Masuda-Cleveland v Life Insurance Company of America

Filing 49

ORDER DENYING PLAINTIFF'S: (1) MOTION TO DETERMINE SCOPE OF ADMINISTRATIVE RECORD; AND (2) MOTION TO DETERMINE APPLICABLE STANDARD OF REVIEW re 33 Motion re 35 Motion. Signed by JUDGE LESLIE E. KOBAYASHI on 01/31/2017. (eps, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
MARNIE MASUDA-CLEVELAND,

)
)
Plaintiff,
)
)
vs.
)
)
LIFE INSURANCE COMPANY OF
)
NORTH AMERICA,
)
)
Defendant.
)
_____________________________ )

CIVIL 16-00057 LEK-RLP

ORDER DENYING PLAINTIFF’S: (1) MOTION TO
DETERMINE SCOPE OF ADMINISTRATIVE RECORD; AND
(2) MOTION TO DETERMINE APPLICABLE STANDARD OF REVIEW
Before the Court is Plaintiff Marnie Masuda-Cleveland’s
(“Plaintiff”) Motion to Determine Scope of Administrative Record
(“Administrative Motion”), filed on August 24, 2016.
33.]

[Dkt. no.

Defendant Life Insurance Co. of North America (“Defendant”)

filed its memorandum in opposition on September 30, 2016, and
Plaintiff filed her reply on October 17, 2016.
44.]

[Dkt. nos. 40,

Also before the Court is Plaintiff’s Motion to Determine

Applicable Standard of Review (“Standard of Review Motion”),
filed on September 9, 2016.

[Dkt. no. 35.]

Defendant filed a

memorandum in opposition on September 30, 2016.1
1

[Dkt. no. 38.]

Along with its opposition to both the Administrative
Motion and the Standard of Review Motion, Defendant filed a
Concise Statement of Facts (“CSOF”). [Dkt. nos. 39 (“Def.’s
Standard of Review Motion CSOF”), 41 (“Def.’s Administrative
Motion CSOF”).] Defendant also filed an ex parte motion for
leave to file the Declaration of Michael Dean James, Defendant’s
Operations Representative, as a separate document to support both
(continued...)

Both motions came on for hearing on November 7, 2016.

After

careful consideration of both motions, supporting and opposing
memoranda, and the arguments of counsel, the Administrative
Motion and the Standard of Review Motion are HEREBY DENIED for
the reasons set forth below.
BACKGROUND
Plaintiff’s Complaint, filed on February 9, 2016,
challenges Defendant’s denial of accidental death benefits after
the untimely passing of Plaintiff’s husband, Harlan Masuda
(“Masuda”).

[Dkt. no. 1.]

The Complaint states that:

Masuda

was driving towards Baldwin Beach Park in Pa`ia, Maui on
February 11, 2014; he stopped the car before the entrance, and
then proceeded forward, sideswiping Lifeguard Glenn Larson’s
(“Larson”) truck; Larson approached Masuda’s car and saw him
“laughing,” “spinning in his seat,” and “stepping on the gas and
revving his engine”; Masuda’s car reached a barrier, and he
continued to rev the engine until the barrier tipped over; and
“the truck took off across the field at a high rate of speed and
then collided into a coconut tree on the opposite side of the
field.”

[Complaint at ¶ 8a.-d.]

Plaintiff argues that Masuda

1

(...continued)
Defendant’s Standard of Review Motion CSOF and Defendant’s
Administrative Motion CSOF (“Motion for Leave”). [Filed under
seal 9/30/16 (dkt. no. 37).] On September 30, 2016, Defendant
filed the Declaration of Michael Dean James (“James Decl.”).
[Dkt. no. 42.] The Court granted the Motion for Leave on
October 17, 2016. [Dkt. no. 45.]
2

died as the result of “fatal head injuries” caused by a car
accident.

[Id. at ¶ 8e.]
Masuda worked for Hawaiian Electric Industries, Inc.

(“Hawaiian Electric”), and, pursuant to 29 U.S.C. § 1002(7),2 was
a participant in its Group Accident Plan (“the Plan”).
¶ 4.]

[Id. at

Plaintiff contends that she “is a beneficiary of the group

accidental death plan issued to her husband . . . that was
underwritten by [Defendant], pursuant to 29 U.S.C. [§] 1002(8).”3
Defendant administered the Plan under Group Accident

[Id.]

Policy No.: OK 820810 (“the Policy”).4

[Id. at ¶ 5.]

After

Masuda’s death, Plaintiff submitted a claim for accidental death
benefits.

[James Decl., Exh. G.]

Plaintiff’s claim was denied

on May 20, 2014 (“5/20/14 Denial”).

2

[Id., Exh. L.]

