COLLINGS, United States Magistrate Judge.
Originally filed in the Suffolk County Superior Court in Massachusetts, this case was removed to the United States District Court for the District of Massachusetts on June 26, 2009. At the time of the removal, the operative pleading was the first amended complaint. (#7
On July 30, 2009, Liberty filed a motion to dismiss plaintiffs first amended complaint (# 8) along with a memorandum in support and attachments (# 9) which the plaintiff opposed (##10-14). After a hearing on January 22, 2010, the motion to dismiss was denied on March 11, 2010. (See Electronic Order entered 03/11/2010) Thereafter on April 1, 2010, Liberty filed an answer to the first amended complaint as well as a counterclaim alleging a claim for specific performance and/or equitable declaration and enforcement of the policy against Merigan under 20 U.S.C. § 1132(a)(3) premised upon the plaintiffs purported failure to reimburse Liberty for overpayment of LTD benefits.
At a status conference on July 15, 2010, the parties agreed that most, if not all, of the material facts in the case were undisputed. (Electronic Clerk's Notes entered 07/15/2010) Counsel were directed to file a stipulation of undisputed facts on or before the close of business on September 15, 2010, as well as memoranda of law in support of their respective positions on the question of whether the defendant acted properly in refusing to consider Merigan's application on the ground that it was untimely. (Electronic Clerk's Notes entered 07/15/2010) All of these pleadings were duly filed. (## 30, 35, 36, 37)
On October 15, 2010, Liberty filed a motion for summary judgment on the counterclaim with supporting papers. (## 31, 32, 33, 34) Merigan filed pleadings in opposition to the motion. (## 38, 39, 40) With leave having been granted, Liberty filed a reply brief on December 6, 2010. (# 42) On September 22, the motion for summary judgment on the counterclaim was allowed with respect to liability. (# 44)
On May 16, 2011, the plaintiff submitted a copy of a recent Supreme Court decision, CIGNA Corp. v. Amara, ___ U.S. ___, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011), that he contends supports his position that Liberty acted wrongly in refusing to consider his appeal. (# 43) Liberty was ordered to file a memorandum of law explaining its position on the effect of the new Supreme Court case (Electronic Procedural Order entered 09/20/2011); this brief was filed on October 3, 2011.(# 45) Merigan was granted leave to file a memorandum of law in response to Liberty's pleading, and this was submitted on October 17, 2011. (# 46)
At this juncture, the issue of whether Liberty acted properly in refusing to consider Merigan's application on the ground that it was untimely is poised for decision on the record of undisputed facts.
Unless otherwise indicated, the following facts are undisputed.
Liberty provided to UHS a Certificate of Coverage describing certain terms in the Policy as well as a draft Summary Plan Description ("SPD") describing certain terms in the Policy. (# 30 ¶ 4 and Exh. B) The Policy and the Certificate of Coverage are different documents. (# 30 ¶ 5)
UHS bore the responsibility for delivering SPDs to its employees, including Merigan. (# 30 ¶ 6) UHS did not request that Liberty draft an SPD, nor did Liberty prepare an SPD for UHS. (# 30 ¶¶ 7, 8) Since 1991, UHS has prepared and distributed SPDs to its employees describing employee benefits including, but not limited to, LTD benefits. (# 30 ¶ 9) Although UHS has no written policy memorializing the practice, the SPDs are sent to new employees via U.S. Mail to the addresses listed in UHS' payroll system. (# 30 ¶¶ 10, 11) Employees are also able to request copies from the Human Resources department or benefits office of UHS. (# 30 ¶ 10) All written requests for copies of SPDs are kept in the requesting employee's personnel file. (# 30 ¶ 10)
When benefit design changes or regulatory changes occur, SPDs are updated and reissued. (# 30 ¶ 12) Moreover, SPDs are also reissued every six years. (# 30 ¶ 12) Reissued SPDs are sent to employees via U.S. Mail to the addresses listed in UHS' payroll system. (# 30 ¶ 12) UHS does not itself send the SPDs, but rather outsources the task of printing and mailing SPDs to a vendor. (# 30 ¶ 13) The SPDs contain an acknowledgment form for employees to sign and return. (# 30 ¶ 14) In practice, few employees return the acknowledgment forms, and UHS does not follow up with employees to obtain the signed forms because it would be too onerous of an undertaking. (# 30 ¶ 15)
An SPD was prepared and reissued in full by UHS in or around April of 2003. (#30 ¶ 16 and Exh. C
The plaintiffs last day of work with UHS, due to disability, was November 29, 2003. (# 30 ¶ 22; # 32 ¶ 5; # 40 ¶ 5) The plaintiff sought LTD benefits, which Liberty paid to Merigan pursuant to the Policy for the period between February 18, 2004 and February 18, 2006. (#30 ¶ 23; # 32 ¶ 2; # 40 ¶ 2) By letter dated March 14, 2006, Liberty notified Merigan that, based on medical and occupational information, he did not qualify for further LTD benefits. (#30 ¶ 24 and Exh. D) Liberty
