                          NOT FOR FULL-TEXT PUBLICATION
                                File Name: 06a0390n.06
                                   Filed: June 2, 2006

                                          NO. 05-5798

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

MICHAEL W. NOLAND,

               Plaintiff-Appellant,
                                                      ON APPEAL FROM THE
v.                                                    UNITED STATES DISTRICT
                                                      COURT FOR THE WESTERN
THE PRUDENTIAL INSURANCE                              DISTRICT OF KENTUCKY
COMPANY OF AMERICA,

            Defendant-Appellee.
_____________________________________/

BEFORE:        SUHRHEINRICH, GILMAN, and ROGERS, Circuit Judges.

       PER CURIAM. Appellant Michael W. Noland appeals from the order of the district court

upholding Defendant Prudential Insurance Company’s (“Prudential’s”) decision to deny his claim

for additional long-term disability benefits in this action for alleged wrongful denial of benefits

under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461.

For the following reasons, we AFFIRM.

                                         I. Background

       Noland worked as a quality auditor at KPMG Peat Marwick LLP (“KPMG”), and was an

eligible employee under KPMG’s employee long-term disability policy provided by Prudential.

       In October 2000, and again in December 2000, Noland was hospitalized for pneumonia and

was unable to work for several months. On January 17, 2001, Noland applied for disability benefits



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under the Prudential policy.1 Along with his claim; Noland submitted an “Attending Physician’s

Statement” (“APS”) that listed “bilateral pneumonia and respiratory failure” as the conditions that

prevented Noland from working. The APS indicated that the usual duration of the condition was

one month. The statement also noted a history of acute myocardial infarction from April 2000 and

depression from March 2000.

       On June 21, 2001, Prudential approved Noland’s application for long-term disability

benefits. Noland was also awarded Social Security disability benefits on May 31, 2001, with a

commencement date of December 22, 2000.

       On January 16, 2002, Noland again saw his cardiologist, Dr. Abraham Joseph. Dr. Joseph

performed a catheterization. Dr. Joseph noted, “There appears to be no overt cause for this patient’s


       1
        The policy defines “Total Disability” as follows:

       “Total Disability” exists when Prudential determines that all of these conditions
       are met:

       (1) Due to Sickness or accidental injury, both of these are true:

               (a) You are not able to perform, for wage or profit, the material
               and substantial duties of your occupation.

               (b) After the Initial Duration of a period of Total Disability, you
               are not able to perform for wage or profit the material and
               substantial duties of any job for which you are reasonably fitted by
               your education, training or experience. The Initial Duration is
               shown in the Schedule of Benefits.

       (2) You are not working at any job for wage or profit.

       (3) You are under the regular care of a Doctor.




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acute symptoms of shortness of breath and fatigue, nor is there any evidence of significant

pulmonary hypertension to suggest a secondary pulmonary etiology.”

       On January 31, 2002, Prudential informed Noland that it was discontinuing his disability

benefits as of May 1, 2002, because Prudential had determined that he no longer met the criteria for

long-term disability. In that letter, Prudential explained that it had reviewed Noland’s medical

records from Taylor County Hospital, as well as medical information from Noland’s physicians, Dr.

El-Asyouty, Dr. Joseph, Dr. Geeverghese, and Dr. Garner. Prudential relied on Dr. Joseph’s January

16, 2002 finding of no overt cause for Noland’s symptoms. Prudential noted that Dr. Geevarghese’s

report reflected that Noland did not have any side effects or impairments arising from his pain

medications, and that while an MRI showed findings of cervical disc disease, there was no indication

that Noland’s condition had changed from when he was working. Regarding Dr. El-Asyouty’s

report, Prudential noted that while Noland reported symptoms of anxiety and depression, there was

no documentation that this condition was severe enough to prevent him from working. Prudential

remarked that the records from Taylor County Hospital showed that Noland was hospitalized with

pneumonia in October 2001, but that “as of October 25, 2001, the diagnostic testing showed that

Noland had near complete resolution of [his] right upper lobe infiltrate.”

