GREGORY L. FROST, District Judge.
This matter is before the Court for consideration of Defendant TransAm Trucking, Inc., the TransAm Trucking, Inc. Employee Benefit Plan, and FMH Benefit Services, Inc.'s ("Health Plan Defendants") Motion for Summary Judgment and for Judgment on the Pleadings (Doc. # 39), Plaintiff's Memorandum in Opposition to the Health Plan Defendants' Motion (Doc. #50), the Health Plan Defendants' Reply Memorandum in Further Support of their Motion (Doc. #53), Plaintiff's Motion for Leave to File Sur-Reply Instanter (Doc. #54), the Health Plan Defendants' Supplemental Brief on the Issue of Plaintiff's Entitlement to Additional Benefits Under ERISA ("the Health Plan Defendants' Motion for Judgment on the Administrative Record") (Doc. #72), Plaintiff's Motion for Judgment on the Administrative Record ("Plaintiff's Motion for Judgment on the Administrative Record") (Doc. #73), the Health Plan Defendants' Supplemental Memorandum in Further Support of their Motion for Summary Judgment and Motion for Judgment on the Pleadings ("the Health Plan Defendants' Motion for Summary
For the reasons that follow, the Court
Defendant TransAm Trucking, Inc. is the plan sponsor and administrator for Defendant TransAm Trucking's Employee Benefit Plan ("Plan"). The Plan is an employee welfare benefit plan and is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001, et seq. Defendant FMH Benefit Services, Inc. ("FMH") supervises the claims for the Plan. Plaintiff was a participant in the Plan and was entitled to receive certain health care benefits under it.
On January 17, 2008, Plaintiff sought treatment for her knee from Defendant Robert Steensen, M.D. who practices with Defendant Columbus Orthopaedic ("Physician Defendants"). During this office visit and prior to rendering any medical care, an employee of Columbus Orthopaedic contacted FMH to obtain a pre-certification authorization code, which was provided by FMH. Plaintiff testified that Dr. Steensen's office represented to her that her medical care would be covered as an "in-network" expense.
On February 8, 2008, Plaintiff was admitted to Mount Carmel Hospital to undergo knee surgery. In connection with the surgery, Plaintiff incurred medical bills totaling approximately $85,000.00 and submitted claims for payment of these bills to FMH. FMH paid 25% of the amount due to Mount Carmel, which is the out-of-network rate, and paid 80% of the amount due to Dr. Steensen, which is the in-network rate. Plaintiff filed this action to recover the medical costs she incurred at Mount Carmel that would have been paid if it had been considered to be an in-network provider or if the services were covered under the Plan's exception allowing in-network payment when the plan participant received in-network care at a non-network provider.
In the amended complaint (Doc. #16), Plaintiff alleged claims for relief against the Physician Defendants based upon state law, which the Physician Defendants moved to have dismissed (Doc. #30). This Court granted in part and denied in part the Physician Defendants' motion, granting it in regards to Plaintiff's claim for professional negligence and denying it in regards to Plaintiff's claims for negligent misrepresentation and promissory estoppel. (Doc. # 43.)
On May 8, 2009, the Health Plan Defendants filed the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #39) and on July 31, 2009, Plaintiff filed Plaintiff's Motion for Leave to File Sur-Reply Instanter (Doc. #54). After consideration of both of those motions, this Court issued an Opinion and Order in which it indicated that it could not appropriately decide the motions because the parties had failed to file the administrative record. (Doc. #59.) In the Opinion and Order, the Court explained that summary judgment was not the appropriate standard to utilize for review of a denial of benefits determination, it held in abeyance the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #39) and Plaintiff's Motion for Leave to File Sur-Reply Instanter, and it directed the parties to file the administrative record. The parties timely complied with the Court's order, jointly filing the administrative record. (Doc. #60) (cited as "A.R.1").
Once the administrative record was filed, the Court again reviewed the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings and Plaintiff's Motion for Leave to File Sur-Reply Instanter. On January 5, 2010, 2010 WL 99044, the Court issued an Opinion and Order in which it denied the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings, denied as moot Plaintiff's Motion for Leave to File Sur-Reply Instanter, remanded the action to the Plan administrator with instructions to conduct a timely, full and fair review of Plaintiff's benefits claim, and administratively closed the case pending completion of the administrative appeal process. (Doc. #61.) The Court also directed the parties to contact the Court within one week of the final administrative decision so that, if necessary, the case could be restored to the active docket.
