United States District Court, D. Arizona
ORDER
G.
Murray Snow Chief United States District Judge.
Pending
before the Court is Defendant United States Life Insurance
Company in the City of New York's Motion for Partial
Summary Judgment (Doc. 172). For the following reasons the
motion is denied.[1]
BACKGROUND
At the
summary judgment stage, Plaintiff Kelly Ann Tyler's
evidence “is to be believed, and all justifiable
inferences are to be drawn in [her] favor.” See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). Disputed facts are “viewed in the light most
favorable to” Tyler, the non-moving party. See
Scott v. Harris, 550 U.S. 372, 380 (2007).
Tyler
filed this action against United States Life Insurance
Company and American General Life Insurance Company
(together, “American General”). Tyler alleges
breach of a disability insurance contract with American
General to provide monthly payments to Tyler in the event
that she became “totally disabled.” She also
alleges a breach of the covenant of good faith and fair
dealing by American General, and seeks punitive damages.
Tyler
applied for a group long-term disability insurance policy
underwritten by American General. The agreement defines
“total disability” as “your complete
inability to perform the substantial and material duties of
your Current Occupation beyond the end of the Elimination
Period, and you are not engaged in any other
occupation.” (Doc. 172 at 3). “Current
Occupation” means “[t]he duties of the medical
specialty then being practiced or of the occupation being
performed immediately prior to the disability.”
(Id.) Tyler practiced as a psychiatrist for the VA
in Phoenix.
In
March 2012, Tyler submitted a claim to American General for
total disability because of chronic pain, fatigue,
post-herpetic neuralgia, Mollarets meningitis, and chronic
migraines. American General approved the claim after
receiving additional information from Tyler. American General
notified Tyler that it would periodically request updated
medical records in order to reevaluate the ongoing nature of
Tyler's disability.
In July
2014, Tyler's case was transferred to Linda Donahue, a
case manager at American General. Donahue reviewed the case
file and notified Tyler that her claim was still medically
supported. Donahue also requested updated records. In those
records, Donahue received an updated report from Tyler's
primary physician, Dr. Crever, which stated that Tyler was
currently physically unable to work because it was hard to
predict the flare-ups that caused her headaches. (Doc. 183-3
at 105-06).
After
reviewing the updated records and noting apparent
inconsistencies (including the fact that Tyler had stopped
preventative therapy for migraines while attempting to become
pregnant), Donahue sent the case file to Health Direct, Inc.
(“HDI”)-a third-party medical services
provider-for evaluation. During its review of Tyler's
records, HDI unsuccessfully attempted to contact some of
Tyler's treating physicians.
HDI's
report noted that Tyler continued to suffer from frequent
severe headaches, but concluded that “[Tyler's]
inability to [return to work] . . . [f]ull [t]ime does not
appear supported based on the most recent medical exam
findings” from Tyler's rheumatologist and
neurologist. (Doc. 173-11 at 2). HDI recommended to Donahue
that Tyler's case be referred to an independent medical
provider for peer review. Donahue agreed. HDI then sent
Tyler's case to CompPartners, Inc., a company that
facilitates independent medical reviews. CompPartners sent
Tyler's case to Dr. Alberto Ramos, a board-certified
neurologist.
Ramos
reviewed Tyler's records and concluded that the extent to
which Tyler's migraines were disabling was unclear
because she had discontinued preventative therapy while
trying to become pregnant. He noted that the medications she
was still taking, however, had side effects which prevented
Tyler from being able to drive. Ramos further noted that the
frequency of Tyler's migraines had decreased since she
initially filed the claim. Finally, Ramos noted
that-according to the medical records-Tyler had “no
gross motor or fine motor abnormalities that would limit
[Tyler's] ability to work” and that there were also
“no side effects from medications that would impair the
claimant, ” (Doc. 173-22 at 3). Ramos concluded that
although Tyler was “limited by her chronic migraines,
” they had improved with some medications and so there
were no cognitive or physical limitations affecting
Tyler's ability to return to work.
After
reviewing the reports from HDI and Dr. Ramos, Donahue
concluded that Tyler's claim was no longer medically
supported. She sent Tyler a letter informing her that
American General had “determined that there is no
medical evidence to support any ongoing restrictions or
limitations to your activity which would prevent you from
performing the material and substantial duties of your
regular occupation.” (Doc. 173-23 at 3). The letter
explained the grounds for the decision and informed Tyler of
her right to appeal.
In
response, Tyler's attorney sent a letter to American
General informing them that Tyler's condition had
recently worsened, resulting in Tyler's hospitalization.
Donahue responded that the termination decision had been
based on records received prior to January 1, 2015, and
requested any additional medical records after that date.
Tyler sent updated records. Donahue sent them back to HDI for
further review. HDI reviewed the records and again
recommended third-party review, and the updated records were
sent back to Dr. Ramos for a second evaluation. This time,
Ramos concluded that while Tyler continued to suffer from
severe migraines that functionally impaired her work, she
could return to former job if given flexible leave when
experiencing a migraine (up to two hours at a time, up to
four times per month) and a dark, private place to rest when
experiencing a migraine at work. Ramos also recommended that
Tyler avoid severe work-related stress that could trigger the
headaches.
Donahue
reviewed the report from Ramos and sent the file to an
in-house vocational rehabilitation counselor. The counselor
concluded, based on the Ramos reports, that “Dr. Tyler
currently does have the physical capacity to perform her
Current Occupation” if given the accommodations noted
by Ramos. (Doc. 173-33 at 5). Based on the second Ramos
report and the report from the vocational counselor, Donahue
concluded that Tyler could perform the essential functions of
her regular occupation if given the stated accommodations.
Donahue sent Tyler a letter to this effect, again ...