Liberty Mutual wins long-term disability case because of video surveillance - backdrop for an unsuccessful LTD claim (Part 1)

Donna Cusson went into Appeals Court challenging the First District Court’s decision issuing summary judgment to Liberty Life Assurance Company of Boston (Liberty Mutual) and thereby upholding the disability denial. Cusson believed that the material facts in her case should have gone in her favor, not the disability insurance company’s.

In this article, we will look at the background for this case. Hints as to why her appeal proved unsuccessful are found in her history.

Case History

As a senior facilities planner for Fleet Boston, Cusson participated in a short-term disability plan and a long-term disability plan payable by Liberty Mutual. Under the short-term disability coverage, she would be considered disabled if she was unable to perform “the material and substantial duties of her own occupation.” This coverage lasted for 24 months. Her insurance plan would switch her to long-term disability if at the end of 24 months, if she remained unable to perform, with reasonable continuity, all the material and substantial duties of any occupation for which she already was or could become “reasonably fitted to perform because of her training, education, experience, and physical or mental capacity.”

Cusson was diagnosed with breast cancer in March 2002. Her chemotherapy caused considerable pain and fatigue. Liberty Mutual began paying Cusson short-term disability benefits in April 2002. Liberty Mutual notified her on October 9, 2002 that she qualified for long-term disability benefits under the policy. The insurance company also advised her that she was required to apply for social security disability income benefits in order to qualify.

Even though her chemotherapy ended in October, Cusson continued to experience dizziness, fatigue, headaches and widespread body pain. In February 2003, her rheumatologist, Dr. James Figueroa, diagnosed her condition as fibromyalgia, a condition that is characterized by chronic pain in the muscles and soft tissues around the joints. Pain management for those afflicted with this condition is frequently difficult.

Liberty evaluates her medical condition

On March 28, 2003, Liberty Mutual asked Cusson to complete an activities questionnaire. This document asked her to describe her day-to-day activities and her functional limitations. She indicated that she was able to sit for approximately 2 hours, stand for 15 to 30 minutes, and walk for 30 to 45 minutes. She also noted that these figures could change from day to day because she never knew how she would feel from one day to the next. She also indicated that she had memory and concentration issues.

On August 21, 2003, Liberty Mutual asked Dr. Figueroa, Donna’s doctor, to fill out a questionnaire regarding Cusson’s condition. He was asked to describe specific restrictions and limitations that would prevent her from being able to work. In the physical capacities form, which he also had to fill out, he reportedly Cusson could lift no more than 10 pounds twice a day. He stated that she could sit for four hours per day, but she needed to stand up every 15 minutes. He indicated that she could stand for up to one hour but that she needed to sit every 5 to 10 minutes. He also said she could walk for an hour, but that she needed to rest every few minutes. He concluded that Cusson would not be able to work a full eight hour day until her pain and fatigue subsided.

Liberty applies new definition of disabled

On March 15, 2004, Liberty notified Cusson that beginning September 29, 2004, the insurance company would begin applying the new definition for disabled, which required her to be unable to perform all of the material and substantial duties of any occupation for which she qualified, also known as “any occupation”. In May, Liberty requested that Dr. Figueroa complete a new functional capacities form and a restrictions form. He did so, on May 7, 2004. In the forms, he indicated that Cusson was unable “to squat, bend, kneel, climb, push or pull objects, or lift any weight over 10 pounds.”

On May 18, 2004, Liberty hired Omega Insurance Services, a video surveillance service, to covertly film Cusson’s daily activities. On May 29, Liberty told Cusson to apply for social security disability insurance benefits (SSDI) once again. The company warned her in their letter that if she did not do so, Liberty would reduce her disability benefit payment by the amount she was eligible to receive from the Social Security Administration (SSD). Liberty offered to assist her in obtaining her SSDI benefits.

