Golden, et al v. Kelsey Hayes Co, et al

Filing 605

ORDER granting in part and denying in part 587 Motion; adopting in part 599 Report and Recommendation. Signed by District Judge Arthur J. Tarnow. (MLan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JOSEPH GOLDEN, ET AL.,
Case No. 93-cv-40530
Plaintiffs,
SENIOR U.S. DISTRICT JUDGE
ARTHUR J. TARNOW

v.
KELSEY HAYES CO, ET AL.,

U.S. MAGISTRATE JUDGE
ANTHONY J. PATTI

Defendants.
/
ORDER ADOPTING REPORT AND RECOMMENDATION [599]; OVERRULING
PLAINTIFF’S OBJECTIONS TO REPORT AND RECOMMENDATION [601]; GRANTING
IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO REINSTATE ITS MOTION
TO ENFORCE THE GOLDEN SETTLEMENT AGREEMENT [587]
The cases at issue arose from three separate class actions between Defendant
and some of its retirees, former employees and/or their surviving spouses.
Ultimately, settlement agreements were reached which guaranteed, inter alia, that
health care benefits would be fully paid by Defendant, and provided to Plaintiffs for
life.
Before the Court is Plaintiffs’ Motion to Reinstate Motion to Enforce
Settlement Agreement [587] filed on August 29, 2019. Defendant TRW filed a
Response [588] on September 12, 2019. Plaintiffs filed a Supplemental Brief [594]
on February 3, 2020. The Magistrate Judge held a hearing on the Motion [587] on
April 22, 2020. Both parties filed a joint Supplemental Brief [598] filed on April 29,
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2020. On May 15, 2020, the Magistrate Judge issued a Report and Recommendation
(“R&R”) [599] granting Plaintiffs’ request for discovery and recommending that the
Court grant in part and deny in part Plaintiffs’ Motion [587]. Plaintiffs filed
Objections [601] to the R&R on May 29, 2020. TRW filed a Response [603] to
Plaintiffs’ Objections [601] on June 12, 2020.
For the reasons stated below, the R&R [590] is ADOPTED; Plaintiffs’
Objections [601] are OVERRULED; and Plaintiffs’ Motion to Reinstate Motion to
Enforce Settlement Agreement [587] is GRANTED in part and DENIED in part.
FACTUAL AND PROCEDURAL BACKGROUND
The Court adopts the facts of this case as set forth in the R&R:
A. Factual and Procedural Background
“As explained in the Court’s November 8, 2016 order granting
Plaintiff’s motion to enforce settlement and denying their motion
for contempt: ‘The cases at issue arose from three separate class
actions between [TRW] and some of its retirees, former
employees and/or their surviving spouses. Ultimately, settlement
agreements were reached which guaranteed, inter alia, that
health care benefits would be fully paid by [TRW], and provided
to Plaintiffs for life.’” (ECF No. 590, PageID.6324-6325)
(quoting ECF No. 531, PageID.4377).) In its Final Judgment, the
Court ordered TRW to “comply with the terms of the Settlement
Agreement,” and retained “continuing jurisdiction over all
parties hereto for the purposes of enforcing and administering the
Settlement Agreement.” (ECF No. 414, PageID.14, 16.) The
instant motion is brought solely by the Golden Retiree
Committee (Golden) on behalf of the Gunite Class Members.

