Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-00119/USCOURTS-casd-3_07-cv-00119-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ANDREW ASHBY,

Plaintiff,

CASE NO. 07CV119 JLS (CAB)

ORDER DENYING

DEFENDANT’S MOTION FOR

SUMMARY JUDGMENT

(Doc. No. 14)

vs.

UNDERWRITERS AT LLOYD’S,

LONDON,

Defendant.

This action arises out of Andrew Ashby’s (“plaintiff”) disputed claim for disability benefits

pursuant to a Professional Athlete’s Insurance Policy (“Policy”) issued by Underwriters at

Lloyd’s, London (“defendant”). Defendant has moved for summary judgment, arguing that

plaintiff did not suffer a “permanent, total disablement” within the meaning of the Policy and/or

that plaintiff’s lawsuit is time-barred by the Policy’s limitations provision. (Doc. No. 14.) For the

reasons stated below, the Court denies the motion.

BACKGROUND

A. Facts

1. Relevant Policy Provisions

Defendant issued the Policy to plaintiff effective February 26, 2003 to February 26, 2004. 

(Answer ¶ 7.) The Policy lists plaintiff’s occupation as “professional baseball player–pitcher” and

provides coverage for “Permanent Total Disablement Accident or Sickness.” (Policy Declaration

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Page.) The Policy defines “permanent total disablement” as “the Assured’s complete and total

physical inability to engage in his occupation . . . for 12 continuous months. Provided that at the

end of such 12 months, the Assured is adjudged . . . to be completely unable ever again to engage

in such stated occupation.” (Id. “Definition”.) The Policy provides coverage 

against any bodily injury caused by an accident occurring during the certificate

period . . . which shall solely and independently of any other cause within 12

months from the date of such accident . . . results in the commencement of the

Permanent total disablement, as herein defined, of the Assured and thereby prevents

him from continuing his occupation as stated in the declaration page.

(Id. “Loss of Services Insurance”.)

The Policy further explains that “[a]ny claim . . . shall be subject to the approval of two

independent medical referees, one to be appointed by the Assured and one by the Underwriters.” 

(Id. Part I–Agreements ¶ 1.) If those two referees do not agree, the Policy provides for the

American Medical Association to appoint a third referee, whose decision “shall be final and

binding upon all parties.” (Id.) The Policy states additional preconditions for the payment of

claims:

No benefit will be payable under this certificate unless the Assured shall be

continuously and Permanently totally disabled as the result of such bodily injury or

sickness for a period of 12 months during which the Assured is prevented from

continuing his occupation . . . at any time during such period and unless at the

expiration of such 12 months period the Assured is deemed in the opinion of the

aforesaid referees, to be completely unable to engage in such occupation without

hope of improvement.

(Id. ¶ 2.) 

 In addition, the Policy provides: 

[n]o action at law or equity shall be brought to recover under this certificate prior to

the expiration of 12 months from the commencement of the Permanent and total

disablement. . . . No such action shall be brought after the expiration of three years

from the commencement of such Permanent and total disablement.

(Id. Part IV–Conditions ¶ 8.) International Risk Management Group (“IRMG”) managed claims

for Underwriters. (Gleason Decla. ¶ 1.) 

2. Plaintiff’s Claim

Plaintiff began his career as a professional baseball pitcher in 1992. (Ashby Decla. ¶ 9.) In

April 2004, plaintiff, through his agent Mark Gilliam Enterprises, submitted a completed

“Disability Claim Form.” (Gleason Decla., Exhibit B, at 1.) The Disability Claim Form

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1

 The “Tommy John” surgery reconstructed plaintiff’s ulnar collateral ligament in his right

elbow and cleaned out additional bone spurs. (Gleason Decla. ¶ 8; Ashby Decla. ¶ 11 & Exhibit 3.)

2

 Based on her prior occupation as a registered nurse for over ten years, Gleason represents that

“valg stress” is a reference to the Valgus Stress Test, which is used to diagnose ulnar collateral

ligament problems. (Gleason Decla. ¶¶ 1, 9.) 

