Vanmark Strickland v. AT&T West Disability Benefits Program, No. 3:2017cv01393 - Document 65 (N.D. Cal. 2018)
Court Description: AMENDED ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT [re 40 MOTION for Summary Judgment Defendant's Notice of Motion and Motion for Summary Judgment filed by AT&T Pension Benefit Plan]. Signed by Judge William Alsup on 2/7/2018. (whasec, COURT STAFF) (Filed on 2/7/2018)
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Vanmark Strickland v. AT&T West Disability Benefits Program Doc. 65 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 VANMARK STRICKLAND, 11 For the Northern District of California United States District Court 10 12 13 14 Plaintiff, v. AT&T PENSION BENEFIT PLAN, / 16 18 AMENDED ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT Defendant. 15 17 No. C 17-01393 WHA INTRODUCTION In this action for disability benefits, defendant insurer moves for summary judgment. For the reasons herein, the motion is GRANTED. 19 STATEMENT 20 In essence, the facts are simple. A former employee was denied disability benefits 21 under his former employer’s pension plan because he failed to provide proof that he was still 22 eligible to receive benefits. After his appeal was denied, the former employee brought this 23 action against the plan. 24 Plaintiff Vanmark Strickland worked for AT&T Inc. for more than fifteen years before 25 he became disabled “due to low back pain which radiates to his hip and down his leg to his right 26 foot” (Dkt. No. 38 ¶ 2). He became disabled on June 3, 2013, and as a member and beneficiary 27 of the AT&T West Disability Benefits Program received short-term and long-term disability 28 under that plan up until March 2015 (Dkt. No. 40-1 ¶ 9). Dockets.Justia.com 1 Strickland was then approved for pension disability benefits under the plan at issue, 2 defendant AT&T Pension Benefit Plan, effective June 9, 2015 (see AR ATT003513). 3 The AT&T Pension Benefit Plan fell under the AT&T Umbrella Benefit Plan No. 3. 4 Sedgwick Claims Management Services, Inc., operating under the name AT&T Integrated 5 Disability Service Center (IDSC), was responsible for adjudicating claims for disability pension 6 benefits made by participants of the AT&T Umbrella Benefit Plan No. 3 (Dkt. No. 40-1 ¶ 7; 7 Dkt. No. 56-1 at 4). Importantly, the AT&T Pension Benefit Plan stated: “The Plan 8 Administrator will have all powers necessary or appropriate to accomplish its respective duties 9 and obligations including, without limitation, complete and absolute discretion to interpret the 11 For the Northern District of California United States District Court 10 Plan and all matters of fact with respect to such duties and obligations” (AR ATT002824). The AT&T Pension Benefit Plan specified that it would provide benefits until the 12 earliest of six possible or eventual dates, one being “[t]he date the Program Participant is no 13 longer Totally Disabled as a result of [injury] or sickness” (AR ATT003239). In order to assess 14 whether a participant was “Totally Disabled,” the participant was required to “provide the 15 Plan Administrator with such information and evidence, and [] sign such documents, as 16 reasonably may be requested from time to time for purpose of administration of the Plan” 17 (AR ATT002838). If the participant failed to submit the requested information, at least 18 forty-five additional days were allowed to provide the information, after which point a 19 “decision [would] be made without regard to the requested information” (AR ATT003292). 20 On December 22, 2015, IDSC notified Strickland that it would need additional medical 21 documentation by February 15, 2016, in order to determine whether he remained “Totally 22 Disabled” and eligible to receive benefits. Specifically, the letter stated that Strickland needed 23 to provide: (1) a disability questionnaire; (2) an authorization for release of information; and 24 (3) copies of all medical records dating from August of the previous year. The letter further 25 stated that it was Strickland’s responsibility to pay any fees charged for medical records, and 26 that he would need to sign and date the authorization for release of information and provide it to 27 his physician and a copy to IDSC. Finally, the letter warned that if this information was not 28 2 1 received by IDSC by February 15, 2016, his claim would be denied for “failure to provide 2 information under the plan/program provisions” (AR ATT003507). 