Mazet v. Halliburton Co. Long Term Disability Plan

FILED
NOT FOR PUBLICATION FEB 24 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
DAVID L. MAZET, No. 08-17101
Plaintiff - Appellant, D.C. No. 2:04-cv-00493-FJM
v. MEMORANDUM *
HALLIBURTON COMPANY LONG TERM
DISABILITY PLAN; HARTFORD LIFE
AND ACCIDENT INSURANCE
COMPANY,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Arizona
Frederick J. Martone, District Judge, Presiding
Argued and Submitted December 10, 2009
San Francisco, California
Before: O’SCANNLAIN, COWEN,** and RAWLINSON, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent except
as provided by 9th Cir. R. 36-3.
**
The Honorable Robert E. Cowen, Senior United States Circuit Judge for
the Third Circuit, sitting by designation.
David L. Mazet appeals from the district court’s judgment in favor of
Appellees Halliburton Company Long Term Disability Plan and Hartford Life and
Accident Insurance Company. The district court rejected his claim for disability
benefits under an employee benefit plan subject to the Employee Retirement
Income Security Act (“ERISA”). Among his other arguments on appeal, Mazet
asserts that the district court committed reversible error by reviewing Appellees’
denial of benefits for an abuse of discretion. We review de novo the district court’s
choice of the applicable standard of review. Montour v. Hartford Life & Accident
Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). We conclude that the district court
applied the wrong standard and accordingly vacate the judgment in favor of
Appellees.
“De novo is the default standard of review.” Abatie v. Alta Health & Life
Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006) (en banc) (citing Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Kearney v. Standard Ins. Co., 175
F.3d 1084, 1089 (9th Cir. 1999) (en banc)). To change the standard of review, the
ERISA plan must unambiguously provide discretion to the administrator. Id.
While there are no “‘magic’ words that conjure up discretion,” Abatie, 458 F.3d at
963 (citing Sandy v. Reliance Standard Life Ins. Co., 222 F.3d 1202, 1207 (9th Cir.
2000)), the discretionary reading of the language at issue must still be the “the only
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reasonable reading,” Kearney, 175 F.3d at 1090. “Under this reasoning, if
language only arguably confers discretion, it does not unambiguously confer
discretion and cannot escape the default of de novo review.” Feibusch v.
Integrated Device Tech., Inc. Employee Benefit Plan, 463 F.3d 880, 884 (9th Cir.
2006).
The district court turned to a “Proof of Loss” provision in the Plan’s policy
document as grounds for adopting the abuse of discretion standard. The Plan
stated, inter alia, that: “The Hartford reserves the right to determine if your proof
of loss is satisfactory.” (SER14.) This provision, especially its “reserves the right
to determine” language, could reasonably be read as conferring discretion.
However, this is not “the only reasonable reading” of the provision. In fact, we
have repeatedly found similar “Proof of Loss” or “Satisfactory Proof” provisions to
be ambiguous. See Feibusch, 463 F.3d at 883-85; Thomas v. Or. Fruit Prods. Co.,
228 F.3d 991, 993-95 (9th Cir. 2000); Sandy, 222 F.3d at 1203-08; Newcomb v.
Standard Ins. Co., 187 F.3d 1004, 1005-06 (9th Cir. 1999); Kearney, 175 F.3d at
1089-90. Based on this precedent, we must likewise find the Plan provision at
issue here ambiguous. See, e.g., Thivierge v. Hartford Life & Accident Ins. Co.,
No. C 05-0163 CW, 2006 WL 823751, at *10 (N.D. Cal. Mar. 28, 2006) (finding
identical provision ambiguous under Ninth Circuit case law).
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Appellees contend that the denial of benefits should be upheld under the de
novo standard. However, it would be inappropriate for an appellate court to make
such a determination, especially because Mazet presented additional evidence not
contained in the administrative record that the district court refused to consider but
that could be admissible under the applicable de novo standard. Abatie, 458 F.3d
at 970 (citing Jebian v. Hewlett-Packard Co. Employee Benefits Org. Income
Protection Plan, 349 F.3d 1098, 1110 (9th Cir. 2003); Kearney, 175 F.3d at 1090-
91; Mongeluzo v. Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d
938, 944 (9th Cir. 1995)); Kearney, 175 F.3d at 1090-91 (quoting Mongeluzo, 46
F.3d at 944). We therefore remand for the district court to apply the proper de
novo standard of review. In the process, the district court must also exercise its
discretion to decide whether the additional evidence should be considered.
Mongeluzo, 46 F.3d at 944 (holding that district court has discretion to allow
evidence not before administrator “only when circumstances clearly establish that
additional evidence is necessary to conduct an adequate de novo review”
(quotation omitted)).
VACATED AND REMANDED.
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