Rodriguez v. Oriental Financial Grp., Inc.

• Decision Date: 14 July 2011
• Docket Number: Civil No. 10–2182 (DRD).
• Parties: Rafael Limardo RODRIGUEZ, Plaintiff, v. ORIENTAL FINANCIAL GROUP INC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

802 F.Supp.2d 350

Rafael Limardo RODRIGUEZ, Plaintiff,

v.ORIENTAL FINANCIAL GROUP INC., Defendant.

Civil No. 10–2182 (DRD).

United States District Court, D. Puerto Rico.

July 14, 2011.

Alondra M. Fraga–Melendez, Alondra Fraga Melendez Law Offices, Gregorio J. Igartua–Arbona, San Juan, PR, for Plaintiff.

Alfredo Fernandez–Martinez, Elias Correa–Menendez, Delgado & Fernandez Fernandez Juncos Station, San Juan, PR, for Defendant.

OPINION AND ORDER

DANIEL R. DOMINGUEZ, District Judge.

Pending before the Court are: (a) Motion to Dismiss pursuant to F.R.C.P. 12(b)(6) (Docket No. 9) filed by Defendant Oriental Financial Group Inc. (“Oriental”); and (b) Opposition to the Motion to Dismiss (Docket No. 10) filed by Plaintiff Rafael Limardo Rodriguez (“Limardo”). For the reasons set forth below, Oriental's Motion to Dismiss is DENIED.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Limardo filed a Complaint on December 3, 2010 (Docket No. 1) against Defendant Oriental alleging a violation under Section 606 of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), 29 U.S.C. § 1166. The Complaint alleges that Oriental failed to provide adequate notice to Limardo of his rights under the Employee Retirement Income Security Act (“ERISA”), pursuant to 29 U.S.C. § 1166, at the time of Limardo's commencement in the health plan, and when Limardo's employment was terminated. For these violations, Limardo is seeking an award of $220 per day until the notice violations are corrected. Limardo also claims that under Puerto Rico Law No. 80 of May 30, 1979, 29 L.P.R.A. §§ 185a, et seq. (“Law 80”), Oriental owes him a severance payment for unjust dismissal in the amount of $26,363.75.

On February 4, 2011, Oriental filed a motion to dismiss (Docket No. 9). Therein, Oriental advocates that Limardo failed to allege in the Complaint that Oriental acted in bad faith and that Limardo was adversely affected by the alleged lack of notification. Additionally, Oriental states that since Limardo's Law 80 claim was brought before this Court's jurisdiction thru the COBRA claim, then the Complaint should be dismissed when this Court dismisses the COBRA claim.

On February 18, 2011, Limardo filed an opposition to the motion to dismiss (Docket No. 10). Therein, Limardo asserts that no statute or court require any allegations of adverse effect, prejudice, or bad faith in order to determine that a failure in the notice procedures has occurred. Nonetheless, Limardo stresses that as a result of not receiving the proper notice under ERISA–COBRA, his access to medical services was impaired.

THE MOTION TO DISMISS STANDARD

Rule 12(b)(6) of the Federal Rules of Civil Procedure (“Fed.R.Civ.P.”) provides that a complaint will be dismissed for “failure to state a claim upon which relief can be granted.” “So, when the allegations in a complaint, however true, fall short of a claim of entitlement to relief, ‘this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.’ ” (Citations omitted). Bell Atlantic Corporation, et al. v. Twombly, et al., 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In Twombly, 550 U.S. at 555 and 570, 127 S.Ct. 1955, the Court held:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations ... (citations omitted) ... a plaintiff's obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of actions not do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (on a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”). Factual allegations must be enough to raise a right to relief above the speculative level, see 5C. Wright & Miller, Federal Practice and Procedure § 1216, pp. 235–236 (3d ed. 2004).

...

Here, in contrast, we do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed. (Emphasis ours).

See also Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (“Specific facts are not necessary; the statements need only ‘give the defendants fair notice of what the ... claim is and the grounds upon which it rests' ”) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955) (emphasis ours).