Liberty conducts covert video surveillance

Omega began conducting covert disability video surveillance on June 9, 2004. Between the dates of June 9th to the 12th, the 17th and the 24th Omega captured 50 minutes and 58 seconds of video. On the 9th, she was filmed walking her dog for 30 minutes. The person filming her observed that she walked “in a smooth, fluid manner without exhibiting any external signs of impairment.” Later the same day, she drove to a nearby Home Depot. When she came out of the store, she was carrying a shopping bag. On June 24, Cusson was observed going into Wal-Mart. After being inside the store for almost an hour, she came back out with a loaded shopping cart. She unloaded the cart without assistance, including what appeared to be a large bag of cat litter. She was also observed bending at the waist to pick up something that had fallen on the ground.

Liberty informed Cusson on July 20, 2004 that if she did not provide proof of her application to Social Security for SSDI benefits by August 3, that they would begin reducing her benefits by the estimated amount of the SSDI benefit immediately. They also requested that Omega conduct the second round of surveillance between July 26 and 28. Cusson was seen only once on July 27, for a total of one minute and 7 seconds.

A third round of video surveillance was ordered in August 2004. The August 26 surveillance video would prove particularly injurious to Cusson’s claims of disability. She was captured on film bending at the waist to retrieve something she dropped outside her front door. She was observed eating lunch at a local restaurant, driving to a dry cleaner, then a Wal-Mart, and other department stores. She was observed carrying various items into and out of the stores and bending at her waist to retrieve items from her car or to place them into her car.

Cusson completed another activities questionnaire at Liberty’s request on September 15. She reported that she couldn’t remember going to a mall since the last time she filled out a questionnaire on March 28, 2003. She claimed that they were just too large, and that she preferred small stores with easy access in and out. She said that she had good days during which she would run errands, visit other people and have lunch outside her home. But she reported that on bad days she was unable to sleep because of her pain and that she often could not get out of bed for several days.

Liberty forwards video & medical evidence to expert for review

Liberty Mutual requested an updated report from Dr. Figueroa. His October 13 assessment stated that Cusson could sit for less than two hours, stand for less than 30 minutes, and walk for 15 minutes. He also noted that she could not lift or carry more than 10 pounds. He concluded that it would be impossible to work eight hours per day in any occupation. Two days later, Dr. Figueroa told Liberty that her limitations varied with the severity of her symptoms.

When they received Dr. Figueroa’s records, Liberty sent Cusson’s file to Dr. Robert Millstein, a full-time employee of Liberty Mutual. After reviewing the video surveillance tapes, Dr. Millstein came to the conclusion that Cusson’s functional capacity exceeded what she was reporting. He noted that there were several apparent inconsistencies between what she reported as a limitation and what was being filmed. There were some inconsistencies though in his interpretation of the video surveillance tapes.

Liberty ordered a fourth round of surveillance in November 2004. This time they used a different surveillance service, MJM Investigations, Inc. Surveillance was conducted from November 2-6 and on the 11th. During this time, Cusson was seen outside of her home for about a half hour. On November 2, she was seen leaving her home carrying various bags. She left the premises as a passenger. She was seen again on November 4 and 11. Both times she was observed running errands.

Liberty terminates long-term disability benefits

Liberty conducted a transferable skills analysis and labor market survey on November 29. The company relied entirely on Millstein’s report. They concluded she could still perform her occupation as a facilities manager as well as several other occupations such as construction manager, property/real estate manager or civil engineer.

This evaluation resulted in Liberty sending Cusson a letter on December 8 informing her that her disability benefits were going to be terminated. The video surveillance and Dr. Millstein’s review were cited as primary reasons for the termination. They also point to the results of the transferable skills analysis. They also informed her that they had requested a response to Millstein’s report on the video surveillance from Dr. Figueroa, but that he had not responded.

Claimant appeals Liberty’ termination of disability benefits

Cusson appealed on June 1, 2005. She submitted various documents including a sworn statement, affidavits from her friends, family, and former colleagues. She provided a chart comparing the surveillance reports with her own recollections of what she had done on those days. She indicated that on some of the days covered in the video surveillance, she had “hit a wall” and had returned home “crying in pain.” But her activity chart for the days she had not been captured on video failed to mention what symptoms she was experiencing these days.

