L. v. Newmont USA Limited
Filing
82
MEMORANDUM DECISION AND ORDER: Plaintiff's Motion is DENIED and Defendants' Motion is GRANTED IN PART and DENIED IN PART. Signed by Judge Robert J. Shelby on 6/22/20. (dla)
1IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
C.L., on behalf of minor, H.L.,
MEMORANDUM DECISION AND
ORDER
Plaintiff,
v.
Case No. 2:18-cv-00192
NEWMONT USA LIMITED,
EMPLOYEE BENEFITS PLAN OF
NEWMONT, and THE
ADMINISTRATION COMMITTEE OF
NEWMONT USA LIMITED,
Chief Judge Robert J. Shelby
Magistrate Judge Daphne A. Oberg
Defendants.
This action concerns a denial of benefits under the Employee Retirement Income Security
Act (ERISA).1 Plaintiff C.L. brings this action on behalf of her minor child, H.L., against
Defendants Newmont USA Limited (Newmont), Employee Benefits Plan of Newmont (the Plan
or Employee Benefits Plan), and the Administration Committee of Newmont USA Limited
(Administration Committee) seeking recovery of benefits and alleging breach of fiduciary duty.2
The parties have filed cross-motions for summary judgment.3 For the reasons explained below,
Plaintiff’s Motion is DENIED and Defendants’ Motion is GRANTED IN PART and DENIED
IN PART.
1
29 U.S.C. § 1001 et seq.
2
See dkt. 16.
3
Dkt. 62; dkt. 63.
1
BACKGROUND4
W.L. and C.L. are H.L.’s parents.5 W.L. is employed by Newmont.6 Newmont has
established ERISA-qualified benefits plans for its employees, including the Health Plan of
Newmont.7 The Health Plan is a component plan of the Employee Benefits Plan.8 W.L. is a
participant in the Health Plan, and H.L. is a beneficiary of the Health Plan.9
The Plan establishes an Administration Committee and an Appeals Committee.10 The
Plan grants the Administration Committee discretion to interpret and oversee the administration
of the component plans—including the Health Plan—except for matters reserved for the Appeals
Committee.11 The Plan grants the Appeals Committee discretion to interpret component plan
provisions in making determinations on benefit claims on appeal.12
The Plan outlines the process for appealing any denial of benefits. It requires that “[a]
claimant must exhaust his or her administrative remedies under the Plan and Component Plan
prior to bringing any legal action with respect to a claim for benefits.”13 It clarifies that “[a]n
authorized representative may act on behalf of a claimant, and any reference to ‘claimant’ . . .
shall include such an authorized representative.”14 The Plan provides that a claimant (including
4
The facts recited below are undisputed by the parties unless otherwise noted.
5
Dkt. 62 at 4.
6
Dkt. 62 at 3.
7
Dkt. 62 at 4.
8
Dkt. 62 at 4.
9
Dkt. 62 at 4.
10
Dkt. 62 at 5.
11
Dkt. 62 at 6.
12
Dkt. 62 at 6.
13
Dkt. 62 at 10.
14
Dkt. 62 at 10.
2
an authorized representative) may appeal an adverse benefit determination to the Appeals
Administrator.15 It requires that “[a]ppeals of medical claims decisions . . . must be made in
writing and be received by the Appeals Administrator within 180 days after the claimant receives
the notice of denial.” The Plan also provides that, “[i]n the event that an Internal Appeal results
in a denial based upon medical judgment or a Rescission (in whole or in part), the claimant may
request an External Review.”16
H.L. was born in Elko, Nevada, on March 27, 2014.17 The following day, H.L.
developed respiratory distress and was transferred to Intermountain Medical Center in Murray,
Utah.18 H.L. was released from Intermountain Medical Center on April 8, 2014.19
Intermountain Medical Center is an out-of-network provider under the Health Plan.20
On April 11, 2014, IHC Health Services (IHC) submitted the claim for H.L.’s treatment,
which totaled $98,372.96.21 On June 28, 2014, Anthem Blue Cross Blue Shield (Anthem)—the
Plan’s third-party claims administrator—gave notice to Plaintiff that it was denying the claim, at
least in part.22 Between May 2014 and October 2015, Anthem paid benefits in the amount of
$41,250.00.23
15
Dkt. 62 at 11.
