Torres v. Reliance Standard Life Insurance
Docket: No. 08-35308
Court: Court of Appeals for the Ninth Circuit; March 16, 2009; Federal Appellate Court
Plaintiff-Appellant Donna Osbourne Torres appeals the district court's summary judgment favoring Defendant-Appellee Reliance Standard Life Insurance Company in her ERISA action seeking long-term disability benefits. The appeal falls under 28 U.S.C. 1291 jurisdiction. The court reviews the summary judgment de novo. The district court correctly applied an abuse of discretion standard with a heightened level of scrutiny. However, it was procedurally erroneous for Reliance Standard to use internet-sourced information about Torres's social activities in the final denial letter, as she could not have anticipated its consideration. This procedural error, while significant, did not constitute a "wholesale and flagrant" violation of ERISA, thus not triggering a de novo review. The court determined that Reliance Standard's admission on March 13, 2006, that Torres met the policy's definition of total disability was undervalued by the district court. Reliance Standard acknowledged her total disability until June 30, 2006, prior to the change to an “any occupation” standard effective April 29, 2006. The district court mischaracterized the September 8, 2006 letter as the original denial of her claim and failed to recognize that Reliance Standard's subsequent finding of ineligibility was a reversal of its prior eligibility determination. Reliance Standard did not demonstrate any improvement in Torres's condition post-disability determination. The case is remanded to the district court to further develop the record on whether Relaince Standard's policy necessitates a demonstration of ongoing eligibility and if periodic updates for continued eligibility are required. This remand allows for the examination of post-March 13, 2006, evidence regarding Torres's total disability status. The appellate court reverses and remands the case, with the disposition not intended for publication or to serve as precedent except as specified by 9th Cir. R. 36-3.