Rol-Hoffman v. Reg'l Care, Inc.
| Decision Date | 18 May 2021 |
| Docket Number | Civil Action No. 20-cv-02549-LTB-SKC |
| Citation | 540 F.Supp.3d 1027 |
| Parties | Meshara ROL-HOFFMAN, Plaintiff, v. REGIONAL CARE, INC. and OSF Investments, LLC d/b/a Carpet Exchange Employee Benefit Plan, Defendants. |
| Court | U.S. District Court — District of Colorado |
Susan Paige Singleton, Bendinelli Law Firm PC, Westminister, CO, for Plaintiff.
Kevin Paul Perez, Nemirow Perez P.C., Lakewood, CO, for Defendant Regional Care, Inc.
Juan Cruz Obregon, Jackson Lewis PC, Denver, CO, for Defendant OSF Investments, LLC.
This matter is before me on two motions: (1) a Partial Motion to Dismiss Amended Complaint filed by Defendant OSF Investments, LLC d/b/a Carpet Exchange Employee Benefit Plan (the "Plan") [Doc #19 ]; and (2) a Motion for Judgment on the Pleadings filed by Defendant Regional Care, Inc. ("RCI") [Doc #25 ]. Plaintiff, Meshara Rol-Hoffman has filed a Response to the Partial Motion to Dismiss [Doc #24] and a Response to the Motion for Judgment on the Pleadings. [Doc #32] The Plan and RCI have filed their respective Replies. [Doc ##29, 33] Oral argument would not materially assist me in my determination of these motions. After consideration of the parties’ briefs, and for the reasons stated, I grant in part and deny in part the motions.
This case arises under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1101 et seq. ("ERISA"). The following facts are not disputed for purposes of these motions. Plaintiff was severely injured in a single car accident on December 15, 2018. At the time of the accident, she was employed by OSF Investments LLC d/b/a/ Carpet Exchange ("Carpet Exchange") and participated in Carpet Exchange's ERISA-governed benefits plan, which included medical benefits (the "ERISA Plan"). Carpet Exchange, the ERISA Plan Administrator, delegated the Plan's medical claim administration process to RCI as the third-party administrator. Plaintiff submitted claims to RCI to recover medical benefits under the ERISA Plan for the injuries she sustained in the accident. RCI, who had been provided with an opinion that concluded that the ERISA Plan's Alcohol and Illegal Acts exclusion applied to Plaintiff's claims (based on the results of a blood test administered at the hospital shortly after the accident), denied the claims as not covered under the ERISA Plan. In her First Amended Complaint [Doc #13] (the "Complaint"), Plaintiff asserts that Defendants wrongfully denied her benefits and did not fully and fairly review her claim.
To survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), a complaint "must contain sufficient factual matter, accepted as true, ‘to state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). This means that the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "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." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). When deciding a motion to dismiss under Rule 12(b)(6), the court must assume the truth of all well-pleaded facts in the complaint and draw all reasonable inferences therefrom in the light most favorable to the plaintiff. Teigen v. Renfrow , 511 F.3d 1072, 1078 (10th Cir. 2007). Legal conclusions, however, do not receive this treatment. Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. "A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to dismiss under Rule 12(b)(6)." Atlantic Richfield Co. v. Farm Credit Bank of Wichita , 226 F.3d 1138, 1160 (10th Cir. 2000).
Federal Rule of Civil Procedure 8(a) requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although "[s]pecific facts are not necessary" to comply with the rule, the complaint must " ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ " Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ) (alteration in original).
Plaintiff asserts four claims against the Plan. The First Claim for Relief, brought under ERISA Section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), is a claim based on wrongful denial of benefits to recover benefits allegedly due to Plaintiff under the Plan. The Second Claim for Relief, brought pursuant to ERISA Sections 404(a) and 502(a)(3), 29 U.S.C. §§ 1104(a) and 1132(a)(3), is for breach of fiduciary duty based on various alleged procedural violations committed in the processing of Plaintiff's claim. The Fourth Claim for Relief, brought under ERISA Section 503, 29 U.S.C. § 1133(2), for the Plan's alleged failure to fully and fairly review Plaintiff's claims, is based on similar procedural violations. The Fifth Claim for Relief, brought pursuant to ERISA Section 404(a), 29 U.S.C. § 1104(a), is based on the Plan's wrongful denial of benefits by allegedly failing to comply with certain provisions of the Affordable Care Act ("ACA").
Plaintiff asserts two claims against RCI. The Third Claim for Relief, brought pursuant to ERISA Sections 404(a) and 502(a)(3), 29 U.S.C. §§ 1104(a) and 1132(a)(3), alleges breach of fiduciary duty based on various procedural violations committed during the processing and denial of Plaintiff's claim. The Sixth Claim for Relief, a common law claim for breach of contract, is based on the same or similar violations as alleged in the Third Claim for Relief.
The relevant sections of ERISA under which Plaintiff advances her first two claims against the Plan are Section 502(a)(1)(B) – First Claim for Relief – which allows a participant or beneficiary to recover benefits due under the terms of a plan, to enforce rights under the plan, or to clarify rights to future benefits under the plan, and Section 502(a)(3) – Second Claim for Relief – which allows a plan participant to bring a civil action "(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan." 29 U.S.C. § 1132(a)(1)(B) & (a)(3). The Plan is not seeking dismissal of the First Claim for Relief in this motion.
The Plan seeks dismissal of the Second Claim for Relief on the grounds that "while Count II purports to seek equitable relief under § 502(a)(3), it is just a repackaged wrongful denial of benefits claim already asserted under Count I" under which Plaintiff "seeks the same allegedly wrongfully denied benefits." Motion [Doc #19] at 7, 8. Relying on Varity Corp. v. Howe , 516 U.S. 489, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996), the Plan argues that the Second Claim for Relief should be dismissed as duplicative of the First Claim for Relief.
In Varity , the Supreme Court explained the difference between the two types of claims at issue here. ERISA § 502(a)(1)(B) provides a "remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims," while § 502(a)(3) is a "catchall" provision that affords " ‘appropriate equitable relief’ for ‘any’ statutory violation." Id. , 516 U.S. at 512, 116 S.Ct. 1065. In other words, § 502(a)(3) "act[s] as a safety net ... for injuries caused by violations that § 502 does not elsewhere adequately remedy." Id. The Court, however, cautioned that "where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief, in which case such relief normally would not be appropriate." Id. at 515, 116 S.Ct. 1065 ().
Plaintiff argues that it is premature to dismiss her adequately pled claims seeking alternative forms of relief and asserts that Varity does not require that she choose one form of relief over another at this stage of the case. Plaintiff acknowledges the Court's guidance in Varity that "where Congress elsewhere provided adequate relief for a beneficiary's injury, there will likely be no need for further equitable relief ...." Id. at 515, 116 S.Ct. 1065. However, Plaintiff argues that at the pleading stage, which was not the posture of the case in Varity , it is too soon to know whether the relief provided under § 502(a)(1)(B) will be adequate.
Plaintiff also takes issue with the Plan's assertion that the First and Second Claims for Relief are duplicative. Plaintiff explains that Count I seeks monetary relief in the form of payment of her medical benefits due under the terms of the ERISA Plan and is based on the Plan's wrongful denial of benefits; whereas Count II seeks equitable relief based on the Complaint's allegations regarding the Plan's "deprivation her of her right to a full and fair review of Carpet Exchange's adverse benefit determination." Resp. [Doc #24] at 6, citing Compl. ¶ 120; see also Compl. ¶ 119 (...
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