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Kalnajs v. The Lilly Extended Disability Plan

United States District Court, W.D. Wisconsin

June 14, 2017

SARAH B. KALNAJS, Plaintiff,
v.
THE LILLY EXTENDED DISABILITY PLAN, Defendant.

          OPINION & ORDER

          JAMES D. PETERSON, District Judge

         Plaintiff Sarah B. Kalnajs worked as a pharmaceuticals sales representative for Eli Lilly and Company until 2000, when she became disabled. She began receiving long-term disability benefits under defendant the Lilly Extended Disability Plan in 2001. But in 2014, after learning that Kalnajs had worked for nearly a decade as an internationally acclaimed dog trainer and obtaining multiple doctors' reports indicating that Kalnajs was able to perform some work despite several mental and physical conditions, the Disability Plan terminated her benefits. Kalnajs filed suit, claiming that the termination of benefits violated her rights under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(a)(1)(B). The parties have filed cross-motions for summary judgment. Dkt. 15 and Dkt. 18. The record contains conflicting evidence regarding Kalnajs's physical and mental health. But the decision to terminate benefits is supported by evidence in the record, and the Disability Plan explained its reasons for that decision. Under the deferential standard of review applicable to this case, the Disability Plan is entitled to summary judgment.

         UNDISPUTED FACTS

         The following facts are undisputed unless otherwise noted.

         Kalnajs worked as a pharmaceuticals sales representative for Eli Lilly and Company until 2000. As an Eli Lilly employee, Kalnajs was eligible for coverage under Eli Lilly's Employee Welfare Plan, which is composed of various “component plans, ” including the Lilly Extended Disability Plan. Both plans are covered by ERISA and administered by the Eli Lilly Employee Benefits Committee (EBC).

         Kalnajs stopped working in September 2000 because of medical issues-doctors suspected Lyme disease or a severe viral infection. She filed a claim for long-term disability benefits under the Disability Plan. Under the Disability Plan's definition, an employee is disabled if, in the first 24 months after the end of the employee's short-term disability benefits, he or she is unable

to engage, for remuneration or profit, in the Employee's own occupation . . . provided that the inability results from the Employee's illness or accidental bodily injury and such illness or injury requires the Employee to be under the regular care of a Licensed Physician.

Dkt. 12-12, at 238. After the first 24 months, the employee is disabled if he or she is unable

to engage, for remuneration or profit, in any occupation consistent with the Employee's education, training, and experience provided that the inability results from an illness or accidental bodily injury that requires the Employee to be under the regular care of a Licensed Physician.

Id.[1] In May 2001, the EBC approved Kalnajs's long-term disability benefits claim under the first definition.[2] (The record is unclear, but it appears that at the time, the EBC determined that Kalnajs was disabled as a result of chronic fatigue syndrome and Lyme disease. See Dkt. 12-4, at 100.) The question in this case is whether Kalnajs now meets the second definition of disabled. Over the intervening years, Kalnajs provided the EBC with documentation supporting her contention that she was disabled, while the EBC independently collected evidence supporting the opposite finding.

         In 2002, Kalnajs asked the EBC whether she could start a short-term job to determine if she would be able to return to work full time. She proposed a part-time, hourly retail position. An EBC representative told Kalnajs that “this employment would be acceptable . . . given the nature of the work and minimal hours” but that she should contact the EBC “if she decides to seek any other form of employment.” Id. at 81. Despite the EBC's approval, Kalnajs did not take the retail job, but did briefly work part-time at a local gym. Around the same time, the EBC found information online indicating that Kalnajs was “a full-time professional Applied Animal Behaviorist and the owner of Fundamentally Dogs Canine Behavior consultants.” Id. The EBC did not immediately follow up on this information.

         In 2010, Kalnajs gave the EBC medical records from 2009 that indicate that she was being treated for degenerative disk desiccation and back, hip, buttock, and ankle pain. She also indicated that she had been hospitalized for “depression, anxiety, agoraphobia, and substance abuse.” Dkt. 12-2, at 5. She claimed she suffered from the following medical conditions:

• Migraine headaches
• Herniated discs
• Insomnia
• Irritable Bowel Syndrome
• Colitis
• Reflux
• Tendonitis
• Neuroma
• Weight gain
• Severe chronic depression
• General anxiety disorder
• Agoraphobia
• Drug dependency

         Kalnajs also informed the EBC that back in 2003, she had become a certified dog behavior consultant, had worked occasionally as a dog trainer ever since, and she earned a “modest income” from sales of a video of a talk she gave to a local dog rescue group in 2005. Id.

         This information prompted the EBC to perform its own investigation in 2010. It discovered that Kalnajs owned and operated a dog consulting business, Blue Dog Training & Behavior, LLC. Blue Dog's website listed 28 seminars that Kalnajs had presented since 2008 all over the county and internationally. The website advertised nine upcoming seminars and a dog-training DVD featuring “a lively presentation” by Kalnajs. Id. at 45. The website also listed testimonials from clients praising Kalnajs's in-home dog training and ...


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