EDWARD M. CHEN, District Judge.
Plaintiff Sunil Srinivasan has filed suit against Defendants Continental Assurance Company and Trustmark Insurance Company (collectively, "Trustmark"). According to Dr. Srinivasan, he had a disability insurance policy with Trustmark, and Trustmark improperly denied a claim he made for disability benefits. The causes of actions pled by Dr. Srinivasan are breach of contract and breach of the implied duty of good faith and fair dealing. Currently pending before the Court are cross-motions for partial summary judgment/adjudication. The dispute is whether Trustmark has actually denied the claim for benefits. Dr. Srinivasan argues that Trustmark has denied the claim — more specifically, as of May 2, 2018, when it sent a letter to him. Trustmark argues that it has yet to make a final decision on his claim and that the May 2, 2018, letter was simply an update. Resolution of this issue will affect the course of the litigation.
Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby
The undisputed evidence submitted by the parties in conjunction with the pending motions reflects as follows.
Before he allegedly became disabled, Dr. Srinivasan was a self-employed endodontist. See Srinivasan Decl. ¶ 4. In May 1994, Dr. Srinivasan purchased a disability insurance policy from Trustmark.
"Total Disability" and "Residual Disability" are both defined in the policy.
"Total Disability" means that because of Injury or Sickness:
Swan Decl., Ex. 1 (Policy at 4).
As for "Residual Disability," it "means that although You are gainfully employed at Your regular occupation, Your Loss of Earnings Ratio is 20% or more because of Injury or Sickness and You are receiving care by a Physician which is appropriate for the condition causing your Disability." Swan Decl., Ex. 1 (Policy at 5). "[I]n no event" does Trustmark pay the Residual Disability Benefit "beyond Age 65." Swan Decl., Ex. 1 (Policy at 6).
In 2015, Dr. Srinivasan began to experience pain, including back and leg pain. See Srinivasan Decl. ¶ 4. Dr. Srinivasan claims that, "as of October 5, 2017, [he] could no longer perform the material and substantial duties of [his] occupation." Srinivasan Decl. ¶ 4; see also Swan Decl., Ex. 2 (narrative attached to disability claim, stating that Dr. Srinivasan stopped working on October 5, 2017).
On November 16, 2017, Dr. Srinivasan submitted a disability claim to Trustmark. See Srinivasan Decl. ¶ 5; Swan Decl., Ex. 2 (claim). Trustmark acknowledged receipt of the claim several weeks later. See Srinivasan Decl. ¶ 6 & Ex. 2 (letter) (stating that "we have received the Disability Income Insurance Claim application" and that "[y]our claim has been assigned to Traci Talamini for handling") (emphasis omitted); Swan Decl. ¶ 4 (testifying that Trustmark received Dr. Srinivasan's initial disability benefits claim form on or about December 7, 2017).
Subsequently, from about December 21, 2017, through April 4, 2018, Trustmark sent several letters to Dr. Srinivasan regarding his claim. See Srinivasan Decl. ¶¶ 7-12 & Exs. 3-8 (letters).
On April 11, 2018, Dr. Srinivasan met with Mr. Cipro. Dr. Srinivasan recorded the conversation he had with Mr. Cipro (with Mr. Cipro's permission) and sent a copy of the recording to Trustmark. See Srinivasan Decl. ¶ 13 & Ex. 9 (transcript of recording). Excerpts from the conversation are provided below.
Mr. Cipro thereafter prepared an internal memo in which he noted, inter alia, that "[t]he Insured did request the company's position in writing before he could consider any next steps on his behalf." Srinivasan Decl., Ex. 10 (Memo at 4) (emphasis added).
Subsequently, Dr. Srinivasan received a letter from Trustmark, dated May 2, 2018. See Srinivasan Decl. ¶ 17 & Ex. 13 (letter). Dr. Srinivasan takes the position that, in this letter, Trustmark denied his claim for benefits — or, as explained below, at least his claim for Total Disability benefits as opposed to Residual Disability benefits — whereas Trustmark maintains that the letter was just the written update that Dr. Srinivasan had requested.
Trustmark began the May 2 letter with the following statement: "Thank you for the courtesies you extended to our representative, Mr. Jon Cipro. We are writing to update you regarding your claim." Srinivasan Decl., Ex. 13 (Letter at 1). Trustmark acknowledged that Dr. Srinivasan had provided information to it as part of the claim handling process. See Srinivasan Decl., Ex. 13 (Letter at 1-2). Trustmark then noted that "[w]e had an independent Orthopedic Spine Surgeon review your claim" and he provided his opinion that Dr. Srinivasan did not have certain limitations. Srinivasan Decl., Ex. 13 (Letter at 2). Trustmark continued:
Srinivasan Decl., Ex. 13 (Letter at 2) (emphasis added).