Plaintiff

29 U.S.C. § 1002(7) defines “participant” as
any employee or former employee of an employer, or
any member or former member of an employee
organization, who is or may become eligible to
receive a benefit of any type from an employee
benefit plan which covers employees of such
employer or members of such organization, or whose
beneficiaries may be eligible to receive any such
benefit.

3

29 U.S.C. § 1002(8) defines “beneficiary” as “a person
designated by a participant, or by the terms of an employee
benefit plan, who is or may become entitled to a benefit
thereunder.”
4

The Policy is attached to the James Declaration as
Exhibit A.
3

filed her first appeal on November 5, 2014 (“First Appeal”),5
which Defendant denied on December 18, 2014 (“12/18/14 Denial”).6
[Id., Exh. Q (First Appeal); id., Exh. S (12/18/14 Denial).]
Plaintiff filed a second appeal on June 15, 2015, and submitted
an additional document on June 16, 2015 (collectively “Second
Appeal”).

[Id., Exhs. U, V.]

Defendant denied the Second Appeal

on August 20, 2015 (“8/20/15 Denial”).7

[Id., Exh. AA.]

On August 24, 2015, Plaintiff requested a copy of all
documents upon which the 8/20/15 Denial was based (“8/24/15
Letter”), which Defendant provided on September 9, 2015 (“9/9/15
Letter”).

[Id., Exh. BB (8/24/15 Letter); id., Exh. CC (9/9/15

Letter).]

On November 5, 2015, Plaintiff requested a review of

the 8/20/15 denial because she alleged that it “raised an

5

Plaintiff notified Defendant of her intention to appeal on
July, 20, 2014 (“7/20/14 Letter”), and she requested all
documents related to the 5/20/14 Denial. [Id., Exh. M.] Because
they needed more time to prepare the requested documents,
Defendant extended Plaintiff’s deadline for filing the appeal.
[Id., Exh. N.] On August 4, 2014, Plaintiff’s counsel sent
Defendant a letter to inform it that, going forward, a new
attorney would be handling Plaintiff’s claim. [Id., Exh. O.]
6

On December 4, 2014, Defendant notified Plaintiff that it
needed additional time to reach a decision on the First Appeal.
[Id., Exh. R.]
7

On June 22, July 20, and August 5, 2015, Defendant
informed Plaintiff that it would need additional time to reach a
decision on the Second Appeal. [Id., Exh. W (“6/22/15 Letter”);
id., Exh. X (“7/20/15 Letter”); id., Exh. Y (“8/5/15 Letter”).]
4

entirely new and different theory” (“11/5/15 Letter”).8

[Mem. in

Supp. of Administrative Motion, Decl. of Jeffrey C. Metzger
(“Metzger Administrative Motion Decl.”), Exh. A.]
the 11/5/15 Letter were letters from:

Attached to

(1) Lindsey Harle, M.D.

(“Dr. Harle Letter”), dated October 20, 2015; [id., Exh.
B;] (2) Peter W. Rossi, M.D. (“Dr. Rossi Letter”), dated
September 25, 2015; [id., Exh. C;] and (3) Joana H. Magno, M.D.
(“Dr. Magno Letter,” and collectively “Doctors’ Letters”) [id.,
Exh. D].9

On November 18, 2015, Defendant informed Plaintiff

that she had exhausted her appeals.

[James Decl., Exh. DD.]

On

November 30, 2015, Plaintiff again requested a review of the
8/20/15 Denial, and included the Doctors’ Letters.
Administrative Motion Decl., Exh. E.]

[Metzger

On December 21, 2015,

Defendant wrote Plaintiff and reminded her that her appeals had
been exhausted, and denied adding a new theory of denial.
Decl., Exh. EE.]

[James

The instant suit followed.

Plaintiff brings her claims pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), as amended, 29
U.S.C. § 1132(a)(1).

[Complaint at ¶ 1.]

Plaintiff argues that

she was denied a full and fair review of her benefits claim.
[Id. at ¶ 30.]

Plaintiff seeks attorneys’ fees and costs, [id.

8

Plaintiff argues that the 8/20/15 Review was based on a
“paper review” of the record by Dr. Scott Denton (“Denton
Report”). [11/5/15 Letter at 1.]
9

The Dr. Magno Letter is not dated.
5

at ¶ 39,] and equitable relief in the form of:

the addition of

the Doctors’ Letters to the administrative record; an order
enjoining Defendant from denying Plaintiff’s claim; and an order
removing Defendant as the “plan and/or claims administrator” for
Plaintiff’s claim [id. at ¶ 40].

Plaintiff also seeks:

accidental death benefits under the Plan, plus interest; a
declaration that Masuda’s death was accidental; a declaration
that Defendant violated the Plan’s terms; and any other relief
the Court “deems just and proper.”

