Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00931/USCOURTS-caed-1_05-cv-00931-2/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 29:1132 E.R.I.S.A.-Employee Benefits

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

KAREN MARTINEZ,

Plaintiff,

v.

PACIFIC GAS & ELECTRIC COMPANY

LONG TERM DISABILITY PLAN,

Defendants.

1:05-CV-00931 OWW DLB

MEMORANDUM DECISION AND ORDER

GRANTING DEFENDANT’S MOTION

FOR SUMMARY JUDGMENT

1. INTRODUCTION

Plaintiff Karen Martinez (“Martinez”) filed a complaint to

recover benefits from a Pacific Gas & Electric (“PG&E”) Long Term

Disability (“LTD”) employee benefit plan. (Doc. 1, Complaint,

Filed July 21, 2005.) Before the court is Defendant PG&E’s

motion for summary judgment. (Doc. 20, Mot. for Summary

Judgment, Filed September 1, 2006) Martinez opposes the motion. 

(Doc. 22, Opposition, Filed September 18, 2006)

2. PROCEDURAL BACKGROUND

Martinez filed her complaint on July 21, 2005. (Doc. 1,

Complaint.) PG&E filed its motion for summary judgment on

September 1, 2006. (Doc. 20, Mot. for Summary Judgment.) On

September 18, 2006 Martinez filed her opposition. (Doc. 22,

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28 Doc. 20-9, Jasper Decl., Exh. A at ¶ 14(a). 1

2

Opposition.) On September 25, 2006, PG&E filed its reply. (Doc.

25, Reply.)

3. FACTUAL BACKGROUND

A. The Plan Terms1

I. The Employee Benefit Administrative Committee as

Administrator of the Plan

According to the language of the PG&E’s LTD Plan, the

Employee Benefit Administrative Committee (“EBAC”) is the

Administrator of the Plan and responsible for the overall

administration of the plan. (Doc. 20-9, Jasper Decl., Exh. A at

¶ 24(b).) According to the terms of the plan: 

The Administrator has the sole power and duty to

establish, and from time to time revise, such rules and

regulations as may be necessary to administer the Plan

in a non-discriminatory manner for the exclusive

benefit of Participants and all other persons entitled

to benefits under the Plan. 

The Administrator shall also maintain such records

and make such rules, computations, interpretations, and

decisions as may be necessary or desirable for the

proper administration of the Plan. The Administrator

shall maintain for inspection by Participants copies of

the Plan, the group insurance contract, investment

policy, each agreement with an investment manager, the

latest annual report, plan description and summary

description and any amendments or changes in any of

these documents. On written request, Participants may

obtain from the Administrator a copy of any of these

documents at a cost established by the Administrator

from time to time. 

The Employee Benefit Administrative Committee

shall have the authority to allocate among its members

or to delegate to any other person any fiduciary

responsibility with respect to the Plan. The

administrator may appoint and delegate to one or more

individuals the power and duty to handle the day-to-day

administration of the Plan. Such individuals need not

be members of the committee and shall serve at the

pleasure of the committee. 

(Id.)

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ii. The Plan’s Definition of Disability

The Plan’s definition of disability is as follows: 

The determination of disability will be made by the

Administrator. In general, a Participant shall be considered

disabled if, by any reason of injury or illness, said Participant

is off work and : (1)is unable to perform the duties of the

Participant’s classification, and (2) The employer is unable to

place the participant in a position commensurate with the

Participant’s reduced work capabilities. (Doc. 20-9, Jasper

Decl., Exh. A at ¶ 14(a).)

According to Martinez, there does not appear to be any

dispute that she meets these requirements. Instead, Martinez

argues that the dispute is whether her benefits are limited to

two years due to the Plan’s “mental/nervous limitation”: 

If the primary cause of a participant’s disability is a

Mental or Nervous Disorder except schizophrenia, dementia,

organic brain syndromes, delirium, amnesia syndromes or organic

delusional or hallucinogenic syndromes, and the Participant is

not receiving Social Security disability benefits, Long-Term

Disability benefits unless the Participant is hospitalized or

institutionalized (institutionalized shall mean admission on a

24-hour basis to a facility under medical supervision and

specializing in the treatment of alcoholism, drug addiction,

chemical dependency or Mental or Nervous Disorder illness). So

long as Participant is hospitalized or institutionalized,

benefits shall continue for the duration of the Participant’s

stay. (Id., ¶ 19(c)) 

//

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B. Undisputed Facts

I. PG&E’s LTD Plan

PG&E’s LTD plan is covered by the provisions of the Employee

Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a). 

