United States District Court, N.D. California
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT
PHYLLIS J. HAMILTON, United States District Judge.
The parties' cross-motions for summary judgment came on
for hearing before this court on March 15, 2017. Plaintiff
appeared by her counsel Corinne Chandler, and defendants
appeared by their counsel Linda Lawson. Having read the
parties' papers and carefully considered their arguments
and the relevant legal authority, the court GRANTS
plaintiff's motion and DENIES defendants' motion as
Cathleen Murphy brings this action under § 502 of the
Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1132(a), seeking
payment of benefits under a Long-Term Disability
("LTD") policy. Defendant California Physicians
Service d/b/a Blue Shield of California Long Term Disability
Plan ("the Plan") is an employee welfare benefit
plan subject to ERISA. The Plan was established by California
Physicians Service, which does business as Blue Shield of
California ("Blue Shield"). Plaintiff was employed
by Blue Shield, and was a participant in the Plan. Defendant
The Prudential Insurance Company of America
("Prudential") issued Group Contract No. G-43995-CA
to Blue Shield, and is also the Plan Administrator.
regard to LTD coverage, the Plan provides, in relevant part:
disabled when you are either totally disabled or partially
disabled. . . .
totally disabled when as a result of your sickness or injury:
• you are unable to perform with reasonable continuity
the substantial and material acts necessary to pursue your
usual occupation; and
• you are not working in your usual occupation.
Record ("AR") 27. Plaintiff originally submitted
her claim for LTD benefits on December 23, 2013. Plaintiff
filed the original complaint in this action on June 4, 2014,
asserting that Prudential had failed to respond to her claim.
Prudential subsequently issued its decision, denying the
Plan further provides that after 24 months, the definition of
disability changes such that in order to be qualified to
receive benefits, the participant, based on the same
condition, must be unable to perform any occupation that
he/she could reasonably be expected to perform based on age,
education, training, experience, station in life, and
physical and mental capacity. AR 27. It is undisputed that
Prudential has made no decision with respect to whether
plaintiff is disabled under this second definition.
filed the first amended complaint ("FAC") on June
20, 2014, asserting a single cause of action for ERISA
benefits under 29 U.S.C. § 1132(a)(1)(B), seeking
payment of benefits, plus interest, and attorney's fees
and costs. At the October 16, 2014, initial case management
conference (“CMC”), the parties indicated that
plaintiff's administrative appeal was still in progress.
The court informally stayed the litigation during the appeal
process. At a further CMC held on March 3, 2016, the court
set a date for plaintiff to file a motion on the appropriate
standard of review.
filed a motion to determine that the standard of review is de
novo, and on October 3, 2016, the court issued an order
granting plaintiff's motion. Pursuant to a briefing
schedule set by the court, the parties filed cross-motions
for summary judgment on January 18, 2017. They also jointly
filed the administrative record.
Education, Training, and Work History Plaintiff has
undergraduate and graduate degrees in nursing, and worked as
a nurse at various locations, including at the University of
California - San Francisco (“UCSF”) Medical
Center. AR 498-499.
1996, plaintiff began her career in Human Resources. She
worked as an executive for different companies until 2004,
when she became the Director of Human Resources for Blue
Shield. AR 499. After one year, she was promoted to Vice
President, Human Resources Operations and Welfare (“VP
of Human Resources”). She held that position until
2013. AR 478-480.
early 2013, plaintiff's supervisor at Blue Shield was
Marianne Jackson, the Chief Human Resources Officer.
Plaintiff worked with Ms. Jackson on a daily basis. Plaintiff
has submitted a declaration by Ms. Jackson, in which she
states that plaintiff's job had a high level of
responsibility and was "very cognitively demanding[,
]" and that plaintiff performed her duties "in a
competent manner." See Declaration of Marianne
Jackson (“Jackson Decl.”), AR 1932-1935, at
Prior Surgery and Diminished Cognitive Abilities
1988, while working as a nurse, plaintiff began experiencing
auditory seizures, precipitated by "hearing a song in
her head." AR 1609. A neurologist diagnosed a left
temporal AVM (arteriovenous malformation). After experiencing
symptoms for approximately three years, plaintiff had an open
resection of what she describes as "a lesion in her
brain" in 1991. AR 1609, 1665, 1874. Following the
surgery, she took anti-seizure medication for two years. AR
1609. Although she felt dyslexic, and had trouble thinking,
she returned to her job after the surgery. AR 1609.
former supervisor Ms. Jackson states that, starting in 2011,
she began to notice problems with plaintiff's
"ideas" (referring to them as
"illogical"), and also noticed a decline in
plaintiff's speaking and presentation skills. Jackson
Decl. ¶ 4. As a result, "we created an Individual
Development Plan (hereinafter ‘IDP') for her to
improve some areas of her performance, including improving at
making presentations[, ]" and also "arranged for
her to take a few courses/coaching sessions to improve her
presentation skills." Id. At that time, Ms.
