Bennett et al v. Aetna Life Insurance et al

Filing 61

MEMORANDUM DECISION AND ORDER granting in part and denying in part 36 Motion for Summary Judgment; granting in part and denying in part 37 Motion for Summary Judgment; denying 45 Motion to Strike; denying 51 Motion to Stri ke. Within 14 days of this Order, Plaintiffs' counsel is to supply the Court with a calculation of prejudgment interest, attorneys fees, and costs. The Court will supplement the judgment with those amounts. Signed by Judge Ted Stewart on 8/30/13 (alt)

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

WENDY BENNETT and ROBERT
OSBORNE,
Plaintiffs,

MEMORANDUM DECISION AND
ORDER ON PENDING MOTIONS

vs.

AETNA LIFE INSURANCE COMPANY,
CIBER, INC. and THE CIBER INC. AETNA
CHOICE POS II GROUP BENEFIT PLAN,

Case No. 2:12-CV-139 TS

Defendants.

This ERISA case is before the Court on cross Motions for Summary Judgment. In
addition, Plaintiffs have filed two Motions to Strike. For the reasons discussed below, the Court
will grant in part and deny in part the cross Motions for Summary Judgment, and deny the
Motions to Strike.
I. FACTUAL BACKGROUND
Plaintiff Robert Osborne (“Osborne”) was an employee of Defendant CIBER, Inc.
(“CIBER”) and was a participant in the CIBER INC. AETNA CHOICE POS II GROUP
BENEFIT PLAN (the “Plan”). Osborne’s wife, Wendy Bennett (“Bennett”) was a beneficiary of

1

the Plan. Aetna Life Insurance Company (“Aetna”) is the administrator for processing claims
under the Plan.
On June 21, 2009, Plaintiffs were in Bali, Indonesia. Bennett went to BIMC Hospital in
Bali after feeling bloated and nauseated for several days. Bennett had an exploratory laparotomy
and sigmoid colostomy. During these procedures, a tumor was discovered that was suspected to
be malignant.
While at BIMC Hospital, it was determined that Bennett needed to be evacuated to a
higher care facility.1 Bennett was transferred to St. Mark’s Hospital in Salt Lake City, Utah via
air ambulance transport (“AirMed”). At St. Mark’s Hospital, the suspected colorectal cancer
diagnosis was confirmed and she was treated for that condition. Both the doctor treating Bennett
at BIMC Hospital and her doctor at St. Mark’s Hospital stated that her AirMed transport from
Bali to Salt Lake City was medically necessary.2
Plaintiffs submitted claims for Bennett’s treatment at BIMC Hospital and for the AirMed
costs. On October 8, 2009, Defendant Aetna sent Osborne an Explanation of Benefits (“EOB”).
In the EOB, Aetna stated that it required additional information on the BIMC Hospital charges.
As for the AirMed costs, Aetna stated: “Your plan covers professional ambulance service for
emergency transport only. Since the service(s) submitted does not meet this requirement, the

1

BEN 206.

2

Id. at 204, 206.
2

service is not covered under your plan.”3 Additionally, Aetna stated that “[c]harges for non
emergency transport are excluded from coverage under your plan.”4
In response to the EOB, Plaintiffs contacted Aetna a number of times concerning
Bennett’s claim. On October 11, 2009, Osborne called Aetna to provide information about the
nature of Bennett’s medical condition, the fact that she could not be effectively and safely treated
at BIMC Hospital, that her transport was an emergency based on Bennett’s deteriorating
condition, and that it was medically necessary.5 Osborne also provided information about the
amount of the charges for the AirMed transport.6 This same information was provided by email.7
On October 14, 2009, Osborne wrote: “Please note that I am appealing this denial of
payment, and am faxing today the medical records regarding my wife’s hospitalization in Bali.”8
Another document from that same date entitled “Medical Claim Details” appears to have a
handwritten statement from Osborne indicating that he was appealing the denial.9

3

Id. at 231.

4

Id.

5

Docket No. 37-15.

6

Id.

7

DEF 143.

8

Id. at 146.

