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COKER v. TRANSWORLD AIRLINES INC.

April 9, 1997

DOUGLAS E. COKER, SR., and SUSAN COKER, Plaintiffs,
v.
TRANSWORLD AIRLINES INC., COOPERATIVE GROUP INSURANCE PLAN FOR EMPLOYEES OF TWA INC., and TRANSWORLD AIRLINES INC. RETIREMENT PLAN, Defendants.



The opinion of the court was delivered by: ALESIA

 Before the court is defendant Transworld Airlines Inc.'s ("TWA"), the TWA Retirement Plan for Mechanics and Related Employees, Dining Service Employees and Passenger Service Employees' ("the Retirement Plan"), and the TWA Group Medical, Dental and Disability Income Benefit Plans' ("the Group Benefit Plans") *fn1" (collectively, "defendants") motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons that follow, the court grants defendants' motion.

 I. BACKGROUND2

 Mr. Coker has worked for TWA since October 1986 *fn3" as a ramp service employee at O'Hare International Airport ("O'Hare") in Chicago, Illinois. He has been a member of the District Lodge 142 of the International Association of Machinists and Aerospace Workers, AFL-CIO ("IAM"), during his employment with TWA. Mr. Coker was covered by a collective bargaining agreement ("CBA") between the IAM and TWA throughout his employment with TWA.

 As a TWA employee, Mr. Coker participated in TWA's benefit plans. As Mr. Coker's spouse, Mrs. Coker was a covered dependent under the Group Benefit Plans. The Group Benefit Plans provided health, life insurance, temporary disability, long-term disability, and death benefits to eligible employees of TWA and their spouses. The Retirement Plan provided retirement benefits to eligible employees of TWA.

 On September 30, 1992, Mr. Coker was laid off, or furloughed. The IAM filed a grievance with the System Board of Adjustment ("the Board"), disputing the furlough on the ground that TWA had violated its CBA with the IAM by using American Airlines employees to staff its ground operations.

 Article 20 of the IAM-TWA CBA pertained to medical benefits and provided that a furloughed employee with at least 10 years of compensated service would continue to receive medical coverage for 12 months after the date of furlough or until he obtained new employment, whichever occurred first. Mr. Coker qualified as having at least 10 years of compensated service with TWA. *fn4" At the time of his furlough, Mr. Coker had a copy of the CBA and knew that the CBA covered medical benefits. Mr. Coker also had a copy of a booklet entitled "TWA Group Medical, Dental and Disability Income Benefit Plans" ("Summary Plan Description," or "SPD"). The SPD contained basically the same provision of medical insurance for furloughed employees as the CBA, but provided that the benefits would terminate either in 12 months or when the furloughed employee obtained medical insurance through other employment, whichever occurred first.

 On September 30, 1992, Mr. Coker's last day of work before his furlough took effect, Mr. Coker attended a meeting for furloughed employees. At this meeting, TWA's local station manager handed out a memorandum describing post-furlough group medical benefits and continuation of benefits under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), 29 U.S.C. § 1161. The station manager and the furloughed employees, including Mr. Coker, also discussed TWA's group medical benefits and COBRA as they pertained to furloughed employees.

 In addition, the SPD explained that continued coverage was available under COBRA for 18 months from the date that coverage otherwise would have terminated. Mr. Coker understood that he could elect to receive COBRA benefits once his furlough insurance benefits had expired and thought that he would receive further information from TWA about COBRA. However, plaintiffs never received the letter that TWA sent to furloughed employees in November 1992 explaining COBRA coverage or any other information or application materials regarding COBRA benefits. When the 12-month post-furlough benefit period expired at the end of September 1993, Mr. Coker did not contact TWA or the Group Benefit Plans regarding his TWA medical benefits or COBRA coverage. Plaintiffs never applied for continued medical benefits under COBRA.

 Notwithstanding that the 12-month benefit period had ended and that plaintiffs had not applied for COBRA coverage, in November 1993 and November 1994, plaintiffs received notices from TWA giving employees covered by TWA's group medical benefit plan the option to convert to a health maintenance organization. Plaintiffs also received prescription cards and information regarding doctors. So, plaintiffs assumed that they still were covered under TWA's insurance. However, they did not contact TWA, the Group Benefit Plans, or anyone else to verify their coverage. Nor did they inform TWA or the Group Benefit Plans that Mr. Coker had obtained other employment in December 1992 and insurance through his employment in May 1993. Mr. Coker was employed at United Airlines ("United") part-time during December 1992, May 1993 to April 1994, and May 1995 to August 1995. He became a full-time employee with United in August 1995 and continues to work there. Plaintiffs were entitled to medical benefits while Mr. Coker was employed with United from May 1993 to April 1994 and from May 1995 to the present. However, Mrs. Coker's pre-existing condition apparently was not covered by United's medical benefits during those time periods.