Jackson was unaware of plaintiff's prior brain surgery.
Jackson reports that during the period 2011 to 2012, she also
noticed a decline in plaintiff's "word-retrieval
process" and “speaking/presentation skills.”
Id. ¶¶ 4-5. In addition, she asserts, a
number of plaintiff's colleagues commented on
plaintiff's difficulties in meetings during this time
period, and also noticed she was having problems with memory,
concentration, and word retrieval abilities. Id.
provides declarations by former co-workers Craig Cadwallader,
Earl Barron, and Kerry Hanchett. Mr. Cadwallader worked at
Blue Shield as a Senior Manager of Compensation at the time
plaintiff was employed there as VP of Human Resources. He
left Blue Shield in September 2013, and states that he began
to notice a decline in plaintiff's abilities over the
course of the last 1/2 to 2 years he worked with plaintiff.
Cadwallader Declaration, AR 1928-1930, ¶¶ 3-4.
Barron was Director of Technology at Blue Shield while
plaintiff was employed there. He left Blue Shield in 2013,
and states that he noticed that plaintiff "had problems
with finding words and finishing her thoughts for quite some
time, but because we worked closely, I could often figure out
what she meant, so I thought little of it." Barron
Declaration, AR 2100-2101, ¶¶ 3-4.
Hanchett worked at Blue Shield as Senior Program Manager from
the time plaintiff was employed as VP of Human Resources, and
worked directly with plaintiff on a number of projects. She
was laid off in November 2013, and states that in the
11-month period preceding her departure, she noticed that
plaintiff had problems with memory, comprehension,
“connecting the dots.” Hanchett Declaration, AR
2113-2115, ¶¶ 1-4.
Jackson states that at some point after they put the IDP in
place, plaintiff told her that she had had brain surgery
about 20 years before, and said that she thought that her
medical condition was causing cognitive impairment, memory
loss, and difficulties with speech. Jackson Decl.
¶¶ 6-7. Ms. Jackson asserts that plaintiff lost
confidence in her ability to adequately present in
senior-level meetings, and that around the time that
plaintiff disclosed her condition, the two of them decided
that Ms. Jackson would conduct the meeting presentations
herself, while giving plaintiff credit for the content.
Id. ¶¶ 7-8. Ms. Jackson explains that she
did this "to ensure our department objectives were not
impaired and to personally help [plaintiff] even though it
was to my own detriment as it appeared to others I was trying
to take credit for [plaintiff's] ideas and micro-managing
her department." Id. ¶ 8.
the end of 2011, the Chief Executive Officer of Blue Shield
announced he was leaving the company. Id. ¶ 9.
Ms. Jackson states that this led to her decision to leave the
company, which she did in February 2013. Id. She
adds that she disclosed plaintiff's cognitive impairment
to Blue Shield's then-current Chief Executive Officer and
Chief Financial Officer at the time of her departure from the
company. Id. ¶ 10.
for Plaintiff's Departure from Blue Shield
O'Hara replaced Ms. Jackson as Chief Human Resources
Officer at Blue Shield. On May 2, 2013, plaintiff wrote Ms.
O'Hara an email, stating, "I am currently seeking
medical care for treatment for exacerbation of a medical
condition." AR 2152. A week later, on May 9, 2013,
plaintiff wrote Ms. O'Hara early in the morning to say
she was taking time off that day for a medical examination,
as she had seen her physician the previous day and had
received a referral to a neurologist for an MRI and further
testing. She added that she hoped to be able to meet with Ms.
O'Hara later to discuss the "transition
approach" for her role and other issues. AR 2158.