Trustmark concluded its letter by advising — for the first time in any of its communications with Dr. Srinivasan — that
Srinivasan Decl., Ex. 13 (Letter at 2-3) (emphasis added).
Several weeks later, Dr. Srinivasan received another letter from Trustmark, this one dated May 31, 2018. See Srinivasan Decl. ¶ 19 & Ex. 14 (letter). In the letter, Trustmark stated: "We are writing to update you regarding the status of your claim" and "[w]e have yet to receive any additional medical information or communication from you in support of your claim. If we do not receive any medical information or communication from you within the next 14 days, we will conduct a final review of your claim based on the information on hand at that time." Srinivasan Decl., Ex. 14 (Letter at 1) (emphasis added). Trustmark concluded its letter by containing the same advisement above. See Srinivasan Decl., Ex. 14 (Letter at 1) ("Please be advised that the Policy contains the following provision setting forth the Time Limit for Filing Legal Action. . . .").
The following day, June 1, 2018, an internal Trustmark record indicated that the claims examiner's plan of action was to proceed with an IME for Dr. Srinivasan. The examiner's supervisor, Robert Swan, approved this plan of action on June 11, 2018. See Swan Decl. ¶ 11 & Ex. 9 (internal record).
On June 8, 9, and 10, 2018, Frasco Investigative Services, a private investigating company hired by Trustmark, conducted surveillance of Dr. Srinivasan to document his activities. See Swan Decl., Ex. 10 (report) (stating that the surveillance was "an attempt to document and video his activities, when feasible, given his complaint of an injury to his mid-back").
On June 13, 2018, at approximately 11:14 a.m., Trustmark sent to Exam Coordinators Network an email requesting an IME with Dr. Jones. See Swan Decl., Ex. 11 (email exchange).
On June 13, 2018, at 12:08 p.m. — about an hour after the email requesting an IME was sent — Dr. Srinivasan e-filed his complaint in state court. See Srinivasan Decl. ¶ 20; Docket No. 1 (summons and complaint). At the time, the complaint had not been served on Trustmark, and there was no evidence that Trustmark had notice of the suit.
On June 18, 2018, Frasco Investigative Services provided a report to Trustmark regarding the surveillance it had conducted of Dr. Srinivasan more than a week earlier on June 8, 9, and 10, 2018.
Two days later, on June 20, 2018, Dr. Srinivasan served a copy of the complaint on Trustmark. More specifically, personal service was effected on CT Corp., Trustmark's agent for service of process at 12:15 p.m.
Before receiving the email from CT Corp. on June 21, 2018, Trustmark sent a letter on June 20, 2018, to Dr. Srinivasan. In the letter, Trustmark stated: "We are writing to advise you of the current status of your claim. [¶] Trustmark has not received any additional medical or other information from you in support of your claim. Prior to a final review of your claim, we will be arranging for an Independent Medical Examination (IME)." Srinivasan Decl., Ex. 15 (Letter at 1) (emphasis added). Trustmark indicated that Exam Coordinators Network would be contacting Dr. Srinivasan about the IME. Trustmark concluded its letter by containing the same advisement above. See Srinivasan Decl., Ex. 15 (Letter at 1) ("Please be advised that the Policy contains the following provision setting forth the Time Limit for Filing Legal Action. . . ."). As indicated above, although Trustmark did not send the letter to Dr. Srinivasan until June 20, 2018, its efforts to obtain an IME began at least a week earlier.
Federal Rule of Civil Procedure 56 provides that a "court shall grant summary judgment [to a moving party] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). "The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Id. at 252. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See id. at 255.
Where a plaintiff moves for summary judgment on claims that it has brought (i.e., for which it has the burden of proof), it "must prove each element essential of the claims . . . by undisputed facts." Cabo Distrib. Co. v. Brady, 821 F.Supp. 601, 607 (N.D. Cal. 1992).
