Metaxas v. Gateway Bank F.S.B.

1

2

3

4 UNITED STATES DISTRICT COURT

5 NORTHERN DISTRICT OF CALIFORNIA

6

7 POPPI METAXAS, Case No. 20-cv-01184-EMC

8 Plaintiff,

ORDER GRANTING IN PART AND

9 v. DENYING IN PART THE PARTIES’

CROSS-MOTIONS FOR SUMMARY

10 GATEWAY BANK F.S.B., et al., JUDGMENT

11 Defendants. Docket Nos. 74, 77, 83

12

13

14 This is an action for supplemental retirement benefits pursuant to the Employee Retirement

15 Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(a). Plaintiff Poppi Metaxas filed this

16 case against her former employer Defendant Gateway Bank, F.S.B. (“Gateway”) and the Gateway

17 Bank Supplemental Executive Retirement Plan (“the Plan”). She alleges that she worked as the

18 President and CEO of Gateway Bank and that she became “totally disabled under the terms of the

19 plan” due to “prolonged sickness” and other “acute and chronic medical problems.” Docket No. 1

20 (“Compl.”) ¶¶ 7-10. She filed a claim for disability and termination benefits on March 23, 2013,

21 which Defendants denied on February 25, 2016. Id. Metaxas appealed the denial on August 15,

22 2016, and “sent defendants additional documentation of her disability” with her appeal.

23 Defendants upheld the decision to deny benefits on May 22, 2017. Id. at ¶¶ 12, 13. Metaxas filed

24 the complaint on February 17, 2020 seeking relief under ERISA §§ 502(a)(1)(B), (a)(3). See 29

25 U.S.C. §§ 1132(a)(1)(B), 1132(a)(3).

26 Now pending are the parties’ cross-motions for summary judgment, and Defendants’

27 related motion to strike extra-record evidence. See Docket Nos. 74 (“Def. MSJ”), 77 (“Pl. MSJ”);

1 the parties’ respective cross-motions for summary judgment and DENIES Defendants’ motion to

2 strike. The Court REMANDS the case to Defendants for reconsideration of Plaintiff’s eligibility

3 for termination benefits consistent with this decision.

4 I. BACKGROUND

5 Unless otherwise noted, all facts are drawn from the undisputed administrative record. See

6 Docket Nos. 41-2, 41-3, 41-7, 42-3.1

7 A. Relevant Plan Provisions

8 1. Administration and Claim Procedure

9 Plaintiff was the only participant in Gateway’s Supplemental Executive Retirement Plan, a

10 top hat plan designed to “retain[] and attract[] individuals of exceptional ability” by providing

11 Retirement, Disability, or Termination Benefits subject to the terms and conditions of the Plan.

12 Docket No. 41-7 (“Plan”) §§ 1, 5. The administration of the Plan is governed by the provisions in

13 Article VII. Accordingly, the “Plan shall be administered by an Administrative Committee which

14 shall consist of not less than three persons appointed by the Board [of Gateway]” and the

15 “Committee shall have the authority to make, amend, interpret, and enforce all appropriate rules

16 and regulation for the administration of this Plan and decide or resolve any and all questions

17 including interpretations of this Plan, as my arise in connection with the Plan.” Plan § 7.1. “A

18 majority vote of the Committee members constituting a quorum shall control any decision.” Id.

19 Furthermore, the “decision or action of the Committee in respect of any question arising out of or

20 in connection with the administration, interpretation and application of the Plan and the rules and

21 regulations promulgated hereinunder shall be final and conclusive and binding upon all persons

22 having an interest in the Plan.” Id. § 7.3.

23 The Plan sets out a claim procedure for “any person claiming a benefit, requesting an

24 interpretation or ruling under the Plan, or requesting information under the Plan shall present the

25 request in writing to the Committee which shall respond in writing as soon as practicable.” Id. §

26 8.1. The decision on a claim, including review of the denial of a claim, rests with the

27

1 Administrative Committee. Id. §§ 8.1-8.4. The Committee’s “decision” regarding a claim for

2 benefits “shall be in writing” and the Committee’s “decisions on review shall be final and bind all

3 parties concerned.” Plan § 8.4.

4 2. Benefit Categories

5 The Plan provides three categories of potential supplemental retirement benefits:

6 retirement, disability or termination benefits. Plan §§ 5.1, 5.2, 5.3. Participants can only receive

7 one form of benefit if eligible under the terms of the Plan. Id. §§ 5.2, 5.3 (stating that Disability

8 Benefits or Termination Benefits were only available “in lieu of any other benefit under” the

9 Plan).

10 First, Retirement Benefits are available only if a Plan participant separates from

11 employment upon reaching retirement age. Plan §§ 2.13, 5.1. There is no dispute that Plaintiff

12 separated before reaching retirement age and is therefore not eligible for Retirement Benefits. Id.

13 Second, the Plan provides for Disability Benefits, in lieu of any other benefit under the

14 Plan. Id. § 5.2. “If a Participant receives a monthly benefit under this Plan due to Disability, the

15 benefit payable, in lieu of any other benefit under this Article, shall be the Participant’s Accrued

16 Benefit determined on the date of Disability. The date of such Disability shall be determined by

17 the Committee.” Id. The Plan defines “Disability” as

18 (i) a medically determinable physical or mental impairment

which can be expected to result in death or can be expected

19 to last for a continuous period of not less than twelve (12)

months, as a result of which the Participant is unable to

20 engage in any substantial gainful activity, or

21 (ii) an above-described impairment from which the Participant is

receiving income replacement benefits for at least three (3)

22 months under an accident and health plan covering the

employees of Employer.

23

24 Plan § 2.9.

25 Third, if a Plan participant separates from employment prior to retirement age, the Plan

26 provides for a Termination Benefit, unless the termination was supported by cause. Id § 5.3; see

27 also id. § 3.4 (“[N]o benefit shall be paid hereunder if a Participant’s employment with Employer

1 upon” the participant’s “willful and intentional violation of any state or federal banking or

2 securities laws, or of the Bylaws, rules, policies or resolutions of Employer, or the rules or

3 regulations of the Federal Deposit Insurance Corporation, Office of the Comptroller of the

4 Currency, or other regulatory agency or governmental authority having jurisdiction over

5 Employer, which has a material adverse effect upon Employer.” Id. § 3.4(a).

6 Even if a Plan participant is not terminated with “cause,” the Plan excludes a participant

7 from receiving benefits under the SERP pursuant to a “Change in Employment Status” clause:

8 If the Board determines that a Participant’s employment

performance is no longer at a level which deserves reward through

9 participation in this Plan, but does not terminate the Participant’s

employment with Employer, participation herein and eligibility to

10 receive benefits hereinunder shall be limited. . . and shall only be

payable if the Participant attains Retirement with Employer or

11 becomes disabled while employed by Employer.

12 Id. § 3.2.

13 B. Plaintiff’s Employment with and Suspension from Gateway

14 Gateway employed Plaintiff as President and CEO since 1998, as an at-will employee

15 serving at the pleasure of the Board. AR 174. During her employment in this position, Plaintiff

16 became a participant in the Bank’s SERP, with a retirement age of 60. AR 31.

17 Around September 2008, the Office of Thrift Supervision (“OTS”), the federal agency

18 tasked with conducting oversight of Gateway, instructed Gateway’s Board that it needed to reduce

19 the number of nonperforming assets and bank-owned real estate on Gateway’s books and to raise

20 capital. AR 356-63, 407, 227. Thereafter, in 2009, Plaintiff Metaxas, in her role of CEO of

21 Gateway, caused Gateway to engage in fraudulent transactions to purportedly clear nonperforming

22 assets, but, which, in fact had the effect of reducing Gateway’s capital. AR 227, 407-408. “Most

23 of the damage resulted from backscratching deals that Metaxas arranged with Ideal Mortgage, a

24 mortgage lender run by Metaxas’s co-conspirators.” AR 227. “The scheme involved several

25 kinds of fraudulent transactions” which were “intended to conceal the true financial conditions of

26 Gateway and Ideal, and allow for the perpetuation of fraudulent schemes by the co-conspirators.”

27 Id.

1 Gateway’s transactions in 2009 indicated that Metaxas engaged in unlawful and fraudulent

2 conduct, Gateway’s Board suspended Metaxas without pay, effective immediately, pending

3 further investigation of the matter. AR 227 (2016 memo from Initial Claim Committee member to

4 Board describing Plaintiff’s employment history), 353 (March 25, 2010 letter from Board to

5 OTS), 376 (Minutes from March 25, 2010 Board Meeting). In voting to immediately suspend

6 Metaxas without pay, the Board also instructed Bank employees to immediately revoke all of her

7 access privileges to the Bank, including the Bank’s physical and electronic property, any remote

8 electronic access to Bank files, databases, email, or other accounts, and changing locks, key codes

9 and passwords through which Metaxas could access the Bank. AR 353. In addition, the Board

10 instructed employees not to discuss any Bank matters with Metaxas, and the Board informed OTS

11 that it would advise the agency in advance of any further contact between the Board and Metaxas.

12 AR 353-54. The Board, however, made no express finding that Ms. Metaxas’ performance

13 warranted a bar on her receiving SERP benefits pursuant to §3.2

14 Two days later, on March 25, 2010, the Board met to discuss the day-to-day operations of

15 the Bank given Plaintiff’s suspension, the response to OTS concerns, and a succession plan to

16 replace Plaintiff as CEO. AR 374, 376. “With the suspension of CEO Metaxas, three directors

17 assumed the day-to-day responsibilities of the office of the CEO.” AR 366.

18 Over the next month, and with OTS approval, “the board recruited Mr. Jeffrey Cheung to

19 replace Ms. Metaxas as CEO.” AR 366. Thereafter, according to a report prepared by OTS in its

20 May 2010 examination of the Bank’s activities, “[a]t the board meeting held on April 29, 2010,

21 the directors unanimously voted to terminate Ms. Metaxas’s employment” based on her role in the

22 fraudulent scheme. AR 367. However, apart from the OTS report, there is no documentation that

23 Gateway terminated Mr. Metaxas, and as indicated below, there is documentation to the contrary –

24 that she resigned rather than suffered termination.

25 C. Plaintiff’s Medical History and Resignation Letter

26 According to Plaintiff’s medical records, in May 2008, Plaintiff was diagnosed with

27 ovarian cancer, which resulted in surgery and chemotherapy from June to October 2008. AR 35,

1 induced by chemotherapy. AR 44. Medical notes from November 2008 indicate that Plaintiff had

2 a history of migraine headaches and chronic back pain, and indicated that her migraines were

3 “stable” at that time. Id. By May 28, 2009, Plaintiff’s neuropathy was reported to be

4 “improving,” and her migraines remained “stable.” AR 47-48. In September 2009, Plaintiff

5 experienced “intense. . . wrist pain involving thumbs and forearms,” which was “worse at night”

6 and “worse with rotational movements of [the] wrist.” AR 51. Plaintiff reported “no numbness or

7 tingling in fingers or toes” at that time, and was “still working on computer same amount.” Id.

