BAY AREA ROOFERS HEALTH AND WELFARE TRUST, its JOINT BOARD OF TRUSTEES, and KEITH ROBNETT and BRUCE LAU, as Trustees Plaintiffs,
SUN LIFE ASSURANCE COMPANY OF CONFERENCE CANADA, and DOES 1-10, inclusive, Defendant.
Richard C. Johnson, (SBN 40881), Anne M. Bevington, (SBN 111320), Shivani Nanda, (SBN 253891), SALTZMAN & JOHNSON LAW CORPORATION, San Francisco, CA, Attorneys for Plaintiffs BAY AREA ROOFERS HEALTH AND WELFARE TRUST, et al.
Sean P. Nalty, (SBN 121253), OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C., San Francisco, CA, Attorneys for Defendant SUN LIFE ASSURANCE COMPANY OF CANADA.
JOINT CASE MANAGEMENT STATEMENT; JOINT REQUEST TO CONTINUE CASE MANAGEMENT CONFERENCE TO COINCIDE WITH MOTION HEARING DATE; ORDER CONTINUING CASE MANAGEMENT CONFERENCE
WILLIAM H. ORRICK, District Judge.
REQUEST TO CONTINUE CASE MANAGEMENT CONFERENCE TO COINCIDE WITH MOTION HEARING DATE
Plaintiffs Bay Area Roofers Health and Welfare Trust, its Joint Board of Trustees, and Keith Robnett and Bruce Lau as Trustees (collectively the "Trust Fund") and Defendant Sun Life Assurance Company of Canada ("Sun Life of Canada"), jointly request that the Court continue the initial case management conference, currently set for December 10 at 2:00 p.m., to coincide with the hearing on plaintiffs' Motion to Strike Defendant Sun Life Assurance Company of Canada's Defenses, which is set for December 18, 2014, at 2:00 p.m.
JOINT CASE MANAGEMENT CONFERENCE STATEMENT
The parties submit this Joint Case Management Conference Statement in accordance with Rule 26 of the Federal Rules of Civil Procedure and Local Rule 16-9, following the Conference of Counsel that occurred on November 26, 2013.
I. Jurisdiction and Service
This court has original jurisdiction over the subject matter pursuant to 28 U.S.C. §§ 1331 and 1332. There are no parties that remain to be served.
A. Plaintiffs' Statement of the Case
The Trust Fund provides health care benefits for employees and their dependents covered by collective bargaining agreements in the roofing industry in the San Francisco Bay Area. To provide those benefits, the Joint Board of Trustees established a self-funded, multiemployer health and welfare plan ("the Plan"), governed by ERISA.
In establishing the Plan, the Joint Board of Trustees recognized a need to indemnify the Trust against potentially large health claims, so it purchased stop loss insurance coverage from Sun Life of Canada. For the relevant policy period, the stop loss policy obligated Sun Life of Canada to reimburse the Trust Fund for payments made on health claims beyond a $150, 000 deductible.
The Trust Fund and Sun Life of Canada agreed that the Joint Board of Trustees was responsible for making benefit determinations under the Plan and that Sun Life of Canada had no duty or authority to administer, settle, adjust or provide advice regarding claims. Instead, the authority to determine all questions relating to eligibility for benefits and to construe the terms of the Plan was fully vested with the Joint Board of Trustees.
As the stop loss policy issued by Sun Life of Canada was a "reimbursement policy, " coverage was promised in exchange for payment of premiums by the Trust Fund calculated solely based on a head count of the total number of persons eligible for health care benefits under the Plan. Sun Life of Canada never required Plaintiffs to submit the names and/or social security numbers of employees for whom Plaintiffs were remitting premiums.
In November 2011, Plaintiffs submitted claims for reimbursement under the Sun Life of Canada stop loss policy for the amount the Trust paid above the $150, 000 deductible for medical treatment received by two prematurely born twin babies that were enrolled in the Plan. The babies' father, a roofing employee who was enrolled as a Plan participant, is referred to in the Complaint as Participant X. In total, the Trust paid $256, 178.29 for Twin A's medical treatment and $452, 663.29 for Twin B's medical treatment.
