Zanny v. Kellogg Company, 2006 WL 1851236 (W.D.Mich. 6/30/2006)(Issues: Subjective Claims).  This opinion, authored by Judge Richard Enslen, who also decided Loucks v. Liberty Life Assur.Co. of Boston, 337 F.Supp.2d 990 (W.D. Mich. 10/1/2004)(vacated following settlement) (October 2004), goes even further than Loucks in his criticism of ERISA.  The judge’s sentiment is signaled from the opening sentences of the opinion:

Metropolitan Life Insurance Company has arrived at a formula for operating a profitable insurance business. It simply does not allow piddling things like facts to intrude upon its employee benefit claims decisions. Witness Zanny v. Kellogg Company and Metropolitan Life Insurance Co.

The court detailed the claimant’s extensive psychiatric history and her approval to receive benefits made both by MetLife and the Social Security Administration.  Even MetLife’s own psychiatrist found that disability was supported.  An independent psychiatric evaluation concurred with the other findings.  Nonetheless, MetLife repeatedly demanded ongoing reassessments of disability; and even performed surveillance which did little more than show the plaintiff attended therapy appointments and occasionally visited fast food establishments.  The court expressed concern about the nature of the surveillance in light of the claimant’s condition:

What is most shocking about the Report is the underlying context. In this instance, Mr. Kooi [MetLife’s investigator] made the object of videotaped surveillance and spying at her home, on the road, and at her therapist's offices a woman suffering extreme depression, paranoid symptoms, anxiety toward strangers and a history of repeated suicide attempts. MetLife and its henchmen should appreciate that such conduct may itself precipitate the suicide death of a person who has placed implicit trust in their organization to foster mental health. MetLife should investigate the conduct of Mr. Kooi to insure that its agents are not either wittingly or unwittingly subjecting mentally-ill claimants to untoward risks of suicide death or other preventable injury. 

What apparently triggered MetLife’s ongoing inquiry was that Zanny was volunteering on a part-time basis at her therapist’s office, and MetLife believed such activity showed work capacity.  MetLife also listed the claim as a “High Liability Review.”  Although the judge could not find an improper purpose in that characterization, the court stated “the manner and number of the claim department inquiries…suggest an intention to obtain documentation to justify denial of benefits which are properly due under the plan language.”  Although MetLife also pointed to the plaintiff’s design of a website for the organization where she volunteered, the court deemed the web pages as being “not professional in character or quality and cannot be judged competent professional work.”

As the claim was reaching the four year mark since benefits commenced, MetLife had a vocational counselor review the file.  The court described the counselor’s report which “for the most part, completely ignored medical information supporting disability, psychiatric hospitalization records, or the reports of examining psychologists and previous rehabilitation counsels who concluded that Plaintiff was not employable at any occupation nor able to operate a for-profit business.”  Despite its insufficiencies, that report led to the benefit termination. 

Zanny appealed, and her file of more than 2,000 pages was sent for review to Ernest Gosline, M.D., a psychiatrist.  Dr. Gosline did not examine Zanny; and he wrote a three page report concluding that there was insufficient documentation supporting an inability to work.  The denial was therefore affirmed, citing an absence of sufficient evidence and also noting that plaintiff’s ability to compose an appeal letter was inconsistent with her disability claim, which triggered the following comment by the court:

If this is a regular basis for denial by MetLife, then presumably it has a 100 percent formula for denying claims--since then it would deny badly drafted letters as ill-explained and deny good letters as evidence of a lack of disability. Of course, this is preposterous since the insurance company will seldom if ever have a basis in fact for knowing how a well-written letter was prepared (i.e., whether by claimant, attorney, relative, etc.) It is noted that Plaintiff regularly had others prepare correspondence on her behalf. (See, e.g., A.R. 414-16.) 

Finding no language that would trigger an arbitrary and capricious standard of review, the court conducted a plenary review of the evidence contained in the claim record.  The court began its analysis by characterizing the record as “an open indictment of MetLife’s practices and treatment of the mentally-ill and long-term disability benefits.”  The court added: 

In this case, MetLife regularly reviewed the client's file with an open intention to deny benefits despite the profound and compelling evidence of serious and prolonged mental illness. MetLife in July 2002 concluded that Plaintiff was no longer disabled without any independent medical examination supporting a conclusion that her condition had improved. MetLife relied solely upon a search-and-destroy mission by Cheryl Edwards, which sought to attribute abilities to Plaintiff even though Edwards had not examined Plaintiff, could not competently make a psychiatric examination of Plaintiff, and did not seek an independent medical examination by a competent psychiatrist.

Referencing MetLife’s mischaracterization of the evidence as “the Hall of Fame of Bad Ideas,” the court castigated MetLife for equating plaintiff’s volunteer activities to having the ability to perform meaningful work.  The court pointed out:

The reference to Plaintiff's role as a "director," "manager" or "executive" of Sparrows' Haven is about as important as any person's self-ordained role as special emissary to either Santa Claus or the Tooth Fairy. While this pipe-dream itself may be effective as a mental health technique, in the same way that sheltered work may be effective as a rehabilitation technique, it has no business being confused with active capable employment in any real market. Regardless of Plaintiff's self-aggrandizing characterizations of her role and station (which themselves connote mental illness), the most reasonable objective construction of Plaintiff's activities on behalf of Sparrows' Haven are minimal voluntary activities of a passive investor seeking profit in a hopeless investment. Income from passive investments is consistent with disability since it does not reflect upon one's ability to engage in active work. See Prai v. Mass. Mut. Life Ins. Co., 2006 WL 1382322, at *3-4 (W.D.Mo 2006) (holding that managing one's income from passive investments and doing charitable work does not fit within the definition of an "occupation"). The last report of Dr. Gosline, which is better characterized as a "punt" rather than a specific record review, is wholly consistent with the conclusion that Plaintiff's long-term psychiatric disabilities have not changed. The independent medical examinations which had determined prolonged disability over time and the record of psychiatric hospitalization and of functional disability is not refuted by the devout wishes of MetLife's case managers.

The court added a footnote pointing out, “Even folks on respirators profit from passive investments, which, of course, does not denote an ability to perform an occupation or employment by them.”  The insurer was then directed to pay benefits to the claimant. 

Discussion:      It is hard to add to the court’s discussion.  Obviously, Judge Enslen was thoroughly disgusted by MetLife’s conduct in this case, and he was particularly appalled by how the insurer would take advantage of a claimant’s mental illness.