Hughes v. Puget Sound Electrical Workers Pension Trust Fund, No. 2:2010cv00337 - Document 24 (W.D. Wash. 2011)
Court Description: ORDER denying dft's 11 Motion for Summary Judgment and granting summary judgment in plaintiff's favor by Judge Robert S. Lasnik.(RS)
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Hughes v. Puget Sound Electrical Workers Pension Trust Fund Doc. 24 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 JOSEPH HUGHES, 9 10 11 12 13 Plaintiff, Case No. C10-0337RSL v. PUGET SOUND ELECTRICAL WORKERS PENSION TRUST FUND, Defendant. ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR 14 15 16 I. INTRODUCTION 17 This matter comes before the Court on a motion for summary judgment filed by 18 defendant Puget Sound Electrical Workers Pension Trust Fund (the “Trust”). Plaintiff, 19 who suffers from a chronic back problem, alleges that defendant violated the Employee 20 Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. by assigning an 21 erroneous disability onset date once defendant belatedly approved his application. 22 23 For the reasons set forth below, the Court denies defendant’s motion and grants summary judgment in plaintiff’s favor. 24 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 1 Dockets.Justia.com 1 2 II. DISCUSSION A. 3 Background Facts. The Trust is a Taft Hartley Fund that operates the Puget Sound Electrical Workers 4 Pension Plan (the “Plan”). The Plan is covered by labor agreements between 5 participating employers and a labor union. The Trust is administered by a Board of 6 Trustees, which is comprised of half employer and half union representatives. 7 The Plan provides for disability retirement benefits for a participant who “becomes 8 permanently and totally disabled.” PSEW 232 (Plan at 4.05). “Retirement benefit 9 payments under this Plan will become payable to, or on behalf of vested Participants as of 10 the first of the month immediately following receipt of the Participant’s written 11 application requesting the commencement of such retirement benefit payments or as soon 12 thereafter as such recipient is otherwise eligible to receive” the benefits. PSEW 236 (Plan 13 at 5.07). The Plan provides that the participant is eligible for benefits “the first month 14 following six full consecutive calendar months throughout which he has been under such 15 disability provided application is made in accordance with Section 5.07. Disability 16 benefits will not be paid for the first six months of such disability.” PSEW 232 (Plan at 17 4.05). 18 19 20 21 22 23 In the section titled, Determination of Permanent and Total Disability, the Plan provides, For purposes of this Plan, permanent total disability is disability resulting from any medically determinable physical or mental impairment which can be expected to be of long, continued or indefinite duration and which will render the Participant incapable of continuing in the employment of an Employer or engaging in any other regular employment for an Employer or engaging in any regular employment or occupation substantially gainful in character which he would otherwise be expected to be capable of performing in light of his training, experience and ability. 24 Disability will not be considered established until it has continued for a period of 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 2 1 2 at least six consecutive months. It shall be the responsibility of the Participant to submit proof of disability satisfactory to the Trustees, and the Trustees may require that the Participant be examined by a physician of their choice before awarding Disability Retirement Benefits under this Plan. 3 PSEW 249 (Plan at 7.01). 4 It is undisputed that plaintiff, an electrician, is covered by the disability benefits 5 plan at issue. Plaintiff submitted his application for a disability pension in December 6 2007. In February 2008, plaintiff’s treating physician, Dr. Debra Chaput, completed a 7 written evaluation regarding his condition. One side of the form cited the definition of 8 “Total and Permanent Disability” from the Plan and continued, 9 10 11 12 13 14 While the above definition requires that an Employee be disabled from all regular employment or occupations, the Board wishes to clarify that this restriction is limited to employment activities that involve similar physical and mental capabilities with comparable or equivalent wage potential as electrical work based on the employee’s training, experience, and ability. To summarize, even if an Employee is able to perform some basic, unskilled work for a minimum wage, this Plan may still consider him to be totally and permanently disabled if he is unable to perform job duties comparable to those provided previously, especially if he does not have training, education or the ability to engage in similar work for similar wages. 