O'Hara responded approximately an hour later, stating she
"was hoping to follow on from our conversation regarding
a transitional approach, " and adding that she was
"glad you are getting quick attention for your medical
issue." AR 2161. In a return email a few hours later,
plaintiff thanked Ms. O'Hara for her words of support,
and stated, "As I get a better sense of the magnitude of
this in the coming week or so, I will have a better sense of
what I may need from a flexibility/accommodation
perspective." She also noted they were set to meet that
afternoon on the "transition approach." AR 2161.
that afternoon, Ms. O'Hara sent an email to "Senior
Staff, " advising them "in confidence" that
she and plaintiff “have been discussing her role and
performance for the past few weeks and some medical issues
that she is dealing with[, ]" and that they "now
agreed that the best outcome is for her to transition in a
flexible way for a few months, whilst also dealing with her
health issues[, ]" at which point plaintiff would depart
Blue Shield. AR 2160. She added that plaintiff's role
"will be split going forward." AR 2160. Plaintiff
received an email from a Senior Staff member that evening,
saying he had "just heard about your transition, "
and asking if there was anything he could do to help. AR
on the morning of May 10, 2013, plaintiff forwarded the
Senior Staff member's email to Ms. O'Hara, asking
that she send her the original message or summarize it
“so I'm clear in what they hear so I can craft my
response.” AR 2163. Ms. O'Hara responded
approximately half an hour later, confirming that she had
advised Senior Staff members that plaintiff would be
"transitioning flexibly for the next few months and then
depart[, ]" and would be looking after her health for a
while and “we will be backfilling your role but split
into total rewards and shared services.” AR 2163.
13, 2013, plaintiff sent Ms. O'Hara an email enclosing
the text of an announcement she wanted to send to "all
HR" as soon as Ms. O'Hara approved it. The
announcement described various "organizational structure
changes" anticipated to follow plaintiff's departure
from Blue Shield, which would result in areas of
plaintiff's responsibility being re-allocated. Plaintiff
added, "I will be transitioning my role through
August." AR 2165. Blue Shield later confirmed that over
the next few months, entire duties were
“transitioned” from Ms. Murphy, including her
responsibility for HR Technology, Employee Relations, and
Corporate Security. See AR 247-248.
May 24, 2013, plaintiff began taking time off to deal with
her medical issues. AR 2195, 2213. As of that time, she
generally worked four days a week. Because she was upper
management, her pay was not reduced, but the time off was
recorded as "Personal Time Off" or "PTO."
AR 246-247. Blue Shield also advised plaintiff that "PTO
time" did not count as "earnings" for purposes
of the disability plans. AR 2183.
Daley, the Blue Shield Manager in charge of Absence
Management, also corresponded directly with Prudential and
with plaintiff regarding plaintiff's eligibility for STD
benefits. AR 2183. Plaintiff received confirmation from Blue
Shield that her PTO time was being recorded. AR 2195. On July
18, 2013, Ms. Daley reported the status of plaintiff's
reduced schedule to Ms. O'Hara. AR 2213-2215. Plaintiff
worked a reduced schedule and assisted with the transition of
her job duties until August 28, 2013, when she went out on
administrative leave. She remained a full-time employee of
Blue Shield, with benefits, until January 3, 2014. AR 419.
Medical Testing and Evaluations
consulted with her primary care physician, Margaret Forsyth,
M.D., on May 8, 2013, regarding the symptoms she had been
experiencing. AR 561. Dr. Forsyth referred plaintiff to a
neurologist, Adama Frye, M.D. AR 559-561, 1609. Dr. Frye
referred plaintiff for an EEG on May 18, 2013, and a brain
MRI on May 20, 2013. AR 552-556. The EEG was normal, and the
brain MRI revealed mild gliosis around the surgical resection
cavity. AR 550, 669-670.
initial consultation with Dr. Frye on June 6, 2013, plaintiff
reported occasional auditory seizures "[o]ver the past
several years, " and also stated that "in the last
6-8 months her degree of dysphasia seems to be worsening,
noted personally and from friends" and co-workers."
AR 547. Dr. Frye conducted mental status and language
screening tests, and recommended formal neuropsychological
assessment, to include language testing, and also suggested
anti-seizure medication. AR 549-550, 1609-1615. Dr. Frye also
discussed EEG testing, but explained that local seizures are
potentially missed on EEG testing. AR 550, 1615.
was initially reluctant to try Keppra, the anti-seizure
medication recommended by Dr. Frye, because of a prior bad
experience with another anti-seizure medication. AR 545-546.
However, she ultimately agreed to a trial of Keppra, but on
July 22, 2013, reported to Dr. Frye that she had to stop
taking it because it was worsening her symptoms. AR 538-539.
Dr. Frye responded that plaintiff's reported symptoms
were "very unusual with Keppra, " but agreed on
July 26, 2013, to a trial of another medication, Vimpat. AR
537-538. Plaintiff agreed, but asked that the trial be
delayed until after completion of the baseline speech
assessment. AR 536-537.
2013, plaintiff submitted a claim for STD Benefits, which was
handled by Sedgwick Claims Management Services, Inc.
