Burque v. Mutual of Omaha Insurance Company

Filing 57

ORDER DENYING UNITED OF OMAHA'S MOTION FOR SUMMARY JUDGMENT. Re: Dkt. No. 49 . Signed by Judge Nathanael Cousins. (Attachments: # 1 Certificate/Proof of Service)(lmh, COURT STAFF) (Filed on 1/10/2018)

1
2
3
4
5
6
7

UNITED STATES DISTRICT COURT

8

NORTHERN DISTRICT OF CALIFORNIA

9
10

PHILIP BURQUE,
Plaintiff,

United States District Court
Northern District of California

11
v.

12
13

UNITED OF OMAHA LIFE
INSURANCE COMPANY,

14

Case No. 17-cv-02725 NC
ORDER DENYING UNITED OF
OMAHA’S MOTION FOR
SUMMARY JUDGMENT
Re: Dkt. No. 49

Defendant.
15
16
In this Employment Retirement Income Security Act (ERISA) case, pro se plaintiff

17
18

Philip Burque seeks to recover long term disability (LTD) benefits under a group policy

19

issued by defendant United of Omaha Life Insurance Company. United of Omaha moves

20

for summary judgment on the sole ERISA claim based on Mr. Burque’s failure to exhaust

21

administrative remedies.
Because the Court finds that there is a genuine issue of material fact regarding Mr.

22
23

Burque’s receipt of the denial of his LTD application, such that it is unclear whether Mr.

24

Burque would have known the timeline to exhaust his administrative remedies, the Court

25

DENIES United of Omaha’s motion for summary judgment.

26

I.

27
28

BACKGROUND
A.

United of Omaha, Group Policy No. GLTD-96B7

United of Omaha issued policy number GLTD-96B7 to California Dairies Inc. on
Case No. 17-cv-02725 NC

1

May 1, 2004, and that policy was revised on August 1, 2014. Dkt. No. 49-1 at 7 (the

2

Policy, as attached to the declaration of Trisha Pellett). A rider to the policy, effective

3

August 1, 2014, establishes that Challenge Dairy Products employees are also covered by

4

the policy. Id. at 13. The policy describes the procedure for filing, reviewing, and

5

appealing denials of claims for LTD benefits. Id. at 51-56. The policy sets forth a 180-day

6

period for appealing an adverse benefit determination (i.e., a denial) upon receipt of the

7

determination. Id. at 54. Upon denial of an appeal, a claimant then receives a statement of

8

his or her right to bring a civil action under ERISA. Id. at 55.

9

B.

Mr. Burque’s Claim

Mr. Burque was employed by Challenge Dairy Products, Inc. until he went on

11

United States District Court
Northern District of California

10

disability on August 13, 2014. Dkt. No. 32 at 4. He is still on disability. Id. In November

12

2014, Mr. Burque filed for LTD benefits from United of Omaha, and was denied his claim

13

in a letter dated February 20, 2015. Id. at 4, 5; Dkt. No. 49-1 at 64-65.

14

Ms. Pellett, an Appeals Specialist at United of Omaha declared “on information and

15

belief” that the denial letter was mailed to Mr. Burque on March 10, 2015. Dkt. No. 49-1

16

at 4 (Pellett Decl.). Furthermore, Ms. Pellett stated there was nothing in the record to

17

indicate that the denial letter mailed to Mr. Burque was returned as undeliverable due to an

18

incorrect address or for any other reason. Id. United of Omaha furnished the declaration

19

of Kelli Schneckloth, a Supervisor in its Outgoing Mail Department. Dkt. No. 49-2 at 1

20

(Schneckloth Decl.). Ms. Schneckloth described United of Omaha’s regular mailing

21

practices, and declared that based on United of Omaha’s records, the February 20, 2015,

22

letter to Mr. Burque “was printed, folded, inserted into an envelope, affixed with the

23

proper postage, and picked up by [the presorting service] for delivery to the USPS on

24

March 9, 2015, and was mailed on March 10, 2015.” Id. at 3. Mr. Burque denies

25

receiving this denial letter. Dkt. No. 32 at 4. Mr. Burque became aware of the denial of

26

his application in December 2015. Id. at 5. It is undisputed that Mr. Burque did not file an

27

administrative appeal of United of Omaha’s denial of his LTD benefits claim.

