Brenna Moorhead v. Unum Life Insurance Company of America, et al.

• Court: District Court, N.D. California
• Decided: March 30, 2026
• Docket: 4:25-cv-01826
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BRENNA MOORHEAD, Case No. 25-cv-01826-HSG

8 Plaintiff, ORDER DETERMINING STANDARD OF REVIEW 9 v. Re: Dkt. Nos. 27, 28 10 UNUM LIFE INSURANCE COMPANY OF AMERICA, et al., 11 Defendants. 12 13 Pending before the Court are the Parties’ cross-motions to establish the standard of review 14 in this Employee Retirement Income Security Act (“ERISA”) action. See Plaintiff’s Letter Brief 15 (“Pl.’s Br.”), Dkt. No 27; Defendants’ Letter Brief (“Defs.’ Br.”), Dkt. No. 28. 16 The Parties dispute the appropriate standard of review applicable to Plaintiff’s group LTD 17 policy issued by Defendant Unum Life Insurance Company of America to Plaintiff’s employer. 18 Defs.’ Br. at 1; Pl.’s Br. at 1. Defendants Unum Life Insurance Company of America (“Unum”) 19 and Provident Life and Accident Insurance Company (“Provident”) (collectively, “Defendants”) 20 contend that an abuse of discretion standard of review should apply, while Plaintiff Brenna 21 Moorhead (“Plaintiff” or “Ms. Moorhead”) contends that the standard of review should be de 22 novo. 23 The Court finds this matter appropriate for disposition without oral argument and the 24 matter is deemed submitted. See Civil L.R. 7-1(b). For the reasons detailed below, the Court 25 GRANTS Defendant’s motion, DENIES Plaintiff’s motion, and finds that the abuse of discretion 26 standard of review applies to this action. 27 I. BACKGROUND 1 LLP (“Company”) and participated in the Company’s employee health and welfare benefit plan 2 (“Plan”), which was funded by policies issued by Defendants (“Policies”). See Complaint 3 (“Compl.”), ¶ 2. The plan provided long-term disability (“LTD”) and life insurance (“Life”) 4 benefits. Compl., ¶ 2. These benefits were and are insured by both Unum and Provident, through 5 three separate policies: Unum policy numbers 38003-003 and 629715, and Provident policy 6 number 06-675-4964429 (collectively, “the Policies”). Id. 7 Plaintiff alleges that while employed at the Company, she became disabled on March 17, 8 2023, due to a combination of medical conditions. Compl., ¶ 9. Due to her disability, Plaintiff 9 then claimed that she was entitled to long-term disability and life waiver of premium (“LWOP”) 10 benefits under the Policies. Compl., ¶ 10. Relevantly, Plaintiff claimed she was entitled to Life 11 Waiver of Premium (“LWOP”) benefits under the LTD group policy insured by Unum. Compl., ¶ 12 2; Pl.’s Br. at 1. Unum assigned Plaintiff a claim number (23635606) for her LWOP benefits 13 claim. Compl., ¶ 10. Defendants denied Plaintiff’s claims by letter dated May 6, 2024. Id. 14 Plaintiff appealed, and Defendants upheld the denial. Compl., ¶¶ 11, 12. 15 Plaintiff now brings suit to recover plan benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B). 16 Compl., ¶¶ 7-19. She alleges that Defendants improperly denied Plaintiff’s claims for long-term 17 disability (“LTD”) and Life Waiver of Premium (“LWOP”) benefits. Compl., ¶¶ 7-19. 18 II. LEGAL STANDARD 19 A denial of ERISA benefits under 29 U.S.C. § 1132(a)(1)(B) “is to be reviewed under a de 20 novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to 21 determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber 22 Co. v. Bruch, 489 U.S. 101, 115 (1989); see also Abatie v. Alta Health & Life Ins. Co., 458 F.3d 23 955, 963 (9th Cir. 2006) (en banc) (“De novo is the default standard of review.”). “To assess the 24 applicable standard of review, the starting point is the wording of the plan.” Abatie, 458 F.3d at 25 962-63. “[F]or a Plan to alter the standard of review from the default of de novo to the more 26 lenient abuse of discretion, the Plan must unambiguously provide discretion to the administrator.” 