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1. Motion to Enforce
On November 17, 2017, Golden filed a motion to enforce the
Golden Settlement Agreement, which requires TRW’s
compliance with the Gunite Health Care Benefit Plan. (ECF No.
535, PageID.4422.) In so doing, it alleged that the Gunite Plan
contains a Basic Hospital Medical Surgical Plan with no lifetime
maximum limit on expenses for services rendered, as well as a
supplemental Major Medical Plan with a $50,000 lifetime
maximum limit on expenditures. According to these plaintiffs,
TRW breached the Gunite Plan and, thus, the Golden Settlement
Agreement, by applying the Major Medical lifetime maximum to
expenses for services rendered to Mr. S, a Golden Class Member,
that should have been covered under the Basic HMS Plan. (ECF
No. 535, PageID.4423, 4442.) To remedy the alleged breach,
Golden requested that the Court enter an injunction requiring
TRW to: (1) comply with the Golden Settlement Agreement; (2)
respond to discovery requests seeking information regarding the
extent of the violation; and (3) pay attorney fees and costs. (ECF
No. 535, PageID.4424-4425.)
On January 11, 2018, following a telephonic status conference
the day before, during which TRW acquiesced to Golden’s
interpretation of the Gunite Plan—that the lifetime maximum
limitation does not apply to services covered by the Basic HMS
Plan (ECF No. 554-2, PageID.5698-5700)—the Court entered an
order holding the motion to enforce the settlement agreement
(ECF No. 535) in abeyance pending TRW’s resolution of the
issues raised within 60 days (ECF No. 543; ECF No. 554-2,
PageID.5706). At the telephonic status conference, TRW’s
counsel informed the Court that TRW had directed Meritain, its
benefits administrator, to correct the claims Mr. S had submitted
after December 2017 that should not have been subject to the
lifetime maximum, and to “go back through all of the other
members of the class and recalculate those claims if there were
any that were denied because of this lifetime maximum benefit.”
(ECF No. 554-2, PageID.5699-5700.) In response, Golden’s
counsel clarified that six or seven Gunite Class Members beyond
Mr. S had claims for services denied due to the “application of
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this lifetime maximum from major medical to basic medical.”
(ECF No. 554-2, PageID.5700-5701.)
Nearly five months later, on June 8, 2018, TRW’s counsel wrote
to the Court to report its progress on addressing the issues raised
in Golden’s motion to enforce the settlement agreement and
discussed in the Court’s January 11, 2018 order. (See ECF No.
549.) She indicated in the letter that Meritain had undertaken a
review to ensure that no claims for services rendered under the
Basic HMS Plan would be denied under, or subject to, the
lifetime maximum benefit limitation, and stated:
In order to adjust properly any claims that are
affected by TRW’s decision not to interpret the
Basic Plan as requiring a Lifetime Maximum
Benefit Limit, Meritain also has to determine
whether any claims should be transferred from the
Major Medical Plan to the Basic Plan. To do that,
Meritain must review each claim, and each total in
the two Plans for each of the seven Retirees who
“bumped up” against the maximum as previously
interpreted to apply to the Basic Plan. If such a
claim in fact should be covered under the Basic Plan
and not the Major Medical Plan, that claim has to be
transferred and applied to the unlimited Basic Plan.
If that transfer then means that the retiree no longer
has exceeded the maximum limit under the Major
Medical plan, previous claims must be adjusted and,
if appropriate, covered when, in the past, they
exceeded the Major Medical limit.
(ECF No. 549, PageID.5551-5552.)
2. The 2018 motion to vacate
Apparently unsatisfied with TRW’s progress, on July 6, 2018,
Golden filed a motion to vacate the Court’s January 11, 2018
order holding the original motion to enforce the settlement
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agreement (ECF No. 535) in abeyance, requesting that the Court
enter an order:
(1) compelling TRW to immediately process all
claims improperly processed under the Major
Medical Plan and therefore wrongly applied to the
lifetime maximum; (2) enjoining TRW from doing
so in the future; (3) compelling TRW to recalculate
the lifetime maximum for each Class Member; (4)
compelling TRW to provide documentation
verifying compliance with the Gunite Plan
Settlement Agreement, and above orders; (5)
compelling TRW and Meritain to produce
documents in response to the attached subpoena1;
and (6) awarding reasonable attorney fees and costs.
(ECF No. 554, PageID.5668.)
However, following another status conference, the Court entered
an order on September 19, 2018, noting that Golden had agreed
to withdraw, without prejudice, its original motion to enforce the
settlement agreement (ECF No. 535) and, accordingly, denying
as moot Golden’s motion to vacate the order holding that original
motion in abeyance. (ECF No. 571, PageID.5926.) These actions
were taken based on TRW’s assurance that it would “provide
Plaintiffs with the Protected Health Information (‘PHI’) related
to their lifetime maximum benefits’ claims within 40 days of the
entry” of the Court’s order. (ECF No. 571, PageID.5925-5926)
(emphasis in original). Both parties agree that TRW provided
some responsive documents on November 2, 2018. (See ECF No.
587, PageID.6161; ECF No. 588, PageID.6287.)

