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Clay v. AT&T Umbrella Benefit Plan No. 3

United States District Court, E.D. California

October 31, 2019

JEROME A. CLAY, Plaintiff,
v.
AT&T UMBRELLA BENEFIT PLAN NO. 3, Defendant.

          FINDINGS AND RECOMMENDATIONS REGARDING SUMMARY JUDGMENT (ECF NOS. 71)

          KENDALL J. NEWMAN, UNITED STATES MAGISTRATE JUDGE.

         This case arises from Defendant's alleged improper denial of short term disability benefits, as governed by the Employee Retirement Income Security Act. The following causes of action survived multiple rounds of motions to dismiss and amendments to the pleadings: (I) failure to provide Plaintiff benefits under 29 U.S.C. § 1132(a)(1)(B), a “full and fair review” of his claim for benefits, or “the true reasons and documentation supporting [its] denial of his claim” under 29 U.S.C. § 1133; and (II) failure to provide Plaintiff with information about his benefits, under 29 U.S.C. § 1132(c)(1)(B). Plaintiff also generally alleges that “Defendant[ ] acted under a conflict of interest in denying [his] claim.”

         Defendant has moved for summary judgment, and Plaintiff opposed. (ECF Nos. 71, 74.) After carefully considering the written briefing, the record, and the applicable law, the Court recommends Defendant's motion for summary judgment be GRANTED.

         Factual Background

         A. Plaintiff's Insurance Plan

         Plaintiff works as a splicing technician for Pacific Bell Telephone Company. (ECF No. 71-2, Defendant's Statement of Undisputed Facts, at ¶ 1.) His employer-sponsored insurance includes eligibility for the AT&T West Disability Benefits Program. (Id. at ¶ 3.) This Disability Program offers short term disability (“STD”) benefits to disabled employees whose injury precludes them “from engaging in [their] normal occupation or employment.” (Id. at ¶ 7.) It is self-funded by the AT&T Voluntary Employee Beneficiary Association Trust. (Id. at ¶ 6; see also 71-4 (AR) at p. 84, the “Summary Plan Description.”) The Disability Program grants Defendant the authority to “determine the rights and status of [participants, and] the eligibility of any individual” to receive benefits under the plan's various programs. (ECF No. 71-2 at ¶ 4.) Defendant has delegated this authority to its Plan Administrator, who in turn has delegated its authority to determine benefits claims and appeals to a claims administrator: Sedgwick Claims Management Services Center, Inc. (Id. at ¶ 5.) Sedgwick operates the AT&T Integrated Disability Service Center, which processes STD claims.[1] (Id. at ¶¶ 5, 14.)

         To properly demonstrate disability, participants must see a physician, “follow a treatment plan that is reasonably designed” to help them recover, and “periodically furnish satisfactory Medical Evidence of [their] disability from [their] physician.” (AR 61.) The medical evidence must consist of “[o]bjective medical information sufficient to show that the Participant is Disabled . . . [such as] results from diagnostic tools and examinations performed in accordance with the generally accepted principles of the health care profession.” (AR 81.) Further, the Disability Program asks participants to “[e]nsure that [their] medical providers cooperate with the Claims Administrator to provide” it with “all necessary information . . . in a timely manner.” (AR 61.) Sedgwick may discontinue benefits if the participant does not provide it with “objective Medical Evidence for [his] condition.” (AR 67.) It is within the sole discretion of Sedgwick “or its delegates” to determine whether a participant is qualified to received STD benefits. (AR 62.)