8 Plaintiff’s physician treating her for cancer noted that “numbness/tingling” is “typical of

9 peripheral neuropathy,” and, because Plaintiff did not report such symptoms, referred Plaintiff for

10 a consultation with an orthopedic physician “to evaluate [her] for carpal tunnel syndrome.” AR

11 52.

12 There are no medical records regarding Plaintiff’s condition between September 18, 2009

13 and April 1, 2010.

14 On April 1, 2010, Plaintiff sent a message to the physician treating her cancer, Dr. Rajpal,

15 indicating she was not feeling well and needed an appointment. AR 54. Plaintiff visited Dr.

16 Rajpal on April 6, 2010, and was reported to be experiencing “diffuse weakness,” “right groin

17 pain,” “syncope,” “nausea,” “vomiting 1x/day,” and “diarrhea x2/day.” AR 56-57. Plaintiff

18 experienced “decreased wrist pain. . . after steroid injection – not wearing braces,” neuropathy was

19 reported to have “improved,” and migraines were noted to be “stable.” AR 57-58. The medical

20 visit notes state that Plaintiff reported she was “unable to work x couple weeks,” however there is

21 no indication of the basis of Plaintiff’s inability to work. AR 57.

22 On April 9, 2010, Plaintiff reported having migraines, abdominal pain and dizziness. AR

23 60. According the physician notes from the April 9, 2010 visit, “3 months ago, [Plaintiff]

24 developed dizziness, has had two syncopal episodes, upset stomach, [right] sided migraines

25 associated with nausea (used to get migraines once a month but now get them every other day). . .

26 feels profoundly weak at times; stressed from work; had mild diarrhea that started in January that

27 is now worse. . . weight has decreased about 3lbs; has had night sweats. . . has cut back on water

1 On May 12, 2010, Plaintiff reported dizziness, migraine headaches and occasional nausea,

2 and was prescribed a new medication for migraines and to restart a vitamin B6 regimen. AR 65-

3 67.

4 On May 25, 2010, Plaintiff wrote a note to her primary care physician stating that she

5 continued to suffer dizziness and drowsiness, as well as pain in her upper body and head. AR 68.

6 She stated, “I simply need to lay down in complete silence and darkness rather frequently. I also

7 find myself unable to sleep at night so I start up each day drained, tired, irritable and unable to

8 focus and concentrate.” Id. She further stated, “I have been unable to work since early April and

9 do not know what to expect next.” Id.; AR 69. Plaintiff did not state the basis for her inability to

10 work, and there is no indication in this message or in the prior medical history notes that Plaintiff

11 reported that she had been suspended without pay from Gateway on March 23, 2010. On May 26,

12 2010, Plaintiff’s primary care physician responded and suggested “a different medication called

13 topiramate which may cause less sedation,” and asked Plaintiff to let her know what she thought.

14 AR 70.

15 Also on May 26, 2010, Plaintiff filed a letter of resignation with the Bank based on

16 disability. AR 170. The letter, addressed to the Chairman of the Board, states:

17 [E]ffective immediately, I am hereby resigning from the Board of

Directors and all employment with Gateway Bank. As you know, I

18 have been battling ovarian cancer since 2008. Although I have been

under treatment since that time, the effects of that treatment and my

19 condition generally have rendered be disabled and unable to return

to work.

20

21 Id. On June 1, 2010, the company, through its Human Resources Director, issued a “Notice to

22 Employee as to Change in Relationship” indicating that Plaintiff’s “employment status has

23 changed” due to her “[v]oluntary quit effective: 5/26/10.” AR 172.

24 On June 1, Plaintiff informed her primary care physician that she “had to tender [a] letter

25 of resignation to the job that I have loved as of last week, due to health reasons.” Id. Similarly, on

26 June 6, Plaintiff wrote a message to the physician treating her cancer, informing the physician of

27 her resignation and requesting assistance to “complete the required disability forms.” AR 71.

1 arms and fingers,” “sharp shooting pain,” “diffuse myalgias,” “migraines 3x/wk.” AR 73-74. The

2 notes state Plaintiff’s pain conditions are “not consistent with taxol-induced neuropathy,” and

3 scheduled Plaintiff for a neurology consultation and rheumatology consultation. AR 75.

4 At the neurology consultation on June 14, Dr. Mujahid Mahmood noted that Plaintiff

5 reported she “feels she cannot do her normal work at bank – bc involved long distance travel and

6 cannot sit for prolonged periods of time,” and that Plaintiff was “planning to apply for disability –

7 but [she] feels [she] could do other jobs.” AR 77; id. at 78 (“Planning to send disability

8 paperwork. . . Feels could do other type of work – but not what she was doing previously”). Dr.

9 Mahmood found that Plaintiff experienced “chronic pain” with “multifactorial” causes, including

10 “likely w[ith] a component of peripheral neuropathy due to chemo[therapy].” AR 78. That same

11 day, Plaintiff visited a rheumatologist who stated, “I believe you. . . have fibromyalgia. . . This is a

12 type of chronic pain that has many associated symptoms. Most of it is related to the pain and

13 aching and fatigue in the muscles. There is no particular medication. We don’t know why people

14 get it.” AR 83-84.

15 On June 24, MRIs of Plaintiff’s spine revealed disc protrusions and impingement of the

16 spinal cord. AR 86-90. On July 8, Dr. Rajpal, Plaintiff’s oncologist, noted that Plaintiff continued

17 to experience chronic pain and referred her to a chronic pain clinic. AR 94. In a pain assessment

18 questionnaire in connection with Plaintiff’s July 28, 2010 visit to the chronic pain clinic, Plaintiff

19 answered a question regarding her symptoms in the “last 6 months” by indicating her symptoms

20 included, among others, “back pain,” “diarrhea,” “dizziness,” “fainting spells,” “low energy,”

21 “headaches,” “joint problems,” “nausea,” and “sleep problems.” AR 96. Thereafter, on August 6,

22 Plaintiff visited a pain specialist, Dr. Joseph Kwok, who assessed that Plaintiff experienced

23 “chronic pain syndrome” and “facet arthropathy,” and scheduled Plaintiff for a “back injection.”

24 AR 102-03.

25 On October 18, 2010, Dr. Kwok noted that the injection for Plaintiff’s lower back provided

26 one week of “good relief,” and that her back pain decreased on most days, but that her pain

27 continued. AR 105. A second injection was prescribed. Id. On October 22, 2010, Dr. Rajpal

1 mornings. AR 110. Additional records from November 24, December 7, and January 11, 2011

2 indicate that Plaintiff continued to report severe pain with nausea and dizziness, and spent periods

3 of time in her bed as a consequence. AR. 114-23. Among the various treatments she was

4 prescribed to address her pain included morphine. AR 124.

5 D. Applications for Insurer Disability Benefits and Social Security Disability Benefits

6 After resigning from Gateway, Plaintiff filed a claim for long-term disability benefits from

7 UNUM, a group insurance policy for Gateway employees, and with the Social Security

8 Administration (“SSA”) for disability benefits. The record does not include Plaintiff’s application

9 for benefits to UNUM or UNUM’s determination of Plaintiff’s eligibility for benefits, but there is

10 evidence that UNUM provided benefits to Plaintiff beginning on June 22, 2010. AR 218.

11 UNUM’s policy includes a 90-day elimination period from the date a disability begins before

12 benefits are paid, AR 283, so the June 22 benefit payment date corresponds to a March 23, 2010

13 disability onset date. Plaintiff also received disability benefits from the State of California as of

14 March 31, 2010, corresponding to a disability onset date of March 24, 2010. AR 218.

15 On November 1, 2011, after a hearing, the SSA determined that Plaintiff had been disabled

16 from working under §§ 216 and 223 of the Social Security Act since March 23, 2010. AR 207-

17 214. The SSA found that Plaintiff suffered from the following severe impairments:

18 Status post ovarian cancer with surgery and chemotherapy, in

remission; lower extremity peripheral neuropathy; migraine;

19 cervical and lumbar degenerative disc disease with cervical spinal

canal stenosis and spinal cord compression per MRI; right upper

20 extremity burning pain and shooting pain, numbness of all fingers

and toes and weakness of right upper extremity; chronic pain

21

22 AR 211. The SSA determined Plaintiff “has the residual capacity to perform sedentary work as

23 defined in 29 CFR 404.1567(a) except is unable to sustain work activities for an 8-hour work day,

24 or equivalent due to upper extremity pain, cervical and lumbar pain, and spinal stenosis.” Id. The

25 decision further states,

26 The extensive treatment notes from Kaiser Permanent/South San

Francisco show that the claimant was forced to stop working in early

27 2010 due to the effects of her chronic back pain, migraine

1 AR 212. In support of its finding that Plaintiff’s disability began on March 23, 2010, the SSA

2 explained that, “On August 13, 2011, Dr. Kwok submitted a report to the claimant’s long-term

3 disability carrier. He opined that the claimant had been incapable of performing her regular or

4 customary work since March 23, 2010 and that he anticipated her return to her regular/customary

5 work on December 1, 2011.” AR 212-13. Dr. Kwok’s underlying report does not appear in the

6 record.

7 E. Plaintiff’s Criminal Conviction for Fraudulent Conduct as CEO of Gateway

8 The fraudulent transactions reported by OTS led to a criminal indictment against Plaintiff,

9 charging her with conspiracy to commit bank fraud in a case filed in the United States District

10 Court for the Eastern District of New York. AR 512 (United States v. Metaxas, 14-CR-190-JFB

11 (E.D.N.Y.)), 520. According to the indictment, “[Plaintiff] along with others knowingly and

12 willfully conspired or agreed to execute a fraudulent scheme against Gateway Bank FSB and to

13 obtain more monies under the control of Gateway Bank by means of materially false and

14 fraudulent representations, in violation of the bank fraud statute section.” Id.

15 In April 2015, Plaintiff pled guilty to federal conspiracy to commit bank fraud. AR 227.

16 In doing so, she admitted to the following conduct:

17 In 2009 I acted and agreed with others to arrange certain

transactions that would help make Gateway’s books look more

18 acceptable to the regulators. One set of transactions included a loan

to Gateway’s biggest customer which . . . was used to fund

19 payments back to the bank in the form of down payments from three

other entities that purchased certain assets that the regulators wanted

20 off the bank’s books. I know that the customers used the money

from the loan to fund the down payments to Gateway for the

21 purchase of the assets. Taken together, these transactions did not

actually improve the condition of the bank, and I did not provide the

22 complete information about these transactions to Gateway’s board

which ultimately had to approve them.

