Minton v. Deloitte and Touche USA LLP Plan
Filing
35
ORDER DENYING PLAINTIFFS 23 MOTION FOR SUMMARY JUDGMENT AND GRANTING DEFENDANTS 27 CROSS- MOTIONS TO DISMISS AND FOR SUMMARY JUDGMENT. Signed by Judge Claudia Wilken on 6/3/2011. (ndr, COURT STAFF) (Filed on 6/3/2011)
1
2
IN THE UNITED STATES DISTRICT COURT
3
FOR THE NORTHERN DISTRICT OF CALIFORNIA
4
5
BUD MINTON,
6
7
8
No. 09-05636 CW
Plaintiff,
v.
DELOITTE AND TOUCHE USA LLP PLAN,
9
Defendant.
/
United States District Court
For the Northern District of California
10
11
METROPOLITAN LIFE INSURANCE COMPANY,
12
ORDER DENYING
PLAINTIFF’S MOTION
FOR SUMMARY
JUDGMENT AND
GRANTING
DEFENDANT’S CROSSMOTIONS TO DISMISS
AND FOR SUMMARY
JUDGMENT
Real Party in Interest.
____________________________________/
13
14
15
Plaintiff Bud Minton moves for summary judgment on his claims
16
against Defendant Deloitte and Touche USA LLP Plan and Real Party
17
in Interest Metropolitan Life Insurance Company (MetLife)
18
(collectively, Defendant) for long term disability (LTD) benefits
19
based on his inability to work in “any occupation”1 and for a
20
supplemental benefit, both under the Employee Retirement Income
21
Security Act (ERISA), 28 U.S.C. § 1132, and for interest on late
22
payments of ERISA benefits under California Insurance Code
23
§ 10111.2.
24
dismissal of the supplemental benefit claim for failure to exhaust
Defendant opposes the motion and cross-moves for
25
26
1
27
28
After Plaintiff filed his complaint, Defendant awarded him
benefits under the “any occupation” definition of disability.
Therefore, Plaintiff’s ERISA claim for an award of these benefits
is moot.
1
administrative remedies and for summary judgment.
2
taken under submission on the papers.
3
papers filed by the parties, the Court denies Plaintiff’s motion
4
for summary judgment and grants Defendant’s cross-motions to
5
dismiss and for summary judgment.
6
7
The motions were
Having considered all the
PROCEDURAL BACKGROUND
Plaintiff formerly worked as a graphics designer for Deloitte
8
and Touche (Deloitte) and was a participant in the Deloitte and
9
Touche USA LLP Plan (Plan).
United States District Court
For the Northern District of California
10
11
Deloitte administers the Plan.
MetLife is the funding source and the claim fiduciary for the Plan.
In a previous lawsuit against the same Defendant, Minton v.
12
Deloitte and Touche USA LLP Plan (Minton I), C 08-1941 CW, the
13
Court granted Plaintiff’s motion for judgment, concluding that he
14
was eligible for LTD benefits under the Plan’s “own occupation”
15
definition of disability.
16
benefits under the “any occupation” Plan provision and the
17
supplemental benefit provision.
18
19
The Court remanded Plaintiff’s claim for
FACTUAL BACKGROUND
Participants in the Plan can choose coverage equal to either
20
fifty percent or 66 2/3 percent of their basic monthly salary.
21
March 1, 1997, the option of a supplemental benefit was added for
22
participants at the 66 2/3 level.
23
the supplemental benefit, they had three coverage options ranging
24
from $250 to $917 of additional monthly benefits.2
On
If participants chose to pay for
Participants
25
26
27
28
2
The maximum supplemental benefit increased over time,
reaching $1,250 per month in 2006, when Plaintiff became disabled.
AR at 330, 366.
2
1
could apply for the supplemental benefit, without evidence of good
2
health, only during the first thirty-one days they were eligible
3
for coverage.
4
announced in a rider amending the Plan.
5
at 201.
6
Description (SPD) for the years 1998 and 2000 through 2007.
7
208, 224, 242, 261, 283, 308, 330, 366 and 435.
8
9
AR at 475, 206.
The supplemental benefit was first
Administrative Record (AR)
Thereafter, it was included in the Supplemental Plan
AR at
It was Deloitte’s practice to distribute documents describing
employee benefits to each employee by way of the employee’s
United States District Court
For the Northern District of California
10
individual mailbox.
