Kurth v. Hartford Life & Accident Ins. Co., Case No. 2:10–cv–01229–JHN–DTBx.

Decision Date27 February 2012
Docket NumberCase No. 2:10–cv–01229–JHN–DTBx.
Citation845 F.Supp.2d 1087
CourtU.S. District Court — Central District of California
PartiesDonald J. KURTH, Plaintiff, v. HARTFORD LIFE AND ACCIDENT INSURANCE CO., Defendant.


Glenn R. Kantor, Niamh E. Doherty, Kantor and Kantor LLP, Northridge, CA, for Plaintiff.

Daniel W. MaGuire, Burke Williams & Sorensen LLP, Los Angeles, CA, for Defendant.




This is an action for benefits pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., brought by Plaintiff Donald J. Kurth, M.D. (Plaintiff) against Defendant Hartford Life and Accident Insurance Co. (Defendant). The suit stems from Defendant's alleged failure to conduct a full and fair review of Plaintiff's disability claim. On August 9, 2011, the Court held a bench trial. One of the key issues was whether Defendant erred in failing to conduct an independent medical evaluation (“IME”), such that, at a minimum, the matter must be remanded for further consideration.1 Plaintiff posits that Defendant abused its discretion in denying Plaintiff's claim because, while an IME was not required, Defendant could have easily requested one.2 Plaintiff further asserts that, while Defendant has discretion in eligibility determinations, it is a conflicted fiduciary. Thus, Plaintiff's argument goes, the abuse of discretion standard must be tempered.3 Defendant counters that Defendant, as claims administrator, has no obligation to conduct an IME and, in any event, an IME would be meaningless because Plaintiff's heart condition is subject to objective testing.4

Having considered the evidence presented at the trial and the parties' briefs, the Court now makes the following findings of fact and conclusions of law. 5 The Court finds in favor of Plaintiff and remands the matter.


Plaintiff commenced this action on February 18, 2011, invoking diversity jurisdiction, 28 U.S.C. § 1332.6 The Complaint alleges claims for breach of contract and breach of covenant of good faith and fair dealing. On July 12, 2010, the Court allowed the parties to brief whether the matter should proceed as an ERISA case.7 On September 27, 2010, the parties stipulated, inter alia, that the bad faith claim be dismissed with prejudice; the breach of contract claim be converted into an ERISA claim under 29 U.S.C. § 1132(a)(1)(B); and Plaintiff's jury demand be stricken.8 The Court approved the parties' stipulation.

On May 3, 2011, Plaintiff filed a “Request to Conduct a Pre-trial NolanHearing to Consider Extrinsic Evidence Relevant to Defendant's Structural And Actual Financial Bias.” 9 Defendant filed an opposition and Plaintiff filed a reply.10 The Court then held a bench trial. The Court allowed the parties to present evidence as to Defendant's structural conflict of interest.11


“In bench trials, Fed.R.Civ.P. 52(a) requires a court to ‘find the facts specially and state separately its conclusions of law thereon.’ Vance v. American Hawaii Cruises, Inc., 789 F.2d 790, 792 (9th Cir.1986) (quoting Fed.R.Civ.P. 52(a)). “One purpose behind Rule 52(a) is to aid the appellate court's understanding of the basis of the trial court's decision. This purpose is achieved if the district court's findings are sufficient to indicate the factual basis for its ultimate conclusions.” Id. (citations omitted). Furthermore, the court “is not required to base its findings on each and every fact presented at trial.” Id. at 792. The following constitutes the findings of fact based on the Administrative Record (“A.R.”) and extrinsic evidence. The Administrative Record in this matter consists of documents stamped “H0001–1719.” 13

A. Plaintiff's Occupation and Job Duties

Plaintiff was employed by the Faculty Physicians and Surgeons of Loma Linda University School of Medicine (“Loma Linda”).14 He was hired in 1997 and worked as a Psychiatrist and Addictionist or Addiction Medicine Physician.15 According to Loma Linda, Plaintiff's job description was his employee contract, and there were no written specific job duties for him as an Addiction Medicine Physician.16 Plaintiff provided group counseling and was specifically employed by the psychiatry department.17 Plaintiff performed chemical dependency patient care from Monday through Friday. Additionally, Plaintiff covered chemical dependency calls from Monday through Friday, 24 hours a day, five days a week.18 The physical aspects of Plaintiff's job included frequent standing and walking, occasional sitting, stooping, kneeling and crouching.19

In addition to his employment with Loma Linda, at the time Plaintiff applied for Long Term Disability (“LTD”) benefits in July 2007, he was also the Mayor of Rancho Cucamonga, a position he has held since 2006, and his duties included “attending a three hour council meeting every other week.” 20 Plaintiff also owned and oversaw various medical facilities. 21