       Thus, Prudential’s assessment of the medical documentation on file was that Noland stopped

working due to respiratory failure, this condition presented a closed period of disability, and Noland

had recovered from this condition. Prudential concluded that while Noland had conditions that

might require ongoing medical treatment, they did not prevent him from performing his occupation.

Prudential therefore terminated Noland’s benefits as of May 1, 2002.

       Noland sought reconsideration of Prudential’s decision, which Prudential denied by letter


                                                 -3-
dated April 1, 2002. Prudential acknowledged Dr. Garner’s opinion that Noland was unable to work

because of disabling fatigue, Dr. El-Asyouty’s opinion that Noland’s depression worsened when he

was working and the doctor’s recommendation of disability for depression, and Dr. Dao’s statement

that Noland had severe obstructive sleep apnea requiring the use of a BiPap machine and the

doctor’s opinion that the combination of Nolan’s cardiopulmonary condition and sleep apnea

precluded work. Nonetheless, Prudential concluded that Noland was capable of performing his

occupation:

       In January, 2002, you were seen by a cardiologist, Dr. Joseph, who indicated there
       appears to be no overt cause for your acute symptoms of shortness of breath and
       fatigue, nor is there any evidence of significant pulmonary hypertension to suggest
       a secondary pulmonary etiology. The January, 2002 pulmonary function test
       indicates mild restriction. The medical records indicate severe sleep apnea for which
       you are using a BiPap machine. There is no indication that your sleep apnea is not
       under control with the use of the BiPap. Further the BiPap machine is portable and
       adaptable to travel.

              With regard to depression, Dr. El-Asyouty indicates your condition worsens
       when working. This does not support a current disabling mental impairment. You
       have been treating for depression for several years during which time you continued
       to work. There is no documentation of a significant change in your mental condition
       that would prevent you from performing your occupation while continuing with
       treatment.

Thus, Prudential concluded that “the medical records did not document a current sickness or injury

that would prevent [Noland] from performing [his] occupation while continuing with treatment for

[his] symptoms.”

       Noland appealed again. This time Prudential hired Dr. Howard Kipen, an outside physician

specializing in environmental and occupational medicine, to review Noland’s records. On August

2, 2002, Dr. Kipen submitted a report to Prudential. Dr. Kipen reviewed the medical records of each

of the treating physicians and concluded: “Mr. Noland suffers from identified medical problems


                                                -4-
without identified medical limitations that would come close to making him disabled.” Dr. Kipen

observed that Noland also suffers from “identified psychiatric problems which may, but [were] not

shown to, confer a degree of impairment . . . related to his cardiac condition.” Further, Dr. Kipen

remarked that Noland suffered from musculoskeletal limitations, but to the extent they had been

specified, the limitations would not confer a substantial degree of disability. Dr. Kipen further

stated, “Dr. Gardner’s own APS [attending physician’s statement] from 4/9/02 seems to indicate that

Mr. Noland could perform sedentary work without restrictions, and I see no medical restrictions for

Mr. Noland in terms of sedentary work.”

       Because his report contradicted their opinions, Prudential sent Dr. Kipen’s report to two of

Noland’s treating physicians, Dr. Garner and Dr. Geevarghese, for response. Neither gave a

substantive response. On September 30, 2002, Prudential notified Noland that it was upholding the

termination of the long-term disability benefits on the basis of Dr. Kipen’s report. The letter

concluded that “[w]hile we have taken the opinions of your physicians into consideration, our review

of the medical file, in conjunction with Dr. Kipen’s file review, does not document a current

sickness or injury that would prevent you from performing your occupation while continuing with

treatment for your symptoms.”

       Noland appealed again in November 2002. On December 27, 2002, KPMG notified Noland

that because Prudential had terminated his long-term disability benefits on May 1, 2002, and Noland

had not returned to work with KPMG, his employment was terminated effective December 30, 2002.