15 PSEW 121. The second side of the form contained questions to be completed by a 16 physician. In response to the question, “In conclusion, based on your findings, do you 17 believe that the member is disabled according to the definition given on the reverse side?” 18 Dr. Chaput responded, “Yes, he is disabled. I don’t think he needs reexamining.” PSEW 19 122. In an employee’s form, plaintiff stated that he had been disabled since May 2005, he 20 had worked since his disability began, and identified the real estate appraisal company for 21 whom he had worked as a trainee in October 2007. PSEW 123, 126. 22 Dr. Chaput also completed an attending physician’s statement form that plaintiff 23 included with his application. In that form, Dr. Chaput responded, “Yes” to the question, 24 “Based on medical evidence, do you believe this Patient is totally and permanently 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 3 1 disabled and prevented from performing duties of his/her occupation?” PSEW 124. She 2 responded, “No” to the question, “Based on medical evidence, do you believe this Patient 3 is totally and permanently disabled from performing the duties of any occupation for 4 which he may be qualified by training or experience.” Id. In the “Comments” section 5 regarding the latter question, Dr. Chaput wrote, “[patient] has done retraining for Real 6 Estate Appraisal.” Id. In response to the question, “Date disability commenced?” Dr. 7 Chaput responded, “5/05.” Id. Plaintiff submitted a second attending physician’s 8 statement from his chiropractor, Dr. Dusty DuBois, who noted that plaintiff’s symptoms 9 were improving with care. PSEW 127. Dr. DuBois did not check a box regarding 10 whether the patient was “totally and permanently disabled.” Instead, he wrote, “I do not 11 do impairment ratings, but I believe [the patient] can not perform duties of occupation.” 12 Id. He responded, “No” to the question of whether plaintiff “is totally and permanently 13 disabled and prevented from performing the duties of any occupation for which he may 14 be qualified by reason of training or experience.” Id. 15 Plaintiff’s application was denied by letter dated March 17, 2008. PSEW 20. The 16 letter recited the Plan’s definition and stated only that the denial was based on the 17 information submitted by plaintiff and his physician. Plaintiff subsequently appealed the 18 denial, and the trustees of the plan conducted a hearing in June 2009. The trustees 19 decided to send plaintiff for an independent medical examination (“IME”) and noted that 20 an IME was not requested earlier because plaintiff’s “physician had originally indicated 21 he was not totally and permanently disabled from all gainful employment.” PSEW 204. 22 Soon after the hearing, plaintiff’s counsel provided the Trust with additional medical 23 records for the period of time between 2005 and 2007. 24 The IME was conducted by Dr. Tallerico, who opined that plaintiff “was able to 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 4 1 work for a while in 2007 but has not been able to work since May 2008.” PSEW 109. 2 After reviewing the results of an MRI conducted in August 2009, Dr. Tallerico finalized 3 his report and opined, “He will never likely be able to do any work; he tried light 4 duty/desk work to no avail secondary to prolonged sitting.” PSEW 109. The Trust then 5 required plaintiff to attend a second hearing in December 2009. The Trust subsequently 6 granted plaintiff’s appeal and awarded him benefits as of August 2009, based on the date 7 of the IME. 8 9 Plaintiff contends that he was entitled to benefits beginning no later than January 2008 because he had been disabled for over six months at that time. He argues in the 10 alternative that benefits should be awarded as of November 2008, which was six months 11 after he ceased all work. Plaintiff filed this suit after the Trust refused to alter plaintiff’s 12 retirement date. 13 B. 14 Summary Judgment Standard and Evidentiary Issue. Summary judgment is appropriate when, viewing the facts in the light most 15 favorable to the nonmoving party, the records show that “there is no genuine issue as to 16 any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. 17 Civ. P. 56(a). Once the moving party has satisfied its burden, it is entitled to summary 18 judgment if the non-moving party fails to designate, by affidavits, depositions, answers to 19 interrogatories, or admissions on file, “specific facts showing that there is a genuine issue 20 for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). 21 All reasonable inferences supported by the evidence are to be drawn in favor of the 22 nonmoving party. See Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 23 2002). “[I]f a rational trier of fact might resolve the issues in favor of the nonmoving 24 party, summary judgment must be denied.” T.W. Elec. Serv., Inc. v. Pacific Elec. 