In December 2011, Sun Life of Canada wrongfully denied Plaintiffs' claims. Based solely on a social security no-match response from the Social Security Administration as to Participant X's social security number, Sun Life of Canada claimed that Participant X was not an "Employee" within the meaning of the Plan, and therefore, the Plan was not entitled to reimbursement of amounts paid for Twin A's and Twin B's medical treatment.
Plaintiffs appealed Sun Life of Canada's wrongful claim denial because the policy entitled the Trust to reimbursement for the amounts it already had paid for the twins' medical care and there was no specific policy exclusion for claims paid by the Trust on behalf of an employee whose social security number generates a no match response from the Social Security Administration.
On appeal, Sun Life of Canada notified Plaintiffs that "as a matter of procedure" it checks the Social Security Numbers listed for all Stop Loss claimants through a program called Accurint after it receives a new claim submission. This was the first notice of any kind that the Board of Trustees, as the policyholder, and the Plan, as the insured, received from Sun Life of Canada that coverage under the Policy was conditioned upon a social security match through the Accurint program. At no point during the initial underwriting process, nor through Policy renewals, did Sun Life of Canada inform Plaintiffs that a social security match through Accurint was a condition precedent to coverage. Thereafter, Sun Life of Canada denied the Plan's appeal and confirmed denial of coverage. Sun Life of Canada will not meet its burden to prove that there was any policy exclusion based on a Plan participant's immigration status.
On September 10, 2013, Plaintiffs sued Sun Life of Canada in this Court seeking monetary relief, declaratory relief, and to enjoin Sun Life of Canada's unfair business practices.
B. Sun Life's Statement of the Case
Sun Life disagrees with Plaintiff's Statement of the Case. It is true that Sun Life issued a policy of Stop-Loss insurance to the Trust ("the Stop-Loss Policy"). The Stop-Loss Policy provides coverage for certain eligible expenses paid by the Trust on behalf of employees, who obtained coverage under the Trust's Plan by virtue of employment with a participating employer. If one is not lawfully authorized to work in the United States, then one cannot be considered to be a lawful employee under the Plan or Sun Life's Stop Loss Policy.
It is not true that the Trust and Sun Life "agreed that the authority to determine all questions relating to eligibility for benefits and to construe the terms of the Plan was fully vested with the Joint Board of Trustees", for purposes of the Stop-Loss Policy, as the Trust seems to contend. This is not a situation where the Plan was expressly incorporated into the Stop-Loss Policy. To the contrary, the Stop-Loss Policy specifically provides Sun Life with the right to determine whether an expense was paid in accordance with the terms of the Plan ("For the purpose of determining Eligible Expenses under the Policy, We have the right to determine whether an Eligible Expense was paid by you in accordance with the terms of your Plan."); ("We have the right to require documentation from You that demonstrates You paid an Eligible Expense and that payment was made in accordance with the terms of your Plan.").
It is true that the Trust submitted a claim to Sun Life in early November 2011, in connection with a worker on whose behalf the Trustees had paid medical expenses under the Plan. It is not true that Sun Life denied the claim and upheld the denial "[b]ased solely on a social security no-match response from the Social Security Administration..." as the Trust contends. To the contrary, upon receipt of the claim Sun Life attempted to verify the SSN listed for Participant X, and the resulting report showed that the SSN provided belongs to a person other than Participant X. Thus, upon initial review, the evidence indicated that the expenses had been paid on behalf of an employee who had not used a Social Security Number ("SSN") that validly belonged to him, and was therefore not lawfully working in the U.S. Nonetheless, Sun Life gave the Trust every opportunity to provide additional information, affording it two separate appeals of Sun Life's determination and offering to review any information submitted by the Trust. With respect to both the first and ...