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Teresa Shappell v. Sun Life Assurance Company

June 21, 2012

TERESA SHAPPELL,
PLAINTIFF,
v.
SUN LIFE ASSURANCE COMPANY; LINCOLN NATIONAL LIFE INSURANCE; EMPLOYERS INSURANCE COMPANY OF NEVADA; AND DOES 1 TO 100, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through this action, Plaintiff Teresa Shappell ("Plaintiff") seeks damages for the denial of total long term disability benefits she claims she was entitled to under disability insurance plans issued by Defendants Sun Life Assurance Company ("Sun Life") and Lincoln National Life Insurance ("Lincoln"). Those disability plans were obtained by Plaintiff's former employer, Employers Insurance Company of Nevada ("Employers").

Plaintiff has now moved for a Protective Order preventing Sun Life and Lincoln from subpoenaing records associated with Plaintiff's concurrent arbitration proceedings against Employers on grounds that such discovery is not permitted in actions arising under the Employee Retirement Income Security Act of 1971, 29 U.S.C. § 1001 et seq. ("ERISA"). The parties have agreed both that the instant matter comes within the purview of ERISA and that the decision denying Plaintiff's benefits should be reviewed under an abuse of discretion standard. As set forth below, Plaintiff's Motion for Protective Order will be GRANTED.*fn1

BACKGROUND

As indicated above, Plaintiff seeks long term disability ("LSD") benefits that were denied by Defendants. Plaintiff has alleged she was totally disabled and unable to work at the time that Defendants Sun Life and Lincoln denied her disability claim. Plaintiff simultaneously pursues, however, a wrongful termination/discrimination claim against Employers that is being arbitrated in Nevada ("Nevada Arbitration"). Defendants contend that Plaintiff alleges, in the Nevada Arbitration, that she was able to work, without accommodation, and was wrongfully terminated from her employment.

Defendants served Employers with a subpoena seeking production of the following documents associated with the Nevada Arbitration: written discovery and responses; deposition transcripts; employment records pertaining to Plaintiff; and orders or decisions issued by the arbitrator.

Plaintiff objected to the subpoena. Defendants refused to withdraw the subpoena. Plaintiff filed this motion seeking to limit the production of records pertaining to Plaintiff's last day of work, documents which Plaintiff has agreed to produce Plaintiff also seeks an award of expenses incurred in bringing this motion.

Plaintiff argues that discovery in ERISA actions is limited instances where exceptional circumstances apply, as set forth in Steiner v. Hartford Life & Accident Ins., 2004 WL 2271599 (9th Cir. 2004) (delineating the factors set forth in Quesinberry v. Life Ins. Of N. Am., 987 F.2d 1017, 1027 (4th Cir. 1993).)*fn2

Plaintiff argues that no exceptional circumstances are present here. Additionally, in her reply, Plaintiff further contends that the evidence in this case must be limited to the administrative record because this matter is subject to an abuse of discretion standard of review.

Despite these contentions, as indicated above, Plaintiff has agreed to the discovery of evidence pertaining to her last day of work because that issue may be critical in determining whether a pre-existing condition on Plaintiff's part bars her LTD claim.

Defendant argues that the exceptional circumstances factors set forth in Quesinberry, supra, 987 F.2d 1017, are not exhaustive. Defendants contend that exceptional circumstances also exist when a plaintiff is seeking long term disability benefits for an alleged permanent disability while concurrently, in a separate wrongful termination action, alleging that she was capable of performing her occupation without limitation.

Since filing the instant motion, each party has submitted a Motion for Judgment under Federal Rule of Civil Procedure 52. Plaintiff and both Defendants unanimously concur that this matter should be reviewed under an abuse of discretion standard. See ECF No. 49 at 15; ECF No. 56-1 at 9; ECF No. 57-1 at 14.

ANALYSIS

A. Because this action is reviewed under an abuse of to lead to the discovery of admissible evidence. discretion standard, ...


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