On approximately April 8, 2010, the parties contacted the Court to inform it that the administrative process was complete and that FMH had upheld the denial of benefits requested by Plaintiff. The Court scheduled a status conference for April 14, 2010. (Doc. #62.) As a result of the conference, the Court restored this case to its active docket, entered judgment against Plaintiff and in favor of the Health Plan Defendants on Plaintiff's claim for relief filed under COBRA, directed the parties to supplement the administrative record filed before this Court, and set forth a schedule to accommodate the discovery and briefing of the remaining issues currently before the Court. (Doc. #63.) Those issues are (1) review of the benefits denial; (2) Plaintiff's promissory estoppel claim against the Health Plan Defendants; (3) Plaintiff's
Plaintiff's entitlement to benefits claim was originally briefed in the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #39), Plaintiff's Memorandum in Opposition to the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #50), and the Health Plan Defendants' Reply Memorandum in Further Support of their Motion (Doc. #53). As per the request of the parties, the Court currently re-examines those briefs in conjunction with the Health Plan Defendants' Motion for Judgment on the Administrative Record (Doc. #72), Plaintiff's Motion for Judgment on the Administrative Record (Doc. #73), the administrative record (Doc. #60), and the supplement to the Administrative Record (Doc. #65) (cited as "A.R.2").
Plaintiff's entitlement to benefits claim is governed by ERISA. "ERISA provides that insurance companies `shall discharge [their] duties with respect to a plan solely in the interest of the participants and beneficiaries and [] for the exclusive purpose of [] providing benefits to participants and their beneficiaries . . . in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this subchapter . . .'" Rochow v. Life Ins. Co. of N. Am., 482 F.3d 860, 865 (6th Cir.2007) (alterations in original) (quoting 29 U.S.C. § 1104(a)(1)).
It is well-settled that in reviewing an administrator's decision to deny benefits, a district court reviews the record de novo "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Marks v. Newcourt Credit Group, Inc., 342 F.3d 444, 456 (6th Cir.2003) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). "If a plan affords such discretion to an administrator or fiduciary, [the court] review[s] the denial of benefits only to determine if it was `arbitrary and capricious,' Miller v. Metro. Life Ins. Co., 925 F.2d 979, 983 (6th Cir.1991), and will uphold [its] decision if it is `rational in light of the plan's provisions,' Borda v. Hardy, Lewis, Pollard & Page, P.C., 138 F.3d 1062, 1066 (6th Cir.1998) (quotation omitted)." Id. at 456-57. Under this deferential standard of review, the benefits decision will be upheld if "`it is possible to offer a reasoned explanation, based on the evidence, for the particular outcome.'" Haus v. Bechtel Jacobs Co., LLC, 491 F.3d 557, 561-62 (6th Cir.2007) (quoting Davis v. Kentucky Fin., 887 F.2d 689, 693 (6th Cir.1989)). See also Helfman v. GE Group Life Assur. Co., 573 F.3d 383, 392 (6th Cir.2009) ("Under this standard, we uphold the administrator's decision `if it is the result of a deliberate, principled reasoning
Plaintiff argues that the Court must employ a de novo review because, at the very least the phrase upon which the denial was based is ambiguous. (Doc. #73 at 7.) Plaintiff relies on Wulf v. Quantum Chem. Corp., 26 F.3d 1368, 1376 (6th Cir.1994) for this proposition. Wulf, however, is inapposite. As the Sixth Circuit explained to a party who relied upon Wulf for a similar proposition:
Peruzzi v. Summa Med. Plan, 137 F.3d 431, 433 (6th Cir.1998). Here FMH, unlike the plan administrator in Wulf, was given the discretion to interpret the terms of the plan. Thus, the arbitrary and capricious standard of review is applicable to the instant action regardless of whether the terms of the plan are considered ambiguous.
On March 1, 2010, after this Court remanded this case to the Plan administrator for a full and fair review of Plaintiff's benefits claim, the administrator delegated the supervision of the appeal to FMH, and Plaintiff submitted to FMH a written request for commencement of the appeal process. There is no dispute that the Health Plan Defendants provided a timely review of Plaintiff's benefits claim.
Plaintiff appealed the denial of payment of benefits at the in-network rate for three medical bills incurred during her knee surgery. Two of the bills were for the services provided by Mount Carmel Hospital and one for the anesthesiologist provided by Mount Carmel. Defendants paid these medical expenses at the out-of-network rate because this facility and physician were not preferred providers under contract with the Plan. In her appeal, Plaintiff argued:
A.R.2 at 2.
The Health Plan Defendants began the review process in accordance with the Plan, which provides that a review of claims shall be provided for by the Plan administrator (or its designee, here FMH), and will not be the same person, or a subordinate of the person who initially decided the claim. A.R.1 at 46. In this instance, FMH reviewed the denial of Plaintiff's benefits claim. The review was performed and signed by Michael LaHood, who neither made the initial decision, nor is a subordinate to the person who made the initial decision.
