IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

DIANA MADDRED-EXUM

: : v. : Civil Action No. WMN-04-660 : DAVCO RESTAURANTS, INC., et al. : MEMORANDUM Before the Court is Plaintiffs Motion for Partial Summary Judgment. Paper No. 11. and ripe for decision. The motion is fully briefed

Upon review of the pleadings and

applicable case law, the Court determines that no hearing is necessary, Local Rule 105.6, and that the motion will be granted. I. BACKGROUND This case arose out of a dispute over a sick employees entitlement to benefits under her employer-sponsored health insurance plan (Plan). Plaintiff Diana Maddred-Exum, had been

employed by Wendys, the trading name of Defendant DavCo Restaurants, Inc. (DavCo), on an intermittent basis since 1981, and was, before her present illness, the general manager of a Wendys restaurant. When Ms. Maddred-Exum was diagnosed

with multiple myeloma, a cancer of the plasma cell, her treating physician recommended that she receive a bone marrow transplant for which she sought reimbursement under the Plan.

It is acknowledged by both sides that the bone marrow transplant in and of itself is a medically necessary procedure for Ms. Maddred-Exums type of cancer and would normally be covered by the Plan. Defendants DavCo and CoreSource Inc.,

the managing company of DavCos Health Benefit Plan, contend, however, that Ms. Maddred-Exums treating physicians undertaking to give her a pneumococcal conjugate vaccine after the bone marrow transplant renders the entire course of treatment experimental, and thus excludable, under the terms of the Plan. This suit, brought pursuant to Section 502 of

the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132, seeks recovery of benefits by Ms. MaddredExum that she alleges are due under the terms of the Plan. Ms. Maddred-Exum now moves for partial summary judgment, seeking an order of this Court that Defendants pay for that portion of her medical bills related to the bone marrow transplant. II. LEGAL STANDARD Summary judgment is proper if the evidence before the court, consisting of the pleadings, depositions, answers to interrogatories, and admissions of record, establishes that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. 2 Fed.

R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Rule 56 mandates the entry of summary judgment against a party who, after reasonable time for discovery and upon motion, fails to make a showing sufficient to establish the existence of an element essential to that partys case, and on which that party will bear the burden of proof at trial. at 322. If the moving party demonstrates that there is no genuine issue of material fact and that the moving party is entitled to summary judgment as a matter of law, the non-moving party must, in order to withstand the motion for summary judgment, produce sufficient evidence in the form of depositions, affidavits or other documentation which demonstrates that a triable issue of fact exists for trial. 324. Celotex, 477 U.S. at Id.

Unsupported speculation is insufficient to defeat a Felty v. Graves-Humphreys Co.,

motion for summary judgment.

818 F.2d 1126, 1128 (4th Cir. 1987)(citing Ash v. United Parcel Serv., Inc., 800 F.2d 409, 411-12 (4th Cir. 1986). Furthermore, the mere existence of some factual dispute is insufficient to defeat a motion for summary judgment; there must be a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Thus, only disputes over those facts that might affect the 3

outcome of the case under the governing law are considered to be "material." III. DISCUSSION A. Disputed Medical Benefits Id.

The crux of the dispute in this case is whether the addition of an experimental procedure1 to one that would otherwise be deemed medically necessary can render the entire course of treatment experimental in nature, such that Defendants are justified in denying coverage under the Plan. Under relevant Fourth Circuit precedent, since Defendants have discretion to interpret the Plan, this Court reviews their decision to deny benefits to Ms. Maddred-Exum for abuse of discretion. Feder v. Paul Revere Life Ins. Co., 228 F.3d 518,

522 (4th Cir. 2000) (If the reviewing court determines that the language of the plan confers discretion on the administrator to determine eligibility or to construe terms of the plan, then a court reviews the decision to deny benefits for abuse of discretion.); Booth v. Wal-Mart Stores, Inc. Associates Health and Welfare Plan, 201 F.3d 335, 341 (4th Cir. 2000) ([T]he abuse of discretion standard, not the arbitrary and capricious standard, is the appropriate one for judicial
1

