Horton v. Phoenix Fuels, Co., Inc.
| Decision Date | 31 March 2009 |
| Docket Number | No. CV 05-00432-PHX-SMM.,CV 05-00432-PHX-SMM. |
| Citation | 611 F.Supp.2d 977 |
| Parties | Richard M. HORTON, Plaintiff, v. PHOENIX FUELS, CO., INC., et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Eric Glenn Slepian, Slepian Law Office, Phoenix, AZ, for Plaintiff.
A. Louis Dorny, Wilson Elser Moskowitz Edelman & Dicker LLP, Los Angeles, CA, for Defendants.
Before the Court is Defendants' The Prudential Insurance Company of America and Giant Industries, Inc. Group Long Term Disability Policy Motion for Summary Judgment, or in the alternative, Partial Summary Judgment (Doc. 58). Also pending is Plaintiff Richard Horton's Cross-Motion for Summary Judgment (Doc. 66). Having reviewed the administrative record and the parties' arguments, the Court now issues this Memorandum of Decision and Order.
A. Statement of Facts1
Plaintiff Richard Horton ("Horton") was employed by Giant Industries, Inc. ("Giant") as a truck driver and was paid hourly wages, as well as compensation for bonuses and overtime work (Doc. 59, Defs Statement of Facts ("DSOF") ¶ 1). As part of its compensation plan, Giant offered its employees certain benefits, including income replacement in the event of disability. As an employee of Giant, Horton participated in Giant's employee welfare benefits plan ("Giant LTD Plan") and was covered under Group Policy # 22949 issued by The Prudential Insurance Company of America ("Prudential") (Id.).
The Giant LTD Plan is an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Giant LTD Plan provides that Prudential is the long-term disability insurer and Claims Administrator (Doc. 58, 3:16-19). Prudential issued Group Policy # 24929 to Giant which provided disability benefits to eligible Giant employees (Id.). The Giant LTD Plan grants Prudential "the sole discretion to interpret the terms of the Group Contract, to make factual findings, and to determine eligibility for benefits." (DSOF ¶ 16) This dispute arises out of Prudential's calculation of Horton's long-term disability benefits.
The core plan paid for by Giant provided income replacement of 40% of pre-disability earnings, up to a maximum monthly benefit of $2,000.00 (Doc. 62, Ex. 1, PRU HORTON AR0008). The core plan also had a benefit duration of five years; thus, disability coverage terminated after five years regardless of an employee's medical condition (Id. at AR0005). However, if the optional Buy-Up Plan 1 is selected, the benefit rises to 50% of the monthly predisability earnings, but not more than $4,000.00 (Id. at AR0008). Finally, if the optional Buy-Up Plan 2 is selected, the benefit rises to 60% of the monthly predisability earnings, but not more than $4,000.00 (Id.). The duration of coverage could also be extended through purchase of the Buy-Up Plan 1 or Buy-Up Plan 2, which extended coverage until normal retirement age (Id. at AR0006). Horton elected Buy-Up Plan 2, thereby increasing his coverage to provide income replacement of 60% of pre-disability earnings and a maximum monthly benefit of $4,000.00 (Id. at AR0024, AR0044, AR0064, AR0071; Doc. 62, Ex. 2, PRU HORTON AR0122).2 Horton also extended his coverage from 5 years to normal retirement age through his election of Buy-Up Plan 2 (Doc. 62, Ex. 1, PRU HORTON AR0006).
Horton was found to be disabled by Prudential as of April 3, 2002 (DSOF ¶ 1). Giant submitted to Prudential a "Group Disability Insurance Employer Statement" containing the following information:
Employee: Richard Horton
LTD coverage selected: 60%
Date last worked: October 2, 2001
Normal earnings prior to his absence (exclude bonus, overtime, etc.): $15.80
Frequency of earnings: Hourly
Number of hours worked per normal work week: 40
(Id. ¶ 2). In 1999, Horton earned $45,092.53 in gross pay, of which $11,671.65 was overtime pay, and $1,300.00 was bonus pay (Id. ¶ 3). In 2000, Horton earned $45,751.47 in gross pay, of which $11,983.07 was overtime pay, and $1,350.00 was bonus pay (Id. ¶ 4). In 2001, Horton earned $41,952.73 in gross pay, of which $9,335,69 was overtime and $1,400.000 was bonuses (Id. ¶ 5). Upon the determination that Horton was disabled in 2002, Horton was awarded a monthly disability benefit of $1,643.19 (Id. ¶ 6).
