Bruce v. Hartford Life Insurance Company

• Court: District Court, E.D. California
• Decided: November 21, 2019
• Docket: 2:17-cv-02201
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 EASTERN DISTRICT OF CALIFORNIA 9 10 LORETTA BRUCE, No. 2:17-cv-02201-MCE-KJN 11 Plaintiff, 12 v. MEMORANDUM AND ORDER 13 HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, 14 Defendant. 15 16 In this action, Plaintiff Loretta Bruce (“Plaintiff”) seeks redress under various 17 California laws from Defendant Hartford Life and Accident Insurance Company 18 (“Defendant”) arising from Defendant’s termination of Plaintiff’s long-term disability 19 (“LTD”) benefits.1 Presently before the Court are Defendant’s Motion for Summary 20 Adjudication and Plaintiff’s Motion for Partial Summary Judgment pursuant to Federal 21 Rule of Civil Procedure 56, as well as Defendant’s Motion to File Sur-reply and Motion to 22 Strike. The matter is fully briefed, and for the reasons outlined below Defendant’s 23 Motion for Summary Adjudication (ECF No. 47) is GRANTED, Plaintiff’s Motion for 24 Partial Summary Judgment (ECF No. 48) is DENIED, and Defendant’s Motion to File 25 Sur-reply (ECF No. 82) and Motion to Strike (ECF No. 63) are DENIED as moot.2 26 1 This Court has jurisdiction over Plaintiff’s claims under 28 U.S.C. § 1332. 27

2 Because oral argument would not have been of material assistance, the Court ordered this 28 matter submitted on the briefs. E.D. Cal. Local Rule 230(g). 1 BACKGROUND 2 3 Defendant issued Group Contract Number GLT-677969 (the “Policy”) to Los Rios 4 Community College District (“Los Rios”), effective July 1, 2010, for Los Rios employees. 5 Pl.’s Compl., ECF No. 1 ¶ 7. Plaintiff, as a Los Rios employee, was a beneficiary of the 6 Policy. Id. ¶¶ 6-8. On February 11, 2016, Plaintiff sustained an injury after falling at 7 work. She subsequently underwent surgery for a meniscus tear, and she still 8 experiences continuous pain and swelling in her knee. Id. ¶ 13. As a result, according 9 to Plaintiff, she became disabled from her job as a Center Lead Pre-School Teacher. 10 In relevant part, the applicable Policy provides coverage for injuries in the event 11 of disability, as follows: 12 [D]uring the Elimination Period and for the next 24 month(s), as a result of injury or sickness, You are unable to perform with 13 reasonable continuity the Essential Duties necessary to pursue Your occupation in the usual and customary way. After 14 that, as a result of injury or sickness You are unable to engage with reasonable continuity in Any Occupation. 15 16 Id. ¶ 9 (emphasis added). 17 Accordingly, Plaintiff applied for LTD benefits (“Your Occupation” benefits) from 18 Defendant in March 2016 after her employer determined she could no longer perform 19 her occupation and could not be accommodated to do so. Id. ¶ 15. On April 27, 2016, 20 Defendant granted Plaintiff’s claim for Your Occupation benefits, effective for a two-year 21 period retroactive to January 11, 2016, but also referred Plaintiff’s claim to Defendant’s 22 special investigation unit (“SIU”) for further investigation. Id. ¶ 16; Def.’s Mem. Supp. 23 Summ. Adj., ECF No. 47 at 5:9-11. 24 Defendant thereafter conducted surveillance of Plaintiff, during which she was 25 observed driving, pumping gas, running errands, carrying items weighing less than 26 approximately twenty pounds, and standing and walking for about twenty to thirty 27 minutes at a time, with sit-down breaks and/or driving in between. Pl.’s Compl. ¶ 19. 28 /// 1 Plaintiff was also seen performing activities such as ascending and descending two or 2 three steps, adjusting a hose, and sweeping. Id. ¶ 19. 3 One of Defendant’s field investigators interviewed Plaintiff, and again her claim 4 was referred to the SIU to clarify [Plaintiff’s] current restrictions/limitations and her ability 5 to perform her occupation. Id. ¶¶ 22-23. Defendant also conducted an occupational 6 analysis and arranged for Plaintiff to attend an Independent Medical Evaluation (“IME”), 7 which she did. Id. ¶¶ 24, 27-28. The attending doctor, Dr. Bernhard, concluded that 8 Plaintiff was able to walk forty minutes at a time for a total of three hours per day, lift 9 twenty pounds for five minutes continuously per hour, carry fifteen pounds up to five 10 minutes per hour for a total of eight hours per day, and push and pull fifty pounds for ten 11 minutes per hour for a total of eight hours per day. Id. ¶ 28. 