Opinion
Civil Action 00-235-AH-L
January 16, 2001
ORDER
This matter is before the Court on three separate motions for Summary Judgment, filed respectively by co-Defendant Aetna Life Insurance Co. ("Aetna") (Doc. 20), Plaintiff Delisa M. Baker, as individual and spouse of Gary L. Baker, deceased ("Baker") (Doc. 31), and by co-Defendant Marriott International Inc., d/b/a Marriott's Grand Hotel ("Marriott) (Doc. 33). Subsequent to this Court's Order on July 7, 2000 (Doc. 16), which struck Plaintiff's state law claims, Plaintiff's claim for punitive or extra-contractua damages and Plaintiff's demand for a jury trial, there remains only one claim pending before the Court. As stated in Plaintiff's last amended complaint ("First Amended Complaint") (Doc. 17), the Court must determine whether or not "Defendants have wrongfully denied [Plaintiff's Life Insurance] claims. " First Amended Complaint, p. 3 (Doc. 17).
This action arises out of the alleged wrongful denial of a claim for life benefits under an employee benefit plan as defined by the Employee Retirement Income Security Act of 1974 ("ERISA"). This Court has jurisdiction to decide this matter pursuant to 29 U.S.C. § 1132 (e). To decide whether a wrongful denial of alleged life-insurance benefits did or did not take place, the Court must examine the two remaining issues the parties identified in their Joint Pretrial Order, filed January 9, 2001: " 1. Whether Defendants acted improperly in refusing to approve Plaintiff's spouse's "late enrollee' application for life benefits for himself and for Plaintiff under a certain ERISA plan offered through Plaintiff's spouse's employment with Defendant Marriott. 2. Whether Defendants acted improperly in denying Plaintiff's later claim for life benefits under the ERISA plan." Joint Pretrial Order, p. 5. Having found no genuine issues of material fact remaining after reviewing the parties' extensive briefs, and for the reasons set forth below, each Defendant's Motion for Summary Judgment is GRANTED, and Plaintiff's Motion for Summary Judgment is DENIED.
I. Facts
Gary L. Baker, whose surviving spouse is the Plaintiff in this action, worked at Marriott's Grand Hotel in Point Clear, Alabama, as a Bellman from September 10, 1984, until his death on July 29, 1999. The hotel offered participation in a group term life insurance plan to those employees that qualified under Marriott International, Inc.'s eligibility requirements, and that were also approved for benefits by the Plan's insurer (the "Plan"). Since 1995, Marriott has contracted with Aetna to insure Marriott's group term life insurance benefits. The Plan gives Aetna "sole, absolute and final discretion to determine eligibility for benefits, to construe the terms of the policy, and to determine eligibility for late enrollment." Agreed Facts, Joint Pretrial Order, p. 2.
Mr. Baker, at the time he first became employed by Marriott, was eligible to elect participation in the Plan without completion of a Statement of Health. Since he did not elect to participate in the Plan at that time, any later election would have been as a "late enrollee, " and subject to the Plan's requirement for late enrollment. Id. Mr. Baker met the employment requirements to seek late enrollment in the Plan in 1999, and properly submitted to Aetna an application entitled "Statement of Health for Group Term Life or Survivor Income Protection" ("Baker Statement of Health") dated January 7, 1999, which both Plaintiff and Mr. Baker signed. See "Plaintiff's Proposed Determinations of Undisputed Facts" (Doc. 32) (The Baker Statement of Health is contained within that submission and in various submissions throughout the record).
Based upon this submitted information, Aetna applied its underwriting guidelines and determined that both Mr. Baker and Plaintiff were ineligible for life benefit coverage under the Plan, due to their respective height and weight ratios. The Baker Statement of Health, completed and signed by Mr. Baker and Plaintiff, puts Mr. Baker's height at five feet, 10 inches tall, with a weight of three hundred five pounds. See Baker Statement of Health, p. 2. The submission reflects Mr. Baker's spouse to be five feet, six inches tall, with a weight of two hundred seventy five pounds. Id. Additionally, Mr. Baker checked the "Yes" box in response to each of the following three questions: 1) "Within the past 10 years, has there been any disease/impairment of or treatment for any individual for any of the following" (Blood Pressure/ Hypertension box checked), 2) Whether any individual was "currently taking medication, " and 3) Whether "he had been examined by, consulted with, or received medical treatment from any physician or practitioner for anything other than minor illnesses such as a cold, flu, etc?" Id., p. 1-2. Mr. Baker further wrote out in longhand on page two of the application that he had been diagnosed with hypertension, which had begun on 8/19/96. Id., p. 2. He stated that he was treated with the medicines Tiazac and Accupril, and wrote "still take pills daily" under the "Full Recovery Date" portion. Id.
