                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-23-2004

Alvares v. Montell USA Inc
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-2271




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                                                             NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                 ___________

                                     No. 03-2271
                                     ___________

                               WINSOM J. ALVARES,

                                                Appellant

                                           v.


        MONTELL USA INC., a Foreign Corporation, MONTELL USA INC., Plan
                     Administrator of LTD and STD Plan,
      MONTELL LONG-TERM DISABILITY PLAN, and MONTELL SHORT-TERM
                             DISABILITY PLAN




                    On Appeal from the United States District Court
                            for the District of Delaware

               District Court Judge: The Honorable Joseph J. Farnan, Jr.
                              (D.C. Civil No. 01-cv-00072)
                                     ___________

                     Submitted Under Third Circuit L.A.R. 34.1(a)
                                 on March 22, 2004

               Before: FUENTES, SMITH and GIBSON,* Circuit Judges.

                                (Filed: June 23, 2004)



  *
   The Honorable John R. Gibson, Senior Circuit Judge for the United States Court of
Appeals for the Eighth Circuit, sitting by designation.
                               ________________________

                                OPINION OF THE COURT
                               ________________________

Fuentes, Circuit Judge:

       This case involves a claim for short and long term disability benefits subject to the

Employee Retirement Income Security Act (“ERISA”). Winsom Alvares began her

employment with Montell USA, Inc. (“Montell”) in November 1988. In 1994, she

requested a four-day per week work schedule because she suffered from fibromyalgia.

Montell accommodated this request by allowing her to work 32 hours per week and to be

paid 80% of the salary she would have earned working a 40-hour week.

       In 1998, Alvares was terminated after Montell downsized and eliminated her

position. Montell notified her in March 1998 that she would be terminated on June 30,

1998. By mutual agreement, Alvares ceased working for Montell on June 8, 1998, but

was paid through June 30, 1998.

       On June 26, 1998, Alvares submitted an application for short and long term

disability benefits, which Montell denied on October 1, 1998. Subsequently, Alvares

filed suit in the United States District Court. In order to avoid a one-year statute of

limitations defense in Delaware, Alvares filed her action in the Eastern District of

Pennsylvania. However, the action was transferred to the District of Delaware. Alvares

claimed that Montell owed her short term disability benefits for the one day each week



                                              2
(Wednesday) that she did not work between 1994 and 1998 because of her fibromyalgia.

Alvares also argued that she was totally disabled as of June 26, 1998 and therefore should

receive long term disability benefits. Alvares and Montell filed cross-motions for

summary judgment. On November 25, 2002, the District Court denied Alvares’ motion

for summary judgment and granted Montell’s, holding that Alvares had no right to the

disability benefits claimed and that, in any event, her claim was time barred. The District

Court subsequently denied Alvares’ Rule 59 Motion for Reconsideration. Thereafter,

Alvares appealed to this Court.

       We review a district court’s grant of summary judgment de novo. After carefully

reviewing the record, we agree with the District Court’s thorough and well-reasoned

opinion. We therefore affirm.

                                          I.

       To be eligible under Montell’s short term disability plan, an employee must show

that she is “unable to work because of sickness or injury.” App. at 103. To be eligible for

long term disability, an employee must show that she suffered “six months of continuous

disability.” Id. On appeal, Alvares argues that her fibromyalgia qualifies as a disability1

and that her reduced work load for four years satisfies the eligibility requirements under

both of these plans. However, Montell counters that Alvares failed to satisfy the



  1
    Alvares cites Rodriguez v. McGraw-Hill Cos. LTD Plan, 297 F. Supp. 2d 676, 679
(SDNY 2004), to support her argument that fibromyalgia is a medically determinable
disability despite the lack of an objective diagnostic test for the condition.

                                               3
prerequisites for either short or long term disability benefits because she was able to

continue working with her condition and retained full-time status according to her

accommodated schedule of 32 hours per week.

       In addition, Montell contends that coverage under both the short term and long

term disability plans ended when Alvares’ employment ended on the agreed upon date of

June 8, 1998. Therefore, Montell asserts that Alvares’ June 26, 1998 filing was too late

to allow her to qualify for benefits.

                                           II.

       Montell’s short term disability plan provides lost compensation to employees for

those regularly scheduled work days on which they are unable to work because of

sickness or disability. Alvares claims that her reduction in hours and pay was attributable

to a disability and, therefore, should have been compensable under M ontell’s short term

disability plan. However, because Wednesdays were not regular work days for Alvares

under her accommodated work schedule, she did not lose compensation on Wednesdays.

Further, Alvares never claimed that her reduced work schedule constituted a disability

until after she was terminated for unrelated reasons.

       Montell’s short term disability plan does provide coverage for employees working

less than a 40-hour week. App. at 104. However, the employee must demonstrate that

she is “unable to work because of sickness or injury,” in which case the plan “replaces 66

2/3 % to 100% of [her] Basic Monthly Earnings . . . for up to six months of disability.”



                                                 4
App. at 103. Thus, the purpose of the plan is to replace lost income from short term

absences during which an employee is unable to work due to illness or injury. We agree

with the District Court that Alvares was not “unable to work because of sickness or

injury,” but that she only worked 32-hour weeks because this was the schedule to which

she and Montell agreed. Dist. Ct. Op. at 6. Because Alvares was only scheduled to work

32 hours per week and her income was based on this schedule, she did not lose any

income. She was, therefore, not eligible to have any income replaced through M ontell’s

short term disability plan.

       In addition, we agree that Alvares’ claim for benefits due to her reduced work

schedule that began in 1994 is time barred by Delaware’s one-year statute of limitations.

10 Del.C. § 8111. Alvares’ claim for disability benefits arose in 1994, but she did not file

her claim until June 1998. Alvares cites VanDusen v. Barrack, 376 U.S. 612 (1964), in

which a transferee district was obligated to apply the state law that would have applied

had there been no change of venue, to argue that the District Court should have applied

Pennsylvania’s three-year statute of limitations. However, even if this were the case here,

Alvares’ claim is equally time barred under Pennsylvania’s statute.

       As to long term disability, Alvares is similarly unable to show that there was a six

month period in which she was unable to perform her job. She was still capable of

working 32 hours per week and therefore did not suffer a period of “continuous total

disability” as the plan requires. App. at 103. As the District Court points out, “[i]t is


                                              5
uncontested that, after 1994, [Alvares’] job was to work her 32 scheduled hours per week

and that she did so until her termination in 1998.” Dist. Ct. Op. at 6. Alvares never

identified a claimed period of continuous total disability to the District Court and she does

not attempt to claim in this Court that she was continuously and totally disabled for six

months. We therefore agree that Alvares failed to meet the prerequisites for eligibility

under Montell’s long term disability plan.

         Finally, we agree with the District Court’s holding that Alvares is ineligible for

either short or long term disability because her coverage under the plans ended before she

applied for benefits. Montell’s disability plans provide that in order to be eligible for

benefits one must be currently employed with Montell. App. at 104. Therefore, an

employee’s disability coverage ends when her employment ends. Alvares’ employment

ended on June 8, 1998 by her agreement with M ontell, despite the fact that she was paid

until June 30, 1998. We agree with the District Court that because her employment ended

on June 8, 1998, her coverage also ended on this date. Therefore, her application for

benefits on June 26, 1998 occurred outside her coverage period, making her ineligible for

the claimed benefits.

         Accordingly, for the reasons stated above, we affirm the opinion of the District

Court.




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