16
Dkt. 62 at 11–12.
17
Dkt. 63 at x.
18
Dkt. 63 at x.
19
Dkt. 62 at 4.
20
Dkt. 62 at 8.
21
Dkt. 63 at xi.
22
Dkt. 62 at 20; dkt. 77 at 24 (noting that notice of denial of benefits was sent on June 28, 2014). The parties
dispute whether the claim was denied in whole or in part. It is immaterial, however, what portion of the claim was
denied on June 28, 2014. The material fact is that notice was given on June 28, 2014.
23
Dkt. 63 at xi; dkt. 78 at 4–5. The parties dispute when Anthem paid this amount. Plaintiffs allege payment did
not occur until October 22, 2015. Dkt. 63 at xi. Defendants allege it was paid on May 8, 2014. Dkt. 78 at 5. In any
event, it is immaterial on what date payment was made.
3
On October 7, 2014, IHC sent a letter addressed to Anthem with the subject line “ATTN:
Appeals,” writing, “[Anthem] reduced payment of the above-referenced claim significantly
following an internal determination that services were administered out-of-network. Please
reconsider that determination.”24 On November 14, 2014, Anthem replied to IHC, explaining,
“Please be advised per the member’s plan regarding your appeal for [dates of service]
3/28/2014–4/8/2014: they need a member authorization on file in order to consider the appeal.”25
On March 18, 2015, IHC sent via facsimile a letter addressed to Anthem with the subject
line “ATTN: Appeals” in which IHC again asked Anthem to reconsider its prior determination.26
The cover letter states, “[a]ttached is the appeal letter and signed [Assignment of Benefits
(AOB)] form for [H.L.].”27 Defendants deny that an AOB form was attached.28
On April 6, 2015, Anthem sent a letter to H.L. that stated in relevant part, “We received a
request from Intermountain Medical Center for an appeal. If you want this person to submit the
appeal for you, please fill out and sign the form that’s included with this letter and return it to us.
We can’t begin reviewing the request until we receive a completed form from you.”29 The
Administrative Record contains an AOB form dated May 1, 2015, that is signed by W.L. and
designates IHC as an authorized representative.30
24
Dkt. 61-27 at 127.
25
Dkt. 61-27 at 130.
26
Dkt. 61-27 at 132.
27
Dkt. 61-27 at 131.
28
Dkt. 62 at 13. Plaintiff disputes this assertion, arguing “[t]he Administrative Record does not conclusively
support whether the AOB was attached or not in part because Defendant has failed to provide records it received
from Plaintiff in the appeals process.” Dkt. 77 at 15.
29
Dkt. 62 at 13.
30
Dkt. 61-27 at 135–37.
4
On May 29, 2015, Anthem sent a letter to H.L. stating in relevant part, “We received a
request for an appeal from ER Intermountain Medical Center for the inpatient stay rendered on
March 28, 2014, through April 8, 2014. This request was received on May 1, 2015. Appeal
requests must be received within 180 calendar days from the date you were notified of an
adverse coverage decision. An explanation of benefits was issued to you on June 28, 2014,
summarizing the benefit determination made on the claim. We did not receive the request
timely. Therefore, it cannot be reviewed.”31 Plaintiff did not file a request for external review.32
Plaintiff filed this lawsuit on March 1, 2018.33 Plaintiff filed an Amended Complaint on
May 23, 2018, asserting two causes of action against Defendants: (1) recovery of benefits under
29 U.S.C. § 1132(a)(1)(B), and (2) breach of fiduciary duty under 29 U.S.C. §§ 1104, 1109, and
1132.34 The parties filed cross-motions for summary judgment on October 15, 2019.35
LEGAL STANDARD
Summary judgment is appropriate when “there is no genuine dispute as to any material
fact” and the moving party is “entitled to judgment as a matter of law.”36 A fact is material if it
“might affect the outcome of the suit under the governing law,” and a dispute is genuine “if the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”37
Where, as here, the parties in an ERISA case both move for summary judgment, “the
factual determination of eligibility for benefits is decided solely on the administrative record, and
31
Dkt. 62 at 14.
