Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_10-cv-03020/USCOURTS-caed-2_10-cv-03020-2/pdf.json

Parties Involved:
Employers Insurance Company of Nevada
Defendant
Lincoln National Life Insurance
Defendant
Teresa Shappell
Plaintiff
Sun Life Assurance Company
Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

TERESA SHAPPELL, No. 2:10-cv-03020-MCE-EFB

Plaintiff,

v. MEMORANDUM AND ORDER

SUN LIFE ASSURANCE COMPANY, 

et al.,

Defendants.

----oo0oo----

Through this action, Plaintiff Teresa Shappell (“Plaintiff”)

seeks damages for the denial of total disability benefits she

claims entitlement to under disability insurance plans issued by

Defendants Sun Life Assurance Company (“Sun Life”) and Lincoln

National Life Insurance (“Lincoln”). Those disability plans were

obtained by Plaintiff’s former employer, Employers Insurance

Company of Nevada (“Employers”). 

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Presently before the Court is a Joint Motion to Stay filed by Sun

Life and Lincoln (hereafter “Defendants”). For the following

reasons, Defendants’ Motion is DENIED.1

BACKGROUND

Plaintiff initiated this action against Sun Life, Lincoln

and Employers on November 5, 2010, seeking to recover benefits

under the Employee Retirement Income Security Act of 1974,

29 U.S.C. § 1001 et seq. (“ERISA”). Plaintiff alleges she

participated in an employee welfare benefit plan while employed

by Employers, and the benefit plan included long-term disability

benefits funded by policies issued by Defendants. 

This Court granted a Motion to Dismiss Plaintiff’s original

Complaint filed by Defendant Sun Life as to Plaintiff’s Second

Cause of Action, which was initially couched as a claim for

“Breach of Contract: Plan Benefits.” Plaintiff subsequently

filed the operative First Amended Complaint, which Sun Life and

Lincoln answered. 

Defendant Employers, however, then filed its own Motion to

Dismiss, which this Court granted on May 20, 2011. According to

Employers, Plaintiff’s claims against it in the instant action

were duplicative of those already pending against the company in

a Nevada arbitration (“Nevada Arbitration”). 

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 Because oral argument will not be of material assistance, 1

the Court ordered this matter submitted on the briefs. E.D. Cal.

Local Rule 230(g). 

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The Nevada Arbitration came about when Plaintiff filed a gender

discrimination, retaliation and breach of contract action against

Employers in Nevada state court. Employers removed that action

to federal court and moved to compel arbitration. The Nevada

district court granted Employers’ motion, and since that time the

parties to the Nevada Arbitration have undertaken arbitrationrelated discovery. Through their instant Motion, Defendants now

argue this action should be stayed pending completion of those

discovery proceedings. 

STANDARD

The power to issue a motion to stay derives from a federal

district court’s power to control its docket and to ensure that

cases before it are justly determined. Levya v. Certified

Grocers of Cal., Ltd., 593 F.2d 857, 864 (9th Cir. 1979), cert.

denied, 444 U.S. 827 (1979). Indeed, “[a] trial court may, with

propriety, find it is efficient for its own docket and the

fairest course for the parties to enter a stay of an action

before it, pending resolution of independent proceedings which

bear upon the case.” Id. at 863. “This rule applies whether the

separate proceedings are judicial, administrative, or arbitral in

character, and does not require that the issues in such

proceedings are necessarily controlling of the action before the

court.” Id. at 863-64. A federal district court has broad

discretion in deciding whether to issue a stay. Fed. Sav. & Loan

Ins. Corp. v. Molinaro, 889 F.2d 899, 902 (9th Cir. 1989). 

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Nonetheless, “[w]here it is proposed that a pending proceeding be

stayed, the competing interests which will be affected by the

granting or refusal to grant a stay must be weighed.” CMAX, Inc.

v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). “Among these

competing interests are the possible damage which may result from

the granting of a stay, the hardship or inequity which a party

may suffer in being required to go forward, and the orderly

course of justice measured in terms of the simplifying or

complicating of issues, proof, and questions of law which could

be expected to result from a stay.” Id. 

ANALYSIS

Defendants seek to stay this action pending discovery in the

Nevada Arbitration. According to Defendants, “the review of the

discovery and information from the Nevada Arbitration will allow

the parties and the Court to efficiently consider all information

necessary and relevant to [Plaintiff’s] ERISA claims.” Motion,

5:27-6:1. More specifically, Defendants contend “it would be

most efficient for Defendants to obtain the deposition

transcripts and discovery responses from Employers and

[Plaintiff] from the Nevada Arbitration to review and determine

whether to seek to supplement the administrative record in this

ERISA action.” Id., 6:20-22. 

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Defendants are putting the cart before the horse. In this

Court’s Pretrial Scheduling Order (“PTSO”) (ECF No. 33), the

Court ordered that since “[t]his case is governed by ERISA...all

evidence for trial will be limited to the administrative record,”

but that “[t]he parties may move to admit evidence outside of the

administrative record.” PTSO, 2:2-4. Defendants have not made

such a motion. Instead, they are asking the Court to stay this

action while discovery is conducted in a separate and unrelated

non-judicial proceeding, so Defendants can then review that

discovery to determine whether they should, at some point in the

future, move to supplement the record. Since the evidence here

is currently limited to the administrative record, however,

Defendants’ argument is premature. If Defendants had already

successfully moved to supplement the record, a motion for a stay

might be more appropriate, but right now the need for a stay is

speculative at best. 

Moreover, Defendants have not adequately explained why this

action and the Nevada Arbitration cannot proceed simultaneously. 

For example, Plaintiff has already been deposed once in the

Nevada action and it is anticipated her deposition will continue

early this year. Opposition, 5:3-4. Dispositive motions in this

litigation, however, need not be filed until March 22, PTSO,

2:10-11, so, depending on when discovery is expected to be

completed in the Nevada Arbitration, a stay may not be needed to

achieve Defendants’ efficiency goals. 

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In addition, even if Defendants did successfully move to

supplement the record in this case at some point, it is unclear a

stay would be proper given the availability of other less-drastic

alternatives (e.g., Defendants could move to amend the PTSO to

extend the dispositive motion filing deadline).

Finally, on balance, and despite Defendants’ arguments to

the contrary, Plaintiff will likely suffer more hardship from a

stay than Defendants will suffer if no stay is ordered. 

Plaintiff is seeking disability benefits she claims have been

wrongfully withheld and argues that, absent those benefits, she

must survive on a fraction of her former income. Opposition,

3:13-17. She thus contends she will suffer great hardship if

resolution of this case is prolonged. The hardship to Defendants

if their current Motion is denied, on the other hand, will be

minimal. Defendants will remain free to move to augment the

record, to amend the PTSO or to re-file their Motion in a manner

consistent with this Order. Accordingly, Defendants’ Motion is

denied without prejudice.

CONCLUSION

For the reasons just stated, Defendants’ Joint Motion to

Stay (ECF NO. 34) is DENIED without prejudice. 

IT IS SO ORDERED. 

Dated: January 11, 2012

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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