9

Id. at 100.
3

On October 21, 2009, Osborne inquired as to whether Aetna had received the medical
records he had faxed previously.10 In response, Aetna stated that it had received the information
and that it was reviewing the claim.11
On October 28, 2009, Osborne again sought confirmation that Aetna had received
information regarding the necessity of the AirMed transport.12 Aetna confirmed that it had
received this information and stated that additional time was required for review.13
On November 4, 2009, Osborne sent a follow-up email detailing the information he
provided in support of Bennett’s claim.14 Osborne stated: “Please advise on the status of your
evaluation on this claim, or if you require additional information.”15 Aetna responded by stating
that Osborne’s appeal had been forwarded to the appropriate department and that a decision
would be made within thirty days.16
Aetna denied Bennett’s AirMed claim in a second EOB issued on November 7, 2009.
The second EOB referenced only the AirMed claim and provided the following basis for denial:
“This plan provides coverage for service and supplies that are deemed by Aetna to be necessary

10

Id. at 127.

11

Id.

12

Id. at 129; Docket No. 37-15.

13

DEF 129.

14

Id. at 138.

15

Id.

16

Id.
4

for the diagnosis, care or treatment of the disease or injury involved. Based on the information
provided, this expense does not meet the coverage requirement.”17 The second EOB did not
mention the limitation of plan coverage for professional ambulance service, as the first EOB had
done.
The EOB provided a box to check “[i]f you would like to appeal” and directs the recipient
to send a written appeal along with the EOB to a certain address.18 The EOB then provides the
following:
You are entitled to a review (appeal) of this benefit determination if you
have questions or do not agree.
To obtain a review, you or your authorized representative should call our
Member Services Department using the telephone number displayed on the
member ID card or submit a request in writing to the Appeals Resolution Team
address shown above . . . . You may also review documents relevant to your
claim. Verbal or written requests for review of the adverse determination must be
communicated, mailed or delivered within 180 days following receipt of this
explanation or such longer period as may be specified in your plan brochure or
Summary Plan Description.19
On December 14, 2009, Osborne sent the following message to Aetna:
You still don’t have the claim amounts correct - the other insurance
company paid $100,000 of the total AirMed amount, and we’re only submitting
$98,000 to Aetna as the secondary insurance provider.
The other company, AIG, also recognized this as medically necessary,
which is supported by the letter/statement from the doctor in Bali, and also from
the Utah colo-rectal doctor, Dr. Edward J. Eyring.

17

BEN at 228.

18

Id. at 229.

19

Id. at 230.
5

You have this documentation. Please review and advise what steps we
need to take to appeal.20
In response, Osborne was informed that he could appeal Aetna’s decision.21 Specifically,
Osborne was provided the following information:
How do you file an appeal?
You can file an appeal one of three ways:
1. You can call the Member Services number on your ID card.
2. You can write a letter to the address on the bottom of your explanation of
benefits.
3. You can use the ‘Contact Us’ link and email us that you want to appeal the
decision.22
On January 7, 2010, Osborne sent an email to Aetna asking how to “determine what types
of international medical or ambulatory services are covered, and the limits/conditions of
those?”23
After this period, the parties have been unable to provide the Court with any other
electronic communications between them, despite the fact that there is evidence showing such
communications exist.24 In all, it appears that the parties have been unable to produce eleven
electronic communications during the relevant time period. Aetna states that it “does not know

20

DEF at 135.

21

Id.

22

Id.

23

Id. at 112.

24

Docket No. 44, Ex. 1.
6

why there might be additional emails listed on the Screen Captures that would not have been
retrieved as a result of Aetna’s diligent search of its archived materials.”25
In addition to these electronic communications, Defendants have provided the Court with
seven electronic spreadsheets from an Aetna database used to store and log Aetna’s responses to
customer service inquiries. Aetna did not routinely record telephonic inquiries to customer
service representatives during the relevant time period. However, a review of the spreadsheets
shows that several calls were made by Plaintiffs to Aetna concerning the AirMed claim. Of
particular interest is a series of entries made on February 15, 2010. These entries reference an
inbound call concerning Plaintiffs’ AirMed claim. Under the heading labeled “Request Type”
most of the entries state “Claim Inquiry.” However, two of the entries state “Appeal Inquiry.”
On May 23, 2010, Osborne wrote to Aetna to appeal the denial of coverage. The letter
stated:
Even though Aetna Customer service advised via email that an appeal could be
handled via telephone or through the website, when I spoke with Customer
Service by phone, they advised that the appeal needs to be in writing. Therefore
please record this letter and the referenced Attachments as a written and formal
appeal for payment of the Claim ID PZJKH7YCT.26
The letter went on to provide information in support of the AirMed claim.
On June 23, 2010, Aetna responded with two letters. In a letter directed to Osborne,
Aetna stated that he was not authorized to act on Bennett’s behalf.27 In a letter to Bennett, Aetna

25

Decl. of Laura L. Jackson in Response to Court’s Order Dated July 1, 2013, ¶ 6.

