R. v. Valueoptions et al

Filing 80

MEMORANDUM DECISION and ORDER Awarding Judgment and denying 64 Motion for Reconsideration. Signed by Judge Ted Stewart on 12/3/2014. (blh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
LYNN R., as guardian of T.R., a minor,
MEMORANDUM DECISION AND
ORDER AWARDING JUDGMENT AND
DENYING PLAINTIFF’S MOTION FOR
RECONSIDERATION

Plaintiff,
v.
VALUEOPTIONS, AT&T (f/k/a SBC
Communications Inc.), and SBC
UMBRELLA BENEFIT PLAN NO. 1 –
SNET ACTIVE BARGAINING UNIT
EMPLOYEE HEALTH PLAN,

Case No. 2:12-CV-1201 TS
District Judge Ted Stewart

Defendants.

This matter is before the Court for determination of the amount to be awarded to Plaintiff
under 28 U.S.C. § 1132(a)(1)(B), in light of the Court’s recent grant of summary judgment in
Plaintiff’s favor. Also before the Court is Plaintiff’s Motion for Reconsideration. 1 For the
reasons discussed more fully below, the Court will award Plaintiff $76,801.22, plus prejudgment
interest at 10% per annum and postjudgment interest at the statutory rate, and will deny
Plaintiff’s Motion for Reconsideration.
I. BACKGROUND
Plaintiff brought this action under the Employee Retirement Income Security Act
(“ERISA”). 2 In 2010, Plaintiff’s dependent, T.R., began receiving residential mental-health care
in a residential treatment facility in Loa, Utah. Defendants denied coverage for the treatment,

1

Docket No. 64.

2

29 U.S.C. §§ 1001–1461 (2012).

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based on the terms of the self-funded group health benefit plan (the “Plan”) sponsored by T.R.’s
father’s employer.
The Court granted summary judgment in Plaintiff’s favor, finding that Defendants’ denial
of coverage was arbitrary and capricious. In addition to concluding that an award of benefits
was warranted, the Court awarded Plaintiff prejudgment interest, but did not award attorneys’
fees or costs to Plaintiff. The Court directed Plaintiff to supply the Court with clarification of the
cost of the treatment plus 10% per annum prejudgment interest, and provided Defendants with an
opportunity to object to Plaintiff’s calculation.
II. MOTION FOR RECONSIDERATION
First, Plaintiff moves for the Court to reconsider its decision to not award attorneys’ fees
or costs.
“[E]very order short of a final decree is subject to reopening at the discretion of the
district judge.” 3 “Courts have generally permitted a modification of the law of the case when
substantially different, new evidence has been introduced, subsequent, contradictory controlling
authority exists, or the original order is clearly erroneous.” 4 “Thus, a motion for reconsideration
is appropriate where the court has misapprehended the facts, a party’s position, or the controlling
law. It is not appropriate to revisit issues already addressed or advance arguments that could
have been raised in prior briefing.” 5
3

Elephant Butte Irrigation Dist. v. U.S. Dep’t of Interior, 538 F.3d 1299, 1306 (10th Cir.
2008) (citation and internal quotation marks omitted).
4

Major v. Benton, 647 F.2d 110, 112 (10th Cir. 1981) (citing Furhman v. U.S. Steel
Corp., 479 F.2d 489, 494 (6th Cir. 1973)).
5

Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (citation omitted).

2

Plaintiff does not present substantially different and new evidence or subsequent and
contradictory controlling authority. Rather, Plaintiff argues that the Court misapprehended
controlling law in seeking reconsideration of the Court’s denial of attorneys’ fees under 29
U.S.C. § 1132(g)(1).
The Court has considered all of Plaintiff’s arguments and concludes that Plaintiff has not
raised issues demonstrating that the Court misapprehended controlling law. Therefore, for
substantially the same reasons described in the Court’s prior Order, 6 the Court will deny
Plaintiff’s Motion for Reconsideration.
III. AMOUNT OF AWARD
Plaintiff initially asserted that her out-of-pocket expenses were $74,334. In support of
this figure, Plaintiff submitted an affidavit attesting to the total amount Plaintiff paid to Aspen
Ranch and seven itemized account statements issued by Aspen Ranch to Plaintiff.
Defendants AT&T and SBC Umbrella Benefit Plan No. 1 – SNET Active Bargaining
Unit Employee Health Plan object to Plaintiff’s initial calculations, arguing that Plaintiff
included charges for services that are not covered by the Plan and that Plaintiff failed to provide
adequate detail about the charges to allow for an accurate determination of which charges would
be compensable under the Plan.
Defendant ValueOptions also objects to Plaintiff’s initial calculations. ValueOptions
argues that Plaintiff included items that are not covered by the Plan, psychiatric services for
which Plaintiff did not submit a claim, insufficient detail of the “residential treatment” line item

6

Docket No. 61.

