# Opposition Brief — Sommer v. UNUM Life Insurance Co. of America

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2002
- **Citation:** 537 U.S. 948

## Text

a FILED
Y) SEP 12 2002
No. 02-203 i
In The
Supreme Court of the United States
¢

ALEXANDER P. SOMMER
and his counsel, JOHN G. WARNER,

Petitioners,

vs.

UNUM LIFE INSURANCE COMPANY OF AMERICA,

Respondent.

¢

On Petition For Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit

4

OPPOSITION BRIEF OF RESPONDENT
UNUM LIFE INSURANCE COMPANY OF AMERICA
TO PETITION FOR WRIT OF CERTIORARI

¢

RIMAC & MARTIN, P.C.
WILLIAM REILLY
JOSEPH M. RIMAC
Counsel of Record
1700 California Street, Suite 470
San Francisco, CA 94109
(415) 561-8440
Attorneys for Respondent
UNUM Life Insurance

Company of America

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831

RULE 29.6 DISCLOSURE STATEMENT

The undersigned, counsel of record for UNUM LIFE
INSURANCE COMPANY OF AMERICA, certifies that the
following listed party has a direct, pecuniary interest in
the outcome of this case.

UNUMProvident Corporation
UNUM Life Insurance Company of America

ii

TABLE OF CONTENTS
Page
I. CITATIONS TO OPINIONS BELOW ..........++ 1
Il. STATEMENT OF THE CASE AND PRO-
CEREDINGS..........ccccscoscccssssssssesssscrnnneneasensences 1
III. REASONS FOR DENYING THE WRIT ......... 8
1. SOMMER III WAS BARRED BY THE
DOCTRINE OF RES JUDICATA ........--+- 11
29. SOMMER I WAS A FINAL DECISION
ON THE MERITG...........:::seeeeesererererenenees 17

3. SUMMARY JUDGMENT IS AN APPRO-
PRIATE ACTION WHERE A PLAINTIFF
HAS FAILED TO EXHAUST ERISA AD-
MINISTRATIVE REMEDIES ..........-++0++00++ 18

TV. CONCLUSION ..........-sssscsesrrrececerreesnrersesenersen® 22

TABLE OF AUTHORITIES
Page
CASES
Costantini v. Trans World Airlines, 681 F.2d 1199

(Othe Cir, 1982) ...........-scsssccssorsssenenssseneneesenernnsnenesensesennenes 13
Denton v. First National Bank of Waco, Texas, 765

F.2d 1295 (Sth Cir. 1985)........seccseserersssssseretecsseesesnens 8, 12
Diaz v. United Agricultural Employee Welfare

Benefit Plan and Trust, 50 F.3d 1478 (9th Cir.

DOE) ccccvessorcssinoesardscossesvnqevosoncavnnnsestonesovsosocnsenons 20, 21, 22
Foman v. Davis, 371 U.S. 178 (1962) .....ceseeccceesesreeeensreeees 11
Griffith v. Wainwright, 772 F.2d 822 (11th Cir.

I cas sblvvsbeniauncnnrorsvenvnnceenvdavenpenniiepnceantorenennenent® 11
Harris v. Jacobs, 621 F.2d 341 (Oth Cir. 1980)..........:eeee 13
Hoffman v. Babbitt Bros. Trading Co., 203 F.2d 636

(9th Cir, 1953) ......c.cssccsscoosssesesssensesenonvensnnensonesenarsossoneens 11

International Union of Operating Engineers-
Employers Construction Industry Pension, Wel-
fare and Training Trust Funds v. Karr, 994 F.2d
1426 (Oth Cir. 1993)........cssssssseersrsrenrssserenenenensesenrensorses 16

Lester v. NBC, 217 F.2d 399 (9th Cir. 1954), cert.
denied, 348 U.S. 954, 75 S. Ct. 444, 99 L. Ed. 746

I 56 iclccsahsnshcsrssecnednseonasabhivoiekenstivnsneseevenoanrunsneesenceses 16
Pengilly v. The Guardian Life Insurance Co. of

America, 81 F.Supp.2d 2010 (N.D.Cal. 2000).........++--++ 21
Rand v. Rowland, 154 F.3d 952 (9th Cir. 1998) .........-++++ 11
Sarraf v. Standard Ins. Co., 102 F.3d 991 (9th Cir.

DUIS. sncnnscasenvate\nusnaneivinsinenrasonsanegnenecroanananensnnnnensenne® 22

Scoggin v. Schrunk, 522 F.2d 436 (9th Cir. 1975),
cert. denied, 423 U.S. 1066, 96 S.Ct. 807, 46
L. Ed. 2d 657 (1976) ......cssescesesserserssenesssesennenenensssnenens +16

iV

TABLE OF AUTHORITIES — Continued

Page
Sommer v. UNUM, 1999 U.S. LEXIS 5382 (9th Cir.

TODD) giosncsnsssusaiescsssussonsenvensscovennnnvenensnonnenonsensuseneetets 6, 16, 19
Sommer v. UNUM, 1999 U.S. LEXIS 5388 (9th Cir.

SEI ..sscysrunenseiocesnpsneneiesnainonenenepunnnbenneconemmnssoenennn=* passim
Sommer v. UNUM Life Ins. Co. of Am., 35 Fed.Appx.

489, 2002 WL 972177 (Oth Cir. 2002) .......seceeecreeees passim
Stein v. Wood, 127 F.3d 1187 (Oth Cir. 1997) ........sseeceeereees 5
White v. Jacobs Eng’g Group, 896 F.2d 344 (9th Cir.

SII, sosnseensscivcrecucroensecerinennmiienoneiectesian ete amy atenn tenner 19
FEDERAL STATUTES
Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. Sections 1001, et seq.......--++ passim
RULES
Federal Rule of Civil Procedure 11........:cesscecsesrreeessreesesees 9
Federal Rules of Civil Procedure 12(b)(6) ......sssesesseeseeesees 11
Federal Rule of Civil Procedure 59(a) .........sseee+++9 eat Re 12
Federal Rule of Civil Procedure | en 7, 10, 12, 17, 18
OTHER
Wright, Miller & Kane, Federal Practice and

Procedure: Civil 2d § 2713 (2d ed. 1983) .......--eeeeeeereeeer® 11

Wright, Miller & Kane, Federal Practice and
Procedure: Jurisdiction § 4444 (1981) ......sccccseeerreceeseeees 11

1

I. CITATIONS TO OPINIONS BELOW

The opinion of the Ninth Circuit Court of Appeals is
reproduced in Petitioner’s Appendix (“P's App.”) at 1-8
(Sommer v. UNUM Life Ins. Co. of Am., 35 Fed.Appx. 489,
2002 WL 972177 (9th Cir. 2002).

The opinion of the District Court denying Petitioner's
motion to correct a clerical mistake is reproduced in
Petitioner’s Appendix at 9-24.

The opinion of the District Court entering judgment in
favor of UNUM Life Insurance Company of America
(“UNUM”) is reproduced in Respondent’s Appendix (“R’s
App.”) at 1-10.

