Opinion ID: 2995171
Heading Depth: 2
Heading Rank: 2

Heading: Recovery of Benefits Under Section

Text: 502(a)(1)(B) of ERISA We first examine Neuma’s allegation that AMP improperly discontinued Larsen’s group life insurance benefits after it cancelled the Provident Policy at the end of 1997. As an initial matter, both parties agree that the AMP life insurance program that Larsen enrolled in is an employee welfare benefit plan as defined by ERISA. ERISA defines such plans as any plan, fund, or program . . . established or maintained by an employer . . . for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise . . . medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, [or] death. 29 U.S.C. sec. 1002(1)(A). AMP contends that this life insurance program constitutes an entire benefit plan unto itself. Neuma, however, claims that the life insurance program was but one part of a larger Benefit Plan provided by AMP, entitled the AMP AKZO Corporation Medical, Dental, Life Insurance Plan, which also included medical and dental insurance./4 ERISA plans are governed by written documents that define their scope; the statute requires that [e]very employee benefit plan . . . be established and maintained pursuant to a written instrument. 29 U.S.C. sec. 1102(a)(1). Through those instruments, the parties are free to subject such welfare benefits to vesting requirements not provided by ERISA, or they may reserve the power to terminate such plans. Ryan, 877 F.2d at 603. ERISA requires that employers provide these documents to their employees to protect their interests as participants in employee welfare plans. See Panaras v. Liquid Carbonic Indus. Corp., 74 F.3d 786, 788 (7th Cir. 1996) (citing 29 U.S.C. sec. 1001(b)). Although they dispute the nature of the ERISA plan at issue, the parties agree that the plan document that describes the contours of Larsen’s life insurance benefits is the Summary Plan Description. Apparently, there are no other existing plan documents that relate to the group life insurance benefits at issue in this litigation. The disagreement between the parties centers on a key provision of that Summary Plan Description, the Disability Clause. This clause explains AMP’s responsibilities to employees such as Larsen who become disabled before age 60, with regard to the payment of life insurance premiums. It states that, if a policyholder becomes disabled, AMP will keep [his] life insurance in force by paying the appropriate premium as long as [he is] disabled. R.42, Ex.6 at 19. Yet, it further states that [i]n no event, however, will such insurance be continued beyond the date the life insurance provisions of the Plan terminate. Id. The meaning of the word Plan in the clause is crucial. Neuma claims that Plan refers to a larger medical, dental and life insurance plan that AMP provided to its employees, of which the Provident Policy was merely a part. Under this interpretation, AMP was obligated to continue paying Larsen’s life insurance premiums as long as the life insurance provisions of that larger Benefit Plan remained in effect. Therefore, because AMP continued to provide life insurance coverage to its employees through MetLife after it cancelled the Provident Policy, it should have continued to provide coverage to Larsen under the Disability Clause even after the Provident Policy was replaced by the MetLife policy. AMP counters that, in the Summary Plan Description, Plan clearly refers to the Provident Policy, and that, when that policy was cancelled, its obligation to provide group life insurance benefits to Larsen also ended. In interpreting the language of the Disability Clause, we must apply federal common law rules of contract interpretation. See, e.g., Grun, 163 F.3d at 419; Brewer v. Protexall, Inc., 50 F.3d 453, 457 (7th Cir. 1995). Those rules direct us to interpret ERISA plans in an ordinary and popular sense as would a person of average intelligence and experience. Brewer, 50 F.3d at 457 (citation and quotation marks omitted). In attempting to interpret such plans, our first task is to determine if the contract at issue is ambiguous or unambiguous. See Grun, 163 F.3d at 420; Ryan, 877 F.2d at 602. Contract language is ambiguous if it is susceptible to more than one reasonable interpretation. See Grun, 163 F.3d at 420; Brewer, 50 F.3d at 458. If a district court determines that the provision is without ambiguity, we have noted that it need not consider extrinsic evidence and should proceed to declare the meaning of the provision. Ryan, 163 F.3d at 602; see also Moriarty v. Svec, 164 F.3d 323, 330 (7th Cir. 1998); Swaback v. Am. Info. Techs. Corp., 103 F.3d 535, 541 (7th Cir. 1996). Thus, if a document governing an ERISA plan is unambiguous, this court will not look be yond its four corners in interpreting its meaning. Mathews v. Sears Pension Plan, 144 F.3d 461, 466 (7th Cir. 1998). In reviewing the Summary Plan Description, we believe that the document unambiguously equates the term Plan with the Provident Policy. The Disability Clause therefore absolved AMP of the responsibility