Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

HARRIS TRUST & SAV. BANK v. PROVIDENT LIFE & ACCID

April 15, 1994

HARRIS TRUST AND SAVINGS BANK, and MARTIN DEN HARTOG, as co-guardians of the Estate of SANDRA DEN HARTOG, a disabled person, and MARTIN DEN HARTOG, individually, Plaintiffs,
v.
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, a Delaware corporation; CAMPBELL SOUP COMPANY, a New Jersey domestic corporation, Defendants.


Conlon


The opinion of the court was delivered by: SUZANNE B. CONLON

Harris Trust and Savings Bank and Martin Den Hartog, co-guardians of the estate of Sandra Den Hartog ("the estate"), sue Provident Life and Accident Insurance Co. ("Provident") and Campbell Soup Co. ("Campbell") (collectively "the defendants"). The estate sues for a declaration that it is entitled to be reimbursed for medical expenses under an employee benefit plan. The estate also seeks to recover expenses it claims are owed under the plan. The benefit plan, which is funded by Campbell and administered by Provident, is governed by the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001, et seq. ("ERISA"). *fn1" Campbell counterclaims for reimbursement of medical expenses it advanced to the estate under the plan. The parties file cross-motions for summary judgment. *fn2"

 BACKGROUND

 In September 1985, Sandra Den Hartog was involved in an automobile accident at a railroad crossing, and was rendered a quadriplegic. See Estate 12(m) Stmt. P 11. Since the accident, Sandra has been totally disabled and dependant on supportive care; she will be dependant for life. See Campbell 12(m) Stmt. P 5. The annual cost for Sandra's treatment is about $ 50,000. See Campbell 12(m) Stmt. P 76.

 After the accident, Sandra's father, Martin Den Hartog, opened a probate estate on Sandra's behalf and, as her guardian, filed a personal injury suit against the responsible parties. *fn3" See Estate 12(m) Stmt. P 14. On January 27, 1989, the suit was settled for $ 7 million. See Campbell 12(m) Stmt. P 32. The settlement generates sufficient annual income to cover Sandra's treatment expenses. Id. P 77.

 At the time of Sandra's accident, Martin Den Hartog was employed by Specialty Brands, Inc. ("Specialty Brands") and worked at Specialty Brand's Thornton, Illinois plant. See Estate 12(m) Stmt. P 8. Martin Den Hartog was a participant in Specialty Brand's employee benefits plan, which was underwritten and administered by Lincoln National Life Insurance Co. ("the Lincoln plan"). Id. PP 9-10. As Martin Den Hartog's dependant, Sandra received medical benefits under the Lincoln plan. Id. P 12. Lincoln paid the medical expenses relating to Sandra's disability (hereinafter Sandra's "expenses") *fn4" until March 31, 1989. See Campbell 12(m) Stmt. PP 6, 28.

 On March 24, 1988, Campbell acquired the Thornton plant from Specialty Brands. See Estate 12(m) Stmt. P 32. Consequently, Martin Den Hartog became an employee of Campbell -- for whom he continues to work. Upon Campbell's acquisition of the Thornton plant, Martin Den Hartog became a participant in Campbell's group benefit plan, which is sponsored and fully-funded by Campbell and is administered by Provident ("the Provident plan"). See Provident 12(m) Stmt. PP 9-17, 28.

 The Provident plan, which has covered the Martin Den Hartog family from the day that Campbell acquired the Thornton plant, provides Thornton employees and their families with substantially the same benefits that were available to them under the Lincoln plan. See Campbell 12(m) Stmt. PP 14, 16; see also Estate Exs. 4 and 5. Between March 1988 and June 1989, when Campbell published a new summary of benefits for Thornton employees, Martin Den Hartog was advised to rely on the terms of the Lincoln plan in determining his family's benefits coverage. See Campbell 12(m) Stmt. PP 16-17.

