Dioquino v. United of Omaha Life Insurance Company et al, No. 3:2020cv00167 - Document 39 (S.D. Cal. 2021)

Court Description: ORDER Granting in Part and Denying in Part Defendant's Motion for Partial Summary Judgment (ECF No. 22 ). The parties shall proceed to their mandatory settlement conference before the Magistrate Judge on 6/8/21. If the case does not settle, the parties shall promptly contact the Court to schedule a bench trial to resolve Defendant's exhaustion defense and the remainder of Plaintiff's action. the Court denies as moot Defendant's ex parte application to submit supplemental authority consisting of two out-of-circuit district court decisions. (ECF No. 38 .) Signed by Judge Cynthia Bashant on 4/9/21. (jmo)

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Dioquino v. United of Omaha Life Insurance Company et al Doc. 39 1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 JONI DIOQUINO, Case No. 20-cv-00167-BAS-RBB Plaintiff, 14 v. 15 16 UNITED OF OMAHA LIFE INSURANCE COMPANY, 17 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No. 22) Defendant. 18 19 Plaintiff Joni Dioquino brings this action under the Employee Retirement Income 20 Security Act of 1974 (“ERISA”). She seeks disability benefits under two employee benefit 21 plans funded by Defendant United of Omaha Life Insurance Company. Now before the 22 Court is Defendant’s motion for partial summary judgment. (ECF No. 22.) Defendant 23 argues part of Plaintiff’s action is moot. And it believes the remainder is not properly 24 before the Court because she did not exhaust her plan-based remedies. Plaintiff opposes. 25 (ECF No. 25.) The Court finds this motion suitable for determination on the papers 26 submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For 27 the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendant’s 28 motion. -120cv0167 Dockets.Justia.com 1 2 BACKGROUND I. Disability Insurance Plans 3 In 2013, Plaintiff started working for Children’s Physicians Medical Group, Inc. 4 (Joint Statement of Undisputed Facts (“JSUF”) 6:2–5, ECF No. 27.) Plaintiff participated 5 in two employee welfare benefit plans that her employer sponsored: a short-term disability 6 benefits plan (“STD Plan”) and a long-term disability benefits plan (“LTD Plan”). (Id. 7 1:7–12, 1:23–2:1.) Children’s Medical served as the administrator for the plans, and 8 Defendant issued the group insurance policies that funded the plans. (Id. 1:14–17; 2:3–5; 9 6:7–13; see also STD Policy, Campbell Decl. Ex. 1, ECF No. 22-4; LTD Policy, Campbell 10 Decl. Ex. 3, ECF No. 22-6.) Plaintiff’s lawsuit seeks benefits under both plans. (Complaint 11 ¶¶ 57–65, ECF No. 1.) 12 A. 13 The STD Plan provides disability benefits for a maximum of eleven weeks. (STD 14 Plan 2.) Although the plan provides benefits for both partial and total disability, this 15 dispute centers on the benefits for total disability. (Compl. ¶¶ 7, 10.) Short-Term Disability Plan 16 Total Disability. A plan participant like Plaintiff is “Totally Disabled” when she is 17 “unable to perform, with reasonable continuity, the Substantial and Material Acts necessary 18 to pursue [her] Usual Occupation” because of “an Injury or Sickness.” (STD Plan 17.) 19 “Substantial and Material Acts” are “the important tasks, functions and operations 20 generally required from employers” in the employee’s Usual Occupation “that cannot be 21 reasonably omitted or modified.” (Id.) And the employee’s “Usual Occupation” is “any 22 employment, business, trade or profession and the Substantial and Material Acts of the 23 occupation [she was] regularly performing for the Policyholder when the Disability 24 began.” (Id. at 17–18.) 25 Elimination Period. An employee who becomes disabled is not immediately entitled 26 to benefits. Rather, the employee must first satisfy the “Elimination Period,” which is a 27 minimum “period of continuous Total or Partial Disability.” (STD Plan 16.) The STD 28 Plan’s Elimination Period is fourteen calendar days. (Id. at 2.) Therefore, an employee -220cv0167 1 can first start receiving benefits only after fourteen days of continuous disability. (Id. at 2 8.) 