Schwalm v. Guardian Life Insurance Co. of America
2010 U.S. App. LEXIS 23621
| 6th Cir. | 2010Background
- Schwalm sustained a back injury in 1999, underwent multiple surgeries, and remained with chronic pain and cognitive side effects from medications.
- Guardian provided ERISA long-term disability benefits to Schwalm under an own-occupation then gainful-work framework, beginning May 1, 2003, based on his disability.
- Guardian conducted periodic reviews, including an IME in 2005 and a Social Security Administration denial in 2006, while continuing benefits until 2007.
- In 2005–2006 Schwalm secretly engaged in a non-salaried executive/consulting role at Peritus Technologies under a Cooperation Agreement emphasizing flexible hours and rest breaks.
- Guardian terminated Schwalm’s benefits as of September 11, 2007, asserting he could perform gainful work at a salary consistent with insured earnings and that cognitive limitations were not proven by objective evidence.
- Schwalm appealed; Guardian issued a final denial in June 2008; Schwalm filed suit under ERISA § 502(a)(1)(B); district court affirmed Guardian’s denial as supported by substantial evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Guardian’s denial was arbitrary and capricious | Schwalm contends Guardian ignored evidence and misapplied the plan. | Guardian argues decision followed substantial evidence and proper plan interpretation. | Affirmed: guardian’s decision supported by substantial evidence and proper deference. |
| Whether the plan’s gainful-work salary threshold was properly applied | Schwalm claims loss of earning capacity could not meet 80% threshold and was misinterpreted. | Guardian properly used 80% of insured earnings to determine disability cessation. | Affirmed: Guardian correctly concluded Schwalm could earn salaried work consistent with insured earnings. |
| Whether cognitive limitations were adequately substantiated | Schwalm argues cognitive impairment from medications prevented executive-level work. | Record lacked objective evidence of cognitive disability; other evidence supported return to sedentary work. | Affirmed: substantial evidence favored ability to perform sedentary work; cognitive limitations not proven objectively. |
Key Cases Cited
- Shields v. Reader's Digest Ass'n, Inc., 331 F.3d 536 (6th Cir.2003) (arbitrary-and-capricious review requires rational explanation from evidence)
- Evans v. UnumProvident Corp., 434 F.3d 866 (6th Cir.2006) (weighing medical evidence under arbitrary-and-capricious standard)
- Williams v. Int'l Paper Co., 227 F.3d 706 (6th Cir.2000) (court may discount subjective disability evidence when objective record supports it)
- Glenn v. Metropolitan Life Ins. Co., 554 U.S. 105 (2008) (conflict of interest as a factor in reviewing plan decisions under ERISA)
- Spangler v. Lockheed Martin Energy Sys., Inc., 313 F.3d 356 (6th Cir.2002) (avoid cherry-picking vocational evidence in disability determinations)
- Cooper v. Life Ins. Co. of N. Am., 486 F.3d 157 (6th Cir.2007) (require objective medical evidence where appropriate in disability determinations)
- Wilkins v. Baptist Healthcare Sys., Inc., 150 F.3d 609 (6th Cir.1998) (limits of discretion in plan administrator reviews under ERISA)
- Killian v. Healthsource Provident Admin'rs, Inc., 152 F.3d 514 (6th Cir.1998) (treatment of conflicting medical evidence in benefit determinations)