       In March and June of 2003, Noland sent additional records to Prudential. These included

a copy of Noland’s Social Security disability benefits letter; records from his April 12, 2000

hospitalization due to myocardial infarction; various 2003 treatment records; and a follow-up letter


                                                -5-
stating that Noland had continued treatment with Dr. El-Asyouty, underwent an endartectomy for

carotid stenosis, and had masses in his lung and thyroid.

       Prudential sent a final denial letter on June 23, 2003. In addition to reiterating its previous

conclusions, Prudential made the following conclusions regarding the new submissions:

                On January 16, 2003, Mr. Noland underwent a carotid ultrasound. According
       to the result, the test was performed due to Mr. Noland’s history of carotid bruit, and
       not symptoms such as TIA, dizziness or stroke. According to your letter, this
       procedure was performed on April 28, 2003. The maximum duration for this
       procedure is typically 35 days and it would be expected that a period of impairment
       would exist from April 28, 2003 until approximately May 26, 2003. Further
       impairment related to this condition would not be expected.

              Included on appeal is a February 26, 2003 letter from Dr. Dao indicating
       impairment due to severe restrictive lung disease and severely abnormal PFTs. The
       PFT’s in file, dated January 8, 2002 revealed only mild disease, and the February 14,
       2003 CT scan did not reveal significant pathology. Changes noted in the CT scan
       included mediastinal lymphadenopathy, bibasilar airspace opacity and 5mm
       pulmonary nodule. Although Dr. Dao opines as to Mr. Noland’s level of
       impairment, the changes on the CT scan are not significant to account for the
       reported symptoms of shortness of breath or a need for oxygen.

               Although you indicate that Mr. Noland was hospitalized in January 2003 for
       chest pain and fluid in the lungs, there is no documentation of these visits. It would
       be expected that if Mr. Noland was unstable from a cardiac perspective, he would
       have undergone a complete workup within the first six months of 2003.

       Noland brought suit in state court. Prudential removed it to federal district court on the basis

of federal question jurisdiction. The parties filed cross motions for summary judgment. The district

court granted Prudential’s motion and denied Noland’s. The court concluded that “the decisions of

Prudential to deny Noland further benefits under the plan was not arbitrary and capricious, but rather

were thoroughly investigated and reasonably substantiated by specific citation to medical findings.”

(J.A. 30.) Noland appeals.

                                     II. Standard of Review


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       This Court reviews the denial of benefits under § 502(a)(1)(B) [29 U.S.C. § 1132(a)(1)(B)]

de novo “unless the benefit plan gives the administrator or fiduciary discretionary authority to

determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co.

v. Bruch, 489 U.S. 101, 115 (1989). “When a plan affords discretion to an administrator or

fiduciary, the arbitrary and capricious standard of review applies.” McCartha v. Nat’l City Corp.,

419 F.3d 437, 441 (6th Cir. 2005) (and citations therein).

        Prudential’s plan reserves for itself the discretion to make factual determinations. The plan

states that benefits are granted only “when Prudential determines that all of these conditions are met

. . . .” Such language reserves discretionary authority to Prudential. Cf. Perez v. Aetna Life Ins. Co.,

150 F.3d 550, 556 (6th Cir. 1998) (en banc) (holding that language stating that the insurer “shall

have the right to require as part of the proof of claim satisfactory evidence” conferred discretion);

Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996) (finding that language

stating that claimant must submit “satisfactory proof of Total Disability to us” conferred discretion);

see also Green v. Prudential Ins. Co of Am., 383 F. Supp.2d 980, 990-91 (M.D. Tenn. 2005) (finding

this exact language to confer discretion so as to trigger the arbitrary and capricious standard of

review); Adams v. Prudential Ins. Co. of Am., 280 F. Supp.2d 731,736 (N.D. Ohio 2003) (same; and

cases discussed therein).

       Under the arbitrary and capricious standard of review, this Court determines whether, in light

of the plan’s provisions, the plan administrator’s decision was rational. McDonald v. Western-

Southern Life Ins. Co., 347 F.3d 161, 168 (6th Cir. 2003). “[W]hen it is possible to offer a reasoned

explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or

capricious.” Id. (internal quotation marks and citations omitted). In making this determination, the


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court is limited to reviewing only those materials in the administrative record. Peruzzi v. Summa

Med. Plan, 137 F.3d 431, 433-34 (6th Cir. 1998).

