United States District Court, D. Massachusetts
AMENDED MEMORANDUM OF DECISION AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT 
Judith Gail Dein United States Magistrate Judge
The plaintiff, Bruce Tracia (“Tracia”), was employed as a business account executive at Comcast Cable Communication Management, LLC (“Comcast”). On May 10, 2011, he stopped working due to ankle related pain, for which he subsequently underwent surgery. Tracia was later diagnosed with chronic regional pain syndrome and degenerative disc disease, among other medical conditions. On December 23, 2013, Tracia brought this action, pursuant to the Employee Retirement Income Security Act, 29 U.S.C. §§ 1132 et seq. (“ERISA”), to recover long-term disability (“LTD”) benefits under the terms of an LTD benefits policy that was issued and administered by the defendant, Liberty Life Assurance Company of Boston (“Liberty”). Under the relevant provisions of the policy, an employee is considered disabled if, for the first 12 months, the employee is “unable to perform the Material and Substantial Duties of his Own Occupation” as a result of injury or sickness. Thereafter, an employee is only considered disabled if he “is unable to perform, with reasonable continuity, the Material and Substantial Duties of Any Occupation.” Although Liberty determined that Tracia was disabled and entitled to LTD benefits for the first 12 months, it concluded after the initial period that he no longer qualified as disabled under the terms of the policy. Accordingly, Liberty terminated his LTD benefits after November 14, 2012.
In connection with its decision to terminate Tracia’s benefits, Liberty relied primarily on the opinions of third-party physicians who reviewed the medical records and other information contained in the plaintiff’s claim file, and determined that there was no objective evidence showing that the plaintiff’s impairments and associated pain precluded his ability to perform full-time sedentary work. Tracia asserts that Liberty acted improperly by requiring objective evidence to support his claim of disabling pain, and that its reliance on the opinions of the reviewing physicians was arbitrary and capricious. In addition, Tracia asserts that Liberty’s decision to terminate his benefits was influenced by a conflict of interest arising from its dual role in making benefits determinations and paying claims. By his complaint, Tracia is seeking reinstatement of his LTD benefits retroactive to the date of termination (Count I), as well as an award of attorney’s fees, costs and interest under ERISA (Count II).
The matter is presently before the court on the “Plaintiff’s Motion for Judgment on All Counts in His Complaint” (Docket No. 28), and on the “Defendants’ Motion for Summary Judgment” (Docket No. 29). By their motions, each of the parties is seeking summary judgment in its favor on both Counts of Tracia’s complaint. At issue is whether Liberty’s decision to terminate Tracia’s LTD benefits on the grounds that Tracia could perform sedentary work and therefore was not disabled was reasonable and supported by substantial evidence. As detailed below, this court finds that Liberty deprived Tracia of a full and fair review of his claim and that its decision to deny his request for benefits was unreasonable, but that the matter must be remanded to the defendant for further administrative proceedings. Therefore, and for all the reasons described herein, the plaintiff’s motion for summary judgment is ALLOWED IN PART and DENIED IN PART, and the defendants’ cross-motion for summary judgment is DENIED.
II. STATEMENT OF FACTS
The Long-Term Disability Policy
Tracia began working as a line technician at Comcast in 1993. (PF ¶ 15; DR ¶ 15). He held various positions during the course of his employment, and was working as a Business Account Executive in sales at the time of the events giving rise to this action. (PF ¶ 15; DF ¶ 9). As part of his employment with Comcast, Tracia was eligible for benefits under the terms of a Group Disability Income Policy (“Policy”). (PF ¶ 16; DR ¶ 16; AR 000001). There is no dispute that the Policy constitutes an employee welfare benefit plan, which is governed by ERISA. (DF ¶ 2).
Liberty is both the administrator of the Policy and the payer of any benefits awarded thereunder. (See DF ¶ 3; PF ¶ 6; DR ¶ 6). In order to qualify for LTD benefits, eligible employees are required to provide Liberty with “Proof of continued . . . Disability.” (DF ¶ 4). Under the applicable provisions of the Policy, an employee is deemed to be “Disabled” or under a “Disability” if, “during the Elimination Period and the next 12 months[, ]” the employee, “as a result of Injury or Sickness, is unable to perform the Material and Substantial Duties of his Own Occupation[.]” (DF ¶ 6 (emphasis added)). After that time, an employee is considered to be “Disabled” or under a “Disability” only if he “is unable to perform, with reasonable continuity, the Material and Substantial Duties of Any Occupation.” (Id. (emphasis added)). The Policy defines the term “Own Occupation” to mean the occupation that the employee “was performing when his Disability . . . began.” (AR 000012). The term “Any Occupation” is defined as:
any gainful occupation that the [employee] is or becomes reasonably fitted by training, education, experience, age, physical and mental capacity. Gainful occupation means an occupation in which earnings are: equal to or greater than 80% of the Employee’s pre-disability income; less than 80% of the Employee’s average pre-disability income, but higher than the average earnings for the geographic area in which the Employee resides; or equal to or greater than the gross benefit.
