Free Motion for Reconsideration - District Court of Arizona - Arizona

R ANDOLPH G . B ACHRACH
ATTORNEY AT LAW 5103 E. THOMAS ROAD PHOENIX, ARIZONA 85018 (602) 852-9540
(AZ #12621 - CA #93278)

Attorney for Plaintiff

United States District Court
FOR THE DISTRICT OF ARIZONA

DAVID L. MAZET, Plaintiff, vs. HALLIBURTON COMPANY LONGTERM DISABILITY PLAN; and, HARTFORD LIFE & ACCIDENT INSURANCE COMPANY, Defendants.
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No.: CV 04 0493 PHX FJM MOTION FOR RECONSIDERATION

For good cause, Plaintiff moves for reconsideration of the Court's previous standard of review Order (Docket #38) and previous grant of judgment to Defendants (Docket #40). The basis for this motion is that subsequent to the decisions and Orders of this Court (supra) the Ninth Circuit has issued it decision in Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir. 2006). Abatie has resolved any conflict or uncertainty among previous Ninth Circuit cases which may have existed with respect to the effect upon the standard of review where the plan administrator has failed to exercise any discretion. Abatie held: In general, we review de novo a claim for benefits when an administrator fails to exercise discretion. See Jebian, 349 F.3d at 1106 (holding that an administrator failed to exercise its discretion when it did not make a benefits decision within the 60 days specified by the terms of the plan and the applicable regulation, so that the ultimate decision rendered was "undeserving of deference"). Other circuits have also held that review is de novo when the plan administrator fails to exercise discretion. See Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 109 (2d Cir. 2005) (holding that a "deemed denied" claim, in which the administrator did not issue a decision within the time required by the regulations, constituted "inaction," which was not an exercise of discretion and which therefore was entitled to no deference; de novo review applied); Gilbertson v. Allied Signal, Inc., 328 F.3d
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RANDOLPH G. BACHRACH
ATTORNEY AT LAW 5103 E. THOMAS ROAD PHOENIX, ARIZONA 85018 S (602) 852-9540

625, 632 (10th Cir. 2003) (noting that "[d]eference to the administrator's expertise is inapplicable where the administrator has failed to apply his expertise to a particular decision"); Gritzer v. CBS, Inc., 275 F.3d 291, 296 (3d Cir. 2002) ("Where a trustee fails to act or to exercise his or her discretion, de novo review is appropriate because the trustee has forfeited the privilege to apply his or her discretion.. . . "). Similarly, when a plan administrator's actions fall so far outside the strictures of ERISA that it cannot be said that the administrator exercised the discretion that ERISA and the ERISA plan grant, no deference is warranted. This case does not, however, fall into that rare class of cases.. 458 F.3d 955, at 972. Here, Hartford never responded to Mr. Mazet's administrative appeal and thus never exercised any discretion to which the Court may defer. This Court, following Gatti v. Reliance Standard Life Ins. Co., 415 F.3d 978 (9th Cir. 2005), applied a deferential standard of review in its initial Order granting judgment to Defendants. Plaintiff believes that the result would have been different had this Court been guided by the Abatie decision at that time. According to Abatie, the facts of this case are among that "rare class of cases" for which de novo review should be applied, notwithstanding, the existence of discretionary language in the Plan documents. In a case with very similar facts, the District Court held that a de novo review was appropriate . . . because regardless of whether the plan contains a grant of discretionary authority, the plan administrator, by failing to rule on plaintiff's appeal, failed to exercise any such authority. A plan administrator "is entitled to deference only when the administrator exercises discretion that the plan grants." See [Abatie] at 971. Courts "review de novo a claim for benefits when an administrator fails to exercise discretion." See id. at 972. In short, "`[w]here a trustee fails to act or to exercise his or her discretion, de novo review is appropriate because the trustee has forfeited the privilege to apply his or her discretion.'" See id. (quoting Gritzer v. CBS, Inc., 275 F.3d 292, 296 (3d Cir. 2002)). The Court finds unpersuasive defendants' reliance on Gatti v. Reliance Standard Life Ins. Co., 415 F.3d 978 (9th Cir. 2005) and Moskowite v. Everen Capital Corp. Group Disability Income Plan ("Moskowite"), 2005 U.S. Dist. LEXIS 20942 (N.D. Cal. Aug. 10, 2005), for the proposition that "`procedural violations of ERISA
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RANDOLPH G. BACHRACH
ATTORNEY AT LAW 5103 E. THOMAS ROAD PHOENIX, ARIZONA 85018 S (602) 852-9540

do not alter the standard of review.'" (See Opp. at 15:20-27 (quoting Gatti, 415 F.3d at 985).) In both Gatti and Moskowite, the plan administrator issued a decision, albeit untimely, resolving the plaintiff's appeal. See Gatti, 415 F.3d at 981; Moskowite, 2005 U.S. Dist. LEXIS 20942 at *19. By Page 4 contrast, defendants here have never ruled on plaintiff's appeal. Defendants cite no authority holding abuse of discretion to be the appropriate standard where the plan administrator fails entirely to issue a decision, and, as noted, Abatie holds to the contrary. See Abatie v. Alta Health Life Ins. Co., 458 F.3d at 972. Kowalski v. Farella, Braun & Martel, LLP, No. C-06-3341 MMC (N.D.Cal. 7-23-2007, pg. 3). If this Court agrees that the de novo standard of review applies to the remand decision, then consistency requires that the entire case and previous Orders be revisited under a single (de novo) standard of review. Plaintiff, in that case, suggests that supplemental briefs by the parties would be appropriate to assist the Court in deciding this case under the correct standard of review. DATED: August 31, 2007 RANDOLPH G. BACHRACH Attorney at Law

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By s/Randolph G. Bachrach Randolph G. Bachrach 5103 E. Thomas Road Phoenix, Arizona 85018 Attorney for Plaintiff I hereby certify that on August 31, 2007 I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:
Thomas Klinkel Scott Bennett LEWIS & ROCA, LLP 40 N. Central Ave. Phoenix, Arizona 85004-3329 Attorneys for Defendants

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s/Randolph G. Bachrach

Case 2:04-cv-00493-FJM

Document 70 3 Filed 08/31/2007

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