Free Joint Case Management Statement - District Court of California - California

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 1 of 12

1 Robert J. McKennon (123176), [email protected] Jenny H. Wang (191643), [email protected] 2 BARGER & WOLEN LLP 19800 MacArthur Boulevard, 8th Floor 3 Irvine, California 92612 Telephone: (949) 757-2800 / Fax: (949) 752-6313 4 Attorneys for Defendant 5 The Prudential Insurance Company of America 6 Frank N. Darras (128904), [email protected] SHERNOFF BIDART DARRAS ECHEVERRIA, LLP 7 3257 East Guasti Road, Suite 300 Ontario, California 91761 8 Telephone: (909) 390-3770 / Fax: (909) 974-2121 9 Attorneys for Plaintiff Gloria J. Saunders 10 11 12 13 14 GLORIA J. SAUNDERS, 15 16 vs. Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO.: C-08-02285 SI JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT DATE: August 22, 2008 TIME: 2:00 p.m. CTRM.: 10 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

17 PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New 18 Jersey Corporation, and, DOES 1 through 10, inclusive, 19 Defendants. 20 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

Complaint Filed: March 17, 2008

C-08-02285 SI JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 2 of 12

1 2 3

1.

JURISDICTION AND SERVICE

The Court has jurisdiction over this matter under 28 U.S.C. Section 1332

4 because it is a civil action between citizens of different states, and the matter in 5 controversy exceeds the sum of $75,000, exclusive of interest and costs. Venue is 6 appropriate under 28 U.S.C. Section 1391(a)(2) in that this is the judicial district in 7 which a substantial part of the events giving rise to Plaintiff Gloria J. Saunders' 8 ("Plaintiff") claims occurred. There are no issues regarding personal jurisdiction or 9 venue. No parties remain to be served. 10 11 12 13 Plaintiff was a participant of a group long term disability insurance policy (the 2. FACTS

14 "policy") issued by Prudential to her former employer, St. Joseph Health System. In 15 November 2006, Plaintiff submitted a claim to Prudential for benefits under the 16 policy, claiming disability as of August 1, 2006 from her occupation as a radiation 17 therapist due to low back pain. Prudential investigated the claim, and paid Plaintiff 18 benefits for two months following the 90-day elimination period to December 6, 19 2006. However, Prudential denied the claim effective December 7, 2006 based upon 20 its determination that Plaintiff did not meet the policy's definition of "disability." 21 Plaintiff alleges that by doing so, Prudential unreasonably breached the policy 22 because she was and continues to be disabled. Prudential denies the allegations and 23 contends that its decision to deny benefits was correct and that it was made in good 24 faith. 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

The principal factual issues in dispute are as follows: (1) Is Plaintiff "disabled" within the meaning of the policy and applicable law? 1
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 3 of 12

1 2 3 4 5 6 7 8 9 10 11 12

(2)

Was Prudential's decision to deny Plaintiff's claim reasonable?

(3)

Is Prudential's conduct toward Plaintiff of the type to justify an award of punitive damages?

3.

LEGAL ISSUES

The disputed points of law are as follows:

(1)

Whether Prudential breached the policy by denying Plaintiff's claim.

(2)

Whether Prudential breached the implied covenant of good faith and fair

13 dealing by unreasonably denying Plaintiff's claim. Prudential contends that even if 14 its claim decision was in error (which it vigorously disputes), there is a genuine issue 15 of coverage to render its decision reasonable as a matter of law. See Chateau 16 Chamberay Homeowners Ass'n v. Associated Int'l Ins. Co., 90 Cal. App. 4th 335, 347 17 (2001) ("It is now settled law in California that an insurer denying or delaying the 18 payment of policy benefits due to the existence of a genuine dispute with its insured 19 as to the existence of coverage liability or the amount of the insured's coverage claim 20 is not liable in bad faith even though it might be liable for breach of contract."); 21 Guebara v. Allstate Ins. Co., 237 F.3d 987, 993-994 (9th Cir. 2001) (the existence of 22 a genuine issue of coverage under a policy of insurance eliminates the issue of bad 23 faith from the case as a matter of law); Phelps v. Provident Life and Accident Ins. 24 Co., 60 F. Supp. 2d 1014 (C.D. Cal. 1999) (holding that where as genuine factual 25 issue existed as to whether claimant was totally disabled, there could be no bad faith 26 as a matter of law). 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