11
computer system, Deloitte does not have specific information as to
12
how notice of the supplemental benefit was given to Plaintiff, but
13
it was Deloitte’s custom and practice to provide notice of all
14
changes to insurance plans.
15
information about the Plan, including the SPD, was available to all
16
employees on Deloitte’s intranet.
17
computerized records show that at least twenty-two Plan
18
participants became disabled between January, 1997 and December,
19
1998 and, of those twenty-two, four received the supplemental
20
benefit.
21
Curtin Dec. at ¶ 3.
Due to changes in its
Id. at ¶¶ 3-4.
Starting in 1999, all
Id. at ¶ 5.
MetLife’s
Hallford Dec. at ¶ 3.
Plaintiff enrolled in the Plan on November 13, 1990, prior to
22
the availability of the supplemental benefit.
23
in the 66 2/3 percent of salary coverage option.
24
Plaintiff was never again presented with a LTD insurance
25
application form or asked to review his coverage, and disability
26
insurance was not part of the annual open enrollment process.
27
at 185, 187.
28
Plaintiff enrolled
AR at 164.
AR
According to Plaintiff, the Plan first disclosed the
3
1
availability of the supplemental benefit in the March, 1998 edition
2
of the LTD handbook which served as the SPD.
3
states that he did not become aware of the supplemental benefits
4
until his counsel discovered it during the prosecution of Minton I.
5
AR at 202.
Plaintiff
On September 14, 2009, after the remand of his first lawsuit,
6
Plaintiff wrote to MetLife requesting payment of LTD benefits under
7
the “any occupation” provision of the Plan, and the supplemental
8
benefit.
9
request to counsel for Deloitte, the Plan Administrator.
United States District Court
For the Northern District of California
10
On September 20, 2009, Plaintiff presented the same
On September 24, 2009, MetLife wrote to Plaintiff that it was
11
extending its time to make a determination regarding LTD benefits
12
under the “any occupation” definition of disability because it had
13
not yet received requested medical information.
14
September 24 and October 5, 2009, MetLife contacted Deloitte and
15
inquired whether its records showed that Plaintiff had applied and
16
paid for the supplemental benefit.
17
2009, James Blakely, from Deloitte, responded that Plaintiff had
18
not applied for the supplemental benefit and never paid for such
19
coverage.
20
AR at 703-04.
AR at 571, 694.
On
On October 6,
AR at 472.
On December 4, 2009, MetLife wrote to Plaintiff’s counsel that
21
Plaintiff was eligible for LTD benefits under the “any occupation”
22
definition of disability, but that he had not applied for the
23
supplemental benefit.
24
decision could be appealed by sending a written request to MetLife
25
within 180 days of receipt of the denial letter.
26
Plaintiff is currently receiving LTD benefits under the “any
27
occupation” provision of the Plan.
28
4
AR at 678.
The letter indicated that the
Id. at 679.
DISCUSSION
1
2
Plaintiff’s motion for summary judgment addresses his claim
3
under ERISA for the supplemental benefit and his claim under the
4
California Insurance Code for interest on late benefits payments.
5
In his claim for the supplemental benefit, Plaintiff asserts that
6
MetLife breached its fiduciary duty by failing to tell him that he
7
was entitled to apply for the supplemental benefit and during the
8
thirty-one day period that he was eligible without proof of good
9
health.
Defendant moves to dismiss this claim on the ground that
United States District Court
For the Northern District of California
10
Plaintiff failed to exhaust administrative remedies before filing
11
this lawsuit.
12
Defendant argues that, because Plaintiff fails to address the
13
issue, he concedes it.
14
I. Motion to Dismiss for Lack of Exhaustion
15
Plaintiff does not address exhaustion in his reply.
Although not explicitly set out in ERISA, the Ninth Circuit
16
has announced as a general rule that a claimant for ERISA benefits
17
must exhaust administrative appeals prior to filing an action in
18
district court.
19
1980).
20
including the reduction of frivolous litigation, the promotion of
21
consistent treatment of claims, the provision of a non-adversarial
22
method of claims settlement, the minimization of costs of claim
23
settlement and a proper reliance on administrative expertise.
24
"Consequently the federal courts have the authority to enforce the
25
exhaustion requirement of suits under ERISA, and as a matter of
26
sound policy they should usually do so."
