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Buss v. United of Omaha Life Insurance Co.

United States District Court, D. Kansas

September 4, 2014

BRYAN BUSS, Plaintiff,
v.
UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, Chief District Judge.

This case stems from the denial of continuing long-term disability insurance benefits under the terms of a disability insurance policy. The court has before it two motions for summary judgment: one by defendant United of Omaha Life Insurance Company (Dkt. 39) and the other by plaintiff Bryan Buss (Dkt. 42), each filed on February 18, 2014. The court grants Buss's motion and denies United's motion. The court begins by deeming well-supported facts not properly controverted as undisputed under Federal Rule of Civil Procedure 56.1.

I. Undisputed Facts[1]

Plaintiff Bryan Buss is thirty-nine year old male who was employed as a Regional Marketing Manager for MedaSTAT USA, LLC, where he began working in November 2003. MedaSTAT is a healthcare information company that provides database and research services to manage the cost and quality of healthcare.

MedaSTAT's Disability Insurance Policies

MedaSTAT allows its employees to enroll in group short-term and long-term disability plans (collectively, "the Plan"). As an employee of MedaSTAT, Buss was enrolled in the Plan at all relevant times. The Plan was insured by group short-term and long-term disability insurance policies, both issued to MedaSTAT by defendant United of Omaha Life Insurance Company and both effective May 1, 2007. United is incorporated in the State of Nebraska and authorized to do business in Kansas.

The short-term policy allows benefits to be paid for a continuous period of disability of thirteen weeks, or until benefits become payable under the long-term disability plan, whichever occurs first. The short-term policy defines "disability" and "disabled" as follows:

Disability and Disabled means that because of an Injury or Sickness, a significant change in Your mental or physical functional capacity has occurred in which You are:
(a) prevented from performing at least one of the Material Duties of Your Regular Job on a part-time or full-time basis; and
(b) unable to generate Current Earnings which exceed 99% of Your Weekly Earnings due to that same Injury or Sickness.
Disability is determined relative to Your ability or inability to work. It is not determined by the availability of a suitable position with Your employer.

Dkt. 41-1, p. 95. Under a section titled "Authority to Interpret Policy, " the policy states:

By purchasing the policy, the Policyholder grants United of Omaha Life Insurance Company the discretion and the final authority to construe and interpret the policy. This means that United has the authority to decide all questions of eligibility and all questions regarding the amount and payment of any policy benefits within the terms of the policy as interpreted by United. In making any decision, United may rely on the accuracy and completeness of any information furnished by the Policyholder or an insured person. United's interpretation of the policy as to the amount of benefits and eligibility shall be binding and conclusive on all persons.
The Policyholder, as Plan sponsor, agrees that the Policyholder retains full responsibility for the legal and tax status of its benefits program and releases United from all responsibility for the reporting and the employment-based design of the program and from all other responsibilities not accepted in writing by an officer of United.

Id. at 7.

The long-term disability policy contains the same language regarding United's discretion. Id. at 291. It also provides that "[b]enefits will be paid during a period of Disability until the earliest of" several different events occurs, including "the day You are no longer Disabled, " "the day You fail to provide Us satisfactory proof of continuous Disability and/or any Current Earnings, " and "the day You are able to return to work on a part-time or full-time basis and do not do so." Id. at 277. The long-term policy defines "disability" and "disabled" as follows:

Disability and Disabled means that because of an Injury or Sickness, a significant change in Your mental or physical functional capacity has occurred in which You are:
(a) prevented from performing at least one of the Material Duties of Your Regular Occupation on a part-time or full-time basis; and
(b) unable to generate Current Earnings which exceed 99% of Your Basic Monthly Earnings due to that same Injury or Sickness.
After a Monthly Benefit has been paid for 2 years, Disability and Disabled mean You are unable to perform all of the Material Duties of any Gainful Occupation.
Disability is determined relative to Your ability or inability to work. It is not determined by the availability of a suitable position with Your employer.