         B. Plaintiff's Disability Claims

         Plaintiff underwent surgery on his right knee on December 7, 2016. (ECF No. 71-2 at ¶ 13.) On December 16, 2016, Plaintiff applied for STD benefits; Sedgwick approved his claim for a period of disability extending until January 29, 2017. (Id. at ¶ 15.) On January 30, 2017, this period was extended through March 9, 2017. (Id. at ¶ 16.) Thereafter, Sedgwick contacted Plaintiff to explain that it needed more medical documentation to further extend Plaintiff's STD benefits. (Id. at ¶¶ 16-17.) After some delay on Plaintiff's part, his physician informed Sedgwick that Plaintiff was scheduled for an upcoming appointment; Sedgwick further extended Plaintiff's benefits through March 15. (Id. at ¶¶ 18-19.) Sedgwick advised Plaintiff multiple times of his ongoing responsibility to provide it with updated medical records should he wish to assert his eligibility for STD benefits. (Id. at ¶¶ 15, 16, 18, 19, 21, 23.)

         In March 2017, Plaintiff's physician informed Sedgwick that Plaintiff's knee exam was “fairly normal, ” and that Plaintiff could return to work in April. (Id. at ¶ 20, 22.) Sedgwick discontinued Plaintiff's STD benefits, but this decision was overturned on appeal; Sedgwick then granted Plaintiff an extension through June 11, 2017. (Id. at ¶¶ 24-28.) In the summer of 2017, Sedgwick reviewed Plaintiff's file, and found Plaintiff had not submitted any updated medical records after March 31. (Id. at ¶¶ 29-31.) When Sedgwick contacted both Plaintiff's physician and physical therapist, it learned that Plaintiff was not scheduled for any upcoming medical appointments. (Id. at ¶ 31.) On July 26, Sedgwick sent Plaintiff a letter explaining that it denied his request to extend STD benefits because it did not receive medical documentation demonstrating ongoing disability. (Id. at ¶ 32.) The letter quoted the Disability Program's participant guide, which detailed claimants' duties to “periodically furnish satisfactory medical evidence of your disability from your physician, ” and outlined the appeal process. (AR 333-34.)

         Plaintiff appealed, but did not furnish updated medical records. (ECF No. 71-2 at ¶ 34.) Sedgwick subsequently contacted Plaintiff asking for the records, but he “stated that the medical information in the file was complete and that he had nothing else to provide.” (Id. at ¶ 35.) Sedgwick then referred Plaintiff's case to an independent physician advisor. (Id. at ¶ 36.) The physician advisor, a board-certified orthopedic surgeon, attempted to contact Plaintiff's physician on multiple occasions, but never reached him. (Id. at ¶ 37.) After reviewing the medical records that were on file for Plaintiff, the physician advisor determined that there was insufficient medical evidence to establish that Plaintiff was disabled after June 11, 2017. (Id. at ¶ 38.) Thereafter, Sedgwick upheld its previous decision based on the physician advisor's analysis and the lack of updated medical records concerning Plaintiff's alleged disability. (Id. at ¶ 39.)

         Plaintiff returned to work without any restrictions on August 14, 2017. (Id. at ¶ 33.)

         Procedural History

         On April 7, 2017, Plaintiff, proceeding without counsel, filed a complaint against Defendant challenging the denial of his STD benefits.[2] (ECF No. 1.) Plaintiff's most recent (third amended) complaint alleged thirteen causes of action; however, only the first, third, and fourth causes of action remain. (See ECF No. 52 at 10:20-25.) In Plaintiff's first cause of action, he seeks recovery of STD benefits pursuant to 29 U.S.C. § 1132(a)(1)(B). (ECF No. 43 at 11:26.) His third cause of action alleges that Defendant violated 29 U.S.C. § 1133 by failing to provide Plaintiff with a “full and fair review” of his claim for benefits and “failing to disclose to Plaintiff the true reasons and documentation supporting [its] denial of his claim.” (Id. at 14:19-25.) These causes of action, which the Court reviews together, solely concern Plaintiff's application for STD benefits after June 11, 2017. (ECF No. 52 at 5:11-14.) In his fourth cause of action, Plaintiff alleges that Defendant violated 29 U.S.C. ยง 1132(c)(1)(B) by failing to provide Plaintiff with information ...


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