Diaz v. Texas Health Enterprises, Inc.

• Decision Date: 13 April 1993
• Docket Number: No. MO-92-CA-175.,MO-92-CA-175.
• Parties: Evelyn DIAZ v. TEXAS HEALTH ENTERPRISES, INC. d/b/a New Horizons Nursing Home.
• Court: U.S. District Court — Western District of Texas

822 F. Supp. 1258

Evelyn DIAZ v. TEXAS HEALTH ENTERPRISES, INC. d/b/a New Horizons Nursing Home.

No. MO-92-CA-175.

United States District Court, W.D. Texas, Midland-Odessa Division.

April 13, 1993.

Charles Philips, Burnett & Burnett, Odessa, TX, for plaintiff.

Stephen Greenberg, Small, Craig & Werkenthin, Austin, TX, Richard Andrew Bonner, Shafer, Davis, McCollum, Ashley, O'Leary & Stoker, Odessa, TX, Iris J. Jones, and Julie L. Benson, Small, Craig & Werkenthin, Austin, TX, for defendant.

MEMORANDUM OPINION AND ORDER

BUNTON, Senior District Judge.

BEFORE THE COURT is Defendant TEXAS HEALTH ENTERPRISES, INC.'s Motion for Summary Judgment and supporting brief in the above-captioned cause. Plaintiff filed a Response with supporting brief opposing said motion. On April 8, 1993, Defendant filed a Reply to Plaintiff's Response. After extensive and careful consideration of the Motion, Response, Reply, the supporting briefs, pleadings on file, attached exhibits and the controlling law, the Court is . . . exhausted. Notwithstanding the foregoing, the Court is of the Opinion the Motion for Summary Judgment is meritorious and should be GRANTED.

JURISDICTION

Plaintiff commenced this action against the Defendants in the 358th Judicial District Court of Ector County, Texas. Plaintiff alleged a claim for benefits under an employee benefit plan governed by the Employees' Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). Defendant removed the action to this Court under the provisions of 28 U.S.C. § 1441(a), and based on ERISA preemption. 29 U.S.C. § 1001 et seq. This Court has original subject matter jurisdiction pursuant to 28 U.S.C. § 1332.

FACTUAL BACKGROUND

This case involves Plaintiff's claim against Defendant Texas Health Enterprises, Inc., d/b/a New Horizons Nursing Home (herein "THE") regarding an alleged accident during her employment with THE. THE is a nonsubscriber to worker compensation pursuant to the Texas Worker's Compensation Act. THE offers their employees the option of electing to participate in an Employee Injury Benefit Plan (herein the "Plan") which provides certain wage replacement, medical, dismemberment, and other benefits to employees electing to be covered and who are injured during the course of their employment. The uncontroverted evidence clearly shows the Plan is an ERISA plan and governed by the act. See 29 U.S.C. § 1002(3) (defining an "employee benefit plan" as one which provides its beneficiaries with "medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, or disability. ..."). The Plaintiff elected to be covered by the Plan at the beginning of her employment on March 24, 1992. (See exhibit B of Defendant's Motion). The Plaintiff also signed an acknowledgement form stating she had received and reviewed a "Summary" of the Plan's provisions, which contained a waiver of the right to sue for any claims unrelated to a claim for benefits. (see exhibit A of the Affidavit of Glenda Jones).

Plaintiff was allegedly injured on August 20, 1992, while she was working and while a participant under the Plan. The Plaintiff apparently then made an effort to obtain benefit payments for her injuries, although the evidence is unclear on whether she filed a formal claim or not. THE denied the claim for benefits, regardless of whether the claim was filed in compliance with the Plan. The Plaintiff did not file an appeal from this denial, as provided for in the Plan.

Subsequently, the Plaintiff filed suit in the 368th District Court in Ector County, Odessa, Texas. While the crux of the Plaintiff's claims involved the non-payment of benefits she believed she was entitled to under the Plan, the petition also included state law claims for negligence on the part of THE. On December 9, 1992, the case was removed to this Court on the basis of preemption by ERISA. 29 U.S.C. §§ 1001-1461.

ISSUES

1. Are the Plaintiff's state law claims for negligence against THE preempted by ERISA?

2. Assuming the Plaintiff's state law claims are not preempted by ERISA, did the Plaintiff waive the right to sue for these claims under the provisions of the Plan?