Id. at 293-94. The policy defines "Gainful Occupation" as a job the claimant is reasonably fit to perform and "can be expected to provide [the claimant] with Current Earnings at least equal to 85% of Basic Monthly Earnings within 12 months of [claimant's] return to work." Id. at 294.

Buss's Medical Conditions

Buss's last day of work for MedaSTAT was October 30, 2007. That same day, Buss underwent surgery on his left ankle by Dr. Harry Visser. On February 18, 2008, Dr. Ravi Yadava examined Buss as a follow-up to his surgery, noting Buss "has had a problem with narcotic abuse and was referred to [the doctor] for pain control just before his surgery." Id. at 169-70. Dr. Yadava said Buss "has not been compliant with instruction given by this office and needs to improve his compliance if he wants to continue to be served by this clinic, " and "if he is more disciplined with his therapeutic program, he might not have the swelling in his ankle that requires injections and other techniques." Id. Dr. Yadava noted that "[f]urther care of [Mr. Buss's] knee will be based on results of his MRI. There are no other recommendations that I would have for him at this time. I am hopeful that he will be more compliant with instructions provided and enjoy a good result." Id.

Buss also sought treatment for knee pain. On April 16, 2008, Buss underwent arthroscopic surgery on his right knee. On July 13, 2008, Buss had a right knee partial arthroplasty. On June 24, 2009, Buss underwent a whole-body bone scan which found "moderate diffuse uptake in relation to knee joints, somewhat diffusely on the right and more in relation to the lateral compartment and patellofemoral compartment on the left. Mild to moderate diffuse uptake in relation to the left ankle joint." Id. at 914-15. On September 6, 2011, Buss underwent a CT scan of his left knee, which revealed that the "lateral meniscus appears diminutive which may be related to partial meniscectomy. Otherwise no meniscal tear is identified of the left knee." Id. at 472. The CT also revealed "[m]oderate to severe medial and moderate lateral compartment chondrosis/osteoarthritis." Id.

Buss also sought treatment for back pain. On April 6, 2009, he underwent an MRI on his spine which indicated

"mild annular disc bulge with a small focal right posterolateral disc protrusion and possible annular tear at L5-S1. In conjunction with mild prominence of the facet joints and ligamentum flavum and mild loss of the disc height, there is mild bilateral neural foraminal stenosis, right greater than left."

Id. at 891. On October 19, 2010, Buss underwent an MRI of his spine which found his disc height and desiccation "unchanged since previous exam, " as well as "[n]o bone marrow edema or abnormal marrow signal, " and found "the distal spinal cord and conus medullaris are normal and signal intensity." Id. at 690. The MRI also revealed "a disc bulge present with a superimposed right foraminal zone protrusion that exerts mass effect upon the S1 nerve root and the right L5 nerve root. There is a moderate right greater than left foraminal narrowing not significantly changed since the previous exam." Id. This lead the reviewing radiologist to conclude there was "interval development of a right foraminal zone protrusion at L5-S1 as described above with mass effect upon the LS and S1 nerve roots on the right." Id.

Buss sought treatment for his back, knee and ankle pain at Millennium Pain Management from Dr. Kevin Coleman and Susan Witlich, P.A. from March 12, 2011, through August 2012. Specifically, Buss received pain medications and epidural injections, reporting varying levels of pain in his back and knees and varying levels of success of pain management.

In October 2011, he sought treatment for his back, knee and ankle pain from Dr. Robert Hagan at Plastic & Hand Surgery, a Peripheral Nerve Institute. On October 31, 2011, Dr. Hagan stated that "based on [Buss's] symptoms, their distribution, and his examination, I do not find any significant entrapment neuropathy or nerve related neuromas." Id. at 417. Dr. Hagan explained, "I do not currently feel that I have any surgical recommendations for him regarding nerve decompression or denervation procedures, " but he believed Buss "might benefit significantly from biologic injections." Id. Although he had several prior surgeries, Buss had no surgical intervention between 2008 and 2012 to address his reports of back, knee and ankle pain. Id. at 384-87.

