Minton v. Deloitte and Touche USA LLP Plan, No. 4:2009cv05636 - Document 35 (N.D. Cal. 2011)
Court Description: ORDER DENYING PLAINTIFFS 23 MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANTS 27 CROSS- MOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT. Signed by Judge Claudia Wilken on 6/3/2011. (ndr, COURT STAFF) (Filed on 6/3/2011)
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Minton v. Deloitte and Touche USA LLP Plan Doc. 35 1 2 IN THE UNITED STATES DISTRICT COURT 3 FOR THE NORTHERN DISTRICT OF CALIFORNIA 4 5 BUD MINTON, 6 7 8 No. 09-05636 CW Plaintiff, v. DELOITTE AND TOUCHE USA LLP PLAN, 9 Defendant. / United States District Court For the Northern District of California 10 11 12 13 ORDER DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANT’S CROSSMOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT METROPOLITAN LIFE INSURANCE COMPANY, Real Party in Interest. ____________________________________/ 14 15 Plaintiff Bud Minton moves for summary judgment on his claims 16 against Defendant Deloitte and Touche USA LLP Plan and Real Party 17 in Interest Metropolitan Life Insurance Company (MetLife) 18 (collectively, Defendant) for long term disability (LTD) benefits 19 based on his inability to work in “any occupation”1 and for a 20 supplemental benefit, both under the Employee Retirement Income 21 Security Act (ERISA), 28 U.S.C. § 1132, and for interest on late 22 payments of ERISA benefits under California Insurance Code 23 § 10111.2. 24 dismissal of the supplemental benefit claim for failure to exhaust Defendant opposes the motion and cross-moves for 25 26 1 27 28 After Plaintiff filed his complaint, Defendant awarded him benefits under the “any occupation” definition of disability. Therefore, Plaintiff’s ERISA claim for an award of these benefits is moot. Dockets.Justia.com 1 administrative remedies and for summary judgment. 2 taken under submission on the papers. 3 papers filed by the parties, the Court denies Plaintiff’s motion 4 for summary judgment and grants Defendant’s cross-motions to 5 dismiss and for summary judgment. 6 7 The motions were Having considered all the PROCEDURAL BACKGROUND Plaintiff formerly worked as a graphics designer for Deloitte 8 and Touche (Deloitte) and was a participant in the Deloitte and 9 Touche USA LLP Plan (Plan). United States District Court For the Northern District of California 10 11 Deloitte administers the Plan. MetLife is the funding source and the claim fiduciary for the Plan. In a previous lawsuit against the same Defendant, Minton v. 12 Deloitte and Touche USA LLP Plan (Minton I), C 08-1941 CW, the 13 Court granted Plaintiff’s motion for judgment, concluding that he 14 was eligible for LTD benefits under the Plan’s “own occupation” 15 definition of disability. 16 benefits under the “any occupation” Plan provision and the 17 supplemental benefit provision. 18 19 The Court remanded Plaintiff’s claim for FACTUAL BACKGROUND Participants in the Plan can choose coverage equal to either 20 fifty percent or 66 2/3 percent of their basic monthly salary. 21 March 1, 1997, the option of a supplemental benefit was added for 22 participants at the 66 2/3 level. 23 the supplemental benefit, they had three coverage options ranging 24 from $250 to $917 of additional monthly benefits.2 On If participants chose to pay for Participants 25 26 27 28 2 The maximum supplemental benefit increased over time, reaching $1,250 per month in 2006, when Plaintiff became disabled. AR at 330, 366. 2 1 could apply for the supplemental benefit, without evidence of good 2 health, only during the first thirty-one days they were eligible 3 for coverage. 4 announced in a rider amending the Plan. 5 at 201. 6 Description (SPD) for the years 1998 and 2000 through 2007. 7 208, 224, 242, 261, 283, 308, 330, 366 and 435. 8 9 AR at 475, 206. The supplemental benefit was first Administrative Record (AR) Thereafter, it was included in the Supplemental Plan AR at It was Deloitte’s practice to distribute documents describing employee benefits to each employee by way of the employee’s United States District Court For the Northern District of California 10 individual mailbox. 11 computer system, Deloitte does not have specific information as to 12 how notice of the supplemental benefit was given to Plaintiff, but 13 it was Deloitte’s custom and practice to provide notice of all 14 changes to insurance plans. 15 information about the Plan, including the SPD, was available to all 16 employees on Deloitte’s intranet. 