26

BEN at 235.

27

Id. at 239.
7

stated that her appeal came too late. “Therefore, a review of this appeal will not be conducted
and Aetna will consider the original decision to be final.”28
On February 18, 2011, Plaintiffs’ counsel wrote to Aetna and CIBER. Counsel requested
various plan documents and all documents related to Bennett’s claim. Aetna responded on
March 15, 2011, by providing some, but not all, documents related to Bennett’s claim. Aetna
advised counsel that he should contact CIBER for documents related to the plan.
On March 21, 2011, counsel again wrote to Aetna requesting all documents related to
Plaintiffs’ claim. Aetna responded by resubmitting the same documents it provided in response
to counsel’s prior letter.
Also on March 21, 2011, counsel wrote to CIBER requesting plan documents. CIBER
responded by providing the Summary Plan Description and the Administrative Services
Agreement between CIBER and Aetna. Counsel sent two additional letters to CIBER seeking all
plan documents. CIBER did not respond to either letter.
The parties have each filed a Motion for Summary Judgment. Defendants argue that
summary judgment in their favor is appropriate because: (1) Plaintiffs failed to exhaust their
remedies under the plan; (2) Plaintiffs failed to submit their claim for medical expenses of
$10,006; and (3) Plaintiffs are not entitled to statutory penalties. Plaintiffs, in turn, argue that
summary judgment should be granted in their favor because: (1) Defendants’ denial of the
AirMed claim is not supported by the record; and (2) they are entitled to statutory damages. If
Plaintiffs prevail, they also seek prejudgment interest, attorney’s fees, and costs.

28

Id. at 238.
8

II. MOTIONS TO STRIKE
Before addressing the merits of the Motions for Summary Judgment, the Court must first
consider Plaintiffs’ two Motions to Strike. In those Motions, Plaintiffs seek to strike the exhibits,
an affidavit, and two declarations supplied by Defendants in support of their Motion for
Summary Judgment. Plaintiffs argue that the documents and statements made in the affidavit
and declarations were not previously provided and should not be considered.
Generally, the Court’s review in an ERISA case is limited to the administrative record.29
Most of the documents cited to in the affidavit and declarations are the same documents that
Plaintiffs provided with their Pre-Litigation Record. Therefore, those documents need not be
stricken. The more problematic issue arises from the statements made in the affidavit and
declarations that are not supported by the other documents in the record. However, even
considering these statements, the outcome of the Motions for Summary Judgment does not
change. Therefore, the Court will deny Plaintiffs’ Motions to Strike.
III. SUMMARY JUDGMENT
In an ERISA case, where both parties move for summary judgment and stipulate that no
trial is necessary, “summary judgment is merely a vehicle for deciding the case; the factual

29

Foster v. PPG Indus. Inc., 693 F.3d 1226, 1231 (10th Cir. 2012) (“In reviewing the
administrator’s actions, we are limited to the administrative record—the materials compiled by
the administrator in the course of making his decision.”) (quotation marks and citation omitted).
9

determination of eligibility for benefits is decided solely on the administrative record, and the
non-moving party is not entitled to the usual inferences in its favor.”30
A.

EXHAUSTION
Defendants first argue that Plaintiffs’ claims are barred because Plaintiffs failed to

exhaust their remedies under the Plan. Specifically, Defendants argue that the Plan required a
written appeal within 180 days of the denial of the claim for benefits. Defendants argue that the
second EOB was issued November 7, 2009, but that Plaintiffs did not submit a written appeal
until May 23, 2010, after the 180 day period had run. Defendants argue that Plaintiffs’ claims are
therefore barred. Plaintiffs argue that they did exhaust their remedies or were excused from
doing so because of Defendants’ conduct.
ERISA contains no explicit exhaustion requirement.31 However, the Tenth Circuit has
held that “exhaustion of administrative (i.e., company—or plan—provided) remedies is an
implicit prerequisite to seeking judicial relief.”32 Exhaustion is an affirmative defense and,
therefore, the burden is on Defendants to show that Plaintiffs failed to exhaust their remedies
under the plan.33

30

LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment &
Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010).
31

McGraw v. Prudential Ins. Co. of Am., 137 F.3d 1253, 1263 (10th Cir. 1998).

