Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

COSSEY v. ASSOCIATES' HEALTH & WELFARE PLAN

November 21, 2005.

KARLA L. COSSEY and WILLIAM COSSEY, Plaintiffs,
v.
ASSOCIATES' HEALTH AND WELFARE PLAN; and ADMINISTRATIVE COMMITTEE, ASSOCIATES' HEALTH AND WELFARE PLAN, Defendants.



The opinion of the court was delivered by: WARREN URBOM, Senior District Judge

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR RECONSIDERATION OR, IN THE ALTERNATIVE, MOTION TO CERTIFY FOR INTERLOCUTORY APPEAL AND TO STAY ACTION PENDING APPEAL.
In a memorandum and order dated March 15, 2005, I resolved the Plaintiffs' Motion for Summary Judgment, (filing 91); the Defendants' Motion to Affirm the Determination of the Administrative Committee or, Alternatively, Motion for Summary Judgment, (filing 18); the Defendants' Supplemental Motion to Affirm the Determination of the Administrative Committee or, Alternatively, Motion for Summary Judgment, (filing 105); and the Defendants' Motion for Summary Judgment on Plaintiffs' Statutory Penalty Claim, (filing 67). (See Mem. and Order on Mots. for Summ. J., filing 141.) The defendants have now filed a motion requesting that I reconsider a particular determination that I made in that memorandum, or, alternately, that I certify that determination for interlocutory appeal and stay this case while the appeal is pending. (See filing 144.) For the following reasons, I find that the defendants' motion must be denied.

I. BACKGROUND

  On April 26, 2004, the plaintiffs, Karla and William Cossey, filed a complaint against Defendants Associates' Health and Welfare Plan ("the Plan") and Administrative Committee, Associates' Health and Welfare Plan ("the Committee"), alleging violations of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (ERISA). (See generally Sixth Am. Compl., filing 121.) The plaintiffs sought, among other things, a declaratory judgment that the defendants violated their fiduciary duty; a declaratory judgment that the defendants cannot require covered persons or their counsel to sign "subrogation-reimbursement agreements" as a condition to the payment of benefits; an order requiring the defendants to pay fines for their alleged failure to provide the plaintiffs' counsel with copies of certain documents; and an order that the defendants pay, with interest, all medical expenses that arose from an automobile accident suffered by Karla Cossey. (See id. at 15-17.) The parties filed cross-motions for summary judgment, and I resolved those motions in a memorandum and order dated March 15, 2005. (See Mem. and Order on Mots. for Summ. J., filing 141.) At issue presently is my determination in that memorandum that the plaintiffs' motion for summary judgment, filing 91, should be granted in part. (See Mem. and Order on Mots. for Summ. J., filing 141, at 39.) The reasoning underlying this determination is set forth in great detail in the March 15 memorandum; however, in the interest of clarity I have summarized that reasoning, along with certain relevant background information, below.

  The Plan was created by Wal-Mart Stores, Inc. "to provide medical benefits to its employees." (Mem. and Order on Mots. for Summ. J., filing 141, at 1 (quoting filing 19 at 2).) The plaintiffs were eligible to receive benefits under the Plan. After Karla Cossey was injured in a car accident in October 2001, the Plan informed the plaintiffs' counsel that Ms. Cossey's claims for benefits would not be processed until the plaintiffs completed "reimbursement/subrogation" forms and counsel completed a "disbursement agreement." (Id. at 2 (quoting Administrative Record ("A.R."), filing 32, at 167 202).) Counsel refused the Plan's requests and asked the Plan to provide authority for its position that it could refuse to pay benefits if the forms were not executed. (Id. at 3.) The defendants responded via letter dated June 11, 2002, stating,
The Plan language includes a Right to Reduction, Reimbursement and Subrogation provision, which clearly states 100% reimbursement is required with no reduction for attorneys' fees. This provision further states 100% reimbursement is required regardless of whether the participant was made whole or not as well as that the Plan has first priority from any judgment, payment or settlement. . . . Please refer to page 43 of the enclosed Summary Plan Description. There it states, "To aid the Plan in its enforcement of its right of reduction, recovery, reimbursement and subrogation, you and your representative must, at the Plan's request and at its direction: Take any action; give information; and execute documents so required by the Plan. Failure to aid the Plan and to comply with such requests may result in the Plan's withholding or recovering benefits, services, payments or credits due or paid under the Plan.". . .
(Id. at 3-4 (quoting A.R., filing 32, at 167 206).)

  The plaintiffs and their counsel refused to execute the forms, and the defendants refused to pay Ms. Cossey's accident-related claims.*fn1 (See Mem. and Order on Mots. for Summ. J., filing 141, at 4-5.) In addition, after a settlement was reached in Karla Cossey's personal injury action against the party or parties involved her car accident, the Plan informed the plaintiffs that "Ms. Cossey's medical benefits are now subject to reduction since she has obtained a settlement from the third parties responsible for her injuries." (Id. at 5 (quoting filing 107, Ex. A-2 at 3).) Thus, the defendants' decision to deny the plaintiffs' claims for benefits was based upon two separate grounds: 1) the plaintiffs' and counsel's failure to execute the reimbursement/subrogation and disbursement agreements, and 2) the fact that the Cosseys obtained a settlement in their personal injury action.