On February 12, 1999, Aetna issued a letter to Gary L. Baker at his residence, marked personal and confidential, notifying Mr. Baker and Plaintiff of Aetna's underwriting decision to deny approval of Mr. Baker's application for group term life benefit coverage for himself and Plaintiff through Marriott's employee benefit plan. It is not disputed that Mr. Baker received this letter and understood its contents. Aetna also formally advised Marriott of its underwriting decision by means of a weekly status report submitted to Marriott in mid-February, 1999, covering the period beginning 2/12/99 and ending 2/18/99. The report indicates the denial of life benefit coverage for Mr. Baker on 2/12/99. Prior to the denied request for benefits that is the subject of Plaintiff's First Amended Complaint, Defendants received no inquiries or requests for reconsideration from Mr. Baker or Plaintiff with respect to Aetna's decision to deny them participation in the plan.
As the result of an admitted clerical input error in Marriott's payroll system, Aetna's denial of coverage was erroneously coded in February, 1999, as commencement of coverage, and benefit premiums in the amount of $3.70 bi-weekly were deducted from Mr. Baker's paychecks. If benefits coverage for the Bakers had been approved by Aetna, which all parties agree was not the case, the amounts, representing $1.85 per week, would have provided coverage at four times Mr. Baker's annual base salary of $11,000 for a total benefit of $44,000. Though the Bakers had been informed by Aetna through the letter of February 12, 1999, that coverage had been denied, Mr. Baker executed a Marriott Beneficiary Form identifying his spouse Delisa M. Baker as the beneficiary of life benefits on March 4, 1999. As a result of the same aforementioned input error, a confirmation of life term benefits statement, dated March 8, 1999, was automatically produced by Marriott indicating that group term life coverage for the Bakers had been added effective February 12, 1999.
For the Plan years 1995 through 1997, the same multi-year premium rates were in effect for employee life insurance benefits for all Marriott employees who were eligible, enrolled and were approved by Aetna for participation in the Plan. For the Plan years 1998 and 1999, Aetna developed, in July of 1997, one set of premium rates for eligible and approved Marriott employees. Thus, the premium rates that would have been applicable to Mr. Baker (had he been eligible for benefits under the Plan) were developed and in place prior to the Bakers' submission of the Baker Statement of Health to Aetna. The premium rates are age-bracketed and are the same for all employees in the specified age groups. Further, the development of group premium rates for Marriott's employees is unrelated to whether life insurance benefits exist for any particular Marriott employee. The decision by Aetna whether to approve or deny the issuance of benefits based upon the eligibility of a particular employee is completely unrelated to the establishment or modifications of the Plan's premium rates.
Marriott discovered the error in its payroll system approximately eight months later, subsequently refunded the full amount of the premiums deducted from Mr. Baker's paycheck, and corrected the Plan's date of effective denial as to Mr. Baker. Prior to Marriott's discovery of the clerical error, Mr. Baker died of natural causes on July 29, 1999. Based upon its prior determination that Mr. Baker was ineligible for term life benefits, and was therefore not a Plan participant, Aetna denied Plaintiff's claim for life benefits after Mr. Baker's death. On July 31, 2000, Plaintiff served a single-count First Amended Complaint against Aetna and Marriott, asserting the wrongful denial of her claim for life benefits under the Plan.
On October 28, 1999, Marriott sent a check for $38.85 to "Gary L. Baker", representing the refunded premiums deducted from his paychecks from February 26, 1999 through July 30, 1999. Mr. Baker's spouse, Plaintiff in this action, did not negotiate the refund check.
II. Summary Judgment Standard
Federal Rule of Civil Procedure 56(c) provides that summary judgment shall be granted: "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 judgment as a matter of law." Fed.R.Civ.P. 56(c). A factual dispute is "genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is "material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Technologies. Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986)); accord Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir. 1992).
The basic issue before the Court on a motion for summary judgment is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." See Anderson, 477 U.S. at 251-252. The moving party has the burden of showing the absence of a genuine issue as to any material fact, and in deciding whether the movant has met this burden the Court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the nonmoving party. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970); see also Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B B Cash Grocery Store. Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citing Mercantile Bank Trust v. Fidelity Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985)).
