Daniel v. Master Health Plan, Inc.

• Decision Date: 20 September 1994
• Docket Number: Civ. A. No. CV192-110.
• Citation: 864 F. Supp. 1399
• Parties: Carey Wayne DANIEL, Plaintiff v. MASTER HEALTH PLAN, INC. and Georgia Power Company, Defendants. MASTER HEALTH PLAN, INC., Third Party Plaintiff v. GEORGIA POWER COMPANY MEDICAL BENEFITS PLAN, Third Party Defendant.
• Court: U.S. District Court — Southern District of Georgia

864 F. Supp. 1399

Carey Wayne DANIEL, Plaintiff v. MASTER HEALTH PLAN, INC. and Georgia Power Company, Defendants.

MASTER HEALTH PLAN, INC., Third Party Plaintiff v. GEORGIA POWER COMPANY MEDICAL BENEFITS PLAN, Third Party Defendant.

Civ. A. No. CV192-110.

United States District Court, S.D. Georgia, Augusta Division.

September 20, 1994.

COPYRIGHT MATERIAL OMITTED

Thomas F. Allgood, Jr., Allgood, Childs, Mehrhof & Millians, Augusta, GA, for Carey Wayne Daniel.

Phillip A. Bradley, Long, Aldridge & Norman and William Scott Laseter, Atlanta, GA, for Master Health Plan, Inc.

Benjamin Howard Brewton, Dye, Tucker, Everitt, Wheale & Long, Augusta, GA, and Douglas D. Salyers and Richard L. Ford, Troutman & Sanders, Atlanta, GA, for Georgia Power Co.

ORDER

BOWEN, District Judge.

Pending in the above-captioned case are various motions for summary judgment. For the reasons stated below, Georgia Power Company Medical Benefits Plan's Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART; Master Health Plan, Inc.'s Motion for Summary Judgment¹ is GRANTED IN PART and DENIED IN PART; and Plaintiff's Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

This lawsuit stems from a tragic automobile accident involving Carey Wayne Daniel, the Plaintiff herein. In the accident, Plaintiff sustained severe burns over much of his body. The cost of his medical treatment to date exceeds two million dollars. At issue is the extent of liability of two group health insurance providers, Master Health Plan, Inc. (Master Health) and Georgia Power Company Medical Benefits Plan (Georgia Power) for the cost of Plaintiff's medical treatment.²

The following facts, unless otherwise noted, are not disputed. Plaintiff is the natural son of Larry W. Daniel and Catherine Rabun f/k/a Catherine Daniel. Plaintiff was born in 1973 and lived with his natural parents until November 1978, when they divorced. Under the divorce decree, Larry Daniel was (at all times relevant to this lawsuit) responsible for all of Plaintiff's reasonable medical and dental bills. At the time of the subject vehicular accident, Plaintiff was a covered dependent of Larry Daniel under the "Master Health Plan Medical Benefits Plan," sponsored by Master Health.³

Under the divorce decree, Plaintiff's mother had (at all times relevant to this lawsuit) legal custody of Plaintiff. In 1979, Plaintiff's mother married Perritt Rabun, an employee of Georgia Power. Through his job with Georgia Power, Perritt Rabun had group health insurance coverage for himself and his family. Upon his marriage to Plaintiff's mother, Perritt Rabun added Plaintiff as a covered dependent under his health insurance with Georgia Power.

Georgia Power is the sole source of funding for its health insurance plan, the Georgia Power Company Medical Benefits plan; there are no separate trust funds out of which to pay plan benefits.

From 1979, when Catherine and Perritt Rabun married, until June of 1990, Plaintiff lived with the Rabuns. The parties dispute who had "actual" custody of Plaintiff after June, 1990. In June of 1990, Plaintiff moved some of his belongings to Larry Daniel's residence, where Plaintiff began to reside. Thereafter, Plaintiff continued to spend some nights with the Rabuns, however. After June, 1990, the Rabuns continued to share Plaintiff's living expenses, such as clothing, gas money, spending money, etc., with Larry Daniel.

In the latter part of 1990, Georgia Power notified Perritt Rabun that his position with the company would be eliminated the following year. Rabun terminated his position, effective January 15, 1991, pursuant to the Georgia Power Company Project and Facility Group Outplacement Program, which afforded Rabun severance pay and other benefits. Georgia Power also notified Rabun that he could elect to continue his health insurance coverage for himself and his dependents for a specified length of time at his own expense. Rabun chose continuation coverage for himself and his dependents, including Plaintiff.