32
Dkt. 62 at 16.
33
Dkt. 2.
34
Dkt. 16.
35
Dkt. 62; dkt. 63.
36
Fed. R. Civ. P. 56(a).
37
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
5
the nonmoving party is not entitled to the usual inferences in its favor.”38 Additionally, the court
considers “only the arguments and evidence before the administrator at the time it made [the]
decision.”39
ANALYSIS
Plaintiff has moved for summary judgment only on her recovery of benefits claim.
Defendants have moved for summary judgment on both of Plaintiff’s claims. For the reasons
explained below, the court GRANTS summary judgment in Defendants’ favor on both claims.40
Defendants also seek an award of reasonable attorney fees and costs. For the reasons,
explained below, the court DENIES Defendants’ request for fees.
I. RECOVERY OF BENEFITS
Both parties have moved for summary judgment on Plaintiff’s recovery of benefits claim.
Because the court concludes Defendants are entitled to summary judgment on this cause of
action, it addresses only Defendants’ Motion.
Defendants argue they are entitled to summary judgment on Plaintiff’s recovery of
benefits claim because Plaintiff failed to exhaust her administrative remedies before filing this
action.41 Among other things, Defendants argue Plaintiff failed to exhaust her administrative
remedies by failing to timely appeal the denial of benefits for H.L.’s care.42 Plaintiff responds
38
LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment & Dependent Life Ins. Plan, 605 F.3d
789, 796 (10th Cir. 2010).
39
Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 380 (10th Cir. 1992).
40
Summary judgment is also granted in Newmont’s favor on an additional, alternative ground. Defendants argue in
their Motion that Newmont is not a proper defendant. Dkt. 62 at 17. In her Opposition, Plaintiff concedes
Newmont is not a proper defendant in light of “Defendants’ admission that the Administration Committee was the
Plan Administrator in control of benefit determinations.” Dkt. 77 at 22. As a result, summary judgment is
appropriate as to Newmont on this additional, alternative ground.
41
Dkt. 62 at 18.
42
Dkt. 62 at 19–20.
6
that she timely appealed the adverse benefits determination and that, even if she did not timely
appeal, her failure to exhaust administrative remedies should be excused.43
A. Plaintiff Failed to Exhaust Her Administrative Remedies
“Although ERISA contains no explicit exhaustion requirement, . . . exhaustion of
administrative . . . remedies is an implicit prerequisite to seeking judicial relief.”44 This
judicially created doctrine is derived from “the exhaustion doctrine permeating all judicial
review of administrative agency action” and “is necessary to keep from turning every ERISA
action, literally, into a federal case.”45 “[F]ailure to file a timely administrative appeal from a
denial of benefits is one means by which a claimant may fail to exhaust her administrative
remedies.”46
Defendants argue Plaintiff failed to timely appeal the adverse benefits determination for
H.L.’s treatment within the requisite 180-day window.47 The notice of denial was sent on June
28, 2014. Therefore, Plaintiff had until December 25, 2014 to file an appeal. Plaintiff argues
that it timely appealed because IHC filed an appeal with Anthem on October 7, 2014.48 The
question, then, is whether the October 7, 2014 appeal constituted a timely appeal for purposes of
administrative exhaustion. The court concludes it did not.
43
Dkt. 77 at 24, 26–29.
44
Whitehead v. Okla. Gas & Elec. Co., 187 F.3d 1184, 1190 (10th Cir. 1999) (citation omitted) (internal quotation
marks omitted).
45
Id. (citation omitted) (internal quotation marks omitted).
