Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_08-cv-00174/USCOURTS-caed-1_08-cv-00174-1/pdf.json

Parties Involved:
Liberty Life Assurance Company of Boston
Defendant
Harry Schoettler
Plaintiff
Wachovia Corporation/Wachovia Corporation Long-Term Disability Plan
Defendant

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

HARRY SCHOETTLER,

Plaintiff,

v.

WACHOVIA CORPORATION/WACHOVIA

CORPORATION LONG-TERM DISABILITY

PLAN, and LIBERTY LIFE ASSURANCE

COMPANY OF BOSTON,

Defendants.

 

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1:08-cv-0174 OWW DLB

SCHEDULING CONFERENCE ORDER 

Discovery Cut-Off: 9/15/08

Non-Dispositive Motion

Filing Deadline: 9/19/08

Dispositive Motion Filing

Deadline: 9/30/08

Settlement Conference Date:

None

Pre-Trial Conference

Date: 12/1/08 11:00 Ctrm. 3

Trial Date: 1/13/09 9:00

Ctrm. 3 (CT-1 day)

I. Date of Scheduling Conference.

May 7, 2008.

II. Appearances Of Counsel.

Brekhus Law Partners by Peter B. Brekhus, Esq., appeared on

behalf of Plaintiff. 

Seyfarth Shaw LLP by William D. Bishop, Jr., Esq., appeared

on behalf of Defendants. 

///

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III. Summary of Pleadings. 

1. This is an ERISA action in which Plaintiff claims he is

entitled to disability benefits from the Defendant Plan. It is

undisputed that Plaintiff was a participant in the self-funded

Wachovia Corporation Long Term Disability Plan (“Plan”). It is

undisputed that the Plan is an employee welfare benefit plan, as

that term is defined under ERISA § 3(1), 29 U.S.C. § 1102(1). 

Defendants assert that Plaintiff was not entitled to the

benefits.

2. Wachovia, as the plan administrator as granted in the

Plan, has sole discretionary authority to interpret plan terms

and provisions.

3. Liberty Life Assurance Company of Boston (“Liberty

Life”) provides administrative services only through an agreement

with Wachovia (“ASO agreement”) and is neither the administrator,

a fiduciary nor a named fiduciary of the plan.

4. Plaintiff was employed by Wachovia Corporation

(“Wachovia”) as a Senior Vice President/Investments in the

Fresno, California office. He became disabled in July 2002 and

applied for, and was granted, LTD benefits by the Plan from

January 14, 2003, through January 31, 2004. Plaintiff suffered

from major depressive disorder resulting in his complete

inability to perform in his former position. In May of 2003, he

worked as an independent contractor, loan officer for a local

mortgage company. He worked in that position until the end of

February, 2004. Defendants have no information regarding

Plaintiff’s claim of independent contractor status. Plaintiff

has the burden of proof of establishing his employment status.

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5. By letter dated March 11, 2004, the Plan terminated

Plaintiff’s LTD benefits effective February 1, 2004. The Plan

made its decision that Plaintiff no longer qualified for benefits

under the Plan because his earnings exceeded 80% of his predisability income. The Plan does not know if Plaintiff would

have remained eligible for benefits under any other criteria

(i.e., disability status) after February 1, 2004. Plaintiff

appealed the decision to deny future benefits. Plaintiff’s

appeal was denied on September 24, 2005, and Plaintiff filed suit

on February 4, 2008.

6. Plaintiff contends that he was improperly denied long

term disability benefits under the Plan in violation of ERISA. 

Plaintiff also contends that the contract violates California

Insurance Code § 1031.5 requiring notice and warning regarding

statute of limitations, and that the notice terminating benefits

provided by Defendants was improper and insufficient. By reason

thereof, Defendants are estopped from asserting the statute of

limitations. SG&B v. AIIC, 71 Cal.App.4th 1260 (1999).

7. Defendants assert that Plaintiff’s complaint seeking

benefits is time-barred. Defendants also deny the allegations

and assert that all actions taken were done in accordance with

Plan terms and ERISA. Defendants have discharged their duties,

in the interest of the Plan participants and its beneficiaries,

and in doing so, Defendants have acted in accordance with the

documents and instruments governing the Plan. 

IV. Orders Re Amendments To Pleadings.

1. The parties do not anticipate amending the pleadings at

this time. 

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V. Factual Summary.

A. Admitted Facts Which Are Deemed Proven Without Further

Proceedings. 

1. Wachovia self-funds the LTD Plan.

2. The Plan vests Wachovia, as the plan

administrator, with sole discretionary authority to interpret

plan terms and provisions.

3. Liberty Life Assurance Company of Boston (“Liberty

Life”) provides administrative services only and is neither the

administrator, a fiduciary nor a named fiduciary of the Plan.