2
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 4 of 12

1

Plaintiff contends that due to muscle spasms and debilitating back pain that had

2 been developing throughout 2006, she was no longer able to perform the substantial 3 and material duties of her occupation, including lifting, and submitted a claim to 4 Defendant for long term disability benefits. However, instead of paying Plaintiff the 5 full amount of benefits due her under the terms of the Policy, Defendant unreasonably 6 relied upon an outdated "estimated" return to work date to originally deny Plaintiff's 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

claim; and then, upon appeal, unreasonably relied upon selective information and facts from surveillance and a medical record review which actually substantiated her disability, to continue to unreasonably refuse to pay her disability benefits. (3) Prudential contends that there no evidence, let alone the requisite clear

and convincing evidence, of despicable conduct on the part of Prudential to justify an award of punitive damages. See Tomaselli v. Transamerica Ins. Co., 25 Cal. App. 4th 1269, 1287 (1994) (Despicable conduct is "conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people. Such conduct has been described as having the character of outrage frequently associated with crime."); Basich v. Allstate Ins. Co., 87 Cal. App. 4th 1112, 1118-1119 (2001) (affirming the trial court's grant of the insurer's motion for summary adjudication on the issue of punitive damages and holding that any evidence submitted in response to a motion for summary adjudication must necessarily meet the clear and convincing evidentiary standard); Stewart v. Truck Ins. Exch., 17 Cal. App. 4th 468, 471 (1993) (upholding trial judge's nonsuit of the plaintiff on the issue of punitive damages: "[T]he trial court properly viewed [the insured's] evidence through the prism of the substantive burden of `clear and convincing' evidence. When the evidence of [the insurer's] alleged [conduct] is so examined it is obvious that there is no issue to be submitted to a jury.").

3
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 5 of 12

1

Plaintiff contends that Defendant has refused to provide disability benefits

2 despite significant medical evidence which clearly supported an approval of the 3 claim. Plaintiff also contends that Defendant's claims practices will be shown to 4 have violated the duty of good faith and fair dealing as Defendant improperly sought 5 out and relied upon any evidence which would justify the denial of the claim instead 6 of acting as Plaintiff's fiduciary and investigating with an eye towards payment. 7 8 9 10 Prudential anticipates filing a motion for partial summary judgment to 4. MOTIONS

11 eliminate Plaintiff's claim for breach of the implied covenant of good faith and fair 12 dealing and her prayer for punitive damages on the grounds that Prudential's decision 13 to deny Plaintiff's claim was reasonable as a matter of law, or at a minimum there 14 was a genuine issue of coverage that precludes a finding of bad faith, and that 15 Plaintiff cannot, as a matter of law, demonstrate by clear and convincing evidence 16 despicable conduct on the part of Prudential to justify an award of punitive damages. 17 18 19 20 21 22 23 24 The parties will preserve evidence relevant to the issues reasonably evident in 6. EVIDENCE PRESERVATION The parties do not anticipate amending the pleadings. 5. AMENDMENT OF PLEADINGS

25 this action. 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

4
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 6 of 12

1 2 3

7.

DISCLOSURES

The parties will make their initial disclosures pursuant to Rule 26(a) on or

4 before August 20, 2008. Prudential's initial disclosures consist of the claim file 5 pertaining to Plaintiff's claim for benefits under the subject insurance policy. 6 Plaintiff's initial disclosures will include information pertaining to receipt of other 7 income that may constitute offsets to any benefits that may be payable under the 8 policy and updated medical records. 9 10 11 12 Other than making their initial disclosures as stated above, the parties have not 8. DISCOVERY

13 yet conducted any discovery. 14 15 Prudential currently anticipates conducting the following discovery: written