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 5 1 Contractors Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). “The mere existence of a scintilla 2 of evidence in support of the non-moving party’s position is not sufficient.” Triton 3 Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995). “[S]ummary 4 judgment should be granted where the nonmoving party fails to offer evidence from 5 which a reasonable jury could return a verdict in its favor.” Id. at 1221. 6 In its reply memorandum, defendant moved to strike Exhibits 3 and 4 attached to 7 plaintiff’s counsel’s declaration.1 A district court’s review of a determination under 8 ERISA is typically limited to the administrative record, which may be supplemented with 9 evidence relating to a conflict of interest. See, e.g., Welch v. Metro Life Ins. Co., 480 10 F.3d 942, 949-50 (9th Cir. 2007). Neither of the exhibits was offered to show a conflict 11 of interest, so they are stricken on that basis alone. Moreover, Exhibit 4, which includes a 12 chart allegedly showing the Plan’s practice in other cases, was not considered by the 13 Court because it lacks relevance. The Trustees’ past practices cannot modify the 14 unambiguous Plan language. See, e.g., Bergt v. Ret. Plan for Pilots Employed by 15 MarkAir, Inc., 293 F.3d 1139, 1143 (9th Cir. 2002). In this case, the Plan’s language is 16 unambiguous. The Court therefore considers it, rather than any extrinsic evidence, to 17 resolve the issue. 18 C. 19 Analysis. The Court reviews benefit denials under ERISA de novo “unless the benefit plan 20 21 22 23 24 25 26 1 Defendant properly included the request to strike in its reply memorandum, as set forth in Local Rule 7. Thereafter, plaintiff improperly submitted a sur-reply that was not directed towards striking material in the reply. Local Rule 7(g) (stating that a sur-reply may be filed to request to strike material in a reply memorandum “and shall be strictly limited to addressing the request to strike.”). Defendant then filed a response to the improperly filed sur-reply, and plaintiff filed yet another sur-reply. The Court did not consider any of those improperly filed memoranda. ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 6 1 gives the administrator or fiduciary discretionary authority to determine eligibility for 2 benefits.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan 3 does grant discretionary authority, the Court reviews the administrator’s decision for 4 abuse of discretion. See Saffon v. Wells Fargo & Co. Long Term Disability Plan, 511 5 F.3d 1206, 1209 (9th Cir. 2008) (citing Firestone, 489 U.S. at 115). In this case, it is 6 undisputed that the Plan grants the trustees discretion to determine eligibility. PSEW 255 7 (Plan, Art. IX, 9.01) (stating that the trustees have “exclusive power and authority, in 8 their discretion, to construe the Plan and other Plan documents, determine eligibility for 9 participation in the Plan and for benefits under the Plan . . . .”). 10 “Where the decision to grant or deny benefits is reviewed for abuse of discretion, a 11 motion for summary judgment is merely the conduit to bring the legal question before the 12 district court and the usual tests of summary judgment, such as whether a genuine dispute 13 of material fact exists, do not apply.” Bendixen, 185 F.3d at 942. The only legal question 14 before the Court is whether defendant abused its discretion, or in other words, acted 15 arbitrarily and capriciously. The Ninth Circuit has held that “[a]n ERISA administrator 16 abuses its discretion only if it (1) renders a decision without explanation, (2) construes 17 provisions of the plan in a way that conflicts with the plain language of the plan, or (3) 18 relies on clearly erroneous findings of fact.” Boyd v. Bell, 410 F.3d 1173, 1178 (9th Cir. 19 2005); see Taft v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1472 (9th Cir. 1993). 20 If a plan administrator is operating under a conflict of interest, the Court must 21 consider that conflict as a factor in determining whether the Plan abused its discretion. 22 Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008). The Supreme Court has 23 explained that the conflict factor’s weight varies depending on the facts and 24 circumstances of each case. Id. For example, the conflict factor “should prove more 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 7 1 important (perhaps of great importance) where circumstances suggest a higher likelihood 2 that it affected the benefits decision.” Id. at 117; see also Montour v. Hartford Life & 3 Acc. Ins. Co., 588 F.3d 623, 630 (9th Cir. 2009) (explaining that when a conflict exists, 4 “the court must consider numerous case-specific factors, including the administrator’s 5 conflict of interest, and reach a decision as to whether discretion has been abused by 6 weighing and balancing those factors together.”). 