[Id., Prayer for Relief ¶¶ 1-

3, 7.10]
I.

Administrative Motion
The Ninth Circuit has stated:
When a plan administrator has failed to
follow a procedural requirement of ERISA, the
court may have to consider evidence outside the
administrative record. . . . We follow the Sixth
Circuit in holding that, when an administrator has
engaged in a procedural irregularity that has
affected the administrative review, the district
court should “reconsider [the denial of benefits]
after [the plan participant] has been given the
opportunity to submit additional evidence.”
VanderKlok v. Provident Life & Accident Ins. Co.,
956 F.2d 610, 617 (6th Cir. 1992).
. . . .
Even when procedural irregularities are
smaller, though, and abuse of discretion review
applies, the court may take additional evidence
when the irregularities have prevented full
development of the administrative record. In that

10

Paragraphs 4 to 6 of the Prayer for Relief duplicate
previous requests.
6

way the court may, in essence, recreate what the
administrative record would have been had the
procedure been correct.
Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 972-73 (9th
Cir. 2006) (some alterations in Abatie).11

Plaintiff argues that

the Court should consider the Doctors’ Letters as part of the
administrative record because, by including a “new reason” in the
8/20/15 Denial and failing to give Plaintiff copy of the Denton
Report, Plaintiff was denied a full and fair review.
Supp. of Administrative Motion at 5, 9.]

[Mem. in

The Court will address

each of these arguments in turn.
A.

The “New Reason” in the 8/20/15 Denial
Plaintiff argues:
Defendant’s initial determination denying
Plaintiff’s claim, and its determination rejecting
Plaintiff’s first appeal, both asserted that
a) Masuda died from the injuries suffered in the
accident, and b) Masuda suffered some medical
event, that . . . the second denial speculated was
either a heart attack or a seizure, that was the
etiology or cause of the crash. Plaintiff is only
required to appeal the grounds upon which the
claim is denied. As there was no dispute,
therefore, that Masuda’s death was from the
injuries in the accident, there was nothing for
Plaintiff to appeal on that issue.
Defendant’s flip-flop in the “final denial”
to claiming that Masuda’s death did not occur from
his head injuries, but was from a “cardiac event”
(and added that it might have been an arrhythmia
that Masuda suffered if not a heart attack) is
precisely the kind of last-minute excuse to reject

11

Abatie was abrogated on other grounds by Metro Life
Insurance Co. v. Glenn, 554 U.S. 105 (2008).
7

a claim to which the Abatie court wrote of.
[Mem. in Supp. of Administrative Motion at 8-9.]
The Ninth Circuit has found a denial of a fair review
in violation of ERISA where the reasoning for the decision is
“shifting,” “inconsistent,” or “illogical.”

Salomaa v. Honda

Long Term Disability Plan, 642 F.3d 666, 678 (9th Cir. 2011).

In

Salomaa, the plaintiff – a car company employee with an
impeccable employment record – was diagnosed with chronic fatigue
syndrome.

Id. at 668-69.

The plaintiff applied for disability

benefits, appealed the defendant’s determination, and filed a
suit in federal district court, but he was denied each time.
at 670-73.

Id.

The Ninth Circuit considered the standard of review

the district court should have applied, id. at 673-76, as well as
the “reasonableness” of the denial of the plaintiff’s claim, id.
at 676-80.

In examining the plan administrator’s reasons for

denial, the Ninth Circuit observed:
The plan’s reasons for denial were shifting
and inconsistent as well as illogical. The
initial denial says that there were “no specific
serial descriptions of appearance or physical
signs consistent with chronic fatigue syndrome,”
but the final denial omits any mention of
physicians’ observations, because the physicians’
letters to CIGNA are replete with dramatic
descriptions of their observations of Salomaa’s
appearance and physical condition. About the only
thing that stays the same from the initial denial
to the final denials is the irrelevant emphasis on
absence of objective evidence such as blood tests.
Id. at 678.

8

While Plaintiff argues that the same thing happened
here – namely, that “Defendant . . . added a new reason and basis
for denial in its rejection of Plaintiff’s second appeal” [Mem.
in Supp. of Administrative Motion at 9] – the record says
otherwise.

The Policy states that,
We agree to pay benefits for loss from bodily
injuries:
a) caused by accident which happens while an
insured is covered by this policy; and
b) which, directly and from no other causes,
resulted in a covered loss. . . .
We will not pay benefits if the loss was caused
by:
a) sickness, disease, or bodily infirmity; or
b) any of the Exclusions listed in the
policy.

