Admin. Committee of Wal-Mart Stores v. Gamboa

479 F.3d 538

ADMINISTRATIVE COMMITTEE OF the WAL-MART STORES, INC. Associates' Health and Welfare Plan, Appellant, v. Nancy Lynn GAMBOA; Baudelio Jose Gamboa; Wendy Aurora Gamboa; Lucas Tizoe Gamboa, Appellees.

No. 06-2285.

United States Court of Appeals, Eighth Circuit.

Submitted: November 15, 2006.

Filed: March 7, 2007.

Lawrence C. DiNardo, argued, Chicago, IL (Elizabeth B. McRee, Chicago, IL, Thomas H. Lawrence, Edwin L. Rawson, Memphis, TN, Alan S. Miller, Michelle A. Morgan, Dallas, TX, on the brief), for appellant.

Paul W. Mollica, argued, Chicago, IL (Michael M. Mulder, Chicago, IL, Donald B. Bolt, III, Thomas F. Ganem, Tulsa, OK, on the brief), for appellee.

Before RILEY, HANSEN, and SMITH, Circuit Judges.

HANSEN, Circuit Judge.

The Administrative Committee of the Wal-Mart Stores, Inc. Associates' Health and Welfare Plan ("the Administrative Committee") appeals the district court's grant of summary judgment to the Gamboas, refusing to enforce a reimbursement provision in Wal-Mart's health benefits plan. We reverse and remand for further proceedings.

I.

For the benefit of its employees and their dependents, Wal-Mart established and maintains a self-funded, ERISA-covered health and welfare plan ("the Plan"). The Plan is governed by the Wal-Mart Stores, Inc. Associates' Health and Welfare Plan Wrap Document ("the Plan Wrap Document"), amended and restated on January 1, 2001. That document defines the Plan as the Plan Wrap Document plus "each Welfare Program incorporated hereunder by reference," and a "Welfare Program" is a "written arrangement . . . incorporated into this Plan by identification in Appendix A." (Appellant's App. at 195.) Appendix A references a welfare program entitled, "Wal-Mart Associates' Group Health Plan." Health benefits are provided to Wal-Mart associates and their beneficiaries as listed in the Associate Benefits Book, which is distributed to employees. The Plan Wrap Document expressly provides the Administrative Committee, as the plan administrator, with complete discretion to interpret the Plan provisions. (Id. at 198.)

In 2002, while Nancy Gamboa was a Wal-Mart employee covered under the Plan, a drunk driver collided with the Gamboas' car, causing serious injuries to Nancy and her family. Her husband, Jose, is now permanently disabled as a result of injuries sustained in the accident. Pursuant to the benefits listed in the 2002 Associate Benefits Book, subtitled, "Summary Plan Description," the Administrative Committee paid health care benefits totaling $177,136 on Jose's behalf. The Gamboas filed a dram shop action for damages, and in December 2004, Nancy, Wendy, and Lucas Gamboa all settled their individual claims against the tortfeasor for a total of $1 million. In consideration for the settlement proceeds paid to those family members, Jose executed a written release of his claims arising from the accident.

The Administrative Committee sought reimbursement from the settlement proceeds for the benefits it had paid on behalf of Jose, relying on a provision in the Associate Benefits Book that gives the Plan the right to "recover or subrogate 100 percent of the benefits paid or to be paid by the Plan for covered persons" where there has been a "judgment, settlement or payment made or to be made, because of an accident." (Id. at 189.) The Associate Benefits Book also obligates covered persons "to cooperate in order to guarantee reimbursement to the Plan." (Id.) The Gamboas refused to reimburse the Plan out of the settlement proceeds, asserting that Jose's written release rendered the settlement proceeds solely for the benefit of his wife and children. The Administrative Committee rejected this argument, asserting that the Associate Benefits Book clearly creates a right of reimbursement whenever settlement proceeds are paid "because of an accident," as occurred in this case.

The Administrative Committee filed suit in federal court seeking equitable relief to enforce its right of reimbursement as set forth in the Plan. See 29 U.S.C. § 1132(a)(3)(B)(ii) (authorizing a participant, beneficiary, or fiduciary to file a civil action to obtain appropriate equitable relief in order to enforce any provision of ERISA or the terms of a plan); see also Admin. Comm. of Wal-Mart v. Varco, 338 F.3d 680, 686-88 (7th Cir.2003) (holding the court had subject matter jurisdiction over Committee's claim for restitution out of a participant's recovery of damages in state court), cert. denied, 542 U.S. 945, 124 S.Ct. 2904, 159 L.Ed.2d 828 (2004). The Gamboas continued to assert Jose's release of any claim to the settlement proceeds as a bar to reimbursement. Additionally, the Gamboas claimed for the first time that the reimbursement provision was not officially part of the Plan because it was found only in the Associate Benefits Book, not in the formal Plan Wrap Document. The Administrative Committee issued a letter setting forth its interpretation that the terms of the group health plan are contained in both the Plan Wrap Document and the medical section of the Associate Benefits Book, which includes not only the participant's right to payment of benefits but the corresponding obligation to reimburse the Plan for judgments or settlements obtained because of an accident.