12 On November 21, 2016, Defendant terminated Plaintiff’s Your Occupation 13 benefits by letter. Id. ¶ 31; Def.’s UMF, ECF No. 70-2 at 47:15-23. The letter set out 14 Dr. Bernhard’s conclusions from the IME and noted that, although Plaintiff’s treating 15 doctor, Dr. Coward, somewhat disagreed with Dr. Bernhard’s conclusions, Dr. Coward 16 did not believe they had any major differences of opinion. Def.’s UMF at 47:15-23. 17 Therefore, Defendant concluded Plaintiff was able to perform the Essential Duties of her 18 occupation. Id. Approximately six months later, with the assistance of counsel, Plaintiff 19 appealed the termination of those benefits. Pl.’s Compl. ¶¶ 36, 38; Def.’s UMF at 47:24- 20 27. 21 After receiving Plaintiff’s appeal, Defendant requested an independent peer 22 review of Plaintiff’s medical file by Dr. Pietro Seni. Def.’s UMF at 50:16-18. Because 23 Dr. Seni ultimately agreed with Dr. Coward on Plaintiff’s restrictions and limitations, 24 Defendant reversed its initial termination and reinstated Plaintiff’s Your Occupation 25 benefits. Id. at 50:18-51:6. 26 Thereafter, Defendant conducted an Employability Analysis Report (“EAR”) using 27 the restrictions and limitations determined by Dr. Seni and other relevant information. Id. 28 at 51:28-52:3. Based on those results, by letter dated August 29, 2017, Defendant 1 prospectively terminated Plaintiff’s future LTD benefits effective January 10, 2018, at 2 which point Plaintiff had to meet the Policy’s Any Occupation standard (“Any Occupation” 3 benefits). Id. at 71:21-72:5. Defendant notified Plaintiff of the opportunity to appeal; 4 however, Plaintiff, determining an appeal would be futile, initiated this action instead. Id. 5 at 71:21-72:5; Pl.’s Compl. ¶ 42. 6 7 STANDARD 8 9 The Federal Rules of Civil Procedure provide for summary judgment when “the 10 movant shows that there is no genuine dispute as to any material fact and the movant is 11 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v. 12 Catrett, 477 U.S. 317, 322 (1986). One of the principal purposes of Rule 56 is to 13 dispose of factually unsupported claims or defenses. Celotex, 477 U.S. at 325. 14 Rule 56 also allows a court to grant summary judgment on part of a claim or 15 defense, known as partial summary judgment. See Fed. R. Civ. P. 56(a) (“A party may 16 move for summary judgment, identifying each claim or defense—or the part of each 17 claim or defense—on which summary judgment is sought.”); see also Allstate Ins. Co. v. 18 Madan, 889 F. Supp. 374, 378-79 (C.D. Cal. 1995). The standard that applies to a 19 motion for partial summary judgment is the same as that which applies to a motion for 20 summary judgment. See Fed. R. Civ. P. 56(a); State of Cal. ex rel. Cal. Dep’t of Toxic 21 Substances Control v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998) (applying summary 22 judgment standard to motion for summary adjudication). 23 In a summary judgment motion, the moving party always bears the initial 24 responsibility of informing the court of the basis for the motion and identifying the 25 portions in the record “which it believes demonstrate the absence of a genuine issue of 26 material fact.” Celotex, 477 U.S. at 323. If the moving party meets its initial 27 responsibility, the burden then shifts to the opposing party to establish that a genuine 28 issue as to any material fact actually does exist. Matsushita Elec. Indus. Co. v. Zenith 1 Radio Corp., 475 U.S. 574, 586-87 (1986); First Nat’l Bank v. Cities Serv. Co., 391 U.S. 2 253, 288-89 (1968). 