Source: http://openjurist.org/982/f2d/1031/libbey-owens-ford-company-v-blue-cross-and-blue-shield-mutual-of-ohio
Timestamp: 2016-02-10 05:18:40
Document Index: 492024463

Matched Legal Cases: ['§ 1003', '§ 1002', '§ 1002', '§ 1104', '§ 1104', '§ 1104', '§ 1104', '§ 1104', '§ 1104', '§ 1104']

982 F2d 1031 Libbey-Owens-Ford Company v. Blue Cross and Blue Shield Mutual of Ohio | OpenJurist
982 F. 2d 1031 - Libbey-Owens-Ford Company v. Blue Cross and Blue Shield Mutual of Ohio HomeFederal Reporter, Second Series 982 F.2d.
982 F2d 1031 Libbey-Owens-Ford Company v. Blue Cross and Blue Shield Mutual of Ohio 982 F.2d 1031
24 Fed.R.Serv.3d 857, 16 Employee Benefits Cas. 1315
LIBBEY-OWENS-FORD COMPANY, as Administrator of the GroupHealth Insurance Plan,Plaintiff-Appellant/Third-Party Defendant,v.BLUE CROSS AND BLUE SHIELD MUTUAL OF OHIO,Defendant-Appellee/Third-Party Plaintiff,Trinova Corporation, as Administrator of the Group HealthInsurance Plan, Third-Party Defendant-Appellee.
No. 92-3129.
Argued Nov. 16, 1992.Decided Jan. 13, 1993.Rehearing Denied Feb. 1, 1993.Order on Motion for Rehearing En BancFeb. 23, 1993.
On April 8, 1991, Libbey-Owens-Ford moved for voluntary partial summary judgment to determine whether Blue Cross was a fiduciary under ERISA and whether Libbey-Owens-Ford was entitled to an accounting upon demand. The district court denied this motion on July 30, 1991. Subsequently, Libbey-Owens-Ford moved for voluntary dismissal of its case without prejudice in accordance with Fed.R.Civ.P. 41(a)(2).
On November 25, 1991, the district court issued an opinion that set forth the conditions for dismissal and allowed Libbey-Owens-Ford the option of withdrawing its motion for partial summary judgment and proceeding with the case. In the opinion, the district court held that Blue Cross was not a fiduciary and did not have to provide an accounting to Libbey-Owens-Ford. Based upon this determination, the court ordered dismissal with prejudice of the claim for breach of common law fiduciary duties and the ERISA claims. Nonetheless, Libbey-Owens-Ford did not withdraw its motion to dismiss, and it proceeded on the merits of the case. Consequently, on January 2, 1992, the district court entered a final judgment order that dismissed with prejudice Libbey-Owens-Ford's first, second, and sixth claims for relief and eliminated all references to ERISA in the remaining claims. The district court dismissed the third, fourth, fifth, and seventh claims without prejudice pursuant to Fed.R.Civ.P. 41(a). On January 31, 1992, Libbey-Owens-Ford filed a notice of appeal.
We have jurisdiction over this case. As a general rule, neither party may appeal from a voluntary dismissal because it is not an involuntary adverse judgment. Laczay v. Ross Adhesives, 855 F.2d 351, 351 (6th Cir.1988), cert. denied, 489 U.S. 1014, 109 S.Ct. 1125, 103 L.Ed.2d 188 (1989). However, in this circuit, this "rule is ironclad only with respect to dismissal without prejudice." Id. at 354. An exception arises when the dismissal is with prejudice and "designed only to expedite review of an order which had in effect dismissed appellant's complaint." Raceway Properties, Inc. v. Emprise Corp., 613 F.2d 656, 657 (6th Cir.1980). A limit on the appellant's procedural options is necessary to prevent piecemeal appeals. When a party chooses to appeal the claims dismissed with prejudice, the party is unable to proceed in the district court with the claims that were dismissed without prejudice.
Our standard of review in this case is de novo because the district court's conclusion that an administrator of a self-insured benefits plan is not an ERISA fiduciary is a conclusion of law. See Waxman v. Luna, 881 F.2d 237, 240 (6th Cir.1989) (holding that when the trial court applies statutory law to the facts, the holding becomes a conclusion of law reversible under the de novo standard.)
We first address the question of whether ERISA is applicable to the instant case. ERISA applies to all employee benefit plans created by an employer engaged in interstate commerce or any industry affecting interstate commerce. 29 U.S.C. § 1003(a)(1). Employee benefit plans include both employee welfare benefits plans and employee pension benefit plans. Libbey-Owens-Ford contends that this case involves an employee welfare benefit plan. Pursuant to the statute, ERISA welfare benefits plans include:
Employers may establish ERISA plans very easily. International Resources, Inc. v. New York Life Insurance Company, 950 F.2d 294, 297 (6th Cir.1991). As defined under ERISA, employee welfare benefit plans may be created through the mere purchase of a group health insurance policy when the owner does not retain control, administrative power, or responsibility for benefits. Id.
