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Turna v. Mayo Clinic

United States District Court, D. Minnesota

April 16, 2019

Tarlochan S. Turna, M.D., Plaintiff,
Mayo Clinic, Defendant.

          Emily Lacy Marshall, Tim Louris, M. William O'Brien, Miller O'Brien Jensen, P.A., Minneapolis, MN for plaintiff Tarlochan S. Turna.

          Andrew J. Holly, Caitlin L. D. Hull, Dorsey & Whitney, LLP, Minneapolis, MN for defendant Mayo Clinic.


          Eric C. Tostrud United States District Jude

         In this ERISA lawsuit, plaintiff Dr. Tarlochan S. Turna seeks to recover long-term disability benefits under an employee welfare benefit plan (the “Plan”) sponsored and administered by defendant Mayo Clinic. This case is not about whether Dr. Turna is disabled. The Parties agree Dr. Turna is totally disabled, and the Plan has paid him a monthly long-term disability benefit since September 2016. This case is about the amount of benefits Dr. Turna should receive. Under the Plan, benefits are determined by reference to a claimant's “annual salary” at the time his disability begins. Dr. Turna says the Plan has underpaid him benefits based on an arbitrarily low determination of his pre-disability annual salary. Mayo says that its determination of Dr. Turna's annual salary and the resulting amount of his benefits under the plan are reasonable. The Parties have filed competing summary-judgment motions. Should its summary-judgment motion be denied, Mayo alternatively seeks remand of Dr. Turna's claim. The Parties' summary-judgment motions will be denied, and the claim will be remanded to the administrator for further consideration consistent with this opinion and order.



         Dr. Turna worked as a “full-time physician” at the Mayo Clinic Health System in Cannon Falls, Minnesota. Compl. ¶¶ 8, 15 [ECF No. 1]. Dr. Turna provided services in the hospital and in the emergency room. Id. ¶ 17; AR 156. He began working at the Cannon Falls Hospital in 2002, though it appears the hospital was not part of the Mayo Clinic Health System at that time. AR 597 (physician employment agreement dated March 11, 2002, identifying the employer as “Cannon Falls Hospital District, a Minnesota municipal corporation”). Dr. Turna says his Mayo employment began in 2006. AR 201. The administrative record and summary-judgment submissions establish-and the Parties agree-that Dr. Turna worked long hours before becoming disabled. See, e.g., Compl. ¶ 24; Answer ¶ 24 [ECF No. 5].

         On the advice of his treating physicians, Dr. Turna reduced his work schedule significantly in March 2016 because of adverse health effects from Parkinson's Disease. Compl. ¶ 33; Answer ¶ 33. As a result, Dr. Turna qualified for and began receiving short-term disability benefits effective March 14, 2016. Compl. ¶ 34; Answer ¶ 34. In a letter to Dr. Turna dated July 21, 2016, Mayo Senior Claims Adjuster Nancy M. Ehlke described his short-term disability benefits simply as a continuation of his “full salary” and advised Dr. Turna that, if he remained disabled through a twenty-six-week qualifying (or “elimination”) period, then he would qualify for long-term disability benefits under the Plan effective September 12, 2016. AR 208. Along with her letter, Ehlke enclosed a form application for long-term disability benefits and asked Dr. Turna to “please complete this form and return it in the enclosed envelope.” Id.

         Like its short-term disability benefit plan, the Mayo long-term disability benefit plan ties the amount of benefits to a claimant's “annual salary.” Compl. ¶ 12, Ex. A at 12; see also Answer ¶ 12 (admitting that copy of Plan attached to Complaint as Exhibit A was “in effect when Plaintiff's disability commenced in March of 2016”). The key term of the Plan that describes how Dr. Turna's long-term disability benefit amount would be determined reads in relevant part as follows:

Amount of Benefit. For the purpose of determining the amount of long term disability income benefits . . . the Plan uses your annual salary. Annual salary means your basic salary at the time your disability begins and the Elimination Period commences (based on your regularly scheduled hours) and does not include bonuses, incentive pay, commissions, overtime pay, shift pay or other extra compensation. The Monthly Benefit you are eligible to receive is based on 84% of your annual salary at the time your disability commences.

