Fugarino v. Hartford Life and Acc. Ins. Co.
| Decision Date | 24 August 1992 |
| Docket Number | No. 91-3652,91-3652 |
| Citation | 969 F.2d 178 |
| Parties | Richard FUGARINO, Jo Marie Fugarino and Marc A. Fugarino, Plaintiffs-Appellants, v. HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY and Consolidated Group, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Walter R. Lawrence (argued and briefed), Tallmadge, Ohio, for plaintiffs-appellants.
Lisa M. Newmark, Eliott R. Good (briefed), Philip F. Brown (argued), Chorpenning, Good & Mancuso, Columbus, Ohio, for defendant-appellee.
Before: MARTIN and MILBURN, Circuit Judges; and BROWN, Senior Circuit Judge.
Plaintiffs Richard Fugarino, Jo Marie Fugarino, and Marc A. Fugarino appeal the district court's dismissal of their complaint which asserted various state law causes of action relating to an insurance policy purchased from defendant Hartford Life and Accident Insurance Company. The dismissal was under Federal Rule of Civil Procedure 12(b)(6) and based on the ground of preemption pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. On appeal, the principal issues presented are: (1) whether the insurance plan in question is an employee welfare benefit plan as defined by ERISA, (2) whether the status of plaintiff Richard Fugarino as a self-employed sole proprietor affects the status of the insurance plan pursuant to ERISA, (3) whether the district court erred in dismissing the complaint pursuant to Rule 12(b)(6), and (4) whether the district court's Rule 12(b)(6) dismissal is a grant of summary judgment pursuant to Federal Rule of Civil Procedure 52 because the court considered matters outside the pleadings when deciding the motion for dismissal. For the reasons that follow, we affirm in part, reverse in part, and remand.
This case involves a dispute between the plaintiffs and defendants concerning an insurance policy. The policy is a Group Health Insurance Policy which, as stated, was purchased by plaintiff Richard Fugarino from defendant Hartford Life and Accident Insurance Company. The policy is administered by defendant Consolidated Group Inc.
Plaintiff Richard Fugarino purchased the policy to provide health and medical coverage for himself, his dependents, and for a few of his employees and their dependents. Plaintiff Richard Fugarino is the sole proprietor and operator of a business known as "The Glens Restaurant." Full-time and part-time employees work at the restaurant.
The insurance policy was purchased in November of 1985. Since the policy was purchased, three of Richard Fugarino's restaurant employees have been covered under the policy. Richard Fugarino advised his employees of the insurance program, and they then decided whether or not they wanted to participate in the coverage. The employees who participated in the coverage paid their own premiums by reimbursing Fugarino. However, Fugarino paid for the coverage of one of his employees, and he paid for coverage for his dependents, plaintiff Jo Marie Fugarino, his wife, and plaintiff Marc A. Fugarino, his minor son. The insurance contract was cancelled in June 1989.
On or about February 1, 1988, plaintiff Marc A. Fugarino was involved in an automobile accident. Marc A. Fugarino, who was 17 years of age at the time of the accident, sustained severe injuries which left him a paraplegic. Plaintiffs submitted a claim to defendants for payment of Marc A. Fugarino's expenses arising out of the automobile accident; however, a dispute arose between the parties concerning payment of the expenses.
On February 10, 1989, plaintiffs brought an action against defendants in the Court of Common Pleas of Summit County, Ohio. Plaintiffs' complaint contained four separate counts. Count One sought judgment against defendants for the amount of Marc A. Fugarino's unpaid medical bills arising out of the automobile accident. Count Two sought judgment for unpaid medical bills incurred by some of plaintiff Richard Fugarino's employees. Counts One and Two were subsequently dismissed by agreement of the parties on November 2, 1989, after a settlement was reached by the parties and as well by the plaintiffs in behalf of the restaurant employees. 1
Count Three of the complaint sought compensatory and punitive damages for alleged bad faith by defendants in their handling of the claims submitted by plaintiffs on their own behalf and on behalf of the restaurant employees. Count Four sought a declaratory judgment that the insurance contract was in full force and effect and that defendants were responsible for payment of all past and future medical bills incurred by plaintiffs which were covered under defendant Hartford's insurance policy.