(DSUF, No. 1) The plan is self-funded and is the product of

collective bargaining negotiations between PG&E and the

International Brotherhood of Electoral Workers (“IBEW”), Local

1245. (Id.) The plan document provides that determination of

disability will be made by the Plan Administrator. (DSUF, No. 2)

The Employee Benefits Administrative Committee (“EBAC”) also

decides all appeals regarding benefits decisions. (DSUF, No. 4)

The EBAC has delegated its operational authority through a

contract with Fortis Benefits, but retains its other authority,

including the authority to decide appeals under the Plan. (DSUF,

No. 5)

In 1999 PG&E and the union representing employees including

those in Plaintiff’s classification, negotiated amendments to the

LTD plan. (DSUF, No. 6) The amendments, which applied to all

employees whose onset of disability occurred after January 1,

2000 included a provision that LTD benefits would be limited to

two years if the primary cause of the employee’s disability is a

mental or nervous disorder, except for schizophrenia, dementia,

amnesia syndromes or organic delusional or hallucinogenic

syndromes; and the employee is not receiving social security

benefits or is not hospitalized at the time the benefits expire. 

(DSUF, No. 7)

ii. Martinez’s LTD Claim

Martinez is a 50-year-old woman who worked as a clerk in

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PG&E’s vegetation management department. (DSUF, No. 8; Doc. 22,

Pl.’s Opposition.) The position was covered by the terms of a

collective bargaining agreement between PG&E and the IBEW, Local

1245. (DSUF, No. 9) She was first hired in July of 1984, and

transferred to her final position in November of 2002. (Doc. 22,

Pl.’s Opposition.) 

Although Plaintiff has a history of Bi-polar II disease, she

was able to work with her condition until May 15, 2002. (Id.) 

On that day, she was hospitalized for two days due to depressive

symptoms of her disease. (Id.) Upon her release, she was unable

to return to work and has not returned since. (Id.) 

In November 2002 Ms. Martinez applied for LTD benefits.

(DSUF, No. 10) PG&E’s LTD Plan administrator granted plaintiff’s

application for benefits based on her doctor’s diagnosis of bipolar II depression. (DSUF, No. 11) Bi-polar depression is not

one of the mental disorders exempted from the two year limit

under defendant Plan. (Id.) 

The letter informing plaintiff of the approval of her

benefit claim explicitly stated that the maximum duration of the

benefits would be two years, ending on November 14, 2004, unless

she was hospitalized or receiving Social Security Disability

benefits. (DSUF, No. 12)

Plaintiff’s treating doctor sent the Plan Administrator

yearly medical reports. (DSUF, No. 14) Each of these reports

repeated the original diagnosis of depression (bi-polar II). 

(Id.) Neither report lists any physical ailments, other than the

assertion that Plaintiff’s disorder results from a chemical

imbalance. (Id.)

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 In her appeal letter dated December 24, 2004 Plaintiff 2

states that her bi polar II disorder is a chemical imbalance that

“exists in the brain.” She further writes that “there is

significant medical information that [she has] located” which

supports that her disease is a physical condition. (Doc. 20-4,

Fries Decl., Ex. J, Filed September 1, 2006.) Plaintiff however

does not provide this information in the record.

 Specifically, the report noted that Plaintiff’s has little 3

information regarding Ms. Martinez’s treatment or symptoms. 

(Doc. 20-4, Fries Decl. Ex, K Fortis Behavioral Assessment dated

January 15, 2005, Filed September 1, 2006.) According to the

report, none of the information from any of the providers has

provided a definitive type of Bi polar Disorder diagnosis. (Id.) 

Ms. Martinez stated that she had a Bi-polar II Disorder in her

appeal letter dated 12/24/04. (Id.) According to DSM IV-TR a

Bi-polar II Disorder is defined as a clinical course of recurrent

6

On May 1, 2003 and again on June 27, 2003, the Social

Security Administration denied Plaintiff’s applications for

benefits, finding that she was capable of working, and that her

claimed limitations were not fully supported by the evidence in

the file. (DSUF, No. 15) The Plan administrator terminated her

benefits on November 2004. (DSUF, No. 16)

Plaintiff appealed denial of LTD benefits to the EBAC. 

(DSUF, No. 17) In her letter of appeal, Plaintiff argued that

the Plan Administrator incorrectly characterized her bi-polar II

disorder as a mental or nervous disorder, limited to two years of

benefits. (DSUF, No. 18) Rather, she claims that it should be

considered a physical disorder because it was based on a chemical

imbalance. (Id.) She referred to “significant medical

information” she had located to support her contention. (Id.) 2

In addition to reviewing Plaintiff’s medical records, the

EBAC consulted with a retained psychologist who issued a report

to Fortis. (DSUF, No. 19) Based on its review of the record 3

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Major Depressive Disorder accompanied by at least one episode of

hypomania. (Id.) 

