Walker v. Wal-Mart Stores, Inc., WAL-MART
| Decision Date | 18 November 1998 |
| Docket Number | No. 98-60224,WAL-MART,98-60224 |
| Citation | 159 F.3d 938 |
| Parties | 22 Employee Benefits Cas. 2150 Sandria F. WALKER, Plaintiff-Appellant, v.STORES, INC., Defendant-Appellee. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Philip Bohrer, Ramsey, Koederitz & Bohrer, Baton Rouge, LA, for Plaintiff-Appellant.
William O. Luckett, Luckett Law Firm, Clarksdale, MS, W. O. Luckett, Jr., Lorrie Komar Ridder, Rossie, Luckett, Parker & Ridder, Memphis, TN, for Defendant-Appellee.
Appeal from the United States District Court for the Southern District of Mississippi.
Before REYNALDO G. GARZA, JOLLY and WIENER, Circuit Judges.
I. FACTUAL AND PROCEDURAL BACKGROUND
In January of 1990, Sandra Walker ("Walker") was employed by Wal-Mart Stores Inc. and was a member of the Wal-Mart Associates Group Health Plan ("the Plan"), which provided Walker with medical and dental benefits. The Plan is governed by the Employee Retirement Income Security Act ("ERISA").
Beginning January 18, 1990, through January 25, 1990, Walker underwent dental treatment by Dr. Van R. Simmons, a dentist in Mississippi. On January 7, 1992, Walker initiated a malpractice action in state court against Dr. Simmons for dental malpractice. She alleged that he propped her mouth open excessively, thus causing her to undergo three inpatient surgeries for repair of her right and left temporomandibular joints.
Walker's medical expenses totaled $41,598.59 and were paid by the Plan. On June 19, 1996, Walker agreed to release Dr. Simmons of all claims in exchange for a settlement agreement of $12,500.
On December 13, 1996, Walker instituted a declaratory judgment action against the Plan in the Circuit Court of Pike Country, Mississippi. Walker argued that she was entitled to the whole of the settlement proceeds received in the underlying malpractice action. On January 21, 1997, the Plan removed the case to federal court on the basis of federal question jurisdiction.
On March 31, 1998, the United States District Court for the Southern District of Mississippi granted the Plan's Motion for Summary Judgment, and ordered that the entirety of the $12,500 be paid to the Plan as reimbursement for its medical expenses. Walker appealed the lower court's decision.
II. STANDARD OF REVIEW
In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court established that courts must apply a de novo standard of review in actions brought by ERISA plan participants who challenge the denial of benefits. However, if the plan vests the plan administrator with discretionary authority to make eligibility determinations or construe the plan's terms, the appropriate standard of review is for abuse of discretion. Id.
This Court has held Bruch's principles applicable not only to benefit determinations brought by plan participants, but also to plans' assertions of purported reimbursement and subrogation rights. Sunbeam-Oster Company, Inc. Group Benefits Plan for Salaried and Non-Bargaining Hourly Employees v. Whitehurst, 102 F.3d 1368, 1373 (5th Cir.1996). In Whitehurst, we applied a de novo standard of review because the parties agreed that the administrator had not been vested with discretionary authority to interpret the Plan at the time of the plaintiff's injuries. Id. Had we found that the administrator had possessed discretionary authority at the time of the injury, the appropriate standard of review would have been for abuse of discretion.
Like in Whitehurst, the Plan herein is asserting its reimbursement and subrogation rights over the plaintiff's monetary recoveries from the tortfeasor. In this case, however, the issue on whether the administrator was vested with discretionary authority has not been settled and we must look at the Plan's language to determine if any of its provisions vested the administrator with such authority. The relevant provision, for determining this issue, reads as follows:
The PLAN herein expressly gives the ADMINISTRATIVE COMMITTEE discretionary authority to resolve all questions concerning the administration, interpretation or application of the PLAN, including without limitation, discretionary authority to determine eligibility for benefits or to construe the terms of the PLAN in conducting the review of the appeal....
This provision clearly vested the Administrative Committee with the discretionary authority to interpret the terms of the Plan, therefore, the proper standard of review in this case is for abuse of discretion.
III. DISCUSSION
There are two issues presented in this case. First, whether the Plan's language unambiguously speaks to this dispute and sufficiently provides for the distribution of settlement proceeds of the type paid in this case. Second, whether the plaintiff's attorney is entitled to deduct his fees and expenses prior to the Plan being reimbursed under his own reimbursement contract with the plaintiff.
Walker's argument, for right of possession over the settlement money, is three-fold. First, she argues that the Plan chose not to participate or finance the lawsuit and should therefore be barred from recovering any of the settlement money. Second, Walker maintains that the language of the Plan never contemplated partial recovery by a participant nor did it ever consider the issue of attorneys' fees. Third, Walker...
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