After review, FMH reaffirmed the original denial of payment at the in-network rate for the three Mount Carmel bills. FMH based its decision on a consideration of 1) whether adequate in-network hospital facilities existed in Plaintiff's geographic area that could have provided the services at an "in-network" rate; and, finding that an adequate number existed, 2) whether the terms of the Plan's Summary Plan Description ("SPD") or the SPD's Schedule of Benefits which provided for an "in-network" rate for "non-network providers" was applicable to Plaintiff's claims.
In construing the Plan, FMH referred to the applicable language in the SPD, as well as its Schedule of Benefits, and noted that the SPD expressly notified Plaintiff that payment of covered expenses under the Plan would vary, and that those paid to healthcare providers outside the company's "PPO" network, i.e., its preferred provider network, would receive lower payment from the Plan. The decision indicated that both Mount Carmel and Mount Carmel's anesthesiologist were not in the preferred providers network.
FMH then reviewed the purpose behind the provision in the Schedule of Benefits that provided for a reimbursement of expenses at the in-network rate for "In-Network care by Non-Network Provider." FMH reviewed the Processing Guidelines, which provides directions for the processing of claims under the Plan. The administrator indicated that the section of the Processing Guidelines titled "Medical Services" offered guidance on the issue under consideration. A.R.2 at 12. In that section, there is a subsection titled "Ancillary," which states: "If a network facility was used, then the ancillary providers i.e. pathologist, radiologist, anesthesiologist should also be processed as a network provider using
Additionally, FMH pointed out that the second reference to allowing non-PPO providers to be paid in-network rates could be found in a footnote in the Schedule of Benefits, which states:
Id. FMH then explained that since the knee surgery was pre-authorized more than ten days prior to the admission and was elective on the part of Plaintiff, the Plan considered the surgery and hospital admission not life threatening.
Finally, FMH considered whether Plaintiff had adequate time to exercise her choice of hospital for her knee surgery, which was considered an elective, non-emergent surgery. FMH noted that Plaintiff had been issued an insurance card that set forth the telephone number for her to call to determine if a provider was a member of the preferred provider network. This telephone number is listed as a separate telephone number from the telephone number listed for pre-certification of a medical procedure. FMH explained that the process performed by Dr. Steensen's office, i.e., obtaining pre-certification is a separate phone number because it is an entirely separate process.
Plaintiff offers several reasons why she believes that FMH's decision was arbitrary and capricious. Plaintiff argues, first, that she offers the "only plausible interpretation" of the provision "In-Network care by a Non-Network provider":
(Doc. #73 at 11.) Plaintiff bolsters this interpretation with the fact that a "preferred provider" is defined as "[a]ny Physician, medical professional or medical facility listed in network directories under contract with the Plan." A.R.1 at 16. Consequently, Plaintiff contends that Mount Carmel, a medical facility, is properly considered a non-network provider. Plaintiff further contends that if the Court considers the phrase ambiguous, Plaintiff's interpretation of the phrase is still the only proper one on which to rely because the phrase must be strictly construed against its drafters, i.e., against the Health Plan Defendants. Plaintiff's arguments are not well taken.
Initially, the Court notes that in its review of FMH's decision, the Court is not engaging in a strict contract interpretation review of the language of the Plan and the documents governing the Plan. Instead, the Court is tasked with determining whether the administrator's decision is "rational in light of the plan's provisions." Borda, 138 F.3d at 1066. The decision is rational in light of the Plan's provisions if "it is possible to offer a reasoned explanation, based on the evidence, for the particular outcome." Davis, 887 F.2d at 693. While the Court agrees that Plaintiff's interpretation of the phrase is certainly a reasonable one, the Health Plan Defendants have offered a reasoned explanation, based upon the evidence, for their interpretation of the phrase.
That is, the Health Plan Defendants explain that the phrase "non-network provider" is provided in the Plan so as to prevent a penalty against individuals who attempted to stay in-network but were given treatment by non-network physicians regardless of that attempt. In the appeal denial, FMH explained that, "[a]s a general rule, patients have no choice over which emergency room doctor they get or who will administer anesthesia and interpret lab work or ex-rays." A.R.2 at 6. Consequently, the Plan allows in-network payment "to
As to the disagreement as to the meaning of the phrase, Plaintiff argues that the Court must construe the phrase strictly against the Plan's drafters. As support for this proposition, Plaintiff relies on two cases that are inapposite. That is, neither case upon which Plaintiff relies is a denial of benefits case subject to an arbitrary and capricious standard of review. See West v. AK Steel Corp. Ret. Accumulation Pension Plan, 484 F.3d 395, 409 (6th Cir.2007) (determining whether the Pension Plan's failure to use the "whipsaw calculation" when determining the value of the lumpsum distributions to plan participants caused a forfeiture of benefits in violation of ERISA) and Regents of the Univ. of Mich. v. Employees of Agency Rent-A-Car Hosp. Ass'n, 122 F.3d 336, 340 (6th Cir.1997) (considering whether the benefits that were due to the plan participants should be paid by the husband's insurance plan or the wife's plan). This Court cannot engage in a de novo review here. See Wulf, 26 F.3d at 1373 (in context where administrator is given discretion, the court could not engage in a "de novo-i.e., without deferring to either party's interpretation").