Il. STATEMENT OF THE CASE AND PROCEED-
INGS

Alexander P. Sommer, a securities firm account
executive, was an insured under a UNUM group long-term
disability plan, established by his former employer Piper
Jaffray, Inc. Mr. Sommer was apparently employed by
Piper Jaffray from December 1992 through August 1994.
After Piper Jaffray terminated Mr. Sommer’s employment
in August, 1994, he then went to work for Wedbush Mor-
gan Securities. Mr. Sommer was insured under another
UNUM group long-term disability plan, established by his
next employer, Wedbush Morgan Securities. Mr. Sommer
was apparently employed by Wedbush Morgan Securities
from August 1994 through January 1996. Despite the fact
that Mr. Sommer was employed from 1992 through 1996,
he submitted disability claims in 1995 in which he as-
serted that he was and had been disabled since 1988. (P’s
App. 10). UNUM denied Mr. Sommer’s claim because,
among other reasons, he was working full-time during the

2

period that he claimed that he could not perform all of the
material duties of his regular occupation. Mr. Sommer did
not appeal the denial of his claim under the Wedbush plan
within sixty days, as required by the plan and ERISA. (P’s
App. 11). The denial of Mr. Sommer’s disability claim lead
to the ever-reoccurring stream of litigation described
below.

Mr. Sommer has litigated this identical disability
claim under the same UNUM disability policies’ in
THREE separate District Court filings and FOUR Ninth
Circuit Appeals. In Sommer I, the Honorable D. Lowell
Jensen granted UNUM’s motion for summary judgment
regarding Mr. Sommer’s disability claims against UNUM
under the Wedbush Morgan Securities group long-term
disability policy, at issue here. Specifically, as to Mr.
Sommer’s claim under the Wedbush group policy, Judge
Jensen held that his claim was barred for failure to ex-
haust administrative remedies and granted summary
judgment in favor of UNUM. (P's App. 3 & 11).

Mr. Sommer filed a motion for reconsideration of the
summary judgment entered against him in Sommer I,
pursuant to F.R.C.P. Rule 59(a), which was denied by
Judge Jensen on August 4, 1997. (P’s App. 12). Mr. Som-
mer did not allege in his motion for reconsideration that
there were any clerical errors in the summary judgment.
Additionally, Mr. Sommer did not assert in his motion for

1 Here, Mr. Sommer only contests the denial of his disability
benefits under the Wedbush policy, that was affirmed by the District
Courts and the Ninth Circuit on at least six separate occasions. Mr.
Sommer is not contesting the denial of his disability claim under the
Piper Jaffray policy.

3

reconsideration that the judgment entered should actually
have been a dismissal without prejudice. Instead, Mr.
Sommer argued that he should have been excused from
exhausting his administrative remedies because exhaus-
tion would have been futile. The District Court rejected
Mr. Sommer’s argument because plaintiff had every
opportunity to raise the futility argument in response to
UNUM’s summary judgment motion, but failed to do so.
Thus, the trial Court would not consider this argument on
a motion for reconsideration. Since Mr. Sommer was
apparently unsatisfied with Judge Jensen’s decision, he
appealed Sommer I to the Ninth Circuit on August 14,
1997. (P’s App. 12).

In addition to filing his appeal of Sommer I, on or
about August 29, 1997, Mr. Sommer proceeded to refile
identical claims for disability benefits with UNUM under
the same policies and based upon the same disabilities,
which had been previously adjudicated by Judge Jensen
and which were now pending before the Ninth Circuit. Mr.
Sommer refiled these claims with UNUM based upon the
same purported disabilities as had been finally adjudi-
cated by Judge Jensen in Sommer I. (P’s App. 18).

UNUM responded to Mr. Sommer’s refiled August 29,
1997 claims through its attorneys, because of the pending
appeal of Sommer I. UNUM’s attorneys informed Mr.
Sommer’s attorney that the matter was in litigation, and,
therefore, requested that all future communications from
Mr. Sommer be directed to UNUM’s attorneys, informed
Mr. Sommer that any disability claims that he could
possibly have had under the UNUM policies had been
finally adjudicated by Judge Jensen, and that the policies
terminated by their terms when Mr. Sommer completed
his employment with Piper Jaffray in August 1994 and

ee Ke

4

with Wedbush in January 1996. Thus, any claim arising
after January 1996 (the termination of the last UNUM
policy available to Mr. Sommer) could not possibly be
covered by any UNUM policy. (P’s App. 19).

On November 13, 1997, Mr. Sommer filed a second
action in District Court against UNUM (“Sommer IT’) case
number C-97-4159. (Ps App. 12). In Sommer II, Mr.
Sommer contended that he was entitled to benefits under
the same UNUM disability policies as a result of the same
purported 1988 illness that was the subject of the earlier
claim and lawsuit. Sommer II alleged claims against
UNUM for past disability benefits, future benefits, and
breach of fiduciary duty under the same UNUM disability
policies based upon the purported August 29, 1997 claim
submission to UNUM that was responded to by UNUM’s
attorneys. (P’s App. 12).

On February 17, 1998, UNUM filed and served a
Motion to Dismiss Sommer II on the grounds that the
claims asserted therein had been previously submitted
and completely adjudicated in Sommer I. In response, Mr.
Sommer filed a Motion for Partial Summary Judgment of
Sommer II, asking the District Court to hold as a matter of
law that he was entitled to disability benefits and that
UNUM breached its fiduciary duties under ERISA. Mr.
Sommer argued that UNUM failed to re-review his re-
submitted claim in 1997, and that such failure constituted
both grounds for awarding benefits and a breach of fiduci-
ary duty. In UNUM’s opposition to Mr. Sommer’s motion
for partial summary judgment and in UNUM’s motion to
dismiss, it asserted that Mr. Sommer’s claims were barred
by the principles of res judicata.

Bi

5

The hearing of UNUM’s Motion to Dismiss and Mr.
Sommer’s Motion for Partial Summary Judgment of
Sommer II occurred on March 23, 1998. At the hearing,
Mr. Sommer’s counsel conceded that every issue raised in
Sommer II was raised in Sommer I, and was pending
before the Ninth Circuit in the appeal of that action.

Judge Armstrong of the District Court issued an
Order granting UNUM’s Motion to Dismiss and denying
Mr. Sommer’s Motion for Partial Summary Judgment in
Sommer II, on March 27, 1998, based upon Stein v. Wood,
127 F.3d 1187 (9th Cir. 1997). Judge Armstrong ruled that
she did not have jurisdiction to adjudicate the issues
raised in Sommer II because all of these claims were
already pending before the Ninth Circuit in the appeal of
Sommer I. Moreover, Judge Armstrong held that, if the
court had jurisdiction, Mr. Sommer’s claims were barred
by res judicata. The court further sanctioned Mr. Sommer
$1,000 under F.R.C.P. Rule 11. (P's App. 12). Mr. Sommer
proceeded to appeal Sommer II to the Ninth Circuit. (9th
Cir. Case No. 97-16340). (P’s App. 12).

