Third Circuit Reverses District Court, Finds Lincoln Financial Group Did Not Abuse Its Discretion When Terminating Long-Term Disability Benefits

In Hawks v. PNC Financial Services Group Inc, et al., No. 23-2636, 2024 WL 3664599 (3d Cir. Aug. 6, 2024), an unpublished opinion, the Third Circuit vacated and remanded the district court’s grant of summary judgment in favor of Plaintiff-Appellee Hawks, a former PNC Financial Services employee whose long-term disability benefits were terminated by the company’s plan administrator, Lincoln Financial Group, when it determined she was no longer disabled in her occupation of banking center manager. The court agreed with Lincoln that the district court misapplied the applicable standard of review in this ERISA matter, failed to consider the language of PNC’s Long Term Disability Plan in assessing Plaintiff’s ability to perform the duties of a financial manager, and considered evidence that was never presented to Lincoln prior to litigation.

Plaintiff worked as a banking center manager for PNC when in 2018 she fractured her ankle and underwent surgery. She applied for and received short-term disability and long-term disability benefits under the Plan. For the first 24 months of disability under the LTD plan, one must be “unable to perform the material or essential duties of [her] own occupation as it is normally performed in the national economy.” Lincoln’s vocational analysis determined that Plaintiff’s own occupation in the national economy was most analogous to “Financial Managers, Branch or Department,” a sedentary physical demand level occupation. After about a year and a half, Plaintiff’s medical records showed improvement in her condition and her internist completed a form for Lincoln indicating that Plaintiff had the capacity for full-time sedentary work, but is not able to stand/walk any substantial length of time. Thereafter, Lincoln terminated Plaintiff’s benefits on the basis that she had the capacity to perform her own occupation as it is normally performed in the national economy.

Plaintiff appealed Lincoln’s termination of benefits and submitted an OAS Lifecare Plan prepared by a certified rehabilitation counselor and life planner, Edmond Provder, who concluded that Plaintiff’s own occupation was sedentary to light work because Plaintiff spent most of her time standing and walking while at PNC. Based on her doctor’s opinion, Provder opined that Plaintiff could only work one third of the day. Lincoln sought out additional vocational reviews by two different counselors. They came to the conclusion that the closest analogous occupation was Manager, Financial Institution, and that the occupation was sedentary. Even though Plaintiff was awarded disability benefits by the Social Security Administration, Lincoln upheld its decision. Plaintiff filed suit and the district court ruled in her favor.

In overturning the district court, the Third Circuit addressed the court’s basis for finding Lincoln’s denial of benefits to be arbitrary and capricious, the standard that applies since the Plan gives Lincoln discretionary authority. First, Lincoln was not required to consider the demands of Plaintiff’s own job at PNC since the Plan evaluates “own occupation” as it is normally performed in the national economy. Plaintiff did not dispute that her occupation in the national economy was anything other than Manager, Financial Institution or Bank Manager. The district court faulted Lincoln for not considering how Plaintiff performed her job for PNC, but the Third Circuit found that the district court’s conclusion ignores the Plan’s language of “in the national economy.”

Second, the district court found that Lincoln engaged in self-serving selective use and interpretation of the medical records and failed to give appropriate weight to Plaintiff’s treating physician opinions. The Third Circuit noted that Plaintiff’s doctor never opined that Plaintiff could not do sedentary work, other than his view that she would continue to have pain and stiffness. Further, Provder relied on a physical capacity evaluation completed by Plaintiff’s doctor which was never submitted to Lincoln when it considered Plaintiff’s appeal. Provder quoted from the evaluation in his report, but the underlying evaluation is not in the record. Plaintiff attached it to her summary judgment motion, but the Third Circuit explained that ERISA prohibits the supplementation of the administrative record and the court is barred now from considering it. The court found that Lincoln’s decision was supported by substantial evidence.

Third, the Third Circuit found that Lincoln’s failure to send Plaintiff for an Independent Medical Examination (IME) was not arbitrary and capricious. The burden is on Plaintiff to establish disability. Since the medical records showed that Plaintiff was improving and able to perform work at a sedentary level, it was not necessary for Lincoln to send her out for an IME.

The court also distinguished Plaintiff’s SSDI award, finding that it is not binding in this case and that the SSA found Plaintiff disabled prior to the records showing her improvement. The court also vacated the district court’s award of fees to Plaintiff and remanded for further consideration consistent with the court’s view of the merits.