Perris Valley Community Hospital, LLC v. Southern California Pipe Trades Administrative Corp.

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 8 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PERRIS VALLEY COMMUNITY No. 14-55408
HOSPITAL, LLC, DBA Vista Hospital of
Riverside, A California Limited Liability D.C. No. 5:13-cv-00291-GAF-
Company, DTB
Plaintiff - Appellant,
MEMORANDUM *
v.
SOUTHERN CALIFORNIA PIPE
TRADES ADMINISTRATIVE
CORPORATION, A California
Corporation; SOUTHERN CALIFORNIA
PIPE TRADES HEALTH & WELFARE
FUND, a California unknown entity,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Submitted February 2, 2016**
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent except
as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
Before: WARDLAW and HURWITZ, Circuit Judges and RICE,*** District Judge.
Perris Valley Community Hospital LLC (the “Hospital”) appeals a summary
judgment in favor of the Southern California Pipe Trades Administrative
Corporation and the Southern California Pipe Trades Health and Welfare Fund (the
“Administrators”). We have jurisdiction under 28 U.S.C. § 1291 and affirm.
1. The Administrators oversee an employee benefit plan (the “Plan”) subject
to the Federal Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §
1001 et seq. Months after a covered patient reached the Plan’s $500,000 lifetime
benefits cap in December 2008, the Administrators issued a Supplement to the Plan
supplying additional coverage for “claims incurred since January 1, 2009.” The
Administrators then paid the Hospital’s claims for services rendered to the patient in
January 2009, but refused to pay for charges incurred in December 2008 after the
lifetime limit had been reached. The patient assigned her rights under the Plan to
the Hospital, and this suit ensued.
2. Because the Plan is subject to ERISA, confers discretionary authority on
the Administrators to determine eligibility for benefits, and the Administrators both
evaluate and fund the Plan, we review the Administrators’ decision under the
skeptical abuse of discretion standard. See Metro. Life Ins. Co. v. Glenn, 554 U.S.
***
The Honorable Thomas O. Rice, Chief United States District Judge for the
Eastern District of Washington, sitting by designation.
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105, 111 (2008); Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 673-
77 (9th Cir. 2011). The “plan administrator’s interpretation of the plan will not be
disturbed if reasonable.” Conkright v. Frommert, 559 U.S. 506, 521 (2010)
(internal quotation marks omitted).
3. The Hospital argues that the language in the Supplement providing
coverage for “claims incurred since January 1, 2009” is ambiguous and should be
construed against the Administrators to refer to all bills received by the Plan after
January 1, 2009, regardless of when the underlying services were rendered. See
McClure v. Life Ins. Co. of N. Am., 84 F.3d 1129, 1134 (9th Cir. 1996) (stating
ambiguous language in ERISA insurance policies is construed in favor of the
insured). The district court did not err in concluding that Administrators reasonably
rejected the Hospital’s interpretation of the Supplement. See Evans v. Safeco Life
Ins. Co., 916 F.2d 1437, 1441 (9th Cir. 1990) (stating that terms in an ERISA policy
must be interpreted in an “ordinary and popular sense as would a person of average
intelligence and experience” and should not be read to “artificially create ambiguity
where none exists”) (alteration and internal quotation marks omitted). Read in
context, the phrase “claims incurred since January 1, 2009” in the Supplement means
claims for services rendered after January 1; a claim is ordinarily understood to be
“incurred” when a service is rendered, not when the Hospital decides to bill for the
services. See Incur, Merriam-Webster.com, 2015 http://www.merriam-
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webster.com/dictionary/incur (last visited Feb. 2, 2016) (defining “incur” as “to
become liable or subject to”).
4. The Hospital submitted no evidence that the Administrators had previously
interpreted the term “claims incurred” in a contrary manner. The record merely
reflects that claims were categorized by the Administrators according to when they
were received, and that each claim number could include billing for services
rendered across multiple days.
AFFIRMED.
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