On March 24, 1999, after briefing of Sommer I and II
and oral argument, the Ninth Circuit affirmed the ruling
in Sommer I and held that “Sommer cannot survive
UNUM’s motion for summary judgment, even under a de
novo standard.” Further, the Ninth Circuit held that “the
district court did not abuse its discretion in declining to
consider Sommer’s argument that exhaustion of adminis-
trative remedies would be futile. Sommer’s argument was
presented for the first time in a motion for reconsideration
following the grant of summary judgment for UNUM and
was based on evidence that Sommer had before him at the
time of briefing the summary judgment motion.” See
Sommer v. UNUM, 1999 U.S. LEXIS 5388 (9th Cir. 1999).

6

Additionally, as to Sommer II, the Ninth Circuit affirmed
the “district court’s dismissal of his [Sommer IT] complaint,
summary judgment in favor of UNUM ... [and affirmed
the] denial of Sommer’s motion for partial summary
judgment.” The Ninth Circuit further ruled that Mr.
Sommer’s claims in Sommer II were “barred by the doc-
trine of res judicata.” See Sommer v. UNUM, 1999 U.S.
LEXIS 5382 (9th Cir. 1999).

Then, just as he had done in August, 1997 before filing
Sommer II, in January, 2000, Mr. Sommer proceeded to
attempt to refile with UNUM for a third time, the same
disability claims based upon the same purported disability,
on the same UNUM policies (which had terminated years
before). Again, UNUM’s counsel informed Mr. Sommer’s
counsel that his claim had been finally adjudicated by the
Ninth Circuit and that his attempt to submit another
claim to UNUM, after the matter had been resolved on the
merits by the Ninth Circuit, was improper. Mr. Sommer’s
counsel then filed a third action, Sommer v. UNUM, Case
#00-1368 SBA (“Sommer IIT’), which is the subject of this
Petition for Writ of Certiorari. (P’s App. 13).

By refiling his disability claim with UNUM for a
third time and refiling his lawsuit against UNUM for a
third time, Mr. Sommer was again merely improperly
attempting to circumvent Judge Jensen's, Judge Arm-
strong’s and the Ninth Circuit’s prior rulings, which all
had become final. In opposing UNUM’s motion to dismiss
in Sommer III, Mr. Sommer attempted to argue, as he has
here, that the summary judgment granted in favor of
UNUM in Sommer I was actually a dismissal without
prejudice because the basis of the summary judgment was
that he failed to exhaust his administrative remedies
under ERISA. Judge Armstrong entered judgment against

ee

7

Mr. Sommer finding that Judge Jensen’s decision of June
17, 1997 granting summary judgment in Sommer I was a
final judgment on the merits of the same claim that
plaintiff raised in Sommer III. (P’s App. 3). Judge Arm-
strong dismissed Sommer III again based upon the doc-
trine of res judicata.

Further, Judge Armstrong found that the Sommer III
complaint was frivolous. Sommer’s counsel “should have
known, after Sommer I and Sommer II, that the claim for
benefits under the Wedbush policy was barred by the
doctrine of res judicata.” (P’s App. 5). Judge Armstrong
sanctioned Mr. Sommer’s counsel $2,500 to serve as a
deterrent to further frivolous litigation and awarded
UNUM its attorneys’ fees. (P’s App. 3).

After Judge Armstrong rejected the argument in
Sommer III that the summary judgment granted in favor
of UNUM in Sommer I was actually a dismissal without
prejudice, true to form, Mr. Sommer filed with Judge
Jensen what purported to be a F.R.C.P. Rule 60(a) motion
to correct a clerical error in the judgment of Sommer I. (P's
App. 9). Judge Jensen denied Mr. Sommer’s motion finding
that the Court granted summary judgment in favor of
UNUM in Sommer I with respect to the Wedbush policy on
the grounds that plaintiff had failed to exhaust his
administrative remedies. Further, in finding that the
summary judgment issued in Sommer I was not a clerical
error and that the Order was exactly as the Court in-
tended, the Court stated as follows:

The Court finds that a plain reading of the Order
indicates the Court’s intention to grant summary
judgment, with its attendant consequences to
plaintiff. First, the Court unequivocally used
the words “summary judgment,” and entered a

RON | en Sa Le EE St Ae

8

separate judgment on the same day against
plaintiff and in favor of UNUM. See Judgment of
June 17, 1997. Second, the Order made no men-
tion of plaintiff’s return to this Court after ex-
haustion. Third, the Order cited Denton v. First
National Bank of Waco, Texas, 765 F.2d 1295 (5th
Cir. 1985), [cases that supported the issuance of
summary judgment for failure to exhaust admin-
istrative remedies].

(P’s App. 22).

Thereafter, Mr. Sommer filed two notices of appeal,
one appealing Judge Jensen’s Order denying his motion to
correct a clerical mistake and the other appealing Judge
Armstrong’s dismissal of Sommer III based upon the
doctrine of res judicata. Mr. Sommer’s counsel also ap-
pealed the $2,500 Rule 11 sanction award and the award
of attorneys’ fees against him issued by Judge Armstrong
in Sommer III.

The Ninth Circuit affirmed the Order denying Mr.
Sommer’s motion to correct a clerical mistake and Judge
Armstrong’s dismissal of Sommer III based upon the
doctrine of res judicata. Those rulings are the subject of
this Petition for Writ of Certiorari. Additionally, the Ninth
Circuit affirmed the $2,500 Rule 11 sanction award and
the award of attorneys’ fees against Mr. Sommer’s counsel
issued by Judge Armstrong in Sommer III. See Sommer v.
UNUM, 35 Fed.Appx. 489, 2002 WL 972177 (9th Cir.
2002).

III. REASONS FOR DENYING THE WRIT

Beginning in the mid-1990s, Alexander Sommer
sought disability benefits under policies he obtained

9

through his employer, Wedbush. Following denial of
benefits by UNUM, he sued in federal court. The Ninth
Circuit’s consideration of Sommer’s last Ninth Circuit
appeal was the fifth given to his case in the federal courts.
Sommer v. UNUM Life Ins. Co. of Am., 35 Fed.Appx. 489,
2002 WL 972177 (9th Cir. 2002). This Petition for Writ of
Certiorari amounts to Sommer’s sixth foray into the
federal courts on the same disability claim.