Moreover, the Court notes that the administrator's decision is rational in light of the plan's provisions, which provide for two specific categories of payments for services. Payment for physicians and facilities that have contracted with the Plan so as to be awarded a preferred status and those providers who are not in contractual privity with the Plan. Application of the provision at issue in the way requested by Plaintiff would permit covered individuals free reign to utilize out-of-network facilities and physicians even though in-network facilities and physicians were conveniently available to them. This result would circumvent the Plan's offer of in-network rates only to certain physicians and facilities that have contracted with the Plan to obtain preferred status.
In Plaintiff's second argument, Plaintiff contends that the FMH's denial of her benefits claim was arbitrary and capricious because the Processing Guidelines upon which the administrator relied do not reasonably interpret the Plan. (Doc. #73 at 11) ("A plan administrator can rely on internal rules or policies in construing the terms of an employee benefits plan only if these rules or policies reasonably interpret the plan. Smith v. Health Servs. of Coshocton, 314 Fed.Appx. 848, 859 (6th Cir. 2009) (citing Tiemeyer v. Cmty. Mut. Ins. Co., 8 F.3d 1094, 1100 (6th Cir.1993))"). Plaintiff contends that the Processing Guidelines do not reasonably interpret the Plan because they are not consistent with the Plan and are an attempt to modify its terms for the sole purpose of denying Plaintiff her medical benefits. This Court disagrees.
FMH explained that the phrase "non-network providers," refers only to certain types of physicians considered as ancillary providers. FMH relies on the Processing Guidelines' instruction that ancillary providers consist only of certain types of physicians, over whom a covered individual had no control in choosing. Even if this interpretation is not considered to be the most reasonable interpretation, it is rational in light of the Plan's provisions.
Third, Plaintiff requests the Court to find the Health Plan Defendants' decision arbitrary and capricious because she disagrees with FMH's conclusion that Plaintiff
In this same vein, Plaintiff argues that, instead of determining whether Mount Carmel was in-network herself, she relied upon Dr. Steensen's staff to obtain that information. In Plaintiff's appeal letter, Plaintiff contends that she was told by her surgeon's office that the benefits would be paid at the in-network rate. Plaintiff, however, submitted no evidence from the individual who allegedly spoke to FMH on her behalf. The Health Plan Defendants note that, even if Dr. Steensen's office would not voluntarily provide such a statement, Dr. Steensen and his medical practice are named as defendants in this action and Plaintiff could have obtained through discovery information regarding Plaintiff's claim that FMH had expressly and falsely represented to Dr. Steensen's staff that the hospital costs would be treated as in-network. The Health Plan Defendants reasonably argue that absent providing some evidence to FMH that verified that her doctor's office had contacted the appropriate number to determine whether Mount Carmel was an in-network facility and that the office employee had been given incorrect information, FMH was free to determine that Plaintiff failed to make every effort to stay within network. This Court agrees with that conclusion.
Fourth, Plaintiff argues that FMH's decision was arbitrary and capricious because it misinterpreted the Processing Guidelines. Plaintiff points out that in a separate section of the Processing Guidelines, the section on how a claim is to be "coded" and entered into the computer network, the Guidelines indicate that non-network charges are to be coded as in-network (code 01) "[i]f provider is network or services were done at a network facility." A.R.1 at 15. (emphasis added). Plaintiff interprets this to mean that if either the provider (Dr. Steensen) or the facility (Mount Carmel) are in-network, then the claim must be designated as in-network. While this is certainly a reasonable interpretation at first glance, when the language is put in context, it is clear that it is not the correct interpretation. That is, the language upon which Plaintiff relies specifically indicates that it refers only to a category labeled as "TA02," defined as the "Affordable Option" plan as opposed to the category listed as "TA01" and defined as the PPO plan. Under the TA01 category, there is no similar language. Thus, there are at least two interpretations of the Guidelines instruction on coding claims. The fact that FMH does not agree with Plaintiff's interpretation does not mean that the FMH's interpretation is arbitrary and capricious.
Finally, Plaintiff argues that the fact that the Health Plan Defendants are operating under an inherent conflict of interest weighs heavily in favor of finding that their decision to deny Plaintiff's benefits claim was arbitrary and capricious. Plaintiff, however, has failed to offer any evidence at all as to how this conflict of
Cochran v. Trans-General Life Ins. Co., 12 Fed.Appx. 277, 281 (6th Cir.2001).
