Brand Tarzana Surgical Inst. v. Ilwu-Pma Welfare Plan , 706 F. App'x 442 ( 2017 )

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NOT FOR PUBLICATION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
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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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