Sawyer v. USAA Ins. Co.
| Decision Date | 09 November 2012 |
| Docket Number | No. CIV 11–0523 JB/CG.,CIV 11–0523 JB/CG. |
| Citation | 912 F.Supp.2d 1118 |
| Parties | Constance A. SAWYER, Plaintiff, v. USAA INSURANCE COMPANY, Blue Cross Blue Shield of Kansas City, Nueterra Healthcare, and Cobraguard, Defendants. |
| Court | U.S. District Court — District of New Mexico |
OPINION TEXT STARTS HERE
Daniel R. Lindsey, Clovis, NM, for Plaintiff.
Jeff L. Martin, Montgomery & Andrews, P.A., Albuquerque, NM, Randy S. Bartell, Montgomery & Andrews, P.A., Santa Fe, NM, for Defendants.
THIS MATTER comes before the Court on Defendant Blue Cross and Blue Shield of Kansas City's Motion to Dismiss Plaintiff's First Amended Complaint with Prejudice, filed April 19, 2012 (Doc. 56)(“MTD”). The Court held a hearing on May 31, 2012. The primary issues are: (i) whether the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 to 1461 (2012)( “ERISA”) preempts some or all of Plaintiff Constance A. Sawyer's state-law claims; and (ii) whether Plaintiff Constance Sawyer's federal cause of action under ERISA has accrued because she has exhausted her administrative remedies. Sawyer filed an affidavit outside of the pleadings on this matter, and the Court has thus converted the motion to dismiss into a motion for summary judgment. No genuine issue of material fact exists whether ERISA preempts Sawyer's state-law claims. ERISA completely preempts Sawyer's state-law claims and thus they may be converted into federal causes of action; and the Court will thus not dismiss her state-law claims on that basis. On the other hand, no genuine issue of material fact exists whether Sawyer exhausted the administrative remedies required under her benefits plan: Sawyer has not alleged that she has exhausted the administrative procedures that her benefits plan requires. Further, she does not dispute Defendant Blue Cross and Blue Shield of Kansas City's allegation that she has not filed a written request for review of the denial of her coverage, as her benefits plan requires. Because Sawyer has not exhausted her administrative remedies, nor shown that she has met an exception to the exhaustion requirement, the Court will dismiss without prejudice her claim for relief that is framed under ERISA and her state-law claims that ERISA completely preempts. Sawyer must exhaust her administrative remedies before bringing a civil suit to recover her benefits under her healthcare plan from Blue Cross and Blue Shield of Kansas City.
Defendant Nueterra Healthcare, LLC, employs Sawyer from April 9, 2007, through May 27, 2007. See First Amended Complaint and Jury Demand ¶ 8, at 2, filed Mar. 30, 2012 (Doc. 51)(“FAC”)(setting forth fact); Reply of Defendant Blue Cross and Blue Shield of Kansas City in Support of its Motion to Dismiss Plaintiff's First Amended Complaint with Prejudice ¶ 1, at 1, filed Sept. 26, 2012 (Doc. 81)(“Reply”)(not contesting fact). Sawyer had a health insurance policy through Nueterra Healthcare. See FAC ¶¶ 4, 8, at 2 (setting forth fact); Sawyer Aff. ¶ 2, at 1 (setting forth fact); Reply ¶ 1 at 1 (not contesting fact). Nueterra Healthcare gave Sawyer a copy of a policy document (“Policy”) from Defendant Blue Cross and Blue Shield of Kansas City (“BCBSKC”), before June 7, 2007. See First Requests for Admissions to Plaintiff from Defendant Blue Cross Blue Shield of Kansas City, ¶ 1, at 2, filed Sept. 26, 2012 (Doc. 81–1)(“Requests for Admissions”)(setting forth fact).2 Sawyer's health care policy was subject to the provisions of ERISA. See FAC ¶ 8, at 2 (setting forth fact); Reply ¶ 3, at 2 (not contesting fact).
On or about May 31, 2007, Sawyer's employment with Nueterra Healthcare ended. See FAC ¶ 9, at 2 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact). Sawyer elected to continue her coverage pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. § 1161 (2012)(“COBRA”). See FAC ¶ 9, at 3. Sawyer paid the premiums to continue her coverage to the COBRA administrator, CobraGuard. See FAC ¶ 9, at 3 (setting forth fact); Sawyer Aff. ¶ 2, at 1 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact). BCBSKC did not receive notification from CobraGuard that Sawyer elected to continue her coverage. See FAC ¶ 45, at 7 (setting forth fact); Reply ¶ 4, at 2 (not contesting fact).
