Court Opinion

ID: 4229816
Source: CourtListenerOpinion
Date Created: 2017-12-18 21:00:35.931174+00
Date Added: 2024-06-11T14:43:14.024392
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            DEC 18 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

BRAND TARZANA SURGICAL                           No.   16-55503
INSTITUTE, INC., a California
Corporation,                                     D.C. No. CV 2:14-3191 FMO

              Plaintiff-Appellant,
                                                 MEMORANDUM*
 v.

INTERNATIONAL LONGSHORE AND
WAREHOUSE UNION-PACIFIC
MARITIME ASSOCIATION WELFARE
PLAN,

              Defendant-Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                   Fernando M. Olguin, District Judge, Presiding

                     Argued and Submitted December 4, 2017
                              Pasadena, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: D.W. NELSON and REINHARDT, Circuit Judges, and STEEH,** District
Judge.

      Appellant Brand Tarzana Surgical Institute, Inc. appeals the district court’s

order partially dismissing its case and granting summary judgment to Appellee

International Longshore and Welfare Union-Pacific Maritime Association Welfare

Plan (the Plan). For the reasons stated below, we AFFIRM the district court.

      Brand claims that it has authority to pursue ERISA benefits because of

assignments from plan participants and beneficiaries. Brand’s argument fails

because an assignment is not valid where prohibited by unambiguous plan

language like an anti-assignment provision. Davidowitz v. Delta Dental Plan of

Cal., Inc., 946 F.2d 1476, 1478 (9th Cir. 1991). The Plan’s language

unambiguously states that Plan benefits are not subject to assignment and any

attempt to do so shall be void.

      The Plan’s clauses regarding the direction to pay benefits directly to the

provider do not contradict the anti-assignment of benefits clause. The direct

payment clauses appear to give Plan beneficiaries the right to insist that the Plan

make payments directly to providers. However, nothing about the direct payment

clauses suggests that providers, rather than beneficiaries, are entitled to sue the

      **
             The Honorable George Caram Steeh III, United States District Judge
for the Eastern District of Michigan, sitting by designation.
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Plan over the breach of its obligation to make direct payments. The clauses

therefore do not grant any rights to the providers, nor do they authorize the

assignment of any rights to the providers.

      The Plan is not estopped from asserting the anti-assignment provision.

Under the theory of equitable estoppel “(1) the party to be estopped must know the

facts; (2) he must intend that his conduct shall be acted on or must so act that the

party asserting the estoppel has a right to believe it is so intended; (3) the latter

must be ignorant of the true facts; and (4) he must rely on the former’s conduct to

his injury.” Gabriel v. Alaska Elec. Pension Fund, 773 F.3d 945, 955 (9th Cir.

2014). Brand has not established that the Plan made a material misrepresentation.

The direct payment clauses concern eligibility to receive payments. They do not

guarantee that a claim will be approved and do not give Brand the right to

challenge decisions denying the claims. Thus, the Plan’s representations that Brand

was eligible to receive payments and the eventual decision to deny several claims

do not constitute nonperformance or a lack of intent to perform the Plan’s promise

that Brand was eligible to receive direct payment.

      The Plan did not waive the anti-assignment provision. “A plan administrator

may not fail to give a reason for a benefits denial during the administrative process

and then raise that reason for the first time when the denial is challenged in federal
                                             3
court.” Harlick v. Blue Shield of Cal., 686 F.3d 699, 719 (9th Cir. 2012). The anti-

assignment provision, however, is a litigation defense, not a substantive basis for

claim denial. The Plan did not need to raise it during the claim administration

process. Further, the Plan did not waive the provision through its course of dealing

with Brand. There is no evidence that the Plan or its vendors took action

inconsistent with the anti-assignment provision or that they were aware, or should

have been aware, that Brand was acting as an assignee. Spinedex, 770 F.3d at 1297.

      AFFIRMED.

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