28

Mr. Burque filed this lawsuit in Santa Clara County Superior Court, but Mutual of
Case No. 17-cv-02725 NC

2

1

Omaha, the original defendant, removed the case on the basis of federal question

2

jurisdiction under 28 U.S.C. § 1331. Dkt. No. 1. Mutual of Omaha successfully moved to

3

dismiss the claim against it because it was not the proper defendant. Dkt. Nos. 10, 26.

4

Mutual of Omaha was dismissed from this case on August 31, 2017, and United of Omaha

5

was added as a defendant in the operative First Amended Complaint. Dkt. No. 32. United

6

of Omaha now moves for summary judgment as to the entire action. Dkt. No. 49. Both

7

parties consented to the jurisdiction of a magistrate judge under 28 U.S.C. § 636(c). Dkt.

8

Nos. 14, 41.

9

II.

10

United States District Court
Northern District of California

11

LEGAL STANDARD
A.

Federal Rule of Civil Procedure 56
Summary judgment may be granted only when, drawing all inferences and

12

resolving all doubts in favor of the nonmoving party, there is no genuine dispute as to any

13

material fact. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014);

14

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under

15

governing substantive law, it could affect the outcome of the case. Anderson v. Liberty

16

Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if “the

17

evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

18

Bald assertions that genuine issues of material fact exist are insufficient. Galen v. Cnty. of

19

L.A., 477 F.3d 652, 658 (9th Cir. 2007).

20

The moving party bears the burden of identifying those portions of the pleadings,

21

discovery, and affidavits that demonstrate the absence of a genuine issue of material fact.

22

Celotex, 477 U.S. at 323. Once the moving party meets its initial burden, the nonmoving

23

party must go beyond the pleadings, and, by its own affidavits or discovery, set forth

24

specific facts showing that a genuine issue of fact exists for trial. Fed. R. Civ. P. 56(c);

25

Barthelemy v. Air Lines Pilots Ass’n, 897 F.2d 999, 1004 (9th Cir. 1990) (citing Steckl v.

26

Motorola, Inc., 703 F.2d 392, 393 (9th Cir. 1983)). All justifiable inferences, however,

27

must be drawn in the light most favorable to the nonmoving party. Tolan, 134 S. Ct. at

28

1863 (citing Liberty Lobby, 477 U.S. at 255).
Case No. 17-cv-02725 NC

3

B.

1

ERISA & Exhaustion of Administrative Remedies

“ERISA protects employee pensions and other benefits by providing insurance . . . ,

2
3

specifying certain plan characteristics in detail . . . , and by setting forth certain general

4

fiduciary duties applicable to the management of both pension and nonpension benefit

5

plans.” Varity Corp. v. Howe, 516 U.S. 489, 496 (1996). A participant in or a beneficiary

6

of an employee benefit plan may sue to “recover benefits due to him under the terms of his

7

plan, [or] to enforce his rights under the terms of the plan . . . .” 29 U.S.C.

8

§ 1132(a)(1)(B). Yet the Ninth Circuit has “announced as the general rule governing

9

ERISA claims that a claimant must avail himself or herself of a plan’s own internal review
procedures before bringing suit in federal court.” Diaz v. United Agr. Employee Welfare

11

United States District Court
Northern District of California

10

Ben. Plan & Tr., 50 F.3d 1478, 1483 (9th Cir. 1995) (citing Amato v. Bernard, 618 F.2d

12

559, 566-68 (9th Cir. 1980)). As a result, “federal courts have the authority to enforce the

13

exhaustion requirement in suits under ERISA, and that as a matter of sound policy they

14

should usually do so.” Amato, 618 F.2d at 568.

15

III. DISCUSSION
There is no dispute that Mr. Burque did not appeal United of Omaha’s decision

16
17

internally prior to bringing suit. Instead, Mr. Burque opposes United of Omaha’s motion

18

on the basis that he never received the denial of his LTD benefits claim. Mr. Burque

19

asserts that “from Dec. 2014 to May 2015 the Post Office sent many different carrier

20

deliver [sic] people new to the neighborhood and mail was delivered to wrong address or

21

lost.” Dkt. No. 53 at 5 (Burque Decl); Dkt. No. 52 at 3.1
As a result, this motion comes down to a discussion of the “mailbox rule.” As

22
23

stated by the Ninth Circuit, “[p]roper and timely mailing of a document raises a rebuttable

24

presumption that the document has been timely received by the addressee.” Lewis v.