Merigan requested a copy of his claims file shortly after Liberty terminated his benefits in March 2006. (# 30 ¶ 25) Liberty delivered the claims file to the plaintiff as requested, including a copy of the Policy. (# 30 ¶ 25) By letter dated September 11, 2006, Merigan's attorney contacted Liberty to advise that he would be appealing Liberty's decision to cease paying benefits to the plaintiff, but that the letter was not his appeal. (# 30 ¶ 26 and Exh. E) Plaintiffs counsel thereafter sent a letter to Liberty dated February 18, 2009, purporting to constitute Merigan's appeal of Liberty's decision to cease paying him benefits. (# 30 ¶ 27 and Exh. F) By letter dated March 23, 2009, Liberty notified Merigan that his February 18, 2009 appeal was untimely and would not be considered because he did not seek review of Liberty's decision to terminate within 180 days of the March 14, 2006 notification. (# 30 ¶ 28 and Exh. G)
The issue presented in Count I of the amended complaint is whether, in not filing his appeal of a March 2006 adverse benefit decision by Liberty until February of 2009, Merigan failed to exhaust his administrative remedies prior to instituting a lawsuit seeking judicial review of that benefits termination decision. Liberty takes the position that Merigan's appeal of the decision to terminate his LTD benefits was untimely, coming as it did nearly two and a half years after the 180-day appeal period set forth in the SPD
Merigan, on the other hand, contends that the 180-day appeal is not incorporated in the Policy
The District Court determined that "CIGNA's initial descriptions of its new plan were significantly incomplete and misled its employees" and ordered that the terms of the new pension plan be reformed. Amara, 131 S.Ct. at 1872, 1875. One of the issues before the Supreme Court was "whether . . . (ERISA's recovery-of-benefits-due provision, § 502(a)(1)(B)) authorizes entry of the relief the District Court provided." Amara, 131 S.Ct. at 1871. The Supreme Court concluded that the relief afforded by the District Court was not available under § 502(a)(1)(B), but "that a different equity-related ERISA provision . . . authorizes forms of relief similar to those that the court entered. § 502(a)(3), 29 U.S.C. § 1132(a)(3)." Amara, 131 S.Ct. at 1871.
Of significance for the case at hand is the Supreme Court's discussion of the Solicitor General's argument that "the `plan' includes the disclosures that constituted the summary plan descriptions. In other words, . . . the terms of the summaries are the terms of the plan." Amara, 131 S.Ct. at 1877. The Court rejected that contention, holding:
Amara, 131 S.Ct. at 1877 (emphasis in original).
Admittedly, as Liberty argues, the facts and legal issues involved in the Amara case were quite different from those in the case at bar. In the defendant's view, "[t]he Supreme Court's discussion of the relationship
A review of recent cases reveals that courts have not limited the determination that SPDs are not part of the ERISA plan to the facts in Amara, but rather have applied the holding in differing contexts.
Shoop, 2011 WL 3665030, at *5 (further internal citations omitted).
In like manner, when determining whether a deferential or de novo standard of review should be applied in an ERISA benefits case where it was alleged that Blue Cross had failed to provide reimbursement for certain medical care that had been provided, Judge Caspar noted:
Bonanno v. Blue Cross and Blue Shield of Massachusetts, Inc., 2011 WL 4899902, *7 n. 4 (D.Mass., Oct. 14, 2011) (emphasis added); see also Strawn v. Federal Exp. Corp. Long Term Disability Plan, 2011 WL 3875625, *7 (E.D.Cal., Aug. 31, 2011) ("Defendant contends that because the Summary Plan Description is an LTD Plan document, it is clear evidence that Federal Express as the LTD Plan administrator recognizes and has given authority to the Aetna Review Committee as the appeal committee. Summary plan documents `provide communication with beneficiaries about the plan,' but `do not themselves constitute the terms of the plan. . . .' CIGNA Corp. v. Amara, ___ U.S. ___, ___, 131 S.Ct. 1866, 1878, 179 L.Ed.2d 843 (2011) (emphasis in original). Although the Summary Plan Description is not a plan document, however, it is evidence that the Aetna Review Committee was appointed as the appeals committee.").
When discussing the plaintiffs' equitable estoppel claim in Nalbandian v. Lockheed Martin Corporation, 2011 WL 3881473 (N.D.Cal., Sept. 1, 2011)
In a Seventh Circuit case, retirees alleged that CUNA Mutual Insurance Society and its health care plan for retirees violated ERISA when the plan was amended and ceased paying any portion of retirees' health care costs. Sullivan v. CUNA Mut. Ins. Society, 649 F.3d 553, 557-558 (7th Cir.2011). Addressing the plaintiffs' contention that their rights had vested and that numerous documents distributed by CUNA did not provide for a reservation of rights to amend the Plan, the Seventh Circuit wrote:
Sullivan, 649 F.3d at 557-558.
Having found "that every version of the Plan reserved the right to change required contributions or even eliminate healthcare benefits," the court affirmed the judgment for the defendants. Sullivan, 649 F.3d at 557, 559.