17 computerized records show that at least twenty-two Plan 18 participants became disabled between January, 1997 and December, 19 1998 and, of those twenty-two, four received the supplemental 20 benefit. 21 Curtin Dec. at ¶ 3. Due to changes in its Id. at ¶¶ 3-4. Starting in 1999, all Id. at ¶ 5. MetLife’s Hallford Dec. at ¶ 3. Plaintiff enrolled in the Plan on November 13, 1990, prior to 22 the availability of the supplemental benefit. 23 in the 66 2/3 percent of salary coverage option. 24 Plaintiff was never again presented with a LTD insurance 25 application form or asked to review his coverage, and disability 26 insurance was not part of the annual open enrollment process. 27 at 185, 187. 28 Plaintiff enrolled AR at 164. AR According to Plaintiff, the Plan first disclosed the 3 1 availability of the supplemental benefit in the March, 1998 edition 2 of the LTD handbook which served as the SPD. 3 states that he did not become aware of the supplemental benefits 4 until his counsel discovered it during the prosecution of Minton I. 5 AR at 202. Plaintiff On September 14, 2009, after the remand of his first lawsuit, 6 Plaintiff wrote to MetLife requesting payment of LTD benefits under 7 the “any occupation” provision of the Plan, and the supplemental 8 benefit. 9 request to counsel for Deloitte, the Plan Administrator. United States District Court For the Northern District of California 10 On September 20, 2009, Plaintiff presented the same On September 24, 2009, MetLife wrote to Plaintiff that it was 11 extending its time to make a determination regarding LTD benefits 12 under the “any occupation” definition of disability because it had 13 not yet received requested medical information. 14 September 24 and October 5, 2009, MetLife contacted Deloitte and 15 inquired whether its records showed that Plaintiff had applied and 16 paid for the supplemental benefit. 17 2009, James Blakely, from Deloitte, responded that Plaintiff had 18 not applied for the supplemental benefit and never paid for such 19 coverage. 20 AR at 703-04. AR at 571, 694. On On October 6, AR at 472. On December 4, 2009, MetLife wrote to Plaintiff’s counsel that 21 Plaintiff was eligible for LTD benefits under the “any occupation” 22 definition of disability, but that he had not applied for the 23 supplemental benefit. 24 decision could be appealed by sending a written request to MetLife 25 within 180 days of receipt of the denial letter. 26 Plaintiff is currently receiving LTD benefits under the “any 27 occupation” provision of the Plan. 28 4 AR at 678. The letter indicated that the Id. at 679. DISCUSSION 1 2 Plaintiff’s motion for summary judgment addresses his claim 3 under ERISA for the supplemental benefit and his claim under the 4 California Insurance Code for interest on late benefits payments. 5 In his claim for the supplemental benefit, Plaintiff asserts that 6 MetLife breached its fiduciary duty by failing to tell him that he 7 was entitled to apply for the supplemental benefit and during the 8 thirty-one day period that he was eligible without proof of good 9 health. Defendant moves to dismiss this claim on the ground that United States District Court For the Northern District of California 10 Plaintiff failed to exhaust administrative remedies before filing 11 this lawsuit. 12 Defendant argues that, because Plaintiff fails to address the 13 issue, he concedes it. 14 I. Motion to Dismiss for Lack of Exhaustion 15 Plaintiff does not address exhaustion in his reply. Although not explicitly set out in ERISA, the Ninth Circuit 16 has announced as a general rule that a claimant for ERISA benefits 17 must exhaust administrative appeals prior to filing an action in 18 district court. 19 1980). 20 including the reduction of frivolous litigation, the promotion of 21 consistent treatment of claims, the provision of a non-adversarial 22 method of claims settlement, the minimization of costs of claim 23 settlement and a proper reliance on administrative expertise. 24 "Consequently the federal courts have the authority to enforce the 25 exhaustion requirement of suits under ERISA, and as a matter of 26 sound policy they should usually do so." 27 28 Amato v. Bernard, 618 F.2d 559, 566-568 (9th Cir. Numerous policy considerations underlie this rule, Id. Id. at 568. After Amato, the Ninth Circuit has affirmed the dismissal of 5 1 ERISA claims for failure to exhaust administrative remedies. 