298 F.3d 102 (1st Cir. 2002), 01-2133, Watson v. Deaconess Waltham Hosp.

Docket Nº:01-2133.
Citation:298 F.3d 102
Party Name:Larkin D. WATSON IV, Plaintiff, Appellant, v. DEACONESS WALTHAM HOSPITAL, Caregroup, Inc., Liberty Life Assurance Co. Of Boston, Defendants, Appellees.
Case Date:August 08, 2002
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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298 F.3d 102 (1st Cir. 2002)

Larkin D. WATSON IV, Plaintiff, Appellant,

v.

DEACONESS WALTHAM HOSPITAL, Caregroup, Inc., Liberty Life Assurance Co. Of Boston, Defendants, Appellees.

No. 01-2133.

United States Court of Appeals, First Circuit

August 8, 2002

Heard April 5, 2002

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[Copyrighted Material Omitted]

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Robert LeRoux Hernandez for appellant.

Philip M. Cronin with whom Joseph K. Scully and Peabody & Arnold LLP were on brief for appellee.

Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, and LYNCH, Circuit Judge.

LYNCH, Circuit Judge.

Larkin Watson, fifty-six years old and totally disabled due to a heart condition, is unemployed and not receiving Long Term Disability (LTD) benefits.1 He claims that, at pertinent times when he would have been eligible for LTD coverage through his employer, he was never told of the eligibility. As a result, he made choices about the number of hours he worked, not understanding that a consequence of his choices was that he was no longer eligible for LTD coverage. By the time that Watson says he did learn of the LTD policy and submitted his application, that application was denied on a number of grounds; had he applied earlier and made different choices, he says he would have been given the LTD benefits he now needs. Watson sued his employers and plan administrators under the Employee

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Retirement Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461 (2000).

Watson does not sue the Plan for denial of benefits under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B); there would be obvious problems in doing so. Rather, he attempts to fit his claim into the particular circumstances in which benefits plan participants and beneficiaries may bring claims alleging breach of fiduciary duty by plan administrators and others. See, e.g., Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996).

The district court granted judgment for Deaconess Waltham Hospital, Watson's employer, Watson v. Deaconess Waltham Hosp., 141 F.Supp.2d 145 (D.Mass.2001), declined to allow Watson to amend his complaint to add previous plan administrators as defendants, Watson v. Deaconess Waltham Hosp., No. 00-10583-WGY (D.Mass. June 1, 2001), and also granted summary judgment for the Liberty Life Assurance Co. of Boston, the LTD insurer after January 1, 1996, Watson v. Deaconess Waltham Hosp., No. 00-10583-WGY (D.Mass. June 29, 2001). We affirm the district court's decisions, although our reasoning differs in some respects.

We summarize the heart of our reasoning. ERISA does require plan administrators to provide certain benefits plan information, such as Summary Plan Descriptions, to all plan participants and beneficiaries. 29 U.S.C. § 1024(b). ERISA also provides limited and specific remedies if an administrator fails to do so. Id. at § 1132(a)(1), (c)(1)(B). When ERISA itself has specified a duty and a corresponding remedy, we will impose a further duty on fiduciaries only in very narrow circumstances. Even assuming Deaconess was a fiduciary, Watson has not presented facts that fit him into those narrow circumstances. This is not a case in which misrepresentations were made to Watson, nor is this a case in which he requested the LTD information and the response was inadequate.

I.

The facts are largely undisputed. The parties agreed that the district court judge should consider the case against Deaconess as a case stated. See Cont'l Grain Co. v. P.R. Mar. Shipping Auth., 972 F.2d 426, 429 n. 7 (1st Cir. 1992). The case against the insurer was resolved on summary judgment.

Larkin Watson first began working for Waltham-Weston Hospital, the predecessor to Deaconess Hospital, in October 1992, as a part-time employee working twenty-four hours per week as an Addictions Counselor. During the orientation on his first day of work, Watson reviewed and signed an "Employee Orientation Checklist," which included a list of possible benefits. Several of the benefit programs are checked off, and others have notations such as "not interested" or "gave info—will decide." On the line for the LTD Insurance program is the notation "N/A." Watson testified in his deposition that he did not know what "LTD Insurance" meant and that the human resources representatives simply told him that it did not apply to him. Watson was also given a two-page "Part Time Employee Benefits Summary" listing the conditions under which part-time employees became eligible for various types of benefits; LTD benefits were not listed or discussed on this form. At that time, the hospital's LTD insurance plan was provided through the Confederation Life Insurance Company (not a party to this action) and required that an employee work at least thirty-six hours per week in order to be eligible. All parties agree that Watson was not eligible for LTD plan participation when he began his employment in October 1992.

