Spradley v. Owens–Illinois Hourly Emps. Welfare Benefit Plan
Decision Date | 01 June 2012 |
Docket Number | No. 10–7100.,10–7100. |
Citation | 686 F.3d 1135,53 Employee Benefits Cas. 2185 |
Parties | Tommy E. SPRADLEY, an individual resident of Wagoner County, Oklahoma, Plaintiff–Appellee, v. The OWENS–ILLINOIS HOURLY EMPLOYEES WELFARE BENEFIT PLAN, an entity amenable to suit pursuant to 29 U.S.C. 1132(d)(1), Defendant–Appellant. |
Court | U.S. Court of Appeals — Tenth Circuit |
OPINION TEXT STARTS HERE
Brian T. Ortelere of Morgan, Lewis and Bockius LLP, Philadelphia, PA (Kevin D. Gordon and Alison M. Howard of Crowe & Dunlevy, P.C., Oklahoma City, OK; Joseph B.G. Fay and Erica E. Flores of Morgan, Lewis and Bockius LLP, Philadelphia, PA, with him on the briefs) for Defendant–Appellant.
James W. Dunham, Jr., Tulsa, OK, for Plaintiff–Appellee.
Before LUCERO, McKAY, and TYMKOVICH, Circuit Judges.
This is an ERISA case in which the district court overturned an employee benefit plan's denial of a former employee's claim for permanent and total disability life insurance benefits. On appeal, Defendant Owens–Illinois Hourly Employees Welfare Benefit Plan contends the district court erred in rejecting Defendant's argument that the employee was not eligible for this benefit under the Plan's life insurance coverage provisions because his PTD life insurance claim was not filed until after he retired.
Plaintiff Tommy Spradley worked for Owens–Illinois, Inc., for nearly thirty-seven years before a disability caused him to take an early retirement in May 2008 at the age of fifty-five. Approximately nine months after he retired, Plaintiff submitted a written claim to the Plan administrator, the Owens–Illinois, Inc. Employee Benefit Committee. Plaintiff informed the Committee that the Social Security Administration had found him to be permanently and totally disabled as of March 1, 2008, and he accordingly asserted a claim for the Plan's permanent and total disability life insurance benefit. The Committee denied his claim both initially and on administrative appeal.
At this point, we must pause to describe the salient features of the Plan, particularly the PTD life insurance benefit. The Summary Plan Description contains five sections delineated by headings of equal size and prominence: “Healthcare Benefits,” “Life and Accident Insurance Benefits,” “Disability Benefits,” “Retirement Benefits,” and “Other Important Information.” ( See Appellant's App. at 23–28.) A subsection within the “Disability Benefits” section provides for PTD life insurance benefits. This subsection states in part:
Permanent and total disability (PTD) life insurance benefits are paid if:
• You become permanently and totally disabled before you reach age 65, and
• File a claim within 12 months after you stop active work with the Company, and
• You are unable to work for the rest of your life at any gainful occupation for which you are fitted by your education, training, or experience or for which you could reasonably become fitted.
Alternatively, you can qualify for PTD benefits if, on or after April 1, 1999, you are under age 65 and receive an award for Social Security Disability benefits. That award must be submitted to the insurance company responsible for making the PTD award decisions. Claim filing must meet the requirements described in PTD Benefit Claims and Appeals on [the following page].
( Id. at 121.) The next page contains more information about the PTD life insurance benefit, including the following information about claim-filing requirements:
PTD Benefit Claims and Appeals
Claims for PTD benefits must be filed within 12 months from the last day worked. If you are receiving Worker's Compensation or if you have a disabling condition that may change dramatically, you will be required to document your medical condition with the Company before the expiration of one year from your last day worked, but you could then apply for PTD within five years from your last day worked.
The Company sends a notice by registered mail on or about 90 days before the end of the one-year application period. The notice advises you to file a PTD claim or provide evidence of your medical condition before the 12–month anniversary of your last day worked.
( Id. at 122.) This subsection of the Plan contains no cross-references to any other Plan provisions.
