Curran v. United of Omaha Life Ins. Co.
| Decision Date | 15 July 2014 |
| Docket Number | Case No. 12CV1935 JLS (BLM). |
| Citation | 38 F.Supp.3d 1184 |
| Court | U.S. District Court — Southern District of California |
| Parties | Robin CURRAN, Plaintiff, v. UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant. |
OPINION TEXT STARTS HERE
Participant's motion granted and plan administrator's motion denied. Barbara Ann Casino, Stennett/Casino, San Diego, CA, for Plaintiff.
Martin E. Rosen, Barger and Wolen LLP, Irvine, CA, James Hazlehurst, Barger & Wolen LLP, Los Angeles, CA, for Defendant.
ORDER (1) GRANTING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT; AND, (2) DENYING DEFENDANT'S CROSS MOTION FOR PARTIAL SUMMARY JUDGMENT
Presently before the Court are Plaintiff Robin Curran's (“Plaintiff”) and Defendant United of Omaha Life Insurance Company's (“United”) cross motions for partial summary judgment on the standard of review. (Pl. Mot. for Partial Summ. J., ECF No. 33; Def. Mot. for Partial Summ. J., ECF No. 32.) The Court heard oral argument on April 28, 2014 and the motions were taken under submission thereafter. Having considered the parties' arguments and the law, the Court GRANTS Plaintiff's motion for partial summary judgment and DENIES United's cross motion for partial summary judgment,
Plaintiff contends that the policy's language is ambiguous and does not confer discretion upon United. (PL Mot. for Partial Summ. J. 6–7, ECF No. 33.) According to Plaintiff, the policy merely indicates “who makes the [final] decision [regarding benefits] but not how that decision is made or under what standard.” ( Id. at 6 (citing Ingram v. Martin Marietta LTD Income Plan for Salaried Employees, 244 F.3d 1109, 1112 (9th Cir.2001)).) Plaintiff emphasizes that the policy's grant of authority does not “use the term discretion and/or deference,” nor does it provide that the plan administrator's authority over benefit determinations is “full,” “final,” “conclusive,” “unfettered,” or “binding.” (Pl. Resp. in Opp'n 2–4, ECF No. 34.)
Plaintiff's argument lacks merit. Plaintiff's reliance on Abatie v. Alta Health and Life Insurance Co., among other cases, is misplaced, as that opinion actually confirms that a policy may confer discretionary authority upon a plan administrator “even though the word ‘discretion’ does not appear.” 458 F.3d 955, 963 (9th Cir.2006). Moreover, Abatie establishes that a policy's use of terms such as “full and final” and “exclusively” actually “ goes further ” than is required to vest discretion in the plan administrator. Id. at 965 (emphasis added). A policy may vest discretion simply by “bestow[ing] on the [plan] administrator the responsibility to interpret the terms of the plan [or] to determine eligibility for benefits.” Id.
Here, the policy clearly empowers United to “determine eligibility for benefits and [to construe and] interpret the terms and conditions of the Policy,” which is more than sufficient to confer discretion. Moreover, the Policy's grant of discretion is far less ambiguous than language deemed insufficient in prior cases. For example, in Ingram, the Ninth Circuit rejected a grant of discretion, emphasizing that the plan “merely identified the carrier as the entity that was to pay benefits and administer the plan,” but “bestowed no power to interpret the plan.” 244 F.3d at 1113 (emphasis added). Similarly, the Ninth Circuit determined in Feibusch v. Integrated Device Technology, Inc. Employee Benefit Plan that plan language providing only that proof of a disability claim “must be satisfactory to [the plan administrator]” was insufficient to confer discretion. 463 F.3d 880, 883 (9th Cir.2006). The Policy at issue here does not exhibit either of these flaws. Accordingly, the Court finds that the Policy unambiguously confers discretion upon United.
2. Is the Grant of Discretion Rendered Void and Unenforceable by California Insurance Code Section 10110.6 ?
California Insurance Code section 10110.6 provides, in relevant part:
(a) If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or disability insurance coverage for any California resident contains a provision that reserves discretionary authority to the insurer, or an agent of the insurer, to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards of interpretation or review that are inconsistent with the laws of this state, that provision is void and unenforceable.
(b) For purposes of this section, “renewed” means continued in force on or after the policy's anniversary date.
(c) For purposes of this section, the term “discretionary authority” means a policy provision that has the effect of conferring discretion on an insurer or other claim administrator to determine entitlement to benefits or interpret policy language that, in turn, could lead to a deferential standard of review by any reviewing court.
