                                                            F I L E D
                                                      United States Court of Appeals
                                                              Tenth Circuit
                UNITED STATES COURT OF APPEALS
                                                             MAY 28 2002
                       FOR THE TENTH CIRCUIT
                                                         PATRICK FISHER
                                                                   Clerk

JASON HAYMOND, individually and
as a representative of the Estate of
Heather Haymond; ESTATE OF
HEATHER HAYMOND;
UNIVERSITY OF UTAH MEDICAL                    No. 01-4119
CENTER; UNIVERSITY OF UTAH             (D.C. No. 2:98-CV-892-ST)
OPTHAMOLOGY DEPARTMENT;                        (D. Utah)
UNIVERSITY OF UTAH
DEPARTMENT OF NEUROLOGY,
SCHOOL OF MEDICINE;
UNIVERSITY OF UTAH SURGICAL
ASSOCIATES; UNIVERSITY
RADIOLOGY ASSOCIATES;
UNIVERSITY OF UTAH
DEPARTMENT OF
ANESTHESIOLOGY; U-U
PULMONARY DIVISION,
DEPARTMENT OF INTERNAL
MEDICINE; LOVE HOMECARE;
UTAH VALLEY REGIONAL
MEDICAL CENTER,

           Plaintiffs - Appellants,

v.

EIGHTH DISTRICT ELECTRICAL
BENEFIT FUND,

           Defendant - Appellee.
                            ORDER AND JUDGMENT           *




Before EBEL , HOLLOWAY , and MURPHY , Circuit Judges.



       After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal.   See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

       Appellant Jason Haymond challenges the district court’s order entering

summary judgment in favor of appellee Eighth District Electrical Fund (“the

Fund”) and dismissing his complaint with prejudice. Mr. Haymond argues that

the district court erred by applying a one-year rather than a three-year limitations

period to his claim. We agree and reverse and remand for further proceedings.


                                   I. Background

       Jason and Heather Haymond were married on September 14, 1996. As of

this date, Mrs. Haymond was covered by the Fund. Mrs. Haymond had suffered



*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

                                          -2-
from cystic fibrosis from the age of five, and received extensive treatment    1
                                                                                   for her

condition between September 14, 1996 and September 13, 1997, the date of her

death. Mr. Haymond alleges, however, that Mrs. Haymond did not receive

treatment for the period of ninety days prior to their marriage. This is significant

because the Fund’s preexisting condition provision excludes only those conditions

for which the participant received treatment during the ninety days prior to

initiating coverage.

       Nonetheless, the Fund denied benefits above $5,000, citing the preexisting

condition exclusion. Mr. Haymond appealed the decision to the Board of

Trustees, and on May 13, 1997, the Board sent a letter affirming the decision to

deny benefits.

       On December 15, 1998, Mr. Haymond brought the present action, alleging

that he was entitled to recover benefits from the Fund under       29 U.S.C.

§ 1132(a)(1)(B). The Fund moved for summary judgment, arguing that the

Summary Plan Description (“SPD”) provides a one-year limitations period for

such an action and that Mr. Haymond had failed to file within that time. The



1
      Treatment was provided by the various health care providers who are the
other plaintiffs-appellants in this matter. As alleged assignees of Heather
Haymond’s right to recover benefits, the rights of the health care providers were
deemed to be coextensive with the rights of Mrs. Haymond’s estate.    See Aplt.
App. at 215. The parties stipulated to summary judgment against the health care
providers on that basis.  See id.

                                            -3-
district court agreed, entering summary judgment for the Fund and dismissing

Mr. Haymond’s complaint with prejudice.


                                          II. Analysis

       On appeal, Mr. Haymond argues that the district court erred in determining

that the one-year limitations period applied. He points to the fact that the SPD

also provides a three-year limitations period, arguing that there is an ambiguity

regarding which period should apply, and that this ambiguity should be construed

against the Fund as the drafter of the agreement. Mr. Haymond also points to the

Fund’s obligation under the Employee Retirement Income Security Act (ERISA),

29 U.S.C. §§ 1001-1461, to clearly articulate any limitations on the recovery of

benefits. In particular, Mr. Haymond cites 29 U.S.C. § 1022, which requires

insurers to clearly state procedures for redress of denial of claims in the SPD.

       We review the grant of summary judgment de novo, using the same

standard applied by the district court.      United States v. Distefano , 279 F.3d 1241,

1243 (10th Cir. 2002). Summary judgment is proper if the moving party shows

that “there is no genuine issue as to any material fact and [it] is entitled to

a judgment as a matter of law.” Fed. R. Civ. P. 56(c). “When applying this

standard, we view the evidence and draw reasonable inferences therefrom in the

light most favorable to the nonmoving party.”        Distefano , 279 F.3d at 1243

(quotation omitted). In the ERISA context, as elsewhere, determination of the

                                              -4-
applicable limitations period is a question of law reviewed de novo.   See, e.g.,

Wright v. Southwestern Bell Tel. Co., 925 F.2d 1288, 1290 (10th Cir. 1991).

