Lampen v. ALBERT TROSTEL & SONS EMP. WELFARE PLAN

• Decision Date: 28 September 1993
• Docket Number: Civ. A. No. 92-C-1359.
• Citation: 832 F. Supp. 1287
• Court: U.S. District Court — Eastern District of Wisconsin
• Parties: Jim E. LAMPEN, Plaintiff, v. ALBERT TROSTEL & SONS CO. EMPLOYEE WELFARE PLAN and The Travelers Plan Administrators of Illinois, Inc., Defendants.

832 F. Supp. 1287

Jim E. LAMPEN, Plaintiff, v. ALBERT TROSTEL & SONS CO. EMPLOYEE WELFARE PLAN and The Travelers Plan Administrators of Illinois, Inc., Defendants.

Civ. A. No. 92-C-1359.

United States District Court, E.D. Wisconsin.

September 28, 1993.

Lance S. Grady, Previant Goldberg Uelmen Gratz Miller & Brueggeman, Milwaukee, WI, for plaintiff.

Paul D. Braun, Karl A. Dahlen, Foley & Lardner, Milwaukee, WI, for Albert Trostel & Sons Employee Welfare Plan.

John R. Pendergast, Riordan Crivello Carlson Mentkowski & Steeves, Milwaukee, WI, for Travelers Plan.

DECISION AND ORDER

REYNOLDS, Senior District Judge.

Presently before this court are defendants' motions for summary judgment and a cross-motion for summary judgment filed by the plaintiff, Jim Lampen ("Lampen"). Lampen has sued his company's welfare plan and the plan's claims administrators for damages resulting from the denial of medical benefits. Title 29, § 1132(a)(1)(B), (e)(1) of the United States Code grant this court jurisdiction over this case. For the reasons stated below, this court will grant the defendants' motions for summary judgment and dismiss this case.

FACTS

At all times relevant to this case, plaintiff Jim Lampen was an hourly employee of Albert Trostel Packing, Ltd. ("Trostel Packing") and was a participant in defendant Albert Trostel & Sons' company employee welfare plan (the "Trostel Plan"), which is a self-funded employee health benefit trust organized and maintained under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. ("ERISA"). Defendant Travelers Plan Administrators of Illinois, Inc. ("TPA"), is the claims administrator, an "independent contractor appointed by the Fiduciary to perform administrative services" pursuant to the claims administration agreement in effect at the time of the denial of benefits (the "Agreement"). (¶ 1.02 Agreement.) The Agreement names Albert Trostel & Sons Co. (the "Trostel Company") as the plan administrator and the plan sponsor, which is also the fiduciary. (¶¶ 1.07, 1.08, 8.07.)

On November 3, 1991, Lampen suffered injuries in an automobile accident in Walworth County, Wisconsin. The sheriff's deputy who investigated the accident cited Lampen for inattentive driving in violation of Walworth County Ordinance No. 346.89(1). The deputy did not cite Lampen for driving while intoxicated; however Lampen's records from his hospitalization after the accident indicated a blood alcohol level of .2 percent.

The Trostel Plan in effect at the time of the accident excluded payment for health claims resulting from:

Bodily injury resulting directly or indirectly from insurrection, war, service in the armed forces of any country or participation in a riot or during the commission of an act of crime.

(emphasis added). (Summary Plan Description for Hourly Employees of Trostel Packing, Exh. A, p. 16 at ¶ F, attached to July 9, 1993 Somodi Aff.) The plan does not define what constitutes a crime. Ms. Lisa Myers, the TPA employee who handled the plaintiff's claim, denied benefits after seeing the hospital records indicating a blood alcohol concentration above Wisconsin's legal limit for driving an automobile, because she concluded that the plaintiff was injured during the commission of a crime. (Sept. 10, 1992 letter from claims administrator denying benefits.) In order to do so, Myers relied on Wisconsin law, which prohibits driving a motor vehicle with a blood alcohol level of .1 percent or higher. (Wis.Stat. §§ 340.01(46m), 346.63(1)(b).) She also relied on one or more telephone conversations with the controller for the Trostel Company, whose duty it is to oversee the administration of the Trostel Plan and who told her that anything that was not considered to be legal would not be covered under the plan. (Dep. of Lisa Myers, p. 38-20, attached to Aug. 4, 1993 Grady Aff.)

