Branch v. G. Bernd Co.

• Decision Date: 30 May 1991
• Docket Number: Civ. A. No. 89-242-2-MAC (WDO).
• Citation: 764 F. Supp. 1527
• Parties: H. Lynn BRANCH, Administrator of the Estate of Dwayne Elijah Bell, Plaintiff, v. G. BERND COMPANY, et al., Defendants.
• Court: U.S. District Court — Middle District of Georgia

764 F. Supp. 1527

H. Lynn BRANCH, Administrator of the Estate of Dwayne Elijah Bell, Plaintiff, v. G. BERND COMPANY, et al., Defendants.

Civ. A. No. 89-242-2-MAC (WDO).

United States District Court, M.D. Georgia, Macon Division.

May 30, 1991.

COPYRIGHT MATERIAL OMITTED

John A. Draughon, Sell & Melton, Macon, Ga., for plaintiff.

W. Melvin Haas, Jeffery L. Thompson, Haynsworth, Baldwin, Johnson & Harper, Macon, Ga., for G. Bernd Co.

Craig N. Cowart, Jones, Cork & Miller, Macon, Ga., for Pan American Life Ins. Co.

Michael R. Hurst, Heyman & Sizemore, Atlanta, Ga., for Blue Cross & Blue Shield of Ga., Inc.

OWENS, Chief Judge:

The present action was filed on July 13, 1989, under the provisions of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., and the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. § 1161, et seq., as amended ("COBRA"), by H. Lynn Branch ("Branch") in his capacity as administrator of the estate of Dwayne Elijah Bell. On March 25, 1989, Mr. Bell suffered severe injuries when he was shot several times. He was admitted to the Medical Center of Central Georgia, in Macon, where he remained until his death on April 16, 1989. The present litigation concerns the disputes with regard to who should be held responsible for payment of the approximately $98,000.00 in medical bills incurred during Mr. Bell's treatment.

On October 10, 1990, a non-jury trial was held in this matter. This court, by its letter of March 28, 1991, afforded the parties an additional opportunity to address any remaining issues relevant to the court's final resolution of this matter. The court received no responses from the parties by the date set out in the court's letter.¹ The court, by subsequent letter (April 12, 1991) afforded the parties a final opportunity to address the issue of upon whom liability falls should the court rule in favor of Branch. The court, after careful consideration of the evidence presented at the trial, all arguments and memoranda of counsel for all parties, and the record as a whole, hereby makes the following findings of fact and conclusions of law.

FACTS

Mr. Bell was employed by defendant G. Bernd Company ("G. Bernd") from September 19, 1988, until March 15, 1989. On March 15, 1989, Mr. Bell voluntarily terminated his employment with G. Bernd. Mr. Bell first attempted to resign from the company over the telephone by calling Ms. Jane Pratt ("Pratt"), an administrative assistant at G. Bernd. The record indicates that during the course of the phone conversation Pratt attempted unsuccessfully to advise Mr. Bell with regard to his right to continuation coverage under COBRA.

As a G. Bernd employee, Mr. Bell was covered under G. Bernd's Employee Welfare Benefit Plan ("the Plan"). Defendant's Exhibit 8. The health and hospitalization portion of the Plan was, until termination of coverage effective midnight March 26, 1989, provided under a policy of insurance issued by defendant Pan American Life Insurance Company ("PALIC"). Effective March 27, 1989, coverage was provided by Blue Cross and Blue Shield ("BCBS").² G. Bernd acted as "plan administrator" for this coverage under both policies.

ERISA, 29 U.S.C. § 1022 requires the preparation of a summary plan description to be furnished to all participants and beneficiaries. ERISA further requires that:

The summary plan description shall ... be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.

Id.; see also 29 C.F.R. § 2520.102-2(a) (1989) (summary shall be sufficiently comprehensive to fully inform plan participants and beneficiaries).³

While the parties have proceeded in the case sub judice upon the assumption that the relevant election period is sixty (60) days, the G. Bernd employee summary benefit plan description ("the SPD") distributed to G. Bernd employees like Mr. Bell, Defendant's Exhibit 9, sets out no specific election period. Nor is there any evidence in the record to the effect that Mr. Bell ever received either written or oral notice that election of continuation coverage was subject to a sixty (60) day election period. The SPD was drafted from PALIC's "Group Master Plan," which was the Plan in effect at G. Bernd. The Group Master Plan includes a provision entitled "Election Period" which plainly states:

There is a sixty (60) day election period. It begins on the date coverage terminates or from the date the notice is received by the affected insured. To continue, the affected insured must submit a written application and pay the required premium within the Election Period.