3 Benefits. Assuming an employee is disabled and satisfies the Elimination Period, 4 the STD Plan provides a “Weekly Benefit” that is the lesser of: (a) 70% of the employee’s 5 weekly earnings, less “Other Income Benefits,” or (b) “the maximum Weekly Benefit, 6 which is $2,000, less Other Income Benefits.” (STD Plan 2.) The “Other Income Benefits” 7 that offset the Weekly Benefit include state government disability benefits. (Id. at 3.) 8 Claims Procedure. The STD Plan requires an employee to submit written proof of 9 loss in order for a claim for benefits to be considered. (STD Plan 11.) An employee 10 satisfies this requirement by submitting either a completed claim form or a written 11 statement that includes the cause of the disability, treating physician contact information, 12 and any restrictions and limitations preventing the employee from performing job duties. 13 (Id.) Consistent with ERISA regulations, the STD Plan requires Defendant to evaluate the 14 claim within a set period. (Id.) If Defendant denies the claim, it must provide notice of 15 the denial, including “specific reason(s) for the denial” and a “reference to specific Policy 16 provisions on which the denial is based.” (Id. at 13.) The employee has a right to appeal 17 the claim decision within 180 days, and Defendant must again respond to the appeal within 18 a set period. (Id. at 14.) 19 B. 20 Whereas the STD Plan provides benefits for up to eleven weeks, the LTD Plan 21 provides benefits for a participant like Plaintiff until potentially up to her Social Security 22 retirement age. (See LTD Plan 3.) The LTD Plan similarly provides benefits for partial 23 and total disability, but the focus here remains on its total disability benefits. (Compl. ¶¶ 24 8–10.) Long-Term Disability Plan 25 Total Disability. The LTD Plan’s “Total Disability” definition is two-phased. For 26 the first two years, a Total Disability is materially the same as under the STD Plan. An 27 employee is totally disabled when an illness prevents her from doing the Substantial and 28 Material Acts necessary to pursue her Usual Occupation. (LTD Plan 21.) After two years -320cv0167 1 of benefits, the definition becomes more stringent. An employee is totally disabled only if 2 she cannot perform any reasonable occupation in light of her “age, education, training, 3 experience, station in life, and physical and mental capacity.” (Id.) 4 Elimination Period. The LTD Plan likewise includes a waiting period before an 5 employee is entitled to benefits. (LTD Plan 19.) The “Elimination Period” is the later of: 6 (a) “90 calendar days,” or (b) the date . . . short-term disability payments under the 7 Policyholder’s insured or self-insured group plan end.” (Id. at 2.) 8 Benefits. Assuming an employee is totally disabled and satisfies the ninety-day 9 Elimination Period, the LTD Plan provides for a monthly benefit that is the lesser of: 10 (a) 60% of the employee’s gross monthly pay, less Other Income Benefits; or (b) $6,000, 11 less any Other Income Benefits. (LTD Plan 2.) 12 Claims Procedure. The LTD Plan has the same claims procedure as the STD Plan. 13 (Compare LTD Plan 11–14, with STD Plan 14–17.) The employee must submit a written 14 claim, Defendant must respond, and the employee has the right to appeal an adverse 15 decision within 180 days. (LTD Plan 11–14.) 16 II. Plaintiff’s Request for Benefits 17 Claim. Plaintiff worked as a Financial Analyst/Accountant for Children’s Medical. 18 (STD Claim Form, United 428–30.1) On November 8, 2018, she completed Defendant’s 19 Short-Term Disability Claim Form. (United 665–68.) Plaintiff listed her disability as 20 beginning on August 20, 2018, and wrote that she was “unable to sit for [a] period of time” 21 and needed to elevate her legs. (Id. 665.) Plaintiff stated she was first treated for her illness 22 23 24 25 26 27 28 1 The Court cites to the bate stamps on Plaintiff’s claim file. The corresponding exhibits are included below. The two gaps in the bate stamps are the STD and LTD policies, which the Court cites to by their page numbers. United-000044 to United-000188 United-000189 