23

24 AR 529-30. Plaintiff admitted to her knowing and intentional involvement in the fraudulent

25 scheme. AR 474-75, 532. At Plaintiff’s sentencing, a representative of Gateway Bank testified

26 that her unlawful conduct caused significant monetary damages to the Bank, the value of the

27 Bank’s stock plummeted, and a number of employees lost their jobs due the Bank’s losses. AR

1 F. Plaintiff’s Claim for SERP Benefits and Denial by the Initial Claim Committee

2 Plaintiff submitted a claim for SERP benefits on March 25, 2013. AR 7, 14. Due to

3 Plaintiff’s then-pending criminal case, the parties agreed to toll the processing of Plaintiff’s claim.

4 Id. After the tolling agreements expired, the Board appointed a Committee (“Initial Claim

5 Committee) to consider Plaintiff’s initial claim for benefits. AR 226. The Board named Chairman

6 James Keefe, Member Frances Baker, and Member Ken Lee to the initial Committee. Id.

7 On February 25, 2016, the Initial Claim Committee issued a decision denying Plaintiff’s

8 claim. AR 14-16. Specifically, the Committee found that:

9 • “Gateway did not terminate [Plaintiff], she resigned on May

26, 2010.” AR 15;

10

• Plaintiff made several misrepresentations to the Board to

11 induce the Board into approving fraudulent transactions, AR

15;

12

• Plaintiff pled guilty to conspiracy to commit bank fraud

13 against Gateway and caused damage to the financial

condition and reputation of Gateway, id.;

14

• Because of her criminal conduct, Gateway was required to

15 respond to criminal subpoenas, an investigation by a federal

agency and defend itself from any criminal liability, id.;

16

• Such actions do not deserve award through the SERP, id.;

17 and

18 • As a result, the Board suspended Plaintiff’s employment and

cut off her access to Bank privileges, which constituted a

19 change in employment status under § 3.2 of the Plan, id.

20 The Committee also found Plaintiff ineligible for benefits under Plan § 3.2 because she had

21 not reached retirement age or become disabled while employed with the Bank. AR 15. On the

22 issue of disability, the Committee found no evidence in the record suggesting that Plaintiff was not

23 able to perform her work because of a health condition either at the time of her suspension in

24 March 2010 or through her resignation in May 2010. AR 15. The Committee also found no

25 evidence showing Plaintiff was not able to engage in any substantial gainful activity at the time of

26 her separation. Id. The Committee observed that “Metaxas continuously came to work and

27 performed her duties leading up to her resignation.” Id. The Committee concluded that Plaintiff’s

1 from the federal investigation and indictment for defrauding Gateway. Id.

2 The denial decision advised Plaintiff of her right to appeal the decision, to request

3 additional documents, and to submit evidence. AR 16.

4 G. Plaintiff’s Appeal and the Appeal Committee’s Denial

5 Plaintiff appealed the denial of her claim for SERP benefits on August 15, 2016. AR 3.

6 She contended she was entitled to disability benefits due to “disabling symptoms resulting from

7 CIPN [chemotherapy-induced peripheral neuropathy].” AR 4. She argued she “was rendered

8 unable to work due to CIPN and her other symptoms as of March 23, 2010.” AR 5. Plaintiff

9 submitted a letter by Dr. Steven Fugaro, a practitioner in internal medicine and primary care

10 physician, who reviewed Plaintiff’s medical records and opined that Plaintiff’s neuropathy made it

11 “unlikely she would be able to engage in any substantial, gainful activity” as of March 2010. AR

12 155-59.

13 The Board appointed a Committee (“Appeal Committee”) comprised of Directors Colin

14 Madden, Dale McKinney, and Vinod Thukral to consider the appeal. AR 335. The Committee

15 conducted a hearing, which included argument from Plaintiff’s counsel. AR 254, 256. On May

16 22, 2017, the Committee denied Plaintiff’s appeal in a sixteen-page written decision. See Docket

17 No. 41-4 (“App. Dec.”).

18 1. Denial of Termination Benefits

19 First, the Committee found that Plaintiff was ineligible for any SERP benefits because she

20 was terminated for cause pursuant to Plan § 3.4 before Plaintiff tendered her resignation in May

21 2020. Id. at 7-9. The Committee pointed to Plaintiff’s suspension without pay on March 23, 2010

22 suspected fraudulent and criminal conduct, and the OTS Report of Examination indicating that the

23 Board of Directors “unanimously voted to terminate Ms. Metaxas’s employment” on April 29,

24 2010. Id. at 11. The Committee explained that Plaintiff did not dispute the authenticity of the

25 Board’s minutes documenting her suspension on March 23, 2010, nor the OTS’s report

26 documenting that Plaintiff was terminated by the Board on April 29, 2010. Id. The Committee

27 discounted the weight of evidence showing that Plaintiff continued to receive paychecks after

1 an employee up until her resignation in May 2010, explaining that such inconsistencies “may be

2 attributed to error stemming from management instability and inadequate management resources

3 as described by the OTS, or from willful disregard of Gateway employees who previously served

4 under [Plaintiff].” Id. The Committee further rejected Plaintiff’s argument that she was not

5 terminated on April 29, 2010 because she did not receive notice of her termination, concluding

6 that, “Mrs. Metaxas’s termination is best determined from the entirety of the circumstances, and

7 [does not] simple hinge on receipt of written notice.” Id. at 11. It explained:

8 The weight of the evidence show that Ms. Metaxas had been

suspended, her physical and electronic access to the Bank had been

9 revoked, and she was subsequently fired by unanimous decision of

the Board on April 29, 2010 as reported by the OTS. Moreover, Ms.

10 Metaxas's admitted breach of her covenant to perform her duties in

"conformance with the highest standards of diligence, competence,

11 skill, judgment, and efficiency in the Thrift industry" (Ex. A-9,

CLMREC 00176) obviated any duty on the part of Gateway to

12 provide her with formal written notice.

13 Id.

14 2. Denial of Disability Benefits

15 Second, the Committee determined, in the alternative, that Plaintiff was not entitled to

16 disability benefits because she did not become disabled while employed by Gateway Bank. The

17 Committee summarized Plaintiff’s medical records, documenting her appointments and physician

18 notes dating from September 2008 to June 2010. Id. at 4-7. The Committee observed that

19 Plaintiff claimed disability as of the “very same date” as the Board suspended her employment

20 based on her criminal conduct, noting that if true it “would be an astounding coincidence.” Id. at

21 11. It also noted that Metaxas failed to produce any medical records for the six-month period prior

22 to her March 2010 suspension. Specifically, she produced a medical report from September 2009,

23 which did not indicate she had any symptoms of neuropathy at that time. Id.

24 The next medical report is dated April 6, 2010, two weeks after the Board suspended

25 Plaintiff’s employment. App. Dec. at 11. In that visit, Metaxas reported weakness, syncope, right

26 groin pain, nausea, vomiting, and diarrhea. Id. As the Committee found, those are “symptoms

27 that could be attributed to the stress caused by the OTS’s investigation into her fraud and

1 The Committee found that the various symptoms reported by Plaintiff in the subsequent

2 medical records—such as abdominal pain and upset stomach, dizziness, syncopal episodes, and

3 diarrhea—are indicative of stress, not neuropathy, and their appearance coincided with the OTS’s

4 investigation into Metaxas’s illegal activities. Id. at 13. The medical records showed that other

5 symptoms reported by Metaxas, such as carpal tunnel, back pain, and migraines, had improved or

6 were stable. Id. The Committee observed that at no time does it appear that Plaintiff informed her

7 healthcare providers that she had already been suspended from work, was under federal

8 investigation for fraud, and thereafter had been terminated from employment. Id.

9 The Committee determined that Plaintiff’s medical records did not support a finding that

10 any impairment rendered her unable to work as of March 23, 2010 or through her purported

11 resignation on May 26, 2010. Id. The Committee also weighed the expert reports submitted by

12 Plaintiff and Gateway. Id. at 13-15. Plaintiff’s expert opined that Plaintiff suffered from “severe

13 peripheral neuropathy as of March 2010” due to her 2008 chemotherapy rendering her unable to

14 work. Id. at 14. Dr. Ari David Baron, Gateway’s expert, an oncologist with experience treating

15 ovarian cancer, opined that Metaxas’s medical records (which post-dated her purported

16 resignation) support a diagnosis of chronic pain syndrome, unrelated to her chemotherapy, but that

17 this condition did not render Plaintiff unable to engage in any substantial gainful activity. Id. at

18 14. The Committee found Dr. Baron’s expert report more credible in light of his relevant

19 experience in oncology, and given Plaintiff’s expert’s failure to provide any basis for tethering the

20 disability date to March 23, 2010, especially in light of the absence of any medical records in the

21 six months prior to that date. Id.

22 The Committee also decided to give little weight to the Social Security Administration’s

23 finding that Plaintiff was disabled as of March 23, 2010, noting that the medical records did not

24 support a finding of disability at that time, and noting that the Committee was not bound by the

25 SSA’s definition of disability. Id. at 15-16. Specifically, the Committee determined that the

26 medical records did not support of finding of disability under subsection (i) of the definition of

27 disability under the SERP, which requires evidence of an impairment preventing Plaintiff from

1 the SSA was aware of Plaintiff’s suspension from work on March 23, 2010, and there is no

2 independent analysis in the SSA’s decision explaining why the disability date was set to March

3 23. Id.

4 The Committee also found that Plaintiff was not receiving any income replacement

5 benefits under a Gateway benefit plan at the time of her employment separation. Id. at 16.

6 Plaintiff did not apply for disability benefits under any Gateway sponsored plan until months after

7 her separation from employment. Id. Therefore, she did not satisfy subsection (ii) of the Plan’s

8 Disability definition, which requires that the Participant be “receiving income replacement

9 benefits” for at least three months under an employer-sponsored plan at the time of her separation.

10 Id.

11 H. Extra-Record Evidence of Conflicts of Interest

12 Plaintiff submits extra-record evidence which it seeks to have the Court consider solely for

13 the purpose of assessing the Claim Committee and Appeals Committee’s respective conflicts of

14 interests when determining the extent of the deference those decisions are afforded. See Docket

15 No. 86 (“Opp. to Mot. to Strike”) at 4.2

16 Plaintiff submits Meeting Minutes from the Board of Directors Meeting on April 29, 2010.

17 See Docket No. 78 (“Feinberg Decl.”), Exh. A (“April 29 Meeting Minutes”). Those minutes do

18 not expressly state that Plaintiff was terminated at that meeting. The minutes do state that a report

19 was made to “the Board on the status of discussions about Mr. Jeffrey Cheung in the position of

20 President/CEO whom was recommended to the Bank by OTS.” Id. at 3. “The Board discussed

21 Mr. Cheung’s qualifications and ratified the decision to offer Mr. Cheung the position of

22 President/CEO pending OTS approval.” Id.; see also id. at 4 (“Mr. Chairman is very pleased with

23 all the work management is doing and the advances made with respect to the OTS guidance that

24

2 “Although, for the most part, judicial review of benefits determinations is ‘limited to the

25

administrative record’—that is, the record upon which the plan administrator relied in making its

benefits decision—the evaluation of a conflict of interest is not so limited.” Stephan v. Unum Life

26

Ins. Co. of Am., 697 F.3d 917, 930 (9th Cir. 2012) (citing Nolan v. Heald College, 551 F.3d 1148,

1154 (9th Cir. 2009)). “Evidence outside the administrative record is ‘properly considered’ in

27

determining the extent to which a conflict of interest affected an administrator's decision.” Id.

1 Bank has received and that it is a very positive move for the Bank to offer Mr. Cheun the position

2 of President/CEO.”).