 The report also noted that Plaintiff has written cogent 4

letters regarding her claim on several occasions. (Doc. 20-4,

Fries Decl. Ex, K Fortis Behavioral Assessment dated January 15,

2005, Filed September 1, 2006.) The report states that clearly,

Plaintiff is not experiencing any cognitive difficulties

regarding her written expressive language or abstract thought. 

(Id.) The preservation of such abilities in light of true

organic mood disorder, according to the report, would be rather

remarkable and unusual. (Id.) 

7

and the psychologist’s report, the EBAC denied Plaintiff’s appeal

and formally communicated its decision and the reasons for it to

Plaintiff on March 10, 2005. (DSUF, No. 22) The denial letter 4

specifically referenced the Plan section limiting mental/nervous

disorder to two years. (Id.)

Schizophrenia, dementia, amnesia, delusional disorder,

hallucinogenic syndromes, delirium and bi-polar II disorder are

included in Diagnostic and Statistical Manual of Mental Disorders

DSM-IV-TR, 4th ed., rev. Washington D.C. American Psychiatric

Association, 2000 (DSM-IV). (DSUF, No. 23)

C. Disputed Facts

I. PG&E’s LTD Plan

The Plan designates the EBAC as the Administrator and

further provides that the Administrator has the sole power to

establish and revise Plan rules and regulations and make

computations and interpretations as may be necessary or desirable

for the proper administration of the Plan. (DSUF, No. 3) 

Plaintiff disputes this statement by arguing that while the

plan does state that the EBAC has the sole power to establish and

revise the plan, Plaintiff claims it does not vest sole power in

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the EBAC to make computations and interpretations. (PSUF, No.

3.)

ii. Plaintiff’s LTD Claim

In December 2002, plaintiff’s treating doctor filled out a

functional capacity assessment form in which he stated that

plaintiff was physically fine, but suffered from “an inherited

psychiatric illness.” (DSUF, No. 13)

Plaintiff disputes this statement and argues that Dr.

Norwood’s statement was, “She physically is fine - body wise -

She has an inherited psychiatric illness.” (PSUF, No. 13)

Further, Defendants argue that Plaintiff did not provide any

of the “significant medical information” she uses to support her

claim that her Bi-polar II disorder should be considered a

physical, rather than mental, disorder. (DSUF, No. 18) 

Plaintiff argues that the EBAC was in possession of plaintiff’s

physicians’ reports, which constituted significant medical

information in support of her claim. (PSUF, No. 18) 

According to Defendant, the psychologist’s report stated,

inter alia, that the Plan Administrator granted plaintiff’s

application for benefits based on a diagnosis of bi-polar II

disorder; that bi-polar II depression is definitely a mental

disorder, specifically included in DSM-IV; and is less serious

and more easily controlled than some other types of mental

disorders. (PSUF, No. 20) Further, all of the medical reports

submitted to the LTD Administrator diagnosed plaintiff with bipolar II disorder; none mentioned any other medical condition. 

(Id.) Plaintiff disputes this fact to the extent that the

statement attempts to paraphrase Dr. Jones’ report. (PSUF, No.

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 The letter is not clear as to whether Dr. Sievert’s 5

diagnosis that Plaintiff has organic mood disorder is based on a

psychiatric assessment or based on Plaintiff’s theory that her

current mental state is related to gastric bypass surgery she

underwent in 2000. 

9

20.) Plaintiff argues that Dr. Sievert’s letter dated October

30, 2004 expressly diagnosed Plaintiff with organic mood disorder

as well. (Id.; see also, Fries Decl., Ex. M.) 5

Although it was not a basis for plaintiff’s appeal, the

psychologist addressed the purported new diagnosis of organic

mood disorder and discounted it, because in his opinion, such a

disorder would result in significant loss of cognitive abilities. 

(DSUF, No. 21.) Plaintiff disputes that this conclusion is

correct. (PSUF, No. 21.) 

4. STANDARD OF REVIEW

Summary judgment is warranted only “if 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.” Fed. R. Civ. P. 56(c);

California v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998). 

