Beegan v. Associated Press

• Decision Date: 11 March 1999
• Docket Number: No. Civ. 98-329-P-C.,Civ. 98-329-P-C.
• Citation: 43 F.Supp.2d 70
• Parties: Daniel BEEGAN, Plaintiff, v. The ASSOCIATED PRESS; Connecticut General Life Insurance Co., Defendants.
• Court: U.S. District Court — District of Maine

43 F.Supp.2d 70

Daniel BEEGAN, Plaintiff, v. The ASSOCIATED PRESS; Connecticut General Life Insurance Co., Defendants.

No. Civ. 98-329-P-C.

United States District Court, D. Maine.

March 11, 1999.

Paul F. Marcri, John E. Sedgewick, Berman & Simmons, P.A., Lewiston, Maine, for plaintiff Daniel H. Beegan.

Richard G. Moon, Moon, Moss, McGill & Bachelder, P.A., Portland, Maine, for defendant Associated Press.

Alison Denham, Douglas, Denham, Rogers & Hood, Portland, Maine, for defendant Connecticut General Life Insurance Co.

MEMORANDUM OF DECISION AND ORDER

GENE CARTER, District Judge.

Daniel Beegan, Plaintiff, brought this suit against Associated Press and Connecticut General Life Insurance Company ("Connecticut General"), Defendants, alleging violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"), and breach of contract. Now before the Court is Defendant Associated Press's motion brought pursuant to Fed.R.Civ.P. 12(b)(6), in which Associated Press seeks dismissal of this action against it on the ground that it is not a proper defendant to claims under ERISA and that Mr. Beegan's state law breach of contract claim is preempted by ERISA (Docket No. 3).

I. BACKGROUND

Because the Court is considering a motion to dismiss, it will set forth the facts as stated in Mr. Beegan's Amended Complaint. Mr. Beegan was an employee of the Associated Press until July 1, 1994, when he applied for long-term disability benefits ("LTD benefits"). Amended Complaint (Docket No. 2) ¶ 1 at 2. At all relevant times, Mr. Beegan was covered by a group long-term disability insurance policy ("LTD Policy"), which was available to employees of Associated Press and was issued, administered, and underwritten by Connecticut General. Id. ¶ 1. Connecticut General was the designated administrator and fiduciary of the LTD Policy. Id. ¶ 4.

Under the LTD Policy, eligible employees disabled due to sickness or accidental bodily injury may receive LTD benefits for twenty-four months. Id. ¶ 10. In addition, eligible employees who are disabled because of a physical disability may continue to receive LTD benefits beyond the twenty-four-month period if the disability completely prevents him or her from engaging in any occupation for which he or she is qualified by training, education, or experience. Id. ¶ 11. Finally, the LTD Policy limits the period for which a person disabled because of a mental illness or functional nervous disorder may receive LTD benefits to twenty-four months. Id. ¶ 12.

Mr. Beegan suffers from major recurrent and severe depression, irritable bowel syndrome, and degenerative arthritis in his left hip, shoulder, hands, and knees, id. ¶ 1 at 2, and his application for LTD benefits was granted by letter dated January 31, 1995. Id. In April of 1996, Mr. Beegan submitted a supplemental application for benefits wherein he stated that he suffered from somatic dysfunction, cervical and lumbar spine problems, panic disorder, chronic depression, fatigue, sadness, poor concentration, back/neck pain, and cranial strain pattern. Id. On April 30, 1996, Connecticut General notified Mr. Beegan that he was not eligible for benefits beyond the twenty-four months due to the mental illness limitation under the LTD Policy. Id. ¶ 13. Mr. Beegan furnished the insurance company with medical reports and records which allegedly demonstrate that he is physically disabled and unable to engage in any occupation for which he is qualified by training, education, or experience. Id. ¶ 14. Connecticut General continues to deny his claim and provided Mr. Beegan with a final written denial of his claim for LTD benefits on June 27, 1997. Id. Upon the termination of his LTD benefits, Associated Press terminated his employment and discontinued his group health and life insurance and his pension benefits. Id. ¶¶ 25-26

II. DISCUSSION

The principle argument set forth by Mr. Beegan in this case is that Connecticut General mistakenly and wrongfully determined that he suffers from a mental disability and accordingly limited his receipt of LTD benefits to two years. In Count I, Mr. Beegan contends that he is entitled to receive benefits beyond the two-year limitation under the terms of the LTD policy because his disability is physical in nature and he meets the LTD Policy's definition of permanent disability. Amended Complaint ¶ 17. In Count II, he alleges that the handling of his claim for LTD benefits breached requirements imposed by the LTD Policy and responsibilities imposed upon fiduciaries under ERISA. Finally, Mr. Beegan argues in Count III that Associated Press breached a contract which required it to continue to pay his employee fringe benefits, such as group health and life insurance and pension benefits, while he was receiving or eligible to receive LTD benefits. Associated Press's motion to dismiss requires the Court to ascertain whether: 1) Associated Press is a proper defendant to the foregoing claims under ERISA and 2) Mr. Beegan's state common law breach of contract claim against Associated Press is preempted by ERISA.

