Mayhew v. Hartford Life & Accident Insurance Company et al

Filing 31

ORDER by Judge Samuel Conti denying 18 Motion to Dismiss (sclc1, COURT STAFF) (Filed on 10/21/2011)

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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 MELINDA MAYHEW, Plaintiff, v. 10 For the Northern District of California United States District Court 9 11 12 HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY; FORMFACTOR, INC. GROUP WELFARE BENEFIT PLAN, 13 Defendants. 14 ) ) ) ) ) ) ) ) ) ) ) ) Case No. 11-2908 SC ORDER DENYING MAYHEW'S MOTION TO DISMISS COUNTERCLAIM 15 16 I. 17 INTRODUCTION Plaintiff Melinda Mayhew ("Mayhew") commenced this action for 18 declaratory, injunctive, and monetary relief pursuant to 19 § 502(a)(1) of the Employee Retirement Security Act ("ERISA"), 29 20 U.S.C. § 1132(a)(1), against Defendants Hartford Life and Accident 21 Insurance Company ("Hartford") and Formfactor, Inc. Group Welfare 22 Benefit Plan (collectively, "Defendants"). 23 1. 24 for restitution. 25 the Court is Mayhew's Motion to Dismiss the Counterclaim, which is 26 fully briefed. 27 For the reasons set forth below, Mayhew's Motion is DENIED. 28 ECF No. 1 ("Compl.") ¶ In answering the Complaint, Hartford asserted a Counterclaim ECF No. 16 ("Counterclaim") ¶¶ 67-72. Now before ECF Nos. 18 ("Mot."), 22 ("Opp'n"), 23 ("Reply"). 1 II. BACKGROUND As it must on a motion to dismiss Hartford's Counterclaim 2 3 pursuant to Rule 12(b)(6), the Court assumes the veracity of 4 Hartford's well-pleaded factual allegations. 5 Formfactor, Inc. ("Formfactor") employed her as a technical writer 6 between January 15, 2001 and December 15, 2006. 7 all relevant times, Mayhew was a participant in Formfactor's Group 8 Welfare Benefit Plan ("the Plan"), which was funded by Hartford 9 through a group insurance policy. Mayhew alleges that Id. ¶¶ 4-5. Compl. ¶ 9. At Mayhew alleges that United States District Court For the Northern District of California 10 she has been diagnosed with Graves Disease, an autoimmune disorder 11 that leads to overactivity of the thyroid gland. 12 further alleges that her condition significantly worsened in 13 November 2006 and, as a result, she ceased working altogether on 14 December 15, 2006. 15 commenced paying Mayhew monthly benefits under the Plan in March 16 2007. 17 Mayhew's Long Term Disability ("LTD") and Waiver of Premium claim. 18 Id. ¶ 30; Compl. ¶ 30. Id. ¶¶ 10, 16. Counterclaim ¶ 68. Id. ¶ 10. Mayhew Hartford alleges that it In June 2010, Hartford terminated In addition to receiving benefits under the Plan, Hartford 19 20 alleges that Mayhew was also awarded lump sum Social Security 21 Disability ("SSDI") benefit in the amount of $65,342.50 and 22 Dependent Social Security Disability ("DSSD")1 benefits in the 23 amount of $910,000. 24 the SSDI and DSSD payments after it had terminated Mayhew's claims. 25 Id. 26 27 Counterclaim ¶¶ 61, 65. Hartford learned of Hartford alleges that, due to the SSDI and DSSD awards, 1 While it is not pled in the Complaint or Counterclaim, the parties' papers indicate that Mayhew's child qualified for the DSSD benefits. 28 2 1 Mayhew's claim under the Plan was overpaid by $79,393.51 and that 2 Mayhew has yet to reimburse Hartford for the overpayments. 3 65. 4 to Hartford, Mayhew stated, "I am willing to pay Hartford all that 5 I owe [with respect to the SSDI benefits] but I am requesting an 6 extension to pay the overpayment." Id. ¶ Hartford further alleges that in a September 30, 2010 letter Id. ¶ 63. 7 Mayhew filed this action on June 13, 2011, alleging that 8 Defendants violated ERISA by terminating her claim for LTD and her 9 Life Insurance Waiver of Premium benefit under the Plan. Compl. ¶¶ United States District Court For the Northern District of California 10 40, 43. 11 restitution of the alleged LTD overpayments resulting from Mayhew's 12 receipt of SSDI and DSSD benefits. 13 Hartford filed the Counterclaim on August 8, 2011, seeking Counterclaim at ¶¶ 19-20. Mayhew now moves to dismiss Hartford's Counterclaim on the 14 grounds that: (1) it is preempted and otherwise prohibited by 15 ERISA, and (2) the Plan does not permit offsets for DSSD benefits. 16 17 18 III. LEGAL STANDARD A motion to dismiss under Federal Rule of Civil Procedure 19 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 20 Block, 250 F.3d 729, 732 (9th Cir. 2001). 