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represented that plaintiff became totally disabled in September 2003 and had undergone “Tommy

John” surgery1

 in October 2003. (Id., Exhibit B, at 2.) IRMG reviewed medical records and

reports from plaintiff’s treating physicians, including a Scripps Clinic Annual Examination

(“SCAE”) from February 24, 2005. (Id. ¶ 9.) The SCAE report includes the following notation:

“elb well healed/ no pain w/ valg stress/ <5% flex contraction.”2

 (Id., Exhibit C, at 9.) The

examining physician checked the “No restrictions” box under the “Participation” heading. (Id.,

Exhibit C, at 10.) 

Defendant denied plaintiff’s claim and never paid Policy benefits. (Ashby Decla. ¶ 7.) 

B. Procedure

The instant complaint, filed on January 3, 2007 in state court and removed to this Court on

January 18, 2007 based on diversity jurisdiction (Doc. No. 1), alleges that plaintiff suffered a

bodily injury in September 2003 and, as a result of the injury, sustained a covered loss. The

complaint further alleges that defendant failed to make a payment on his claim, thereby breaching

both the insurance contract and the implied covenant of good faith and fair dealing. Plaintiff seeks

damages and declaratory relief. Upon removal, the action was originally assigned to the Hon.

John A. Houston. 

Defendant answered the complaint on January 24, 2007. (Doc. No. 2.) 

Defendant moved for summary judgment on May 3, 2007. (Doc. No. 14.) Plaintiff filed

his opposition to the motion on June 28, 2007. (Doc. No. 17.) Defendant filed its reply on July 5,

2007. (Doc. No. 18.) Judge Houston held a motion hearing on July 12, 2007 and then took the

matter under submission. 

This action was reassigned to the Hon. Janis L. Sammartino on November 15, 2007. This

Court heard additional oral argument on February 1, 2008 and re-submitted the motion. 

//

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LEGAL STANDARD

Summary judgment is properly granted when “there is no genuine issue as to any material

fact and ... the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). Entry

of 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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party

moving for summary judgment bears the initial burden of establishing an absence of a genuine

issue of material fact. Celotex, 477 U.S. at 323. Where the party moving for summary judgment

does not bear the burden of proof at trial, it may show that no genuine issue of material fact exists

by demonstrating that “there is an absence of evidence to support the non-moving party’s case.” 

Id. at 325. A moving party not bearing the burden of proof at trial is not required to produce

evidence showing the absence of a genuine issue of material fact, nor is it required to offer

evidence negating the moving party’s claim. Lujan v. National Wildlife Fed’n, 497 U.S. 871, 885

(1990); United Steelworkers v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989). 

Once the moving party meets the requirements of Rule 56, the burden shifts to the party

resisting the motion, who “must set forth specific facts showing that there is a genuine issue for

trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). Without specific facts to

support the conclusion, a bald assertion of the “ultimate fact” is insufficient. See Schneider v.

TRW, Inc., 938 F.2d 986, 990-91 (9th Cir. 1991). A material fact is one that is relevant to an

element of a claim or defense and the existence of which might affect the outcome of the suit. The

materiality of a fact is thus determined by the substantive law governing the claim or defense. 

Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment. 

T.W. Electrical Service, Inc. v. Pacific Electrical Contractors Ass’n, 809 F.2d 626, 630 (9th Cir.

1987)(citing Anderson, 477 U.S. at 248).

When making this determination, the court must view all inferences drawn from the

underlying facts in the light most favorable to the nonmoving party. See Matsushita Elec. Indus.

Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “Credibility determinations, the

weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions,

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not those of a judge, [when] . . . ruling on a motion for summary judgment.” Anderson, 477 U.S.

at 255.

DISCUSSION

Defendant moves for summary judgment on the grounds that (A) as a matter of law,

plaintiff has not suffered a “permanent, total disablement,” as defined under the Policy; and (B)

plaintiff is barred from bringing the instant suit by the Policy’s three-year limitations provision. 

The Court considers and rejects both grounds below.

