United States Court of Appeals
For the First Circuit
No. 02-2544
JANICE R. PERRY,
Plaintiff, Appellant,
v.
NEW ENGLAND BUSINESS SERVICE, INC.; HARTFORD LIFE
INSURANCE COMPANIES, INC.; SETH A. CANTER;
GROUP LONG TERM DISABILITY INSURANCE BENEFITS FOR
EMPLOYEES OF NEW ENGLAND BUSINESS SERVICE, INC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella and Lipez, Circuit Judges,
and Schwarzer,* Senior District Judge.
Bernard A. Kansky was on brief for appellant.
Richard L. Alfred, with whom Christopher A. Weals, was on
brief for appellees New England Business Service, Inc. and Seth A.
Canter.
David B. Crevier, with whom Theodore F. Glockner, was on
brief for appellees Hartford Life Insurance Companies, Inc. and
Group Long Term Disability Insurance Benefits For Employees of New
England Business Service, Inc.
October 23, 2003
*
Of the Northern District of California, sitting by
designation.
SCHWARZER, Senior District Judge. Janice R. Perry
appeals the district court’s dismissal under Federal Rule of Civil
Procedure 12(b)(6) of her action to recover long-term disability
benefits, statutory penalties, and attorneys’ fees pursuant to the
Employee Retirement Income Security Act of 1974, as amended, 29
U.S.C. §§ 1001-1461 (“ERISA”). Perry applied for but was denied
disability benefits under the Group Long-Term Disability Plan
(“Plan”) maintained by her employer New England Business Service,
Inc. (“NEBS”) and insured by Hartford Life Insurance Companies,
Inc. (“Hartford”). The district court dismissed the complaint
because under the terms of the Plan only active full-time employees
are eligible for benefits and Perry had been on a leave of absence
for six years when she applied. We must decide whether under the
terms of the Plan an employee on leave of absence on account of a
work-related injury ceases to be a participant in the Plan.
The district court had jurisdiction under 28 U.S.C.
§ 1331 and 29 U.S.C. § 1132(a)(1)(B) and we have jurisdiction
pursuant to 28 U.S.C. § 1291. For the reasons discussed below we
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On review of a motion to dismiss, we accept as true the
factual allegations of the complaint and construe all reasonable
inferences therefrom in favor of Perry. See Beddall v. State St.
Bank & Trust Co., 137 F.3d 12, 16 (1st Cir. 1998).
Perry alleges that she became a full-time employee of
NEBS on May 20, 1991, and vested under the Plan on September 16,
1991. She worked full time until October 15, 1992, when she became
disabled by a hand injury for which she received workers’
compensation benefits. Perry further alleges that although the
hand injury initially rendered her disabled and unable to perform
her usual duties, what has caused her to be totally and permanently
disabled since October 1992 is her progressively worsening Type 1
Diabetes Mellitus of long duration and associated impairments.
Perry applied for long-term disability benefits under the Plan on
April 10, 1998, about the time when her workers’ compensation
benefits terminated. On March 25, 1999, Hartford denied Perry’s
appeal from its denial of benefits, stating that because “the
injury that caused you to stop working was sustained at work, any
resulting Disabling condition is excluded from coverage under [the
policy].” By letter of April 27, 2001, counsel for NEBS concurred
in Hartford’s decision, stating that “the plan disqualifies from
benefit eligibility all employees disabled due to work-related
injury.”
Perry filed this action on August 30, 2001.
THE TERMS OF THE PLAN
The Plan provides long-term disability benefits to all
“active full-time employees” of NEBS. Sec. I. The Plan states
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that “you will be paid a monthly benefit if . . . you become
Disabled while insured under this plan.” Sec. V.
The Plan defines disability as “any nonoccupational
accidental bodily injury . . . [or] nonoccupational sickness.”
Sec. II.
Under the Plan,
insurance will terminate on the earliest to
occur of the following dates:
. . .
