Dioquino v. United of Omaha Life Ins. Co.

• Decision Date: 05 November 2021
• Docket Number: 20-cv-00167-BAS-RBB
• Court: U.S. District Court — Southern District of California
• Parties: JONI DIOQUINO, Plaintiff, v. UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant.

JONI DIOQUINO, Plaintiff, v. UNITED OF OMAHA LIFE INSURANCE COMPANY, Defendant.

No. 20-cv-00167-BAS-RBB

United States District Court, S.D. California

November 5, 2021

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Hon Cynthia Bashant United States District Judge

Plaintiff Joni Dioquino brings this action under the Employee Retirement Income Security Act of 1974 (“ERISA”). She seeks short-term disability (“STD”) and long-term disability (“LTD”) benefits under two employee benefit plans funded by Defendant United of Omaha Life Insurance Company. United filed an Administrative Record (ECF No. 45), and the parties filed opening and responding cross-trial briefs (ECF Nos. 46-48, 52). Each party also filed an objection and a response concerning what material the Court may consider at trial. (ECF Nos. 53, 55, 57-58.) The Court then held a bench trial. (ECF No. 59.)

After evaluating the evidence and considering the oral argument of counsel, the Court resolves the parties' objections and renders the findings of fact and conclusions of law set forth below.

OBJECTIONS

I Dioquino's Objection

Dioquino objects to certain items United included in the Administrative Record for the bench trial, specifically AR 833 through AR 1025. (Pl.'s Obj. 1, ECF No. 53.) United responds to the objection. (ECF No. 57.)

Dioquino filed this lawsuit seeking both STD and LTD benefits without having filed an administrative LTD claim with United. Therefore, after Dioquino sued, United opened an LTD claim on her behalf. (AR 834-35.) United asked Dioquino to complete a health questionnaire and provide updated medical records. (AR 834.) United also reached out to Dioquino's past employer for any updated payroll information. (AR 882-900.) Phillip Sourinho, an HR Business Partner for Rady Children's Medical, confirmed that Dioquino was medically separated in 2018. (AR 889.) Then the following email exchange occurred:

Janet Ethofer (United): For Joni's occupation which was an account[ant]/financial analyst, if she was still working, would she be able to elevate her leg while working at her occupation?

Phillip Sourinho: It's a desk job, so I would say that is possible.

(AR 886.) There are several other items in the objected-to portion of the Administrative Record, including a social media report (AR 934-73) and an updated internal spreadsheet/call log that tracks United's handling of the LTD claim (AR 1015-25).

Dioquino argues United manufactured the post-litigation LTD claim to support its defense. (Pl.'s Obj. 5-9.) She also argues these record items are irrelevant because United did not review them when it resolved Dioquino's STD claim. (Id.)

“Judicial review of an ERISA plan administrator's decision on the merits is limited to the administrative record.” Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 632 (9th Cir. 2009). “In the ERISA context, the ‘administrative record' consists of ‘the papers the insurer had when it denied the claim.'” Id. at 632 n.4 (quoting Kearney v. Standard Ins. Co., 175 F.3d 1084, 1086 (9th Cir. 1999)).

Extrinsic evidence may be considered “only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.” Opeta v. Nw. Airlines Pension Plan for Cont. Emps., 484 F.3d 1211, 1217 (9th Cir. 2007) (emphasis omitted). These limited circumstances include where “there is additional evidence that the claimant could not have presented in the administrative process.” Id. “[A] district court should not take additional evidence merely because someone at a later time comes up with new evidence that was not presented to the plan administrator.” Mongeluzo v. Baxter Travenol Long Term Disability Ben. Plan, 46 F.3d 938, 944 (9th Cir. 1995).

The Court sustains Dioquino's objection. Dioquino's lawsuit challenges United's decision to deny her STD benefits. She then seeks to use this denial to also show that submitting an LTD claim would have been futile, allowing her to seek LTD benefits in this action. “The futility exception is ‘designed to avoid the need to pursue an administrative review that is demonstrably doomed to fail.'” A.F. v. Providence Health Plan, 157 F.Supp.3d 899, 909 (D. Or. 2016) (quoting Diaz v. United Agr. Emp. Welfare Ben. Plan & Tr., 50 F.3d 1478, 1485 (9th Cir. 1995)). Meaning, whether her LTD claim was “demonstrably doomed to fail” should normally be determined based on the administrative record before the lawsuit was filed. This approach is fair to both parties. A plaintiff like Dioquino should not invoke the futility exception unless there is convincing evidence to support it. Conversely, the futility exception would make little sense if a defendant could evade it by unilaterally opening a new LTD claim only after litigation commences.