                                           III. Analysis

                                      A. Conflict of Interest

       Noland argues that a conflict of interest exists because Prudential both decides the claims

and pays the benefits. This Court has recognized a conflict of interest when a claims administrator

both funds and administers the plan. Calvert v. Firstar Fin., Inc., 409 F.3d 286, 292 (6th Cir. 2005)

(and citations therein); Killian v. Healthsource Provident Adm’rs, Inc., 152 F.3d 514, 521 (6th Cir.

1998). This conflict does not alter the standard of review, however, but merely becomes a factor

in determining whether Prudential’s decision was arbitrary and capricious. Calvert, 409 F.3d at 292-

93.

       As the district court pointed out, the evidence belies any assertion that Prudential acted

unfairly. Prudential not only conducted an in-house clinical review of Noland’s medical records,

but employed an outside physician specializing in occupational medicine to conduct an independent

review. In addition, Prudential offered Noland’s physicians the opportunity to comment on the

report which they failed to do. Finally, Prudential awarded Noland benefits for one year. In short,

this factor does not reflect arbitrary or capricious decisionmaking by Prudential.

                               B. Termination of Benefits

       Noland argues that the district court erred in affirming Prudential’s decision to terminate his

long-term disability benefits because all of the physicians who evaluated or treated him agreed that

he is totally and permanently disabled. However, under the arbitrary and capricious standard of

review, we are limited to determining whether the administrator’s decision was rational in light of


                                                -8-
the record before it. We conclude that it was. As the district court held, “[a]s evidenced by the

evaluative process recited above, the decisions of Prudential to deny Noland further benefits under

the plan were not arbitrary and capricious, but rather were thoroughly investigated and reasonably

substantiated by specific citation to medical findings.” Prudential’s initial denial on January 31,

2002 stated that Noland had recovered from the pneumonia and respiratory failure–the conditions

which caused him to stop working–and specifically referenced Dr. Joseph’s January 16, 2002 note

stating that there appeared to be no cause for Noland’s acute symptoms of shortness of breath or

fatigue, nor any evidence of significant pulmonary hypertension to suggest a secondary pulmonary

etiology. Dr. Joseph’s note also showed that the cardiac condition was largely resolved. The

January 31, 2002 letter also indicated that Prudential had reviewed Noland’s job description as a

quality auditor for KPMG and that his medical condition would not preclude him from performing

his job. Prudential observed that running, the only essential physical activity Noland identified in

his job description, was not a material and substantial duty of the job.

       Dr. Garner’s conclusion that Noland suffered chronic fatigue was, as Prudential found in its

denial letter dated April 1, 2002, contradicted by Dr. Joseph’s January 2002 diagnosis. Similarly,

as Prudential observed in that same letter, Dr. Dao’s finding of severe obstructive sleep apnea did

not indicate that it was not under control with the use of the BiPap, which is portable. Regarding

Dr. El-Asyouty’s conclusion that Noland suffered from disabling depression, Prudential correctly

observed that there was no documentation of a significant change in Noland’s medical condition to

preclude him from working.

       Dr. Kipen’s report supports Prudential’s denial on September 30, 2002. Dr. Kipen reviewed

the medical records. Regarding pain management, he noted that Dr. Geevarghese himself did not


                                                -9-
draw any conclusions about Noland’s claimed disability. Dr. Kipen observed that Dr. Garner’s own

APS statement indicated that Noland had the ability to perform sedentary work. In addition, Dr.

Kipen observed that “it was unclear why Dr. Garner relies on the less accurate and older

echocardiogram rather than the gold standard left ventriculogram described above, leading him to

assert a non-existent cardiomyopathy.” Dr. Kipen also observed that a PFT from January 8, 2002,

documented only a single trial that was not compliant with ATS standards and was therefore an

invalid study.2 Dr. Kipen found no documentation to support a conclusion that Noland was disabled

from working based on his mental condition. Finally, Dr. Kipen offered two of Noland’s physicians

an opportunity to comment and refute his conclusions, and they failed to do so. Thus, there is

objective evidence in the record to support Prudential’s decision.

