Opinion
CIVIL ACTION No. 02-3194, SECTION: I/2
August 27, 2003
ORDER AND REASONS
Plaintiff, Steve Loria, brought this action against UNUM and his former employer, Children's Hospital, alleging a claim under ERISA for intentional interference with the receipt of benefits under an employer-sponsored long term disability insurance policy and a state law claim for intentional infliction of emotional distress. This matter is before the Court pursuant to a motion for summary judgment filed on behalf of defendant, UNUM Life Insurance Company of America ("UNUM"), seeking dismissal of plaintiff's claims brought under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., and state tort law, or, in the alternative, an order striking the plaintiffs demand for a jury trial. For the following reasons, defendant's motion for summary judgment is GRANTED.
R. Doc. No. 1, PL Complaint, ¶¶ 20-21. Since the filing of this lawsuit, the plaintiff moved to voluntarily dismiss Children's Hospital from this litigation, without prejudice, which motion was granted on March 5, 2003. R. Doc. No. 9. With respect to his ERISA claim, plaintiff alleged that "[a]s a direct result of the intentional acts of UNUM and/or Children's, Loria suffered and continued to suffer interference with receipt of benefits due under the employer sponsored plan, including loss of long term disability benefits." Id. at ¶ 20.
R. Doc. No. 15, Def. Mot. Sum. J.
FACTUAL AND PROCEDURAL BACKGROUND
UNUM issued a group long term disability insurance policy to Children's Hospital with an effective date of August 1, 1991 (the "Policy"). Under the terms of the Policy, the premiums for the Policy were fully funded by Children's Hospital. Loria was employed by Children's Hospital as a social worker beginning on February 24, 1992, and he became insured under the Policy on March 3, 1992. Loria became disabled in 1996 and on July 8, 1996, he applied for long term disability benefits under the UNUM policy. On July 24, 1996, he was approved for long term disability benefits. Loria received monthly disability benefits under the Policy until he was released by his doctor to return to work in October, 2001. On October 9, 2001, while he was still receiving disability benefits, Loria contacted UNUM by telephone and advised UNUM that he was considering returning to work full-time for an employer other than Children's Hospital. At that time, he requested information regarding continuation of coverage under the Policy in the event of a future period of disability. Notations in the Administrative Record, dated October 19, 2001, reflect that UNUM replied to Loria by telephone and left a message on Loria's answering machine. The notation is silent with respect to the substance of the message left by UNUM. Another notation dated that same day, October 19, 2001, indicates that Loria wanted to know how to convert the group Policy into an individual policy. In October, 2001, Loria was offered, and accepted, a job with the Jefferson Parish Mental Health Department ("JPMHD") as a social worker. He began working for JPMHD on October 21, 2001. It is undisputed that Loria continued to work for JPMHD in his occupation as a social worker for a period in excess of six months beginning October 21, 2001. On November 5, 2001, UNUM informed Loria that monthly benefit payments would not be approved beyond October 21, 2001, because he no longer satisfied the definition of "disabled" stated in the Policy,Between October 26, 2001, and November 13, 2001, Loria and UNUM continued to communicate regarding Loria's coverage under the Policy and UNUM representatives noted that in the event of a future disability, Loria would be covered under the Policy's "Recurrent Disability" provision. On November 13, 2001, the Administrative Record indicates that UNUM had determined Loria's coverage under that provision would continue until May 5, 2002. UNUM informed Loria of this determination by telephone on November 14, 2001.
The Administrative Record reflects that on October 22 and 23, 2001, UNUM representatives informed Loria that coverage under the "Recurrent Disability" provision of the Policy would be available so long as he returned to work in his same occupation. Rec. Doc. 15, UPCL 291. A November 5, 2001, notation in UNUM's claim file again states that Loria would be eligible for coverage under the "Recurrent Disability" provision of the Policy. Id. at 294. On November 6, 2001, Loria spoke with a UNUM representative informing her that he understood that coverage under the Policy would continue due to the "Recurrent Disability" provision, and after reviewing the provision with Loria, the UNUM representative agreed. Id. at 285.
Rec. Doc. 15, UPCL 311.
ID. at 308-09.
Throughout November and December, 2001, Loria, individually and through his attorney, contacted UNUM requesting information on how to convert the Policy into an individual policy and inquiring when premium payments would commence. On January 22, 2002, UNUM informed Loria by mail that they had determined that he would not be eligible to convert the Policy into an individual policy.
Id. at 304-06.
