determine which life insurance policy Mr. Leung was covered
under while employed at SOM. As part of these efforts she
contacted Connecticut General. It is now clear, that at the time
of his termination in 1989, Mr. Leung was covered under a
Connecticut General life insurance policy issued to SOM — policy
number 0228218-01. The Summary Plan Description ("SPD") lists
SOM as the plan sponsor, Thomas J. Eyerman of SOM as the Plan
Administrator, and Connecticut General as the Funding Medium.
See SPD at Bates 287 (Pennasilico Decl.Ex. B).
Only employees who worked 30 hours per week were eligible for
life insurance under the plan. See Id. at 288. The SPD also
states that coverage terminated when the employee "leave[s]
active service." Id. at 289. Two further provisions are of
particular importance here. First, premiums were waived for a
year upon sufficient proof that the employee has been totally
disabled for a period of nine months or more. Second, an
employee could convert his group coverage to individual coverage
if application was made within 31 days of termination of the
In a letter dated April 5, 2000, CIGNA, the parent of
Connecticut General, informed SOM that Mr. Leung's coverage had
been canceled because Mr. Leung never applied for a Waiver of
Premium or Conversion after he went out on disability on August
4, 1989. A copy of this letter was forwarded to plaintiff.
Summary judgment is appropriate when the "pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
An issue is "genuine" only if there is sufficient evidence for a
reasonable fact finder to find for the nonmoving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106
S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if the
fact may affect the outcome of the case. See id. at 248, 106
S.Ct. 2505. "In considering a motion for summary judgment, the
court may not weigh the evidence or make credibility
determinations, and is required to draw all inferences in a
light most favorable to the nonmoving party." Freeman v.
Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A principal purpose
of the summary judgment procedure is to identify and dispose of
factually unsupported claims. See Celotex Corp. v. Catrett,
477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The party moving for summary judgment bears the initial burden
of identifying those portions of the pleadings, discovery, and
affidavits which demonstrate the absence of a genuine issue of
material fact. See id. at 323, 106 S.Ct. 2548. Where the
moving party will have the burden of proof on an issue at trial,
it must affirmatively demonstrate that no reasonable trier of
fact could find other than for the moving party. See id. Once
the moving party meets this initial burden, the non-moving party
must go beyond the pleadings and by its own evidence "set forth
specific facts showing that there is a genuine issue for trial."
Fed.R.Civ.P. 56(e). The non-moving party must "identify with
reasonable particularity the evidence that precludes summary
judgment." Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996)
(quoting Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th
Cir. 1995), and noting that it is not a district court's task to
"scour the record in search of a genuine issue of triable
fact"). If the non-moving party fails to make this showing, the
moving party is entitled to judgment as a matter of law. See
Celotex, 477 U.S. at 323, 106 S.Ct. 2548.
Plaintiffs complaint states the following three causes of
action: 1) an ERISA § 502(a)(1) claim for life insurance
benefits, 2) an ERISA § 502(a)(3) claim for other relief, and 3)
a claim that SOM violated a ERISA § 502(c) by failing to provide
requested documents and information.
I. Claim for Benefits under ERISA § 502(a)(1) (against all
Plaintiff brings a claim under ERISA § 502(a)(1) for payment
of benefits under her husband's life insurance policy.
Defendants raise several defenses to this claim.
A. Failure to Exhaust
Defendants claim that this action is barred because plaintiff
has failed to exhaust her administrative remedies under the
plan. The "general rule governing ERISA claims [is] that a
claimant must avail himself or herself of a plan's own internal
review procedures before bringing suit in federal court." Diaz
v. United Agr. Employee Welfare Ben. Plan and Trust,
50 F.3d 1478, 1483 (9th Cir. 1995). As plaintiff points out, however,
the exhaustion requirement is generally waived where resort to
the plan's procedures would be futile or inadequate. See id.
There is no dispute that plaintiff did not technically exhaust
her claim. In fact, she never formally submitted a claim for
life insurance benefits to Connecticut General. However, in a
letter dated April 5, 2000, CIGNA, the parent of Connecticut
General, informed Mrs. Leung that it would "need . . .
documentation" of "Waiver of Premium or Conversion" to process
her claim. See Pennasilico Decl.Ex. B. Plaintiff admits that
she has no such documentation. Accordingly, if her efforts did
not technically exhaust the available administrative remedies,
it is clear that recourse to those remedies would be futile.
