Opinion
Case No. 00-CV-73466
May 23, 2001
OPINION AND ORDER GRANTING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT'S MOTION FOR JUDGMENT ON THE MERITS
INTRODUCTION
Defendant Ford Motor Company moves for summary judgment of the claims brought in this action by plaintiff-employee Manuel Aguilar. Plaintiff's complaint alleges violations of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), and promissory estoppel arising out of Aguilar's alleged reliance on Ford's summary plan descriptions which, he contends, were contrary to Ford's disability benefit plan. For the reasons stated below, the court grants in part defendant's motion for summary judgment and denies what it has construed to be a motion for judgment on the merits concerning defendant's ERISA denial of benefits claim.
BACKGROUND
Plaintiff worked for defendant Ford Motor Company ("Ford") in the 1970s and went back to work for Ford as a salaried engineer in 1990. Between the years of 1991 and 1996, plaintiff reportedly sustained and aggravated injuries to his back and knee through three automobile accidents and two falls at Ford plants, for which he sought medical treatment. In September of 1996 plaintiff began a medical leave from Ford, complaining that his chronic back pain rendered him unable to work. Apparently plaintiff left Michigan at that time to live with his family in Florida, where he treated with physicians. Plaintiff applied for disability benefits under Ford's disability plan and began receiving such benefits about March 1997. His claims were first administered by John Hancock Insurance Company and later Unicare, a former defendant to this action. In 1998, Ford reviewed plaintiff's disability status, and requested that he undergo a series of independent medical evaluations. In August of 1998, Ford made its determination that plaintiff was not disabled and could return to work, and was instructed by Ford at that time to return to work. Plaintiff requested and received an extension for his report-to-work date to October 26, 1998. Plaintiff did not return to work, however, and his disability benefits came to an end in approximately October of 1998.
Plaintiff and Unicare stipulated to Unicare's dismissal from this action on December 29, 2000.
Plaintiff filed his complaint in federal court on March 16, 2000. Count I of plaintiff's complaint alleges that discontinuing his disability benefits violated the terms of the plan. Count II of plaintiff's complaint alleges a breach of fiduciary duty owed by defendants under ERISA pursuant to 29 U.S.C. § 1104(a). In count III, plaintiff alleges estoppel in that he relied to his detriment on language in a Ford summary plan description that he states was inconsistent with Ford's disability benefits plan itself. Defendant Ford now moves for summary judgment of each of plaintiff's claims.
The court notes that although the caption under plaintiff's count I addresses only Unicare, the actual allegations do not specify a defendant.
STANDARD FOR SUMMARY JUDGMENT
Federal Rule of Civil Procedure 56(c) empowers the court to render summary judgment "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 judgment as a matter of law." See FDIC v. Alexander, 78 F.3d 1103, 1106 (6th Cir. 1996). The Supreme Court has affirmed the court's use of summary judgment as an integral part of the fair and efficient administration of justice. The procedure is not a disfavored procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); See also Kutrom Corp. v. City of Center Line, 979 F.2d 1171, 1174 (6th Cir. 1992).
The standard for determining whether summary judgment is appropriate 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.'" Winningham v. North Am. Resources Corp., 42 F.3d 981, 984 (6th Cir. 1994) (citing Booker v. Brown Williamson Tobacco Co., 879 F.2d 1304, 1310 (6th Cir. 1989)). The evidence and all inferences therefrom must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Enertech Elec. Inc. v. Mahoning County Comm'r, 85 F.3d 257, 259 (6th Cir. 1996); Wilson v. Stroh Co., Inc., 952 F.2d 942, 945 (6th Cir. 1992). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also Hartleip v. McNeilab, Inc., 83 F.3d 767, 774 (6th Cir. 1996).
If the movant establishes by use of the material specified in Rule 56(c) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968);see also Adams v. Philip Morris. Inc., 67 F.3d 580, 583 (6th Cir. 1995). Mere allegations or denials in the non-movant's pleadings will not meet this burden. Anderson, 477 U.S. at 248. Further, the nonmoving party cannot rest on its pleadings to avoid summary judgment. It must support its claim with some probative evidence. Kraft v. United States, 991 F.2d 292, 296 (6th Cir.), cert. denied, 510 U.S. 976 (1993).