A. Whether plaintiff has suffered a “permanent, total disablement”

Defendant argues that plaintiff did not present adequate medical evidence to establish that

his claim qualified for Policy coverage. Plaintiff did not show, first, that he suffered from a

permanent and total disablement, nor, second, that any such permanent and total disablement was

caused exclusively by his September 2003 bodily injury. Defendant claims that it was under no

obligation to initiate the Policy’s independent medical review process because plaintiff, in the first

instance, failed to satisfy his burden of proving that the claim fell within the scope of coverage. 

See Pan Pac. Retail Props., Inc. v. Gulf Ins. Co., 471 F.3d 961, 970 (9th Cir. 2006) (“In an

insurance coverage action, the insured has the burden to prove that the claim falls within the basic

scope of coverage”); Goomar v. Centennial Life Ins. Co., 855 F. Supp. 319, 326 (S.D. Cal. 1994)

(“In insurance disputes the burden is on the insured to prove all facts necessary to show that his

claim falls within the terms and conditions of coverage.”) 

The Court declines to adopt defendant’s construction of the Policy, as a matter of law. The

Policy states that “[a]ny claim . . . shall be subject” to the independent medical review process. 

(Part I–Agreement ¶ 1.) Defendant points to no Policy provision that would excuse the parties

from pursuing this review before defendant made its decision about coverage. At oral argument,

defendant emphasized the Policy’s requirement that the insured be “adjudged . . . to be completely

unable ever again to engage in” his occupation and the absence of any such adjudication in this

case. (See Policy “Definition”.) However, the Policy states that the adjudication must take place

“in accordance with the provisions of paragraph 1 of Part I–Agreements,” i.e., the section of the

Policy detailing the independent medical review process. Because no independent medical review

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3

 The Court does not hold that the Policy, properly construed, required the parties to undergo

the independent medical review process. Instead, the Court’s analysis shows that the Policy could be

construed in a way that is different from the construction urged by defendant. In other words,

defendant cannot establish, as a matter of law, that plaintiff’s burden of proving that his claim falls

within the scope of coverage allows defendant to deny plaintiff’s claim without invoking the

independent medical review process. The viability of an alternative interpretation precludes the Court

from granting defendant’s motion for summary judgment.

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took place in this case, defendant arguably failed to adjudicate plaintiff’s claim in accordance with

the relevant Policy provisions. Therefore, defendant cannot prevail on summary judgment merely

by alleging an absence of evidence to support plaintiff’s case.3

Furthermore, the Court rejects defendant’s argument that the evidence relied on to deny the

claim establishes, as a matter of law, that plaintiff was not permanently and totally disabled. Here,

Ms. Gleason is a co-founder and president of IRMG (Gleason Decla. ¶ 1), but apparently not the

claims manager who reviewed plaintiff’s claim. Gleason’s declaration explains that, “[d]uring the

course of its investigation, IRMG obtained copies of medical records and reports from [plaintiff’s]

various physicians and surgeons.” (Id. ¶ 9.) Rather than provide the Court with the entire file that

IRMG reviewed, Gleason attached a single document: the SCAE report. (Id., Exhibit C.) Upon

review of the SCAE report, the Court finds that it consists mostly of a physician’s barely legible

notations. Based on knowledge gained in her prior career, Gleason purports to translate some of

those notations as they relate to plaintiff’s elbow injury. However, the Court is left in the dark as

to whether Ms. Gleason’s translation is accurate or whether anything else in the SCAE report

might qualify those conclusions. More importantly, Gleason’s declaration does not explain why

the Court should treat the SCAE report as dispositive evidence that plaintiff did not suffer a

permanent and total disablement. Taken alone, the isolated statements that plaintiff’s elbow was

“well healed” and that his “Participation” had “no restrictions” do not provide final answers to the

questions of whether plaintiff had a “complete and total physical inability” to be a professional

baseball pitcher for twelve consecutive months or whether, at the end of that period, he was

completely unable ever again to pitch professionally. For his part, plaintiff declares that the SCAE

report was merely a basic preseason physical, without the battery of diagnostic tests performed by

the orthopedists who originally examined plaintiff’s September 2003 injury. (Ashby Decla. ¶ 16

& Exhibit 2.) Therefore, the Court finds a material dispute of fact concerning the scope of the

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4

 The Policy’s limitations provision does not satisfy either prong of Insurance Code § 10350.

