Opinion ID: 197450
Heading Depth: 1
Heading Rank: 3

Heading: Particular Contentions in This Case

Text: 129 The parties to this appeal have acknowledged, and we have noted, that some aspects of the out-of-court decisions of the NET Committees must be judicially reviewed under an arbitrary and capricious standard. Other aspects of the challenged decisions must be decided either as matters of law are decided or under a standard less deferential than an arbitrary and capricious standard. Also, as proceedings have developed both before and after the filing of the civil action, some issues earlier in controversy have become moot or an opportunity for challenge has been lost under rules of procedural preclusion. 130 In this Part III, we discuss separately these different kinds of issues, beginning with asserted violations of the applicable arbitrary and capricious standard. 131
132 Having determined that the role of the courts with respect to typical claims under an employee benefits plan is jurisdictionally limited to review, if a plan administrator or fiduciary was given discretion to decide particular claims, we now consider whether Recupero has shown that the Committees created to decide claims of the type at issue in this case acted arbitrarily and capriciously. Recupero argues: 133 Ms. Recupero was seriously injured in an elevator accident at her workplace while she was on-duty and being paid by the company. At the time of her accident she was in the course of her employment and was under the direction and control of her employer. The only reasonable meaning of the Plan language is that Ms. Recupero sustained an accident and not sickness and it was arbitrary and capricious of the Plan to deny her accident disability claim. 134 (Appellant's Br. at 6-7.) Recupero contends that she was: 135 ... en route to obtain coffee in the building lobby at the direction of her supervisor on company time at the time of the accident. She made ... [an] adjustment [from her usual time for a break] at the direction of her supervisor for the sole purpose of furthering, and in direct connection with, the performance of her duties to enable her to establish a conference call with a customer at a time when she would otherwise have been away from her usual work station. 136 (Id. at 13). Thus, she argues, she was on-duty at the time that she sustained her injury, and is entitled to accident benefits. (Id. at 14.) 137 The defendant-appellee counters that [i]t is undisputed that Recupero was injured during break time, after leaving her work station while on an elevator en route to a coffee shop. (Appellees' Br. at 7.) This fact, NET contends, shows that Recupero was not solely and directly engaged in the performance of duties at the time of the injury. (Id.) Thus, the defense argument goes, the Committees did not act arbitrarily and capriciously in determining that Recupero was not entitled to accident benefits. (Id.) 138 As already noted, the district court ruled in favor of NET on this issue. The district court rejected Recupero's argument that, because she was taking her break at the request of her employer, her injuries should entitle her to Accident Disability Benefits. The court stated: 139 Recupero's argument is predicated on the assertion that she was taking her coffee break a half hour early at the request of her supervisor in order to accommodate a job-related phone call which she was expecting. Such a fact is not properly before the court for two reasons. First, the court, when applying the arbitrary and capricious standard of review, may only review the actions of the fiduciary in light of the evidence which was before it at the time it made its decision. It does not appear that the NET Benefits Office, the EBC or the EBCRC had the benefit of considering this fact. (# 20, Exh. 2, Affidavit of Richard Waldron, p 7). Second, this is a mere allegation unsupported by affidavits or as otherwise provided under Fed.R.Civ.P. 56(e) since Recupero offers no evidence to this court to support this contention. 140 (Recupero v. New England Telephone & Telegraph Co., Civil Action No. 94-12266-MLW, Memorandum and Order, Sept. 20, 1996 at 9 n. 5.) 141 The EBC and the EBRC decided that Recupero qualified for Sickness Disability Benefits only. The district court correctly concluded that this decision was not arbitrary and capricious. Three lines of reasoning support this conclusion. 142 First. The court below correctly determined that Recupero had not proffered evidence before the EBC or EBRC of any irregularity in the break from work that she was on when the incident occurred. (Id.) Nothing in the record before the Committees, the record before the district court, or the record before this court suggests otherwise. If Recupero did not proffer, before the Committees, factual support for a contention that the circumstances of the incident brought it within the meaning of an accident because she was taking her break at a specific time, at the behest of her supervisor, in order to allow her to perform her duties at a later time, then the record before the EBC and the EBRC was not sufficient to support a court determination, on judicial review, that the decisions of the Committees were arbitrary and capricious. 