Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-01506/USCOURTS-casd-3_06-cv-01506-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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06cv1506

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

LYN PATRICK,

Plaintiff,

v.

HEWLETT-PACKARD COMPANY

EMPLOYEE BENEFITS ORGANIZATION

INCOME PROTECTION PLAN, etc.;

et al.,

Defendants. 

 

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Case No. 06-CV-1506-JMA (LSP)

ORDER GRANTING DEFENDANT

VOLUNTARY PLAN ADMINISTRATORS,

INC.’S MOTION FOR SUMMARY

JUDGMENT AND DENYING

PLAINTIFF’S APPLICATION FOR A

CONTINUANCE PURSUANT TO

FED.R.CIV.P. 56(f)

I. Introduction.

On July 26, 2006, Plaintiff filed a Complaint to Recover

Benefits, Costs and Attorneys’ Fees Under [the Employee

Retirement Income Security Act of 1974 (“ERISA”)]; and for

Recovery of Statutory Penalties Under ERISA. [Doc. No. 1] The

parties filed a Consent to Exercise of Jurisdiction by a United

States Magistrate Judge on May 4, 2007. [Doc. No. 19] On June

29, 2007, Defendant Voluntary Plan Administrators, Inc. filed a

Motion for Summary Judgment (“the Motion”). [Doc. No. 29] 

Plaintiff filed an Opposition to the Motion (“Oppo.”) on August

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Amendment Four to the Hewlett-Packard Company Employee Benefits

Organization Income Protection Plan, effective December 16, 2001, 

changed the name of the Plan to the “Hewlett-Packard Company

Disability Plan.” (Declaration of Lauren A. Deeb filed in support of

the Motion [Doc. No. 29-3], exh. A at H00585.)

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14, 2007, and Defendants filed a Reply on August 23, 2007. [Doc.

Nos. 40-45] On August 27, 2007, Judge Adler found the Motion to

be suitable for determination on the papers submitted and without

oral argument pursuant to Civil Local Rule 7.1.d.1. and vacated

the August 30, 2007 hearing date. [Doc. No. 47]

II. Factual Background.

Plaintiff Lyn Patrick was a 20-year employee of Defendant

Hewlett-Packard Company (“HP”). (Declaration of Lyn Patrick

filed in support of Oppo. [Doc. No. 44], “Patrick Decl.,” ¶ 2.) 

In or about 2000, Plaintiff required right shoulder impingement

release therapy and was off work from January to March 2000. She

returned to work in April 2000, but her condition degenerated,

and by 2002 she could no longer function at work. (Id.) 

Plaintiff’s doctors then certified her as totally disabled, and

she was paid long term disability (“LTD”) benefits under the

Hewlett-Packard Company Disability Plan (“the Plan”)1 for a

period of one year. (Id. at ¶ 3.) She also received workers’

compensation benefits. (Id. at ¶ 4.)

On August 11, 2003, Defendant Voluntary Plan Administrators,

Inc. (“VPA”), acting on behalf of HP, terminated Plaintiff’s LTD

benefits. (Id. at ¶ 6.) Plaintiff participated in vocational

rehabilitation training without success, and VPA and HP did not

reinstate her LTD benefits. (Id. at ¶¶ 9-10.) Plaintiff filed a

“Request for Appeal” on February 4, 2004, and VPA responded in a

letter dated February 12, 2004 that Plaintiff had not “presented

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3 06cv1506

any evidence or documentation to substantiate [her] disability

beyond August 24, 2003.” (Id. at ¶¶ 11-12.) In a letter dated

July 9, 2004, VPA upheld the original denial of Plaintiff’s LTD

benefits claim. (Id. at ¶ 13.)

Plaintiff subsequently retained counsel and, on November 24,

2004, counsel requested that VPA and HP reopen Plaintiff’s claim. 

