The opinion of the court was delivered by: Honorable Larry Alanburns United States District Judge
ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
This matter is before the court on the parties' cross-motions for summary judgment in this action seeking disability benefits from an employer's plan covered by the Employee Retirement Income Security Act of 1974 ("ERISA"). Defendants San Diego Gas & Electric Company ("SDG&E"), San Diego Gas & Electric Company Pension Plan, and Sempra Energy ("Sempra") (collectively "Defendants") filed a Motion For Summary Judgment ("Motion"). Dkt No. 17. Plaintiff Ray A. DeLoach ("DeLoach" or "Plaintiff") filed a Cross-Motion For Summary Judgment ("Cross-Motion"). Dkt No. 16. Each side filed an Opposition to the other's motion, and each filed a Reply to the other's Opposition. Pursuant to Civil Local Rule 7.1 (d)(1), the court finds the issues presented appropriate for decision on the papers and without oral argument. For the reasons discussed below, Defendants' Motion is GRANTED, and Plaintiff's Cross-Motion is DENIED.
DeLoach was an employee performing the duties of a heavy equipment operator for SDG&E until 1998, at which time he became, and allegedly remains, continuously disabled. Compl. ¶¶ 6-7. He was at that time a participant in the San Diego Gas & Electric Company Pension Plan ("Plan"), an employee welfare benefit plan as defined by 29 U.S.C. § 1002(1), offering, among other things, total disability income ("TDI") benefits. Compl. ¶¶ 7-8. He attached as Exhibit A to the Complaint, incorporated therein by reference, "a three page summary of the PLAN" he represented was the only plan document he had received despite repeated requests for "a copy of the PLAN documents that set forth all of his rights and obligations under the PLAN." Compl. ¶ 8. DeLoach alleges he experienced chronic neck and back pain, bilateral knee problems, and the side effects of pain medication persisting for several years. He applied for Plan TDI benefits when he became eligible in the fall of 2000 after exhausting his sick leave accumulated over his 23 years of SDG&E employment. Defendants approved the claim, but paid him no benefits because he was receiving Workers' Compensation Disability benefits at the time, which were scheduled to terminate in June 2006. Compl. ¶ 12.
The parties' Joint Statement of Undisputed Facts establishes DeLoach was born June 29, 1957, is a high school graduate, and was an employee of SDG&E from 1976 until 1998. During his employment period, he participated in the Plan. The Plan's TDI benefit for qualifying participants defines "Total Disability" as a participant's illness or injury that: "Prevents him from performing the duties assigned and required of him for the Employer's job classification or job description as of the date of illness or injury; or after 24 months of continuous disability, prevents him from engaging in any substantially gainful occupation for wages or profit for which he is reasonably qualified by education, training, or experience." Undisputed Fact No. 6. The Plan provides the amount of TDI benefits shall be the equal of the greater of: "(a) The participant's primary benefit under the Federal Social Security Act, or (b) Any early retirement benefit payable under the Plan at the time the Total Disability commences." Undisputed Fact No. 7. The Plan further provides: "The TDI benefit amount is reduced by the amount of any other income from Employer sick leave, Workers' Compensation, occupational disease laws, or pursuant to the disability income provisions of any state laws." Undisputed Fact No. 8.
The parties agree DeLoach sustained an injury on the job in October 1997. In October 2000, he submitted a claim for TDI benefits. The Plan administrators approved the claim under the "own occupation" definition of disability, and referred the file to an outside vendor to estimate the amount of his TDI benefit. Undisputed Fact Nos. 9-11. The vendor reported his estimated TDI benefit was $592.50 per month, an amount less than the Workers' Compensation benefits DeLoach was then receiving through that program of $680.00 per month as Permanent Partial Disability Benefits. Undisputed Fact Nos. 12; see Def. Mot. P&A 5:14-16 & Exh. E, p. E661. DeLoach's "workers' compensation benefits exceeded his estimated TDI benefits and the Plan's offset provisions prevented him from collecting TDI." Def. Mot. P&A 5:16-19 ("Because the TDI was less than Plaintiff's worker's compensation benefits, the Plan monitored the claim in coordination with the worker's compensation claim").
In April 2005, DeLoach received an award of Social Security disability benefits retroactive to April 2003. Undisputed Fact No. 13. Defendants notified him the Social Security award might change the status of his TDI benefits. The Plan had arranged for Dr. Kane to perform an independent medical examination to determine DeLoach's eligibility for further benefits, an examination he performed in February 2006, followed by a report of his findings to the Plan. Undisputed Fact Nos. 14-16. Dr. Kane concluded DeLoach was not disabled from all occupations. By letter dated April 6, 2006, the Plan informed DeLoach of its determination he was not entitled to TDI benefits. He appealed that determination by letter dated May 9, 2006 and thereafter submitted additional documentation and medical records, including a Functional Capacity Evaluation ("FCE") performed by Barbara Tourtellott, an occupational therapist. Undisputed Fact Nos. 17-18.
In December 2006, the Plan's Benefits Committee ("Committee") met to consider DeLoach's appeal. The Committee decided to await the results of a December 11, 2006 Agreed Medical Examination by Dr. Harvey Wieseltier before making a final determination. In February 2007, the Committee reviewed Dr. Wieseltier's report and conclusion that DeLoach was able to perform the duties of a computer repair technician, an occupation SDG&E had paid to train DeLoach to perform in the aftermath of his disability. By letter dated March 8, 2007, the Plan informed DeLoach that the benefits denial was upheld on appeal. DeLoach asked the Committee to reassess its decision in a letter dated April 10, 2007. Undisputed Fact Nos. 19-22.