Id. at 314. The Policy provides that "[w]hen an individual's insurance under this policy terminates because he ends employment with the policyholder, he may obtain converted disability income coverage without medical evidence of insurability." Id. at 391. However, the Policy excepts from this conversion privilege "any individual . . . who recovers from a disability and does not return to work for the policyholder. . . ." Id. UNUM's determination with regard to the unavailability of the conversion privilege is unopposed in plaintiffs response to defendant's motion for summary judgment.
Throughout Spring, 2002, Loria continued to contact UNUM in an effort to clarify Loria's coverage under the Policy. On May 10, 2002, UNUM again wrote to plaintiff, quoting both the language of the "Recurrent Disability" provision and the "Conversion Privilege" provision, and it advised Loria that if an insured returns to work for a new employer, such an individual is no longer covered under the Policy.
On April 3, 2002, Loria again contacted UNUM inquiring about his coverage under the Policy's "Recurrent Disability" provision and the payment of premiums. Rec. Doc. No. 15, UPCL 327-28. The UNUM representative initially told Loria that he was covered under the Policy, but after checking with the UNUM legal department, the UNUM representative was told that Loria was not covered because he went to work for an employer other than Children's Hospital. See id. The representative made several attempts to contact Loria later that day in order to inform him of her error. See id.
Rec. Doc. 15, UPCL 339-40.
Loria states that when he contacted UNUM in October, 2001, he specifically informed a UNUM representative that he was considering employment with the Jefferson Parish Human Services Authority and that his primary reason for contacting UNUM was to ensure that disability coverage under the Policy would continue in the event he returned to work. Loria asserts that during these conversations, the UNUM representative assured him that coverage would continue under the "Recurrent Disability" provision of the Policy. He asserts that the UNUM representative explained to him that under the provision of the Policy, if Loria became disabled during the first six months following his return to work, there would be no elimination period; if he became disabled more than six months after returning to work, a new elimination period would apply. Loria states that prior to beginning his employment at JPMHD, the UNUM representative never explained that his coverage under the Policy would terminate after six months if he went to work for another employer. According to Loria, if the UNUM representative had done so, he would have returned to work at Children's Hospital.
Rec. Doc. No. 16, Ex. B, Affidavit of Steve Loria ("Aff. Loria"), at ¶ 5.
Id. at ¶ 7.
Id. at ¶ 8.
Id.
Id. at ¶ 9.
Id. at ¶ 10. As noted supra note 2, plaintiff has voluntarily dismissed Children's Hospital from this litigation without prejudice.
On October 21, 2002, plaintiff filed a complaint against Children's Hospital and UNUM which alleged an ERISA claim for interference with the receipt of benefits under the Policy and a state tort law claim for intentional infliction of emotional distress. Plaintiff also prayed for a trial by jury. Thereafter, defendant filed this motion for summary judgment contending: 1) that plaintiff is not covered for long term disability benefits under the plain language of the Policy; 2) that plaintiffs cause of action based on oral statements made to plaintiff regarding the scope of his coverage under an ERISA plan is not cognizable under ERISA; and 3) that ERISA preempted plaintiffs state law claim for intentional infliction of emotional distress. Alternatively, defendant moves to strike plaintiffs jury demand.
Rec. Doc. No. 1, ¶¶ 19-23.
Id. at ¶¶ 24.
LAW AND ANALYSIS
I. Summary Judgment Standard
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Once the moving party carries its burden of proving that there is no material factual dispute, the burden shifts to the nonmovant "to show that summary judgment should not he." Hopper v. Frank, 16 F.3d 92, 96 (5th Cir. 1994). While the court must consider the evidence with all reasonable inferences in the light most favorable to the nonmovant, the nonmoving party must come forward with specific facts showing that there is a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Webb v. Cardiothoracic Surgery Associates of North Texas, 1998 WL 175313, *2 (5th Cir. 1998). This requires the nonmoving party to do "more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec., 475 U.S. at 586, 106 S.Ct. at 1356. The nonmoving party must "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Auguster v. Vermillion Parish School Board, 249 F.3d 400, 402 (5th Cir. 2001). In this case, there is no genuine issue as to any material fact, and the Court finds that the defendant is entitled to a judgment as a matter of law.