3 In attempting to establish the existence or non-existence of a genuine factual 4 dispute, the party must support its assertion by “citing to particular parts of materials in 5 the record, including depositions, documents, electronically stored information, 6 affidavits[,] or declarations . . . or other materials; or showing that the materials cited do 7 not establish the absence or presence of a genuine dispute, or that an adverse party 8 cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). The 9 opposing party must demonstrate that the fact in contention is material, i.e., a fact that 10 might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, 11 Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v. Local No. 169, Assoc. of W. Pulp and 12 Paper Workers, 971 F.2d 347, 355 (9th Cir. 1987). The opposing party must also 13 demonstrate that the dispute about a material fact “is ‘genuine,’ that is, if the evidence is 14 such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 15 477 U.S. at 248. In other words, the judge needs to answer the preliminary question 16 before the evidence is left to the jury of “not whether there is literally no evidence, but 17 whether there is any upon which a jury could properly proceed to find a verdict for the 18 party producing it, upon whom the onus of proof is imposed.” Anderson, 477 U.S. at 251 19 (quoting Improvement Co. v. Munson, 81 U.S. 442, 448 (1871)) (emphasis in original). 20 As the Supreme Court explained, “[w]hen the moving party has carried its burden under 21 Rule [56(a)], its opponent must do more than simply show that there is some 22 metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586. Therefore, 23 “[w]here the record taken as a whole could not lead a rational trier of fact to find for the 24 nonmoving party, there is no ‘genuine issue for trial.’” Id. at 587. 25 In resolving a summary judgment motion, the evidence of the opposing party is to 26 be believed, and all reasonable inferences that may be drawn from the facts placed 27 before the court must be drawn in favor of the opposing party. Anderson, 477 U.S. at 28 255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s 1 obligation to produce a factual predicate from which the inference may be drawn. 2 Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 3 810 F.2d 898 (9th Cir. 1987). 4 ANALYSIS 5 6 Plaintiff brings three state causes of action: breach of contract; breach of implied 7 covenant of good faith and fair dealing; and intentional infliction of emotional distress. 8 Pl.’s Compl. at ¶¶ 43-63. Defendant moves for summary adjudication of the breach of 9 contract claim as it relates to Your Occupation benefits, while Plaintiff moves for 10 summary judgment on the breach of contract claim to the extent it challenges 11 Defendant’s denial of Any Occupation benefits. Both parties move for summary 12 judgment as to Plaintiff’s breach of implied covenant of good faith and fair dealing. 13 Lastly, Defendant moves for summary adjudication of the intentional infliction of 14 emotional distress claim.3 15 A. Breach Of Contract 16 The standard elements of a claim for breach of contract are: “(1) the contract; 17 (2) plaintiff’s performance or excuse for non-performance; (3) defendant’s breach; and 18 (4) damage to the plaintiff therefrom.” Abdelhamid v. Fire Ins. Exchange, 19 182 Cal. App. 4th 990, 999 (2010). However, in California disability insurance cases, the 20 only damages obtainable for a breach of contract are the “sum or sums payable in the 21

22 3 Additionally, Plaintiff seeks summary adjudication of Defendant’s affirmative defenses. Pl.’s Mem. Supp. Part. Summ. J., ECF No. 48-1 at 19:4-20:16. Plaintiff argues that Defendant’s first through 23 thirteenth affirmative defenses do not qualify as affirmative defenses as they either attack the Plaintiff’s prima facie case or are denials of allegations. However, as Defendant correctly points out, granting 24 summary adjudication as to the affirmative defenses has little value as it would not prevent Defendant from contesting Plaintiff’s prima facie case nor disproving the allegations. In fact, in light of this Memorandum 25 and Order, only Plaintiff’s breach of contract claim as to the Any Occupation benefits withstands summary adjudication; therefore, it is unclear to the Court at this point which affirmative defenses will be raised. Furthermore, Plaintiff has failed to show how she is prejudiced by the Defendant’s assertion of these 26 defenses, Plaintiff’s objections are largely conclusory, and because the Plaintiff’s explanations are mis- numbered and out of order, it is unclear to the Court which analysis applies to each affirmative defense. 27 See Reiffer v. HGM Holdings LLC, No. 1:18-CV-1058-LJO-BAM, 2019 WL 1455325, at *2 (E.D. Cal. Apr. 2, 2019). Based on the foregoing reasons, Plaintiff’s Motion for Summary Adjudication as to 28 Defendant’s affirmative defenses is DENIED. 