District Court Judge Jensen issued a final judgment
in Sommer I. The Ninth Circuit affirmed the summary
judgment. Sommer v. UNUM Life Ins. Co. of Am., 1999
WL 173570, 1999 U.S. LEXIS 5388 (9th Cir. 1999). Som-
mer filed his claim with UNUM again. His claim was for
the same disability under the same policy, so UNUM
rejected it again. Following this second rejection, Sommer
filed his second suit in federal district court. In Sommer il,
District Judge Armstrong dismissed the case based on lack
of jurisdiction because Sommer I was pending before the
Ninth Circuit and also imposed $1,000 in Rule 11 sanc-
tions. She noted that even if the court did have jurisdic-
tion, Sommer II would be barred by res judicata as a result
of Sommer I. The Ninth Circuit agreed, affirming on res
judicata grounds. Sommer v. UNUM Life Ins. Co. of Am.,
1999 WL 173592, 1999 U.S. LEXIS 5382 (9th Cir. 1999).
After yet another rejection of the same disability claim by
UNUM, Sommer brought a third suit, again in Judge
Armstrong’s court. The district court dismissed Sommer
III on res judicata grounds. The district court also imposed
$2,500 in Rule 11 sanctions and assessed attorneys’ fees
and costs against Sommer’s attorney pursuant to 29
U.S.C. § 1132(g)(1).

Sommer appealed the Sommer III decisions, as well as
Judge Jensen’s refusal to amend his final judgment in

SE

10

Sommer I per Sommer’s Rule 60(a) motion. The Ninth
Circuit affirmed the Sommer III district court’s decision in
all respects and affirmed the Sommer I court’s denial of
Sommer’s Rule 60(a) motion for correction of a clerical
mistake. Sommer v. UNUM Life Ins. Co. of Am., 35
Fed.Appx. 489, 2002 WL 972177 (9th Cir. 2002).

This Petition for Writ of Certiorari purportedly seeks
the review of the Ninth Circuit’s ruling affirming Sommer
III. However, the “Question Presented” by Sommer herein
— “Did the Court of Appeals for the Ninth Circuit commit
judicial error by concluding that in an ERISA case a
beneficiary under a long-term disability plan is barred by
the doctrine of res judicata from filing a second lawsuit to
enforce his or her entitlement to benefits, after subse-
quently exhausting his or her administrative remedies?” —
was not at issue in Sommer III. Accordingly, this Court
must reject Sommer’s Petition because Sommer does not
have standing to raise the issue presented.

If Sommer wished to dispute District Court Judge
Jensen’s issuance of a final judgment, instead of a dis-
missal without prejudice, in Sommer I, he needed to raise
that issue in the appeal of Sommer I. Sommer v. UNUM
Life Ins. Co. of Am., 1999 WL 173570, 1999 U.S. LEXIS
5388 (9th Cir. 1999). He did not. He is now foreclosed from
doing so by the doctrine of res judicata. Sommer cannot
avoid the doctrine of res judicata by simply refiling his
action over and over again.

The only issues that Mr. Sommer can challenge in this
Petition for Writ of Certiorari are the Ninth Circuit's
affirmance of Judge Armstrong’s ruling in Sommer III that
the action was barred by the doctrine of res judicata and
Judge Jensen’s denial of Mr. Sommer’s purported Rule

11

60(a) motion. Sommer has not raised that issue and
Respondent respectfully urges this Honorable Court to
deny the Petition for Writ of Certiorari.

1. SOMMER III WAS BARRED BY THE DOC-
TRINE OF RES JUDICATA

The Ninth Circuit has long recognized that summary
judgment affects substantive rights. See Hoffman uv.
Babbitt Bros. Trading Co., 203 F.2d 636, 637 n.1 (9th Cir.
1953). While a complaint that is sought to be dismissed
under Rule 12(b)(6) can often be amended, see, e.g.,
Foman v. Davis, 371 U.S. 178, 182, (1962); Wright, Miller
& Kane, Federal Practice and Procedure: Civil 2d § 2713
(2d ed. 1983), a grant of summary judgment is a final
adjudication on the merits. See Rand v. Rowland, 154 F.3d
952, 957 (9th Cir. 1998) citing Griffith v. Wainwright, 772
F2d 822, 825 (11th Cir. 1985); Wright, Miller & Cooper,
Federal Practice and Procedure: Jurisdiction § 4444
(1981). The Griffith Court explained that the disposition of
a case on summary judgment grounds represents a final
adjudication on the merits and forecloses subsequent
litigation of the matter. See Griffith, 772 F.2d at 825.

Here, although Mr. Sommer characterizes Judge
Jensen’s ruling in Sommer I as a dismissal, the facts
establish that summary judgment was entered in favor of
UNUM. (See Sommer v. UNUM, 1999 U.S. LEXIS 5388,
*2 (9th Cir. 1999) “Alexander P. Sommer (“Sommer”)
appeals from the district court's summary judgment in favor
of UNUM Life Insurance Company (“UNUM”) and the Paul
Revere Life Insurance Company (“Paul Revere”). We have
jurisdiction under 28 U.S.C. § 1291 and we afhirm.”). More-
over, this fact was confirmed again by Judge Jensen, when

el

12

he denied Mr. Sommer’s purported F.R.C.P. Rule 60(a)
motion to correct a clerical error in the judgment of Som-
mer I. (P’s App. 9). Judge Jensen denied Mr. Sommer’s
motion finding that the Court granted summary judgment
in favor of UNUM in Sommer I with respect to the Wed-
bush policy on the grounds that plaintiff had failed to
exhaust his administrative remedies. Further, in finding
that the summary judgment issued in Sommer I was not a
clerical error and that the Order was exactly as the Court
intended, the Court stated as follows:

The Court finds that a plain reading of the Order
indicates the Court’s intention to grant summary
judgment, with its attendant consequences to
plaintiff. First, the Court unequivocally used the
words “summary judgment,” and entered a sepa-
rate judgment on the same day against plaintiff
and in favor of UNUM. See Judgment of June 17,
1997. Second, the Order made no mention of
plaintiff’s return to this Court after exhaustion.
Third, the Order cited Denton v. First National
Bank of Waco, Texas, 765 F.2d 1295 (5th Cir.
1985), [cases that supported the issuance of
summary judgment for failure to exhaust admin-
istrative remedies].

(P’s App. 22).

Accordingly, Judge Jensen’s disposition of Sommer I
on summary judgment grounds represented a final
adjudication on the merits.

For the same reasons that the Ninth Circuit decided
that Sommer II was barred by the doctrine of res judicata,
Sommer III was also barred. In making its finding that
Sommer II was barred by the doctrine of res judicata the
Ninth Circuit stated as follows:

13

Sommer’s claims are barred by the doctrine of
res judicata. Res judicata bars the relitigation of
claims raised (or that could have been raised)
and adjudicated in a prior lawsuit involving the
same parties. Costantini v. Trans World Airlines,
681 F.2d 1199, 1201 (9th Cir. 1982). Whether a
suit involves the same “claim” as an earlier suit
is determined by looking at four factors:

“(1) whether rights or interests established in the
prior judgment would be destroyed or impaired
by prosecution of the second action; (2) whether
substantially the same evidence is presented in
the two actions; (3) whether the two suits involve
infringement of the same right; and (4) whether
the two suits arise out of the same transactional
nucleus of facts.”

Id. at 1201-02 (quoting Harris v. Jacobs, 621 F.2d
341, 343 (9th Cir. 1980)). The fourth factor is the
_ most important. 681 F.2d at 1202.

