Lee v. Sun Life Assurance Company of Canada

Filing 52

OPINION AND ORDER. Viewing defendant's decision with a heightened level of skepticism, I agree with Magistrate Judge Stewart's conclusion that defendant abused its discretion by: (1) concluding that Mr. Lee's death was "not accidental" without providing any explanation; and (2) improperly ignoring substantial evidence in the record indicating that the train trestle was "open to the public" under Oregon law. Accordingly, I ADOPT Magistrate Judge Stewart& #039;s Findings and Recommendation in its entirety. I DENY defendant's motion for summary judgment (doc. 19), and GRANT plaintiff's cross-motion for summary judgment (doc.25). IT IS SO ORDERED. Signed on 12/23/09 by Judge James A. Redden. (pvh)

UNITED STATES D I S l R I C T C O U R T D I S l R I C T OF O R E G O N

SUSAN E. LEE, Plaintiff,

C V 08-140-ST

OPINION A N D O R D E R

v.

S U N LIFE A S S U R A N C E C O M P A N Y OF CANADA, Defendant.

R E D D E N , Judge: O n June 9, 2009, Magistrate Judge Janice Stewart filed h e r Findings and R e c o m m e n d a t i o n ( d o c . 3 2 ) t h a t t h e c o u r t d e n y d e f e n d a n t ' s m o t i o n f o r s w n m a r y j u d g m e n t (doc. 19), grant p l a i n t i f f s cross-motion for summary j u d g m e n t (doc. 25), and enter j u d g m e n t in favor o f plaintiff. The m a t t e r is n o w before m e pursuant t o 28 U.S.C. § 636(b)(1)(B) and Federal Rules o f Civil P r o c e d u r e 7 2 ( b ) a n d 5 4 ( d ) ( 2 ) ( D ) . T h e d i s t r i c t c o u r t i s n o t b o u n d b y t h e r e c o m m e n d a t i o n s

PAGE 1 - OPINION A N D O R D E R

of the magistrate judge, and " m a y accept, reject, o r modify the recommended decision, receive further evidence, o r r e c o m m i t t h e m a t t e r t o t h e m a g i s t r a t e j u d g e w i t h i n s t r u c t i o n s . " 28 U.S.C. § 636(b)(1); Fed. R Civ. P. 72(b). When either party timely objects to any portion o f t h e m a g i s t r a t e ' s F i n d i n g s a n d R e c o m m e n d a t i o n , t h e d i s t r i c t c o u r t m u s t c o n d u c t a de n o v o r e v i e w o f those portions o f the magistrate's report. 28 U.S.C. § 636(b)(lXC); Fed. R. Civ. P. n e b ) ; McDonnell Douglas Com. v. Commodore Bus. Machines, 656 F.2d 1 3 0 9 , 1 3 1 3 (9th Cir. 1981), cert. denied, 455 U.S. 920 (1982). The district court is not, however, required to review the factual and legal conclusions to which the parties do not object. Thomas v. A m , 4 7 4 U.S. 140, 149 (1985); United States v. Reyna- Tapi§, 328 F.3d 1114, 1121 (9th Cir. 2003). Defendant timely filed objections to Magistrate Judge Stewart's findings that: (1) d e f e n d a n t ' s d e n i a l o f p l a i n t i f f ' s a c c i d e n t a l d e a t h a n d d i s m e m b e r m e n t ( " A D & D " ) c l a i m s h o u l d be r e v i e w e d w i t h a " h i g h l e v e l o f s k e p t i c i s m " b e c a u s e t h e c l a i m d e t e n n i n a t i o n w a s a f f e c t e d b y a " s i g n i f i c a n t " c o n f l i c t o f i n t e r e s t ; a n d (2) d e f e n d a n t ' s d e t e n n i n a t i o n t h a t p l a i n t i f f ' s c l a i m w a s b a r r e d u n d e r the A D & D p l a n ' s c r i m i n a l a c t e x c l u s i o n w a s a n a b u s e o f discretion. I h a v e , therefore,
gi~en t h o s e

p o r t i o n s o f t h e F i n d i n g s a n d R e c o m m e n d a t i o n a d e n o v o review. I

agree w i t h Magistrate J u d g e S t e w a r t ' s analysis a n d conclusions. Magistrate J u d g e S t e w a r t ' s finding t h a t d e f e n d a n t o p e r a t e d u n d e r a " s i g n i f i c a n t " c o n f l i c t o f interest in denying p l a i n t i f f s AD&D claim was based o n defendant's: (1) failure to proffer e v i d e n c e t h a t its s t r u c t u r a l c o n f l i c t o f i n t e r e s t d i d n o t i n f l u e n c e the d e c i s i o n - m a k i n g p r o c e s s ; (2) f a i l u r e t o a d e q u a t e l y i n v e s t i g a t e p l a i n t i f f ' s c l a i m ; a n d ( 3 ) i m p r o p e r e m p h a s i s o n e v i d e n c e favorable to the denial o f benefits, while ignoring evidence favorable to a grant o f benefits. With respect to defendant's failure to adequately investigate p l a i n t i f f s claim, Magistrate Judge