3

listed on Plaintiff’s account statements, and services provided to Plaintiff’s dependent beyond
the period of time encompassed by the original denial of Plaintiff’s claim for benefits.
Plaintiff responded to Defendants’ objections by amending the calculation of her out-ofpocket expenses to $76,801.22, after accounting for some of Defendants’ objections and
providing additional documentation and analysis in support of her calculations. Plaintiff does
not dispute Defendants’ objections to the itemized charges for services that are not covered under
the Plan—for example, enrollment fees, clothing, hygiene items, haircuts, and so on. Plaintiff
also does not dispute that she is not entitled to reimbursement for the psychiatric services for
which Plaintiff did not submit a claim. Because Plaintiff concedes Defendants’ objections as to
services not covered under the Plan and services for which a claim was not submitted, the Court
will turn to Defendants’ remaining objections.
First, Defendants argue that Plaintiff failed to provide adequate detail to determine
whether each charge listed on the itemized account statements should be covered by the Plan—in
particular, the line item for residential treatment. In so doing, Defendants invoke a basis for
denying benefits that was not relied upon in the administrative process. But “federal courts will
consider only ‘those rationales that were specifically articulated in the administrative record as
the basis for denying a claim.’” 7 Having “rejected the sole basis upon which the administrator

7

Spradley v. Owens-Ill. Hourly Emps. Welfare Benefit Plan, 686 F.3d 1135, 1140 (10th
Cir. 2012) (quoting Flinders v. Workforce Stabilization Plan of Phillips Petroleum Co., 491 F.3d
1180, 1190 (10th Cir. 2007), abrogated on other grounds by Metro. Life Ins. Co. v. Glenn, 554
U.S. 105 (2008)); see also Garrett v. Principal Life Ins. Co., 555 F. App’x 809, 812–13 (10th
Cir. 2014) (unpublished) (affirming district court’s refusal to consider new arguments raised by
administrator in an attempt to reduce the amount of benefits owed).

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grounded its denial of benefits, [the Court] will not permit the administrator to rely on new
grounds for denial in this litigation or in further administrative proceedings.” 8
Second, Defendant ValueOptions objects to Plaintiff’s calculation of charges incurred
after March 9, 2011, and argues that those charges were not part of Plaintiff’s administrative
appeal or the instant suit. The administrative record does not contain documentation of this
period, and ValueOptions’s denials appear to indicate that Plaintiff’s claim for benefits was
denied only for the period from July 9, 2010, to March 9, 2011. But Plaintiff has now submitted
documentation demonstrating that Plaintiff’s dependent continually received treatment at Aspen
Ranch until June of 2011, and that ValueOptions denied coverage for this time period.
The Court’s review of ValueOptions’s denial of benefits is “‘limited to the administrative
record—the materials compiled by the administrator in the course of making his decision.’” 9
“‘[T]he district court should only look at the evidence that was before the plan administrator or
trustee at the time of the determination.’” 10 “[I]t is the unusual case in which the district court
should allow supplementation of the record,” 11 and therefore “[a] party seeking to introduce
evidence from outside the administrative record bears a significant burden in establishing that he
may do so.” 12

8

Spradley, 686 F.3d at 1142.

9

Foster v. PPG Indus., Inc., 693 F.3d 1226, 1231 (10th Cir. 2012) (quoting Holcomb v.
Unum Life Ins. Co. of Am., 578 F.3d 1187, 1192 (10th Cir. 2009)).
10

Hall v. Unum Life Ins. Co. of Am., 300 F.3d 1197, 1203 (10th Cir. 2002) (quoting
Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017, 1025 (4th Cir. 1993)).
11

Id.

12

Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1309 (10th Cir. 2007).

5

In Hall v. Unum Life Insurance Co. of America, the Tenth Circuit explained that the
administrative record in an ERISA case could be supplemented when the following four prongs
have been met:
(1) the evidence must be “necessary to the district court’s . . . review;” (2) the
party offering the extra-record evidence must “demonstrate that it could not have
been submitted to the plan administrator at the time the challenged decision was
made;” (3) the evidence must not be “[c]umulative or repetitive;” nor (4) may it
be “evidence that is simply better evidence than the claimant mustered for the
claim review.” 13
All four prongs are satisfied in this suit. First, Plaintiff has submitted documentation
demonstrating that her dependent received continuous treatment from July 2010 to June 2011.
To determine the appropriate judgment to be awarded in this case, it is necessary that the Court
consider documentation of all charges associated with the treatment for which coverage was
denied. Second, the disputed charges were incurred after Plaintiff’s administrative appeals had
been denied, so Plaintiff could not have submitted them to ValueOptions at the time the claim
was denied. Third, the additional documentation reflects unique charges incurred for treatment
provided between March 2011 and June 2011, and is not cumulative or repetitive of evidence
elsewhere in the record. Fourth, because the documentation reflects unique costs incurred, it is
not simply better evidence than what is already contained in the administrative record. It is
evidence of costs not otherwise represented in the record.

13

Id. (quoting Hall, 300 F.3d at 1203). Although Hall and Jewell involved a de novo
standard of review, the Tenth Circuit has acknowledged that a party seeking admission of extrarecord evidence in an arbitrary-and-capricious case “must meet at least the same burden.”
Williams v. Metro. Life Ins. Co., 459 F. App’x 719, 729 n.8 (10th Cir. 2012) (unpublished).
Without guidance about any differences that might be applicable in cases involving arbitraryand-capricious review, the Court will apply the Hall test in this case.

6

Based on the foregoing, the Court will supplement the administrative record with
Plaintiff’s documentation of costs incurred throughout the treatment period. The Court will
therefore adopt Plaintiff’s amended calculation that incorporates Defendants’ objections for
services not claimed under the Plan or covered by the Plan, and costs for the full period of
treatment.
IV. CONCLUSION
It is hereby
ORDERED that Plaintiff’s Motion for Reconsideration (Docket No. 64) is DENIED.
The Clerk of the Court is directed to enter judgment in favor of Plaintiff and against
Defendants in the amount of $76,801.22, plus prejudgment interest at 10% per annum and
postjudgment interest at the statutory rate.
DATED this 3rd day of December, 2014.
BY THE COURT:

Ted Stewart
United States District Judge

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