In contrast, where a defendant moves for summary judgment on claims for which the plaintiff has the burden of proof, the defendant may prevail simply by pointing to the plaintiff's failure "to make a showing sufficient to establish the existence of an element essential to [the plaintiff's] case." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In his motion for summary judgment, Dr. Srinivasan contends a reasonable jury could only find that Trustmark issued a final denial of his disability claim. Trustmark, in its motion for summary judgment, contends a reasonable jury could not find that Trustmark had finally denied Dr. Srinivasan's disability claim. The Court focuses on Trustmark's motion first. If it finds in favor of Trustmark on its motion for summary judgment, then Dr. Srinivasan's motion is rendered moot.
The undisputed facts in the record weigh heavily in favor of Trustmark's motion such that no reasonable jury could find that Trustmark had issued a final denial on Dr. Srinivasan's disability claim. Dr. Srinivasan relies heavily on Trustmark's letter of May 2, 2018, claiming it constituted an unequivocal denial. But the letter, on its face, patently establishes otherwise. The letter states:
Srinivasan Decl., Ex. 13 (Letter at 2) (emphasis added). The letter expressly states that "final review" was still pending — and hence no final denial had taken place. That no final decision had been made was also explicit in the subsequent Trustmark letter of May 31, 2018 which stated: "If we do not receive any medical information or communication from you within the next 14 days, we will conduct a final review of your claim based on the information on hand at that time." Srinivasan Decl., Ex. 14 (Letter at 1) (emphasis added).
Not only did Trustmark explicitly communicate to Dr. Srinivasan that a final decision had not been made, Trustmark's own internal documents corroborate that fact. As indicated above, after the two May 2018 letters, Trustmark caused a private investigation company to surveil Dr. Srinivasan (on June 8, 9, and 20, 2018). In addition, Trustmark ordered an IME of Dr. Srinivasan. As Trustmark argues, it would make no sense to spend money in this way if Trustmark had in fact already denied the disability claim. And notably, both of these actions took place before Dr. Srinivasan ever e-filed his complaint in state court on June 13, 2018 and served notice on Trustmark.
In his papers, Dr. Srinivasan protests that Trustmark's May 2018 letters to him never made reference to the fact of the surveillance or the IME. But that fact is immaterial. The point is that Trustmark's internal actions corroborate what is plainly stated on the face of the May 2018 letters — i.e., that a final review was still pending.
Left with this predicament, Dr. Srinivasan argues that the letter of May 2, 2018, must be construed as a denial — or at least could reasonably be construed as such, which would require denial of Trustmark's motion — because it contains language required by the state of California when an insurer denies a claim. See Pl.'s Mot. at 13-14 (noting that "California insurance regulations require that an insurer's denial must meet specific requirements" — e.g., "include a notice to the insured that, if the insured believes that the claim has been wrongfully denied, the insured may have the matter reviewed by the California Department of Insurance"). Dr. Srinivasan underscores that the many letters that Trustmark sent before the letter of May 2, 2018, never contained this language. In response, Trustmark argues that, while a letter of denial must contain the language, the inverse is not necessarily true — i.e., that a letter that contains the language must be a denial. Trustmark asserts that it included the language in the May 2, 2018, letter simply out of an abundance of caution. See Swan Decl. ¶ 9 ("Because the letter advised Plaintiff of interim findings that, though not final, were not favorable to him, the letter also notified Plaintiff that he had the right to request a review by the California Department of Insurance, in an abundance of caution."). The inference Dr. Srinivasan seeks to draw from this cautionary language does not raise a genuine dispute of fact as to whether there was a final denial. The boilerplate language does not negate the clear and unequivocal language in the letter specifically stating a "final review" was still pending and the fact that Trustmark was proceeding with surveillance and an IME.
Dr. Srinivasan also makes a passing argument that there is a genuine dispute of fact (i.e., as to whether there was a denial) because, even though he filed suit in July 2018, Trustmark did not immediately raise the defense of "no denial" and never expressly raised the defense until months later. If anything this amounts to a waiver agreement, not a merits claim. In any event, it is not enough to counter the overwhelming evidence in Trustmark's favor.
As a final attempt to save his case, Dr. Srinivasan makes a new argument in his opposition to Trustmark's motion — i.e., notably, one that he could have made, but did not, in his own motion for summary judgment. More specifically, Dr. Srinivasan argues that, at the very least, Trustmark partially denied his disability claim: it denied his claim for Total Disability Benefits and left pending for review only his claim for Residual Disability Benefits. In support of this position, Dr. Srinivasan primarily relies on two pieces of evidence:
Dr. Srinivasan emphasizes that, because the claim for Residual Disability Benefits was still undecided (unlike the claim for Total Disability Benefits), this explains why, after the May 2, 2018, letter, Trustmark engaged in surveillance of him and arranged for an IME.