Buss's 2007 Claim for Short-Term Disability Benefits

On November 6, 2007, MedaSTAT submitted a claim on Buss's behalf for short-term disability benefits under the short-term disability policy, seeking benefits retroactively to October 30, 2007. Buss sought short-term disability benefits for his post-surgical recovery after his surgery to repair the tendons and fibular groove deepening on his left ankle. United granted Buss's claim for short-term disability benefits as of October 30, 2007. Buss sought, and United granted, an extension of these benefits through February 5, 2008. Buss received all benefits available under the terms of the short-term disability policy until the thirteen-week time period expired on February 5, 2008.

Buss's 2008Claim for Long-Term Disability Benefits

On February 28, 2008, shortly after Buss's eligibility for short-term disability benefits expired, MedaSTAT submitted a claim on his behalf for long-term disability benefits under the long-term disability policy. United categorized Buss's "Regular Occupation" as a "Light Duty" occupation. Plaintiff received long-term disability benefits under the long-term disability policy, retroactive from February 5, 2008 until February 5, 2010, because he was not able to perform "at least one of the Material Duties of [his] Regular Occupation." Id. at 293-95.

On or about December 16, 2009, consultant Rebecca Bober, Physical Therapist, conducted a Functional Capacity Examination ("FCE") on Buss. Bober concluded that Buss "gave consistent, but submaximal effort" throughout the examination "due to pain complaints and fear of increasing his back pain that he would not then be able to get back under control." Dkt. 41-2, p. 1. Bober noted that "[a]ll occasional lifting was self-limited by the client due to subjective reports of increased pain despite the absence of showing normal kinesiophysical signs or objective signs of difficulty during material handling tasks." Id. During the FCE, Buss reported to Bober that he could independently perform "activities of daily living (ADL's) including: dressing, grooming, bathing, and hygiene daily." Id. at 5. Bober evaluated Buss's "positional tolerance" in the FCE, noting that he

"sat for 45 minutes with only a few weight changes and stood up one time to retrieve some paperwork from a different chair, however he sat on his right buttocks and his right arm resting on the arm rest causing him to sit in right tilted position. After the 45 minutes, he said he could not sit any longer due to pain and laid down on the floor. Although client sat for 45 minutes which meets the requirements for constant, due to his poor sitting posture, the evaluator determined he met the occasional category only."

Id. at 11. Bober concluded that Buss could occasionally stand, walk, climb stairs, reach overhead, reach floor level, stoop and kneel or half kneel. She noted "an absence of showing normal kinesiophysical signs or objective signs of difficulty during material handling tasks." Id. at 1.

Bober noted that Buss's results indicated "submaximal effort" on several of the tasks. For example, Buss's hand strength tests gave inconsistent results, suggesting inconsistent or incomplete effort. However, Bober also stated that "Buss tested negative on 5 of 5 Waddell's Non-Organic Signs."[2] Bober concluded that Buss was "capable of functioning in the Sedentary Physical Demand Level over an eight hour work day, " based on Buss's ability to lift twenty pounds from floor to knuckle, lift ten pounds from knuckle to shoulder, lift ten pounds from floor to shoulder, and carry fifteen pounds for twenty-five feet, all on an occasional basis. United continued paying long-term disability benefits to Buss after his FCE.

After ordering a Transferable Skills Analysis (TSA) on Buss, United consulted Amanda J. Ruhland of Stricklett & Associates Inc. on February 1, 2010, to conduct a survey to assess the labor market in Buss's geographic area. Ruhland verified wages paid for positions identified in the TSA and verified Buss's ability to perform those positions with the work restrictions previously identified. United continued to pay Buss long-term disability benefits throughout 2010.

Buss's 2010 Claim for Social Security Disability Insurance Benefits

On about March 15, 2010, the Social Security Administration Office of Disability Adjudication and Review determined that Buss was disabled under the terms of the Social Security Disability Insurance Act as of August 26, 2009. The Social Security Administration awarded Buss benefits of $1, 535 per month beginning on February 1, 2010. The SSA considered Plaintiff's testimony, ...


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