Brumm v. Bert Bell NFL Retirement Plan

• Decision Date: 14 September 1993
• Docket Number: No. 92-3346,92-3346
• Citation: 995 F.2d 1433
• Parties: , 16 Employee Benefits Cas. 2361, Pens. Plan Guide P 23879C Donald BRUMM, Appellant, v. BERT BELL NFL RETIREMENT PLAN, William V. Bidwell, Michael Lynn, James Kensil, Thomas Condon, Daniel Jiggets, Edward Garvey, Sarah Meizlik, Plan Administrator, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1433

995 F.2d 1433

62 USLW 2016, 16 Employee Benefits Cas. 2361,

Pens. Plan Guide P 23879C

Donald BRUMM, Appellant, v. BERT BELL NFL RETIREMENT PLAN, William V. Bidwell, Michael Lynn, James Kensil, Thomas Condon, Daniel Jiggets Edward Garvey, Sarah Meizlik, Plan Administrator, Appellees.

No. 92-3346.

United States Court of Appeals Eighth Circuit.

Submitted April 14, 1993.

Decided June 16, 1993.

Rehearing and Suggestion for Rehearing

En Banc Denied

Sept. 14, 1993.

Helmut Starr, St. Louis, MO, argued, for appellant.

Richard Ralston, Kansas City, MO, argued (Dennis J. Dobbels and Diane P. Duvall, on the brief), for appellees.

Before WOLLMAN, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and MORRIS SHEPPARD ARNOLD, Circuit Judge.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

Donald Brumm, a vested participant in the Bert Bell NFL Retirement Plan (Plan), applied for disability benefits under the Plan, which is governed by ERISA, 29 U.S.C. § 1001 et seq. Throughout a number of proceedings between 1984 and 1987, the Plan's retirement board (Board) denied Brumm the full disability benefits that he sought. Brumm then sued the Plan and Board members under 29 U.S.C. § 1132(a)(1). This appeal arises from the district court's grant of the Plan's summary judgment motion, 802 F.Supp. 258. We reverse.

I.

Brumm played football for two different NFL teams between 1963 and 1972. He sustained a number of injuries to his back and knees during his NFL career, and he suffers from traumatic spondylolisthesis (forward displacement of one vertebrae over another) between the second and third vertebrae of his back.

After his football career, Brumm worked as a truck driver until October, 1977, when he was involved in a truck accident and suffered a back injury. A physician's notes, recorded at the time of the post-accident examination, indicate that Brumm was suffering a "pre-existing spondylolisthesis between L2 and L3" with "some degenerative changes between this area indicating that this spondylolisthesis was old." The doctor noted that the "injury occurred during [Brumm's] occupation as a professional athlete." Following the accident, Brumm worked as a dispatcher for the trucking company, then as a surveyor, and finally as owner/manager of a fast-food restaurant. Brumm has been unemployed since December, 1984, and says he is unable to work because he suffers constant back pain.

Brumm applied for Plan benefits in November, 1984. Under Section 5.2 of the Plan, a participant is "totally and permanently disabled" if he "has become totally disabled to the extent that he is prevented from or unable to engage in any occupation or employment for remuneration or profit...." Section 5.1 of the Plan provides for two levels of total and permanent disability payments: a player is eligible for "Level 1 T & P" benefits if "totally and permanently disabled" due to "a football injury incurred while an Active Player"; he receives "Level 2 T & P" benefits if his "total and permanent disability results from other than a football injury." The phrase "a football injury incurred while an Active Player" is not defined.

Pursuant to his application for benefits, Brumm was examined by a Dr. Darnell, a Plan-selected physician. Although there is some confusion as to Dr. Darnell's assessment of Brumm's disability, he indicated on a Plan document that Brumm was neither "totally disabled" nor "unable to engage in any occupation for any remuneration or profit." In April, 1985, the Board considered Brumm's application for disability benefits and, looking only at Dr. Darnell's report, denied Brumm's disability claim because it determined that he was not "totally and permanently disabled" under Section 5.2. A notice-of-denial letter sent to Brumm in May, 1985 confirmed that the Board's decision was based on Section 5.2, i.e., that Brumm was not totally and permanently disabled.