(DF ¶ 8). The fundamental question in this case is whether Liberty abused its discretion when it determined, after paying Tracia LTD benefits for an initial 12 month period, that the plaintiff had the ability to perform the material and substantial duties of “Any Occupation, ” and no longer qualified as Disabled within the meaning of the Policy.
Approval of Tracia’s Claim for Short-Term Disability Benefits
The circumstances leading up to the present dispute began in early May 2011. At that time, Tracia sought medical treatment due to increasing pain, burning and swelling in his left ankle. (PF ¶ 20). The plaintiff’s treating podiatrist, Dr. Drew Taft, diagnosed Tracia with tarsal tunnel syndrome, and on May 10, 2011, Tracia stopped working and submitted a claim for short term disability to Liberty. (See DF ¶¶ 9-11). On May 13, 2011, Liberty notified Tracia that it had approved his claim for short term benefits. (Id. ¶ 11). Accordingly, Tracia began receiving benefits on May 17, 2011. (AR 002479). It is undisputed that Tracia never returned to Comcast, and has remained out of work since May 10, 2011.
The record establishes that the plaintiff underwent tarsal tunnel release surgery on June 3, 2011. (PF ¶ 21). However, the surgery failed to relieve his symptoms. Instead, following the surgery, Tracia developed increased pain on the upper part of his foot, and suffered a loss of sensation in his toes and heel. (AR 000077). An MRI performed on July 25, 2011 also revealed mild-to-moderate spondylosis and post-surgical changes in Tracia’s lumbar spine, as well as a mild annular disc bulge at L4-5. (PF ¶ 22). In late July 2011, Dr. Taft referred Tracia to German Levin, M.D. at New England Spine Care Associates for treatment of pain in his left distal lower extremity, low back and left leg. (DF ¶ 20; AR 000642). Liberty continued to approve Tracia’s claim for short term disability benefits during that time period. (DF ¶ 22).
Dr. Levin began treating the plaintiff on or about August 2, 2011. (See AR 000642). In his progress notes, Dr. Levin noted that the plaintiff had a medical history of, among other things, back pain, rheumatoid arthritis and deep vein thrombosis (“DVT”), as well as a surgical history of, among other things, discectomy, and hernia repair. (Id.). Based on his own examinations, Dr. Levin determined that Tracia’s lower back pain was secondary to his mild lumbar spondylosis. (See AR 000638, 000643). He also diagnosed Tracia with “[l]eft lower extremity chronic regional pain syndrome” (“CRPS”). (AR 000640). CRPS is “a chronic neurological syndrome characterized by severe pain.” Holmstrom v. Metro. Life Ins. Co., 615 F.3d 758, 762 (7th Cir. 2010). Dr. Levin attempted to treat the plaintiff’s pain with lumbar sympathetic blocks, medication and a referral to physical therapy. (See DF ¶¶ 21, 25; AR 000638-40). Throughout the course of that treatment, Liberty continued to monitor the plaintiff’s medical condition and to approve his claim for short term disability benefits. (DF ¶¶ 21-23, 25).
Dr. Levin’s prescribed treatment proved ineffective at relieving Tracia’s pain. (AR 000638). Accordingly, the plaintiff was referred to James P. Rathmell, M.D. at the Massachusetts General Hospital (“MGH”) Center for Pain Management for possible implantation of a spinal cord stimulator (“SCS”). (See DF ¶ 30; PF ¶¶ 27-28). On October 26, 2011, Tracia informed Liberty that he would be receiving an SCS. (DF ¶ 33). Liberty agreed that it would continue to pay his claim for short term disability benefits through November 14, 2011. (Id.).
Approval of Tracia’s Initial Claim for LTD Benefits
Because Tracia’s right to receive short term disability benefits expired on November 14, 2011, Liberty agreed to consider his claim under Comcast’s LTD Policy. (AR 002479). Accordingly, Liberty referred Tracia’s claim file to Steven M. Lobel, M.D., an independent peer reviewer, for purposes of determining the diagnoses causing impairment, the restrictions and limitations supported by the medical evidence, and other information relevant to Tracia’s claim for LTD benefits. (DF ¶¶ 36, 39; AR 002375). It also obtained medical records from Dr. Rathmell’s office, and information from Tracia’s primary care physician, Emily Chin, M.D., which it forwarded to Dr. Lobel. (DF ¶¶ 35, 37-39). On or about November 23, 2011, Dr. Lobel issued a report describing the results of his review. (Id. ¶ 40; AR 002356-60). Therein, Dr. Lobel opined in relevant part as follows:
1. The claimant has a diagnosis of left leg CRPS following tarsal tunnel surgery and the failure to respond to conservative care. The diagnosis of CRPS can allow for pain of such a severity that it can limit work entirely, and is well supported in the medical evidence provided for this claimant at this time. The duration of the condition and its restrictions is life-long.