Therefore, to defeat a motion for summary judgment, the nonmoving party must show (1) that a genuine factual issue exists

and (2) that this factual issue is material. Id. A genuine

issue of fact exists when the non-moving party produces evidence

on which a reasonable trier of fact could find in its favor

viewing the record as a whole in light of the evidentiary burden

the law places on that party. See Triton Energy Corp. v. Square

D Co., 68 F.3d 1216, 1221 (9th Cir. 1995); see also Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 252-56 (1986). Facts are

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“material” if they “might affect the outcome of the suit under

the governing law.” Campbell, 138 F.3d at 782 (quoting Anderson,

477 U.S. at 248). 

The nonmoving party cannot simply rest on its allegations

without any significant probative evidence tending to support the

complaint. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir.

2001).

[T]he plain language of Rule 56(c) mandates the

entry of summary judgment, 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 the party's case, and on which that party

will bear the burden of proof at trial. In such

a situation, there can be “no genuine issue as

to any material fact,” since a complete failure

of proof concerning an essential element of the

nonmoving party’s case necessarily renders all

other facts immaterial.

Celotex Corp. v. Catrell, 477 U.S. 317, 322-23 (1986). The more

implausible the claim or defense asserted by the nonmoving party,

the more persuasive its evidence must be to avoid summary

judgment. See United States ex rel. Anderson v. N. Telecom,

Inc., 52 F.3d 810, 815 (9th Cir. 1996). Nevertheless, the

evidence must be viewed in a light most favorable to the

nonmoving party. Anderson, 477 U.S. at 255. A court’s role on

summary judgment is not to weigh evidence or resolve issues;

rather, it is to determine whether there is a genuine issue for

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trial. See Abdul-Jabbar v. G.M. Corp., 85 F.3d 407, 410 (9th

Cir. 1996).

5. DISCUSSION

A. Request for Judicial Notice 

Federal Rule of Evidence 201(b) permits courts to judicially

notice facts not subject to reasonable dispute because they are

either (1) generally known or (2) “capable of accurate and ready

determination by resort to sources whose accuracy cannot be

reasonably questioned.” 

Defendants request judicial notice of the following fact:

Schizophrenia, dementia, amnesia, delusional disorder,

hallucinogenic syndromes, delirium, and bi-polar disorder are

included in Diagnostic and Statistical Manual of Mental Disorders

DSM-IV-TR, 4th ed., rev. Washington, D.C., American Psychiatric

Association, 2000 (DSM-IV). 

This fact is not in dispute. Further, in United States v.

Cantu, 12 F.3d 1506, 1509 n.1 (9th Cir. 1993) the Ninth Circuit

took judicial notice of the content of the DSM-IV manual. 

The request for judicial notice of the inclusion of bi-polar

disorder in DSM-IV is GRANTED. 

B The Administrator’s Determination is Reviewed De Novo

To assess the applicable standard of review, the starting

point is the wording of the plan. Abatie, v. Alta Health & Life

Ins. Co., 458 F.3d 955, 962-963 (9th Cir. 2006). When a plan

does not confer discretion on the administrator “to determine the

eligibility for benefits or to construe the terms of the plan,” a

court must review the denial of benefits de novo “regardless of

whether the administrator or the fiduciary is operating under a

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possible or actual conflict of interest.” Id. at 963. If de

novo review applies, no further preliminary analytical steps are

required. Id. The court simply proceeds to evaluate whether the

plan administrator correctly or incorrectly denied benefits. Id.

But if a plan does confer discretionary authority as a matter of

contractual agreement, then the standard of review shifts to

abuse of discretion. Id. For a plan to alter the standard of

review from the default of de novo to the more deferential abuse

of discretion, the plan must unambiguously provide discretion to

the administrator. Id. If a plan administrator wishes to claim

the benefit of discretionary review, it is not difficult to draft

plan language to grant the appropriate discretion. Sandy v.

Reliance Standard Life Ins. Co., 222 F.3d 1202, 1206 (9th Cir.

2000). The essential first step of the analysis is to examine

whether the terms of the ERISA plan unambiguously grant

discretion to the administrator. Id. Accordingly we first turn

to the text of the plan. Id. 