ANALYSIS Count III — Estoppel Claim
The court will first address the estoppel claim plaintiff has brought in Count III. In that count, plaintiff alleges that he relied to his detriment on summary plan description language provided by defendants which defendants knew, but plaintiff did not know, was inconsistent with Ford's disability benefit plan. Plaintiff's allegations do not specify whether this claim is brought under state law or ERISA. Ford moves for summary judgment of plaintiff's estoppel claim as alleged in Count III as being a state law claim preempted by ERISA, and further argues that Ford in fact looked to the very summary plan language at issue in making its determination concerning plaintiff's entitlement to benefits. Finally, Ford points out in its reply brief that plaintiff has never provided any evidence concerning which plan provision was allegedly inconsistent with the summary plan language.
As plaintiff points out, the Sixth Circuit in Armistead v. Vernitron Corp., 944 F.2d 1287 (6th Cir. 1991) permitted an estoppel claim relating to an employee welfare plan by the plaintiff in that case, holding that "the purpose of Congress in enacting 29 U.S.C. § 1102(a) would not be frustrated by recourse to estoppel principles, which are generally applicable in all legal actions." Armistead, 944 F.2d at 1300. However, the court in Armistead also set forth the elements of a claim of equitable estoppel, as follows: 1) conduct or language amounting to a representation of material fact; 2) awareness of the true facts by the party to be estopped; 3) an intention on the part of the party to be estopped that the representation be acted on, or conduct toward the party asserting the estoppel such that the latter has a right to believe that the former's conduct is so intended; 4) unawareness of the true facts by the party asserting the estoppel; and 5) detrimental and justifiable reliance by the party asserting estoppel on the representation.Armistead, 944 F.2d at 1298.
In the instant matter, plaintiff made only a vague allegation asserting that he detrimentally relied upon Ford's summary plan language, which stated that he would be paid benefits. Plaintiff, whose deposition Ford apparently requested but was unable to take, has not come forward with any more specific information concerning his estoppel claim. Further, plaintiff's response to Ford's motion for summary judgment states only that "plaintiff relied on the policy stating that he will be paid benefits if disabled," and then asserts that independent medical examinations secured by Ford were not independent but "directly influenced by defendant" (Plaintiff's response, p. 15). Plaintiff does not allege inconsistencies between the pertinent language in the summary plan description and the plan itself, which, at oral argument, Ford asserted were one and the same. The court is unable to find that plaintiff has set out the required elements of an estoppel claim, and therefore grants Ford's motion for summary judgment as to Count III as a matter of law.
Count II — Breach of Fiduciary Duty
Plaintiff's second count is captioned "Breach of Fiduciary Duty as to All Defendants, ERISA 502(a)(3); 29 U.S.C. (a)(3)" (sic). That section of plaintiff's complaint alleges that in providing "false information pertaining to the plaintiff's medical condition" (Complaint, ¶ 19), Ford breached the fiduciary duty it owed to plaintiff pursuant to 29 U.S.C. § 1104(a), and that as a result of such breach plaintiff suffered damages through the termination of disability benefits. Further, in that count, plaintiff alleges that Ford's conduct "amounted to interference with the attainment of the plaintiff's benefits in violation of ERISA subsection 510."
Plaintiff is apparently seeking to state a cause of action under the "catchall provision" of ERISA § 502(a)(3), identical to 29 U.S.C. § 1132(a)(3). However, plaintiff's breach of fiduciary duty/interference claim is not available to a plan participant who is entitled to challenge a denial of benefits under 29 U.S.C. § 1132(a)(1)(B). See Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 615 (6th Cir. 1998) (holding that "[t]he Supreme Court clearly limited the applicability of § 1132(a)(3) to beneficiaries who may not avail themselves of § 1132's other remedies. Varity Corp. v. Howe, 516 U.S. 489, 512 (1996)]."). Plaintiff's first count, which the court discusses below, challenges the plan administrator's denial of benefits to which plaintiff believes he is entitled, under 29 U.S.C. § 1132(a)(1)(B). As discussed in Wilkins, 150 F.3d 609, 616, the Supreme Court has expressly rejected the characterization of a denial of benefits as a breach of fiduciary duty. See Varity, 116 S.Ct. at 1079. Plaintiff has made a claim under another 29 U.S.C. § 1132(a)(1)(B), and therefore Ford is entitled to summary judgment of plaintiff's ERISA breach of fiduciary duty/interference claim as alleged in Count II as a matter of law. Wilkins, 150 F.3d at 615;Winningham, 42 F.3d at 984.
