Napodano v. Ericsson Inc. Short Term Disability Plan
Filing
28
MEMORANDUM OPINION AND ORDER. The Court GRANTS Defendant's Motion for Summary Judgment (Dkt. # 12 ), and DENIES Plaintiff's Motion for Summary Judgment (Dkt. # 10 ). Signed by District Judge Amos L. Mazzant, III on 8/15/2019. (rpc, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
XIEN HUANG NAPODANO, Individually
and as Representative of the Estate of Caleb
Napodano
v.
ERICSSON INC. SHORT TERM
DISABILITY PLAN
§
§
§
§
§
§
§
§
Civil Action No. 4:18-cv-302
Judge Mazzant
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Parties’ respective motions for summary judgment
(Dkt. #10; Dkt. #12). After careful consideration, Defendant’s motion will be granted while
Plaintiff’s will be denied.
BACKGROUND
Plaintiff Caleb Napodano 1 worked at Ericsson Inc. (“Ericsson”) and was a member of its
various employee benefits plans, including its Long-Term Disability Plan and Short-Term
Disability Plan. Both plans provide employees with some or all of their income while they are on
leave from work due to a disability. On August 22, 2017, Napodano placed a signed letter on his
manager’s chair, instructing Ericsson’s Human Resources team to “consider today Tuesday
08/22/2017 [his] last working day.” (Dkt. #12, Exhibit 2 at p. 390). Napodano explained that he
was “resigning due to on-going illness issues with [his] health,” that the HR Team “w[ould] find
[his] work laptop below [his] letter of resignation, and [that his] work badge w[ould] be left
downstairs with the security officer.” (Dkt. #12, Exhibit 2 at p. 390). Ericsson construed
1
The Court appreciates that Caleb Napodano has passed, and that his estate has since substituted him as the formal
plaintiff in this case. For simplicity, the Court nevertheless refers to Caleb Napodano as the plaintiff.
Napodano’s letter as a resignation and “honored [his] request to process the resignation with the
effective date of 8/22.” (Dkt. #12, Exhibit 2 at p. 94).
A few days later, Napodano submitted a claim for long-term disability benefits to
Prudential Insurance Company of America (“Prudential”), the claims administrator for Ericsson’s
long-term disability plan. Prudential subsequently denied the claim. It noted that, to be eligible
for long-term disability benefits, claimants are required to seek short-term disability benefits first.
Prudential then referred Napodano’s claim for long-term disability benefits to Sedgwick Claims
Management Services, Inc. (“Sedgwick”), the claims administrator for Ericsson’s Short-Term
Disability Plan. Sedgwick agreed to process his claim as one for short-term disability benefits.
Sedgwick denied the claim about a week later, finding him ineligible for benefits under
Ericsson’s Short-Term Disability Plan.
The corresponding Summary Plan Description (the
“SPD”), which sets out the benefits the plan offers, provides that “coverage under the Plan ends
on the earliest of” four dates. These include:
1. The date the Plan terminates;
2. The date [the claimant] no longer meet[s] the definition of Eligible Employee;
3. The last day [the claimant is] in Active Employment; and
4. The date [the claimant is] no longer in Active Employment due to a Disability
that is not covered under the Plan.
(Dkt. #12, Exhibit 1 at p. 15). Ericsson argues that, once Napodano resigned, he was no longer an
“Eligible Employee.” (Dkt. #12, Exhibit 1 at p. 15). Napodano questions whether his letter can
constitute a formal resignation. He contends that, based on a conversation he had with Ericsson’s
Human Resources team, he believed that he needed to resign to be eligible for long-term disability
benefits. He also notes that, because the fourth possible termination date is triggered only if he is
“no longer in Active Employment due to a Disability . . . not covered under the Plan,” his coverage
2
did not end because he stopped working due to a disability that was covered (Dkt. #12, Exhibit 1
at p. 15) (emphasis added). Ericsson, on the other hand, stresses that coverage ends on the
“earliest” of the four dates and that, once Napodano’s employment status ended, the second
possible termination date went into effect since he was no longer an “Eligible Employee.” (Dkt.
#12, Exhibit 1 at p. 15).
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported claims
or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). Summary judgment is proper
under Rule 56(a) of the Federal Rules of Civil Procedure “if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). A dispute about a material fact is genuine when “the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby Inc.,
477 U.S. 242, 248 (1986). Substantive law identifies which facts are material. Id. The trial court
“must resolve all reasonable doubts in favor of the party opposing the motion for summary
judgment.” Casey Enters., Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981).
