Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-02234/USCOURTS-caed-2_06-cv-02234-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1441 Petition for Removal- Labor/Mgmnt. Relations

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

AL HEYDARIAN,

Plaintiff, NO. CIV. S-06-2234 LKK/KJM

v. O R D E R

AGILENT TECHNOLOGIES, INC.,

INCOME PROTECTION PLAN, VPA,

INC., and DOES 1 to 100,

Defendants.

 /

Plaintiff Al Heydarian has brought suit against defendants

Agilent Technologies, Inc. Income Protection Plan and VPA, Inc. for

benefits under Section 502(a)(1)(B) of the Employee Retirement

Income Security Act (“ERISA”), 29 U.S.C. § 502(a)(1)(B). Pending

before the court is defendants’ motion for summary judgment, which

argues that plaintiff failed to exhaust his administrative

remedies. The court resolves the matter based upon the papers and

after oral argument. The court denies summary judgment on the

grounds either that defendants have failed to rebut the presumption

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 The facts are undisputed unless otherwise noted.

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that plaintiff timely mailed his appeal or that, even if they have,

there is still a genuine dispute as to whether the appeal was

timely received. The court also remands the matter to the plan

administrator.

I. Facts1

Plaintiff Al Heydarian was hired by Agilent Technologies in

1978 and worked there until October 2001. Pl.’s Statement of

Disputed Fact (“SDF”) ¶ 1. He enrolled in the Agilent

Technologies, Inc. Income Protection Plan (“Plan”), which is a

disability plan subject to ERISA, on or before May 1, 2000. 

Defs.’ Statement of Undisputed Fact (“SUF”) ¶ 1. In July 2000,

plaintiff was diagnosed with cancer and began chemotherapy soon

thereafter. SDF ¶ 8. Plaintiff maintains that he terminated his

employment in October 2001 due to continuing health issues. SDF

¶ 11.

Plaintiff timely filed a claim for disability benefits under

the plan. SDF ¶ 5. Plaintiff’s claim was initially approved and

his benefits were paid until October 1, 2002. Id. Based on an

August 8, 2002 functional capacity evaluation, however, VPA -- the

plan’s administrator and named fiduciary -- determined that

plaintiff did not meet the plan’s definition of disabled. SUF ¶¶

2, 13. The plan confers discretion on VPA when making benefit

determinations. SUF ¶ 4. Defendants notified plaintiff by letter

dated September 6, 2002 that his benefits were to be discontinued.

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2

 Defendants’ confidence in the efficacy of their filing

system, while evidence, is hardly determinative.

3

 Once again, it appears unlikely that the adjudicator or

appeals manager have independent recollection of plaintiff’s file.

What they most likely mean is no appeal is found in the file.

3

SUF ¶ 14. 

The letter also stated that, pursuant to the terms of the

plan, the decision on plaintiff’s claim could be appealed by

submitting a written request within 180 days after the date of

termination, and that the failure to submit a timely appeal would

extinguish plaintiff’s ability to later file suit in court. SUF

¶ 14. Defendants assert that they have no record that plaintiff

submitted a timely appeal. SUF ¶ 15. Defendants maintain that had

anyone at VPA received an appeal, that person would have lodged its

receipt in plaintiff’s claims file case notes. SUF ¶ 16.2 Those

case notes, however, do not indicate that a timely appeal was

received. SUF ¶ 17. Both the claims adjudicator and appeals

manager assigned to plaintiff’s claim have also stated that they

did not receive a timely appeal from plaintiff. SUF ¶ 18.3

Plaintiff, however, represents that he wrote and mailed a

letter to defendants on September 20, 2002 appealing his denial of

benefits. SDF ¶ 13. A copy of that letter is attached to his

declaration. It reads, in relevant part: “Please review the

physical test results again and see if you can reinstate my

benefits.” Decl. of Al Heydarian, Ex. 1. It is not clear that

plaintiff understood this letter as constituting an “appeal” at the

time that he wrote it.