(“Sedgwick”), the STD administrator. AR 1854. In
support of plaintiff's claim, Dr. Frye reported that
plaintiff had a seizure disorder and had only been working 4
days a week since May 24, 2013. AR 101-102, 740-741, 1575.
determined that plaintiff should undergo a neuropsychological
examination. On August 16, 2013, Sedgwick's evaluation
service sent plaintiff notice of an Independent
Neuropsychological Evaluation scheduled for September 9,
2013, with William D. Hooker, Ph.D. AR 2345. Three days
later, another Sedgwick evaluation service sent plaintiff
notice of an Independent Neuropsychological Evaluation
scheduled for September 12, 2013, with Peter Karzmark, Ph.D.
AR 2347. Plaintiff notified Sedgwick of the scheduling
mistake and additionally advised that the examinations would
conflict with the examination ordered by her physician. On
September 16, 2016, Sedgwick denied the claim. The sole
explanation in the denial letter was “Insufficient
Medical received.” AR 1651. However, Sedgwick's
claim notes indicate that the reason for the denial was that
“medical does not support ongoing disability as
severity has not been established per plan and [claimant] did
not attend scheduled IME.” AR 1864.
Dr. Frye saw plaintiff for a follow-up appointment on August
28, 2013. AR 527-529. Dr. Frye ordered an EKG, and advised
plaintiff later in the day on August 28, 2013, that it
appeared "normal." AR 532. Dr. Frye also instructed
plaintiff to "go ahead and start the Vimpat." AR
532. On September 19, 2013, plaintiff reported that she had
tried the sample of Vimpat that Dr. Frye had given her, and
stated that "it seems to be tolerated[, ]" and that
"the cognitive and speech difficulties" she had on
the last medication had not occurred, although she reported
some side effects. AR 521. However, on September 25, 2013,
plaintiff was advised that her insurance would not cover the
Vimpat prescription. AR 518-519. Dr. Frye agreed to provide
plaintiff with additional samples of the medication. AR 518.
Plaintiff had a follow-up neurology consultation with Dr.
Frye on August 28, 2013. AR 2010.
September 18, 2013, as recommended by Dr. Frye, plaintiff
underwent a speech-language and cognitive-linguistic
evaluation with Michelle Shimamoto, a Speech-Language
Pathologist at Mills Peninsula` Medical Group. AR 147-149.
Ms. Shimamoto noted that plaintiff's "language and
cognition" were "grossly functional for
routine/daily activities and simple/social conversation,
" but that "[d]ifficulty occurs with discussion
surrounding complex/abstract ideas." AR 149.
Shimamoto found that plaintiff was unable to express herself
in a timely manner, which was required for “managing
medical, financial and vocational affairs[;]” that she
had delayed auditory processing and reduced comprehension for
conversation; that she employed compensatory measures, and
that she had "deficits within the areas of attention,
auditory processing memory, thought organization and
executive functioning." AR 149. Ms. Shimamoto also noted
that plaintiff "required a very high functioning
baseline to conduct the level of work that was required of
her in her previous job duties, " but stated that it was
"unclear . . . what the etiology of this progressive
decline might be" and added that she would "lean
heavily upon further work-up by physician and future
neurology and neuropsychology evaluation results to hopefully
gain some answers." AR 149.
October 10 and 14, 2013, Dr. Hooker conducted the
previously-scheduled Independent Neuropsychological
Evaluation, and he issued a report October 16, 2013. AR
491-517. Dr. Hooker's tests included embedded validity
measures. AR 502. Dr. Hooker reported that the test results
were valid and that measures of plaintiff's auditory
attention, concentration, language functioning, speed in
detecting numbers, and working memory were borderline
impaired to low average. AR 516. Plaintiff's overall
immediate memory and reasoning were “average”
which fell “significantly below the predicted range,
” for one with her post graduate education and
executive occupation. AR 516. Dr. Hooker diagnosed plaintiff
with a cognitive disorder and opined that she could not
perform the usual and customary duties of her executive
position or any occupation requiring higher cognitive
functioning. AR 517.
October 29, 2013, report of neurology follow-up visit, Dr.
Frye wrote that in the “mental status”
evaluation, plaintiff had halting speech at times, with
word-finding difficulties. AR 2008. Dr. Frye recommended that
plaintiff consult with the UCSF Memory/Behavioral Clinic to
determine if a clear diagnosis could be made. Dr. Frye stated
that she would continue to support plaintiff's disability
claim. AR 2010.