The party seeking summary judgment bears the initial burden of informing the court of its
motion and identifying “depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of
material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the burden
of proof on a claim or defense for which it is moving for summary judgment, it must come forward
with evidence that establishes “beyond peradventure all of the essential elements of the claim or
defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant
3
bears the burden of proof, the movant may discharge the burden by showing that there is an absence
of evidence to support the nonmovant’s case. Celotex, 477 U.S. at 325; Byers v. Dall. Morning
News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the movant has carried its burden, the
nonmovant must “respond to the motion for summary judgment by setting forth particular facts
indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at
248–49). A nonmovant must present affirmative evidence to defeat a properly supported motion
for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn
allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this
burden. Rather, the Court requires “significant probative evidence” from the nonmovant to dismiss
a request for summary judgment. In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 440
(5th Cir. 1982) (quoting Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 114 (5th Cir. 1978)). The
Court must consider all of the evidence but “refrain from making any credibility determinations or
weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.
2007).
DISCUSSION
ERISA requires the Court to review determinations made by employee benefit plans,
including employee disability plans. See 29 U.S.C. § 1132(a)(1)(B); Baker v. Metro. Life Ins. Co.,
364 F.3d 624, 629 (5th Cir.2004). If a plan document expressly confers on the plan administrator
the authority to determine benefits and construe the plan terms, that is sufficient to invoke an abuse
of discretion standard of review. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989); McCorkle v. Metro. Life Ins. Co., 757 F.3d 452, 457 (5th Cir.2014). Ericsson contends
that the abuse of discretion standard should apply here, and the Court agrees. As Ericsson explains,
this is because:
4
[I]n the SPD, Ericsson Inc., as the Plan Administrator, delegated Prudential, and
subsequently Sedgwick, with the responsibility to act on behalf [of] the Plan
Administrator. (Ericsson 0164). The SPD further provides that, with respect to
ERISA, Sedgwick will be the appropriate named fiduciary for purposes of denial
and/or review of denied claims under the STD Plan. (Ericsson 0165). In exercising
its fiduciary responsibility, Sedgwick, as claim administrator, was conferred with
the discretionary authority to determine eligibility for benefits; to determine the
amount of benefits for each claim received; to handle any appeal of a denied claim;
and to interpret and construe the terms of the STD Plan. (Ericsson 0165).
(Dkt. #12 at pp. 11–12). See Burell v. Prudential Ins. Co. of America, 820 F.3d 132, 137 (5th Cir.
2016) (“As the Plan expressly gives Prudential discretionary authority, the district court did not
err in reviewing the denial of Burell’s long-term disability-benefits claim under an abuse of
discretion standard.”) (footnote omitted).
The Court must therefore decide whether Ericsson abused its discretion in denying
Napodano’s request for short-term disability benefits. Courts in the Fifth Circuit apply a “twostep process” when reviewing a “plan fiduciary’s interpretation of its plan.” Ellis v. Liberty Life
Assurance Co. of Boston, 394 F.3d 262, 269 (5th Cir.2004). The court first determines whether
the administrator correctly interpreted the plan. If not, “the court must then determine whether the
administrator’s decision was an abuse of discretion.” Id.
Ericsson correctly interpreted the plan here. As stated, the SPD provides that “coverage
under the Plan ends on the earliest of” four dates:
1. The date the Plan terminates;
2. The date [the claimant] no longer meet[s] the definition of Eligible Employee;
3. The last day [the claimant is] in Active Employment; and
4. The date [the claimant is] no longer in Active Employment due to a Disability
that is not covered under the Plan.
(Dkt. #12, Exhibit 1 at p. 15).
5
Napodano argues that, under the fourth possible termination date, coverage ends if a
claimant is “no longer in Active Employment due to a Disability that is not covered under the
Plan.” (Dkt. #12, Exhibit 1 at p. 15). According to Napodano, this means that coverage necessarily
continues if a claimant is not in Active Employment due to a Disability that is covered under the
Plan. While this interpretation might have been persuasive if the fourth possible termination date
were the sole grounds for ending coverage, that is not the case here. The SPD provides that
“coverage under the Plan ends on the earliest of” the four possible termination dates. (Dkt. #12,
Exhibit 1 at p. 15) (emphasis added). This means that coverage necessarily ends if any of the
possible termination dates are triggered.