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4 Indeed, counsel states that he has never met plaintiff and

instead communicates by telephone, email, and mail; when plaintiff

is experiencing a “good day,” he contacts counsel.

4

On March 22, 2006, plaintiff retained his present attorney to

pursue his denial of benefits. SDF ¶ 21. Plaintiff’s counsel was

initially unaware of the September 2002 letter. Counsel states

that his client’s medical condition made communication difficult,4

and notes that the letter was not contained in the file sent to him

by VPA. Accordingly, counsel submitted an administrative appeal

in July 2006 -- which, unbeknownst to him at the time, was arguably

a second appeal. The plan administrator denied the July 2006

appeal as untimely. SUF ¶ 22. The parties’ joint December 29,

2006 status report also stated that due to his medical problems,

“Plaintiff was prevented from filing a timely administrative appeal

under the plan.” When plaintiff’s counsel ultimately discovered

the September 20, 2002 appeal letter, he informed defendants’

counsel of its existence.

II. Standard

Summary judgment is appropriate when it is demonstrated that

there exists 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 also Adickes v. S.H. Kress & Co., 398 U.S. 144,

157 (1970); Secor Ltd. v. Cetus Corp., 51 F.3d 848, 853 (9th Cir.

1995).

Under summary judgment practice, the moving party

always bears the initial responsibility of informing the

district court of the basis for its motion, and

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identifying those portions of "the pleadings,

depositions, answers to interrogatories, and admissions

on file, together with the affidavits, if any," which it

believes demonstrate the absence of a genuine issue of

material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). "[W]here the

nonmoving party will bear the burden of proof at trial on a

dispositive issue, a summary judgment motion may properly be made

in reliance solely on the 'pleadings, depositions, answers to

interrogatories, and admissions on file.'" Id. Indeed, summary

judgment should be entered, after adequate time for discovery and

upon motion, 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. See id. at 322. "[A] complete failure of proof concerning

an essential element of the nonmoving party's case necessarily

renders all other facts immaterial." Id. In such a circumstance,

summary judgment should be granted, "so long as whatever is before

the district court demonstrates that the standard for entry of

summary judgment, as set forth in Rule 56(c), is satisfied." Id.

at 323.

If the moving party meets its initial responsibility, the

burden then shifts to the opposing party to establish that a

genuine issue as to any material fact actually does exist.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986); see also First Nat'l Bank of Ariz. v. Cities Serv. Co.,

391 U.S. 253, 288-89 (1968); Secor Ltd., 51 F.3d at 853. 

In attempting to establish the existence of this factual

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dispute, the opposing party may not rely upon the denials of its

pleadings, but is required to tender evidence of specific facts in

the form of affidavits, and/or admissible discovery material, in

support of its contention that the dispute exists. Fed. R. Civ.

P. 56(e); Matsushita, 475 U.S. at 586 n.11; see also First Nat'l

Bank, 391 U.S. at 289; Rand v. Rowland, 154 F.3d 952, 954 (9th Cir.

1998). The opposing party must demonstrate that the fact in

contention is material, i.e., a fact that might affect the outcome

of the suit under the governing law, Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986); Owens v. Local No. 169, Ass’n of

Western Pulp and Paper Workers, 971 F.2d 347, 355 (9th Cir. 1992)

(quoting T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n,

809 F.2d 626, 630 (9th Cir. 1987)), and that the dispute is

genuine, i.e., the evidence is such that a reasonable jury could

return a verdict for the nonmoving party, Anderson, 477 U.S. 248-

49; see also Cline v. Indus. Maint. Eng’g & Contracting Co., 200

F.3d 1223, 1228 (9th Cir. 1999).

In the endeavor to establish the existence of a factual

dispute, the opposing party need not establish a material issue of

fact conclusively in its favor. It is sufficient that "the claimed

factual dispute be shown to require a jury or judge to resolve the

parties' differing versions of the truth at trial." First Nat'l

Bank, 391 U.S. at 290; see also T.W. Elec. Serv., 809 F.2d at 631.

