Opinion
No. CV 05-2936-PHX-DGC.
August 23, 2006
ORDER
Pending before the Court are Defendant's motion for summary judgment, Defendant's motion to strike Plaintiff's request for a jury trial, and Defendant's evidentiary objections to Plaintiff's statement of facts. Docs. ##15, 22, 29. Plaintiff has filed a cross-motion for summary judgment and a motion to strike the declaration of Laura Hannan. Docs. ##13, 35. For the reasons set forth below, the Court will sustain Defendant's evidentiary objections, grant Defendant's motion to strike Plaintiff's jury trial demand, deny Plaintiff's motion to strike Laura Hannan's declaration, and deny both parties' motions for summary judgment. The Court will then set forth procedures for a bench trial based on the administrative record.
The Court will deny the request for oral argument because the parties have submitted memoranda thoroughly discussing the law and evidence and the Court concludes that oral argument will not aid its decisional process. See Macon v. Credit Bur. of Placer County, Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).
I. Background.
In May of 1995, Plaintiff Landon Ross began working for White Electronic Designs Corporation. White Electronic owned a group long term disability ("LED") insurance policy issued by Defendant Prudential ("Plan"). Plaintiff requested payment of LED benefits from Defendant following two failed back surgeries. On October 23, 2003, Defendant granted Plaintiff's request for LED benefits effective October 6, 2002. Id., Ex. 21. Defendant informed Plaintiff that it would continue to obtain records from Plaintiff's physicians to support his continued eligibility for benefits. Id.
Plaintiff worked part-time between November 1, 2002 and November 17, 2004. Doc. #15. On July 12, 2004, Plaintiff was informed that his benefits would be terminated, effective October 6, 2004, because he did not satisfy the more restrictive definition of "disability" applicable after 24 months of disability payments under the Plan. Doc. #14, Ex. 22. The denial of Plaintiff's benefits was affirmed on appeal and upon reconsideration. Docs. ##30,34.
"Disability" during the first 24 months, is defined as the inability "to perform the material and substantial duties of [Plaintiff's] regular occupation due to sickness or injury." "Disability" after 24 months of benefit payments is defined as the inability "to perform the duties of any gainful occupation for which you are reasonably fitted by education, training, or experience." Doc. #14, Ex. 21 (emphasis added).
On August 10, 2005, Plaintiff filed a breach of contract claim in Arizona Superior Court. Doc. #1, Attach. 1. Defendant removed the case to this Court on September 14, 2005. Doc. #1. Both parties agree that the appropriate standard of review is de novo. Doc. #29.
II. Evidentiary Issues.
A. Motion to Strike the Declaration of Laura Hannan
Plaintiff, citing little case law, seeks to strike the declaration of Laura Hannan, Defendant's Associate Manager of Disability Claims, because (1) it lacks foundation, (2) is irrelevant, and (3) is inadmissible under Mongeluzo v. Baxter Travenol Disability Ben. Plan, 46 F.3d 938 (9th Cir. 1995). Doc. #35.
The Court will deny Plaintiff's motion to strike. Federal Rule of Evidence 602 requires that a witness have personal knowledge of the declared subject matter. Ms. Hannan's declaration states, under penalty of perjury, that she is the Associate Manager of Prudential's Disability Claims division, is familiar with Prudential's procedures for receipt and retention of documents submitted in support of a claim for LTD benefits, has reviewed the records pertaining to Plaintiff's claim, and affirms that Plaintiff's exhibits 10 through 19 were not received by Prudential with Plaintiff's initial claim or any subsequent administrative appeal. Doc. #28. The Court finds that Defendant has laid sufficient foundation for Ms. Hannan's declaration.
Moreover, the Court finds that the declaration is relevant for the limited purpose of deciding what documents were and were not before Defendant at the time of Plaintiff's disability determination. A document is deemed relevant pursuant to 29 C.F.R. § 2560.503-1(m)(8) if it was "relied upon in making the benefit determination [or] was submitted, considered, or generated in the course of making the benefit determination[.]" The Court finds that Ms. Hannan's declaration is relevant because it establishes what documents were and were not received and relied upon by Defendant in making its benefits determination.
On March 28, 2006, the Court instructed Plaintiff to explain in his response to Defendant's motion for summary judgment why, in light of Mongeluzo v. Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d 938, 943 (9th Cir. 1995), the Court should consider additional evidence outside of the administrative record. Doc. #20. Plaintiff did not do so, but instead addressed the issue in his response to Defendant's motion to strike. Doc. #34. The Court has read and considered Plaintiff's response, but Plaintiff should, in the future, comply more carefully with the Court's orders.