The pneumococcal conjugate vaccine is assumed to be properly categorized as experimental for the purposes of this motion. 4

review of a fiduciary's discretionary decision under ERISA.). The factors identified by Ms. Maddred-Exum, and not disputed by Defendants, as relevant to the present determination are the language of the plan and whether the decision making process was reasoned and principled[.] See Booth, 201 F.3d at 342-43 (listing potentially relevant factors). The Plan provides coverage for a wide array of medically necessary treatments that are not specifically excluded from coverage. Weiner Aff., Exh. 1, p.68. The Plan defines a

medically necessary treatment as one that is: 1. Appropriate and consistent with the symptoms and provided for the diagnosis or treatment of the covered persons illness or injury and which could not have been omitted without adversely affecting the covered persons condition or the quality of the care rendered; and 2. Supplied or performed in accordance with the current standards of medical practice within the United States; and 3. Not primarily for the convenience of the covered person or the covered persons family or professional provider; and 4. Is an appropriate supply or level of service that safely can be provided; and 5. Is recommended or approved by the attending professional provider. Id. at 75. Conversely, the Plan does not provide coverage for services supplies or treatment that are considered 5

experimental/ investigational, despite their medical necessity or a physicians recommendation. Id. at 35. The

Plan defines experimental/investigational treatment as: Services, supplies, drugs and treatment which does not constitute accepted medical practice properly within the range of appropriate medical practice under the standards of the case and by the standards of a reasonably substantial, qualified, responsible, relevant segment of the medical community or government oversight agencies at the time services were rendered. Id. at 70. Decisions as to whether a treatment is

experimental or not are to be made in good faith and rendered following a factual background investigation of the claim and the proposed treatment. Id. at 71.

Here, Ms. Maddred-Exums treating physician, Dr. Aaron Rapoport, Director of Lymphoma-Gene Medicine at the University of Maryland Medical System Greenebaum Cancer Center (GCC), determined that a bone marrow transplant was required to treat her cancer. Rapoport Aff. at 4. Dr. Rapoport further

offered, and Ms. Maddred-Exum accepted, the opportunity to participate in a clinical trial in which a pneumococcal conjugate vaccine would be administered to her post-transplant to enhance and improve her immune system recovery and increase her protection from pneumococcal pneumonia. Id. at 6. In

the process of seeking authorization from the Plan for the proposed treatement, Dr. Rapoport was required to speak to two 6

doctors employed as outside reviewers by Defendants. 8, 18.

Id. at

According to Dr. Rapoport, and not disputed by

Defendants,2 both of these doctors, Dr. Marciniak and Dr. Wortman, determined that the bone marrow transplant itself was a standard of care procedure for Ms. Maddred-Exums type of cancer. Id. at 9, 19; see also Kopicki v. Fitzgerald

Automotive Family Employee Benefits Plan, 121 F. Supp. 2d 467, 478 (D. Md. 2000) (concluding after an extensive evidentiary review that a bone marrow transplant to treat multiple myeloma was likely a medical necessity). Dr. Rapoport also

specifically informed Defendants that the post-transplant vaccine treatment would be covered by GCCs research funding. Rapoport Aff. at 11, 14. Despite the positions of Defendants own reviewing doctors, and the assurance by Dr. Rapoport, Defendants ultimately decided not to cover any portion of Ms. MaddredExums proposed treatment due to their position that the addition of an experimental protocol renders the entire procedure experimental in nature. Rather than allowing Ms.

Maddred-Exums health to be jeopardized by further delays, Dr.

In their Opposition and Answer, Defendants admit that a bone marrow transplant would normally be a covered benefit under the terms of the Plan. Opp. at 2; Weiner Aff., Exh. 2 at 27, Exh. 3 at 27. 7

Rapoport performed the bone marrow transplant at GCC, without guarantee of payment, at an approximate cost of $90,000. Maddred-Exum now argues that she should be able to recover that cost under the Plan due to Defendants unreasonable denial of coverage. Surprisingly, Defendants offer no medical opinions nor relevant case law to support their position. Instead, they Ms.

offer an affidavit of a nurse case manager to clarify that the coverage decision rests with CoreSource, Inc., as the claim processor, and DavCo Restaurants, as the Plan Administrator, rather than with reviewing physicians contracted by Defendants. While Defendants argue that the opinions of their

two reviewing physicians are irrelevant to the issue before this Court, they make no proffer that any other physician would agree with their harsh interpretation of the Plan, nor any other facts that would lead the Court to conclude their denial was reasoned and principled. Nevertheless, Defendants

claim that whether they abused their discretion is a genuine issue of material fact that can only be resolved by a full trial. The Court cannot agree.

