Ross v. Rail Car America Group Disability Income

• Citation: 285 F.3d 735
• Decision Date: 09 April 2002
• Docket Number: No. 00-2800.,00-2800.
• Parties: James B. ROSS, Plaintiff-Appellant, v. RAIL CAR AMERICA GROUP DISABILITY INCOME PLAN; The Canada Life Assurance Company, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 735

285 F.3d 735

James B. ROSS, Plaintiff-Appellant, v. RAIL CAR AMERICA GROUP DISABILITY INCOME PLAN; The Canada Life Assurance Company, Defendants-Appellees.

No. 00-2800.

United States Court of Appeals, Eighth Circuit.

Submitted: March 15, 2001.

Filed: April 9, 2002.

Rehearing and Rehearing En Banc Denied: May 16, 2002.^*

William Carl Brown, Omaha, NE, argued, for Plaintiff-Appellant.

Michael S. Degan, Omaha, NE, argued (Sally B. Surridge, on the brief), for Defendants-Appellees.

Before BYE and JOHN R. GIBSON, Circuit Judges, and FRANK,¹ District Judge.

JOHN R. GIBSON, Circuit Judge.

James Ross appeals from the district court's² entry of summary judgment in favor of Canada Life Assurance Company on his amended complaint seeking relief under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461 (1994 & Supp. V 1999). Ross had been receiving disability income benefits pursuant to a group insurance policy issued to his employer by Canada Life. When those benefits ceased, Ross brought this action against three entities: Canada Life; Rail Car America, Inc., his employer;³ and Rail Car America Group Disability Income Plan, the employee benefit plan established to provide disability income benefits to Rail Car employees. Ross later voluntarily dismissed the action against Rail Car America, Inc., and the district court entered summary judgment in favor of the Plan and Canada Life.

Ross argues on appeal that the district court erred by determining that the Plan was twice properly amended. The first amendment shortened the duration of his benefits and the second reduced the amount of his monthly payment. Ross also argues that the district court erred in finding that Canada Life was not the Plan Administrator and therefore not liable for statutory damages for failing to provide documents that he requested. Finally, Ross objects to evidentiary and attorney's fee rulings by the district court. We affirm the judgment entered by the district court.

I.

We review the district court's grant of summary judgment de novo, viewing the record in the light most favorable to Ross as the non-moving party. Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir.1998). Ross, who became disabled due to colon cancer while he was employed at Rail Car, began receiving benefits under the Rail Car Disability Income Plan in 1992. The Plan is an employee welfare benefit plan as defined in 29 U.S.C. § 1002(1), and it provided benefits through a Canada Life insurance policy held by Rail Car. In April 1997, Canada Life determined that Ross was no longer disabled and advised him that his benefits would cease at the end of that month. He appealed the termination decision and Canada Life agreed to continue paying benefits pending its investigation. After having no success in obtaining medical information it requested from Ross, Canada Life suspended benefits payments in December 1997. Ross then involved counsel in his efforts to resume benefits, and Canada Life once again prepared to review its decision on appeal.

During the appeal period, Canada Life advised Ross through his counsel that his benefits were being terminated for a new reason: he had exceeded the policy's maximum benefit period of sixty months. Canada Life also indicated that Ross had been overpaid benefits because the policy called for its benefits to be reduced by any Social Security disability payments he may have received, and he had failed to notify Canada Life that he was receiving dependent disability benefits. In addition, although his sixty months of benefits had been paid by May 1997, Canada Life continued to make monthly payments through December of that year. Canada Life requested no refund on these overpayments, but once again advised Ross that he had the right to appeal its determination. His attorney challenged the process under which the Canada Life policy had been amended before Ross became disabled (resulting in the sixty-month maximum benefit period) and requested documents concerning the amendment process. Canada Life did not respond, and Ross filed this action.

At various times during this more than year-long exchange of correspondence, Ross and his attorney asked Canada Life to provide copies of Plan documents. In response, Canada Life sent a copy of the insurance policy.