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On November 5, 1993, Watson changed his employment status. According to an affidavit of the hospital's Director of Human Resources, Watson became a "full-time" Addictions Counselor at that time. In a letter offering him the full-time position, Watson's supervisor wrote, "[F]ull-time benefits will be available to you. Please discuss these issues with the representative from human resources."2 Watson says that he discussed the "benefits of the new full-time job" with the Assistant Director of Human Resources and the Human Resources Benefits Coordinator and that, at that time, he opted to enroll in the major medical and dental plans. Watson says that no one informed him that, as a full-time employee, he was eligible for LTD benefits, nor was he given any summary plan description or other notice of benefits. The hospital's LTD plan was an employer-pay-all plan, under which Watson automatically became a beneficiary because he was a full time employee working at least thirty-six hours per week; no action was required on his part to enroll.

In late 1995, Watson began having health problems related to a heart condition and, as a result, began missing days at work. In early 1996, his supervisor, Lynne Foster, had several conversations with him, asking him if he would like to reduce his hours to part-time work, because she believed that he was having trouble keeping up with full-time work due to his health condition. Watson says that these conversations "induced" him to change his status to part-time employment at thirty-two hours per week, effective on March 17, 1996. Again, no one informed him that there could be changes in his benefits eligibility as a result of this change. Watson says that he contacted someone in Human Resources to ask how the change would affect his major medical and dental benefits, but that he never requested a listing of benefits for which he was or would be eligible. Nor did he ask anyone about any disability benefits.

For the next three years, Watson worked as a part-time employee. Between June 1998 and February 1999, Watson repeatedly requested a return to full-time employment. He says that he first became aware of the existence of the LTD policy on about February 3, 1999, when he learned of the policy from a Human Resources employee. On March 29, 1999, he returned to full-time work, but his medical condition apparently deteriorated. On or about April 28, 1999, his doctor informed the hospital that Watson was totally disabled and would be unable to return to work because of his heart condition. As a result, in 1999, Watson was a full-time employee for less than a month.

On July 28, 1999, after the expiration of the LTD policy's ninety-day "elimination period" (a waiting period after the onset of the disability before benefits will be paid), Watson submitted a disability claim form to Liberty Life Assurance. Liberty had taken over as carrier of Deaconess Waltham's LTD policy as of January 1, 1996, and Deaconess Waltham had renewed the policy with Liberty effective January 1, 1998. Watson's claim was denied on November 19, 1999 because Liberty determined that Watson's disability was due to a condition that predated his plan enrollment.3

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When Watson returned to full-time work in March 1999, the hospital and Liberty agreed to waive the standard six-month waiting period for plan eligibility; otherwise, Watson would not have been covered by the plan at all after only a month's worth of full-time employment. After determining that Watson's April 1999 disability was barred by the preexisting condition clause, Liberty also considered whether Watson was disabled as of December 29, 1995, when he was first hospitalized for his heart problems. Liberty determined that a claim based on a December 29, 1995, disability onset date must be denied because: (1) although Watson was scheduled to work forty hours per week in December 1995, his time cards indicated that he worked only 32 hours per week in the three weeks prior to December 29 and was therefore not eligible as a full-time employee;4 (2) any claim based on a December 29, 1995 disability should have been filed by April 28, 1997; and (3) evidence showed that Watson's condition improved and he was not disabled after December 29, 1995. Watson appealed Liberty's decision, and Liberty again denied his claim. Watson filed this federal lawsuit on March 27, 2000.

During the course of Watson's employment, a series of different LTD policies was in effect. We outline the policies here, and attach an Appendix for further clarification.

When Watson began working for the hospital, the LTD carrier was Confederation, and the hospital (then Waltham-Weston Hospital) functioned as the plan administrator. On November 1, 1994, Northwestern Mutual Life Insurance Company became the carrier for the hospital's LTD plan. This plan remained...

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