B. Plaintiff's LTD Coverage

The Policy confers upon Defendant “full discretion and authority to determine eligibility for benefits.” 22 Benefits are payable to the insured only upon submission of proof of loss to Defendant.23 Under the Policy, Defendant reserves the right to require the insured to be examined by a physician, vocational expert, functional expert, or other professionals. 24

The pertinent sections of Dr. Kurth's Policy provide:

Disability or Disabled means You are prevented from performing one or more of the Essential Duties of: 1) Your Occupation, during the Elimination Period; and 2) Your Occupation, following the Elimination Period, and as a result Your Current Monthly Earnings are less than 80% of Your Indexed Pre-disability Earnings.25

For physicians, the coverage further provides:

Your Occupation means the general or sub-specialty in which You are practicing for which there is a specialty or sub-specialty recognized by the American Board of Medical Specialties. If the sub-specialty in which You are practicing is not recognized by the American Board of Medical Specialties, You will be considered practicing in the general specialty category.26

“Essential Duty” is defined by the Policy as “a duty that (1) is substantial, not incidental; (2) is fundamental or inherent to the occupation; and (3) cannot be reasonably omitted or changed.” 27

C. Plaintiff's Claim & Defendant's Denials

Plaintiff left work on June 1, 2007 “due to acute myocardial infarction and severe coronary artery disease.” 28 On June 3, 2007, Defendant determined that Plaintiff was “Disabled” and was entitled to benefits beginning on September 1, 2007.29 Thereafter, on June 4, 2007, Plaintiff underwent a quintuple bypass surgery at San Antonio Community Hospital. 30

Plaintiff was paid short term disability insurance benefits, but was originally denied LTD benefits.31 In its initial denial letter, dated October 31, 2007, Defendant concluded that Plaintiff was not entitled to LTD benefits because he failed to show that he was unable to perform the essential duties of his occupation as required by the Policy.32 Thereafter, upon review of Plaintiff's complaints to Dr. Patadia, Defendant determined that Plaintiff was entitledto receive LTD for the period of September 1, 2007 through January 6, 2008.33

Defendant continued paying Plaintiff LTD benefits until February 20, 2009, when, for the second time, it denied the payments of LTD benefits.34 By a letter from Hartford Investigative Specialist Theresa T. McGagin (hereinafter, 2/20/2009 Denial Letter”), Defendant notified Plaintiff that he no longer satisfied the definition of disability under the Policy.35 Defendant explained that as part of its claims management and to determine Plaintiff's current level of functionality, Defendant conducted a surveillance investigation performed on May 28 and 29, 2008 and again on June 28 and 29, 2008.36 During the surveillance, Plaintiff was documented engaging in physical activities, including walking, standing, driving, sawing a piece of wood, and carrying shopping bags.37 The 2/20/2009 Denial Letter also recounted that on September 17, 2008, Defendant sent Kenneth Tingley (“Tingley”), a Hartford investigator, to Plaintiff's residence, and during a 4–hour interview, Plaintiff was observed walking and moving and denied pain. 38 During the interview, Plaintiff reported his “inability to keep up with the physical and cognitive pace and demands of [his] job.” 39 However, Plaintiff also reported at the interview that he received a Master of Business Administration (“MBA”) from Loma Linda University in August 2007 and a Master of Public Administration (“MPA”) from Harvard University in June 2008. 40

On January 22, 2009, Defendant forwarded a copy of the in-person statement made by Plaintiff to Tingley and the reports and surveillance videos to Dr. Patadia, Plaintiff's cardiologist.41 On February 3, 2009, Dr. Patadia reported that he did not wish to be involved or did not want to respond” to Defendant's inquiry.42 Thereafter, Plaintiff's information was referred to MES Solutions (“MES”) for a paper review.43 On February 17, 2009, Mark J. Friedman, M.D. (“Dr. Friedman”) finalized his review of Plaintiff's medical records.44 Dr. Friedman opined that Plaintiff “should be capable of a light level of work.” 45

Based on the foregoing information, Defendant concluded that Plaintiff has “demonstrated a significant degree of cognitive and psychological functioning and stress tolerance based on [his] ability to complete an MBA, MPA, operate and oversee operations of various companies, and maintain the office of Mayor of Rancho Cucamonga while being on disability.” 46 Defendant concluded that Plaintiff is capable of performing sedentary and light work on a full time basis.47 Defendant's payment of LTD benefits to Plaintiff ceased effective February 20, 2009.

D. Plaintiff's Appeal & Defendant's Review

In September 2009, Plaintiff...

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