Fourth Circuit Endorses Bench Trials on the Administrative Record in ERISA Denial-of-Benefits Cases

In Tekmen v. Reliance Standard Life Ins. Co., No. 20-1510, __F.4th__, 2022 WL 17725720 (4th Cir. Dec. 16, 2022), a dispute over long-term disability benefits, the Fourth Circuit decided the appropriate method of resolving ERISA denial-of-benefits cases and the standard of review of a district court’s factual findings in these cases. The court also addressed whether the district court clearly erred in its findings of fact and whether, on de novo review, Plaintiff Anita Tekmen was “totally disabled” under the terms of the plan and entitled to benefits.

In August 2015, Tekmen stopped working as a financial analyst due to symptoms related to post-concussion syndrome, hyperacusis, endolymphatic hydrops, tinnitus, and vestibular dysfunction. Tekmen’s treating doctors were supportive of her disability even though the results of many tests were normal or otherwise failed to fully explain her symptoms. Reliance Standard denied Tekmen’s LTD claim in reliance on the findings of doctors it retained to conduct a medical records review of Tekmen’s file. Tekmen appealed the denial to Reliance Standard who hired more doctors to conduct a medical records review. Those doctors’ findings did not support disability and Reliance upheld the denial. Tekmen filed suit and the parties filed summary judgment motions. In opposition to Reliance’s summary judgment motion, Tekmen requested that the court resolve the case pursuant to Federal Rule of Civil Procedure 52. Reliance did not address this request. The district court denied both motions for summary judgment and then awarded judgment to Tekmen on the merits after conducting a bench trial based on the administrative record pursuant to FRCP 52. Reliance appealed.

The Fourth Circuit first addressed two interrelated questions concerning the method a district court uses to resolve an ERISA denial-of-benefits case and the standard of review that the Court of Appeals should employ on appeal. The Fourth Circuit disagreed with Reliance’s arguments that district courts in this Circuit are required to resolve these cases via summary judgment and that the court must review the district court’s legal conclusions and factual findings de novo. The court surveyed the procedures employed by its sister circuits, including the use of Rule 56 when there is no genuine issue as to any material fact, Rule 52 when fact-finding is required, or a modified, quasi-summary-judgment procedure which Reliance appeared to be advocating. Under this approach, summary judgment is simply the vehicle for deciding the benefits issue and the non-moving party is not entitled to the usual inferences in its favor.

The court declined to endorse the quasi-summary-judgment procedure. The court explained that it is difficult to employ summary judgment in these cases where the parties disagree as to key facts and a court may need to resolve competing factual contentions within the administrative record about the cause, severity, or legitimacy of an individual’s impairment in order the decide the ultimate legal question of whether the individual meets the relevant plan definition of disability. In the context of de novo review of ERISA denial-of-benefits cases, district courts should employ the appropriate procedural mechanism for resolving the case, which is a Rule 52 bench trial when there are disputed issues of material fact. When a district court makes factual findings under Rule 52, those are reviewed for clear error.

The court reviewed the district court’s factual findings for clear error and its legal conclusion that Tekmen was entitled to benefits de novo. The court found that the district court’s factual determination to give more weight to reports of Tekmen’s treating doctors over those who merely reviewed her file was not clearly erroneous. A district court is permitted to assign treating doctors’ opinions more weight, even though they are not required to do so as the U.S. Supreme Court ruled in Black & Decker Disability Plan v. Nord, 538 U.S. 822, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003).

Reliance also argued that Tekmen’s ability to work for most of two years following her car accident undermines the conclusion that she is unable to work. Citing several of its sister circuits, the court explained that there is no logical incompatibility between working full time and being disabled from working full time. Even though Tekmen was able to work for a period despite her symptoms, it does not necessarily mean that she was not disabled. Upon reviewing the record, the court was not left with the definite and firm conviction that a mistake has been committed.

On de novo review of the district court’s conclusion that, as a matter of law, Tekmen was entitled to benefits, the court agreed with the district court. Tekmen was not required to submit “objective evidence” supporting her claim. Her self-reported symptoms constituted satisfactory proof of disability. The policy at issue here does not contain an objective proof requirement. Thus, the court rejected Reliance’s argument that Tekmen’s claim fails for lack of objective evidence. The court also found that the district court correctly applied the terms of the plan, including the definition of Regular Occupation, which looks at the occupation as it is normally performed in the national economy and not duties unique to a specific employer or in a specific locale. The evidence here showed that Tekmen’s move to a new office which subjected her to vibration that caused a worsening of her symptoms did more than just make it impossible to work there, it led to a significant relapse and consistent worsening of her various underlying symptoms that first accrued after her accident in 2013. These symptoms continued even after she was removed from the problematic work location. Also, Tekmen required an environment with no ambient noise or vibration, a setting unlikely to exist in a standard office building. Because of these facts, the district court’s determination that Tekmen’s disability was not limited to a “specific locale” was supported by the record.