3 Plaintiff also submits Meeting Minutes from the Board of Directors Meeting on May 27,

4 2010. Id., Exh. B (“May 27 Meeting Minutes”). The minutes reflect that “the Bank has received

5 Poppi Metaxas[‘s] resignation from the Board and Directors and of employment CEO and

6 President of the Bank on May 26, 2010.” Id. at 1. “After an appropriate motion. . . it was

7 unanimously RESOLVED that the Board of Directors, having received the resignation of Poppi

8 Metaxas, accept it as submitted.” Id. The May 27 Minutes also reflect that OTS approved the hire

9 of Jeff Cheung, and the Board unanimously resolved to appoint Jeff Cheung as the CEO and

10 President of the Bank. Id. at 1-2.

11 The parties also jointly stipulated to facts regarding the share-holdings of various members

12 of the Claim Committee and Appeal Committee. See Docket No. 79. Significantly, as of

13 February 2016, James Keefe owned 24.91% of Gateway’s common stock and 77.34% of

14 Gateway’s preferred stock. Id. ¶ 1. As of May 22, 2017, Colin Madden, Dale McKinney and

15 Vinod Thukral, members of the Appeal Committee, each owned less than 1% of Gateway’s

16 common stock and less than 4% of Gateway’s preferred stock. Id. ¶¶ 2-4.

17 Finally, Plaintiff Metaxas enters a declaration attaching various court filings, meeting

18 reports, financial reports, and audits of Gateway’s finances, and her own analysis, calculations,

19 and conclusions regarding those reports. See Docket No. 80 (“Metaxas Decl.”). The main point

20 Plaintiff makes in her declaration analyzing these underlying documents is that Plaintiff’s SERP

21 plan was a deferred compensation plan, which, until a final a decision regarding Plaintiff’s

22 qualification for the benefits was made, was a liability to the Bank. Plaintiff purports to show that

23 Gateway was under pressure by OTS to reduce its liabilities and to increase its capital, and by

24 denying Plaintiff’s claim for SERP benefits, Gateway acted in its own interests by increasing its

25 capital by $1.2 million. Id. ¶ 7.

26 I. Procedural Background

27 Plaintiff filed her Complaint on February 17, 2020, challenging the administrative denial

1 Security Act (“ERISA”), 29 U.S.C. § 1001, et seq.: (1) a claim for benefits under ERISA Section

2 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B); and (2) a claim for equitable relief under ERISA Section

3 502(a)(3), 29 U.S.C. § 1132(a)(3).

4 With regards to Plaintiff’s motion to supplement the record, the Court issued a ruling that

5 Plan at issue here confers discretionary authority to the Committee to construe the terms of the

6 plan and determine eligibility for benefits, and, thus, the Court reviews Plaintiff’s appeal from

7 denial of benefits for abuse of discretion. See Docket No. 58 at 3. Accordingly, the Court

8 concluded that the proceedings would generally be limited to the administrative record, save and

9 except evidence pertaining to any conflict of interest which may affect the level of deference

10 accorded under abuse of discretion review. Id. at 7. Plaintiff thereafter moved to supplement the

11 administrative record with approximately 215 pages of additional information. Docket No. 60-1.

12 The Court denied Plaintiff’s motion. Docket No. 70.

13 Now pending are the parties’ respective cross-motions for summary judgment. See Def.

14 MSJ; Pl. MSJ.

15 II. STANDARD OF REVIEW

16 As the Court previously determined, because the Plan grants discretionary authority to

17 Gateway Bank’s SERP Plan Administrator, the Court reviews the Administrator’s benefits

18 decision for an abuse of that discretion. See Docket No. 58; Stephan v. Unum Life Ins. Co. of Am.,

19 697 F.3d 917, 928 (9th Cir. 2012). “Under this deferential standard, a plan administrator's

20 decision ‘will not be disturbed if reasonable.’” Stephan, 697 F.3d at 928 (citation omitted). This

21 reasonableness standard requires deference to the administrator's benefits decision unless it is “(1)

22 illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in

23 the record.” Id. (citation omitted).

24 The test for abuse of discretion in a factual determination is whether the Court is “left with

25 a definite and firm conviction that a mistake has been committed,” and the Court may not merely

26 substitute its view for that of the fact finder. Salomaa v. Honda Long Term Disability Plan, 642

27 F.3d 666, 676 (9th Cir. 2011) (citation omitted). Additionally, the Ninth Circuit does not permit

1 the suit has commenced. Jebian v. Hewlett-Packard Co. Emp. Benefits Org. Income Prot. Plan,

2 349 F.3d 1098, 1104 (9th Cir. 2003) (citing Marolt v. Alliant Techsystems, Inc., 146 F.3d 617, 620

3 (8th Cir.1998)). Instead, in the ERISA context, the Ninth Circuit adheres to “the general rule that

4 ‘an agency's order must be upheld, if at all, on the same basis articulated in the order by the

5 agency itself,’ not a subsequent rationale articulated by counsel.” Id. (citation omitted).

6 Moreover, as discussed below, the extent of the deference which the Court affords to the

7 Plan Administrator is tempered by the degree to which evidence evinces a likelihood that a

8 conflict of interest affected the Administrator’s decision-making.

9 III. LEGAL STANDARD

10 Traditional summary judgment principles have limited application in ERISA cases

11 governed by the abuse of discretion standard. Nolan v. Heald College, 551 F.3d 1148, 1154 (9th

12 Cir. 2009). “Where,” as here, “the abuse of discretion standard applies in an ERISA benefits

13 denial case, a motion for summary judgment is,” in most respects, “merely the conduit to bring the

14 legal question before the district court and the usual tests of summary judgment, such as whether a

15 genuine dispute of material fact exists, do not apply.” Id. (internal quotation marks omitted).

16 Consideration of a conflict of interest is, however, an exception to this feature of ERISA

17 cases as “the traditional rules of summary judgment” do apply. Id. As to issues regarding the

18 nature and impact of a conflict of interest, summary judgment may only be granted if after

19 “viewing the evidence in the light most favorable to the non-moving party, there are [no] genuine

20 issues of material fact.” Id. (internal quotation marks omitted).

21 IV. DISCUSSION

22 A. Conflict of Interest

23 Under ERISA, Gateway has a duty to process claims “solely in the interests of the [plan's]

24 participants and beneficiaries.” Stephan, 697 F.3d at 928 (citation omitted). But because Gateway

25 “both decides who gets benefits and pays for them. . . it [also] has a direct financial incentive to

26 deny claims.” Id. (citation omitted). Gateway’s dual role as plan administrator, authorized to

27 determine the amount of benefits owed, and insurer, responsible for paying such benefits, creates a

1 “While not altering the standard of review itself, the existence of a conflict of interest is a

2 factor to be considered in determining whether a plan administrator has abused its discretion.” Id.

3 The weight of this factor depends upon the likelihood that the conflict impacted the administrator's

4 decision-making. Id. See also Harlick v. Blue Shield of Cal., 686 F.3d 699, 707 (9th Cir. 2012)

5 (noting that abuse-of-discretion review “is tempered by skepticism when the plan administrator

6 has a conflict of interest in deciding whether to grant or deny benefits”). Where, for example, an

7 insurer has “taken active steps to reduce potential bias and to promote accuracy,” the conflict may

8 be given minimal weight in reviewing the insurer's benefits decisions. Id. (citation omitted). In

9 contrast, where “circumstances suggest a higher likelihood that [the conflict] affected the benefits

10 decision,” the conflict “should prove more important (perhaps of great importance).” Id. (citation

11 omitted).

12 In Harlick, the Ninth Circuit applied “some skepticism” because “the record before [it]

13 does not indicate whether [the insurance company] has a history of bias in claims administration

14 or whether it has taken any steps to promote accurate decision-making.” 686 F.3d at 707-08. In

15 the instant case, the record before the Court does not indicate, nor does Plaintiff assert, a history of

16 biased claims administration. Plaintiff presents evidence suggesting that at least one member

17 (James Keefe) of the six total Committee members had a significant financial stake in the health of

18 the Bank. Docket No. 79 ¶ 1. Furthermore, Plaintiff presents evidence suggesting that the Bank

19 was under pressure from its federal regulator, OTS, to reduce its liabilities and increase its capital,

20 and that, in denying Plaintiff’s claim for SERP benefits, Gateway allegedly reduced its liabilities

21 and increased its capital by $1.2 million. Metaxas Decl. ¶ 7. These submissions reveal, at most, a

22 degree of self-interest in this particular adjudication. Additionally, the record reflects, at most,

23 only limited steps taken by the Bank to promote accurate decision-making (e.g., providing

24 multiple opportunities for Plaintiff to request evidence and to supplement the record).

25 Accordingly, like in Harlick, the Court also applies “some skepticism” in the case at bar. See also

26 Cromwell v. Kaiser Found. Health Plan, No. 18-CV-06187-EMC, 2019 WL 4601527, at *5 (N.D.

27 Cal. Sept. 23, 2019) (applying “some skepticism” to abuse of discretion review where no evidence

1 B. Termination Benefits

2 Plaintiff challenges the reasonableness of the Committee’s denial of her claim for

3 termination benefits under the SERP, arguing that the Committee abused its discretion in two

4 ways: (1) the Initial Claim Committee lacked authority to change Ms. Metaxas’s employment

5 status to render her ineligible for termination benefits pursuant to Plan § 3.2, Pl. MSJ at 14-15; and

6 (2) the Appeal Committee erred in determining Plaintiff was “terminated for cause,” rather, she

7 voluntarily resigned from her position, Pl. MSJ at 23-27. Taking into account the extra-record

8 evidence as to conflicts of interest and viewing the Committees’ decisions with “some skepticism,

9 the Court agrees with both of Plaintiff’s arguments.

10 1. Change in Employment Status

11 The Initial Claim Committee abused its discretion by overstepping the bounds of its

12 authority and declaring that Plaintiff experienced a “change in employment status” which rendered

13 her ineligible for termination benefits. The Plan excludes a participant from receiving termination

14 benefits under the SERP pursuant to a decision by the Board that the employee experienced a

15 “Change in Employment Status:”

16 If the Board determines that a Participant’s employment

performance is no longer at a level which deserves reward through

17 participation in this Plan, but does not terminate the Participant’s

employment with Employer, participation herein and eligibility to

18 receive benefits hereinunder shall be limited. . . and shall only be

payable if the Participant attains Retirement with Employer or

19 becomes disabled while employed by Employer.

20 Plan § 3.2 (emphasis added). There is, however, no evidence in the record that the Board ever

21 made such a determination that Plaintiff’s “employment performance is no longer at a level which

22 deserves reward through participation in this Plan.” Id. Instead, the Initial Claim Committee

23 asserted that the Board’s decision to suspend Plaintiff without pay and revoke her access

24 privileges to the Bank constituted such a conclusion by the Board. AR 15. But the Initial Claim

25 Committee’s own written decision, through its absence of citation to any evidence of a Board

26 decision or finding to this effect, confirms that the Committee made this determination on its own

27 in 2016, six years after the fact:

Gateway was not at a level that deserves reward through the SERP.