The Plan, as already noted, paid disability income benefits through the Canada Life insurance policy held by Rail Car.⁴ Indeed, the policy constituted the Plan's only asset. The Rail Car policy was a standard long-term group disability policy offered by Canada Life for coverage of a policyholder's employees. All full-time employees of Rail Car were eligible for coverage, with the employee paying the premium by way of a payroll deduction. Employees were first notified of the policy and its benefits through employee meetings held in 1983, when Rail Car began offering the benefits. At that time, Rail Car gave each employee a copy of the Summary Plan Description relating to the policy. Thereafter, each new employee was given a copy of the Summary Plan Description after that employee completed ninety days of continuous employment (the policy's eligibility period).

In both 1990 and 1991, Canada Life informed Rail Car that employee premiums would be increased. Charles Franklin, a Rail Car vice president who was authorized by the company to act on its behalf as Plan Administrator, negotiated with Canada Life to change the terms of the coverage so as to avoid premium increases. In the fall of 1990, the policy was amended to reduce benefits from sixty-six percent of an employee's monthly earnings to sixty percent. In mid-1991, the policy was again amended to reduce the maximum benefit period for claimants who were under age 65 at the time they became disabled. Those benefits were originally available until the claimant reached age 65, but following the amendment, benefits were payable for a maximum of sixty months. As a result of these amendments, premiums actually decreased by five cents per $100 of a participant's income.

Franklin met individually with each Plan participant in June 1991, after both amendments were negotiated, and provided each with a personalized memorandum describing the changes and the premium formula to be effective July 1. In August 1991, Franklin received copies of a new Summary Plan Description from Canada Life that reflected the amendments. He forwarded copies to each of the Rail Car facilities for distribution to participants. Ross denies having received a personalized memorandum and does not recall receiving a copy of the revised Summary Plan Description.

Because the Rail Car America Group Disability Income Plan is an employee benefit plan as defined by 29 U.S.C. § 1002(1) and (3), it is required to be "established and maintained pursuant to a written instrument," 29 U.S.C. § 1102(a)(1). The district court determined that the policy and the Summary Plan Description jointly constitute the Plan documents.⁵ The policy is a standard contract of insurance setting forth eligibility requirements, benefit payments, and similar information. It contains no mention of ERISA or its requirements. The Summary Plan Description that was in place at the time Mr. Ross applied for benefits in 1992 provided general information about the policy. ("While it does not take the place of the Group Policy and is not a contract of insurance, [this Summary Plan Description] explains the essential features of the group plan.") In addition, it provided information about the Plan, as required by ERISA, including the Plan's name, the name and address of the policyholder, identification of the type of plan and type of administration, and a statement of a participant's ERISA rights. See 29 U.S.C. § 1022 (Supp. V 1999) (setting forth required contents of summary plan descriptions); 29 C.F.R.§ 2520.102-3 (2000) (same). The Summary Plan Description identified the Plan Administrator as Rail Car America and provided the company's address and phone number. It advised participants of their rights and protections under ERISA, including the right to obtain Plan documents and other Plan information from the Administrator.

The Summary Plan Description also notified participants that Canada Life was responsible for the administration of claims, including the handling and processing of claims forwarded to it by Rail Car. Canada Life was designated as the entity authorized to make the final decision on all claims. Mr. Ross does not allege, and the record contains no evidence, that Canada Life performed any functions beyond that of claims administrator.

II.

Ross argues that summary judgment should not have been entered against him on the first two counts of his amended complaint because the district court erred in its conclusion that the policy was validly amended to reduce both the amount and the duration of his benefits. Ross alleges that the policy was not properly amended according to procedures articulated in the policy itself, and that Canada Life's failure to follow the procedure should invalidate the purported amendments.

A.

We begin our discussion of this issue by analyzing the ERISA provision that authorizes this cause of action. Remarkably, this case went from complaint through judgment without any mention of what statutory provision that might be.⁶ Ross asserts in his opening brief to this court that this is a claim for benefits under 29 U.S.C. § 1132(a)(1) (section 502(a)(1) of ERISA), but it is not. Although his ultimate goal is to continue receiving disability income benefits from Canada Life, section 502(a)(1)(B) authorizes a participant to bring an action to recover benefits, enforce rights, or clarify rights to future benefits under the terms of the plan. Ross is not seeking to obtain benefits under the terms of the Plan. Rather, he is seeking to reform the Plan by obtaining a declaration that the purported 1990 and 1991 amendments are void. Section 502(a)(1)(B)...