In his claim for benefits, Plaintiff argued he qualified for this benefit because he was under age sixty-five, he had received and submitted to Defendant his award of Social Security Disability benefits, and he had submitted his claim for PTD benefits within twelve months after his last day worked. The Committee's initial denial letter said nothing about any of the PTD provisions. Instead, the letter simply stated that Plaintiff's benefit coverage ended on the last day of the month in which his employment ended. For support, the letter cited only to the third page of the Summary Plan Description. This page, which is part of the “Healthcare Benefits” portion of the Plan, describes when “coverage under the medical and dental plans” begins, then states that “[c]overage for you and your dependents ends at the end of the month in which [y]our employment with the Company ends.” ( Id. at 32.) In context, it is clear these provisions refer only to coverage for Owens–Illinois's healthcare program. Nothing on page three of the Summary Plan Description has any relevance to the PTD life insurance benefit sought by Plaintiff.
Plaintiff appealed the denial of benefits, citing again the pertinent language of the PTD life insurance provision and arguing he had fulfilled all of the requirements to qualify for this benefit. On appeal, the Committee reviewed its earlier decision, then sent Plaintiff a one-page letter reiterating that Plaintiff's benefit coverage ended on the last day of the month in which his employment ended. This time, the Committee cited for support to the first page of the Summary Plan Description. Page one of the Summary Plan Description states, “You are eligible to participate in the Company's healthcare program if you are a full-time active hourly employee of this Company.” ( Id. at 30.) Again, this provision is part of the “Healthcare Benefits” section of the Plan and clearly has no relevance to the PTD life insurance benefit Plaintiff sought. The Committee cited to no other Plan provisions or sections to support its decision.
After his administrative appeal was denied, Plaintiff filed suit under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). He again asserted he was entitled to benefits under the Plan's PTD life insurance provision.1 In response, Defendant filed a motion for judgment on the administrative record. In this motion, Defendant did not rely on either of the provisions the Committee had relied on in the administrative proceedings; rather, Defendant now argued Plaintiff's coverage had ended based on provisions located within the “Life and Accident Insurance Benefits” section of the Summary Plan Description. Specifically, Defendant argued the PTD life insurance benefit was part of the Plan's life insurance coverage and was thus governed by a coverage provision found in the earlier “Life and Accident Insurance Benefits” section of the Summary Plan Description. This provision states that “life insurance coverage ends at the end of the month in which” an employee retires. ( Id. at 107.) In its motion for judgment on the administrative record, Defendant finally addressed the specific PTD provisions Plaintiff had urged throughout the administrative proceedings. According to Defendant, these provisions only created a twelve-month application window for PTD life insurance claims to be filed by disabled employees who had stopped active work but had not retired or otherwise terminated their employment.
The district court rejected Defendant's arguments, concluding that Plaintiff was entitled to benefits under the unambiguous language of the Plan or, alternatively, that Defendant's interpretation of ambiguous Plan terms was arbitrary and capricious. The district court accordingly remanded the case for the Committee to reconsider Plaintiff's claim in accordance with this conclusion. This appeal followed.
As an initial matter, we must consider the question of our appellate jurisdiction. “Aside from a few well-settled exceptions, federal appellate courts have jurisdiction only over appeals from ‘ final decisions of the district courts of the United States.’ ” Rekstad v. First Bank Sys., Inc., 238 F.3d 1259, 1261 (10th Cir.2001) (quoting 28 U.S.C. § 1291) (emphasis in original). “We analyze the finality of an ERISA remand order ... on a case-by-case basis applying well-settled principles governing final decisions.” Metzger v. UNUM Life Ins. Co., 476 F.3d 1161, 1164 (10th Cir.2007) (quotation marks omitted). Analogizing to remand orders in the administrative agency context, we have held that ERISA remand orders will not be considered final where there are still issues to be resolved on remand and the parties' legal arguments can be considered in a future appeal after these issues are resolved. See Rekstad, 238 F.3d at 1262 ( ); Graham v. Hartford Life & Accident Ins. Co., 501 F.3d 1153, 1158–59 (10th Cir.2007) ( ). However, we have noted that a remand order in the administrative agency context may be considered final when the district court “essentially instructs the agency to rule in favor of the plaintiff.” Rekstad, 238 F.3d at 1262. Analogously, a remand order in the bankruptcy context will be considered final where the...
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