senior production planner with Moxtek Inc., Mr. Sadler participated in an employee welfare benefit plan (the “Plan”) that provided eligible employees with coverage under both short-term disability (“STD”) and long-term disability (“LTD”) insurance policies issued by United of Omaha.[4]

         2. The LTD policy grants United of Omaha authority to interpret their language and states:

By purchasing the Policy, the Policyholder grants Us the discretion And the final authority to construe and interpret the Policy.[5]

         3. The LTD policy also grants United of Omaha the authority to make benefits decisions, stating:

Benefits under the Policy will be paid only if We decide, in Our discretion, that a person is entitled to them.[6]

         Mr. Sadler's Disability Claim

          4. Mr. Sadler submitted a claim for STD benefits on October 22, 2015.[7] In his claim Plaintiff indicated that he suffered from mononucleosis, beginning in September 2015, and his last day worked was September 30, 2015.[8]

         5. Mr. Sadler's claim also included an attending physician statement (“APS”) from Dr. Karyn Springer (“Dr. Springer”). Dr. Springer explained that “fatigue & fevers limit [Mr. Sadler's] ability to work” and listed his functional restrictions as “relative rest, [and] supportive care.”[9]

         6. Dr. Springer further indicated that Mr. Sadler should be able to work full-time in 3-6 months.[10]

         7. United of Omaha approved and paid Mr. Sadler's STD claim under the Policy for the maximum benefit duration of 11 weeks, through December 31, 2015.[11]

         8. Thereafter, the claim was reviewed under the LTD Policy.[12]

         9. Mr. Sadler completed a Supplementary Report of Disability claiming total disability. He reported suffering from a painful foot and indicated that his fatigue had increased.[13]

         10. In an APS dated February 19, 2016, Dr. Springer provided diagnoses of infectious mononucleosis, diabetes, chest pain, and left shoulder bursitis. The APS also offered the following restrictions for Mr. Sadler: (1) sit up to five hours; (2) stand up to two hours; and (3) walk up to two hours, in each eight-hour work day.[14]

         11. United of Omaha medical consultant, Nurse Denise Theisen (“Nurse Theisen”), summarized Mr. Sadler's medical records. Based on her review, Nurse Theisen provided opinions on Plaintiff's various medical conditions.[15]

         12. On March 22, 2016, United of Omaha a letter informing Dr. Spring that it did not have medical findings or documentation of consistent treatment to support Mr. Sadler's claim for ongoing benefits. United of Omaha asked Dr. Springer to state whether she agreed with the assessment.[16]

         13. In her April 1, 2016, response, Dr. Springer stated that she considered Mr. Sadler disabled. She explained that Plaintiff suffered from chronic fatigue, related to his medication side effects, and mononucleosis. Dr. Springer noted that tests for the EBV early antigen were positive, and in order to recover from his various surgeries, stroke, and chronic fatigue, Mr. Sadler was unable to work for any extended period of time.[17]

         14. Nurse Theisen analyzed the additional information provided. While the medical documentation showed a history of various medical conditions, Nurse Theisen concluded that Mr. Spring had no complications or obvious physical functional impairments related to the medical conditions and his treatment was conservative.[18]

         15. As a result, United of Omaha determined there was no evidence of any significant physical, mental, or cognitive impairment that would preclude Mr. Sadler from his previous work demands. United of Omaha recognized that Mr. Sadler had been seen by multiple providers but found his treatment to be conservative and controlled with medications. Defendant failed to find anything in the record that prevented Mr. Sadler from returning to work in his regular occupation on a full-time basis, and his surgeon had cleared his return to work as of December 2015.[19]

         16. Based on its review of the claim information, medical records, correspondence, and analysis provided by its medical reviewer, United of Omaha approved Mr. Sadler's LTD benefits under the Policy from January 1, 2016 to April 14, 2016. Defendant, however, denied benefits beyond the April 14, 2016 date.[20]