to continue to pay Larsen’s life insurance premiums after it discontinued that Policy. The most compelling passage from the Plan in this regard, which the district court highlighted prominently in its opinion, is located on page 5 of the Summary Plan Description, before any of the substantive provisions of that document. It appears in a letter from Provident’s president and chief executive officer that specifies the following: PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY Chattanooga, Tennessee (herein called the Provident) Certifies that it has issued Group Policy No. N-377 (herein called the Plan) to AMP CIRCUITS, AN AMP DIVISION (herein called the Policyholder) The Plan provides the benefits described on the following pages for certain employees covered under the Plan. This booklet gives the principal provisions of the Plan. The Plan alone constitutes the entire contract between the Provident and the Policyholder. Employees become covered under the Plan as provided on a following page. This booklet becomes the employee’s certificate of coverage while covered under the Plan. The benefits and provisions described on the following pages are subject in all respects to the terms and conditions of the Plan. [signature] President and Chief Executive Officer Provident Life and Accident Insurance Company R.42, Ex.6 at 5 (emphasis added). This portion of the Summary Plan Description clearly states that Group Policy No. N- 377, which all parties agree is the Provident Policy that covered Larsen, will be herein called the Plan in the remainder of the Summary Plan Description. Id. It then notes that the Provident Policy provides the benefits described on the following pages for employees covered under that Policy. Id. Moreover, the statement itself is signed by Provident’s president, which suggests that the document that contains it refers exclusively to a Provident-related product. These statements provide direct and unambiguous evidence that the use of the term Plan in the Summary Plan Description (including the Disability Clause) refers to the Provident Policy. Other textual passages in the Summary Plan Description support the same conclusion. On the cover of the booklet, along with its title (Group Benefits Program for Employees of AMP Circuits, an AMP Division), is a logo that reads: Provident Life and Accident Insurance Company. Id. Moreover, the booklet itself has many provisions relating to life insurance and Provident, but it provides no direct reference to any other type of insurance or to a more comprehensive benefit plan. Additionally, a number of times in the document the word Plan is referred to in a way that appears to relate directly to a life insurance policy provided by Provident. Page 9 notes that certain representations made to the employee by the Policyholder . . . about being covered for benefits under this Plan . . . shall: (a) not be considered as representations or statements made by, or on behalf of, the Provident; and (b) not bind the Provident for benefits under the Plan. Id. at 9 (emphasis in original). On page 21, the text explains that [t]he Provident will pay to you the amount shown if the Dependant dies while covered under the Plan. Id. at 21. And on page 26 the document states that [c]laims for benefits under the Plan are to be submitted to Provident and that [p]ayment of claims under the Plan will be made by the Provident. Id. at 26. Neuma points to several other passages in the document to demonstrate ambiguity regarding the meaning of the word Plan, but its arguments are not persuasive. First, it notes that the document refers to the title of the Plan in a few different ways: on page 1, it refers to it as the Life Insurance Plan; on page 5’s letter from Provident’s president, the Plan is called Group Policy No. N- 377 and on page 25, the document states that [t]he name of the Plan is [the] Employees Group Life Benefit Program. Id. at 1, 5, & 25. Neuma submits that, because they use different titles for the Plan, these examples create confusion as to what that term means. We cannot accept this argument. Indeed, this argument supports AMP’s interpretation of Plan, not Neuma’s. Each of these titles indicates a connection to a life insurance policy alone, such as the Provident Policy; none suggests a reference to a more comprehensive Benefit Plan containing medical, dental and life insurance plans. Second, Neuma points to the Disability Clause itself, which states that AMP will not keep a disabled employee’s life insurance benefits in force beyond the date that the life insurance provisions of the Plan terminate. Id. at 19. Neuma maintains that the only logical reading of this phrase suggests that the Plan must have provisions other than those relating to life insurance, because, if it did not, the phrase would be redundant. Therefore, it claims that, be cause the Provident Policy solely refers to life insurance coverage, to give effect to each word of the Disability Clause, the term Plan must identify a larger Benefit Plan that contains the Policy along with many other