Rein v. The Standard Insurance Company et al, No. 2:2009cv02348 - Document 30 (E.D. Cal. 2010)
Court Description: ORDER denying 26 Pltf's Motion for Summary Judgment, signed by Judge Garland E. Burrell, Jr., on 7/30/10. (Kastilahn, A)
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Rein v. The Standard Insurance Company et al Doc. 30 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE EASTERN DISTRICT OF CALIFORNIA 7 8 JAN ELLEN REIN, Plaintiff, 9 v. 10 11 12 13 THE STANDARD INSURANCE COMPANY, UNIVERSITY OF THE PACIFIC LONG TERM DISABILITY BENEFITS PLAN, Defendants. ________________________________ ) ) ) ) ) ) ) ) ) ) ) ) 2:09-cv-02348-GEB-EFB ORDER DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT* 14 Plaintiff Jan Ellen Rein moves for summary judgment, in 15 16 which Plaintiff seeks “a determination that the appropriate standard 17 of review of her claim for long term disability benefits is de novo.” 18 (Pl.’s Notice & Mot. for Summ. J. 1:24-26.) 19 Insurance Company (“Standard”) and University of the Pacific Long Term 20 Disability Benefits Plan oppose Plaintiff’s motion, arguing 21 Plaintiff’s ERISA claim should be reviewed under the abuse of 22 discretion standard of review. Defendants Standard Plaintiff was employed as a law professor by the University 23 24 of the Pacific, McGeorge School of Law, until May 31, 2007. (Compl. ¶ 25 9.) 26 “participant” and received coverage under a group long term disability As a University of Pacific employee, Plaintiff was a 27 28 * argument. This matter is deemed suitable for decision without oral E.D. Cal. R. 230(g). 1 Dockets.Justia.com 1 insurance policy (“the Policy”). 2 6, 10.) 3 2006, submitted a claim for long term disability benefits under the 4 Policy to Defendant Standard. 5 22, 2007, Standard denied Plaintiff’s claim for benefits. 6 Plaintiff filed her complaint in this federal court on August 21, 7 2009, challenging Standard’s denial of her benefits claim under 29 8 U.S.C. § 1132(a)(1)(B); she filed her pending summary judgment motion 9 on June 28, 2010. 10 11 I. (Smith Decl. ¶ 4, Ex. A; Compl. ¶¶ Plaintiff had a history of back problems, and on November 28, (Compl. ¶ 10.) However, on February (Id.) The Policy Constitutes the ERISA Plan at Issue in This Case Plaintiff’s ERISA claim is brought under 29 U.S.C. § 12 1132(a)(1)(B), which “permits a participant in an ERISA-regulated plan 13 to bring a civil action to recover benefits due to her under the terms 14 of her plan, to enforce rights under the terms of the plan, or to 15 clarify her rights to future benefits under the terms of the plan.” 16 Gilliam v. Nevada Power Co., 488 F.3d 1189, 1192 n.2 (9th Cir. 2007) 17 (quoting 29 U.S.C. § 1132(a)(1)(B)). 18 Plaintiff alleges in her complaint that the Policy is the ERISA 19 plan at issue. (Compl. ¶ 1.) 20 summary judgment motion that “the administrative record [in this case] 21 contains no plan . . . .” 22 counters that the Policy is the pertinent plan. 23 However, Plaintiff argues in her (Pl.’s Mot. for Summ. J. 5:2-3.) Standard (Opp’n 7-9.) Plaintiff’s argument that there “is no plan” is unavailing; 24 “[t]he [group disability] insurance policy is the [ERISA] plan 25 document in this case.” 26 750032, at *1 (9th Cir. Mar. 4, 2010) (rejecting plaintiff’s argument 27 that “there is no plan document, only an insurance policy,” citing 28 Cinelli v. Security Pacific Corp., 61 F.3d 1437, 1441 (9th Cir. 1995) Sterio v. HM Life, No. 08-17426, 2010 WL 2 1 (stating “it is clear that an insurance policy may constitute the 2 ‘written instrument’ of an ERISA plan”)). 3 II. The Abuse of Discretion Standard of Review Applies to Plaintiff’s ERISA Claim 4 A “denial of benefits challenged under 29 U.S.C. § 5 1332(a)(1)(B) is to be reviewed under a de novo standard unless the 6 benefit plan gives the administrator or fiduciary discretionary 7 authority to determine eligibility for benefits or to construe the 8 terms of the plan.” Firestone Tire & Rubber Co. v. Burch, 489 U.S. 9 101, 115 (1989). However, “the plan must unambiguously” confer 10 discretion on the administrator or fiduciary to invoke the abuse of 11 discretion standard of review. Abatie v. Alta Health & Life Ins. Co., 12 458 F.3d 955, 962 (9th Cir. 2006) (en banc) (citing Kearney v. 13 Standard Ins. Co., 175 F.3d 1084, 1090 (9th Cir) (en banc)) 14 Plaintiff argues de novo review is the applicable standard 15 of review in this case because “no plan instrument properly creates or 16 delegat[e]s discretionary authority” to Standard. (Mot. for Summ. J. 17 3:13.) The essence of Plaintiff’s argument appears to be that where 18 the ERISA plan is an insurance policy, it is improper for the policy 19 to confer discretion upon the insurer. (Reply 1:26-2:1 (stating that 20 “an insurance company [cannot] bestow discretion on itself in a 21 policy.”)) Defendant counters that its “denial of [Plaintiff’s] 22 benefits should be reviewed for abuse of discretion because the Policy 23 unambiguously confers discretionary authority upon Standard . . . .” 