In this case, the SPD and the LTD Policy are separate documents. Under Amara, the terms of the SPD are not the terms of the plan. It is undisputed that the Policy does not incorporate any time limit within which an appeal from a negative decision must be taken. In these circumstances, Liberty acted improperly in refusing to consider Merigan's appeal of the termination of his LTD benefits on the grounds that the appeal was untimely.
In their various pleadings the parties have not focused on Count II of the amended complaint, a claim for attorney's fees and costs under 29 U.S.C. § 1132(g), which provides in pertinent part that "[i]n any action under this subchapter . . . by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." The First Circuit has recently had occasion to write:
Gastronomical Workers Union Local 610 & Metropolitan Hotel Ass'n Pension Fund v. Dorado Beach Hotel Corp., 617 F.3d 54, 66 (1st Cir.2010).
In light of the Court's decision on Count I of the amended complaint, the merits of Count II must be addressed.
To summarize, Liberty's decision that Merigan's appeal was untimely was incorrect as a matter of law. As a consequence, the argument that the plaintiff failed to exhaust his administrative remedies must fail. The Court specifically reserved the question of what the plaintiffs remedy should be if his application was timely. (Electronic Clerk's Notes entered 07/15/2010) The Court shall hear oral argument on this issue and on the question of whether, under the Hardt and Gastronomical Workers cases, an award of attorney's fees and costs should be made to the plaintiff under 29 U.S.C. § 1132(g)(1). The hearing is set for
On November 30, 2011, the Court issued a Memorandum and Order, Etc. (# 47) in the above-styled case. Merigan v. Liberty Life Assurance Company of Boston, 826 F.Supp.2d 388, 2011 WL 5974455 (D.Mass., Nov. 30, 2011). Unbeknownst to me, my colleague, Chief Magistrate Judge Dein, was dealing with a similar issue in the case of Tetreault v. Reliance Standard Life Insurance Company, et al, C.A. 10-11420-JLT and issued a Report and Recommendation in that case on November 28, 2011. On the basis of Judge Dein's opinion, the defendant in the instant case ("Liberty") filed Defendant's Motion for Reconsideration, Etc. (#49) on December 6, 2011. Liberty contends that Judge Dein's opinion is persuasive and that the Court should reconsider its decision in the instant case on the basis of it. The plaintiff ("Merigan") argues that Judge Dein's decision is erroneous and/or distinguishable and that the Court should not alter its decision. Since the plaintiff in each case is represented by the same attorney, the Court heard preliminary argument on Liberty's
The Supreme Court's broad language in CIGNA Corp. v. Amara, ___ U.S. ___, 131 S.Ct. 1866, 179 L.Ed.2d 843 (2011) vis-a-vis the relationship between an ERISA Plan and an ERISA Summary Plan Description (SPD) is going to be a lightening rod for litigation in the future, especially as to how the holding will be applied to other parts of ERISA Plans and SPDs which were not specifically at issue in the Amara case.
Be that as it may, the Court declines to alter its November 30th decision in the instant case.
First, the Tetreault case is distinguishable. As Judge Dein noted, in Tetreault, "the procedures detailed in the SPD [were] expressly incorporated into and made part of the written ERISA Plan." (Civil Action No. 10-11420-JLT, # 33 at 2) In the case at hand, no such incorporation by reference of the SPD into the Plan has been made.
Second, in Tetreault, the Plan at least referred to "claims procedures," (Civil Action No. 10-11420-JLT, # 33 at 5), a reference that Judge Dein found sufficient to meet the statutory requirement in 29 U.S.C. § 1133.
Title 29 U.S.C.A. § 1133.
As Liberty conceded at oral argument, the Plan in this case is absolutely silent with respect to whether a participant has a right to appeal an adverse decision terminating benefits in order obtain a "fair review," or the time frame within which such an appeal must be submitted. While it certainly is true that the ERISA statute and regulations require that the SPD contain certain detailed information with respect to claims procedures, see, e.g., 29 U.S.C. § 1022, 29 C.F.R. § 2560.503-1(b)(2), that does not mean that provisions respecting appeals need not be in the Plan. Rather, it simply means that as a "summary" (which would not by definition contain all of the provisions of the Plan), the SPD must contain a summary of those portions of the Plan which provide for a "fair review" of decisions adverse to participants.
Lastly, I respectfully disagree with Judge Dein's statement that ". . . the claims procedures are ministerial and not substantive," (Civil Action No. 10-11420-JLT, # 33 at 15), at least to the extent that Judge Dein is referring to a time within
For all of these reasons, it is ORDERED that Defendant's Motion for Reconsideration, Etc. (# 49) be, and the same hereby is, DENIED.
# 30, Exh. D at 5.
Merigan asserts that a material term of a plan cannot be informally amended or modified via a letter from a case manager; the procedures detailed in the plan and the ERISA statutory requirements must be met. See Coffin v. Bowater Inc., 501 F.3d 80, 85 (1st Cir. 2007).
Spain v. Prudential Ins. Co. of America, 2010 WL 669866, *6 (S.D.Ill., Feb. 22, 2010) (emphasis in original).
