Elgin Cox v. Allin Corporation Plan ( 2021 )

FILED
NOT FOR PUBLICATION
FEB 17 2021
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ELGIN K. COX, No. 16-15231
Plaintiff-Appellant, D.C. No. 4:12-cv-05880-SBA
v.
MEMORANDUM*
ALLIN CORPORATION PLAN; et al.,
Defendants-Appellees.
ELGIN K. COX, No. 18-16975
Plaintiff-Appellant, D.C. No. 4:16-cv-04675-SBA
v.
ALLIN CORPORATION PLAN; UNUM
LIFE INSURANCE COMPANY OF
AMERICA,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Saundra B. Armstrong, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Argued and Submitted January 11, 2021
San Francisco, California
Before: BYBEE and R. NELSON, Circuit Judges, and WHALEY,** District
Judge.
Elgin Cox (Cox) appeals the district court’s judgment in favor of Unum Life
Insurance Company (Unum) in his suit for long term disability (LTD) benefits
brought pursuant to the Employee Retirement Income Security Act (ERISA), 29
U.S.C. § 1132. Cox, a former employee of Allin Corporation (Allin), submitted
claims for LTD benefits based on his diagnoses of vertigo and dizziness.
However, Unum, the plan administrator for the Allin Plan, terminated benefits after
24 months under the policy’s self-reported symptoms limitation. The district court
affirmed Unum’s denial of LTD benefits, and Cox appealed. Because the parties
are fully familiar with the facts and record, we recite only those facts relevant to
our decision.
The district court had jurisdiction pursuant to 29 U.S.C. § 1132(a), and we
have jurisdiction under 28 U.S.C. § 1291. We review the district court’s
underlying findings of fact for clear error, Abatie v. Alta Health & Life Ins. Co.,
458 F.3d 955, 962 (9th Cir. 2006), and mixed questions of fact and law, including
**
The Honorable Robert H. Whaley, United States District Judge for the
Eastern District of Washington, sitting by designation.
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contract interpretation, de novo, Tyler v. Cuomo, 236 F.3d 1124, 1134 (9th Cir.
2000) (citation omitted). We review the denial of benefits for abuse of discretion.
See Demer v. IBM Corp. LTD Plan, 835 F.3d 893, 896 (9th Cir. 2016). We
REVERSE and REMAND.
The district court erred in finding that Unum’s 2005 California Settlement
Agreement (CSA) with the California Department of Insurance (CDOI) did not
apply to the Allin Plan and thus that the CSA’s prohibition on self-reported
symptoms limitations did not apply. The CSA provides that LTD policy
limitations on self-reported conditions “shall not be applied in existing California
Contracts.”1 The CSA defines a “California Contract” as “a policy of disability
income insurance issued by a Respondent which is subject to the jurisdiction of
and approved by the Department.” Unum argues, and the district court found, that
the Allin Plan was not subject to the jurisdiction of CDOI. This was an error.
The Allin Plan is a California Contract subject to the CSA’s prohibition on
self-reported symptoms limitations. California law is clear that insurance provided
in California is subject to the jurisdiction of CDOI. “All insurance” in California is
governed by the California Insurance Code. Cal. Ins. Code § 41. All “transaction
1
The CSA applies to California contracts renewed “following the CSA
Effective Date or December 31, 2007.” Because the 1997 Allin Plan was renewed
on June 30, 2008, the CSA applies to the Allin Plan if it is a California Contract.
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of insurance business” requires admission and certification by CDOI, and
certification “shall not be granted until the applicant conforms to the requirements
of this code and of the laws of this state” or face criminal penalties. Cal. Ins. Code
§ 700(a)–(b). Further, “[n]o group disability policy shall be issued or delivered in
this state nor . . . shall an insurer provide or agree to provide group disability
coverage until a copy of the form of the policy is filed with the commissioner and
approved by him.” Cal Ins. Code § 10270.9. The California Insurance Code thus
explicitly prohibits the provision of group disability coverage in California unless
the policy is approved by CDOI. Cal. Ins. Code § 10270.9.
Here, the coverage was provided in California to a California resident at a
California subsidiary of Allin. Unum recognized Cox as a California employee.
Unum’s claims documents for Cox described his policy subgroup as “Employees
of Allin Consulting of California” and specifically noted: “Our agreement:
Employees of Allin Consulting of California.” The Allin Plan itself differentiates
between divisions or subsidiaries of Allin Corporation, including “Allin Consulting
of California” and provides different coverage for employees of Allin Consulting
of California. Moreover, Unum understood that it was subject to the jurisdiction of
CDOI: in its letters denying Cox’s claim, it directed him to CDOI for review of the
denial. The denial letters informed Cox that he “may also contact the California
4
Department of Insurance if you wish to have them review your [] claim,” and
provided contact information for CDOI. Unum cannot now argue that the Allin
Plan is not subject to the jurisdiction of CDOI. It is irrelevant that the Allin Plan
states that it is governed by Pennsylvania law because the CSA applies to all
California Contracts, without regard to the policy’s stated governing jurisdiction.
The CSA’s prohibition on self-reported symptoms limitations applies to the Allin
Plan.
Because we conclude that the CSA prohibits application of the Allin Plan’s
self-reported symptoms limitation, we do not reach Cox’s other arguments.
We REVERSE and REMAND for further proceedings consistent with this
disposition.
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