 During January and February 1995, while Mr. Coker was still furloughed, Mrs. Coker incurred medical expenses from three separate hospital admissions relating to several pre-existing medical conditions. Prior to each hospitalization, Aetna Life Insurance Company ("Aetna"), the Group Benefit Plans' third party administrator, approved, or certified, Mrs. Coker's hospital admission by phone conversation with Mr. Coker. Plaintiffs also received copies of notices of certification, each of which contained the following statement, boxed off from the rest of the text and written in bold type and capital letters:

 
Certification is based upon the medical information provided. ... This notice is not a guarantee of benefits. Payment of benefits is subject to any subsequent review(s) of medical information or records, the patient's eligibility on the date the service is rendered, and any other contractual provisions of the plan.

 Plaintiffs had received such notices prior to 1995.

 Aetna paid nearly the entire amount of the first bill, but denied payment for the remainder of the first bill and the subsequent bills because TWA had discovered that Mr. Coker was no longer eligible for medical benefits under the Group Benefit Plans. In fact, plaintiffs' medical benefits through TWA should have ended September 30, 1993, at the latest, and possibly as early as December 1992, when Mr. Coker obtained other employment, or May 1993, when Mr. Coker received other medical insurance. However, because of an administrative mistake by TWA, plaintiffs continued to receive medical benefits until February 24, 1995, when TWA realized its mistake.

 On March 2, 1995, the IAM notified Mr. Coker that the Board had found that TWA was in violation of its obligations under the CBA with respect to furloughed O'Hare ramp service employees, including Mr. Coker. The award ordered TWA to reinstate the O'Hare employees and provide them with make-whole relief consisting of back pay for the furlough period. Mr. Coker was reinstated on June 26, 1995, and since then has worked part-time with TWA and been covered under TWA's benefit plans. However, Mr. Coker did not receive any back pay under the award because the compensation he received from his other employment during his furlough was more than he would have earned at TWA during his furlough.

 Mr. and Mrs. Coker sued defendants because of the denial of medical benefits in January and February 1995, alleging federal promissory estoppel and breach of contract claims (Counts I and III, respectively) and a claim for interference with protected rights under the Employee Retirement Income Security Act ("ERISA"), as amended, 29 U.S.C. § 1140 (Count II). Defendants now move for summary judgment on all counts. However, the court dismissed Counts II and III for lack of subject matter jurisdiction when it granted in part and denied in part defendants' earlier filed motion to dismiss. See Memorandum Opinion and Order dated March 13, 1997. Thus, only Count I remains pending against defendants.

 II. DISCUSSION

 A. Standard for deciding a motion for summary judgment

 A motion for summary judgment must be granted if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The burden is on the moving party to show that no genuine issues of material fact exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. 2505, 2514, 91 L. Ed. 2d 202 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).

 Once the moving party presents a prima facie showing that it is entitled to judgment as a matter of law, the party opposing the motion may not rest upon the mere allegations or denials in its pleadings but must set forth specific facts showing that a genuine issue for trial exists. Anderson, 477 U.S. at 256-57, 106 S. Ct. at 2514; Celotex, 477 U.S. 324, 106 S. Ct. at 2553; Schroeder v. Lufthansa German Airlines, 875 F.2d 613, 620 (7th Cir. 1989). All reasonable factual inferences must be viewed in favor of the non-moving party. Holland v. Jefferson Nat'l Life Ins. Co., 883 F.2d 1307, 1312 (7th Cir. 1989).

 B. Local Rules 12(M) and 12(N)

 Local rules of a federal district court are written by and for district judges to deal with the special problems of their court. Bell, Boyd & Lloyd v. Tapy, 896 F.2d 1101, 1103 (7th Cir. 1990) (district courts need to streamline their procedures in response to unprecedented caseloads). General Rule 12(M) of the United States District Court for the Northern District of Illinois ("Local Rule 12(M)") requires a party moving for summary judgment to submit "a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to judgment as a matter of law." Local Rule 12(M); Curde v. Xytel Corp., 912 F. Supp. 335, 338 (N.D. Ill. 1995). General Rule 12(N) of the United States District Court for the Northern District of Illinois ("Local Rule 12(N)") requires the non-movant to submit a concise response to the movant's 12(M) statement that contains "a response to each numbered ...


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