to United-000438 United-000439 to United-000613 United-000614 to United-000788 United-000833 to United-001025 Campbell Decl. ¶ 4, Ex. 2-1, ECF No. 34-1 Campbell Decl. ¶ 4, Ex. 2-2, ECF No. 34-2 Campbell Decl. ¶ 4, Ex. 2-3, ECF No. 34-3 Campbell Decl. ¶ 4, Ex. 2-4, ECF No. 34-4 Campbell Decl. ¶ 4, Ex. 4, ECF No. 34-5 -420cv0167 1 on August 29, 2028, and identified Dr. Richard Campbell as her treating physician. (Id.) 2 Children’s Medical completed the employer’s portion of the form, where it noted Plaintiff’s 3 job was sedentary and checked a box indicating that Defendant “cover[s] the Employee for 4 group long-term disability.” (Id. 666.) 5 Dr. Campbell completed the attending physician’s portion of the disability form. 6 (United 667–68.) According to Dr. Campbell, Plaintiff needs to elevate her legs frequently, 7 and she is “unable to sit/stand/walk” for more than ten minutes per hour, as she needs to 8 frequently get up from sitting for stretch breaks. (Id. 668.) Dr. Campbell also checked a 9 box indicating Plaintiff is unable to work with modifications to her job. (Id.) 10 Claim Decision. Defendant’s claims manager referred Plaintiff’s claim for medical 11 review by its Clinical Nurse Consultant. (United 670–72.) The nurse summarized 12 Plaintiff’s medical file, including Dr. Campbell’s treatment notes from August 29, 2018, 13 and November 8, 2018. (Id. 671–72.) In those notes, Dr. Campbell diagnosed Plaintiff 14 with “Achilles tendinitis of left lower extremity (M76.62),” “Arthritis of knee (M17-10),” 15 and “Left knee sprain (S83.92XA).” (Id. 449.) His diagnosis relied on an August 29, 2018, 16 x-ray of Plaintiff’s knee. (Id. 448.) The x-ray did not reveal that Plaintiff’s knee was 17 dislocated or fractured, but it did show there was mild arthrosis, joint effusion, and 18 moderate-to-severe narrowing of the patellofemoral compartment. (Id.) Therefore, the x- 19 ray led to an impression of bilateral knee arthrosis. (Id.) After reviewing Plaintiff’s file, 20 Defendant’s nurse consultant wrote on January 8, 2019: 21 22 23 24 25 While it would be reasonable to support restrictions and limitations of elevating the left leg frequently, being unable to sit/stand/walk greater than 10 minutes per hour, and the need to get up from sitting frequently for stretch breaks, for 2-3 days, without a higher level of evaluation or treatment[,] one would not expect ongoing restrictions and limitations beyond that time. (Id. 672.) 26 Defendant later referred Plaintiff’s claim for review by an outside occupational 27 physician, Gregory Smith. (United 702–07.) In a report dated February 6, 2019, Dr. Smith 28 agreed that Plaintiff met the criteria for “Achilles tendinitis and left knee arthritis with -520cv0167 1 effusion.” (Id. 703.) However, he opined that “[f]or the period under review 8/15/18 and 2 forward,” Plaintiff’s diagnosis “is only consistent with moderate functional limitations of 3 the left lower extremity”; that is, only “use of [a] cane” and “some limitations on 4 weightbearing and repeated use of the left leg.” (Id. 703.) Consequently, Dr. Smith 5 concluded Plaintiff can stand “occasionally, 30 minutes at a time, 3 hours [a] day” and can 6 sit “constantly.” (Id. 703–04.) 7 On March 7, 2019, Defendant denied Plaintiff’s claim for STD benefits. (United 8 647–52.) After incorporating Plaintiff’s medical records and Dr. Smith’s report, Defendant 9 reasoned Plaintiff’s restrictions and limitations “do not preclude [her] from working” 10 because she has “a sedentary occupation.” (Id. 649.) Hence, Defendant determined no 11 benefits are payable and advised Plaintiff of her right to appeal. (Id. 649–50.) 12 Appeal. On June 22, 2019, Plaintiff appealed the denial of her disability benefits. 13 (JSUF 8:4–7.) She forwarded updated medical records, x-ray results, MRI results, a list of 14 exercises for physical therapy, reference materials, and Dr. Campbell’s visit summary 15 dated January 3, 2019. (Id.) Defendant again referred Plaintiff’s complete file for review 16 by a different orthopedic consultant. (Id. 127.) That physician, Dr. Hulett, opined that the 17 “clinical findings are limited despite multiple complaints.” (Id. 249.) Dr. Hulett concluded 18 those findings do not “clearly indicate functional impairment,” with “no restrictions 19 supported from 8/22/18–7/9/19.” (Id. 249.) 