3. Alleged deficiencies and non-compliance
On January 18, 2019, counsel for Golden wrote to TRW’s
counsel, outlining what Golden believed to be deficiencies with
TRW’s document production and, thus, proof of non-compliance
1

The subpoena referenced is attached as Exhibit 4 to the motion. (ECF No. 554-5.)
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with the Gunite Plan and Golden Settlement Agreement, and
with reimbursement of Mr. S’s claims that TRW had incorrectly
processed. (ECF No. 587-2, PageID.6185-6196.) Specifically,
Golden’s counsel stated, “Unfortunately, we have had to expend
a great amount of time reviewing and interpreting the Meritain
website as to Mr. [S], and comparing the information there with
the Medicare EOBs we sent to you in May 2018, to determine
what is still owed and where there are questions[,]” and “TRW’s
production of documents showing balances owing for three of
the four Gunite Class Members identified as hitting the Major
Medical ‘lifetime maximum’ demonstrates that TRW is not
serious about rectifying its mistakes[.]” (ECF No. 587-2,
PageID.6168, 6195.)
Counsel for TRW responded on February 2, 2019, that it would
review with Meritain the issues raised, and the attorneys for the
parties continued to communicate in this vein for the next several
months. On April 12, 2019, Golden’s counsel sent
correspondence identifying what Golden asserted to be
improperly processed claims for two deceased Class Members,
Mrs. R. and Mrs. N, to which TRW’s counsel responded that
Meritain had found, adjusted, and paid additional amounts to
providers for some of the services identified, but was still
working through others. (ECF No. 587-4, PageID.6202.) Further,
she identified what TRW perceived to be an issue wholly
unrelated to the lifetime maximum, stating:
[Y]our letter provided information about bills from
doctors and providers from which Meritain has not
received claims; your letter is the first time that
certain services have been brought to the attention
of Meritain. Typically, without a claim (in the form
of an invoice from the provider), Meritain does not
know of the claim and cannot make a payment to
the provider.
(ECF No. 587-4, PageID.6202.)
Then on June 13, 2019, in another letter to Golden’s counsel,
counsel for TRW explained that TRW had directed Meritain to
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undertake exceptional measures to process claims from Mr. S for
which Meritain had never received bills from the service
providers. (ECF No. 587-6, PageID.6210-6212.) Further, with
regard to Mrs. C, Mrs. R, and Mrs. N, counsel stated, “The claims
of these three retirees were researched and patient responsibility
has been reduced to zero, either by confirming that was the case
or by adjusting and making an additional payment to a provider.”
(ECF No. 587-6, PageID.6212.) Following a response in late
June in which Golden’s counsel expressed dissatisfaction with
TRW’s document production and processing of claims (ECF No.
587-7, PageID.6215-6220), Golden’s counsel indicated in a July
8, 2019 letter, that she planned to move again 8 to reinstate
Golden’s original motion to enforce the Settlement Agreement
(ECF No. 587-7, PageID.6226).
B. Instant Motion
On August 29, 2019, Golden followed through and filed the
instant motion on behalf of the Gunite Class Members to
reinstate its original motion (ECF No. 535) to enforce the Golden
Settlement Agreement. (ECF No. 587.) In the attached brief,
Golden summarizes its arguments as follows:
Despite repeated demands by the Retiree
Committee, and repeated intervention by this Court,
TRW still refuses to identify, reprocess and pay all
of [the] claims of Gunite Class Members that were
wrongly denied based on the wrongful application
of the Major Medical Plan “lifetime maximum” to
Basic Medical Plan benefits. TRW has continually
refused to provide the Retiree Committee with the
documents and other information it needs to
determine the extent of TRW’s remaining violations
of the Settlement Agreement. Without an Order
enforceable by contempt, TRW will simply
continue to respond piecemeal to the Retiree
Committee’s demands, ensuring that this matter is
never finally resolved.