21 on the lack of a cognizable legal theory or the absence of 22 sufficient facts alleged under a cognizable legal theory." 23 Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 24 1988). 25 should assume their veracity and then determine whether they 26 plausibly give rise to an entitlement to relief." 27 Iqbal, 129 S. Ct. 1937, 1950 (2009). "Dismissal can be based "When there are well-pleaded factual allegations, a court 28 3 Ashcroft v. However, "the tenet that a 1 court must accept as true all of the allegations contained in a 2 [claim] is inapplicable to legal conclusions. 3 of the elements of a cause of action, supported by mere conclusory 4 statements, do not suffice." 5 Twombly, 550 U.S. 544, 555 (2007)). 6 complaint or counterclaim must be both "sufficiently detailed to 7 give fair notice to the opposing party of the nature of the claim 8 so that the party may effectively defend against it" and 9 "sufficiently plausible" such that "it is not unfair to require the Threadbare recitals Id. (citing Bell Atl. Corp. v. The allegations made in a United States District Court For the Northern District of California 10 opposing party to be subjected to the expense of discovery." 11 Starr v. Baca, 633 F.3d 1191, 1204 (9th Cir. 2011). 12 13 IV. DISCUSSION 14 A. ERISA § 502(a)(3) 15 Under § 502(a)(3) of ERISA, a fiduciary may bring a civil 16 action "(A) to enjoin any act or practice which violates any 17 provision of this title or the terms of the plan, or (B) to obtain 18 other appropriate equitable relief (i) to redress such violations 19 or (ii) to enforce any provisions of this title or the terms of the 20 plan." 21 "those categories of relief that were typically available in equity 22 (such as injunction, mandamus, and restitution, but not 23 compensatory damages)." 24 256 (1993). 25 29 U.S.C. § 1132(a)(3). This provision authorizes only Mertens v. Hewitt Assocs., 508 U.S. 248, Mayhew contends that, in spite of its label, Hartford's 26 Counterclaim for restitution constitutes a claim for legal or money 27 damages, which is barred by ERISA. 28 4 Mot. at 5. Hartford responds 1 that the Counterclaim is equitable in nature and thus permissible. 2 Opp'n at 6-7. 3 decisions in Great-West Life & Annuity Insurance Company v. 4 Knudson, 534 U.S. 204 (2002) and Sereboff v. Mid Atlantic Medical 5 Services, Inc., 547 U.S. 356 (2006). The parties' dispute turns on the Supreme Court's Knudson dealt with the reimbursement provision of an insurance 6 7 plan that gave the insurer, Great-West, the "right to recover from 8 the [beneficiary] any payment for benefits" paid by Great-West 9 which was later recovered from a third party. 534 U.S. at 207. United States District Court For the Northern District of California 10 After Great-West paid a portion of the Knudsons' medical expenses 11 resulting from a car accident, the Knudsons entered into a 12 settlement agreement with a car manufacturer which established a 13 special needs trust to provide for the Knudsons' medical care. 14 at 207-08. 15 reimbursement claim because the settlement funds sought were in a 16 special needs trust rather than the Knudsons' possession. 17 214. 18 relief but "the imposition of personal liability for the benefits 19 that they conferred upon [the Knudsons]." 20 Id. The Supreme Court rejected Great-West's § 502(a)(3) Id. at The Court concluded that Great-West was not seeking equitable Id. at 214. In Sereboff, the Supreme Court allowed an insurer's claim for 21 reimbursement under similar facts. The Sereboffs were injured in a 22 car accident, received insurance benefits for medical expenses 23 incurred, and later settled against third parties involved in the 24 accident. 25 insurer, Mid Atlantic, sought to enforce a plan provision which 26 required "a beneficiary who receives benefits under the plan . . . 27 to reimburse [Mid Atlantic] for those benefits from [a]ll Sereboff, 547 U.S. at 360. 28 5 Pursuant to § 502(a)(3), the 1 recoveries from a third party." 2 marks omitted). 3 Knudson on the grounds that the Sereboffs' settlement funds were 4 not held by a trust and, as such, Mid Atlantic was seeking 5 particular funds in the Sereboffs' possession, not the imposition 6 of personal liability. 7 Mid Atlantic's claim was permissible under ERISA. 