Torre v. Federated Mut. Ins. Co.
| Decision Date | 04 August 1995 |
| Docket Number | Civ. A. No. 91-4235-DES. |
| Citation | 897 F. Supp. 1332 |
| Parties | Pamela J. TORRE, and Pamela J. Torre as guardian and next friend of Trisha B. Torre, Plaintiffs, v. FEDERATED MUTUAL INSURANCE COMPANY, Federated Mutual Insurance Company Medical Plan #501; John Cummings, Medical Plan # 501 Administrator; William Haegele, a/k/a Bill Haegele, Regional Manager; Thomas Lauritzen, a/k/a Tom Lauritzen, Federated Mutual Insurance Company District Manager; John Cummings, Individually; William Haegele, a/k/a Bill Haegele, individually; Thomas Lauritzen, a/k/a Tom Lauritzen, individually, Defendants. |
| Court | U.S. District Court — District of Kansas |
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Cheryl D. Myers, Michael B. Myers, Myers & Myers, Topeka, KS, for plaintiffs.
Arthur E. Palmer, Goodell, Stratton, Edmonds & Palmer, Topeka, KS, R. Scott Davies, Minneapolis, MN, for defendants.
Pamela Torre brought the instant action alleging the following: (1) sex discrimination in violation of Title VII of the Civil Rights Act of 1964; (2) various violations of the Employee Retirement Income Security Act of 1974 ("ERISA"); (3) discrimination in violation of Minnesota Statutes Chapter 62A; (4) breach of employment contract; (5) intentional infliction of emotional distress; and (6) tortious interference with prospective business advantage. The parties moved for summary judgment. The court issued a Memorandum and Order, filed by the Clerk May 31, 1994, denying Mrs. Torre's motion and granting-in-part and denying-in-part defendants' motion. More specifically, the court granted defendants' motion as to Mrs. Torre's Minnesota Statutes Chapter 62A, tortious infliction, and tortious interference claims; and the court granted-in-part and denied-in-part defendants' motion as to Mrs. Torre's Title VII, ERISA, and breach of contract claims. Plaintiffs moved for reconsideration. The court denied their motion in a Memorandum and Order filed August 4, 1994. The court bifurcated the instant action for trial. The parties tried Mrs. Torre's contract claim to a jury;1 immediately thereafter, the parties tried the remaining claims to the court.
After thoroughly reviewing the testimony of the witnesses (both those who testified at trial and by deposition) and examining the numerous exhibits, the court makes the following findings of fact and conclusions of law. Fed.R.Civ.P. 52(a).
For the purposes of clarity and convenience, the court organizes its findings into the following four interrelated subsections: "Parties," "Witnesses," "Health Benefits," and "Employment Discrimination."2
1. Defendant Federated Mutual Insurance Company ("Federated") has its corporate offices in Owatonna, Minnesota. Federated is a mutual insurance company selling property, casualty, group health and life, and personal lines of insurance. It concentrates its efforts on selling insurance to small and medium sized retail businesses. Its customers include auto dealers, contractors, equipment dealers, machine shops, petroleum marketers, tire dealers, and wholesalers. It also provides professional counsel, loss prevention, and claims services as "value added" components to its insurance products. Federated's commercial divisions issue and service insurance policies for their assigned states. Kansas is within Federated's Central Division. Marketing Representatives ("MRs") provide direct client contact and are responsible for selling insurance within the divisions. Federated assigns a sales territory to each MR. For administrative and supervisory purposes, MRs report to District Marketing Managers ("DMMs"). DMMs report to Regional Marketing Managers ("RMMs").
2. Federated Mutual Insurance Company Medical Plan # 501 ("Plan # 501 or the Plan") is an "employee welfare benefit plan" under 29 U.S.C. § 1001, et sequitur. Federated issued the policy that is Plan # 501 and also is named as Plan # 501's ERISA administrator.
3. Plaintiffs name John Cummings both as plan administrator and individually. Defendant John Cummings was a Senior Health Claims Manager who supervised various aspects of Trisha Torre's health benefits claim and was involved in some allocation decisions. He was not an officer. He is not the named administrator or fiduciary of Plan # 501; furthermore, he did not hold himself out as such. In a Memorandum and Order filed December 3, 1990, the court dismissed Mr. Cummings as plan administrator and individually. The court finds there was no evidence presented at trial sufficient to subject Mr. Cummings to liability either as plan administrator or individually.