II. Standard of Review in an ERISA case
Consistent with established principles of trust law, an administrator's denial of benefits under an ERISA plan is to be "reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire Rubber v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d (1989); Estate of Bratton v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa., 215 F.3d 516, 521 (5th Cir. 2000). Where the plan in question does vest the administrator with such discretion, courts will review the administrators decision under "the more deferential abuse of discretion standard." Schadler v. Anthem Life Ins. Co., 147 F.3d 388, 394 (5th Cir. 1998) (citing Barhan v. Ry-Ron, Inc., 121 F.3d 198, 201 (5th Cir. 1997)); see also Tolson v. Avondale Indus., Inc., 141 F.3d 604, 608 (5th Cir. 1998).
The Fifth Circuit Court of Appeals has set forth a two-step methodology for testing a plan administrators interpretation of a plan for abuse of discretion. Tolson, 141 F.3d at 608. Under that analysis, "a court must determine the legally correct interpretation of the plan. If the administrator did not give the plan the legally correct interpretation, the court must then determine whether the administrator's decision was an abuse of discretion." Id. To determine whether such an abuse of discretion occurred, a court must consider: 1) the uniformity of the plan administrator's interpretation; 2) whether that interpretation is consistent with a fair reading of the plan; and 3) any unanticipated costs resulting from different interpretations of the plan. See id.
However, the Fifth Circuit has held that an administrator's factual determinations underlying a decision to deny benefits are always reviewed for an abuse of discretion without regard to whether a plan administrator has discretion to interpret the terms of a plan. See Schadler, 147 F.3d at 395; see also Bratton, 215 F.3d at 522 (noting that federal courts owe due deference to an administrator's factual determinations) (citing Southern Farm Bureau Life Ins. Co. v. Moore, 993 F.2d 98, 101 (5th Cir. 1991); Pierre v. Connecticut Gen. Life Ins. Co., 932 F.2d 1552, 1562 (5th Cir. 1991)). When applying the abuse of discretion standard, courts in this Circuit analyze whether an administrator has acted arbitrarily or capriciously. Lain v. UNUM Life Ins. Co. 279 F.3d 337, 342 (5th Cir. 2002) (citations omitted). A plan administrator's factual determinations are arbitrary if they have "[no] rational connection between the known facts and the decision or between the found facts and the evidence." Lain, 279 F.3d at 342 (quoting Bellaire Gen. Hosp. v. Blue Cross Blue Shield of Mich., 97 F.3d 822, 828 (5th Cir. 1996)). A plan administrator does not abuse its discretion if its factual determinations are "based on evidence, even if disputable, that clearly supports the basis for its denial." Vega v. Nat'l Life Ins. Services, Inc., 188 F.3d 287, 299 (5th Cir. 1999). Accordingly, a court must find an abuse of discretion in the absence of "some concrete evidence in the administrative record that supports the denial of the claim. . . ." Id. at 302. When applying the abuse of discretion standard, a court's assessment of factual questions involving a denial of benefits under an ERISA plan is "constrained to the evidence before the plan administrator." Id. at 299 (citing cases).
The Fifth Circuit Court of Appeals has explained the analytic methodology applicable to ERISA cases as follows:
In sum, ERISA and its regulations contemplate a system in which the administrator makes a decision as to whether to grant or deny benefits based on the factual scenario and based on its interpretation of the relevant plan provisions. . . . If the administrator denies benefits, the claimant may bring suit under § 1132. The district court will then engage in a deferential review of the administrator's factual determinations, based on the record before the administrator. Next, depending on whether the plan expressly grants the administrator discretion in interpreting its terms, the reviewing court will review the administrator's interpretation of the plan provisions either under a de novo or an abuse of discretion standard.Schadler, 147 F.3d at 395.
UNUM's factual determinations underlying its denial of coverage under the Policy are not at issue in this case; the denial of coverage is based on undisputed facts and its interpretation of the "Recurrent Disability" provision of the Policy. It is undisputed that Loria was disabled within the meaning of the plan between 1996 and when he. returned to work for JPMHD in October, 2001. In addition, the plaintiff does not dispute that he continued to work for a period in excess of six months after the termination of his monthly benefit payments. These undisputed facts, amply supported by the administrative record in this case, formed the basis for UNUM's denial of coverage under the Policy as they interpreted it. Because these facts are uncontested, the Court does not find that these factual determinations constituted an abuse of UNUM's discretion.
With respect to UNUM's interpretation of the Policy, UNUM concedes that the Policy does not vest discretionary authority in UNUM to interpret the terms of the Plan. Accordingly, this Court will analyze the terms of the Policy under a de novo standard of review. See Wegner v. Standard Ins. Co., 129 F.3d 814, 818 (5th Cir. 1997); Sunbeam-Oster Co., Inc. Group Benefits Plan v. Whitehurst, 102 F.3d 1368, 1373 (5th Cir. 1996) (holding that where the parties agree that an ERISA plan does not give a plan administrator discretion to interpret the terms of a plan, the district court properly applied a de novo standard of review); Todd v. AIG Ins. Co., 47 F.3d 1448, 1451 (5th Cir. 1995).