27 Id. at 963. That is, if a plan unambiguously gives the plan administrator discretion to determine a 1 Abatie, 458 F.3d at 963. 2 Some states, including California, have enacted statutes that prohibit an insurance policy 3 from assigning discretion to the insurer or administrator. Specifically, in 2011, California enacted 4 Insurance Code § 10110.6 (effective January 1, 2012), which bans discretionary clauses in any 5 policy that funds life insurance or disability insurance coverage for any California resident. The 6 statute, which is “self-executing,” Cal. Ins. Code § 10110.6(g), provides: 7 If a policy, contract, certificate, or agreement offered, issued, delivered, or renewed, whether or not in California, that provides or funds life insurance or disability coverage for 8 any California resident contains a provision that reserves discretionary authority to the 9 insurer, or an agent of the insurer, to determine eligibility for benefits or coverage, to interpret the terms of the policy, contract, certificate, or agreement, or to provide standards 10 of interpretation or review that are inconsistent with the laws of this state, that provision is void and unenforceable. 11 12 Cal. Ins. Code § 10110.6(a). “Discretionary authority” refers to “a policy provision that 13 has the effect of conferring discretion on an insurer or other claim administrator to determine 14 entitlement to benefits or interpret policy language that, in turn, could lead to a deferential 15 standard of review by any reviewing court.” Id., § 10110.6(c). If any discretionary provision is 16 covered by the statute, “the courts shall treat that provision as being void and unenforceable.” 17 Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, 856 F.3d 686, 692 (9th Cir. 18 2017) (Section 10110.6 is not preempted by ERISA and applies to disability insurance plans). 19 III. DISCUSSION 20 The Parties do not dispute that the LTD group policy at issue contains language conferring 21 discretionary authority upon Unum to determine benefits eligibility. Pl.’s Br. at 1; Defs.’ Br. at 1- 22 2. That language provides: “In making any benefits determination under this summary of 23 benefits, the Company shall have the discretionary authority both to determine an employee’s 24 eligibility for benefits and to construe the terms of this summary of benefits.” Defs.’ Br. at 2. 25 However, Plaintiff contends that California Insurance Code § 10110.6 voids any provision 26 conferring such discretionary authority upon Unum. Pl.’s Br at 1-2. 27 Defendant responds that Massachusetts law governs the policy. Defs.’ Br. at 2. The 1 Pl.’s Br. at 1; Defs.’ Br. at 2. Massachusetts law does not contain the same statutory prohibition 2 on the reservation of discretionary authority to the insurer. See Pl.’s Br. at 3; Defs.’ Br. at 2. 3 Nevertheless, Plaintiff contends that this Court should apply California Insurance Code § 10110.6 4 and void the discretionary language in the policy. Pl.’s Br. at 1-3. 5 Accordingly, this dispute boils down to a choice-of-law disagreement. If California law 6 governs, the policy’s discretionary provision is void and unenforceable, and a de novo standard 7 applies. If Massachusetts law governs, the policy’s discretionary provision dictates application of 8 the abuse of discretion standard. 9 Lawsuits filed regarding ERISA-regulated plans are treated as federal question cases. Pilot 10 Life Ins. Co. v. Dedeaux, 481 U.S. 41, 56 (1987). In federal question cases, “the court should 11 apply federal, not forum state, choice of law rules.” In re Lindsay, 59 F.3d 942, 948 (9th Cir. 12 1995). Here, the federal choice of law rule provides that “[w]here a choice of law is made by an 13 ERISA contract, it should be followed, if not unreasonable or fundamentally unfair” “when 14 viewed from the time when the contract was made.” Wang Laboratories, Inc. v. Kagan, 990 F.2d 15 1126, 1128-29 (9th