Plaintiff here sets forth no evidence that the conflict actually affected the decision at issue here. See e.g., Peruzzi, 137 F.3d at 433 (finding that the plaintiff's evidence that defendant SummaCare's medical director conferred with two members of the plan's management, including the chief financial officer, shortly before the claim was denied was insufficient evidence that the conflict of interest affected the defendant's decision to deny benefits). Plaintiff relies merely upon the fact that the conflict exists. Thus, this factor too does not support Plaintiff's argument that FMH's decision to deny her benefits claim was arbitrary and capricious.
In summary, while Plaintiff's interpretation of the provision at issue is not unreasonable or implausible, that is not the inquiry required of this Court. This Court must review FMH's decision to determine if it was arbitrary or capricious. In doing so, this Court has reviewed in detail each stated reason for FMH's decision as well as each of Plaintiff's arguments offered to support her claim that the decision was arbitrary and capricious. In other words, the Court has not simply "rubber stamped" FMH's decision. After this analysis, the Court concludes that the decision to deny Plaintiff's benefits claim was the result of deliberate and principled reasoning; rational in light of the Plan's provisions.
Plaintiff requests attorneys fees, presenting evidence that she has been billed for $32,146.15 since the filing of this action. The amount requested by Plaintiff includes attorneys' fees for the portion of this action that this Court found in her favor and remanded to the Plan administrator. (Doc. #61) (finding the Health Plan Defendants' denial of benefits was arbitrary and capricious). The amount requested by Plaintiff also includes attorneys' fees for the portion of this action after remand. As set forth above, the Court herein determined that the Health Plan Defendants' denial of benefits was not arbitrary and capricious. Plaintiff's motion, as it currently stands, is therefore not well taken and will be denied without prejudice.
Based on the foregoing, the Court
The second issue remaining before the Court after it restored this action to its active docket is Plaintiff's promissory estoppel claim she filed against the Health Plan Defendants. Plaintiff argues that the Health Plan Defendants should be estopped from denying in-network payment to Mount Carmel Hospital for the costs associated with her knee surgery because the Health Plan Defendants represented that the treatment would be covered at the in-network rate.
The parties originally briefed this issue in the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #39), Plaintiff's Memorandum in Opposition to the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings (Doc. #50), the Health Plan Defendants' Reply Memorandum in Further Support of their Motion (Doc. #53), and Plaintiff's Motion for Leave to File Sur-Reply Instanter (Doc. # 54). As per the request of the parties, the Court currently re-examines those briefs in conjunction with the Health Plan Defendants' Motion for Summary Judgment on Plaintiff's Promissory Estoppel Claim (Doc. #78), Plaintiff's Memorandum in Opposition to the Health Plan Defendants' Motion for Summary Judgment on Plaintiff's Promissory Estoppel Claim (Doc. # 80), and the Health Plan Defendants' Reply Brief in Further Support of their Motion for Summary Judgment on Plaintiff's Promissory Estoppel Claim (Doc. #81).
Plaintiff requests that the Court permit her to file a surreply because the Health Plan Defendants addressed certain issues for the first time in their reply in support of the Health Plan Defendants' Motion for Summary Judgment and for Judgment on the Pleadings. The Court
The Clerk shall detach the surreply and place it on the docket. (Doc. #54-1). The Court has considered the surreply with the other briefs on Plaintiff's promissory estoppel claim.
Summary judgment is appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (2). The Court may therefore grant a motion for summary judgment if the nonmoving party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party's case. See Muncie Power Prods., Inc. v. United Techs. Auto., Inc., 328 F.3d 870, 873 (6th Cir.2003) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
The "party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions" of the record which demonstrate "the absence of a genuine issue of material fact."
The Health Plan Defendants argue that they are entitled to summary judgment on Plaintiff's promissory estoppel claim for two reasons. First, they contend that the claim is preempted by ERISA. Second, the Health Plan Defendants argue that even if the claim is not preempted by ERISA, it fails because Plaintiff cannot establish the elements required for such a claim. The Court finds it unnecessary to engage in a preemption analysis because even if the claim is not preempted it cannot survive summary judgment. Plaintiff has failed to establish all of the elements of a promissory claim.
Armistead v. Vernitron Corp., 944 F.2d 1287, 1298 (6th Cir.1991) (citation omitted). The Health Plan Defendants argue that Plaintiff cannot meet the fourth element. This Court agrees.
As to the fourth element, Plaintiff contends that "there is no question" that she "was not aware of the true facts concerning the amount of coverage available to her if her surgery was performed at Mount Carmel." (Doc. #80 at 5.) Plaintiff supports this argument by pointing out that the SPD does not contain a listing of the Plan's preferred providers, that at the relevant time she had never heard of the organization "PHCS," which is the entity that informs whether a provider is preferred, and that she delegated the duty to call about Mount Carmel's status to an employee of Dr. Steensen's office who called on her behalf, which is not specifically prohibited by the Plan. Plaintiff relies on the SPD language that provides:
A.R.1 at 2. As to that provision, Plaintiff states:
(Doc. #80 at 5.)
