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Kaiser Can Amend Answer to ERISA Complaint

SAN FRANCISCO (CN) - Kaiser can amend its answer to a complaint claiming it unfairly terminated a doctor's long-term disability benefits, a federal judge ruled.

Thomas Gonda, a retired cardiothoracic surgeon, applied for benefits under the Employee Retirement Income Security Act (ERISA) after leaving his job in 2006. He received benefits from 2008 to October 2010, when he was notified they would be cut off.

Gonda sued the Permanente Medical Group and its plan, the Long Term Disability Plan for Physicians, seeking benefits and damages for breach of fiduciary duty.

Kaiser then asked that U.S. District Judge Samuel Conti adopt an abuse-of-discretion standard. Conti denied the request, stating that "any grant of discretionary authority contained in the plan or the policy was rendered void by California Insurance Code."

Kaiser then sought summary judgment based on a settlement agreement with Gonda that allegedly released his claims.

Conti previously held that Kaiser must amend its answer to the complaint if it wanted to raise release as an affirmative defense, and ordered supplemental briefing to decide whether Kaiser should be allowed to do so.

Conti granted Kaiser leave to amend its answer on Monday.

"The court finds that defendants unduly delayed in raising the affirmative defense of the settlement agreement," Conti wrote in the 9-page order. "However, there is no evidence of bad faith or futility. Most importantly, the court finds that there will be no undue prejudice to Dr. Gonda."

Conti, who gave Kaiser until Friday to amend its answer, deferred consideration of the motion for summary judgment until the amended answer is filed.

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