Cir. 1993) (where plaintiff was California resident injured in California, but 16 defendant and most of its employees resided in Massachusetts, application of plan’s selection of 17 Massachusetts law was fair and reasonable); see also Fenberg v. Cowden Automotive Long Term 18 Disability Plan, 259 F. App’x 958, 959 (9th Cir. Dec. 17, 2007) (reversing district court’s decision 19 to review de novo and holding that the district court should have reviewed for abuse of discretion 20 pursuant to Rhode Island law). In Wang Laboratories, the Ninth Circuit reasoned that because the 21 plan would have to account for greater risk and uncertainty if it were subject to the choice of law 22 doctrine of every state in which it might be sued, the benefits of consistently enforcing the 23 contractual Massachusetts choice of law provision “redound ultimately to the beneficiaries.” Id. at 24 1129. To avoid application of the contract’s choice of law, a plaintiff must show that “viewed 25 from the time when the contract was made, when a particular individual could not know whether 26 he would be a litigant,” the parties’ choice of law was “unreasonable or fundamentally unfair.” 27 Fenberg, 259 F. App’x at 959. 1 line of cases voiding discretionary clauses contained in insurance policies that specify a governing 2 law of another state. See Pl.’s Br. at 1 (citing Rapolla v. Waste Management Employee Benefits 3 Plan, No. 13-cv-0860-JST, 2014 WL 2918863, at *5 (N.D. Cal. Jun. 25, 2014); Snyder v. Unum 4 Life Ins. Co. of Am., No. CV 13-07522 BRO (RZx), 2014 WL 7734715, at *10-11 (C.D. Cal. Oct. 5 28, 2014); Hirschkron v. Principal Life Ins. Co., 141 F. Supp. 3d 1028 (N.D. Cal. 2015). Those 6 district court decisions were persuaded by the language of California Insurance Code § 7 10110.6(a), which expressly applies to policies “offered, issued, delivered, or renewed, whether or 8 not in California” providing life insurance of disability coverage for California residents. See 9 Hirshkron, 141 F. Supp. 3d at 1031 (allowing a choice-of-law provision to override Section 10 10110.6 on “the narrow issue of the applicable standard of review for a denial of benefits” would 11 “subvert the right to a ‘fair review of claims denials’” granted by the California legislature to all 12 California residents); Snyder, 2014 WL 7734715, at *11 (applying the policy’s choice of law 13 would “subvert” “the substantive right of insured Californians to a fair review of claim denials,” 14 and “undermine the legislature’s intent”). 15 The Court respectfully disagrees with the reasoning of these cases. None of these 16 decisions performed a choice-of-law analysis, which is the threshold issue. Specifically, none of 17 these decisions appear to clearly apply the federal choice-of-law rule applicable to this situation, 18 which requires examining whether following the choice of law made by an ERISA contract would 19 be “unreasonable or fundamentally unfair” when viewed from the time when that contract was 20 made. Wang Laboratories, 990 F.2d at 1128-29. 21 By contrast, the Court finds persuasive the approach employed by the courts in Whitesell v. 22 Liberty Life Assurance Co. of Bos., 650 F. Supp. 3d 832, 836 (N.D. Cal. 2022) (applying plan’s 23 choice-of-law provision selecting Minnesota law and applying abuse of discretion standard) and 24 Ehrlich v. Hartford Life & Acc. Ins. Co., No. 20-cv-02284-JST, 2021 WL 4472845, at *7-8 (N.D. 25 Cal. May 7, 2021) (applying plan’s choice of law provision selecting Florida law and applying 26 abuse of discretion standard).1 27 1 In these cases, the courts considered whether the parties’ choice of law at the time the 2 contract was made was both reasonable and fair. See Whitesell, 650 F. Supp. 3d at 835-36 3 (Minnesota choice of law was fair and reasonable because plaintiff’s former employer had tens of 4 thousands of employees in Minnesota and conducts substantial business there, and reason 5 supported applying the law of one state because the plan covered over 190,000 employees across 6 all 50 states); Ehrlich, 2021 WL 4472845, at *8 (Florida choice of law was fair and reasonable 7 where the plan covered employees all across the country, Florida was a major market for the plan 8 sponsor, the plan sponsor had a large number of employees residing in Florida, and the plan 9 sponsor’s Florida subsidiary provided Plaintiff’s employer with benefit administration services 10 from Florida). 