20 On August 22, 2019, Plaintiff responded to Dr. Hulett’s review and submitted 21 additional documentation. (United 246–47.) Dr. Hulett reviewed the supplemental records 22 the following week but concluded they did not alter her opinions. (Id. 199–200.) 23 On September 1, 2019, after considerable back-and-forth, and over a year after 24 Plaintiff stopped working, Defendant denied Plaintiff’s appeal. (United 125–32.) The 25 appeal letter notes that Defendant considered Plaintiff’s additional documentation, 26 including supplemental state disability certifications from Dr. Campbell and test results. 27 (Id. 126–27.) The letter then incorporates Dr. Hulett’s opinions. (Id. 128.) The insurance 28 company concludes: -620cv0167 Based upon our review, the medical information contained in your file supports various diagnoses; however, these diagnoses do no[t] support [restrictions and limitations] that would preclude the performance of the substantial and material acts of your usual occupation, which is performed at a sedentary level. Therefore, the denial of the claim is upheld. 1 2 3 4 5 (Id. 129.) After exhausting her plan remedies for STD benefits, Plaintiff did not file a 6 separate claim for LTD benefits with Defendant. (See JSUF 4:24–5:28.) 7 III. 8 9 Plaintiff’s Action On January 24, 2020, Plaintiff filed this action seeking both STD and LTD benefits. (ECF No. 1.) After Defendant answered, the parties participated in an early neutral 10 evaluation conference on April 23, 2020. (ECF No. 14.) When the case did not settle, 11 Defendant issued Plaintiff a check for $1,244.76 plus interest, which it calculated to be the 12 maximum amount she is owed under the STD Plan. (JSUF 1:19–21; Hess Decl. ¶ 3, Ex. 13 B, ECF No. 22-10.) Defendant claims it did so because “it makes no sense to continue to 14 litigate a claim that is worth less than $1,300.” (Hess Decl. ¶ 3, Ex. B.) The amount of 15 STD benefits is lower than one might expect because, as mentioned above, the STD Plan 16 provides that state government disability benefits offset the plan’s benefits, and Plaintiff 17 received those benefits from California. (See id.; see also STD Plan 2–3.) Defendant now 18 moves for partial summary judgment, arguing Plaintiff’s STD claim is moot. (Mot., ECF 19 No. 22.) The company also argues her LTD claim is not properly before the Court because 20 Plaintiff lacks standing and failed to exhaust her remedies under the LTD Plan. (Id.) 21 LEGAL STANDARD 22 “A party may move for summary judgment, identifying each claim or defense—or 23 the part of each claim or defense—on which summary judgment is sought.” Fed. R. Civ. 24 P. 56(a). Summary judgment is appropriate under Rule 56(c) where the moving party 25 demonstrates the absence of a genuine issue of material fact and entitlement to judgment 26 as a matter of law. See id. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A 27 fact is material when, under the governing substantive law, it could affect the outcome of 28 the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a -720cv0167 1 material fact is genuine if “the evidence is such that a reasonable jury could return a verdict 2 for the nonmoving party.” Id. at 248. 3 When resolving a summary judgment motion, the court must view all inferences 4 drawn from the underlying facts in the light most favorable to the nonmoving party. 5 Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 6 “Credibility determinations, the weighing of evidence, and the drawing of legitimate 7 inferences from the facts are [factfinder] functions, not those of a judge, [when] he [or she] 8 is ruling on a motion for summary judgment.” Anderson, 477 U.S. at 255. 