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Ames v. Group Health Inc.

March 31, 2008


The opinion of the court was delivered by: Townes, United States District Judge


Plaintiffs John Ames and Michael Pantony, as representative Trustees and Fiduciaries of the United Welfare Fund-Welfare Division ("the Fund" or "UWF") and, Fred Tremarcke, a participant in the Fund, commenced suit against defendant Group Health Incorporated ("GHI") under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. 1001 et seq. ("ERISA"), seeking relief pursuant to ERISA §§ 409, 502, and 702 in the form of equitable remedies. Tremarcke seeks to recover benefits due to him under the terms of the plan. Plaintiffs also seek relief for various state law claims alleging inter alia breach of contract and breach of fiduciary duties. (Am. Compl. § 1.)

The Fund is a jointly administered, multi-employer, Taft-Hartley benefit fund trust administered by trustees designated by a union and by employers, established and maintained pursuant to § 302(c)(5) of the Labor Management Relations Act, 29 U.S.C. § 186(c)(5) ("LMRA"). According to plaintiffs, a board of trustees with representatives from both the union and employers governs the Fund. Plaintiffs Pantony and Ames sit on the board of trustees.

Plaintiffs move and defendant cross moves for partial summary judgment for the second and third causes of action in the amended complaint. The Court describes these claims in turn.

Plaintiffs Ames and Pantony claim that after Tremarcke*fn1 went on disability leave beginning December 2001, his employer continued to make contributions for health insurance on his behalf through and including May 2002, when Tremarcke retired, but GHI refused to extend him full coverage. (Am. Compl. ¶¶ 34-51.) For the second cause of action, plaintiffs Ames and Pantony allege that GHI's refusal to pay the majority of Tremarcke's medical expenses constitutes illegal discrimination in violation of the Health Insurance Portability and Accountability Act, 29 U.S.C. § 1182. (Am. Compl. ¶ 51.)

For the third cause of action, Tremarcke alleges that GHI's refusal to pay all or most of his medical claims constitutes a breach of the policy between the Fund and GHI. (Am Compl. ¶ ¶ 34-59. He brings suit under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), to recover benefits allegedly owed to him under the plan and to enjoin acts which may violate provisions of ERISA Title 1. Tremarcke claims that on September 24, 2003, he sent a letter to GHI appealing its denial of his benefits. (Am. Compl. ¶ 54.) On October 15, 2003, Tremarcke claims that GHI sent a letter to him indicating that it had received his appeal and was reviewing it, but he had received no further correspondence from GHI regarding the appeal of the denial of his claim for benefits. (Am. Compl. ¶ 55.) Tremarcke charges GHI with being in material non-compliance with the Department of Labor regulation governing claims procedures, 29 C.F.R. § 2560.503-1.

(Am. Compl.¶ 59.) Tremarcke seeks to recover the benefits allegedly due him under the terms of the plan as provided by ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). (Am. Compl. ¶ 59.)


The UWF-GHI Group Contract

The Fund has provided its participants and beneficiaries health insurance policies through various insurance carriers, including Oxford Health Plans ("Oxford"), and Aetna Health Care ("Aetna"). (Plaintiffs' Rule 56.1 Statement, ¶ 1.) In 2002, the Fund's policies with Oxford and Aetna were due to expire. In 2001, GHI submitted to the Fund its proposal for health care coverage for UWF participants who were members of the United Service Workers of America ("USWA"). (Defendant's Rule 56.1 Statement, ¶ 4.) Following negotiations between the parties, GHI was selected to provide health insurance for Fund members from February 1, 2002 through March 31, 2003. (Plaintiffs' Rule 56.1 Statement, § 1.) Participants who had coverage through Oxford became covered under the GHI policy on February 1, 2002. Participants insured by Aetna became covered under the GHI plan on April 1, 2002. (Plaintiffs' Rule 56.1 Statement, ¶ 1.)

Pursuant to the Proposal, UWF and GHI agreed that participants entitled to enroll in the GHI-insured group plan were "all active full-time (in excess of 20 hours per week) eligible UWF participants" who were members of a collective bargaining agreement ("CBA") with the UWSA. (Defendant's Rule 56.1 Statement, ¶ 7, Plaintiffs' Second Rule 56.1 Statement, ¶ 7.) Additionally, a Rider to the Group Contract between GHI and USW limited eligibility for coverage under the Plan only to "bona fide members of [UWF], who are also actively employed on a full-time basis." (Kessler Aff., Ex. B, at UWF 0146.) The collective bargaining agreement between plaintiff Tremarcke's employer, Classic Chevrolet, and his union, USW Local 455 provided for participation in the Fund's health plan. The CBA provided, in relevant part:

d) Benefits provided by United Welfare Fund for employees covered by this Agreement shall terminate . on the first date of the month following the date an employee ceases to be employed by the Employer. Termination of employment and ceases to be employed shall be defined as cessation of active work by termination, layoff, work stoppage, leave of absence, resignation, quitting, dismissal, being pensioned or retired, or cessation of active work because of disability. (Ex. C. to Kessler Aff., UWF 0027-0028.) (emphasis supplied.)

The Fund terminated its contract with GHI effective March 1, 2003 due to alleged deficiencies in GHI's service. (Am. Compl. § 31.)

Beginning in November 2001, Tremarcke claimed he was disabled and stopped working in December 2001. (Tash Decl. ΒΆ 3., Plaintiff's Motion.) On September 6, 2002, Tremarcke entered the hospital as an inpatient and underwent a heart transplant on December 25, 2002. He was discharged on November 26, 2003 after ...

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