First, defendant submits no evidence that the California Insurance Commissioner approved the

Policy’s different wording. Second, the Policy’s limitations provision, which requires the plaintiff to

sue within three years of the commencement of the permanent and total disablement, is less favorable

than § 10350.11, which requires the plaintiff to sue within three years of the deadline for furnishing

proof of loss. No Policy provision requires that the proof of loss be submitted simultaneously with

the commencement of the disability. Therefore, § 10350.11 trumps the limitations provision in Part

IV, Paragraph 8 of the Policy.

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SCAE, which precludes the Court from granting summary judgment on the issue of whether the

medical evidence in the record mandated the denial of plaintiff’s claim.

B. Whether plaintiff’s claim is contractually time-barred

Plaintiff initiated this action in San Diego County Superior Court on January 3, 2007. 

(Notice of Removal, Exhibit A, at 1.) The Policy bars recovery actions “brought after the

expiration of three years from the commencement of [the] Permanent total disablement.” (Part

IV–Conditions ¶ 8.) If plaintiff had any permanent and total disablement, it commenced when

plaintiff was injured in September 2003. Defendant argues that plaintiff’s lawsuit is time-barred,

therefore, because plaintiff filed more than three years after the commencement of the

disablement.

Plaintiff responds, inter alia, that the Policy’s limitations period is unenforceable because it

conflicts with mandatory language required by the California Insurance Code. Section 10350

requires that any disability policy delivered to a person in California must include twelve specific

provisions as codified in §§ 10350.1-12, or “substitute . . . corresponding provisions of different

wording approved by the commissioner which are in each instance not less favorable in any

respect to the insured or the beneficiary.” One such required provision is § 10350.11, “Limitation

of actions on policy,” which reads as follows:

A disability policy shall contain a provision which shall be in the form set forth

herein.

Legal Actions: No action at law or in equity shall be brought to recover on this

policy prior to the expiration of 60 days after written proof of loss has been

furnished in accordance with the requirements of this policy. No such action shall

be brought after the expiration of three years after the time written proof of loss is

required to be furnished.

California-mandated provisions take precedence over other language in the Policy, including any

language that conflicts with the statutorily required provisions.4

 Galanty v. Paul Revere Life Ins.

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5

 If a “loss” under the Policy does not occur until twelve months after the injury giving rise to

the permanent and total disablement, plaintiff’s claim may have been filed prematurely. The Court

need not reach that issue, however, because the single question before the Court is the timeliness of

plaintiff’s claim.

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Co., 23 Cal. 4th 368, 375 (Cal. 2000); Interinsurance Exch. of the Auto. Club of S. Cal. v. Ohio

Cas. Ins. Co., 58 Cal. 2d 142, 145-46 (Cal. 1962). Defendant responds that the Policy’s failure to

include § 10350.11 is unavailing, since another mandatory provision renders plaintiff’s original

claim untimely:

A disability policy shall contain a provision which shall be in the form set forth

herein.

Proofs of Loss: Written proof of loss must be furnished to the insurer . . . in case of

claim for loss . . . within 90 days after the date of such loss. Failure to furnish such

proof within the time required shall not invalidate nor reduce any claim if it was not

reasonably possible to give proof within such time, provided such proof is furnished

as soon as reasonably possible and in no event, except in the absence of legal

capacity, later than one year from the time proof is otherwise required.

Cal. Ins. Code § 10350.7. Defendant claims that plaintiff’s April 2004 proof of loss was untimely

because it was submitted more than ninety (90) days after plaintiff suffered injury in September

2003. 