The only evidence before the Court is that Ms. MaddredExum suffered from a life threatening condition for which she sought a bone marrow transplant which three physicians agree,

with no dissent on the record, falls within the appropriate standard of care. Without some theoretical medical support,

this Court will not sanction an insurers failure to cover that treatment simply because the patient will also participate in an experimental procedure, beginning some 30 days after her transplant, that is designed to increase her chances of a successful recovery. The Court can find no

language in the Plan meriting such an exclusion of coverage and concludes that Defendants attempted construction of one to be a bad faith abuse of their discretion. B. Attorneys Fees

Under ERISA 502(g)(1), a court has discretion to award reasonable attorneys fees and costs to a prevailing party. The Fourth Circuit has established the following five factors to guide a court in deciding whether attorneys fees should be awarded in an ERISA action: (1) degree of opposing parties culpability or bad faith; (2) ability of opposing parties to satisfy an award of attorneys fees; (3) whether an award of attorneys fees against the opposing parties would deter other persons acting under similar circumstances; (4) whether the parties requesting attorneys fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and (5) the relative merits of the parties positions.

Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017, 1029 (4th Cir. 1993)(en banc). Here, given the Courts conclusion concerning bad faith, the financial resources of the Defendants, and the utter lack of support for Defendants position, the Court concludes that factors one, two, and five all weigh heavily in favor of an award of attorneys fees. The possibility that a future plan

administrator might grant coverage benefits to a potentially terminally ill patient under similar circumstances, out of fear of a similar award of attorneys fees, provides further justification for the award under the fourth factor. Accordingly, the Court will award Ms. Maddred-Exum reasonable attorneys fees upon appropriate motion. IV. CONCLUSION For the foregoing reasons, Plaintiffs Motion for Partial Summary Judgment will be granted and attorneys fees will be awarded. A separate order consistent with this memorandum See Local Rule 109.

will issue.

/s/ William M. Nickerson Senior United States District Judge Dated: May 13, 2004.

10

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

DIANA MADDRED-EXUM

: : v. : Civil Action No. WMN-04-660 : DAVCO RESTAURANTS, INC., et al. : ORDER In accordance with the foregoing Memorandum and for the reasons stated therein, IT IS this 13th day of May, 2004, by the United States District Court for the District of Maryland, hereby ORDERED: 1. That Plaintiffs Motion for Partial Summary Judgment,

Paper No. 11, is GRANTED; That parties shall submit a joint status report within ten days of this order informing the Court what remains to be done in this action; and 3. That the Clerk of the Court shall transmit copies of

this Order to all counsel of record.

/s/ William M. Nickerson Senior United States District Judge

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

DIANA MADDRED-EXUM

: : v. : Civil Action No. WMN-04-660 : DAVCO RESTAURANTS, INC., et al. : ORDER In accordance with the foregoing Memorandum and for the reasons stated therein, IT IS this 7th day of July, 2004, by the United States District Court for the District of Maryland, hereby ORDERED: 1. That Defendants Motion for Reconsideration, Paper No. 22, is DENIED; 2. That Plaintiffs Motion for Attorneys Fees and Costs, Paper No. 23, is GRANTED and fees are awarded in the amount of $37,205.00, and costs are awarded in the amount of $4,267.12; 3. That Plaintiff shall, within ten days of this Order,

submit one additional bill to Defendants for attorneys fees and costs incurred in connection with Plaintiffs motion for attorneys fees and Defendants motion for reconsideration; 4. 5. That Civil Action No. WMN-04-660 is CLOSED; That any and all prior rulings made by this Court

disposing of any claims against any parties are incorporated by reference herein and this order shall be deemed to be a final judgment within the meaning of Fed. R. Civ. P. 58; and 6. That the Clerk of the Court shall transmit copies of

the foregoing memorandum and this order to all counsel of record.

/s/ William M. Nickerson Senior United States District Judge