Danielle Mull v. Motion Picture Industry Health , 865 F.3d 1207 ( 2017 )


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  •                  FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    DANIELLE MULL, appointed              No. 15-56246
    Guardian Ad Litem for C. Mull;
    C. MULL, as Plaintiff and              D.C. No.
    Danielle Mull is Appointed              2:12-cv-
    Guardian Ad Litem for C. Mull,        06693-VBF-
    Plaintiffs-Appellees,       MAN
    LENAI MULL; NORMAN MULL,
    Plaintiffs-Counter-Defendants-        OPINION
    Appellees,
    v.
    MOTION PICTURE INDUSTRY
    HEALTH PLAN,
    Defendant-Appellant,
    BOARD OF DIRECTORS OF MOTION
    PICTURE INDUSTRY HEALTH
    PLAN,
    Defendant-Counter-Claimant-
    Appellant.
    Appeal from the United States District Court
    for the Central District of California
    Valerie Baker Fairbank, District Judge, Presiding
    2    MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN
    Argued and Submitted June 7, 2017
    Pasadena, California
    Filed August 1, 2017
    Before: Susan P. Graber and Mary H. Murguia, Circuit
    Judges, and Susan R. Bolton, * District Judge.
    Opinion by Judge Bolton
    SUMMARY **
    Employee Retirement Income Security Act
    The panel vacated the district court’s grant of summary
    judgment in favor of the plaintiffs in an ERISA action.
    The district court enjoined an ERISA plan and its board
    of directors from enforcing Summary Plan Description
    provisions regarding reimbursement of benefits previously
    paid upon a plan participant’s receipt of a third-party
    recovery.       The district court ruled that these
    reimbursement/recoupment provisions were not enforceable
    under ERISA because they were found only in the Summary
    Plan Description and not in any document that constituted
    the ERISA plan.
    *
    The Honorable Susan R. Bolton, United States District Judge for
    the District of Arizona, sitting by designation.
    **
    This summary constitutes no part of the opinion of the court. It
    has been prepared by court staff for the convenience of the reader.
    MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN           3
    The panel concluded that a Motion Picture Industry Plan
    Agreement and Declaration of Trust, along with the
    Summary Plan Description, together comprised the ERISA
    plan because only the Summary Plan Description provided
    the basis on which payments were made to and from the
    plan. The panel distinguished CIGNA Corp. v. Amara,
    
    563 U.S. 421
    (2011), which held that summary documents
    do not constitute the terms of an ERISA plan when there
    exist both a governing plan document and a summary plan
    description. The panel vacated the district court’s grant of
    summary judgment and remanded for further proceedings.
    COUNSEL
    Kathryn Jane Halford (argued) and Elizabeth Rosenfeld,
    Wohlner Kaplon Cutler Halford & Rosenfeld, Encino,
    California, for Defendants-Appellants.
    Donald Mitchell de Camara (argued), Law Office of Donald
    M. de Camara, Carlsbad, California; Drew M. Widders and
    Daniel E. Wilcoxen, Wilcoxen Callahan LLP, Sacramento,
    California; for Plaintiffs-Appellees.
    OPINION
    BOLTON, District Judge:
    This appeal arises from the order of the district court
    granting summary judgment in favor of Plaintiffs Norman,
    Danielle, Lenai, and C. Mull on claims under the Employee
    Retirement Income Security Act of 1974 (“ERISA”) against
    Defendants Motion Picture Industry Health Plan (the “Plan”)
    and the Board of Directors of the Plan.
    4   MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN
    The Plan is a self-funded multi-employer health and
    welfare benefit plan established under a Motion Picture
    Industry Plan Agreement and Declaration of Trust (the
    “Trust Agreement”). The Board of Directors are named
    fiduciaries and administrators of the Plan. The Board
    adopted the Motion Picture Industry Health Plan Summary
    Plan Description for Active Participants (the “SPD”), which
    specifies eligibility requirements, conditions for the receipt
    of benefits, the types of benefits, and the amount and
    duration of benefits provided to participants and their
    eligible dependents.