The Booklet-Certificate3 provides for an offset in disability benefits based upon the receipt of Social Security Disability Benefits ("SSDB"), but this "Adjusted Benefit" is not to be less than $100 per month (Id. ¶ 7). Horton was specifically advised in writing that "should SSDB be awarded an overpayment will occur on your claim that will need to be repaid." (Id. ¶ 8) On December 27, 2002, Horton executed a "Reimbursement Agreement" that provided that if any SSDB were retroactively awarded to him, he agreed to repay Prudential "the amount paid to me under this Agreement in excess of the amounts to which I would have been entitled under the terms of the Plan." (Id. ¶ 9) Subsequently, on February 18, 2003, Horton was awarded SSDB, including a retroactive determination of benefits dating to April of 2002 when he was deemed disabled by Prudential (Id. ¶ 10). The SSDB totaled $12,033.00 with a monthly award of $1,622.00 (Id.). Then, on April 15, 2003, Prudential sent a letter to Horton's counsel indicating that an overpayment of $15,006.38 had been made based on the February 18 award notice (Id. ¶ 11). The letter included a calculation showing the overpayments (Id.). On May 19, 2003, Horton contested the overpayment and asked that Prudential pay "the full amount due without any offset." (Id. ¶ 12)
This case arises from Horton's claim for long-term disability benefits under the Giant LTD Plan for employees of Giant. The long-term disability benefit is funded through a group insurance policy purchased from Prudential. In April 2002, Mr. Horton's claim for long term disability benefits was approved, and thereafter Horton began receiving monthly benefit payments. The dispute in this case relates to the amount of those monthly benefits. Upon exhausting his administrative appeals, Horton brought this action against Prudential and Giant LTD Plan seeking benefits under the group long-term disability policy issued by Prudential to Giant (Doc. 1).
The parties previously filed cross-motions for summary judgment with this Court (Docs. 30, 43). However, these motions were denied by the Court without prejudice with leave to refile (Doc. 55). In its March 17, 2008 ruling, the Court found that the parties had not provided the administrative record to the Court and had failed to provide cogent analysis of several relevant issues (Id.). Consequently, the Court ordered the parties to refile their motions for summary judgment with specific citations to the administrative record as well as to submit supplemental briefing as to several questions (Id.).4 Defendants filed the current Motion for Summary Judgment on April 30, 2008 (Doc. 58). Plaintiff subsequently filed a Cross-Motion for Summary Judgment on June 26, 2008 (Doc. 66).5 The supplemental briefing addressing the Court's designated four questions was filed by Defendant on April 30 2008 (Doc. 61), and by Plaintiff on May 2, 2008 (Doc. 63).
A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Jesinger v. Nev. Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Jesinger, 24 F.3d at 1130. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The dispute must also be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id.; see Jesinger, 24 F.3d at 1130.
A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548. Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322, 106 S.Ct. 2548; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. See Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548. The party opposing summary judgment need not produce evidence "in a form that would be admissible at trial in order to avoid summary judgment." Id. at 324, 106 S.Ct. 2548. However, the nonmovant "may not rest upon the mere allegations or denials of [the party's] pleadings, but ... must set forth specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e); see Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir.1995).
Where the decision to grant or deny ERISA benefits is reviewed for abuse of discretion, a motion for summary judgment is merely the conduit to bring the legal question before the district court and the usual tests of summary judgment, such as whether a genuine dispute of material fact exists, do not apply. Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir.1999) citing 29 U.S.C.A. § 1132(a)(1)(B); Fed. Rules Civ. Pro....
To continue reading
Request your trial
-
Roth v. the Prudential Ins. Co. of Am.
...to establish an abuse of discretion standard of review. This court is not persuaded by this authority. In Horton v. Phoenix Fuels, Co., 611 F.Supp.2d 977, 985–86, 989 (D.Ariz.2009), the court found that language in an ERISA Statement was sufficient to establish an abuse of discretion standa......
-
Woolsey v. Aetna Life Ins. Co., No. CV-18-00578-PHX-SMB
...administrator's decision was an abuse of discretion, just as a court would weigh a conflict of interest." Horton v. Phoenix Fuels, Co., Inc. , 611 F.Supp.2d 977, 986 (D. Ariz. 2009). "Procedural violations of ERISA do not alter the standard of review unless those violations are so flagrant ......
-
Lewis v. Unum Life Insurance Company of America
...administrator's decision was an abuse of discretion, just as a court would weigh a conflict of interest." Horton v. Phoenix Fuels, Co., Inc. , 611 F.Supp.2d 977, 986 (D. Ariz. 2009). "Procedural violations of ERISA do not alter the standard of review unless those violations are so flagrant ......
-
United Air Ambulance LLC v. Cerner Corp.
...an administrator's decision was an abuse of discretion, just as a court would weigha conflict of interest." Horton v. Phoenix Fuels, Co., Inc., 611 F.Supp.2d 977, 986 (D. Ariz. 2009). "Procedural violations of ERISA do not alter the standard of review unless those violations are so flagrant......