This case and Sommer’s prior lawsuit, Som-
mer v. UNUM Life Ins. Co., 1999 U.S. LEXIS
5388, No. 97-16564, also pending before this
Court, arise out of the same transactional nu-
cleus of facts: Sommer’s brain surgeries in 1988
and 1989; Sommer’s application for disability
benefits from the Paul Revere Insurance Com-
pany (“Paul Revere”); Paul Revere’s denial of
benefits; Sommer’s application for disability
| benefits from UNUM; and UNUM’s denial of
benefits. Both of Sommer’s lawsuits involve the
same parties - Sommer, UNUM, and Paul Re-
vere — and the same claim — wrongful denial of
disability benefits under ERISA. Sommer’s com-
plaint in each case alleges the same disability,
the same cause of disability, and the same al-
leged right to disability benefits under the same

ES ————

14

disability policies. The other three factors also
establish that Sommer’s second suit involves the
same “claim” as his prior suit: prosecution of
Sommer’s second action would impair the rights
established in the prior judgment that UNUM
and Paul Revere did not violate ERISA in deny-
ing Sommer benefits, substantially the same evi-
dence is presented in the two actions, and the
two suits involve infringement of the same right
— to recover benefits payable from a benefits plan
covered by ERISA.

Sommer argues that he has stated a cause of
action different from that raised in his first suit
because his current cause of action is based upon
“new” medical evidence, reports not considered
by UNUM and Paul Revere in denying benefits.
Although Sommer labels the evidence “new,” this
evidence was submitted by Sommer in the prior
case in a motion to “augment the administrative
record” before the plan administrator. The dis-
trict court denied that motion and the district
court’s ruling is an issue in the appeal of Som-
mer’s first suit. Allowing Sommer to proceed with
his second suit would circumvent the district
court’s ruling in that case.

Sommer also argues that his current action
is not subject to the doctrine of res judicata be-
cause it is a claim for benefits under ERISA. No
ERISA case from this Court or any other has
carved out such an exception to the rules of pro-
cedure and we decline to adopt such a rule. We
affirm the district court’s dismissal of Sommer’s
complaint on the ground of res judicata.

Here, again, Sommer III and Sommer I & II arise out
of the same transactional nucleus of facts: Sommer’s
surgeries in 1988 and 1989; Sommer’s application for

15

disability benefits from UNUM; and UNUM’s denial of
benefits. All three of Sommer’s lawsuits involve the same
parties - Sommer and UNUM - and the same claim —
purported wrongful denial of disability benefits under
ERISA. Sommer’s complaint in each of the cases alleges
the same disability, the same cause of disability, and the
same alleged right to disability benefits under the same
disability policies. The other three factors also establish
that Sommer III involves the same “claim” as his prior
suits: prosecution of Sommer III would impair the rights
established in the prior judgments which were upheld by
the Ninth Circuit that UNUM did not violate ERISA in
denying Sommer benefits, substantially the same evidence
is presented in the three actions, and the three suits
involve infringement of the same right — to recover bene-
fits payable from a benefits plan covered by ERISA.

In Sommer III, Mr. Sommer made another erroneous
claim that he had stated a cause of action different from
those raised in Sommer I & II because he had now pur-
portedly exhausted his administrative remedies and had a
new cause of action based on an alleged denial of disability
benefits by UNUM on or about March, 2000. This same
allegation was made and rejected in Sommer II. Mr.
Sommer cannot create a new cause of action by resubmit-
ting a claim under a policy which he acknowledges has
long since terminated. This alleged claim is a fiction
created by Mr. Sommer and is simply the refiling for a
third time of his previously finally adjudicated disability
claims with UNUM. All of Mr. Sommer’s claims arise from
the same disability policies and all claims which could
have arisen from those disability policies were previously
fully, fairly and finally adjudicated. What Mr. Sommer
continues to fail to acknowledge is that the judgment

16

entered and affirmed in Sommer I is a final adjudication
on the merits of all of his claims. Once the summary
judgment was entered he no longer had any administra-
tive remedies to exhaust. Again, allowing Mr. Sommer to
pursue the same claims that were previously resolved both
at trial and on appeal in Sommer III would circumvent the
District Courts’ and the Ninth Circuit’s rulings in Sommer
I and II.

Under federal law, a party cannot avoid the bar of res
judicata merely by alleging conduct not previously alleged
in their prior suit, nor can a party avoid the bar of res
judicata by pleading a new legal theory. Lester v. NBC, 217
F.2d 399, 400 (9th Cir. 1954), cert. denied, 348 U.S. 954, 75
S. Ct. 444, 99 L. Ed. 746 (1955); Scoggin v. Schrunk, 522
F.2d 436, 437 (9th Cir. 1975), cert. denied, 423 U.S. 1066,
96 S. Ct. 807, 46 L. Ed. 2d 657 (1976). A review of the
pleadings of Sommer I, Sommer II, Sommer III, the
District Court’s Orders, Sommer v. UNUM, 1999 U.S.
LEXIS 5382 (9th Cir. 1999), Sommer v. UNUM, 1999 U.S.
LEXIS 5388 (9th Cir. 1999) and Sommer v. UNUM Life
Ins. Co. of Am., 35 Fed.Appx. 489, 2002 WL 972177 (9th
Cir. 2002) conclusively establish that Sommer III is merely
a regurgitation of the prior actions and an attempt to
undermine Judge Jensen’s, Judge Armstrong’s and the
Ninth Circuit’s rulings and, as such, Mr. Sommer’s present
claim is barred by the doctrine of res judicata.

The doctrine of res judicata “is motivated primarily by
the interest in avoiding repetitive litigation, conserving
judicial resources, and preventing the moral force of court
judgments from being undermined.” International Union
of Operating Engineers-Employers Construction Industry
Pension, Welfare and Training Trust Funds v. Karr, 994
F.2d 1426, 1430 (9th Cir. 1993) (citation omitted). Sommer

ee eee

17

III violates principles of res judicata, is frivolous and such
conduct should not be tolerated by this Court. Judicial
resources have been and continue to be wasted by Mr.
Sommer’s and his attorney's spurious tactics. Under Mr.
Sommer’s repetitive litigation theory, every matter once
finally adjudicated would be subject to endless re-litigation
until the matter was resolved to Mr. Sommer’s satisfac-
tion. No legal system could function applying Mr. Som-
mer’s rules, and the Federal Court system definitely does
not follow Mr. Sommer’s rules. Accordingly, the Ninth
Circuit’s affirmance of Judge Armstrong’s dismissal of
Sommer III based upon the doctrine of res judicata is
correct. As such, Respondent respectfully urges this
Honorable Court to deny the Petition for Writ of Certio-
rari.

_ 2. SOMMER I WAS A FINAL DECISION ON
THE MERITS

While Sommer III was pending before Judge Arm-
strong, Mr. Sommer filed a motion with Judge Jensen
pursuant to Rule 60(a) to correct a purported clerical error
in Sommer I. In it, Mr. Sommer argued that Judge Jen-
sen’s designation of his final order in Sommer I as a
“summary judgment” rather than a “dismissal judgment”
was a clerical error. In his denial of Mr. Sommer’s Rule
60(a) motion, Judge Jensen made clear that there was, in
fact, no clerical error: he intended his June 17, 1997 order
in Sommer I to be a summary judgment, and not a dis-
missal without prejudice.