32

Held v. Mfg. Hanover Leasing Corp., 912 F.2d 1197, 1206 (10th Cir. 1990).

33

Metro. Life Ins. Co. v. Price, 501 F.3d 271, 280 (3d Cir. 2007); Wilson v. KimberlyClark Corp., 254 F. App’x 280, 287 (5th Cir. 2007); Jones v. State Wide Aluminum, Inc., 246 F.
Supp. 2d 1018, 1023 (N.D. Ind. 2003).
10

The Court must first address Defendants’ contention that the Plan required any appeal to
be made in writing. The Summary Plan Description states: “You may file an appeal in writing to
Aetna.”34 However, the Summary Plan Description also states that “[i]f your appeal is of an
urgent nature, you may call Aetna’s Member Services Unit.”35
The EOBs provided to Plaintiffs provided a box to check if the recipient sought to appeal
and directed that person to send a written appeal to the address provided. However, the EOBs
further stated that “[y]ou are entitled to a review (appeal) of this benefit determination if you
have questions or do not agree.”36 The EOBs provided the following instruction:
To obtain a review, you or your authorized representative should call our Member
Services Department using the telephone number displayed on the member ID
card or submit a request in writing to the Appeals Resolution Team address shown
above . . . . You may also review documents relevant to your claim. Verbal or
written requests for review of the adverse determination must be communicated,
mailed or delivered within 180 days following receipt of this explanation or such
longer period as may be specified in your plan brochure or Summary Plan
Description.37
At oral argument, Defendants’ counsel argued that these different provisions of the EOB
correspond to different levels of appeals and that Plaintiffs’ appeal had to be in writing. This
argument is simply not supported by the language of the EOB. The EOB does not differentiate
between levels of review and makes clear that appeals can be made either orally or in writing.

34

BEN at 62.

35

Id.

36

Id. at 230.

37

Id.
11

In addition to the statements in the EOB, Osborne was advised via email that he could
appeal by calling, writing, or emailing Aetna. After the second EOB was issued, Osborne
emailed Aetna. In that email, Osborne specifically asked Aetna to review its denial and sought
information on how to appeal.38 Aetna provided Osborne the following information:
How do you file an appeal?
You can file an appeal one of three ways:
1. You can call the Member Services number on your ID card.
2. You can write a letter to the address on the bottom of your explanation of
benefits.
3. You can use the ‘Contact Us’ link and email us that you want to appeal the
decision.39
Based upon all of this evidence, the Court cannot agree with Defendants’ argument that
Plaintiffs’ appeal was required to be in writing. Rather, Plaintiffs were repeatedly informed that
there were several ways in which appeal could be sought. The Court must next consider whether
Plaintiffs actually did appeal the denial of the AirMed claim.
The evidence concerning Plaintiffs’ attempts to appeal the denial of benefits is less than
clear, largely because of Defendants’ poor record keeping. The records that have been provided
to the Court show that after the first EOB was issued, Osborne repeatedly communicated with
Aetna to appeal that denial. Osborne provided Aetna with additional documentation to support
Bennett’s claim and continually followed up on the claim during the period that Aetna was
conducting its review.

38

DEF at 135.

39

Id.
12

Aetna then issued its second EOB on November 7, 2009, again denying the AirMed
claim. Osborne continued communicating with Aetna about the claim. On December 14, 2009,
a little over a month after the second EOB was issued, Osborne sent the following message to
Aetna:
You still don’t have the claim amounts correct - the other insurance
company paid $100,000 of the total AirMed amount, and we’re only submitting
$98,000 to Aetna as the secondary insurance provider.
The other company, AIG, also recognized this as medically necessary,
which is supported by the letter/statement from the doctor in Bali, and also from
the Utah colo-rectal doctor, Dr. Edward J. Eyring.
You have this documentation. Please review and advise what steps we
need to take to appeal.40
As is detailed above, Osborne was informed that he could appeal by calling, writing, or
emailing Aetna. The only writing produced by the parties that mentions an appeal is the May 23,
2010 letter. However, there are several additional emails during the relevant time period that
Aetna has not been able to provide. Aetna states that it “does not know why there might be
additional emails listed on the Screen Captures that would not have been retrieved as a result of
Aetna’s diligent search of its archived materials.”41 In addition to the emails that have not been
produced, there are records of a number of telephone calls made by Plaintiffs to Aetna
concerning the AirMed claim, at least some of which reference an “Appeal Inquiry.” These
conversations were not recorded and, therefore, have not been produced.