[The Policy at 4.12]
The 5/20/14 Denial explains:
Documentation received and reviewed indicates that
Harlan Masuda passed away on 2/11/2014 after
sustaining blunt force injuries in a single
vehicle crash. Information on file supports that
Mr. Masuda suffered a medical event while driving,
which resulted in his crash. This is supported by
not only the Coroner, but multiple witnesses, who
stated that there was no breaking or avoidance
maneuvers as Mr. Masuda sped toward the coconut
tree. In his review of the case file, in-house

12

The entirety of the James Declaration is consecutively
paginated using very large numbers. For the sake of convenience
and clarity, the Court will reference the page numbers assigned
by this district court’s electronic case filing system.
9

Medical Director, Dr. Hall, stated that “with the
history of the bizarre, immediate events prior to
the crash, the past medical history of
prediabetes, hypertension, and dyslipidemia and
the autopsy findings of severe atherosclerotic
narrowing of the . . . coronary artery it is
concluded . . . that Mr. Masuda had an acute
medical event that was the etiology of his
[crash].”
[5/20/14 Denial at 4 (alterations in original).]

The 12/18/14

Denial reached a similar conclusion to the 5/20/14 Denial:
In this case, Mr. Masuda was witnessed by a
lifeguard, presumably with some emergency medical
training, to be experiencing something similar to
seizure (and if not a seizure, then some form of
medical event) immediately before the crash. A
medical event is the most likely explanation for
Mr. Masuda hitting the lifeguard’s truck, not
responding verbally when confronted by the
lifeguard, revving his engine while his vehicle
was against the barrier, and driving several
hundred feet with no avoidance maneuvers. This is
supported by the review by Dr. Hall that some form
of medical event was likely to a reasonable degree
of medical certainty and the pathology report that
concludes the insured had atherosclerotic
cardiovascular disease and that some acute medical
event, such as a myocardial infarction or seizure,
likely occurred to cause the crash. Therefore, it
would be reasonable to conclude under this policy
language that there is no coverage for his death
because an illness, disease or bodily infirmity
directly caused the fatal accidental injury.
[12/18/14 Denial at 4.]
Finally, the 8/20/15 Denial considered the Doctors’
Letters submitted by Plaintiff, as well as the Denton Report.
[8/20/15 Denial at 5-8.]

The 8/20/15 Denial reasoned:

A review of the information in the file shows that
Harlan Y. E. Masuda had a pre-existing medical
condition of hypertension for which he received
10

treatment through prescribed anti-hypertensive
medication. On 02/11/2014[,] Mr. Masuda drove his
vehicle slowly into another vehicle that had been
parked. A reliable witness stated that while he
tried to converse with Mr. Masuda he was acting
unusual immediately after this crash, reporting
delirious actions and stated he appeared
intoxicated. Without responding to the witness,
Mr. Masuda depressed the gas pedal and accelerated
into a concrete barrier, which temporarily stopped
his vehicle. However, Mr. Masuda continued to
press the gas pedal of his vehicle and caused it
to break free from the barrier. Mr. Masuda
continued depressing the accelerator across a
field until he struck a coconut tree. On autopsy
it was noted that Mr. Masuda had suffered
lacerations, scrapes, and bruises to his head,
neck, upper chest, arms and right foot, as well as
fractures of the facial and nasal bones and jaw.
Dr. Denton stated that the autopsy report showed
Mr. Masuda had “. . . no rib, skull, basal skull,
or upper cervical spine fractures, and no injuries
or hemorrhages of the brain, lungs, aorta, heart,
liver, or internal hemorrhages.” Dr. Denton,
after reviewing the information in the file,
concluded that “. . . Mr. Masuda suffering sudden
cardiac arrhythmia from myocardial ischemia, or a
heart attack, due to his severe coronary artery
atherosclerosis while in his vehicle. Therefore,
the main underlying cause of his death and the
cause of the crash are both best attributed to a
sudden cardiac event.”
[Id. at 8.]

Plaintiff asserts that the 8/20/15 Denial states,

for the first time, that “Masuda’s death did not occur from his
head injuries.”

[Mem. in Supp. of Administrative Motion at 9.]

To the contrary, the 5/20/14 Denial, 12/18/14 Denial, and 8/20/15
Denial all conclude that Masuda died as a result of a medical
event, likely having to do with his heart, and that it was that

11

medical event that caused the crash.13

The Court FINDS that the

8/20/15 Denial did not contain a “new reason.”
B.

Failure to Provide the Denton Report
Plaintiff also argues that the administrative record

should be expanded to include the Doctors’ Letters because
Defendant did not provide her with the Denton Report prior to the
8/20/15 Denial.

