Vandana Upadhyay v. Aetna Life Insurance Company ( 2016 )

FILED
NOT FOR PUBLICATION MAR 23 2016
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
VANDANA UPADHYAY, No. 14-15420
Plaintiff - Appellant, D.C. No. 3:13-cv-01368-SI
v.
MEMORANDUM*
AETNA LIFE INSURANCE COMPANY,
a Connecticut corporation, in its capacities
as a fiduciary and an administrator of the
Symmetricom, Inc. Long Term Disability
Benefits Plan, an ERISA-regulated
employee welfare benefit plan,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
Susan Illston, Senior District Judge, Presiding
Submitted March 15, 2016**
San Francisco, California
Before: McKEOWN, TALLMAN, and M. SMITH, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel concludes this case is suitable for decision without oral
argument. See Fed. R. App. P. 34(a)(2).
Vandana Upadhyay appeals the district court’s grant of Aetna Life Insurance
Co.’s (Aetna) motion for summary judgment in Upadhyay’s civil action under the
Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et
seq. Upadhyay also appeals the district court’s denial of her motion for
reconsideration. We have jurisdiction under 28 U.S.C. § 1291, and we affirm the
district court’s judgment.
1. The district court properly granted Aetna summary judgment on the
ground that Upadhyay’s action was untimely under the Symmetricom, Inc. Long
Term Disability Benefits Plan’s (the Plan) provisions. The Plan provides: “No
legal action can be brought to recover under any benefit after 3 years from the
deadline for filing claims.” Under the Plan’s provisions, Upadhyay was required
to file a claim for benefits by July 1, 2007; and the three-year contractual
limitations period ended on July 1, 2010. Upadhyay, however, did not file her
claim for benefits until December 13, 2010, and she did not file the present lawsuit
until March 4, 2013. Therefore, Upadhyay’s ERISA action is untimely under the
provisions of the Plan.
We further hold that Aetna did not waive its contractual limitations defense
despite failing to inform Upadhyay, in its denial letters, of the Plan’s contractual
limitations period for filing suit under ERISA. Under California law, an insurance
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company cannot waive a contractual limitations defense when the limitations
period has already run. See Gordon v. Deloitte & Touche, LLP Grp. Long Term
Disability Plan, 749 F.3d 746, 752 (9th Cir. 2014) (under California law, insurer
could not waive statute of limitations that had already run); see also id. (“[C]ourts
may turn to state common law for guidance and apply state law to the extent that it
is consistent with the policies expressed in ERISA.”); Scharff v. Raytheon Co.
Short Term Disability Plan, 581 F.3d 899, 901 (9th Cir. 2009) (declining to create
federal common law that would require insurers to “inform claimants expressly of
statutes of limitations that may bar their claims”).
Therefore, Aetna cannot waive its contractual limitations defense because
the Plan’s contractual limitations period had already run at the time Aetna sent its
denial letters to Upadhyay. Even if Aetna could waive the contractual limitations
period, Upadhyay has not shown “an element of detrimental reliance or some
misconduct” on the part of Aetna. Gordon, 749 F.3d at 753.
Nor does it change our analysis that the Plan’s contractual limitations period
ran before Upadhyay submitted her benefits application. The Supreme Court in
Heimeshoff v. Hartford Life & Accident Insurance Co., 134 S. Ct. 604, 611 (2013),
held that parties may “agree[] by contract to commence the limitations period at a
particular time,” which may start before an insurer has issued its final denial of
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benefits. Here, Upadhyay’s benefits application was submitted three-and-a-half
years late.
Finally, Upadhyay argues that Aetna’s contractual limitations defense fails
because the defense is “an impermissible attempt to circumvent” California’s
notice-prejudice rule. See UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358,
366–67 (1999) (notice-prejudice rule bars an insurer from avoiding liability based
on an untimely claim for benefits unless insurer can show actual prejudice from
delay). Upadhyay cites to no authority requiring a showing of prejudice in order to
prevail on a limitations defense challenging the timing of the ERISA action itself.
2. Because Upadhyay’s ERISA claim is untimely under the Plan’s
contractual limitations period, we need not address whether Aetna waived its
Settlement Agreement defense.
3. Not until her motion for reconsideration did Upadhyay argue that her suit
was timely under the Supreme Court’s decision in Heimeshoff and § 10350.7 of the
California Insurance Code. We hold that the district court did not abuse its
discretion by denying Upadhyay’s motion for reconsideration. Smith v. Pac.
Props. & Dev. Corp., 358 F.3d 1097, 1100 (9th Cir. 2004) (“We review the denial
of a motion for reconsideration for abuse of discretion.”).
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“A motion for reconsideration ‘may not be used to raise arguments or
present evidence for the first time when they could reasonably have been raised
earlier in the litigation.’” Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH &
Co., 571 F.3d 873, 880 (9th Cir. 2009) (quoting Kona Enters., Inc. v. Estate of
Bishop, 229 F.3d 877, 890 (9th Cir. 2000)). The district court correctly noted that
“there was no reference or citation to the California Insurance Code at all in
[Upadhyay’s] opposition brief.”
In addition, the legal principle annunciated in Heimeshoff—that a controlling
statute could supplant a plan’s contractual limitations period—was already law in
the Ninth Circuit at the time Upadhyay filed her opposition brief. See, e.g., Wetzel
v. Lou Ehlers Cadillac Grp. Long Term Disability Ins. Program, 222 F.3d 643,
650–51 (9th Cir. 2000) (en banc) (remanding action to district court to determine
whether the plaintiff’s action was contractually barred by the plan’s limitations
provisions in light of California law, particularly Cal. Ins. Code § 10350.7);
Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 927 (9th Cir. 2012)
(explaining that California statutory law is read into insurance policies and
becomes part of the contract).
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The district court acted well within its discretion by declining to reconsider
its prior order based on an argument that should have been raised earlier in the
litigation.
AFFIRMED.
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