Opinion
Civil No. 00-695-AS
March 6, 2001
FINDINGS AND RECOMMENDATION
Defendant Regence BlueCross BlueShield Oregon/Regence HMO Oregon ("Defendant") moves for summary judgment against the sole remaining claim of plaintiff B.J. Hall ("Plaintiff"). For the reasons stated below, the court recommends granting Defendant's motion.
Defendant notes that Regence BlueCross BlueShield of Oregon and Regence HMO Oregon are two separate and distinct entities and that Regence HMO Oregon issued the group health insurance plan at issue in this action.
BACKGROUND
Plaintiff, who suffers from Post Polio Syndrome, had health insurance with Defendant through his employment. In the fall of 1997, Plaintiff's physician prescribed a stairway lift for Plaintiff's residence to prevent further acceleration of the deterioration of Plaintiff's leg muscles and respiratory capacity. Plaintiff contacted Defendant before purchasing the lift and was assured by a representative that the lift was covered by the health insurance plan issued by Defendant (the "Plan"), subject to applicable co-payments. In early January 1998, Plaintiff purchased and installed the lift and paid the $8,625 bill. Thereafter, Defendant denied coverage for the lift and refused to reimburse Plaintiff. Plaintiff filed this action in state court asserting claims for breach of contract and breach of fiduciary duty. Defendant removed the action to this court and filed a motion to dismiss, which the court granted with regard to Plaintiff's equitable estoppel claim. The court construed the breach of contract claim as a suit to enforce the terms of the Plan under the Employee Retirement Security Act of 1974 ( 29 U.S.C. § 1001-1161)("ERISA") and allowed that claim to stand. Plaintiff voluntary dismissed his claim for breach of fiduciary duty.
LEGAL STANDARD
Rule 56 of the Federal Rules of Civil Procedure allows the granting of summary judgment:
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). "[T]he requirement is that there be no genuine issue of material fact." Anthes v. Transworld Systems, Inc., 765 F. Supp. 162, 165 (Del. 1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)) (emphasis in original).
The movant has the initial burden of establishing that no genuine issue of material fact exists or that a material fact essential to the nonmovant's claim is absent. Celotex v. Catrett, 477 U.S. 317, 322-24 (1986). Once the movant has met its burden, the onus is on the nonmovant to establish that there is a genuine issue of material fact. Id. at 324. In order to meet this burden, the nonmovant "may not rest upon the mere allegations or denials of [its] pleadings," but must instead "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324.
An issue of fact is material if, under the substantive law of the case, resolution of the factual dispute could affect the outcome of the case. Anderson, 477 U.S. at 248. Factual disputes are genuine if they "properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250. On the other hand, if after the court has drawn all reasonable inferences in favor of the nonmoving party, "the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Id. at 249-50 (citations omitted).
DISCUSSION
Plaintiff claims that the lift is covered under the Plan as a piece of "durable medical equipment" or, alternatively, as an "appliance." Defendant argues that the plain meaning of these terms, as defined by the Plan, exclude the lift and that Plaintiff was not entitled to reimbursement.
ERISA claims must be decided under contract principles contained in federal common law. Evans v. Safeco Life Ins. Co., 916 F.2d 1437, 1439-41 (9th Cir. 1990). Four general principles of federal common law control contract interpretation:
One. "A written contract must read as a whole and every part interpreted with reference to the whole."
Two. "Preference must be given to reasonable interpretations as opposed to those that are unreasonable, or that would make the contract illusory."
Three. "The fact that the parties dispute a contract's meaning does not establish that the contract is ambiguous."
Four. "A contract is ambiguous if reasonable people could find its terms susceptible to more than one interpretation."
FDIC v. New Hampshire Ins. Co., 953 F.2d 478, 481 (9th Cir. 1991) (citations omitted).
ERISA contains a strong bias in favor of the written plan document. A court should not consider parol evidence if it will alter the unambiguous terms of a formal plan document. Cinelli v. Security Pac. Corp., 61 F.3d 1437, 1445 (9th Cir. 1995).
The parties submitted different versions of the Plan. It appears that the version submitted by Plaintiff and quoted here was in effect at the time Plaintiff purchased the lift. The version of the Plan submitted by Defendant was modified on March 30, 1998. The provisions of the Plan relevant to the issues before the court do not differ in any material respect.
We will pay covered expenses for the following outpatient supplies and appliances, including durable medical equipment when prescribed or ordered by a professional provider. Additionally, covered durable medical equipment must be medically necessary for diagnosis and/or treatment of an illness or injury. The copayment for covered supplies, appliances and durable medical equipment is determined by the prescribing professional provider. If the supply, appliance or durable medical equipment was prescribed by a participating professional provider, in-program benefit copayment will apply. If the supply, appliance or durable medical equipment was prescribed by a nonparticipating professional provider, the out-of-program benefit copayment will apply.
* * *
Appliances and orthopedic braces (not including dental appliances and braces, supporting devices such as corsets or elastic stockings, hearing aids, glasses and contact lenses) are included as covered expenses. An appliance is an item used for performing or facilitating the performances of a particular bodily function.
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The term durable medical equipment means an item that can withstand repeated use, is primarily used to serve a medical purpose, is generally not useful to a person in the absence of illness or injury, and is appropriate for use in the enrollee's home. Examples include oxygen equipment and wheelchairs. Durable medical equipment may not serve solely as a comfort or convenience item. Deluxe equipment with mechanical or electrical features such as motorized driven wheelchairs and chair lifts, environmental modifications such as wheel ramps or elevators for the home, and devices and equipment used for environmental control or to enhance the environmental setting, such as air conditioners, humidifiers, air filters, and portable whirlpool pumps, are not considered durable medical equipment under this plan and are not covered.
Plaintiff uses the lift to travel up and down the stairs in his home. It consists of a sitting platform that rides on a rail and is powered by an electrical motor. Plaintiff purchased the basic model for a curved stairway, without any options.
The court finds that Plaintiff's lift clearly falls within the exclusion for "deluxe equipment." It is driven by a motor and has various mechanical features. While it might not specifically qualify as a "chair lift," it is evident that this term was given as merely an example of an excluded item. The motorized device used to transport an individual up and down stairs is sufficiently similar to a chair lift or motorized wheelchair to be included within the definition. The court also finds that Plaintiff's lift qualifies as an environmental modification. It is a device designed to help Plaintiff maneuver within his residence, similar to wheel ramps or elevators, which are given as examples of "environmental modifications."
The court also finds that the lift is not a covered appliance under the terms of the Plan. First, the lift does share the same characteristics of smaller items contemplated under the definition of the term "appliance." Second, and more important, to allow the lift to be covered as an appliance would directly contradict the specific language excluding the lift under the deluxe equipment exclusion. As noted above, the court must read the Plan as a whole and must give each term a reasonable interpretation.
CONCLUSION
Defendant's motion (# 32) for summary judgment should be GRANTED.
SCHEDULING ORDER
Objections to these Findings and Recommendation(s), if any, are due March 21, 2001. If no objections are filed, the Findings and Recommendation(s) will be referred to a district court judge and go under advisement on that date.
If objections are filed, the response is due no later than April 5, 2001. When the response is due or filed, whichever date is earlier, the Findings and Recommendation(s) will be referred to a district court judge and go under advisement.