To support her position, Plaintiff cites Salomaa

and Yancy v. United of Omaha Life Insurance Co., Case No. CV 149803 PSG (PJWx), 2015 WL 5132086 (C.D. Cal. Aug. 25, 2015).
Pursuant to the regulations governing ERISA:
Except as provided in paragraphs (h)(3) and (h)(4)
of this section,[14] the claims procedures of a
plan will not be deemed to provide a claimant with
a reasonable opportunity for a full and fair
review of a claim and adverse benefit
determination unless the claims procedures –
. . . .

13

Other district courts in the Ninth Circuit have stated:
Cases that have found an abuse of discretion on
the basis of a failure to comply with this
dialogue requirement have generally involved
situations where the plan administrator knew of
specific missing information but failed to notify
the claimant of the need for the information, or
where the administrator gave illogical or
inconsistent grounds for the denial.

Kludka v. Qwest Disability Plan, No. CV-08-01806-PHX-DGC, 2012 WL
1681983, at *5 (D. Ariz. May 14, 2012).
14

Section 2560.503-1(h)(3) concerns “[g]roup health plans,”
and § 2560.503-1(h)(4) covers “[p]lans providing disability
benefits.”
12

(iii) Provide that a claimant shall be
provided, upon request and free of charge,
reasonable access to, and copies of, all
documents, records, and other information
relevant to the claimant’s claim for
benefits. Whether a document, record, or
other information is relevant to a claim for
benefits shall be determined by reference to
paragraph (m)(8)[15] of this section[.]
29 C.F.R. § 2560.503-1(h)(2)(iii).

In Salomaa, the first denial

of the plaintiff’s claim was based, in part, on “one physician
[who] had read [the plaintiff’s] medical file and written his
opinion.”

642 F.3d at 669.

The first denial “invited

supplementation,” but the defendant in Salomaa was still
unconvinced after the plaintiff submitted additional evidence,
and issued a “final denial.”
plaintiff filed an appeal.

Id. at 670.

Thereafter, the

In addition, the plaintiff’s

“attorney made a written request for [the plaintiff’s] entire
file, including correspondence with anyone the plan consulted
with regard to the claim,” but “[t]he plan did not respond to
[the plaintiff’s] attorney’s letter.”

Id. at 671.

In its letter

denying the appeal, the defendant “quoted from a file review it
had obtained from its own consulting physician,” but “[t]his
consulting physician’s report, like the previous one, was not

15

Section 2560.503-1(m)(8)(i) defines “relevant” as, in
part, “[a] document, record, or other information” that “[w]as
relied upon in making the benefit determination[.]” It is clear
to the Court that, if requested, the Denton Report would qualify
as “relevant.”
13

provided to [the plaintiff’s] lawyer.”

Id. at 672-73.

The Ninth

Circuit held that, because “the plan failed to furnish [the
physicians’] letters to [the plaintiff] or his lawyer,” “the plan
denied him the statutory obligation of a far review procedure.”16
Id. at 680.
In Yancy, the plaintiff submitted a claim for long term
disability benefits under an ERISA-governed plan, and the
defendant insurance company had two nurses review the plaintiff’s
medical records.

2015 WL 5132086, at *1.

After her claim was

denied, the plaintiff requested a copy of her file and filed a
timely appeal.

Id.

Along with her appeal, the plaintiff

submitted a neuropsychological report, and, during the course of
the appeal, she had an Independent Medical Examination (“IME”) by
a different neuropsychologist.

Id. at *2.

The plaintiff

requested the IME report twice, but the defendant failed to
provide her with a copy and denied her appeal.

Id.

The district

court noted that, in responding to the plaintiff’s assertion that
the court in that cause should allow the plaintiff to augment the
administrative record, the defendant in Yancy tried to
“distinguish[ ] between documents generated and considered when

16

Plaintiff argues that Salomaa “does not state that
plaintiff Salomaa or his lawyer asked for the review report
before the final determination was made, nor did the court
require such before allowing a claimant the right to respond to
it.” [Reply at 9.] This is simply not true. See Salomaa, 642
F.3d at 671.
14

making the initial claim determination and those generated and
considered when making the final appellate determination.”
at *3.

Id.

The district court, however, cited Salomaa in concluding

that “failure to provide a claimant with a physician’s report
generated during the administrative appeal process violates
ERISA’s ‘full and fair review’ disclosure requirements,” and
rejected the defendant’s distinction.

Id. at *4.17

Case law and the relevant regulations state that a plan
must provide a claimant with copies of his or her record “upon
request.”