In Abatie, the language of the plan stated: “The

responsibility for full and final determinations of eligibility

for benefits; interpretation of terms; determination of claims;

and appeal of claims denied in whole or in part under the HFLAC

Group policy rests exclusively with HFLAC. Abatie, 458 F.3d at

963. The court in Abatie found this provision to be sufficient

to confer discretion on Alta, the plan administrator, and

successor in interest to Home Life, even though the word

“discretion” does not appear. Id. The court reasoned that

“there are no ‘magic’ words that conjure up discretion on the

part of the plan administrator.” Id. A plan grants discretion

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 For example, the plan in Bogue v. Ampex Corp., 976 F.2d 6

1319, 1324 (9th Cir. 1992), stated that “the determination...

will be made by Allied-signal upon consideration of whether the

new position... has responsibilities similar to those of your

current position”; the plan in Eley v. Boeing Co., 945 F.2d 276,

278 n.2 (9th Cir. 1991), provided that “the company shall

determine the eligibility of a person for benefits under the

plan, pursuant to the terms and conditions specified”; the plan

in Jones v. Laborers Health & Welfare Trust Fund, 906 F.2d 480,

481 (9th Cir. 1990), specified that the “Board of Trustees shall

have power to construe the provisions of this Trust Agreement and

the Plan, and any such construction adopted by the Board in good

faith shall be binding”; the plan in McDaniel v. Chevron Corp.,

203 F.3d 1099, 1107 (9th Cir. 2000) which gave the administrator

“sole discretion to interpret the terms of the Plan” and whose

interpretations “shall be conclusive and binding” conferred

discretion sufficient to overcome the presumption in favor of de

13

if the administrator has the “power to construe disputed or

doubtful terms” in the plan. Id. Lastly, Abatie held that,

unlike the language of the plan in Ingram v. Martin Marrietta

Long Term Disability Income Plan, 244 F.3d 1109, 1112-1113 (9th

Cir. 2001), the language of the Abatie plan bestowed on the

administrator the responsibility to interpret the terms of the

plan and to determine eligibility for benefits. Id. at 965. 

The language of the PG&E LTD plan in this case cannot be

said to be an unambiguous grant of discretionary authority to the

EBAC. While Plaintiff argues that PG&E’s plan does not use the

words “full and final,” “discretion,” or anything similar that

would connote discretionary authority there are no “magic” words

that conjure up discretion on the part of the plan administrator. 

Abatie, 458 F.3d at 963. Further, the word “discretion” need not

appear for discretion to be explicit. Id. 

However, unlike other plan provisions that have conferred

discretion, the language of the PG&E plan is unclear as to 6

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novo review; and in the language in Bendixen v. Standard Ins.

Co., 185 F.3d 939, 943 & n.1 (9th Cir. 1999) which acknowledged

“full and exclusive authority to interpret the Group Policy”

along with a provision that “any decision [made] in the exercise

of our authority is conclusive and binding” clearly confers

discretion to decide whether a claimant is disabled. see also,

Sandy, 222 F.3d at 1206. 

14

whether it confers authority on EBAC to determine eligibility, to

construe the terms of the Plan, or to make final and binding

determinations. The PG&E plan language states that the EBAC, as

the administrator of the plan: 

(1) is responsible for the overall Administration of

the Plan

(2) has the sole power and duty to establish, and from

time to time, revise such rules and regulations as

may be necessary to administer the Plan 

(3) shall maintain such records and make such rules,

computations, interpretations, and decisions as

may be necessary or desirable for the proper

administration of the Plan.

(Doc. 20-9, Jasper Decl., Exh. A at ¶ 24(b).) Unlike the

language in Abatie, it cannot be said that PG&E’s plan language

is unambiguous in granting discretionary authority to the EBAC. 

Discretion in this case cannot be inferred simply from the EBAC

being responsible for the administration of the plan and for 

establishing and revising the rules of the plan. Further, while

the language which states that the EBAC shall “maintain such

records and make such rules, computations, interpretations, and

decisions as may be necessary or desirable for the proper

administration of the Plan,” does connote discretionary decision

making, it does not unambiguously grant the EBAC power to

determine eligibility, to construe the terms of the Plan, or to

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make decisions that are final and binding. see, Sandy, 222 F.3d

at 1206. It does not say the EBAC shall solely and finally

determine eligibility and the extent of benefits. The language

“necessary and desirable” is ambiguous as to the extent and

conclusions of EBAC’s discretion to make decisions as to

benefits. The EBAC’s determination of Plaintiff’s benefits will

be reviewed de novo. see, Id. at 1207 (it should be clear:

unless plan documents unambiguously say in sum or substance that

the Plan Administrator or fiduciary has authority, power, or

discretion to determine eligibility or to construe the terms of

the Plan, the standard of review will be de novo.)

