United States District Court, N.D. California
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT RE: DKT. NO. 33
PHYLLIS J. HAMILTON, UNITED STATES DISTRICT JUDGE
Life Insurance Company of North America's
(“LINA”) motion for summary judgment came on for
hearing before this court on April 25, 2018. Plaintiff Brenda
Spies appeared through her counsel, P. Randall Noah.
Defendant appeared through its counsel, Anna Martin. Having
read the papers filed by the parties and carefully considered
their arguments and the relevant legal authority, and good
cause appearing, the court hereby GRANTS defendant's
motion, for the following reasons.
A. The Genesis of This Action
contracted with Staples Inc. to provide short term and long
term disability insurance (“STD” and “LTD,
” respectively). Staples employed Spies between
September 3, 2013, and February 4, 2014. Dkt. 33-3, Maria
Medina Decl. ¶¶ 11, 19. On February 5, 2014, Spies
was hospitalized and diagnosed with ischemic colitis and
lupus. Shortly thereafter, Spies submitted a claim for STD
benefits. Medina Decl. ¶ 19.
26, 2014, LINA approved plaintiff's STD claim through
July 18, 2014. LINA later extended Spies' STD benefits
through August 10, 2014, the 6-month maximum duration
afforded by the STD plan. On August 21, 2014, LINA advised
plaintiff that she was eligible for LTD benefits under the
“regular occupation” definition of disability,
with payments retroactively commencing on August 11, 2014.
Though LINA reviewed medical records and physician opinions
before making that determination, through an administrative
mistake LINA failed to verify plaintiff's enrollment in
and eligibility for benefits under the LTD plan. See
Ex. G (“Eligibility Verification” form showing
employee failed to verify existence of LTD “enrollment
card”); Martin Decl. ¶ 3. As a result of this
mistake, Spies received LTD benefits for nearly two years
between August 2014 and June 2016.
2016, because the definition of disability was set to change
from “regular occupation” to “any
occupation, ” LINA requested that plaintiff attend an
independent medical examination. That examination concluded
that plaintiff could work full time in a sedentary
occupation. Accordingly, LINA determined that plaintiff was
not entitled to further LTD benefits, notified her of that
decision on July 28, 2016, and subsequently notified her that
the decision had been upheld on appeal.
subsequently initiated this suit under 29 U.S.C. §
1132(a) challenging LINA's decision. While investigating
plaintiff's claims, LINA discovered, and Staples
confirmed, that Spies had never elected voluntary LTD
coverage and had never paid LTD insurance premiums. Medina
Decl. ¶ 20; Downey Decl. ¶ 3. Despite this
undisputed fact and despite plaintiff receiving
two-years' worth of LTD benefits that she was not
entitled to, plaintiff argues that the court should require
LINA to continue Spies' LTD benefits. LINA contends that
it has no continuing obligations to Spies because she never
enrolled in the LTD plan and, additionally, principles of
equitable estoppel do not apply in this case.
Staples' Benefits Plan and Spies' Benefits Elections
offers a portfolio of health and welfare benefits for its
full-time, non-exempt employees. Staples automatically
enrolls its non-exempt employees in the following benefits:
(1) basic life insurance; (2) accidental death &
dismemberment insurance; and (3) short-term disability
insurance. Medina Decl. ¶ 4.
may also voluntarily elect other benefits. Id.
¶ 5. Long-term disability insurance is one such benefit.
Id. To enroll in that benefit, an employee must
affirmatively elect the LTD coverage either when first hired
or during Staples' annual open enrollment. Id.
LINA's LTD policy with Staples states that “An
Employee . . . may elect to be insured only by authorizing
payroll deduction in an electronic format . . . [and] [t]he
effective date of this insurance depends on the date coverage
is elected.” Dkt. 33-2, Ex. A at 21. In other words, an
employee must affirmatively elect to enroll in LTD insurance,
may only do so by authorizing payroll deductions, and that
deduction will appear as a deduction on the employee's
paychecks. See id.; see also Medina Decl.
¶ 5; Ex. B at 27 (“You pay $0.364 per $100 of
covered pay per month for LTD. When you enroll, you will see
your specific paycheck cost.”).
open enrollment period occurs between May and June each year.
See Medina Decl. ¶ 6. In conjunction with open
enrollment, Staples distributes a corresponding
“Benefits Guide” that describes the benefits
available and the procedures for enrolling in or modifying
coverage. Id. ¶¶ 6-8. That Benefits Guide
states that Staples provides STD coverage for free but
employees must elect and purchase LTD coverage. Id.;
Ex. B at 27 (2013-2014 Benefits Guide). It also states that
if an employee elects LTD coverage, the premium payment will
be deducted from the employee's paycheck. Ex. B at 27.
After each enrollment period, regardless of whether the
employee made benefits changes, Staples sends a
“Confirmation of Elections Statement” that
documents the employees' benefits (“Confirmation
Statement”). Medina Decl. ¶¶ 10, 15, 17;
Medina Reply Decl. ¶ 9.
employees also have an opportunity to review and elect
voluntary benefits when first hired. Medina Decl.
¶¶ 10, 13. Newly hired employees receive a
worksheet that describes coverage options and the costs of
those options. Id. The employee is also provided
access to Staples' benefits website, which contains
information about voluntary and automatic benefits.
Id. After an employee elects coverage options
through an online portal, Staples mails the employee her
Confirmation Statement. Id.; Dkt. 35-1, Medina Reply
Decl. ¶¶ 4-6.
Staples hired Spies on September 3, 2013, Spies participated
in the above process. Medina Decl. ¶ 13, 14.
Plaintiff's initial employment paperwork included a
personalized benefits worksheet, which included the option to
elect LTD insurance. Id. ¶ 13. Plaintiff does
not dispute that Staples provided her that worksheet. Indeed,
it would be hard for her to do so because on the same
day-September 3, 2013-plaintiff elected several other
voluntary benefits, including dental and vision insurance.
Id. ¶ 14; Ex. C; Medina Reply Decl. ¶ 6.
The same records indicate that Spies “waived” LTD
insurance. Ex. C; Medina Reply Decl. ¶ 5. On September
19, 2013, Staples sent plaintiff her Confirmation Statement
showing the benefits she selected. Ex. D; Medina Decl. ¶
15; Medina Reply Decl. ¶ 7. And once plaintiff became
eligible to receive benefits, plaintiff's paychecks
reflected premium payment deductions for the additional
benefits Spies elected, but no deduction for LTD coverage.
Medinal Decl. ¶ 16; see, e.g., Ex. E at 50
was on STD leave during Staples' 2014 open enrollment.
Medina Decl. ¶ 17. Spies nevertheless received the 2014
Benefits Guide and, though she made no benefits changes, also
received a subsequent Confirmation Statement. Medina Decl.
¶ 17; Ex. F. In any event, even if plaintiff had elected
to enroll in LTD insurance at that time-and the evidence
shows that she did not-that coverage would not have become
effective because Spies never returned to Staples as a
full-time employee. Ex. A. at 21 (“If an Employee is
not in Active Service on the date insurance would otherwise
be effective, it will be effective on the date he or she
returns to any occupation for the employer on a full time
basis.”); see also Ex. A at 32 (defining
best plaintiff musters in response to this evidence does not
come close to creating a dispute of material fact about
whether Spies enrolled in the LTD plan. Spies'
declaration, the only evidence plaintiff submitted, merely
states that Spies neither remembers being asked to opt in or
out of LTD ...