Rec. Doc. No. 15, Def. Mem. in Support of Mot. for Sum. L, at 14.
Similarly, the parties agree that ERISA governs this policy. The cover page of the Policy states that it "is delivered in and governed by the laws of the governing jurisdiction and to the extent applicable by [ERISA]."
A. Plan Interpretation
Federal common law governs the construction of an ERISA plan. See Wegner, 129 F.3d at 818; Jones v. Georgia Pacific Corp. 90 F.3d 114, 116 (5th Cir. 1996); Todd, 47 F.3d at 1451. Although a court may "draw guidance from analogous state law in ascertaining the applicable federal common law," Wegner, 129 F.3d at 818 (quoting Brandon v. Travelers Ins. Co., 18 F.3d 1321, 1325 (5th Cir. 1994) (internal quotation omitted), a court may do so "only to the extent that [it] is not inconsistent with congressional policy concerns." Id. (quoting Todd, 47 F.3d at 1451) (internal quotation omitted). In construing ERISA plan provisions, courts in this Circuit "interpret the contract language `in an ordinary and popular sense as would a person of average intelligence and experience,' such that the language is given its generally accepted meaning if there is one." Id. (quoting Todd, 47 F.3d at 1451 n. 1; Jones, 90 F.3d at 116). A court applying federal common law should interpret a contract to give all of the terms meaning and it should presume that every provision was intended to accomplish some purpose. See Transitional Learning Cmty. at Galveston, Inc. v. United States Office of Pers. Mgmt. 220 F.3d 427, 431 (5th Cir. 2000) (applying federal common law contract principles to a non-ERISA insurance plan). Further, courts in this Circuit "follow the rule of contra proferentem, which dictates that `when plan terms remain ambiguous after applying ordinary principles of contract interpretation, courts are to construe them strictly in favor of the insured.'" Jones, 90 F.3d at 116 (quoting Todd, 47 F.3d at 1452); see also Wegner, 129 F.3d at 818; Ramsey v. Colonial Life Ins. Co. of America, 12 F.3d 472, 479 (5th Cir. 1994); Hansen v. Continental Ins. Co., 940 F.2d 971, 982 (5th Cir. 1991).
In interpreting the provisions of ERISA plan documents and instruments de novo, courts are guided by "settled principles of trust law" and the courts construe ERISA plans "without deferring to either party's interpretation." Bruch, 489 U.S. at 112, 109 S.Ct. at 955. "The extent of the duties and powers of a trustee is determined by the rules of law that are applicable to the situation, and not the rules that the trustee or his attorney believes to be applicable, and by the terms of the trust as the court may interpret them, and not as they may be interpreted by the trustee himself or by his attorney." Id. (quoting 3 William F. Fratcher, Scott on Trusts § 201, at 221 (1988) (emphasis in original) (internal quotation omitted). In sum, a court should "review the claim `as it would . . . any other contract claim — by looking to the terms of the plan and other manifestations of the parties' intent.'" Bratton, 215 F.3d at 522 (quoting Bruch, 489 U.S. at 112-13, 109 S.Ct. at 955). With these principles of construction in mind, the precise legal issue this Court must resolve is whether, under the terms of the Policy, plaintiffs insurance coverage under the "Recurrent Disability" provision continued after he returned to work, in his regular occupation, for an employer other than the policyholder.
B. The Recurrent Disability Provision
UNUM contends that the Policy provisions, and specifically the "Recurrent Disability" provision, are unambiguous. UNUM asserts that coverage for the plaintiff existed under that provision for six months after plaintiff began working at JPMHD. However, UNUM contends that the Policy clearly precludes coverage beyond six months because plaintiffs insurance terminated when his employment terminated and, therefore, the plaintiff was not covered under the Policy. Plaintiff argues that the language of the "Recurrent Disability" provision is ambiguous because it merely requires that an insured return to work in his regular occupation without specifying that an insured must return to work for the policyholder. Moreover, the plaintiff points to the inconsistent interpretations given by UNUM's own representatives as support for the proposition that genuine issues of material fact exist as to whether the Policy provisions are ambiguous.