25

United States, 144 F.3d 1220, 1222 (9th Cir. 1998) (Anderson v. United States, 966 F.2d

26

487, 491 (9th Cir. 1992)). However, the mailbox rule does not always govern, and “the

27
28

1

The Court will not in this order consider the declaration of Iliana Sarmiento, which was
not signed under penalty of perjury. Dkt. No. 53 at 11.
Case No. 17-cv-02725 NC
4

1

intended recipients can rebut the presumption by producing credible, probative evidence of

2

non-receipt.” Chavez v. Bank of Am., No. 10-cv-00653 JCS, 2011 WL 4712204, at *6

3

(N.D. Cal. Oct. 7, 2011) (citing Schikore v. BankAmerica Supp. Ret. Plan, 269 F.3d 956,

4

961 (9th Cir. 2001) (“We have held a sworn statement is credible evidence of non-receipt

5

to rebut the presumption.”)). In addition, the presumption of receipt is weaker where

6

delivery was made by regular mail, as compared to certified mail. Id. (citing Salta v.

7

I.N.S., 314 F.3d 1076, 1079 (9th Cir. 2002)).
Here, Mr. Burque does not state that he did not receive the denial letter without

8

more. In his declaration he claims that there were issues with the delivery of mail in his

10

neighborhood from December 2014 to May 2015, and that is why he believes that he did

11

United States District Court
Northern District of California

9

not receive the denial letter. Mr. Burque does not assert United of Omaha never sent the

12

letter. United of Omaha’s mailing practices are therefore not at issue. Yet the Court

13

observes that United of Omaha’s arguments regarding its pattern and practice of mailing

14

generated documents is undercut by the fact that the denial letter was dated February 20,

15

2015, but the letter was not sent until March 9, 2015, 17 days later.
In this motion, all justifiable inferences must be drawn in the light most favorable to

16
17

Mr. Burque, the non-movant.2 Tolan, 134 S. Ct. at 1863. As a result, the question of

18

whether Mr. Burque received the letter, which was mailed via regular mail, raises an issue

19

of material fact that may not be resolved on summary judgment. See Chavez, 2011 WL

20

4712204, at *6 (holding the denial of receipt of an arbitration agreement in addition to

21

evidence of an incorrect mailing address is sufficient to rebut the presumption of receipt);

22

c.f. Castro v. Macy’s, Inc., No. 16-cv-05991 CRB, 2017 WL 344978, at *3 (N.D. Cal. Jan.

23
24
25
26
27
28

In its reply, United of Omaha moves to strike portions of Mr. Burque’s declaration
because he lacks personal knowledge about mail delivery in his neighborhood. Dkt. No.
54 at 7. The Court DENIES this motion, finding that Mr. Burque, as a resident of his
neighborhood, would likely be competent to testify on whether or not his mail was getting
mis-delivered or not delivered at all during the relevant time period. As to United of
Omaha’s other objections to Mr. Burque’s declaration, the Court does not reach those
issues because it does not otherwise rely on his statements in this order. Yet the Court
does caution Mr. Burque that at trial he will be required to provide further testimony and
evidence of the mail delivery issues he claims existed during December 2014 to May 2015.
Case No. 17-cv-02725 NC
5
2

1

24, 2017) (holding that denial of receipt of an arbitration agreement and opt-out form,

2

without more, is insufficient to rebut the presumption of receipt)). To hold otherwise

3

would require the Court to weigh the evidence. This the Court may not do. Thus, United

4

of Omaha’s motion for summary judgment is DENIED.

5

IV. CONCLUSION

6

United of Omaha’s motion for summary judgment as to the First Amended

7

Complaint is DENIED. The Court reminds the parties that it has scheduled a case

8

management conference for January 31, 2018, at 10:00 a.m., in Courtroom 7, in the San

9

Jose Courthouse. A joint case management statement must be filed by January 24, 2018.

10

United States District Court
Northern District of California

11

IT IS SO ORDERED.

12
13

Dated: January 10, 2018

14

_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

15
16
17
18
19
20
21
22
23
24
25
26
27
28
Case No. 17-cv-02725 NC

6