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Gonzales v. Unum Life Insurance Company of America

September 16, 2010

RUBEN GONZALES, PLAINTIFF,
v.
UNUM LIFE INSURANCE COMPANY OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

Defendants Unum Life Insurance Company and Provident Life and Accident Insurance Company have filed a motion for partial summary judgment on Plaintiff's state-law claims [Doc. 32]. For the following reasons, the Court GRANTS the motion.

I. BACKGROUND

Starwood Hotels and Resorts ("Starwood") formerly employed Plaintiff as a sales team manager. (Compl. ¶ 9.) Plaintiff suffered a disability on June 8, 2007, at which time his Starwood employment ceased.

During his employment with Starwood, Plaintiff elected to participate in the Voluntary Workplace Disability Plan (the "VW Plan"), a short-term disability plan. The VW Plan provided voluntary workplace disability benefits through an insurance policy issued by Defendant Provident. (Compl. ¶ 10.) The terms of the VW Plan provided benefits in the amount of $5,000.00 per month for a maximum benefit period of six months. (Compl. ¶ 11.)

While a Starwood employee, Plaintiff also elected to participate in a long-term disability plan (the "LTD Plan") sponsored by Starwood. (Compl. ¶ 12.) Defendant Unum issued disability benefits under the LTD Plan to participating Starwood employees through a group insurance policy. (Compl. ¶ 12.) The LTD Plan provided benefits for Plaintiff in the amount of 60% of his monthly earnings for a period of 18 months following his disability. (Compl. ¶ 13.)

Plaintiff allegedly suffered a loss under both the VW and LTD Plans when he became totally disabled on June 8, 2007, following an operation for coronary stenting to address his coronary artery disease. (Compl. ¶¶ 17, 21.) Plaintiff filed for benefits with Provident under the VW Plan. (Compl. ¶ 18.) On August 6, 2007, Provident granted Plaintiff's application for benefits. (Id.) But in December of that same year, Provident stopped paying benefits under the VW Plan. (Id.) Plaintiff had also applied for benefits under the LTD Plan, but his application was denied. (Compl. ¶ 19.) He appealed the denial of benefits under both plans unsuccessfully. (Compl. ¶ 20.) And he never received a decision on a second, later appeal. (Id.)

Plaintiff brings two causes of action against Defendants: (1) a claim pursuant to the Employee Retirement Security Act, 29 U.S.C. § 1001, et seq. for benefits denied under the LTD Plan and the VW Plan;*fn1 and (2) a claim for breach of the implied covenant of good faith and fair dealing arising out of the denial of benefits under the VW Plan. Defendants move for summary judgment on the second claim.

II. STANDARD

Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Pro- cedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322-23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 314. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

III. DISCUSSION

Defendants argue that ERISA preempts Plaintiff's state-law claim for breach of the implied covenant of good faith and fair dealing based on their failure to pay benefits under the VW Plan. Defendants initially contend that the VW Plan qualifies as an employee welfare benefit plan on its own. Alternatively, Defendants argue that ...


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