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 Id. at 359 (internal quotation The Supreme Court distinguished Sereboff from Id. at 362-63. The Court concluded that Id. at 369. The Supreme Court found that the reimbursement provision in the Sereboffs' insurance plan gave rise to an equitable lien by agreement. Id. at 363-365. The Court explained: [T]he Sereboffs' plan specifically identified a particular fund, distinct from the Sereboffs' general assets--"[a]ll recoveries from a third party (whether by lawsuit, settlement, or otherwise)"--and a particular share of that fund to which Mid Atlantic was entitled-"that portion of the total recovery which is due [Mid Atlantic] for benefits paid." 16 Id. at 364. 17 "follow[] a portion of the recovery 'into the [Sereboffs'] hands' 18 'as soon as [the settlement fund] was identified,' and impos[e] on 19 that portion a constructive trust or equitable lien." 20 (quoting Barnes v. Alexander, 232 U.S. 117, 123 (1914)). 21 Supreme Court noted that "the fund over which a lien is asserted 22 need not be in existence when the contract containing the lien 23 provision is executed." 24 rules" apply to an equitable lien by agreement. 25 Accordingly, the property to which the lien attached could be 26 converted to other property without destroying the lien. 27 at 364-65. Under "a familiar rule of equity," the insurer could Id. at 366. 28 6 Id. The Further, no "strict tracing Id. at 365. See id. Mayhew argues that Hartford's counterclaim is barred under 1 2 Knudson since Hartford "seeks to impose personal liability on 3 [Mayhew] for her alleged breach of the plan." 4 responds that it seeks permissible equitable relief under Sereboff 5 because the Plan created an equitable lien by agreement. 6 6. The Court agrees with Hartford. 7 Mot. at 8. Hartford Opp'n at The Plan created an equitable 8 lien as it "specifically identified a particular fund, distinct 9 from [Mayhew's] general assets. . . and a particular share of that Seberoff, 547 U.S. at 364. United States District Court For the Northern District of California 10 fund to which [Hartford] was entitled." 11 The particular fund is identified by the Plan as the "benefit for 12 loss of income, provided to you or to your family, as a result of 13 the Period of Disability . . . includ[ing] . . . disability 14 benefits under the United States Social Security Act." 15 Decl.2 Ex. 1 ("Plan") at 30. 16 identified as "any amount that is an overpayment of benefits under 17 this plan." Roberts The particular share of that fund is Id. at 28. 18 Mayhew argues that the Plan, unlike the reimbursement 19 provision in Sereboff, did not purport to create a lien of any 20 kind. 21 from the Plan is sufficient to create an equitable lien: 22 the right to recover from you any amount that is an overpayment of 23 benefits under this plan. 24 amount." 25 26 27 28 Reply at 3. 3 The Court finds that the following language "We have You must refund to us the overpaid Plan at 28. 2 Michelle L. Roberts ("Roberts"), Mayhew's attorney, submitted a declaration in support of the Motion. ECF No. 19 ("Roberts Decl."). 3 The First and Third Circuits as well as district courts in the Ninth Circuit have found similar provisions sufficient to create an 7 The Court also rejects Mayhew's contention that Hartford must 1 2 identify a fund containing the overpayments that is directly 3 traceable to Mayhew's custody, control, or possession. 4 at 9. 5 possession of the settlement funds was sufficient to distinguish 6 the case from Knudson, where the settlement funds at issue had been 7 held in a special needs trust. 8 stated: 9 United States District Court For the Northern District of California 10 11 12 See Reply In Sereboff, the Supreme Court found that the Sereboffs' Specifically the Supreme Court The impediment to characterizing relief in Knudson as equitable is not present here. . . . [I]n this case Mid Atlantic sought specifically identifiable funds that were within the possession and control of the Sereboffs--that portion of the tort settlement due Mid Atlantic under the terms of the ERISA plan, set aside and preserved [in the Sereboffs'] investment accounts. 13 14 547 U.S. at 362-63. 15 the Sereboffs' contention that Mid Atlantic was required to trace 16 its property to a particular fund or asset held by the Sereboffs to 17 state a claim for equitable relief. 