Blake v. Unionmutual Stock Life Ins. Co. of America

• Decision Date: 30 July 1990
• Docket Number: No. 89-5334,89-5334
• Citation: 906 F.2d 1525
• Parties: Marlowe BLAKE and Pam Blake, Plaintiffs-Appellants, v. UNIONMUTUAL STOCK LIFE INS. CO. OF AMERICA, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1525

906 F.2d 1525

Marlowe BLAKE and Pam Blake, Plaintiffs-Appellants, v. UNIONMUTUAL STOCK LIFE INS. CO. OF AMERICA, Defendant-Appellee.

No. 89-5334.

United States Court of Appeals, Eleventh Circuit.

July 30, 1990.

Joel S. Perwin, Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, Miami, Fla., for plaintiffs-appellants.

William J. Gallwey, III, Shutts & Bowen, Miami, Fla., Peter J. Guffin, Asst. Counsel, Unionmutual Life Ins. Co., Portland, Me., for defendant-appellee.

Appeal from United States District Court for the Southern District of Florida.

Before FAY, Circuit Judge, RONEY ^*, Senior Circuit Judge, and PITTMAN ^**, Senior District Judge.

PER CURIAM:

Maintaining that additional compensation of $33,269 is due under a group health insurance policy, Marlowe and Pam Blake brought a civil action pursuant to 29 U.S.C.A. Sec. 1132(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA). ¹ The district court held that the insurance company's responsibility for Pam Blake's medical bills, which were incurred for extensive psychiatric care related to a postpartum depression, a complication of As to the claim to a jury trial under the Seventh Amendment, appellants concede that this Circuit has held that plaintiffs are not entitled to a jury trial under ERISA when the issue is whether it was arbitrary or capricious for benefits to be denied. Chilton v. Savannah Foods & Industries, Inc., 814 F.2d 620 (11th Cir.1987) (rejecting claim that a suit for benefits under 29 U.S.C.A. Sec. 1132(a)(1) should be tried to a jury); Howard v. Parisian, Inc., 807 F.2d 1560 (11th Cir.1987) (stating that the former Fifth Circuit squarely held that plaintiffs in actions under 29 U.S.C.A. Sec. 1132(a)(1)(B) are not entitled to trial by jury); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir.1980), (following Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d 820 (7th Cir.1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981)).

pregnancy, was limited under the policy's coverage of mental illness. The Blakes' claim that postpartum depression is covered under "the sickness," rather than "the mental illness," section of the policy, and that, in any event, they were entitled to a jury trial. We affirm.

Circuit courts dealing with the jury trial issue in ERISA-regulated plans have generally followed Wardle's reasoning. Cox v. Keystone Carbon Co., 894 F.2d 647 (3rd Cir.1990) (plaintiff's claim to Seventh Amendment jury trial dealt fatal blow by earlier decisions that section 502(a)(1)(B) claims are equitable in nature) petition for cert. filed, (U.S. Apr. 20, 1990) (No. 89-1721); Daniel v. Eaton Corp., 839 F.2d 263, 268 (6th Cir.) (no right to a jury trial under Sec. 502) (citing Crews v. Central States, 788 F.2d 332, 338 (6th Cir.1986)), cert. denied, 488 U.S. 826, 109 S.Ct. 76, 102 L.Ed.2d 52 (1988); Berry v. Ciba-Geigy, 761 F.2d 1003, 1006-07 (4th Cir.1985) (no right to jury trial in termination of pension benefits); Katsaros v. Cody, 744 F.2d 270 (2d Cir.), cert. denied, 469 U.S. 1072, 105 S.Ct. 565, 83 L.Ed.2d 506 (1984); In re Vorpahl, 695 F.2d 318 (8th Cir.1982) (no jury trial required in cases under section 502). But cf. Stamps v. Michigan Teamsters Joint Council No. 43, 431 F.Supp. 745 (E.D.Mich.1977); (claims under Sec. 1132(a)(1)(B) legal rather than equitable); Gangitano v. NN Investors Life Insurance Co., 733 F.Supp. 342 (S.D.Fla.1990) (constitutional right to jury trial exists in Sec. 1132(a)(1)(B) action).

The Blakes argue, however, that the change in the standard of review from arbitrary and capricious to de novo, made by Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), converts the claim from an equitable claim to a breach of contract action, which entitles them to a jury trial under the Seventh Amendment.

