Mongeluzo v. Baxter Travenol Long Term Disability Ben. Plan
| Decision Date | 31 January 1995 |
| Docket Number | No. 93-55702,93-55702 |
| Citation | 46 F.3d 938 |
| Parties | 18 Employee Benefits Cas. 2771, Pens. Plan Guide P 23910C Raymond MONGELUZO, Plaintiff-Appellant, v. BAXTER TRAVENOL LONG TERM DISABILITY BENEFIT PLAN, an unincorporated association; Connecticut General Life Insurance Company, a Connecticut corporation; and Dynamic Controls, a division of Baxter Travenol Labs, a California corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Dan Feinberg and Lucia C. Savage, Sigman & Lewis, Oakland, CA, for plaintiff-appellant.
Susan D. Salisbury, Lee & Dickinson, Universal City, CA, for defendants-appellees.
Sheldon Weinhaus, Weinhaus & Dodson, St. Louis, MO, Gary Wood, Aids Legal Consultants, San Francisco, CA, for amicus curiae.
Appeal from the United States District Court for the Central District of California.
Before: CANBY, LEAVY, and T.G. NELSON, Circuit Judges.
Raymond Mongeluzo appeals the district court's grant of summary judgment in favor of the appellees, the Baxter-Travenol Long Term Disability Benefit Plan, Connecticut General Life Insurance Company, and Dynamic Controls, a division of Baxter Travenol Laboratories. Mongeluzo's action is based on the denial of his claim for long-term disability benefits pursuant to section 502(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1132(a) (1985). 1 Mongeluzo contends the district court erred by refusing to consider new evidence tending to show that he was suffering from chronic fatigue syndrome when he was terminated from his employment in 1986. We reverse and remand.
Mongeluzo, who has a Master's Degree in Business Administration, began work as a hospital information specialist in November of 1985 for Dynamic Controls. His work, which he describes as very demanding, included frequent business trips and overtime. One month after the start of his employment, Mongeluzo suffered an umbilical hernia. He had corrective surgery in January of 1986 and immediately returned to a heavy workload. One week after his surgery, he developed white streaks on his tongue which required medical treatment. His ulcerative colitis, which had required hospitalization in 1973, flared up as well. The symptoms of colitis that persisted in 1986 were severe abdominal cramps, diarrhea, and rectal bleeding.
Mongeluzo states in a declaration dated March 29, 1993, that he began to experience severe fatigue while employed at Dynamic Controls, which rendered him unable to perform his work. He states he also suffered from headaches, oral candidiasis, and back and shoulder pain. In April of 1986 he was terminated for unsatisfactory work performance.
After he was terminated, Mongeluzo received treatment from a psychiatrist for anxiety and depression, and from an internist for his ulcerative colitis. He was examined by at least ten different doctors from April of 1986 until December of 1988, some in connection with his application for workers' compensation benefits, and some in connection with symptoms including loss of energy, ulcerative colitis, oral candidiasis, painful lymph nodes, headaches, muscle weakness, joint pain, depression, and anxiety. Mongeluzo has never returned to work.
As an employee of Dynamic Controls, Mongeluzo participated in Baxter-Travenol's long-term disability plan. The governing plan was issued by Connecticut General Life Insurance Company, a subsidiary of CIGNA Employee Benefits Company (CIGNA). CIGNA administers the Baxter-Travenol plan and pays the benefits. In 1986, Mongeluzo requested Dynamic Controls to send him the forms to apply for long-term disability. In June of 1988, after a lengthy delay and intervention by the Department of Labor, Baxter-Travenol, the parent company of Dynamic Controls, provided Mongeluzo with claim forms and other plan documents. Mongeluzo submitted his claim for long-term disability benefits on August 2, 1988. On January 13, 1989, CIGNA awarded Mongeluzo retroactive disability benefits for a period of twenty-four months from October 9, 1986, through October 8, 1988.
On May 9, 1989, CIGNA notified Mongeluzo that it was limiting him to twenty-four months of disability benefits based on CIGNA's determination that Mongeluzo's disability was caused by a "mental illness" or a "functional nervous disorder." This determination was based on a clause in the limitations section of the plan that reads in relevant part:
Payment will not be made under this plan for any disability ... for more than 24 months during your lifetime if the disability is caused by mental illness or functional nervous disorder.