3 After Strickland failed to provide the information requested in December 2015, IDSC 4 sent another letter dated January 23, 2016, indicating it had sent a previous request and that 5 if the requested information was not received by February 15, his claim would be denied (see 6 AR ATT003500). After the passing of that deadline without receiving any documentation from 7 Strickland, IDSC sent him another letter dated March 22, urging him to submit this information 8 as soon as possible (see AR ATT003493). Strickland faxed to IDSC the questionnaire and 9 authorization for release of information on April 22 (see AR ATT003486–3489). Missing from this submission was the requested medical documentation. 11 For the Northern District of California United States District Court 10 On April 29, IDSC sent a letter to Strickland denying him benefits effective May 1, 12 in which it noted all previous requests made and explained that “[t]he determination to deny 13 benefits is based on the fact that as of the date of this letter, we have not received any medical 14 documentation to establish your continued inability to perform active service with a Program 15 Employer as a result of sickness or injury” (AR ATT003481). The letter informed Strickland 16 of his right to submit a written appeal within 180 days, advising that he state the reasons he 17 believed his claim should not have been denied, and to submit any “additional medical or 18 vocational information, and any facts, data, questions or comments” he deemed appropriate 19 in order for IDSC to give his appeal proper consideration. Enclosed was a copy of the appeal 20 procedure and appeal form. Strickland was notified of his right to sue once he had exhausted 21 this appeals process (AR ATT0003481–3482). 22 Strickland filled out an appeal form on May 10, explaining that he was appealing the 23 denial of benefits decision because IDSC “didn’t have all of the information requested 24 regarding [his] status and condition” (AR ATT003473). Strickland forwarded this form to 25 IDSC, along with a copy of the authorization for release of information submitted to John Muir 26 Health (AR ATT003472–3473). On May 17, John Muir Health sent a letter to IDSC in which it 27 acknowledged that it had “received your request for the health records of Vanmark Strickland,” 28 but stated that it could not comply with the request because while Strickland’s authorization 3 1 was submitted, “a request for records from AT&T is missing” (AR ATT003471). The letter 2 further noted that John Muir Health does not process third-party requests, and that “[i]f the 3 patient is responsible for payment, the patient needs to request the records and records would 4 need to be sent to the patient not AT&T” (ibid.). IDSC notified Strickland of this letter and its 5 contents on June 1 (see AR ATT003362–3363). 6 On May 31, IDSC sent a letter to Strickland acknowledging that it had received his 7 appeal on May 25, and would render a decision by July 9 (see AR ATT003470). On July 1, 8 IDSC sent another letter, in which it announced its decision to uphold the denial decision due to 9 the fact that it still had not received Strickland’s medical documentation. The letter mistakenly referenced the “AT&T West Disability Benefits Program” throughout, while referencing the 11 For the Northern District of California United States District Court 10 provision defining “Totally Disabled” found in the AT&T Pension Benefit Plan. It noted that 12 the decision to deny benefits was final, and that Strickland had “the right to bring a lawsuit 13 against the AT&T Umbrella Benefit Plan No. 1, under which the AT&T West Benefits Program 14 is a program” (AR 003465–3466). Strickland subsequently hired an attorney, who requested 15 documents from IDSC (AR ATT003452–3459). 16 Strickland brought this action against AT&T West Benefits Program to “seek[] review 17 of a failure to extend benefits under a disability plan which may be covered by ERISA” (Dkt. 18 No. 1 ¶ 1). An order dismissed his ERISA claim and adjoining state law causes of action for 19 breach of contract, intentional infliction of emotional distress, and bad faith (Dkt. No. 24). 20 Strickland’s amended complaint alleges “wrongful termination of benefits under a plan subject 21 to ERISA” against AT&T Pension Benefit Plan (Dkt. No. 38 ¶ 1). Defendant now moves for 22 summary judgment (Dkt. No. 40). ANALYSIS 23 24 1. STANDARD OF REVIEW. 