9 10 ANALYSIS I. Mootness of Short-Term Disability Claim 11 There is no dispute that ERISA governs the employee benefit plans at issue. ERISA 12 § 502 allows a plan participant like Plaintiff to bring an action to recover benefits due to 13 her under a plan, to enforce her rights under a plan, or to clarify her rights to future benefits 14 under a plan. 29 U.S.C. § 1132(a)(1)(B). Defendant argues Plaintiff’s claim for benefits 15 under the STD Plan is moot because the insurer has since paid her the maximum amount 16 of benefits. (Mot. 10:27–11:12.) 17 “A claim is moot if it has lost its character as a present, live controversy.” Rosemere 18 Neighborhood Ass’n v. U.S. Env’t Prot. Agency, 581 F.3d 1169, 1172–73 (9th Cir. 2009). 19 Hence, a claim “becomes moot when a plaintiff actually receives all of the relief he or she 20 could receive on the claim through further litigation.” Chen v. Allstate Ins. Co., 819 F.3d 21 1136, 1144 (9th Cir. 2016) (emphasis omitted). 22 Plaintiff’s claim for STD benefits is moot. The payment she received from 23 Defendant is all the relief she “could receive on the claim through further litigation.” See 24 Chen, 819 F.3d at 1144. 25 Plaintiff still opposes Defendant’s motion because she argues ERISA entitles her to 26 recover her reasonable attorney’s fees and costs. (Opp’n 6:8–7:9, ECF No. 25.) See Hardt 27 v. Reliance Std. Life Ins. Co., 560 U.S. 242, 244–45 (2010) (providing that where ERISA’s 28 fee-shifting provision applies, the court may award fees and costs to either party so long as -820cv0167 1 the claimant shows “some degree of success on the merits”). Even so, Plaintiff’s 2 underlying claim is moot. The Court can resolve any request for attorney’s fees and costs 3 at the end of this case. See Tom v. Hartford Life & Accident Ins. Co., No. C 16-01067 4 WHA, 2017 WL 6209306, at *1 (N.D. Cal. Dec. 8, 2017) (resolving a plaintiff’s motion 5 for attorney’s fees and costs under ERISA where the court had dismissed the action as moot 6 after the defendant provided the requested benefits). 7 Defendant’s request for summary judgment on Plaintiff’s request for STD benefits. 8 II. Therefore, the Court grants Propriety of Long-Term Disability Claim 9 Although Plaintiff has received her STD benefits, she is also seeking LTD benefits 10 under the LTD Plan. Defendant argues summary adjudication of this claim is appropriate 11 on justiciability and exhaustion grounds. 12 A. 13 Defendant briefly argues Plaintiff lacks standing to seek LTD benefits because she 14 did not file a claim for LTD benefits with Defendant. (Mot. 11:14–12:12.) “There is no 15 ERISA exception to Article III.” Thole v. U. S. Bank N.A, 140 S. Ct. 1615, 1622 (2020). 16 That said, an “ordinary Article III standing analysis” shows Plaintiff can bring her ERISA 17 § 502 claim. See id. Plaintiff has a concrete stake in this dispute because she claims 18 entitlement to monetary benefits from Defendant under the LTD Plan, which she has not 19 received. Cf. id. (holding plaintiffs lacked standing where winning or losing the lawsuit 20 would not change their pension benefits under the plan). And as fully explored below, she 21 asserts Defendant’s treatment of her claim for STD benefits doomed any request for LTD 22 benefits from Defendant. In addition, the Court can award relief that remedies Plaintiff’s 23 asserted injury. See Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (explaining 24 the standing requirements). Standing 25 Moreover, the ERISA case Defendant cites for this argument is distinguishable. 26 There, the court determined the plaintiffs lacked standing because they sought healthcare 27 plan benefits based on medical services that had not yet been rendered. Delgado v. ILWU- 28 PMA Welfare Plan, No. 2:18-CV-5539 CBM, 2018 WL 8014336, at *3 (C.D. Cal. Nov. -920cv0167 1 20, 2018). Here, in contrast, Plaintiff claims she already meets the plan’s definition of 2 disability and is entitled to LTD benefits. 3 Defendant’s standing argument. The Court is therefore unpersuaded by 4 B. 5 The heart of Defendant’s motion relies on the judicially created exhaustion 6 requirement for this type of claim. Defendant argues the Court should not entertain 7 Plaintiff’s cause of action because her failure to file a separate claim for LTD benefits 8 means she did not exhaust her remedies under the LTD Plan. (Mot. 12:13–25:19.) Plaintiff 9 responds that she was excused from doing so because exhaustion would have been futile. 