Candeub v. Blue Cross Blue Shield of Michigan

• Decision Date: 24 October 2006
• Docket Number: No. 5:06-cv-63.,5:06-cv-63.
• Citation: 577 F.Supp.2d 918
• Parties: Adam CANDEUB, et al., Plaintiffs, v. BLUE CROSS BLUE SHIELD OF MICHIGAN, Defendant.
• Court: U.S. District Court — Western District of Michigan

577 F.Supp.2d 918

Adam CANDEUB, et al., Plaintiffs, v. BLUE CROSS BLUE SHIELD OF MICHIGAN, Defendant.

No. 5:06-cv-63.

United States District Court, W.D. Michigan, Southern Division.

October 24, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Adam Candeub, Okemos, MI, Pro se.

Julie Taiber, Okemos, MI, Pro se.

Sue E. Jenkins, Lansing, MI, Robert A. Phillips, Detroit, MI, for Defendant.

OPINION

JOSEPH G. SCOVILLE, United States Magistrate Judge.

This is a civil action brought by two pro se plaintiffs against Blue Cross Blue Shield of Michigan. Plaintiff Adam Candeub is an assistant professor of law at the Michigan State University School of Law and is a participant in the law school's health care plan. Plaintiff Julie Taiber is the wife of Professor Candeub and is a beneficiary under the health care plan. At all relevant times, defendant Blue Cross Blue Shield of Michigan (BCBSM) provided a policy of group health insurance under contract with the law school, which provided health care coverage under the law school plan. The claims in plaintiffs' third amended complaint (docket # 61) arise from the denial of plaintiffs' claim for benefits under the group policy covering services provided by nurse midwives in October 2004 relating to the birth of plaintiffs' daughter. BCBSM denied plaintiffs' claim, asserting that the nurse midwife services procured by plaintiffs were not covered under the Plan documents.

Among the other claims in the third amended complaint, plaintiffs assert causes of action under the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. Count 6 asserts an ERISA claim for recovery of benefits pursuant to section 502(a)(1)(B). 29 U.S.C. § 1132(a)(1)(B). In addition to a claim for benefits arising from the Plan documents themselves, plaintiffs assert a theory of equitable or promissory estoppel, based on representations in favor of coverage of midwife services allegedly made by representatives of the insurer. (Count 3). Plaintiffs also bring ERISA claims under section 502(a)(3) for equitable relief to redress a breach of fiduciary duty. 29 U.S.C. § 502(a)(3). (Counts 1, 2, 3 and 4).

Pursuant to the requirements of the case management order, BCBSM has now filed the administrative record, and the parties have filed a series of motions and briefs addressed to the procedural and substantive issues relating to plaintiffs' claim for benefits under section 502(a)(1)(B). (Defendant's Motion to Affirm Administrative Decision (docket # 31) and supporting brief (docket # 32); Plaintiffs' Motion for Judgment on Partial Findings (docket # 33) and supporting brief (docket # 34); defendant's responsive brief (docket # 39), and plaintiffs' reply brief (docket # 43)). Under Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609 (6th Cir.1998), the court's review of a claim for ERISA benefits under section 502(a)(1)(B) must be based upon the administrative record alone. The parties have consented to the dispositive jurisdiction of a magistrate judge. (See Consent and Order of Reference, docket # 12). Upon review of the administrative record, the court finds that plaintiffs have established a meritorious claim for prenatal and postnatal benefits, but not for delivery benefits. The court will therefore require defendant to certify the benefits due, and a partial judgment for plaintiffs will be entered on count 6. Plaintiffs' claims that rely upon facts outside the administrative record, including their claim for promissory or equitable estoppel and for breach of fiduciary duty, cannot be determined on the present record and will therefore be scheduled for evidentiary hearing.

Findings of Fact

A. ERISA Plan

1. The Michigan State University College of Law ("the law school") maintains a number of benefit plans for its employees. The law school issued a single summary plan description (SPD) covering all such plans, including a life insurance plan, longterm and short-term disability plans, dental plan, and flexible spending account. Additionally, the SPD covered the medical plan at issue in this case. (See SPD, AR 326-340).

2. The SPD did not set forth a description of the benefits provided by any of the several plans that it covered. Rather, the first page of the SPD indicated that "benefits under this Plan are provided through the insurance carriers noted on the following page." The SPD emphasizes that it supplements the certificates and benefit booklets provided by the insurance carriers and that, in the case of conflict, the certificate and benefit booklets issued by the insurance carriers "will govern and control." (AR 327). "It is important to note that the benefit certificates issued by the insurance carriers control and that the Employer is merely providing this coverage in conjunction with the insurance carriers." (SPD, AR 328).

