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 Plaintiff’s Motion for Partial

Summary Judgment. Paper No. 11. The motion is fully briefed

and ripe for decision. 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 employee’s

entitlement to benefits under her employer-sponsored health

insurance plan (Plan). Plaintiff Diana Maddred-Exum, had been

employed by Wendy’s, 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 Wendy’s 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.

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 It is acknowledged by both sides that the bone marrow

transplant in and of itself is a medically necessary procedure

for Ms. Maddred-Exum’s type of cancer and would normally be

covered by the Plan. Defendants DavCo and CoreSource Inc.,

the managing company of DavCo’s Health Benefit Plan, contend,

however, that Ms. Maddred-Exum’s treating physician’s

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. Maddred-

Exum 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. Fed.

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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 party’s case, and on

which that party will bear the burden of proof at trial.” Id.

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. Celotex, 477 U.S. at

324. Unsupported speculation is insufficient to defeat a

motion for summary judgment. Felty v. Graves-Humphreys Co.,

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

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outcome of the case under the governing law are considered to

be "material." Id.

III. DISCUSSION

A. Disputed Medical Benefits

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.

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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 person’s illness or injury and which could
not have been omitted without adversely affecting
the covered person’s 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 person’s 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

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experimental/ investigational,” despite their medical

necessity or a physician’s 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-Exum’s 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

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doctors employed as outside reviewers by Defendants. Id. at

¶¶ 8, 18. 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-Exum’s 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 GCC’s 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. Maddred-

Exum’s 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-Exum’s health to be jeopardized by further delays, Dr.

2
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.

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Rapoport performed the bone marrow transplant at GCC, without

guarantee of payment, at an approximate cost of $90,000. Ms.

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

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. Maddred-

Exum suffered from a life threatening condition for which she

sought a bone marrow transplant which three physicians agree,

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with no dissent on the record, falls within the appropriate

standard of care. Without some theoretical medical support,

this Court will not sanction an insurer’s 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.

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Quesinberry v. Life Ins. Co. of North America, 987 F.2d 1017,

1029 (4th Cir. 1993)(en banc).

Here, given the Court’s 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. See Local Rule 109.

IV. CONCLUSION

For the foregoing reasons, Plaintiff’s Motion for Partial

Summary Judgment will be granted and attorneys’ fees will be

awarded. A separate order consistent with this memorandum

will issue.

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

Dated: May 13, 2004.

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