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NOT FOR PUBLICATION FILED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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