Defendant objects to the admission of Plaintiff's evidence offered in support of his motion for summary judgment. Specifically, Defendant seeks to strike Plaintiff's exhibits 10-19 and the deposition of Francesca LeDoux because they were not received by Defendant with Plaintiff's initial claim or at any time during Plaintiff's administrative appeal. Doc. #14 (Ex. 10-19, 29), 29. Plaintiff makes no showing that the contested documents were submitted to Defendant prior to the filing of this action.
Defendant asserts "under a de novo review, where there is a sufficiently developed record before a plan administrator in rendering a decision on benefit eligibility[,] `the court should not review documents not submitted to the plan administrator prior to its decision[.]'" Doc. #29. (quoting Mongeluzo v. Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d 938, 943 (9th Cir. 1995)). Defendant also argues that the disputed documents "are not necessary to conduct an adequate de novo review [because] [t]he documents do not offer any new support or insight into Plaintiff's claim." Id.
Plaintiff argues that the deposition of Ms. LeDoux is admissible because he is entitled to "information necessary to demonstrate the manner in or extent to which the conflict of interest affected the carrier's decision-making process and address any shortcomings in the record or decision-making process caused by the conflict." Doc. #34 (citing Waggener v. UNUM Life Ins. Co. of America, 238 F.Supp.2d 1179 (S.D.Cal., 2002)). Plaintiff argues that (1) there is obviously a conflict of interest as evidenced by the de novo review, (2) the LeDoux deposition gives "insight into that conflict of interest and supplies invaluable information into the hypocrisy and inconsistency of Defendant's claim process," and (3) the "thoughts, instructions, opinions, and methods" of the plan administrator were "before the plan administrator" at the time of the decision to deny benefits, and therefore the deposition is admissible under Mongeluzo. Id.
Plaintiff also argues that the medical records of Drs. Kemp and Bayham (exhibits 10-19) are admissible because they "speak directly to the credibility of Dr. Kemp's letter of January 18, 2005, which was dismissed by Defendant as non-credible and without foundation or supporting medical records." Doc. #34. Plaintiff appears to argue that issues regarding the credibility of medical experts constitute an exceptional circumstances under Mongeluzo that warrants the exercise of the court's discretion to allow additional evidence outside the administrative record. See Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017, 1027 (4th Cir. 1993).
1. LeDoux Deposition.
Generally, "additional evidence is not necessary for adequate review of the benefits decision, [and] the district court should only look at the evidence that was before the plan administrator . . . at the time of the determination." Mongeluzo, 46 F.3d at 944. The Ninth Circuit has not specifically addressed the situations that warrant consideration of evidence outside the administrative record during a de novo review, but in Mongeluzo the Ninth Circuit cited favorably to Quesinberry, a case that noted several circumstances where additional evidence may be relevant:
[C]laims that require consideration of complex medical questions or issues regarding the credibility of medical experts; the availability of very limited administrative review procedures with little or no evidentiary record; the necessity of evidence regarding interpretation of the terms of the plan rather than specific historical facts; instances where the payor and the administrator are the same entity and the court is concerned about impartiality; claims which would have been insurance contract claims prior to ERISA; and circumstances in which there is additional evidence that the claimant could not have presented in the administrative process.Quesinberry, 987 F.2d at 1027.
Additional evidence is not necessarily appropriate every time an administrator and payor are the same party. As noted in Hall v. Unum Life Ins. Co., 300 F.3d 1197 (10th Cir. 2002), "the administrator and the payor are often the same party for many ERISA benefit plans. If [district courts] were to adopt a blanket rule that the admission of additional evidence should be allowed whenever the same party is the administrator and payor, then it will not be the unusual case in which additional evidence is admitted." Id. at 1205. As noted in the language quoted above from Quesinberry, there should be an identity between the administrator and payor and reason for concern about impartiality. Quesinberry, 987 F.2d at 1027. "[T]here should be a showing of `the manner in or extent to which the conflict of interest affected [defendant's] decision making process' and `how the additional evidence would be relevant to the conflict of interest or would address any shortcomings in the record or decisionmaking process caused by the conflict." Hall, 300 F.3d at 1205; see also Regula v. Delta Family-Care Disability Survivorship, 266 F.3d 1130, 1147 (9th Cir. 2001) (permitting evidence outside the administrative record when the evidence supported an apparent conflict of interest and the insurance carrier repeatedly hired particular physicians as experts and then relied on their opinions over treating physicians); Lang v. Long-Term Disability Plan, 125 F.3d 794, 799 (9th Cir 1997) (finding a conflict of interest when the administrator gave inconsistent reasons for terminating plaintiff's benefits); Tremain v. Bell Industries, Inc., 196 F.3d 970, 977 (9th Cir. 1999) (finding a conflict of interest when Plaintiff's benefits were terminated based on an incorrect definition of disability, the plan administrator refused to apply the correct definition, and plaintiff was later informed that her disability benefits were terminated because of her earning capacity, but Defendant would not state what it considered her earning capacity to be).
