Soehnlen v. Fleet Owners Ins. Fund

• Decision Date: 26 January 2016
• Docket Number: CASE NO. 1:15-CV-445
• Parties: DANIEL P. SOEHNLEN, et al., Plaintiffs, v. FLEET OWNERS INSURANCE FUND, et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

DANIEL P. SOEHNLEN, et al., Plaintiffs, v. FLEET OWNERS INSURANCE FUND, et al., Defendants.

CASE NO. 1:15-CV-445

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

January 26, 2016

JUDGE DONALD C. NUGENT

MEMORANDUM OPINION

This matter is before the Court upon Defendants' Fleet Owners Insurance Fund, (hereafter the "Plan"), Robert Kavalec, Charlie Alferio and Victor Collava (hereafter "Defendants") Motion to Dismiss First Amended Complaint and to Strike Jury Demand. (ECF #13). Plaintiffs Daniel P. Soehnlen, Bill Reeves and Superior Dairy, Inc. (hereafter "Plaintiffs") filed a Memorandum of Law in Opposition, (ECF #18) and Defendants filed their Reply Brief (ECF #22). Therefore the issues have been fully briefed and are ripe for review.

For the reasons set forth in this Memorandum, Defendants' Motion to Dismiss is GRANTED.

I. Procedural and Factual Background

Plaintiff Superior Dairy is an Ohio corporation located in Canton, Ohio that engages in intrastate and interstate commerce as a manufacturer of milk, cheese, cottage cheese and ice cream. (ECF #11, ¶3). Plaintiff Soehnlen is President and Chief Executive Officer of Superior Dairy, and Plaintiff Reeves is an hourly-compensated employee. (Id. at ¶5). As employees, both Plaintiffs, along with their spouses and eligible dependents, are considered participants and beneficiaries under a group health plan (the "Plan") managed by Defendants.¹ The Plan is a collectively bargained "employee benefit welfare plan" within the meaning of ERISA² that provides medical coverage to approximately 1,000 covered employees and their beneficiaries.³ For purposes of this pleading, the terms of the Plan are provided by a Participation Agreement signed April 14, 2014, which incorporates the Amended and Restated Agreement and Declaration of Trust signed in 2002. (See ECF #11-1 and 11-2).⁴

Plaintiffs filed their First Amended Complaint (ECF #11) against Defendants, alleging that they violated the Patient Protection and Affordable Care Act of 2010,⁵ (hereafter the "ACA"), the Employee Retirement Income Security Act (hereafter "ERISA"),⁶ the Taft-Hartley Act,⁷ and various provisions of the Trust and Participation Agreements that govern the Plan.

Specifically, the Amended Complaint asserts eights counts:

1. Plaintiffs Soehnlen and Reeves seek to recover benefits due, enforcetheir rights under the terms of the Plan, and clarify their future rights to benefits under the Plan, including those mandated by the ACA (citing ERISA §1132(a)(1)(B);

2. Plaintiffs Soehnlen and Reeves allege that the Plan "forfeited and surrendered its purported 'grandfathered' status" under the ACA, and therefore seek to recover benefits due, enforce their rights under the terms of the Plan, and clarify their future rights to benefits under the Plan, including those mandated by the ACA, for "non-grandfathered group health plans" (citing ERISA §1132 (a)(1)(B));

3. Plaintiffs Soehnlen and Reeves allege that Defendants have refused to provide benefits and coverages mandated by the ACA, ERISA and the Plan, and seek to enjoin future violations and obtain appropriate monetary, declaratory and equitable relief to redress the violations (citing §1132(a)(1)(B) and §1132(a)(3);

4. All Plaintiffs allege that Defendants breached their fiduciary duties in failing to adhere to the ACA, ERISA and the Plan, which has caused the Plan to be subject to taxes and penalties. Plaintiffs seek economic, injunctive and equitable relief (citing §1132(a)(2), §1132(a)(3) and §1109(a);

5. Plaintiff Superior Dairy alleges that Defendants Kavalec, Collova and Alferio made false statements and/or representations while marketing the Plan to Superior Dairy in violation of 29 U.S.C. §1149, and requests monetary damages, injunctive, declaratory and equitable relief;

6. Plaintiffs assert that Defendants have violated the Taft Hartley Act, 29 U.S.C. §186, by failing to provide a neutral person in the event there is a deadlock in the administration of the Plan. Plaintiffs claim they "are entitled to recoup and recover all monies remitted" to the Fund and all monies remitted by the Plan to Defendants;

7. Plaintiffs allege that Defendants have breached the Participation Agreement between the Plan and Plaintiffs; (See ECF #11-1); and

8. Plaintiffs allege that Defendants have breached the Amended and Restated Agreement and Declaration of Trust of the Fund. (See ECF #11-2).