The Ninth Circuit affirmed the denial of the Rule
60(a) motion. Sommer v. UNUM Life Ins. Co. of Am., 35
Fed.Appx. 489, 2002 WL 972177. Further, the Ninth

18

Circuit confirmed that the Rule 60(a) motion failed be-
cause the Rule “only applies during the pendency of an
appeal. By the time Sommer filed his Rule 60(a) motion,
the Sommer I appeal had been over for nearly two years.”
(P’s App. 8). This further illustrates that if Mr. Sommer
wished to contend that the Order of summary judgment in
Sommer I should have been a dismissal without prejudice,
he needed to raise that argument in Sommer I. Sommer v.
UNUM, 1999 U.S. LEXIS 5388 (9th Cir. 1999). He did not.
Therefore, as explained above, he is forever precluded
from raising that argument because of the doctrine of res
judicata.

3. SUMMARY JUDGMENT IS AN APPRO-
PRIATE ACTION WHERE A PLAINTIFF
HAS FAILED TO EXHAUST ERISA AD-
MINISTRATIVE REMEDIES

Mr. Sommer failed to appeal the denial of his disabil-
ity claim within the sixty day time period provided under
ERISA and expressly stated in the UNUM denial letter
and policy. Accordingly, after the sixty day time period for
administrative appeal expired without Mr. Sommer
requesting an appeal, it was impossible for Mr. Sommer to
ever exhaust his administrative remedies because he had
failed to request a timely appeal of the denial of his
disability claim. In Sommer III, Judge Armstrong con-
firmed this point as follows:

Plaintiff argues that his claim in the instant case
is not barred by res judicata because he has fi-
nally exhausted his administrative remedies un-
der the UNUM policy by appealing the initial
denial of his claim for benefits. He argues that
Judge Jensen’s finding that plaintiff failed to

19

exhaust his administrative remedies is not a fi-
nal judgment on the merits. It is undisputed,
however, that plaintiff failed to appeal the initial
denial of benefits with UNUM'’s Quality Review
Board within 60 days, as required by the terms
of the plan. Therefore, plaintiff had failed, and
was unable, to exhaust his administrative reme-
dies under the disability policy. This Court is not
free to rewrite the terms of the Wedbush policy to
permit plaintiff's appeal of the initial denial of
his claim nearly four years after it was denied.
Judge Jensen’s decision granting summary
judgment was a final judgment on the merits of
the same claim that plaintiff raises here today.

(R’s App. 6-7).

Further, the sixty day time bar in which a claimant
must file their request for appeal under an ERISA plan
was affirmed by the Ninth Circuit in White v. Jacobs Eng’g
Group, 896 F.2d 344, 349 (9th Cir. 1989). Mr. Sommer’s
contentions that Sommer I should have resulted in a
dismissal without prejudice and that he has subsequently
exhausted his administrative remedies are both com-
pletely spurious and irrelevant. When Mr. Sommer chose
not to request an appeal with UNUM Life Insurance
Company of America of the initial decision to deny his
disability claim, he chose not to exhaust his administra-
tive remedies and he cannot change those facts.

The Ninth Circuit affirmed Judge Jensen’s ruling in
Sommer I and held that “Sommer cannot survive UNUM’s
motion for summary judgment, even under a de novo
standard.” Further, the Ninth Circuit held that “the
district court did not abuse its discretion in declining to
consider Sommer’s argument that exhaustion of adminis-
trative remedies would be futile. Sommer’s argument was

20

presented for the first time in a motion for reconsideration
following the grant of summary judgment for UNUM and
was based on evidence that Sommer had before him at the
time of briefing the summary judgment motion.” See
Sommer v. UNUM, 1999 U.S. LEXIS 5388 (9th Cir. 1999).
Now, Mr. Sommer contends that Judge Jensen erred in
granting UNUM’s motion for summary judgment in
Sommer I and in not ordering a dismissal without preju-
dice. Mr. Sommer does not mention that he did not con-
tend or request that the Court Order a dismissal without
prejudice during the trial Court proceedings and/or appel-
late proceedings in Sommer I and II.

Judge Jensen’s grant of summary judgment in Som-
mer I was based upon binding authority that stated under
ERISA, summary judgment should be entered, not a
dismissal without prejudice, when a claimant fails to
exhaust their administrative remedies, as such an action
is barred. The purpose of the requirement to exhaust
administrative remedies is to alleviate the need for federal
courts to make initial claims determinations as well as to
allow for the establishment of a record for review by the
courts. Indeed, the Ninth Circuit has required that a
beneficiary exhaust this plan review process before bring-
ing suit, recognizing the exhaustion of administrative
remedies requirement as a “matter of sound policy.” The
Ninth Circuit also recognizes that the failure to exhaust
administrative remedies prior to filing suit serves as a bar
to the action and results in a binding appealable judg-
ment, not a dismissal without prejudice. See, e.g., Diaz v.
United Agricultural Employee Welfare Benefit Plan and
Trust, 50 F.3d 1478, 1483 (9th Cir. 1995). Under ERISA, a
claimant must exhaust a plan’s internal review proce-
dures, described above, prior to bringing suit in federal

21

court. Pengilly v. The Guardian Life Insurance Co. of
America, 81 FSupp.2d 2010, 1023 (N.D.Cal. 2000); Diaz v.
Unite? Agriculture Employee Welfare Benefit Plan and
Trust, 50 F.3d 1478, 1483 (9th Cir. 1995).

In Diaz and Pengilly, all actions governed by ERISA,
summary judgment was entered against plaintiffs because
their actions were barred due to their failure to exhaust
their administrative remedies under ERISA. Further, the
Ninth Circuit affirmed the entries of summary judgment
in Diaz and Pengilly.

Mr. Sommer improperly contended in Sommer III, for
the first time, contrary to clear Ninth Circuit precedent,
that his failure to exhaust administrative remedies under
ERISA should have resulted in a dismissal without preju-
dice and that, therefore, the entry of summary judgment
in Sommer I was improper. Clearly, as discussed above,
Mr. Sommer’s contention is not one that could be advanced
in Sommer III because of the doctrine of res judicata. Be
that as it may, Mr. Sommer’s contention in that regard is
incorrect.

None of the cases cited by Mr. Sommer are governed
by ERISA and, as a result, are completely inapplicable to
the case at bar. The Ninth Circuit has ruled that a claim-
ant’s failure to exhaust his administrative remedies under
ERISA results in his action being barred and subject to a
summary judgment being entered against the claimant.
See, e.g., Diaz v. United Agricultural Employee Welfare
Benefit Plan and Trust, 50 F.3d 1478, 1483 (9th Cir. 1995).
Judge Jensen’s granting of summary judgment for UNUM
in Sommer I was based upon sound binding legal authority
and was correct.