27
28
Amato v. Bernard, 618 F.2d 559, 566-568 (9th Cir.
Numerous policy considerations underlie this rule,
Id.
Id. at 568.
After Amato, the Ninth Circuit has affirmed the dismissal of
5
1
ERISA claims for failure to exhaust administrative remedies.
2
e.g., Diaz v. United Agr. Employee Welfare Benefit Plan, 50 F.3d
3
1478, 1483 (9th Cir. 1995) (affirming dismissal for lack of
4
exhaustion where ERISA plan provided for internal appeal procedures
5
which were adequate and appeal was not futile); Sarraf v. Standard
6
Ins. Co., 102 F3d 991, 993 (9th Cir. 1996) (failure to request in
7
writing review of administrator's adverse decision, as required by
8
ERISA plan, precluded ERISA claims); see also, Glaus v. Kaiser
9
Found. Health Plan, 2009 WL 2905961, at *2 (N.D. Cal) (where ERISA
United States District Court
For the Northern District of California
10
plan provided for administrative remedies, exhaustion was not
11
See
optional even if plan used optional language).
12
Here, the Plan provides for the administrative appeal of
13
adverse decisions.
AR 33.
It is undisputed that Plaintiff did not
14
appeal MetLife's adverse decision regarding his claim for the
15
supplemental benefit.
16
In his complaint, Plaintiff alleges, "Following remand the
17
Plan has neither granted nor denied the appeal, and the time for it
18
to do so has expired, both under 29 C.F.R. § 2560.503-1, and under
19
the order of the Court.
20
administrative remedies."
Mr. Minton has exhausted his
21
Section 2560.503-1(f) provides,
22
27
if a claim is wholly or partially denied, the plan
administrator shall notify the claimant . . . of the
plan's adverse benefit determination within a reasonable
time, but not later than 90 days after receipt of the
claim by the plan, unless the plan administrator
determines that special circumstances require an
extension of time for processing the claim. If the plan
administrator determines that an extension of time for
processing the claim is required, written notice of the
extension shall be furnished to the claimant prior to the
termination of the initial 90-day period.
28
6
23
24
25
26
1
2
3
4
5
6
7
8
9
United States District Court
For the Northern District of California
10
The Plan provides that MetLife must provide notification of
its decision regarding a claim for benefits
within a reasonable period, not to exceed 45 days from
the date you submitted your claim; except for situations
requiring an extension of time because of matters beyond
the control of the Plan, in which case MetLife may have
up to two (2) additional extensions of 30 days each to
provide you such notification. . . . If an extension is
needed because you did not provide sufficient information
or filed an incomplete claim, the time from the date of
MetLife’s notice requesting further information and an
extension until MetLife receives the requested
information does not count toward the time period MetLife
is allowed to notify you as to its claim decision.
AR at 32.
As noted above, Plaintiff filed his claim on September 14,
11
2009 and, on September 24, 2009, MetLife wrote to Plaintiff
12
informing him that it had not yet received all of his medical
13
records and that it would make a decision on his claim after it had
14
received the requested information.
15
the requested medical information on September 30, 2009 (AR at
16
695), October 9, 2009 (AR at 682) and October 27, 2009 (AR at 680).
17
On November 12, 2009, Plaintiff's attorney informed MetLife that
18
Plaintiff's medical record was complete.
19
4, 2009, MetLife sent Plaintiff's attorney a letter that
20
Plaintiff’s claim for LTD benefits under the "any occupation"
21
definition was approved and that the claim for supplemental
22
benefits was denied.
23
AR at 703-04.
Plaintiff sent
AR at 575.
On December
Because MetLife informed Plaintiff of the need for additional
24
medical information within the time period allowed by § 2560.503-
25
1(f) and by the Plan, and because MetLife made a decision regarding
26
Plaintiff’s claim less than thirty days after he informed MetLife
27
28
7
1
that his record was complete, MetLife's decision was timely.
2
Therefore, Plaintiff's argument that he is not required to exhaust
3
because MetLife's decision was untimely fails.
4
to dismiss the ERISA supplemental benefit claim for lack of
5
exhaustion is granted.
6
Plaintiff had exhausted this claim, it would fail on the merits.