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(ECF No. 587, PageID.6167.) Further, it asserts that TRW’s
compliance with the Settlement Agreement requires TRW’s
production of documents showing all claims of Gunite Class
Members that Meritain improperly denied and claims Meritain
reprocessed and paid. (ECF No. 587, PageID.6177.)
TRW responded on September 12, 2019, arguing that Golden’s
motion is based not on Meritain’s failure to reprocess claim
related to the lifetime maximum, as “TRW voluntarily resolved
the ‘lifetime maximum’ issue in Plaintiffs’ favor, and
reprocessed all affected claims in 2018,” but rather on arguments
first raised in 2019 regarding claims for services performed
during 2016 and 2017 that, upon investigation, “were deficient
in one of two ways: (1) either the provider (a doctor, for example)
had never sent a bill to Meritain, or (2) the provider had never
given Meritain any information regarding Medicare’s payment
as primary payer.” (ECF No. 588, PageID.6280.)2 In so doing, it
cites the 2019 correspondence between the parties’ attorneys,
outlined in detail above. (ECF No. 588, PageID.6287-6292.)
Thus, TRW asserts, Golden’s motion to reinstate its motion to
enforce the Golden Settlement Agreement should be denied
because: (1) “TRW is not imposing a lifetime maximum on Basic
Medical Plan benefits,” and the “concerns raised by [Golden’s]
counsel have no relation to the lifetime maximum issue”; and (2)
Golden has made no showing that injunctive relief is necessary
to prevent irreparable harm, and would be inappropriate because
any harm would be compensable with an award of money
damages. (ECF No. 588, PageID.6292-6294.)

2

Further, TRW states:
In an extraordinary effort to resolve this matter, TRW asked Meritain to make an
exception to the industry standard claims process that requires providers to submit bills to
the insurer in order for the insurer to process [sic] payment.
***
Nothing in the Plans or in the parties’ settlement agreement required TRW to take these
actions. Ignoring TRW’s extraordinary efforts, Plaintiffs have brought a motion asking
the Court to find that TRW violated the parties’ settlement agreement. No such violation
exists, and Plaintiffs’ motion should be denied.