Count I — Failure to Pay Full Benefits Use of Summary Judgment in ERISA Cases
A request for summary judgment in an ERISA case where the plaintiff contests the plan administrator's denial of benefits requires the court's review of the record of the administrator. As discussed below, when the plan administrator maintains discretionary authority to determine eligibility for benefits or to interpret the terms of a plan, the court's review is under the arbitrary and capricious standard, as opposed to a de novo review of both the administrator's interpretation of plan terms and the administrator's factual findings. Firestone v. Bruch, 489 U.S. at 115, 109 S.Ct. 948; Rowan v. Unum Life Ins. Co., 119 F.3d 433, 435 (6th Cir. 1997). However, as stated by the Supreme Court in the Anderson case, cited above, the district court's function in connection with a motion for summary judgment is to determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may be reasonably be resolved in favor of either party" (Anderson, 477 U.S. at 250), in which case the motion is denied. Ford's motion for summary judgment does not fit the court's review of a plan administrator's denial of benefits to a plan participant. For this reason, the court will construe defendant's motion for summary judgment in connection with an ERISA denial of benefits claim as a motion for judgment on the merits.
Standard of Review
Plaintiff's denial of benefits cause of action under 29 U.S.C. § 1132(a)(1)(B) includes the allegation that "the discontinuation of plaintiff's disability payment benefits are in direct violation of the terms of the plan." Ford, in its motion, asserts that its disability benefit plan clearly reserves discretion to the plan administrator to interpret the plan's provisions, and for that reason plaintiff's ERISA claim is subject to the court's "arbitrary and capricious" standard of review. Ford argues that it made a rational decision to terminate plaintiff's benefits, based on thorough examinations by its corporate physician and independent medical specialists, and that it is therefore entitled to dismissal of plaintiff's ERISA claim as a matter of law.
In response, plaintiff asserts that Ford's plan does not clearly and unambiguously grant discretionary authority to grant or withhold benefits to its plan administrator, and that without such authority, this court must review the denial of benefits de novo. Plaintiff further contends that the court should consider Ford's conflict of interest in being both the payer of benefits and the plan administrator.
When an ERISA plan grants discretionary authority to the plan administrator to determine a plan participant's benefits eligibility and to interpret plan terms, the court reviews a challenged decision for an abuse of discretion. See Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989); Wilkins v. Baptist Healthcare System. Inc., 150 F.3d 609, 619 (6th Cir. 1998); Perry v. Simplicity Engineering, 900 F.2d 963, 965 (6th Cir. 1990). In this situation, a decision to deny ERISA benefits must be "reviewed by the district court under an arbitrary and capricious standard, taking into account the entire record before the administrator at the time of the determination." Daniel v. Eaton Corp., 839 F.2d 263, 267 (6th Cir. 1988). The court may consider "the facts known to the plan administrator at the time he made the decision," and the decision is not arbitrary or capricious if it "is rational in light of the plan's provisions." Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996). "Under the arbitrary and capricious standard of review, an administrator's decision will be overturned only upon a showing of internal inconsistency, bad faith or some other ground for calling such determinations into question." Livingston v. Central States Southeast and Southwest Areas Health and Welfare Fund, 900 F. Supp. 108, 115 (E.D. Mich. 1995) (citing Davis v. Kentucky Finance Co. Retirement Plan, 887 F.2d 689, 695 (6th Cir. 1989), cert. denied., 495 U.S. 905 (1990)).
The language which Ford contends grants it, as plan administrator, such discretionary authority (and which plaintiff argues does not) is set forth below:
All benefit plans and programs described in this book are sponsored by Ford Motor Company.
Ford Motor Company is also the plan administrator. In most cases, including the health care plans, the responsibility to administer the plans and make interpretations on such issues as eligibility and payment of benefits has been delegated to the Employee Relations Staff. In other cases, such as the General Retirement plan and the Savings and Stock Investment Plan, the plan provides for the appointment of Committees. The Committees have discretionary authority to interpret the plan, and upon appeal to determine eligibility for and entitlement to benefits and the amount of such benefits. Any such interpretation or determination is final and binding subject only to the arbitrary and capricious standard of judicial review.
Defendant's Exhibit D; Plaintiff's Exhibit 11. Plaintiff, in response to Ford's motion for summary judgment, asserts that this language limits discretionary authority only to Committees administering the General Retirement Fund and the Savings and Stock Investment Plan, and that discretion is not clearly granted to the Employee Relations Staff which would have jurisdiction over plaintiff's disability benefits. However, as Ford points out in its reply brief, the language clearly states that Ford is the "plan administrator," and further goes on to state "where the responsibility to administer the plans and make interpretations on such issues as eligibility and payment of benefits" lies: either in the hands of the employee relations staff or committees appointed pursuant to plan provisions. Although the sentence addressing health care plans does not include the word "discretion" or "discretionary," whereas the sentence concerning the Committees' authority does contain the word "discretionary," as argued by plaintiff's counsel at oral argument, the court finds that the plan has clearly and unambiguously granted to Ford, as plan administrator, "discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone, 489 U.S. 101, 115 (1989).