46
IHC Health Servs., Inc. v. FCH1 LLC, No. 2:11-cv-00657, 2012 WL 5928338, at *3 (D. Utah Nov. 27, 2012)
(unpublished) (quoting Edwards v. Briggs & Stratton, 639 F.3d 355, 362 (7th Cir.2011)).
47
Dkt. 62 at 19–20.
48
Dkt. 77 at 24.
7
The Plan provides that “[a] claimant may appeal an adverse benefit determination.”49
The Plan explains that any reference to a “claimant” also includes an “authorized
representative.”50 Thus, as Plaintiff acknowledges, only a claimant or an authorized
representative may submit an appeal under the Plan.51
Defendants argue that the October 7, 2014 appeal does not constitute a timely appeal
because IHC was not H.L.’s authorized representative at the time it filed the appeal.52 Plaintiff
never argues that IHC was her authorized representative at the time it filed the October 7, 2014
appeal. Thus, the October 7, 2014 appeal was not a cognizable appeal under the express terms of
the Plan because it was filed by someone other than the claimant or an authorized representative.
Anthem’s November 21, 2014 letter to IHC confirmed as much when Anthem explained, “Please
be advised per the member’s plan regarding your appeal for [dates of service] 3/28/2014–
4/8/2014: they need a member authorization on file in order to consider the appeal.”53
In response, Plaintiff argues only that an authorization form was provided to Anthem on
March 18, 2015, in which Plaintiff authorized IHC to act as her representative.54 But Plaintiff
does not explain how this ex-post authorization in March 2015 affected the October 7, 2014
49
Dkt. 61-4 at 27.
50
Dkt. 61-4 at 23.
51
Dkt. 77 at 11–12.
52
Dkt. 62 at 19.
53
Dkt. 61-27 at 130.
54
Dkt. 77 at 24. The parties dispute when Anthem actually received such a form. Plaintiff argues it sent Anthem a
form authorizing IHC as her personal representative on March 18, 2015. Dkt. 77 at 24. Defendant seems to argue
no such authorization took place until May 1, 2015. Dkt. 62 at 13. But this dispute need not be resolved because, in
any event, the administrative record contains no evidence suggesting Plaintiff designated IHC as her authorized
representative prior to the October 7, 2014 appeal. Nor does the administrative record contain any evidence
suggesting IHC submitted an authorized appeal until at least March 2015.
8
appeal. Nor does Plaintiff address the fact that the March 2015 authorization occurred well
outside the 180-day appeal window provided for by the Plan.55
As a result, the court must conclude the October 7, 2014 appeal did not constitute a
timely appeal under the terms of the Plan. At the time it submitted the appeal, IHC was not an
authorized representative and therefore had no right or ability under the terms of the Plan to
appeal any adverse benefit determinations. Although IHC later obtained authorization to act as
Plaintiff’s authorized representative, Plaintiff has not demonstrated how or why that
authorization had the effect of converting the October 7, 2014 appeal from an unauthorized, noncognizable appeal to a timely, authorized appeal under the Employee Benefits Plan. Because
Plaintiff failed to timely appeal the adverse benefits determination, she has failed to exhaust her
administrative remedies under the Employee Benefits Plan.
B. Plaintiff’s Failure to Exhaust Is Not Excused
Having concluded Plaintiff failed to exhaust her remedies under the Plan, the court must
now consider whether Plaintiff’s failure to exhaust should be excused.
“Generally, a failure to exhaust will be excused in two limited circumstances—when
resort to administrative remedies would be futile or when the remedy provided is inadequate.”56
Additionally, ERISA’s implementing regulations contain a third exception known as the
“deemed exhaustion” exception, which deems claimants to have exhausted their administrative
remedies “if a plan has failed to establish or follow claims procedures consistent with the
55
Indeed, Plaintiff had more than a month remaining on the 180-day clock when she received the November 21,
2014 letter explaining IHC’s appeal could only be considered if Plaintiff designated IHC as her authorized
representative. Had IHC obtained Plaintiff’s authorization after receiving the November 21, 2014 letter and then
filed an appeal before December 25, 2014, such appeal would have been timely.