11 The Court concludes that it is fair and reasonable to apply the LTD group policy’s choice 12 of Massachusetts law. The policy was entered into between Goodwin and Unum in 1972, long 13 before Section 10110.6 took effect, and before Unum or Goodwin could have purposefully 14 selected Massachusetts law to avoid the effects of Section 10110.6. Defs.’ Br. at 3. Given that the 15 Company was and is a Massachusetts-based entity with its principal place of business in Boston, 16 Massachusetts, and that the Company has thousands of employees throughout the world, the Court 17 finds the uniform application of Massachusetts choice of law to each dispute arising under the 18 LTD policy to be reasonable. See Whitesell, 650 F. Supp. 3d at 835-36; Ehrlich, 2021 WL 19 4472845, at *8; Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 108 (2013) 20 (application of bargained-for choice of law provisions is important to achieve uniformity, 21 predictability, and efficiency under ERISA). As in Wang Laboratories, where the Ninth Circuit 22 reasoned that because the plan would have to account for greater risk and costs if it were subject to 23 the choice of law doctrine of every state in which it might be sued, here, the Plan’s beneficiaries 24 ultimately benefit from consistent enforcement of the Plan’s choice of Massachusetts law. 990 25 F.2d at 1129. 26

27 instruction in Wang Laboratories. 2021 WL 4472845, at *7 n.8. The Ehrlich court noted that ] Plaintiff also argues that upholding the Plan’s choice of law provision would “read the 2 || savings clause out of ERISA.” Pl.’s Br. at 2. The Court disagrees, because ERISA’s savings 3 clause, 29 U.S.C. § 1144(b)(2)(A), simply preserves the states’ ability to “regulate[] insurance, 4 || banking, or securities.” Upholding the Plan’s choice of Massachusetts rather than California law 5 || with respect to this particular Plan, which was entered into in Massachusetts with a Massachusetts 6 || company, does not undermine California’s ability to regulate insurance. 7 Accordingly, the Court finds that the Plan’s choice of Massachusetts law applies and that 8 California’s prohibition on discretionary clauses does not apply to this case. 9 || IV. CONCLUSION 10 Because Massachusetts law is the applicable choice of law, the abuse of discretion standard 11 of review therefore applies to this case. Accordingly, Plaintiff's motion (Dkt. No. 27) is DENIED 12 || and Defendant’s motion (Dkt. No. 28) is GRANTED. 13 The Court SETS a case management conference in this case on April 14, 2026, at 2:00 14 || p.m. The hearing will be held by Public Zoom Webinar. All counsel, members of the public, and 3 15 || media may access the webinar information at https://www.cand.uscourts.gov/hsg. All attorneys 16 || appearing for the case management conference are required to join at least 15 minutes before the 17 || hearing to check in with the courtroom deputy and test internet, video, and audio capabilities. The Zz 18 Court DIRECTS the parties to meet and confer and file a joint case management statement by 19 || April 7, 2026. The statement should include an agreed-upon schedule for prompt briefing and 20 || hearing cross-motions under Federal Rule of Civil Procedure 52. 21 IT IS SO ORDERED. 22 || Dated: 3/30/2026 23 Alaipurnl 5 |). HAYWOOD S. GILLIAM, JR. 24 United States District Judge 25 26 27 28