In our judgment, however, this argument cannot prevail. The nature of an action under section 502(a)(1)(B) is for the enforcement of the ERISA plan. Although the plaintiffs assert that they are claiming money damages, in effect they are claiming the benefits they are allegedly entitled to under the plan. Although here the medical treatment has been completed so that a money judgment would satisfy their demands, if the claimant were still under treatment, only an order for continuing benefits would be sufficient. This is traditionally equitable relief so that the cases relied upon by the appellants are not applicable. Curtis v. Loether, 415 U.S. 189, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974) (the Seventh Amendment requires a jury trial where a statute creates legal rights and remedies enforceable in a action for damages in a court of law); Granfinanciera, S.A. v. Nordberg, --- U.S. ----, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989) (if a statutory right is not closely intertwined with a federal regulatory program, and the right is legal in nature, then it carries the Seventh Amendment's guaranty of a jury trial).

Thus we are constrained to follow the overwhelming precedent which has clearly determined that claims on medical insurance plans issued pursuant to ERISA are equitable in nature, and the de novo standard of review does not control the application of the Seventh Amendment. See Chauffeurs, Teamsters and Helpers, Local No. 391 v. Terry, 494 U.S. ----, 110 S.Ct. 1339, 108 L.Ed.2d 519 (1990) (the This decision makes it unnecessary to confront the alternate argument of defendant-appellee that because of the failure of the plaintiffs to offer sufficient evidence to prove their case, the district court would have been compelled to direct a judgment for the defendant even if a jury otherwise would be required.

right to a jury trial is determined by "the nature of the issues involved and the remedy sought").

As to the argument that Pam Blake's postpartum treatment was covered by the "sickness" provisions of the policy, a review of the record reveals that the district court must be affirmed on the findings of fact and reasoning under the proper de novo standard of review as reflected in its Memorandum Order attached hereto as an Appendix.

AFFIRMED.

APPENDIX

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

Marlowe and Pam Blake, Plaintiffs,

vs.

Unionmutual Stock Life Insurance Co. of America, Defendant.

Case No. 87-0543-CIV-SCOTT

MEMORANDUM ORDER

Plaintiffs, Marlowe and Pam Blake, seek recovery of hospitalization and other medical expenses which Pam Blake incurred following the birth of their child. Defendant, Unionmutual Stock Life Insurance Co. of America, admits that Mrs. Blake was at all times a beneficiary of the policy but contends that it has paid her claims up to the limits of the policy. The parties agree that there are two issues: one legal and one factual. The legal issue involves which standard of review should be applied in reviewing the insurer's actions. The factual issue is whether the postpartum depression that Pam Blake suffered after giving birth was a mental illness or a physically based illness with psychiatric manifestations.

I. Standard of Review

The Court has already ruled that Plaintiff's common law actions have been preempted by the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1002(1). See Pilot Life v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Defendant argues that under ERISA the standard of review is an arbitrary and capricious action. Plaintiffs argue that the standard should be the traditional state law standard which states that where there is an ambiguity, the interpretation of the policy favoring coverage should be applied. We reject both contentions and proceed to the merits on a de novo standard of review. Firestone Tire and Rubber Company v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The Court apologizes for the delay in entering its decision, but we opted several months ago to postpone it pending resolution of Bruch. The parties will recall that this Court previously expressed our view that the arbitrary and capricious standard was inconsistent with the underlying purpose behind ERISA. Now, guided by the correct standard as enunciated in Bruch, we proceed to decide the merits of this controversy.

II. History of the Case

In 1984, Marlowe Blake was employed by the law firm of Wallace, Engels, Pertnoy and Solowsky. As a benefit of his employment, Marlowe and his wife Pam were insured for health and medical benefits under an insurance policy issued by Unionmutual Stock Life Insurance Company.

On August 13, 1984, Pam Blake gave birth to a healthy baby girl. Three days later, the family returned to their home, where Pam developed ill feelings toward the baby and herself. Pam described her condition as feeling like jumping out of her skin; she stated that she felt this heat in her body; and she felt itchiness. Pam testified that she was having bad thoughts about hurting the baby and herself. The couple called Pam's general physician who recommended that Pam drink a beer to help her relax. Unfortunately, the ill feelings continued. On August 20, 1984, Pam woke up and banged her head on the wall. The couple went to her physician's office, where Pam acted like a caged tiger. That same evening, Pam was admitted to Jackson Memorial Hospital where she remained until September 25, 1984.

Pam was readmitted to Jackson in October, 1984 and remained there until the end of December, 1984. After her December release from Jackson, she continued to seek and receive treatment at other hospitals. She spent two weeks at Highland Park and sought treatment at Hollywood Memorial. Pam has been out of treatment since January of 1988 and has received no medication since January, 1987. Today, Pam and the baby are doing well and enjoying a good relationship.

Unionmutual denies that it owes the Blakes any additional medical benefits. It claims that it has paid up to the policy limits set forth in Section I(2)(b)(iv) of the insurance agreement....