40

Id.

41

Decl. of Laura L. Jackson in Response to Court’s Order Dated July 1, 2013, ¶ 6.
13

Based on the materials provided, as well as the fact that a number of communications
have not been provided, the Court finds that Defendants have failed to meet their burden of
showing that Plaintiffs failed to exhaust their remedies under the plan.
As an initial matter, it seems that Osborne’s December 14, 2009 email could be construed
as an appeal. This email, which was in writing and was sent to Aetna within 180 days after the
issuance of the second EOB, specifically referenced the AirMed claim. That email provided
clarification of the amount Plaintiffs sought from Aetna, referenced evidence concerning medical
necessity, asked Aetna to review its denial, and sought further guidance on how to appeal.
Even if this email from Osborne is not construed as an appeal, Defendants still have not
met their burden. The record reflects that Osborne had nearly continuous contact with Aetna
concerning the AirMed claim from the time the claim was submitted to the time that Aetna
responded to Osborne’s May 23 appeal. However, much of the communication from the relevant
time period has not been produced by Aetna. Given the continued communication that Osborne
had with Aetna concerning the denial of Bennett’s claim, it strains credulity to believe that
Plaintiffs did not seek to appeal in these various communications.
The documentation related to the telephone calls made by Plaintiffs to Aetna supports this
conclusion. Defendants originally provided phone call documentation, indicating that only two
calls were made by Osborne to Aetna. Osborne, in his Declaration, stated that this record did not
“accurately reflect the many telephone calls I made to Aetna to discuss and appeal the Plan’s
denial of coverage for Wendy’s AirMed transport costs.”42 Osborne was correct.

42

Docket No. 44, ¶ 10.
14

In response to the Court’s prior order, Defendants have now provided the Court with
seven electronic spreadsheets from an Aetna database used to store and log Aetna’s responses to
customer service inquiries. Unfortunately, Aetna did not routinely record telephonic inquiries to
customer service representatives during the relevant time period. Thus, there is no way to know
exactly what was said during the phone calls Plaintiffs made to Aetna representatives.
However, a review of the spreadsheets shows that several calls were made by Plaintiffs to
Aetna concerning the AirMed claim. Of particular interest are a series of entries made on
February 15, 2010. These entries reference an inbound call concerning Plaintiffs’ AirMed claim.
Under the heading labeled “Request Type” most of the entries state “Claim Inquiry.” However,
two of the entries state “Appeal Inquiry.” It is reasonable to infer that Plaintiffs attempted to
appeal the denial during this phone call.
This inference is supported by the statement made in Osborne’s May 23, 2010 letter,
where he stated that “[e]ven though Aetna Customer Service advised via email that an appeal
could be handled via telephone or through the website, when I spoke with Customer Service by
phone, they advised that the appeal needs to be in writing.”43 This statement is, in turn,
supported by the email documentation, discussed above, where Osborne was advised that he
could appeal either by phone, email, or writing.
In the end, it is Defendants’ burden to show that Plaintiffs failed to exhaust their remedies
under the plan. Defendants have not carried their burden. The evidence shows that Plaintiffs
were provided conflicting information on how to appeal the denial of benefits. The evidence also