C. The Plan Definition of “Mental or Nervous Disorder” is

Unambiguous 

The “mental/nervous limitation” of the LTD plan provides: 

“If the primary cause of a participant’s disability is

a Mental or Nervous Disorder except schizophrenia,

dementia, organic brain syndromes, delirium, amnesia

syndromes or organic delusional or hallucinogenic

syndromes, and the Participant is not receiving Social

Security disability benefits, Long-Term Disability

benefits will end immediately after two years from the

date the participant became eligible to receive Long

Term Disability benefits unless the Participant is

hospitalized or institutionalized (institutionalized

shall mean admission on a 24-hour basis to a facility

under medical supervision and specializing in the

treatment of alcoholism, drug addiction, chemical

dependency or Mental or Nervous Disorder illness). So

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long as Participant is hospitalized or

institutionalized, benefits shall continue for the

duration of the Participant’s stay.” 

It is undisputed that Plaintiff’s treating doctor

characterized her disability as a psychiatric illness. It also

undisputed that Plaintiff’s bi-polar II diagnosis was not one of

the explicitly excepted mental disorders under the Plan, and that

Plaintiff was not hospitalized or accepted for Social Security

Benefits. 

However, Plaintiff argues that the dispute in this case

hinges on whether Plaintiff’s condition is a “Mental or Nervous

Disorder” as defined by the Plan. 

a. Under the Policy Terms Plaintiff is Not Entitled

to Benefits

Plaintiff first argues that the Plan provision is fatally

ambiguous because it fails to adequately define mental illness. 

In support of her argument, Plaintiff first cites Kunin v.

Benefit Trust Life Ins., Co., 910 F.2d 534 (9th Cir. 1990.) In

Kunin, Plaintiff sought reimbursement from his group health

insurance policy for treatment of his child’s autism. Kunin, 910

F.2d at 535. The court dealt with the issue of whether the term

“mental illness” encompasses autism. Id. The Kunin court agreed

that the Administrator acted unreasonably in determining that

autism was a “mental illness.” Id. at 539. The record did not

indicate that the doctors with whom the medical director

consulted had any significant experience with or particular

expertise concerning autism. Id. at 538. The director made no

effort to discuss the matter with Kunin’s physicians who later

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testified that autism was not a mental illness. Id. Further,

the textbook definition Dr. Zolot relied on states that although

autism was previously thought to be “primarily psychiatric,” it

later came to be thought of as organically based.” Id. The

court reasoned that, on its face, this definition contains no

conclusions about whether autism should be classified as a mental

illness. Id. Ultimately the fact that autism was no longer

considered “primarily psychiatric” suggests that autism is not a

mental illness. Id. 

Plaintiff also cites Patterson v. Hughes Aircraft Co., 11

F.3d 948, 950 (9th Cir. 1993). In Patterson, Plaintiff filed a

claim for disability benefits due to headaches. Patterson, 11

F.3d at 949. The Administrator found Plaintiff totally disabled

and began paying benefits. Id. However, the benefits were

terminated two years later on the ground that Plaintiff’s

disability “was mental rather than physical, and that he had

exhausted the policy’s two year limitation on benefits resulting

from “mental, nervous or emotional disorders of any type.” Id. 

Upon review, the court held that the term “mental disorder” was

ambiguous because the language of the plan did “not define

‘mental disorder,’ or offer illustrations of conditions that are

excluded or included.” Id. at 950. The court reasoned that the

term “mental illness” is ambiguous in two ways: (1) The plan did

not specify whether a disability is to be classified as “mental”

by looking to the cause of the disability or to its symptoms and

(2) the Plan does not make clear whether a disability qualifies

as a “mental disorder” when it results from a combination of

physical and mental factors. Id. According to the court,

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Plaintiff’s disability may result solely from depression, or

solely from headaches, or a combination of the two. Id. 

Similarly in Mongeluzo v. Baxter Travenol Long Term

Disability Plan, 46 F.3d 938 (9th Cir. 1995) the language of the

mental health limitation stated in relevant part: “Payment will

not be made under this plan for any disability... for more than

24 months during your lifetime if the disability is caused by

mental illness or functional nervous disorder. Id. at 941. 

Relying on Patterson, the court in Mongeluzo reasoned that the

mental illness limitation as applied to plaintiff was ambiguous. 

Id. at 942. Plaintiff suffered from symptoms including fatigue,

ulcerative colitis, oral candidiasis, painful lymph nodes,

recurrent headaches, muscle weakness, joint pain, depression and

anxiety. Id. The court held that the policy did not address the

question of whether a disability with mixed physical and

emotional symptoms and an unclear etiology is considered a

“mental illness.” Id. This is particularly problematic in cases

- such as plaintiffs’s - where the vast majority of symptoms are

physical, but the patient becomes depressed or anxious over a

lack of adequate medical diagnosis and treatment. Id. In this

case, Martinez’s claim is factually distinguishable from

Mongeluzo since she does not provide evidence that her disability

is a mix of physical and emotional symptoms. 