Once the movant satisfies their initial burden under Rule 56(c) of demonstrating the absence of a genuine issue of material fact, as the movant has done in this case, the burden shifts to the nonmovant to "come forward with "specific facts showing that there is a genuine issue for trial.'" See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)). Otherwise stated, the nonmovant must "demonstrate that there is indeed a material issue of fact that precludes summary judgment." See Clark v. Coats Clark. Inc, 929 F.2d 604, 608 (11th Cir. 1991). "A mere "scintilla' of evidence supporting the [nonmoving] party's position will not suffice; there must be enough of a showing that the jury could reasonably find for that party." Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citation omitted). "[T]he nonmoving party may avail itself of all facts and justifiable inferences in the record taken as a whole." Tipton, 965 F.2d at 998 (citing United States v. Diebold. Inc., 369 U.S. 654, 655 (1962)). ""The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor."' Tipton, 965 F.2d at 999 (quoting Anderson, 477 U.S. at 255). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial. " Matsushita, 475 U.S. at 587 (internal quotation and citation omitted).
III. Aetna's Denial of Benefits
Plaintiff claims that Defendants Aetna and Marriott wrongfully denied her claim for life benefits following the death of her spouse. Putting aside for the moment the extent of Marriott's involvement in this matter as administrator of the Plan, all the parties agree that Aetna retained sole, absolute and final discretion to determine eligibility for participation as well as benefits and to construe the terms of the Plan. Pursuant to Aetna's requirements for late enrollees, the Bakers submitted the Baker Statement of Health, and through its underwriting policies Aetna determined that neither Mr. Baker nor Plaintiff was eligible for coverage under the Plan due to their respective height and weight ratios.
It is important to note that the sole count in Plaintiff's First Amended Complaint does not dispute Aetna's absolute discretion to make a decision which denies coverage, nor does it attack the substance of Aetna's actual decision to deny the Bakers' request for benefits on its merits. Plaintiff has at no point in its pleadings or briefs disputed Aetna's assertion, presented on page 11 of Aetna's Brief in Support of its Motion for Summary Judgment (Doc. 21). that Mr. Baker's request for participation was never approved by any entity, agent or employee possessing the power to bind Aetna under an enforceable ERISA benefits plan. Accordingly, pursuant to local rule 7.2, Plaintiff is deemed to admit that there exists no genuine issue as to any material fact concerning Aetna's denial of coverage as to the Bakers. It is not disputed that Aetna affirmatively and explicitly disclosed its denial of eligibility to both the Bakers and to the Plan's administrator Marriott, and that no follow-up requests for reconsideration were ever submitted to Aetna.
In her Response to Defendant Aetna's Motion for Summary Judgment (Doc. 23), Plaintiff argues unconvincingly that because "Aetna established the premium rate for employee life insurance coverage for Mr. Baker, " Aetna has therefore "acknowledged the existence of life insurance coverage for Mr. Baker under the Plan by establishing his premium rate." Plaintiff's Response, p. 3. On the contrary, the Court finds that Aetna explicitly informed both the Bakers and Marriott of its decision to deny coverage, hardly the kind of legal acknowledgment that must exist for a court to enforce an agreement between contracting parties. Additionally, the Court has found that the premium rates were set for each insurable age group prior to the submission of Mr. Baker's application for coverage, rendering the notion that Aetna devised premium rates specifically Mr. Baker untenable on its face.
The rule states that "if it is contended that there are material factual disputes, [the party opposing the Motion for Summary Judgment] shall point out the disputed facts . . . [and] Failure to do so will be considered an admission that no material factual dispute exists." Local Rule 7.2(b), U.S. District Court for the Southern District of Alabama. (West 2000).
Sympathetic as the Court may be to the admitted misrepresentation of coverage by Marriott, whether based on clerical error or not, this Court cannot compel a defendant insurance company to provide benefits for an employee that that insurance company explicitly and legally determined was ineligible for benefits. As Plaintiff does not dispute the correctness, soundness or legal sufficiency of Aetna's initial decision to deny the Bakers coverage, and has not cited any authority to suggest that the Court should create an agreement for the two parties, this Court
While the Parties' Joint Pretrial Order purports to presents as a triable issue "Whether Defendants acted improperly in refusing to approve Plaintiff's spouse's "late enrollee' application for life benefits, " no such claim is in fact before the Court. See Plaintiff's First Amended Complaint. Thus, what appears on its face to be a factual dispute merely touches upon the purely legal question as to whether Aetna had the sole and exclusive power to deny coverage for Mr. Baker.' The Court finds as a factual matter, based upon the undisputed evidence contained in the record, that Aetna did in fact possess such power, and further, that the propriety of Aetna's exercise of that power is not presented in any claim before this Court. As Defendant Marriott correctly notes in its Brief in Opposition to Plaintiff's Motion for Summary Judgment, the Court's scheduling Order of May 9, 2000, sets the deadline for amending the pleadings at August 31, 2000. Plaintiff is therefore estopped from presenting claims, not previously pled, through any subsequent briefs or filings, including the Joint Pretrial Order.