  It is undisputed that the defendants relied upon language that appears only in a Summary Plan Description, or SPD, to support their decision to deny benefits to the plaintiffs. (See Mem. and Order on Mots. for Summ. J., filing 141, at 15-18.) It is also undisputed that the defendants believed that the SPD, or at least the portion of the SPD that contained the relevant language, was "part of the `Plan.'" (Id. at 21 (quoting filing 107, Ex. C, Loftus Aff. ¶ 3).) In their briefs submitted in connection with the cross-motions for summary judgment, the plaintiffs argued, inter alia, that the SPD was not a part of the Plan. (See id. at 18 (citing filing 91 at 43-44; filing 113, ¶¶ 6, 20-21; filing 117 at 43-48; filing 134).) After carefully studying the "Wrap Document," "Trust Document," and the SPD, I determined that the plaintiffs were correct, and that the portions of the SPD upon which the defendants relied were not part of the Plan. (See id. at 18-27.)*fn2 This determination was based upon two principal findings. (See id. at 18-21.) First, I noted that "[a]ccording to the Wrap Document, the Plan comprises the Wrap Document itself `and each Welfare Program' that has been `incorporated [therein] by reference.'" (Id. at 18 (quoting A.R., filing 32, at 161 170).) A "Welfare Program" is defined as "a written arrangement that is offered by one or more Employers and incorporated into the Plan by identification in Appendix A and which provides any employee benefit that would be treated as an `employee welfare benefit plan' under Section 3(1) of ERISA if offered separately," or "any plan established pursuant to Section 125 of the Code if incorporated herein by identification in Appendix A." (Id. at 18-19 (quoting A.R., filing 32, at 167 170-71).) Since the SPD was not listed in Appendix A, I found that the SPD was not a "Welfare Program" that had been incorporated into the Plan. (See id. at 19, 20.)

  Second, I explained that the Wrap Document also provides that certain portions of the SPD would be deemed "Plan documents" if: "1) there is `no separate formal plan document' that provides the relevant benefits; 2) the relevant portions of the SPD describe the benefits set forth in `any applicable insurance policy or contract'; and 3) the relevant portions of the SPD are `consistent with' that policy or contract." (Id. at 19 (quoting A.R., filing 32, at 167 171).) As I considered the first criterion, I observed that it was unclear whether a "separate formal plan document" existed. (See id. at 19-20.) I stated,
Turning first to the question of whether there is a "separate formal plan document" that provides the health benefits sought by the plaintiffs, I note that the list of Welfare Programs incorporated into the Plan includes the "Wal-Mart Associates' Group Health Plan." (A.R., filing 32, at 167 180.) Although the title of this plan suggests that it may be relevant, and although it is a formal Plan document by virtue of its designation as a Welfare Program in Appendix A of the Wrap Document, the Wal-Mart Associates' Group Health Plan has not been produced. Indeed, with the exception of the Trust Document, none of the eleven Welfare Programs listed in Appendix A of the Wrap Document is to be found in the record. At the same time, there is no evidence suggesting that these Welfare Programs do not exist. On the contrary, the record does suggest that the Welfare Programs existed as of January 1, 2001, when the Wrap Document was "restated," and the Welfare Programs were incorporated by reference therein. (See A.R., filing 32, at 167 167; see also id. at 167 180 (incorporating "Wal-Mart Associates' Group Health Plan" into the Plan).) In any event, since the Welfare Programs have not been produced, it is unclear whether there is a "separate formal plan document" that provides health benefits to the Plan participants.
(Mem. and Order on Mots. for Summ. J., filing 141, at 19-20 (footnote omitted).) I also remarked in a footnote that the SPD itself suggested that a separate document called the "Associates' Medical Plan (Network Plan; Network $ Saver Plan)" may have existed, though that document was not produced and was not listed in Appendix A to the Wrap Document. (See id. at 20 n. 14.) In any event, I found that, "[e]ven if I were to assume that there is no applicable `separate formal plan document,' the portions of the SPD relied upon by the defendants would be incorporated into the Plan only to the extent that they describe, and are consistent with, the terms of `any applicable insurance policy or contract.'" (Id. at 20.) Since there was "no evidence that the relevant portions of the SPD accurately describe an `applicable insurance policy or contract,'" I concluded that "the relevant portions of the SPD have not been incorporated into the Plan." (Id.)

  After analyzing and rejecting each of the defendants' counter-arguments, (see Mem. and Order on Mots. for Summ. J., filing 141, at 21-27), I found that "the defendants' decision to treat the SPD as a formal Plan document was `contrary to the plan's clear language' and rendered `the plan's language meaningless or internally inconsistent,'" (id. at 28 (quoting Wald v. Southwestern Bell Customcare Medical Plan, 83 F.3d 1002, 1007 (8th Cir. 1996)). I also found that "[t]here is no evidence that the denials of the plaintiffs' claims were . . . in accordance with the Plan's terms or were based upon a reasonable interpretation of the Plan's terms." (Id. at 29.) I therefore granted the plaintiffs' motion for summary judgment in part, stating, "the defendants' decision to deny the plaintiffs' claims for benefits was not reasonable." (Id. at 39; see also id. at 15 (quoting Wald, 83 F.3d at 1007).)

