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Foust v. Lincoln National Life Insurance Co.

United States District Court, D. Utah, Central Division

September 24, 2019

DON FOUST, Plaintiff,
v.
LINCOLN NATIONAL LIFE INSURANCE COMPANY, Defendant.

          ORDER AND MEMORANDUM OF DECISION

          TENA CAMPBELL U.S. District Court Judge.

         In 2014, Plaintiff Don Foust started experiencing serious back problems. His insurer, Defendant Lincoln National Life Insurance Company, began paying Mr. Foust long-term disability benefits (“LTD benefits”). Two years later, Lincoln stopped paying LTD benefits. Lincoln also denied Mr. Foust’s request to waive his life insurance premiums (a benefit known as “life waiver of premiums” or “LWOP”). After twice appealing those decisions internally, Mr. Foust filed this lawsuit to compel Lincoln to provide LWOP benefits and further LTD benefits.

         Mr. Foust and Lincoln each filed a cross-motion for summary judgment. (ECF No. 40, 41.) Because the court concludes Lincoln’s decision to deny LWOP and LTD benefits was arbitrary and capricious, Mr. Foust’s motion is granted, and Lincoln’s motion is denied.

         I. ADMINISTRATIVE RECORD

         A. Mr. Foust Stops Working and Undergoes Surgery

         Mr. Foust suffered a serious spinal injury in his youth and, as a result, had ongoing back problems as an adult. (Administrative Record (AR) 397, 1986, 1989.) Beginning in June 2014, his condition worsened. After recording that Mr. Foust was experiencing chronic pain and weakness, Dr. Arlan Henrie diagnosed Mr. Foust with “severe stenosis and myelomalacia.” (AR 1497, 1502.) On June 18, Dr. Angelo Pugliano, Mr. Foust’s primary physician, recorded that Mr. Foust was in significant pain. (AR 1503-04.) But on July 10, Mr. Foust obtained a neurosurgical review from Dr. Andrew Dailey, who concluded the problem was not yet severe enough to require surgery. (AR 1511.)

         Mr. Foust, an engineer for DriverTech, Inc., stopped working on August 12, 2014. (AR 095.)

         On August 29, Dr. Pugliano recorded that Mr. Foust was experiencing progressively longer and more severe headaches; that his hands were numb; and that vertigo was limiting his ability to walk. (AR 1513-14.) Dr. Pugliano reported this information to Lincoln in an Attending Physician Statement. When asked, “Date you believe patient was unable to work?” Dr. Pugliano wrote August 12, 2014. When asked “When do you think your patient will be able to return to work?” Dr. Pugliano wrote that Mr. Foust would “never” return to his previous job, and that it was “unknown” whether he would ever be able to work at any other job. (AR 1279.)

         On September 12, Lincoln approved Mr. Foust’s request for short-term disability benefits. (AR 1279.) On November 17, Lincoln informed Mr. Foust that, effective November 14, 2014, his short-term benefits would transition to LTD benefits. (AR 052.)

         In September, [1] Dr. Dailey, Mr. Foust’s surgeon, completed a disability form for Lincoln that included contradictory statements. Dr. Dailey indicated on one page that Mr. Foust was fit for “only sedentary work.” But on the next page, Dr. Dailey indicated that Mr. Foust was incapable of even “minimum sedentary activity.” (AR 1296.) On March 12, 2015, Lincoln discovered this apparent discrepancy and noted that Dr. Dailey needed to be contacted for clarification. But it does not appear any contact occurred at that time. (AR 1305.) In May, Lincoln asked a nurse, Fil Castillo, to review the file. He tried to call Dr. Dailey on May 11, May 15, and May 18, to discuss the issue, but did not reach him. (AR 1310.)

         On April 1, the Social Security Administration (SSA) told Mr. Foust that he had been awarded Social Security Disability Income (SSDI) effective January 2015. (AR 535.) The SSA also concluded that Mr. Foust had become disabled in July 2014. (AR 535.)

         On April 23, Mr. Foust underwent surgery to try to repair his back. (AR 1038.) At two follow-up visits on May 20 and July 28, Dr. Dailey indicated the surgery had led to significant improvements for Mr. Foust. (AR 1046, 1048.)

         B. Lincoln Denies LWOP Benefits and Mr. Foust Appeals

         On June 9, 2015, Lincoln told Mr. Foust that he was ineligible for LWOP benefits because he could have worked part-time in a sedentary job in the six months after he left his job (meaning between August 12, 2014, and February 12, 2015). (AR 1925-28.)

         On November 4, Mr. Foust filed an appeal of the denial of LWOP benefits. (AR 1471.)

         Lincoln then retained Dr. Jacqueline Hess to review Mr. Foust’s file. Dr. Hess concluded that from August 12, 2014, to September 24, 2014, Mr. Foust could have worked at a sedentary level. She concluded that from September 24, 2014, to October 4, 2015, Mr. Foust was unable to function in any capacity. And she concluded that from October 4, 2015 onward, Mr. Foust could again function at a sedentary level. (AR 920.)

         Dr. Hess also called Dr. Dailey to discuss Mr. Foust’s status and recorded that Dr. Dailey “agreed that the claimant was capable of sedentary work activities as of 10/4/15.” (AR 930.) Dr. Dailey confirmed by letter that this was an accurate summary of their conversation. (AR 931.)

         On December 21, 2015, Lincoln upheld its denial of the LWOP benefits. (AR 381-85.)

