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Whitley v. Standard Insurance Co.

United States District Court, D. Minnesota

February 6, 2015


Decided: February 4, 2015.

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[Copyrighted Material Omitted]

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Sean T. Foss, Kennelly & O'Keeffe, Ltd., Counsel for Plaintiff.

Molly R. Hamilton and Terrance J. Wagener, Messerli & Kramer P.A., Counsel for Defendant Standard Insurance Co.

Kent D. Mattson and Samuel S. Rufer, Pemberton Law, Counsel for Defendant Lake Region Medical Group, P.A.

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Michael J. Davis, Chief United States District Judge.


This matter is before the Court on Defendant Standard Insurance Company's Motion for Summary Judgment [Docket No. 30], Defendant Lake Region Medical Group, P.A.'s Motion for Summary Judgment [Docket No. 42], and Plaintiff Gwendolyn Whitley's Motion for Summary Judgment [Docket No. 47]. Oral argument took place on Friday, November 7, 2014. For the reasons set forth below, the Court grants Lake Region Medical Group, P.A.'s motion and dismisses Count II of the Amended Complaint, denies Defendant Standard Insurance Company's motion, and grants Plaintiff Whitley's motion as to Count I of the Amended Complaint.

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A. Factual Background

1. Plaintiff's Employment and Disability Insurance Coverage

Plaintiff Gwendolyn Whitley was employed at Defendant Lake Region Medical Group, P.A. (" Lake Region" ) as an emergency room physician. (STND[1] 993, 1052.) She is Board Certified in family medicine and previously practiced family medicine. (Id. 995, 1020.)

Whitley's employment contract with Lake Region, dated October 20, 2008, stated that she was hired " as a physician practicing in the specialty of Emergency Department Medicine." (Id. 1175.) Whitley's employment contract also provided: " Physician shall be afforded disability insurance benefits pursuant to the Corporation's plans and policies maintained by the Corporation, in accordance with the eligibility provisions and other terms and conditions thereof." (Id. 1178.)

According to Whitley, when she decided to work for Lake Region, she asked about Lake Region's disability insurance plan for physicians. (Affidavit of Sean T. Foss (" Foss Aff." ), Ex. A, Deposition of Gwendolyn Whitley (" Whitley Dep." ) 90-91 [Docket No. 54].) She specifically asked John Peterson, Lake Region's chief executive officer, whether the disability insurance policy was an " own occupation" policy and would provide coverage to her if she were unable to work as an emergency medicine physician. (Id.; Foss Aff., Ex. B, Deposition of John Peterson (" Peterson Dep." ) 6-7.) Whitley already had an existing disability insurance policy that provided own occupation coverage to her as an emergency medicine physician, and she did not want to drop that coverage until she was sure that her new insurance through Lake Region would cover her own occupation. (Whitley Dep. 90-91.) However, Lake Region did not take any steps to ensure that the policy provided own occupation coverage to Whitley as an emergency medicine physician. (Peterson Dep. 35.)

In 2010, after Whitley received a memorandum from Lake Region discussing changes to disability coverage under her policy, she then contacted Lake Region's Human Resources Director, Mardelle Jacobson, and her supervisor to ask whether the changes affected her coverage. (Peterson Dep. 59; Foss Aff., Ex. C, Deposition of Mardelle Jacobson (" Jacobson Dep." ) 6; Whitley Dep. 58-59, 96-97.) She was particularly concerned about whether her own occupation would be an emergency room physician, because she was board certified in family medicine. (Whitley Dep. 96-97.) They both told her that her own occupation would be emergency room physician. (Id. 58-59, 96-97.) Whitley testified that no one at Lake Region ever indicated that she needed to direct her question to the insurer. (Id. 96.)

2. Applicable Disability Policy

On May 1, 2004, Defendant Standard Insurance Company (" Standard" ) issued Group Policy No. 642850 (the " Policy" or " Plan" ) to Lake Region. (STND 2, 14.) The Policy provides, in relevant part, that an employee is " Disabled" if she meets the Policy's " Own Occupation Definition Of Disability," defined as:

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A. Own Occupation Definition Of Disability
. . .
You are Disabled from your Own Occupation if, as a result of Physical Disease, Injury, Pregnancy or Mental Disorder, you are unable to perform with reasonable continuity one of the Material Duties of your Own Occupation.
Note: You are not Disabled merely because your right to perform your Own Occupation is restricted, including a restriction or loss of license.
During the Own Occupation Period you may work in another occupation while you meet the Own Occupation Definition Of Disability. However, you will no longer be Disabled when your Work Earnings from another occupation meet or exceed 80% of your Indexed Predisability Earnings. Your Work Earnings may be Deductible Income. See Return To Work Provisions and Deductible Income.
Own Occupation means any employment, business, trade, profession, calling or vocation that involves Material Duties of the same general character as the occupation you are regularly performing for your Employer when Disability begins. In determining your Own Occupation, we are not limited to looking at the way you perform your job for your Employer, but we may also look at the way the occupation is generally performed in the national economy. If your Own Occupation involves the rendering of professional services and you are required to have a professional or occupational license in order to work, your Own Occupation is as broad as the scope of your license.
However, if your Own Occupation is medical doctor, during the Benefit Waiting Period and the Own Occupation Period, we will consider your Own Occupation to be the one general or sub-specialty in which you are board certified to practice for which there is a specialty or subspecialty recognized by the American Board of Medical Specialties, provided you have earned at least 60% of your gross professional service fee income in your specialty or sub-specialty during the 24 months immediately before you become Disabled. If the sub-specialty in which you are practicing is not recognized by the American Board of Medical Specialties, you will be considered practicing in the general specialty category.
Material Duties means the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation that cannot be reasonably modified or omitted. In no event will we consider working an average of more than 40 hours per week to be a Material Duty.

( Id. 6-7.)

The Policy further provides:

A. Return To Work Responsibility.
During the Own Occupation Period no LTD Benefits will be paid for any period when you are able to work in your Own Occupation and able to earn at least 20% of your Indexed Predisability Earnings, but you elect not to work.

(Id. 24.)


C. Proof Of Loss.
Proof Of Loss means written proof that you are Disabled and entitled to LTD Benefits. Proof Of Loss must be provided at your expense.
For claims of Disability due to conditions other than Mental Disorders, we may require proof of physical impairment that results from anatomical or

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physiological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques.

(Id. 35.)

The Policy also addresses Standard's authority to make benefits decisions:

Except for those functions which the Group Policy specifically reserves to the Policyholder or Employer, we have full and exclusive authority to control and manage the Group Policy, to administer claims, and to interpret the Group Policy and resolve all questions arising in the administration, interpretation, and application of the Group Policy.

Our authority includes, but is not limited to:

1. The right to resolve all matters when a review has been requested;
2. The right to establish and enforce rules and procedures for the administration of the Group Policy and any claim under it;
3. The right to determine:
a. Eligibility for insurance;
b. Entitlement to benefits;
c. The amount of benefits payable; and
d. The sufficiency and the amount of information we may reasonably require to determine a., b., or c., above.
Subject to the review procedures of the Group Policy, any decision we make in the exercise of our authority is conclusive and binding.

(Id. 37.)

3. Plaintiff's Injury and Claim for Long-Term Disability Benefits

On February 20, 2011, Whitley was injured in a motor vehicle accident. (STND 93, 306.) A few weeks after the accident, Whitley attempted to return to work full-time at Lake Region. (Id. 736, 804-05.) She was unable to continue her schedule, however, because of fatigue, short-term memory loss, and an inability to properly perform the duties of an emergency room physician. (Id.)

On June 28, 2011, Whitley made a claim for long-term disability benefits under the Policy. (Id. 993-95.) In her claim, she noted that she was unable to perform her occupation due to post-concussive syndrome, a C5 disk rupture, headaches, back pain, and memory problems. (Id. 993.) She had attempted to return to work as an emergency room physician at Lake Region from March 16, 2011, through March 24, 2011, but that attempt was unsuccessful. (Id.)

Along with her claim, Whitley submitted an Attending Physician Statement from her primary care physician, Patricia Lindholm, M.D., who diagnosed Whitley with " cerebral concussion and postconcussive syndrome." (Id. 809.) Lindholm referred to an April 7, 2011, neuropsychological evaluation performed by Paula Bergloff, Ph.D., which concluded that Whitley was suffering from a " mild traumatic brain injury with persistent postconcussion symptoms." (Id. 738.) Bergloff noted that Whitley had problems with headaches, which became more intense from thinking, needed to sleep for long periods of time, and was unable to remember patients during her attempted return to work. (Id. 736.) Referencing this report, Lindholm recommended that Whitley stop working because of her failed attempt and not return until cleared to do so by Bergloff. (Id. 810) Dr. James Andrews, D.O., also concluded that Whitley should not be working because her postconcussive syndrome was " significantly affecting her memory and she has had this well documented through neuropsychology and speech pathology." (Id. 798.)

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In August 2011, Whitley submitted Attending Physician Statements from Bergloff and Tanya Harlow, M.D. Bergloff's statement provided a primary diagnosis of " post concussive syndrome" and a secondary diagnosis of " neck pain, headaches" and recommended that Whitley should not work due to " cognitive an[d] physical symptoms." (Id. 298-299.) She opined that, when Whitley was able to return to work, she would " need reduction in work hours." (Id.) Harlow identified Whitley's primary diagnosis as postconcussive syndrome with a secondary diagnosis of neck pain and noted that Whitley was unable to work due to " cognitive difficulties." (Id. 707.) Harlow opined that Whitley was " gradually improving," might be ready for a ...

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