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.

ANDERSON v. DePHILLIPS

March 15, 2004.

CHARLES E. ANDERSON, Trustee on behalf of BOARD OF TRUSTEES OF THE PAINTERS' DISTRICT COUNCIL NO. 30 HEALTH AND WELFARE FUND, Plaintiff
v.
DONNA M. DePHILLIPS Defendant



The opinion of the court was delivered by: JOHN GRADY, Senior District Judge

MEMORANDUM OPINION

Before the court is defendant's motion for summary judgment. For the reasons set forth below, the motion is denied.

BACKGROUND

  Plaintiff Charles Anderson is a Trustee of the Painters' District Council No. 30 Health and Welfare Fund ("the Fund"). The Fund is a trust that pays out medical, disability, and, death benefits to member employees (and their covered dependents and beneficiaries) in accordance with the Painters' District Council No. 30 Health and Welfare Plan. The Fund is a multi-employer benefits plan subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA" or "the Act"). Defendant DePhillips is a former employee of the Fund. This action, brought by Anderson in his capacity as Trustee, alleges that DePhillips breached her fiduciary duties under ERISA, and Page 2 seeks to recover financial losses to the Fund allegedly caused by the breach.

  The following facts are drawn from the parties' Local Rule 56.1 Statements and are undisputed unless otherwise noted. In November 1993, the Fund's Board of Trustees ("the Board") hired DePhillips to supervise the Fund's office staff and to handle various administrative matters relating to the Fund. She reported directly and solely to the Board, an eight-member panel which met quarterly to discuss Fund business.

  DePhillips was never given a written job description. She testified at her deposition that, when hired, she understood that her responsibilities generally would be "managing the office, overseeing one claims adjuster, one clerical person and a bookkeeper, answering to the trustees regarding any business that came up." (Def's Exhibits to 56.1 Statement, Ex. D (DePhillips Dep., p. 11).) Anderson also testified to DePhillips's duties:
She was hired as the Fund Administrator to interpret the plan of benefits, to enter into contractual obligations with vendors, to deal with our professionals and our consultants, our actuaries, our auditors, legal counsel [.] She was in charge of the office. She was in charge of any special projects that came to light through changes in Health and Welfare and/or Pension. She had the ability to hire and fire and to fully administer the Funds.
(Pl.'s. 56. 1 Statement, ¶ 15, Ex. M (Anderson Dep., pp. 13-14).) DePhillips denies the last sentence of the quoted testimony, that Page 3 "[s]he had the ability to hire and fire and to fully administer the Funds." She also denies that she was hired as the "Fund Administrator," and claims instead that she was the Fund's "Administrative Manager." DePhillips does not contest the remainder of Anderson's summary.

  In addition to the parties' deposition testimony, DePhillips proffers a two-plus page interrogatory answer which lists her general job functions in the following areas: office management, Fund maintenance, claims adjuster supervision, employer audits, preparation of reports for employer delinquency meetings and Board meetings, bookkeeping, and dealing with consultants and vendors.

  With these summaries as background, we focus on several areas of DePhillips's responsibilities that are particularly relevant to our analysis below. First, DePhillips had significant authority over "claims handling, adjudication, monitoring, recordkeeping, payment and reimbursement." (Pl.'s 56.1 Statement, ¶ 20.) With respect to claims processing, although DePhillips had initial authority to grant or deny claims, appeals were decided by the Board.

  Second, DePhillips trained and oversaw the Fund claims adjusters. She trained them on "not just how to use the system but how to adjust claims, how to look at the plan and apply those — what the plan rules [sic] or how to apply it to a claim." (Pl.'s 56.1 Statement, ¶ 28, Ex. D (DePhillips Dep., pp. 84-85).) Page 4 DePhillips would decide when adjusters were competent to process claims without her help, and she would assist in processing claims when there was a backlog.

  Finally, and at the heart of this dispute, DePhillips was responsible for monitoring and maintaining various Fund contracts. One such contract was the Group Medical Specific Excess Risk Agreement which the Fund maintained with Bankers Life and Casualty Company ("the Stop-Loss Policy" or "the Policy"). By the Policy's terms, Bankers Life agreed, inter alia, to reimburse the Fund for certain medical expenses in excess of $150,000 incurred by a Fund participant in one calendar year ("the Stop-Loss threshold") and paid by the Fund by the end of the next calendar year ("the Agreement Period"). Under the Policy, the Fund was required to provide notice to Bankers Life of any Stop-Loss claims within ninety days of the end of the Agreement Period.

  In 1996, three Fund participants incurred covered medical expenses exceeding $150,000 which were paid by the Fund on or before December 31, 1997: $213,107.84 for James Flynn, $34,063.23 for Maria DeJesus, and $146,418.23 for Christine Angelos. In 1997, two Fund participants incurred covered medical expenses, again exceeding $150,000, and paid by the Fund on or before December 31, 1998: $112, 234.42 for Jeffrey Holzkampf, and $232,846.61 for Delton Robbins.

  The Fund never submitted Stop-Loss claims to Bankers Life Page 5 for any of these individuals. The parties agree that the unsubmitted claims totaled $732, 293.70.*fn1 It is undisputed that DePhillips was responsible for submitting the Stop-Loss claims, but, in an interrogatory response, she maintains that she was never given the requisite information from the claims adjusters to do so:
[I]t was the responsibility of the claims adjusters employed by the Fund to notify DePhillips once a Stop-Loss threshold was reached by an individual member. As claims were paid, the claims adjusters were able to review the aggregate amount of money paid out towards the patient's life-time maximum on the computer screen. Once the Stop-Loss limit was reached, paper copies of that individual's claims should have been pulled from the "claims batches", a copy of that patient's Explanation of Benefits letter for each claim should have been printed, and all of those documents should have been photocopied for submission to Banker's Life, along with a Banker's Life claims form. Copies of all photocopied information and the completed claim form should have been provided by the claims adjusters to DePhillips for follow-up.
  (Def's. 56.1 Statement, ¶ 10, Ex. C (DePhillips Interrogatory Answer No. 11).)

  DePhillips testified at her deposition that she could not recall any procedures used by the adjusters to monitor for potential Stop-Loss claims. She further testified that she did not Page 6 remember ever having any conversations with any adjusters regarding the Stop-Loss Policy.

  Lastly with respect to the Policy, Anderson presents the minutes of a June 12, 1996 Board meeting, taken by DePhillips herself, which reflect that she was explicitly told by the Fund's attorney to notify Bankers Life, in anticipation of a potential Stop-Loss ...


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.