4. Plaintiffs name William Haegele both as Federated manager and individually. Defendant William Haegele was the RMM in charge of the district and territory in which Mrs. Torre was located. Mr. Haegele's region included Kansas, Missouri, and Nebraska. Mrs. Torre failed to name Mr. Haegele in her state or federal sex discrimination administrative charges. In a Memorandum and Order filed December 3, 1993, the court dismissed Mrs. Torre's Title VII clams against Mr. Haegele.
5. Plaintiffs name Thomas Lauritzen both as Federated employee and individually. Defendant Thomas Lauritzen was the DMM in charge of Mrs. Torre's district. Mrs. Torre failed to name Mr. Lauritzen in her state or federal sex discrimination administrative charges. In a Memorandum and Order filed December 3, 1993, the court dismissed Mrs. Torre's Title VII claims against Mr. Lauritzen.
6. Pamela Torre is the principal plaintiff; she brings claims on her own behalf and on behalf of her daughter, Trisha Torre.
7. Pamela Torre was a MR for Federated. She signed an employment contract with Federated February 10, 1988. Mrs. Torre received training at Federated's headquarters in Owatonna, Minnesota, in March of 1988. Federated assigned her a sales territory in Kansas. She continued as a MR in this territory until March 30, 1992. On March 30, 1992, Mrs. Torre applied for and was granted short term disability status. She qualified for long term disability benefits October 1, 1992. At the time of trial, she was on disability leave.
8. Trisha Torre is Pamela Torre's minor daughter. Trisha is a dependant covered under Plan # 501. She received health benefits under the Plan.
9. Of the witnesses who testified at the bench trial, the court finds that the testimony given by the following was not credible: Charlotte White and Doug Crable. Ms. White is a disgruntled former Federated employee who was fired for cause by Mr. Haegele. Mr. Crable is a relative of plaintiff's and former Federated employee. The court has given their testimony no weight.
10. Trisha Torre was born in 1978. She was three months premature and weighed two pounds, three ounces. She suffered various health complications, including heart valve problems and underdeveloped lungs; as a result, she was placed in the intensive care unit for several weeks. At the age of one and one half years, she had heart surgery. Shortly thereafter, she began to show signs of hyperactivity.
11. Federated interviewed Mrs. Torre for employment in December of 1987. She signed an employment contract with Federated February 10, 1988. She and Trisha immediately received coverage under Plan # 501. Plan # 501 has lifetime maximum coverage limits of $1,000,000 for medical benefits and $50,000 for mental/nervous benefits.3
12. On November 9, 1989, the Hillside Unit of Menninger's Children's Hospital admitted Trisha for short term treatment and in-patient evaluation. Prior to admission, Menninger contacted Federated's group health claims department to request pre-approval for payment of mental/nervous benefits.
13. At some point in their evaluation of Trisha, the medical personnel at Menninger concluded she would be better served at another facility — more specifically, as Dr. Kearns later explained in a report dated December 26, 1989, she would be better served at a "skilled residential treatment center or medical psychiatric center" with "special educational components." During late November and early December of 1989, Mrs. Torre tried to locate another suitable facility.
14. On November 28, 1989, the Devereaux Foundation, a residential treatment facility in Chester, New Jersey, contacted Federated to request pre-approval for "benefits for in-patient m/n mental/nervous treatment."
15. On December 4, 1989, Mrs. Torre telephoned Federated's Health Claims Department regarding the allocation of Trisha's benefits under Plan # 501's mental/nervous limit. She explained to Lori Abbe that Trisha suffered from a physical condition which caused behavior problems. Ms. Abbe told her that Federated needed a letter from Trisha's physician describing the diagnosis. On December 11, 1989, Dr. William Kearns, Trisha's treating physician at Menninger, telephoned Federated and spoke with Ms. Abbe about his diagnosis. He provided a list of diagnostic codes from the International Classification of Diseases, 9th Edition ("ICD9").4 Ms. Abbe summarized their conversation with the following notation in her phone log: "he feels her dx diagnosis is primarily organic medical condition and secondary is psychological."
16. On December 13, 1989, Mrs. Torre telephoned Federated and spoke with Fran Janous, a Senior Health Claims Supervisor in Federated's Health Claims Department.5 Ms. Janous's telephone record reflects that Mrs. Torre explained her understanding that Trisha's problem was physical and not mental and related her concern about whether the Devereaux Foundation would be covered. Ms. Janous told Mrs. Torre Trisha needed to be placed in a facility covered by contract and "Devereaux just doesn't appear to be a covered facility under contract." Ms. Janous also explained that if Trisha were...
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