The circumstances in this case implicate the second possible termination date, which
provides that coverage ends once a claimant is no longer an “Eligible Employee.” (Dkt. #12,
Exhibit 1 at p. 15). The SPD defines an “Eligible Employee” as “[a] regular Employee on
Ericsson’s U.S. payroll who has a Domicile in the U.S.” who is either (a) “[r]egularly scheduled
to work at least thirty (30) hours per week;” or (b) “on an approved, paid Leave of Absence” after
previously being scheduled for at least 30 hours per week (Dkt. #12, Exhibit 3 at p. 6). In this
case, Napodano provided Ericsson with a letter stating that he resigned on August 22, 2018, and
exchanged correspondence with his former co-workers confirming that he had, in fact, resigned
on that date. Ericsson also construed Napodano’s letter as a resignation and “honored [his] request
to process the resignation with the effective date of 8/22.” (Dkt. #12, Exhibit 2 at p. 94). This
means that, following that date, Napodano stopped being an “Eligible Employee” covered by the
Plan for at least three reasons. Napodano was no longer (1) a “regular [e]mployee,” (2) on
Ericsson’s payroll, or (3) either scheduled to work thirty hours per week or on a paid leave of
6
absence. 2 Accordingly, when Napodano sought short-term disability benefits after he advised
them of his “resignation,” see supra note 2, Sedgwick properly denied his claim.
Napodano contends that he did not need to file his claims before his resignation under the
Plan’s Proof of Loss Provisions. These provisions state that claims can be submitted at least 90
days after the “Elimination Period,” which was seven (7) days (Dkt. #10, Exhibit 1 at pp. 7, 22).
According to Napodano, this means that he could have waited at least 97 days to file his claim for
benefits. But, while the Proof of Loss provisions allow Napodano to file a claim within this time,
they do not extend his coverage beyond the last day of his employment. Because Napodano was
seeking benefits that would start after August 22, 2017—not payment for his prior use of benefits
before his coverage ended—his request was properly denied.
The Court therefore does not address Napodano’s argument that the decision to deny his
claim constitutes an abuse of discretion stemming from the decisionmakers’ purported conflict-ofinterest. See Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252, 258 (5th Cir. 2009)
(citing Metro. Life Insurance, Co. v. Glenn, 554 U.S. 105, 108 (2008)) (“This Circuit does not
consider a conflict of interest until the second stage of the analysis because if an administrator's
interpretation is legally correct no abuse of discretion could have occurred.
Therefore,
Metropolitan Life has no relevance to the district court’s determination that the Administrator and
2
Napodano asks the Court to find that Napodano did not resign—his letter stating otherwise apparently
notwithstanding. He claims that he only submitted the resignation letter after Ericsson’s Human Resources team told
him “to leave a note for his boss explaining he would not be at work” and to “contact his disability insurer to start the
claim.” (Dkt. #10 at p. 1). But Napodano has not cited any case law or legal principles allowing the Court to disregard
a resignation letter under these circumstances. See Audler v. CBC Innovis Inc., 519 F.3d 239, 255 (5th Cir. 2008)
(quoting Castro v. McCord, 259 F. App’x 664, 665 (5th Cir. 2007)) (“A party ‘waives an issue if he fails to adequately
brief it.’”) (emphasis added). Napodano’s argument is unavailing, regardless. Napodano’s status as an “regular
employee” (potentially eligible for coverage) does not turn on whether or not Ericsson correctly interpreted
Napodano’s letter. If Napodano resigned, then he was no longer a “regular employee” once the letter was submitted.
If Napodano did not resign, on the other hand, then Ericsson terminated him on receipt of the letter. The latter might
have entitled Napodano to damages on a wrongful termination claim under the Americans with Disabilities Act. But,
for purposes of the benefits denial claim before the Court, once Ericsson severed its relationship with Napodano, he
stopped being a (1) “regular employee” (2) on Ericsson’s payroll who (3) was either scheduled to work thirty hours
per week or on a paid leave of absence.
7
Committee’s decision was legally correct. If we agree with that conclusion, we need not consider
whether there was a conflict of interest or an abuse of discretion.”) (quotations and citations
omitted). 3
.
CONCLUSION
The Court GRANTS Defendant’s Motion for Summary Judgment (Dkt. #12), and
DENIES Plaintiff’s Motion for Summary Judgment (Dkt. #10).
IT IS SO ORDERED.
SIGNED this 15th day of August, 2019.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
3
See also Tolson v. Avondale Industries, Inc., 141 F.3d 604, 608 (5th Cir. 1998) (“Only if the court determines that
the administrator did not give the legally correct interpretation, must the court then determine whether the
administrator’s decision was an abuse of discretion.”); accord Ellis, 394 F.3d at 270.
8
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?