25 Following the Supreme Court’s direction in Firestone, our court of appeals held that 26 abuse of discretion review is required “whenever an ERISA plan grants discretion to the plan 27 administrator,” but this review must be “informed by the nature, extent, and effect on the 28 decision-making process of any conflict of interest that may appear in the record.” Abatie v. 4 1 Alta Health & Life Ins. Co., 458 F.3d 955, 967 (9th Cir. 2006). We therefore look to the record 2 to determine the appropriate standard of review. Under the AT&T Pension Benefit Plan, “[t]he 3 Plan Administrator will have all powers necessary or appropriate to accomplish its respective 4 duties and obligations including, without limitation, complete and absolute discretion to 5 interpret the Plan and all matters of fact with respect to such duties and obligations” (ATT 6 AR002824). Accordingly, all of Strickland’s arguments as to why de novo review should be 7 applied are meritless, contradicted by the unambiguous record and letter of the law. We apply 8 abuse of discretion review. Abuse of discretion review allows a district court “to tailor its review to all the 9 circumstances before it,” and “decide in each case how much or how little to credit the plan 11 For the Northern District of California United States District Court 10 administrator’s reason for denying insurance coverage.” Abatie, 458 F.3d at 968. While our 12 court of appeals considered the “level of skepticism with which a court views a conflicted 13 administrator’s decision,” if, for instance, “a structural conflict of interest is accompanied [] by 14 evidence of malice, of self-dealing, or of a parsimonious claims-granting history,” no immediate 15 cause for skepticism arises here. AT&T has delegated authority over plan administration to 16 Sedgwick (operating as IDSC), eliminating any structural conflict of interest (see Dkt. No. 40-1, 17 Exh. A). This order reviews IDSC’s decision for abuse of discretion, recognizing that this is a 18 19 question of law and “the usual tests of summary judgment, such as whether a genuine dispute of 20 material fact exists, do not apply.” Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 21 1999). 22 2. IDSC DID NOT ABUSE ITS DISCRETION. 23 “Under the deferential abuse of discretion standard of review, the plan administrator’s 24 interpretation of the plan will not be disturbed if reasonable.” Day v. AT&T Disability Income 25 Plan, 685 F.3d 848, 852 (9th Cir. 2012) (citations and quotations omitted). “ERISA Plan 26 administrators abuse their discretion if they render decisions without any explanation, . . . 27 construe provisions of the plan in a way that conflicts with the plain language of the plan, or 28 rely on clearly erroneous findings of fact.” Id. at 853 (citations and quotations omitted). In 5 1 light of the criteria established by our court of appeals, and for the reasons stated below, it is 2 clear that IDSC did not abuse its discretion in denying benefits to Strickland. 3 4 A. IDSC Not Responsible for Obtaining Records Under Plan. Strickland’s core argument as to why IDSC abused its discretion in denying him benefits medical records directly from health-care providers, but suddenly IDSC changed policy, instead 7 relying on Strickland to supply these records (see Dkt. No. 49 at 1). Strickland cites to signed 8 authorizations dated May 2014 and April 2016 as evidence of this supposedly abandoned 9 practice (ibid.). But he does not dispute that the three letters he received prior to denial 10 expressly stated that “IDSC requires that you provide [] the information”; “[i]t is your 11 For the Northern District of California is that in previous years the plan administrator had used Strickland’s authorization to obtain his 6 United States District Court 5 responsibility to promptly pay any fees charged for medical records”; and “[i]f all of the 12 requested information is not received . . . your claim will be denied for failure to provide 13 information under the plan/program provisions” (AR ATT003507, AR ATT003500, AR 14 ATT003493). Indeed, the plan itself stated that “[a] participant will provide the Plan 15 Administrator with such information and evidence, and will sign such documents, as 16 reasonably may be requested from time to time for purpose of administration of the Plan” 17 (AR ATT002838). 