Compl. Ex. A at 12 (emphasis added).


         Dr. Turna completed the application for long-term disability benefits and signed it August 9, 2016. AR 207. Along with the application, Dr. Turna submitted a letter to Mayo raising what he described as a “significant discrepancy” between his compensation and the amount of short-term disability benefits he was receiving. AR 201. Dr. Turna's letter presages the central issue in this case. Dr. Turna wrote that he believed his short-term disability benefits were “deficient” because the administrator had “seriously undervalued [his] actual pay history.” AR 202. Dr. Turna explained that he was raising the issue “in the hope of avoiding the confusion over [his] proper rate of pay that plagued [his] short term disability.” AR 201.

         Dr. Turna made several points in his letter to substantiate his position that his short-term disability benefits had been underpaid. He wrote that he “was scheduled a minimum of 2, 080 hours per year for the last three years . . . covering both the Emergency Department and the Hospital at the same time.” AR 201. He represented that his annual compensation “has been substantially above $400, 000 for the last four years” and that this figure “never explicitly contained any Bonus Pay, Commissions, or Overtime Pay, ” items excluded from the computation of annual salary under the Plan. AR 201-02; Compl. Ex. A at 12. Dr. Turna asserted that a July 1, 2015 change in pay model was intended to facilitate the creation of “safe practices” and was not “intended to be a pay cut.” AR 202. In fact, Dr. Turna wrote, the change led to an increase in his hours “as [he] was asked to cover additional shifts generated by the change.” Id. Dr. Turna asserted that a letter he had received on April 12, 2016-the month after his short-term disability benefits commenced-setting his “total compensation” at $301, 566 “was a mistake” because it “did not take [his] regularly scheduled Emergency Department hours into consideration.” Id. He believed that the short-term disability plan administrator had “undervalued [his] actual pay history” by relying on this document. Id. Dr. Turna wrote that his “regular baseline Annual Salary should be in the neighborhood of $398K or higher.”[2] Id.

         After receiving Dr. Turna's application for long-term disability benefits and his accompanying letter, Ehlke looked into the issues Dr. Turna raised concerning the calculation of his benefits. AR 59. Ehlke spoke with then-Chief Administrative Officer Steve Gudgell.[3] Id. Gudgell had co-signed the April 12, 2016 compensation letter referenced by Dr. Turna in his August 9 letter. See AR 202. Gudgell also co-signed an earlier document dated July 1, 2015, informing Dr. Turna that his compensation from July 1, 2015 through April 2016 would be $298, 579.80 excluding additional “quarterly true-up” pay to account for “actual shifts worked.” AR 8. In her notes of the call, Ehlke described Gudgell as being “very aware of Dr. Turna and his benefit base.” AR 59. She described talking with Gudgell “about the discrepancy between our benefit base and Dr. Turna's annual salary calculation” and that Gudgell “let [her] know that Dr. Turna did in fact work many, many hours over his base and did earn upwards of $400, 00 each year because of this.” Id. Ehlke recorded that Gudgell “commended Dr. Turna for his work effort, but states his base pay was the $298, 579.84” identified in the July 1, 2015 compensation notice. Id.

         Ehlke approved Dr. Turna's claim for long-term disability benefits and notified Dr. Turna of her decision in a letter dated September 6, 2016. AR 417-19. Ehlke referred to the “Amount of Benefit” term of the Plan and concluded that Dr. Turna's “base annual salary” at the commencement of his disability in March 2016 was $298, 579.84. AR 417. Ehlke addressed how the relatively small number of hours Dr. Turna continued to work would affect his benefits, described the process by which he would receive his benefits, asked him to apply for Social Security disability benefits, explained the effect that process might have on his Plan benefits, and concluded by describing the Plan's two-level administrative-appeal process. AR 417-19. Ehlke did not address specifically or respond directly to Dr. Turna's contention that Mayo had miscalculated his baseline annual salary in connection with his short-term disability benefits. See id.