7
II. Motions for Summary Judgment
Defendant's motion
However, as discussed below, even if
8
A. Legal Standard
9
Summary judgment is properly granted when no genuine and
United States District Court
For the Northern District of California
10
disputed issues of material fact remain, and when, viewing the
11
evidence most favorably to the non-moving party, the movant is
12
clearly entitled to prevail as a matter of law.
13
56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);
14
Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir.
15
1987).
16
Fed. R. Civ. P.
The moving party bears the burden of showing that there is no
17
material factual dispute.
18
the opposing party’s evidence, if it is supported by affidavits or
19
other evidentiary material.
20
815 F.2d at 1289.
21
favor of the party against whom summary judgment is sought.
22
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
23
587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d
24
1551, 1558 (9th Cir. 1991).
25
Therefore, the court must regard as true
Celotex, 477 U.S. at 324; Eisenberg,
The court must draw all reasonable inferences in
Material facts which would preclude entry of summary judgment
26
are those which, under applicable substantive law, may affect the
27
outcome of the case.
28
The substantive law will identify which facts
8
1
are material.
2
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986).
3
B. Evidentiary Objections
4
Plaintiff objects to certain evidence presented by Defendant.
5
The Court has reviewed these evidentiary objections and has not
6
relied on any inadmissible evidence.
7
each objection individually.
8
relied on evidence to which Plaintiff objects, such evidence has
9
been found admissible and the objections are overruled.
The Court will not discuss
To the extent that the Court has
United States District Court
For the Northern District of California
10
C. Analysis
11
To further ERISA’s goal of protecting benefit plan
12
participants by requiring the disclosure to participants of
13
information regarding the plan, employee benefit plans must provide
14
plan participants with an SPD.
15
Disability Plan, 581 F.3d 899, 904 (9th Cir. 2009).
16
the ‘statutorily established means of informing participants of the
17
terms of the plan and its benefits’ and the employee’s primary
18
source of information regarding employment benefits.”
19
Retirement Plan for Pilots Employed by MarkAir, Inc., 293 F.3d
20
1139, 1143 (9th Cir. 2002); Pisciotta v. Teledyne Indus, Inc., 91
21
F.3d 1326, 1329 (9th Cir. 1996).
22
policy and is bound by its provisions even if he did not read or
23
understand them.
24
210450, *7 (N.D. Cal.).
25
Scharff v. Raytheon Co. Short Term
“The SPD is
Bergt v.
An insured has a duty to read his
Gravell v. Health Net Life Ins. Co., 2009 WL
Plaintiff argues that he did not receive notice within thirty-
26
one days of when the supplemental benefit became available and
27
disputes Defendant’s evidence that he was provided notice within
28
9
1
this time period.
2
other employees in Plaintiff’s position purchased the supplemental
3
benefit without proof of good health during the first thirty-one
4
days that it was available, this does not prove that Plaintiff
5
received notice of the supplemental benefit during that period.
6
Therefore, there is a dispute of fact on this issue which, if
7
dispositive, would preclude summary judgment for either party.
8
However, it is not dispositive.
9
Although Defendant presents strong evidence that
Although Plaintiff states that he was not aware of the
United States District Court
For the Northern District of California
10
availability of the supplemental benefit until his counsel
11
discovered it, he does not dispute that he received the SPDs from
12
1998 onward, that they were available on Defendant’s intranet, or
13
that they accurately describe the supplemental benefit and how to
14
apply for it.
15
updated SPDs because he was never asked to renew or review his
16
disability coverage and his disability insurance was not part of
17
the annual open enrollment process.
18
Bergt, and Pisciotta, the fact that the SPDs were available to
19
Plaintiff is sufficient to charge him with notice of the
20
availability of the supplemental benefit.
21
Plaintiff argues that he did not have to read the
However, pursuant to Scharff,
According to Plaintiff, this is still insufficient because,
22
thirty-one days after the supplemental benefit became available, he
23
could no longer qualify for it without proof of good health.
24
However, Plaintiff does not provide evidence that the proof of good
25
health requirement would have prevented him from purchasing the
26
supplemental benefit.
27
Plaintiff did not become disabled until August 2006.
28
According to the evidence in Minton I,
10
Therefore,
1
from 1997 through August 2006, Plaintiff could have applied for the
2
benefit with evidence of good health, but did not do so.
3
has failed to show that Defendant’s conduct prevented him from
4
purchasing the supplemental benefit.