On June 21, 1991, Plaintiff was injured in a automobile accident. As previously indicated, the cost of Plaintiff's medical treatment for injuries that he sustained in the accident have been exorbitant. Almost immediately following the accident, insurance claims were tendered by Plaintiff's health care providers to both insurance plans involved in this case. Master Health has paid, to date, at least $1.2 million dollars in benefits for Plaintiff's treatment.

On October 14, 1991, Georgia Power notified the Rabuns of its decision that Plaintiff was not a covered dependent under its plan and that the denial of coverage was retroactive to February, 1991 (when Perritt Rabun elected continuation coverage). Georgia Power refuses to pay any of Plaintiff's medical claims based on its contention that he was not a covered dependent of Perritt Rabun at the time of the accident.

Plaintiff filed this lawsuit pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., naming Master Health and Georgia Power as Defendants.⁴ Plaintiff's Complaint prompted a volley of claims and defenses asserted by the Defendants.⁵ All claims and defenses raised in this litigation, whether as third-party plaintiff/defendant, cross-claimant, counterclaimant, or otherwise, derive from the parties' respective positions on two basic questions: (1) Was Plaintiff a covered dependent of Perritt Rabun under Georgia Power's plan at the time of the accident? (2) If so, which provider is the primary insurer? Georgia Power, Master Health and Plaintiff seek summary resolution of both questions.⁶

II. ANALYSIS

A. Standards for Summary Judgment

The Court should grant summary judgment only if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The applicable substantive law identifies which facts are material in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

"The movant bears the initial burden to show, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial." Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991). When the moving party has the burden of proof at trial, that party must carry its burden at summary judgment by presenting evidence affirmatively showing that, "on all the essential elements of its case ..., no reasonable jury could find for the non-moving party." United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir.1991) (en banc). When the non-moving party has the burden of proof at trial, the moving party may carry its burden at summary judgment either by presenting evidence negating an essential element of the non-moving party's claim or by pointing to specific portions of the record which demonstrate that the non-moving party cannot meet its burden of proof at trial, see Clark, 929 F.2d at 606-608 (explaining Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); merely stating that the non-moving party cannot meet its burden at trial is not sufficient, Clark, 929 F.2d at 608. Any evidence presented by the movant must be viewed in the light most favorable to the non-moving party. Adickes, 398 U.S. at 157, 90 S.Ct. at 1608.

If — and only if — the moving party carries the initial burden, then the burden shifts to the non-moving party "to demonstrate that there is indeed a material issue of fact that precludes summary judgment." Clark, 929 F.2d at 608. The non-moving party cannot carry its burden by relying on the pleadings or by repeating conclusory allegations contained in the complaint. Morris v. Ross, 663 F.2d 1032, 1033-34 (11th Cir.1981), cert. denied, 456 U.S. 1010, 102 S.Ct. 2303, 73 L.Ed.2d 1306 (1982). Rather, the non-moving party must respond by affidavits or as otherwise provided in Fed.R.Civ.P. 56. "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. at 2513. A genuine issue of material fact will be said to exist "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. at 248, 106 S.Ct. at 2510.

The clerk has given the non-moving party notice of the summary judgment motion, the right to file affidavits or other materials in opposition, and of the consequences of default; thus, the notice requirements of Griffith v. Wainwright, 772 F.2d 822 (11th Cir. 1985), are satisfied. The time for filing materials in opposition has expired, and the motion is ripe for consideration. The Court will proceed to review the applicable substantive law and inquire whether the moving party — and, if necessary, the non-moving party — has carried the respective burdens set forth above. See Clark, 929 F.2d at 609 n. 9.

B. Summary Judgment in this Case

There is no dispute that the two group insurance plans in this case are "employee welfare benefit plans," or "welfare plans," within the meaning of ERISA. See 29 U.S.C. § 1002(1). ERISA authorizes civil actions in federal court by any ERISA-plan participant or beneficiary "to recover benefits due him under the terms of his plan...." Id., § 1132(a)(1)(B). In his Complaint, Plaintiff maintains that the Defendants owe him payment for certain insurance benefits under the respective health insurance plans. As noted above, however, Plaintiff has settled his claim against Master Health. The real dispute remaining in the case is between Master Health and Georgia Power regarding the latter's liability, if any, for the cost of Plaintiff's medical treatment.

As a threshold matter, counsel differ on what standard of review — arbitrary and capricious, or de novo — should confine this Court's scrutiny of ...