Plaintiff further argues that Ford, as both administrator and payer of benefits, had a conflict of interest that directs the court to pay little deference to Ford's decision. Plaintiff cites from an internal email message written by Dr. Maria Bradshaw, then Ford's Chief Physician for the Research and Engineering Complex, in which she expresses frustration with Unicare, a former defendant to this matter. Pertinent excerpts from that message follow:
* * * * * * * * *
The most recent case involves a Mr. Manuel Aguilar who is a salaried employee who had testified against Ford Motor Company in a 3rd party lawsuit involving his wife and a Ford product. Somehow, after leaving Ford he was rehired (he fell through the cracks apparently) but has proceded (sic) to utilize both health care and disability benefits for the last 2 year (sic), where he has been living in Florida with his family, claiming a Back Injury and secondary depression.
He is identified by HR as someone they wish us to Case Manage which we do spending a great deal of company assetts (sic) including nursing, MD, HR and OGC's staff time. We spend thousands of dollars ordering specialists evaluation, EMG's, MRI's, MMPI's etc and many man hours sifting through his volume of medical records from his numerous providers (provided by Ford through his benefits) etc. etc. Spending for our work-up was recommended by our attorney in order to bring this case to a closure.
Unfortunately the rug was pulled from under us when Unicare, oblivious to our efforts and after HR send him a BoneFide (sic) Job offer, send him to one of their cheap and easy IME's which found him disabled probably because Unicare did not send any Objective data or specialist reports but allowed employee to bring in whatever reports he had from doctors his lawyer sent him to.
I suggest we in medical stop spending our time and effort on Case Management, and Ford's good money until such time we can be assured that Unicare will not derail our efforts. Please assist us in any manner you are able to. Thanks.
Plaintiff's Exhibit 6. Plaintiff contends this memo constitutes extrinsic evidence that Ford had an animus toward Mr. Aguilar and that the reference to "Ford's good money" shows that Ford's spending concerns influenced its decision to terminate plaintiff's benefits.
The parties agree that in the Sixth Circuit, a conflict of interest is a factor to be considered by the court when determining whether a plan administrator's decision was arbitrary and capricious. Borda v. Hardy, Lewis Pollard Page, 138 F.3d 1062, 1069 (6th Cir. 1998). Ford cites toBorda in support of its argument that when the plan administrator has reserved discretionary authority to make plan determinations, even with the presence of a conflict of interest, the court must apply the arbitrary and capricious standard of review and uphold a denial of benefits so long as the decision was rational in light of information available at the time of the decision. In Borda, as pointed out by plaintiff, the plan administrators/trustees were themselves plan participants, to whom the subject nonvested suspense account would be distributed if not to plaintiff Borda. See Borda, 138 F.3d 1062, 1069.
Plaintiff attempts to distinguish the instant matter from what he calls the "inherent conflict of interest" present in Borda, by pointing to the "extrinsic" evidence that Ford was influenced by a conflict of interest (represented by the Bradshaw email message excerpts, above), and asserts that this evidence should "tip the scales" in favor of plaintiff even under the arbitrary and capricious standard of review. In his "counter-statement of facts," plaintiff asserts that the email message demonstrates that Dr. Bradshaw's determination was influenced by certain factors, including: a) her belief that plaintiff testified in a lawsuit against Ford; b) her belief that plaintiff should not have been rehired after giving such testimony (inferred from her characterization of plaintiff as someone who "fell through the cracks"); c) plaintiff's Florida residence; d) the amount of money Ford spent on plaintiff's medical examinations; and e) her belief that Unicare's independent medical examination by a "cheap and easy IME" "derailed" Ford's efforts to find plaintiff able bodied.
Ford asserts that the email message does not demonstrate any animus toward plaintiff, pointing to Dr. Bradshaw's deposition testimony, where she attested that she considered the fact that plaintiff had given testimony against Ford as a "psychological component that might account for the back pain being so continuous and, quote, severe. . . ." (Bradshaw deposition transcript, p. 32). The court also notes that Dr. Bradshaw provided explanation in deposition that she considered plaintiff's move to Florida to be a potential indicator that he did not intend to return to work in Dearborn (Bradshaw deposition transcript, p. 56-57), and addressed what she explained to be frustration over Unicare's decision to refer plaintiff to a doctor she believed might have based a decision solely on plaintiff's own reports of pain (Bradshaw deposition transcript, p. 27-28).