18 "the familiar rul[e] of equity that a contract to convey a specific 19 object even before it is acquired will make the contractor a However, the Supreme Court ultimately rejected Id. at 365. The Court noted 20 21 22 23 24 25 26 27 28 equitable claim for Social Security benefits enforceable under § 502(a)(3). See Funk v. CIGNA Group Ins., 648 F.3d 182, 193-195 (3rd Cir. 2011) (permitting counterclaim for overpaid LTD benefits where the plan provided that a Social Security offset "shall be . . . . payable . . . by the recipient"); Cusson v. Liberty Life Assurance Co. of Boston, 592 F.3d 215, 230-31 (1st Cir. 2010) (counterclaim for LTD benefits constituted an equitable claim allowable under § 502(a)(3)); Pollok v. Northrop Grumman Health Plan, CV09-7006 JST, 2011 U.S. Dist. LEXIS 41716, at *7, 13-14 (N.D. Cal. Apr. 12, 2011) (permitting counterclaim for overpaid LTD benefits where plan provided "the payments you receive under the . . . LTD plans are offset dollar for dollar by other disability income benefits that you receive"); DeBenedictis v. Hartford Life & Accident Ins. Co., 701 F. Supp. 2d 1113, 1134 (D. Ariz. 2010) (Defendant entitled to recover overpaid LTD benefits, even though benefits were not specifically traceable). 8 1 trustee as soon as he gets a title to the thing." Id. at 363-64 2 (quotation marks and citations omitted). 3 instant action, there is no indication that Mayhew's benefits were 4 distributed to a trust outside of her possession. 5 Hartford's equitable lien attached when Mayhew came into possession 6 of the overpayments, Hartford may state a claim under § 503(a)(3) 7 without directly tracing the overpayments to particular property 8 within Mayhew's possession. Unlike in Knudson, in the Further, as Mayhew points to two Ninth Circuit decisions where the court 9 United States District Court For the Northern District of California 10 found that ERISA claims for restitution were not equitable and were 11 thus barred under § 502(a)(3): Honolulu Joint Apprenticeship & 12 Training Committee of United Association Local Union No. 675 v. 13 Foster, 332 F.3d 1234 (9th Cir. 2003), and Carpenters Health and 14 Welfare Trust for Southern California v. Vonderharr, 384 F.3d 667 15 (9th Cir. 2004). 16 decision in Sereboff, which clarified the types of equitable claims 17 available under ERISA.4 18 Ins. Plan, C 09-4420 MEJ, 2010 U.S. Dist. LEXIS 110292, at *25 19 (N.D. Cal. Sep. 30, 2010).5 See Mairena v. Enter. Rent-A-Car Hosp. Mayhew argues that, even if the Counterclaim states a claim 20 21 However, these cases pre-date the Supreme Court's for equitable relief, the Social Security Act expressly prohibits 22 23 24 25 26 27 28 4 Additionally, Foster is distinguishable since, in that case, "no funds were actually transferred to [defendant] -- [plaintiff] merely seeks reimbursement for the costs it incurred for his training." 332 F.3d at 1238. 5 Plaintiff also relies on Martorello v. Sun Life Company of Canada, C 09-0912 PJH, 2009 U.S. Dist. LEXIS 41465 (N.D. Cal. May 1, 2009), where the district court dismissed an insurance company's counterclaim for restitution of overpaid disability benefits on the grounds that the insurance company's claim was not equitable. However, that case did not cite to or address Sereboff. 9 1 the attachment of Social Security benefits. 2 Social Security Act states: 3 5 6 7 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 42 U.S.C. § 407(a). The Court finds that § 407(a) does not bar the Counterclaim because Hartford "is not attempting to recover [Mayhew's] SSDI benefits. Rather, [Hartford] seeks to recover in equity from funds [Hartford] itself already paid under the LTD plan." Cusson, 592 F.3d at 232. in accord. The authority cited by Mayhew is See Epolito v. Prudential Ins. Co. of Am., 737 F. Supp. 2d 1364, 1383 n.9 (M.D. Fla. 2010) ("[T]he Court recognizes that 42 U.S.C. § 407(a) is not applicable to this matter insofar as Prudential seeks to impose the equitable lien, not on the SSD[I] benefits, but on the overpaid long term disability benefits.").6 18 19 The The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law. 4 8 Reply at 4. For these reasons, the Court finds that Hartford's Counterclaim for restitution is an equitable claim and permissible 20 21 22 23 24 25 26 27 6 The Court also rejects Mayhew's argument that the Plan's reimbursement provision cannot be applied in good conscience because Hartford terminated Mayhew's claim. Mot. at 8-9. Mayhew reasons that Hartford "effectively recoup[ed]" any moneys owed by withholding benefits, despite a finding of disability by the Social Security Administration. Id. at 9. She argues that she should not "pay Hartford money for a decision it refused to accept." Id. Mayhew offers no authority in support. In any event, the Court is not currently in a position to determine whether Hartford had an adequate basis for terminating Mayhew's claim. 