Thus, the "purpose of summary judgment is to 'pierce the pleadings

and to assess the proof in order to see whether there is a genuine

need for trial.'" Matsushita, 475 U.S. at 587 (quoting Fed. R.

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Civ. P. 56(e) advisory committee's note on 1963 amendments); see

also Int’l Union of Bricklayers & Allied Craftsman Local Union No.

20 v. Martin Jaska, Inc., 752 F.2d 1401, 1405 (9th Cir. 1985).

In resolving the summary judgment motion, the court examines

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any. Rule

56(c); see also In re Citric Acid Litig., 191 F.3d 1090, 1093 (9th

Cir. 1999). The evidence of the opposing party is to be believed,

see Anderson, 477 U.S. at 255, and all reasonable inferences that

may be drawn from the facts placed before the court must be drawn

in favor of the opposing party, see Matsushita, 475 U.S. at 587

(citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)

(per curiam)); see also Headwaters Forest Def. v. County of

Humboldt, 211 F.3d 1121, 1132 (9th Cir. 2000). Nevertheless,

inferences are not drawn out of the air, and it is the opposing

party's obligation to produce a factual predicate from which the

inference may be drawn. See Richards v. Nielsen Freight Lines, 602

F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898, 902

(9th Cir. 1987).

Finally, to demonstrate a genuine issue, the opposing party

"must do more than simply show that there is some metaphysical

doubt as to the material facts. . . . Where the record taken as a

whole could not lead a rational trier of fact to find for the

nonmoving party, there is no 'genuine issue for trial.'"

Matsushita, 475 U.S. at 587 (citation omitted).

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5

 That it also serves to defeat otherwise worthy claims

appears not to have been considered significant.

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III. Analysis

Where, as here, a benefit plan governed by ERISA confers

discretion on its administrator, the court reviews the

administrator’s decision for abuse of discretion. Firestone Tire

& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Defendants move

for summary judgment on the grounds that plaintiff failed to

exhaust administrative remedies, and that the plan administrator’s

decision to deny his July 2006 appeal on grounds of untimeliness

was therefore not an abuse of discretion.

“[A] claimant must avail himself or herself of a plan's own

internal review procedures before bringing suit in federal court.”

Diaz v. United Agr. Employee Welfare Ben. Plan and Trust, 50 F.3d

1478, 1483 (9th Cir. 1995). Although not required by statute, the

exhaustion doctrine has been said to “serve[] several important

policy considerations, including the reduction of frivolous

litigation, the promotion of consistent treatment of claims, the

provision of a nonadversarial method of claims settlement, the

minimization of costs of claim settlement and a proper reliance on

administrative expertise.” Id.5

Whatever the value of the exhaustion doctrine, here,

defendants have failed to conclusively prove that they did not

receive plaintiff’s September 2002 letter, which would likely

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6 Defendants argue that plaintiff is bound by two admissions

that he did not appeal until July 2006. The first purported

admission, found in the complaint, simply states that “Plaintiff

appealed his claim July 24, 2006,” FAC ¶ 11, and does not state

that the July appeal was the first or only appeal. The court

declines to construe as binding the second purported admission,

found in the status report, that plaintiff was “prevented from

filing a timely administrative appeal under the plan.” Admissions

made outside pleadings “may be considered admissions of the party

in the discretion of the district court.” Am. Title Ins. Co. v.

Lacelaw, 861 F.2d 224, 227 (9th Cir. 1988). Plaintiff’s counsel,

however, has provided sufficient reason to explain why he was

initially unaware of the letter’s existence. Defendants also do

not dispute that plaintiff’s counsel informed them about the letter

once it was discovered.

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constitute an appeal under the plan.6 Plaintiff has submitted a

copy of the letter and his affirmed statement that he mailed the

letter to defendants on September 20, 2002. SDF ¶ 13. Under the

mailbox rule, “a settled feature of federal common law,” “the

proper and timely mailing of a document raises a rebuttable

presumption that the document has been received by the addressee.”