43

BEN at 211.
15

shows that Plaintiffs frequently contacted Aetna concerning the AirMed Claim. There is also
evidence to suggest that Plaintiffs attempted to appeal the AirMed claim as directed by Aetna.
The gap in the record during the period relevant to this issue is extremely troubling and, as stated,
it is simply not believable to suggest that Plaintiffs did not seek an appeal in one of the many
communications that Defendants have been unable to provide.
In making this determination, the Court has considered Defendants’ conduct, both preand post-litigation. Prior to filing suit, Plaintiffs’ counsel repeatedly asked for information
concerning the communications Plaintiffs had with Defendants. Defendants failed to provide all
of these communications and it was not until Defendants were ordered by the Court to turn over
such communications that Defendants provided many of the documents at issue. Even with the
Court order, Defendants have been unable to provide all of the communications between the
parties, with many of those communications occurring during the relevant time period.
Defendants are unable to provide any explanation for their failure to provide this evidence.
Based upon this behavior, the Court cannot find credible Defendants’ claim that Plaintiffs failed
to exhaust. Rather, the evidence suggests that Plaintiffs attempted to appeal and that Defendants
thwarted their efforts to do so. Therefore, the Court finds that Defendants have failed to meet
their burden to show that Plaintiffs failed to exhausted their remedies as to the AirMed claim.
Plaintiffs argue that, if the Court finds that they failed to exhaust their remedies under the
plan, Defendants’ failure to comply with the requirements of ERISA and failure to comply with
the claims procedure regulations under ERISA excuse any failure to exhaust. Because the Court

16

finds that Defendants have failed to meet their burden to show that Plaintiffs failed to exhaust,
the Court need not address this issue.
B.

STANDARD OF REVIEW
A denial of benefits under an ERISA plan “is to be reviewed under a de novo standard

unless the benefit plan gives the administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan.”44 If, however, “the plan gives an
administrator discretionary authority to determine eligibility for benefits or to construe its terms,
we employ a deferential standard of review, asking only whether the denial of benefits was
arbitrary and capricious.”45
In this case, there is no dispute that the Plan provides the plan administrator discretion to
interpret the terms of the plan and determine eligibility for benefits. Thus, generally a deferential
standard would apply. However, Plaintiffs argue that a de novo standard of review is called for
in this case. Plaintiffs argue that Defendants have “forfeited their right to deferential standard
due to repeated, significant failures to comply with ERISA’s claims procedure review regulations
in processing Plaintiffs’ claims and handling pre-litigation appeal process.”46
Ultimately, the Court need not decide what standard of review applies. Even under a
deferential standard of review, Defendants’ decision concerning the AirMed claim cannot be
sustained.
44

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).

45

Holcomb v. UNUM Life Ins. Co. of Am., 578 F.3d 1187, 1192 (10th Cir. 2009)
(quotation marks and citation omitted).
46

Docket No. 50, at 32.
17

C.

AIRMED CLAIM
Defendants denied the AirMed claim because it was not medically necessary.47 In

evaluating Aetna’s denial of Plaintiffs’ AirMed claim the Court will assume that the deferential
standard applies.
In applying the arbitrary and capricious standard, the decision will be
upheld so long as it is predicated on a reasoned basis. In fact, there is no
requirement that the basis relied upon be the only logical one or even the
superlative one. Accordingly, [the Court’s] review inquires whether the
administrator’s decision resides somewhere on a continuum of
reasonableness—even if on the low end.
A lack of substantial evidence often indicates an arbitrary and capricious
decision. Substantial evidence is of the sort that a reasonable mind could accept
as sufficient to support a conclusion. Substantial evidence means more than a
scintilla, of course, yet less than a preponderance. The substantiality of the
evidence is evaluated against the backdrop of the administrative record as a
whole.48
In this case, there is a lack of any evidence, let alone substantial evidence, that would
support Defendants’ determination that Bennett’s AirMed transportation was not medically
necessary. The only evidence in the record reveals that two different treating physicians, in both
Bali and Utah, opined that Bennett’s transportation was medically necessary. Additionally, there
is evidence that another insurer covered part of the AirMed cost, presumably finding that such
transportation was medically necessary. There is absolutely no evidence to the contrary.

47

Defendants have also pointed to language in the Plan concerning the limitation of
coverage for professional ambulance services. While the first EOB provided this as a basis for
denial, the second EOB did not.
48

Adamson v. UNUM Life Ins. Co. of Am., 455 F.3d 1209, 1212 (10th Cir. 2006) (internal
quotation marks and citations omitted).
18