28 10 1 under § 502(a)(3) of ERISA.7 2 equitable lien on Mayhew's overpaid LTD benefits. Hartford may seek to impose an 3 B. Offset for DSSD Benefits 4 The parties also dispute whether Hartford may offset the DSSD 5 benefits for Mayhew's child against Mayhew's LTD benefits. 6 Plan allows Hartford to offset "Other Income Benefits," which are 7 defined as: 8 [T]he amount of any benefit for loss of income, provided to you or to your family, as a result of the period of Disability for which you are claiming benefits under this plan. This includes any such benefits for which you or your family are eligible or that are paid to you, or to a third party on your behalf, pursuant to any: . . . 9 United States District Court For the Northern District of California 10 11 12 5. disability benefits under the United States Social Security Act . . . or similar plan or act that, your spouse and children are eligible to receive because of your Disability. 13 14 15 The Plan at 30. 16 Mayhew contends that offsetting DSSD benefits is inappropriate 17 because they constitute support payments, not benefits for "loss of 18 income." 19 intended to replace income lost due to a wage earner's inability to 20 work. 21 requires DSSD offsets because "Other Income Benefits" include 22 payments provided to family members, including Social Security 23 benefits paid to children. Opp'n. at 18. Hartford responds that DSSD benefits are Hartford also argues that the Plan expressly Opp'n at 14-15. The Court finds that the express terms of the Plan support 24 25 Mot. at 10. offsetting the DSSD benefits. "[A] court must give effect to every 26 27 28 7 As Hartford can state a claim for restitution under ERISA, the Court need not determine whether it has a valid claim under state law. 11 1 word or term employed by the parties and reject none as meaningless 2 or surplusage in arriving at the intention of the contracting 3 parties." 4 (quoting United States v. Hathaway, 242 F.2d 897, 900 (9th Cir. 5 1957)). 6 of income, provided to you or to your family," including 7 "disability benefits under the Social Security Act . . . your 8 spouse and children are eligible to receive." 9 that Mayhew's DSSD benefits do not constitute a benefit for loss of United States District Court For the Northern District of California 10 Cree v. Waterbury, 78 F.3d 1400, 1405 (9th Cir. 1996) The plan provides for the offset of "any benefit for loss Plan at 30. To hold income would render this language entirely superfluous. Neither party cites, nor is the Court aware of, a Ninth 11 12 Circuit decision directly on point. Mayhew relies on cases holding 13 that plan offset provisions did not apply to DSSD benefits. 14 at 10-16 (citing In re Unisys Corp. Long-Term Disability Plan ERISA 15 Litig., 97 F.3d 710 (3rd Cir. 1996); Carstens v. U.S. Shoe Corp. 16 Long-Term Benefits Disability Plan, 520 F. Supp. 2d 1165 (N.D. Cal. 17 2007); Meeks v. Mutual of Omaha Ins. Co., 70 Ill. App. 3d 800 (Ill. 18 App. Ct. 1979)). Mot. None of these cases are controlling. 19 Unisys is distinguishable since the plan provision at issue in 20 that case stated that offsets would only apply to benefits received 21 by the claimant.8 22 provided that the offsets would apply to benefits received "(1) by 23 the protected person or (2) by any other person on his behalf." 24 Ill. App. 3d at 802. 97 F.3d at 712. Similarly, in Meeks, the plan 70 The court concluded that checks made payable 25 26 27 8 Specifically, the plan provided that "The LTD you receive may be adjusted if you receive pension benefits from Unisys and/or disability income from other sources, such as Social Security." Carstens, 97 F.3d at712 (emphasis in the original). 28 12 1 to the insured on the dependent's behalf did not constitute 2 payments to a protected person. 3 action, the Plan's offset provision expressly applies to benefits 4 paid to Mayhew, her spouse, or her children. Id. In contrast, in the instant Carstens involved a plan providing offsets for "[p]eriodic 5 6 benefits, for loss of time . . . by reason of . . . the United 7 States Social Security Act . . . , exclusive of benefits paid . . . 8 . to a child of the Employee." 