18 In his opposition, Strickland asks: “[I]f the Plan was requiring the plan participant 19 to obtain the records directly, then why would it need the authorization?” (Dkt. No. 49 at 5). 20 The answer is that IDSC did not require Strickland to obtain the records directly. In fact, 21 Strickland sent a signed authorization to John Muir Health, in which he requested that his 22 records be faxed to IDSC (see AR ATT003472). While requiring an authorization, the fax 23 transmittal would have eliminated the need for IDSC to do the legwork or for Strickland to 24 obtain the records “directly.” Strickland’s argument presupposes that IDSC was aware that 25 John Muir Health would not comply with his request. Strickland provides no basis for that 26 assumption, and if there were IDSC still did not abuse its discretion by requiring Strickland to 27 obtain the records himself. Strickland also asks why IDSC didn’t contact his physician after it 28 received from John Muir Health “the [May 17] letter refusing to send medical records” (Dkt. 6 1 No. 49 at 8; see AR ATT003471). But IDSC made Strickland aware of that letter on June 1, 2 giving Strickland time to contact his physician and obtain the records before an appeal 3 determination was made on July 1 (see AR ATT003362–3363). 4 Moreover, Strickland received the first follow-up request for medical documentation 5 in December 2016, just six months after he began receiving benefits under the plan (see AR 6 ATT003513, 3507). To the extent that he bases his argument on the administrative procedures 7 throughout his previous short-term and long-term disability plans, these are not at issue and 8 have no bearing on this distinct plan. The language of the plan is clear, and the actions and 9 ultimate decision of IDCS are consistent with its provisions. IDSC did not abuse its discretion by requiring Strickland to obtain and provide his own medical records, or by denying him 11 For the Northern District of California United States District Court 10 benefits when he failed to do so. 12 B. 13 14 15 IDSC Adhered to Procedural Requirements. Strickland argues that IDSC improperly handled his appeal in two ways. Neither argument has merit. First, Strickland asserts that in its April 29 denial of benefits letter, IDSC “failed to 16 describe what is necessary to perfect the claim, or why the material is necessary” (Dkt. No. 49 17 at 6). Under federal law, an ERISA plan administrator “shall set forth, in a manner calculated 18 to be understood by the claimant: 19 20 21 22 23 (1) [t]he specific reason or reasons for the adverse determination; (2) [r]eference to the specific plan provisions on which the benefit determination is based; (3) [a] description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such information is necessary; and (4) [a] description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review. 24 29 CFR 2560.503-1(g)(1)(i)–(iv). Under the Summary Plan Description appears each of these 25 requirements (see ATT AR003290-3291). Appropriately, in its April 29 denial letter, IDSC: 26 (1) stated that “[t]he determination to deny benefits is based on the fact that as of the date of this 27 letter, we have not received any medical documentation to establish your continued inability to 28 perform active service with a Program Employer as a result of sickness or injury”; (2) made 7 1 specific reference to the provision of the plan which defines “Totally Disabled”; (3) explained 2 that it needed the request for updated medical information returned in order to review his claim 3 for ongoing benefits; and (4) explained that he could appeal the decision within 180 days, after 4 which he had a right to sue under Section 502 of the Act (see AR ATT003481). Indeed, IDSC 5 followed the requirements set forth in the plan and federal regulations exactly. 6 Second, Strickland claims that in its July 1 denial of appeal letter, IDSC referred to the concerning the denial of benefits under the AT&T Pension Plan” (Dkt. No. 49 at 8). Procedural 9 requirements for appeal determinations closely follow those for initial benefit determinations, 10 see 29 CFR 2560.503-1(j), which are also mirrored in the Summary Plan Description (see AR 11 For the Northern District of California wrong plan, which “does not operate to foreclose the submission of additional material 8 United States District Court 7 ATT003292). Our court of appeals requires “substantial compliance” with the regulatory 12 requirements. See Chuck v. Hewlett Packard Co., 455 F.3d 1026, 1032 (9th Cir. 2006). 