PAGE 2 - OPINION AND ORDER

Stewart found t h a t defendant failed t o c o n d u c t " a n y independent investigation o f the circumstances surrounding Mr. L e e ' s death," a n d n e v e r sought o r obtained: any e v i d e n c e c o n c e r n i n g t h e reasoning b e h i n d t h e d e s i g n o f t h e trestle, including i t s p e d e s t r i a n - f r i e n d l y f e a t u r e s s u c h as a w a l k w a y , h a n d r a i l s , a n d a s a f e t y i s l a n d ; . . . any actuarial analysis r e g a r d i n g w h e t h e r it w a s h i g h l y likely t h a t c r o s s i n g t h e trestle w o u l d r e s u l t i n s e r i o u s i n j u r y o r death; . . . any e v i d e n c e r e g a r d i n g w h e n the " N o T r e s p a s s i n g " sign(s) were i n s t a l l e d a n d t h e r e a s o n i n g b e h i n d t h e i r d e s i g n a n d placement; . . . a n y further evidence concerning t h e n u m b e r o f pedestrians w h o c r o s s t h e t r e s t l e o n a d a i l y basis; . . . any e v i d e n c e t h a t t h e p o l i c e h a d e v e r c i t e d o r p r o s e c u t e d p e d e s t r i a n s with c r i m i n a l t r e s p a s s as a r e s u l t o f w a l k i n g o n o r a c r o s s t h e trestle; a n d . . . a n y s t a t e m e n t f r o m representative(s) o f t h e r a i l r o a d c o m p a n i e s w h o s e n a m e ( s ) a r e o n t h e " N o T r e s p a s s i n g " sign(s). Findings a n d Recommendation, a t 14. Magistrate Judge Stewart also found t h a t d e f e n d a n t ' s first explanation for its denial o f b e n e f i t s - t h a t Mr. L e e ' s death was n o t d u e t o "accidental m e a n s " - " " i g n o r e s a n d is contrary to the only relevant evidence i n t h e record." Id. a t 17. B a l a n c i n g all o f t h e s e c a s e - s p e c i f i c factors, a s t h e N i n t h C i r c u i t h a s instructed, M a g i s t r a t e J u d g e Stewart properly concluded .that the record evidenced a "significant" conflict o f interest a n d therefore, d e f e n d a n t ' s s t a t e d b a s e s f o r its d e n i a l w e r e s u b j e c t t o e n h a n c e d skepticism. M o n t o u r v. Hartford L i f e & Accident Insurance, 2009 W L 3856933, a t *5-6 (9th Cir. Nov. 1 9 , 2 0 0 9 ) . I a m n o t persuaded t h a t d e f e n d a n t ' s ""new" evidence proves otherwise. That defendant has t a k e n s t e p s t o r e d u c e p o t e n t i a l b i a s a n d p r o m o t e a c c u r a c y i n i t s c l a i m s r e v i e w p r o c e s s d o e s n o t u n d e r m i n e M a g i s t r a t e J u d g e S t e w a r t ' s c o n c l u s i o n t h a t d e f e n d a n t ' s d e c i s i o n i n t h i s case w a s affected b y a s i g n i f i c a n t c o n f l i c t o f interest. D e f e n d a n t ' s " n e w " e v i d e n c e d o e s n o t h i n g t o r e b u t M a g i s t r a t e Judge' S t e w a r t ' s f i n d i n g s t h a t d e f e n d a n t f a i l e d t o a d e q u a t e l y i n v e s t i g a t e p l a i n t i f f ' s c l a i m , i m p r o p e r l y e m p h a s i z e d e v i d e n c e f a v o r a b l e to t h e d e n i a l o f b e n e f i t s , i g n o r e d e v i d e n c e favorable to a g r a n t o f b e n e f i t s , a n d p r o v i d e d a r e a s o n for d e n i a l t h a t w a s n o t s u p p o r t e d b y a n y

PAGE 3 - OPINION A N D O R D E R

evidence in the record. Weighing all o f these case-specific factors together, including d e f e n d a n t ' s structural c o n f l i c t o f i n t e r e s t , I agree w i t h M a g i s t r a t e J u d g e S t e w a r t t h a t d e f e n d a n t ' s denial o f benefits should be viewed with enhanced skepticism. V i e w i n g d e f e n d a n t ' s d e c i s i o n w i t h a h e i g h t e n e d l e v e l o f s k e p t i c i s m , I agree w i t h Magistrate Judge Stewart's conclusion that defendant abused its discretion by: (1) concluding that Mr. L e e ' s death was ' ' n o t accidental" without providing any explanation; and (2) improperly ignoring substantial evidence i n the record indicating that the train trestle was " o p e n to the public" under Oregon law. Accordingly, I ADOPT Magistrate Judge Stewart's Findings and Recommendation in its entirety. I DENY d e f e n d a n t ' s motion for swnmary j u d g m e n t (doc. 19), and GRANT plaintiff's cross-motion for swnmary j u d g m e n t (doc. 25). IT IS SO ORDERED. D A T E D this

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~day o f December, 2009.

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edden States D i s t r i c t J u d g e

P A G E 4 - OPINION A N D O R D E R