IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, EASTERN DIVISION

OWEN J. ROGAL, D.D.S., )

P.C., )

)

Plaintiff, )

) CIVIL ACTION NO.

v. ) 3:06cv711-MHT

) 

SKILSTAF, INC., )

)

Defendant. )

ORDER ON PRETRIAL HEARING

A pretrial conference was held in the above case on

August 14, 2007, wherein, or as a result of which, the

following proceedings were held and action taken:

1. PARTIES AND TRIAL COUNSEL: 

For Plaintiff: Robert E. Cole (REC6159)

For Defendant: Charles A. Stewart III

(STE067)

Amelia T. Driscoll (DRI016)

COUNSEL APPEARING AT PRETRIAL HEARING: 

For Plaintiff: Robert E. Cole (REC6159)

For Defendant: Charles A. Stewart III

(STE067)

Amelia T. Driscoll (DRI016)

2. JURISDICTION AND VENUE: 

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Subject matter jurisdiction exists under 28

U.S.C. §§ 1331 & 1332 and 29 U.S.C. § 1132

(ERISA). Personal jurisdiction and venue are

not contested.

3. PLEADINGS: The following pleadings have been

allowed: 

(a) Complaint on behalf of Plaintiff; 

(b) Answer on behalf of Defendant.

4. CONTENTIONS OF THE PARTIES: 

(a) Plaintiff: 

 1. 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.

 2. 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.

 3. This matter concerns plaintiff medical

provider’s allegations of non-payment of medical bills by

defendant incurred by patient/insured Dennis Berry. 

 4. Dennis Berry executed an assignment of

rights to plaintiff.

5. Dennis Berry sought treatment with plaintiff from

August 6, 2004 through August 19, 2005 due to

symptomology he indicated he sustained in a work-place

incident of September 26, 2003.

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6. Dennis Berry received radio-frequency surgical

treatment and related on the dates aforesaid. 

7. Medical bills for treatment rendered by plaintiff

to Dennis Berry total $369,390.00.

8. Workers’ compensation carrier for Dennis Berry’s

employer, Newspaper Processing, as of September 26, 2003

was CSC Claim Company, 2995 L.B.J. Freeway, #121, Dallas,

TX 75234. 

9. Group health plan sponsor for Dennis Berry’s

employee welfare benefit plan is defendant herein.

10. Plaintiff submitted bills for treatment rendered

to Dennis Berry to CSC Claim Company.

11. All bills submitted by plaintiff to CSC Claim

Company were denied due to plaintiff’s medical personnel

not being on the TWCC approved provider list as required.

12. Plaintiff subsequently forwarded bills for

medical services provided to Dennis Berry to defendant

herein. Bills were denied pursuant to contract

interpretation that same were payable under workers’

compensation law.

13. By correspondence of January 17, 2005, plaintiff

requested review of said determination. 

14. By correspondence of May 20, 2005, plaintiff

through counsel again requested review of said

determination. Specifically therein, plaintiff’s counsel

requested, “As such, kindly review your determination of

non-payment and process the outstanding bills at your

earliest convenience.” (Emphasis added). 

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15. Plaintiff did not request review/appeal further

as it was apparent to plaintiff and counsel that any

further efforts would be futile. 

16. Defendant’s plan administrator has been afforded

discretion to interpret provisions of the Plan and the

Plan is self-insured with the plan sponsor making

contributions to the plan based upon determination of the

amounts necessary to timely pay benefits and expenses.

As such, the administrator operates under a conflict of

interest.

17. Herein, the heightened arbitrary-and-capricious

standard of review applies to the administrator's

interpretation of the plan where the plan affords the

administrator discretion and the administrator has a

conflict of interest. Brown v. Blue Cross & Blue Shield

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

18. Defendant’s plan interpretation that medical

bills for treatment rendered to Dennis Berry by plaintiff

were excluded due to being payable by workers’

compensation insurance was in error. 

19. Medical bills for treatment rendered to Dennis

Berry by plaintiff were in fact not payable by the

appropriate workers’ compensation carrier according to

Tex. Lab. Code § 408.023.

20.Defendant’s group health plan contains conflicting

provisions with regard to payment of medical benefits in

situations where workers’ compensation coverage may be

present. Therein, said plan indicates, “This plan will

apply its rights of subrogation and reimbursement with

respect to work related injuries or sickness even though

benefits are in dispute or are made by means of

settlement or compromise...” The said section conflicts

entirely with Section 9, paragraph 16 of defendant’s

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health plan, and as such the discrepancy should be

regarded to defendant’s disfavor.

21. Plaintiff has exhausted all administrative

remedies prior to filing the instant matter. 

22. Defendant has incorrectly determined that

benefits are excluded in the instant matter.

 (b) Defendant: 

Defendant’s determination that Plaintiff’s treatment

of Dennis Berry (“Mr. Berry”) was excluded from coverage

under the Skilstaf Group Health Plan (the “Plan”) was

correct and should be affirmed by this Court. As more

fully explained in Defendant’s Brief in Support of

Defendant’s Motion for Summary Judgment and in

Defendant’s Reply to Plaintiff’s Opposition to

Defendant’s Motion for Summary Judgment, Defendant is

entitled to judgment in this action. 

First, the deferential arbitrary and capricious

standard of review applies in this case because the Plan

vests discretionary authority to interpret the Plan and

to apply the Plan’s claim review procedures in the Plan

Administrator and there is no conflict of interest. More

specifically, the Plan vests full discretionary authority

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in Risk Reduction, Inc. (“RRI”), the Plan Administrator,

to make discretionary decisions under the Plan.

Skilstaf-00058, Skilstaf-00060. Skilstaf, Inc.

(“Skilstaf”), by contrast, is designated as the Plan

Sponsor responsible for funding the Plan. Skilstaf00060. Because Skilstaf funds the Plan and RRI, who is

responsible for making discretionary decisions under the

Plan, does not, there is no conflict of interest and the

deferential arbitrary and capricious standard of review

applies in this case. 

Second, and because the Plan contains discretionary

language, the Court’s review of RRI’s decision in this

action is restricted to a review of the Administrative

Record, which consists of documents bates-labeled

Skilstaf-00001 through Skilstaf-02184. 

Third, RRI correctly determined that Plaintiff’s

treatment of Mr. Berry was not covered under the Plan.

Plaintiff treated Mr. Berry for an injury he sustained in

a work-related accident. The Plan expressly excludes

from coverage “[c]harges for injury or sickness occurring

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during or arising from [a claimant’s] performance of

service in a covered business or industry or payable

under worker’s compensation or an occupational disease

act or law.” Skilstaf-00040 (emphasis supplied).

Because Plaintiff treated Mr. Berry for an injury that

occurred during or arose from his performance at work,

RRI correctly determined that Plaintiff’s treatment of

Mr. Berry was excluded from Plan coverage. In any event,

Plaintiff cannot establish, as it must to prevail in this

action under the arbitrary and capricious standard of

review, that RRI’s decision was unreasonable.

Accordingly, RRI’s determination that Plaintiff’s

treatment of Mr. Berry was excluded from Plan coverage

should be affirmed by this Court. 

5. STIPULATIONS BY AND BETWEEN THE PARTIES:

Plaintiff Owen J. Rogal, D.D.S., P.C., d/b/a The Pain

Center is a corporation with its principal place of

business at 501-07 South 12th Street, Philadelphia, PA

19147.

Defendant Skilstaf, Inc. is an Alabama corporation

with its principal place of business at 860 Airport

Drive, Alexander City, Alabama. 

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Skilstaf is an employee leasing company that provides

its clients with employee benefits and human resources

services including, but not limited to, health care

benefits. As an employee leasing company, Skilstaf

enters into co-employment agreements with its clients

under which the client leases its employees to Skilstaf

and Skilstaf simultaneously assigns the employees back to

the client. Although Skilstaf’s clients retain direct

control and supervision of their employees, Skilstaf

becomes the co-employer of its clients’ employees for

specified purposes such as payroll, benefits, and

workers’ compensation.

Newspaper Processing, Inc. is one of Skilstaf’s

clients and, accordingly, Skilstaf provides group health

coverage under the Skilstaf Group Health Plan (the

“Plan”) to Newspaper Processing, Inc. employees. 

Dennis Berry (“Mr. Berry”) is an employee of

Newspaper Processing, Inc., and, during the time relevant

to the Complaint, was a participant in the Plan, which is

an employee welfare benefits plan governed by the

Employee Retirement Income Security Act of 1974, 29 U.S.C

§ 1001 et seq. (“ERISA”). 

Mr. Berry was injured in a work-related accident on

September 26, 2003. From August 2004 until August 2005,

Plaintiff treated symptomology that Mr. Berry indicated

he had sustained in his September 26, 2003 work-related

accident with radiofrequency therapy. 

Mr. Berry executed an assignment of rights to

Plaintiff.

In connection with its treatment of Mr. Berry,

Plaintiff submitted medical bills to Defendant totaling

$369,390.00.

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Defendant denied the claims Plaintiff submitted in

connection with its treatment of Mr. Berry.

It is ORDERED that:

(1) The jury selection and trial of this cause, which

is to last one (1) day, are set for September 5, 2007, at

10:00 a.m. at the Federal Courthouse in Opelika, Alabama;

(2) A trial docket will be mailed to counsel for each

party approximately two weeks prior to the start of the

trial term;

(3) Each party shall have available at the time of

trial, for use by the court (the judge, the courtroom

deputy clerk, and the law clerk), three copies of the

exhibit list and a sufficient number of copies of each

photostatically reproducible exhibit for opposing

counsel, the courtroom deputy clerk, the law clerk, and

the judge to each have a set of the exhibits;

(4) Trial briefs are required to be filed by

September 3, 2007;

(5) All deadlines not otherwise affected by this

order will remain as set forth in the uniform scheduling

Case 3:06-cv-00711-MHT-WC Document 65 Filed 08/15/2007 Page 9 of 10
order (Doc. No. 27) entered by the court on October 12,

2006; and

(6) All understandings, agreements, deadlines, and

stipulations contained in this pretrial order shall be

binding on all parties unless this order be hereafter

modified by Order of the court.

DONE, this the 15th day of August, 2007.

 /s/ Myron H. Thompson 

UNITED STATES DISTRICT JUDGE

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