56
Holmes v. Colo. Coalition for Homeless Long Term Disability Plan, 762 F.3d 1195, 1204 (10th Cir. 2014).
9
requirements of ERISA.”57 Here, Plaintiff argues any failure to exhaust should be excused
because: (1) any attempt to exhaust her administrative remedies would have been futile and (2)
the deemed exhaustion exception should apply because Anthem did not comply with certain
ERISA regulations.58
Plaintiff argues any attempt to exhaust her administrative remedies would have been
futile “because Defendants failed to comply with the Plan’s administrative procedures.”59
Specifically, Plaintiff points to a notice of denial Anthem sent that failed to satisfy certain Plan
criteria such as “specific references to pertinent Plan provisions on which the denial is based.”60
In support of this argument, Plaintiff cites to a case from the District of New Mexico, which
cited a Third Circuit case for the proposition that a plan’s compliance with its own administrative
procedures is a factor courts must consider in determining whether attempted exhaustion would
be futile.61
As an initial matter, noncompliance is only one of five non-exclusive factors considered
under the Third Circuit’s test and does not alone appear to be dispositive.62 More importantly,
courts in this circuit—including this court—employ a different test for determining futility.
57
Id. (citing 29 C.F.R. § 2560.503-1(l).
58
Dkt. 77 at 26–29.
59
Dkt. 77 at 26.
60
Dkt. 77 at 27.
61
Dkt. 77 at 27 (citing Coonen v. Sandia Corp., No. CIV-04-1035, 2005 U.S. Dist. LEXIS 36732 (D.N.M. Aug. 30,
2005)).
62
See Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244, 250 (3d Cir. 2002).
10
To demonstrate futility, a claimant “must show her claim would be denied on appeal, and
not just that she thinks it is unlikely an appeal will result in a different decision.”63 Here,
Plaintiff has not produced evidence to show her claim would have been denied had she filed a
timely appeal. Indeed, her attempts to cure the defect of the October 7, 2014 appeal suggest that
Plaintiff did not view the appeal process as futile. Accordingly, the court will not excuse
Plaintiff’s failure to exhaust on futility grounds.
Plaintiff next argues the court should excuse her failure to exhaust because the notice of
denial Anthem issued does not comply with certain notice requirements under 29 C.F.R. §
2560.503–1, such as the requirement that a notification include a “[r]eference to the specific plan
provisions on which the determination is based.”64 Plaintiff argues this noncompliance excuses
her failure to exhaust under the deemed exhaustion exception. Defendants respond that
Anthem’s notice “substantially compl[ied]” with ERISA’s notice requirements and therefore
should not form the basis for deemed exhaustion.65
As the Tenth Circuit has explained, “[c]ourts have ... been willing to overlook [an]
administrator[’s] failure to meet certain procedural requirements when the administrator has
substantially complied with the regulations and the process as a whole fulfills the broader
purposes of ERISA and its accompanying regulations.”66 As a result, deviations from ERISA’s
63
Getting v. Fortis Benefits Ins. Co., 5 F. App’x 833, 836 (10th Cir. 2001) (unpublished); see also Rando v.
Standard Ins. Co., 182 F.3d 933 (Table) (10th Cir. 1999) (unpublished) (“We agree with the Seventh Circuit’s
approach to evaluating a claim of futility and hold that in order to satisfy the futility exception to the exhaustion
requirement, plaintiff must establish that ‘it is certain that [his] claim will be denied on appeal, not merely that [he]
doubts that an appeal will result in a different decision.’” (citation omitted)); Baker v. Comprehensive Emp.
Solutions, 227 F.R.D. 354, 356–57 (D. Utah 2005) (applying Getting futility test).
64
Dkt. 77 at 28–29; 29 C.F.R. § 2560.503–1(g)(1)(ii).
65
Dkt. 80 at 9.
