Court Opinion

ID: 612699
Source: CourtListenerOpinion
Date Created: 2011-08-27 00:19:44+00
Date Added: 2024-06-11T14:58:28.958895
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                AUG 26 2011

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

LAURA A. CYR,                                    No. 07-56869

              Plaintiff - Appellee,              D.C. No. CV-06-01585-DDP

  v.
                                                 MEMORANDUM*
RELIANCE STANDARD LIFE
INSURANCE COMPANY, an Illinois
corporation,

              Defendant - Appellant.

LAURA A. CYR,                                    No. 08-55234

              Plaintiff - Appellee,              D.C. No. CV-06-01585-DDP

  v.

RELIANCE STANDARD LIFE
INSURANCE COMPANY, an Illinois
corporation,

              Defendant - Appellant,

  and

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
CHANNEL TECHNOLOGIES, INC.
GROUP LONG TERM DISABILITY
INSURANCE PROGRAM, an employee
benefit plan; CHANNEL
TECHNOLOGIES, INC., in its capacity as
Administrator of the Channel
Technologies Inc Group Long Term
Disability Program,

             Defendants.

                   Appeal from the United States District Court
                      for the Central District of California
                   Dean D. Pregerson, District Judge, Presiding

                     Argued and Submitted October 6, 2009
                 Ordered to be Heard En Banc December 2, 2010
                 Transferred to Three-Judge Panel June 22, 2011
                               Pasadena, California

Before: W. FLETCHER and CLIFTON, Circuit Judges, and POLLAK, Senior
District Judge.**

      Reliance Standard Life Insurance Company appeals the district court’s grant

of summary judgment and attorneys’ fees to Laura Cyr in her action for retroactive

benefits under the Employee Retirement Income Security Act. An en banc panel

of this court held that Reliance was a proper defendant under 29 U.S.C.

§ 1132(a)(1)(B). Cyr v. Reliance Standard Life Ins. Co., 642 F.3d 1202 (9th Cir.

       **
             The Honorable Louis H. Pollak, Senior District Judge for the U.S.
District Court for Eastern Pennsylvania, Philadelphia, sitting by designation.

                                        2
2011) (en banc). The case was transferred back to this panel for disposition of the

remaining issues. We affirm.

      We review de novo whether Cyr was entitled to retroactive disability

benefits under the terms of the benefit plan. See Blankenship v. Liberty Life

Assurance Co. of Boston, 486 F.3d 620, 624 (9th Cir. 2007). Under the plan,

benefits were payable based on “covered monthly earnings,” which were defined

as “salary received from [the employer] on the day just before the date of Total

Disability” (emphasis added). The plan also required that the insured be “actively

at work on the date of the change.”

      The term “received” is not defined in the plan, but the term can reasonably

be construed to encompass a salary retroactively acquired on a particular date. See

Blankenship, 486 F.3d at 624-25 (ruling that the term “receives” is ambiguous and

applying the rule of contra proferentem to adopt an interpretation most favorable

to the insured). It is undisputed that Cyr was actively at work on October 1, 2000,

the date to which the salary increase was retroactively applied. Therefore, absent

other defenses, Reliance was obliged to provide retroactive benefits.

      The district court did not abuse its discretion in declining to reach Reliance’s

remaining defenses: unclean hands and absence of a bona fide wage adjustment.

Although the underlying circumstances may arouse suspicion, Reliance failed to

                                          3
communicate these particular concerns to Cyr during the administrative process,

and Cyr was unable to respond to its concerns. There was no “meaningful

dialogue” between Reliance and Cyr as required under ERISA. See Booton v.

Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir. 1997). The

administrative record was therefore not developed on these grounds.

      Allowing Reliance to present these defenses for the first time would have

required the district court to consider evidence outside the administrative record,

which the district court should not do unless “circumstances clearly establish that

additional evidence is necessary to conduct an adequate de novo review of the

benefit decision.” Opeta v. Nw. Airlines Pension Plan, 484 F.3d 1211, 1217 (9th

Cir. 2007) (citation omitted). Here, Reliance’s benefit decision was apparently not

based on Cyr’s alleged “unclean hands” or any conclusion that the wage

adjustment was not bona fide. Indeed, the only clear response from Reliance in the

record indicated simply that its own reinsurer did not wish to pay the benefits.

Any evidence related to Reliance’s two new defenses was therefore not necessary

to review the actual decision Reliance made during the administrative process, and

the district court did not abuse its discretion in excluding it. See id. at 1217-18.

      Moreover, the court did not abuse its discretion in excluding evidence

related to settlement discussions under Federal Rule of Evidence 408. See Cassino

                                           4
v. Reichhold Chems., Inc., 817 F.2d 1338, 1342 (9th Cir. 1987). Nor was Reliance

prejudiced by being prohibited from introducing evidence related to defenses it

was not entitled to raise to the district court in the first instance.

       Finally, the district court properly exercised its discretion in awarding

attorneys’ fees. The court carefully examined the time sheets and determined that

the awarded time was reasonable and related to litigating the ERISA claim,

including those hours logged for work involving the pre-litigation administrative

process. See Dishman v. UNUM Life Ins. Co. of Am., 269 F.3d 974, 987-88 (9th

Cir. 2001) (noting that courts may award pre-litigation fees under ERISA for

“efforts directed toward the filing of the litigation”). The court set the hourly rates

after determining the prevailing rate for ERISA attorneys and evaluating the ability

and reputation of the attorneys. See Welch v. Metro. Life Ins. Co., 480 F.3d 942,

945-46 (9th Cir. 2007). We review a district court’s award of fees deferentially,

see id. at 946, and we find no error.

       AFFIRMED.

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