plan "relate to" that plan within the meaning of the preemption provision of ERISA; rather, such claims generally "relate to" a benefit plan when they arise out of some action taken in the execution or administration of the plan.
An example of a claim not relating to the benefit plan is McNamee v. Bethlehem Steel Corp., 692 F. Supp. 1477 (E.D.N.Y. 1988). In McNamee, the plaintiff's claims did not relate to the defendant's pension plan within the meaning of ERISA, because he did not seek benefits under the plan, but rather damages for defendant's failure to permit vesting of the pension as promised. Id. at 1478. This distinguished his case from those in which ERISA preempted state law breach of contract of claims. In those cases the contract allegedly breached was the pension plan itself, whereas he was claiming a breach of a collateral employment agreement. Id. at 1479.
Unfortunately for the plaintiff, the common law causes of action she has raised alleging that the denial of her claim for benefits is unjustified and in bad faith, clearly relate in subject matter to the employee benefit Plan. She is seeking the benefit of the defendant's Plan. A resolution of the claim will determine whether any benefits should be paid and will directly affect the administration of benefits under the Plan. Thus, the alleged improper processing of a claim for benefits under an employee benefit plan, undoubtedly meets the criteria for preemption under ERISA.
Bad faith applies to any breach of contract; not merely a breach of an insurance contract. The common law of bad faith, even if associated with the insurance industry, has developed from general principles of tort and contract law available in any breach of contract case. The uniformity of decisions which the act is designed to foster will help to predict the legality of proposed actions without the necessity of reference to varying state laws. Pilot Life Ins. Co., 481 U.S. at 54.
ERISA preempts a state breach of contract claim and applies to the instant action. Because the plaintiff "did not assert any of the several causes of action available to (her) under ERISA," Pilot Life Ins. Co., 481 U.S. at 44, and her time to amend her complaint has expired, summary judgment must be granted in favor of MetLife.
B. Arbitrary and Capricious.
Although this motion has been resolved under the preemption by ERISA, a comment is in order on whether defendant's factual determination that plaintiff's claim should be denied was, as a matter of law, not arbitrary and capricious given the information that was before MetLife when the claim was denied.
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 103 L. Ed. 2d 80, 109 S. Ct. 948 (1989) sets forth the proper standard of review for actions challenging a denial of benefits under 29 U.S.C. § 1132(a)(1)(B). Such actions are to be "reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115. Since discretionary authority is given to the Plan administrators in this case, such authority will be given full force and effect, unless it can be shown that the determination was arbitrary and capricious.
All of Owens' physicians (Dr. Daniel Dischiavo, Dr. Arne Pedersen, and Dr. Warren Rinehart) agree that it is impossible for Owens to perform, completely and continuously, each of the material duties of her regular job as a retail group manager for Steinbach. As claimed by Owens, some of her material duties include: unloading trucks, doing floor moves, climbing ladders, lifting heavy objects, and standing or walking for long periods of time, all of which she is now unable to do. Owens stated in her letter for review that she needed regular care and attendance of a doctor, and that she has suffered more that a 50% loss of earnings because she was unable to return to work. Owens finds it unreasonable that doctors who never examined her or saw her in person could draw different conclusions than the three physicians that regularly treated her since the accident, using the same data.
Information on which MetLife's denial was based included the report of the UMAC. MetLife states UMAC's opinion that Owens' medical records lacked objective medical evidence which would support a conclusion that Owens was disabled at any relevant time.
All three reviewing physicians for UMAC claim that Owens' symptoms do not correlate with the findings of her own physicians, and that such restrictions claimed and complaints of pain presented are not accomplished by any evidence of physical disorders which could reasonably be expected to produce such restrictions and complaints. MetLife afforded Owens' personal orthopedic physician, Dr. Rinehart, an opportunity to comment upon UMAC's reports as well as an opportunity to submit additional medical evidence. Dr. Rinehart responded by expressing his disagreement with UMAC's report, but he did not submit additional medical evidence.
On November 23, 1992, MetLife received a copy of a prescription pad page bearing Dr. Rinehart's instruction that Owens should consult a physical therapist, Patricia Dispirito, P.T. Ms. Dispirito's conclusion was that Owens "is unable to work at this time." MetLife argues that this evaluation of Owens does not reflect that Ms. Dispirito had been provided with or otherwise had the opportunity to examine Owens' medical records. MetLife contends that Ms. Dispirito's evaluation was performed in October 1992, and addresses only her condition at that juncture.
The UMAC's evaluation of the plaintiff's injuries and her own personal physician's medical reports are in direct conflict with each other. Therefore, a genuine issue exists as to this particular factual matter and a reasonable trier of fact may find for either side. MetLife's decision simply came down to a choice between the position of UMAC, MetLife's own independent medical consultants, and the position of Owens' own physicians. MetLife's decision to deny benefits would be arbitrary and capricious if Owens can demonstrate that the denial decision was implausible enough to be ascribed to a difference in view. Such issues of fact should be brought before the factfinder to decide after both sides have a full opportunity to be heard.
The function of the court on this motion is to determine whether there is a genuine factual dispute. The undisputed facts presented demonstrate that ERISA applies exclusively to the instant action. Owens has failed to state a cause of action under ERISA, and the complaint must be dismissed.
Therefore, it is
ORDERED that the complaint be dismissed.
The Clerk is directed to enter judgment accordingly.
IT IS SO ORDERED.
David N. Hurd
U.S. Magistrate Judge
Dated: October 7, 1994
Utica, New York.
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