2. The claimant has impairments of an impaired gait, impaired sense-tion, and CRPS related to pain. The restrictions and limitations are no work until the condition is treated as noted in the rationale. The diagnosis has been present for only the past few months, and the course of this disease process is variable, therefore the duration of restrictions is not clear at this point.
3. The medical evidence provided supports a diagnosis of complex regional pain syndrome (CRPS).
(AR 002358-59). Although Dr. Lobel found that Tracia lacked the present ability to work, he predicted that Tracia would have the ability to perform work in the future. Thus, as Dr. Lobel stated, “it would be reasonable to expect that a trial of SCS, and if successful, an implantation of the device would resolve his symptoms and the permanent inability to perform any work, and would allow for future gainful full-time employment to be supported.” (AR 002359). He further opined that Tracia would likely have the capacity to perform full-time sedentary work following a ten week post-operative period of recovery. (Id.). The parties’ dispute in this case concerns whether Liberty’s eventual conclusion that Tracia could carry out such work despite his continuing complaints of pain was reasonable, or whether the defendant acted unlawfully by terminating his claim for LTD benefits.
In a letter dated November 29, 2011, Liberty notified Tracia that based on the medical and vocational information in his file, it had determined that he was disabled within the meaning of the Policy, and was entitled to receive LTD benefits as of November 15, 2011. (DF ¶ 44; AR 002362-63). It also notified him that his claim “will be evaluated periodically to determine ongoing disability[, ]” and that its approval of LTD benefits “does not guarantee payments through the maximum benefit duration.” (AR 002362). In addition, Liberty informed Tracia that the Policy “requires that you apply for Social Security Benefits, should your disability be expected to extend for twelve months[, ]” and that his LTD benefits would be reduced by the amount of any other income, including social security benefits. (AR 002363). Tracia subsequently filed an application for social security disability insurance benefits, claiming that he had been disabled since May 11, 2011 due to, among other things, CRPS, rheumatoid arthritis, permanent nerve damage in his left leg and foot, lower back pain, history of pulmonary embolism, Reynaud’s disease and POTS. (AR 000658). As described below, the Social Security Administration ultimately determined that he was disabled and eligible for disability benefits under the social security regulations. (AR 000669).
The plaintiff underwent surgery for placement of a permanent SCS on January 20, 2012. (AR 002191). However, the device was removed nine days later due to the development of a staph infection, and on March 20, 2012, Tracia underwent a second surgery to implant a permanent SCS. (AR 002186-88; DF ¶ 47). Shortly thereafter, on April 18, 2012, Dr. Rathmell completed a Certification by Health Care Provider form at the request of Liberty. (AR 002325-29; DF ¶ 50). Therein, Dr. Rathmell stated that Tracia was suffering from “chronic lumbar radiculopathy - chronic low back pain and left leg pain”; that he was unable to sit, stand, or walk without pain; and that he was unable to perform the essential functions of his job at Comcast. (AR 002326-27). Dr. Rathmell further opined that the duration of Tracia’s impairment, and the associated limitations, were likely to be “long term.” (AR 002326). However, he indicated that he would reassess Tracia’s recovery from surgery in four weeks, and he suggested that Tracia remain out of work on leave for another six weeks. (AR 002327). As described below, Liberty’s subsequent efforts to obtain updated opinion evidence from Dr. Rathmell proved unsuccessful.
Dr. Chin, the plaintiff’s primary care physician, provided a similar assessment of Tracia’s physical limitations. During an office visit with Tracia on April 19, 2012, Dr. Chin determined that the plaintiff was still experiencing significant back and left leg pain, and that he was unable to sit or stand without discomfort for any period of time. (AR 002286-87). She also noted that Tracia had been complaining about sudden weakness in his left leg since his surgery, which had caused him to fall “over a dozen times” and required the use of a cane. (Id.). On May 1, 2012, Liberty received a Certification by Health Care Provider form from Dr. Chin in which she indicated that Tracia was suffering from chronic low back pain and left radiculopathy. (DF ¶ 51). She further opined that Tracia could not sit, stand or walk for more than 20 minutes due to pain, and that he could not perform any job functions that required him to sit, stand, walk or drive for any sustained period of time. (Id.).