       In addition to Dr. Kipen’s report, which considered earlier medical records, Noland’s

medical records from June 2 through June 4, 2002, further supported the finding that Noland was

no longer disabled. During a hospitalization for alleged chest pain, Noland’s cardiologist, Dr.

Joseph, concluded that Noland “presented with atypical chest pain with no evidence of myocardial

injury through serial EKGs and enzymes. . . . I have low index suspicion that any of his symptoms

are cardiac in origin given his recent negative catheterization and the lack of findings on either his



       2
        Dr. Kipen stated:

               A PFT from 1/08/02 documents only a single trial, not compliant with ATS
       standards, and the time/volume curve indicates that volume was still rising, and had
       not plateaued, when exhalation ceased. This makes the study invalid. Also, no
       bronchodilator was administered. FVC was 62% predicted, with FEV1 65%
       predicted and ratio of 86%. Computer interpretation was mild chest restriction, no
       obstruction noted or indicated, and the printout also gave a ‘lung age’ of a 79 year
       old.


                                                -10-
enzymes or his EKGs.” The radiology report from that visit showed that Noland’s heart size and

pulmonary vasculature were within normal limits, and that the lungs were clear “of an acute

process.” (J.A. 306.) A follow-up x-ray from August 2002 confirmed: “Single portable view of the

chest does not show failure, pneumonia or effusions. The heart size is normal. Previous coronary

artery bypass surgery. . . . IMPRESSION: No change or development of acute cardiopulmonary

disease.”

       There was also evidence to support Prudential’s final denial. In the letter dated June 23,

2003, Prudential addressed Noland’s newly submitted materials and explained why each item did

not require Prudential to reverse its decision to deny benefits.

       In short, despite “identified medical limitations,” the record evidence demonstrated that the

pulmonary and cardiac illness that formed the basis of Noland’s benefits had been substantially

resolved as of January 2002, and that no other medical evidence supported a finding of total

disability. In sum, then, as the district court concluded, “It cannot be said that [the ultimate denial

of benefits] lack[ed] a reasonable basis in light of the evidence.”

                           C. Social Security Disability Determination

       Noland asserts that the inconsistency between the district court’s decision and the Social

Security Administration’s decision supports his argument that Prudential’s decision was arbitrary

and capricious, relying on our decision in Darland v. Fortis Benefits Ins. Co., 317 F.3d 516, 532 (6th

Cir. 2003). The Supreme Court effectively overruled Darland in Black & Decker Disability Plan

v. Nord, 538 U.S. 822 (2003). Nord holds that the treating physician rule does not apply in the

ERISA context. Instead, the Social Security Administrator’s decision becomes one factor for the

court to consider in determining whether an insurer’s contrary decision was arbitrary and capricious.


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Calvert, 409 F.3d at 295. This is also true when the insurer requires the insured to apply for social

security disability benefits. See id. at 294-95 (rejecting the insured’s argument that the plan

administrator was effectively estopped from asserting that the Social Security Administration

determination was inaccurate because the administrator had asked the claimant to apply for Social

Security benefits so as to concomitantly reduce its own patient obligations). This contention is

without merit.

                           D. Prudential’s Reliance on a File Review

       Noland complains that Prudential acted arbitrarily in relying on Dr. Kipen’s file review,

especially since Dr. Kipen never examined Noland. As we held in Calvert, an insurer’s decision to

conduct a file review rather than a physical exam is simply a factor to consider in the overall

assessment of the decisionmaking process. Calvert, 409 F.3d at 295. For all of the reasons

discussed above, Prudential’s decisionmaking process, including reliance on Dr. Kipen’s report, was

not arbitrary or capricious.

                                          IV. Conclusion

       For all of the foregoing reasons, the decision and judgment of the district court is

AFFIRMED.




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