7 In this case, a conflict of interest existed. Trustee Washburn, who, along with one 8 other trustee, made the decision to deny plaintiff’s benefits application, had a personal 9 bias against plaintiff. Trustee Hamilton, whose motives have not been questioned, 10 testified in his deposition that Trustee Washburn “hates” plaintiff. Hamilton Dep. at 11 p. 16; id. at pp. 17-18 (testifying that he had heard Trustee Washburn speak negatively of 12 plaintiff “every time Mr. Hughes [sic] name is mentioned;” he had heard him speak as 13 negatively of only three or four of their 4,600 members). Trustee Washburn has not 14 denied that bias. Moreover, although Trustee Washburn claims to have “recused” himself 15 from the appeal, he chaired the two appeal hearings, questioned plaintiff during the June 16 2009 hearing, and chaired the June and December 2009 meetings when the trustees ruled 17 on plaintiff’s claim. The fact that Trustee Washburn made the initial decision and 18 participated in the appeal suggest a high likelihood that the bias affected the decision. 19 The Court weighs that factor and views the Trustees’ reason for delaying benefits with 20 “enhanced skepticism.” Montour, 588 F.3d at 631. 21 Because the Trustees ultimately granted plaintiff’s claim, the Court must determine 22 whether they abused their discretion in beginning his benefits in August 2009. Plaintiff 23 contends that the Trustees abused their discretion by failing to apply their own 24 comparable wage standard and relying on an interpretation of the Plan language that 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 8 1 conflicts with the plain language of the Plan. “Our inquiry is not into whose 2 interpretation of the Plan documents is most persuasive, but whether the plan 3 administrator’s interpretation is unreasonable.” Barnett v. Kaiser Found. Health Plan, 4 Inc., 32 F.3d 413, 416 (9th Cir. 1994) (internal citation and quotation omitted). 5 Defendant contends that under the Plan, “disability retirement benefits start no 6 earlier than the date the Trustees have satisfactory evidence of the applicant’s eligibility.” 7 Reply at p. 1. The Plan, however, is devoid of such language. Instead, the plain language 8 of the Plan states that benefits “will become payable to . . . Participants as of the first of 9 the month immediately following receipt of the Participant’s written application 10 requesting the commencement of such retirement benefit payments or as soon thereafter 11 as such recipient is otherwise eligible to receive” the benefits. PSEW 236 (Plan at 5.07). 12 The Plan provides that the participant is eligible for benefits “the first month following 13 six full consecutive calendar months throughout which he has been under such disability 14 provided application is made in accordance with Section 5.07.” Plan at 4.05. That 15 provision clearly and unambiguously refers to the triggering event as when the participant 16 is “under such disability.” See also Section 7.01 (“Disability will not be considered 17 established until it has continued for a period of at least six consecutive months.”). 18 Defendant notes that under Section 7.01, the participant is responsible for 19 providing proof of disability, and the Trustees may order an IME. The fact that the 20 participant has the burden of production, however, does not mean that he or she is not 21 “under such disability” until the Trustees determine that they have received sufficient 22 evidence. 23 24 Defendant also argues that it is “much more clear cut” to start benefits on the date the Trustees receive satisfactory evidence of disability. Reply at p. 4. As set forth above, 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 9 1 however, the plain language of the Plan controls, not expediency for the Plan. 2 Accordingly, the Court finds that the Trustees’ interpretation conflicts with the clear 3 language of the Plan. The fact that the Trustees relied on an expedient interpretation of 4 the Plan, rather than one that comports with its language and is tethered to evidence, 5 demonstrates that they abused their discretion.2 6 Consistent with the terms of the Plan, plaintiff should have been deemed eligible 7 for benefits “the first month following six full consecutive calendar months throughout 8 which he has been under such disability.” Plan at 4.05. Applying that definition, Dr. 9 Chaput clearly opined that plaintiff was disabled as of May 2005.3 PSEW 122, 124. Dr. 10 DuBois opined that plaintiff could not perform his own occupation. PSEW 127. Plaintiff 11 also submitted to the Trustees a vocational assessment concluding that he had no 12 transferrable skills to obtain other employment (PSEW 158) and a labor market summary 13 stating that real estate appraisers earn approximately $30,000-$40,000 per year (PSEW 14 164), which is undisputedly significantly less than electricians’ salaries. Dr. Tallerico, 15 16 17 18 19 20 21 22 23 24 25 26 2 Based on the plain language of the Plan, the Court finds that the Trustees’ interpretation is unreasonable regardless of the existence of the conflict of interest. Viewing the Trustees’ interpretation with skepticism only highlights the fact that they abused their discretion. 