         Mr. Sadler's Appeal

         16. Mr. Sadler appealed United of Omaha's benefit termination on September 29, 2016.[21]

         17. As part of its review on appeal, United of Omaha continued gathering medical records from Mr. Sadler's physicians, including an updated physical assessment and mental capacity assessment from Dr. Springer.[22]

         18. Moxtek also submitted a letter in support of the appeal stating Plaintiff suffered serious health conditions for the previous eight years.[23]

         19. An Occupational Analysis was conducted and found that the material duties of Mr. Sadler's occupation primarily involved scheduling and coordinating the flow of work within or between departments such that the physical demand characteristics were generally at the sedentary level.[24]

         20. United of Omaha also requested an independent medical review by Kent Crossley, M.D. (“Dr. Crossley”).[25]

         21. As part of his review, Dr. Crossley analyzed Plaintiff's medical records. Dr. Crossley opined that Mr. Sadler's medical problems were well managed and would not interfere with his ability to function in the workplace.[26] For the referenced period of time, Dr. Crossley did not find any evidence of an impairment that would prevent Mr. Sadler from performing his occupation.[27]

         22. After analyzing all the medical records, occupational requirements, claim and appeals information and multiple medical consultations, United of Omaha informed Mr. Sadler that the prior denial of his claim for benefits beyond April 14, 2016 was appropriate.[28]

         23. In doing so, United of Omaha provided a list of documents and reports that were reviewed as part of his appeal. This included: 1) the LTD application; (2) attending physician statements; (3) physical assessment form dated 10/28/16; (4) mental capacity assessment dated 11/2/2016; (5) appeal letter; (6) medical records from IHC; (7) job description; (8) medical records from Dr. Wilkinson; (9) medical records from Dr. Baker; (10) prescription history; (11) medical records from Dr. Bunch; (12) a letter from Sadler's employer; (13) request for reasonable accommodation form; (14) a return to work form dated 2/24/15; (15) Lincoln Financial Group disability forms; (16) medical records from S. Clayson, NP, neurology dated 12/16/15; (17) medical records from M. Jensen, PA-C, pain medicine dated 12/2/14-7/6/16; (18) medical records from S. Schauss, PA-C, for sleep; (19) a vocational consultant review; (20) and an independent physician consultant review by Dr. Crossley, dated January 3, 2017.[29]

         24. United of Omaha acknowledged that Mr. Sadler was assessed with several chronic conditions, but determined that the clinical findings did not support any conditions that would result in functional impairment or work limitations that precluded Mr. Sadler from performing the material duties of his regular occupation beyond April 14, 2016.[30]

         25. Mr. Sadler commenced this lawsuit on August 30, 2017.[31]

         26. The parties agree that the Plan is “interpreted under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).[32]



         Under ERISA, summary judgment can be “a vehicle for deciding the case [where] the factual determination of eligibility for benefits is decided solely on the administrative record, and the non-moving party is not entitled to the usual inferences in its favor.”[33] Generally, the applicable standard of review is de novo, “unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or construe the terms of the plan.”[34] In circumstances where the plan grants discretionary authority to the administrator, then the arbitrary and capricious standard of review applies to the administrator's actions.[35]

         Here, the United of Omaha Policy clearly states that benefits “will be paid only if We decide, in Our discretion, that a person is entitled to them.”[36] This language vests the plan administrator with the discretionary authority to determine benefit eligibility and therefore the arbitrary and capricious standard of review applies.[37]

         Under an arbitrary and capricious review, the court is not tasked with “determining whether [the claimant] was, in the district court's view, entitled to . . . benefits.”[38] Rather, the court must determine “whether the administrator's actions were arbitrary and capricious.”[39] A plan administrator's interpretation is not arbitrary and capricious if it is reasonable and based on substantial evidence in the administrative record.[40]


         A. United of Omaha Has an Inherent Conflict as Both ...

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