Perez v. Aetna Life Ins. Co.

Citation150 F.3d 550
Decision Date01 July 1998
Docket NumberNo. 95-1111,95-1111
Parties22 Employee Benefits Cas. 1385, Pens. Plan Guide (CCH) P 23946R Benito T. PEREZ, Jr., Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Timothy A. O'Rourke (argued and briefed), Hay & O'Rourke, Lansing, MI, for Plaintiff-Appellant.

Francis R. Ortiz (argued), K. Scott Hamilton (briefed), Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, MI, Jeffrey V. Stuckey (briefed), Richard D. McNulty, Dickinson, Wright, Moon, Van Dusen & Freeman, Lansing, MI, for Defendant-Appellee.

Before: MARTIN, Chief Judge; MERRITT, KENNEDY, JONES, NELSON, RYAN, BOGGS, NORRIS, SUHRHEINRICH, SILER, BATCHELDER, DAUGHTREY, MOORE, and COLE, Circuit Judges.

SUHRHEINRICH, J., delivered the opinion of the court, in which BOYCE F. MARTIN, Jr., C.J., KENNEDY, DAVID A. NELSON, RYAN, ALAN E. NORRIS, SILER, and BATCHELDER, JJ., joined. BOGGS, J. (pp 558-561), delivered a separate dissenting opinion, in which MERRITT, NATHANIEL R. JONES, DAUGHTREY, MOORE, and COLE, JJ., joined.

OPINION

SUHRHEINRICH, Circuit Judge.

The matter before the en banc court today stems from a panel decision by this Court reversing Aetna Life Insurance Company's ("Aetna") decision to terminate disability benefits to Benito Perez, Jr., ("Perez") under a plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. The panel held that the language "[Aetna] shall have the right to require as part of the proof of claim satisfactory evidence ... that [the claimant] has furnished all required proofs for [receipt of] benefits" did not vest discretion in Aetna to make benefits determinations. 1 Perez v. Aetna Life Ins. Co., 96 F.3d 813, 825-26 (6th Cir.1996), vacated, 106 F.3d 146 (6th Cir.1997). Given that conclusion, the panel reached the related issue of whether the de novo standard of review announced in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), applies to factual determinations made by a plan administrator. 2

The panel's decision in Perez conflicted with a prior panel's decision in Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376 (6th Cir.1996). The Yeager panel held that similar plan language vested discretion in the plan administrator to make benefits determinations. Id. at 380.

To resolve this conflict, we voted to rehear the case en banc to address two specific issues: 1) whether the Plan language grants Aetna discretion; and 2) whether the de novo standard of review announced in Firestone applies to both fact determinations and plan interpretation, or only to plan interpretation. Perez v. Aetna Life Ins. Co., 106 F.3d 146 (6th Cir.1997). For the following reasons, we conclude that the Plan language grants Aetna discretionary authority to make benefits determinations. We therefore do not reach the issue of whether the de novo standard announced in Firestone applies to factual determinations made by a plan administrator.

I. FACTS

For sixteen years, Perez worked for the Motor Wheel Corporation, a division of Goodyear Tire and Rubber Company located in Lansing, Michigan. In 1984, Perez suffered a work-related injury when he jumped from a platform to avoid an explosion of molten steel. The accident fractured his left heel and foot. Doctors inserted metal screws and pins into Perez's foot and surgically fused his ankle joint. As a result, effective December 1, 1985, Aetna considered Perez "totally disabled" within the meaning of the Plan and he began receiving disability benefits. 3

In 1987, Perez enrolled in Lansing Community College to pursue an associate's degree in business management. 4 On August 12, 1988, Perez's rehabilitation counselor wrote to Aetna estimating that "Mr. Perez will complete his educational program either at the completion of Spring or Summer term, 1989. Following completion of this program, job placement assistance will be provided until Mr. Perez has obtained employment." J.A. at 245. However, Perez did not complete his degree until March of 1991, approximately two years behind schedule. From 1985 to 1991, Aetna continued to provide disability benefits to Perez.

On April 8, 1991, Aetna informed Perez by letter that his benefits would extend "through June 30, 1991, or until such time as [he] secured employment, but not beyond June 30, 1991." J.A. at 330. In accordance with this letter, Perez has received no disability benefits from Aetna since June 30, 1991.

