Gallardo v. Sun Life Assurance Co. of Can.
| Decision Date | 10 June 2013 |
| Docket Number | Cv. No. SA:12-CV-00130-DAE |
| Parties | RUDY GALLARDO, Plaintiff, v. SUN LIFE ASSURANCE COMPANY OF CANADA, Defendant. |
| Court | U.S. District Court — Western District of Texas |
JUDGMENT; (2) DENYING PLAINTIFF'S MOTION
On May 31, 2013, the Court heard oral argument on the cross-Motions for Summary Judgment filed by Plaintiff Rudy Gallardo and Defendant Sun Life Assurance Company of Canada. George E. Mauze II, Esq., appeared on behalf of Plaintiff. Eric Mathisen, Esq., appeared on behalf of Defendant. After carefully considering the memoranda in support of and in opposition to the Motions, and in light of the parties' arguments at the hearing, the Court, for the reasons that follow, GRANTS Defendant's Motion for Summary Judgment (doc. # 30) and DENIES Plaintiff's Motion for Summary Judgment (doc. # 31).
Plaintiff Rudy Gallardo worked as a purchasing manager for Labatt Food Service, LLC ("Labatt") for approximately twenty-seven years, from 1984 to 2011. (First Amended Complaint ("FAC") ¶ 5.) His duties included overseeing purchases of products for distribution, determining inventory levels by item, ensuring accurate product costs, developing relationships with product manufacturers, negotiating pricing, managing purchasing staff, and traveling regularly to visit manufacturers and for trade shows and industry conferences. (CF1 at 364.) Labatt paid premiums to Defendant Sun Life Assurance Company ("Sun Life") for a long-term disability insurance policy (the "Policy") for its employees in managerial positions. (FAC ¶ 12.) Plaintiff, who was employed by Labatt in a managerial capacity, is a beneficiary of the Policy. (Id. ¶ 13.)
The Policy lists as Eligible Classes "[a]ll full-time Executives, Senior Managers, Managers and Sales Representatives working a minimum of 30 hours per week." (Doc. # 30-24 ("Policy") at 4.) An insured's coverage ceases on the earliest of several dates, including (1) the date that he is no longer in an Eligible Class, (1) the date his employment terminates, and (3) the date when he ceases tobe Actively at Work. (Id. at 10.) The Policy considers an insured to be "Actively at Work" when he "performs all the regular duties of his job for a full work day . . . ." (Id. at 6.)
The Policy provides that an insured is entitled to long-term disability benefits for Total Disability when the facts establish that the claimant (1) "is not working or is earning less than 20% of his Indexed Total Monthly Earnings" and (2) "is unable to perform the Material and Substantial Duties of his Own Occupation." (Id. at 12.) To determine the Total Disability Benefit:
(Id. (emphasis added).)
"Total Monthly Earnings" refers to "the Employee's average monthly earnings from the W-2 form . . . received from the Employer for the prior calendar year immediately prior to the first date Total or Partial Disability begins . . . ." (Id. at 10 (emphasis added).) "Other Income Benefits," in turn, are benefits that are "provided or available to the Employee while a Long Term Disability Benefit is payable . . . as a result of the same Total or Partial Disability payable under [the] Policy." (Id. at 14.) The Policy explains that Other Income Benefits include, interalia, the amount the Employee is eligible for under workers' compensation law, a union benefit plan, social security benefits, and "any salary continuation paid to the Employee by his Employer . . . ." (Id. at 15 (emphasis added).) As the method of calculating the Total Benefits demonstrates, Other Income Benefits offset Sun Life's obligation to the insured. (Id. at 16.)
The Policy provides that an employee qualifies for a Partial Disability Benefit if: (1) "the Employee is working and has Disability Earnings of more than 20% but less than 80% of his Indexed Total Monthly Earnings"; and (2) "the Employee . . . is unable to perform the Material and Substantial Duties of his Own Occupation." (Id. at 13-14.) To determine the Partial Disability Benefit for the first twelve months of Partial Disability:
(Id. (emphases added).)
"Disability Earnings" are "the employment income an Employee receives while Partially Disabled or income an Employee receives whileparticipating in an approved Rehabilitation program." (Id. at 8.) Again, the method of calculating the Partial Disability Benefit demonstrates that Other Income Benefits are distinct from Disability Earnings and may offset Sun Life's obligation to the insured.