See Rec. Doc. No. 16, Claimant's Statement of Genuine Issues of Material Fact
Under federal common law, the question of whether a contract is ambiguous is a question of law. . . ." Henley v. Edlemon, 297 F.3d 427, 430 (5th Cir. 2002). An ERISA plan is not ambiguous if, "when examined in [its] entirety, [it is] susceptible to only one reasonable interpretation." Weir v. Fed. Asset Disposition Assn., 123 F.3d 281, 286 (5th Cir. 1997). As the Fifth Circuit Court of Appeals has explained:
That the parties may have interpreted the plans differently is of no moment. Disagreement as to the meaning of a contract does not make it ambiguous, nor does uncertainty or lack of clarity in the language chosen by the parties. [Where] the written instrument is so worded that it can be given a certain definite legal meaning or interpretation, then it is not ambiguous, and this Court will construe the contract as a matter of law.Id. (quoting D.E. W., Inc. v. Local 93, Laborers' Int'l Union, 957 F.2d 196, 199 (5th Cir. 1992)).
Turning to the language of the Policy, the "Recurrent Disability" provision of the Policy in Section IV, entitled "Benefits," provides:
"Recurrent disability" means a disability which is related to or due to the same cause(s) of a prior disability for which a monthly benefit was payable.
A recurrent disability will be treated as part of the prior disability if, after receiving disability benefits under this policy, an insured:
1. returns to his regular occupation on a full-time basis for less than six months; and 2. performs all the material duties of his occupation.
Benefit payments will be subject to the terms of this policy for the prior disability.
If an insured returns to his regular occupation on a full-time basis for six months or more, a recurrent disability will be treated as a new period of disability. The insured must complete another elimination period.
In order to prevent overinsurance because of duplication of benefits, benefits payable under the Recurrent Disability provision will cease if benefits are payable to the insured under any other group long term disability.
Rec. Doc. No. 15, UPCL 396 (emphasis added). As the issue is presented by the parties in this case, the question is not whether a future period of disability suffered by the plaintiff would constitute a "recurrent disability" as defined in this provision. Nor is there any dispute between the parties that plaintiff has returned to work full-time in this regular occupation. Rather, the question raised by defendant's motion for summary judgment is, assuming a future period of disability is a recurrent disability, i.e. "related to or due to the same cause(s) of a prior disability," whether coverage exists under the Policy beyond six months after plaintiffs return to work for an employer other than the policyholder.
Under the plain language of this provision, if an "insured" returns to his regular occupation less than six months, a recurrent disability is treated as "part of the prior disability." In such a case, the provision further provides that "[b]enefit payments will be subject to the terms of this policy for the prior disability." If, however, an "insured" returns his regular occupation for six months or more, a recurrent disability "will be treated as a new period of disability." In that case, the following sentence provides, "[t]he insured must complete another elimination period."
The Policy defines the "Elimination Period" as "a period of consecutive days of disability for which no benefit is payable." Id. at 404. According to the Policy Specifications, the elimination period is 180 days. Id. at 407.
The "Recurrent Disability" provision does not define "insured." Instead, it simply assumes coverage exists and it sets forth rules as to how recurrent disabilities are treated depending on when they recur. Construing this provision in its ordinary sense, if an individual is "insured," the "Recurrent Disability" plainly applies, and the time at which a disability recurs governs whether that disability is treated as a continuous period of disability, i.e. "part of the prior disability," or whether's it is treated as a "new period of disability," such that a new 180 day elimination period applies. If, on the other hand, a claimant is not "insured" within the terms of the Policy, the provision does not have any effect; the provision does not apply to an individual who is not "insured." Put simply, the question of how a recurring disability is treated under the Recurrent Disability provision is secondary to the requirement that insurance coverage exist under the Policy.
To determine when a person is "insured," one first turns to the Policy, Section II, entitled "Definitions." Under the Definitions section of the Policy, an "Insured" means "an employee insured under this policy." In turn, the Policy defines an "Employee" as "a person in active employment with the employer." The definition of "Active Employment" requires, inter alia, that the "employee" work for the "employer" Finally, the Policy defines the "Employer" as "the policyholder [including subsidiaries and affiliates]." Simply put, an "insured" is an employee, "insured under this policy" who is actively employed for the policyholder.
Id. at 401-404
Id. at 403 (emphasis added).
Id. at 404 (emphasis added)
Id. (emphasis added).
Id. at 403.