II. Law and Analysis

A. Standard of Review

In ruling on a motion to dismiss under Rule 12(b)(6), the court must construe the complaint in a light most favorable to the plaintiff, accept all well-pleaded allegations in the complaint as true, and determine whether plaintiff undoubtedly can prove no set of facts in support of those allegations that would entitle him to relief. Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Bishop v. Lucent Technologies, Inc., 520 F.3d 516, 519 (6th Cir.2008). To survive a motion to dismiss, the "complaint must contain either direct or inferential allegations with respect to all material elements necessary to sustain a recovery under some viable legal theory."Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir.2005).

While the complaint need not contain detailed factual allegations, the "[f]actual allegations must be enough to raise the claimed right to relief above the speculative level, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and must create a reasonable expectation that discovery will reveal evidence to support the claim. Campbell v. PMI Food Equipment Group, Inc., 509 F.3d 776, 780 (6th Cir.2007). A complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "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."Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Id. Where the facts pleaded do not permit the court to infer more than the mere possibility of misconduct, the complaint has not shown that the pleader is entitled to relief as required under Fed.R.Civ.P. 8(a)(2). Ibid.

Plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do."Twombly, 550 U.S. at 555; see also Association of Cleveland Firefighters v. City of Cleveland, Ohio, 422 F.Supp.2d 883 (N.D.Ohio 2006).

In evaluating a motion to dismiss, a court considers the complaint. Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001). The court may also consider a document or instrument which is attached to the complaint, or which is referred to in the complaint and is central to the plaintiff's claim. See id.; Fed. R.Civ.P. 10(c) ("[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes."); Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir.1997).

Defendants argue in their Motion to Dismiss that each of Plaintiffs Counts in the Amended Complaint fail to state a claims and should be dismissed pursuant to Rule 12(b)(6). Each Count will be addressed herein.

B. Analysis

Counts 1 and 2 are brought by Plaintiffs Soehnlen and Reeves under ERISA §502(a)(1)(B), claiming that Defendants have failed to provide coverages mandated under the ACA and ERISA. Section 502(a)(1)(B) allows a participant or beneficiary to bring a civil action to recover benefits owed to him under the plan, enforce his rights under the plan, or to clarify his rights to future benefits under the terms of the plan. Daft v. Advest, Inc., 658 F.3d 583, 587 (6^th Cir.2011); 29 U.S.C. §1132(a)(1)(B).

Federal courts only have the power that is authorized by Article III of the Constitution and that statutes enacted by Congress, therefore, a plaintiff must possess both constitutional and statutory standing in order for this Court to have jurisdiction. Loren v. Blue Cross & Blue Shieldof Mich., 505 F.3d 598, 607 (6^th Cir.2007). As the party invoking federal jurisdiction, Plaintiffs bear the burden of establishing standing. Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). In order to establish Article III standing, Plaintiffs "must allege (1) injury in fact, (2) a causal connection between the injury and the conduct complained of, and (3) redressability." Taylor v. KeyCorp, 680 F.3d 609, 612 (6^th Cir.2012)(citing Lujan, 504 U.S. at 560).

In this matter, Plaintiffs have failed to show standing because they have not sufficiently alleged an injury in fact, or "an invasion of a legally protected interest which is (1) concrete and particularized, and (2) actual or imminent, not conjectural or hypothetical." Taylor, 680 F.3d at 612. Plaintiffs have not alleged any concrete or actual injury - rather, they allege potential injuries that might occur under a hypothetical set of circumstances.⁸ Where there is no injury, there is no redressability - therefore, Plaintiffs lack standing to pursue Counts I and II, and they are dismissed. Count III also presents a §502(a)(1)(B) claim against Defendants, and as outlined above, that claim will be dismissed for lack of standing. In addition, Plaintiffs cite §502(a)(3) in Count III, which allows a Plaintiff to bring an action "(A) to enjoin any act or practice which violates any provision of [ERISA] 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 [ERISA] or the terms of the plan." 29 U.S.C. §1132(a)(3). It has already been determined that Plaintiffs Soehnlen and Reeves have not sufficiently alleged an injury, and in the ERISA setting, a dispute is not ripe for adjudication if it involves...