Schikore v. BankAmerica Supplemental Retirement Plan, 269 F.3d 956,

961 (9th Cir. 2001). Indeed, “[t]he common law mailbox rule is

consistent with the purposes of ERISA and applies to ERISA plans

where receipt is a factual issue in dispute.” Id.

Defendants respond that they have no evidence of receiving

plaintiff’s September 2002 appeal letter on file and that those

responsible for recording such an appeal also have stated that no

such appeal was ever received. Furthermore, they argue that the

plan administrator’s decision to deny the July 2006 appeal was not

an abuse of discretion based on the information available to

defendants at the time. But therein lies the rub: what information

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7

 The court’s hesitance was likely attributable to the fact

that such an rule might run afoul of ERISA’s stated purpose to

“protect . . . the interests of participants in employee benefit

plans and their beneficiaries.” 29 U.S.C. § 1001(b).

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was in fact available to defendants?

In Schikore, a case with substantially similar facts to the

present case, the Ninth Circuit held that “it was an abuse of

discretion for the [ERISA] Plan to fail to apply the

long-established common-law rebuttable presumption that a letter

mailed is received.” 269 F.3d at 961. There, the plaintiff

maintained that she had timely submitted a benefit payment election

form, but defendants had no record of its receipt. Id. at 959.

Significantly, as in the case at bar, the only evidence adduced by

plaintiff was a sworn declaration that she mailed the form. Id.

at 964. Nevertheless, the court noted that a sworn statement “is

credible evidence of mailing for purposes of the mailbox rule.”

Id.

Schikore left unanswered the question of precisely what

evidence a party must adduce to rebut the presumption of receipt

in the context of ERISA. In a footnote, the court noted that a

“specific factual denial of receipt” would be sufficient to rebut

the presumption in a different context (whether a party is entitled

to an extension of time to appeal where the would-be appellant

claimed not to have received notice of the entry of judgment).

Schikore, 269 F.3d at 964 n.7. But it also stated: “We are not

certain that [this] approach to the application of the rule would

apply outside the [time for appeal] context.”7 Id. The court did

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not reach the issue because it found that the plan had failed to

produce a “specific factual denial of receipt,” which “[a]t the

very least [] requires a plan to describe in detail its procedures

for receiving, sorting, and distributing mail.” Id. at 964. Here,

however, the same cannot be said. Defendants have tendered the

declaration of a VPA claims adjudicator, which describes how mail

was received, sorted, and distributed. Decl. of Linda Kennedy ¶

5.

Nevertheless, this court also need not resolve whether a

“specific factual denial of receipt” is sufficient to rebut the

mailbox rule presumption. First, even if defendants have rebutted

the presumption, there would still be a genuine dispute as to

whether the appeal was actually received, and the court would deny

summary judgment on that basis. 

Second, while the plan administrator in Schikore was fully

apprised of plaintiff’s position that she had timely submitted her

paperwork when it denied her administrative appeal, 269 F.3d at

960, here, defendants were not aware of the September 2002 letter

until after litigation had commenced. Accordingly, the appropriate

course of action would be to remand the matter to the plan

administrator for reconsideration in light of the letter. See

Saffle v. Sierra Pacific Power Co. Bargaining Unit Long Term

Disability Income Plan, 85 F.3d 455, 461 (9th Cir. 1996) (holding

that remand to ERISA plan administrator is appropriate where the

administrator has not yet had opportunity “to make [a] call in the

first instance”). Indeed, unlike the parties in Schikore, this is

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8 It also appears that, on remand, defendants are willing to

construe the September 2002 letter as timely received but will only

review medical information submitted up to that point in time.

Plaintiff, however, argues that defendants must consider all

information available to defendants (whether submitted or not) up

to that point in time. That issue is not properly before the court

and I pass no judgment on the merits of either position.

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precisely the remedy requested by defendants.8

IV. Conclusion

For the reasons explained above, defendants’ motion for

summary judgment is DENIED. The court REMANDS the case to the plan

administrator to review plaintiff’s September 2002 appeal. The

clerks’ office is directed to close the case.

IT IS SO ORDERED.

DATED: January 17, 2008.

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