Plaintiff seeks to introduce the deposition testimony of Francesca LeDoux because "there is obviously a conflict of interest here," Doc. #34, but Plaintiff fails to provide any facts concerning the extent to which the conflict of interest allegedly affected Defendant's decision making process or any explanation of "how the additional evidence would be relevant to the conflict of interest or would address any shortcomings in the record or decisionmaking process caused by the conflict." Hall, 300 F.3d at 1205. Because Plaintiff has failed to make the showing required for the consideration of additional evidence, the Court will grant Defendant's motion to exclude Ms. LeDoux's deposition testimony.
2. Additional Medical Records.
Plaintiff also seeks to introduce the medical records of Drs. Kemp and Bayham. Plaintiff argues that the medical records "speak directly to the credibility of Dr. Kemp's letter of January 18, 2005" that stated "Plaintiff is not employable even on a sedentary basis." Doc. #14, Ex. 17, #34.
Although the Ninth Circuit suggested in Mongeluzo that "issues regarding the credibility of medical experts" might warrant an exercise of the court's discretion to allow additional evidence, 46 F.3d at 94, the case cited favorably by the Ninth Circuit makes clear that a district court "should address why the evidence proffered was not submitted to the plan administrator" and whether "the evidence is cumulative of what was already presented." Quesinbery, 987 F.2d. at 1027. Having reviewed Plaintiff's proffered medical documents, the Court finds that they do not add anything new to the record. The physician notes reiterate Plaintiff's complaints of back pain, but do not reference any new diagnostic tests or findings that were not previously in the administrative record. Moreover, the progress notes do not address the issue of Plaintiff's ability or inability to work and therefore do not speak directly to the credibility of Dr. Kemp's letter as Plaintiff argues. Finally, Plaintiff does not argue that the proffered evidence was unavailable or could not have been timely submitted to Defendant during its initial review or on appeal. For these reasons, Defendant's motion to exclude the progress notes of Drs. Kemp and Bayham will be granted.
III. Summary Judgment in ERISA Cases.
In considering motions for summary judgment in ERISA actions, the Ninth Circuit has made clear that the sole question to be decided is whether "there are genuine issues of material fact, [and] not whether there was substantial or ample evidence to support the plan administrator's decision." Mongeluzo, 46 F.3d at 942, (citing Casey v. Uddeholm Corp., 32 F.3d 1094, 1098) (7th Cir. 1994) ("Where the plan administrator has left contested issues of fact unresolved, the district court's review under Rule 56(c) should have been limited to determining whether any of the facts in dispute were material."). Therefore, to survive summary judgment, Plaintiff must show that there is a genuine issue of material fact as to whether he was disabled under the terms of the policy, based on the current administrative record.
In this case, it is undisputed that "[u]nder [Defendant's] policy . . . the claimant must provide `proof' of his claim, which requires that the claimant show: (1) he is under the regular care of a doctor, (2) appropriate documentation of monthly earnings, (3) the date of disability, (4) appropriate documentation of disabling disorder, (5) extent of disability, (6) name and address of hospitals and medical centers, and (7) name and address of physician." Doc. #24 at 7. It also is undisputed that the definition of "disability" during the first 24-months is defined as the "inability to perform material and substantial duties of regular occupation due to the injury," and "[a]fter that 24 month period, a covered claimant [is disabled when he is] unable to perform the duties of any gainful occupation for which [the claimant is] reasonably fitted by education, training, or experience." Id. at 5. "Gainful occupation" is defined, as "an occupation, including self-employment, that is or can be expected to provide [the claimant] with an income equal to at least 60 percent of [his/her] indexed monthly earnings within 12 months of [his/her] return to work." Id.