         C. Lincoln Stops Providing LTD Benefits

         On January 11, 2016, Nurse Jennifer Scarborough reviewed Mr. Foust’s records for Lincoln. She wrote, “I am in agreement with [Dr. Dailey] that the claimant would be limited from performing any greater than sedentary level activities.” (AR 037.) On March 18, Ms. Brandy Thomas, M.A., C.R.C., conducted a transferable skills assessment of Mr. Foust on Lincoln’s behalf. She concluded Mr. Foust was “able to function in a sedentary capacity, with functional limitations include no lifting, carrying, pulling or pushing over 10 pounds. Dr. Jacqueline Hess does not indicate any additional restrictions or limitations.” (AR 906.) Based on Mr. Foust’s educational background and training, Ms. Thomas identified three potential sedentary jobs for Mr. Foust: project director, specification writer, or consultant. (AR 906.)

         On April 6, Lincoln wrote Mr. Foust and informed him that they had preliminarily concluded that he was capable of sedentary work, so they would be ending his LTD benefits. Lincoln gave Mr. Foust 45 days to provide medical records that challenged this determination. On June 2, having received no additional records, Lincoln informed Mr. Foust that his LTD benefits would be discontinued beginning November 11, 2016. (AR 516-17.)

         D. Mr. Foust’s Condition Worsens

         Throughout the first half of 2016, Mr. Foust repeatedly met with Dr. Rajiv Shah, who treated him with steroid injections, lumbar medial branch blocks, and lumbar radiofrequency rhizotomies. In each instance, Dr. Shah indicated that the procedures were necessary because Mr. Foust was “experiencing a significant flare-up of [his] baseline pain which is not controlled with the current regimen or treatment plan.” (AR 0447-49, 457, 474, 489, 493-96.)

On July 20, 2016, Dr. Dailey completed a new assessment of Mr. Foust. He wrote:
[Mr. Foust] continues to have difficulty with right arm symptoms. . . . On his myelopathy testing there is worsening of his times on the pegboard. . . . His 10-meter walk has increased in time too, and his grip strength is tremendously different. . . . At this stage, I think it would be very hard for [Mr. Foust] to work given his weakness that is progressing.

(AR 390.)

         On August 6, 2016, Ms. Dina Galli, M.Ed., L.V.R.C., C.R.C., C.C.M., conducted a vocational examination with Mr. Foust. In her report, Ms. Galli wrote:

With respect to his cervical myelopathy, both Dr. Hess and Dr. Dailey indicate Mr. Foust is capable of Sedentary exertion as of 12/2015. From a vocational stand point, that is not the same as a finding of being capable of sustained Sedentary employment. . . . [They did not] address non-exertional aspects of Sedentary work (reaching, handling, fingering, sustained sitting, memory, concentration, vision, persistence, pace, attendance, etc.). . . . My review of the record is not consistent with Mr. Foust having reached a point of medical stability or functional improvement at any point since his leaving work in 2014 sufficient to allow for reentrance into the work force at any exertional level.

(AR 400.) In particular, Ms. Galli was concerned Mr. Foust would not be able to obtain a job given his difficulty typing or engaging in other tasks requiring fine motor skills. (See AR 401 (“Given his dominant arm/hand complaints diagnosed as CRPS by Dr. Hutchinson 12/07/2015, as well as the pegboard and grip testing performed by Dr. Daily (sic) on 07/20/16 . . . it is my opinion that the occupational base available to Mr. Foust has been substantially reduced in relation to manipulative limitations alone.”).)

         Ms. Galli also warned that Mr. Foust would not be able to attend work on a regular basis, and that when he did attend, he would be unfocused:

Mr. Foust is reporting multiple days a week when his headaches and other symptoms are so severe that he is doing nothing other than eating and toileting. Dr. Daily (sic) has specifically opined that Mr. Foust would miss work three times a week.[2] . . . An absentee rate of multiple days weekly (or even monthly) would clearly fall outside of even the most generous of employer paid or unpaid sick leave policies.
Other basic work activities include the ability to concentrate and focus sufficiently to perform the essential elements of the work, to work at a consistent pace, [to] get to and stay at the work site for prescribed periods, to achieve expected productivity and accuracy standards, and to interact appropriately with supervisors and peers. Dr. Daily (sic) addresses these non-exertional limitations in his “Assessment of Restrictions” report noting deficits in concentration, need for additional rest period, need to lie down during the workday, etc. . . .

(AR 401.) Based on all these issues, Ms. Galli concluded “that Mr. Foust has been and continues to be incapable of gainful employment of any kind.” (AR 402.)

         On August 16, 2016, Dr. Dailey completed an Assessment of Restrictions for Purposes of Determining Disability. It states that in a full-time job, Mr. Foust would be able to sit or stand for only 15-20 minutes at a time, and that Mr. Foust could “occasionally” lift 1-5 pounds, “infrequently” lift 5-10 pounds, and “never” lift anything greater. (AR 392.) Dr. Dailey reported that, in a typical workday, Mr. Foust would require bedrest twice a day for 30 to 60 minutes, and that he would need to take a one-hour break for every two-to-three hours of work. Dr. Dailey warned that Mr. Foust would be expected to have “lapses in concentration or memory . . . for several hours per day” while at work, and that Mr. Foust would “constantly” struggle with fine manipulation, typing, writing, and grasping small objects. Finally, when asked “Please estimate, to the best of your ability and expertise, how many absences could be reasonably medically expected in any week, ” Dr. Dailey wrote “3x/week if he is lucky.” (AR 393-94.)

         E. Mr. Foust Appeals the LTD Benefits Denial for the First Time, and Appeals ...


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