    Two related provisions of the SPD are relevant to this
    appeal. The SPD provides that no benefits will be payable in
    a third-party liability claim unless the participant, or
    applicable dependent, agrees to reimburse the Plan for any
    benefits previously paid upon receipt of a third-party
    recovery. The SPD further states that if reimbursement is
    requested but not received by the Plan, the amount of the
    benefits paid will be deducted from all future benefits
    payable to the participant and his or her dependents.
    Lenai was injured in a motor vehicle accident in 2010.
    At the time of her accident, she received health benefits from
    the Plan as a dependent of Norman. The Plan extended
    $147,948.38 in benefits to Lenai for treatment of her injuries.
    In 2011, Lenai received a $100,000 recovery from a third
    party involved in the accident. The Plan sought
    reimbursement, but Lenai declined. The Plan then instituted
    its overpayment procedures to recoup $100,000 from future
    benefits payable to Norman and the other beneficiaries under
    his policy.
    Lenai and Norman, joined by other family-member
    beneficiaries under Norman’s policy, sued the Plan and the
    MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN               5
    Board for declaratory relief, injunctive relief, and recovery
    of benefits. The Board filed a counterclaim against Lenai and
    Norman for equitable relief under ERISA § 502(a)(3),
    29 U.S.C. § 1132(a)(3), seeking an equitable lien or a
    constructive trust to recover the $100,000 received by Lenai
    from the third party.
    Lenai then filed for Chapter 7 bankruptcy, and the
    bankruptcy court discharged the counterclaim against her. In
    this action, the district court later dismissed the counterclaim
    against Norman on grounds not challenged on appeal.
    On Plaintiffs’ claims, the district court granted summary
    judgment to Plaintiffs. The court ruled that, because the
    reimbursement/recoupment provisions that the Plan sought
    to enforce were found only in the SPD and not in any
    document      that     constituted       “the     plan,”  the
    reimbursement/recoupment provisions were not legally
    enforceable under ERISA. The district court enjoined
    Defendants from enforcing the reimbursement/recoupment
    provisions, and the court directed Defendants to reimburse
    Norman $1,861 in benefits previously recouped. We vacate
    and remand.
    I.
    We have jurisdiction to hear an appeal from a final order
    of the district court pursuant to 28 U.S.C. § 1291, and we
    review de novo a district court’s grant of summary judgment.
    Fin. Mgmt. Advisors, LLC v. Am. Int’l Specialty Lines Ins.
    Co., 
    506 F.3d 922
    , 925 (9th Cir. 2007). Findings of fact are
    reviewed for clear error, and conclusions of law are reviewed
    de novo. Metro. Life Ins. Co. v. Parker, 
    436 F.3d 1109
    , 1113
    (9th Cir. 2006); Conestoga Servs. Corp. v. Exec. Risk
    Indem., Inc., 
    312 F.3d 976
    , 981 (9th Cir. 2002).
    6   MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN
    II.
    ERISA requires that every employee benefit plan include
    (1) a procedure for establishing and carrying out a funding
    policy, (2) the procedure for the allocation of responsibilities
    for operation and administration of the plan, (3) a procedure
    for amending the plan and the identity of persons with the
    authority to do so, and (4) the basis on which payments are
    made to and from the plan. 29 U.S.C. § 1102(b). The Trust
    Agreement, originally written in 1977, meets the first three
    requirements. But, because the Trust Agreement does not
    provide a basis on which payments are made to and from the
    Plan, the Trust Agreement does not meet the fourth
    requirement. Instead, Trust Agreement Article VI, Section 3,
    titled “Written Plan of Benefits,” states: “After
    determination of the detailed basis upon which payments of
    Benefits is to be made pursuant to this agreement, the same
    shall be specified in writing by appropriate resolution of the
    [Board of] Directors . . . .”
    The Board carried out the Trust Agreement’s directive
    by approving the SPD, which supplies, in great detail, the
    basis for payments. See Eugene S. v. Horizon Blue Cross
    Blue Shield of N.J., 
    663 F.3d 1124
    , 1131 (10th Cir. 2011)
    (“[T]he SPD cannot create terms that are not also authorized
    by, or reflected in, governing plan documents.” (emphasis
    added)). The natural conclusion is that “the plan” is
    comprised of two documents: the Trust Agreement and the
    SPD.