      The SPD contains two distinct limitations periods. The first appears in a

section entitled “Benefits Underwritten by PM Group Life Insurance Company.”        2



Within this section is a provision entitled “Legal Action,” which states:

      No legal action can be started with respect to health claims under the
      group policy:

      1. until 60 days after the required proof of loss has been sent to the
      PM Group; or

      2. more than three years after the time proof of loss is required.

Aplt. App. at 72. This provision does not cross-reference any other portion of the

SPD. Mr. Haymond argues that this three-year statute of limitations should apply

to the instant action.

      The SPD contains a later section entitled “ERISA - Information Required

by the Employee Retirement Income Security Act of 1974 (ERISA).” Within this

section is a provision entitled “Settlement of Disputed Claims,” which states:

      Any dispute as to eligibility, type, amount or duration of benefit
      under the Plan . . . shall be resolved by the Board of Trustees . . . ,
      and the Board of Trustees shall have complete discretion to construe,
      interpret and apply all terms and provisions of the Restated Rules and
      Regulations and the Trust Agreement in resolving any dispute. The
      Board of Trustees’ findings and determination of the dispute shall be


2
     The first $100,000 of coverage was insured by the Fund itself; beyond that
amount, the Haymonds’ policy was underwritten by PM Group.

                                           -5-
      final and binding upon all parties to the dispute. No action may be
      brought for benefits provided by the Plan or any amendment or
      modification thereof, or to enforce any right thereunder, until after
      the claim therefore has been submitted to and determined by the
      Board of Trustees or designated committee thereof, and thereafter the
      only action that may be brought is one to enforce the decision of the
      Board of Trustees . . . or to clarify the rights of the claimant under
      such decision. No such action may be brought at all unless brought
      within one year after the date of the decision of the Board of
      Trustees . . . .

Aplt. App. at 98-99. The Fund argues that this second provision, imposing a

one-year limitations period, applies.

      In concluding that the one-year limitations period applies, the district court

relied primarily on the notion that the Fund was entitled to establish a contractual

limitations period in the SPD that was different than Utah’s statutory limitations

period, citing Moore v. Berg Enterprises, Inc.   , 3 F. Supp. 2d 1245 (D. Utah

1998). At this stage, the Fund’s right to establish a contractual limitations period

is not contested. What is in controversy is whether, in light of the apparent

conflict between the above provisions, participants such as the Haymonds

received adequate notice of the applicable limitations period. Accordingly, we

must determine whether the two provisions cited above create an ambiguity, and

if so, to what consequence. On this point, the district court determined that the

two provisions were not inconsistent. It harmonized the provisions, concluding

that “[t]he three-year total only comes into play if the administrative claim



                                          -6-
process takes longer than two years, then the total three-year limitations rather

than the additional one year applies.” Aplt. Addendum at 9.

      In analyzing ERISA plan documents,       “standard tenets of contract

construction” apply. Pirkheim v. First Unum Life Ins., 229 F.3d 1008, 1010

(10th Cir. 2000). Thus, “[a]mbiguity exists when a contract provision is

‘reasonably susceptible to more than one meaning, or where there is uncertainty

as to the meaning of a term.’” Id. (quoting Stewart v. Adolph Coors Co.,

217 F.3d 1285, 1290 (10th Cir. 2000), cert. denied, 531 U.S. 1077 (2001)).

      In addition, the relative clarity of plan documents must be viewed against

the special obligations that attach in the ERISA context. Section 1022(a) of

ERISA requires that the summary plan description “shall be written in a manner

clearly calculated to be understood by the average plan participant, and shall be

sufficiently accurate and comprehensive to reasonably apprise such participants

and beneficiaries of their rights and obligations under the plan.” Section 1022(b)

requires that certain information be included in the summary plan description,

including “circumstances which may result in disqualification, ineligibility, or

denial or loss of benefits,” as well as “the remedies available under the plan for

the redress of claims which are denied in whole or in part.”

      Stated another way:

      The duty of clarity falls on the plan sponsor. As the Fifth Circuit
      cogently reasoned in Hansen:

                                         -7-
      Any burden of uncertainty created by careless or inaccurate drafting
      must be placed on those who do the drafting, and who are most able
      to bear that burden, and not the individual employee, who is
      powerless to affect the drafting of the summary or the policy and ill
      equipped to bear the financial hardship that might result from a
      misleading or confusing document. Accuracy is not a lot to ask.
      And it is especially not a lot to ask in return for the protection of
      ERISA’s preemption of state law causes of action–causes of action
      which threaten considerably greater liability than that allowed by
      ERISA.

Chiles v. Ceridian Corp., 95 F.3d 1505, 1518 (10th Cir. 1996) (quoting Hansen v.

