UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Louise Polley,

Plaintiff

v. Civil No. 08-cv-392-SM

Opinion No. 2009 DNH 176

Harvard Pilgrim

Health Care, Inc.,

Defendant

O R D E R

Given previous rulings (document no. 17), this case now

consists of Louise Polley’s claim that her former employer,

Harvard Pilgrim Health Care, Inc. (“Harvard Pilgrim”), is liable

for failing to provide her with benefit plan documents, in

violation of the Employee Retirement Income Security Act of 1974

(“ERISA”). Before the court is defendant’s motion for summary

judgment. Plaintiff objects. The court held a hearing on

defendant’s motion on November 13, 2009. For the reasons given,

defendant’s motion is granted.

The Legal Standard

A summary judgment motion should be granted when the record

reveals “no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law.” FED.

R. CIV. P. 56(c). “An issue is genuine if ‘the evidence is such

that a reasonable jury could return a verdict for the nonmoving

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party.’ ” Chadwick v. WellPoint, Inc., 561 F.3d 38, 43 (1st Cir.

2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986)). “The object of summary judgment is to ‘pierce the

boilerplate of the pleadings and assay the parties’ proof in

order to determine whether trial is actually required.’ ” Dávila

v. Corporación de P.R. para la Diffusión Pública, 498 F.3d 9, 12

(1st Cir. 2007) (quoting Acosta v. Ames Dep’t Stores, Inc., 386

F.3d 5, 7 (1st Cir. 2004)). “Once the moving party avers an

absence of evidence to support the non-moving party’s case, the

non-moving party must offer ‘definite, competent evidence to

rebut the motion,’ ” Meuser v. Fed. Express Corp., 564 F.3d 507,

515 (1st Cir. 2009) (citing Mesnick v. Gen. Elec. Co., 950 F.2d

816, 822 (1st Cir. 1991)), and “cannot rest on ‘conclusory

allegations, improbable inferences, [or] unsupported

speculation,’ ” Meuser, 564 F.3d at 515 (quoting Welch v. Ciampa,

542 F.3d 927, 935 (1st Cir. 2008)). When ruling on a party’s

motion for summary judgment, a trial court “constru[es] the

record in the light most favorable to the nonmovant and

resolv[es] all reasonable inferences in [that] party’s favor.” 

Meuser, 564 F.3d at 515 (citing Rochester Ford Sales, Inc. v.

Ford Motor Co., 287 F.3d 32, 38 (1st Cir. 2002)).

Background

Polley worked for Harvard Pilgrim from May of 1999 through

December 28, 2005. Harvard Pilgrim provided her with a group

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 2 of 13
1 The letter denying Polley’s claim described an appeal

process and provided:

After completion of the first level of appeal, you may

also file a lawsuit under the Employee Retirement

Income Security Act (ERISA). ERISA allows you to file

suit for policy benefits and reasonable attorney’s

fees. Your decision on whether to file a second appeal

will not affect your rights to sue under ERISA.

(Pl.’s Obj., Ex. D (document no. 20-6), at 2.) A subsequent

letter upholding the denial of Polley’s claim provided:

This decision is final and cannot be appealed further

to Prudential. If you still disagree with the above

decision, you may file a lawsuit under the Employee

Retirement Income Security Act (ERISA). ERISA allows

you to file suit for policy benefits and reasonable

attorney’s fees.

(Id., Ex. E (document no. 20-7), at 3.) 

According to the plan description, notifications such as

those quoted above are required when a claim is denied. (See

id., Ex. C, at 20-21.) The plan description further provides:

“As a participant in this plan, you are entitled to certain

rights and protections under the Employee Retirement Income

Security Act of 1974 (ERISA). ERISA provides that all plan

participants shall be entitled to: . . . [o]btain, upon written

request to the plan administrator, copies of documents governing

the operation of the plan . . .” (Id. at 22.)

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disability plan that provided both short- and long-term

disability benefits. Those benefits are described in a document

titled “Administrative Services for Short Term Disability Plan”

(hereinafter “plan description”). Claims administration for the

short-term disability benefit was handled by The Prudential

Insurance Company of America (“Prudential”). Polley made a claim

for short-term disability benefits, which Prudential denied.1 

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Margaret Malumphy, Harvard Pilgrim’s Director of

Compensation, Benefits, and HRIS, says, in an affidavit, that

“[s]hort-term disability benefits at [Harvard Pilgrim] are paid

from general assets of [Harvard Pilgrim] as part of an employee’s

normal compensation paid in the event of an employee’s

disability” and that “[s]hort-term disability benefits at

[Harvard Pilgrim] are not insured by a third party.” (Malumphy

Aff. (document no. 19-2) ¶¶ 2-3.) Polley appears not to dispute

Harvard Pilgrim’s characterization of its short-term disability

benefit as “self-insured” (see Pl.’s Mem. of Law (document no.

