Aaron v. Leday
| Decision Date | 05 November 2013 |
| Docket Number | Civ. Action No. 4:13-cv-01716 |
| Parties | TIFFANY AARON and EBONI HORN-WATSON, Individually and on Behalf of All Persons Similarly Situated Plaintiffs, v. JASON LEDAY, LTHM HOUSTON-OPERATIONS, LLC, and KIGLAPAIT HOSPITAL CORPORATION d/b/a/ RENAISSANCE HOSPITAL GROVES Defendants. |
| Court | U.S. District Court — Southern District of Texas |
This case arises out of the employment and termination of Plaintiffs Tiffany Aaron and Eboni Horn-Watson (together "Plaintiffs") by Renaissance Hospital Groves ("Renaissance" or "Renaissance Hospital"). Plaintiffs have brought suit against Renaissance, Jason LeDay and LTHM Houston-Operations, LLC ("LTHM"). Before the Court is Defendants' Motion to Dismiss for Failure to State a Claim. (Doc. No. 11.) After considering the Motion, all responses and replies, and the applicable law, the Court concludes that the Motion should be GRANTED IN PART and DENIED IN PART.
Plaintiffs worked at Renaissance in Groves, Texas.2 (Doc. No. 10 ¶¶ 3-4, 17.) Renaissance was a "d/b/a" name for Kiglapait Hospital Corporation. (Id. ¶ 7.) On April 26,2013, Plaintiffs and most of their colleagues at Renaissance Hospital "were abruptly and involuntarily terminated, without any warning, and the hospital was shut down." (Id. ¶ 18.) Three employees, however, continue to work at Renaissance Hospital. (Id. ¶ 19.)
Plaintiffs received no warning prior to April 26 that they would be terminated or that the facility would shut down. (Id. ¶ 24.) At first, LeDay "indicated that the hospital was temporarily shut down to reorganize, deal with internal construction, and for purposes of changing its focus to behavioral health and senior care." (Id. ¶ 25.) Plaintiffs aver that now, however, "the shutdown appears to be permanent." (Id.)
While employed at Renaissance Hospital, Plaintiffs received "medical and other health benefits." (Id. ¶ 28.) Plaintiffs explain that they and many of their colleagues "heavily depended on these benefits." (Id. ¶ 29.) But, upon termination, Plaintiffs and their fellow former employees had their health coverage terminated. (Id. ¶ 33.) Plaintiffs aver that, upon their termination, "they became entitled to benefits under the Consolidated Omnibus Budget Reconciliation Act ("COBRA")." (Id. ¶ 30.) They allege that Defendants "were obligated to send a COBRA election notice to [former employees] within 44 days of their termination." (Id. ¶ 31.) But, those former employees have still not received such notification. (Id.)
Plaintiffs also received Paid Time Off (PTO) benefits during the course of their employment. (Id. ¶ 35.) An employee handbook, which Plaintiffs attribute to "Defendants," stated that "[e]mployees who are laid off or terminated for cause will receive accrued PTO." (Id.) Plaintiffs have not, however, received such payments. (Id. ¶ 36.) Likewise, Plaintiffs were not compensated for the days they worked between April 21 and April 26. (Id. ¶ 39.)
Defendant Jason LeDay served as the "sole manager and member of LTHM Houston-Operations, LLC." (Id. ¶ 10.) He also had "operational control" over that entity. (Id. ¶ 12.) Additionally, he was the administrator of Renaissance Hospital Groves, of which he also had operational control. (Id. ¶¶ 11-12.) Some combination of LeDay, LTHM, and Kiglapait "own and/or operate Renaissance Hospital Groves." (Id. ¶ 15.) They also "own, operate, and/or have control over at least two other hospitals." (Id. ¶ 16.)
Plaintiffs have alleged violations of the Worker Adjustment and Retraining Notification (WARN) Act, the Employee Retirement Income Security Act (ERISA), and the Fair Labor Standards Act (FLSA), as well as breach of contract. (Doc. No. 10 at 1.) With respect to ERISA, Plaintiffs allege violations of 29 U.S.C. § 1132(a)(1)(B), § 1132(a)(2) and § 1132(c)(1). (Doc. No. 10 at 8.) Plaintiffs intend to seek class certification pursuant to Federal Rule of Civil Procedure 23. (Id. ¶ 47.)
Defendants LTHM and LeDay now move pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss all claims. (Doc. No. 11.) All Defendants move to dismiss each of the ERISA claims. (Id.)
A court may dismiss a complaint for a "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a Rule 12(b)(6) motion to dismiss, a complaint 'does not need detailed factual allegations,' but must provide the plaintiff's grounds for entitlement to relief — including factual allegations that when assumed to be true 'raise a right to relief above the speculative level.'" Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). That is, a complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible onits face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The plausibility standard "is not akin to a 'probability requirement,'" though it does require more than simply a "sheer possibility" that a defendant has acted unlawfully. Id. at 678. Thus, a pleading need not contain detailed factual allegations, but must set forth more than "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citation omitted).
"ERISA provides 'a panoply of remedial devices' for participants and beneficiaries of benefit plans." Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 108 (1989) (quoting Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985)). ERISA Section 502(a) provides that "[a] civil action may be brought (1) by a participant or beneficiary . . . (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004). Worthy of emphasis is the phrase "terms of the plan." Any right to benefits derives not from the statute, but from the plan. See, e.g., Firestone Tire & Rubber Co., 489 U.S. at 113 ; Schadler v. Anthem Life Ins. Co., 147 F.3d 388, 394 (5th Cir. 1998) .
Defendants argue that the claims under Section 1132(a)(1)(B) should be dismissed because Plaintiffs have not specified "what specific 'past benefits' are allegedly owed or to whom." (Doc. No. 11 at 5.) Defendants also argue that Plaintiffs have not pleaded "specifics as to how their benefits were 'improperly terminated' even though they did cease to be employed." Plaintiffs counter that they "are not receiving medical benefits as they did when they were employed, and they did not receive COBRA notifications." (Doc. No. 12 at 7.) They add that "[r]elief under § 1132(a)(1)(B) may require Defendants to pay for incurred medical expenses . . . and reinstate their medical coverage and/or offer COBRA coverage." (Id.)
Defendants are correct that Plaintiffs have not identified any specific "past benefits" due to them. Plaintiffs' argument (made only in their brief) that Defendants may be obligated "to pay for incurred medical expenses" is unavailing because Plaintiffs have not pleaded the existence of any incurred medical expenses. (Doc. No. 12 at 7.) Still, the Court does not feel as though it can dismiss Plaintiffs' claim. Section 1132(a)(1)(B) also allows for a plaintiff "to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." Plaintiffs assert that, upon termination, the plan entitled them to COBRA benefits.3 (Doc. No. 10 ¶ 30.) Defendants have offered no reason why this is insufficient to statea claim to enforce rights under the plan or to clarify Plaintiffs' rights to future benefits.4 Cf. Hospitals, Inc. v. Health Plus of Louisiana, Inc., 418 F.3d 436, 441 (5th Cir. 2005) ("'ERISA, as amended by COBRA, is remedial legislation which should be liberally construed to effectuate Congressional intent to protect employee participants in employee benefit plans.'" (quoting McGee v. Funderburg, 17 F.3d 1122, 1124 (8th Cir. 1994)). It is plausible that Plaintiffs' claim to continuing COBRA benefits entitles them to relief under § 1132(a)(1)(B). This claim can move forward.5
29 U.S.C. § 1109(a). ERISA Section 502, codified at 29...
To continue reading
Request your trial