Padilla v. Triple-S, Inc.

• Decision Date: 30 July 2007
• Docket Number: Civil No. 07-1246 (DRD).
• Citation: 500 F.Supp.2d 43
• Parties: Luis E. Diaz PADILLA, et al., Plaintiffs, v. TRIPLE-S, INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

500 F.Supp.2d 43

Luis E. Diaz PADILLA, et al., Plaintiffs, v. TRIPLE-S, INC., Defendant.

Civil No. 07-1246 (DRD).

United States District Court, D. Puerto Rico.

July 30, 2007.

Pedro J. Landrau-Lopez, San Juan, PR, for Plaintiffs.

Cesar T. Alcover-Acosta, Manuel A. Pietrantoni, Casellas, Alcover & Burgos PSC, San Juan, PR, Roberto Cortes-Moreno, Roberto Cortes Moreno Law Office, Mayaguez, PR, for Defendant.

ORDER AND OPINION

DOMINGUEZ, District Judge.

I. PROCEDURAL HISTORY

The instant case is a breach of contract claim arising under the Employee Retirement Security Act (ERISA), 29 U.S.C. § 1001, et. seq., brought by Luis Diaz Padilla against Triple-S Inc. Plaintiff seeks injunctive and equitable relief, specific performance and damages for Defendant's refusal to cover Plaintiffs desired INTACS procedure under his ERISA-regulated insurance plan. Plaintiff is insured under a health benefit plan sponsored by his employer, COSTCO, and Triple-S is the health insurer of that group health plan. Plaintiff has a degenerative condition known as Keratcconus in both eyes for which his doctor recommends INTACS as a treatment alternative to corneal transplants. Defendant insurance company refused to cover this procedure under Plaintiffs health insurance plan because the Technology Evaluation Center (TEC) of the Blue Cross Blue Shield Association, the umbrella insurance organization under which Triple-S exists, deems this procedure "investigative". Plaintiffs health insurance plan does not cover "investigative" procedures. Plaintiff claims that this denial of coverage is unreasonable.

This case was removed from the San Juan Superior Court on March 23, 2007 (Docket No. 1) and the Court entertained a Show of Cause Hearing on May 7, 2007 (Docket No. 11). At this hearing, the Court granted Defendant ten (10) days to submit a motion for summary judgment.

On May 14, 2007, the Defendant filed its timely Motion for Summary Judgment (Docket No. 12) and corresponding Statement of Uncontested Material Facts (Docket No. 13). Therein, Defendant alleged that Plaintiffs claims are without merit under ERISA because Defendant's decision to deny coverage was reasonable. Defendant alleges that Plaintiffs case lacks merit because the TEC is one of the sources that the contract allows to exclude procedures from coverage for "investigative" or "experimental" status. Finally, Defendant argues that the Puerto Rico Insurance Commissioner already confirmed Triple-S' denial of coverage, stating that the plan's exclusions were clear and unambiguous. Although the decision of the Insurance Commissioner is not binding on this Court, Defendant argues that the Court should give weight to the Commissioner's conclusions on the matter.

Plaintiff filed his Opposition to Defendant's Motion for Summary Judgment (Docket No. 14) on May 28, 2007 and a Counter Statement of Uncontested Material Facts (Docket No. 16) on June 4, 2007. Plaintiff's argument against summary judgment centers around his allegation that the medical reference manual from which Triple-S draws its definition of "investigative" (and therefore uncovered) procedures was not explicitly referenced in the policy. Plaintiff argues that the "TEC" which Defendant refers to in the policy is not the Technology Evaluation Center, but rather the Technology Evaluation Coverage Manual. Plaintiff also asserts that the Technology Evaluation Center itself does not promulgate strict regulations encouraging or discouraging any medical procedure. In addition, Plaintiff refers to the policy as an adhesion contract, which, in the case of any ambiguity, should be interpreted in favor of the policy holder.

Defendant reads Plaintiff's Opposition and Counter Statement of Uncontested Facts (Docket Nos. 14 and 16) as a camouflaged cross-motion for partial summary judgment. As such, Defendant opposes this cross-motion in its Opposition to Plaintiffs' Request for Partial Summary Judgment (Docket No. 20), dated June 7, 2007. Defendant states that, in the Opposition (Docket No. 14), the Plaintiffs present only conclusory and self-serving allegations, unsupported by any admissible evidence. Additionally, in its Reply to Opposition to Motion for Summary Judgment (Docket No. 19), filed on June 6, 2007, Defendant presents three additional arguments in support of the essentiality of brevis disposition of the case. First, Defendant states that, by failing to contest Triple-S' uncontested material facts, Plaintiff allowed those facts to be admitted as a matter of law. Next, Defendant alleges that, regardless of whether the Court applies the de novo or arbitrary and capricious standard, the conclusion will be the same and hence the summary judgment is appropriate. Finally, Defendant asserts reliance upon the medical policy grounded in reliance upon the TEC's assessments.

Most recently, Plaintiff filed a Surreply (Docket No. 24) on June 18, 2007, renewing his claim that the policy is an adhesion contract to be interpreted in his favor as well as his protests regarding the meaning of the acronym "TEC" which is used in the policy. Additionally, Plaintiff challenges the use of the Technology Evaluation Center's assessments as they are not intended as recommendations for coverage.

After reviewing the individual facts of the case, the Court concludes that summary judgment for the Defendant is, in fact, warranted as a matter of law and that partial summary judgment for the Plaintiff is thus not appropriate. Accordingly, the Court GRANTS the Defendant's motion for summary judgment and therefore DENIES Plaintiff's motion for partial summary judgment for the reasons stated below.

II. SUMMARY JUDGMENT STANDARD

Rule 56(c) bestows upon the Court the power to grant summary judgment where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact" and "the moving party is entitled to judgment as a matter of law." FED. R.CIV.P. 56(c). In order to overcome a motion for summary judgment, the adverse party "may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." FED.R.CIV.P. 56(e). Citing any alleged factual dispute between the parties is not sufficient; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)(emphasis in original). Under this standard, an issue is genuine where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106 S.Ct. 2505. Likewise, a fact is material where it has the "potential to affect the outcome of the suit." Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir.1993).

The nonmoving party may thus defeat a motion for summary judgment by showing that a trialworthy issue of material fact exists in the case. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This action, however, "requires more than the frenzied brandishing of a cardboard sword." Calvi v. Knox County, 470 F.3d 422, 426 (1st Cir.2006). "Neither wishful thinking ... nor conclusory responses unsupported by evidence will serve to defeat a properly focused Rule 56 motion." Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.1990) (internal citations omitted). Ultimately, "[o]nly if the record ... reveals no genuine issue as to any material fact may the court enter summary judgment." Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.1997).

There is, however, a critical distinction as to summary judgment disposition in ERISA cases. In these cases, the court acts in a distinctive manner and "sits more as an appellate tribunal than as a trial court." Leahy v. Raytheon Co., 315 F.3d 11, 18 (1st Cir.2002). That is to say, "instead of considering affidavits submitted to the court, it evaluates the reasonableness of an administrative determination in light of the record compiled before the plan fiduciary." Denmark v. Liberty Life Assur. Co. of Boston, 481 F.3d 16, 26 (1st Cir.2007) (internal quotations omitted). In the instant case, the determination of lack of coverage is made by the company administrator, ultimately followed by a determination made by the Insurance Commissioner. Here, the Insurance Commissioner found a lack of coverage based on the following language from the policy itself:

This policy does not cover the following expenses or services:

1....

10. Services that are not medically necessary, investigative or experimentally consolidated services, as defined in the Federal Drug Administration (FDA), Department of Human and Health Services (DHHS), the Department of Health, or services that are not in agreement with the medical policy established by the Technology Evaluation Coverage Manual (TEC) of the Blue Cross and Blue Shield Association for the indications and specific methods ordered.

Because the court's review is generally based on the administrative record, "summary judgment is simply a vehicle for deciding the issue." Orndolf v. Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir.2005). Therefore, "the non-moving party is not entitled to the usual inferences in its favor." Id.

III. BREACH OF CONTRACT CLAIM UNDER ERISA

Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA) provides litigants with a cause of action for recovery of wrongfully denied insurance benefits. Aetna Health, Inc. v. Davila, 542 U.S. 200, 205, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). In this capacity, section 502(a)(1)(B) provides that a "civil action may be brought ... by a participant or beneficiary ... to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his...