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PHILLIPS v. LINCOLN NATL. LIFE INS. CO.

September 26, 1991

GORDON B. PHILLIPS as guardian of JAMES G. PHILLIPS, Plaintiff,
v.
LINCOLN NATIONAL LIFE INSURANCE COMPANY, an Indiana corporation, Defendant



The opinion of the court was delivered by: DUFF

 BRIAN BARNETT DUFF, UNITED STATES DISTRICT JUDGE

 The plaintiff, Gordon B. Phillips, as guardian for his son James G. Phillips, seeks to recover nearly $ 500,000 in insurance benefits that he claims have been wrongly withheld by the defendant, Lincoln National Life Insurance Company ("Lincoln"). Mr. Phillips has sued Lincoln pursuant to § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B), for reimbursement of what he has spent for the care of his sick son. That provision allows beneficiaries and participants in an employee welfare benefit plan to recover benefits due them under the terms of their plan. Id.

 The dispute requires this court to determine whether the plaintiff's son's condition falls within the meaning of the term "mental illness" in the insurance policy. If James's condition is a "mental illness," then the insurance coverage is a great deal less than if his condition is other than a "mental illness." In his motion for summary judgement, the plaintiff asserts that this court can decide as a matter of law that the policy's provision limiting coverage for mental illnesses does not apply because James's condition is not a mental illness. By contrast, the defendant's cross-motion for summary judgment argues that this court can decide as a matter of law that the insurance policy's limitation of coverage for mental illnesses does apply. In addition to moving for summary judgment, both sides seek attorneys fees pursuant to 29 U.S.C. § 1132(g)(1).

 Facts1

 Gordon Phillips was and still is President of Seedburo Equipment Company ("Seedburo"). On November 1, 1984, Seedburo executed a group insurance plan with Lincoln which remained in effect until November 1, 1990. The parties agree that the group insurance plan was an employee welfare benefit plan governed by ERISA and that James, as Gordon Phillips' dependent, was a beneficiary of the group plan.

 The insurance contract between Lincoln and Seedburo stated in pertinent part: MAJOR MEDICAL BENEFITS Maximum Benefit (Lifetime Aggregate) $ 1,000,000 Except that, the Maximum Benefit (Lifetime Aggregate) for charges for mental illness(es) is $ 25,000

 * * * * *

 
MAJOR MEDICAL LIMITATIONS
 
The maximum payment for care of mental illness or care of nervous conditions of any type or cause by a doctor will not be more than:
 
1. $ 20.00 for each visit; and
 
2. one visit on any one day; and
 
3. 50 visits during any calendar year.
 
(A "visit" occurs each time the doctor provides care to the patient.)

 * * * * *

 Illness -- means:

 
1. A disorder or disease of the body or mind; or
 
2. An accidental bodily injury; or
 
3. Pregnancy.

 Thus, the insurance contract provides a lifetime maximum benefit for major medical expenses of $ 1,000,000. It limits, however, the lifetime maximum benefit for charges for "mental illness(es)" to $ 25,000.

 Until October, 1987, Lincoln paid the claims submitted on behalf of James for his medical expenses. In October, 1987, the claims paid by Lincoln reached $ 25,000. Thereafter, Lincoln refused to pay any further claims on James's behalf, insisting that James's condition is a mental illness and that the lifetime limitation of $ 25,000 for care of mental illness applies. *fn2" From October, 1987 through June, 1990, Mr. Phillips has paid $ 498,615.41 for James's care without reimbursement from Lincoln and he has continued since June, 1990 to pay his son's medical expenses.

 James Phillips suffers from a debilitating condition marked by abnormal behavioral symptoms. His abnormal behavior includes hyperactivity, hyperexcitability and hyperkinesis. He is extremely self-abusive and has attempted suicide on several occasions. Sometimes he eats indiscriminately whatever he can get his hands on. In addition, James has difficulty processing visual stimuli and becomes anxious and overly excited when faced with a new or strange situation. He also needs constant reassurance and needs to hear statements repeated numerous times before he feels secure in his surroundings. James also requires an inordinate amount of attention and ...


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