4. Plaintiff was a participant in the Plan.

5. The Plan is an employee welfare benefit plan, as

that term is defined under ERISA § 3(1), 29 U.S.C. § 1102(1).

6. Plaintiff became disabled in July 2002.

7. Plaintiff applied for, and was granted, LTD

benefits by the Plan from January 14, 2003, through January 31,

2004.

8. Plaintiff suffered from major depressive disorder

resulting in his complete inability to perform in his former

position. Plaintiff was able to pursue an occupation in a

different industry between May of 2003 and February of 2004.

9. The Plan terminated Plaintiff’s LTD benefits

effective February 1, 2004. 

B. Contested Facts.

1. Whether Plaintiff’s complaint is time-barred.

2. Whether Defendants’ plans and procedures are or

were subject to Insurance Code § 10270.97, et seq.

3. Whether Defendants are estopped from asserting the

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statute of limitations by reason of their actions, concerning the

denial of the benefits. SG&B v. AIIC, 71 Cal.App.4th 1260

(1999).

4. Whether Defendants improperly denied Plaintiff’s

LTD benefit claim.

5. Whether Defendants’ denial of Plaintiff’s LTD

benefit claim is supported by the administrative record.

6. Whether Plaintiff is entitled to benefits under

the terms of the Plan.

7. Whether there is a sufficient conflict of interest

proven by Plaintiff to justify considering it as a factor in the

abuse of discretion analysis required under, inter alia, Abatie,

supra. 

8. If the Court finds a conflict of interest exists,

what weight if any should be given to that factor in the abuse of

discretion standard of review. 

VI. Legal Issues.

A. Uncontested.

1. Plaintiff’s claim for relief arises under the

Employee Retirement Income Security Act of 1974, as amended

(“ERISA”), 29 U.S.C. § 1132(a)(1)(B). Pursuant to 29 U.S.C.

§ 1331, this court has jurisdiction over this action because this

action arises under the laws of the United States of America. 29

U.S.C. § 1132(e)(1) provides for federal district court

jurisdiction of this action. 

2. Jurisdiction exists under 28 U.S.C. § 1331 and

is invoked under ERISA. 

3. Venue is proper in the Eastern District of

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California in that Plaintiff is and was a resident of the City of

Fresno, in the County of Fresno, and in the State of California,

when Defendant terminated Plaintiff’s long-term disability

benefits. Therefore, 29 U.S.C. § 1132(e)(2) provides for venue

in this Court in the Fresno Division.

B. Contested. 

1. Defendants contend that ERISA claims of this

nature are subject to a three-year statute of limitations. 

Plaintiff disputes this and/or contends that Defendants are

estopped from asserting the statute of limitations by reason of

their actions and conduct. SG&B v. AIIC, 71 Cal.App.4th 1260

(1999). 

2. Defendants also contend that the benefits

determination in question should be reviewed under the abuse of

discretion standard, Abatie v. Alta Health & Life Insurance

Company, 458 F.3d 955 (9th Cir. 2006), because the Plan language

clearly vests “the exclusive right and sole discretionary

authority” to interpret plan terms and provisions. Plaintiff

disputes this contention on the grounds that under Section 4.7 of

the Administrative Plan decision as to denial of benefits is

subject to review. Plaintiff contends that the discretion

granted to the “Plan Administrator” (Wachovia Corporation

pursuant to Section 4.7) must be reviewed pursuant to the rules

applicable to a “structural conflict of interest because the Plan

Administrator is both the administrator and the funding party.” 

Abatie v. Alta Health & Life Ins. Co., (2006) 458 F.3d 955. 

VII. Consent to Magistrate Judge Jurisdiction.

1. The parties have not consented to transfer the 

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case to the Magistrate Judge for all purposes, including trial.

VIII. Corporate Identification Statement.

1. Any nongovernmental corporate party to any action in

this court shall file a statement identifying all its parent

corporations and listing any entity that owns 10% or more of the

party's equity securities. A party shall file the statement with

its initial pleading filed in this court and shall supplement the

statement within a reasonable time of any change in the

information. 

IX. Discovery Plan and Cut-Off Date.

1. This is an ERISA action seeking to challenge the plan’s

determination of eligibility for benefits and as such is governed

by somewhat different principles than other civil cases routinely

before the Court.

Plaintiff.

2. Inspection of documents and records and earnings

summaries relied upon and used by Defendants in deciding to

terminate Plaintiff’s benefit, review and Plaintiff’s

interrogatories regarding Defendants’ past action in determining

or denying benefits based on the “80% rule” in weighing and

determining Defendants’ “conflict of interest” position, with

respect to funding the benefits and serving as Plan Administrator

to deny benefits.

Defendants.