Finally, the Policy explains that "[t]he Plan Administrator [Labatt] has delegated to Sun Life its entire discretionary authority to make all final determinations regarding claims for benefits under the benefit plan insured by this Policy," including "the determination of eligibility for benefits, based upon enrollment information provided by the Policyholder, and the amount of any benefits due, and to construe the terms of the Policy." (Id. at 32.) "Any court reviewing Sun Life's determinations," the Policy continues, "shall uphold such determination unless the claimant proves that Sun Life's determinations are arbitrary and capricious. (Id. at 32.)
From November 18, 2009, through December 24, 2009, Plaintiff underwent eleven vertebroplasties for compression fractures in his back. (Id. ¶ 6; CF at 223-55.) In January of 2010, Plaintiff was hospitalized for ten days after he developed complications—including acute renal failure, anemia, hypertension,edema, low albumin, hypomagnesemia, and cement pulmonary embolism—from the vertebroplasties. (Id. ¶ 7; CF at 160, 174, 177, 181, 213.) Plaintiff was in an inpatient rehabilitation program from January 21, 2010, through February 5, 2010. (CF at 51, 151, 155.) During this time, Plaintiff's treating doctors reported that Plaintiff needed supervision or assistance with even the most basic activities of daily living, such as eating, grooming, bathing, dressing, using the toilet, and walking. (Id. at 740-45.) Plaintiff told his doctors, "I can't walk." (Id. at 740-45.) On February 22, 2010, another of Plaintiff's treating physicians reported that Plaintiff: (1) was not improving; (2) was still in a wheelchair; (3) was unable to get out of a chair; and (4) still required constant attention. (Id. at 498.) Plaintiff did not return to work until late May or early June of 2010. (Id. at 470-71.) Labatt paid Plaintiff his full salary during this period of leave, and Plaintiff did not apply for disability benefits from Sun Life. (Pl.'s MSJ at 7; CF at 42-43, 1089, 1093.)
It is not clear how many hours Plaintiff worked when he returned to Labatt, because Labatt did not keep track of that information. (CF at 40.) However, there is evidence that Plaintiff was only working half-days during this period and that his physical condition would not have permitted him to work more than that. In discussions with Sun Life representatives, for example, Labattindicated that Plaintiff had returned to work in a reduced capacity in May of 2010 and that he had not worked full days. (Id. at 39.) Labatt explained that Plaintiff was permitted to have a flexible schedule as a courtesy due to Plaintiff's long tenure at the company. (Id. at 39-40.)
Statements from Plaintiff's doctors also suggested that Plaintiff was not working full days. On September 28, 2010, Plaintiff's treating physician, Dr. Seaworth, reported that Plaintiff had "returned to work for half days." (CF at 265-66.) On March 1, 2011, Dr. Molina reported that Plaintiff "ha[d] been working just half a day five days a week since May 2010" and that Plaintiff was "having a difficult time completing his days, even working a half a day . . . ." (Id. at 470-71 (emphasis added).) On April 13, 2011, Dr. Thorner reported that Plaintiff was "unable to walk stairs" or to "carry a briefcase or laptop"; that Plaintiff suffered "[b]ack discomfort if he walk[ed] for more than 20 to 30 feet"; and that Plaintiff had suffered from "[s]hortness of breath with minimal activity since the pulmonary emboli [in January 2010]." (Id. at 365-66 (emphasis added).) Dr. Thorner concluded: "I don't think [Plaintiff] is even capable of sitting at a chair and performing a job." (CF at 365-66.) Finally, on April 25, 2011, Dr. Willingham reported: "[Plaintiff] cannot continue to perform the work that he did before and even in his attempts of returning to work he has only been able to endure partial days." (CF at 350-52.)
Plaintiff, however, insists that he was able to perform the Material and Substantial Duties of his Own Occupation during this time period and that he "worked essentially full-time" from May 2010 until late April of 2011. (Doc. # 32 at 5; accord Pl.'s MSJ at 7.) There is no dispute that Labatt continued to pay Plaintiff 100% of his salary and that Plaintiff did not apply for Partial or Total Disability Benefits from Sun Life during this period. (Pl.'s MSJ at 7; CF at 42-43, 1089, 1093.)
On or about April 26, 2011, Plaintiff ...
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