Koch v. Infosys Ltd et ano

Filing 40

ORDER by Judge Robert S. Lasnik granting defendant Aetna's 21 Motion for Summary Judgment; denying plaintiff's 25 Motion for Summary Judgment. (PM)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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KENNETH KOCH,
Plaintiff,

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NO. C14-1649RSL
v.

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INFOSYS, LTD., a foreign corporation, and
AETNA LIFE INSURANCE COMPANY, a
foreign corporation,
Defendant.

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ORDER GRANTING
DEFENDANT’S MOTION FOR
SUMMARY JUDGMENT AND
DENYING PLAINTIFF’S MOTION
FOR SUMMARY JUDGMENT

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This matter comes before the Court on cross-motions for summary judgment. Dkt. ## 21,

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25. Having reviewed the memoranda, declarations, exhibits, and the remainder of the record, the

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Court finds as follows.
BACKGROUND

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Plaintiff Kenneth Koch began working for Infosys, Ltd.1 (“Infosys”) on March 5, 2012.

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As part of his employment, Koch was covered under the Infosys Technologies Limited Group

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Policy GP-8834 (“Plan”). The Plan provided both long-term disability benefits (“LTD

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benefits”) and temporary disability income benefits (“TDI benefits”). Defendant Aetna Life

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Insurance Company (“Aetna”) issued the Plan to Infosys. In January 2013, Koch became

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disabled and stopped working for Infosys. Based on this disability, Koch applied for and

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ultimately received both TDI benefits paid by Aetna and social security disability benefits.

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Pursuant to a joint motion, the Court previously dismissed defendant Infosys. Dkt. # 20.

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 1

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Aetna denied Koch’s claim for LTD benefits on the basis that he had not met the eligibility

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requirements. Koch brought this action to recover LTD benefits under the Employee Retirement

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Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”). Aetna and Koch both moved for

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summary judgment.
DISCUSSION

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A. Summary Judgment Standard

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Summary judgment is appropriate if, viewing the evidence and all reasonable inferences

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drawn therefrom in the light most favorable to the nonmoving party, the moving party shows

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that “there are no genuine issues of material fact and the moving party is entitled to judgment as

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a matter of law.” Fed. R. Civ. P. 56(a); Torres v. City of Madera, 648 F.3d 1119, 1123 (9th Cir.

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2011). The moving party “bears the initial responsibility of informing the district court of the

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basis for its motion.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving

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party will bear the burden of proof at trial, the moving party may meet its burden by “pointing

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out . . . that there is an absence of evidence to support the nonmoving party’s case.” Id. at 325.

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Once the moving party has satisfied its burden, the nonmoving party must then set out “specific

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facts showing that there is a genuine issue for trial” in order to defeat the motion. Id. at 324.

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“The mere existence of a scintilla of evidence in support of the non-moving party’s position” is

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not sufficient; this party must present probative evidence in support of its claim or defense.

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Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001); Intel Corp. v.

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Hartford Accident & Indem. Co., 952 F.2d 1551, 1558 (9th Cir. 1991). An issue is genuine only

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if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the

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nonmoving party. In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008). On cross motions for

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summary judgment, the Court evaluates the motions separately, “giving the nonmoving party in

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each instance the benefit of all reasonable inferences.” Lenz v. Universal Music Corp., No.

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13-16106, 2015 WL 5315388, at *2 (9th Cir. Sept. 14, 2015) (internal quotation marks and

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citation omitted).

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 2

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B. Entitlement to Long Term Disability Benefits2

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Section 502 of ERISA allows a plan participant or beneficiary “to recover benefits due to

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him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his

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rights to future benefits under the plan.” 29 U.S.C. § 1132(a)(1)(B). The parties agree that

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Aetna’s denial of disability benefits under an ERISA plan is subject to de novo review. Dkt. ##

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21 (Aetna’s Motion for Summary Judgment) at 16 n.11; 25 (Plaintiff’s Motion for Summary

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Judgment) at 15-18. When the Court reviews an ERISA benefits decision under a de novo

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standard, it is the claimant’s burden to prove entitlement to benefits. Muniz v. Amec Const.

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Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010).

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The Plan established two classes of employees for the purpose of determining eligibility

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for LTD benefits. Dkt. # 18-3 (Summary of Coverage) at 19. Class I employees become

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eligible for LTD benefits on the date they “complete a probationary period of one year of

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continuous service” for the employer, while Class II employees are eligible for LTD coverage

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without any probationary period. Id. Therefore, to prove that he is entitled to benefits, Koch

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must prove either that he was a Class II employee or that he was a Class I employee who had

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completed the requisite probationary period. The Court will first address whether Koch has

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offered evidence that he is a Class II employee not subject to a probationary period.

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The sole argument that Koch offers to prove that he was immediately eligible for LTD

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benefits as a Class II employee is that “the Infosys personnel and payroll records indicate that,

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for the purposes of monitoring of dates, Koch was a “No Probation” employee. Dkt. # 25

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(Plaintiff’s Motion for Summary Judgment) at 15. But the only evidence that Koch submitted in

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support of this contention is the declaration of his attorney, Patrick LePley, which states that the

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Aetna moved to supplement the administrative record with the declaration of Peggy Tayloe,
Dkt. # 24, which it contends is necessary for the Court to conduct an adequate de novo review of
Aetna’s benefits decision. See Dkt. # 21 (Aetna’s Motion for Summary Judgment) at 16-18. The Court
did not find the declaration necessary to its determination on the parties’ cross-motions for summary
judgment, and therefore has not considered it.