143 Second. Despite the difficulties of drawing bright lines of separation and fitting every conceivable circumstance of injury into either the category of accident or the category of sickness, the Committees did not act arbitrarily and capriciously when interpreting on-duty to exclude break time, regardless of the nature of any reason or reasons for the break. A plan may prescribe a definition of on-duty that takes into account the myriad of possible ways in which and times at which an employee may be injured. A plan that does so may require of the out-of-court decisionmakers, in deciding a particular claim, that they make an evaluative determination rather than a rigorously logical application of bright-line rules that leave no choice, even reasoned choice, in arriving at a decision concerning the merit of a particular claim. 144 It is true that in the context of trial of a paradigm tort or contract claim, evaluative issues often go to a jury for decision. See, e.g., Springer v. Seaman, 821 F.2d 871, 876 (1st Cir.1987) (in tort law, not only ordinary fact questions but also evaluative applications of legal standards (such as the legal concept of 'foreseeability') to the facts are properly jury questions), cited with approval in Dedham Water v. Cumberland Farms Dairy, 972 F.2d 453 (1st Cir.1992). 145 In the context of judicial review of out-of-court decisions, however, if employee benefit plan provisions confer discretion on an out-of-court decisionmaker, ordinarily the evaluative determinations of that decisionmaker are judicially reviewed under a deferential standard, as explained in Parts II.B and II.C of this opinion. 146 Section 5(5) of the plan before us in this record is one of the provisions the interpretation of which was challenged in this case. It provides: 147 Relationship of Injury to Employment. Accidental injuries shall be considered as arising out of and in the course of employment only where the injury has resulted solely from accident during and in direct connection with the performance of duties to which the employee is assigned in the service of the Company, or was assigned by the Former Affiliate or Associated or Allied Company from which the employee was reassigned as of January 1, 1984, or which he is directed to perform by proper authority, or in voluntarily protecting the Company's property or interests. There must be a clear and well-established history of the cause and circumstances of injury accidentally inflicted, which must be sufficient to produce the alleged injury, and there must be satisfactory evidence that such injury renders the employee unable to perform his duty in the service of the Company. 148 (Appellees' Br. at 59-60) (emphasis added). In view of the emphasized phrase in this passage quoted from the plan, we cannot say that the district court erred in its interpretation of the plan as supporting NET's position in this appeal. 149 Third. Recupero apparently bases her argument, in part, on an assumption that because she was eligible for worker's compensation, her injury should be treated, as a matter of law, as having occurred on-duty. This assumed premise is erroneous, as a matter of law. Neither ERISA nor any other source of authority declares that the standards of eligibility for workers' compensation benefits and accident disability benefits under an ERISA-regulated plan be the same. See Pagan v. NYNEX Pension Plan, 52 F.3d 438 (2d Cir.1995). Further, the plan provisions in this case do not explicitly prescribe a test for on-duty status that mirrors the test commonly used in worker compensation systems. 150 For these reasons, we conclude that the district court did not err in deciding that the decisions of the EBC and the EBRC were not arbitrary and capricious. 151
152 We take note that plaintiff is not seeking Sickness Disability Benefits beyond those already paid to her. Rather, she is asking merely that we order, or direct the district court to order, that the benefits already paid to her as Sickness Disability Benefits be declared to be reclassified as Accident Disability Benefits. (Appellant's Br. at 1 n. 1.) 153 Recupero does not argue, nor do we know of any ground on which she could creditably do so, that she was entitled to such a reclassification decision by the district court, or is entitled to have this court declare such a reclassification. Instead, she asks this court, as a matter of discretion in the interests of justice, to declare the reclassification or order the district court to make a discretionary decision regarding reclassification. 154 We are not persuaded that we should exercise discretion in this way at this late stage in the development of proceedings regarding Recupero's claim for benefits, even if we were to determine that we have jurisdiction to do so. Recupero has failed to place before us, or before the district court, a record showing that she made a request that the Committees make a determination of this type. Nor has she called to our attention any good cause for determining that she should be allowed to present this request at this late point in the face of the apparent unfairness of allowing a claimant to proceed on one set of contentions to the threshold of final resolution and only then assert a new theory of claim. In these circumstances, without undertaking to resolve very substantial doubts about our jurisdiction to entertain such a late request for a declaration of reclassification of benefits she was paid and accepted as Sickness Disability Benefits, we conclude that her request must be denied as untimely. This conclusion is amply supported by precedent. See, e.g., United States v. Bongiorno, 106 F.3d 1027, 1034 (1st Cir.1997) (constitutional arguments not raised in the lower court cannot be advanced on appeal); Armstrong v. Jefferson Smurfit & Corp., 30 F.3d 11, 13 n. 4 (1st Cir.1994) (argument that reimbursement of taxes paid in lump-sum payments could be benefits under ERISA waived when made for the first time on appeal.)