1 Specifically, Metaxas pled guilty to conspiracy to commit bank

fraud against Gateway bank and caused immeasurable damage to the

2 financial condition and reputation of Gateway. As a result of

Metaxas’s actions, Gateway was required to respond to criminal

3 subpoenas, an investigation by a federal agency and defend itself

from any criminal liability. Such actions do not deserve award

4 through a SERP.

5 AR 15. Indeed, while the Committee’s reasoning suggests that the Board may have good reason to

6 make a “change in employment status” finding against Plaintiff, the written decision does not

7 indicate any evidence in the record that the Board actually made such a determination.

8 Defendants attempt to defend the Initial Claim Committee’s conclusion that Plaintiff

9 suffered a “change of employment” determination by arguing that that the “Plan delegates to the

10 Committee the sole discretionary authority to interpret the SERP” and “[i]n the exercise of such

11 discretion, the Committee reasonable found that the Board’s vote to suspend Plaintiff’s

12 employment on March 23, 2010 and revoke all Bank privileges satisfied the Plan’s requirement

13 for a Board determination that Plaintiff’s employment performance no longer deserved reward

14 through the Plan.” Docket No. 84 (“Def. Opp.”) at 21.

15 But even recognizing that the Committee had discretion to interpret the SERP provisions,

16 such discretionary authority is not endless; the Committee is bound by the scope of the discretion

17 afforded to it by the relevant SERP provision. See Jebian v. Hewlett-Packard Co. Emp. Benefits

18 Org. Income Prot. Plan, 349 F.3d 1098, 1104 (9th Cir. 2003) (“The instrument in this case does

19 vest discretion, but the same instrument and the regulation that governed it set time boundaries

20 within which that discretion must be exercised. . . Decisions made outside the boundaries of

21 conferred discretion are not exercises of discretion, the substance of the decisions

22 notwithstanding.”). Here, while the Committee may have discretion generally to find whether “the

23 Board determines that a Participant’s employment performance is no longer at a level which

24 deserves reward through participation in this Plan,” Plan § 3.2 (emphasis added), the Committee’s

25 finding is not based on any evidence: the Committee failed to cite any action by the Board so

26 indicating. The Board’s suspension of Ms. Metaxas from her job duties in 2010 was pending

27 further investigation. The Board made no final determination at that point and did not address

1 this Plan,” under § 3.2.

2 Defendants’ briefing suggests that the Initial Claim Committee reasonably relied on the

3 Board’s decision to suspend Plaintiff without pay as evidence of the Board’s implied

4 determination of Plaintiff’s “change in employment status.” Def. Opp. at 21. But this is a new

5 argument that is presented for the first time in this litigation.3 No such rationale appears in the

6 decision of the Initial Claim Committee. Cf. AR 15. Indeed, the entirety of the reasoning

7 provided by the Initial Claim Committee on this issue is quoted above. No part of that reasoning

8 references or is otherwise tethered to any decision, determination or action by the Board.4

9 Moreover, at the hearing, Defendants’ counsel asserted that the Court should infer the

10 Board made a determination that Plaintiff’s employment status had changed, contending that

11 evidence in the record shows that the Board suspended Plaintiff with an implicit plan to terminate

12 her because OTS had made a demand of the Board that Plaintiff be terminated when they notified

13 the Bank of her alleged misconduct. However, this is yet another post hoc rationale that appears

14 nowhere in the Initial Claim Committee’s denial. Moreover, none of the record citations which

15 Defendants’ counsel provided to the Court at the hearing provide evidence in support of the

16 proposition that OTS demanded Gateway terminate Plaintiff at the time that it informed Gateway

17 of her alleged misconduct. See AR 227 (2016 memo from Initial Claim Committee member to

18 Board); AR 353 (March 25, 2010 letter from Board to OTS stating that Board voted to “suspend

19 Ms. Metaxas, without pay, effective immediately, pending the conclusion of an independent

20 internal investigation”) (emphasis added); AR 376 (March 25, 2010 Board Meeting Minutes

21 noting only that the Board discussed with OTS day-to-day management of the Bank during

22 Plaintiff’s suspension).

23 Thus, because the Court considers only the rationales given by the Initial Claim Committee

24 and not new arguments raised by Defendants’ counsel now, the Court finds the Initial Claim

25

3 Accordingly, the Court takes no position on the merits of this rationale, nor on a related rationale

26

that the Board could have made a retroactive “change in employment status” determination under

§ 3.2 after Plaintiff later pleaded guilty to and thus was convicted of the charged crimes

27

1 Committee’s interpretation of SERP § 3.2 and conclusion that Plaintiff was ineligible for

2 termination benefits because she experienced a change in employment status exceeded the scope

3 of its discretionary authority and was not supported by the record, and, therefore, constituted an

4 abuse of discretion.

5 2. Termination for Cause

6 The Appeal Committee abused its discretion in determining that Plaintiff was “terminated

7 for cause,” and was, therefore, ineligible for any SERP benefits. Several errors in the Appeal

8 Committee’s process and reasoning combine to yield the Court’s conclusion.

9 First, the Appeal Committee articulated the rationale denying Plaintiff’s claim for

10 termination benefits because she was “terminated for cause” for the first time when reviewing

11 Plaintiff’s administrative appeal. In so doing, the Appeal Committee failed to adhere to ERISA’s

12 implementing regulations ensuring Plaintiff a full and fair review. See 29 C.F.R. § 2560.503-

13 1(g)(i)-(iv). Indeed, here, the Initial Claim Committee expressly and definitively stated, “Gateway

14 did not terminate Metaxas, she resigned on May 26, 2010.” AR 15 (emphases added).

15 Accordingly, the Initial Claim Committee did not deny Plaintiff’s claim for termination benefits

16 on the basis that she was “terminated for cause” by Gateway. Nonetheless, the Appeal Committee

17 fully reversed the decision of the Initial Claim Committee and denied Plaintiff’s claim for

18 termination benefits solely on the basis that she was terminated for cause by Gateway. See App.

19 Dec. at 9 (“The Appeals Committee. . . finds that Ms. Metaxas is not entitled to receive

20 termination benefits because she was fired for cause pursuant to Section 3.4 of the SERP prior to

21 her alleged resignation.”). Indeed, the Appeals Committee abandoned the only rationale on which

22 the Initial Claim Committee relied to deny Plaintiff’s claim for termination benefits – that Plaintiff

23 experienced a “change in employment status.”

24 An administrator must provide a plan participant with adequate notice of the reasons for

25 denial, 29 U.S.C. § 1133(1), and must provide a “full and fair review” of the participant's claim,

26 id. § 1133(2); see also 29 C.F.R. § 2560.503–1(g)(1), (h)(2). “When an administrator tacks on a

27 new reason for denying benefits in a final decision, thereby precluding the plan participant from

1 ERISA's procedures.” Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 974 (9th Cir. 2006).

2 “[S]ection 1133 requires an administrator to provide review of the specific ground for an adverse

3 benefits decision.” Id. (citation omitted). “By requiring that an administrator notify a claimant of

4 the reasons for the administrator's decisions, the statute suggests that the specific reasons provided

5 must be reviewed at the administrative level.” Id. “Moreover, a review of the reasons provided by

6 the administrator allows for a full and fair review of the denial decision, also required under

7 ERISA.” Id. “Accordingly, an administrator that adds, in its final decision, a new reason for

8 denial, a maneuver that has the effect of insulating the rationale from review, contravenes the

9 purpose of ERISA.” Id. “This procedural violation must be weighed by the district court in

10 deciding whether [the Administrator] abused its discretion.” Id.

11 Here, the Appeal Committee did not just “tack[] on a new reason for denying benefits in a

12 final decision,” id., it completely reversed the finding of the Initial Claim Committee (that Plaintiff

13 was not terminated by Gateway, rather, she resigned), abandoned the only reason articulated by

14 the Initial Claim Committee for denying Plaintiff’s termination benefits (that Plaintiff experienced

15 a “change in employment status”), and relied on this new reason (that Plaintiff was terminated for

16 cause) as the sole basis for its denial of Plaintiff’s claim for termination benefits. Here, then, the

17 Appeal Committee’s substantial procedural violations undermining Plaintiff’s right to a full and

18 fair review of her claim, “insulating the rationale form review,” and “contravene[ing] the purpose

19 of ERISA,” weigh heavily against Defendants. See Booton v. Lockheed Med. Ben. Plan, 110 F.3d

20 1461, 1463 (9th Cir. 1997) (ERISA’s procedural protections call for “a meaningful dialogue

21 between ERISA plan administrators and their beneficiaries. . . There is nothing extraordinary

22 about this; it's how civilized people communicate with each other regarding important matters.”).

23 Second, the Appeal Committee’s reasoning for reversing the Initial Claim Committee’s

24 determination that Plaintiff was not terminated, but, rather, that Plaintiff resigned, “lacks support

25 in inferences that may be drawn from the facts in the record.” Stephan, 697 F.3d at 928. To

26 support its finding that Plaintiff was terminated for cause, the Appeal Committee relies on the

27 OTS Report of Examination, AR 367, in which the OTS states, “At the board meeting held on

1 App. Dec. at 11. Interestingly, the Appeal Committee elected to rely on this statement which

2 appears in a document prepared by a third-party, OTS, rather than review the underlying document

3 to which it refers – the minutes from Gateway’s own April 29, 2010 Board Meeting, to which the

4 company undoubtedly had access. Defendant faults Plaintiff for failing to present the minutes of

5 that meeting to the Appeal Committee in her submissions. This argument rings hollow in light of

6 the fact that Plaintiff lacked notice that the issue of whether she was “terminated” was a matter in

7 dispute. More importantly, Gateway obviously has access to its Board minutes, yet failed to make

8 them part of the record. As discussed, the Initial Claim Committee expressly stated in its written

9 decision that “Gateway did not terminate Ms. Metaxas,” AR 15, a finding the Appeal Committee

10 fails to adequately address.

11 In any event, the Court has the April 29, 2010 Board Meeting minutes to review, as part of

12 its extra-record review of evidence of Defendants’ conflicts of interest. Those minutes do not

13 reflect that Ms. Metaxas’s termination was raised, discussed or voted on during that meeting. See

14 April 29 Meeting Minutes. At most, they indicate that the Board was inclined to go forward with

15 hiring a new CEO. Id. at 3. But the prospective hire of a new CEO is clearly different than a

16 unanimous vote terminating Plaintiff for cause. Moreover, the Court also reviewed the May 27,

17 2010 Board Meeting Minutes which state, “After an appropriate motion. . . it was unanimously

18 RESOLVED that the Board of Directors, having received the resignation of Poppi Metaxas,

19 accept it as submitted.” Id. at 1 (emphasis added). These meeting minutes tend to confirm

20 Plaintiff’s position and the view of the Initial Claim Committee that Plaintiff resigned from

21 Gateway rather than being terminated. At the very least, the May 27 Board Meeting Minutes raise

22 a question which warrants explanation: if the Board had unanimously voted to terminate Plaintiff a

23 month earlier, why did they unanimously agree to accept Plaintiff’s letter of resignation? These

24 documents were both generated by the company, appear to be clearly relevant to the Committee’s

25 determination that Plaintiff was terminated, and they strongly contradict, or at least cast doubt on,

26 the Appeal Committee’s reliance on the OTS Report regarding a “termination vote” at the April 29

27 Board Meeting. Thus, these submissions confirm the skepticism with which the Court’s reviews

1 Indeed, even without a lens of skepticism, the Appeal Committee’s cursory reasoning and

2 hand-waving to dismiss pertinent record evidence evinces an abuse of discretion. The Appeal

3 Committee acknowledged record evidence that Plaintiff’s personnel record indicated that she

4 resigned effective May 26, 2010 and that she continued to be paid after she was suspended, AR

5 172, but summarily rejected the import of these facts by asserting that they could be “attributed to

6 error stemming from management instability and inadequate management resources as described

7 by the OTS, or from willful disregard of Gateway employees who previously served under her.”