Here, Plaintiff does not claim that she requested a

copy of the Denton Report, or that she even made a general

17

In its opposition, Defendant argues that the relevant
regulations “[d]o not require that a plan administrator provide
[a] claimant copies of medical reviews as part of the appeal
process prior to issuing a final decision on appeal.” [Mem. in
Opp. to Administrative Motion at 13-14.] To support its
position, Defendant cites Montoya v. Reliance Standard Life
Insurance Co,, Case No. 14-cv-02740-WHO, 2015 WL 1056560 (N.D.
Cal. Mar. 20, 2015). Montoya relies on a Tenth Circuit Case,
Metzger v. UNUM Life Insurance Co. of America, 476 F.3d 1161
(10th Cir. 2007), and other out of circuit cases to support its
conclusion that “a claimant is not guaranteed the right to review
IMEs or peer review reports prior to the determination of the
administrative appeal.” 2015 WL 1056560, at *5 (internal
quotation marks omitted). Montoya also cites Ninth Circuit
district court cases that pre-date Salomaa. In Yancy, the
district court stated, “the Montoya court did not mention Salomaa
in its analysis and, as the plaintiff failed to raise the case in
its briefing, the court may have been unaware of the conflicting
Ninth Circuit authority when issuing its decision.” 2015 WL
5132086, at *4 (citation omitted). Because the district court in
Montoya did not consider binding Ninth Circuit precedent, the
district court in Yancy stated that the defendant could not rely
on Montoya “to overcome the ruling in Salomaa.” Id. (citation
omitted). This Court agrees, and will therefore not address
Defendant’s argument regarding Montoya.
15

request for information relied upon during the Second Appeal.18
The Court therefore FINDS that there was no procedural
irregularity and CONCLUDES that Plaintiff is not entitled to
submit additional evidence to be considered as part of the
administrative record.19

The Administrative Motion is therefore

DENIED.
II.

Standard of Review Motion
The Standard of Review Motion argues that the Court

should review Defendant’s decision de novo.

Specifically,

Plaintiff asserts that the Plan does not merit abuse of
discretion review because:

(1) it does not expressly grant

discretion to Defendant to make benefit determinations as
required by ERISA; and (2) discretionary clauses violate Hawai`i
law.

[Mem. in Supp. of Standard of Review Motion at 5, 9.]

The

Court will address each of these arguments in turn.

18

At the hearing, Plaintiff’s counsel represented that he
did not request the Denton Report because he did not know that it
existed. However, both the 7/20/15 Letter and the 8/5/15 Letter
explained that Defendant was waiting on a review by an
independent forensic pathologist.
19

The Court notes that, in the 7/20/14 Letter, Plaintiff’s
former attorney stated, “[p]lease consider our document request
ongoing; and we demand production of any documents meeting the
description set forth above which are received, compiled, or
created during the course of further administration of this
claim.” [7/20/14 Letter at 4.] Neither party addressed the
language in the 7/20/14 Letter. As such, any argument regarding
the effect of the 7/20/14 Letter is not before the Court.
16

A.

Grant of Discretionary Authority
The Ninth Circuit has held that, pursuant to Firestone

Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), courts must
employ “abuse of discretion review whenever an ERISA plan grants
discretion to the plan administrator, but a review informed by
the nature, extent, and effect on the decision-making process of
any conflict of interest that may appear in the record.”
458 F.3d at 967.

Abatie,

Here, according to Plaintiff, while the Policy

contains the requisite language delegating responsibility to
Defendant, the Plan itself does not.
of Review Motion at 7.]

[Mem. in Supp. of Standard

Plaintiff argues that having this

language in the Policy is not sufficient, as “other documents do
not constitute the Plan.”

[Id. at 7-8 (citing CIGNA Corp. v.

Amara, 563 U.S. 421, 131 S. Ct. 1866 (2011)).]

Moreover, “[t]he

Plan states only that Defendant . . . is the provider of the
subject accidental death and dismemberment benefits.

It never

refers to Defendant as a fiduciary, never grants it any fiduciary
responsibilities, and nowhere in the Plan does it delegate any
discretion with regard to claims brought under such policies.”
[Id. at 8.]
It is undisputed that both the Plan and the Policy are
governed by ERISA.
In the Ninth Circuit, an ERISA plan may be
comprised of multiple documents. Gunn v. Reliance
Standard Life Ins. Co., 399 Fed. Appx. 147, 149
(9th Cir. 2010). Moreover, there is no
17

requirement that the documents comprising the Plan
be labeled as such. Horn v. Berdon, Inc. Defined
Ben. Pension Plan, 938 F.2d 125, 127 (9th Cir.
1991). The Supreme Court has made clear that
[Summary Plan Descriptions (“SPD”)] are summaries
about the Plan and thus do not constitute the
Plan’s terms. CIGNA Corp. v. Amara, 563 U.S. 421,
131 S. Ct. 1866, 1877-78, 179 L. Ed. 2d 843
(2011). Extraneous documents, such as SPDs, are
not themselves part of the Plan. Oldoerp v. Wells
Fargo & Co. Long Term Disability Plan, 500 Fed.
Appx. 575, 577 (9th Cir. 2012). Notwithstanding
Amara, courts have found that SPDs and other
documents may constitute Plan documents where they
are incorporated by reference. See Gonzales v.
Unum Life Ins. Co. of Am., 861 F. Supp. 2d 1099,
1107 (S.D. Cal 2012) (stating that a Plan may
incorporate other formal or informal documents)
. . . .
Noah U. v. Tribune Co. Med. Plan, 138 F. Supp. 3d 1134, 1143–44
(C.D. Cal. 2015).
document.

