Appeal from the United States District Court for the Central District of Illinois. No. 00-1210--John A. Gorman, Magistrate Judge.
Before Coffey, Easterbrook, and Williams, Circuit Judges.
The opinion of the court was delivered by: Coffey, Circuit Judge.
Plaintiffs Mark Fritcher ("Fritcher") and Country Trust Bank ("the Bank") sued Defendant Health Care Service Corporation ("HCSC") for failing to pay benefits that the plaintiffs alleged were due under Fritcher's employee benefit plan, which HCSC administered. The district court granted the plaintiffs' motion for summary judgment, and HCSC appeals. We affirm.
Fritcher works for Mitsubishi Motor Manufacturing of America ("MMMA") and is a participant in the MMMA employee benefit plan ("the Plan"). The parties agree that the Plan is an employee welfare benefit plan governed by ERISA. (Def.'s Br. at 8; Pl.'s Br. at 7.) See 29 U.S.C. § 1001, et seq. The Bank is the trustee of the Lucas Fritcher Trust. Lucas Fritcher, the son of Plaintiff Mark Fritcher, is a beneficiary under the Plan. Lucas was born with certain serious birth defects in 1989, and by virtue of his severe health problems (e.g., severe hypoxic encephalopathy, *fn1 severe cerebral palsy, frequent daily seizures, cleft palate, cortical blindness, microcephaly, *fn2 severe mental motor retardation, spastic quadriplegia, an inability to swallow, asthma), (R. at 362-93; Pl.'s Ex. 12), Lucas requires constant medical care or monitoring (e.g., administration of medication, frequent suctioning of his airway, periodic application of oxygen, close monitoring and management of seizures, gastro-intestinal feedings) in order to survive. (R. at 400-04; Pl.'s Ex. 12.)
In 1994, the Plan began assuming the responsibility for Lucas' primary health coverage, and paid for an average of eighteen hours per day of in-home health care for Lucas. In a letter dated March 28, 1997, HCSC sent a letter to Fritcher notifying him that effective May 1 of that same year, the Plan would cover "a maximum of two hours per day" for Lucas' care, as anything beyond that would be deemed to be "custodial care" and not "medically necessary" under the terms of the Plan. HCSC asserted that most of the in-home care Lucas was receiving did not qualify as "Skilled Nursing Services" under the Plan.
The term "Skilled Nursing Services" is defined under the "Definitions" section of the Health Care Service Plan document as "those services provided by a registered nurse (R.N.) or licensed practical nurse (L.P.N.) which require the technical skills and professional training of an R.N. or L.P.N. . . . ." The definition adds that "Skilled Nursing Service does not include Custodial Care Service." "Custodial Care Service," meanwhile, is defined under the Plan as "those services which do not require the technical skills or professional training or medical and/or nursing personnel in order to be safely and effectively performed." Under the "Exclusions--What Is Not Covered" section of the Plan, "Custodial Care Service" is specifically delineated as a type of service that is not "Medically Necessary" under the terms of the Plan.
HCSC's determination to reduce benefits was based largely on the work of one Dr. Robert Fucik. Fucik, a part-time practicing endocrinologist, acknowledged at trial that he was not board-certified in any field, including endocrinology. Fucik, a twenty-year HCSC employee, determined after a review of the record that whatever "skilled nursing care" Lucas was receiving could be administered over the course of a one to two hour period. Fucik admitted that he made his determination without reference to Lucas' need for skilled medical care throughout the day and not simply during a one to two hour period. (R. at 582.) Fucik also conceded that he made his decision without reference to the number of times a day Lucas had seizures, (R. at 587), which Lucas' pediatrician noted as "frequent," even up to twenty times per day. (Pl.'s Ex. 66.)
After receiving HCSC's March 28, 1997 letter curtailing his son's benefits, Fritcher took some action that apparently satisfied his obligation under the "Claim Review Procedure" outlined in the Plan. (Pl.'s Ex. 8 at 69.) *fn3 Just two months after its first letter, HCSC responded to Fritcher's request for "additional information regarding [HCSC's] recent review of the nursing notes and subsequent determination of the services being provided as custodial care." (Pl.'s Ex. 9.) In this letter, dated May 28, 1997, HCSC repeated its assertion that "the services being provided represent approximately 2 hours daily which fulfill the technical and professional training of an RN or LPN," and maintained its position that "as of 5/1/97, benefits will be limited to 2 hours a day." (Id.)
On June 26, 1998, Fritcher and the Bank timely filed an action in federal district court under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., seeking judicial review of the Plan administrator's decision to deny benefits. In November 1999, the matter was tried in a bench trial before the Honorable Michael P. McCuskey, United States District Court Judge. Before rendering his opinion, Judge McCuskey recused himself in an order dated June 8, 2000 because of his own brewing conflict with a division of HCSC. (R. at 96.) The matter was thereupon reassigned to Magistrate Judge John A. Gorman of the Peoria District of the United States District Court for the Central District of Illinois.
In December 2000, the parties filed cross motions for summary judgment. On March 20, 2001, Magistrate Judge Gorman granted summary judgment in favor of the plaintiffs and against the defendant on the issue of liability. On November 15, 2001, the district court awarded damages to plaintiffs and against defendant in the amount of $341,142.03, awarded plaintiffs their attorney's fees and costs in the amount of ...