(ECF No. 588, PageID.6281.)
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On April 22, 2020, the Court struck Golden’s reply brief (ECF
No. 589) by text-only order for exceeding the Court’s page
limitations, but accepted and has closely considered Golden’s
February 3, 2020 supplemental brief in support of the motion to
reinstate (ECF No. 594). In it, Golden adds factual assertions
related to TRW’s actions and correspondence between the parties
after the filing of the instant motion. Further, it states that
although TRW produced, on October 9, 2019, 143 Explanation
of Benefits (EOB) forms showing payments made to three
previously unidentified Gunite Class Members as well as 103
EOBs showing additional claim payments to Mrs. N., Mrs. R.,
and Mrs. C, Golden had been requesting such information since
December 2017. (ECF No. 594, PageID.6379-6380.)
Accordingly, Golden asserts, the Court should:
[E]nter a precise Order requiring TRW to comply
with the terms of the Gunite Health Care Plan, one
that enjoins TRW from applying the limitations of
the Major Medical Plan – the annual deductible and
co-payment and the $50,000 lifetime maximum – to
the Basic Hospital, Medical and Surgical Plan; that
requires TRW to calculate the “lifetime maximum”
based only on Major Medical Plan claim payments;
that requires TRW to process outpatient surgery and
related procedures covered by the Basic HMS Plan
as benefits under the Basic HMS Plan; and that
requires that, in the future, TRW fully comply with
any reasonable information and documents [sic]
requests 11 from the Retiree Committee relating to
the administration of the Gunite Health Care Plan.
(ECF No. 594, PageID.6384.) Golden also requests attorney fees,
asserting that TRW’s alleged history of non-compliance forced
it to file the instant motion to obtain TRW’s compliance with the
Settlement Agreement. (ECF No. 594, PageID.6385.)
At a hearing on April 22, 2020, Golden’s counsel indicated that
the Court should consider the above-quoted portion of the
supplemental brief, plus attorney fees, as the entirety of Golden’s
requests for relief regarding the instant motion, and that Golden
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wants a precise order in place so that if TRW violates the Golden
Settlement Agreement, the Court may hold TRW in contempt.
Counsel further argued that to determine the full extent of TRW’s
non-compliance, Golden needs documents responsive to the
November 15, 2017 subpoena issued to Meritain, which was
attached to its July 6, 2018 motion to vacate the order holding
Golden’s motion to enforce the settlement agreement in
abeyance (ECF No. 554-5).
Counsel for TRW made arguments consistent with those made in
TRW’s response brief (ECF No. 588) – that the lifetime
maximum issue has been resolved, and that the complaints of the
instant motion instead relate to services for which TRW never
received claims. Further, she objected to Golden’s discovery
requests as overbroad and onerous.
In response to the Court’s request at the hearing that the parties
provide additional correspondence since the filing of the last
pleading in February, and a stipulation as to the ten Class
Members considered the highest “Lifetime Maximum
Accumulators” to assist in narrowing the scope of the discovery
requests, the parties jointly filed a supplement containing the
information requested on April 29, 2020. (ECF No. 598.) This
additional correspondence relates in large part to reimbursement
for wound debridement services performed on Mr. S, for which
TRW’s counsel provided an explanation of error and stated,
“[G]oing forward Mr. [S’s] claims for outpatient wound
debridement services will be processed under the Basic Plan, and
will not be applied toward the Major Medical Plan lifetime
maximum figure.” (ECF No. 598-2, PageID.6446; see, generally,
ECF Nos. 598-2, 598-3, 598-4, 598-5.)
STANDARD OF REVIEW
The Court’s review of objections to a Magistrate Judge’s R&R on a
dispositive motion is de novo. 28 U.S.C. § 636(b)(1)(c). “‘[O]bjections disput[ing]
the correctness of the magistrate’s recommendation but fail[ing] to specify the
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findings . . . believed in error’ are too general.” Novak v. Prison Health Services,
Inc., No. 13-11065, 2014 WL 988942, at *3 (E.D. Mich. Mar. 13, 2014) (quoting
Miller v. Currie, 50 F.3d 373, 380 (6th Cir. 1995)). Ordinarily, objections that lack
specificity do not receive de novo review. Mira v. Marshall, 806 F.2d 636, 637 (6th
Cir. 1986). In addition, the Court may accept, reject, or modify any or all of the
Magistrate Judge’s findings or recommendations. FED. R. CIV. P. 72(b)(3).
“A plaintiff who seeks a permanent injunction must demonstrate: (1) it has
suffered irreparable injury; (2) there is no adequate remedy at law; (3) that
considering the hardships between the plaintiff and defendant, a remedy in equity is
warranted; and (4) that it is in the public’s interest to issue such an injunction.”
American Auto Ass’n v. Dickerson, 995 F.Supp.2d 753, 757 (E.D. Mich. 2014).
ANALYSIS
Objection 1: “Scope of the Injunction – Outpatient Surgery and Skilled Nursing
Facility Benefits.” (ECF No. 601, PageID.6519).
Objection 2: “Scope of the Injunction – The Major Medical Plan Deductible and
Co-Insurance Payment Limitations Do Not Apply to Basic HMS Plan Benefits.”
(ECF No. 601, PageID.6522).
Because Objections 1 and 2 pertain to the R&R’s conclusion as to the scope
of the injunction, the Court analyzes them together. The Magistrate Judge
recommends that the Court enjoin TRW from applying the lifetime maximum in the
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Major Medical Plan to claims under the Basic HMS Plan, which does not impose a
lifetime maximum for services. The Magistrate Judge, however, does not
recommend imposing an injunction requiring TRW to process outpatient surgery
and related services as benefits under the Basic HMS Plan, because Golden has
neither proven that these services are covered by the Basic HMS Plan nor shown
that TRW breached the Settlement Agreement in regard to these services.
Plaintiff objects and argues that (1) TRW should be required to designate
outpatient surgery and skilled nursing as benefits under the Basic HMS Plan, and (2)
TRW should be enjoined from applying the Major Medical Plan deductible and coinsurance payment limitations to the Basic HMS Plan. While the Court agrees with
Golden’s assessment of the contents on the Basic HMS Plan (i.e. outpatient surgery
and skilled nursing services are covered by the Basic HMS Plan, while the Major
Medical Plan deductible and co-insurance payment limitations are not, see ECF No.
536, PageID.4662-74), the Court concludes that the record does not support a finding
that TRW has violated the Settlement Agreement such that an injunction regarding
these benefits must be imposed. The Court finds that the issues that retirees and their
spouses have experienced have stemmed from one of two problems: misapplying
the lifetime maximum and claim processing issues.
First, Golden has established that TRW’s imposition of the lifetime maximum
onto services covered by the Basic HMS Plan was the impetus for most of the errors
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complained of, including the failure to cover skilled nursing services. For example,
TRW denied payment of Mr. S’s skilled nursing services, erroneously claiming that
Mr. S had met his lifetime maximum benefit. Enjoining TRW from misapplying the
lifetime benefit resolves the bulk of the complained of issues.
Second, TRW has established that Class Member issues that were not due to
the misapplication of the lifetime maximum were due to billing errors by Meritain.
For example, TRW notes that Mr. S’s outpatient surgery was erroneously billed as
non-surgical outpatient care due to how his providers billed for services. (ECF No.
594-13, PageID.6425, 6430). After discovering the error TRW reprocessed these
claims to be correctly covered the Basic HMS Plan. As it stands, these third-party
errors cannot be attributed to TRW as willful violations of the Settlement Agreement
which warrant an injunction. However, if and when Golden discovers claim errors
that can be attributed to TRW’s violations of Settlement Agreement, it is welcome
to seek injunctive relief from this Court. Objections one and two are overruled.