Hence, the Court adheres to the default rule and limits the Administrative Record to the items gathered before the lawsuit. See Montour, 588 F.3d at 632 n.4; see also Abate v. Hartford, 471 F.Supp.2d 724, 732 (E.D. Texas 2006) (“The administrative record consists of the ‘relevant information made available to the administrator prior to the complainant's filing of a lawsuit and in a manner that gives the administrator a fair opportunity to consider it.'” (citing Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 300 (5th Cir. 1999))).

II. United's Objection

United objects to Dioquino's declaration filed in support of her Responding Trial Brief (ECF No. 52-1). (ECF No. 55.) In her declaration, Dioquino provides more information about the history of her ailments and other items not found in the Administrative Record, including Dioquino's specific claim that in 2018, Mr. Sourinho “confirmed that [my employer] was unable to accommodate me” given “the manner in which I had to elevate my leg.” (Dioquino Decl. ¶ 7.)

United argues Dioquino had every opportunity to submit this information to the insurer beforehand, so none of the Ninth Circuit's exceptions for allowing additional evidence apply here. (United's Obj. 3.) Further, United raises various specific evidentiary objections to the declaration, including hearsay and lack of foundation for the attached exhibits. (Id. 4-5.) Dioquino responds to United's objection. (ECF No. 58.)

The Court sustains this objection for two reasons. First, Dioquino concedes that if the Court “does not allow consideration of the LTD AR”-the material addressed by the objection above-“then Ms. Dioquino's declaration is irrelevant.” (Dioquino's Resp. to Obj. 2.) Because the Court has sustained Dioquino's objection, the Court similarly excludes this material because she concedes it is irrelevant. Second, regardless, the same rules provide this material should not be considered. Dioquino offers no reason why this information could not have been submitted before she filed suit. Therefore, the Court also excludes her declaration on this basis. See Mongeluzo, 46 F.3d at 944 (“[A] district court should not take additional evidence merely because someone at a later time comes up with new evidence that was not presented to the plan administrator.”).

FINDINGS OF FACT^[1]

The Disability Benefits Plans

1. In 2013, Plaintiff Joni Dioquino started working for Children's Physicians Medical Group, Inc. (“Children's Medical”). (AR 195.)

2. Dioquino participated in two employee welfare benefit plans that her employer sponsored: a short-term disability benefits plan (“STD Plan”) and a long-term disability benefits plan (“LTD Plan”). The policy that funds the STD Plan is Policy No. GUG-AZ46. (AR 1-40.) A separate policy, Policy No. GLTD-AZ46, funds the LTD Plan. (AR 789-832.)

Short-Term Disability Plan

3. The STD Plan provides disability benefits for a maximum of eleven weeks. (AR 18.) Although the plan provides benefits for both partial and total disability, this dispute centers on the benefits for total disability. (Compl. ¶¶ 7, 10 ECF No. 1.)

4. Total Disability. A plan participant like Dioquino is “Totally Disabled” when she is “unable to perform, with reasonable continuity, the Substantial and Material Acts necessary to pursue [her] Usual Occupation” because of “an Injury or Sickness.” (AR 33.) “Substantial and Material Acts” are “the important tasks, functions and operations generally required from employers” in the employee's Usual Occupation “that cannot be reasonably omitted or modified.” (Id.) And the employee's “Usual Occupation” is “any employment, business, trade or profession and the Substantial and Material Acts of the occupation [she was] regularly performing for the Policyholder when the Disability began.” (AR 34.)

5. Elimination Period. An employee who becomes disabled is not immediately entitled to benefits. Rather, the employee must first satisfy the “Elimination Period, ” which is a minimum “period of continuous Total or Partial Disability.” (AR 32.) The STD Plan's Elimination Period is fourteen calendar days. (AR 18.) Therefore, an employee can first start receiving benefits only after fourteen days of continuous disability. (AR 24.)

6. Benefits. Assuming an employee is disabled and satisfies the Elimination Period, the STD Plan provides a “Weekly Benefit” that is the lesser of: (a) 70% of the employee's weekly earnings, less “Other Income Benefits, ” or (b) “the maximum Weekly Benefit, which is $2, 000, less Other Income Benefits.” (AR 18.) The “Other Income Benefits” that offset the Weekly Benefit include state government disability benefits. (AR 19.)

7. Claims Procedure. The STD Plan requires an employee to submit written proof of loss in order for a claim for benefits to be considered. (AR 27.) An employee satisfies this requirement by submitting either a completed claim form or a written statement that includes the cause of the disability, treating...