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Doe v. Prudential Insurance Company of America

United States District Court, C.D. California

March 27, 2017

JOHN DOE, Plaintiff,



         In this case under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq., Plaintiff John Doe (“Plaintiff”) alleges that Defendant Prudential Insurance Company of America (“Prudential”) improperly terminated his long term disability benefits by applying a 24-month mental illness limitation to his claim. Plaintiff contends that Prudential should not have applied the mental illness limitation, and that therefore his benefits should not have been terminated. Plaintiff seeks an order reinstating his benefits retroactively and prospectively, among other relief.

         The parties submitted their opening and responsive trial briefs, along with the administrative record and supplemental evidentiary materials. The Court heard oral argument on November 29, 2016. The Court rules as follows.


         This case turns on whether Plaintiff's long term disability (“LTD”) benefits are subject to the Plan's 24-month mental health limitation, which caps at 24 months LTD benefits for a disability “due in whole or part to mental illness.” It is not disputed that Plaintiff has problems with attention, memory, focus, and executive function that prevent him from performing his job. Nor is it disputed that Plaintiff is “disabled” within the meaning of the Plan. As such, on July 11, 2011, Prudential awarded Plaintiff LTD benefits.

         However, Prudential determined that Plaintiff's disability was caused by his mental health condition, in particular, depression and anxiety that he struggled with for years. Prudential also determined that Plaintiff's physical health conditions- conditions related to HIV, asthma, migraines, hypertension, bundle branch block, and osteoporosis- were not disabling. Accordingly, Prudential applied the mental health limitation and terminated his benefits after 24 months. Plaintiff argues that his disability has a physiological cause - in particular, brain damage likely resulting from HIV - and that therefore Prudential should not have applied the mental health limitation.

         The doctors' reports Plaintiff submitted to support his initial claim do focus all but exclusively on the debilitating psychological and cognitive effects of Plaintiff's depression. But, neuropsychological evaluations obtained thereafter show that Plaintiff suffers from cognitive deficiencies that may be caused by brain damage. Thus, even if the initial doctors' opinions can reasonably support only a mental health etiology, subsequent reports show that there may be a physical etiology. Resolving this issue is particularly difficult because Plaintiff's disabling symptoms are cognitive problems that are not physically visible, and they may have either a psychological etiology or a physical etiology, or a combination of both. In sum, the record contains evidence that could arguably support a determination either way. However, after carefully considering all of the evidence, the Court finds that Plaintiff's disability was not “due in whole or part to mental illness” and that Prudential should not have applied the mental illness limitation.


         This is an action to recover plan benefits governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). 29 U.S.C. § 1132(a)(1)(B). In the Ninth Circuit, ERISA claims for benefits are adjudicated by a bench trial under Federal Rule of Civil Procedure Rule (“Rule”) 52(a). Kearney v. Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999). Under Rule 52(a), the court can resolve factual issues in favor of either party, and it must “find the facts specially and state its conclusions of law separately.” Fed. R. Civ. Proc. 52(a).

         In a previous Order, the Court determined that it will review the record de novo. See Order (Dkt. No. 57). Under the de novo standard, the Court independently considers the evidence, finds facts, and determines how the policy applies, just as it would resolve any other breach of contract claim. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 112-113 (1989); Krolnik v. Prudential Ins. Co. of Am. 570 F.3d 841, 843 (7th Cir. 2009) (“ ‘de novo review' is a misleading phrase . . . For what Firestone requires is not ‘review' of any kind; it is an independent decision rather than ‘review' that Firestone contemplates . . . [The] court takes evidence (if there is a dispute about a material fact) and makes an independent decision about how the language of the contract applies to those facts.”).

         “In a trial on the record, the court ‘can evaluate the persuasiveness of conflicting testimony and decide which is more likely true.' ” Armani v. Nw. Mut. Life Ins. Co., 2014 WL 7792524, at *8 (quoting Kearney, 175 F.3d at 1095); see also Schramm v. CNA Fin. Corp. Insured Group Benefits Program, 718 F.Supp.2d 1151, 1162 (N.D. Cal. 2010) (a court reviewing the administrative record “evaluates the persuasiveness of each party's case, which necessarily entails making reasonable inferences where appropriate”).

         The court may consider the administrative record, which are the materials the administrator considered in reaching its benefit determination, and “under certain circumstances [new evidence may be considered] to enable the full exercise of informed and independent judgment.” Mongeluzo v. Baxter Travenol Long Term Disability Ben. Plan, 46 F.3d 938, 943 (9th Cir. 1995).

         Plaintiff bears the burden of proof of showing, by a preponderance of the evidence, that he is entitled to the benefits provided by the Policy. Sabatino v. Liberty Life Assurance Co. of Boston, 286 F.Supp.2d 1222, 1232 (N.D. Cal. 2003). In its previous Order, the Court held that Plaintiff also bears the burden of showing that the mental health illness limitation does not apply. See Order, pp. 8-10.


         The Court considered the evidence in the Administrative Record (“AR”).

         The parties also submitted materials outside of the administrative record. Materials outside of the record can be considered “ ‘only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.' ” Mongeluzo, 46 F.3d at 944 (citation omitted). The Court reviewed the submitted excerpts of the depositions of Drs. Jay Gladstein, Gary Cohan, Kristen Fiano, Mark Alfano, and Richard Perrillo. The deposition excerpts were somewhat enlightening on general background matters, such as the distinction between a relative impairment and an absolute impairment, and on the viability of neuropsychological testing to assess cognitive function. As to Plaintiff's specific condition, however, the excerpts were too choppy to yield useful evidence beyond what the administrative record already covered.