Indeed, defendants' argument that recourse to administrative
procedures at this point would not be futile is somewhat
disingenuous. Defendants claim that they are entitled to summary
judgment, on several grounds other than exhaustion doctrine.
Accordingly, it is difficult to see how recourse to their
administrative procedures would not be an exercise in futility.
B. Proper Party
Both SOM and Connecticut General claim that they are not
proper defendants in a claim for benefits based on the law set
forth in Everhart v. Allmerica Financial Life Ins. Co.,
275 F.3d 751 (9th Cir. 2001). Everhart held that a claim for
benefits, under section 502(a)(1), can be maintained only
against the ERISA plan itself or against the plan administrator.
The majority in that decision explicitly rejected a test,
supported by the dissent, which would have permitted suit
against any entity retaining discretionary authority over
benefit determinations. See Id. at 754 n. 3. That is, the
majority rejected a test that would rely on the fiduciary status
of the defendant. Unfortunately, while rejecting fiduciary
status as the test, the case offers little guidance as to the
definition of a plan "administrator." A common sense definition
of plan administrator would seem to admit of some overlap with
the inquiry into fiduciary status, thereby permitting fiduciary
considerations to creep back into a definition they were
explicitly rejected from.
From Everhart, it is clear that this action can be
maintained against the Insurance Plan itself. Further, because
SOM is identified as the "plan administrator" in the SPD, there
is at least a triable issue of fact as to whether SOM is the
"plan administrator," and therefore summary
judgment as to SOM should be denied. The real issue concerns
Everhart affirmed a granting of summary judgment in favor of
the insurance company. But in Everhart both parties conceded
that the employer was the plan administrator. Id. at 754. By
contrast, in the instant action plaintiff argues that
Connecticut General was at least a co-plan administrator with
SOM. Connecticut General's moving papers admit that it was
responsible for making claims decisions. The Court concludes
that there is a triable issue of fact as to whether Connecticut
General was a plan administrator.
1. Connecticut General
It is undisputed that Mr. Leung was not technically covered
under the group life insurance policy when he died.*fn2 It is
further undisputed that plaintiff never submitted an actual
application for waiver of premium due to disability or for
conversion of his group coverage to individual coverage.
Therefore, there is no real issue as to whether Connecticut
General validly canceled coverage.
Plaintiffs only argument is that Mr. Leung substantially
complied with the procedures for applying for a waiver of the
life insurance premium due to his disability. Mr. Leung
submitted a claim for short-term disability benefits to
Connecticut General in August 1989. Plaintiff claims that this
submission amounts to substantial compliance with the terms of
the life insurance policy providing for extension of benefits
during total disability.
The relevant portion of the life insurance policy states:
If the Employee submits due proof to the Insurance
Company that he became Totally Disabled prior to his
60th birthday and has remained continuously Totally
Disabled for 9 months or more, his Term Life
Insurance will be extended, without further payment
of premiums for him, for a period of one year . . .
Policy at § 24.
As an initial matter, there is a serious question as to
whether the California doctrine of substantial compliance
applies in this context. In ERISA cases, it appears that the
doctrine has only been applied in the context of an attempt to
change the designated beneficiary. See Bankamerica Pension Plan
v. McMath, 206 F.3d 821 (9th Cir. 2000). But even if the
doctrine were to apply, Mr. Leung's actions do not amount to
substantial compliance, which is defined as "every reasonable
effort under the circumstances." Id. at 830. Mr. Leung did not
make an application to Connecticut General that in any way
related to life insurance benefits. He made a claim for
short-term disability benefits. These actions were not "every
reasonable effort under the circumstances" to secure a life
insurance premium waiver due to disability.
Connecticut General is entitled to summary judgment on this
2. Skidmore, Owings, & Merrill
ERISA § 502(a)(1)(B) provides a right of action "to recover
benefits due . . . under the terms of the plan." As stated
above, under the terms of the plan, plaintiff was not due any
benefits because under the terms of the plan, Mr. Leung's
coverage ceased when he stopped working 30 hours per week and
Mr. Leung did not pursue the only avenues for extending the
coverage, total disability and conversion. It is undisputed that
plaintiff was actually terminated. And even if the Leungs were
unaware of this fact, they certainly knew that Mr. Leung was not
working 30 hours per week as required by the terms of the
In essence, it appears that plaintiff argues that SOM failed
to adequately inform Mr. Leung that he had been terminated.