3 In its motion, defendant deprecates Dr. Chaput’s opinion by stating that it is unexplained and contradictory. A review of the form shows that the opinion is neither, but even if it had been, defendant should have, but did not, request additional information to resolve the alleged deficiency. See, e.g., Montour, 588 F.3d at 636 (explaining that Department of Labor regulations require “plan administrators working with an apparently deficient administrative record to inform claimants of the deficiency and to provide them with an opportunity to resolve the problem by furnishing the missing information.”). The same principle undermines defendant’s allegation that plaintiff failed to provide sufficient information about electrician’s wages. Defendant never requested that information, likely because the trustees were well aware of the wage rates. ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 10 1 who conducted the MRI, diagnosed plaintiff with “severe thoracolumbar degenerative 2 disc disease.” PSEW 109. He opined that the condition “will not improve and will likely 3 even worsen. . . . He will never likely be able to do any work; he tried light duty/desk 4 work to no avail secondary to prolonged sitting.” PSEW 109. Nevertheless, the Trustees 5 declined to find that plaintiff was disabled pursuant to the Plan in May 2005, based in 6 large part on the fact that plaintiff attempted to work as a real estate appraiser. PSEW 7 181-183. As set forth above, the Board informed physicians that the evaluation of 8 whether a claimant could perform alternate work was limited to activities with 9 comparable or equivalent wage potential to electrical work. The Plan itself defines 10 disability in terms of whether the participant can perform work that is “substantially 11 gainful in character.” PSEW 249. However, there is no evidence that the Trustees 12 considered that factor in plaintiff’s case. Even if the Court had not already concluded that 13 the Board abused its discretion, it would so find based on its failure to apply its own 14 standard in plaintiff’s case. Under the proper standards and in light of the medical 15 evidence, the record demonstrates that plaintiff was disabled pursuant to the Plan’s 16 definition by May 2005. 17 Having determined that defendant abused its discretion, the Court may grant 18 summary judgment in plaintiff’s favor and order the provision of benefits in accordance 19 with this order. See, e.g., Montour, 588 F.3d at 637; Fed. R. Civ. P. 56(f). In this case, 20 absent defendant’s arbitrary and capricious conduct, plaintiff should have received 21 benefits beginning January 1, 2008, the first day of the first month following his 22 application for benefits. See, e.g., Grosz-Salomon v. Paul Revere Life Ins. Co., 237 F.3d 23 1154, 1163 (9th Cir. 2001) (finding that an award of retroactive benefits was appropriate 24 when the administrator’s denial of benefits was contrary to the factual record). By that 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 11 1 time, he had already been disabled under the Plan’s definition for more than six months, 2 so the waiting period would not apply. Therefore, the Court orders defendant to pay 3 plaintiff benefits as of January 1, 2008. 4 Plaintiff has also requested an award of attorney’s fees and costs. See, e.g., United 5 Steel Workers of Am. v. Ret. Income Plan for Hourly-Rated Employees of ASARCO, 6 Inc., 512 F.3d 555, 564 (9th Cir. 2008) (explaining that as a “general rule, the prevailing 7 party on an ERISA claim is entitled to attorney’s fees, unless special circumstances would 8 render such an award unjust.”). In this case, plaintiff requested an award of fees in his 9 response memorandum, and defendant, in its reply, did not identify any factors that would 10 make an award unjust. Nor does the record reveal any such factors. Accordingly, the 11 Court awards plaintiff his attorney’s fees in prosecuting this case. Plaintiff’s counsel 12 shall submit a memorandum and declaration setting forth those fees and costs within 13 thirty days of the date of this order. 14 III. CONCLUSION 15 For all of the foregoing reasons, the Court DENIES defendant’s motion for 16 summary judgment (Dkt. #11) and GRANTS summary judgment in plaintiff’s favor. The 17 Clerk of the Court is directed to enter judgment in favor of plaintiff and against 18 defendant. 19 20 DATED this 18th day of January, 2011. 21 22 A Robert S. Lasnik 23 United States District Judge 24 25 26 ORDER GRANTING SUMMARY JUDGMENT IN PLAINTIFF’S FAVOR- 12
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