    The Board clearly intended that result. For example, the
    SPD states: “If you have selected the self-funded medical
    and hospital benefits provided by the [Motion Picture
    Industry] Health Plan, benefit details are included in this
    Summary Plan Description.” Two pages later the SPD
    states: “The Plan is operated under the provisions of an
    MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN                          7
    Agreement and Declaration of Trust, and all benefits
    provided are subject to the terms of the Trust, this Plan of
    Benefits and the Group Master Contracts issued by: [various
    health benefits providers].” The SPD also provides, in the
    section titled “Employee Retirement Income Security Act of
    1974,” that “[t]his book constitutes both the Plan document
    and the Summary Plan Description for the Motion Picture
    Industry Health Plan.”
    In summary, neither the Trust Agreement nor the SPD
    meets ERISA’s requirements for constituting a plan. But by
    clear design reflected in provisions of both documents, the
    two documents together constitute a plan. Accordingly, we
    conclude that the ERISA plan is the Trust Agreement plus
    the SPD. 1
    The Supreme Court’s decision in CIGNA Corp. v.
    Amara, 
    563 U.S. 421
    (2011), is not to the contrary. In
    Amara, the Court held that “summary documents, important
    as they are, provide communication with beneficiaries about
    the plan, but that their statements do not themselves
    constitute the terms of the plan for purposes of [ERISA]
    § 502(a)(1)(B).” 
    Amara, 563 U.S. at 438
    ; see also US
    Airways, Inc. v. McCutchen, 
    133 S. Ct. 1537
    , 1543 n.1
    1
    Plaintiffs point out that Article VI uses the future tense (the Board
    “shall” specify the basis of payments), that the effective date of the Trust
    Agreement is 2010, and that the SPD was approved in 2007. Plaintiffs
    conclude that the SPD therefore cannot constitute the relevant basis of
    payments. We are unpersuaded. Article VI was last revised in 1977; at
    most, Plaintiffs have pointed out an editing oversight that cannot undo
    the otherwise clear intent of the Board. Moreover, without the SPD, there
    would be no plan at all, because the Trust Agreement contains no
    benefits of any kind. We decline to adopt an interpretation of the
    documents that would render the plan a nullity, thereby contradicting the
    longstanding practice and understanding of the parties that a plan exists.
    8   MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN
    (2013) (“We have made clear that the statements in a
    summary plan description ‘communicate with beneficiaries
    about the plan, but do not themselves constitute the terms of
    the plan.”’ (alterations omitted) (quoting 
    Amara, 563 U.S. at 438
    )). We have clarified that “Amara addressed only the
    circumstance where both a governing plan document and an
    SPD existed, and the plan administrator sought to enforce
    the SPD’s terms over those of the plan document. It did not
    address the situation . . . that a plan administrator seeks to
    enforce the SPD as the one and only formal plan document.”
    Prichard v. Metro. Life Ins. Co., 
    783 F.3d 1166
    , 1170 (9th
    Cir. 2015). Accordingly, “an SPD may constitute a formal
    plan document, consistent with Amara, so long as the SPD
    neither adds to nor contradicts the terms of existing Plan
    documents.” Id.; see also Eugene 
    S., 663 F.3d at 1131
    (“We
    interpret Amara as presenting either of two fairly simple
    propositions, given the factual context of that case: (1) the
    terms of the SPD are not enforceable when they conflict with
    governing plan documents, or (2) the SPD cannot create
    terms that are not also authorized by, or reflected in,
    governing plan documents.”). Here, the SPD is part of the
    plan itself, and there is no conflict between the SPD and the
    Trust Agreement. Amara does not prohibit this type of
    arrangement.
    III.
    The district court erred in concluding that the SPD is not
    part of the Motion Picture Industry Health Plan. On appeal,
    Plaintiffs raised four alternative grounds to affirm. Those
    issues were raised but not decided by the district court,
    including whether the reimbursement provision is
    enforceable against any Plaintiff other than Lenai. We
    decline to reach those issues in the first instance, leaving
    them to the district court to consider on remand. Therefore,
    MULL V. MOTION PICTURE INDUSTRY HEALTH PLAN        9
    we vacate the district court’s grant of summary judgment
    and remand for further proceedings consistent with this
    opinion.
    VACATED and REMANDED. The parties shall bear
    their own costs on appeal.