Glocker v. W.R. Grace & Co.
| Decision Date | 04 September 1992 |
| Docket Number | No. 91-2262,91-2262 |
| Citation | 974 F.2d 540 |
| Court | U.S. Court of Appeals — Fourth Circuit |
| Parties | Elma A. GLOCKER, Personal Representative of Edwin L. Glocker, Plaintiff-Appellant, v. W.R. GRACE & COMPANY; Aetna Life Insurance Company, Defendants-Appellees. |
Peter Baldwin Turney, Baltimore, Md., argued for plaintiff-appellant.
Jeffrey Peabody Ayres, Venable, Baetjer & Howard, Baltimore, Md., argued (Todd J. Horn, Venable, Baetjer & Howard, on the brief), for defendants-appellees.
Before RUSSELL, Circuit Judge, BUTZNER, Senior Circuit Judge, and SIMONS, Senior United States District Judge for the District of South Carolina, sitting by designation.
Elma A. Glocker, personal representative of her deceased husband (Mrs. Glocker), sued W.R. Grace & Co. and Aetna Life Insurance Company pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (ERISA). In count one, Mrs. Glocker seeks reimbursement under Grace's retiree's employee welfare benefit plan and medicare supplement benefits plan (collectively, Plan) for the cost of private duty nursing services provided to her husband, Edwin M. Glocker, a former employee of Grace. In a second count she seeks civil penalties against Grace for its alleged failure to provide her with certain documents.
The principal issue in this appeal is whether the district court should have reviewed Grace's denial of reimbursement for the cost of special duty nurses de novo, as Mrs. Glocker contends, or for abuse of discretion, as Grace contends. The district court applied the abuse of discretion standard and granted summary judgment in favor of Grace. Because the Plan does not grant the administrator discretion, we vacate the judgment and remand the case for reconsideration by the district court under the de novo standard. Because Mrs. Glocker needed material that Grace did not timely provide, the district court on remand should reconsider its denial of civil penalties.
When Mr. Glocker retired from Grace on May 1, 1973, Grace provided him with postretirement medical benefits under an retiree's employee welfare plan. Since Mr. Glocker was over 65, he received coverage under Grace's Medicare Supplement Benefits-I Plan. Both the general provisions of the welfare plan and the medicare supplement plan exclude expenses for custodial nursing care from coverage.
In 1985, a urologist discovered that Mr. Glocker had prostate cancer. Mr. Glocker was treated with radiation and chemotherapy for the next three years. In 1988 when he was hospitalized, he had private-duty nurses pursuant to his doctor's recommendation. His doctor recommended the nurses to ensure that Mr. Glocker did not choke on his own saliva or phlegm, that he did not remove some of the tubes attached to him, that he did not lie on his back and increase the risk of pneumonia, that any instance of apnea did not pass unnoticed, and that he received oxygen regularly. The doctor thought that the regular nursing staff could not adequately guard against these risks because of their workload. The hospital obtained some private-duty nurses and charged their services to Mr. Glocker's hospital bill. The hospital obtained other nurses who billed Mr. Glocker directly. After Mr. Glocker died, Mrs. Glocker filed a claim with AEtna seeking reimbursement for the expense of the nurses. AEtna and Grace employees reviewed the claim and concluded that the expenses were not covered by the Plan, because in their view the nurses provided only custodial care.
Grace contracted with AEtna for the administration and operation of the Plan. Section 5 of the contract specified that AEtna in performing its obligations "is acting only as agent of" Grace. This section also stipulated that for the purpose of ERISA and similar state laws, Grace shall "be deemed the administrator of the Plan."
Grace furnished the Glockers a handbook containing a summary of the Plan as required by 29 U.S.C. § 1022 and 29 C.F.R. §§ 2520.102-2 and 2520.102-3. The handbook states that private-duty nursing is covered only if "a doctor certifies that such care is medically necessary, subject to the approval of AEtna."
The Plan in contrast does not require that private-duty nursing care be subject to the approval of AEtna in order to be covered. The difference between the handbook and the Plan raises the question: which document governs? The answer is provided by the handbook. It states:
Grace, having represented to its employees that the Plan--not the handbook--governed questions about benefits, cannot now repudiate this representation and rely on statements in the handbook that are less favorable to Mrs. Glocker. In McGee v. Equicor-Equitable HCA Corp., 953 F.2d 1192 (10th Cir.1992), the court applied the same reasoning where the provision in the plan benefited the beneficiary rather than the employer, concluding that the plan "by operation of Equicor's own disclaimer" controls. 953 F.2d at 1201. The disclaimer, to which the McGee court referred, was similar to Grace's. It, too, provided that the plan--not the handbook--controls.
This is not to say that in every case the plan prevails when there is a disclaimer in the handbook. In Pierce v. Security Trust Life Ins. Co., --- F.2d ---- (4th Cir.1992), citing 29 U.S.C. § 1022, legislative history and abundant precedent, we held that employees can rely on the handbook--or, as it is frequently called, the Summary Plan Description (SPD)--despite a disclaimer in the handbook (or SPD) that ostensibly designates the Plan, with its different provisions, as the primary document. Pierce, --- F.2d at ----, ----. The distinction between this case and Pierce is this: in this case, where the handbook favors the employer, the employer cannot disavow a disclaimer in the handbook representing that the Plan controls; in Pierce, where the Plan favors the employer, the employer cannot invoke the Plan by relying on a disclaimer in the handbook that, contrary to the intent of Congress, designates the Plan as the controlling document.
Nothing in the Plan gives AEtna discretionary authority. In view of Grace's disclaimer, we reject its contention that where the Plan is silent the handbook controls. Also, the Plan does not confer on Grace, the administrator of the Plan, discretionary authority with respect to eligibility for benefits or the interpretation of the Plan. Consequently, the district court should have reviewed the denial of benefits de novo. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989).
De novo review requires credibility findings and weighing the testimony of Mr. Glocker's treating physician against the testimony of Grace's experts. It also requires weighing the evidence derived from nurses' charts and the testimony of the private-duty nurses. For these reasons, we conclude that the district court is in a much better position than this court to conduct de novo review of the denial of the benefit of private nurses.
Grace argues that the requirements for reimbursement of private-duty nurses set forth in the handbook foreclose recovery by Mrs. Glocker. These requirements are different than those set forth in the Plan. As we have previously explained, the provisions of the Plan trump the provisions of the handbook, and the district court on remand should look to the Plan--not the handbook--for guidance.
The parties differ on the proper interpretation of the phrases that serve to negate the concept of custodial care. Pages 2-3 of the general provisions state that care is not custodial when it "must be combined with other necessary...
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