DeLoach received Long-Term Disability ("LTD") benefits from the Plan for two years associated with the 1997 work injury to his knees and back under the "own occupation" definition of LTD. Def. Mot. P&A 1:6-9. It is Defendants' position DeLoach was not eligible for continued benefits thereafter because he was not disabled from "any occupation" as required under Plan TDI definitions. Def. Mot. P&A 1:10-13. They contend the Plan correctly found DeLoach was eligible for no disability benefits after two years -- neither LTD nor TDI -- because he did not meet the requirement he be "unable to perform the duties of any gainful occupation for which he was reasonably suited by education, training, or experience," as confirmed by two independent physicians, because he "was re-trained (at Defendants' expense) as a computer repair technician," and the two physicians confirmed his "ability to perform that occupation." Def. Mot. P&A 1:15-19
DeLoach's Complaint asserts a single cause of action for payment of benefits pursuant to 29 U.S.C. § 1132. That statutory provision, in pertinent part, authorizes civil actions brought by an ERISA plan participant to recover benefits due, to enforce rights conferred, or to clarify rights to future benefits under the terms of the participant's plan.
29 U.S.C. § 1132(a)(1)(A),(B). DeLoach alleges he "is entitled under the PLAN to disability benefits, contributions and credits to his pension fund, continued health, dental, vision benefits, continued life insurance and other benefits pursuant to the terms of the PLAN," as well as reasonable attorneys' fees and costs pursuant to 29 U.S.C. § 1132(g)(1). Compl. ¶ 15. He seeks the value of his denied benefits and a declaration he is entitled to ongoing Plan benefits. Compl. 3:27-28.
Defendants seek summary judgment in their favor on grounds DeLoach is not entitled to any of the benefits he seeks in this action, the Plan administrator's decision to deny his claim was reasonable under the applicable abuse of discretion standard of review, and defendants SDG&E and Sempra Energy are not proper parties. They move for summary adjudication of five issues, with judgment in their favor disposing of the entire action: (1) the standard of judicial review in this action is abuse of discretion; (2) the scope of the court's review is limited to the Administrative Record; (3) Defendants' decision denying DeLoach's claim for ERISA benefits was not arbitrary, capricious, or unreasonable; (4) a determination SDG&E is not a proper party to this action; and (5) a determination Sempra is not a proper party to this action. Dkt No 17.
DeLoach seeks summary judgment awarding him past and future benefits, asserting entitlement to judgment because the termination of benefits in April 2006 and the denial of his administrative appeal in March 2007 were improper. Dkt No. 16, 1:5-7. He contends: the Plan "abused its discretion by relying on clearly erroneous findings of fact . . . and in relying on a medical report that failed to consider or address all the evidence;" and the Plan violated his rights to a full and fair review when it performed a "bait and switch" by advising him it was relying on Dr. Kane's report to terminate his benefits, then relying on new evidence in denying his appeal. Dkt No. 16, 1:7-13. Alternatively, he asks the court to summarily adjudicate two "sub-issues:" first, "[t]hough the Plan grants [the Pension Committee] full discretion to administer and interpret the Plan, the pension committee did not delegate discretionary authority to the Benefits Committee who actually terminated [his] benefits" (Dkt No. 16, 1:16-21); second, he seeks a determination of "the proper amount of past benefits" the Plan should have paid him because he "was granted total disability status by the Plan from December 2000 through April 2006 [but] was never paid any benefits due to a gross miscalculation of benefits to which [he] was entitled" (Dkt No. 16, 21:22-25). DeLoach urges the Court to apply the de novo standard of review (Dkt No. 16, 22:7-23:8), but argues under either the abuse of discretion or the de novo standard, the only "reasonable conclusion" is that he is entitled to TDI benefits because the Plan "unreasonably relied upon the report of Dr. Wieseltier in the face of overwhelming conflicting medical evidence to deny [his] appeal" and made a clearly erroneous factual finding based on that incomplete report lacking a complete analysis of all the evidence. Dkt No. 23:11-17.
In enacting ERISA, Congress intended to:
"protect . . . participants in employee benefit plans and their beneficiaries, by requiring disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligations for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts."
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 44 (1987), quoting 29 U.S.C. § 1001(b).
"ERISA comprehensively regulates, among other things, employee welfare benefit plans that, 'through the purchase of insurance or otherwise,' provide medical, surgical, or hospital care, or benefits in the event of sickness, accident, disability, or death." Pilot Life, 481 U.S. at 44, citing 29 U.S.C. § 1002(1) (deciding ERISA pre-empts state common law tort and contract actions asserting improper processing of a claim for benefits under an insured employee benefit plan). Pension plan regulation is exclusively a federal concern. Pilot Life, 481 U.S. at 45-46; see Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (1981).
The Plan is provided as part of Exhibit A to the Green Declaration, pages A524 through A639, associated with the cross-motions. Dkt No. 18. In pertinent part, the Plan provides TDI benefits are available to employees who have attained the age of 35 and have completed 10 years of service with the company. There is no dispute DeLoach meets those requirements. There is also no dispute the amount of TDI benefits awardable to qualifying participants is equal to the greater of:
(a) The Participant's primary benefit under the Federal Social Security Act, -- or --
(b) Any Early Retirement Benefit payable under the Plan at the time Total Disability commences.
The Plan defines "Total Disability" as an injury or illness that:
1.9.1 Prevents [the Participant] from performing the duties assigned and required of him for the Employer's job classification or job description as of the date of illness or injury [referred to by the parties as the "Own Occupation" period]; or
1.9.2 After 24 months of continuous disability, prevents him from engaging in any substantially gainful occupation for wages or profit for which he is reasonably qualified by education, training, or experience ...