20-2), at 1 (“For purposes of this motion, Mrs. Polley does not

dispute the enumerated paragraphs 1-3 on page 2 of ‘Defendant’s

Memorandum of Law . . .’ ”); Def.’s Mem. of Law (document no. 19-

3) ¶ 2 (characterizing the benefit as “self-insured”)), but also

argues, perhaps a bit inconsistently, that “the [short-term

disability] benefit does not provide ‘normal compensation’ and

[that] there is evidence contrary to the assertion that the

benefits are paid only from the general assets of the employer”

(Pl.’s Memo. of Law, at 2). 

The evidence on which Polley relies includes two denial

letters from Prudential, both of which refer to her “claim for

. . . benefits under the Group Plan #43774 issued to Harvard

Pilgrim Health Care, Inc.” (Pl.’s Obj., Ex. D, at 1 & Ex. E, at

1.) A document titled “Your Group Disability Plan at a Glance,”

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5

bearing Group Contract Number 43774, describes both a short-term

disability plan and a long-term disability plan, indicates that

employee contributions for the short-term disability plan are

“100% employer paid” (id., Ex. B, at 1), and also provides:

“Short Term Disability, Long Term Disability, and Integrated

Short and Long Term Disability Coverages are underwritten by The

Prudential Insurance Company of America” (id. at 2). Finally,

under the heading “Cost of Coverage,” the “Benefit Highlights”

section of the plan description explains: “The short term

disability plan is provided to you on a non-contributory basis. 

The entire cost of your coverage under the plan is being paid by

your Employer.” (Id., Ex. C, at 2.) 

At the hearing, defendant produced a supplemental affidavit

from Ms. Malumphy, along with Harvard Pilgrim’s IRS Form 5500 for

2005, and the six Schedule A forms attached thereto. Form 5500

is titled “Annual Return / Report of Employee Benefit Plan.” 

(Malumphy Supp. Aff., Ex. C.) Harvard Pilgrim’s Form 5500

indicates that the “Plan funding arrangement” and the “Plan

benefit arrangement” both involved a combination of insurance and

“General assets of the sponsor.” (See id.) Schedule A is titled

“Insurance Information.” (See id.) Each Schedule A lists, with

regard to a specific benefit, an insurance carrier and the kind

of coverage that insurer provided. (See id.) The Schedule A for

Prudential Financial indicates that Prudential provided long-term

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 5 of 13
2 She also asked Prudential for a copy of the plan, and was

told she needed to get it from Harvard Pilgrim. (Pl’s Obj., Ex.

F (document no. 20-8).) 

6

disability coverage only; the “Long-term disability” box is

checked, while the “Temporary disability” box is not. (See id.) 

The “Temporary disability” box is not checked on any of Harvard

Pilgrim’s other Schedule A forms. (See id.)

On November 4, 2005, Polley wrote to Sharon Boucher, of the

Harvard Pilgrim human resources department, seeking a copy of the

company’s short-term and long-term disability plans.2 (Malumphy

Aff., Ex. A.) Polley says that Boucher told her that the shortterm disability benefit “was not, in [Harvard Pilgrim]’s opinion,

an ERISA Plan and that they did not have to send [her] a copy of

the plan.” (Polley Aff. (document no. 20-3) ¶ 5.) Polley says,

and Harvard Pilgrim conceded at the hearing, that she did not

receive a copy of the short-term disability plan description

until May 31, 2006. (Id. ¶ 2.) 

In Count II of her amended complaint, Polley asserts that

Harvard Pilgrim violated 29 U.S.C. § 1132(c)(1) by failing to

provide her with plan documents within thirty days of her request

for them.

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Discussion

Harvard Pilgrim moves for summary judgment on grounds that

its short-term disability benefit is not provided under an

employee-benefit plan governed by ERISA and, because ERISA does

not govern the short-term disability plan, Polley had no ERISAenforceable right to plan documents. Polley objects, arguing

that summary judgment is precluded by two genuine issues of

material fact: Whether the short-term disability benefit is

governed by ERISA, and whether Harvard Pilgrim provided plan

documents in compliance with ERISA.

Under the Employee Retirement Income Security Act, an ERISA

plan administrator who 

fails or refuses to comply with a request for any

information which such administrator is required . . .

to furnish to a participant or beneficiary . . . within

30 days after such request may in the court’s

discretion be personally liable to such participant or

beneficiary in the amount of up to $100 a day from the

date of such failure or refusal . . .