Section 502(a)(1)(B) does not permit recovery for reporting and
disclosure violations. See Hozier v. Midwest Fasteners, Inc.,
908 F.2d 1155, 1167 (3rd Cir. 1990). The Ninth Circuit deviated
from this generally accepted rule in Blau v. Del Monte Corp.,
748 F.2d 1348 (9th Cir. 1984), and reversed summary judgment in
favor of a defendant who had failed to comply with reporting and
disclosure requirements. But in Blau the Ninth Circuit
presumed that substantive harm had resulted from "defendants'
egregious procedural violations." See McKenzie v. General
Telephone Co. of California, 41 F.3d 1310, 1315 (9th Cir.
1994). There have been no egregious violations in this case,
therefore SOM is entitled to summary judgment on this basis.
II. Claim for Other Relief under ERISA § 502(a)(3) (against
Insurance Plan and Connecticut General)
Defendants claim that they are entitled to summary judgment on
this claim because plaintiff seeks an award of money damages,
and such an award is not available under section 502(a)(3).
Plaintiff concedes that legal remedies are not available, under
section 502(a)(3), but argues that the relief she requests can
be characterized as equitable.
By its terms, section 502(a)(3) permits a civil action by a
beneficiary seeking an injunction or "other appropriate
equitable relief" for violations of ERISA.
29 U.S.C. § 1132(a)(3). Damages cannot be recovered in a civil action under
section 502(a)(3). See Great-West Life & Annuity Ins. Co. v.
Knudson, 534 U.S. 204, 122 S.Ct. 708, 718-19, 151 L.Ed.2d 635
(2002); Bast v. Prudential Ins. Co. of America, 150 F.3d 1003,
1009 (9th Cir. 1998).
Plaintiff urges that the relief she requests can be considered
equitable. She states, "the Court might order Defendants to
accept a late request for conversion, premium waiver and claim
. . ." She also suggests that the Court might order restitution.
These arguments are unconvincing.
In Great-West, the Court significantly narrowed the forms of
restitution that were available under section 502(a)(3). "[F]or
restitution to lie in equity, the action generally must seek not
to impose personal liability on the defendant, but to restore to
the plaintiff particular funds or property in the defendant's
possession." Id. at 714-15. In essence, only a constructive
trust or equitable lien would be appropriate under section
502(a)(3). Id. at 715. Because there is no specific property
that defendants are in possession of, to which plaintiff asserts
a legal claim, such relief would not be appropriate in this
Finally, plaintiffs argument that the Court might order
defendants to accept a late request for conversion or waiver of
premium is a creative attempt to disguise a claim for damages as
a claim for equitable relief. If Mr. Leung were still alive,
such an order from the Court might constitute equitable relief.
But Mr. Leung has passed, thereby triggering any payment due
under life insurance. Plaintiff in this case seeks a monetary
award of life insurance benefits she claims are due. In drawing
a distinction between equitable and legal relief, Great-West
makes clear that this Court should look to the substance of the
requested relief. Here the requested relief is a monetary award.
"A claim for money due and owing under a contract is
quintessentially an action at law." Wal-Mart Stores, Inc.
Associates' Health and Welfare Plan v. Wells, 213 F.3d 398, 401
(7th Cir. 2000) (internal quotation omitted). Therefore,
defendants are entitled to summary judgment on this claim.
III. ERISA § 502(c) (against SOM)
Plaintiffs Third Cause of Action alleges a violation of
section 502(c),*fn3 which provides as follows:
Any administrator . . . who fails or refuses to
comply with a request for any information which such
administrator is required by this subchapter to
furnish to a participant or beneficiary . . . may in
the court's discretion be personally liable to such
participant or beneficiary in the amount of up to
$100 a day from the date of such failure or refusal,
and the court may in its discretion order such other
relief as it deems proper.
29 U.S.C. § 1132(c)(1)(B).