Even when viewing all of the evidence in the light most favorable to Plaintiff and drawing all reasonable inferences in her favor, her estoppel claim fails. That is, Plaintiff argues and presents evidence supporting only that she had no actual knowledge of the fact that Mount Carmel was not an in-network facility. The fourth element of her estoppel claim, however, requires that Plaintiff possessed either actual knowledge of the truth or had the means by which with reasonable diligence she could acquire the knowledge. This Sixth Circuit explains:
Trustees of the Mich. Laborers' Health Care Fund v. Gibbons, 209 F.3d 587, 593 (6th Cir.2000) (quoting Heckler v. Community Health Servs., 467 U.S. 51, 59 n. 10, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984)) (emphasis added by circuit court). See also Teamster's Local 348 Health and Welfare Fund v. Kohn Beverage Co., 749 F.2d 315, 319 (6th Cir.1984) (stating that, for estoppel to apply, representation must be made "to a party without knowledge of the facts and without the means to ascertain them"). The Gibbons court held that the defendants in that case failed to establish the fourth element of a promissory estoppel claim because, although they did not have actual knowledge of the material fact at issue, they had the means by which with reasonable diligence they could have acquired the knowledge.
Gibbons involved a collective bargaining agreement pursuant to which the defendants were required to make monthly payments into a fund overseen by the plaintiffs. In 1990, an audit of the defendants' payroll records revealed that the defendants owed unpaid contributions to the fund. The plaintiffs filed a lawsuit under ERISA to recover the unpaid amount, which resulted in a declaratory judgment against the defendants for approximately $70,000. From 1991-1994, the defendants failed to make any further payments into the fund. In 1994 an auditor contacted the defendants to request access to payroll records to perform another audit. At that time, the defendants informed the auditor of the defendants' belief that the 1991 judgment terminated the collective bargaining agreement. Although both the defendants and the plaintiff's auditor expressed an intent to check their files to determine whether defendants were party to the collective bargaining agreement, no further contact occurred until 1996 when the defendants again refused to permit an audit.
The plaintiffs filed a second action against the defendants under ERISA seeking recovery of unpaid contributions. The defendants sought to defend against plaintiffs' allegations on the basis of estoppel due to their purported reliance upon the auditor's statement that she would check her files regarding whether the judgment terminated the collective bargaining agreement. The district court denied the plaintiffs' motion for summary judgment and held in favor of the defendants on the basis of estoppel. On appeal, the Sixth Circuit overturned the decision of the district court finding that the defendants had failed to establish the fourth element of equitable estoppel. Gibbons, 209 F.3d at 592 (finding "even more substantial deficiencies in the district court's analysis" of the fourth factor of the estoppel claim
Similar to the Gibbons defendants' reliance on the plaintiff's auditor to determine the Gibbons defendants' responsibilities under the collective bargaining agreement, Plaintiff in the instant action relied upon the statements of a third party to determine her rights under the Plan. Like the Gibbons defendants too, Plaintiff had adequate means to determine the information upon which she relied on another to provide. Indeed, not only were the means available, Plaintiff had made use of these means to determine the in-network status of a surgeon less than ten months prior to the surgery at issue here. Specifically, Plaintiff contacted FMH and had a discussion with a representative who explained to her that she was required to use the telephone number for PCHS listed on her health insurance card to determine whether an orthopedic surgeon was "in-network" under the Plan. Plaintiff testified that she understood that she needed to call that number in order to determine the status of a provider.
As Gibbons makes clear, it is not enough to lack actual knowledge of the material fact at issue if the individual claiming benefit of the estoppel had a means to acquire through reasonable diligence the knowledge and failed to do so. Plaintiff has admitted, under oath, that she not only had knowledge that a means existed to determine whether Mount Carmel was "in-network," she had previously personally made use of those exact means. Under these circumstances, the Court finds that, like the Gibbons defendants' failure to review the plain language of the collective bargaining agreement, Plaintiff's failure to personally contact FMH constitutes negligence which precludes her estoppel claim. Therefore, the Court concludes that Plaintiff has failed to make a showing sufficient to establish the existence of an element that is essential to her claim. See Catrett, 477 U.S. at 322, 106 S.Ct. 2548.
According to the above analysis, the Court
In Plaintiff's Motion for Summary Judgment on her Non-Disclosure Claim, Plaintiff contends, and the Health Plan Defendants do not deny, that the Health Plan Defendants failed to provide documents that she requested within 30 days, as required by ERISA.
