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June 14, 1990


The opinion of the court was delivered by: Brieant, Chief Judge.


On October 30, 1983, Joan Short Vicinanzo, an employee of defendant Brunschwig & Fils, Inc. (B & F), was seriously injured in an off-duty automobile accident. For more than seven years, she was a valued employee and wallpaper designer. Now, nearly seven years later, she is completely, but perhaps not permanently disabled, and requires round-the-clock medical care at a cost of approximately $300,000 per year.

This lawsuit involves her continuing rights, if any, under an employee benefit plan sponsored by B & F and issued by New England Mutual Life Insurance Company ("New England"). The Court has jurisdiction under 29 U.S.C. § 1132(e) (1987) ("ERISA") and 28 U.S.C. § 1331.


At the time of Mrs. Vicinanzo's accident, she was insured under a group medical, dental and life insurance policy and group long-term disability policy (collectively, "the Policy"). Issued by New England Mutual Life Insurance Company ("New England") and governed by ERISA, the Policy provides that Major Medical Benefits are payable for expenses incurred while the employee is "covered" and sets no lifetime limit. Should "employment" terminate as a result of sickness or injury, coverage "shall" (according to the Policy) or "may" (according to the Certificate of Insurance) continue until the employer

  (a) acting in a uniform and non-discriminatory
  manner which precludes individual selection,
  notifies New England in writing, to cancel; or

(b) the applicable date specified below.

Sickness or injury — continuance is indefinite.

Pursuant to the Policy, New England paid Mrs. Vicinanzo's medical expenses for more than three and half years following the accident. Then, by a letter dated July 2, 1987, B & F notified plaintiffs that because New England no longer viewed Mrs. Vicinanzo's claims as a pooled risk and had announced its intention to charge back $300,000 per year to her employer, Mrs. Vicinanzo's employment would terminate as of July 23, 1987.*fn1 After advising plaintiffs of their rights under New York law to obtain a statutory continuation of benefits and a conversion policy at their own expense, B & F instructed New England to terminate Mrs. Vicinanzo's insurance coverage. It is at least implicit that B & F acted at the suggestion of New England and solely to avoid the threatened annual premium surcharge resulting from New England's refusal to treat the claims as a pooled risk. Thereafter, plaintiffs received Extended Major Medical Benefits for twelve more months before going onto the conversion policy.

In the absence of a stipulation of counsel, plaintiffs could have sued in this Court for a sum certain.*fn2 Had they prevailed, they then could have recovered, under ordinary principles of issue preclusion, an indefinite number of subsequent judgments for future medical care, provided only that Mrs. Vicinanzo remains in need of medical care.

In two previous opinions, we granted defendants' motions for summary judgment on several of plaintiffs' ERISA claims. See Memorandum and Order of April 15, 1989 (treating defendants' Rule 12 motions as Rule 56 motions); Memorandum and Order of August 30, 1989 (discussing defendants' subsequent Rule 56 motions). At least three contested issues, however, have precluded summary adjudication of plaintiffs' Section 510 claims. These include:

(i) Whether, under the Policy, coverage of medical expenses extends for the indefinite period of disability (as it reads literally) or only while an employee is "covered" — a central question since Mrs. Vicinanzo's disability and expenses might persist for the rest of her life;

(ii) Whether, under the Policy, B & F has an option to terminate coverage for sickness or injury so long as such termination is performed in a uniform and non-discriminatory manner that precludes individual selection — a mixed question of contractual and statutory interpretation since plaintiffs claim not only that the Policy is ambiguous on this point but also that any such provision is unenforceable as violative of ERISA; and

(iii) Whether B & F, which had no preexisting policy as to the termination of disabled employees, may be regarded as having terminated Mrs. Vicinanzo's coverage in a uniform and non-discriminatory manner. B & F's board of directors purported to terminate coverage in accordance with a newly adopted official corporate policy. Apparently, however, this policy was adopted sometime after Mrs. Vicinanzo's accident, either in response to that event or at the suggestion of New England. B & F's Board resolution states:

  [I]n the event of the continuous, long-term
  illness or injury of the Corporations' employees,
  the Corporation shall terminate the coverage of
  the employees in question under the Corporation's
  health insurance plan at the end of the period
  beginning on the first date of said injury or
  illness and ending one year thereafter, plus one
  additional month per year of service of said

Relying on this resolution, B & F claims that Mrs. Vicinanzo, who had approximately seven years' tenure with the company prior to her accident, received substantially more insurance coverage than she was owed. But it remains an open issue whether this resolution establishing a corporate policy — enacted after Mrs. Vicinanzo's accident, with full knowledge of her continuing disability, and quite probably as an alternative to paying $300,000 per year in annual premiums — may be regarded as "uniform and non-discriminatory." Surely it does not qualify as such merely by reciting words of general application; the events surrounding its enactment and application are apt to suggest far more to the trier of the facts than are superficially neutral phrases. For this reason alone, ...

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