8 App. Dec. at 11. But the Appeal Committee cited no evidence for its proposition that Gateway

9 employees were “willful[ly] disregard[ing]” a decision of such magnitude as the Board’s

10 termination of the company’s longtime CEO. Similarly, nor does the Appeal Committee explain

11 how the OTS’s structural analysis of the company’s management resources would explain why

12 Plaintiff’s personnel file erroneously indicated that she resigned, when, in fact, she had been

13 terminated nearly one month earlier. Likewise, the Appeal Committee summarily concluded that

14 it had no obligation to every provide Plaintiff with any notice of her termination for cause. App.

15 Dec. at 11. But, to support this claim, the Appeal Committee cited Plaintiff’s employment

16 contract, which expressly stated the opposite:

17 Early Termination by Employer for Cause: This Agreement and

Employee’s employment may be terminated for cause by the Board

18 of Directors of Gateway Bank upon written notice to Employee and

Employee shall not be entitled to receive compensation or other

19 benefits for any period after termination for cause. Employee

understand and agrees that her/his satisfactory performance of this

20 Agreement require conformance with the highest standards of

diligence, competence, skill, judgment and efficiency in the Thrift

21 industry. Failure to conform to such standards is cause for

termination of this Agreement by the Board.

22

23 AR 176 ¶ 11(b) (emphasis added). The Appeal Committee referred to a clipped fragment of the

24 provision to justify its determination that Plaintiff’s conduct warranted termination for cause, but

25 completely ignored the language requiring that a termination for cause be made “upon written

26 notice to Employee.”5

27

1 And beyond the Appeal Committee’s selective review of the record, the Committee also

2 failed to consider or address evidence that supported Plaintiff’s position that she resigned. Most

3 notably, Plaintiff submitted evidence of a transcript of an October 22, 2013 Gateway Bank

4 Business Meeting between Tim Green, Gateway’s CFO, Edward McGrath, Gateway’s COO and

5 CLO, and Jeff Cheung, Gateway’s President and CEO. AR 259-261. The transcript reflects Mr.

6 Green informing his associates:

7 But that SERP, if we ever end up in litigation, Poppi’s going to sue

over the SERP. And here’s where Larry Wang [Chairman of

8 Gateway’s Board in 2010 at the time of Plaintiff’s separation from

the company] did something that is not smart. Larry Wang and the

9 board allowed her to resign and didn’t terminate her. It says

specifically in the SERP document that termination for cause will

10 deny you access to the policy. They allowed her to resign.

11 AR 261. The Appeal Committee, however, does not reference, let alone address this evidence.

12 In sum, the Appeal Committee’s justifications for why there is no written record of a

13 decision as momentous as the termination of the company’s CEO of 12 years while internal and

14 federal investigations were pending against her, defy logic and plausibility, and also finds no

15 support in the record. Stephan, 697 F.3d at 928. This conclusion is strengthened when viewing

16 the Appeal Committee’s decision with the appropriate skepticism in light of the conflict-of-

17 interest evidence, and when considering the Appeal Committee’s failure to adhere to ERISA’s

18 procedural requirements by reversing the express finding of the Initial Claim Committee that

19 Plaintiff resigned, and articulating, as the sole basis and for the first time on appeal, that Plaintiff

20 was not eligible for termination benefits because she was terminated for cause. The record

21 provides ample support for the proposition that Gateway’s Board could have terminated Plaintiff

22 for cause, but the Appeal Committee abused its discretion in its determination from the record that

23

for cause, which counsel asserted the Appeal Claim Committee relied upon to support its

24

conclusion that Plaintiff was terminated with cause. Counsel is wrong on both grounds. Counsel

cited the employment contract at § 11(e)(v), but this provision says nothing about an automatic

25

conversion of a suspension into a termination for cause. See AR 178. This provision states that,

“A termination of Employee’s employment pursuant to this Section 11.e. shall be deemed a

26

termination for cause pursuant to Section 11.b. of this agreement.” AR 178. The plain language

of the provision which addresses what constitutes “cause” requires an independent termination

27

decision to be made; there is no indication that any “automatic” termination that is triggered.

1 the Board actually did terminate Plaintiff for cause before she resigned. Thus, the Appeal

2 Committee abused its discretion in denying Plaintiff’s claim for termination benefits.

3 3. Conclusion re Termination Benefits

4 Accordingly, the Court concludes that Defendants abused their discretion in denying

5 Plaintiff’s claim for termination benefits. As explained, the Committee abused its discretion in

6 interpreting and applying Plan §§ 3.2 and 3.4, and in concluding that Plaintiff experienced a

7 change in employment status or was terminated with cause. Additionally, the Committee erred

8 procedurally by issuing its “termination for cause” rationale for the first time on appeal, denying

9 Plaintiff a full and fair hearing. Where the Plan administrator has abused its discretion in

10 interpreting a provision of the plan or erred procedurally, the appropriate remedy is to remand to

11 the administrator for reconsideration. See Saffle v. Sierra Pac. Power Co. Bargaining Unit Long

12 Term Disability Income Plan, 85 F.3d 455, 460-61 (9th Cir. 1996) (“We now make it explicit, that

13 remand for reevaluation of the merits of a claim is the correct course to follow when an ERISA

14 plan administrator, with discretion to apply a plan, has misconstrued the Plan and applied a wrong

15 standard to a benefits determination.”); Hoffman v. Screen Actors Guild-Producers Pension Plan,

16 571 F. App'x 588, 590–91 (9th Cir. 2014) (“Here, the Plan's denial of a full and fair review of

17 Hoffman's claim prevented full development of the administrative record. . . Thus, the only way

18 that the district court can assess the ‘effect of th[e] failure’ here and ‘recreate what the

19 administrative record would have been had the procedure been correct’ is to remand to the Plan”);

20 Henry v. Home Ins. Co., 907 F. Supp. 1392, 1398–99 (C.D. Cal. 1995) (“Home's rejection of

21 Henry's claim was an abuse of discretion. It is not the court's function ab initio to apply the

22 correct standard to Henry's claim. That function, under the Plan, is reserved to the Plan

23 administrator. Accordingly, this matter must be remanded to the Plan administrator for a re-

24 determination of Henry's claim, in a manner consistent with this opinion.”); King v. Hartford Life

25 & Acc. Ins. Co., 414 F.3d 994, 1005 (8th Cir. 2005) (“We think the posture of this case is

26 comparable to those in which the administrator of an ERISA-regulated plan denies a claim for

27 benefits based on an unreasonable interpretation of terms in the plan. . . Under these

1 reevaluation of the claim”).

2 Accordingly, the Court GRANTS Plaintiff’s motion for summary judgment, DENIES

3 Defendants’ motion for summary judgment as to Plaintiff’s claim for termination benefits, and

4 REMANDS to Defendants to reconsider Plaintiff’s claim for termination benefits in a manner

5 consistent with this opinion.

6 C. Disability Benefits

7 Plaintiff challenges the reasonableness of the Committee’s denial of her claim for

8 disability benefits under the SERP, arguing that the Committee abused its discretion in three ways:

9 (1) the Committee misconstrued the Plan’s definition of “disability;” (2) the Committee

10 improperly weighed the medical evidence, including unjustifiably discounting the SSA’s disability

11 determination as of March 23, 2010; and (3) the Committee denied her a full and fair hearing by

12 departing from ERISA’s procedural regulations requiring the Committee to inform her at the time

13 it initially denied her claim what specific evidence she needed to submit on appeal to perfect her

14 claim. Plaintiff’s arguments are unpersuasive.

15 1. Definition of Disability

16 Recall that the Plan defines a “Disability” as

17 (i) a medically determinable physical or mental impairment

which can be expected to result in death or can be expected

18 to last for a continuous period of not less than twelve (12)

months, as a result of which the Participant is unable to

19 engage in any substantial gainful activity, or

20 (ii) an above-described impairment from which the Participant is

receiving income replacement benefits for at least three (3)

21 months under an accident and health plan covering the

employees of Employer.

22

23 Plan § 2.9. Plaintiff challenges the Appeal Committee’s interpretation of § 2.9(ii), arguing that the

24 provision “contains no timing requirement for the receipt of other ‘income replacement benefits,’”

25 yet the Appeal Committee impermissibly “invented a temporal requirement in section 2.9 of the

26 Plan which does not exist” by erroneously citing to “Section 3.2 of the Plan for the proposition

27 that benefits are payable only if an employee becomes disabled while employed by the Bank.” Pl.

1 argument renders it, ultimately, unpersuasive.

2 The Appeal Committee did make reference to and incorporate a portion of Section 3.2,

3 which defines “Change in Employment Status,” when initially construing the definition of

4 disability under § 2.9(ii):

5 Disability benefits are payable under SERP Section 3.2 only if an

employee "becomes disabled while Employed by Employer." (Ex.

6 A-2, CLMREC 00025) (italics added). Section 2.9(ii) defines

"Disability" as an impairment for which a participant "is receiving

7 income replacement benefits for a period of not less than three (3)

months under an accident and health plan covering employees of

8 Employer." (Id., CLMREC 00024) (italics added). Thus, a

participant must show that he or she "is receiving income

9 replacement benefits" while an employee of Gateway Bank to be

deemed disabled under Section 2.9(ii). The Appeals Committee

10 interprets this section to cover situations where, for example, an

employee is on extended sick leave (but has not resigned or been

11 terminated) and is receiving income replacement benefits. In such a

situation, there is a high probability that such participant will not be

12 able to return to work.

13 App. Dec. at 16 (emphasis in the original). Plaintiff is correct that the Appeal Committee’s

14 reference and incorporation of Section 3.2 was unwarranted, as the Appeal Committee did not

15 determine that Plaintiff experienced a “Change in Employment Status” under § 3.2. In fact, the

16 Appeal Committee abandoned the Initial Claim Committee’s reliance on § 3.2 altogether.

17 Therefore, § 3.2 did not apply to the Appeal Committee’s analysis and its language should not

18 have controlled the Committee’s interpretation of § 2.9(ii).