2 e.g., Diaz v. United Agr. Employee Welfare Benefit Plan, 50 F.3d 3 1478, 1483 (9th Cir. 1995) (affirming dismissal for lack of 4 exhaustion where ERISA plan provided for internal appeal procedures 5 which were adequate and appeal was not futile); Sarraf v. Standard 6 Ins. Co., 102 F3d 991, 993 (9th Cir. 1996) (failure to request in 7 writing review of administrator's adverse decision, as required by 8 ERISA plan, precluded ERISA claims); see also, Glaus v. Kaiser 9 Found. Health Plan, 2009 WL 2905961, at *2 (N.D. Cal) (where ERISA United States District Court For the Northern District of California 10 plan provided for administrative remedies, exhaustion was not 11 See optional even if plan used optional language). 12 Here, the Plan provides for the administrative appeal of 13 adverse decisions. 14 appeal MetLife's adverse decision regarding his claim for the 15 supplemental benefit. 16 AR 33. It is undisputed that Plaintiff did not In his complaint, Plaintiff alleges, "Following remand the 17 Plan has neither granted nor denied the appeal, and the time for it 18 to do so has expired, both under 29 C.F.R. § 2560.503-1, and under 19 the order of the Court. 20 administrative remedies." Mr. Minton has exhausted his 21 Section 2560.503-1(f) provides, 22 27 if a claim is wholly or partially denied, the plan administrator shall notify the claimant . . . of the plan's adverse benefit determination within a reasonable time, but not later than 90 days after receipt of the claim by the plan, unless the plan administrator determines that special circumstances require an extension of time for processing the claim. If the plan administrator determines that an extension of time for processing the claim is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period. 28 6 23 24 25 26 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 The Plan provides that MetLife must provide notification of its decision regarding a claim for benefits within a reasonable period, not to exceed 45 days from the date you submitted your claim; except for situations requiring an extension of time because of matters beyond the control of the Plan, in which case MetLife may have up to two (2) additional extensions of 30 days each to provide you such notification. . . . If an extension is needed because you did not provide sufficient information or filed an incomplete claim, the time from the date of MetLife’s notice requesting further information and an extension until MetLife receives the requested information does not count toward the time period MetLife is allowed to notify you as to its claim decision. AR at 32. As noted above, Plaintiff filed his claim on September 14, 2009 and, on September 24, 2009, MetLife wrote to Plaintiff informing him that it had not yet received all of his medical records and that it would make a decision on his claim after it had received the requested information. Plaintiff sent the requested medical information on September 30, 2009 (AR at 695), October 9, 2009 (AR at 682) and October 27, 2009 (AR at 680). On November 12, 2009, Plaintiff's attorney informed MetLife that Plaintiff's medical record was complete. AR at 575. On December 4, 2009, MetLife sent Plaintiff's attorney a letter that Plaintiff’s claim for LTD benefits under the "any occupation" definition was approved and that the claim for supplemental benefits was denied. Because MetLife informed Plaintiff of the need for additional medical information within the time period allowed by § 2560.5031(f) and by the Plan, and because MetLife made a decision regarding Plaintiff’s claim less than thirty days after he informed MetLife 27 28 AR at 703-04. 7 1 that his record was complete, MetLife's decision was timely. 2 Therefore, Plaintiff's argument that he is not required to exhaust 3 because MetLife's decision was untimely fails. 4 to dismiss the ERISA supplemental benefit claim for lack of 5 exhaustion is granted. 6 Plaintiff had exhausted this claim, it would fail on the merits. 7 II. Motions for Summary Judgment Defendant's motion However, as discussed below, even if 8 A. Legal Standard 9 Summary judgment is properly granted when no genuine and United States District Court For the Northern District of California 10 disputed issues of material fact remain, and when, viewing the 11 evidence most favorably to the non-moving party, the movant is 12 clearly entitled to prevail as a matter of law. 13 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); 14 Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 15 1987). 