The Court begins its analysis by rejecting the argument that plaintiff ran afoul of § 10350.7

by untimely submitting his proof of loss more than ninety days after the initial injury. Under §

10350.7, a policyholder must submit a proof of loss within 90 days of the “loss.” Given the

present state of the record, the Court cannot conclude, as a matter of law, that the “loss” occurred

on the date that plaintiff initially suffered the injury. Defendant points the Court to no other Policy

language that would support such a construction of the term “loss”. Indeed, the Policy language

suggests a different conclusion, i.e., that the “loss” occurred twelve months after the injury

occurred. (See Part I–Agreements ¶ 2 (“No benefit will be payable . . . unless the Assured shall be

continuously and Permanently totally disabled as the result of such bodily injury . . . for a period

of 12 months[.]”) & ¶ 3 (“but in no event shall any payment be made hereunder prior to the

expiration of 12 months from the commencement of such Permanent total disablement.”) Because

the proper construction of “loss” remains disputed, the Court declines to find that plaintiff’s claim

was untimely when filed in April 2004, approximately seven months after the injury.5

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6

 Wetzel overruled Williams and earlier precedents on the issue of when a cause of action

accrued under the Employee Retirement Income Security Act (“ERISA”). As Wetzel established that

§ 10350.11 was no longer a statute of limitations for actions alleging breach of a disability insurance

contract (but, instead, acted as a separate contractual limitations provision), Wetzel further held that

§ 10350.11 did not provide the accrual rule for applying the statute of limitations. Nonetheless,

Williams remains good law for the proper construction of § 10350.11 as a contractual limitations

provision.

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The Ninth Circuit has explained that § 10350.11 is a “contractual limitations period[]

which operate[s] distinct and apart from the statutory limitations period set by the state

legislature.” Wetzel v. Lou Ehlers Cadillac Group Long Term Disability Ins. Program, 222 F.3d

643, 648 (9th Cir. 2000) (en banc) (emphasis omitted). In other words, a reviewing court must

first determine whether plaintiff’s suit complies with actual statutes of limitations, and, if so, then

determine whether plaintiff’s suit complies with § 10350.11, as a term read into the Policy. Id. at

650; Heighley v. J.C. Penney Life Ins. Co., 257 F. Supp. 2d 1241, 1258 (C.D. Cal. 2003). Here,

defendant does not claim that plaintiff’s lawsuit is barred by any actual statute of limitations, but,

instead, by limitation provisions in the Policy. Therefore, the Court focuses on the second prong

of the analysis.

In applying the correct contractual limitations provision (i.e., reading the requisite §

10350.11 language into the Policy), the Court finds that plaintiff’s action is not time-barred, as a

matter of law. Interpreting § 10350.11, the Ninth Circuit held, “If [the policyholder] provided

proof that was adequate to put [the insurer] on notice of a claim . . . , his cause of action would be

timely if filed within three years after he knew or had reason to know [the insurer] had denied his

claim.” Williams v. Unum Life Ins. Co. of Am., 113 F.3d 1108, 1112 (9th Cir. 1997), overruled

on other grounds by Wetzel, 222 F.3d at 649.6 Alternatively, the three-year period of § 10350.11

“is equitably tolled ‘from the time the insured files a timely notice, pursuant to policy notice

provisions, to the time the insurer formally denies the claim in writing.’” Rodolff v. Provident Life

& Accident Ins. Co., No. 01-CV-0768 H (AJB), 2002 WL 32072401, at *4 (S.D. Cal. Apr. 5.

2002) (quoting Prudential-LMI Commercial Ins. Co. v. Superior Court, 51 Cal. 3d 674, 678 (Cal.

1990)). Here, defendant presents no evidence as to the date when plaintiff had actual or

constructive knowledge of the denial of his claim, much less the date when defendant formally

denied the claim in writing. Depending on these dates, plaintiff’s cause of action could have been

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7

 Having found that, pursuant to § 10350.11, plaintiff’s action is not time-barred, the Court

declines to reach plaintiff’s additional arguments that the Policy’s limitations provision is

unconscionable or tolled by the parties’ failure to appoint referees pursuant to the Policy’s

independent medical review provisions.

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timely (with or without the benefit of equitable tolling). Lacking this dispositive evidence, the

Court cannot conclude, as a matter of law, that plaintiff’s cause of action was contractually timebarred.7

CONCLUSION

For the reasons stated herein, the Court DENIES defendant’s motion for summary

judgment.

IT IS SO ORDERED.

DATED: March 6, 2008

Honorable Janis L. Sammartino

United States District Judge

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