Here, the SPD and the Plan are the same

See Mem. in Supp. of Standard of Review Motion, Decl.

of Jeffrey C. Metzger (“Metzger Standard of Review Motion
Decl.”), Exh. 5 (Summary of Hawaiian Electric Welfare Benefits
Plan) at 2 (“Part I is the summary plan description . . . and
plan document for [Hawaiian Electric] Welfare Benefits Plan
(“WBP”)”); see also id. at 4 (describing the document as the
“Summary Plan Description and Plan Document”).

Further, the Plan

states that, “[t]he WBP is an unfunded plan that provides insured
benefits and uninsured employee assistance benefits through the
purchase of group contracts.

All benefits under this plan are

provided to eligible participants, spouses and dependents from
the issuers of these group contracts.”

18

[Id. at 4.]

More

specifically, “[b]enefits are provided through contacts with
insurance companies, [Health Maintenance Organizations (“HMOs”)],
and other benefit providers.”

[Id.]

Defendant is named as the

provider for “Accidental Death and Dismemberment Insurance,” and
the Plan references the Policy number – OK 820810.

[Id. at 28.]

Finally, under “Claims Procedures” the Plan states:
The Benefits of the WBP are not provided directly
by the WBP but through contracts with insurance
companies . . . , HMOs, and other service
providers. Accordingly, claims for Benefits must
be made to the insurance company, HMO or other
service provider that provides the Benefit . . . .
For information on how to make claims for
benefits, please refer to the claim procedures of
your insurance company, HMO, or other service
provider.
[Id. at 30.]

Thus, the Plan references the Policy, and states

that the procedures for making a claim under the Policy will be
provided by Defendant.
The Policy contains explicit language regarding
delegation:
For plans subject to [ERISA], the Plan
Administrator of the Employer’s employee welfare
benefit plan (the Plan) has appointed the
Insurance Company as the Plan fiduciary under
federal law for the review of claims for benefits
provided by this Policy and for deciding appeals
of denied claims. In this role the Insurance
Company shall have the authority, in its
discretion, to interpret the terms of the Plan
documents, to decide questions of eligibility for
coverage or benefits under the Plan, and to make
any related findings of fact. All decisions made
by the Insurance Company in this capacity shall be
final and binding on Participants and
Beneficiaries of The Plan to the full extend
19

permitted by law.
[The Policy at 7.]

Accordingly, the Policy states that Defendant

is the “Plan fiduciary,” grants Defendant fiduciary
responsibilities, and delegates discretion to Defendant so that
it may fulfill its obligations.

See Gonzales, 861 F. Supp. 2d at

1109 (“On this record, [the defendant] has met its burden to show
that a plan document – the insurance policy – unambiguously
delegates the discretion to determine whether an employee is
eligible for . . . benefits.” (citations omitted)).

The Court

CONCLUDES that the Plan properly grants discretion to Defendant
to make benefit determinations.
B.

Discretionary Clauses and Hawai`i Law
Plaintiff argues that the Court should adopt the

opinion of a 2004 letter written by the then Hawai`i Insurance
Commissioner (“2004 Insurance Letter”), which interpreted Haw.
Rev. Stat. § 431:13-102 to bar discretionary clauses in the
insurance business.20

[Mem. in Supp. of Standard of Review

Motion at 9; Metzger Standard of Review Motion Decl., Exh. 6
(2004 Insurance Letter).]

In Daic v. Metropolitan Life Insurance

Co., this district court explained that “[t]he [p]laintiff’s

20

Haw. Rev. Stat. § 431:13-102 states that, “[n]o person
shall engage in this State in any trade practice which is defined
in this article as, or determined pursuant to section 431:13-106
to be, an unfair method of competition or an unfair or deceptive
act or practice in the business of insurance.” Section 431:13106 explains the hearings process that the Insurance Commissioner
may utilize when necessary.
20

final argument is that the de novo standard should apply because
the ‘discretionary clause’ . . . violates Hawaii law.”

458 F.

Supp. 2d 1167, 1174 (D. Hawai`i 2006), aff’d sub nom, Daic v.
Haw. Pac. Health Grp. Plan for Emps. of Haw. Pac. Health, 291 F.
App’x 19 (9th Cir. 2008).