Objection 3: “TRW Must Be Required to Pay Attorney Fees.” (ECF No. 601,
PageID.6523).
The Magistrate Judge recommends that this Court deny without prejudice
Golden’s request for attorney fees, because without the benefit of the discovery just
ordered, “the Court is unconvinced that TRW has continually failed to comply with
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the Settlement Agreement by misapplying the lifetime maximum.” (ECF No. 599,
PageID.6501). The Court agrees with this assessment. Without clear evidence of
continual violations by TRW that are also not merely attributable to third party
providers, ordering payment of attorney fees at this stage is premature.
The last sentence of Golden’s objection says it best: “When this dispute is
finally resolved, when all of the wrongly denied claims are finally reprocessed and
paid, when all of the “lifetime maximum” amounts are correctly adjusted, and when
it can be said that TRW and Meritain are correctly administering both the Basic HMS
Plan and the Major Medical Plan, the Retiree Committee will seek the full amount
of attorney fees reasonably expended to enforce the Settlement Agreement and
vindicate this Court’s Final Judgment.” (ECF No. 601, PageID.6535). The Court
welcomes Golden to do so when the discovery has substantiated its allegations of
continual noncompliance on behalf of TRW. Until then, objection 3 is overruled.
CONCLUSION
For the reasons stated above, the R&R [599] is ADOPTED; Plaintiff’s
Objections [601] are OVERRULED; and Plaintiff’s Motion to Reinstate its Motion
to Enforce the Golden Settlement Agreement [587] is GRANTED
DENIED IN PART.
Accordingly,
IT IS ORDERED that the R&R [599] is ADOPTED.
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IN PART AND

IT IS FURTHER ORDERED that Plaintiff’s Objections [601] are
OVERRULED
IT IS FURTHER ORDERED that Plaintiff’s Motion to Reinstate its Motion
to Enforce the Golden Settlement Agreement [587] is GRANTED in part and
DENIED in part.
IT IS FURTHER ORDERED that TRW is REQUIRED to comply with the
terms of the Gunite Health Care Plan, ENJOINED from applying the $50,000
lifetime maximum to the Basic Hospital, Medical and Surgical Plan, REQUIRED
to calculate the “lifetime maximum” based only on Major Medical Plan claim
payments, and ORDERED to fully comply with any reasonable information and
document requests from the Retiree Committee relating to the administration of the
Gunite Health Care Plan.
SO ORDERED.

Dated: March 31, 2021

s/Arthur J. Tarnow
Arthur J. Tarnow
Senior United States District Judge

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