components. However, the passage in question must be read within the context of the entire document, including the specific provisions that we previously have noted. When evaluated in this context, the phrase highlighted by Neuma does not cause the term Plan to be susceptible to more than one reasonable interpretation. See Grun, 163 F.3d at 420. As we noted earlier, in many instances the Summary Plan Description either specifically equates the Plan with the Provident Policy or references the word in a way that can seemingly point to nothing other than the Policy. At no point does the document explicitly mention the more comprehensive Benefit Plan that Neuma refers to, or any form of medical or dental insurance. Read in this context, the Disability Clause’s reference to the life insurance provisions of the Plan appear to be simply the result of cautious drafting designed to distinguish those provisions of the Provident Policy from others concerned with administrative detail./5 Neuma notes that, even if we find that the term Plan is unambiguous, in limited circumstances parties may present objective extrinsic evidence to demonstrate that, although a contract appears unambiguous, a disputed term actually means something different from what it appears to mean on its face. See Rossetto v. Pabst Brewing Co., Inc., 217 F.3d 539, 542 (7th Cir. 2000), cert. denied, 121 S. Ct. 1191 (2001); Mathews, 144 F.3d at 466. This type of ambiguity is often referred to as latent or extrinsic ambiguity. See Rossetto, 217 F.3d at 542-43 (distinguishing latent ambiguity from patent ambiguity, which is ambiguity that is clear from the reading of a contract’s language); Stone Container Corp. v. Hartford Steam Boiler Inspection & Ins. Co., 165 F.3d 1157, 1162 (7th Cir. 1999) (same). Neuma claims that the term Plan is, at the least, latently ambiguous, even if it is not ambiguous on its face. To support this assertion, it puts forward two pieces of extrinsic evidence. Neuma first refers us to a separate summary plan description for the MetLife insurance policy that replaced the Provident Policy in providing life insurance coverage to AMP’s employees. It notes that this document shows that, although the MetLife policy has a different policy number than the Provident Policy, it identifies a Plan Identification Number of 13-3429437- 524, the same identification number as that located in the Provident Policy’s Summary Plan Description. R.40, Ex.5D at 32. Neuma then assumes that this number must refer to the larger Benefit Plan and that its presence in the Provident Summary Plan Description demonstrates that the Plan referenced in that document must be the Benefit Plan. Second, Neuma refers to the 1997 and 1998 Form 5500 Annual Return/Report of Employee Benefit Plan (the Form 5500s) submitted by AMP to the IRS in those years. These documents each appear to (1) identify a benefit plan entitled the AMP AKZO Corporation Medical, Dental, Life Insurance Plan, which includes a life insurance policy and a health maintenance organization (HMO) policy that provides medical and dental coverage to AMP employees, and (2) state that this plan was not terminated in 1997 or 1998, respectively./6 Neuma then claims that, because these documents identify a more comprehensive benefit plan than one that simply included a life insurance policy, the Plan referenced in the Summary Plan Description must also equate to a larger AMP Benefit Plan. With respect to the identification number 13-3429437-524, it is unclear as to what this number actually refers. Neuma has not put forward any evidence linking the number to a Benefit Plan that provides medical, dental and life insurance. By contrast, when Neuma’s attorney asked Jacqueline Mooneyhan, a Human Resources Manager at AMP, about the fact that this same number was listed as an identification number in both the Provident and MetLife summary plan descriptions, she replied that this number was issued by the government and referred not to a larger Benefit Plan but only to AMP’s life insurance plan./7 As for the Form 5500s, the district court questioned their accuracy, noting that the 1998 form incorrectly listed Provident as the life insurance carrier for that year, when in fact MetLife provided life insurance coverage for AMP employees at that time. See R.49 at 5 (noting that it may be that other aspects of these [forms] are incorrect as well). Regardless, even if the Form 5500s do reference a larger Benefit Plan, they cannot bring serious dispute to the fact that the word Plan in the Summary Plan Description refers to the Provident Policy. We agree with the district court’s determination that the Disability Clause’s reference to the Plan clearly equated it with the Provident Policy. Therefore, because the Disability Clause specifically stated that AMP was responsible for paying Larsen’s life insurance premiums only until the life insurance provisions of the Plan terminate, AMP’s obligation to pay those premiums ended on December 31, 1997. As a result, the court was correct in granting summary judgment to AMP on Count I.