Lastly, Plaintiff cites Lang v. Long Term Disability Plan of

Sponsor Applied Remote Tech., Inc., 125 F.3d 794 (9th Cir. 1997.) 

In Lang, Plaintiff’s disability to work was triggered by stress

arising from her job. Id. at 796. The symptoms she described

were “uncontrollable crying,” “throwing up before work,” and

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“inability to concentrate.” Id. Plaintiff was diagnosed as

having depressive neurosis and was treated for insomnia and

frequent crying spells. Id. Under the insurance plan, mental

disorder was defined as “mental, emotional, behavioral, or

stress-related disorder.” Id. The plan, however, was silent as

to whether the administrator should look to causes or symptoms

when determining whether the claimant had a “mental disorder” for

purposed of applying the limitation. Id. Further, while

Plaintiff was receiving benefits during the two year period, she

was diagnosed with a type of muscular or soft-tissue rheumatism

that affects principally muscles and their attachment to bones. 

Id. The depression and anxiety associated with this rheumatism

are believed to be symptoms of the muscular disease. Id. In

reliance on Kunin and Patterson, this court also held that the

term “mental disorder” was ambiguous because it did not include

“mental” conditions resulting from “physical” disorders. Id. at

779. 

This case, however, is factually distinguishable from the

cases cited by Plaintiff. Plaintiff does not contend that her

bi-polar II disorder is the result or symptom of a physical

disorder or condition, except as it relates to a “chemical

imbalance” which is medically unexplained. It is undisputed that

Plaintiff’s treating doctor sent the Administrator yearly medical

reports which repeated the original diagnosis of bi-polar II

depression. Neither report listed any physical ailments, other

than the uncorroborated opinion that Plaintiff’s disorder

resulted from a chemical imbalance. Further, Plaintiff’s

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 The policy states that “if the primary cause of a 7

participant’s disability is a mental or nervous disorder except

schizophrenia, dementia, organic brain syndromes, delirium,

amnesia syndromes or organic delusional or hallucinogenic

syndromes...benefits will end immediately after two years...” 

 This forecloses Plaintiff’s argument that she is entitled 8

to further benefits. Plaintiff cites the District of Columbia

District Court case of Fitts v. Unum Life Ins. Co. of Am., 2006

U.S. Dist. LEXIS 9235 (D.D.C. 2006). In Fitts, under the LTD

insurance policy, any employee who develops a disability is

eligible for a certain package of benefits until age sixty-five. 

Id. at *3. The policy contains an exception, however. Id. If

the employee’s disability is “due to a mental illness,” the

employee’s benefits are discontinued after twenty-four months. 

Id. The policy in Fitts defines mental illness as a “mental,

nervous or emotional disease or disorder of any type.” Id. The

court framed the final issue Fitts as whether Plaintiff had been

properly diagnosed as someone suffering from bi polar disorder,

and as such, an individual who should be excluded from the

policy’s mental illness exception. Id. at *25. The inquiry in

this case, however, is different from Fitts. In this case, the

policy language includes a list of mental illnesses that are

covered under the plan beyond the two year exception. There is

no question that certain mental illnesses, such as Bi-Polar II

disorder, do not fall under the policy’s mental illness

exception. Because the insurance company expressly excluded Bipolar II disorder from the policy coverage beyond two years, a

Fitts inquiry as to whether Plaintiff was properly excluded from

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treating doctor characterized her disability as a psychiatric

illness. 

Unlike the policy in Patterson, the policy in this case does

define what mental disorders are included rather than only those

that are not excluded from the terms of the LTD policy. Bi 7

polar II disorder is a known psychological disability. The fact

that some psychological conditions were included in the policy’s

language and that bi-polar II disorder was not indicates an

intent by the insurer to specifically exclude bi-polar II

disorder from coverage. While Plaintiff concedes that the Plan 8

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the mental illness exception is not applicable in this case. 

Plaintiff also argues that the Ninth Circuit uses a “caused

based” classification of what constitutes “mental illness.” 

However, the cases discussed in Fitts and cited by Plaintiff are

cases where the language of the policy as to the term “mental

illness” is ambiguous. That is not the case here where the

language intentionally includes some mental illnesses while

intentionally excluding others. 

