Danielle Mull v. Motion Picture Industry Health

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.