9 court reasoned that loss of time referred to the loss of income 520 F. Supp. 2d at 1166-67. Id. at 1167. The Citing Unysis and Meeks, United States District Court For the Northern District of California 10 resulting from disability. 11 the court found that DSSD benefits constituted support payments 12 rather than payments for income replacement under the plan. 13 1168. 14 holding that similar offset provisions applied to DSSD payments.9 15 In light of the weight of authority and the express terms of the 16 Plan, the Court respectfully disagrees with the holding in Carstens 17 to the extent that it is inconsistent with the Court's order in the 18 instant action. Id. at A number of courts have reached a contrary conclusion, 19 Further, the Court rejects Mayhew's contention that the Plan's 20 offset provision does not apply to DSSD benefits because, under the 21 Social Security Act, DSSD benefits belong to the dependent as 22 opposed to the disabled adult. 23 24 25 26 27 Mot. at 11-13. 9 Mayhew points to See Schultz v. Aviall, Inc., 09 C 2387, 2011 U.S. Dist. LEXIS 37125, at *11-12 (N.D. Ill. Apr. 4, 2011); Potop v. Aetna Life Ins. Co., CV 09-02949 DMG, 2010 U.S. Dist. LEXIS 141667, at *4, 12 (C.D. Cal. Sep. 30, 2010); Pennell v. Hartford Life & Accident Ins. Co., 09 CV 485, 2010 U.S. Dist. LEXIS 4695, at *13-21 (N.D. Ohio Jan. 20, 2010); Fortune v. Group Long Term Disability Plan, 637 F. Supp. 2d 132, 145-46 (E.D.N.Y. 2009), aff'd 391 Fed. Appx. 74, 79-80 (2d Cir. 2010); Spinella v. Unum Life Ins. Co., 94-411-JD, 1995 U.S. Dist. LEXIS 11156, at *10-11 (D.N.H. July 14, 1995). 28 13 1 sections of the Social Security Act that provide: a dependent may 2 continue to receive DSSD benefits after her disabled parent dies, a 3 dependent must apply for DSSD benefits, and a dependent is 4 responsible for paying taxes on DSSD benefits. 5 U.S.C. § 402(d)). 6 adults to use DSSD payments for the benefit of the dependent. 7 at 14-15. 8 and most importantly, these provisions have no bearing on the terms 9 of the Plan, which expressly provide that Hartford may offset Id. (citing 42 Mayhew also points to regulations requiring This argument fails for at least two reasons. Id. First, United States District Court For the Northern District of California 10 Social Security benefits received by Mayhew's children. Indeed, 11 Mayhew cites no statute or other authority which would prohibit 12 Hartford from offsetting her child's DSSD payments. 13 regardless of who the benefits belong to, the purpose of the 14 benefits is to replace income lost due to the disabled parent's 15 inability to work.10 Second, 16 Finally, Mayhew argues that, because she must use the DSSD 17 benefits to pay for her child's specific needs, a DSSD offset would 18 result in her receiving a total income of less than 66 2/3 percent 19 of her pre-disability earnings. 20 that allowing such an offset would be contrary to the terms of the 21 Plan, which provide that she is entitled to receive 66 2/3 percent 22 of monthly income loss. 23 Plan contemplates offsets for other disability benefits, including 24 25 26 27 28 Id. Mot. at 16-17. Mayhew reasons This argument is unpersuasive. 10 The See Califano v. Goldfarb, 430 U.S. 199, 213-14 (1977) (the Social Security Act's Old-Age, Survivors, and Disability Insurance scheme "is intended to insure covered wage earners and their families against the economic and social impact on the family normally entailed by loss of the wage earner's income"); Fortune, 391 Fed. Appx. at 80 ("the purpose of social security disability benefits is to replace income lost due to the wage earner's inability to work"). 14 1 disability benefits for which Mayhew's spouse or child are 2 eligible. 3 would reduce the amount offset for these particular disability 4 benefits. 5 into the Plan which were not agreed to by the parties. 6 declines to do so. Mayhew is effectively asking the Court to read new terms The Court For these reasons, the Court finds that the Plan permits 7 8 Yet Mayhew can point to no language in the Plan which offsets for DSSD benefits. 9 United States District Court For the Northern District of California 10 11 12 V. CONCLUSION The Court DENIES Plaintiff Melinda Mayhew's Motion to Dismiss Hartford Life and Accident Insurance Company's Counterclaim. 13 14 IT IS SO ORDERED. 15 16 17 Dated: October 21, 2011 UNITED STATES DISTRICT JUDGE 18 19 20 21 22 23 24 25 26 27 28 15

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