13 IDSC strictly adhered to these requirements in its denial of appeal letter, except that throughout 14 the letter it erroneously referred to the “AT&T West Disability Benefits Program” and “AT&T 15 Umbrella Benefit Plan No. 1” instead of the “AT&T Pension Benefit Plan” and “AT&T 16 Umbrella Benefit Plan No. 3.” IDSC’s letter otherwise correctly included the specific provision 17 of the AT&T Pension Benefit Plan on which it based its denial, and met all of the express 18 procedural requirements (see AR ATT003465-3466). It is thus to no avail that Strickland argues 19 that by referencing the wrong plan — a plan from which Strickland had already been terminated 20 in March 2015 — IDSC did not “substantially comply” with these requirements in its July 1 21 denial of appeal letter, or that he was prejudiced by this harmless error. IDSC plainly did not 22 abuse its discretion in denying Strickland’s appeal. 23 24 C. SSA Determination Contrary to Plan. Strickland relies on Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623 (9th Cir. 25 2009), to argue that IDSC’s failure to consider the evidence used by the Social Security 26 Administration in awarding him disability benefits is sufficient grounds to find abuse of 27 discretion (Dkt. No 49 at 9). In Montour, our court of appeals reviewed an insurance company’s 28 “failure to grapple with the SSA’s contrary disability determination,” where the insurance 8 1 company’s contrary determination was made after having reviewed the plaintiff’s medical 2 records. Here, IDSC had no medical records to review. It based its decision, not on evidence 3 which it could “compare and contrast” with that relied on by the SSA, (ibid.), but on a complete 4 lack of evidence which could support a determination that Strickland was “Totally Disabled” 5 under the plan. Absent such evidence, the plan gave IDSC the discretion to make a decision 6 “without regard to the requested information,” and the numerous letters Strickland received 7 from IDSC warned that his claim would be denied “for failure to provide information under the 8 plan/program provisions” (AR ATT003292, 3507). IDSC was not required to follow the SSA’s 9 determination. See Madden v. ITT Long Term Disability Plan for Salaried Employees, 914 F.2d 1279, 1286 (9th Cir. 1990). Strickland’s reliance on Montour is therefore misplaced, and does 11 For the Northern District of California United States District Court 10 not support a finding that IDSC abused its discretion. 12 D. Strickland Misinterprets Plan Provision For Correcting Mistakes. 13 Strickland argues that IDSC “failed either to apply, or to consider applying, a provision 14 of the AT&T Pension [Benefit] Plan which allowed the Plan to correct errors” (Dkt. No. 49 at 2). 15 Strickland claims that IDSC should have done so upon his submission of medical records, after 16 IDSC made its final decision to deny him benefits. Specifically, the provision Strickland cites to 17 provides: “Plan provisions to the contrary notwithstanding, if an error has occurred in 18 connection with the Plan, including, but not limited to, an error in determining the amount of a 19 Participant’s Accrued Benefit, as a result of human or systems error, data, recordkeeping, or 20 other administrative error, the Plan Administrator may correct the error to the extent 21 reasonably practicable by taking any action it deems appropriate to effect such correction” 22 (AR ATT002838). Strickland self-servingly asks that this provision be applied to a reasonable 23 decision to deny him benefits, a circumstance for which it was clearly not intended. IDSC did 24 not “error” as Strickland suggests, but denied him benefits because it was unable to discern 25 whether he remained “Totally Disabled” and qualified for benefits under the plan. Despite 26 multiple requests, Strickland failed to provide the necessary medical documentation to allow 27 IDSC to evaluate his continued eligibility. IDSC properly denied Strickland’s claim “without 28 9 1 regard to the requested information” (AR ATT003292). Its decision was therefore reasonable 2 and not an abuse of discretion. 3 CONCLUSION 4 For the foregoing reasons, defendant’s motion for summary judgment is GRANTED. 5 The Clerk shall close the file. 6 7 IT IS SO ORDERED. 8 9 Dated: February 7, 2018. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
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