1 manner and at the times as provided in the policy to the person entitled thereto.” Cal. 2 Ins. Code § 10111. 3 In this case, Plaintiff alleges that Defendant breached its contractual obligations 4 under the Policy by: (1) terminating and failing to pay Your Occupation benefits; and 5 (2) terminating and failing to pay Any Occupation benefits. Pl.’s Compl. ¶ 16. The Court 6 addresses these theories of liability separately.4 7 1. Your Occupation Benefits 8 As indicated, Defendant moves for summary adjudication of the issue of whether 9 there was a breach of contract with respect to Your Occupation benefits. At the outset, it 10 is undisputed that Defendant has paid Plaintiff the full amount of Your Occupation 11 benefits. Therefore, according to Defendant, Plaintiff cannot prove an essential element 12 of her claim—that she suffered damages from the termination of those benefits. Def.’s 13 Mem. Supp. Summ. Adj. at 12:26-13:12. Plaintiff argues, however, that she suffered 14 damages in multiple additional ways: (1) by applying for early retirement; (2) by hiring 15 counsel to litigate her internal appeal of the Defendant’s denial of Your Occupation 16 benefits; and (3) by the Defendant’s failure to pay interest on the “delayed payment of 17 /// 18 4 As a preliminary matter, Plaintiff moves to strike Exhibits 16, 17, 19, 20, 37, 38, and 39, which 19 are attached to the Dekshenieks Declaration (ECF No. 47), and requests judicial notice of various other documents (ECF No. 48-6; ECF No. 72-1). 20 First, this Court finds the documents in 16, 17, and 19 admissible under the business record exception in the Federal Rules of Evidence 803(6) because the documents were kept in the ordinary 21 course of business as part of Plaintiff’s claim file. Further, the documents in 20, 37, 38, and 39 are similarly admissible as business records. The fact that they contain “expert opinions” without Defendant 22 having qualified the individuals as experts does not prevent them from admissibility. See Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 170 (1988) (“[P]ortions of investigatory reports otherwise admissible . . . 23 are not inadmissible merely because they state a conclusion or opinion. As long as the conclusion is based on a factual investigation and satisfies the Rule’s trustworthiness requirement, it should be 24 admissible along with other portions of the report.”); Duarte Nursery, Inc. v. United States Army Corps of Engineers, No. 2:13-CV-02095-KJM-DB, 2017 WL 3453206, at *1-*2 (E.D. Cal. Aug. 11, 2017) 25 (determining “[b]usiness records can include, among other things, ‘condition[s], opinion[s], or diagnos[e]s’” and finding evidence admissible without requiring “qualif[ication] [of] the proponents of the records as experts . . .”). 26 Second, the Court takes judicial notice of Exhibits 1(A) and (B) and Exhibit 6, attached to Pl.’s Mem. Supp. Part. Summ. J. However, as taking judicial notice of Exhibits 2-5, attached to Pl.’s Partial 27 Mot. Summ. J, and Exhibits 1(A) and (B), attached to Pl.’s Reply Supp. Part. Summ. J., is unnecessary to determine the outcome of the present Motion, this Court declines to take judicial notice of those 28 documents. 1 benefits.” Pl.’s Compl. ¶ 48; Pl.’s Reply Supp. Part. Summ. J., ECF No. 72 at 8:15-28. 2 Defendant has the better argument. 3 First, California Insurance Code § 10111 expressly provides, “[i]n . . . disability 4 insurance, the only measure of liability and damage is the sum or sums payable in the 5 manner and at the times as provided in the policy.” Cal. Ins. Code § 10111. Therefore, 6 damages from reduced future retirement benefits cannot serve as a basis for 7 consequential damages because the only measure of damages allowed is the sum 8 payable under the Policy—the total amount of unpaid Your Occupation benefits. It also 9 follows then that Plaintiff’s second argument, that mitigation costs arising from retaining 10 counsel constitute damages, likewise fails. Although Plaintiff bases its argument on 11 Howard v. American National Fire Ins. Co., that case does not support Plaintiff’s 12 assertion and is distinguishable because that court discussed attorney fees in relation to 13 bad faith damages rather than attorney fees as a basis for a breach of contract cause of 14 action. 