Doe v. General American Life Ins. Co., 91-1957C(5).

• Decision Date: 16 March 1993
• Docket Number: No. 91-1957C(5).,91-1957C(5).
• Citation: 815 F. Supp. 1281
• Parties: Jane DOE, Plaintiff, v. GENERAL AMERICAN LIFE INSURANCE, CO., Defendant.
• Court: U.S. District Court — Eastern District of Missouri

815 F. Supp. 1281

Jane DOE, Plaintiff, v. GENERAL AMERICAN LIFE INSURANCE, CO., Defendant.

No. 91-1957C(5).

United States District Court, E.D. Missouri, E.D.

March 16, 1993.

David Campbell, St. Louis, MO, for plaintiff.

Ralph Hart, Associate, Kortenhof and Ely, St. Louis, MO, for defendant.

MEMORANDUM

LIMBAUGH, District Judge.

This matter is before the Court on the parties' cross-motions for summary judgment. The case was set for trial on September 21, 1992 and was actually presented to the Court on September 24, 1992. The parties agreed, in lieu of trial, to submit the entire case on the basis of the pending summary judgment motions, together with affidavits, responses, and additional documentary evidence. Both parties have objections to the submission of certain exhibits, mainly affidavits of the plaintiff and hospital personnel and deposition testimony of hospital personnel. Defendant strenuously objects to the expert deposition testimony (with attached exhibits) as inadmissible in an ERISA case. The exhibits and the objections raised are noted in the court record. After careful consideration of the objections raised and the caselaw cited in support, the Court determines that all evidence will be admitted. However, with respect to the affidavits of the plaintiff and the hospital personnel, and the deposition testimony of Dr. David L. Ohlms, the Court considers such evidence to have little significant impact upon the Court's final determination in this matter.

Courts have repeatedly recognized that summary judgment is a harsh remedy that should be granted only when the moving party has established his right to judgment with such clarity as not to give rise to controversy. New England Mut. Life Ins. Co. v. Null, 554 F.2d 896, 901 (8th Cir.1977). Summary judgment motions, however, "can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts' trial time for those that really do raise genuine issues of material fact." Mt. Pleasant v. Associated Elec. Coop. Inc., 838 F.2d 268, 273 (8th Cir.1988).

Pursuant to Fed.R.Civ.P. 56(c), a district court may grant a motion for summary judgment if all of the information before the court demonstrates that "there is no genuine issue as to material fact and the moving party is entitled to judgment as a matter of law." Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962). The burden is on the moving party. Mt. Pleasant, 838 F.2d at 273. After the moving party discharges this burden, the nonmoving party must do more than show that there is some doubt as to the facts. Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986). Instead, the nonmoving party bears the burden of setting forth specific facts showing that there is sufficient evidence in its favor to allow a jury to return a verdict for it. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

In passing on a motion for summary judgment, the court must review the facts in a light most favorable to the party opposing the motion and give that party the benefit of any inferences that logically can be drawn from those facts. Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983). The court is required to resolve all conflicts of evidence in favor of the nonmoving party. Robert Johnson Grain Co. v. Chem. Interchange Co., 541 F.2d 207, 210 (8th Cir.1976). With these principles in mind, the Court turns to an examination of the facts.

On or about October 18, 1992 plaintiff was admitted to the Hyland Center¹ for chemical dependency treatment related to her use of cocaine. At the time of her admission, plaintiff was a member of the United Food and Commercial Workers Union, Local 88. As a member of Local 88, plaintiff was a participant in the Local 88 Health and Welfare Group Health Plan. This plan was issued to Local 88 by the defendant.

The health plan policy in question covers chemical dependency treatment for alcoholism, but contains a provision excluding treatment for "injury or sickness arising out of the use of: a) narcotics; b) hallucinogens; c) barbiturates; d) marijuana; e) amphetamines; or similar drugs or substances." Plaintiff's Exhibit 1² — Local 88 Health and Welfare Group Health Plan, Policy No. MCP-4093, pg. 8E. This exclusion further notes that "this exception shall not apply if the drug or substance was i) legally prescribed by a doctor, and ii) the amount taken by the insured individual did not exceed the usual amount that would be authorized by one doctor for the treatment of the medical condition for which it was prescribed."