22

Further, in Sommer III, the Ninth Circuit correctly
confirmed that “summary judgment is an appropriate
action where a plaintiff has failed to exhaust ERISA
administrative remedies.” (P’s App. 4). Citing Diaz v.
United Agric. Employee Welfare Benefit Plan & Trust, 50
F.3d 1478, 1480 (9th Cir. 1995); Sarraf v. Standard Ins.
Co., 102 F.3d 991, 992 (9th Cir. 1996).

IV. CONCLUSION

For all of the foregoing reasons, Respondent respect-
fully requests that this Honorable Court deny the Petition.

Respectfully submitted,

RIMAC & MARTIN, P.C.

WILLIAM REILLY

JOSEPH M. RIMAC

Counsel of Record

1700 California Street, Suite 470
San Francisco, CA 94109

(415) 561-8440

Attorneys for Respondent
UNUM Life Insurance Company
of America

App. 1

APPENDIX
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

ALEXANDER P. SOMMER, No. C 00-01368 SBA

Plaintiff, ORDER
Vv. (Filed Jan. 8, 2001)
UNUM LIFE INSURANCE,
Defendant.
/
INTRODUCTION

This matter comes before the Court on defendant's
motion to dismiss, or in the alternative for summary
judgment, and motion for Rule 11 sanctions. Having read
and considered all the papers filed in connection with
these motions, having considered the arguments advanced
by the parties and being fully informed, the Court
GRANTS defendant’s motion for summary judgment [# 6-
1] and GRANTS defendant’s motion for Rule 11 sanctions
[# 9-1].

BACKGROUND
I. Undisputed, Material Facts

Plaintiff Alexander P. Sommer was employed as an
account executive for Henry F. Swift & Co. (“Swift”), a
securities firm, from November 1988 through December
1992. In January 1993, Swift merged with Piper Jaffray,
Inc. (“Piper”). Plaintiff continued to work as an account
executive for Piper until he was fired in August 1994 for

App. 2

lack of production. Approximately one month later, plain-
tiff obtained employment as an account executive with
Wedbush Morgan Securities (“Wedbush”), where he
worked until January 1996. Plaintiff voluntarily left
Wedbush after being diagnosed by his neuropsychologist
with an organic brain disorder attributable to previous
surgeries. While plaintiff worked for Piper and Wedbush,
he was covered by a long-term disability policy issued by
defendant UNUM Life Insurance Company of America.

Plaintiff underwent three separate brain surgeries in
1988 and 1989. He alleges that as a result of the surgeries,
he was totally disabled by organic brain deficits during the
times he worked for Swift, Piper, and Wedbush. In Sep-
tember 1994, Plaintiff filed a claim for disability benefits
with UNUM payable under the terms of the Piper policy.
UNUM rejected plaintiffs claim on July 10, 1995 on the
ground that plaintiff was not disabled under the terms of
the policy. Defendant reviewed its determination on
appeal, and determined that plaintiff was in fact disabled
as early as January 1, 1993. Nonetheless, it still deter-
mined that plaintiff was ineligible for benefits because of a
policy exclusion for pre-existing conditions.

On January 26, 1996, plaintiff filed another disability
claim with UNUM under the Wedbush policy. That claim
was also denied on April 24, 1996, on the ground that
plaintiff was not disabled under the policy. Plaintiff failed
to appeal this determination.

II. Procedural History

Plaintiff filed a First Amended Complaint on Septem- |
ber 6, 1996, alleging causes of action under the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29

sii

App. 3

U.S.C. §§ 1001, et seq., against UNUM, the Paul Revere
Life Insurance Company, and the administrators of his
disability insurance plans (hereinafter, “Sommer I”), Case
No. C 96-2407 DLJ. Defendant UNUM moved for sum-
mary judgment on three issues: (1) standard of review; (2)
scope of review; and (3) liability.

On June 17, 1997, Judge Lowell Jensen of the North-
ern District of California granted defendant’s motion. The
court concluded that UNUM did not abuse its discretion in
denying benefits under the Piper policy. As to the Wed-
bush policy, the court found that plaintiff had failed to
exhaust his administrative remedies since he did not
appeal the denial of benefits to defendant’s Quality Review
Section, as required by the terms of the policy. Plaintiff
appealed the district court’s grant of summary judgment
on August 14, 1997.

On or about August 28 and 29, 1997, plaintiff filed
new claims for disability benefits with UNUM under the
Piper and Wedbush Policies, respectively. On November
13, 1997, plaintiff commenced a new action (“Sommer II”)
before this Court, Case No. C 97-4159 SBA. In the Sommer
II complaint, plaintiff adopted the substance of his first
amended complaint from the previous action. (Pl. Exhs. D,
F) Again, UNUM moved for summary judgment. On

' The parties agree that plaintiff's claims of August 28 and 29,
1997 were denied, though neither party presents evidence of the
reasons for the denial.

2 ‘The main differences are that the new complaint contains dates
to reflect a different request for benefits and denials by UNUM;
allegations that UNUM denied benefits without conducting any review
and a prayer for punitive damages.

App. 4

March 31, 1998, this Court granted defendant’s motion on
the grounds that the same issues raised in Sommer II
were also raised in Sommer I, and Sommer I was on
appeal before the Ninth Circuit. The pending appeal
divested this Court of jurisdiction to hear the matter.
Moreover, the Court concluded that even if it had jurisdic-
tion over the matter, the issues raised in the complaint
were fully adjudicated in the prior action, and plaintiffs
claims were therefore barred by the doctrine of res judi-
cata. (Pl. Exh. J) The Court also granted a co-defendant’s
motion for Rule 11 sanctions in the amount of $1,000
against plaintiff. Plaintiff appealed this Court’s order
granting summary judgment.

On March 24, 1999, the Ninth Circuit affirmed judg-
ments in Sommer I and Sommer II. As to Sommer I, the
Ninth Circuit first held that plaintiffs claims could not
survive defendant’s motion for summary judgment even if
the claim denial were subject to a de novo standard of
review. It agreed that plaintiffs claim was barred by the
pre-existing condition provision of UNUM’s policy, and it
held that the district court did not abuse its discretion in
declining to consider plaintiffs argument that exhaustion
of administrative remedies would be futile. With respect to
Sommer II, the Ninth Circuit held that this Court properly
dismissed plaintiffs complaint on the ground of res judi-
cata.

On April 20, 2000, plaintiff filed a third complaint
against UNUM (“Sommer III”). In Sommer III, plaintiff

* See Pl. Exh. I.
* See Pl. Exh. H.

App. 5

again seeks damages for an unlawful denial of benefits
under ERISA. He alleges that he has been totally disabled
as a result of brain surgeries in 1988, and that this disabil-
ity existed during the time period he was employed by
Wedbush. He also alleges that on or about February 1996,
he filed a claim for disability benefits payable under the
terms of the Wedbush policy, and that on or about March
2000, UNUM rejected his claim.