Although the court is not aware of any specific explanation concerning the portion of Dr. Bradshaw's email message stating "Somehow, after leaving Ford he was rehired (he fell through the cracks apparently)" (see plaintiff's Exhibit 6), the court finds that explanations given in Dr. Bradshaw's testimony concerning the email were reasonable in light of the circumstances. The court is not persuaded that Dr. Bradshaw's email message reflects an animus on the part of Dr. Bradshaw toward plaintiff or requires a finding of bad faith on the part of Ford in making its determination as plan administrator. Therefore, the court will review the denial of benefits decision challenged by plaintiff for an abuse of discretion. See Davis, 887 F.2d at 695.
Review
Defendant has attached to its motion, as an exhibit to the affidavit of Jacqueline Browning, the Ford Human Resources Associate who gave plaintiff instructions to return to work in 1998, undated disability plan provisions stating participants' eligibility for benefits, which read in pertinent part:
Eligibility for benefits
Once you're eligible for the plan, benefits are payable for a disability if you meet these rules:
You're "disabled" as defined on this page.
You're under a doctor's care, except as described on page 142.
You provide required proof of your disability.
You submit to an examination, at the plan's expense, when requested.
* * * * * * * * *
"Disabled" generally means you're unable to work because of an accident, illness, or pregnancy-related condition. If you are disabled because of certain elective surgical procedures, you may not be eligible for disability benefits. For short-term and primary benefits, you must be unable to do your own job at Ford or any comparable job.
For long-term benefits, you must be unable to do any job at Ford in your area for which you're qualified based on work restrictions. You also must be unable to work at any regular job for pay, unless it is for rehabilitation purposes and the Company approves.
Defendant's counsel asserted that the Summary Plan Description language was itself the plan language, and although the plan document itself was not attached to the motion brought by Ford, the plaintiff has no evidence to contradict defendant's claim.
By letter drafted by Jackie Browning, Personnel Relations Representative for the Truck Vehicle Center, plaintiff was notified on August 25, 1998, and again on October 6, 1998, that "Medical has informed me your Independent Medical Exams (IME) state you are no longer disabled. Therefore, your Medical Leave of Absence is terminated." The court notes that letters allegedly received by plaintiff stating that his medical leave was expiring and asking him to provide evidence to demonstrate his continued disability are not in the court's record. The court is unaware of whether any such evidence was provided by plaintiff in response to such letters.
In the affidavit of Dr. Maria Bradshaw, who advised Ford's Human Resources office that plaintiff was no longer entitled to disability benefits, she attests that her determination was based upon her own review of plaintiff's medical history, her own physical examination of plaintiff, and the medical evaluations of a Dr. Theodoulou, a Dr. Dudley, and a Dr. Baker obtained by Ford's medical department. Bradshaw December 14, 2000 Affidavit, ¶ 21. Written reports from those three doctors are attached as exhibits to Ford's motion for summary judgment. Although Dr. Bradshaw attests that she examined plaintiff's medical history, Ford has not specified what comprised that history. The court notes that certain records of Dr. Charles Porretta of Southfield, Michigan, the Mayo Clinic of Jacksonville, Florida, and a Mark S. Schwartz, Ph.D., apparently subpoenaed in the course of this litigation, are also attached to Ford's motion for summary judgment as exhibits. Dr. Bradshaw's deposition testimony indicates that despite plaintiff's agreement to medical releases, his doctors in Florida did not cooperate in disclosing information concerning plaintiff's medical records or discussing plaintiff's medical condition with Dr. Bradshaw. Bradshaw deposition transcript, pp. 41-42. At oral argument, counsel for Ford, Raphael Richmond, indicated that the independent medical examiners retained by Ford received some of plaintiff's records from his Florida physicians, ultimately reviewed by Dr. Bradshaw. However, Ms. Richmond was not able to affirmatively identify these records or state that the court had, in its record, all of the information relied upon by Dr. Bradshaw in making her decision.
Because the court is unable to determine whether and to what extent Ford considered medical evidence provided by or released by plaintiff which was contained in its administrative record, which might support the claim made by plaintiff, it cannot confirm that Ford's determination to terminate plaintiff's benefits was rational. Therefore, the court will deny what it has construed to be a motion for judgment on the merits of plaintiff's denial of benefits claim. However, as set forth above, the court has established that it will employ the abuse of discretion standard of review and apply the plan provisions produced by defendant. The court will complete its review and render a decision after receipt of the entire administrative record in this matter.
CONCLUSION
For the foregoing reasons, the court hereby GRANTS defendant's motion for summary judgment as to plaintiff's claims of estoppel and breach of fiduciary duty, and DENIES defendant's motion for judgment on the merits.
IT IS SO ORDERED.