On July 7, 1989, Mongeluzo appealed CIGNA's determination, stating that his disability did not have a psychiatric origin but rather was due to ulcerative colitis and "back disorders." CIGNA directed Mongeluzo to an orthopedist, Dr. Leonard Kalfuss, for a medical evaluation. After extensive orthopedic testing and a review of Mongeluzo's available medical history, Dr. Kalfuss reported on July 17, 1990, that Mongeluzo's back ailments would not prevent his employment, suggested a gastrointestinal consultation to rule out ulcerative colitis, and recommended a current psychiatric evaluation to support his opinion that Mongeluzo's psychological status would require "periodic and continued evaluation."
On August 31, 1990, CIGNA denied Mongeluzo's appeal on the basis of Dr. Kalfuss' report and the clause in the plan limiting benefits for mental illness. Mongeluzo filed this action, which sought disability benefits beyond the twenty-four month "mental illness" limitation, in federal court on October 8, 1991.
In February of 1992, Mongeluzo received a diagnosis of chronic fatigue syndrome from Dr. Vincent Marinkovich, an immunologist at Stanford University Medical School. Dr. Marinkovich declared:
After I completed my work-up and testing of Mr. Mongeluzo I sent a letter dated March 23, 1992 to his attorney ... [in which] I confirmed my earlier diagnosis of [chronic fatigue syndrome] and stated that based upon his history, Mr. Mongeluzo had been disabled from [chronic fatigue syndrome] since April 1986 and that his disability was not caused by a mental illness or functional nervous disorder.
[Chronic fatigue syndrome] is an immunological disorder which, until very recently, has been unfamiliar to many physicians. The syndrome was first reported in the medical literature after an outbreak of fatigue at Incline Village, California in 1984. The diagnostic guidelines of [chronic fatigue syndrome] were first published in 1988.
Dr. Marinkovich provided his findings to CIGNA on February 26, 1992, stating that Mongeluzo's "history strongly suggest[s] a diagnosis of chronic fatigue syndrome with multiple chemical hypersensitiv[ities]." Marinkovich also sent a letter to Mongeluzo's attorney in which he stated the same findings. The attorney forwarded a copy of Marinkovich's letter to CIGNA on April 1, 1992. CIGNA refused to consider Dr. Marinkovich's report or to reclassify its diagnosis of Mongeluzo.
The parties then filed cross-motions for summary judgment. Mongeluzo argued that the "mental illness" limitation was ambiguous and therefore to be construed against the drafter. Mongeluzo also argued that the district court should consider new evidence. Specifically, Mongeluzo requested the court to consider the diagnosis of chronic fatigue syndrome because it had been unavailable when he (1) became disabled in 1986, (2) presented a claim for disability benefits to CIGNA in 1988; and (3) appealed to CIGNA in 1989. 2 The court declined to consider the new evidence.
On appeal, Mongeluzo argues that the district court improperly excluded the new medical evidence of chronic fatigue syndrome in its de novo review. He also argues that the district court failed to apply this circuit's rule that ambiguous terms in an insurance policy must be construed against the drafter.
A grant of summary judgment is reviewed de novo. Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir.1986). Viewing the evidence in the light most favorable to the non-moving party, we must determine whether there are any genuine issues of material fact and whether the district court correctly applied the relevant law. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986).
In actions challenging denials of benefits based on interpretations pursuant to section 1132(a)(1)(B), the district court reviews de novo, "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 & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989). The benefit plan here does not grant such discretion to the administrator. See Patterson v. Hughes Aircraft Co., 11 F.3d 948, 949 & nn. 1 and 2 (9th Cir.1993) (). Our review is also de novo.
Mongeluzo argues that because the terms "mental illness" and "functional nervous disorder" are not defined in the plan, those terms must be construed against the drafter. Mongeluzo is correct. See id. at 950 (); Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 541 (9th Cir.) (same), cert. denied, 498 U.S. 1013, 111 S.Ct. 581, 112 L.Ed.2d 587 (1990).
The district court did not decide whether the terms "mental illness" or "functional nervous disorder" were ambiguous; it only noted they were undefined: "[n]either the PLAN or Summary Plan Description provide[s] a definition of 'Mental Illness' or 'Functional Nervous Disorder.' " In granting summary judgment, the district court concluded that:
Having applied a de novo standard in reviewing the complete record before the plan administrator, the court finds that the decision of...
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