The controller states that at least three meetings were held prior to Lampen's accident with hourly employees of Trostel Packing. He states that in those meetings, employees were "reminded that a covered employee's intoxicated use of a motor vehicle was a criminal act" and that the Trostel Plan and amended Plan¹ would not cover injuries resulting from a drunk driving accident. (July 9, 1993 Somodi Aff. ¶ 4.) Lampen says that he never attended any meetings at which the terms of the Trostel Plan or the exclusions were explained to him. (July 28, 1993 Lampen Aff.) The controller also states that the Trostel Plan consistently denies benefits to employees who were injured while driving under the influence of alcohol on the grounds that their claims were the result of their criminal acts. (July 9, 1993 Somodi Aff. at ¶ 5.)

Ms. Myers' initial and final denial of Mr. Lampen's claim for benefits was not subjected to any further review. However, under the Agreement, the plan administrator (the Trostel Company) possesses the "ultimate authority to decide all questions of eligibility ... for the payment of benefits to Participants under the Plan." (Agreement, ¶ 2.04.) Further, the employer or trustee has "absolute authority with respect to the control, management, investment, disposition or utilization of Plan assets," but may instruct the TPA as claims administrator to "utilize Plan assets in any manner the Employer and Trustee deem proper." (Agreement, ¶ 2.08.) The Agreement authorizes the TPA to "do all acts necessary and proper to carry out" its enumerated functions. Agreement ¶ 3.01. The TPA adjusts and settles all claims for benefits "in accordance with the terms and conditions of the Plan" and subject to the ultimate decisional authority of the plan administrator. (Agreement, ¶ 3.02.)

Paragraph 4.01 of the Agreement specifically states that the TPA is only the administrative agent of the fiduciary and is not a fiduciary of the Trostel Plan in its own right:

In fulfilling its duties and obligations under the Agreement, in no respect shall the Claims Administrator be deemed to be the administrator of the Plan for purposes of ERISA, nor shall the Claims Administrator be deemed a Trustee with respect to Plan assets which may be used to fund Plan benefits.

(Agreement, ¶ 4.01.) Under the Agreement, the TPA is not the insurer or underwriter of the liability of the Trostel Company, nor does it have discretion regarding the control or management of Plan assets. (Agreement, ¶¶ 4.02-.03.)

Both the TPA and the Plan have moved for summary judgment against Mr. Lampen, and Mr. Lampen has moved for summary judgment against each of the defendants for coverage of his medical expenses incurred as a result of the accident.

ANALYSIS

A court must grant a motion for summary judgment if the pleadings, depositions, answers to interrogatories, admissions, and affidavits "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Material facts are those facts which, under the governing substantive law, "might affect the outcome of the suit." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The party moving for summary judgment has the initial burden of asserting the absence of any dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). In determining whether the movant has satisfied this burden, the court must draw all reasonable inferences from the record in favor of the non-moving party. Johnson v. Pelker, 891 F.2d 136, 138 (7th Cir. 1989).

ERISA preempts state law and governs this case. See, e.g., Pohl v. Nat'l Benefits Consultants, Inc., 956 F.2d 126 (7th Cir. 1992). The plaintiff has brought this action against the defendants for wrongful refusal of benefits pursuant to 29 U.S.C. § 1132(a)(1)(B) under which a participant or beneficiary may bring a civil action against the plan entity to recover benefits due or to enforce rights under the terms of his or her plan. See, Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324-25 (9th Cir.1985) (per curiam); Licciardi v. Kropp Forge Div. Employees Retirement Plan, 772 F.Supp. 1069, 1071 (N.D.Ill.1991).

Under 29 U.S.C. § 1109, a participant or beneficiary may also sue fiduciaries to employee benefit plans for breaches of ERISA's fiduciary provisions. The plaintiff has argued that the TPA in this case acted as a plan fiduciary, that it breached its responsibilities when denying Lampen benefits, and that Lampen can recover personally for that breach. The TPA has moved for summary judgment stating that it is not a fiduciary and cannot therefore be sued, and that even if it were a fiduciary it would only be subject to a suit for breach of fiduciary duty brought on behalf of the plan and not by an individual seeking to recover a denied benefit. The court will address the TPA's summary judgment motion first.

TPA Summary Judgment Motion

Because the TPA is not the plan entity, it may not be sued under § 1132(a)(1)(B). The claims against the TPA must be restricted to breach of fiduciary duty, and therefore this court must grant summary judgment for the TPA if it is not a fiduciary.

ERISA defines a fiduciary to a plan as one who:

(i) ... exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) ... renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) ... has any discretionary authority or discretionary responsibility in the administration of such plan....

29 U.S.C. § 1002(21)(A). Courts define "fiduciary" broadly in accordance with Congress' intent to protect the interests of the plan participants and beneficiaries. See, e.g., Mut. Life Ins. Co. v. Yampol, 840 F.2d 421, 425 (7th Cir.1988). The lack of absolute...