155 As a general rule (independently of the special characteristics of ERISA claims cases), disputes over interpretation of a document (or set of documents taken together as a unit) are decided as matters of law are decided. See, e.g., Den Norske Bank, AS v. First Nat. Bank of Boston, 75 F.3d 49, 52 (1st Cir.1996)(Normally, contract interpretation is a question of law for the court.). And, as a general rule, courts may determine that an out-of-court decision was arbitrary and capricious if that decision was explicitly or implicitly founded on an error of law. E.g., United States v. Members of Estate of Boothby, 16 F.3d 19, 21 (1st Cir.1994) (In scrutinizing administrative actions, a reviewing court is free to correct errors of law, but, otherwise, the court is limited to a search for arbitrary or capricious behavior.). 156 If a genuine dispute exists regarding existence of a contract, ordinarily that issue is a question of fact, for the jury ... [unless] the evidence consists only of writings, or is uncontroverted, in which event the court can decide the issue. American Private Line Services, Inc. v. Eastern Microwave, Inc., 980 F.2d 33, 35 (1st Cir.1992). Even if the core of the dispute is what interpretation to give to a document or to uncontroverted oral communications, in exceptional circumstances an issue of interpretation on which reasonable persons may differ is submitted to a trier of fact. Boston Edison Co. v. F.E.R.C., 856 F.2d 361, 367 n. 3 (1st Cir.1988). But this exception cannot be invoked by a party who has failed to make any proffer of documentary or other evidence sufficient to support a determination of ambiguity in some respect material to disposition on the merits of the controversy before the court. See, e.g., Donoghue v. IBC USA (Publications), Inc., 70 F.3d 206, 215 (1st Cir.1995) (a hypothetical allegation of meaning, whether ambiguity is alleged or not, is inadequate to present a genuine dispute as to a material issue; even if a party is claiming to benefit from ambiguity (for example, by being allowed to proffer extrinsic evidence supporting its interpretation) [that party] must show ambiguity in the meaning of the agreement with respect to the very issue in dispute). The record before us in this case is devoid of any such proffer. 157 For these reasons, we conclude, without deciding unsettled issues about jury trial in ERISA cases generally (see decisions cited in Part II.C.2, supra ), that in no event would it be proper in this case to submit to a jury issues of interpretation of the NET plan provisions bearing upon Accident Disability Benefits claimed by Recupero. Moreover, such an interpretive question could go to a jury only if the court, in which the jury sits, has plenary jurisdiction. For the reasons explained in Parts II.B and II.C of this opinion, the exceptional allowance of a jury decision on an interpretive question does not apply when the court's role is limited to judicial review of an out-of-court decision.
158 NET argues that the same outcome on issues of interpretation of NET plan provisions must be reached on another ground. The argument is that the record before the district court was sufficient, and the record on appeal is sufficient, for this court to determine that remand would be futile because, from undisputed facts that Recupero does not suggest could be challenged if remand were ordered, it is apparent that Recupero's claim fails on the merits. We conclude that, though from a limited perspective, the decision of this matter might have seemed debatable, closer probing supports this defense position with respect to issues concerning the meaning and application to this case of the NET plan provisions regarding Accident Disability Benefits. 159 Recupero has entirely failed, in proceedings before this civil action was filed, in proceedings in the court below, and on appeal, to make any proffer of relevant evidence that could be determined to be sufficient to support her contentions that plan provisions on eligibility for Accident Disability Benefits should be interpreted in a way that would present a genuinely disputable factual issue bearing upon her claim on the merits.
160 As an independent basis for rejecting Recupero's claim for some form of relief because of alleged violation of 29 U.S.C. § 1133 with respect to notice about how to pursue her rights under the plan after denial of her benefits claim, NET contends that Recupero failed to proffer any admissible evidence, at any stage of proceedings, to support any finding of prejudice to her. (Appellees' Br. at 9, 20-21.) The district court determined that Recupero had not proffered evidence sufficient to support a finding of prejudice in any relevant sense. (Memorandum and Order, Sept. 20, 1996 at 14-15.) 161 In effect, Recupero has attempted to demonstrate prejudice by arguing that it is inherent in the circumstances of any claim of the type she has made, rather than by proffering evidence, either to the Committees or to the district court, to show that in some special way the circumstances of her case were unique or at least exceptional. We conclude that allowing a claim for relief because of inadequacy of formal notice without any showing that a precisely correct form of notice would have made a difference would result in benefit claims outcomes inconsistent with ERISA aims of providing secure funding of employee benefit plans. 162 In these circumstances, we conclude that the determination by the district court that Recupero failed to show prejudice in a relevant sense is unassailable, regardless of whether we treat it as a factual finding by the district court or instead as a determination of insufficiency of proffered evidence as a matter of law.