The district court refused to enforce the Administrative Committee's decision to seek reimbursement as provided in the Associate Benefits Book. The district court concluded that the Associate Benefits Book did not fit within the Plan Wrap Document's definition of a Welfare Program, and thus, the Committee's decision to treat it as a plan document was contrary to the plain language of the Plan Wrap Document. The court granted summary judgment to the Gamboas and dismissed the case with prejudice. The Administrative Committee appeals, arguing that the district court erred in not deferring to its reasonable interpretation of the Plan.

II.

We review the grant of summary judgment de novo, using the same standard as the district court, and we view the evidence in the light most favorable to the nonmoving party. See Alliant Techsystems, Inc. v. Marks, 465 F.3d 864, 867 (8th Cir.2006). Summary judgment is appropriate if the evidence of record demonstrates "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The Plan Wrap Document gives the Administrative Committee, as the plan administrator, complete discretion to interpret the terms of the Plan. Accordingly, we are limited to reviewing the Administrative Committee's interpretation of the Plan for an abuse of discretion. See Kennedy v. Ga. Pac. Corp., 31 F.3d 606, 609 (8th Cir.1994) (stating, "[w]e review de novo the district court's application of the abuse of discretion standard" to a plan administrator's interpretation of an employee benefit plan). Where the plan administrator offers a reasonable interpretation of a plan, the district court should not substitute a different, though also reasonable, interpretation that could have been made. See Clapp v. Citibank, N.A. Disability Plan (501), 262 F.3d 820, 828 (8th Cir.2001); Cash v. Wal-Mart Group Health Plan, 107 F.3d 637, 641 (8th Cir.1997). "In applying an abuse of discretion standard, we must affirm if a reasonable person could have reached a similar decision, given the evidence before him, not that a reasonable person would have reached that decision." Groves v. Metro. Life Ins. Co., 438 F.3d 872, 875 (8th Cir.2006) (internal quotation marks omitted).

"We look to the law of trusts when interpreting ERISA plan documents." Hughes v. 3M Retiree Med. Plan, 281 F.3d 786, 790 (8th Cir.2002). We interpret the terms of a written arrangement by considering "`the provisions of the instrument as interpreted in light of all the circumstances and such other evidence of the intention of the settlor with respect to the trust as is not inadmissible.'" Id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 112, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). We thus begin with the language of the Plan. An interpretation that conflicts with the plain language of a health and welfare plan is an abuse of discretion, see Erven v. Blandin Paper Co., 473 F.3d 903, 909 (8th Cir. 2007), but identifying "the plan" is not always a clear-cut task. "[O]ften the terms of an ERISA plan must be inferred from a series of documents none clearly labeled as `the plan.'" Health Cost Controls of Ill. v. Washington, 187 F.3d 703, 712 (7th Cir.1999), cert. denied, 528 U.S. 1136, 120 S.Ct. 979, 145 L.Ed.2d 930 (2000). Unfortunately, "[t]his kind of confusion is all too common in ERISA land." Id. Where a plan contains uncertain terms, this court will not disturb the plan administrator's interpretation of the plan, as long as it is reasonable. Riddell v. Unum Life Ins. Co. of Am., 457 F.3d 861, 864-65 (8th Cir.2006). Our reasonableness review of a plan administrator's interpretation is informed by the Finley factors, see Finley v. Special Agents Mut. Benefit Ass'n, 957 F.2d 617, 621 (8th Cir.1992), which guide us to consider whether the interpretation contradicts the plan's clear language, whether the interpretation renders any plan language internally inconsistent or meaningless, whether the administrator has interpreted the words at issue consistently, whether the interpretation is consistent with the plan's goals, and whether the interpretation conflicts with any substantive or procedural requirements of ERISA. Riddell, 457 F.3d at 864.

On the face of the Plan Wrap Document, Wal-Mart appears to have attempted to eliminate ERISA land confusion in identifying the plan documents. The Plan Wrap Document provides the governing structure of the overall Plan and describes the general procedures for determining participation, funding, administration, and claims under each individual welfare program to be established by the employer. It provides that the Plan consists of...