December 2, 2013, plaintiff consulted with Georges Nassan,
M.D., at the UCSF Memory Clinic. AR 1672, 2261-2263. On
December 9, 2013, plaintiff reported to Dr. Frye that Dr.
Nassan believed her cognitive and language impairments were
permanent, as the repaired area in her brain was more
“vulnerable” to cognitive and memory decline
which happens with aging. Thus, the compensation techniques
she had previously successfully employed were no longer
working. AR 2042. Dr. Nassan requested that plaintiff obtain
her prior MRI and submit it for comparison, that “all
vascular risk factors be controlled” (blood pressure,
LDL cholesterol, glucose), that plaintiff engage in
“routine exercise and a healthy diet, ” and she
begin some “cognitive rehabilitation.” AR 2261.
He also recommended that she obtain a driving evaluation. AR
2263. Plaintiff advised Dr. Frye that Dr. Nassan would be
sending her a note, and Dr. Frye confirmed on December 10,
2013 that she had received the note. AR 2042.
of Denial of STD Benefits Claim
December 23, 2013, plaintiff submitted her appeal to Sedgwick
regarding the denial of STD benefits. To facilitate the
transition to LTD benefits, plaintiff also provided a copy of
the STD appeal submission to Prudential, and requested that
Prudential begin processing her LTD claim. AR 1663. The claim
request was delivered to Prudential on December 29, 2013. AR
462. With the appeal, plaintiff submitted the speech therapy
records, Dr. Hooker's neuropsychological testing, and
updated medical records from Drs. Frye and Forsyth. AR
referred plaintiff's claim for review by Staci Ross,
Ph.D., an internal clinical psychologist. Based on her review
of the speech therapy records and Dr. Hooker's
neuropsychological testing, Dr. Ross concluded in a report
dated February 11, 2014, that Ms. Murphy was disabled. AR
079. Dr. Ross stated that those records “confirmed a
cognitive disorder, impacting language disturbances, memory,
executive functioning, right sided motor skills and visual
spatial dysfunction, in which the combination of cognitive
difficulties demonstrated would preclude her ability to
function in her regular, unrestricted occupation.” AR
Ross concluded that this cognitive disorder would impact
plaintiff's ability to “function in her regular
unrestricted position in that she would have difficulties
with higher level skills of thinking creatively,
strategically, abstractly, analytically . . . ." AR 079.
Plaintiff would also have “difficulties being able to
think critically, evaluate situations, problem solve, and
make decisions as well as organize priorities, and manage
time effectively.” AR 079. Dr. Ross opined that
“[d]isability would be expected to be indefinite,
secondary to neurological changes that have occurred.”
AR 079. However, she also recommended “re-assessment of
disability” in approximately two years. AR 079.
February 24, 2014, Sedgwick reversed its claim decision and
approved plaintiff's disability through the maximum STD
duration, to November 19, 2013. AR 077-078. A separate
disability carrier, Unum, also approved plaintiff's STD
disability claim. AR 2359.
Review of Plaintiff's LTD Claim
February 24, 2014, Prudential referred plaintiff's claim
to Melvyn Attfield, Ph.D., an internal Prudential consulting
neuropsychologist. AR 820-822. Dr. Attfield reviewed
plaintiff's claim and issued a report on March 4, 2014.
AR 815-820. Among other things, Prudential asked Dr. Attfield
to determine whether the neuropsychological testing showed
that plaintiff had significant memory and/or cognitive
impairments which would preclude her ability to perform the
job of VP of HR Operations. Dr. Attfield concluded that Dr.
Hooker's testing revealed cognitive deficits that
prevented plaintiff from performing her occupation:
conclusion Dr. Hooker provided a validated and comprehensive
assessment of neuropsychological function . .
[T]he clinical impressions of the examiner suggested the
insured employed active compensatory strategies (requesting
clarification, circumlocution, using her digits and
rehearsing during digits reverse and sequencing tasks) to
enhance her performance. It would therefore be reasonable to
conclude areas of impairment in right hand motor function,
difficulty processing complex information, efficiently naming
problems within the context of generally average but likely
below pre-morbid function in aspects of memory, non-verbal
intellectual abilities (more fluid aspects of intelligence.)
Attfield noted that "[t]here is no report of the
seizures limiting the insured from her job, " and
"[t]here is no report of an antecedent medical event
impacting her current condition." AR 820. Nevertheless,
he found that plaintiff "has a work capacity but based
upon the likely job demands assumed by a VP of HR the
cognitive restrictions would be expected to limit her from a
position requiring higher executive skills and facile social