(5)the date your employment terminates
or your eligibility for this plan
terminates. Your eligibility
terminates on the date you cease to be
an Active Full-time Employee:
. . .
(b)due to temporary layoff, leave
of absence or a general work
stoppage (including a strike or
lockout).
Sec. IV.
The Plan provides for continuation of insurance as
follows:
If you are disabled and you cease to be an
Active Full-time Employee, your insurance will
be continued:
(1) during the Elimination Period1
while you remain totally disabled by
the same disability; and
(2) after the Elimination Period for as
long as you are entitled to benefits
under the Policy.
Sec. IV.
1
The Elimination Period is the period of time an employee must
be totally disabled before benefits become payable. Sec. II.
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DISCUSSION
We review the district court’s dismissal de novo. See
Beddall, 137 F.3d at 16.
An action for benefits under a plan established under
ERISA may be brought only by a “participant,” defined as an
employee who is or may become eligible to receive benefits under
the plan. 29 U.S.C. §§ 1132(a)(1), 1002(7). Perry contends that
the district court erred in holding that she was ineligible for
benefits under the Plan.2 She argues that while she was disabled
and on a medical leave of absence for the injury to her hand, her
status was protected as an active employee and therefore she was
entitled to receive disability benefits.
Perry’s argument flies in the face of the unambiguous
terms of the Plan. Under Section IV an employee’s “eligibility
terminates on the date [she] cease[s] to be an Active Full-Time
Employee . . . due to . . . leave of absence.” Section IV provides
that insurance will be continued if the employee is disabled and
ceases to be an active full-time employee. But disability under
the Plan is limited to nonoccupational injury or sickness. Thus,
2
Perry’s argument that the district court, in considering the
terms of the Plan, improperly treated the motion to dismiss as one
of summary judgment is not well-taken. Where, as here, “a
complaint’s factual allegations are expressly linked to—and
admittedly dependent upon—a document (the authenticity of which is
not challenged), that document effectively merges into the
pleadings and the trial court can review it in deciding a motion to
dismiss under Rule 12(b)(6).” Beddall, 137 F.3d at 17.
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insurance will continue only if the employee is disabled due to a
nonoccupational injury or sickness. Because, as alleged in the
complaint, Perry worked full time until she became disabled by a
work-related hand injury, her disability leave was the result of an
occupational injury and thus had the effect of terminating her
insurance and rendering her ineligible for continuation of
coverage. Her application for benefits submitted in 1998 upon
termination of her workers’ compensation benefits was therefore
properly rejected.
“Where, as here, the words of an insurance policy are
plain, we will ‘refrain from conjuring up ambiguities’ and likewise
‘abjure unnecessary mental gymnastics which give the terms of the
policy a forced or distorted construction.’” Burnham v. Guardian
Life Ins. Co., 873 F.2d 486, 490-91 (1st Cir. 1989) (quoting
Taylor v. Aetna Cas. & Surety Co., 867 F.2d 705, 706 (1st Cir.
1989)). Giving the straightforward language in the Plan its
natural meaning, see id. at 489, we conclude that the district
court did not err in holding that Perry was not a participant and
therefore failed to state a claim against Hartford or NEBS.3
3
That NEBS may for other purposes have continued to regard
Perry as an employee cannot alter the clear and unambiguous terms
of the Plan. See Sprague v. General Motors Corp.,133 F.3d 388, 404
(6th Cir. 1998) (en banc); Miller v. Coastal Corp.,978 F.2d 622,
624 (10th Cir. 1992) (stating that “an employee benefit plan cannot
be modified . . . by informal communications.”)
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Our conclusion that Perry ceased to be a Plan participant
makes it unnecessary to address Perry’s claim for breach of duty of
disclosure and attorneys’ fees.
CONCLUSION
For the reasons stated, we affirm the judgment of the
district court.
AFFIRMED.
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