The only evidence Defendants have presented on this point is found in the Second
Declaration of Laura L. Jackson. In her Second Declaration, Ms. Jackson states that the denial of
Bennett’s claim
was made only after review of the medical records and the documentation
submitted in support of medical necessity, by an Aetna medical director. The
reviewer is board certified in internal medicine and is a licensed physician in the
states of Arizona and Connecticut. He has 18 years of private practice experience
in internal medicine including two years practicing as a hospitalist in the state of
Connecticut.49
Ms. Jackson further states that affirmation of the denial of the claim, which came after review of
the additional information provided by Mr. Osborne, was based on a determination that the
materials did not demonstrate that BIMC Hospital was not able to diagnose and treat Bennett.50
This information does not meet the substantial evidence standard. While Defendants
contend that Bennett’s claim was reviewed by an individual with “the professional training and
credentials to address the issue of medical necessity,”51 Defendants have failed to provide the
Court with any report or other documentation created by this person explaining his or her
rationale. Indeed, the Declaration of Ms. Jackson does not even go so far as to state that this
individual opined that Bennett’s transportation was not medically necessary. It is reasonable to
believe that if such documentation existed, Defendants would have provided it to the Court in
response to Plaintiffs’ Motion for Summary Judgment.

49

Docket No. 41-2, ¶ 6.

50

Id. ¶ 5.

51

Id. ¶ 6.
19

Further, Defendants have failed to provide the Court with even this person’s name, let
alone any other information that would allow for any sort of meaningful review as to his or
qualification to make a medical necessity assessment. The information provided by Defendants
in response to Plaintiffs’ Motion is insufficient under any standard of review to sustain
Defendants’ denial. Therefore, summary judgment on behalf of Plaintiffs is appropriate.
D.

MEDICAL EXPENSE CLAIM FOR $10,006
Plaintiffs’ Amended Complaint asserts a claim for medical expenses of $10,006 for

expenses incurred at BIMC Hospital in Bali, Indonesia. Defendants seek summary judgment,
because they argue that Plaintiffs did not submit a claim for this amount.
At oral argument, counsel for Plaintiffs conceded that he could not produce
documentation that this claim was submitted to Aetna, but had little confidence in the record.
While the Court agrees with Plaintiffs’ assessment that the record in this case is lacking, there is
nothing to suggest that Plaintiffs submitted this claim. Further, even if Plaintiffs did submit a
claim for this $10,006, there is nothing in the record to show that they exhausted their remedies
under the plan with regard to this amount. The only evidence on the issue of exhaustion relates
to the AirMed claim. Therefore, summary judgment in favor of Defendants is appropriate on this
claim.
E.

STATUTORY PENALTIES
Plaintiffs request penalties for Defendants’ alleged failure to provide certain documents

under which the Plan is established or operated.

20

29 U.S.C. § 1024(b)(4) provides that “[t]he administrator shall, upon written request of
any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and
the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract,
or other instruments under which the plan is established or operated . . . .” 29 U.S.C. §
1132(c)(1) provides for statutory penalties for failing to produce documents pursuant to §
1024(b)(4).
Defendants argue that Plaintiffs are not entitled to statutory penalties because they have
provided Plaintiffs with all documents under which the plan is established or operated,
specifically the Summary Plan Description and the Administrative Services Agreement between
CIBER and Aetna. Plaintiffs, on the other hand, argue that the documents provided by
Defendants refer to another document that has not been provided, specifically the Benefit Plan
references a “Contract” between Aetna and CIBER.52
When asked directly about this “Contract,” Defendants’ counsel stated that no such
contract existed and that there are no other plan documents that have not been supplied to
Plaintiffs. This is supported by the the Affidavit of David Plisko, wherein Mr. Plisko states that
Defendants provided “all of the documents under which the Plan was operated at the time
relevant to the Claim.”53 Plaintiffs have presented no evidence to the contrary. Therefore, the
Court finds that Plaintiffs are not entitled to statutory penalties.

52

BEN 86.

53

Docket No. 37-1, ¶ 10.
21

F.

PREJUDGMENT INTEREST, ATTORNEY’S FEES, AND COSTS
Plaintiffs request prejudgment interest, attorney’s fees, and costs should they prevail. As

discussed, the Court finds that Plaintiffs prevail on the AirMed claim.
1.