19 However, the Committee’s misplaced reference to § 3.2 was of no consequence to its

20 interpretation of § 2.9(ii), because the Appeal Committee also provided independent analysis

21 solely based on the text of § 2.9(ii) and reached the same conclusion:

22 At the hearing, Ms. Metaxas's counsel argued that disability benefits

would be "illusory" if the Appeals Committee "insisted upon a

23 literal interpretation" of Section 2.9(ii). The Appeals Committee

disagrees. Gateway's interpretation not only supports the above-

24 described policy considerations behind Section 2.9(ii), but follows

its common-sense meaning "in an ordinary and popular sense as

25 would a person of average intelligence and experience." (Ex. A at p.

7). On the other hand, under Ms. Metaxas 's interpretation a

26 participant could be eligible for disability benefits any time after her

employment with Gateway has terminated, without any apparent

27 limitation. To qualify for disability benefits under these

period of not less than three (3) months .... "

1

2 Id (emphasis in the original). The Appeal Committee conducted a plain language interpretation

3 solely of the text of § 2.9(ii) and concluded that the use of the present tense in the provision

4 conditions qualification for disability benefits on a showing that the applicant was receiving

5 income-replacement benefits from a health plan covering company employees while employed.

6 This analysis provided an independent basis for the Committee’s interpretation of § 2.9(ii).

7 Plaintiff does not challenge this independent analysis. Such analysis is also consistent with §

8 2.9(ii) requirement that a participant receive at least three months of income replacement benefits

9 under a “plan covering the employees of Employer,” which implies that the participant is

10 employed (a necessary predicate for the participant to be an employee). Thus, the Appeal

11 Committee’s interpretation and reasoning that the provision’s use of the present tense implied that

12 that the employee must be receiving the relevant benefits while employed, supported by a

13 plausible policy consideration, is reasonable.

14 Moreover, when applying its construction of § 2.9(ii) to Plaintiff’s claim, the Appeal

15 Committee accurately determined from evidence in the record that Plaintiff did not begin

16 receiving income replacement disability benefits from Gateway’s health policy under UNUM until

17 “late June 2010” which was after Plaintiff tendered her resignation on May 26, 2010. App. Dec.

18 at 17. Even assuming receipt of SSA or California’s state disability benefits qualified under §

19 2.9(ii), the record indicates and Plaintiff concedes that she received SSA and state disability

20 benefits as of March 23 and 24, 2010. AR 207-214, 218. Plaintiff, therefore, received those

21 benefits for fewer than three months prior to her resignation. Thus, the Appeal Committee’s

22 determination that Plaintiff did not qualify for disability benefits pursuant to § 2.9(ii) was

23 reasonable.

24 2. Weighing the Medical Evidence

25 Next, Plaintiff challenges the Committee’s weighing of the medical evidence as an abuse

26 of discretion. Plaintiff argues that the Committee improperly discounted medical evidence,

27 including the SSA’s finding of disability, which indicated that she satisfied the first prong of the

1 impairment which can be expected to result in death or can be expected to last for a continuous

2 period of not less than twelve (12) months, as a result of which the Participant is unable to engage

3 in any substantial gainful activity”). In support of this contention, Plaintiff focuses on the

4 following evidence and arguments which she contends the Committee illogically overlooked or

5 dismissed:

6 • The Plan’s definition of disability under § 2.9(i) “comes from section

216(l) and 223(d) of the Social Security Act’s definition of disability as

7

applied to claims for Social Security Disability Insurance benefits,” and,

8 therefore, the SSA’s determination that Plaintiff was disabled as of March

23, 2010 necessarily suffices under the Plan. See Pl. MSJ at 16-17.

9

• The Appeal Committee improperly discounted the expert report of

10

Plaintiff’s expert, Dr. Fugaro, including the opinion that Plaintiff suffered

11 from a combination of chronic issues that “caused significant impairment

of her ability to work as of March 23, 2010.” Pl. MSJ at 17 (citing AR

12 159). The Appeal Committee illogically elevated the opinion of its own

expert, Dr. Baron, who improperly focused on the narrow question of

13 whether Plaintiff’s disability was the result of neuropathy – not on

whether Plaintiffs conditions, as a whole, rendered her disabled. Id.; id. at

14

20 (“Thus, while Dr. Baron’s opinion as to whether Ms. Metaxas suffered

15 from CPIN symptoms as a result of the chemo medication she was taking

may be insightful on that specific issue, it sheds very little light on

16 whether she was disabled under the terms of the Plan.”).

17 • The Appeal Committee improperly determined that there were “no

record[s] of any neuropathy, migraine, back pain or any other debilitating

18

symptoms for the six-month period prior to her suspension,” App. Dec. at

19 12, because although there were no contemporaneous medical records

regarding those symptoms in the six-months prior to her suspension, the

20 medical records that were dated after April 2010 indicated Plaintiff’s self-

reports of experiencing those symptoms in the six preceding months. Pl.

21

MSJ at 20.

22 Plaintiff’s arguments, however, do not demonstrate that the Committee abused its discretion in

23 weighing the medical evidence.

24 First, the Committee was not bound by the SSA implementing regulations when

25 determining whether Plaintiff was disabled pursuant to Plan § 2.9(i). Plaintiff provides no support

26 for her assertion that the Plan incorporates the same standard as the Social Security Act for the

27 purposes of determining whether an applicant is disabled. In the absence of any language in the

1 the Committee retained its discretion to reasonably interpret the definition. See Black & Decker

2 Disability Plan v. Nord, 538 U.S. 822, 833 (2003) (quoting Firestone Tire & Rubber Co. v. Bruch,

3 489 U.S. 101, 115 (1989)) (“In determining entitlement to Social Security benefits, the adjudicator

4 measures the claimant’s condition against a uniform set of federal criteria. ‘The validity of a claim

5 to benefits under an ERISA plan,’ on the other hand, ‘is likely to turn,’ in large part, ‘on the

6 interpretation of terms in the plan at issue.’”). Accordingly, the Committee was not bound by the

7 SSA’s disability determination, and the SSA’s determination did not automatically entitle Plaintiff

8 to benefits under the Plan.

9 That said, in choosing to discount the SSA’s determination of disability, the Committee

10 was still obligated to provide a reasonable rationale. It did so. The Appeal Committee explained

11 that the SSA gave “no explanation as to why th[e] date [of March 23, 2010] was chosen [as the

12 disability onset date], or whether the Attorney Advisor who made the decision was aware of Ms.

13 Metaxas’s suspension from employment as of that date.” App. Dec. at 15. “Further,” the Appeal

14 Committee explained “that the same Attorney Advisor disregarded the findings of the State’s own

15 medical consultative examiner. The examiner opined that Ms. Metaxas: could stand and walk for

16 2-4 hours in an 8-hour workday and lift and carry 10 and 20 pounds. . . [Ms. Metaxas] could

17 perform light exertional level work, and she had normal neurological exam in January 2011 by the

18 treating physician. The adjustment disorder identified by the consultative examiner was not sever

19 as that term was defined in the regulations.” Id. at 15-16. The Appeal Committee concluded that

20 the SSA’s determination of disability was not entitled to great weight because of these holes in its

21 reasoning.

22 The Court, therefore, concludes that the Committee’s analysis and discount of the SSA’s

23 report was not illogical, implausible or lacked support in inferences drawn from the record.

24 Indeed, other information in the record as well as within the SSA’s own report support the Appeal

25 Committee’s discount of the SSA disability determination and support the Committee’s

26 interpretation that Plaintiff was not disabled under § 2.9(i) of the SERP because she was not

27 precluded from “engag[ing] in any substantial gainful activity.” For example, the SSA found that

1 “continuing review” because “medical improvement is expected with appropriate treatment,” and

2 the SSA’s disability determination was based, in part, on its finding that no jobs “exist in

3 significant numbers in the national economy that [Plaintiff] can perform” – a narrow standard for

4 assessing whether Plaintiff can engage in any gainful activity which was not binding on the

5 Committee. See AR 207-14.

6 Second, Plaintiff’s argument that the Committee improperly elevated Dr. Baron’s expert

7 report (which diagnosed Ms. Metaxas with chronic pain syndrome unrelated to her chemotherapy

8 and which did not render her disabled), based on its narrow assessment of the disabling impact of

9 neuropathy, over Dr. Fugaro’s report misrepresents the substance of Dr. Fugaro’s report and the

10 nature of the comparison that the Committee was called to make between the reports. Dr.

11 Fugaro’s analysis focused on the impact that neuropathy had on Plaintiff. Indeed, Dr. Fugaro

12 emphasized his opinion that, “the medical records provide indisputable evidence that Ms. Metaxas

13 was suffering from severe peripheral neuropathy as of March 2010.” AR 158. He reiterated, “The

14 medical records show that Ms. Metaxas had significant and severe peripheral neuropathy as of

15 March 2010. . . This would make it very difficult to work on a computer.” Id. And, again, later,

16 he wrote, “In my opinion, the severe peripheral neuropathy that Ms. Metaxas had in March of

17 2010 clearly met the definition of disability as defined earlier in this report. The impairment of

18 her hands as well as her gait, combined with the pain of neuropathy, made it unlikely she would be

19 able to engage in any substantial, gainful activity.” Id. at 159. Although Dr. Fugaro then added,

20 “A further complication is that Ms. Metaxas had additional medical problems,” Dr. Fugaro’s

21 summary reference to those additional issues (“chronic migraines, her cervical and lumbar and

22 spinal stenosis with arm and leg pain, and her fibromyalgia were all documented in the medical

23 records”) does not change the fact that main thrust of Dr. Fugaro’s opinion was about his view that

24 Plaintiff was disabled as a result of neuropathy. Id.; see also id. (“In conclusion, my opinion is

25 that Ms. Metaxas clearly met the definition of disability as noted above, as of March 23, 2010,

26 primarily because of her toxic peripheral neuropathy combined with her migraine headaches,

27 spinal stenosis, and fibromyalgia.”).

1 the Court does not find illogical the Committee’s decision to assess the credibility and weight to

2 give the opinion by comparing it to Dr. Baron’s report addressing the same topic. The Appeal

3 Committee reasonably determined that it would give Dr. Baron’s report and analysis regarding

4 chemotherapy induced peripheral neuropathy more weight than Dr. Fugaro’s because Dr. Baron is

5 an oncologist who “treated hundreds of women with ovarian cancer and over a thousand patients

6 with [the relevant] chemotherapy protocol,” whereas Dr. Fugaro practices “general internal

7 medicine and as a primary care physician” and “does not state whether he has ever treated any

8 women with ovarian cancer, whether he has any experience diagnosing or treating patients with

9 CIPN, or whether he has any experience with chemotherapy.” App. Dec. at 14. Indeed, as

10 Plaintiff concedes, given Dr. Baron’s extensive background in oncology, his opinion about the

11 impact of neuropathy qualifies as “insightful.” Pl. MSJ at 20. The Committee, then, did not abuse

12 its discretion on giving greater weight to Dr. Baron’s insights on this issue than Dr. Fugaro’s, and,

13 accordingly, finding the thrust of Dr. Fugaro’s opinion – which focused on this very issue – to be

14 entitled to little weight.

15 Moreover, to the extent Plaintiff contends that the Committee failed to properly weigh Dr.

16 Fugaro’s analysis regarding non-neuropathy symptoms Plaintiff experienced, this argument is

17 incorrect. As an initial matter, Dr. Fugaro did not analyze Plaintiff’s other symptoms – he only

18 summarily referenced the fact that they were reported in other underlying medical records (all of

19 which the Committee acknowledged, summarized, and considered in its decision). See AR 159.