187 Cal. App. 4th 498, 533 (2010) (stating “the trial court properly characterized 15 the attorney fees as costs incurred to mitigate the damages caused by American’s failure 16 to defend, settle, and indemnify, and properly ordered reimbursement” in discussing bad 17 faith damages); Pl.’s Opp’n, ECF No. 58 at 4:5-12. Plaintiff provides no further case 18 support for its assertion that hiring counsel for an internal appeal constitutes damages 19 for a breach of contract claim in this context. 20 Alternatively, Plaintiff argues both that § 10111.2 modifies § 10111 and that 21 § 10111.2 contains a provision which allows mitigation damages to serve as “a remedy 22 made available by ‘any other law.’” Pl.’s Reply Supp. Part. Summ. J. at 8:15-28. These 23 arguments are not well taken. Section 10111.2 provides for the payment of interest 24 under circumstances not applicable here. As such, none of its provisions are relevant, 25 and Plaintiff’s arguments fail. 26 Third, Plaintiff argues she is entitled to interest based on Defendant’s “delayed 27 payment of benefits” under § 10111.2 and that interest qualifies as damages. Cal. Ins. 28 Code § 10111.2; Pl.’s Reply Supp. Part. Summ. J. at 8:15-28. However, when a party 1 raises a new argument in a reply brief, that argument is improper because the opposing 2 party is deprived of an opportunity to respond. Tovar v. United States Postal Service, 3 3 F.3d 1271, 1273 n.3 (9th Cir.1993); Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir. 4 1996). Moreover, even assuming, arguendo, that Plaintiff’s argument is procedurally 5 proper, she is not entitled to recover interest for two reasons. First, § 10111 provides 6 that “the only measure of liability and damage is the sum or sums payable in the manner 7 and at the times as provided in the policy,” and Plaintiff has failed to provide evidence 8 that shows the Policy entitled her to anything beyond the total amount of unpaid Your 9 Occupation benefits. Cal. Ins. Code § 10111. Second, Plaintiff has not shown how 10 § 10111.2 is even applicable in this case, as Plaintiff has not argued, nor provided facts, 11 that once Defendant had all the information it needed and determined liability existed, it 12 failed to make payments to the insured within thirty calendar days as provided in the 13 statute. In conclusion, Defendant has shown there is no dispute as to any material fact 14 relating to the breach of contract claim based on Your Occupation benefits because 15 Plaintiff cannot show damages. Defendant is thus entitled to judgment as a matter of 16 law as to Plaintiff’s entitlement to those benefits. 17 2. Any Occupation Benefits 18 Any Occupation is defined in the Policy as: “[a]n occupation in which You could 19 reasonably be expected to perform satisfactorily in light of your age, education, training, 20 experience, station in life, and physical and mental capacity.” Pl.’s Compl. ¶ 9. In 21 keeping with California contract law, the Policy’s terms are to be interpreted “in context, 22 with regard to [their] intended function in the policy” and in “their ordinary and popular 23 sense, unless . . . a special meaning is given to them by usage.” Argenal v. Reassure 24 Am. Life Ins. Co., No. C 13-01947 CRB, 2014 WL 1678008, *1, *4 (N.D. Cal. Apr. 28, 25 2014); Klees v. Liberty Life Assur. Co. of Bos., 110 F. Supp. 3d 978, 984 (C.D. Cal. 26 2015). 27 Here, it is Plaintiff’s burden to demonstrate an absence of issues of material fact 28 as to whether she was unable to engage with reasonable continuity in an occupation in 1 which she could reasonably be expected to perform in light of her age, education, 2 training, experience, station in life, and physical and mental capacity; and therefore, that 3 she is entitled to summary adjudication as a matter of law. Pl.’s Mem. Supp. Part. 4 Summ. J., ECF No. 48-1 at 17:3-19:1. 