At the time of her admission, plaintiff did not consult with the defendant as to coverage for her treatment for cocaine addiction. Plaintiff was told that her treatment was covered in a conversation with hospital personnel. Plaintiff further states that she consulted with an unnamed individual at Local 88 and was told her treatment was covered under the health plan.

In connection with the treatment administered to Ms. Doe, St. Anthony's Medical Center billed GENELCO, the plan's administrator. In error, the billing clerk used a code which indicated that the treatment was for alcoholism. In response to the bill and under the belief that Ms. Doe's treatment was for alcoholism, GENELCO paid the bill. Upon finding out that treatment was not for alcoholism, but rather for cocaine addiction, GENELCO requested and received reimbursement from St. Anthony's Medical Center for the payment it contended was made in error. St. Anthony's Medical Center has now turned to plaintiff Doe for payment of her hospital bill.

Plaintiff has filed suit, pursuant to the Federal Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et. seq., against defendant challenging the denial of benefits under the Local 88 health plan. 29 U.S.C. § 1132(a)(1)(B). She contends that 1) cocaine is not pharmacologically a narcotic, therefore not within the exclusion provisions of the plan; 2) Missouri law requires the defendant to provide coverage for cocaine addiction treatment; and 3) defendant is estopped from denying coverage because plaintiff detrimentally relied upon their initial assertion that her treatment was covered under the health plan. Defendant asserts that ERISA preempts all state law, including state law regarding construction of contracts and promissory estoppel. It further contends that under ERISA, contract terms are to be accorded their ordinary meaning as understood by a layperson, not specialized meaning provided by experts. Thus, defendant argues that an expert's testimony as to whether or not cocaine is pharmacologically a narcotic is irrelevant; what is relevant is the common understanding of most persons that cocaine is a narcotic or at least an illegal drug falling within the categories provided in Exclusion Clause 10.

It is clear that a challenge to a denial of benefits under 29 U.S.C. § 1132(a)(1)(B) is reviewed under a de novo standard "unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Firestone Tire and Rubber v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989); Farley v. Benefit Trust Life Ins., 979 F.2d 653 (8th Cir.1992); Finley v. Special Agents Mut. Ben. Assn., 957 F.2d 617, 619 (8th Cir.1992). The parties make no specific mention in their pleadings as to the applicable standard of review in this case, although the defendant makes a passing reference to this Court utilizing the "arbitrary and capricious" standard of review. This Court has carefully reviewed the entire health plan in question and although it appears that there may be some support for the defendant having authority to determine what treatment is "medically necessary" and entitled to benefits, it does not appear that any such discretion exists on the issue of exclusions. Furthermore, since the parties fail to address this issue, it is apparently undisputed that the defendant General American has no such discretion under the terms of the Local 88 health plan regarding the issue of exclusions. Therefore, this Court will review Exclusion No. 10 (the drug exclusion) de novo.

ERISA is a broad comprehensive regulation that preempts state laws relating to employee benefit plans unless the state law "regulates insurance, banking, or securities." 29 U.S.C. § 1144(a) and (b)(2)(A). This broad preemption applies to all state laws that have any direct or indirect relation to employee benefit plans even if the state laws were not designed specifically for that purpose. Shaw v. Delta Air Lines, 463 U.S. 85, 96-98, 103 S.Ct. 2890, 2899-2900, 77 L.Ed.2d 490 (1983); Brewer v. Lincoln Nat'l Life Ins., 921 F.2d 150, 153 (8th Cir.1990). State statutory as well as common law causes of action are preempted. Kanne v. Connecticut General Life Ins., 859 F.2d 96, 100 (9th Cir.1988).

In construing the drug exclusion clause de novo, the Court must look at the terms of the health plan without deference to either parties' interpretations. Bruch, 489 U.S. at 112, 109 S.Ct. at 955; Finley, at 619. Furthermore, the Missouri rule of construction that requires ambiguities to be construed in favor of the insured can not be used in interpreting the terms of the instant health plan. Delk v. Durham Life Ins., 959 F.2d 104, 105 (8th Cir.1992); Finley, at 619; Brewer, at 153-4. It is well-established in the Eighth Circuit that the Court must first attempt to resolve the ambiguity in the plan language by interpreting the language as would "an average plan participant". Brewer, at 154; 29 U.S.C. § 1022(a)(1). If the language remains ambiguous after applying the approach in Brewer, then the Court may consider...