She also submitted medical reports from additional specialists. Dr. Peter Schur, rheumatologist, reported that she had limited motion in her shoulders, hips, and back. The doctor felt that she had fair muscle tone at best, and that she was “painfully sensitive to touch.” His conclusion was that she was disabled at present and made some treatment recommendations.

She also submitted a report from a vocational rehabilitation expert, Paul Blatchford. This report, conducted on February 15, 2005, detailed impaired performance on a variety of standardized vocational tests approved by the United States Department of Labor. The report noted that Cusson had appeared exhausted and distracted the entire time. Blatchford disputed Liberty’s interpretation of the surveillance videos. He noted that the videos could not address Cusson’s cognitive limitations. Batchford pointed to the fact that the videos only demonstrated that Cusson was capable of short periods of activity, something she had previously reported herself. He also contended the videos did not demonstrate that Cusson could sustain activity at the level required for employment.

Liberty sends file for a paper peer review

Liberty informed Cusson that they were referring her file for peer reviews on July 26, 2005. One review, conducted by an oncologist, determined that there was no objective data supporting ongoing impairment due to her prior therapy for breast cancer, but that it would be possible for her to have impairment due to the fibromyalgia. The other review conducted by rheumatologist Dr. Jeffrey Liebermann concluded that Cusson should be able to perform the duties of a light or sedentary occupation despite her fibromyalgia. This doctor claimed to have spoken with Dr. Figueroa, whom he says told him that he no longer wished to be consulted about the disability aspects of Cusson’s case. On August 11, 2005, Dr. Lieberman mailed a letter to Dr. Figueroa in which he summarized their conversation. He asked Dr. Figueroa to review the letter, make any corrections or comments and fax it back to him. Dr. Figueroa did not respond.

A September 7, 2005 examination by Dr. Mitchell Abrahamson stated that Cusson had “multiple trigger points” for pain and was unable to bend forward more than 40° due to her back pain. Abramson concluded that she appeared to be disabled due to her fibromyalgia. Cusson secured an addendum to Blatchford’s February 15 report on September 9, 2005. He stated that even though the videos showed Cusson running errands, this was consistent with her ability to perform activities for limited periods of time. He pointed out the fact that Cusson needed frequent rest, and that she tended to fade after engaging in any task for sustained period of time. Cusson submitted all of this documentation to Liberty on September 15, 2005.

Liberty responded by conducting a second round of peer reviews using a service known as MLS National Medical Evaluations, Inc. The first review performed by Dr. Reynolds Karr, a rheumatologist, concluded that there was no objective medical basis for impairment or a need for physical restrictions based upon the medical record. The second review conducted by Dr. Matthew Kauffman, an oncologist, once again indicated that there would be no identifiable or medically supported level of functional impairment that related to her cancer treatments, but the doctor admitted that fibromyalgia fell outside his area of expertise. This physician suggested that there could be a level of functional impairment due to fibromyalgia and/or psychological overlay.

Liberty upholds termination of long-term disability benefits

After reviewing all of the information in the administrative record, Liberty upheld its decision to terminate Cusson’s benefits. Liberty stated that its November 1 decision was “based on the totality of the clinical and objective medical documentation” in Cusson’s file. The company advised Cusson that they had determined that she was capable of sedentary to light capacity work.

Cusson filed suit against Liberty on December 7, 2005, seeking to recover her disability benefits. Just over a month later on January 21, 2006, Cusson was approved for SSDI benefits, retroactive to March 15, 2002. The basis of the decision revolved around Cusson’s inability to perform sustained work activities.

Liberty filed a counterclaim seeking to recover money they had paid her, because she had received a retroactive payment from SSDI. Both parties filed cross motions for summary judgment in their favor for all the issues brought before the court.

Liberty would come out on top in this case. The question is why? We will look at this in Liberty Mutual wins long-term disability case because of video surveillance – how District and Appeals Courts drew conclusions (Part II).