  The defendants now ask that I reconsider my determination that the SPD "does not contain the terms of the Plan." (Filing 144 at 1.) They argue in the alternative that this determination should be certified for interlocutory appeal. (See id.) II. ANALYSIS

  A. The Defendants' Motion for Reconsideration

  The defendants have identified no rule of federal civil procedure that authorizes their motion for reconsideration. However, even if I assume that the defendants' motion is appropriately made, the defendants have failed to persuade me that my previous determination was erroneous.

  The defendants argue, "The court should reconsider its determination that the Associates Benefits Book [i.e., the SPD] does not contain some of the terms of the Plan because this ruling was based upon the erroneous finding that a document called the "Wal-Mart Associates' Group Health Plan" exists and was not produced in this case." (Filing 145 at 2. See also id. at 4 ("The Court was mistaken in concluding that a `separate formal document' exited — the Wal-Mart Associates' Group Health Plan — and assuming that this document has not been produced."); filing 190 at 2 ("The Court's decision was based on the assumption that additional Plan documents did exist. . . . Since Defendants have shown that no additional Plan documents exist, as assumed by the Court in its Order, the Court has new, additional evidence on which to consider its decision (i.e., that a document called the "Wal-Mart Associates' Group Health Plan" does not exist.)" (Emphasis omitted)).) In support of this argument, the defendants have submitted "additional evidence"*fn3 that, they claim, establishes that "[a]ll documents that contain `Plan terms' were previously produced to Cossey and are part of the record here." (Filing 145 at 1, 4 (citations omitted).) However, it is plain that the defendants' argument is based upon an erroneous reading of my March 15 memorandum. Quite simply, my determination that the SPD had not been incorporated into the Plan was not based upon a finding that the "Wal-Mart Associates' Group Health Plan," or any other "separate formal document," existed. On the contrary, I gave the defendants the benefit of an assumption that no separate formal document existed. (See Mem. and Order on Mots. for Summ. J., filing 141, at 20 ("Even if I were to assume that there is no applicable `separate formal plan document,' the portions of the SPD relied upon by the defendants would be incorporated into the Plan only to the extent that they describe, and are consistent with, the terms of `any applicable insurance policy or contract.' The defendants have not identified, submitted, or requested an opportunity to submit any such policy or contract. . . . Therefore, under the terms of the Plan as stated in the Wrap Document, the relevant portions of the SPD have not been incorporated into the Plan.") (emphasis added).) Thus, even if the defendants' new evidence establishes conclusively that there are no additional formal Plan documents, this evidence would not affect the determination I reached in the March 15 memorandum.

  The defendants have submitted two additional arguments in support of their motion for reconsideration. First, they cite Davidson v. Wal-Mart Associates' Health and Welfare Plan, 305 F. Supp. 2d 1059, 1062-63 (S.D. Iowa 2004), for the proposition that "the `Plan' consists of the terms contained in the Wrap Document and the pertinent portions of the SPD. (See filing 145 at 4.) Davidson states,
For purposes of this lawsuit, the 2002 Summary Plan Description ("SPD") and 2001 Wal-Mart Stores, Inc., Associates Health and Welfare Plan WRAP Document ("WRAP Document") are the applicable versions of the Plan documents. The SPD and WRAP Document govern the operation of the Plan.
Davidson, 305 F. Supp. 2d at 1062-63. The defendants would have me defer to the court's finding in Davidson that the SPD is a "governing" Plan document. However, the court's finding is not supported by an analysis of the Plan documents, and the opening clause of the excerpt quoted above counsels that the court's finding is not meant to carry precedential weight. In sum, Davidson does not persuade me that I erred in finding that "the defendants' decision to treat the SPD as a formal Plan document was `contrary to the plan's clear language' and rendered `the plan's language meaningless or internally inconsistent.'" (Mem. and Order on Mots. for Summ. J., filing 141, at 28 (quoting Wald v. Southwestern Bell Customcare Medical Plan, 83 F.3d 1002, 1007 (8th Cir. 1996)).
 
Finally, the defendants argue, Without reconsideration, neither Cossey nor the rest of the participants in the Plan, which is the largest non-governmental health plan in the United States, will have a basis to receive medical benefits since, under the Court's decision as it currently stands, the only document that authorizes the Plan to pay benefits is not part of the Plan.
. . . .
. . . Without clarification and reconsideration, Cossey will be left with no medical benefits because, as it currently stands, the only Plan terms that require and authorize it to pay benefits — the Medical section of the Associates' Benefits Booklet — is not considered part of the Plan. Under the current ruling, the Plan not only is not required, but is not authorized, to pay any benefits on behalf of Cossey. In short, the document that allows the Plan to offset benefits, recover, and subrogate, is the same and only document that requires the Plan to pay benefits.
(Filing 145 at 1-2, 3-4.) In essence, the defendants claim that ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.