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IN THE UNITED STATED DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

ROBERT E. COLE Attorney For Plaintiff

ROBERT E. COLE, P.C.

ATTORNEY I.D. NO. 73263

437 CHESTNUT STREET, SUITE 218

PHILADELPHIA, PA 19106

(215) 922-2050

___________________________________

OWEN J. ROGAL, D.D.S., P.C. :

d/b/a THE PAIN CENTER

501-07 SOUTH 12TH STREET

PHILADELPHIA, PA 19147

Plaintiff :

V. : NO. 3:06cv728-MHT

SKILSTAF, INC. :

P.O. BOX 729

ALEXANDER CITY, AL 35011

Defendant :

___________________________________

PLAINTIFF OWEN J. ROGAL, D.D.S., P.C.’S BRIEF IN OPPOSITION TO

DEFENDANT SKILSTAF, INC.’S MOTION FOR SUMMARY JUDGMENT

Case 3:06-cv-00728-MHT-WC Document 46 Filed 06/04/2007 Page 1 of 15
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TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . .3

A. COUNTER-STATEMENT OF UNDISPUTED FACTS. . . . . . . . .3

B. STATEMENT OF DISPUTED FACTS. . . . . . . . . . . . . .4

II. JUDICIAL STANDARD OF REVIEW. . . . . . . . . . . . . . . . 5

III. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . 6

A.

WHEN DEFENDANT HAS IDENTIFIED THE INCORRECT STANDARD OF

REVIEW REGARDING AN ADMINISTRATOR’S INTERPRETATION OF AN

ERISA PLAN AND WHEN THE PLAN INTERPRETATION IS INCORRECT NO

MATTER WHAT STANDARD IS APPLIED, HAS DEFENDANT SUSTAINED ITS

BURDEN TO SUPPORT SUMMARY JUDGMENT IN ITS FAVOR?

(ANSWERED IN THE NEGATIVE BELOW)

B.

WHEN PLAINTIFF HAS REQUESTED REVIEW OF DEFENDANT’S INCORRECT

DETERMINATION OF DENIAL OF BENEFITS ON THREE (3) OCCASIONS,

IS THIS MATTER RIPE FOR ADJUDICATION?

(ANSWERED IN THE AFFIRMATIVE BELOW)

IV. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . .14

CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . 15

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I. INTRODUCTION

The plaintiff in this matter is Owen J. Rogal, D.D.S.,

P.C., d/b/a The Pain Center, a corporation with principal place

of business being located at 501-07 South 12th Street,

Philadelphia, PA 19147. Defendant Skilstaf, Inc. is an Alabama

corporation and insurance provider/plan administrator with its

headquarters and principal place of business located at P.O. Box

729, Alexander City, AL 35011.

This matter commenced in October, 2005 in Philadelphia

County, PA and was removed to federal court for the eastern

district of Pennsylvania on or about November of 2005. This

matter was transferred to the present venue by the Court on June

26, 2006. This matter concerns plaintiff medical provider’s

allegations of non-payment of medical bills by defendant

incurred by patient/insured Dianna Berry. Mrs. Berry executed

an assignment of rights to plaintiff which has been reproduced

in defendant’s Exhibit 3 to its motion. Dianna Berry is spouse

of Dennis Berry and thus covered insured under defendant’s Plan.

A. COUNTER STATEMENT OF UNDISPUTED FACTS

Plaintiff incorporates its Reply in Opposition to

Motion for Summary Judgment herein.

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B. STATEMENT OF DISPUTED FACTS

1. Defendant’s plan administrator is vested with

discretionary authority with regard to plan interpretation and

construction.

2. Defendant’s plan is funded based upon

determination of amounts necessary to timely pay benefits and

expenses; as such, the plan sponsor is directly interested in

payments made from the plan.

3. As the plan affords the administrator discretion

and the administrator has a conflict of interest, the Eleventh

Circuit has held that a heightened arbitrary-and-capricious

standard of review applies to the plan administrator's

interpretation of the plan. Brown v. Blue Cross & Blue Shield

of Ala., Inc., 898 F.2d 1556 (1990).

4. Defendant denied payment of medical bills for

treatment rendered by plaintiff to Dianna Berry as being

chiropractic care.

5. Plaintiff did not provide Dianna Berry with

chiropractic care.

6. Plaintiff has never provided any patient with

chiropractic care.

7. Plaintiff is not a chiropractic office.

8. Plaintiff only provides radiofrequency surgery

services to its patients, including Dianna Berry.

9. Radiofrequency surgery is not chiropractic care.

 10. On two (2) occasions, defendant denied payments

of plaintiff’s billing due to being chiropractic care. On three

(3) occasions, plaintiff appealed said denials as plaintiff does

not provide chiropractic care. See collectively, Exhibit “C”

herein, true and correct copies of said documentation attached

hereto and incorporated by reference herein.

 11. Plaintiff has exhausted administrative remedies

in its requests for review/appeal of denial of benefits. Any

further attempt by plaintiff in this regard can only be

considered superfluous, futile and pointless.

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II. STANDARD OF REVIEW

Standard of Review under Rule 56

Under Fed. R. Civ. P. 56(c), summary judgment is

proper "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." Celotex Corp. v. Catrett, 477 U.S.

317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The party

asking for summary judgment "always bears the initial

responsibility of informing the district court of the basis for

its motion, and identifying those portions of the 'pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any,' which it believes

demonstrate the absence of a genuine issue of material fact."

Id. at 323. The movant can meet this burden by presenting

evidence showing there is no dispute of material fact, or by

showing the nonmoving party has failed to present evidence in

support of some element of its case on which it bears the

ultimate burden of proof. Id. at 322-23.

Once the moving party has met its burden, Rule 56(e)

"requires the nonmoving party to go beyond the pleadings and by

[its] own affidavits, or by the 'depositions, answers to

interrogatories, and admissions on file,' designate 'specific

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facts showing that there is a genuine issue for trial.'" Id. at

324. To avoid summary judgment, the nonmoving party "must do

more than show that there is some metaphysical doubt as to the

material facts." Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348

(1986). On the other hand, the evidence of the nonmovant must

be believed and all justifiable inferences must be drawn in its

favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255, 91 L. Ed.

2d 202, 106 S. Ct. 2505 (1986).

III. ARGUMENT

A. Defendant has identified the incorrect legal standard

in its denial of medical benefits/plan interpretation

by fiduciary operating under conflict of interest

This Court has stated:

The Eleventh Circuit has held that a heightened arbitraryand-capricious standard of review applies to the plan

administrator's interpretation of the plan where the plan

affords the administrator discretion and the administrator

has a conflict of interest. See 898 F.2d at 1566-67. "[A]

fiduciary operating under a conflict of interest may be

entitled to review by the arbitrary and capricious standard

for its discretionary decisions as provided in the ERISA

plan documents, but the degree of deference actually

exercised in application of the standard will be

significantly diminished." Id. at 1568. The Brown court

reasoned that, "when an insurance company serves as ERISA

fiduciary to a plan composed solely of a policy or contract

issued by that company, it is exercising discretion over a

situation for which it incurs 'direct, immediate expense as

a result of benefit determinations favorable to plan

participants.'" Id. at 1561 (quoting De Nobel v. Vitro

Corp., 885 F.2d 1180, 1191 (4th Cir. 1989)).

The Eleventh Circuit applies a burden-shifting analysis

under the heightened arbitrary-and-capricious standard

applicable to the plan administrator's interpretation of a

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plan. See Brown, 898 F.2d at 1566-67; Sahlie v. Nolen, 984

F. Supp. 1389, 1400 (M.D. Ala. 1997) (Thompson, C.J.).

Under this approach, the court first must determine whether

the interpretation of the plan proffered by the claimant is

reasonable. See Florence Nightingale Nursing Serv., Inc.

v. Blue Cross/Blue Shield of Ala., 41 F.3d 1476, 1481 (11th

Cir. 1995), cert. denied, 514 U.S. 1128, 115 S. Ct. 2002,

131 L. Ed. 2d 1003 (1995); Sahlie, 984 F. Supp. at 1400-01.

If it determines that the claimant's interpretation is

reasonable, the court applies the principle of contra

proferentem, n84 construing ambiguities in the facts

against the plan administrator, to find that the

administrator's interpretation of the plan is wrong. See

Florence Nightingale, 41 F.3d at 1481; Sahlie, 984 F. Supp.

at 1401. Next, the court determines whether the plan

administrator was arbitrary and capricious in adopting its

incorrect interpretation. See Sahlie, 984 F. Supp. at

1401. In so doing, the court places the burden upon the

administrator to establish that its action was not tainted

by self-interest. See Florence Nightingale, 41 F.3d at

1481; Sahlie, 984 F. Supp. at 1401. Even a reasonable

interpretation will be found arbitrary and capricious

unless the administrator can demonstrate that its decision

was not motivated by self-interest. See Brown, 898 F.2d

1556 at 1566-67; Sahlie, 984 F. Supp. at 1401. Finally, if

the administrator does manage to carry this burden, the

claimant may still succeed if the administrator's action

was arbitrary and capricious by other measures. See Brown,

898 F.2d at 1568; Sahlie, 984 F. Supp. at 1401.

n84 "Contra proferentem" is a term "used in connection with

the construction of written documents to the effect that an

ambiguous provision is construed most strongly against the

person who selected the language." Black's Law Dictionary

327 (6th ed. 1990) (citing United States v. Seckinger, 397

U.S. 203, 216, 90 S. Ct. 880, 887-88, 25 L. Ed. 2d 224

(1970)).

Lake v. UNUM Life Ins. Co. of Amer., 50 F. Supp. 2d 1243 (1999).

Defendant has attached its group health plan as Exhibit “A”

to its motion. Section 15 therein provides general information

regarding the plan. Under TYPE OF PLAN, it states, “The plan is

administered by the plan administrator, which exercises

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authority (1) to construe all of the terms, provisions,

conditions, and limitations of the plan, including, but not

limited to, any uncertain terms contained in the plan and (2) to

make determinations regarding eligibility for benefits under the

plan”. See defendant’s Exhibit A. Further, Section 14, (B)(6)

reads, “The plan administrator has full discretion to interpret

the plan and to apply these claim review procedures”. As such,

the plan vests discretionary authority with the plan

administrator.

Further, under FUNDING, the plan states, “Plan benefits are

self-insured. Based upon its determination of the amounts

necessary to timely pay benefits and expenses, Skilstaf, Inc.

shall make contributions to the plan.” (emphasis added). See

defendant’s Exhibit A. The plan does not identify a trust or

set-aside fund for payment of benefits. Rather, the plan bases

its [self-insured] contributions on an ad-hoc basis. Plaintiff

submits that this may only be seen as a conflict of interest as

by plan directive the plan must determine funding based upon the

volume and amount of claims at any given time. As such, plan

determinations must be judicially reviewed within the heightened

arbitrary-and-capricious standard of review as identified in

Lake above.

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1. Defendant incorrectly and egregiously

characterized Plaintiff’s treatment of Dianna

Berry as chiropractic in order to avoid payment

for said services

Initially, plaintiff vehemently disputes defendant’s bald

contention that defendant denied payment of plaintiff’s bills

for any reason other than that plaintiff’s services were

chiropractic in nature. By way of definition, defendant points

to administrative record page Skilstaf-00039 in its Motion.

Therein, paragraphs 1 and 2 read:

1. Services, expenses or supplies that the plan

administrator determines are not medically necessary.

2. Charges in excess of the maximum allowable charge when

using PPO and non-PPO providers.

However, defendant indicates that paragraph 2 reads,

“rehabilitative-type care that does not result in documented

physical improvement”. This language does not exists in

Skilstaf-00039. Regardless, defendant did not rely on either

paragraph 1 or 2 of Skilstaf-00039 in denying benefits under the

Plan herein. To the contrary, defendant relied on its entirely

incorrect determination that plaintiff’s medical treatment was

chiropractic in order to avoid payment for plaintiff’s

radiofrequency surgery treatments to Dianna Berry. By way of

introduction, kindly see Exhibit “B” attached hereto and made by

reference a part hereof, surgical notes for all dates of service

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for treatment rendered by plaintiff to Dianna Berry. Plaintiff

defies defendant to maintain its determination that said

services were chiropractic in nature.

As seen in plaintiff’s Exhibit “C” attached hereto and made

by reference a part hereof, by correspondence of July 14, 2005,

defendant requested back its payments made to plaintiff, “It

appears that these claims were for services provided by

chiropractors”. (emphasis added). See Exhibit “C”, attached

hereto and made by reference a part hereof, copy of said

correspondence.

Plaintiff corrected defendant’s false determination by

correspondence of July 18, 2005, plaintiff responded, “At no

time did this office bill for chiropractic services.” See

Exhibit “C”, attached hereto and made by reference a part

hereof, copy of said correspondence. Plaintiff likewise

provided defendant an additional opportunity to correct its

error by correspondence of plaintiff’s counsel of September 6,

2005, wherein plaintiff forwarded documentation in the nature of

summary progress reports regarding Dianna Berry’s treatment by

plaintiff. See Exhibit “C”, attached hereto and made by

reference a part hereof, copy of said correspondence.

Despite same, defendant’s plan administrator compounded the

claims adjustor’s original error in correspondence of September

26, 2005. Plan administrator Robert C. Johnson forwarded

Case 3:06-cv-00728-MHT-WC Document 46 Filed 06/04/2007 Page 10 of 15
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correspondence to plaintiff counsel indicating, “As the Plan

already has exceeded the annual limit for chiropractors’

services during 2005 for Ms. Berry, no additional benefits are

payable under the Plan for the referenced claims. In addition,

no future claims will be covered for any such services

administered during 2005.” (emphasis added). See Exhibit “C”,

attached hereto and made by reference a part hereof, copy of

said correspondence. As can be seen from the only documentation

proferred by defendant in denial of benefits, its reason for

non-payment solely involved its entirely incorrect determination

that plaintiff’s radiofrequency surgical procedures were in fact

chiropractic.

Despite defendant’s willful and grossly negligent refusal

to accept that plaintiff’s treatment was not chiropractic, by

correspondence of September 30, 2005, plaintiff’s counsel again

pointed out that plaintiff does not provide chiropractic

services, “Perhaps you should have read the documentation

enclosed with our prior correspondence. The Pain Center at no

point provided Mrs. Berry with chiropractic treatment. In fact,

The Pain Center has never offered said discipline to any

patient.” (emphasis in original). See Exhibit “C”, attached

hereto and made by reference a part hereof, copy of said

correspondence. Defendant has since utterly failed to

acknowledge the obvious error of its determination.

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As a final consideration, defendant attempts to offer a

peer review of treatment rendered by plaintiff to Dianna Berry

in order to fortify its denial of benefits. As should be noted,

the reason for defendant’s denial of benefits was memorialized

on two (2) occasions, Exhibit “C” herein. Plaintiff was never

notified that said peer review was to take place or had taken

place, nor afforded any opportunity to respond thereto. In

fact, the argument may certainly be made that defendant hid the

fact that said peer review had been conducted in order to

utilize same to its advantage for trial purposes only. This,

along with false assertions contained in Mr. Johnson’s

affidavit, are examples of defendant’s abuse of the claims

procedures within defendant’s Plan.

B. Plaintiff on three (3) occasions has in writing

requested review of denial of benefits and any further

adherence to the administrative process would be

fruitless

Pursuant to ERISA, employers must establish procedures for

reviewing employees' claims under their employee benefit plans.

29 U.S.C.A. § 1133 (West 1985 & Supp.1991). Eleventh Circuit

precedent requires employees to exhaust these procedures before

filing suit for benefits under ERISA. Mason v. Continental

Group, Inc., 763 F.2d 1219, 1227 (11th Cir.1985) (while statute

does not contain an express exhaustion requirement, ERISA's

legislative history illustrates Congress' intent that courts

Case 3:06-cv-00728-MHT-WC Document 46 Filed 06/04/2007 Page 12 of 15
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apply exhaustion requirement), cert. denied, 474 U.S. 1087, 106

S. Ct. 863, 88 L. Ed. 2d 902 (1986); accord Springer v. Wal-Mart

Associates' Group Health Plan, 908 F.2d 897, 899 (11th

Cir.1990). Policy considerations supporting the exhaustion

requirement include reducing the number of lawsuits under ERISA,

providing a non-adversarial method of dispute settlement,

providing uniformity of results within a company, and minimizing

cost of dispute settlement. See 763 F.2d at 1227.

The Eleventh Circuit warned in Curry v. Contract Fabricators,

Inc. Profit Sharing Plan, 891 F.2d 842, 846 (11th Cir.1990),

that Mason should not be read to require exhaustion of remedies

in all cases. Accord Springer, 908 F.2d at 899. Instead an

exception should be recognized for pleading impossibility of

exhaustion in cases where claims procedures prove futile. 891

F.2d at 846. Byrd v. MacPapers, Inc., 961 F.2d 157 (1992).

While defendant has raised no issue of sufficiency of

requests to review, it is clear from the plan that said need

merely be in writing. Section 14, (B)(1) reads, “In the event

of a denial of your claim in whole or in part, you shall be

permitted to review pertinent documents and to submit issues and

comments in writing to the plan administrator. You may also

make a written request for a full and fair review of the claim

denial”. See defendant’s Exhibit “A”.

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Initially, please see attached hereto and made by reference

a part hereof Exhibit “C”. As detailed more fully within,

plaintiff requested in writing three (3) times that defendant

correct its error in denial of benefits. Incredibly to

plaintiff, defendant maintained its position that plaintiff

provided chiropractic care to Dianna Berry. Presently,

plaintiff submits that defendant unreasonably denied payment to

plaintiff and any further attempts of plaintiff to engage the

administrative appeals process in hope of remedy therein in this

matter would be folly.

IV. CONCLUSION

Lastly, plaintiff attached the affidavit of Kim RogaldeOliveira in support of its position. In conclusion, for the

foregoing reasons and those contained in the affidavit,

Plaintiff respectfully requests that this Honorable Court enter

the attached Order Denying Defendant’s Motion for Summary

Judgment.

Respectfully submitted,

s/Robert E. Cole______________________

Robert E. Cole, Esquire

Attorney for Plaintiff

Atty. I.D. No. 73263

437 Chestnut Street, Suite 218

Philadelphia, PA 19106

(215) 922-2050

recoleesq6@juno.com

Case 3:06-cv-00728-MHT-WC Document 46 Filed 06/04/2007 Page 14 of 15
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IN THE UNITED STATED DISTRICT COURT

FOR THE MIDDLE DISTRICT OF ALABAMA

ROBERT E. COLE Attorney For Plaintiff

ROBERT E. COLE, P.C.

ATTORNEY I.D. NO. 73263

437 CHESTNUT STREET, SUITE 218

PHILADELPHIA, PA 19106

(215) 922-2050

___________________________________

OWEN J. ROGAL, D.D.S., P.C. :

d/b/a THE PAIN CENTER

V. : NO. 3:06cv728-MHT

SKILSTAF, INC. :

CERTIFICATE OF SERVICE

Robert E. Cole, Esquire, attorney for plaintiff, hereby

verifies that on the 4th day of June, 2007, he electronically

filed the foregoing with the Clerk of the Court using the CM/ECF

system, which will send notification of such filing as follows:

Amelia T. Driscoll, Esquire

Bradley Arant et al.

1819 Fifth Avenue North

Birmingham, AL 35203-2104

Robert E. Cole, Esquire, attorney for plaintiff, hereby

verifies that on the 4th day of June, 2007, he served upon Jeanne

L. Bakker, Esquire, attorney for defendant above, a true and

correct copy of the foregoing by first class mail, postage

prepaid to the following address:

Montgomery, McCracken et al.

123 South Broad Street

Philadelphia, PA 19109

 

s/Robert E. Cole______________________

Robert E. Cole, Esquire

Attorney for Plaintiff

Atty. I.D. No. 73263

437 Chestnut Street, Suite 218

Philadelphia, PA 19106

(215) 922-2050

recoleesq6@juno.com

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