Wolf v. Prudential Ins. Co. of America, 94-5140

Decision Date06 March 1995
Docket NumberNo. 94-5140,94-5140
Citation50 F.3d 793
CourtU.S. Court of Appeals — Tenth Circuit
Parties, 18 Employee Benefits Cas. 2915 Scott WOLF, Brenda Wolf, husband and wife, Plaintiffs-Appellants, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation; the Prudential Service Bureau, Inc., a foreign corporation; the Prudential Life Insurance Company, a foreign corporation, Defendants-Appellees, and Annuity Board of the Southern Baptist Convention, Inc., a Texas Corporation, Defendant.

John H. Tucker, Mary Quinn-Cooper, and Catherine C. Taylor of Rhodes, Hieronymus, Jones, Tucker & Gable, Tulsa, OK, for plaintiffs-appellants.

Elsie Draper and Timothy A. Carney of Gable and Gotwals, Tulsa, OK, for defendants-appellees.

Before MOORE, BARRETT, and EBEL, Circuit Judges.

EBEL, Circuit Judge.

Plaintiffs Scott and Brenda Wolf brought this action against defendant Annuity Board of the Southern Baptist Convention, Inc. and defendant-appellee Prudential 1 asserting claims related to defendants' denial of coverage for breast cancer treatment under a medical benefits plan sponsored by the Annuity Board and administered by Prudential. The Wolfs initially brought claims for breach of contract and specific performance against both the Annuity Board and Prudential and a claim for breach of the duty of good faith against Prudential. On motions for summary judgment by defendants, the district court granted Prudential's motion but denied the Annuity Board's. Plaintiffs moved for reconsideration of summary judgment in favor of Prudential and also moved to amend their complaint to assert a claim for breach of duty of good faith against the Annuity Board and claims for negligence and deceit against both the Annuity Board and Prudential. The court denied both motions. Plaintiffs eventually settled with the Annuity Board, and it is not part of this appeal. Plaintiffs appeal the grant of summary judgment in favor of Prudential and denial of their motions for reconsideration and to amend. We have jurisdiction under 28 U.S.C. Sec. 1291. 2

Scott Wolf is an associate pastor of the First Baptist Church of Morris, Oklahoma, and he and Brenda are insured under a medical benefits plan sponsored by the Annuity Board. The plan is a church-sponsored plan not governed by ERISA. 29 U.S.C. Secs. 1002(33), 1003(b)(2). Ms. Wolf was diagnosed with breast cancer in November 1987. She was initially treated with "standard" chemotherapy that was covered under the medical benefits plan. In October 1990, her breast cancer was found to have metastasized with the discovery of a nodule of cancer in her lung. She was given three options of treatment and chose high dose chemotherapy with autologous bone marrow transplant (HDC/ABMT). In this procedure, the patient donates her own bone marrow, which is stored while she undergoes high dose chemotherapy. After the chemotherapy drugs have cleared her system, the marrow is reinfused into the patient. On November 20, 1990, Ms. Wolf entered the hospital to have her bone marrow harvested. On February 25, 1991, she entered the hospital to undergo high dose chemotherapy and reinfusion of her bone marrow. She was hospitalized for about a month.

Through a memorandum of understanding between Prudential and the Annuity Board, Prudential took over administration of the Annuity Board's medical benefits plan in July 1990. Under the memorandum of understanding, Prudential was to administer the existing plan, which the parties and district court refer to as the Aetna plan, until Prudential and the Annuity Board agreed on a new plan. At some time no earlier than January 1, 1991, Prudential and the Annuity Board implemented a new plan that the parties refer to as the Church plan. 3 Both the Aetna and Church plans excluded coverage for treatment considered experimental or investigational, though the exclusionary language in the two plans differed. The Aetna plan excluded coverage for treatment "considered experimental in nature and practices not generally approved by the AMA." Appellants' App., Vol. II at 472. The plan did not define the term "experimental." The Church plan excluded coverage for "experimental or investigational" treatments, and defined "experimental or investigational" to mean

that the medical use of a service or supply is still under study and the service or supply is not recognized throughout the Doctor's profession in the United States as safe and effective for diagnosis or treatment.

This includes, but is not limited to: All phases of clinical trials; all treatment protocols based upon or similar to those used in clinical trials; ....

Id., Vol. I at 73.

Plaintiffs sought coverage for Ms. Wolf's HDC/ABMT treatment both in November 1990 when she had her bone marrow harvested and in February 1991 (and later) when she received the high dose chemotherapy and reinfusion. The HDC/ABMT treatment Ms. Wolf received was part of a Phase II clinical trial conducted by her oncologist. Both in November 1990 and in February 1991 and thereafter, Prudential denied coverage on the basis that the treatment was experimental or investigational and therefore excluded from coverage. Plaintiffs then brought this action.

Prudential moved for summary judgment in part on the basis that it was merely a claims service provider or administrator of a self-funded medical benefits plan, and therefore had no liability to the Wolfs for benefits under any contract nor owed them an insurer's duty of good faith. The Wolfs argued that they were third-party beneficiaries of the agreements between Prudential and the Annuity Board, that the agreements provided benefits to them in part because Prudential accepted a portion of the risk under a stop-loss provision, and Prudential was obligated to make payment under the contract and to act in good faith.

The district court agreed with Prudential. It concluded that the Wolfs were not third-party beneficiaries of the agreements between Prudential and the Annuity Board because the stop-loss provision provided for payments only from Prudential to the Annuity Board and not to plan participants such as the Wolfs. The court also concluded that Prudential's provision of claims services did not provide a basis for a bad faith claim or a contract claim against Prudential. The court reiterated these conclusions in denying plaintiffs' motion to reconsider. The court denied the motion to amend against Prudential because the motion was untimely (well after discovery ended) and plaintiffs failed to provide any good cause for the untimeliness.