After determining that ERISA applies, we focus on whether a fiduciary duty under ERISA is present as well. ERISA includes in its definition of a fiduciary a party with "any discretionary authority or discretionary responsibility in the administration of such [an employee benefit] plan." 29 U.S.C. § 1002(21)(A)(iii). Although the court in International Resources determined that ERISA applies to administrators in self-insured situations, this court has not heretofore addressed the narrow question of whether administration of an employee benefit plan creates a fiduciary duty under ERISA.
Other courts have ruled that an administrator of a self-insured employee benefit plan is a fiduciary for ERISA purposes. The Seventh Circuit has made such a determination. Reilly v. Blue Cross and Blue Shield United of Wisconsin, 846 F.2d 416, 419 (7th Cir.1988). Although Reilly contained a dissent, the difference between the majority and dissenting opinions in Reilly did not concern whether ERISA imposes a fiduciary duty. Rather, the dissent addressed the factual issue of whether Blue Cross' decision to deny benefits under the plan was arbitrary or capricious. Id. at 426-27 (Posner, J., dissenting). Both the majority and the dissent conclude that a fiduciary duty under ERISA applied, but only the majority concludes that there was a breach of the fiduciary duty. Id. at 419-27. Although Reilly involved an individual claim and this case involves an accounting on behalf of the entire benefit plan, that factual distinction does not affect the question of whether an administrator of an ERISA plan is a fiduciary.
Several district courts have also imposed a fiduciary duty under a similar analysis. See Blue Cross and Blue Shield of Alabama v. Peacock's Apothecary, Inc., 567 F.Supp. 1258, 1268 (N.D.Ala.1983) (insurer was a fiduciary where it had the authority under the plan to review and make decisions regarding claim denials); Sixty-Five Security Plan v. Blue Cross and Blue Shield of Greater New York, 583 F.Supp. 380, 387 (S.D.N.Y.1984) (claims administration rendered Blue Cross an ERISA fiduciary); and Eversole v. Metropolitan Life Insurance Co., 500 F.Supp. 1162, 1164-65 (C.D.Cal.1980) (authority to grant or deny claims is requisite discretionary authority to qualify as ERISA fiduciary).
Our main concern in order to determine the presence of a fiduciary duty is whether the insurance company has discretionary authority. The result is the same whether the insurance company is the carrier administering claims under an insurance policy or whether the insurance company is administering claims for a fee under a self-insured plan. The insurance company may have discretionary authority in both cases. When an insurance company administers claims for an employee welfare benefit plan and has authority to grant or deny the claims, the company is an ERISA "fiduciary" under 29 U.S.C. § 1002(21)(A)(iii). In this case, Blue Cross had discretionary authority regarding claims; therefore, it owed Libbey-Owens-Ford a fiduciary duty.
Finally, we are called upon to determine whether Blue Cross is obligated, as a fiduciary, to provide an accounting on demand. In order to evaluate the nature of the fiduciary duty under ERISA, we begin with the language of the 29 U.S.C. § 1104. ERISA embraces a duty of loyalty to the trust beneficiaries, 29 U.S.C. § 1104(a)(1)(A), and the prudent man standard of care, 29 U.S.C. § 1104(a)(1)(B). Fiduciaries must act "in accordance with the documents and instruments governing the plan." 29 U.S.C. § 1104(a)(1)(D).
Libbey-Owens-Ford did not bring any of the provisions of 29 U.S.C. § 1104 directly into issue or claim a breach of fiduciary duty based on the terms of the agreement. The Master Group Operating Agreement constitutes one of the "documents or instruments governing the plan" within the meaning of 29 U.S.C. § 1104(a)(1)(D). However, the record does not indicate that any provision in the plan addressed the need for an accounting. The plan was silent on the right to an audit.
Instead of arguing that Blue Cross has a fiduciary obligation to provide an accounting because of 29 U.S.C. § 1104 or the operating agreement, Libbey-Owens-Ford asserts that Blue Cross has violated some of the general principles of trust law as incorporated into ERISA. Principles of trust law do apply to ERISA. E.g., Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559, 570, 105 S.Ct. 2833, 2840, 86 L.Ed.2d 447, reh. denied, 473 U.S. 926, 106 S.Ct. 17, 87 L.Ed.2d 696 (1985) (Congress intended that the common law of trusts to define the general scope of fiduciary responsibility). Libbey-Owens-Ford claims that it is entitled to an accounting as a result of this incorporation.