The Court is not here suggesting that it could impose an agreement, and in fact gravely doubts that such a broad exercise of the Court's equitable powers would comport with the limited grant of jurisdiction contemplated by Congress to adjudicate disputes relating to ERISA plans, has no choice but to evaluate Aetna's ultimate decision to deny the Plaintiff benefits under the Plan within the confines of the legal conclusion that Mr. Baker was at no point covered under Marriott's employee life benefits Plan.
As such, the sole legal question the Court must address in reviewing Aetna's decision to deny benefits to Plaintiff is to determine whether Aetna's "interpretation of the Plan was legally correct." See Collins v. American Cast Iron Pipe Co., 105 F.3d 1368, 1370 (11th Cir. 1997), citingLee v. Blue Cross Blue Shield of Alabama, 10 F.3d 1547, 1550 (11th Cir. 1994); Brown v. Blue Cross Blue Shield of Alabama. Inc., 898 F.2d 1556, 1566 n. 12 (11th Cir. 1990), cert. den. 498 U.S. 1040 (1991). If the interpretation was legally correct, then the inquiry ends. See Collins, 105 F.3d at 1370. Based upon the Court's finding that Aetna never approved nor entered into any agreement to provide Mr. Baker with life term benefits, the Court finds as a matter of law that Aetna's subsequent decision to deny benefits to the Plaintiff was legally correct. Just as Aetna could not have retreated from its legal duty to pay benefits, had it approved Mr. Baker for coverage under the Plan, Aetna cannot now be forced to assume the provisions of a contract that it expressly and indisputably declined to enter into.
IV. Plaintiff's Claim Against Marriott.
The Court has already determined that Aetna retained sole and exclusive power under the Plan to deny coverage for Mr. Baker, as well as the sole and exclusive power to determine benefits and construe the terms of the Plan generally. As it is undisputed that Marriott could not which is of course the statutory source of the Federal question at hand. See generally 29 U.S.C. § 1132 et seq. and did not participate in Aetna's decisions to initially deny coverage and subsequently deny Plaintiff's request for death benefits under the Plan, it cannot be the case that Marriott wrongfully denied benefits to the Plaintiff following the death of her spouse. Co-Defendant Marriott is thus entitled to summary judgment on Plaintiff's sole count.
Apparently sensing that such an outcome would come to pass, Plaintiff has attempted to squeeze what is essentially a new claim against co-Defendant Marriott into Plaintiff's Brief in Support of its Motion for Summary Judgment (Doc. 38), submitted three days after Marriott filed its own Motion for Summary Judgment (Doc. 33) before this Court. Plaintiff argues that "Marriott breached its fiduciary duties to both Mr. Baker and Plaintiff," and is therefore "liable under ERISA." Plaintiff's Brief, p. 3. While harboring serious doubts that Plaintiff has standing to pursue such a claim under ERISA, no decision on the merits is necessary. Aside from the threshold difficulty Plaintiff would encounter in trying to convince the Court to construe an argument contained within a brief in support of summary judgment as a pleading, such a claim would be out of time. The Court need only remind Plaintiff of the scheduling orders applicable to this case. As Marriott notes in its Brief in Opposition to Plaintiff's Motion for Summary Judgment, the Court's scheduling Order of May 9, 2000, sets the deadline for amending the pleadings at August 31, 2000. The Plaintiff is therefore estopped from presenting the claim, not previously pled, that Marriott breached its fiduciary duty to Plaintiff through any subsequent briefs or filings.
Though both co-Defendants are present in the style of Plaintiff's Motion for Summary Judgment (Doc. 31), there is no mention of co-Defendant Aetna in the argument section of Plaintiff's supporting brief, and thus no submission of any of genuine issues of material fact with respect to Aetna.
V. Conclusion
Based on the foregoing, the Court finds that each of the two co-Defendant's Motions for Summary Judgment are due to be and hereby are GRANTED. Plaintiff's Motion for Summary Judgment is DENIED.