Diaz v. MCS Life Ins. Co.

• Decision Date: 10 August 2022
• Docket Number: CIVIL 21-1376 (ADC)
• Parties: CARLOS M. SUAREZ DIAZ, et al., Plaintiffs, v. MCS LIFE INSURANCE COMPANY, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

CARLOS M. SUAREZ DIAZ, et al., Plaintiffs,
v.
MCS LIFE INSURANCE COMPANY, et al., Defendants.

CIVIL No. 21-1376 (ADC)

United States District Court, D. Puerto Rico

August 10, 2022

OPINION AND ORDER

S/AIDA M. DELGADO-COLON United States District Judge

Before the Court are co-defendants MCS Life Insurance Company's ("MCS") and Pep Boys -Manny, Moe & Jack of Puerto Rico, Inc.'s ("Pep Boys") motions to dismiss. ECF Nos. 14 and 16. For the reasons below, the motions to dismiss are GRANTED.

I. Background

On April 28, 2021, plaintiffs Carlos M. Suarez Diaz (“Suarez”), his wife Brenda Colon-Lugo (“Colon”), their Conjugal Partnership, and their daughters Karelis Suarez-Colon (“Karelis”) and Karla Suarez-Colon (“Karla”) (together, “plaintiffs”) filed a complaint in the Commonwealth of Puerto Rico Court of First Instance, Guayama Part, claiming contractual and tort damages pursuant to Puerto Rico law. ECF No. 1-1. According to the complaint, plaintiffs had a family health insurance plan through Suarez' employment at Pep Boys, paid by Pep Boys and Suarez. Id. at 1. The insurance provider was MCS. Id.

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In April 2020, Karelis was diagnosed with a cancerous tumor in her head, which required surgery. Id. at 1-2. Karelis' pre-admission process at the hospital was completed on April 28, 2020, using the health plan card. On May 1, 2020, Suarez was informed that the insurance coverage was cancelled. He was later informed that coverage had been in effect until April 30, 2020. Id. Suarez' efforts to reinstate the insurance were unsuccessful. Id. at 3. Eventually, at an unidentified date- Suarez'; Colon's and Karla's health insurance coverage was reactivated, but not Karelis'. Id. at 2-3. Karelis' surgery had to be postponed and was later rescheduled, after Suarez was able to obtain another health plan for his daughter. Id. at 3.

Plaintiffs allege that Pep Boys breached its contractual and fiduciary duty to pay for their health plan and negligently failed to take the necessary steps to ensure that MCS provided coverage. They further allege that MCS breached its contractual and fiduciary duty when it denied coverage to Karelis. Id. Plaintiffs seek to recover more than $600,000.00 for alleged mental damages and anguish and $10,00.00 in attorney's fees. Id. at 3-4.

On August 17, 2021, Pep Boys timely removed this case to federal court. ECF No. 1. In its notice of removal, Pep Boys claims that although the complaint only alleges causes of action under Puerto Rico law, it is a claim for benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 USC § 1001 et seq., that completely preempts plaintiffs' state law claims. Plaintiffs have failed to appear before this Court and the motions to dismiss are unopposed.

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II. Legal Standard

Federal Rule of Civil Procedure 12(b)(6) authorizes the dismissal of a complaint that fails to state a claim upon which relief could be granted. “To avoid dismissal, a complaint must provide ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Garda-Catalan v. United States, 734 F.3d 100, 102 (1st Cir. 2013) (quoting Fed.R.Civ.P. 8(a)(2)). When ruling on a motion to dismiss for failure to state a claim, a district court must “ask whether the complaint states a claim to relief that is plausible on its face, accepting the plaintiff's factual allegations and drawing all reasonable inferences in the plaintiff's favor.” Cooper v. Charter Communications Entertainments I, LLC, 760 F.3d 103, 106 (1st Cir. 2014) (citing Maloy v. Ballori-Lage, 744 F.3d 250, 252 (1st Cir. 2014)) (internal quotations marks omitted).

“To cross the plausibility threshold, the plaintiff must ‘plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Cooper, 760 F.3d at 106 (citing Maloy 744 F.3d at 252). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). That is, “[f]actual allegations must be enough to raise a right to relief above the speculative level, ..., on the assumption that all the allegations in the complaint are true (even if doubtful in fact) ....” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “Non-conclusory factual allegations in the complaint must then be treated as true, even if seemingly incredible.” Ocasio-Hernandez v. Fortuho-Burset, 640 F.3d 1, 12 (1st Cir. 2011).

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III. Discussion

A. Removal Jurisdiction

Removal of a state court complaint to federal court is governed by 28 U.S.C. § 1441, which provides a defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). Jurisdiction is normally ascertained from the face of the state court complaint that triggered the removal. Danca v. Priv. Health Care Sys., Inc., 185 F.3d 1, 4 (1st Cir. 1999), see Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (describing the “well-pleaded complaint” rule).

Here, the complaint alleges only causes of action under state law and thus, on its face it presents no federal question. However, “certain state claims are subject to removal, even if they purport to rest only on state law, because the subject matter is powerfully preempted by federal law, which offers some ‘substitute' cause of action.” Negron-Fuentes v. UPS Supply Chain Sols., 532 F.3d 1, 6 (1st Cir. 2008). This exception to the practice of focusing on the face of the complaint is called “complete preemption.” Danca. 185 F.3d at 4. Complete preemption occurs with statutes, such as ERISA, where a claim "though couched in the language of state law, implicates an area of federal law for which Congress intended a particularly powerful sweep." Danca, 185 F.3d 1, 4 (citing Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)).

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“ERISA preemption is, as a general matter, expansive in scope.” Rosario-Cordero v. Crowley Towing & Transp. Co., 46 F.3d 120, 122 (1st Cir. 1995). The statute contains a sweeping preemption clause, which provides that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan. ” 29 U.S.C. § 1144(a). For preemption purposes, “State laws” are “all laws, decisions, rules, regulations, or other State action having the effect of law.” 29 U.S.C. § 1144(c)(1). Puerto Rico is expressly included in the statute's definition of “State.” 29 U.S.C. § 1002(10).

A claim is preempted under ERISA if the plan at issue is an employee benefit plan within the scope of ERISA and the state-law claim "relates to" the employee benefit plan. Rosario-Cordero, 46 F.3d 124. Both requirements are met in this case. Plaintiffs' health insurance plan is a benefit plan within the scope of ERISA since, according to the complaint, it is a group health plan provided by Suarez's employer. ECF No. 1-1 at 1; 29 USC § 1002 (1).

Plaintiffs' claims relate to the employee benefit plan. ERISA § 502(a) provides for a cause of action by a participant or beneficiary of a plan "to recover benefits due . . . under the terms of the plan, to enforce . . . rights under the terms of the plan, or to clarify . . . rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Danca, 185 F.3d at 5. The United States...