Continental Ins. Co., 940 F.2d 971, 982 (5th Cir. 1991)).

      In light of the Fund’s obligation to draft an SPD that is clear to

participants, we conclude that the limitations provisions in the SPD are clouded

by at least two ambiguities. First, there is a flat contradiction between the two

provisions in that they apply different limitations periods (three years versus one

year) triggered by different events (the filing of a proof of claim versus the Board

of Trustees rendering a decision). The provisions appear in different sections of

the SPD without cross-referencing one another, or providing any suggestion of

how they might properly be read together.

      The district court determined that it must harmonize the provisions, and

concluded that “[t]he three-year total only comes into play if the administrative

claim process takes longer than two years, then the total three-year limitations

rather than the additional one year applies.” Aplt. Addendum at 9. But this


                                         -8-
approach places on the participant the burden of harmonizing apparently unrelated

and conflicting provisions, thus contradicting ERISA’s mandate that the SPD be

clear to the layperson.    See 29 U.S.C. § 1022.

       As we explained in Chiles, “[a]n SPD is intended to be a document easily

interpreted by a layman; an employee should not be required to adopt the skills of

a lawyer and parse specific undefined words throughout the entire document to

determine whether they are consistently used in the same context.” 95 F.3d

at 1517-18 (citing McKnight v. S. Life & Health Ins. Co., 758 F.2d 1566, 1570

(11th Cir. 1985)). Similarly, here, participants should not be required to

“harmonize” seemingly opposed provisions. There is simply no indication in the

text of the SPD that these two provisions should be read together in the manner

suggested by the district court.

       Second, there is an ambiguity internal to the second provision. The final

sentence states, “[n]o such action may be brought at all unless brought within one

year after the date of the decision of the Board of Trustees.” Aplt. App. at 99.

But the referent of the phrase “[n]o such action” is unclear. The preceding

paragraph refers to both an “action . . . brought for benefits” and an “action . . .

brought . . . to enforce the decision of the Board of Trustees . . . or to clarify the

rights of the claimant.”    Id.




                                           -9-
      Mr. Haymond contends the second provision should not apply to this action

at all, because it purports to be limited to actions “to enforce the decision of the

Board of Trustees . . . or to clarify the rights of the claimant under such decision,”

id. , and Mr. Haymond is bringing an action to recover benefits, as he is entitled to

under Section 1132(a)(1)(B) of ERISA. The Fund responds as follows:

“Assuming that the above-quoted language [of the second limitations provision]

of the SPD implies that an action ‘for benefits’ is limited to an action to enforce

the decision of the Board of Trustees, or to clarify the rights of the claimant, such

implication is clearly erroneous as a matter of law, since ERISA expressly allows

benefit recovery actions in addition to actions to enforce or clarify plan rights.”

Answer Br. at 10. The burden of clarity is on the Fund, and to the extent the

second provision is limited to a much narrower cause of action than that pursued

by Mr. Haymond, the consequence of inaccurate drafting falls squarely on the

Fund. See Chiles , 95 F.3d at 1518.

      The Fund also argues that the first limitations provision is inapplicable

because it concerns the timetable for the Fund to submit claims to PM Group.

The Fund points out that participants do not make claims directly to PM Group,

and thus the three-year limitations period cannot apply to the Haymonds. The

Fund cites the affidavit of a claims manager in support of this contention. But the

notion that the first limitations provision is addressed to the Fund rather than


                                          -10-
participants finds no support in the text of the SPD, where it must appear to be

relevant to this inquiry.   See 29 U.S.C. § 1022. To the contrary, the SPD uses

“you” and “your” throughout the PM Group section to refer to the participant, not

the Fund.   3
                Further, the SPD as a whole is addressed to the participant. Nothing

in the text suggests that the first provision is not addressing the participant.

       In short, the provisions of the SPD are at best ambiguous regarding the

applicable limitations period. Moreover, it is possible to read the second

provision as being limited to a cause of action other than the type brought by

Mr. Haymond. The Fund has failed in its duty to provide this critical information

to participants in a clearly understandable manner. As the drafter of the SPD,

the Fund must bear the consequences of this inaccuracy.




3
       See Aplt. App. at 67-73. For example, under “To Whom Benefits are
Payable,” the SPD refers to “loss of your life” and “the beneficiary you have
designated.” Id. at 72. These phrases clearly address the participant rather than
the Fund. Under “Time of Notice” in the PM Group section the SPD states,
“[y]ou must send written notice of a health claim . . . .” Id. at 71. Thus, the text
of the SPD in the PM Group section addresses the participant and appears to
a reasonable reader to outline the participant’s obligations rather than the Fund’s.

                                           -11-
      Accordingly, the judgment of the United States District Court for the

District of Utah is REVERSED, and this matter is REMANDED for further

proceedings consistent with this decision.

                                                   Entered for the Court


                                                   David M. Ebel
                                                   Circuit Judge




                                        -12-
