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Englert v. Prudential Insurance Co. of America

United States District Court, N.D. California

March 27, 2017



          HAYWOOD S. GILLIAM, JR. United States District Judge.

         Pending before the Court are Plaintiff Peter Englert's (“Plaintiff”) motion for partial summary judgment, Dkt. No. 38, and Defendant Prudential Insurance Company of America's (“Defendant”) motion for determination of the standard of review, Dkt. No. 41. These motions arise from Plaintiff's action seeking recovery of employee benefits and equitable relief under the Employee Retirement Income Security Act of 1974 (“ERISA”). Dkt. No. 1 (“Compl.”). The parties have each filed oppositions to the respective motions. Dkt. Nos. 42, 43. For the reasons set forth below, the Court GRANTS Plaintiff's motion for partial summary judgment and DENIES Defendant's motion for determination of the standard of review.

         I. BACKGROUND

         At all relevant times, Plaintiff was a sales associate at JP Morgan Chase Bank (“JPMCB”), and participated in a group long-term disability (“LTD”) plan sponsored by JPMCB and underwritten by Defendant. Compl. ¶¶ 6-7. The Parties agree that Plaintiff's LTD benefits stem from an employee welfare benefit plan that is governed by ERISA. Id. at ¶¶ 7-9; Dkt. No. 33 (“Answer”) ¶¶ 7-9. The LTD benefits are detailed, referenced, and/or evidenced in the Group Insurance Contract and the Group Insurance Certificate titled “Long Term Disability Coverage” (collectively the “Policy”). Dkt. No. 41, Ex. 1-2. Other documents related to the benefits include: (1) a Claims and Appeals section appended to the Policy (“Claims and Appeals”), a Plan Administration Summary Plan Description (“Plan Administration SPD”), (2) a Long-Term Disability Plan Summary Plan Description (“Long-Term Disability SPD”), [1] and (3) a Health & Income Protection Program for JPMCB and Certain Affiliated Companies/JPMC Health Care and Insurance Program for Active Employees (the “Master Wrap Plan” or “Plan”). Dkt. No. 41, Exs. 2-5; Dkt. No. 38, Exs. D, E.

         Defendant was and is the de facto co-plan administrator and the provider of LTD benefits. Compl. ¶ 9; Answer ¶ 9. Plaintiff alleges that while he was an employee of JPMCB and a recipient under the Plan, he experienced severe chronic back pain forcing him to take medical leave effective October 18, 2011. Compl. ¶¶ 8, 13. On November 30, 2012, Defendant sent Plaintiff a letter informing him that his LTD benefits claim had been approved. Dkt. No. 39, Ex. F. However, on September 16, 2013, Defendant terminated Plaintiff's LTD. Compl. ¶ 16; Answer ¶ 16. Plaintiff appealed the termination, and on June 2, 2014, Defendant paid Plaintiff back benefits for the period beginning on September 17, 2013 and ending on May 21, 2014, before again terminating Plaintiff's benefits effective May 22, 2014. Compl. ¶ 16; Answer ¶ 16. On November 25, 2014, Plaintiff again appealed, and on January 14, 2015 Defendant again paid Plaintiff back benefits up to and including December 6, 2014, before again terminating benefits effective December 7, 2014. Compl. ¶ 16; Answer ¶ 16. On July 9, 2015, Plaintiff filed a third appeal, and Defendant affirmed its December 7, 2014 denial of benefits in a letter dated September 15, 2015, stating that Plaintiff's “file no longer supports an impairment which would prevent him from performing the material and substantial duties of his regular occupation.” Dkt. No. 39, Ex. C at PRU005025.

         On October 19, 2015, Plaintiff filed this action against Defendant and Does 1-20. See generally Compl. The complaint articulates two causes of action under ERISA: (1) a claim for recovery of wrongfully withheld LTD benefits; and (2) a claim for equitable relief in the form of a permanent injunction preventing Defendant and Does 1-20 from serving as fiduciaries with respect to Plaintiff's LTD benefits plan. Id. ¶¶ 24-36. Plaintiff requests full payment of all LTD benefits due, pre-judgment interest, disgorgement of profits, surcharge, an injunction against termination of benefits during the maximum benefit period, attorneys' fees and costs, and other make-whole relief. Id.

         On July 28, 2016, the parties filed cross-motions to determine the standard of review the Court must apply in assessing Plaintiff's first cause of action seeking recovery of disability benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). See Dkt. Nos. 38, 41. In his motion for partial summary judgment, Plaintiff contends that the Court should apply de novo review because the Policy, SPDs, and the Plan do not sufficiently confer discretion to trigger the more deferential abuse of discretion standard. Dkt. No. 38 at 3. Furthermore, Plaintiff contends that even if these documents did confer such discretion, these provisions would be voided under California Insurance Code §10110.6. Id. at 4. In contrast, Defendant argues that the Court must apply an abuse of discretion standard because the Plan sufficiently granted discretion and California Insurance Code § 10110.6 is preempted by ERISA. Dkt. No. 41 at 4-8.


         A motion for determining the standard of review in an ERISA suit may be brought as a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). See Murphy v. Cal. Physicians Servs., No. 14-cv-02581, 2016 WL 5682567, at *1 (N.D. Cal. Oct. 3, 2016). However, if “matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d). Addressing the standard of review at the pleadings stage has been found to be appropriate in ERISA suits where, for example, the “motions are directed at a single and specific question of law; both parties have attached the relevant Plan-related documents with their respective motion; and plaintiff has additionally submitted a statement of recent decision after the close of briefing.” Hirschkron v. Principal Life Ins. Co., 141 F.Supp.3d 1028, 1029 (N.D. Cal. 2015). Because the motions here are specifically targeted at determination of the standard of review and the parties have submitted extrinsic documents, the Court will treat both motions as motions for partial summary judgment. See id.; Fed.R.Civ.P. 12(d); Dkt. No. 39, Exs. A-F; Dkt. No. 41, Exs. 1-5; Dkt. Nos. 44, 45.

         Summary judgment is proper where the pleadings and evidence demonstrate that “there is no genuine issue as to any material fact and . . . the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also State Farm Fire & Cas. Co. v. Geary, 699 F.Supp. 756, 759 (N.D. Cal. 1987) (“Partial summary judgment that falls short of a final determination, even of a single claim, is authorized by Rule 56 in order to limit the issues to be tried.”). A material issue of fact is a question a trier of fact must answer to determine the rights of the parties under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

         The moving party bears “the initial responsibility of informing the district court of the basis for its motion.” Celotex, 477 U.S. at 323. To satisfy this burden, the moving party must demonstrate that no genuine issue of material fact exists for trial. Id. at 322. To survive a motion for summary judgment, the non-moving party must then show that there are genuine factual issues that can only be resolved by the trier of fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736, 738 (9th Cir. 2000). To do so, the non-moving party must present specific facts creating a genuine issue of material fact. Fed.R.Civ.P. 56(c); Celotex, 477 U.S. at 324. The Court must review the record as a whole and draw all reasonable inferences in favor of the non-moving party. Hernandez v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003).

         III. ANALYSIS

         A. ERISA Claims Standard of Review

         Participants of an employee benefit plan governed by ERISA may challenge the denial of benefits pursuant to 29 U.S.C. § 1132. See 29 U.S.C. § 1132(a)(1)(B). A court must review a denial of ERISA benefits under a “de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc) (“De novo is the default standard of review.”). Where the benefit plan grants discretionary authority to the plan administrator, the standard of review shifts to abuse of discretion. Abatie, 458 F.3d at 963. For a plan to be afforded the more lenient abuse of discretion ...

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