To determine when an employee is "insured under this policy," one turns to the Policy, Section V, entitled "Termination Provisions." Under the provision entitled "Termination of Employee's Insurance" ("Termination Provision"), the Policy states:
Id. at 391-92
An employee will cease to be insured on the earliest of the following dates:
. . .
5. the date employment terminates. Cessation of active employment will be deemed termination of employment, except:
a. the insurance will be continued for a disabled employee during:
I. the elimination period; and
ii. while benefits are being paid.
Id. at 392.
Taken as a whole, the language of this provision unambiguously provides that insurance terminates when employment terminates, with the exception that if an employee is disabled and either completing the 180 day elimination period or collecting monthly benefit payments, insurance coverage "will be continued." Therefore, under the clear terms of the Policy, insurance coverage exists in three distinct situations. First, an individual is "insured" if he or she is in active employment for the policyholder; second, an individual is "insured" during the 180 day elimination period if he or she is disabled; and third, an individual is "insured" if he or she is disabled and benefit payments are being paid.
UNUM contends that at the time Loria accepted the position with JPMHD, his insurance coverage terminated pursuant to the Termination Provision because he was no longer disabled and, therefore, no longer eligible for benefit payments. Furthermore, UNUM argues that plaintiff was not an employee of the policyholder in active employment. The Court agrees.
It is clear that in 1996, at the time plaintiff originally became disabled, he ceased to be in "active employment" as that term is defined in the Policy and, under the Termination Provision, "cessation of active employment [is] deemed termination of employment." At that time, his insurance coverage would have "ceased" but for the specific exception in the Termination Provision that extends insurance coverage "during the elimination period; and . . . while benefits are being paid." However, once the plaintiff accepted employment and began working at JPMHD, he no longer met the definition of an "insured" and he no longer fell within the specific exception for the continuation of insurance during a period of disability. Accordingly, under the plain language of the Termination Provision, plaintiff "cease[d] to be insured" when he returned to work for JPMHD.
Id.
Id.
The question in this case, however, is whether despite the termination of plaintiff's insurance under the Termination Provision for any new claim of disability, plaintiff nevertheless remained "insured" under the "Recurrent Disability" provision of the Policy. To reiterate, that provision provides in part:
A recurrent disability will be treated as part of the prior disability if, after receiving disability benefits under this policy, an insured'.
1. returns to his regular occupation on a full-time basis for less than six months; and
2. performs all the material duties of his occupation.
Benefit payments will be subject to the terms of this policy for the prior disability.
If an insured returns to his regular occupation on a full-time basis for six months or more, a recurrent disability will be treated as a new period of disability. The insured must complete another elimination period.
In order to prevent overinsurance because of duplication of benefits, benefits payable under the Recurrent Disability provision will cease if benefits are payable to the insured under any other group long term disability.
Defendant interprets the above-quoted provision as meaning that had plaintiffs disability recurred within six months of returning to his regular occupation for any employer, coverage under the Recurrent Disability provision would have continued notwithstanding that plaintiffs insurance terminated under the Termination Provision. UNUM argues that this is because in such a case, the recurrent disability is treated as "part of the prior disability." With respect to a disability that recurs six months or more after returning to work, UNUM takes a much different view. In that case, UNUM asserts, the plaintiff is not entitled to benefits because plaintiffs insurance coverage ceased under the Termination Provision. This, UNUM contends, is because in such a case a recurring disability provision is treated as a new claim of disability subject to the eligibility requirements of all new claims, i.e. eligibility due to the existence of coverage. Plaintiff, on the other hand, argues that the Recurrent Disability provision requires only that plaintiff return to his regular occupation which plaintiff did. Therefore, plaintiff asserts, coverage continues and if plaintiff's disability recurs after six months, plaintiff is still covered under the Policy, the only consequence being that plaintiff would then be required to complete another 180 day elimination period before benefit payments resume.
The Court rejects both the defendant's and the plaintiffs interpretation of this provision as inconsistent with the plain meaning of the terms of the Policy. See Bruch, 489 U.S. at 112, 109 So. Ct. at 955 (noting that under a de novo standard of review, courts construe contracts "without deferring to either party's interpretation); Weir, 123 F.3d at286 ("That the parties may have interpreted the plans differently is of no moment."). While the Court agrees with the plaintiffs interpretation of the provision regarding its effect if one is insured under the Policy, i.e. that an insured whose disability recurs six months or more after an insured returns to work is subject only to a new elimination period, plaintiff ignores that the Policy does clearly define an "insured" as an employee in active employment with the policyholder.