ERISA provides:
29 U.S.C. § 1024(b)(4).
With regard to the penalties available for failure to provide the documents, the Sixth Circuit explains:
Crosby v. Rohm & Haas Co., 480 F.3d 423, 431-32 (6th Cir.2007) (alterations in original). The Sixth Circuit has also noted that § 1132 gives "teeth" to ERISA's disclosure provisions, which, Congress enacted to "ensure that `the individual participant knows exactly where he stands with respect to the plan.'" Minadeo v. ICI Paints, 398 F.3d 751, 757 (6th Cir.2005) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 118, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) (quoting H.R.Rep. No. 93-533, p. 11 (1973))).
Whether to assess penalties and in what amount rests in the discretion of the Court. Bartling v. Fruehauf, 29 F.3d 1062, 1068 (6th Cir.1994). "[T]he statute does not require a district court to take testimony or make any particular findings before assessing a penalty." Lampkins v. Golden, 1996 WL 729136, *4, 1996 U.S.App. Lexis 33271, *11-12 (6th Cir. 1996).
On June 26, 2008, Plaintiff's counsel sent a letter via regular mail and via facsimile to FMH, requesting a copy of the SPD. FMH received the request, but made no response to Plaintiff's counsel. On July 15, 2008, Plaintiff's counsel sent a second letter to FMH requesting the SPD. On August 8, 2008, FMH sent a letter to Plaintiff's counsel notifying him that his request for Plan documents should be made to the administrator of the Plan, TransAm Trucking, Inc.
On August 14, 2008, Plaintiff's counsel sent a letter to TransAm Trucking, Inc., in which he requested not only the SPD, but also the Plan's latest annual report and administration agreement under which the Plan is established or operated. Having received no response to his letter, on September 17, 2008, Plaintiff's counsel telephoned Cheryl Burke, claims manager at FMH, to inquire as to the status of the requested documents and to renew the request.
On October 1, 2008, FMH provided Plaintiff's counsel with the SPD.
On March 5, 2009, the Health Plan Defendants' attorneys provided Plaintiff's counsel with the annual report and the administration agreement.
Based upon this uncontroverted evidence, the Court determines that on August 14, 2008, Plaintiff's attorney made a request for the SPD, the annual report, and the administration agreement to the party that is statutorily required to provide Plan documents to Plaintiff, i.e., the administrator of the Plan, TransAm Trucking, Inc. The first two letters sent by Plaintiff are not relevant to the determination of the date Plaintiff properly made the document request because liability cannot be imposed unless and until a plan participant requests information from the plan administrator. See Hiney Printing Co. v. Brantner, 243 F.3d 956, 961 (6th Cir.2001) (holding a plan administrator cannot be liable for statutory penalties if the request
The SPD was not provided to Plaintiff until October 1, 2008, 14 days past the statutory deadline. The annual report and administrative agreement were not provided to Plaintiff until March 5, 2009, 169 days past the statutory deadline.
The Health Plan Defendants first argue that Plaintiff's claims against defendants FMH and TransAm Trucking, Inc. Employment Benefit Plan must fail because they are not administrators of the Plan. Plaintiff does not dispute this argument nor could she effectively do so. Only plan administrators are liable for statutory penalties under 29 U.S.C. § 1132(c). Caffey v. UNUM Life Insurance Co., 302 F.3d 576, 584 (6th Cir.2002) (citing Hiney Printing Co., 243 F.3d 956 (6th Cir.2001)). In this instance, it is undisputed that TransAm Trucking, Inc. is the plan administrator. Consequently, neither the Plan itself nor FMH may be held liable for statutory penalties imposed under 29 U.S.C. § 1132(c).