We review the grant or denial of summary judgment de novo, applying the same legal standard used by the district court pursuant to Fed.R.Civ.P. 56(c). Universal Money Ctrs., Inc. v. AT & T, 22 F.3d 1527, 1529 (10th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 655, 130 L.Ed.2d 558 (1994); Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990). "Summary judgment is appropriate 'if 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 that the moving party is entitled to judgment as a matter of law.' " Universal, 22 F.3d at 1529 (quoting Fed.R.Civ.P. 56(c)). "When applying this standard, we examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment." Applied Genetics, 912 F.2d at 1241. If there is no genuine issue of material fact in dispute, then we next determine if the substantive law was correctly applied by the district court. Id.

While the movant bears the burden of showing the absence of a genuine issue of material fact, the movant need not negate the non-movant's claim, but need only point to an absence of evidence to support the non-movant's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Universal, 22 F.3d at 1529. If the movant carries this initial burden, the non-movant may not rest upon its pleadings, but must set forth specific facts showing a genuine issue for trial as to those dispositive matters for which it carries the burden of proof. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986); Applied Genetics, 912 F.2d at 1241. An issue of material fact is genuine if a reasonable jury could return a verdict for the non-movant. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510.

Breach of contract claim

On appeal, plaintiffs first contend that the district court erred in dismissing their claim for breach of contract on the basis that they are third-party beneficiaries of the agreements between Prudential and the Annuity Board. They contend that "the Wolfs were to receive benefits in the form of claims servicing, brochures and other information, the stabilization of the self-funded Plan through loss sharing and stop loss guarantees, as well as reinsurance if the claims amounted to more than could be covered." Appellants' Br. at 12.

Third-party beneficiaries have a right to enforce contracts made expressly for their benefit. See Roach v. Atlas Life Ins. Co., 769 P.2d 158, 161 (Okla.1989); Okla.Stat. tit. 15, Sec. 29. We agree that plaintiffs are third-party beneficiaries of the agreements to the extent that they are entitled to receive claims service from Prudential. The relief plaintiffs seek from Prudential, however, is not claims service but payment under the plans for what they contend is covered treatment. In this regard, we agree with the district court that plaintiffs are not third-party beneficiaries of the agreements. Under the Aetna and Church plans and the agreements between the Annuity Board and Prudential, only the Annuity Board is obligated to pay plan participants such as the Wolfs for covered claims. 4 The agreements provide a direct benefit to the ...

To continue reading

Request your trial
302 cases
  • Universe Life Ins. Co. v. Giles
    • United States
    • Texas Supreme Court
    • July 9, 1997
    ...(9th Cir.1988) (Arizona law); Chadima v. National Fidelity Life Ins. Co., 55 F.3d 345 (8th Cir.1995) (Iowa law); Wolf v. Prudential Ins. Co. of Am., 50 F.3d 793 (10th Cir.1995) (Oklahoma law); Bilden v. United Equitable Ins. Co., 921 F.2d 822 (8th Cir.1990) (North Dakota law); Pace v. Insur......
  • MOBIL EXPLORATION & PRODUCING US v. Dept. of Interior
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • June 16, 1999
    ...material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c); see Wolf v. Prudential Ins. Co. of Am., 50 F.3d 793, 796 (10th Cir.1995). "If there is no genuine issue of material fact in dispute, then we next determine if the substantive law was co......
  • Smith v. Midland Brake, Inc., a Div. of Echlin, Inc.
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • March 13, 1998
    ...the retaliatory discharge claim. DISCUSSION We review a district court's grant of summary judgment de novo. See Wolf v. Prudential Ins. Co., 50 F.3d 793, 796 (10th Cir.1995). Summary judgment is appropriate if the record shows that there is no genuine issue as to any material fact and that ......
  • Lewis v. Aetna U.S. Healthcare, Inc., 99-CV-104-H(M).
    • United States
    • U.S. District Court — Northern District of Oklahoma
    • October 20, 1999
    ...Supreme Court has thus far declined to extend this theory to other settings. Id. at 863 n. 1; see also Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 797 (10th Cir.1995) (stating that "Christian found that the special relationship on which an insurer's duty of good faith is based from......
  • Request a trial to view additional results
2 books & journal articles
  • Experimental Medical Treatments: Who Should Decide Coverage?
    • United States
    • Seattle University School of Law Seattle University Law Review No. 20-02, December 1996
    • Invalid date
    ...74 (4th Cir. 1993). 104. Id. at 80. 105. 1993 WL 384498 (D.N.J. Sept. 24, 1993). 106. Id. at *6. 107. Id. at *6-7. 108. Id. at *7-8. 109. 50 F.3d 793 (10th Cir. 110. Id. at 795. 111. Id. at 795-796. 112. Id. at 796. 113. Id. 114. Id. at 799. 115. See infra notes 119-136 and accompanying tex......
  • Chapter 11 - § 11.2 • CASES EXPANDING LIABILITY BEYOND THE SCOPE OF THE CONTRACT
    • United States
    • Colorado Bar Association Colorado Law of Insurance Bad Faith (CBA) Chapter 11 Liability of Insurer's Agents and Employees — Liability of Insurer To Non-parties
    • Invalid date
    ...for claims." Id. at 468. As support for its conclusion, the court cited the Tenth Circuit's decision in Wolf v. Prudential Insurance Co., 50 F.3d 793 (10th Cir. 1995), in which the court declined to apply the privity requirement where the third-party administrator performed nearly all the f......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT