2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 7-20-2005 

# Gro s s m ann v

. M arriott Intl Inc P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 04-2916

F o llow thi s and a dd it ion al work s at : http://d i git alc ommon s .l a w . vi ll anova . e du/thir dc ir c uit_2005

Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2005 D e c i sion s b y an author i z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion " Gr os s m ann v

. M arr iott Intl Inc " (2005). 2005 D e cisio n s . P ape r 808. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2005/8081 NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N o. 04- 2916 J OE L GR OS S M AN, A ppel l ant

v. M A R R I O T T I N T E R N A T I O N A L , I N C . , and L I BE RT Y L I F E AS S UR ANC E CO M P ANY OF BO S T ON, A M E M BE R O F T HE L I BE RT Y M UT UAL GR OUP

____________ APP EAL F ROM THE UNI TE D ST ATE S DI S TRI CT C OURT F O R T H E E A S T E R N D IS T R IC T O F P E N N S Y L V A N IA

(D . C . C iv. N o . 0 2 -cv -07 6 8 6 ) D istri ct Ju d g e: H o n o rab le R o n ald L . B u ck w alt er

____________ Subm i t t ed U nderT hi r d C i r cui tL . A . R . 34. 1( a)

J ul y15, 2005 B efore: S L O V ITE R , M cK E E and W E IS, C i rcui tJudg es.

( Fi l ed J ul y20, 2005)

____________ OP I NI ON W E I S, C i r cui tJ udge.

A s a cons equenc e of bi pol ardi s eas e, pl ai nt i ff be came di s abl ed i n 1999 f r o m h i s p o s i t i o n a s a n a c c o u n t a n ta n d c o n t r o l l e rf o rM a r r i o t tI n t e r n a t i o n a l , I n c . He2

re c e iv e d b e n e f

its f ro m a lo n g ter m d isa b ili typ lan f u n d e d a n d a d m in iste re d b yL ib e rty L i fe A s s ur ance C om pany . A l t hough pl ai nt i ff i ni t i al l yr ece i ved di s abi l i t ybenef i t s , he ch all en g ed the a d m inistrator’s d ec isi o n to term inate the p ay m en ts. T h e D istri ct C o u rt f o u n d a g a in s t p la in tif

f. W e w ill a f

f ir m . T he Pl an pr ovi ded di s abi l i t ybenef i t s forcl ai m s i nvol vi ng m ent al i l l nes s for a tw o -y e a r te rm th a t ex p ire d o n Ju ly2 , 2 0 0 1 . P lain tiff a lso re c e iv e d a d d iti o n a l p a ym e n ts fora per i od endi ng on J ul y27, 2001 dur i ng w hi ch he w as hos pi t al i zed. T hi s addi t i onal benef i tw as gr ant ed byt he pl an’ s “ext ended tr eatm ent ” pr ovi s i on w hi ch r equi r es “c o n ti n u ed ca re tha t i s co n sist en t w ith the A m erican P sy ch iatri c A sso ciati o n ’s st an d ard pr i nci pl es of tr eatm ent , and i s i n l i eu of H os pi t al orI ns t i tut i onal confi nement . ”

T he i ns ur ance companyt erm i nat ed paym ent s aft erpl ai nt i ff l eftthe hos pi t al i n J ul y2001 beca us e pl ai nt i ff di d notm eetthe ext ended c ar e r equi r ement . A ft er conduct i ng an i nt ernal r evi ew pr ocedur e r eques t ed bypl ai nt i ff w hi ch i ncl uded addi t i onal m edi cal eval uat i on, t he companydeni ed r econs i der at i on and cl os ed i t s fi l e on O ct ober4, 2 0 0 1 . Pl ai nt i ff r et ai ned couns el and af t erfrui t l es s at t empt s t o have the i ns ur ance companyr econs i der , fi l ed s ui ti n t he D i s t r i ctC our tas s ert i ng cl ai m s underE R I SA , 29 U . S. C . § 1132( a) ( 1) ( B ) , and bad f ai t h unders t at e l aw , 42 Pa. C ons . St at . A nn. § 8371 (W est19 98 ). T he D i stri ctC ou rtgrant ed sum m aryj ud gm ent for the d efen dan t s, c o n c l u d i n g t h a tt h e r e “ w a s a n o b j e c t i v e a n d r e a s o n a b l e b a s i s f o r[ t h e i n s u r a n c e c o m p a n y]3

t o fi nd t hatPl ai nt i ff w as notengage d i n an ext ended tr eatm entpl an i n l i eu of hos pi t al i zat i on as r equi r ed undert he Pl an forthe cont i nuat i on of bene fi t s . ”

A s t he D i s t r i ctC our tobs erved, ther e ar e no mat er i al fac t s i n di s put e. T he i s s ue i s w hethert he i ns ur ance companyas admi ni s t r at orpr oper l yexer ci s ed i t s di s cr et i on in in te rp re tin g th e e x te n d e d c a re p ro v is io n o f th e p la n . T h e sta n d a rd o f

re v iew is a n im p o rta n t ele m e n t in re so lu tio n o f th e d isp u te p re se n ted h e re . In c o n sid e rin g th a t issu e , the D istric t C o u rt c o rre c tlyb e g a n w ith F i r e s t o n e Ti r e & Ru b b e rCo . v . Bru c h , 4 8 9 U. S . 1 0 1 , 1 1 5 ( 1 9 8 9 ) , wh e r e th e S u p r e me C our thel d “a de ni al of bene fi t s . . . i s t o be r evi ew ed undera de novo s t andar d unl es s t he benef i tpl an gi ves t he admi ni s t r at ororfi duci arydi s cr et i onaryauthor i t yt o det erm i ne el i gi bi l i t yforbenef

i t s ort o cons t rue the t erm s of the pl an. ” Thatdi s cr et i on i s not l i m i t l es s , as t he C our tw enton t o s ay , “[o] f cour s e, i f a be nefi tpl an gi ves di s cr et i on t o an adm i nis t rat or or fi du ci aryw ho i s operat i ng un der a con fl i ctof int eres t , that confli ctm ust be w ei ght ed as a ‘ fac t ori n det erm i ni ng w hetherther e i s an abus e of di s cr et i on. ’ ” F i res t on e T i re & R ub ber C o. , 48 9 U . S . at11 5 (quo t i ng R est at em ent ( S econ d) of T rust s § 1 8 7 , c o m m e n t d (1 9 5 9 )) .

P into v . R eli an ce S tand ard L ife In s. C o . , 2 1 4 F . 3 d 3 7 7 (3d C ir . 2 0 0 0 ), di s cus s ed atl ength confl i ctof i nt er es tcons i der at i ons w her e an i ns ur erboth pai d and determ i ned el i gibi l i t yfor ben efi t s. T here, w e recogn i zed the i nh erentcon fl i ctof int eres t pr es entand the nec es s i t yt o r econc i l e i tw i t h Fi r es t one Ti r e & R ubberC o. ’ s defe r ent i al4

s t a n d a r d o f

r e v i e w . W e c o n c l u d e d t h a tth e a rb i t r a r y a n d c a p r i c i o u s f o r m u l a s h o u l d a p p l y, butt hati ts houl d cal i br at e the “i nt ens i t yof ourr evi ew t o t he i nt ens i t yof the conf l i ct . ” Pi nt o, 214 F. 3d at393. D i s t r i ctcour t s s houl d “cons i derthe natur e and de gr ee of appar ent c o n f licts w ith a v iew to sh a p in g th e ir a rb itrar ya n d c a p ric io u s re v iew o f b e n e f its d e te rm in a tio n s o f

d is c re tio n a ry d e c is io n m a k e rs .” Id . Pi nt o l ooked atbot h t he r es ul tand the pr oces s byw hi ch i tw as achi eved, but d id n o t le a v e th e c o u rt f re e to s im p ly su b s titu te its ju d g m e n t f o r t h a t o f th e a d m in is tr a to r. T he admoni t i on di r ect ed t o t he di s t r i ctcour t s appl i es as w el l t o us as w e r evi ew aw ar ds of s u m m a ry ju d g m e n t.

A gai ns tt hatbackgr ound of w hatm aybe t erm ed l i m i t ed def er ence , w e have car eful l yr evi ew ed the evi dence i n thi s cas e cons i s t i ng of not es of D r . N el s on, the at t endi ng ps y chi atr i s t , and the r eport s of the ps y chi atr i s t s and ps y chol ogi s t s w ho exami ned the pl ai nt i ff be gi nni ng i n 1999. D ur i ng the tw o- y earper i od fr om 1999 t o 2001, p lain tiff re c e iv e d c a re b yD r. N e lso n o n a n o u tp a tien t b a sis p rim a rilyin o f f ice v isits in in te rv a ls o f

th re e to f

o u r w e e k s , a c c o m p a n ie d b ya d ju s tm e n ts o f

m e d ic a tio n s a s n e e d e d . Som e mont hs befor e the tw o- y earcover age w as due t o expi r e, pl ai nt i ff expr es s ed hi s conce r n t o D r . N el s on aboutthatfac t . H ow ever , ot herthan the thr ee- w eek hos pi t al i zat i on att he end of t he per i od, ther e w as no m aj orchange i n t he r egi m en. T he i s s ue the admi ni s t r at orhad t o r es ol ve her e w as w hetherthe tr eatm ent r ender ed af

t ert he pl ai nt i ff’ s di s char ge fr om the hos pi t al w as i n “l i eu of hos pi t al i zat i on. ”5

T he admi ni s t r at orr el i ed s ubs t ant i al l yon t he opi ni on of D r . M i r ki n, a cons ul t i ng ps y chi atr i s t , w ho poi nt ed outconce r ns thatw oul d have i ndi cat ed the nec es s i t yof h o sp it ali za ti o n o r a sim il ar lev el of ca re. T h ese fa ctors, ho w ev er, w ere lack ing an d in D r. M i r ki n’ s vi ew D r . N el s on’ s t r eatm entpr ogr am aft erthe pl ai nt i ff’ s r el eas e fr om the h o s p ita l in J u ly 2 0 0 1 d id n o t m e e t th e c ri te ri a o f in “ lie u o f

h o s p ita liz a tio n .” Pl ai nt i ff c ont ends t hatcar e pr ovi ded byhi s w i fe s houl d qual i fyas

“ e x ten d e d tre a tm e n t.” S h e h a s a d e g re e in p sy c h o lo g ya n d a n M B A in h e a lth a d m in istra tio n , an d sh e w a s e m p lo y e d a s a n a d m in istra to r a t a n u m b e r o f h e a lth p ro g ra m s. S h e re n d e re d se rv ice s f o r p lain tiff

, su c h a s in su rin g th a t h e to o k h is m edi cat i on and mai nt ai ned hi s di et arycompl i ance , m oni t or i ng hi s exer ci s e pr ogr am, and u s in g te c h n iq u e s to c a lm h im w h e n h e b e c a m e a g ita te d .

I n ur gi ng r econs i der at i on of hi s cl ai m s forext ended c ar e, pl ai nt i ff char act er i zed hi s w i fe’ s s ervi ces as “ext ended tr eatm ent ” and i m pl i es thatthe ad m inistrator h ad n o t bee n aw are o f itb ef o re d en y ing the a d d it ion al be n ef it s. H o w ev er, in o u r r e v ie w o f

th e re c o rd s , w e f

o u n d th a t, a s e a rl ya s S e p te m b e r 2 0 0 0 , D r. I v in s , a ps y chol ogi s t , i n hi s r eportof an e xami nat i on des cr i bed the as s i s t ance pr ovi ded bythe pl ai nt i ff’ s w i fe. R efe r ence t o t he s pous e’ s car e al s o appea r s i n t he r epor tof D r . Paul S a c h s , a p s y c h o lo g is t, in h is re p o rt o f e x a m in a tio n s in J a n u a ry 2 0 0 1 . T he w i fe’ s comm endabl e and c om pas s i onat e ca r i ng forpl ai nt i ff w as not s om ethi ng unknow n t o t he admi ni s t r at orbefor e i tdeni ed r econs i der at i on. N orw as i tof6

t he natur e thatr equi r ed medi cal t r ai ni ng. T he w i fe’ s s ervi ces w er e thos e thatar e oft en p ro v id e d b yc o m m itte d s p o u s e s .

Si m i l ar l y , t he pl ai nt i ff’ s at t empt s t o di ffe r ent i at e betw een or gani c and p s y c h o lo g ic a l c o n d itio n s a re o f n o a v a il w h e n th e P la n in c lu d e d b o th . T he t erm “ext ended tr eatm ent ” i s notone thatcan be des cr i bed i n s harp and p r e c i s e t e r ms , b u tmu s tb e u n d e r s t o o d i n l i g h to f th e P l a n ’ s l i mi t a t i o n o f c o v e r a g e t o t wo y ear s and the pl ai nt i ff’ s chr oni c i l l nes s . T he Pl an does notcal l forpaym ent s forthe d u ra tio n o f

d is a b ility, b u t f

o r t w o y e a rs . T he co rr ect ness of the adm i nis t rat or’ s deci si on m aybe sai d to be a close o n e, bu t no t bey o n d the d iscreti o n co n fe rred b ythe P lan. T h e p roc ed u res e m p loy ed h ere w er e r eas onabl e and a dequat el ydocument ed. W e conc l ude thatthe D i s t r i ctC our t , aft er cons i der i ng t he r el evantcr i t er i a, pr oper l ydefe r r ed t o t he di s cr et i on entrus t ed t o t he ad m inistrator. A c c o rd in g ly, th e ju d g m e n t o f th e D is tr ic t C o u rt w ill b e a f f ir m e d .