Prejudgment Interest

“Under ERISA, ‘[p]rejudgment interest is . . . available in the court’s discretion.’”54
“Calculation of the rate for prejudgment interest also ‘rests firmly within the sound discretion of
the trial court.’”55 “Courts commonly look to state statutory prejudgment interest provisions as
guidelines for a reasonable rate.”56
Utah law provides that “[u]nless parties to a lawful contract specify a different rate of
interest, the legal rate of interest for the loan or forbearance of any money, goods, or chose in
action shall be 10% per annum.”57
In this case, Plaintiffs argue that they “have suffered significant financial hardship in
being required to pay the charges for Wendy’s air transport from their own funds.”58 This is
undoubtedly true. Based on this hardship, the Court finds that it is reasonable to award
prejudgment interest in this case. The Court further finds that the rate established under Utah
law is reasonable under these circumstances.

54

Weber v. GE Grp. Life Assurance Co., 541 F.3d 1002, 1016 (10th Cir. 2008) (quoting
Benesowitz v. Metro. Life Ins. Co., 514 F.3d 174, 176 (2d Cir. 2007)).
55

Id. (quoting Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1287 (10th Cir. 2002)).

56

Id.

57

Utah Code Ann. § 15-1-1(2).

58

Docket No. 36, at 24.
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2.

Attorney’s Fees and Costs

Pursuant to 29 U.S.C. § 1132(g)(1), “the court in its discretion may allow a reasonable
attorney’s fee and costs of action to either party.” “A court may award fees and costs under 29
U.S.C. § 1132(g)(1) as long as the fee claimant has achieved some degree of success on the
merits.”59
The Tenth Circuit
has established five factors a court may consider in deciding whether to exercise
its discretion to award attorney’s fees and costs: (1) the degree of the opposing
party’s culpability or bad faith; (2) the opposing party’s ability to satisfy an award
of fees; (3) whether an award of fees would deter others from acting under similar
circumstances; (4) whether the party requesting fees sought to benefit all
participants and beneficiaries of an ERISA plan or to resolve a significant legal
question regarding ERISA; and (5) the relative merits of the parties’ positions.
No single factor is dispositive and a court need not consider every factor in every
case.60
Considering these factors, the Court finds that an award of attorney’s fees and costs is
appropriate in this case. As to the first and fifth factors, Defendants have provided absolutely no
evidence to support their position concerning the denial of the AirMed claim. While Defendant
has stated that an individual with appropriate medical credentials reviewed Bennett’s claim, there
is nothing more than a self-serving declaration to support this contention. Defendants have failed
to identify this person and have failed to provide any sort of documentation setting out this
person’s rationale. Further, as discussed in detail, Defendants have not acted in an evenhanded

59

Cardoza v. United of Omaha Life Ins. Co., 708 F.3d 1196, 1207 (10th Cir. 2013)
(quotation marks and citation omitted).
60

Id. (citation omitted).
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manner in dealing with Plaintiffs’ claim. Aetna provided Plaintiffs conflicting information
concerning the requirements to appeal the denial of benefits and the evidence seems to suggest
that Aetna interfered with Plaintiffs’ efforts to appeal the denial. Additionally, Defendants failed
to fully respond to the requests of counsel prior to litigation, interfering with Plaintiffs’ ability to
bring this suit. Further, Defendants have been unable to provide the Court with all of the
relevant documentation concerning Plaintiffs’ attempts to appeal the denial of benefits.
On the second factor, it is clear that Defendants have the ability to satisfy an award of
fees.
Third, an award of fees would also work to deter Defendants and others from acting in a
similar manner and would encourage claims administrators to operate in the manner envisioned
by ERISA and its regulations.
Finally, though Plaintiffs do not represent others and this case does not resolve a
significant legal question, an award of fees will nonetheless benefit the participants of the plan as
it will help to deter the type of conduct involved here.
V. CONCLUSION
It is therefore
ORDERED that Plaintiffs’ Motions to Strike (Docket Nos. 45 and 51) are DENIED. It is
further
ORDERED that the parties’ cross Motions for Summary Judgment (Docket Nos. 36 and
37) are GRANTED IN PART AND DENIED IN PART.

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The Clerk of the Court is directed to enter judgment in favor of Plaintiffs and against
Defendants in the amount of $93,656.
Within fourteen (14) days of this Order, Plaintiffs’ counsel is directed to supply the Court
with a calculation of prejudgment interest, attorney’s fees, and costs. The Court will supplement
the Judgment with those amounts.
The Clerk of the Court is directed to close this case forthwith.
DATED August 30, 2013.
BY THE COURT:

_____________________________________
TED STEWART
United States District Judge

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