VPA and HP did not respond to counsel’s letter. (Patrick Decl.

at ¶¶ 20-21.) Counsel then sent to VPA and HP a letter dated

February 9, 2006 entitled “Perfection of Internal Appeal of

Denial of Long-Term Disability Benefits,” which included

supplemental medical and vocational reports and other exhibits. 

VPA and HP did not respond to counsel’s letter. (Id. at ¶¶ 22-

27.) Plaintiff filed this action on July 26, 2006. 

III. Defendant Voluntary Plan Administrators, Inc.’s Motion for

Summary Judgment

The sole issue presented by the Motion is whether the Court

should dismiss Defendant VPA as an improper party. Defendant VPA

contends, generally, that because it is not the Plan or “plan

administrator” (the Plan designates VPA as the “claims

administrator”), Plaintiff cannot assert an ERISA claim for

benefits against it. Plaintiff opposes the Motion and contends,

generally, that because VPA acted as a de facto plan

administrator, VPA is a proper defendant. Plaintiff argues that

because the Plan document and the Administrative Services

Agreement (“ASA”) are internally inconsistent regarding the issue

of whether HP delegated its plan administrator function to VPA,

discovery is needed to shed light on VPA’s role as de facto plan

administrator.

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Summary judgment is proper when the “pleadings, depositions,

answers to interrogatories, and admissions on file, together with

the affidavits, if any, 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). An issue is

“genuine” only if there is sufficient evidence for a reasonable

fact finder to find for the non-moving party. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). “In

considering a motion for summary judgment, the court may not

weigh the evidence or make credibility determinations, and is

required to draw all inferences in a light most favorable to the

non-moving party.” Freeman v. Arpaio, 125 F.3d 732, 735 (9th

Cir. 1997).

The party moving for summary judgment bears the initial

burden of identifying those portions of the pleadings, discovery,

and affidavits which demonstrate the absence of a genuine issue

of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24

(1986). Once the moving party meets this initial burden, the

non-moving party must go beyond the pleadings and by its own

evidence “set forth specific facts showing that there is a

genuine issue for trial.” Fed.R.Civ.P. 56(e).

Rule 56(f) provides that the court may continue a motion for

summary judgment if the opposing party “cannot for reasons stated

present by affidavit facts essential to justify the party’s

opposition.” However, “Rule 56(f) is not a shield that can be

raised to block a motion for summary judgment without even the

slightest showing by the opposing party that his opposition is

meritorious.” Willmar Poultry Co. v. Morton-Norwich Products,

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Inc., 520 F.2d 289, 297 (8th Cir. 1975). When “a party fails to

carry his burden under Rule 56(f), postponement of a ruling on a

motion for summary judgment is unjustified.” Id.; see also

Christian v. Mattel, Inc., 286 F.3d 1118, 1129 n.9 (9th Cir.

2002). Furthermore, the discovery sought by means of a Rule

56(f) application must be relevant to the issue presented by the

motion for summary judgment. See Christian, supra, 286 F.3d at

1129 n.9 (upholding denial of Rule 56(f) application when

requested discovery was “immaterial” and “could not change the

undisputed” facts.) 

Plaintiff argues that she should be allowed to conduct

discovery to show that VPA is a de facto plan administrator under

the Plan before the Court decides whether VPA is a proper

defendant to the action. (Oppo. at 7-13.) As the following

discussion illustrates, the issue of whether VPA is a proper

defendant to the action is determinable without the need for

discovery by Plaintiff. For the reasons set forth below, the

Court finds that VPA is not a proper party to the action and

should be dismissed, and further finds that a continuance of the

Motion is neither appropriate nor necessary under Rule 56(f).

A. VPA is the “Claims Administrator” under the Plan

Under Ninth Circuit law, “ERISA authorizes actions to

recover benefits against the Plan as an entity, 29 U.S.C. §

1132(d)(1), and against the Plan’s administrator. See 29 U.S.C.