Defendant's Exhibit 8, p. 43. The portion of the Group Master Plan which sets out the sixty (60) day election period simply does not appear in the SPD. Apparently, through oversight, PALIC failed to insert the page setting out the election period in the SPD.⁴

Pratt testified that when Mr. Bell called announcing his intention to quit she attempted to advise him of his COBRA rights, that as a G. Bernd employee he could enjoy continued insurance coverage and benefits, even after termination of employment, by electing continuation coverage under the Plan.⁵ Apparently, Mr. Bell, leaving G. Bernd on less than friendly terms, did not respond to Pratt's representations with regard to continued coverage; Mr. Bell simply used this phone conversation as an opportunity to unleash his frustrations, in the form of assorted vulgarities and expletives, at a G. Bernd representative. He stated that he wanted nothing more to do with G. Bernd and hung up the phone.

Later that day, Mr. Bell came to G. Bernd's offices. Pratt was again the unfortunate recipient of Mr. Bell's vulgar editorial commentary about G. Bernd. Pratt presented Mr. Bell with a COBRA election form which he bluntly refused to fill out or sign. He demanded his paycheck. When Pratt informed him that his paycheck would not be ready until the following day, Mr. Bell left the office.

The following day, Mr. Bell returned to pick up his check. Pratt had attached a COBRA election form to the check along with instructions to whomever provided Mr. Bell with his check to get him to make an election on the attached form. Apparently, Mr. Bell returned for his check while Pratt was at lunch; it is unclear from the record who gave Mr. Bell his check. A COBRA election form with Mr. Bell's name on it was presented at trial. Defendant's Exhibit 4.⁶ Mr. Bell did not fill out the portion of the form pertaining to acceptance or declination of continued coverage. Rather than electing whether to continue his coverage, Mr. Bell filled out that portion of the election form pertaining to health coverage for dependents — Mr. Bell had neither dependents nor dependent coverage. No witness was presented to attest to Mr. Bell's signature on the form or to the fact that it was indeed Mr. Bell who filled out the form.⁷ The court is nonetheless satisfied that this form was indeed executed by Mr. Bell when he picked up his last check.⁸

On March 25, 1989, Mr. Bell was shot several times by an unidentified gunman. Mr. Bell was admitted to the Medical Center of Central Georgia in Macon ("the Med Center"). He was treated in the emergency room and later transferred to the intensive care unit where he remained comatose or semi-conscious until he died from the gunshot wounds on April 9, 1989. The hospital bill for Mr. Bell's care and treatment was $98,692.00.

On March 30 or 31, 1989, Ms. Mabel Pinkston ("Pinkston"), the assistant director of admissions at the Med Center, called Pratt to inquire with regard to whether Mr. Bell had insurance or was eligible for COBRA benefits. Pratt, at that time unaware of the form executed by Mr. Bell on March 16, 1989, prepared an additional election form and sent it to the Med Center. Pratt apparently told Pinkston that Mr. Bell was still eligible for COBRA benefits. Plaintiff's Exhibit # 1; Transcript of Non-Jury Trial p. 47.

It is undisputed that Mr. Bell was never able to execute an election form during his hospital stay. The Med Center staff attempted without success to have Mr. Bell execute either the COBRA election form or a power of attorney. Branch next attempted to schedule meetings with a Ms. Faulk, Mr. Bell's mother, to allow her to take over Mr. Bell's affairs. These efforts were fruitless and no other family member stepped forward to attend to Mr. Bell.

Finally, on May 25, 1989, over one month after Mr. Bell passed away, Branch was appointed temporary administrator by Bibb County Probate Judge William J. Self. Plaintiff's Exhibit 2. Branch immediately executed the COBRA election form on behalf of the estate of Mr. Bell, electing to continue coverage and delivered the form to G. Bernd on May 25, 1989. Plaintiff's Exhibit 3. At the same time, Branch tendered a cashier's check ($428.16) to G. Bernd to cover Mr. Bell's March and April insurance premiums. Plaintiff's Exhibit 4.

On May 25, 1989, Pratt spoke with Ms. Mary Katz ("Katz"), attorney for Branch in his capacity as an agent of the Med Center. Pratt advised Katz that only that day Pratt had discovered that Mr. Bell had executed an election form on March 16, 1989. Pratt stated that Mr. Bell had effectively elected not to continue coverage, thereby preempting Branch's election form executed on May 25, 1989.

BCBS and G. Bernd executed the agreement for the BCBS insurance plan on May 12, 1989. Coverage was made effective retroactively to March 27, 1989. BCBS was not made aware of G. Bernd's potential health insurance liability with regard to Mr. Bell until some time after the contract for coverage was executed.

DISCUSSION

COBRA was signed into law on April 7, 1986, as an amendment to ERISA, mandating that employer-provided health plans furnish employees and their dependents an option for continuing coverage in...