16 discovery to Plaintiff in the form of interrogatories, document requests and request 17 for admissions; depositions of Plaintiff, her treating physicians and other health care 18 providers, person(s) with knowledge of her pre-disability occupational activities, 19 person(s) with knowledge of her post-disability activities, person(s) with knowledge 20 of Plaintiff's financial condition, Plaintiff's retained experts; issuance of records 21 subpoenas to the foregoing third-party witnesses. 22 23 Plaintiff currently anticipates conducting the following discovery:

24 interrogatories to identify the Persons Most Knowledgeable in the investigation, 25 medical review and denial of Plaintiff's claim; depositions of the claims personnel 26 and medical reviewers utilized by Defendant in investigating and denying Plaintiff's 27 claim; requests for production of documents to obtain claim file documents, claims 28 manuals in effect at the time of the claim; third party subpoenas to any vendors
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

5
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 7 of 12

1 utilized by Defendant during its' claims investigation; discovery with regards to any 2 experts retained by Defendant. 3 4 Discovery need not be conducted in phases. The parties do not propose any

5 limitations or modifications of the discovery rules. The parties anticipate that 6 discovery will be completed by March 2009. 7 8 9 10 11 12 13 14 Plaintiff seeks the following damages: Contractual benefits in an amount equal 15 to 60% of her pre-disability earnings ($3882) less any monies received by Other 16 Income sources. Plaintiff received $840 per week from State Disability from July of 17 2006 through July of 2007. Plaintiff has not yet been approved for Social Security 18 disability benefits. Plaintiff is also seeking an award of extra-contractual damages as 19 20 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

9.

RELATED CASES

There are no related cases.

10.

RELIEF

Defendant's failure to timely approve and pay benefits has caused financial difficulties; an award of punitive damages; damages for emotional distress incurred as a result of the denial of benefits, as well as her attorney fees and costs. If it is determined that Prudential breached the subject insurance policy and that Plaintiff is entitled to disability benefits, then damages should be calculated as follows. The policy provides for monthly benefits in the amount of 50% of predisability earnings not to exceed $6,000. Prudential contends that based on Plaintiff's pre-litigation submissions to it, Plaintiff qualifies for at most $3,234.69 in monthly disability benefits in the event of "disability" as defined in the policy following a 906
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 8 of 12

1 day elimination period to her normal retirement age as defined by the Social Security 2 Act, in Plaintiff's case to December 29, 2012. The $3,234.69 figure is a gross figure 3 that does not take into account offsets for other income as set forth in the policy. 4 Based upon information presently known, Prudential is informed and believes that the 5 $3,234.69 figure should be reduced to at least $1,545.69 to account for offset of 6 benefits due to Plaintiff's receipt of California state disability benefits and estimated 7 primary Social Security Disability benefits. Plaintiff is claiming total disability since 8 August 1, 2006. She was paid by Prudential to December 6, 2006. Therefore, 9 benefits in the amount of $1,545.69 (which is an estimated figure at this point) per 10 month should be calculated beginning December 7, 2006 through the date of trial, 11 plus applicable interest. 12 13 14 15 The parties have not yet discussed settlement at this early stage, but they have 11. SETTLEMENT AND ADR

16 met and conferred regarding the ADR process as required by ADR Local Rule 3-5 17 and agree to participate in non-binding mediation. The parties would like to conduct 18 appropriate discovery and engage in appropriate motion practice before participating 19 in mediation. 20 21 22 23 The parties respectfully decline to have a magistrate judge conduct all further 12. CONSENT TO MAGISTRATE JUDGE FOR ALL PURPOSES

24 proceedings in this case. 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

7
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 9 of 12

1 2 3

13.

OTHER REFERENCES

The parties do not believe that this case is suitable for reference to binding

4 arbitration, a special master, or the Judicial Panel on Multidistrict Litigation. 5 6 7 8 As stated above, Prudential intends to move for partial summary judgment to 14. NARROWING OF ISSUES

9 eliminate Plaintiff's claim for breach of the implied covenant of good faith and fair 10 dealing and her prayer for punitive damages. 11 12 13 14 The parties do not believe that this is the type of case that can be handled on an 15. EXPEDITED SCHEDULE

15 expedited basis with streamlined procedures. 16 17 18 19 20 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

16.