16 Fed. R. Civ. P. The moving party bears the burden of showing that there is no 17 material factual dispute. 18 the opposing party’s evidence, if it is supported by affidavits or 19 other evidentiary material. 20 815 F.2d at 1289. 21 favor of the party against whom summary judgment is sought. 22 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 23 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 24 1551, 1558 (9th Cir. 1991). 25 Therefore, the court must regard as true Celotex, 477 U.S. at 324; Eisenberg, The court must draw all reasonable inferences in Material facts which would preclude entry of summary judgment 26 are those which, under applicable substantive law, may affect the 27 outcome of the case. 28 The substantive law will identify which facts 8 1 are material. 2 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 3 B. Evidentiary Objections 4 Plaintiff objects to certain evidence presented by Defendant. 5 The Court has reviewed these evidentiary objections and has not 6 relied on any inadmissible evidence. 7 each objection individually. 8 relied on evidence to which Plaintiff objects, such evidence has 9 been found admissible and the objections are overruled. The Court will not discuss To the extent that the Court has United States District Court For the Northern District of California 10 C. Analysis 11 To further ERISA’s goal of protecting benefit plan 12 participants by requiring the disclosure to participants of 13 information regarding the plan, employee benefit plans must provide 14 plan participants with an SPD. 15 Disability Plan, 581 F.3d 899, 904 (9th Cir. 2009). 16 the ‘statutorily established means of informing participants of the 17 terms of the plan and its benefits’ and the employee’s primary 18 source of information regarding employment benefits.” 19 Retirement Plan for Pilots Employed by MarkAir, Inc., 293 F.3d 20 1139, 1143 (9th Cir. 2002); Pisciotta v. Teledyne Indus, Inc., 91 21 F.3d 1326, 1329 (9th Cir. 1996). 22 policy and is bound by its provisions even if he did not read or 23 understand them. 24 210450, *7 (N.D. Cal.). 25 Scharff v. Raytheon Co. Short Term “The SPD is Bergt v. An insured has a duty to read his Gravell v. Health Net Life Ins. Co., 2009 WL Plaintiff argues that he did not receive notice within thirty- 26 one days of when the supplemental benefit became available and 27 disputes Defendant’s evidence that he was provided notice within 28 9 1 this time period. 2 other employees in Plaintiff’s position purchased the supplemental 3 benefit without proof of good health during the first thirty-one 4 days that it was available, this does not prove that Plaintiff 5 received notice of the supplemental benefit during that period. 6 Therefore, there is a dispute of fact on this issue which, if 7 dispositive, would preclude summary judgment for either party. 8 However, it is not dispositive. 9 Although Defendant presents strong evidence that Although Plaintiff states that he was not aware of the United States District Court For the Northern District of California 10 availability of the supplemental benefit until his counsel 11 discovered it, he does not dispute that he received the SPDs from 12 1998 onward, that they were available on Defendant’s intranet, or 13 that they accurately describe the supplemental benefit and how to 14 apply for it. 15 updated SPDs because he was never asked to renew or review his 16 disability coverage and his disability insurance was not part of 17 the annual open enrollment process. 18 Bergt, and Pisciotta, the fact that the SPDs were available to 19 Plaintiff is sufficient to charge him with notice of the 20 availability of the supplemental benefit. 21 Plaintiff argues that he did not have to read the However, pursuant to Scharff, According to Plaintiff, this is still insufficient because, 22 thirty-one days after the supplemental benefit became available, he 23 could no longer qualify for it without proof of good health. 24 However, Plaintiff does not provide evidence that the proof of good 25 health requirement would have prevented him from purchasing the 26 supplemental benefit. 27 Plaintiff did not become disabled until August 2006. 