3. Is Plaintiff barred from asserting any claim for non-payment of benefits because she did not exhaust the available administrative remedies provided for in the Plan?

THE COURT ANSWERS

1. Yes, the Plaintiff's state law claims of negligence are preempted by ERISA.

2. Yes, assuming any of the state law negligence claims are not preempted by ERISA, the Plaintiff voluntarily waived the right to sue for these claims.

3. Yes, the Plaintiff is barred from asserting a claim for non-payment of benefits until she exhaust all of the administrative remedies available under the Plan.

STANDARD ON MOTION FOR SUMMARY JUDGMENT

Rule 56(c) of the Federal Rules of Civil Procedure provides summary judgment, "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Furthermore, "all facts contained in the pleadings, depositions, admissions, and answers to interrogatories are reviewed by `drawing all inferences most favorable to the party opposing the motion.'" James v. Sadler, 909 F.2d 834 (5th Cir.1990) (quoting Reid v. State Farm Mutual Auto Ins. Co., 784 F.2d 577, 578 (5th Cir.1986)); Moore v. Mississippi Valley State University, 871 F.2d 545, 549 (5th Cir.1989); Waltman v. Int'l Paper Co., 875 F.2d 468, 474 (5th Cir.1989). Rule 56(e) provides:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial.

Accordingly, the focus of this Court is upon disputes over material facts; that is, facts likely to affect the outcome of the lawsuit under the governing substantive law will preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Phillips Oil Co. v. OKC Corp., 812 F.2d 265, 272 (5th Cir.), cert. denied, 484 U.S. 851, 108 S.Ct. 152, 98 L.Ed.2d 107 (1987). The Fifth Circuit stated, "the standard of review is not merely whether there is a sufficient factual dispute to permit the case to go forward, but whether a rational trier of fact could find for the non-moving party based upon the record evidence before the court." James, 909 F.2d at 837; see Matsushita Elec. Industr. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986); Boeing Co. v. Shipman, 411 F.2d 365, 374-375 (5th Cir.1969) (en banc).

The Supreme Court's 1986 trilogy of summary judgment cases clarified the test for granting summary judgment. In the first case, Anderson, the Court stated the trial court must consider the substantive burden of proof imposed on the party making the claim. In the case before this Court, the Plaintiff has the burden with respect to each claim and Defendant has the burden with respect to their defenses and claims for affirmative relief. Once Defendant THE demonstrates it is entitled to summary judgment under the law, Plaintiff has the burden of rebutting the proof on the issues of preemption, waiver, and exhaustion of administrative remedies under the Plan.

Anderson requires this Court to substantively evaluate the evidence offered by the moving and non-moving party. "The requirement is that there be no genuine issue of material fact." Id. 477 U.S. at 248, 106 S.Ct. at 2510 (emphasis in original). A dispute is "genuine" "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Id. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id.

In the second case, Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), the Supreme Court reiterated the requirement that once the party moving for summary judgment has made a prima facie showing there is no genuine issue as to any material fact, the non-moving party must then come forward with "specific facts" showing a genuine issue for trial. "Its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Id. at 586, 106 S.Ct. at 1355.

The third case in the trilogy, Celotex Corp. v. Catrell, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), held when the moving party shows the opposing party is unable to produce the evidence in support of its case, summary judgment is appropriate. In Celotex Corp., it was not necessary for the motion for summary judgment to be supported by affidavits or other material specifically negating the non-moving party's claim so long as the District Court was satisfied of the absence of evidence to support it. The burden shifted to the non-moving party to produce evidence in support of its claims; if it did not produce any, summary judgment was required.

This Court has demonstrated its willingness to allow a non-moving party a day in court in borderline cases where, under the governing law or reasonable extensions of existing law, the hearing of some testimony would be helpful to understanding the proper application of the law. However, such is not the case in the case now before the Court. The Court is convinced there is no genuine dispute on material issues, and the law clearly supports, the entry of summary judgment in this case.

DISCUSSION

Preemption of State Claims

Plaintiff has asserted state law claims for negligence against THE in this case. After review of these claims and the relevant law, the Court finds the state law claims for negligence "relate to" the ERISA plan...