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(g) This section is self-executing. If a life insurance or disability insurance policy, contract, certificate, or agreement contains a provision rendered void and unenforceable by this section, the parties to the policy, contract, certificate, or agreement and the courts shall treat that provision as void and unenforceable.
Section 10110.6 went into effect on January 1, 2012. Plaintiff maintains that § 10110.6 applies to the Policy and renders its discretionary clause void and unenforceable. (Pl. Mot for Partial Summ. J. 8–9, ECF No. 33.) According to Plaintiff, the Policy falls within the statute's scope of application because the Policy was “renewed” by operation of law, pursuant to § 10110.6(b), on the Policy's “anniversary date” of January 1, 2012, the same day that the law went into effect. ( Id. at 9.) Plaintiff contends that the Policy “anniversary” is the annual recurrence of the Policy's effective date of January 1, 2000. ( Id.)
In support of this interpretation, Plaintiff relies heavily on two recent decisions from the Northern District of California, Polnicky v. Liberty Life Assurance Company of Boston, 999 F.Supp.2d at 1146–49, and Gonda v. The Permanente Medical Group, Inc., 10 F.Supp.3d 1091, 1093–95, Case No. 11–1363 SC, 2014 WL 186354 at *2–4 (N.D.Cal. Jan. 16, 2014), as well as the recent decision of the Southern District of California in Cerone v. Reliance Standard Life Insurance, 9 F.Supp.3d at 1149–50, 13CV184 MMA (DHB), 2014 WL 1304005, at *2-3. In all three cases, the policy in question was deemed to have “renewed” by operation of law upon the annual recurrence of a fixed date specified by the policy, which fell on or after § 10110.6's effective date of January 1, 2012. Thus, § 10110.6 applied to the policy and an otherwise valid discretionary clause was rendered void and unenforceable. See Cerone, 9 F.Supp.3d at 1149–50, 13CV184 MMA (DHB), 2014 WL 1304005, at *2-3; Gonda, 10 F.Supp.3d at 1095, 2014 WL 186354 at *4; Polnicky, 999 F.Supp.2d at 1147–49.
Plaintiff takes pains to distinguish Orzechowski v. Boeing Company Non–Union Long–Term Disability Plan, a recent decision from the Central District of California that appears to reach a contrary conclusion on similar facts. See Case No. SACV 12–01905–CJC (RNBx), 2014 WL 979191 at *8–9 (C.D.Cal. Mar. 12, 2014) ( ). Plaintiff emphasizes that Orzechowski deals exclusively with a discretionary clause appearing in a benefits plan, whereas § 10110.6(b) provides only that an insurance policy renews by operation of law. See id. at *9 n. 3 .
United contends, however, that there is no support for Plaintiff's view “that the term ‘anniversary date’ means every 12 months after the Policy's effective date.” (Def. Resp. in Opp'n 1, ECF No. 35.) United insists that the Policy's “anniversary date” is January 1, 2013, which marks the expiration of the Policy's two-year term, as well as the termination of the Policy's “rate guarantee.” ( Id. at 4–5.) According to United's interpretation of § 10110.6, a policy's “anniversary date” may recur at intervals of any length of time, including periods of more than one year. ( Id. at 1.)
To determine whether § 10110.6 applies to the Policy at issue in this case, the Court must ultimately construe the term “anniversary date.” The Court begins by noting that the term “anniversary date” is not defined in § 10110.6 or in any regulations promulgated thereunder. When a term in a statute is undefined, the term must be construed “in accord with its ‘ ordinary, contemporary, common meaning.’ ” San Jose Christian Coll. v. City of Morgan Hill, 360 F.3d 1024, 1034 (9th Cir.2004) (quoting A–Z Int'l v. Phillips, 323 F.3d 1141, 1146 (9th Cir.2003)); see also United States v. TRW Rifle 7.62X51mm Caliber, One Model 14 Serial 593006, 447 F.3d 686, 689 (9th Cir.2006) (); Davila–Perez v. Lockheed Martin Corp., 202 F.3d 464, 468 (1st Cir.2000) (citations omitted) (“When a word is not defined within the statute, it is given its ordinary meaning, with all due consideration to the context (emphasis added))”; City of Santa Rosa v. Indus. Waste & Debris Box Rentals, Inc., 168 Cal.App.3d 1132, 214 Cal.Rptr. 737, 739 (1985) .
“To determine the plain meaning of a term undefined by a statute, resort to a dictionary is permissible.” Cleveland v. City of L.A., 420 F.3d 981, 989 (9th Cir.2005) (internal quotation...
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