right to appeal to the Fund's trustees. Because the Fund had failed to notify plaintiffs of their appeal rights, however, I granted the motion without prejudice to plaintiffs' right to file a second action if exhaustion proved unsuccessful. Tomczyscyn v. Teamsters, Local 115 Health and Welfare Fund, 590 F. Supp. 211 (E.D.Pa. 1984). Presently before me is the Fund's motion for summary judgment on the merits of plaintiffs' claim. I conclude that the trustees' decision passes muster under the limited standard of review applicable in such cases. I must therefore grant the motion.
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.
After I granted the Fund's motion for summary judgment in plaintiffs' initial lawsuit, plaintiffs exercised their right to appeal their claim to the Fund's trustees. Advancing essentially the information now before me, plaintiffs argued that Gregory was totally and permanently disabled from the time of his accident, and that sufficient notice of that fact had been given to the Fund. After a hearing at which plaintiffs, assisted by counsel, presented evidence in support of their claim, a subcommittee of the trustees recommended that the claim be denied. The trustees accepted this recommendation, finding that Gregory was not eligible for benefits because of his failure to submit proof of total and permanent disability within one year of the accident and because the medical records did not establish that Gregory met the plan's disability criteria.
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 court unless enforcement would violate federal law or policy.
762 F.2d at 1160. The court of appeals based its decision on United Mine Workers of America Health and Retirement Funds v. Robinson, 455 U.S. 562, 71 L. Ed. 2d 419, 102 S. Ct. 1226 (1982), which the court interpreted to preclude judicial review of the reasonableness of trustees' enforcement of collectively bargained benefit plan eligibility requirements.
In the case at bar, plaintiffs' formidable burden is increased by the fact that the trustees rested their denial of benefits on alternative grounds. The trustees concluded that Gregory did not meet the plan's disability requirement, but that even if he did, Gregory had failed to submit proof of his condition within the period required by the plan. For plaintiffs to prevail, they must show that the trustees' decision cannot stand on either ground.
Plaintiffs contend that the trustees' decision is arbitrary and capricious primarily because: (1) the trustees failed properly to consider the Social Security Administration's award of disability benefits, (2) the trustees failed to consider adequately the waiver of premiums by Gregory's life insurance carrier, and (3) the Fund failed to follow its own rules and regulations by interpreting the plan to require proof of total and permanent disability within one year after the accident as opposed to one year after the final employer contribution to the Fund on Gregory's behalf. The Fund responds that both the trustees' assessment of Gregory's medical condition and their interpretation of the plan's eligibility requirements are supported by the information presented to the trustees.
After careful consideration of the record, I conclude that the trustees' denial of death benefits because of Gregory's failure to provide timely proof of total and permanent disability is not arbitrary and capricious. I therefore find it unnecessary to decide whether the trustees acted arbitrarily and capriciously in holding the record insufficient to establish total and permanent disability.
As noted above, it is undisputed that Gregory failed to establish total and permanent disability with the Fund within one year of his accident. In denying plaintiffs' claim for the death benefit, the trustees interpreted the relevant provision of the health and welfare plan to require such proof within one year of the onset of disability. The plan states:
Total and Permanent Disability
If prior to age 60, you become totally and permanently disabled, your eligibility for the death benefit will continue on the following basis in twelve month increments. For continuation, proof of total and permanent disability must be presented within the twelve month period of disability and yearly thereafter to continue your coverage for the benefit.