A motion to dismiss tests the legal sufficiency of the complaint and thus does not require the court to examine the evidence at issue. See Carey v. Mt. Desert Island Hospital, 910 F.Supp. 7, 9 (D.Me.1995). The plaintiff must set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory. See Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988). Thus, a Rule 12(b)(6) motion requires the court to take all of the plaintiff's factual averments as true and indulge every reasonable inference in the plaintiff's favor. See Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 51 (1st Cir.1990). However, the court need not accept "bald assertions" or "unsubstantiated conclusions." Id. at 52. A motion will be granted only if, when viewed in this manner, the pleading shows no set of facts which could entitle plaintiff to relief. Gooley, 851 F.2d at 514.

A. Employer As A Proper Defendant To Claims Brought Under ERISA.

The Court first examines Associated Press's argument that it is an improper party to Mr. Beegan's ERISA claims contained in Counts I and II of his Amended Complaint. Associated Press was Mr. Beegan's employer until July 1, 1994. Amended Complaint ¶ 1. ERISA permits suits to recover benefits only against the Plan as an entity, see 29 U.S.C. § 1132(a)(1)(B), (d) and suits for breach of fiduciary duty only against the fiduciary. See 29 U.S.C. § 1109(a). In addition, ERISA requires that an employee benefit plan designate a plan administrator and to identify those persons or entities who are responsible for the administration of the plan and have a fiduciary duty thereunder. See 29 U.S.C. § 1102(a). Where such designation is lacking, ERISA defines an administrator as the employee benefit plan's sponsor. See 29 U.S.C. § 1002(16)(B). The sponsor of an employee benefit plan is defined as the participant's employer. See 29 U.S.C. § 1002(16)(B). An employer is, thus, a proper party to an ERISA suit brought pursuant to 29 U.S.C. § 1132 if it is the designated plan administrator or fiduciary. In addition, an employer is a proper party to an ERISA suit if it is the employee benefit plan's sponsor and no other administrator or fiduciary has been designated. See Rossi v. Boston Gas Co., 833 F.Supp. 62, 67 (D.Mass.1993).

In the case at bar, Mr. Beegan alleges that, upon information and belief, Connecticut General is the "Designated Plan Administrator and/or named fiduciary of the employee welfare benefit plan, ... within the meaning of ERISA, 29 U.S.C. § 1002(16)(A)(i) and (B)(i)." Amended Complaint ¶ 4. Nowhere in his Amended Complaint does Mr. Beegan allege that Associated Press is a designated plan administrator or fiduciary under the Plan. According to the allegations of Mr. Beegan's Amended Complaint, the LTD Policy properly designates Connecticut General as the plan administrator and named fiduciary of the LTD Policy. Accordingly, Associated Press is not the plan administrator or fiduciary by designation. Nor is Associated Press the plan administrator or fiduciary because the LTD Policy fails to designate one. Thus, it appears under ERISA's plain requirements and the allegations in the Amended Complaint that Associated Press is not a proper party defendant to Mr. Beegan's ERISA claims.

In cases where a plan administrator and fiduciary, other than the employer, is designated, an employer may still be a proper defendant to an ERISA claim. Those courts which have considered whether an employer is a proper party in a suit such as this one, brought pursuant to 29 U.S.C. § 1132, carved out the exception that an employer may be named a defendant in an ERISA action if the plaintiff shows that the employer controlled or influenced the administration of the plan. See Daniel v. Eaton Corp., 839 F.2d 263, 266 (6th Cir.), cert. denied, 488 U.S. 826, 109 S.Ct. 76, 102 L.Ed.2d 52, (1988); McLaughlin v. Reynolds, 886 F.Supp. 902, 906 (D.Me.1995); Marcum v. Zimmer, 887 F.Supp. 891, 894 (S.D.W.Va. 1995); Rossi, 833 F.Supp. at 67; Green v. Eastern Airlines, 138 F.R.D. 146, 147 (M.D.Fla.1991); Adamo v. Anchor Hocking Corp., 720 F.Supp. 491, 498 (W.D.Pa. 1989); Reynolds v. Bethlehem, 619 F.Supp. 919, 928 (D.Md.1984); Foulke v. Bethlehem 1980 Salaried Pension Plan, 565 F.Supp. 882, 883 (E.D.Pa.1983); Boyer v. J.A. Majors Co. Employees' Profit Sharing Plan, 481 F.Supp. 454, 457-58 (N.D.Ga.1979); Barrett v. Thorofare Markets, Inc., 452 F.Supp. 880, 884 (W.D.Pa. 1978); see also Law v. Ernst & Young, 956 F.2d 364, 372-73 (1st Cir.1992) (reasoning that employer "controlled the provision of information concerning ... [the] ERISA plan" and is, thus, a proper defendant to a claim under section 1132(c) of ERISA). Where an administrator has been appointed by the plan, it is the responsibility of the plaintiff to show that the...