This district court reasoned, “[t]here

is no indication that [the 2004 Insurance Letter], or its
contents, was passed as an administrative rule or that [the
defendant’s] ability to act as an insurer in the State of Hawaii
was conditioned on compliance with [the 2004 Insurance Letter]
itself.”

Moreover,
Even if the [p]laintiff is correct that the
[Hawai`i Pacific Health (“HPH”)] benefit plan
language conferring discretion on [the defendant]
violates Hawaii law, this court cannot strike the
language from the plan. [Haw. Rev. Stat.]
§ 431:13-107 states that “[a]ll remedies,
penalties and proceedings set forth in this
article are to be invoked solely and exclusively
by the commissioner.” In other words, there is no
private cause of action for a violation of [Haw.
Rev. Stat.] § 431:13-102. For the court to apply
the de novo standard of review, the court would
have to declare that the plan language violates
[Haw. Rev. Stat.] § 431:13-102. Had the
[p]laintiff brought a declaratory judgment action
to achieve this result, the [p]laintiff’s
complaint would have been dismissed pursuant to
the plain language [Haw. Rev. Stat.] § 431:13-107.
The court sees no reason to allow the [p]laintiff
to circumvent [Haw. Rev. Stat.] § 431:13-107
through an appeal from [the defendant’s] denial of
benefits. . . . Although the Insurance
Commissioner appears to believe that [the
defendant’s] conduct was unfair and deceptive,
neither the [2004 Insurance Letter] nor [Haw. Rev.
Stat.] § 431:13-102 allows the Plaintiff to
invalidate the unlawful policy language. The
abuse of discretion standard applies.
21

Id. (some alterations in Daic) (footnote omitted).21

Plaintiff’s

argument regarding the lawfulness of discretionary clauses must
be rejected.22

Because the Plan properly delegates discretionary

21

In Hawai`i Management Alliance Ass’n v. Schmidt, decided
the same year as Daic, this district court also considered the
2004 Insurance Letter, and noted that,
[the plaintiff] alleges that [the 2004 Insurance
Letter] is an invalid rule since it was not
properly processed under the [Hawai`i
Administrative Procedure Act]. The [defendant,
the Insurance Commissioner for the State of
Hawai`i (“Commissioner”)], on the other hand,
maintains that [the 2004 Insurance Letter] is
merely an expansion of the Commissioner’s opinion
as to the proper interpretation of [Haw. Rev.
Stat.] § 431:13-102. Thus, both parties
effectively agree that [the 2004 Insurance Letter]
is simply an opinion and has no force of law.
Civil No. 07-00593 ACK-KSC, 2008 WL 4107988, at *5 (D. Hawai`i
Sept. 5, 2008). In Schmidt, this district court also noted that
the Commissioner had, on two occasions, tried unsuccessfully to
get the Hawai`i state legislature to pass a bill outlawing
discretionary clauses. Id. at *6. This district court concluded
that, “the Commissioner’s unsuccessful efforts to promote antidiscretionary clause bills further shows that [the 2004 Insurance
Letter] does not have the status of binding law.” Id. Given
that Daic and Schmidt were decided almost a decade ago, the Court
finds Plaintiff’s argument regarding the 2004 Insurance Letter
perplexing, to say the least.
22

Plaintiff appears to argue that her position on
discretionary clauses is not preempted by ERISA, [Mem. in Supp.
of Standard of Review Motion at 12,] while Defendant asserts that
it is [Mem. in Opp. to Standard of Review Motion at 22]. The
instant motion concerns only what level of review the Court
should apply to the review of the administrative record, and the
issue of preemption is not squarely before the court. Further,
this district court has already determined that the 2004
Insurance Letter does not have the force of law. For the purpose
of this Order, the Court does not need to address the parties’
(continued...)
22

authority to Defendant, and because discretionary clauses are not
barred by Hawai`i law, the Court CONCLUDES that the abuse of
discretion standard applies.

The Standard of Review Motion is

HEREBY DENIED.
CONCLUSION
On the basis of the foregoing, Plaintiff Marnie MasudaCleveland’s Motion to Determine Scope of Administrative Record,
filed on August 24, 2016, and Motion to Determine Applicable
Standard of Review, filed on September 9, 2016, are HEREBY
DENIED.
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, January 31, 2017.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

MARNIE MASUDA-CLEVELAND VS. LIFE INSURANCE COMPANY OF NORTH
AMERICA; CIVIL 16-00057 LEK-RLP; ORDER DENYING PLAINTIFF’S:
(1) MOTION TO DETERMINE SCOPE OF ADMINISTRATIVE RECORD; AND (2)
MOTION TO DETERMINE APPLICABLE STANDARD OF REVIEW

22

(...continued)
preemption arguments.
23