§ 1132(a)(1)(B).” Ford v. MCI Communications Health & Welfare,

399 F.3d 1076, 1081 (9th Cir. 2005); see also Everhart v.

Allmerica Financial Life Ins. Co., 275 F.3d 751, 754 (9th Cir.

2001). ERISA claims may not be brought against a claims

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administrator. Id. at 1083.

In Everhart, a beneficiary brought an ERISA action against

an employee benefit plan’s insurer, seeking recovery of benefits

due under a life insurance policy. The district court granted

summary judgment in favor of the insurer, and the beneficiary

appealed. The Ninth Circuit considered the question of whether a

claims administrator with complete discretion to make benefits

determinations under the plan can be held liable under ERISA. 

The court rejected the “discretion” argument:

The dissent proposes a new test for suits under

§ 1132(a)(1)(B) whereby suits for benefits could be

brought against a party that is neither the plan itself

nor the plan administrator, but that makes “the

discretionary decisions as to whether benefits were

owed.” [citation omitted] The dissent cites no authority for

this proposition. It is contrary to the cases discussed in text

in this and other circuits that limit § 1132(a)(1)(B) suits to

plans or plan administrators, and – significantly – it seems to

confuse or conflate a § 1132(a)(1)(B) suit with a § 1132(a)(3)

suit for breach of fiduciary duty ... .

(Everhart, supra, 275 F.3d at 754-755 n.3.)

In Ford v. MCI Communications Health & Welfare, supra, MCI

was defined as the “Plan Administrator/Plan Sponsor” of the plan

at issue. Hartford was the claims administrator for the plan. 

The plan did not list Hartford as a plan administrator. The

district court granted summary judgment in favor of Hartford,

finding that Hartford was not a proper party to the action

because it was neither the plan nor the plan administrator. 

Plaintiff contended on appeal that the district court erred in

determining that Hartford was not a proper party to the action

because Hartford “functioned as” the plan administrator. Ford,

supra, 399 F.3d at 1078-1079. The Ninth Circuit affirmed the

district court’s dismissal of Hartford as a defendant:

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[¶] ERISA authorizes actions to recover benefits

against the Plan as an entity, 29 U.S.C. § 1132(d)(1),

and against the Plan’s administrator. See 29 U.S.C.

§ 1132(a)(1)(B); see also Everhart, 275 F.3d at 754. ...

[¶] ERISA defines a plan administrator as “the person

specifically so designated by the terms of the

instrument under which the plan is operated[.]” 29

U.S.C. § 1002(16)(A)(i). The Plan in this case

designated MCI as the plan administrator and Hartford

as the claims administrator.

Id. at 1081. The court went on to reject plaintiff’s argument

that Hartford was subject to suit as the de facto plan

administrator:

[¶] [Plaintiff] argues that Hartford is the plan

administrator because it had discretionary authority to

determine eligibility for benefits and was functioning

as the plan administrator. The Plan Administrator,

MCI, delegated the “exclusive discretion, authority,

responsibility, and right to interpret and construe the

Plan’s terms and to determine all questions of

eligibility under the Plan and to exercise the fullest

discretion permitted by law regarding Plan

administration” to the claims administrators, including

Hartford. 

[¶] The “discretion” argument was considered and rejected by

us in Everhart.

Id. at 1081-1082 (emphasis in original). The Ford court

characterized its ruling in Everhart as “explicitly reject[ing]

the argument that an insurer who ‘controlled the administration

of the plan and made the discretionary decisions as to whether

benefits were owed’ could be sued under § 1132(a)(1)(B).” Id. at

1082, citing Everhart, supra, 275 F.3d at 759. 

The Plan in this case defines the “Claims Administrator” as

VPA. (Declaration of Lauren A. Deeb filed in support of Motion

[Doc. No. 29-3], “Deeb Decl.,” exh. A, § 2(a) at H00545.) The

Plan additionally states “VPA shall not be deemed to be the plan

administrator of the Plan as determined under ERISA.” (Id.) The

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2

When Plaintiff filed her claim for LTD benefits, the Plan

designated the Organization as the plan administrator. When the Plan

was amended following the dissolution of the Organization, HP became

the plan administrator, while VPA continued to be the claims

administrator. Further, the ASA expressly provides that by providing

claim services, VPA shall not be deemed to be the plan administrator. 