10 (Opp’n 7:10–19:8.) Defendant both anticipates this argument and counters that Plaintiff 11 fails to meet her burden of demonstrating futility. (Mot. 17:12–25:19; Reply 3:22–10:21, 12 ECF No. 26.) The Court will review the exhaustion requirement and then resolve the 13 parties’ well-briefed futility contentions. 14 Exhaustion of Plan Remedies 1. Exhaustion Rule 15 “Quite early in ERISA’s history,” the Ninth Circuit “announced as the general rule 16 governing ERISA claims that a claimant must avail himself or herself of a plan’s own 17 internal review procedures before bringing suit in federal court.” Diaz v. United Agr. Emp. 18 Welfare Ben. Plan & Tr., 50 F.3d 1478, 1483 (9th Cir. 1995) (citing Amato v. Bernard, 618 19 F.2d 559, 566–68 (9th Cir.1980)). This requirement is not “explicitly set out in the statute,” 20 but “the exhaustion doctrine is consistent with ERISA’s background, structure and 21 legislative history.” Id. The doctrine also “serves several important policy considerations, 22 including the reduction of frivolous litigation, the promotion of consistent treatment of 23 claims, the provision of a nonadversarial method of claims settlement, the minimization of 24 costs of claim settlement and a proper reliance on administrative expertise.” Id. Therefore, 25 “courts have the authority to enforce the exhaustion requirement in suits under ERISA, and 26 . . . as a matter of sound policy they should usually do so.” Amato, 618 F.2d at 568. 27 Because this requirement is prudential—and not jurisdictional—there are exceptions 28 to the rule. Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626–27 (9th - 10 20cv0167 1 Cir. 2008). The exception relevant here is “when resort to the administrative route is 2 futile.” Id. (quoting Amato, 618 F.2d at 568). 3 2. Futility Exception 4 “The futility exception is ‘designed to avoid the need to pursue an administrative 5 review that is demonstrably doomed to fail.’” A.F. v. Providence Health Plan, 157 F. Supp. 6 3d 899, 909 (D. Or. 2016) (quoting Diaz, 50 F.3d at 1485 (9th Cir.1995)). Consequently, 7 “bare assertions of futility are insufficient to bring a claim within the futility exception.” 8 See Diaz, 50 F.3d at 1485. And a plan’s “refusal to pay” does not, by itself, show futility. 9 See id. 10 For instance, in Diaz, the plan denied the participant’s claim for medical expenses 11 for his daughter who succumbed to leukemia based on the plan’s pre-existing condition 12 limitation. 50 F.3d at 1482. The plan provided for a right to appeal, but the participant did 13 not do so before he and his spouse sued. Id. The district court granted the defendants’ 14 motions for summary judgment on exhaustion grounds. Id. The Ninth Circuit affirmed. 15 Id. at 1486. It reasoned the district court did not abuse its discretion because the plaintiffs 16 put forth only a bare assertion that exhaustion would be futile: the argument “that it would 17 have been ‘futile’ for them to demand administrative review because both defendants have 18 demonstrated by their continued refusal to pay that they have no intention of doing so.” Id. 19 at 1485–86. Further, the record contained “nothing but speculation to suggest that the 20 administrators would have reached a preconceived result” when examining the merits. Id. 21 at 1486. 22 In comparison, in Burnett v. Raytheon Co. Short Term Disability Basic Benefits 23 Plan, 784 F. Supp. 2d 1170 (C.D. Cal. 2011), the district court excused exhaustion of an 24 LTD claim under the futility exception. There, the same insurance company—MetLife— 25 served as the claims administrator for the employer’s self-funded STD and LTD benefit 26 plans. Id. at 1174–75. MetLife initially granted the plaintiff’s claim for STD benefits 27 based on major depressive disorder, but later terminated his benefits. Id. at 1176–77. The 28 plaintiff appealed the determination, and MetLife referred his claim for review by a board- 11 20cv0167 1 certified psychiatrist. Id. at 1177. Ultimately, like here, MetLife reaffirmed its denial of 2 