Defendant argues that Plaintiff has not presented any evidence on which a trier of fact could reasonably find him disabled under the Plan following the initial 24-month period of the claim. Doc. # 15. As of October 6, 2004, Defendant asserts that Plaintiff was earning greater than 60% of his pre-disability earnings while adhering to the work restrictions of his physicians. Doc. #14, Ex. 35 (Pg. 2). Defendant argues that at no time, except for Dr. Kemp's January 12, 2005 letter, did any physician state that Plaintiff was unable to perform sedentary work. Doc. #15. On October 24, 2002 and January 1, 2003, Dr. Khayata, Plaintiff's neurosurgeon, restricted Plaintiff to 20-hours of light duty work. Doc. #14, Ex. 5. On April 10, 2003, Dr. Khayata increased Plaintiff's work limit to 30 hours per week. Id. On November 8, 2004, April 28, 2005, and February 2, 2005, Plaintiff's orthopedic surgeon, Dr. Rappoport, stated that Plaintiff was able to perform "sedentary work" even though his condition had worsened. Doc. #14, Ex. 7,8, 9. Based on the progress notes of Drs. Khayata and Rappoport, and Plaintiff's work history, Defendant terminated Plaintiff's LED benefits on July 12, 2004, finding that Plaintiff no longer satisfied the more restrictive definition of "disabled" under the Plan. Docs. #14, Ex. 22, #15.
Plaintiff appealed Defendant's termination of his LED benefits. In support of his appeal, Plaintiff submitted a letter from his pain doctor, Dr. Kemp, that states "[i]n my opinion [Plaintiff] is not employable even on a sedentary basis. Simply put, his constant pain and need for drugs makes it totally impossible to concentrate and be responsible." Doc. #14, Ex. 45. Dr. Kemp's letter was not accompanied by any medical records or progress notes to bolster the doctor's opinion. Regardless, Plaintiff asserts that Dr. Kemp's letter is sufficient to prove disability. Doc. #24.
Defendant asks the Court to disregard Dr. Kemp's letter as merely a "scintilla of evidence" because "(1) it was unaccompanied by any supporting medical documentation whatsoever; (2) prompted by a request from Plaintiff with an attached letter from Plaintiff's attorney containing the suggested verbiage used by Dr. Kemp; and (3) . . . was directly contradicted by the prognosis of Plaintiff's own orthopedic surgeon (twice)." Doc. #15 at 13.
Viewing the evidence in the light most favorable to the non-moving party, the Court finds that there is a genuine issue of material fact as to whether Plaintiff was disabled as defined under the policy. The Court does not find the written opinion of a treating physician to be a mere "scintilla" of evidence. Dr. Kemp's letter, if believed, clearly states that Plaintiff is unable perform even sedentary work. Because credibility issues cannot be resolved at the summary judgment stage, and Dr. Kemp's letter gives rise to a question of fact, summary judgment cannot be granted in favor of either party.
IV. Plaintiff's Request for Jury Trial.
On August 10, 2005, Plaintiff submitted a demand for a jury trial. Doc. #1, Attach. 1. On April 19, 2006, Defendant filed a motion to strike Plaintiff's request for a jury trial, asserting that there is generally no right to a jury trial in an ERISA action. Doc. #36. Plaintiff did not respond to Defendant's motion.
There is no constitutional or statutory right to a jury trial in an ERISA action. See Blau v. Del Monte Corp., 748 F.2d 1348 (9th Cir. 1985). The Ninth Circuit in Thomas v. Oregon Fruit Prod., 228 F.3d 991 (9th Cir. 2000), held that "plan participants and beneficiaries are not entitled to jury trials for claims brought under, or preempted by, section 502 of ERISA." Defendant's motion to strike Plaintiff's request for a jury trial will therefore be granted.
V. Trial.
Trial in this matter will be to the Court, applying a de novo standard, and will be based on the administrative record. On or before September 23, 2006, the parties shall each submit a memorandum to the Court, not to exceed ten pages in length, setting forth their view of the evidence in the administrative record and why it should result in a ruling in their favor. Reply memoranda, no longer than five pages each, shall be filed on October 6, 2006. The parties will address in their memoranda whether it is necessary for the Court to hear live testimony from Ms. Hannan, the only source of evidence outside the administrative record. Upon reviewing the memoranda and the record, the Court will determine whether a hearing is necessary.
Both parties are reminded to comply with Local Rule of Civil Procedure 7.1(b)(1) that requires a "font size no smaller than 13 point" or "10 letters per inch." This rule applies to footnotes.
IT IS ORDERED:
1. Plaintiff's Motion for Summary Judgment (Doc. #13) is denied.
2. Defendant's Motion for Summary Judgment (Doc. #15) is denied.
3. Defendant's Evidentiary Objections to Plaintiff's Statement of Facts (Doc. #29) are granted.
4. Defendant's Motion to Strike Plaintiff's Request for Jury Trial (Doc. #22) is granted.
5. Plaintiff's Motion to Strike Declarations of Laura Hannan (Doc. #35) is denied.