3. Defendants contend that discovery with respect to

benefit entitlement is generally not allowed in actions brought

pursuant to 29 U.S.C. § 1132(a)(1)(B) with the possible exception

of some very limited inquiry into issues affecting the existence

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and actual impact of any conflict of interest after the court

determines that a reasonable basis for concluding a conflict

exists sufficient to justify the inquiry. See, Abatie, supra. 

Defendants believe the Court will not find that such a conflict

exists. Defendants also contend that discovery outside the

administrative record on any other topic is barred under Abatie

consistent with the general purpose of ERISA § 502(a)(1)(B), 29

U.S.C. § 1132(a)(1)(B), to provide efficient, expeditious and

inexpensive means of resolving benefits disputes. See also,

Newman v. Standard Ins. Co., 997 F.Supp. 1276, 1279 (C.D. Cal.

1998) (denying discovery to Plaintiff in ERISA action, because

permitting Plaintiff to conduct broad discovery would “completely

frustrate” the purpose of ERISA); see also Taft v. Equitable Life

Assurance Society, 9 F.3d 1469, 1472 (9th Cir. 1993) (“A primary

goal of ERISA was to provide a method for workers and

beneficiaries to resolve disputes over benefits inexpensively and

expeditiously.”)

4. Because this matter is governed by ERISA, a trial of

this matter is limited to the Court’s review of the

administrative record compiled and reviewed during the claims

review and appeal processes. See Kearney v. Standard Ins. Co.,

175 F.3d 1084, 1089 (9th Cir. 1999). The Court may not review,

on summary judgment or at trial, information not provided to the

claims administrator during its decision-making process for

Plaintiff’s claim. See e.g., Amato v. Bernard, 618 F.2d 559,

567-568 (9th Cir. 1980); Diaz v. Agricultural Pension Trust, 50

F.3d 1478, 1483 (9th Cir. 1995) (holding that a claimant must

avail himself or herself of a plan’s own internal review

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procedures before bringing suit in federal court); see also

Alford v. DCH Foundation Group Long-Term Life Ins., 144 F.Supp.2d

1183 (C.D. Cal. 2001). Defendants contend no discovery outside

of the administrative record is relevant or likely to lead to

admissible evidence in a trial of this matter.

5. Further, Defendants contend that this Court should not

permit discovery into whether an actual conflict of interest

exists based solely on Plaintiff’s speculation that discovery may

elicit proof of such a conflict. See Newman v. Standard Ins.

Co., 997 F.Supp. 1276, 1278 (C.D. Cal. 1998) (denying plaintiff’s

request for discovery on the issue of whether the plan’s

determination was tainted by an inherent conflict of interest);

see also Palmer v. University Med. Group, 973 F.Supp. 1179, 1190-

91 (D. Ore. 1997) (denying plaintiff’s request for discovery as

to whether claims decision was tainted by apparent conflict of

interest). The administrative record contains information

sufficient for the Court to determine whether an actual conflict

of interest tainted Defendants’ claim decision and whether

Defendants’ claim decision was supported by the evidence. 

Plaintiff has shown no need to take additional discovery on this

issue and should not be allowed to engage in a “fishing

expedition” for unspecified other evidence of an actual conflict. 

Allowing Plaintiff to conduct discovery outside of the

administrative record “flies in the face” of the purpose of ERISA

“to provide a method for workers and beneficiaries to resolve

disputes over benefits inexpensively and expeditiously.” Newman,

supra, 997 F.Supp. at 1281 (quoting Taft v. Equitable Life

Assurance Society, 9 F.3d 1469, 1472 (9th Cir. 1993)). 

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6. The parties are ordered to complete all discovery on

or before September 15, 2008.

7. The parties are directed to disclose all expert

witnesses, in writing, on or before July 15, 2008. Any rebuttal

or supplemental expert disclosures will be made on or before

August 15, 2008. The parties will comply with the provisions of

Federal Rule of Civil Procedure 26(a)(2) regarding their expert

designations. Local Rule 16-240(a) notwithstanding, the written

designation of experts shall be made pursuant to F. R. Civ. P.

Rule 26(a)(2), (A) and (B) and shall include all information

required thereunder. Failure to designate experts in compliance

with this order may result in the Court excluding the testimony

or other evidence offered through such experts that are not

disclosed pursuant to this order.

8. The provisions of F. R. Civ. P. 26(b)(4) shall 

apply to all discovery relating to experts and their opinions. 

Experts may be fully prepared to be examined on all subjects and

opinions included in the designation. Failure to comply will

result in the imposition of sanctions. 

X. Pre-Trial Motion Schedule.

1. All Non-Dispositive Pre-Trial Motions, including any

discovery motions, will be filed on or before September 19, 2008,

and heard on October 24, 2008, at 9:00 a.m. before Magistrate

Judge Dennis L. Beck in Courtroom 9. 