the claim while reasoning the clinical data did not support that the plaintiff was totally 3 disabled and unable to perform his normal occupation. Id. at 1179. Further, again like 4 here, the plaintiff never submitted an LTD claim before filing suit. Id. at 1181. After a bench trial, the district court found the plaintiff’s exhaustion of plan remedies 5 6 would have been futile for several reasons: 13 First, the definitions for “fully disabled” for purposes of STD benefits and LTD benefits are substantially the same. Second, the STD and LTD plans are integrated, such that they rely on and refer to each other. MetLife’s termination of Burnett’s STD Plan benefits essentially doomed any claim he might have to LTD Plan benefits. Finally, because MetLife is the designated Claim Administrator under both the STD and LTD plans, the plans are administered by the same entity. In light of the foregoing—considered together with MetLife’s unwavering denial of Burnett’s . . . STD benefits— MetLife likely would have denied any LTD benefits claim Burnett submitted for the same reasons it terminated his STD benefits claim. 14 Burnett, 784 F. Supp. 2d at 1185. The court also considered the policies underlying the 15 exhaustion doctrine and reasoned they do not preclude application of the futility exception. 16 Id. 7 8 9 10 11 12 17 As indicated, there is no genuine dispute that Plaintiff failed to comply with the LTD 18 Plan’s internal procedures. (See JSUF 4:24–5:28.) There is, however, a genuine issue of 19 material fact as to whether exhaustion would have been futile. Viewing the evidence in 20 the light most favorable to Plaintiff—as the Court must on summary judgment—a 21 reasonable factfinder could conclude her LTD claim was doomed to fail. 22 In seeking to preempt Plaintiff’s futility argument, Defendant submits a declaration 23 from one of its employees who is a Group Claims Team Leader. (Campbell Decl., ECF 24 No. 22-3.) The employee states he is aware of “other claims where [Defendant] initially 25 found that the claimant was not entitled to STD benefits,” but later favorably resolved a 26 claim for LTD benefits when “additional and later information was submitted in support 27 of the claimant’s LTD claim.” (Id. ¶ 8.) Defendant contends this declaration is the only 28 - 12 20cv0167 1 evidence before the Court concerning futility. (Reply 5:16–20, n.4.) And because it is 2 unchallenged, Defendant argues it defeats Plaintiff’s futility claim. (Id.) 3 The Court is unconvinced. Plaintiff points to several items a factfinder could 4 consider for the futility inquiry. The Court starts with what is obvious: Defendant is the 5 one resolving claims under both plans. A factfinder could rely on the fact that the same 6 entity is the arbiter of claims under both plans in determining whether exhaustion would 7 have been futile. See, e.g., Burnett, 784 F. Supp. 2d at 1185 (relying on the fact that the 8 employer’s two plans were administered by the same entity). 9 Moreover, the terms of the benefit plans inform the futility determination. The STD 10 Plan’s definition of Total Disability is materially the same as under the LTD Plan for the 11 first two years of LTD benefits. See supra Part I.A–B. Yet the LTD Plan requires a longer 12 Elimination Period—a period of continuous disability—than the STD Plan. Whereas a 13 participant must be fully disabled for fourteen days under the STD Plan to obtain benefits, 14 the LTD Plan requires at least ninety days of total disability. See supra Part I.A–B. As 15 Plaintiff argues, a factfinder could infer from these terms that if the claims administrator 16 determined she did not satisfy the STD Plan’s total disability definition for the Elimination 17 Period, then the LTD Plan’s claims administrator would almost certainly conclude she did 18 not satisfy the same definition for an even longer period of continuous disability for LTD 19 benefits. (See Opp’n 16:4–13.) Other courts have reached the same conclusion. 