29 U.S.C. § 1132(c)(1)(B). Both parties agree that the foregoing

requirement pertains only to administrators of employee welfare

benefit plans governed by ERISA. ERISA, in turn, defines

“employee welfare benefit plan” as

any plan, fund, or program which was heretofore or is

hereafter established or maintained by an employer or

by an employee organization, or by both, to the extent

that such plan, fund, or program was established or is

maintained for the purpose of providing for its

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 7 of 13
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participants or their beneficiaries, through the

purchase of insurance or otherwise . . . benefits in

the event of sickness, accident, disability, death or

unemployment . . . .

29 U.S.C.A. § 1002(1). 

That statutory definition is limited, however, in the

following way:

For purposes of Title I of the Act and this chapter,

the terms “employee welfare benefit plan” and “welfare

plan” shall not include–

. . . .

(2) Payment of an employee’s normal compensation,

out of the employer’s general assets, on account

of periods of time during which the employee is

physically or mentally unable to perform his or

her duties, or is otherwise absent for medical

reasons (such as pregnancy, a physical examination

or psychiatric treatment) . . . . 

29 C.F.R. § 2510.3-1(b)(2). Compensation of the kind described

above is deemed, by the relevant regulation, a “payroll

practice,” rather than an employee welfare benefit plan. Id.

Here, Harvard Pilgrim argues that the undisputed factual record

demonstrates that its short-term disability plan qualified as a

payroll practice, and was not an ERISA-governed employee welfare

benefit plan, notwithstanding references in documents that

erroneously suggested otherwise.

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 8 of 13
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“The question of whether an ERISA plan exists is a question

of fact, to be answered in light of all the surrounding facts and

circumstances from the point of view of a reasonable person.”

McMahon v. Digital Equip. Corp., 162 F.3d 28, 36 (1st Cir. 1998)

(quoting Wickman v. Nw. Nat’l Ins. Co., 908 F.2d 1077, 1082 (1st

Cir. 1990)) (internal quotation marks omitted).

Harvard Pilgrim contends that Malumphy’s affidavit

establishes that Harvard Pilgrim pays short-term disability

benefits from its general assets rather than through purchased

insurance. That affidavit, supported by the IRS Form 5500,

Harvard Pilgrim says, constitutes undisputed evidence that

Harvard Pilgrim’s short-term disability benefit is a payroll

practice not subject to ERISA. Plaintiff responds by pointing to

documents in the summary judgment record pertaining to the

benefit that refer to ERISA and the remedies available

thereunder, and to the statement, in the “Plan at a Glance”

sheet, that the benefit is underwritten by Prudential. In reply,

defendant points out that plaintiff has produced no evidence to

create a trialworthy issue regarding the source of the money it

uses to pay short-term disability benefits, and further argues

that references to ERISA in various plan documents and letters do

not preclude a determination, as a matter of law, that the plan

is a payroll practice. Defendant has the better argument.

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 9 of 13
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The dispositive issue is the manner in which Harvard

Pilgrim’s short-term disability benefit was funded. See McMahon,

162 F.2d at 37 (explaining that “benefits derived from an

employee welfare benefit plan . . . that was supported by assets

outside of [company]’s general operating funds . . . cannot be a

payroll practice under the express terms of 29 C.F.R. § 2510.3-

1(b)(2)”). Defendant has produced uncontroverted evidence

establishing that Harvard Pilgrim paid short-term disability

benefits out of its general assets, as normal compensation, “on

account of periods of time during which the employee is . . . 

unable to perform his or her duties.” 29 C.F.R. § 2510.3-1(b)(2) 

That evidence supported Harvard Pilgrim’s report to the

government, the IRS Form 5500 and the Schedule A forms attached

to it, which discloses that Harvard Pilgrim did not purchase

insurance to cover its short-term disability benefit and that it

funded part of its overall employee benefit package (i.e. the

short-term disability benefit) with general company assets.