21

does include specific exceptions, she argues that it does not

explain why these conditions are excepted and that there is no

identifiable link between any of them. Plaintiff argues there is

no reason to believe that bi polar illness should be equated with

any of these conditions, as defendant suggests. However,

Plaintiff offers no law to support her argument that a lack of an

explanation as to the excepted mental conditions in the policy

makes the terms of the policy ambiguous. 

It also undisputed that Plaintiff’s bi-polar II diagnosis is

not one of the explicitly excepted mental disorders from limited

coverage under the Plan, and that Plaintiff was not hospitalized

nor accepted for Social Security Benefits. 

In addition to reviewing Plaintiff’s medical records, the

Administrator consulted with a retained psychologist who issued a

report on Plaintiff’s mental illness. It is an undisputed

judicially noticed fact that bi-polar II disorder is among the

mental disorders listed in Diagnostic and Statistical Manual of

Mental Disorders IV. Unlike the disorder of autism in Kunin,

there is no question, based on undisputed facts, that bi-polar II

disorder is a mental, rather than physical, disorder. 

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However, even if the terms of the PG&E Policy were

ambiguous, the doctrine of contra proferentem, which requires

ambiguities in insurance contracts be construed against the

drafter of the contract, does not apply in this case. In Winters

v. Costco Wholesale Corp., 49 F.3d 550 (9th Cir. 1995), the Ninth

Circuit held that “the rule of contra proferentem is not

applicable to self-funded ERISA plans that bestow explicit

discretionary authority upon an administrator to determine

eligibility for benefits or to construe the terms of the plan.” 

Id. at 539; see also, Eley v. Boeing Company, 945 F.2d 550, 280

(1990)(questioned on other grounds.) In this case, it is

undisputed that the plan is self-funded and is the product of

collective bargaining negotiations between PG&E and the

International Brotherhood of Electrical Workers (“IBEW”), Local

1245. (Id.) If the plan contained any ambiguities in its

language, according to Winters and Eley, the ambiguities would

not be resolved against the Plan. 

ii. The Evidence in the Record Supports a Finding that the

EBAC’s Determination Was Based Upon a Reasonable

Interpretation of the Plan’s Terms. 

Here, it cannot be said that the Administrator’s denial of

Plaintiff’s claims was based on clearly erroneous findings of

fact. It is undisputed that Plaintiff’s treating doctor sent the

Plan Administrator yearly medical reports. Each of these reports

repeated and confirmed the original diagnosis of depression (bipolar II), a mental illness. Neither report lists any physical

ailments or causes, other than the opinion that Plaintiff’s

disorder is related to a chemical imbalance. Plaintiff was also

denied Social Security disability benefits based on her bi-polar

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II disorder and the finding that her cognitive and overall

functioning were not as impaired that she could not perform work. 

Plaintiff appealed denial of PG&E’s LTD benefits to the

EBAC. In her letter of appeal, Plaintiff argued that the Plan

Administrator incorrectly characterized her bi-polar II disorder

as a mental or nervous disorder, limited to two years of

benefits. Rather, she claims that it should be considered a

physical disorder because it was based on a chemical imbalance.

She referred to “significant medical information” she had located

to support her contention. However, she did not provide such

medical information in the record or to the EBAC. 

In addition to reviewing Plaintiff’s medical records, the

EBAC consulted with a retained psychologist who issued a report

to Fortis. Based on its review of the record and the

psychologist’s report, the EBAC denied Plaintiff’s appeal and

formally communicated its decision and the reasons for it to

Plaintiff on March 10, 2005. The denial letter specifically

referenced the Plan section limiting mental/nervous disorder to

two years. 

It is also undisputed that Schizophrenia, dementia, amnesia,

delusional disorder, hallucinogenic syndromes, delirium and bipolar II disorder are included mental disorders in Diagnostic and

Statistical Manual of Mental Disorders DSM-IV-TR, 4th ed., rev.

Washington D.C. American Psychiatric Association, 2000 (DSM-IV). 

(DSUF, No. 23)

Substantial evidence proves that the decision of the EBAC,

as the PG&E’s LTD plan administrator, was based upon a good faith

reliance on and reasonable interpretation of the plan’s terms,

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the medical record, Plaintiff’s psychiatric evaluations

submitted, and on an undisputed supplemental experts’ medical

report. 

Defendant’s motion for summary judgment is GRANTED.

6. CONCLUSION

Defendants’s motion for summary judgment is GRANTED.

Defendant shall submit a form of judgment consistent with this

decision within five (5) days following service by the clerk of

this decision.

IT IS SO ORDERED.

Dated: November 15, 2006 /s/ Oliver W. Wanger 

dd0l0 UNITED STATES DISTRICT JUDGE

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