Second, TransAm Trucking, Inc. argues that Plaintiff is not entitled to summary judgment because material issues of fact exist regarding whether Plaintiff was prejudiced in receiving documents past the statutory 30 day deadline. Prejudice, however, is not a prerequisite to the imposition of statutory penalties. See Daniel, 839 F.2d at 268 (a plaintiff may still recover statutory damages despite a lack of prejudice). The proper analysis to determine whether discretionary penalties should be imposed for a defendant's violation of the ERISA disclosure provisions is set forth properly by a sister district court:
Weddell v. Ret. Comm. of the Whirlpool Prod. Emp. Ret. Plan, 43 Employee Benefits Cas. (BNA) 1257, 2007 WL 4521509, at *13, 2007 U.S. Dist. LEXIS 92461, at *37-38 (N.D.Ohio Dec. 17, 2007) (awarding the plaintiff $60 per day for 237 days for a total of $14,220). Indeed, the Sixth Circuit has been clear as to the purpose of the disclosure provisions of ERISA, stating that "the purpose of the statute was to induce administrators to timely provide participants with requested plan documents, and to penalize failures to do so." Bartling, 29 F.3d at 1068. See also Osborn v. Knights of Columbus, 401 F.Supp.2d 822, 825-26 (N.D.Ohio 2005) ("In this circuit, however, the purpose of
There are several cases in this circuit that inform this Court's awarding of damages. See Zirnhelt v. Mich. Consol. Gas Co., 526 F.3d 282, 290-91 (6th Cir.2008) (affirming award of $100 per day from the date the plaintiff filed her complaint rather than from the date the plaintiff submitted her written request because the district court "reasonably concluded" that the defendant in good faith believed that the plaintiff had withdrawn her request based on a discussion between the defendant and the plaintiff's attorney); Bartling, 29 F.3d at 1069 (affirming $100 per day per document to be split among all plaintiffs); Gatlin, 16 Fed.Appx. at 289-90 (affirming award of $100 per day when the defendant "sent the plan documents 151 days after they were originally requested" where the delay hindered the plaintiff's ability to appeal the decision at the earliest opportunity); McGrath v. Lockheed Martin Corp., 48 Fed.Appx. 543, 557 (6th Cir.2002) (affirming district court's award of $50 for a 154 day delay where there was no evidence of bad faith and prejudice was not clearly present); Daniel v. Eaton Corp., 839 F.2d 263, 268 (6th Cir.1988) (affirming $25 a day for 278 days in situation where the failure to provide the documents was not deliberate but was based on neglect and "the record casts doubt on any claim of prejudice"), disapproved on other grounds in Brown v. Ampco-Pittsburgh Corp., 876 F.2d 546, 549 (6th Cir.1989); Logan v. UniCare Life & Health Ins., Inc., 2007 U.S. Dist. Lexis 45654, at *10-11 (E.D.Mich.2007) (finding prejudice to the plaintiff and no bad faith by defendants and awarding $110 per day for 341 days, or $34,540); Shephard v. O'Quinn, 2006 U.S. Dist. Lexis 24252, at *9-10 (E.D.Tenn.2006) (finding prejudice to the plaintiff and bad faith by the defendants and awarding $100 per day for 826 days, or $90,860.00); Mitchell v. DaimlerChrysler Corp. Salaried Emples. Ret. Plan, 2006 WL 1272566, at *9, 2006 U.S. Dist. Lexis 27459, at *25-26 (N.D.Ohio 2006) (finding lack of bad faith by the defendants, lack of prejudice to the plaintiff, and relatively short delay and awarding $50 per day for a total of $2,800); Dies v. Provident Life & Accident Ins. Co., 2006 WL 208878, at *9, 2006 U.S. Dist. Lexis 84480, at *27-28 (M.D.Tenn.2006) (awarding $25 per day per document for lengthy delays of 160 and 413 days, for a total of $28,650 "regardless whether Plaintiff was actually prejudiced").
Considering the factors relevant to a statutory penalty award, the Court determines that TransAm Trucking, Inc. did not deliberately act in bad faith in failing to fulfill its statutory duty to provide Plaintiff with the documents she properly requested, and instead, were negligent. Further, the Court concludes that it is unclear whether Plaintiff suffered prejudice based upon the administrator's failure to provide the documents. It appears that Plaintiff was certainly prejudiced to some extent by the administrator's failure to provide the SPD before Plaintiff was required to appeal the denial of her benefits claims and to file this lawsuit—Plaintiff relied heavily on the SPD during her appeal after remand, something she was unable to do during her first appeal. However, it appears equally as likely that Plaintiff suffered no prejudice because the administrator's failure to provide the annual report and administrative agreement. Plaintiff did not rely on either of these two documents in her appeal or her claims before this Court. The Court also considers the fact that, while Plaintiff properly requested the documents from the plan administrator only once, Plaintiff twice requested the documents
Plaintiff has requested the costs and attorney fees associated with this motion. The Court has discretion to award costs and attorney fees pursuant to 29 U.S.C. § 1132(g)(1). When determining whether to award attorney fees, the Court must consider the following factors:
Secretary of Dep't of Labor v. King, 775 F.2d 666, 670 (6th Cir.1985). These factors are not dispositive and "no single factor is determinative." Maurer v. Joy Techs., Inc., 212 F.3d 907, 919 (6th Cir. 2000).
Regarding the first factor, the Court has determined that the Health Plan Defendants did not act in bad faith when it failed to provide Plaintiff with the requested documents. Regarding the second and third factors, Plaintiff has not provided any information on the Health Plan Defendants ability to pay, and the statutory penalty imposed above will provide a sufficient deterrent. See Logan, 2007 U.S. Dist. LEXIS 45654 (in denying request for attorneys' fees, finding that the statutory penalty imposed was sufficient deterrent). Regarding the fourth factor, Plaintiff did not seek to provide a common benefit. And, as to the fifth factor, it is the only factor that weighs in favor of Plaintiff.
After considering all five factors in the context of this action, the Court denies Plaintiff's request for attorney fees as it related to her non-disclosure claim.
Based on the foregoing, the Court
For the reasons set forth above, the Court:
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