DISCUSSION
I. Res Judicata

Defendant argues plaintiffs claim for disability
benefits under the Wedbush policy is barred by the doc-
trine of res judicata. A claim is precluded under the
doctrine of res judicata if it involves the same “claim” as a
prior suit, on which a final judgment on the merits was
reached, and it involves the same parties or their privies.
Nordhom v. Ladish Co., 9 F.3d 1402, 1404 (9th Cir. 1993);
see also Federated Department Stores, Inc. v. Moitie, 452
U.S. 394, 398 (1981) (“[a] final judgment on the merits of
an action precludes the parties or their privies from
relitigating issues that were or could have been raised in
that action”).

The Court finds there to be no genuine dispute that
each of the elements of res judicata is met in this case.
First, plaintiffs claim for disability benefits in this case is
the same claim as that asserted by plaintiff against
defendant in Sommer I and in Sommer II. Namely, it is a
claim for disability benefits under the UNUM group
disability insurance policy issued to plaintiffs former
employer, Wedbush Morgan Securities, for the period of
September 1994 through January 1996, for an allegedly

App. 6

disabling condition involving plaintiffs brain that began in
November 1988. Second, Judge Jensen granted summary
judgment to UNUM on this same claim for disability
benefits on the ground that plaintiff had failed to exhaust
his administrative remedies. Summary judgment is a final
judgment on the merits. Rand v. Rowland, 154 F.3d 952,
957 (9th Cir. 1998). This Court also granted summary
judgment to defendant on this claim, in part, on the basis
that Judge Jensen’s adjudication of this claim rendered it
res judicata. The Ninth Circuit affirmed the decisions of
Judge Jensen and this Court. And, third, plaintiff and
defendant were parties to all three cases.

Plaintiff argues that his claim in the instant case is
not barred by res judicata because he has finally ex-
hausted his remedies under the UNUM policy by appeal-
ing the initial denial of his claim for benefits. He argues
that Judge Jensen’s finding that plaintiff failed to exhaust
his administrative remedies is not a final judgment on the
merits. It is undisputed, however, that plaintiff failed to
appeal the initial denial of benefits with UNUM’s Quality
Review board within 60 days, as required by the terms of
the plan. Therefore, plaintiff had failed, and was unable,
to exhaust his administrative remedies under the disabil-
ity policy. This Court is not free to rewrite the terms of the
Wedbush policy to permit plaintiffs appeal of the initial
denial of his claim nearly four years after it was denied.
Judge Jensen’s decision granting summary judgment was

App. 7

a final judgment on the merits of the same claim that
plaintiff raises here today.”

II. Sanctions

Defendant also moves for Rule 11 sanctions.” Rule 11
imposes a duty on attorneys to certify that all pleadings
are legally tenable and well-grounded in fact. Primus
Automotive Fin. Services, Inc. v. Batarese, 115 F.3d 644,
648 (9th Cir. 1997).’ Plaintiffs counsel filed a frivolous
complaint. He should have known, after Sommer I and
Sommer II, that the claim for benefits under the Wedbush
policy was barred by the doctrine of res judicata.

Under Rule 11, the sanction imposed may consist of
“an order directing payment to the movant of some or all

* Heath v. Cleary, 708 F.2d 1376, 1380 n.4 (9th Cir. 1983), cited by
plaintiff, is inapposite. There, the Ninth Circuit observed in a footnote
that, although it found no California cases on point, “it appears that
California courts would conclude that a denial of a writ of mandamus
for failure to exhaust administrative remedies is not a decision on the
merits.” This statement is dictum concerning a matter of state law.
Plaintiffs case is governed by federal law, which holds that summary
judgment is a final decision on the merits.

* Defendant also requests sanctions under 28 U.S.C. § 1927. To
justify the imposition of sanctions under § 1927, defendant must
demonstrate subjective bad faith. New Alaska Dev. Corp. v. Guetschow,
869 F.2d 1298, 1306 (9th Cir. 1989). Defendant has not shown that the
instant complaint was filed with subjective bad faith on the part of
counsel. See id. (“[bJad faith is present when an attorney knowingly or
recklessly raises a frivolous argument or argues a meritorious claim for
the purpose of harassing an opponent”). Defendant’s request for § 1927
sanctions is therefore denied.

’ There is no dispute that defendant complied with the “safe
harbor” provisions of Rule 11. Fed. R. Civ. P. 11(c)(1)(A).

App. 8

of the reasonable attorneys’ fees and other expenses
incurred as a direct result of the violation.” Fed. R. Civ. P.
11(c)(2). However, the sanction imposed must be “limited
to what is sufficient to deter repetition of such conduct or
comparable conduct by others similarly situated.” Fed. R.
Civ. P. 11(c)(2).

Defendant requests an award of $21,000 in attorneys’
fees as a sanction, but does not provide an itemization of
these fees to enable the court to determine whether the
request is reasonable. At the hearing on these motions,
piaintiffs counsel argued that an appropriate sanction, if
the Court is inclined to impose one, is $2,500.

It is clear that the $1,000 sanction this Court imposed
on plaintiffs counsel in Sommer II was insufficient to
deter another frivolous action against the same defendant.
The Court finds that a $2,500 sanction is sufficient deter-
rence. This amount is 150% more than the sanction
imposed in Sommer II. In addition, the Court is persuaded
by plaintiffs counsel statements in court that this amount
would be an appropriate sanction. The Court finds that
this sanction should serve as a deterrent to further frivo-
lous litigation by plaintiffs counsel while not being unfair
or overly punitive to plaintiff under the circumstances
presented herein.*

* The Court denies defendant’s request for an order requiring prior
court approval before plaintiff files any further claims and lawsuits
(whether regarding the Wedbush policy or otherwise). There is no basis
on this record for such a sweeping order.

App. 9

CONCLUSION

For the foregoing reasons, iefendant’s motion for
summary judgment [# 6-1] is G ANTED and defendant’s
motion for Rule 11 sanctions [* 9-1] is GRANTED. Plain-
tiffs counsel shall pay defeiidant’s counsel twenty-five
hundred dollars ($2,500) as a sanction for filing a frivolous
complaint. Plaintiff shall make this payment on or before
March 2, 2001.

Defendant’s request for sanctions under 28 U.S.C.
§ 1927 and for a “vexatious litigant” order are both DE-
NIED.

IT IS SO ORDERED.
Dated: 1-3-01

/s/ Saundra Brown Armstrong
SAUNDRA BROWN ARMSTRONG

United States District Judge

App. 10

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA

ALEXANDER P. SOMMER, No. C 00-01368 SBA

Plaintiff, JUDGMENT
v. (Filed Jan. 8, 2001)
UNUM LIFE INSURANCE,
Defendant.

/

In accordance with the Court’s Order granting Defen-
dant’s Motion for Summary Judgment, IT IS HEREBY
ORDERED that final judgment is entered in favor of
Defendant.

IT IS SO ORDERED.
Dated: 1-8-01
/s/ S B Armstrong

SAUNDRA BROWN ARMSTRONG
United States District Judge

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0220%3A2. Public record. Not legal advice.