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 3

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“personnel records from Infosys . . . show that Koch was hired as a non-probationary, at-will

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employee . . . .” and an Infosys personnel document that states “No probation” under the heading

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“Monitoring of Dates.” Dkt. # 26 (Declaration of Patrick H. LePley) ¶ 5; Dkt. # 18-1 (Infosys

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Personnel Records for Koch) at 64. Koch offers no evidence to tie this entirely ambiguous

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notation to his status as a Class I or Class II employee for the purposes of LTD benefits. In fact,

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the only evidence regarding Koch’s Class status indicates that he was categorized as Class I.

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Dkt. # 22-1 (Excerpts of Administrative Record) at 32. Because Koch has offered not more than

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a scintilla of evidence that he may have been a Class II employee immediately eligible for LTD

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benefits, the Court will turn to the question of whether Koch completed the Class I “probationary

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period of one year of continuous service” for Infosys.

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It is undisputed that Koch began working for Infosys on March 5, 2012. Dkt. # 1

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(Complaint) ¶ 16; Dkt. # 21 (Aetna’s Motion for Summary Judgment) at 6. It is also undisputed

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that Koch received payment in the amount of his full salary until April 2013, some payment

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from Infosys until June 2013, and that he separated from Infosys in June 2013. Dkt. # 18-1

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(Kenneth Koch’s Personnel Records) at 68-70; Dkt. # 18-2 (Kenneth Koch’s Pay Records) at 2-

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14; Dkt. # 22-1 (Administrative Record) at 46-49. There is no evidence that Koch performed

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any work for Infosys after January 2013. Koch’s own statements, and other evidence in the

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record, lead to the opposite conclusion: that Koch did not perform any work for Infosys after

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January 11, 2013. See, e.g., Dkt. # 22-1 (Administrative Record) at 10, 22, 25; accord Dkt. # 1

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(Complaint) ¶¶ 8, 21.

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The Court must determine whether these facts establish that Koch has met the

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requirement that he “complete a probationary period of one year of continuous service” for

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Infosys. Koch seems to concede that merely being paid by Infosys is insufficient to meet the

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“continuous service” requirement. Instead, he asks the Court to infer that he provided service to

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Infosys since Infosys continued to pay him beyond the date of his disability. See, e.g., Dkt. # 25

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(Plaintiff’s Motion for Summary Judgment) at 14 (“[C]ommon sense would indicate that if an

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 4

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employer is paying you, you are of continuous service to the employer.”); id. at 15 (“Arguably,

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he provided continuous service for his employer for more than a year.”); Dkt. # 30 (Plaintiff’s

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Opposition to Defendant’s Motion for Summary Judgment) at 4 (“The reasonable inference is

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that Koch was valued by Infosys.”). The Court is not willing to make such an inference.

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“Service,” as it is commonly understood and defined, requires work or labor. See Dkt. # 29-1

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(dictionary excerpts) at 3, 6. Because Koch has not produced evidence that he performed any

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work for Infosys after January 2013, he cannot show that he provided continuous service for one

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year as was required to receive LTD benefits.

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Moreover, the LTD plan contains an Active Work Rule: “If you happen to be ill or

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injured and away from work on the date your coverage would take effect, the coverage will not

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take effect until the date you return to work full-time.” Dkt. # 18-3 (Summary of Coverage) at

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19. Even if the Court were to accept that simply being paid by Infosys is sufficient to meet the

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requirement of one year of continuous service for LTD benefits eligibility, there is no evidence

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that Koch returned to work on or after March 5, 2013, the date his one year probationary period

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would have ended. Therefore, under the Active Work Rule, Koch’s LTD benefits coverage

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would not have taken effect.

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Because Koch has not provided more than a scintilla of evidence that he may be entitled
to LTD benefits, the Court grants Aetna’s motion for summary judgment on this claim.

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C. Claim for ERISA Penalties

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Koch alleges that he is entitled to ERISA penalties because Aetna failed to respond to

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requests for information. Dkt. # 1 (Complaint) ¶¶ 12, 22. ERISA penalties may only be

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assessed against the plan administrator, as designated in the plan documents. See 29 U.S.C. §§

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1002(16)(A), 1132(c)(1). In this case, the plan documents specify that the plan administrator is

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Infosys. Dkt. # 18-3 (plan documents) at 24. The penalties may not be assessed against Aetna

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as a third-party claims administrator. See Sgro v. Danone Waters of N. Am., Inc., 532 F.3d 940,

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944-45 (9th Cir. 2008); Moran v. Aetna Life Ins. Co., 872 F.2d 296, 301 (9th Cir. 1989).

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 5

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Aetna’s motion for summary judgment on plaintiff’s claim for ERISA penalties is granted.
CONCLUSION

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For the foregoing reasons, the Court GRANTS Aetna’s motion for summary judgment

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(Dkt. # 21) and DENIES plaintiff’s motion for summary judgment (Dkt. # 25). The Clerk of

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Court is directed to enter judgment against plaintiff and in favor of defendants.

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DATED this 9th day of December, 2015.

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A
Robert S. Lasnik

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United States District

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ORDER ON CROSS-MOTIONS
FOR SUMMARY JUDGMENT - 6