UNUM makes a similar error in interpretation. Under its view, the classification of how a recurrent disability is treated under the provision, i.e, as either a "part of the prior disability" or a "new period of disability," defines whether insurance coverage exists. Such a reading is inconsistent with the Termination Provision which unambiguously provides that "an employee will cease to be insured . . . the date employment terminates" unless that employee is disabled. This Court can find no language in the Recurrent Disability provision that suggests that insurance coverage under that provision does not cease when insurance coverage under the entire Policy ceased. To the contrary, the last paragraph of the "Recurrent Disability" provision itself makes clear that the provision is a benefits provision, not an eligibility or termination of insurance provision. Cf. Nance v. Sun Life Assurance Co. of Canada, 294 F.3d 1263, 1272 (10th Cir. 2002) (construing a similar provision and distinguishing between continuation of benefits and continuation of coverage). A contrary construction would result in the anomalous situation where one who is not an "insured" under the Policy is nevertheless entitled to benefits under the policy. See id. As the Ninth Circuit Court of Appeals has observed when presented with similar facts:
. . . [I]t seems unlikely at best that appellee would draft an insurance policy that covered an employee even though (1) his disability ended, thereby allowing him (2) to become employed full-time at a location other than the one through which the employee received his insurance in the first place.Deegan v. Continental Casualty Co., 167 F.3d 502, 508 (9th Cir. 1999). The Ninth Circuit Court of Appeals' reasoning is particularly apt where, as here, the premiums for the Policy are fully funded by Children's Hospital, plaintiffs former employer.
Moreover, a "Recurring Disability" is defined in that provision as "a disability which is related to or due to the same cause(s) of a prior disability for which a monthly benefit was payable." Under the Definitions section of the Policy, the Policy states, inter alia," `Disability' and `disabled' mean that because of injury or sickness . . . the insured cannot perform each of the material duties of his regular occupation." Under this definition, a disability contains two distinct components which are the presence of an "injury" or "sickness" and the inability to work. The Definitions also state, "`[s]ickness' means illness or disease . . . The disability must begin while the employee is insured under this policy."
Rec. Doc. No. 15, UPCL401.
Id.
The definition of "sickness" itself distinguishes between a disability and the underlying illness or condition causing the disability. Therefore, "it is not enough that the disability be caused by an occurrence while the employee is insured; the disability itself must begin while the employee is insured." Nance, 294 F.3d at 1270 (construing a virtually identical definition of "sickness").
Defendants also raise the argument that the plaintiff is not covered under the Policy because he was ineligible to convert the group policy into an individual policy. While the Court need not address this argument for purposes of this summary judgment, the Court notes that the scope of coverage afforded by the Policy itself is unaffected by the availability or unavailability of the conversion privilege. See Ramsey v. Colonial Life Ins. Co. of America, 12 F.3d 472, 479 (5th Cir. 1994) (holding that where original coverage under a group policy continues, a conversion policy is unnecessary).
Although the Court notes that the "Recurring Disability" provision is not a model of drafting precision, the terms of the Policy as a whole plainly evince an intent that coverage under the Policy terminates when employment or disability payments terminate. Moreover, a contrary construction would not give the definitions and the Termination provisions their intended effect. Accordingly, after reviewing the Policy in its entirety, this court finds that the Policy is not ambiguous and that the plain terms of the Policy preclude coverage for the plaintiff. The plaintiff has not demonstrated any genuine issue of material fact with respect to his entitlement for coverage under the Policy and defendant is therefore entitled to a judgment as a matter of law on this issue.