Brumm's attorney subsequently filed a timely request for reconsideration of the Board's decision, providing supplemental medical and psychiatric evidence tending to prove Brumm's disability. The Board denied Brumm's request in June, 1985. Almost a year passed without further activity on the claim. In May, 1986, Brumm's attorney provided the Plan with still more evidence to support Brumm's claim, including evidence of a December, 1985, grant of Social Security benefits based on Brumm's inability "to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment." After tabling Brumm's appeal several times, the Board finally sent Brumm to a neutral psychiatrist. After several examinations, the psychiatrist signed a Plan form indicating that Brumm was disabled from engaging "in any occupation for remuneration or profit." He concluded that Brumm was permanently disabled from a combination of depressive disorder and back pain and that his disability resulted from an injury caused by "a football-related activity." Board trustees finally voted on Brumm's claim by mail ballot in early January, 1987, and Brumm was notified on January 21, 1987, that he was being granted Level 2 benefits for four months with continuation dependent on consideration of his claim at the March meeting. The letter did not state the basis of the decision, but the Board evidently considered Brumm to be totally and permanently disabled within the meaning of Section 5.2, and the issue became the proper level of benefits to which Brumm was entitled under Section 5.1.

On January 28, 1987, the Plan received an arbitrator's opinions and decisions on a separate matter involving seven players whose claims for Level 1 benefits had been submitted to arbitration. The arbitrator, Sam Kagel, concluded that a player would be eligible for Level 1 T & P ("football") benefits (1) if the player incurred his disability from one identifiable football injury and (2) if he became totally and permanently disabled within a reasonable time after leaving football. Other totally and permanently disabled participants would receive Level 2 ("non-football") benefits. Brumm was not a party to this arbitration.

In March, 1987, the Board voted to continue Brumm's Level 2 benefits, but it tabled his request for Level 1 benefits and an earlier onset date. At a May, 1987, meeting the Board summarily denied Brumm's request for Level 1 and an earlier onset date. On June 24, 1987, a Plan administrator sent Brumm a letter informing him that the Board had denied his request for reclassification. The letter referred to Section 5.1 as the basis for the denial. Although no other reason was stated for the denial, an internal Plan document indicates that the Board relied on the standards established in the Kagel arbitration. ¹ In upholding the Board's decision, the district court opined that the Board denied Brumm Level 1 benefits because his disability did not "stem from 'a' football injury" under Section 5.1. Brumm continues to receive Level 2 disability benefits.

Brumm raises several issues on appeal. In our discussion of the proper standard of review and in the context of our assessment of the Board's decision under that standard, we discuss several of Brumm's arguments. We reverse based on our finding that the Board's presumed interpretation of Section 5.1 was unreasonable and constituted an arbitrary and capricious denial of benefits.

II.

We note at the outset that our analysis is somewhat complicated by the Board's failure to provide Brumm with adequate notice regarding its denial of Level 1 benefits. The June, 1987, notice letter stated that he was denied Level 1 benefits "because [Brumm] did not meet the requirements of Section 5.1 of the Plan ..., the disability results from a football injury incurred while an Active Player'." This notice is inadequate under the ERISA statutory scheme which requires that every Plan shall provide "adequate notice in writing to any participant or beneficiary that his claim for benefits under the Plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by any participant." 29 U.S.C. § 1133. In Richardson v. Central States Southeast & Southwest Areas Pension Fund, 645 F.2d 660 (8th Cir.1981), we held that Plan trustees are "obligated to briefly state the facts of the case and the rationale for their decision [because doing so] build[s] a body of precedent that will ultimately bring about a form of consistency otherwise lacking in the administration of the Fund." Id. at 664. We stated that "[b]ald-faced conclusions do not satisfy the requirement." Id. at 665. The June, 1987, notice denying Brumm's request for reclassification was inadequate under Section 1133 and Richardson because it did not state what construction the Board was placing on the Plan language and what element required for recovery Brumm failed to prove.

While the Plan's brief is generally silent regarding the basis for its decision to grant Brumm only Level 2 benefits and the influence of the Kagel arbitration, the Board notes that the Kagel arbitration distinction between Level 1 and Level 2 benefits supported its decision to grant Brumm "non-football" benefits and gave the Board no cause to alter the level of benefits when it reconsidered the matter in March, 1987. During oral arguments the Plan's attorney "surmise[d]" that the Plan had relied on the Kagel arbitration in deciding Brumm's claim. He stated, however, that he could not confirm "definitively" that the Plan temporarily granted Brumm Level 2 benefits in January, 1987 with a view toward reviewing his claim in light of the Kagel arbitration after the decision was final. Based on the temporal proximity of the Kagel arbitration to the early 1987 decisions on Brumm's claim, the internal document indicating the influence of the Kagel arbitration in the disposition of Brumm's claim, and the Board's own comments, we find that the Board was influenced by the Kagel criteria...