Sonnichsen v. Aries Marine Corp.

• Decision Date: 18 November 2009
• Docket Number: Civil Action No. 09-578.
• Citation: 673 F.Supp.2d 466
• Parties: Jeffrey S. SONNICHSEN v. ARIES MARINE CORP.
• Court: U.S. District Court — Western District of Louisiana

673 F.Supp.2d 466

Jeffrey S. SONNICHSEN v. ARIES MARINE CORP.

Civil Action No. 09-578.

United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.

November 18, 2009.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jamie Christopher Gary, Gary Law Firm, Baton Rouge, LA, for Plaintiff.

George C. Plauche', Plauche' & Plauche', Lafayette, LA, for Defendant.

MEMORANDUM RULING

TUCKER L. MELANÇON, Judge.

Before the Court is a Motion for Summary Judgment filed by plaintiff, Jeffrey S. Sonnichsen [Rec. Doc. 11] and a cross Motion for Summary Judgment filed by defendant Aries Marine Corporation [Rec. Doc. 13] and plaintiff's opposition thereto [Rec. Doc. 15]. For the following reasons, each of the motions will be denied in part and granted in part.

I. FACTUAL BACKGROUND

In March 2007, plaintiff was hired as a cook on offshore oil rigs for Aries Marine Corporation ("Aries Marine"). R. 1, ¶ 5. During his time of employment with Aries Marine, plaintiff was enrolled in an employee health benefits plan ("the Plan") administered by Aries Marine. The employee health benefits plan provided coverage to plaintiff for costs incurred as a result of medical treatment provided to him. Id. at ¶ 6.

Following his last offshore shift from which he returned on October 2, 2008, plaintiff received significant medical treatment, including a lumbar surgery performed by Dr. Harry C. Weiser on October 13, 2008. Id. at ¶¶ 7 & 8. Due to the surgery and post-operative treatment, Dr. Weiser completed a return to work/restrictions form stating that plaintiff was totally disabled and would be unable to return to work for approximately twelve weeks, until January 6, 2009. Id. Plaintiff alleges that on October 10, 2008, he called and informed Aries Marine of his pending surgery and restriction from work by Dr. Weiser and faxed the restrictions form to Aries Marine. Id. at ¶ 9. Plaintiff further alleges that he never resigned from his employment with Aries Marine. Id. Dr. Weiser performed surgery on plaintiff on October 13, 2008 and plaintiff received post-operative medical care thereafter. Plaintiff was released to return to work on or about January 6, 2009. Id. at ¶ 10.

Plaintiff received an election letter dated December 1, 2008 under the Comprehensive Omnibus Budget Reconciliation Act of 1985 (COBRA) entitled "Aries Marine Corporation Continuation Coverage Under the Group Health Plan" ("COBRA Election Letter"). Plaintiff alleges in his Complaint that he received the COBRA election letter "on or about December 15, 2008." Id. at ¶ 11.¹ The COBRA Election Letter, notified plaintiff that he had been terminated by Aries Marine and that coverage under the employee health benefits plan would expire retroactively to October 3, 2008 if he did not elect to continue health care benefits under COBRA. Id. at ¶ 11. Attached to the COBRA Election Letter was a COBRA election form entitled "COBRA Continuation Coverage Election Form" on which plaintiff could make a selection to continue receiving health care benefits for himself for a premium of $367.44 per month. Id. at ¶ 12.

Plaintiff asserts that the COBRA election letter was the first notice that he was terminated on October 2, 2008, and the first notice of his COBRA election rights. Id. at ¶ 13. Plaintiff alleges that in November 2008, he received Explanations of Benefits ("EOBs") stating that his medical expenses were covered under the Plan. However in December 2008, he received EOBs stating that the Plan's coverage had terminated on October 2, 2008 and that coverage would not be provided to multiple health expenses during and after October 2008. Id. at ¶ 14. Plaintiff alleges that by the time he received the COBRA Election Letter and Election Form, he had not received any income in over two months to prepare him to pay the COBRA premium or take measures to secure other health care benefits coverage.

On or about February 26, 2009, plaintiff sent correspondence via certified mail to Group Resources, the Plan's Administrative Service Agent that provided the EOBs to plaintiff, in order to place Group Resources on notice that plaintiff was appealing the decision for the failure of Aries Marine to timely provide plaintiff with COBRA election rights. Id. at ¶ 16. Plaintiff alleges he has not received a response from the appeal. Id.