On March 20, 1989, defendants removed plaintiffs' case to the United States District Court for the Northern District of Ohio pursuant to 28 U.S.C. §§ 1441 and 1446. Thereafter, on April 27, 1989, defendants filed a motion to dismiss the complaint on the ground that plaintiffs' claims arose under Ohio law and, thus, were preempted by ERISA. Defendants further asserted that plaintiffs failed to abide by the administrative remedies provided by ERISA and the insurance policy in question and, therefore, that the action was filed prematurely.
Plaintiffs filed a motion in opposition to defendants' motion to dismiss. In their motion, plaintiffs requested that the case be remanded back to state court pursuant to 28 U.S.C. § 1447(c). On June 4, 1991, the district court dismissed plaintiffs' complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted. This timely appeal followed.
Plaintiffs first challenge the dismissal of their complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). They argue that because the district court considered matters beyond the pleadings in granting the dismissal that the dismissal is in effect a grant of summary judgment under Federal Rule of Civil Procedure 56. Second, plaintiffs also argue that the district court erred when it failed to give them ten days notice of its intent to grant summary judgment in favor of defendants.
From the record, it appears that the district court did consider matters outside the pleadings in dismissing this case. When matters outside the pleadings are presented to and considered by the court in a Rule 12(b)(6) motion, the motion is treated as a motion for summary judgment. See Friedman v. United States, 927 F.2d 259, 261 (6th Cir.1991). When matters outside the pleadings are considered in ruling on a Rule 12(b)(6) motion, the parties must be given a reasonable opportunity to present all material made pertinent to the motion under Rule 56. Id.
Plaintiffs essentially argue that because they were not given explicit notice that the district court would rely on matters outside the pleadings, they were not given a reasonable opportunity to respond to such matters. However, the record belies such assertion. In this case, plaintiffs had ample opportunity to respond to defendants' evidence.
Defendants filed their motion to dismiss on April 27, 1989. They filed an additional memorandum with exhibits in September 1989 and an additional supplemental memorandum with exhibits in November 1989. The district court did not act on defendants' motion until June 4, 1991, when it dismissed the case. Thus, although plaintiffs did not receive explicit notice that the district court would consider matters outside the pleadings, they had approximately two years to respond to defendants' evidence.
In Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389 (6th Cir.1975), we addressed circumstances comparable to the facts in this case. In Dayco, the district court granted summary judgment in favor of the defendant. The plaintiff appealed, arguing that the district court should have given the parties ten days notice before he considered the defendant's Rule 12(b)(6) motion as a motion for summary judgment. The plaintiff argued that it did not have ample time to supplement the record. Id. at 392. However, the record revealed that seven weeks elapsed between the service of the Rule 12(b)(6) motion and the entry of judgment. We held that although it would have been a better practice for the district court to give notice of its intention to treat a Rule 12(b)(6) motion as a summary judgment motion, no error was committed under the circumstances present in Dayco. Id.
In this case, plaintiffs responded to each of defendants' motions or memoranda. Furthermore, given the amount of time which elapsed between the filing of defendants' Rule 12(b)(6) motion and the dismissal of plaintiffs' case, it can hardly be said that plaintiffs did not have a reasonable time to respond to defendants' evidence. Thus, the district court did not commit error in failing to give notice to the parties that it would consider matters outside the pleadings in dismissing this case.
As noted above, the district court's dismissal of this case is properly treated as a grant of summary judgment in favor of defendants. This court reviews a district court's grant of summary judgment de novo. See Faughender v. City of North Olmsted, Ohio, 927 F.2d 909, 911 (6th Cir.1991). Summary judgment is proper pursuant to Federal Rule of Civil Procedure 56(c) if the record shows 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. See Canderm Pharmacal, Ltd. v. Elder Pharmaceuticals, Inc., 862 F.2d 597, 601 (6th Cir.1988).
Plaintiffs argue that the district court erred in concluding that the group insurance policy purchased by plaintiff Richard Fugarino constituted an ERISA plan. ERISA applies to an employee benefits plan if it is established or maintained by an employer or an employee organization engaged in commerce or in any industry or activity affecting commerce....
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