66
Holmes, 762 F.3d at 1211 (citation omitted) (internal quotation marks omitted).
11
notice requirements are excused “so long as the claimant has not been prejudiced thereby.”67 To
show prejudice, the claimant must demonstrate “the notice and disclosure deficiencies actually
denied the participant a reasonable review procedure.”68 If the claimant cannot demonstrate they
were actually denied a reasonable review procedure as a result of the deficient notice, then the
deemed exhaustion exception does not apply.69
Here, Plaintiff has not demonstrated that any deficiencies in the notice sent by Anthem
denied her a reasonable review procedure. Even if the notice explaining what Anthem would
and would not cover was deficient in certain ways, there is no evidence suggesting that those
deficiencies prevented Plaintiff from seeking review through an appeal. Indeed, Plaintiff tried to
appeal the denial of benefits, but her appeal was denied on timeliness grounds. Simply put,
Plaintiff has not shown she suffered any prejudice—as defined in the context of the deemed
exhaustion exception—from Anthem’s noncompliance with ERISA’s notice requirements.
In sum, the court concludes Plaintiff failed to exhaust her administrative remedies by
failing to file a timely appeal. The court further concludes Plaintiff’s failure to exhaust is not
excused on futility grounds or under the deemed exhaustion exception. Accordingly, Plaintiff’s
denial of benefits claim is barred, and summary judgment is granted in Defendants’ favor.
II. BREACH OF FIDUCIARY DUTY
Defendants also move for summary judgment on Plaintiff’s breach of fiduciary duty
claim. In its Opposition, Plaintiff states: “Plaintiff concedes its claim for breach of fiduciary
67
Id.
68
Id. at 1213.
69
See id. at 1214 (“Because Union Security's failure to include the details regarding the two-level internal review
process in the SPD did not prejudice Ms. Holmes by denying her a fair and reasonable opportunity to pursue her
claim through the plan's internal review process, the district court correctly rejected her argument that she should be
deemed to have exhausted her administrative remedies based on deficiencies in the SPD.”).
12
duty, Count II of the Complaint, and withdraws this claim.”70 Accordingly, the court grants
summary judgment in Defendants’ favor on this claim.
III. ATTORNEY FEES
Finally, Defendants seek an award of attorney fees and costs under 29 U.S.C.
§ 1132(g)(1).71 Section 1132(g)(1) provides that “the court may in its discretion allow a
reasonable attorney’s fees and costs.”72 The Tenth Circuit has established five factors a court
may consider in deciding whether to exercise its discretion to award attorney fees in an ERISA
action:
(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.73
“No single factor is dispositive and a court need not consider every factor in every case.”74
Having considered these factors, the court declines to exercise its discretion to award fees
to Defendants here. There is no evidence that Plaintiff’s claims were brought in bad faith or that
Plaintiff has otherwise acted culpably. Indeed, the parties’ positions both possessed merit. The
court further finds that none of the remaining factors weigh in favor of awarding fees and costs
to Defendants here. Accordingly, Defendants’ request for reasonable attorney fees and costs is
DENIED.
70
Dkt. 77 at 2.
71
Dkt. 62 at 27.
72
29 U.S.C. § 1132(g)(1).
73
Cardoza v. United of Omaha Life Ins. Co., 708 F.3d 1196, 1207 (10th Cir. 2013).
74
Id.
13
CONCLUSION
For the reasons stated above,
1. Plaintiff’s Motion for Summary Judgment75 is DENIED;
2. Defendants’ Motion for Summary Judgment76 is GRANTED IN PART and DENIED
IN PART as follows:
a. Defendants’ Motion is GRANTED as to Plaintiff’s recovery of benefits claim
and breach of fiduciary duty claim; and
b. Defendants’ Motion is DENIED as to its request for attorney fees and costs.
SO ORDERED this 22nd day of June, 2020.
BY THE COURT:
ROBERT J. SHELBY
United States Chief District Judge
75
Dkt. 63.
76
Dkt. 62.
14
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