Plaintiff
5
Plaintiff cites Kaszuk v. Bakery & Confectionery Union &
6
Indus. Int’l Pension Fund, 791 F.2d 548, 555 (7th Cir. 1986), which
7
held that the plaintiff’s husband was not given adequate notice of
8
his rights under his pension plan from plan booklets stacked at
9
various locations at the husband’s workplace or from an
United States District Court
For the Northern District of California
10
advertisement in the magazine published by the husband’s union.
11
However, this case relied on temporary ERISA guidelines, which were
12
in effect prior to January, 1977, and are not applicable to
13
Plaintiff’s claim because he submitted his claim for benefits after
14
the most recent ERISA regulations went into effect on January 1,
15
2002.
16
Circuit authority cited above, which this Court must follow.
17
Furthermore, this Seventh Circuit case contravenes the Ninth
Plaintiff argues that the Ninth Circuit has held that the
18
responsibilities of ERISA plan fiduciaries are established by the
19
common law of trusts and, thus, they are required to discharge
20
their duties solely in the interest of the plan participants and
21
beneficiaries.
22
Cir. 1991).
23
America, 232 F.3d 719, 726-27 (9th Cir. 2000), which held that the
24
plan administrator breached its fiduciary duty by failing to notify
25
the claimant in its letter denying his claim of a sixty-day time
26
limit in which he was required to demand mandatory arbitration in
27
order to appeal the denial, rather than to rely on notice contained
28
11
See Acosta v. Pacific Ents., 950 F.2d 611, 618 (9th
Plaintiff also cites Chappel v. Laboratory Corp. of
1
2
in the SPD.
Chappel is distinguishable.
As noted there, ERISA regulations
3
specifically require that “a fiduciary must give written notice to
4
a plan participant or beneficiary of the ‘steps to be taken’ to
5
obtain internal review when it denies a claim.”
6
Likewise, the plan administrator should know that a claimant may
7
not be aware, when the internal appeal is denied, of a mandatory
8
arbitration clause and a time limit for seeking arbitration because
9
mandatory arbitration is an additional step in the plan’s claim
Id. at 726.
United States District Court
For the Northern District of California
10
procedure and is, to some degree, a substitute for judicial review
11
of the administrator’s decision.
12
to seek arbitration in a timely manner, both arbitration and
13
judicial review of that arbitration were foreclosed.
14
held that, given these consequences, the administrator was not
15
acting in the interest of the participants or beneficiaries if it
16
failed to specifically inform the claimant of the mandatory
17
arbitration requirement.
18
Id.
Thus, if the claimant failed
The court
Id.
The issue here is not the procedure for appealing the denial
19
of benefits, for which there are specific regulations.
20
although there was a time-limit for applying for the supplemental
21
benefit without evidence of good health, Plaintiff had the
22
opportunity, over a nine-year period, to apply for the supplemental
23
benefit, with proof of good health, but failed to do so.
24
Here,
Based on the foregoing, Plaintiff has not established that he
25
is entitled to judgment as a matter of law on his claim that
26
Defendant breached its fiduciary duty and, thus, his motion for
27
summary judgment is denied.
28
Furthermore, Plaintiff has not raised
12
1
a disputed issue of material fact that Defendant breached its
2
fiduciary duty by failing specifically to notify him within the
3
thirty-one days that the supplemental benefit became available.
4
Therefore, Defendant’s cross-motion for summary judgment is
5
granted.
6
claim for the supplemental ERISA benefit and because Plaintiff’s
7
claim for ERISA benefits under the “any occupation” definition is
8
moot, Plaintiff’s claim for interest on late ERISA benefits is
9
denied as moot.
Because Defendant is granted judgment on Plaintiff’s
United States District Court
For the Northern District of California
10
CONCLUSION
11
For the foregoing reasons, Plaintiff's motion for summary
12
judgment is denied and Defendant's cross-motions to dismiss and for
13
summary judgment are granted.
14
late payments of ERISA benefits is denied as moot.
15
favor of Defendant shall be entered by the Clerk of the Court.
16
parties shall bear their own costs.
Plaintiff’s claim for interest on
Judgment in
All
17
18
IT IS SO ORDERED.
19
20
Dated: 6/3/2011
CLAUDIA WILKEN
United States District Judge
21
22
23
24
25
26
27
28
13
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?