24 (Opp’n 7:3-7.) 25 The relevant language of the plan is included in a section 26 entitled “Allocation of Authority” and provides: 27 28 Except for those functions which the Group Policy specifically reserves to the Policyholder or 3 1 2 3 Employer, [Standard] [has] full and exclusive authority to control and manage the Group Policy, to administer claims, and to interpret the Group Policy and resolve all questions arising in the administration, interpretation, and application of the Group Policy. 4 5 6 7 [Standard’s] authority includes, but is not limited to: 1. The right to resolve all matters when a review has been requested; 2. The right to establish and enforce rules and procedures for the administration of the Group Policy and any claim under it; 3. The right to determine: a. Eligibility for insurance; b. Entitlement to benefits; c. The amount of benefits payable; and d. The sufficiency and the amount of information [Standard] may reasonably require to determine a., b., or c., above. 8 9 10 11 12 13 14 15 16 17 Subject to the review procedures of the Group Policy, any decision we make in the exercise of our authority is conclusive and binding. (Smith Decl. Ex. A STND 1469-00971) (emphasis added). This plan language unambiguously confers discretionary 18 authority upon Standard to construe and interpret the plan and make 19 final benefits determinations. 20 standard of review applies to Plaintiff’s ERSIA claim. 21 Alta Health & Life Ins. Co., 458 F.3d 955, 963-64 (9th Cir. 2006) (en 22 banc) (holding that abuse of discretion standard of review applies if 23 a plan grants the power to construe and interpret the plan and to make 24 final benefit determinations); see also Bendixen v. Standard Ins. Co., 25 185 F.3d 939, 943 (9th Cir. 1999), overruled on other grounds by 26 Abatie, 458 F.3d at 966-69 (finding nearly identical policy language 27 sufficient to confer discretion on insurer to warrant application of 28 abuse of discretion standard of review); Sterio v. Highmark Life Ins. Therefore, the abuse of discretion 4 See Abatie v. 1 Co., No. 2:06-CV-1045 MCE GGH, 2008 WL 4454047, at *3 (E.D. Cal. Sept. 2 30 2008) (same); Skeen v. Rite Aid Corp., 2010 WL 231383, at *5 (E.D. 3 Cal. Jan. 12, 2010) (same); Whalen v. Standard Ins. Co., No. SACV08- 4 0878 DOC (MLGx), 2009 WL 3756651, at *7 (C.D. Cal. Nov. 5, 2009) 5 (same); Ekno v. Northwestern Mut. Life Ins., No. Civ. S-06-2148 RRB 6 EFB, at *4 (E.D. Cal. Mar. 20, 2008) (same); Lawless v. Northwestern 7 Mut. Life Ins. Co., 360 F. Supp. 2d 1046, 1054 (N.D. Cal. 2005) 8 (same). Plaintiff’s reliance upon Madden v. ITT Long Term Disability 9 10 Plan for Salaried Employees, 914 F.2d 1279 (9th Cir. 1994) for the 11 proposition that the University of the Pacific, as the plan 12 administrator, was required to confer discretion upon Standard is 13 unpersuasive. 14 ERISA plan expressly gives the administrator or fiduciary 15 discretionary authority to determine eligibility for benefits or to 16 construe the terms of the plan and (2) pursuant to ERISA, 29 U.S.C. § 17 1005(c)(1)(1998), a named fiduciary properly designates another 18 fiduciary, delegating its discretionary authority, the arbitrary and 19 capricious standard of review” applies. 20 added). 21 In Madden, the Ninth Circuit held: “where: (1) the Id. at 1283-84 (emphasis Under ERISA, an entity “is a fiduciary with respect to a 22 plan to the extent (i) [it] exercises any discretionary authority or 23 discretionary control respecting management of such plan or exercises 24 authority or control respecting management or disposition of its 25 assets . . . or (iii) [it] has any discretionary responsibility in the 26 administration of such plan.” 27 plan provides Standard with discretionary authority concerning the 28 management and administration of the plan, Standard is a fiduciary of 29 U.S.C. § 1002(21)(A). 5 Since the 1 the plan and the plan unambiguously confers discretionary authority 2 upon a fiduciary to determine eligibility for benefits and construe 3 the terms of the plan. 4 discretionary authority to another entity, Madden is inapplicable. 5 Further, Plaintiff has not supported his contention that an insurance 6 policy may not confer discretion upon the insurer with authority or 7 otherwise shown that this contention comports with authority 8 construing ERISA. Since Standard did not delegate its Since the plan at issue in this case unambiguously confers 9 10 discretionary authority upon Standard to determine benefit eligibility 11 and interpret the plan, the abuse of discretion standard of review 12 applies to Plaintiff’s claim. 13 summary judgment is DENIED. 14 Dated: Therefore, Plaintiff’s motion for July 30, 2010 15 16 17 GARLAND E. BURRELL, JR. United States District Judge 18 19 20 21 22 23 24 25 26 27 28 6
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