3. Relevant to the claims in the present case, the law school's medical plan is identified as "fully-insured." Defendant BCBSM is identified in the SPD as the "insurance carrier/claims administrator" of the medical plan. (AR 328).

4. Under the heading "Plan Administration," the SPD provides as follows:

This Plan is administered by the Plan Administrator. The Plan Administrator has full discretion and authority to: administer the Plan, interpret the Plan; determine eligibility for and the amount of benefits; determine the status and rights of participants, beneficiaries and other persons; to make rulings; make regulations and prescribe procedures; gather needed information; to prescribe forms; exercise all of the power and authority contemplated by the Internal Revenue Code with respect to the Plan; employ or appoint persons to help or advise in any administrative functions; appoint investment managers and trustees; and generally do anything needed to operate, manage and administer the Plan. The Plan Administrator reserves the right to change employee Contributions in its sole discretion. The Plan Administrator has full discretionary authority and control over the Plan, including that contemplated by the U.S. Supreme Court's decision in Firestone Tire & Rubber Co. v. Bruch.

This Plan has other fiduciaries, advisors and service providers. The Plan Administrator may allocate fiduciary responsibility among the Plan's fiduciaries and may delegate responsibilities to others. Any allocation of delegation must be done in writing and kept with the records of the Plan.

Each Fiduciary is solely responsible for its own improper acts or omissions. No fiduciary has the duty to question whether any other fiduciary is fulfilling all of the responsibilities imposed upon the other fiduciary by law. Nor is a fiduciary liable for a breach of fiduciary duty committed before it became, or after it is stopped being, a fiduciary. (SPD, AR 337). The SPD earlier identified MSU College of Law as both Plan Sponsor and Plan Administrator. (Id., 328).

5. The substantive provisions of medical coverage for employees of the law school covered by the health insurance involved in this case are set forth in a document called "Community Blue Group Benefits Certificate" (the "Group Certificate"). (AR 13-109). The first page of the certificate informed the reader that the certificate, the application, and the Blue Cross Blue Shield identification card constitute the contract. The same page also informed the reader that riders may make changes to the Group Certificate. (AR 14).

6. Relevant to the claim now before the court, the Group Certificate contained Rider CNM covering certain services by certified nurse midwives. (AR 110-13). Rider CNM provides as follows:

II. SERVICES WHICH ARE PAYABLE

We pay the approved amount for the following services when provided by a Certified Nurse Midwife:

▀ Normal vaginal delivery when provided in:

1. an inpatient hospital setting or

2. a birthing center which is hospital affiliated, state licensed and accredited as defined and approved by BCBSM.

▀ Pre-natal care

▀ Post-natal care, including a Papanicolau (PAP) smear during the six week visit.

(AR 111).

7. Defendant BCBSM also issued a document called "Your Benefits Guide" (the "Guide"). (AR 238-325). The Guide states that it is intended to be a "general summary of your coverage," but not a legal contract. It states that the certificates and riders that apply to coverage constitute the legal contract. (AR 240).

8. Under section 6B, entitled "Physicians Benefits," the Guide provides as follows:

Maternity Care

Your benefits include delivery and pre-and post-natal services. The initial inpatient examination of the newborn is a benefit when performed by a physician other than the anesthesiologist or the delivering physician.

(AR 284).

B. Events Leading Up to Claim

9. Plaintiff Adam Candeub is employed by MSU College of Law as an associate professor and is a participant in the Plan. His wife, Julie Taiber, is a beneficiary of the Plan.

10. Plaintiffs allege that in June 2004, before selecting the BCB SM plan for health coverage, plaintiff Candeub asked an unnamed BCB SM representative whether midwife births were covered by insurance. He was referred to the "Your Benefits Guide," but insurance company personnel allegedly did not make available to him a copy of the insurance certificate.

11. Plaintiffs further allege that on some unspecified date Candeub asked Randy Avery, the law school's benefits manager, to inquire of insurance representatives concerning coverage for midwife services. Plaintiffs allege that Avery talked to an unidentified insurance company representative, who assured Avery that such births were covered. Relying on such information, plaintiffs assert that they chose the BCBSM plan for health coverage.

12. On October 19, 2004, plaintiff Julie Taiber gave birth to a daughter, Lucy Susannah, at the Greenhouse Birth Center in Okemos, Michigan, under the care of nurse practitioners Barbara Kozlowski, R.N., C.N.M. and Clarice Winkler, R.N., C.N.M.

13....