Liberty’s Investigation of Tracia’s Eligibility for Ongoing Benefits
On May 17, 2012, Liberty sent a letter to Tracia regarding his claim for LTD benefits. (AR 001137). Therein, Liberty informed the plaintiff that he was receiving LTD benefits based on his inability to perform the material and substantial duties of his occupation as a Business Account Executive, but that in order to remain eligible for LTD benefits beyond twelve months, he “must be disabled from any occupation.” (Id.). It further informed the plaintiff that the change in definition would occur on November 14, 2012, and that it was gathering information to assess his eligibility for benefits after that date. (Id.).
Among the forms that were attached to Liberty’s letter was an Activities Questionnaire in which Tracia was asked to describe his ability to carry out various activities of daily living. (AR 001139-41). In his answers to the questions posed on the Questionnaire, Tracia indicated that he was able to sit for less than an hour, was able to stand for less than an hour, and was able to walk for fewer than 15 minutes. (AR 001139). He also indicated that he was able to perform certain activities such as driving and using a computer for limited periods of time, and was capable of performing personal hygiene. (AR 001139-40). However, he emphasized that the severe pain and nerve damage in his lower left extremity made sitting, walking and standing very painful. (AR 001141).
In addition to eliciting information from the plaintiff, Liberty continued to collect Tracia’s medical records and to gather information from the plaintiff’s treating physicians. (See DF ¶¶ 58-60). That information revealed that Tracia was hospitalized for nearly a week in mid-May 2012 due to acute GI bleeding. (DR ¶ 60). No source of bleeding was ever identified, and a colonoscopy detected no abnormalities. (Id.; AR 001290). However, the decision was made at that time to take Tracia off his prescribed Coumadin. (AR 001290). Shortly thereafter, in June 2012, Tracia was admitted to the hospital a second time after complaining of shortness of breath. (AR 001460-62). Again, no abnormalities were detected, and it was determined that Tracia’s symptoms were likely caused by a combination of deconditioning and another condition. (Id.).
Although Tracia recovered from his episodes of acute bleeding and shortness of breath, records pertaining to his CRPS and chronic back pain indicate that the plaintiff continued to complain of pain in his back, leg and neck notwithstanding his use of the SCS and prescription medicines. For example, but without limitation, following his discharge from the hospital in May 2012, Dr. Chin indicated that Tracia was complaining of lower back pain and sciatica on his left side, which had worsened since his hospitalization. (AR 001290). Similarly, in June 2012, Dr. Chin reported that Tracia was experiencing left sided neck pain, which was sore to the touch, and that he “[c]ontinues with chronic back/leg pain stable.” (AR 001497). At that time, Tracia was taking medication, and attending physical therapy, in order to address his pain. (See AR 001514). Dr. Rathmell subsequently discontinued the use of some medication due to side effects of orthostasis, and started the plaintiff on other medication in an effort to reduce his chronic pain. (Id.).
On or about June 5, 2012, Liberty hired Hub Enterprises, Inc. (“Hub”) to conduct surveillance of the plaintiff. (DF ¶ 63). Hub performed surveillance activities on June 14 and 19, 2012, but it was unable to observe the plaintiff or capture any video of him on either of those dates. (Id.; AR 002111-16). Consequently, Hub discontinued its efforts pending further instructions from Liberty. (AR 002116). There is no evidence that Liberty made any additional attempts to obtain video surveillance.
On July 27, 2012, at Liberty’s request, Dr. Chin filled out a Restrictions Form concerning Tracia’s physical restrictions. (AR 002088). Therein, Dr. Chin stated that the plaintiff was suffering from neck and back pain, and that he was “unable to sit/stand for prolonged periods [secondary to] pain.” (Id.). In addition, Dr. Chin opined that Tracia had no ability to carry out any occupational activities on a full-time basis. (Id.). Although there is no evidence that Liberty ever emphasized the need for an objective measure of Tracia’s limitations, or otherwise described the criteria for filling out the Restrictions Form, it was unwilling to credit Dr. Chin’s opinions that Tracia remained disabled from working because they were based on the plaintiff’s subjective complaints of pain.
The medical records from late July and early August 2012 demonstrate that Tracia continued to complain of severe pain in his back, leg and neck. For example, during a visit to Dr. Rathmell on July 31, 2012, Tracia complained of “aching low back pain with burning and shooting pain in the left leg and back of the heel[, ]” as well as ongoing neck pain radiating into both of his upper arms and tenderness at the implant site of his SCS. (AR 001509). In his progress notes, Dr. Rathmell reported that the plaintiff had recently undergone a CT of his cervical spine, which had shown “moderately advanced degenerative changes, most pronounced at C6/7 without central canal or foraminal stenosis.” (Id.). He also stated as follows with respect to the plaintiff’s pain symptoms:
This is a 50-year-old with axial [lower back pain] and left lower extremity neuropathic pain status post spinal cord stimulator. There is clearly a myofascial component to his axial low back pain which may be addressed with [physical therapy], topical lidocaine, and potentially trigger point injections. His neuropathic symptoms have remained unchanged. He has had ...