20 After referencing those other conditions, Dr. Fugaro’s analysis consisted of nothing more than an

21 unreasoned and conclusory assertion: “These were chronic issues. I have no doubt that in

22 combination with her peripheral neuropathy, they created further significant impairment of her

23 ability work as of March 23, 2010.” Id. But despite Dr. Fugaro’s deficient analysis of these other

24 symptoms, the Appeal Committee still provided a comparison by looking to Dr. Baron’s analysis

25 of those issues, quoting five paragraphs of Dr. Baron’s assessment of those issues. See App. Dec.

26 15. That Plaintiff disagrees with the Appeal Committee’s analysis on the merits does not indicate

27 that the Appeal Committee’s reasoning was illogical, implausible or that it abused its discretion in

1 Finally, Plaintiff’s argument that the Appeal Committee abused its discretion by over-

2 relying on the fact that there were no contemporaneous medical records of any medical problems

3 experienced by Plaintiff in the six months before she was suspended on March 23, 2010 is not

4 persuasive. Plaintiff does not dispute the fact that there are no medical records regarding any

5 disabling symptoms Plaintiff claimed in the period between September 18, 2009 and April 6, 2010

6 – two weeks after she was suspended from Gateway Bank. App. Dec. at 12; see also id. (“Thus,

7 there is no record of any neuropathy, migraine, back pain, or any other debilitating symptom” in

8 that period of time). Moreover, Plaintiff does not dispute nor is there any evidence calling into

9 question the Committee’s finding that Plaintiff “continuously came to work until March 23, 2010,

10 the date that the Board of Directors suspended her and revoked her physical and electronic access

11 to Gateway Bank.” App. Dec. at 12. Further, Plaintiff provides no answer to the Appeal

12 Committee’s observation that, despite these facts, it would be an “astounding coincidence” that

13 her disability began “on the very same date” that she was suspended without pay. Id. Indeed,

14 Plaintiff points to nothing in the evidentiary record to provide a basis for her claim that her

15 disability began on that date. And, Plaintiff also offer no response or evidence to the Appeal

16 Committee’s observation that “as of May 26, 2010 – the date of her purported evidence – there is

17 no evidence that Ms. Metaxas had been certified by a health care provider or an insurance

18 company that she had a disability that left her no longer able to work.” Id.

19 Rather than substantively respond to these points made by the Appeal Committee, Plaintiff

20 argues that the Committee abused its discretion because the Committee should have overlooked

21 these holes and unanswered question in the evidentiary record, and, instead, should have deferred

22 to the medical records that were created after Plaintiff’s suspension from work, in which Plaintiff

23 self-reported that the experienced debilitating symptoms in the months prior to her suspension.

24 The Court is unpersuaded. The Appeal Committee’s analysis that there is no evidence that

25 Plaintiff suffered a debilitating disability in the six months before her suspension is supported by

26 the record, and the implications which the Committee observed are reasonable. Moreover, the

27 Appeal Committee did not end its analysis there. The Committee reviewed Plaintiff’s medical

1 was disabled within the meaning of the Plan before she resigned on May 26, 2010. The

2 Committee analyzed those records and took note of the medical findings and Plaintiff’s self-

3 reports included in those records. See App. Dec. at 12-13. The Committee reasonably observed

4 that while those records indicated Plaintiff’s self-reports that she had been unable to work for

5 weeks or months (based on the date of the appointment), none of the records indicated that

6 Plaintiff ever disclosed to her medical providers that she had been suspended from her

7 employment as of March 23, 2010. Id.

8 Thus, when evaluating the medical evidence, even apply some skepticism to its analysis,

9 the Committee reasonably included the evidence of Plaintiff’s lack of disclosure to her medical

10 providers of her suspension and the pending internal and federal criminal investigation into her

11 conduct in its analysis. Moreover, the Committee reasonably weighed contemporaneous medical

12 reports against Plaintiff’s post-facto self-reports to reveal inconsistencies in Plaintiff’s self-

13 reported symptoms. See, e.g., App. Dec. at 13 (“Ms. Metaxas claims for the first time that she has

14 experienced unsteadiness and has fallen ever since her chemotherapy for over a year, but none of

15 the medical records she provided corroborates this. In fact, they show the opposite. The record

16 from October 9, 2008 – during her chemotherapy – specifically states ‘no tripping reported’. . .

17 There is no mention of syncope in any of her medical records until April 6, 2010”). Thus, the

18 Committee reasonably weighed the medical evidence in analyzing whether Plaintiff’s alleged

19 disability rendered her unable to engage in any substantial gainful activity for a period of 12

20 months, as required under Plan § 2.9(i).

21 Taken together, the Court concludes that none of Plaintiff’s arguments demonstrate that the

22 Committee abused its discretion in weighing the medical evidence and determining that Plaintiff

23 did not qualify for disability benefits pursuant to Plan § 2.9(i).

24 3. Full and Fair Hearing

25 Plaintiff argues that she not provided with a full and fair hearing on her claim for disability

26 benefits because the Initial Claim Committee did not provide her with a denial decision that

27 articulated “a description of any information necessary for the claimant to perfect the claim and an

1 ERISA’s implementing regulations. See Plan § 8.1; 29 C.F.R. § 2560.503-1(g). The Court

2 disagrees.

3 Importantly, it is undisputed that Plaintiff did not submit any medical evidence in support

4 of her initial claim. See AR 14. Instead, Plaintiff “wrote an e-mail to Gateway requesting a

5 calculation of her benefits under the SERP and that Gateway start paying her benefits on her

6 retirement date when she turned sixty.” Id. The record does not indicate that Plaintiff ever

7 advanced an argument in her initial claim that she was entitled to disability benefits. Nonetheless,

8 the Initial Claim Committee referred to her resignation letter in which she stated she resigned due

9 to disability, and explained that Plaintiff did not qualify for disability benefits because she had not

10 presented any evidence “to indicate that [she] was unable to engage in any substantial gainful

11 activity,” there was “no evidence that [Plaintiff’s] work performance was suffering because of any

12 disability when she resigned,” and because “[Plaintiff] continuously came to work and performed

13 her duties leading up to her resignation.” AR 15.

14 Thus, despite the fact that Plaintiff neither articulated a claim for disability benefits in the

15 first instance, nor presented any evidence of medical disability, the Initial Claim Committee

16 provided reasoning about what evidence was missing and what information would need to be

17 explained in order for Plaintiff to succeed on a claim for a disability benefits. Moreover,

18 Plaintiff’s subsequent appeal and the voluminous information she submitted in support show that

19 she understood from the denial decision the additional information she should submit for

20 consideration on appeal. AR 3-249. Therefore, the Court rejects Plaintiff’s procedural argument.6

21 4. Conclusion re Disability Benefits

22 Accordingly, the Court concludes that Defendants acted reasonably in denying Plaintiff’s

23 claim for termination benefits. Thus, the Court GRANTS Defendants’ motion for summary

24 judgment, and DENIES Plaintiff’s motion for summary as to the denial of Plaintiff’s claim for

25

26

6 In any event, the remedy for any such procedural violations would be to permit Plaintiff to file a

lawsuit without having to exhaust administrative remedies. See 29 C.F.R. § 2560.503-1(l). Thus,

27

even if there were a procedural violation, it would not impact the reasonableness of the

1 disability benefits.

2 D. Equitable Relief

3 In Plaintiff’s complaint, her second cause of action seeks equitable relief under 29 U.S.C. §

4 1132(a)(3), and specifically alleges that, “In their capacity as ERISA fiduciaries, defendants owed

5 plaintiff certain fiduciary duties,” which they allegedly violated. Docket No. 1 (“Compl.”) ¶¶ 21-

6 22. Plaintiff’s claim fails as a matter of law.

7 There is no dispute between the parties that the SERP is a “top-hat plan.” Such a plan is

8 “unfunded and maintained by an employer primarily for the purpose of providing deferred

9 compensation for a select group of management or highly compensated employees,” and is exempt

10 from ERISA’s fiduciary duty obligations. See 29 U.S.C. § 1101(a)(1); Duggan v. Hobbs, 99 F.3d

11 307, 310 (9th Cir. 1996) (“ERISA exempts top-hat plans from the fiduciary, funding, participation

12 and vesting requirements applicable to other employee benefit plans.”) (citing 29 U.S.C. §

13 1101(a)(1)); Koeplin v. Klotz, 265 F. Supp. 3d 1039, 1044 (N.D. Cal. 2017) (“ERISA explicitly

14 states that top hat plans are not subject to the ERISA's fiduciary requirements. Further, it is well

15 established in the caselaw that there is no cause of action for breach of fiduciary duty involving a

16 top hat plan.”). Accordingly, Plaintiff’s claim, which is based solely on alleged violations of

17 Defendants “in their capacity as ERISA fiduciaries,” Compl. ¶ 21, has no application here where

18 ERISA’s fiduciary duties do not attach to the SERP. Plaintiff’s claim fails.

19 Plaintiff attempts to sidestep this obstacle by arguing that Plaintiff’s claim is actually based

20 on an alleged breach of contractual duty of good faith and fair dealing, rather than on an ERISA-

21 mandated fiduciary duty. Pl. MSJ at 34. This argument directly contradicts the claim articulated

22 on the complaint which expressly limits the claim to Defendants violation of their fiduciary duties

23 “in their capacity as ERISA fiduciaries.” The complaint does not allege any facts that would

24 afford Defendants with fair notice of Plaintiff’s current theory of liability. See Pickern v. Pier 1

25 Imps. (U.S.), Inc., 457 F.3d 963, 968-69 (9th Cir. 2006) (holding that the district court did not err

26 in finding that plaintiff failed to provide defendant with adequate notice of new theories raised

27 during summary judgment where plaintiff's complaint alleged different facts). Moreover, Plaintiff

1 leave at this juncture. The parties stipulated to a deadline to amend the pleadings which has long

2 expired. The Court declines Plaintiff’s request for leave to amend, and GRANTS summary

3 judgment to Defendants on Plaintiff’s request for equitable relief.

4 V. CONCLUSION

5 For the foregoing reasons, the Court:

6 • GRANTS Plaintiff’s motion for summary judgment, and DENIES Defendants’

7 motion for summary judgment as to the denial of Plaintiff’s claim for termination

8 benefits;

9 • GRANTS Defendants’ motion for summary judgment, and DENIES Plaintiff’s

10 motion for summary as to the denial of Plaintiff’s claim for disability benefits;

11 • DENIES Defendants’ motion to strike extra-record evidence; and

12 • REMANDS this case to Defendants for reconsideration of Plaintiff’s eligibility for

13 termination benefits, consistent with this decision.

14 This order disposes of Docket Nos. 74, 77, and 83.

15 The Clerk of the Court is directed to enter judgment and close this case.

16

17 IT IS SO ORDERED.

18

19 Dated: August 26, 2022

20

21 ______________________________________

EDWARD M. CHEN

22 United States District Judge

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