The evidence Polley has produced in opposition to

defendant’s summary judgment motion is not sufficient to create a

genuine issue of material fact. See Chadwick, 561 F.3d at 43

(“An issue is genuine if ‘the evidence is such that a reasonable

jury could return a verdict for the nonmoving party.’ ”). To be

sure, Polley has produced a variety of documents in which Harvard

Pilgrim’s short-term disability benefit is described as, and

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 10 of 13
3 Polley’s argument that a benefit paying less than an

employee’s full salary cannot qualify as “normal compensation” is

given no legal support in her brief, and, indeed, runs counter to

the weight of authority. See, e.g., Bassiri v. Xerox Corp., 463

F.3d 927, 934 (9th Cir. 2006) (“we hold that Xerox’s LTD plan may

qualify as a payroll practice even though it pays less than

Bassiri’s full salary”); Hite v. Biomet, Inc., 38 F. Supp. 2d

720, 729-30 (N.D. Ind. 1999) (rejecting employee’s argument that

benefit paying only 60% of full salary could not be a payroll

practice because it did not pay “normal compensation”); Carmouche

v. MEMC Pasadena, Inc., Civil Action No. 06-2074, 2008 WL

2938474, at *12 (S.D. Tex. July 21, 2008) (“Every court that has

considered whether ‘normal compensation’ includes employer plans

providing less than full salary has deferred to [a definition

promulgated by the Department of labor in eleven opinion

letters], finding such plans exempt from ERISA.”) (citation

omitted).

11

treated in the same manner as, an ERISA-governed plan; the

language used is plainly drawn from the lexicon of ERISA plans

and insurance. But, as the court of appeals has noted: “We do

not hold that an employer’s mere labeling of a plan determines

whether a plan is an ERISA plan, since this also could lead to a

form of ‘regulation shopping.’ ” McMahon, 162 F.3d at 38. 

Moreover, while plaintiff has produced various documents

containing language suggesting or implying that Harvard Pilgrim

purchased insurance to cover its short-term disability benefit,

that language is generally mere boilerplate — lumping all

benefits under the same administrative procedures. But Polley

has produced no evidence from which a reasonable jury could

conclude that Harvard Pilgrim actually paid short-term disability

benefits with anything other than its general assets, as normal

short-term compensation for time missed by employees because of

physical inability to perform their duties.3

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 11 of 13
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Prior to the hearing, i.e., before defendant produced the

2005 IRS Form 5500, the posture of this case was roughly

analogous to Marshall v. Whirlpool Corp., No. 07-CV-534-JHP, 2009

WL 1939922 (N.D. Okla. July 6, 2009), at the point when the

district court denied defendant’s first motion for summary

judgment. As the court explained:

[T]he record is actually somewhat ambiguous as to the

process through which those benefits are paid. For

example, although the affidavit of Whirpool’s Paula J.

Gill describes the way those benefits are funded

(Docket No. 29-2, ¶ 4) (“Whirlpool pays benefits from

funds of Whirlpool by checks signed by UniCare as

Whirlpool’s disbursing agent upon a bank account(s)

established and maintained by Whirlpool for the purpose

of payment of claims. All benefits paid to employees

eligible for short-term disability benefits are drawn

from Whirlpool’s general assets.”), her description is

inconsistent with the Summary Plan Description (Docket

No. 29-3, at 18) (“John Hancock Mutual Life Insurance

Company pays you a weekly benefit if you become totally

disabled [.]”) and the Administrative Service Agreement

(Docket No. 29-4, at 15) (referencing the agreement as

being between Whirlpool and John Hancock). This

ambiguity must be resolved before the Court can

determine whether the funding of the benefits plan in

question is or is not a “payroll practice.”

Id. at *1 (citation omitted). Here, language in the plan

documents produced by Polley also might be read as giving rise to

some ambiguity with respect to funding of the short-term

disability benefit. But now, after defendant’s production of the

IRS Form 5500, the ambiguity is resolved and the case is

analogous to Marshall at the point when the district court

granted the defendant’s second motion for summary judgment. No

reasonable jury could conclude that the ambiguous boilerplate

Case 1:08-cv-00392-SM Document 25 Filed 11/25/09 Page 12 of 13
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plan language identified by Polley outweighs Malumphy’s

affidavit, and disclosures made in the IRS forms. A reasonable

fact finder faced with this record could only conclude that

Harvard Pilgrim’s short-term disability benefit was paid out of

general assets and constituted a payroll practice, beyond the

reach of ERISA. Accordingly, Harvard Pilgrim is, as a matter of

law, entitled to judgment that it had no obligation, under ERISA,

to provide Polly with documents pertaining to her short-term

disability benefit, and is not subject to sanction for failing to

respond to her request within thirty (30) days.

Conclusion

For the reasons given, defendant’s motion for summary

judgment (document no. 19) is granted. The clerk of the court

shall enter judgment in accordance with this order and close the

case.

SO ORDERED.

____________________________

Steven J. McAuliffe

Chief Judge

November 25, 2009

cc: John J. LaRivee, Esq.

Martha Van Oot, Esq.

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