The opinion of the court was delivered by: Dean D. Pregerson United States District Judge
A. Factual Background and Plaintiff's Claim Process with Unum before California Regulatory Insurance Settlement
Plaintiff Carmen Celio brings this suit to contest an adverse disability benefit determination by Defendant First Unum Life Insurance Company ("Unum"). Plaintiff was employed by HSBC Bank for twenty-two years until October 2004. Prior to the end of her employment, on January 1, 2004, Unum issued a group policy to HSBC employees such as Plaintiff, providing long-term disability insurance compensating 50 percent of monthly income. As relevant here, the plan defines "disability" as being continuously disabled*fn1 for 180 days; during which the employee is limited from performing the "material and substantial duties of [his or her] regular occupation due to sickness or injury." (Admin. Record*fn2 ("AR") 258.) After twelve months of payments, disability is defined as being unable to perform the duties of "any gainful occupation for which [the employee is] reasonably fitted by education, training or experience." (Id.)
On January 14, 2004, Plaintiff stopped going to work due to various medical conditions causing incontinence. (AR 80, 140.) On April 28, 2004, Plaintiff underwent surgery to correct this symptom, without results. (AR 83, 238.) On June 15, 2004, Plaintiff's doctor Michael Tahery determined that Plaintiff had been continuously disabled since January and would remain so until August 1, 2004. (AR 92.) Unum received Plaintiff's claim for long-term disability on August 23, 2004, based on incontinence, which it acknowledged by letter to Plaintiff on August 30. (AR 17, 48.) In that letter, Unum stated that it intended to contact Dr. Tahery to obtain additional information to review her claim. (AR 48.) On October 19, 2004, Dr. Tahery informed Unum that Plaintiff suffered from incontinence, resulting in frequent urination, and giving a possible return to work date of January 2, 2005. (AR 75.)
On November 17, 2004, Unum states that it spoke to Plaintiff and that she informed Unum that she had been back to work since October and did not intend to pursue a disability claim.*fn3 (AR 102.) That same day, Unum sent Plaintiff a letter confirming this conversation and advising Plaintiff that her claim would be closed, based on her reported return to work. (AR 105.) In response, on December 6, 2004, Plaintiff alleges she sent a letter to Unum stating the following:
Please see attached severance package. I did not physically go back to work. I was released for one day; so I could receive my severance, so I won't be receiving [d]isability. Please note my birthdate is 12/26/54. (AR 225.) Plaintiff argues this letter was an appeal of Unum's decision to close her claim, while Unum argues that it never received this letter. According to Plaintiff, she never actually returned to work and, instead, was "released [by her doctor] for a single day as a fiction so that she could collect severance pay [from HSBC Bank]." (Pl. Br. 6.) Plaintiff's severance pay was based on the fact that, although she was on disability leave as of January 2004, HSBC had already identified Plaintiff to be discharged from employment on March 1, 2004. (AR 210.) Plaintiff was not eligible to begin collecting severance until she was authorized to return to work, which (according to HSBC) occurred on October 28, 2004. (AR 210.)
Plaintiff did not contact Defendant again until approximately 11 months later, on November 7, 2005, when she requested that her claim be reassessed under the regulatory settlement agreement between the California Department of Insurance ("DOI") and Unum.
B. Plaintiff's Request for Reassessment of her Claim under the California DOI Regulatory Settlement Agreement
Unum entered a regulatory settlement agreement (the "CSA") with California's DOI on October 3, 2005. The CSA provides for the reassessment under specific guidelines of claims that were denied or benefits that were terminated during the period from January 1, 1997 to September 29, 2005 - which includes Plaintiff's August 2004 claim.
Although Plaintiff submitted her request for reassessment on November 7, 2005, it was not until one year later, on December 27, 2006, that Plaintiff submitted to Unum a completed Reassessment Information Form ("RIF"), her medical records from 2004 to 2006, and other documentation. (AR 123-215.) In her RIF, Plaintiff stated that Unum's denial of her claim in 2004 had been incorrect, because Plaintiff had "been on disability" since January 14, 2004, and the only reason she had returned to work was that HSBC required this in order for her to qualify for a severance package. (AR 124.)
Unum called Plaintiff on January 9, 2007 and asked why she had not contacted the company after receiving notice on November 17, 2004 that her claim had been denied. (AR 220.) Plaintiff responded that she had gotten confused and thought Unum was the state disability carrier. (Id.)
C. Unum's Denial of Plaintiff's 2005 Reassessment Claim and the Independent Review of Unum's Denial
In January 2007, Defendant's senior clinical consultant Nurse Sledge submitted a report as part of Defendant's CSA reassessment of Plaintiff's claim, noting that work restrictions were not typically associated with incontinence. (AR 238-40.) Sledge also stated that any such restrictions, where applicable, were not supported throughout the Plan's 180-day elimination period (from January to July 2004), and thus Plaintiff's claim would not have been eligible for benefits under the policy. (Id.)
In accordance with the CSA, in February 2007 Defendant sent Plaintiff's file to outside medical reviewer Dr. Jerome Klobutcher, who provided a medical report indicating that Plaintiff's medical records failed to indicate any specific restrictions associated with her condition, and that her alleged disability would only have created brief periods of total functional restriction during the elimination period in 2004. (AR 301-07). Dr. Klobutcher's report further recommended, given that the available medical records did not clearly reveal the underlying cause of Plaintiff's complaint, that Plaintiff be re-evaluated by another urogynecologist, or a urologist with expertise in diverticula and interstitial cystitis, both of which were of particular concern in Plaintiff's case. (AR 305.) Unum also obtained a vocational analysis from Dorothy Edwards, its Senior Vocational Rehabilitation Consultant, who ...