On June 7, 2007, Sawyer was involved in an automobile accident, and she suffered severe and significant injuries. See FAC ¶ 11, at 3 (setting forth fact); Reply ¶¶ 1–12, at 1–4 (not contesting fact). Sawyer was a passenger in a car that was driven negligently by Joel Widener, who was under the influence of alcohol, and his driving caused the vehicle to roll. See FAC ¶ 11, at 3 (setting forth fact); Reply ¶¶ 1–12, at 1–4 (not contesting fact). Sawyer received a full settlement from Widener at the maximum liability amount possible, but the amount she recovered was not enough to cover her medical bills. See FAC ¶ 12, at 3 (setting forth fact); Reply ¶¶ 1–12, at 1–4 (not contesting fact). Sawyer had, as of the filing of her FAC, outstanding medical bills. See FAC ¶ 12, at 3 (setting forth fact); Reply ¶¶ 1–12, at 1–4 (not contesting fact).
The Defendants in this action—United Services Automobile Association (“USAA”), BCBSKC, Nueterra Healthcare, and Cobraguard—have refused to make payments required by their policies with the Defendants. See FAC ¶ 13, at 3 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer telephone BCBSKC once between June 7 and 30, 2007, and she inquired why BCBSKC was not covering her medical bills. See Requests for Admission ¶ 6, at 3 (setting forth fact).3 Sawyer was informed that BCBSKC could not find her policy number, but that BCBSKC would call her back after this issue had been resolved. See Sawyer Aff. ¶ 4, at 1 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer was informed by a representative that BCBSKC had terminated her coverage on June 1, 2007. See Requests for Admissions ¶ 4, at 2 (setting forth fact).4 Sawyer never received a follow-up telephone call from BCBSKC, or any other correspondence, except for medical bills. See Sawyer Aff. ¶¶ 4–7, at 1–2 (setting forth fact); Reply ¶ 5, at 2 (not contesting fact). Sawyer would have received better after-care for her injuries from her accident if her insurance had not been in question at the time. See Sawyer Aff. ¶¶ 9–12, at 2 (setting forth fact); Reply ¶¶ 1–12, at 1–4 (not contesting fact).
The Policy that Sawyer possesses from BCBSKC states that “[f]or Employee Welfare Benefit Plans subject to [ERISA] You must file a first level Grievance before You bring a civil action under ERISA Section 502(a).” BCBSKC's group health plan information ¶ 3, at 4, filed April 19, 2012 (Doc. 56–1)(“the Policy”); Sawyer Aff. ¶¶ 1–21, at 1–3 (not contesting fact). The Policy also states, in Section L, that a member has a right to bring a civil action under ERISA Section 502(a) to recover benefits under the Policy, “provided You have exhausted Your first level Grievance rights.” Policy ¶ 3, at 4 (setting forth fact); Sawyer Aff. ¶¶ 1–21, at 1–3 (not contesting fact). A first level Grievance is initiated when a member submits a Member Grievance form within 365 days of receiving an Explanation of Benefits from BCBSKC. See Policy ¶ 4, at 4–5 (setting forth fact); Sawyer Aff. ¶¶ 1–21, at 1–3 (not contesting fact). A Grievance is defined in Section L, paragraph 1 of the Policy, as “[a] written complaint submitted by or on behalf of a Covered Person to Our Appeals Department regarding: ... (b) Post–Service Claims payment, handling or reimbursement for health care services.” Policy ¶ 1, at 3 (setting forth fact). See Sawyer Aff. ¶ 16, at 3 (not contesting fact).
Sawyer did not call or write to BCBSKC to request a review of BCBSKC's denial of the claims processed on Sawyer's behalf, in the amounts of $11,603.34, $29,050.92, and $16,162.27 as described in the Explanations of Benefits sent to Sawyer on or about December 10, 2007. See Requests for Admission ¶¶ 7–9, at 3–4 (setting forth fact).5 The Explanations of Benefits sent to Sawyer contain a section titled, “Notice to Member,” which provides:
If you disagree with our decision you may request a review of the claim. You must send a written request within 180 days of receiving this notice. You should explain why you disagree and you may provide additional information about the claim.... If your group health plan is subject to ERISA ..., you may file a lawsuit under Section 502(a) of ERISA, if you have used all of the appeal rights required by your plan. Please see your certificate or summary plan description or call the phone number on the EOB for detailed information about the appeal process.
Explanation of Benefits at 8, 10, 12, 14, 16, filed Apr. 19, 2012 (Doc. 56–1) (setting forth fact); Sawyer Aff. ¶¶ 1–21, at 1–3 ().
Sawyer exhausted every effort of which she was aware at the time, but she did not exhaust the administrative remedies described in Section L of the Policy. SeeSawyer Aff. ¶ 18, at 3 (). See also Requests for Admissions ¶ 13, at 5 ().6 CobraGuard did not attempt to initiate a first level Grievance on Sawyer's behalf. See Requests for Admissions ¶ 14, at 5 (setting forth fact).7
Sawyer lawsuit “arises out of, among other things, a dispute between an insured and an insurer subject tot the provisions of ERISA,” and she thus alleges that this Court has jurisdiction under 28 U.S.C. § 1331 (2012), federal question jurisdiction. FAC ¶¶ 1, 3, 6, at 1–2. See28 U.S.C. § 1331. A substantial portion of the events that gave rise to Sawyer's complaint occurred in the State of New Mexico...
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