28 According to the evidence in Minton I, 10 Therefore, 1 from 1997 through August 2006, Plaintiff could have applied for the 2 benefit with evidence of good health, but did not do so. 3 has failed to show that Defendant’s conduct prevented him from 4 purchasing the supplemental benefit. Plaintiff 5 Plaintiff cites Kaszuk v. Bakery & Confectionery Union & 6 Indus. Int’l Pension Fund, 791 F.2d 548, 555 (7th Cir. 1986), which 7 held that the plaintiff’s husband was not given adequate notice of 8 his rights under his pension plan from plan booklets stacked at 9 various locations at the husband’s workplace or from an United States District Court For the Northern District of California 10 advertisement in the magazine published by the husband’s union. 11 However, this case relied on temporary ERISA guidelines, which were 12 in effect prior to January, 1977, and are not applicable to 13 Plaintiff’s claim because he submitted his claim for benefits after 14 the most recent ERISA regulations went into effect on January 1, 15 2002. 16 Circuit authority cited above, which this Court must follow. 17 Furthermore, this Seventh Circuit case contravenes the Ninth Plaintiff argues that the Ninth Circuit has held that the 18 responsibilities of ERISA plan fiduciaries are established by the 19 common law of trusts and, thus, they are required to discharge 20 their duties solely in the interest of the plan participants and 21 beneficiaries. 22 Cir. 1991). 23 America, 232 F.3d 719, 726-27 (9th Cir. 2000), which held that the 24 plan administrator breached its fiduciary duty by failing to notify 25 the claimant in its letter denying his claim of a sixty-day time 26 limit in which he was required to demand mandatory arbitration in 27 order to appeal the denial, rather than to rely on notice contained 28 11 See Acosta v. Pacific Ents., 950 F.2d 611, 618 (9th Plaintiff also cites Chappel v. Laboratory Corp. of 1 2 in the SPD. Chappel is distinguishable. As noted there, ERISA regulations 3 specifically require that “a fiduciary must give written notice to 4 a plan participant or beneficiary of the ‘steps to be taken’ to 5 obtain internal review when it denies a claim.” 6 Likewise, the plan administrator should know that a claimant may 7 not be aware, when the internal appeal is denied, of a mandatory 8 arbitration clause and a time limit for seeking arbitration because 9 mandatory arbitration is an additional step in the plan’s claim Id. at 726. United States District Court For the Northern District of California 10 procedure and is, to some degree, a substitute for judicial review 11 of the administrator’s decision. 12 to seek arbitration in a timely manner, both arbitration and 13 judicial review of that arbitration were foreclosed. 14 held that, given these consequences, the administrator was not 15 acting in the interest of the participants or beneficiaries if it 16 failed to specifically inform the claimant of the mandatory 17 arbitration requirement. 18 Id. Thus, if the claimant failed The court Id. The issue here is not the procedure for appealing the denial 19 of benefits, for which there are specific regulations. 20 although there was a time-limit for applying for the supplemental 21 benefit without evidence of good health, Plaintiff had the 22 opportunity, over a nine-year period, to apply for the supplemental 23 benefit, with proof of good health, but failed to do so. 24 Here, Based on the foregoing, Plaintiff has not established that he 25 is entitled to judgment as a matter of law on his claim that 26 Defendant breached its fiduciary duty and, thus, his motion for 27 summary judgment is denied. 28 Furthermore, Plaintiff has not raised 12 1 a disputed issue of material fact that Defendant breached its 2 fiduciary duty by failing specifically to notify him within the 3 thirty-one days that the supplemental benefit became available. 4 Therefore, Defendant’s cross-motion for summary judgment is 5 granted. 6 claim for the supplemental ERISA benefit and because Plaintiff’s 7 claim for ERISA benefits under the “any occupation” definition is 8 moot, Plaintiff’s claim for interest on late ERISA benefits is 9 denied as moot. Because Defendant is granted judgment on Plaintiff’s United States District Court For the Northern District of California 10 CONCLUSION 11 For the foregoing reasons, Plaintiff's motion for summary 12 judgment is denied and Defendant's cross-motions to dismiss and for 13 summary judgment are granted. 14 late payments of ERISA benefits is denied as moot. 15 favor of Defendant shall be entered by the Clerk of the Court. 16 parties shall bear their own costs. Plaintiff’s claim for interest on Judgment in All 17 18 IT IS SO ORDERED. 19 20 Dated: 6/3/2011 CLAUDIA WILKEN United States District Judge 21 22 23 24 25 26 27 28 13
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