SCHEDULING

The parties propose the following dates: Discovery cut-off: Deadline to designate experts: Last day to hear dispositive motions: Pretrial conference: Trial: March 31, 2009 April 16, 2009 May 28, 2009 June 15, 2009 July 13, 2009

8
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 10 of 12

1 2 3

17.

TRIAL

Plaintiff has demanded a jury trial. The parties estimate that trial will take five

4 to seven court days. 5 6 7 8 9 Prudential has filed a Certificate of Interested Parties as required by Civil Local 18. DISCLOSURE OF NON-PARTY INTERESTED ENTITIES OR PERSONS

10 Rule 3-16 and a Corporate Disclosure Statement as required by Federal Rule of Civil 11 Procedure 7.1. As stated therein, Prudential certifies that other than the named 12 parties, it is unaware of any other parties that might have a direct, pecuniary interest 13 in the outcome of this case. The Prudential Insurance Company of America, a New 14 Jersey corporation, is a subsidiary of Prudential Holdings, LLC, a New Jersey 15 Limited Liability Company, which owns 100 percent of the stock of the Prudential 16 Insurance Company of America. Prudential Holdings, LLC is a subsidiary of 17 Prudential Financial, Inc., which owns 100 percent of Prudential Holdings, LLC. 18 Prudential Financial, Inc. is a publicly-held New Jersey corporation traded on the 19 New York Stock Exchange under the symbol "PRU" and no parent corporation or 20 any publicly-held corporation owns ten percent or more of its stock. 21 22 DATED: August 13, 2008 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

BARGER & WOLEN LLP

By: /s/ Jenny H. Wang ROBERT J. MCKENNON JENNY H. WANG Attorneys for Defendant The Prudential Insurance Company of America

9
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 11 of 12

1 DATED: August 13, 2008 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

SHERNOFF BIDART DARRAS ECHEVERRIA, LLP

By: /s/ Frank N. Darras FRANK N. DARRAS Attorneys for Plaintiff Gloria J. Saunders

10
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI

Case 3:08-cv-02285-SI

Document 18

Filed 08/13/2008

Page 12 of 12

1 2

CERTIFICATE OF SERVICE

3 STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed in the County of Orange, State of California. I am over the age of 18 and not a party to the within action; my business address is 19800 MacArthur 5 Blvd., Suite 800, Irvine, CA 92612. Email address: [email protected]. 4 I hereby certify that on August 13, 2008, I served the foregoing documents described as: JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) 7 JOINT REPORT on the interested parties in this action as follows: 6 8 9 10 11 12 13 14 15 16 17 18 Frank N. Darras, Esq. Shernoff Bidart Darras & Echeverria, LLP 3257 East Guasti Road, Suite 300 Ontario, California 91761 Telephone: (909) 390-3770 Facsimile: (909) 974-2121 Email: [email protected] Counsel for Plaintiff Gloria J. Saunders ELECTRONICALLY: I caused it to be electronically filed using the Court's Electronic Court Filing ("ECF") System and service was completed by electronic means by transmittal of a Notice of Electronic Filing on the registered participants of the ECF System. I served those parties who are not registered participants of the ECF System as indicated below.

I placed the original a true copy thereof enclosed in sealed envelope(s) to the parties listed above and caused such envelope(s) to be delivered by U.S POSTAL SERVICE OVERNIGHT DELIVERY.

I am employed in the office of a member of the bar of this court at whose 19 direction the service was made. I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed at Irvine, 20 California on August 13, 2008. 21 22 23 24 25 26 27 28
BARGER & WOLEN LLP
19800 MACARTHUR BLVD. EIGHTH FLOOR IRVINE, CA 92612 (949) 757-2800

NAME: Gabriela Rubio

(Signature)

/s/ Gabriela Rubio

11
JOINT CASE MANAGEMENT STATEMENT AND RULE 26(f) JOINT REPORT

C-08-02285 SI