On June 24, 1991, Perez enrolled in a computer training course scheduled to last 12 weeks. In subsequent letters, Perez sought review of Aetna's decision to terminate his benefits and requested an extension of his coverage until he could complete additional training to make him employable. J.A. at 291-92, 310. Perez's rehabilitation counselor, in an unsigned March 18, 1992, letter addressed to Aetna, described Perez's situation as follows:

Initial job placement efforts revealed that Mr. Perez needed computer skills to compete for entry-level jobs in the business field. His Business Management program at Lansing Community College did not include computer skills training, and with his prior work history comprised primarily of factory work, Mr. Perez was not suitably prepared for an entry-level business position.

Since mid-June, 1991, Mr. Perez has been involved with an individualized, hands-on computer skills training program with Smith & Bell Computer Training Institute, Inc. in Lansing, Michigan....

... Th[is] training program has had to be further extended because of major medical problems experienced by Mr. Perez from December 1991 through March 1, 1992....

In summary, it is my professional opinion that Mr. Perez was not yet competitively employable with the completion of his Associate Degree in Business Management.... [I]n today's highly competitive job market, Mr. Perez is at a disadvantage without additional short-term [computer] training. It is my understanding that Mr. Perez' LTD [Long-Term Disability] Benefits were discontinued because of the assumption that he was employable with the Associate Degree in Business Management. However, for the reasons described above, Mr. Perez was not yet employable....

J.A. at 441-42.

In response to Perez's repeated requests for an extension of his benefits, Aetna wrote to Perez on February 26, 1992:

You ... wrote us on September 9, 1991, and more recently on February 12, 1992.

You are requesting an extension of Long-Term Disability benefit coverage in order that you may secure additional training and expertise involving the use of personal computers.... We don't dispute that this additional training would be helpful but we feel that it is not essential in determining whether or not you presently have the training to pursue some reasonable occupation that others with the same training that you have are engaged in gainful work. We feel that you have acquired sufficient education and skills by virtue of your attaining your Associate of Arts Degree in Business Management and are now able to pursue some reasonable occupation. Therefore, we must refuse your request for extension of Long-Term Disability Benefits beyond June 30, 1991.

J.A. at 125-26.

This letter became Aetna's final determination that Perez was able to engage in a reasonable occupation and therefore no longer totally disabled under the Plan.

In addition to his benefits from Aetna, Perez collected workers' disability compensation from the State of Michigan until December 5, 1992. On that date, Perez was offered employment as a lab technician with the Laboratory of Clinical Medicine of Michigan State University. He began working there on December 7, 1992, but quit after only one full week on the job. After quitting, Perez applied for reinstatement of his worker's compensation benefits. In an administrative hearing, a Michigan worker's compensation magistrate denied Perez's request for reinstatement of his benefits, concluding that Perez could and did perform work as a lab technician.

Perez sued Aetna under ERISA "to recover benefits due to him under the terms of his plan...." Id. § 1132(a)(1)(B). The district court granted summary judgment to Aetna and denied Perez's cross-motion for summary judgment. Perez then moved to alter or amend the judgment under Fed.R.Civ.P. 59(e), which the district court denied. Perez appealed the district court's grant of summary judgment for Aetna and also its denial of his motion to amend the judgment. The original panel of this court reversed the district court's decision and we granted this en banc review.

II. STANDARD OF REVIEW

We generally review a denial of a motion to alter or amend the judgment under Rule 59(e) for abuse of discretion. Huff v. Metropolitan Life Ins. Co., 675 F.2d 119, 122 (6th Cir.1982). However, when the Rule 59(e) motion seeks review of a grant of summary judgment, as in the case at bar, we apply a de novo standard of review. Columbia Gas Transmission Corp. v. Limited Corp., 951 F.2d 110, 112 (6th Cir.1991) (citing Huff, 675 F.2d at 122-23 n. 5).

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when there is no genuine issue of material fact for trial, and the moving party is entitled to judgment as a matter of law. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing Fed.R.Civ.P. 56(e)). In ruling on a motion for summary judgment, all reasonable inferences must be drawn in favor of Perez, the non-moving party. Timmer v. Michigan Dep't of Commerce, 104 F.3d 833, 842 (6th Cir.1997) (citation omitted).

III. COLLATERAL ESTOPPEL

Before turning to the principal issue on appeal, we must dispose of Aetna's argument that the refusal by a Michigan worker's compensation magistrate to reinstate Perez's worker's compensation benefits collaterally estops Perez from challenging...

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