         Roughly three weeks later, on September 28, Dr. Turna's counsel e-mailed Ehlke to express concern “that the figure [Ehlke] cite[d] as Dr. Turna's base annual salary, $298, 579.84, is not accurate.” AR 422. She continued: “Specifically, we have reason to believe this figure represents considerably less than the 1.0 FTE rate he consistently was scheduled to work prior to the time his disability began.” Id. Dr. Turna's counsel asked Ehlke for “an explanation of why you believe Dr. Turna's base annual salary was $298, 579.84” and closed by observing that “[p]erhaps there is a clear explanation, but based on his regularly scheduled hours, the shift expectations communicated to him by Chief Administrative Officer Bill Priest, and his multi-year pay history, neither we nor Dr. Turna can decipher it.” Id.

         Ehlke responded promptly the following day, September 29, writing in an e-mail that she had relied upon “salary information from a Mayo Clinic benefit database” and the “basic salary that [she] used was in place prior to Dr. Turna's disability commencement date and may not necessarily reflect actual earnings during the tax year.” AR 421. Ehlke pointed out that the salary she used to determine the amount of Dr. Turna's disability benefits was “the basic salary specific to Dr. Turna prior to any bonuses, incentive pay, commissions, overtime pay, shift pay or other extra compensation.” Id. Ehlke again quoted the “Amount of Benefit” term of the Plan and referred Dr. Turna's counsel to the Plan's administrative-appeal procedures. Id.

         Dr. Turna's counsel replied to Ehlke's message the same day-about two hours later, in fact. AR 420. Dr. Turna's counsel asserted that multiplying Dr. Turna's “various rates of pay by the number of shifts he was regularly scheduled to work” produced a number “far in excess of $298, 579.84, and in fact [that] was closer to $400, 000.” Id. She acknowledged “of course, that [Dr. Turna] received bonuses, incentives, etc. that caused his actual earnings to be even higher, ” and closed with a request:

We only wish to understand how this rate was calculated, so that we may understand why we are reaching such disparate conclusions on Dr. Turna's base annual salary. Could you please provide the computation that you made, and the variables associated with the computation (such as FTE assumptions, shifts or hours, or rates that went into the $298, 579.84 figure). This information is critical in order for Dr. Turna to minimally understand the rationale for your determination.


         Ehlke responded to Dr. Turna's counsel in a letter dated October 13, 2016. AR 53. Ehlke referenced the July 1, 2015 compensation notice as the source of Dr. Turna's “basic salary.” Id. Ehlke also purported to quote the Plan's “Amount of Benefit” provision, just as she had in her September 6 letter to Dr. Turna, AR 417-19, and in her September 29 e-mail to his counsel, AR 421. This time, however, Ehlke quoted a revised and inapplicable “Amount of Benefit” term that defined “Annual Benefit Salary” as a participant's “basic salary, as determined by your employer, at the time your disability begins and the Elimination Period commences (based on your regularly scheduled hours) and does not include bonuses, incentive pay, commissions, overtime pay, shift pay or any other extra compensation.” AR 53 (emphasis added). The term Ehlke quoted evidently came from a version of Mayo's long-term disability plan that had been revised or amended after Dr. Turna became disabled. See AR 1344. It differed from the prior version in two ways: it changed the term “Annual Salary” to “Annual Benefit Salary, ” and it included the italicized “as determined by your employer” clause. Compare AR 1344 with Compl. Ex. A at 12. The Parties confirmed at the hearing on these motions that this revised term does not apply to Dr. Turna's claim. Regardless, Ehlke relied upon the term in her October 13 letter to explain her decision. She wrote:

“Annual Benefit Salary” does not include all compensation paid to Dr. Turna (or any other physician) annually. Rather, it includes only Dr. Turna's “basic salary, ” as determined by Mayo Clinic, at the time Dr. Turna's disability began and the Elimination Period commences.
In July 2015, Mayo Clinic provided Dr. Turna with the enclosed memorandum stating that his basic salary for the year in question was $298, 579.80. The figures of 133.5 and 10.5 in the memorandum represent the required annual number of weekday and weekend shifts required.

AR 53 (emphasis in ...

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