(Deeb Supp. Decl., Ex. A at H00620.) 

8 06cv1506

Plan defines the “Organization” as the Hewlett-Packard Company

Employee Benefits Organization, and states that “[t]he

Organization is the ‘plan administrator’ and ‘plan sponsor’ as

such terms are used in ERISA.” (Id.,§§ 2 & 9 at H00547 &

H00572.) Thus, and as unequivocally set forth in the Plan, the

Organization (Hewlett-Packard Company Employee Benefits

Organization), not VPA, is the plan administrator under the

Plan.2

Plaintiff contends that VPA is a proper party because VPA

acted as a de facto plan administrator, in light of the

discretion granted to it by the Plan language. While it is true

that VPA was granted broad discretion under the Plan (see e.g.,

Deeb Decl., exh. A, § 8(e) at H00592), the Ninth Circuit (as

illustrated by Everhart and Ford) has specifically rejected this

theory of liability under ERISA. Under Ninth Circuit law, the

fact that VPA was granted discretionary authority as the claims

administrator does not “convert” its status to that of plan

administrator for purposes of liability under ERISA. See Ford,

supra, 399 F.3d 1081-1082; see also Warner v. Standard Insurance

Company, 2007 WL 174099, *15 (W.D.Wash. Jun. 17, 2007)(Standard’s

motion for summary judgment granted and Standard dismissed as a

defendant: “[d]espite the discretion that Standard enjoyed, they

were not the plan administrator”); Aluisi v. Unum Life Ins. Co of

America, 2005 U.S. Dist. LEXIS 29529 *9 (E.D. Cal. Sept. 28,

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2005)(“Thus, an action under Section 1132(a)(1)(B) must be

brought against the Plan or Plan Administrator even if the Plan

or Plan Administrator have turned over the day to day decisions

of running th plan to another entity”).

B. Plaintiff’s Request for a Continuance to Conduct

Discovery

Plaintiff insists that she should receive responses to her

previously-propounded discovery requests prior to a determination

of whether VPA is a proper party to the action because the

responses to those discovery requests will provide evidence that

VPA acted as a de facto plan administrator. (Oppo. at 7-13.) As

set out above, discovery related to whether VPA acted as a de

facto plan administrator will not change the fact that VPA is the

designated claims administrator, and not the plan administrator,

under the Plan. Controlling Ninth Circuit authority has soundly

rejected the argument advanced by Plaintiff, and no amount of

discovery would assist Plaintiff in establishing that VPA is

properly named as a defendant. As the court in Warner v.

Standard, supra, stated in denying a Rule 56(f) application in

circumstances identical to those present here,

Further discovery by plaintiff on this issue is

unnecessary. No additional information would assist

plaintiff in its position that Standard is a proper

party. Specifically, since this court has rejected the

plaintiff’s discretion argument, documents relating to

the amount of discretion that Standard had are not

relevant to the outcome of the motion for summary

judgment.

2007 WL 174099 at *16. Plaintiff’s application for a continuance

pursuant to Rule 56(f) is therefore denied.

IV. Conclusion and Order

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For the reasons set forth herein, the Court finds that VPA

is not a proper defendant to this action. Accordingly, Defendant

Voluntary Plan Administrators, Inc.’s Motion for Summary Judgment

is GRANTED. Plaintiff’s application for a continuance of the

Motion pursuant to Rule 56(f)is DENIED.

IT IS SO ORDERED.

DATED: October 31, 2007

Jan M. Adler

U.S. Magistrate Judge

Case 3:06-cv-01506-JMA-WMC Document 49 Filed 10/31/07 Page 10 of 10