Despite Dr. Srinivasan's belatedly raised argument, no reasonable jury could find that Trustmark actually denied the claim for Total Disability Benefits, while leaving open a claim for Residual Disability Benefits. First, Mr. Cipro's statement above is inconsequential because, in subsequent statements, he made clear that no decision had been reached on anything. And Dr. Srinivasan's own statements during the meeting reflected that he understood such. See, e.g., Srinivasan Decl., Ex. 9 (Tr. at 8-9) (in response to Dr. Srinivasan's question, "[H]ow much longer is this going to take until you can make a final decision?," stating that "it depends on what else the company feels it needs to make its determination") (emphasis added). As for the May 2, 2018, letter, Dr. Srinivasan has ignored the sentence that follows the reference to Total Disability. The full and complete excerpt is as follows:
Srinivasan Decl., Ex. 13 (Letter at 2) (emphasis added). The above makes clear that the claim for Total Disability is the claim that is subject to "final review." No mention is made of Residual Disability Benefits or any intent to bifurcate the denial between total and residual disability claims.
In fact, Dr. Srinivasan could not and did not make a claim for Residual Disability Benefits. He was not working at all and thus, per the terms of the policy, he would not have been eligible for Residual Disability Benefits. Under the policy, Residual Disability "means that although You are gainfully employed at Your regular occupation, Your Loss of Earnings Ratio is 20% or more because of Injury or Sickness and You are receiving care by a Physician which is appropriate for the condition causing your Disability." Swan Decl., Ex. 1 (Policy at 5) (emphasis added). In his application for benefits, Dr. Srinivasan stated that he had stopped working. See Swan Decl., Ex. 2 (narrative attached to disability claim, stating that Dr. Srinivasan stopped working on October 5, 2017). Attempting to overcome this problem, Dr. Srinivasan relies on the May 2, 2018, letter which cited the definitions of both Total Disability and Residual Disability. But the letter clearly states the pending final review was of the claim for Total Disability Benefits; no mention was made about the disposition of any claim for Residual Disability Benefits.
For the foregoing reasons, the Court concludes that no reasonable jury could find that Trustmark issued a final denial on Dr. Srinivasan's disability claim and therefore the Court grants Trustmark's motion for summary judgment. Because the Court is granting Trustmark's motion, Dr. Srinivasan's motion is moot.
Dr. Srinivasan protests that, at the very least, the Court should defer ruling on Trustmark's motion so that he can conduct discovery which will support his opposition to the motion.
Federal Rule of Civil Procedure 56(d) provides that, "[i]f a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may . . . allow time to obtain affidavits or declarations or to take discovery." Fed. R. Civ. P. 56(d).
In the instant case, Dr. Srinivasan asks that he be allowed to take four depositions, plus propound certain written discovery. The four depositions are as follows:
As for written discovery, Dr. Srinivasan asks for the following:
Dr. Srinivasan has failed to show why this discovery is necessary in order for him to oppose Trustmark's motion for summary judgment. The language of the May 2, 2018, letter is plain and unambiguous. Thus, the depositions of Ms. Talamani, Mr. Swan, and Mr. Cipro are unnecessary. Also, Trustmark does not dispute that California law requires certain language to be included where an insurer issues a denial; its only point is that a letter containing such language does not automatically render the letter a denial. Furthermore, Trustmark has already produced to Dr. Srinivasan the claim file which includes the "short document [it uses to] identify[] any specific claims handling rules applicable to the state in question." Swan Reply Decl. ¶ 3 (also testifying that "Trustmark currently does not, and at all times during the disability claim that is the subject of this action did not, maintain or use a claims manual"). To the extent Dr. Srinivasan has suggested, in his opposition brief, that he also needs discovery on when exactly Trustmark learned of the lawsuit (i.e., did it learn of the lawsuit before CT Corp. notified it), see Pl.'s Opp'n at 8 n.6, that is largely inconsequential information because there is no doubt that Trustmark was conducting surveillance of Dr. Srinivasan and preparing for his IME before the lawsuit was ever filed, let alone served.
For the foregoing reasons, the Court grants Trustmark's motion for partial summary judgment and denies Dr. Srinivasan's motion.
Because the Court has now issued its ruling on the motions, the stay on discovery that the Court previously issued at the hearing on the motions is lifted. The parties are allowed to proceed with discovery, although discovery requests may need to be amended based on the Court's ruling herein.
This order disposes of Docket Nos. 20 and 23.