         Plaintiff also submitted Administrative Law Judge Sally Reason's decision awarding Plaintiff Social Security Disability Insurance benefits. The Court did not find this material helpful because it is not directed towards answering the factual question here - whether Plaintiff's disability is “due in whole or part to mental illness” such that the mental health limitation should apply. The Court did not, therefore, consider the SSDI award for any purpose.

         Thus, the deposition excerpts and the social security decision are not necessary for this Court to conduct an adequate review, so the Court declines to admit them.

         IV. FINDINGS OF FACT [1]

         A. The Plan's LTD Benefit

         Prudential insures long term disability (“LTD”) benefits under the WME IMG Group Welfare Benefits Wrap Plan (the “Plan”) pursuant to the terms of group contract no. DG-93974-CA (the “Group Contract”) Prudential issued to William Morris Endeavor Entertainment, LLC (“WME”). (AR 1865-6.)[2]

         Plaintiff was covered by the Plan.

         The Group Contract was amended by Certificates issued in 2009 and 2012. (AR 1877-8, 1989-90.) However, the Group Contract provides that “an amendment will not affect a claim incurred before the date of change.” (AR 1872.) Plaintiff's claim was incurred when he was awarded benefits in 2011, so the 2009 Certificate applies to his claim and the 2012 Certificate does not.

         Under the 2009 Certificate, the relevant LTD Coverage (the “2009 Certificate”) became effective in 2009. (AR 1786-1823, AR 1878.)

         Under the Plan's LTD Coverage, a participant is entitled to monthly disability benefits when they are “totally disabled, ” which is defined as being “unable to perform with reasonable continuity the substantial and material acts necessary to pursue your usual occupation” due to “sickness or injury.” (AR 1797.) “Substantial and material acts” means the “important tasks, functions and operations generally required by employers from those engaged in your usual occupation that cannot be reasonably omitted or modified.” (AR 1797.)

         The 2009 Certificate limits to 24 months LTD benefits for disabilities that “are due in whole or part to mental illness” (“mental illness limitation”) (AR 1804-5.)

         The 2009 Certificate defines “mental illness” as follows: “Mental illness means a psychiatric or psychological condition regardless of cause. Mental illness includes but is not limited to schizophrenia, depression, manic depressive or bipolar illness, anxiety, somatization, substance related disorders and/or adjustment disorders or other conditions. These conditions are usually treated by a mental health provider or other qualified provider using psychotherapy, psychotropic drugs, or other similar methods of treatment as standardly accepted in the practice of medicine.” (AR 1805, emphasis in original.)

         The 2009 Certificate provides that the mental illness limitation will not apply “to dementia if it is a result of . . . viral infection.” (AR 1805.)

         Coverage under the Policy ends when a claimant is no longer a full-time employee, and is therefore no longer a member of a covered class. (AR 1788, 1794.)

         B. Plaintiff's Employment History

         Plaintiff worked at the talent agency William Morris Agency from November 1992 to May 2009 and, after a merger, at WME from June 2009 to May 2011. At the time he left WME, Plaintiff was employed as Head of Commercial Division. (AR 1297.) In that position, Plaintiff managed approximately 30 people and ran his own department as a talent agent. His job included “coupling high profile artists to brands and handling and managing talent.” (AR 918.)

         The Department of Labor characterizes a talent agent as a demanding profession that requires superior cognitive abilities. A talent agent confers with clients to develop career strategies, develops contacts with others who can advance the clients' careers and provide information about business opportunities, promotes clients to those who might hire them, negotiates contracts for clients, and manages clients' business affairs. (AR 172-191.)

         The ability to process, remember, and act on these exchanges in an unstructured, highly-competitive, and time-sensitive work context is essential to successfully performing the job. (AR 183-84.)

         These activities require the ability to perform certain cognitive abilities at a very high level, including excellent oral comprehension and expression, high problem sensitivity (i.e., the ability to identify problems and solve them), and excellent written comprehension and expression. (AR 177-78.)

         Consistent with advice from his doctors, Plaintiff took a leave of absence from work starting on April 25, 2011. (AR 1159.)

         C. Plaintiff's Initial LTD Claim and Supporting Doctors' Opinions

         On April 12, 2011, Plaintiff filed a claim for LTD benefits. (AR 1473-1482.) Plaintiff stated that he was “unable to work as a result of HIV infections, HIV related pain and fatigue, and related medical conditions including osteoporosis and severe depression.” (AR 1482.) In response to the question “How does this condition interfere with your ability to perform your job?” Plaintiff stated: “My HIV infection, pain, fatigue, osteoporosis, and severe depression cause pain and fatigue and severely disrupt my ability to sustain my focus and concentration for significant periods of time. Due to my inability to sustain focus and concentration, I am unable to perform the essential tasks of my job on a persistent and reliable basis.” (AR 1482.)

         Thereafter, Plaintiff submitted Attending Physician Statements (“APS”) from three doctors in support of his claim. All of the doctors stated that Plaintiff was disabled due to mental health issues including depression and anxiety.

         First, Plaintiff's psychiatrist, Dr. Harvey Sternbach, submitted an APS dated April 25, 2011, listing Plaintiff's primary diagnosis as major depressive affective disorder and secondary diagnoses as dsythymic disorder (persistent depressive disorder) and anxiety disorder. Dr. Sternbach noted that ...

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