2. In scheduling such motions, the Magistrate

Judge may grant applications for an order shortening time

pursuant to Local Rule 142(d). However, if counsel does not

obtain an order shortening time, the notice of motion must comply

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with Local Rule 251. 

3. All Dispositive Pre-Trial Motions are to be

filed no later than September 30, 2008, and will be heard on

October 27, 2008, at 10:00 a.m. before the Honorable Oliver W.

Wanger, United States District Judge, in Courtroom 3, 7th Floor. 

In scheduling such motions, counsel shall comply with Local Rule

230. 

XI. Pre-Trial Conference Date.

1. December 1, 2008, at 11:00 a.m. in Courtroom 3, 7th

Floor, before the Honorable Oliver W. Wanger, United States

District Judge. 

2. The parties are ordered to file a Joint PreTrial Statement pursuant to Local Rule 281(a)(2). 

3. Counsel's attention is directed to Rules 281 

and 282 of the Local Rules of Practice for the Eastern District

of California, as to the obligations of counsel in preparing for

the pre-trial conference. The Court will insist upon strict

compliance with those rules.

XII. Trial Date.

1. January 13, 2009, at the hour of 9:00 a.m. in Courtroom

3, 7th Floor, before the Honorable Oliver W. Wanger, United

States District Judge. 

2. This is a non-jury trial as jury trials are not

permitted under ERISA.

3. Counsels' Estimate Of Trial Time:

a. 1 day.

4. Counsels' attention is directed to Local Rules

of Practice for the Eastern District of California, Rule 285. 

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XIII. Settlement Conference.

1. A Settlement Conference is not scheduled at this time. 

2. Unless otherwise permitted in advance by the

Court, the attorneys who will try the case shall appear at the

Settlement Conference with the parties and the person or persons

having full authority to negotiate and settle the case on any

terms at the conference. 

3. Permission for a party [not attorney] to attend

by telephone may be granted upon request, by letter, with a copy

to the other parties, if the party [not attorney] lives and works

outside the Eastern District of California, and attendance in

person would constitute a hardship. If telephone attendance is

allowed, the party must be immediately available throughout the

conference until excused regardless of time zone differences. 

Any other special arrangements desired in cases where settlement

authority rests with a governing body, shall also be proposed in

advance by letter copied to all other parties. 

4. Confidential Settlement Conference Statement. 

At least five (5) days prior to the Settlement Conference the

parties shall submit, directly to the Magistrate Judge's

chambers, a confidential settlement conference statement. The

statement should not be filed with the Clerk of the Court nor

served on any other party. Each statement shall be clearly

marked "confidential" with the date and time of the Settlement

Conference indicated prominently thereon. Counsel are urged to

request the return of their statements if settlement is not

achieved and if such a request is not made the Court will dispose

of the statement.

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5. The Confidential Settlement Conference

Statement shall include the following: 

a. A brief statement of the facts of the 

case.

b. A brief statement of the claims and 

defenses, i.e., statutory or other grounds upon which the claims

are founded; a forthright evaluation of the parties' likelihood

of prevailing on the claims and defenses; and a description of

the major issues in dispute.

c. A summary of the proceedings to date.

d. An estimate of the cost and time to be

expended for further discovery, pre-trial and trial.

e. The relief sought.

f. The parties' position on settlement,

including present demands and offers and a history of past

settlement discussions, offers and demands. 

XIV. Request For Bifurcation, Appointment Of Special Master, 

Or Other Techniques To Shorten Trial. 

1. None. 

XV. Related Matters Pending.

1. There are no related matters.

XVI. Compliance With Federal Procedure.

1. The Court requires compliance with the Federal

Rules of Civil Procedure and the Local Rules of Practice for the

Eastern District of California. To aid the court in the

efficient administration of this case, all counsel are directed

to familiarize themselves with the Federal Rules of Civil

Procedure and the Local Rules of Practice of the Eastern District

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of California, and keep abreast of any amendments thereto.

XVII. Effect Of This Order.

1. The foregoing order represents the best

estimate of the court and counsel as to the agenda most suitable

to bring this case to resolution. The trial date reserved is

specifically reserved for this case. If the parties determine at

any time that the schedule outlined in this order cannot be met,

counsel are ordered to notify the court immediately of that fact

so that adjustments may be made, either by stipulation or by

subsequent scheduling conference. 

2. Stipulations extending the deadlines contained

herein will not be considered unless they are accompanied by

affidavits or declarations, and where appropriate attached

exhibits, which establish good cause for granting the relief

requested. 

3. Failure to comply with this order may result in

the imposition of sanctions. 

IT IS SO ORDERED.

Dated: May 23, 2008 /s/ Oliver W. Wanger 

emm0d6 UNITED STATES DISTRICT JUDGE

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