5 First, in support of her motion for summary adjudication, Plaintiff takes issue with 6 the Defendant’s interpretation of the “station in life” element in the Policy. Plaintiff 7 contends that the jobs she could arguably perform are inconsistent with her station in life 8 because the wages to be earned are less than those she previously earned. More 9 specifically, she argues that the Defendant erred by using the median wage earned, 10 rather than the entry-25% wage, when considering jobs because Plaintiff would likely not 11 earn the median wage immediately. However, prior earnings is only one factor in 12 determining station in life, and in analyzing Plaintiff’s employability, Defendant did 13 consider the relevant station in life factors—level of education, relevant experience/work 14 history, and prior level of earnings. See Def.’s Opp’n at 18:11-28. For example, 15 Plaintiff’s highest level of education is three years of college, she has worked as a 16 Center Lead Teacher for sixteen years, and she has experience supervising, using 17 technology, and comparing/compiling data for records and reports. Dekshenkieks Decl., 18 ECF No. 47-41, Ex. 39 at 254-56. These factors were all considered in determining jobs 19 in accordance with Plaintiff’s station in life. Therefore, in viewing the facts most 20 favorably to the Defendant, no reasonable jury could find that the Plaintiff could not 21 reasonably be expected to perform one of those jobs.5 22 Second, Plaintiff takes issue with Defendant’s application of the “training” element 23 in the Policy. In order to properly deny Any Occupation benefits, Plaintiff argues that the 24 Policy requires her to be employable immediately, and, because she would need 25 additional training to work in the jobs found, Defendant improperly denied the benefits. 26 5 Plaintiff’s additional reliance on Erreca v. Western States Life Ins. Co. is unpersuasive. 27 19 Cal. 2d 388 (1942). The jobs in this case—for example, comparing a customer service representative with a pre-school teacher—are not as inconsistent as comparing a lawyer required to work as a day 28 laborer. Id. at 395. 1 This argument fails for two reasons. First, the Policy does not read as Plaintiff suggests. 2 The Policy in this case defines “Any Occupation” as “an occupation in which You could 3 reasonably be expected to perform satisfactorily” in light of all the relevant factors. Pl.’s 4 Compl. ¶ 9. Therefore, the fact that a job may require some additional training is not 5 necessarily determinative. Second, not only could Plaintiff have learned the clerical jobs 6 in thirty to ninety days with little vocational training, Plaintiff herself admitted she was 7 already qualified to work in such a position. Pl.’s Opp’n at 17:10-13; Bruce Decl., ECF 8 No. 47-47 at 5:17-6:10. Given the foregoing, Plaintiff has failed to meet her burden of 9 showing that the undisputed material facts mandate that judgment be entered in her 10 favor on Any Occupation breach of contract claim. 11 In conclusion, Defendant’s Motion for Summary Adjudication as to the First Cause 12 of Action for breach of contract based on Your Occupation benefits is GRANTED, and 13 Plaintiff’s Motion for Partial Summary Judgment as to the First Cause of Action for 14 breach of contract based on Any Occupation benefits is DENIED. 15 B. Breach Of Implied Covenant Of Good Faith And Fair Dealing 16 The primary test for tort liability for the breach of the implied covenant of good 17 faith and fair dealing is “whether the insurer withheld payment of an insured's claim 18 unreasonably and in bad faith.” Love v. Fire Ins. Exch., 221 Cal. App. 3d 1136, 1151 19 (1990); see Frommoethelydo v. Fire Ins. Exchange, 42 Cal. 3d 208, 214-215 (1986). If 20 benefits are withheld by the insurer for proper cause, there can be no breach of the 21 implied covenant. California Shoppers Inc. v. Royal Globe Ins. Co.,175 Cal. App. 3d 1, 22 55 (1985). Therefore, there are two requirements to establish a breach of the covenant: 23 “(1) benefits due under the policy must have been withheld; and (2) the reason for 24 withholding benefits must have been unreasonable or without proper cause.” Love, 25 221 Cal. App. 3d at 1151. However, “an insurer denying or delaying the payment of 26 policy benefits due to the existence of a genuine dispute with its insured as to the 27 existence of coverage liability . . . is not liable in bad faith even though it might be liable 28 for breach of contract.” Bosetti v. United States Life Ins. Co. in City of New York, 1 175 Cal. App. 4th 1208, 1237 (2009). “A genuine dispute exists only where the insurer's 2 position is maintained in good faith and on reasonable grounds.” Callahan v. Nw. Mut. 3 Life Ins. Co., No. C-08-02956 RMW, 2010 WL 726955, *1, *6 (N.D. Cal. Feb. 26, 2010). 