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LUTHERAN GEN. HOSP. v. WENDY'S INT'L

March 13, 1997

LUTHERAN GENERAL HOSPITAL, Plaintiff,
v.
WENDY'S INTERNATIONAL, INC., an Ohio corporation; WENDY'S INTERNATIONAL HEALTH BENEFIT PLAN; and METROPOLITAN LIFE INSURANCE COMPANY, a legal reserve stock company, Defendants.



The opinion of the court was delivered by: KEYS

 Before the Court are Defendants' Motions to Dismiss, or, In the Alternative, for Summary Judgment; and Plaintiff's Cross-Motion for Summary Judgment. For the reasons set forth below, the Motions to Dismiss are denied and the Defendants' Motions for Summary Judgment are granted.

 Material Facts

 At all times material herein, Maryann McGivern and John Romito were employed as management level employees by Defendant Wendy's International, Inc. ("Wendy's"). Wendy's International Health Benefit Plan ("Wendy's Health Plan" or "Plan") is a self-funded health insurance plan for Wendy's employees and their dependents. Metropolitan Life Insurance Company ("MetLife") is an administrator of the Plan, performing certain administrative services, including the initial processing of claims for benefits thereunder.

 As of November 10, 1993, both Maryann McGivern and John Romito were enrolled for individual medical benefits coverage with the Plan. The bi-weekly contribution rates for medical coverage was $ 20.00 for single coverage and $ 50.00 for family coverage. At that time, Ms. McGivern was seven months' pregnant and expected delivery on or about January 19, 1994. However, on November 10, 1993, she went into premature labor and was taken to Lutheran General Hospital ("Plaintiff" or "Lutheran General"), where she gave birth to a son, Brandon Romito. John Romito is the father of Brandon Romito. Also on November 10, 1993, Ms. McGivern signed a form seeking dependent coverage under the Plan. The form was received in the Human Resources Department of Wendy's corporate headquarters on November 16, 1993. Upon admission to the hospital, Ms. McGivern executed an assignment of benefits in favor of the hospital.

 Brandon Romito was hospitalized from November 10, 1993 to December 23, 1993 at Lutheran General Hospital, and his medical expenses totaled $ 89,021.36. On December 31, 1993, John Romito submitted a form seeking family coverage under the Plan, which form was received in the Human Resources Department of Wendy's corporate headquarters on January 5, 1994.

 On December 13, 1993, MetLife received the first claim for medical benefits on behalf of Brandon Romito, in the amount of $ 1,500.00 from Dr. John David McKenzie, for services performed on November 22, 1993. There was nothing in MetLife's computer system to indicate that Brandon had received any medical treatment between November 10, 1993, his date of birth, and November 16, 1993, the earliest date on which his coverage could have begun, so there was no need to investigate whether the treatment rendered by Dr. McKenzie on November 22, 1993 related to a pre-existing condition. Therefore, the portion of that bill which MetLife considered to be reasonable and customary was paid. Plaintiff's Response in Opposition to Defendants' Motion for Summary Judgment and Plaintiff's Cross-Motion for Summary Judgment ("Pl.'s Resp. Opp."), Exh. A, and Reply in Support of Defendants' Motions to Dismiss and for Summary Judgment ("Defs.' Reply"), Exh. I.

 On February 28, 1994, MetLife received a claim for medical benefits on behalf of Brandon from Lutheran General Hospital. This was the first claim to identify treatment prior to November 16, 1993. A computer print-out showed that Brandon had been hospitalized from November 10, 1993 to December 23, 1993, but that Ms. McGivern's family coverage was not added until November 16, 1993. Therefore, the claims processor was alerted by the computer to investigate the possibility that the treatment for which Lutheran General was seeking payment related to a pre-existing condition. (Defs.' Reply, Exh. I.) On March 4, 1994, after contacting Wendy's and verifying that the November 16, 1993 effective date for family coverage was correct, that Brandon was hospitalized on that date, that his coverage did not begin until after he was discharged, and that the pre-existing condition provision applied, MetLife denied the payment. (Defs.' Reply, Exh. I.)

 Notwithstanding the March 4, 1994 computer alert that requests for payments for services performed during Brandon's hospitalization were to be denied, a claims processor did approve payment of a claim in the amount of $ 80.00 from Dr. David Mittelman for services performed on December 22, 1993. This was due to a claim-processing error. (Pl.'s Resp. Opp., Exh. A; Defs.' Reply, Exh. I.)

 Standard for Motion to Dismiss

 The purpose of a motion to dismiss, brought under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, is to test the sufficiency of the complaint. Chicago Dist. Council of Carpenters Pension Fund v. G & A Installations, Inc., 1996 U.S. Dist. LEXIS 1444, No. 95 C 6524, 1996 WL 66098, at *1 (N.D. Ill. Feb. 8, 1996). In deciding a Rule 12(b)(6) motion, the Court accepts as true all well-pled factual allegations in the complaint, and draws all reasonable inferences therefrom in the plaintiff's favor. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957); Lashbrook v. Oerkfitz, 65 F.3d 1339, 1343 (7th Cir. 1995); Harris v. City of Auburn, 27 F.3d 1284, 1285 (7th Cir. 1994).

 Defendants contend that the Complaint should be dismissed because the Court lacks subject matter jurisdiction to entertain this action because Lutheran General lacks standing herein. In this regard, Defendants argue that the assignment of rights executed by Ms. McGivern in favor of Lutheran General on November 10, 1993 was not made by a "participant" or "beneficiary" within the meaning of 29 U.S.C. § 1132(a)(1)(B). They argue further that the Plan's language does not provide Lutheran General with a "colorable claim" in its own right, citing Sallee v. Rexnord, 985 F.2d 927 (7th Cir. 1993); Kennedy v. Connecticut General Life Ins. Co., 924 F.2d 698 (7th Cir. 1991).

 Lutheran General notes that the Plan includes dependents under its definition of a "participant" and argues that, therefore, Brandon was a participant within the meaning of 29 U.S.C. § 1132(a)(1)(B). It also argues that Lutheran General is a beneficiary, since it has a "colorable claim" to benefits.

 The Court, having carefully reviewed the parties' respective arguments, the cases relied upon by them, the Statute and the Plan's language in this regard, is unable to conclude that the case should be dismissed for lack of jurisdiction. Therefore, Defendants' Motions to Dismiss are denied.

 SUMMARY JUDGMENT STANDARD

 Summary judgment is appropriate when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In a motion for summary judgment, the initial burden is on the moving party to show an absence of genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). When the movant meets this burden, the opposing party, with the burden of proof, ". . . may not simply rest on its pleadings, but must affirmatively demonstrate with specific factual allegations that a genuine issue of material fact exists and requires trial." Morgan v. Harris Trust and Sav. Bank of Chicago, 867 F.2d 1023, 1026 (7th Cir. 1989) (citing Beard v. Whitley, 840 F.2d 405, 409-10 (7th Cir. 1988)). There are no genuine issues for trial if, when looking at the record, a rational trier of fact could not find for the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986).

 In deciding a motion for summary judgment, the court must view all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). However, the non-movant must show more than a mere "colorable" factual dispute to survive summary judgment. Lloyd v. Bridgeport Brass Corp., 811 ...


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