Plaintiff filed this action under ERISA, the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., alleging that Aries Marine violated the ERISA provision for continuation of coverage under 29 U.S.C. § 1161, et seq. and for failing to provide him with timely notice of the qualifying event, his termination, and of his COBRA rights. Id. at ¶¶ 17-19. Plaintiff alleges that Aries Marine is liable for all medical expenses incurred since October 2, 2008 that would have been covered under the Plan and for all general damages. Id. at ¶¶ 21-25. Plaintiff also contends that Aries Marine is liable for penalties and attorneys' fees. Id. at ¶¶ 26-27.

II. SUMMARY JUDGMENT STANDARD

A motion for summary judgment shall be granted if the pleadings, depositions and affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir.1994)(en banc). Initially, the party moving for summary judgment must demonstrate the absence of any genuine issues of material fact. When a party seeking summary judgment bears the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if such evidence were uncontroverted at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). As to issues which the non-moving party has the burden of proof at trial, the moving party may satisfy this burden by demonstrating the absence of evidence supporting the non-moving party's claim. Id. If the moving party fails to carry this burden, his motion must be denied. If he succeeds, however, the burden shifts to the non-moving party to show that there is a genuine issue for trial.² Id. at 322-23, 106 S.Ct. 2548.

Once the burden shifts to the respondent, he must direct the attention of the court to evidence in the record and set forth specific facts sufficient to establish that there is a genuine issue of material fact requiring a trial. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548; Fed.R.Civ.Pro. 56(e). The responding party may not rest on mere allegations or denials of the adverse party's pleadings as a means of establishing a genuine issue worthy of trial, but must demonstrate by affidavit or other admissible evidence that there are genuine issues of material fact or law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 159, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Little, 37 F.3d at 1075. There must be sufficient evidence favoring the non-moving party to support a verdict for that party. Anderson, 477 U.S. at 249, 106 S.Ct. 2505; Wood v. Houston Belt & Terminal Ry., 958 F.2d 95, 97 (5th Cir.1992). There is no genuine issue of material fact if, viewing the evidence in the light most favorable to the non-moving party, no reasonable trier of fact could find for the non-moving party. Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 178 (5th Cir.1990).

If no issue of fact is presented and if the mover is entitled to judgment as a matter of law, the court is required to render the judgment prayed for. Fed.R.Civ.P. 56(c); Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548. Before it can find that there are no genuine issues of material fact, however, the court must be satisfied that no reasonable trier of fact could have found for the non-moving party. Id.

III. LAW & ANALYSIS

A. COBRA NOTICE VIOLATION

COBRA was enacted "to provide employees with an opportunity to continue to receive group health insurance after the occurrence of a `qualifying event.'" Myers v. King's Daughters Clinic, 912 F.Supp. 233, 237 (W.D.Tex.1996), aff'd, 96 F.3d 1445 (5th Cir.1996). Therefore, COBRA "require[s] an employer who sponsors a group health plan to give the plan's `qualified beneficiaries' the opportunity to elect `continuation coverage' under the plan when the beneficiaries might otherwise lose coverage upon the occurrence of certain `qualifying events,' including the death of the covered employee, the termination of the covered employee's employment (except in cases of gross misconduct), and divorce or legal separation from the covered employee." Geissal v. Moore Medical Corp., 524 U.S. 74, 79-80, 118 S.Ct. 1869, 141 L.Ed.2d 64 (1998) (citing 29 U.S.C. § 1163); Degruise v. Sprint Corp., 279 F.3d 333, 336 (5th Cir.2002). "COBRA demands that the continuation coverage offered to qualified beneficiaries be identical to what the plan provides to plan beneficiaries who have not suffered a qualifying event." Geissal, 524 U.S. at 80, 118 S.Ct. 1869 (quoting 29 U.S.C. § 1162(1)).

Significantly, "the statute requires plans to advise beneficiaries of their rights under COBRA both at the commencement of coverage and within 14 days of learning of a qualifying event." 29 U.S.C. § 1166(a); see Degruise, 279 F.3d at 336. Under § 1166(a)(2), an employer has a duty to report most qualifying events, including the termination of employment, to its group health plan administrator within 30 days of the qualifying event. The plan administrator must then notify the qualified beneficiary within 14 days of being notified of the qualifying event by the employer. 29 U.S.C. § 1166(c).³ In the Fifth Circuit, "the law requires only that the employer make a good faith attempt to comply with COBRA's notification provision." Degruise v. Sprint Corp., 279 F.3d 333, 337 (5th Cir.2002). While the statute itself does not specify what exactly will qualify as notice, numerous courts have held that mailing COBRA...