2 20 Finally, the way Defendant resolved Plaintiff’s STD claim is relevant for the futility 21 inquiry. For example, if Defendant had denied her STD claim because she failed to fill out 22 a form or submit any information from her doctor, it would be unreasonable for a factfinder 23 to infer that filing an LTD claim would have been futile. Here, however, Defendant denied 24 25 26 27 28 2 See Burnett, 784 F. Supp. 2d at 1185 (noting “the definitions for ‘fully disabled’ for purposes of STD benefits and LTD benefits are substantially the same”); see also Darensbourg-Tillman v. Robins, Kaplan, Miller & Ciresi LLP Short Term Disability Plan, No. CV 04-2903 AHM (VBKx), 2004 WL 5603225, at *3 (C.D. Cal. Sept. 3, 2004) (“Given these definitions, it is highly probable that the undisputed denial of Plaintiff’s claim for benefits under the STD plan means that any claim under the LTD plan, which contains a more restrictive definition of disabled, would also be denied.”); Young v. UnumProvident Corp., No. CIV.01-2420 DWF/AJB, 2002 WL 2027285, at *1 (D. Minn. Sept. 3, 2002). - 13 20cv0167 1 Plaintiff’s claim on the merits for reasons that apply equally to a claim under the LTD Plan, 2 which—again—has the same relevant definition of disability and the same arbiter of 3 claims. 4 Further, Defendant reaffirmed its denial on appeal after considering additional 5 information from Plaintiff that stretched well past the Elimination Periods for both STD 6 and LTD benefits. (See United 126–27.) Defendant determined Plaintiff’s medical 7 information supported “various diagnoses,” but concluded those diagnoses do not support 8 restrictions and limitations that would preclude her from performing her sedentary 9 occupation. (United 129.) Defendant did so while knowing it “cover[s] [Plaintiff] for 10 group long-term disability.” (Id. 666.) Therefore, as Plaintiff argues, a factfinder could 11 conclude that requiring Plaintiff to file a separate LTD claim “would have merely been an 12 exercise of [Defendant] reevaluating the same medical evidence that it had just finished 13 evaluating to deny Plaintiff’s STD claim.” (Opp’n 18:20–22.) 14 Nor do the policies underlying the exhaustion doctrine demand a different result. 15 Plaintiff’s case is not frivolous. And viewing the record in her favor, it is not clear why 16 requiring the same insurer to reevaluate the same medical evidence for the same definition 17 of disability to reach the same result would minimize the costs of claim settlement or 18 promote proper reliance on administrative expertise before judicial review. See Diaz, 50 19 F.3d at 1483. The Court already has the insurer’s reasoned explanation for why it believes 20 Plaintiff does not qualify for benefits under a definition of disability that is materially the 21 same as under the LTD Plan. 22 In sum, given the specific circumstances of this case, a reasonable factfinder could 23 find Plaintiff’s LTD claim was “doomed to fail.” See Diaz, 50 F.3d at 1485. Consequently, 24 the Court denies Defendant’s request for summary judgment on exhaustion grounds. 25 CONCLUSION 26 For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART 27 Defendant’s motion for partial summary judgment. (ECF No. 22.) The Court grants 28 Defendant’s request to summarily adjudicate Plaintiff’s request for STD benefits as moot. - 14 20cv0167 1 The Court denies, however, Defendant’s request to summarily adjudicate Plaintiff’s 2 request for LTD benefits on standing and exhaustion grounds. The parties shall proceed to 3 their mandatory settlement conference before the Magistrate Judge on June 8, 2021. (ECF 4 No. 33.) If the case does not settle, the parties shall promptly contact the Court to schedule 5 a bench trial to resolve Defendant’s exhaustion defense and the remainder of Plaintiff’s 6 action. Finally, the Court DENIES AS MOOT Defendant’s ex parte application to submit 7 supplemental authority consisting of two out-of-circuit district court decisions. (ECF No. 8 38.) Both decisions rely on their respective circuits’ futility rules and do not persuade the 9 Court to reach a different result. 10 IT IS SO ORDERED. 11 12 DATED: April 9, 2021 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 15 20cv0167

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