4 Here, Plaintiff alleges that Defendant breached the implied covenant of good faith 5 and fair dealing by denying Plaintiff’s Your Occupation and Any Occupation benefits, 6 failing to reasonably investigate Plaintiff’s claims, and through various other related 7 theories. Pl.’s Compl. ¶ 49-59; Pl.’s Mem. Supp. Part. Summ. J. at 8:6-19:1. Both 8 Plaintiff and Defendant filed cross-motions for summary adjudication as to this claim; 9 however, because there was a genuine dispute as to coverage with regard to both Your 10 Occupation and Any Occupation benefits, Defendant is entitled to judgment as a matter 11 of law. 12 1. Your Occupation Benefits 13 First, for reasons already discussed, Plaintiff has no viable breach of contract 14 claim against Defendant. Accordingly, her claim for breach of implied covenant of good 15 faith and fair dealing also fails as a matter of law. See Behnke v. State Farm Gen. Ins. 16 Co., 196 Cal. App. 4th 1443, 1470 (2011) (concluding that Plaintiff’s bad faith claim 17 failed as a matter of law because he had no viable breach of contract claim based on his 18 failure to prove damages); Waller v. Truck Ins. Exch., Inc., 11 Cal. 4th 1, 35-37 (1995), 19 as modified on denial of reh'g (Oct. 26, 1995) (“Absent [a] contractual right . . . the 20 implied covenant has nothing upon which to act as a supplement, and ‘should not be 21 endowed with an existence independent of its contractual underpinnings.’”). 22 Second, Plaintiff’s bad faith claim fails for the additional reason that there was a 23 genuine dispute regarding Plaintiff’s insurance coverage. See Bosetti, 175 Cal. App. 4th 24 at 1237. Defendant based its decisions to terminate Your Occupation benefits on 25 multiple doctors’ reports, investigations and interviews, surveillance, an occupational 26 analysis, and other related information. Def.’s Mem. Supp. Summ. Adj. at 3:20-9:22; 27 Pl.’s UMF, ECF No. 48-2 at 14:58-94. In fact, after receiving more information, 28 Defendant granted Plaintiff’s appeal of the termination of benefits and paid her Your 1 Occupation benefits. See Shade Foods, Inc. v. Innovative Prod. Sales & Mktg., Inc., 2 78 Cal. App. 4th 847, 880 (2000), as modified on denial of reh’g (Mar. 29, 2000) (“The 3 insurer's willingness to reconsider its denial of coverage and to continue an investigation 4 into a claim has been held to weigh to favor of its good faith.”). In light of that 5 investigation process, no reasonable jury could find that Defendant reached its 6 determination to terminate benefits unreasonably and in bad faith. See Starr-Gordon v. 7 Massachusetts Mut. Life Ins. Co., No. CIV. S-03-68-LKK/GGH, 2006 WL 3218778, at *9- 8 *14 (E.D. Cal. Nov. 7, 2006) (concluding an insurer’s investigation based on medical 9 reviews, surveillance, and claim forms was reasonable, and the termination of benefits 10 based on medical records, surveillance, occupational description, and medical 11 statements regarding limited limitations and restrictions was reasonable). Therefore, the 12 genuine dispute doctrine precludes a finding of bad faith as to Your Occupation claim. 13 2. Any Occupation Benefits 14 Plaintiff’s claim for breach of implied covenant of good faith and fair dealing as to 15 Any Occupation benefits also fails since there was at least a genuine dispute as to 16 Plaintiff’s coverage. Plaintiff argues Defendant acted unreasonably and in bad faith 17 because it knew its EAR was “make believe” and instructed its employees to use make 18 believe facts. Pl.’s Opp’n at 13:2-6. Plaintiff also argues that witnesses lied in their 19 depositions, and that those untruths were both “coordinated and approved” by 20 Defendant who failed to determine that: (1) Plaintiff’s teaching credential was a license, 21 (2) her job was not entry level, and (3) her job was skilled. Pl.’s Opp’n at 14:9-15:15. 22 However, Plaintiff fails to cite to any evidence supporting these conclusions, including 23 her assertions of alleged “false testimony.” 