 Sandra continued to have her expenses paid through the Lincoln plan until March 31, 1989, a year after she first became covered under the Provident plan. See Estate 12(m) Stmt. PP 35-36. Sandra received extended benefits pursuant to the Lincoln plan's twelve-month post-termination coverage extension for disabled eligible dependents. Id. P 33. *fn5" As part of the settlement of the lawsuit, the estate repaid more than $ 400,000 for the expenses that had been covered by the Lincoln plan in light of the Plan's third-party limitations provision. See Campbell 12(m) PP 35-36; Campbell Ex. 9.

 In June 1991, Campbell instructed Provident to stop paying Sandra's benefits under the plan. See Provident 12(m) Stmt. P 36. Campbell decided to discontinue payments because of its understanding that Sandra's expenses were not covered in light of the plan's third-party exclusion. Id. PP 100-07. Because Sandra's disability was caused by third parties and because she had been awarded a cash settlement to compensate her for her disability, Campbell concluded that Sandra was not entitled to recover expenses under the plan. Id.

 The estate sues for a declaration that Sandra's expenses are covered under the Provident plan. The estate also seeks to recover Sandra's expenses for claims it has presented to the Provident plan since June 15, 1991. Campbell counterclaims for reimbursement of the money it paid Sandra between April 1989 and June 1991. Campbell maintains that the payments were "advances" in expectation of future repayment.

 DISCUSSION

 The parties file cross-motions for summary judgment. Summary judgment must be granted when the moving papers and affidavits show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Unterreiner v. Volkswagen of America, Inc., 8 F.3d 1206, 1209 (7th Cir. 1993). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Stewart v. McGinnis, 5 F.3d 1031, 1033 (7th Cir. 1993), cert. denied, 127 L. Ed. 2d 393, 114 S. Ct. 1075 (1994).

 In this case, the cross-motions raise three distinct issues: First, Provident contends that it is not a proper party to this suit because it is not a "fiduciary" of the Provident plan (as that term is defined by ERISA). Second, the estate asserts that the plain terms of the Provident plan demonstrate that Campbell is liable for Sandra's expenses (while the defendants respond that the Provident plan unambiguously establishes that they are not liable for Sandra's expenses). Finally, Campbell claims that it must be reimbursed for the money it "advanced" to Sandra before it ordered Provident to stop payments in June 1991.

 1. Fiduciary Under ERISA

 In moving for summary judgment, Provident contends that, as a matter of law, it cannot be liable to the estate. Provident asserts that under ERISA, it is not a "fiduciary" of the Provident plan, and thus is not a proper party in this suit challenging Sandra's right to recover expenses under the plan. Provident's contention is convincing.

 A suit regarding a benefits claim may not be maintained against an entity that is not a fiduciary of the benefits plan. Under ERISA, a participant in a benefits plan may sue "any person who is a fiduciary with respect to [the] plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries" by ERISA. See 29 U.S.C. §§ 1109(a); 1132(a)(1). Thus, the estate may only sue parties who are deemed to be fiduciaries of the plan. Id.; see also Pappas v. Buck Consultants, Inc., 923 F.2d 531, 535 (7th Cir. 1991). *fn6"

 Provident bases its argument on ERISA's definition of fiduciary. ERISA defines a plan fiduciary as follows:

 
[A] person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan.

 29 U.S.C. § 1001(21)(A). Provident asserts that because it does not exercise discretionary authority or perform discretionary functions in administering the Provident plan, it is not a fiduciary of the plan.

 The undisputed evidence demonstrates that Provident's duties with respect to the plan are ministerial and non-discretionary. The Provident plan is wholly-funded by Campbell. Provident agreed to process benefit claims on Campbell's behalf pursuant to Campbell's contractually-regulated directions. Provident administers the plan for Campbell under an administrative services agreement in which Provident is required to "follow the claims administration procedures and practices desired by [Campbell]." See Provident Ex. 2, Attach. A, P 2(c). Provident also must make all benefits eligibility decisions "in accordance with the Benefit Program and claims administration procedures and practices" created by Campbell. Id. P 2(f). In addition, pursuant to the agreement, all disputed and non-routine claims are to be decided by Campbell; all problems in administering the program are to be reported to Campbell; and Provident must make a monthly accounting of all payments that it processes. Id. PP ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.