In Twombly, 550 U.S. at 562–563, 127 S.Ct. 1955, the Court held:

We could go on, but there is no need to pile up further citations to show that Conley's “no set of facts” language has been questioned, criticized, and explained away long enough. To be fair to the Conley Court, the passage should be understood in light of the opinion's preceding summary of the complaint's concrete allegations, which the Court quite reasonably understood as amply stating a claim for relief. But the passage so often quoted fails to mention this understanding on the part of the Court, and after puzzling the profession for 50 years, this famous observation has earned its retirement. (Emphasis ours).

Thus, the new standard under Twombly is that a claim for relief must contain allegations that “are plausible on its face.” See also Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In Sepúlveda–Villarini v. Department of Education of Puerto Rico, 628 F.3d 25, 29 (1st Cir.2010), SOUTER, J., as Associate Justice (Ret.), the Court held:

“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed.R.Civ.P. 8(a)(2) and Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The make-or-break standard, as the district court recognized, is that the combined allegations, taken as true, must state a plausible, not a merely conceivable, case for relief. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950–51, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955); see also Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (“Factual 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).” (footnote and citations omitted)). “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. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 1949 (citations omitted). (Emphasis ours).

When considering a motion to dismiss, the Court's inquiry occurs in a two-step process under the current context-based “plausibility” standard established by Twombly, 550 U.S. 544, 127 S.Ct. 1955, and reiterated at Iqbal, 129 S.Ct. 1937. “Context based” means that plaintiff must allege facts that comply with the basic elements of the cause of action. See Iqbal, 129 S.Ct. at 1949–1950 (explaining the basic elements of a Bivens claim and thereafter concluding that facts were not sufficiently provided, leaving only conclusory statements ).

First, the Court must “accept as true all of the allegations contained in a complaint[,]” discarding legal conclusions, conclusory statements and factually threadbare recitals of the elements of a cause of action. Maldonado v. Fontanes, 568 F.3d 263, 268 (1st Cir.2009) (quoting Iqbal, 129 S.Ct. 1937) (internal quotation omitted).

Under the second step of the inquiry, the Court must determine whether, based upon all assertions that were not discarded under the first step of the inquiry, the complaint “states a plausible claim for relief.” Id. This second step is “context-specific” and requires that the Court draw from its own “judicial experience and common sense” to decide whether a plaintiff has stated a claim upon which relief may be granted, or, conversely, whether dismissal under Rule 12(b)(6) is appropriate. Id. Thus, “[i]n order to survive a motion to dismiss, [a] plaintiff must allege sufficient facts to show that he has a plausible entitlement to relief.” Sanchez v. Pereira–Castillo, 590 F.3d 31, 41 (1st Cir.2009).”

A complaint that rests on “bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like” will likely not survive a motion to dismiss. Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996). Similarly, unadorned factual assertions are inadequate as well. Penalbert–Rosa v. Fortuno–Burset, 631 F.3d 592 (1st Cir.2011). “Specific information, even if not in the form of admissible evidence, would likely be enough at [the motion to dismiss] stage; pure speculation is not.” Id. at 596.

APPLICABLE LAW AND DISCUSSION

A. ERISA–COBRA NOTICE REQUIREMENTS

COBRA requires “Group Health Plans” that are covered by ERISA to notify participating employees of their COBRA rights at the time of commencement of coverage under the plan. 29 U.S.C. § 1166(a)(1). COBRA requires the employer of an employee under a “Group Health Plan” covered by ERISA to notify the administrator of a qualifying event described in paragraph (1),(2),(4), or (6) of section 1163 of the same title within thirty (30) days of the date of the qualifying event. 29 U.S.C. § 1166(a)(2). Thereafter, the plan administrator shall notify the participant within fourteen (14) days of the date it is notified of the qualifying event of the beneficiary's rights. 29 U.S.C. § 1166(a)(4) and c.

In case of a qualifying event, 29 U.S.C. § 1163, an employer is required to...