The opinion of the court was delivered by: LUONGO
As more fully described in my earlier opinion, Gregory Tomczyscyn worked for Air Master Corporation from July, 1981 until August or September, 1981. Air Master was party to a collective bargaining agreement with Teamsters Union Local 115 pursuant to which an employee health and welfare benefit plan was established. One of the provisions of the benefit plan was a $15,000.00 death benefit for covered employees. There is no dispute that Gregory became eligible for the death benefit at some point during his employment with Air Master.
On August 25, 1981 Gregory suffered severe injuries in a work-related accident. Although he made one or two attempts to return to work in August or September, 1981, Gregory did not thereafter resume employment.
Gregory's separation from Air Master Corporation had a significant impact on his eligibility for benefits under the health and welfare plan. Because Gregory was disabled by his occupational accident, the plan maintained his eligibility for benefits for a period of twenty-six (26) weeks.
The plan also enabled Gregory to maintain his eligibility for the death benefit after twenty-six weeks of disability. To continue the death benefit in effect, Gregory was required to submit proof of his "total and permanent disability . . . within the twelve month period of disability and yearly thereafter . . . ."
The parties dispute whether Gregory was "totally and permanently" disabled during the interval between his accident and his death. Relying on a determination of eligibility for disability benefits by the Social Security Administration, a waiver of premiums by Gregory's personal life insurance carrier, and Gregory's medical records, plaintiffs argue that Gregory's condition clearly precluded employment at any time after his accident. The Fund attempts to distinguish the decisions of the Social Security Administration and Gregory's insurance carrier on the ground that the plan requires proof of a disability that is total and permanent. The Fund also interprets Gregory's medical records as suggesting the possibility that Gregory could eventually return to work.
It is undisputed, however, that Gregory failed to establish his total and permanent disability with the Fund within one year of his accident. Nevertheless, as plaintiffs point out, the Fund accepted payments from Air Master Corporation on Gregory's behalf for the months of July through September, 1982, several months after his eligibility allegedly ceased. In addition, plaintiffs note that the Fund paid two claims, unrelated medical bills, submitted on behalf of Gregory in October, 1982.
In an action to overturn a denial of benefits by the trustees of an employee benefit plan, the plaintiff bears the burden of establishing that the trustees' decision was arbitrary and capricious. Gaines v. Amalgamated Insurance Fund, 753 F.2d 288 (3d Cir. 1985); Wolf v. National Shopmen Pension Fund, 728 F.2d 182 (3d Cir. 1984); Rosen v. Hotel and Restaurant Employees and Bartenders Union, 637 F.2d 592 (3d Cir.), cert. denied, 454 U.S. 898, 70 L. Ed. 2d 213, 102 S. Ct. 398 (1981). Judicial review of the trustees' interpretation of benefit plan documents is similarly restricted to the arbitrary and capricious standard. Where a provision in an employee benefits plan is susceptible of differing interpretations, the trustees' "interpretation should be upheld even if the court disagrees with it, so long as the interpretation is rationally related to a valid plan purpose and not contrary to the plain language of the plan." Gaines, 753 F.2d at 289.
Our court of appeals recently emphasized the degree of deference accorded to trustees' application of benefit plan eligibility requirements. District 2, United Mine Workers of America v. Helen Mining Company, 762 F.2d 1155 (3d Cir. 1985). In Helen Mining Company, the court held that the trustees of an employee benefit plan did not act arbitrarily and capriciously in denying a claim related to surgery for which the claimant had not sought or obtained prior approval. The court rejected the claimant's argument that the trustees should not be permitted to rely on the plan's prior approval rule where the medical necessity of the surgery was admitted. The court held that:
When the trustees have consistently and literally followed an unambiguous benefit eligibility requirement that was bargained for and that was set forth in an employee benefit plan, that action cannot be called arbitrary and capricious by a ...