The Plan Administrator submitted the physical examination reports to the Corporate Medical Director for review and was entitled to rely upon his determination of whether or not the applicant and spouse were in good health for the purpose of the lump-sum payment. The applicant was to be notified immediately of the Plan Administrator's decision. If disapproved, the notification was to inform the applicant of the reason(s), of his right to review by the Board and the procedures to be followed in requesting review.
If the reason for disapproval was lack of good health, the Plan Administrator was to arrange for an independent agency to review the Corporate Medical Director's determination that the applicant, his spouse, or both, were not in good health. At all times that this provision was in effect, Aetna Life Insurance Company's Medical Department was the independent agency to which the disapproved applicant's physical examination report was referred. Aetna's determination was deemed satisfactory by the General Pension Board.
When Aetna was selected as the independent reviewing agency, it made available to Bethlehem Steel's Corporate Medical Director its Manual of Medical Selection to use in making the initial determinations of good health. The manual is a standardized system for assessing the health risks of various medical conditions. Aetna relied upon the Manual in making decisions as to the insurability of and rate structure to be applied to its insurance customers. Based upon mortality studies of insured lives, the Aetna Manual assigns "debit points" to certain medical conditions of the person being evaluated and the individual's points are then totaled. For purposes of the lump-sum payment, a total in excess of 150 points resulted in a determination that the applicant was not in good health.
Prior to 1981, the General Pension Board reviewed the Corporate Medical Director's determination that an applicant or spouse or both were not in good health by referring the physical examination reports to a third physician acceptable to both the applicant and the Corporate Medical Director, whose determination was accepted by the Board. (Affidavits of David Kempken in support of defendants' motions for summary judgment.) That procedure was changed when the Board decided, upon the recommendation of David Kempken, Plan Administrator, that a more consistent reviewing procedure was needed. (Deposition of David Kempken at 68.)
Plaintiff Raymond Foulke retired on January 31, 1982. On January 21, 1982, his application for lump-sum payment of his pension benefits was disapproved because both he and his wife were determined not to be in good health for lump-sum payment purposes. The Foulkes appealed and were informed on April 8, 1982, that their medical records had been reviewed by Aetna and that their appeal was denied. (Exhibits B--F, Defendant's Motion for Summary Judgment).
Nazareno Medei applied for a lump-sum payment on December 10, 1981. On January 13, 1982, he was informed that he had been found not in good health. He was notified on February 12, 1982, that Aetna's review also indicated that he was not in good health for lump-sum payment purposes.
Andrew Kavcak's application, dated December 16, 1981, was denied because his wife was determined not to be in good health. After appealing and submitting additional information for Aetna's review, the Kavcaks were informed in June, 1982, that the appeal had been denied.
Raymond Foulke had a history of bladder cancer and stroke. His wife had hypertension. Nazareno Medei's physician indicated on his medical report that Medei was under treatment for a myocardial infarction suffered in February, 1980. Marian Kavcak underwent surgery for cancer of the colon in November, 1980.
All plaintiffs' physicians signed a form provided by Bethlehem Steel indicating that they were in good health, which was defined on the form as follows:
Good health means a state of physical and mental well-being from a medical point of view and includes the absence of a disease or condition that, from a medical standpoint, may result in a significant shortening of life expectancy.