24 Moreover, the pertinent inquiry is, again, whether the Defendant conducted its 25 investigation reasonably and in good faith. Here, no reasonable jury could conclude that 26 there was no genuine dispute over Plaintiff’s coverage where the Defendant organized 27 an IME, obtained an independent medical review, performed an EAR, and performed a 28 labor market survey in determining whether Plaintiff met the Policy’s Any Occupation 1 definition. See Callahan, 2010 WL 726955 at *7 (holding no reasonable jury could find 2 that there was no genuine dispute over the insured’s entitlement to disability where the 3 insurer sought multiple medical opinions but did not conduct an IME). Defendant’s 4 Motion for Summary Adjudication as to Plaintiff’s Second Cause of Action is also 5 GRANTED.6 6 C. Intentional Infliction Of Emotional Distress 7 The elements of intentional infliction of emotional distress are: (1) outrageous 8 conduct; (2) intentional or reckless disregard of the probability of causing emotional 9 distress; (3) severe or extreme emotional distress; and (4) the outrageous conduct was 10 the actual and proximate cause of the emotional distress. Trerice v. Blue Cross of Cal., 11 209 Cal. App. 3d 878, 883 (1989). Initially, the court determines if the alleged conduct is 12 sufficiently extreme and outrageous to permit recovery. Tollefson v. Roman Catholic 13 Bishop of San Diego, 219 Cal. App. 3d 843 (1990). In order to sufficiently prove a claim 14 for intentional infliction of emotional distress, the defendant’s conduct must be “so 15 extreme as to exceed all bounds of that usually tolerated in a civilized community.” 16 Ricard v. Pacific Indemnity Co., 132 Cal. App. 3d 886, 895 (1982); Trerice, 17 209 Cal. App. 3d at 883, n.4; Cervantes v. J.C. Penney Co., Inc., 24 Cal. 3d 579, 593 18 (1979). However, conduct that is objectively offensive and breaches societies’ standards 19 of decency still may not qualify as outrageous conduct. Yurick v. Superior Court of Butte 20 County (Antonetti), 209 Cal. App. 3d 1116, 1123 (1989). On the spectrum of 21 offensiveness, outrageous conduct is the most extreme or severe form of offensiveness, 22 and anything less is without legal recourse. Id. at 1128-1129. 23 Here, Defendant moves for summary adjudication arguing that Plaintiff cannot 24 prove extreme or outrageous conduct. This Court agrees. Plaintiff specifically alleges 25 that the Defendant conducted “systematic fraud” by: (1) training its employees to 26 misinterpret Your Occupation standard in order to deny benefits; and (2) training its 27 6 Because this Court finds Plaintiff’s bad faith claim fails as a matter of law, Plaintiff’s argument for 28 punitive damages also fails. 1 | vocational personnel to create vocational analyses which systematically misrepresent 2 | the facts and rely on “make believe facts.”’ Pl.’s Opp’n at 19:6-11. However, the facts 3 || on which the Plaintiff relies, as largely already discussed above, do not show conduct so 4 | outrageous that it exceeds all bounds of that tolerated in a civilized society. Id. Even 5 | with the facts taken in a light most favorable to the Plaintiff, no reasonable jury could find 6 | Defendant’s actions constituted outrageous conduct. Moreover, the Plaintiff cites no 7 || analogous case law to show that conduct similar to the conduct at issue here has 8 || constituted extreme and outrageous conduct. Therefore, Defendant’s Motion for 9 | Summary Adjudication as to Plaintiffs Third Cause of Action is GRANTED. 10 11 CONCLUSION 12 13 For the foregoing reasons, Plaintiffs Motion for Partial Summary Judgment (ECF 14 | No. 48-1) is DENIED, and Defendant’s Motion for Summary Adjudication (ECF No. 47) is 15 | GRANTED. The Defendant’s Motion to Strike Plaintiff's Separate Statement of 16 || Undisputed Facts (ECF No. 63) and Motion to File Sur-reply (ECF No. 82) are DENIED 17 | as MOOT. This case shall proceed on Plaintiff's remaining claim for breach of contract 18 || as to Any Occupation benefits. 19 IT IS SO ORDERED. 20 | Dated: November 20, 2019 21

UNITED STATES DISTRI 23 24 25 26 27 TAs the Court discussed above, Plaintiff's claim for breach of implied covenant of good faith and fair dealing fails as a matter of law; therefore, Plaintiff's argument that she can recover emotional distress 28 damages arising from that breach without having to prove outrageous conduct also fails. 15