Richard Kludka v. Qwest Disability Plan , 454 F. App'x 611 ( 2011 )

FILED
NOT FOR PUBLICATION OCT 21 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICHARD KLUDKA, No. 10-16035
Plaintiff - Appellant, D.C. No. 2:08-cv-01806-DGC
v.
MEMORANDUM*
QWEST DISABILITY PLAN; QWEST
COMMUNICATIONS
INTERNATIONAL INC.; QWEST
COMMUNICATIONS
INTERNATIONAL INC. HEALTH
INSURANCE PLAN; QWEST
EMPLOYEE BENEFITS PLANS,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
David G. Campbell, District Judge, Presiding
Argued and Submitted May 10, 2011
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: D.W. NELSON and W. FLETCHER, Circuit Judges, and
DUFFY, District Judge.**
Petitioner Richard Kludka appeals the district court’s order denying his
summary judgment motion, and granting Defendants’ summary judgment motion,
regarding his long-term disability benefits under the Qwest Disability Plan
(“Plan”). Qwest Communications International, Inc., (“Qwest”) funds the Plan but
has delegated administrative responsibilities to Qwest Disability Services (“QDS”).
On appeal, Kludka argues that the district court chose the wrong standard of review
and that QDS abused its discretion when it denied his long-term disability benefits.
We conclude that procedural irregularities committed by QDS, combined with an
erroneous factual finding, warrant remand for the district court to reconsider
whether QDS abused its discretion when it denied Kludka’s claim for disability
benefits.
We review a district court’s grant of summary judgment de novo. Nolan v.
Heald College, 551 F.3d 1148, 1153 (9th Cir. 2009). In ERISA cases, we also
review a district court’s chosen standard of review de novo. Id. In the absence of a
conflict of interest, judicial review of a plan administrator’s benefits determination
involves a “straightforward application” of the abuse of discretion standard.
**
The Honorable Kevin Thomas Duffy, District Judge for the U.S.
District Court for Southern New York, New York, sitting by designation.
2
Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). We
need not resolve whether Qwest’s complete delegation of administrative duties to
QDS frees it from a structural conflict because we conclude that remand is proper
even under a traditional abuse of discretion standard.
QDS committed two procedural errors when it denied Kludka’s claim. First,
it failed to comply with 29 C.F.R. § 2560.503-1(g)(1)(iii), which requires that it
describe “any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information is
necessary.” QDS’s generic reproduction of the Plan’s terms in its denial letter did
not explain to Kludka what specific information was needed and why. Second,
although QDS had notice that Kludka was receiving Social Security benefits, it
failed to request the relevant records or “explain why it reached a different
conclusion than” the Social Security Administration. Montour, 588 F.3d at 637.
In February 2007, QDS notified Kludka by letter that it denied his claim
based on its conclusion that he was not disabled within the meaning of the Plan.
Under the Plan, an employee is disabled if he is “unable to engage” in employment
that pays 60% or more of his prior salary. Relying on an assertion by the Plan in
its motion for summary judgment, the district court misread the QDS denial letter.
The district court concluded that “Kludka would be reinstated to his previous
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employment position with accommodations.” This conclusion is erroneous. At
oral argument on appeal, the Plan conceded that Qwest, Kludka’s previous
employer, has not offered to reinstate him in his prior position. Instead, Kludka
will have to search for a job on the open market.
The only reviewing doctor who conducted a personal interview with Kludka,
Dr. Robert Bevan, concluded that he “could work two hours daily” and
“presumably increase his hours back to full-time.” Dr. Bevan recommended a
timetable that would restrict Kludka to “two hours of work daily for one month,
four hours daily for one month, and then full time without restrictions.”
Based on these conditions, Kludka would have to convince a prospective
employer to hire him on a part-time, gradually escalating basis, even while
knowing that he had received disability benefits for severe psychological problems
since 1999. If the district court had analyzed Kludka’s situation under these
conditions, instead of under the assumption that Kludka had a standing offer to
return to his previous job with accommodations, the court may well have
determined that he is “unable to engage” in meaningful employment and is thus
disabled under the terms of the Plan.
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Accordingly, we remand for the district court to reevaluate whether QDS
abused its discretion, in light of the procedural irregularities and the fact that Qwest
had not offered to reinstate Kludka in his previous job with accommodations.
REVERSED and REMANDED.
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