III. Equitable Estoppel
The defendant has also moved for summary judgment on the ground that under Fifth Circuit law, the plaintiff cannot recover under ERISA based on oral statements made to the plaintiff by the defendant's agents. The law is well-settled in this circuit that an equitable estoppel claim based on oral modifications to an ERISA plan are not cognizable under ERISA. See Rodrigue v. Western Southern Life Ins. Co., 948 F.2d 969,971-72 (5th Cir. 1991) (rejecting equitable estoppel claim where written provisions excluded coverage); Degan v. Ford Motor Co., 869 F.2d 889, 895 (5th Cir. 1989) (holding that claims of promissory estoppel are not cognizable in lawsuits seeking to enforce rights under ERISA); Cefalu v. B.F. Goodrich Co., 871 F.2d 1290, 1296 (5th Cir. 1989). The U.S. Eleventh Circuit Court of Appeals, which also recognizes that claimants cannot seek to enforce oral amendments or modifications to an ERISA plan, see e.g., Nachwalter v. Christie, 805 F.2d 956, 960 (11th Cir. 1986), has held that a federal common law rule of equitable estoppel maybe applied where oral statements made by a plan administrator to a plan participant involved interpretations of ambiguous plan provisions rather than modifications to the plan. See Kane v. Aetna Life Ins. Co, 893 F.2d 1283 (11th Cir. 1990). The Fifth Circuit Court of Appeals has neither accepted nor rejected this doctrine. See Williams v. Bridgestone/Firestone Inc., 954 F.2d 1070, 1073 (5th Cir. 1992) (declining to decide whether to adopt equitable estoppel in cases involving oral interpretations of ERISA plans); Wright v. Anthem Life Ins. Co. of Indiana, 2000 WL 870807 (N.D.Miss.) (noting that application of equitable estoppel involving oral interpretations of ERISA plans is an open question in the Fifth Circuit). In Williams, the Fifth Circuit Court of Appeals noted that "[t]he Eleventh Circuit has made clear that Kane only comes into play when the terms of a plan are ambiguous [and where] communications constituted an interpretation of that ambiguity." Williams, 954 F.2d at 1073;
Viewing the facts in the light most favorable to the plaintiff, the Administrative Record in this case shows that on several occasions, UNUM representatives misinformed the plaintiff about his coverage under the Policy. Moreover, the plaintiff has presented evidence showing that he relied on UNUM's interpretation of the Policy in making the decision to accept employment at JPMHD. While the plaintiff does present a compelling and sympathetic estoppel-based argument for fashioning federal common law to hold UNUM accountable for their erroneous interpretations of the Policy, this Court is of the opinion that, as explained above, the Policy is not ambiguous. The Fifth Circuit has made clear that where an ERISA plan is not ambiguous, oral assurances by plan administrators of benefits on which a plaintiff relies to his detriment cannot be the basis of a claim challenging a denial of benefits under ERISA. See Rodrigue, 948 F.2d at 971; Cefalu, 871 F.2d at 1296-97. Therefore, as a matter of law, the plaintiff cannot prevail on a theory of equitable estoppel. Accordingly, the defendant is entitled to a summary judgment on this issue.
IV. ERISA Preemption of Plaintiffs State Law Claim
Defendant moves for summary judgment on the ground that plaintiffs claim for intentional infliction of emotional distress is preempted by ERISA. Section 1144(a) of the ERISA statute states that "the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. . . ." 29 U.S.C. § 1144(a)(2003). The Supreme Court has held that a "law `relates to' an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan." Shaw v. Delta Air lines, 463 U.S. 85, 96-97, 103 S.Ct. 2890, 2900 (1983). The Supreme Court has also held that common law contract and tort claims based upon laws of general application are preempted by ERISA when they relate to an employee benefit plan. See Metropolitan Life Ins. Co v. Taylor, 481 U.S. 58, 62-63, 107 S.Ct. 1542, 1546 (1987). Therefore, for purposes of ERISA preemption, "a state's law includes its decisional law." Light v. Blue Cross Blue Shield of Alabama, Inc., 790 F.2d 1247, 1249 (5th Cir. 1986). When beneficiaries bring such claims in lawsuits seeking to recover benefits under a plan regulated by ERISA, those claims are preempted and a claimant's exclusive remedy is the civil enforcement provision of ERISA. See Hansen, 940 F.2d at 979; Degan, 869 F.2d at 893. Moreover, the Fifth Circuit Court of Appeals has specifically held that a state law claim of intentional infliction of emotional distress based upon an alleged wrongful denial of benefits under an ERISA plan is preempted where there is a "direct connection between the state laws and the employment benefit plan." Light, 790 F.2d at 1249.
In this case, the plaintiffs claim for intentional infliction of emotional distress arises directly from defendant's denial of coverage under the Policy. Because there is a direct connection between plaintiffs state law cause of action and his denial of benefits under an ERISA regulated plan, plaintiffs state law claim is preempted.
Rec. Doc. No. 1, ¶ 22. Plaintiffs complaint states that the same facts alleged in support of his ERISA claim also "constitute a violation of Louisiana tort law." Id.
Accordingly, for the above and foregoing reasons,
IT IS ORDERED that the motion of defendant, UNUM Life Insurance Company of America, for summary judgment is GRANTED, dismissing plaintiffs' claims with prejudice and at plaintiffs' cost.
Due to the disposition of this case granting defendant's motion for summary judgment, the Court need not address defendant's alternative motion to strike plaintiffs demand for jury trial.
New Orleans, Louisiana
.