Weeks v. UMR, Inc.

Decision Date25 September 2018
Docket NumberCase No. 4:17-cv-4311-SLD-JEH
Parties Joanne WEEKS and Marchele Mahnesmith, Plaintiffs, v. UMR, INC., a corporation, Defendant.
CourtU.S. District Court — Central District of Illinois

Gabriel Paul Casey, Casey Law Office LLC, Peoria, IL, for Plaintiff.

Scott J. Fisher, Jason A. Frye, Seth D. Lamden, Neal Gerber & Eisenberg LLP, Chicago, IL, for Defendant.



This cause is before the Court on Defendant UMR, Inc.'s ("UMR") motion to dismiss, ECF No. 11. For the reasons that follow, Defendant's motion is GRANTED.


Plaintiff Joanne Weeks alleges she has healthcare coverage through the Asarco LLC Medicare Supplement Health Benefit Plan ("Plan"), which is administered by UMR. Am. Compl. ¶ 8, ECF No. 10; Plan, Mem. Supp. Mot. Dismiss Ex. A, ECF No. 12-1.2 UMR determines whether the Plan covers the health-related claims Plan participants submit and also provides "information and advice concerning [Plan] coverage to interested parties that inquire about coverage via telephone and other communication mediums." Am. Compl. ¶¶ 9, 34.

In June and July of 2015, Plaintiff Marchele Mahnesmith, Weeks's daughter and healthcare power of attorney, repeatedly contacted UMR to determine whether the Plan covered in-home healthcare services for Weeks, who suffers from dementia, delirium

, and arthritis. UMR's automated message advised her that she could not rely on information given during the phone call. Id. ¶ 17. Once Mahnesmith reached a UMR employee, she asked whether in-home healthcare services would be covered under Weeks's Plan. Id. ¶ 18. The UMR employee, who knew about the recorded message but who also knew that Mahnesmith would rely on the information provided anyway in order to plan for Weeks's medical needs, informed her that Weeks's Plan would cover in-home healthcare services. Id. ¶¶ 19–22, 35. UMR also told Preferred Home Health Care ("Preferred"), Mahnesmith's chosen provider, that Weeks's Plan covered one hundred percent of the cost of the in-home healthcare services Preferred contemplated providing for Weeks. Id. ¶ 26. In reliance on UMR's continued verbal approvals and assurances to herself and Preferred, Mahnesmith contracted with Preferred to provide in-home healthcare services to Weeks. Id. ¶¶ 27–28. Ultimately, UMR refused to provide full payment for Weeks's in-home healthcare services under the Plan, so Mahnesmith "was forced to hastily find alternative, more reasonably price[d] care for [Weeks] outside [Mahnesmith's] home." Id. ¶¶ 29–30. Weeks was moved to an assisted living facility and, as a result, suffered from additional health issues and severe emotional distress. Id. ¶ 32. Mahnesmith suffered severe emotional distress due to the rushed treatment change, Preferred's unpaid invoices, and seeing the decline in Weeks's health and mental wellbeing after she was moved to the assisted living facility. Id. ¶ 33. UMR intended Mahnesmith to rely on its erroneous statements, did not intend to be bound by them, and was aware of Weeks and Mahnesmith's vulnerability to financial injury and emotional distress in this context. Id. ¶¶ 35, 43.

On October 19, 2017, Plaintiffs filed a complaint in state court. UMR timely removed the action pursuant to 28 U.S.C. §§ 1331, 1332(a), 1441, and 1446. Not. Removal, ECF No. 1. On January 26, 2018, Plaintiffs filed an Amended Complaint alleging an Illinois Consumer Fraud Act ("ICFA") claim, 815 ILCS 505/1 – 505/12, Am. Compl. ¶¶ 46–55, and an intentional infliction of emotional distress ("IIED") claim, id. ¶¶ 56–64. On February 9, 2018, UMR filed a motion to dismiss, arguing that Plaintiffs' claims are preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 – 1461. UMR further argues that Plaintiffs cannot state a claim against it for unpaid benefits under 29 U.S.C. § 1132(a) because, as a third party administrator, UMR is not liable for unpaid benefits and Plaintiffs failed to exhaust the Plan's administrative remedies before filing suit. Mot. Dismiss 1–2. The Court has diversity jurisdiction because the amount in controversy exceeds $ 75,000;3 Plaintiffs are citizens of Illinois, Am. Compl. ¶ 3, and UMR is a Delaware corporation with its principal place of business in Wisconsin, Not. Removal 2. See 28 U.S.C. § 1332(a).

I. Legal Standard
A. Motion to Dismiss

A court will dismiss a complaint if it fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Typically, a complaint does not have to anticipate an affirmative defense. Bausch v. Stryker Corp. , 630 F.3d 546, 561 (7th Cir. 2010). Nevertheless, courts may dismiss a complaint if its allegations establish the affirmative defense. See Collins v. Vill. of Palatine, Ill. , 875 F.3d 839, 842 (7th Cir. 2017) (upholding dismissal based on statute of limitations because the "complaint contain[ed] everything necessary to establish that the claim [wa]s untimely"); Gravitt v. Mentor Worldwide, LLC , 289 F.Supp.3d 877, 884 (N.D. Ill. 2018) (comparing permissibility of ruling on motions to dismiss based on preemption affirmative defense with motions based on statute of limitations defense).4

B. Preemption

There are two types of ERISA preemption. One is called complete preemption and is actually a jurisdictional analysis. If a plaintiff files a claim in state court that is essentially a claim for benefits under 29 U.S.C. § 1132 (also referred to as § 502), ERISA's civil enforcement mechanism, a defendant may remove that case to federal court. See Aetna Health Inc. v. Davila , 542 U.S. 200, 207–09, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004) ; Metro. Life Ins. Co. v. Taylor , 481 U.S. 58, 65–67, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987) (holding that complete preemption "converts an ordinary state common law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule," making it removable). The Court has diversity jurisdiction, so a complete preemption analysis is not required.

Defendant's motion to dismiss is based first on conflict preemption, which is an affirmative defense based on the Supremacy Clause of the Constitution that "operates to prevent the enforcement of state laws that conflict with federal laws or regulations." Fifth Third Bank ex rel. Tr. Officer v. CSX Corp. , 415 F.3d 741, 745 (7th Cir. 2005) (citing U.S. Const. art. VI, cl. 2 ). Whether a federal statute displaces a particular state cause of action depends on whether Congress intended such a result. Id. at 746 (stating the fundamental goal of a preemption analysis is to determine Congress's purpose). Congress's intent can be gleaned from "the explicit statutory language and the structure and purpose of the statute." Ingersoll-Rand Co. v. McClendon , 498 U.S. 133, 138, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990).

[ERISA's] § 502(a) set[s] forth a comprehensive civil enforcement scheme that represents a careful balancing of the need for prompt and fair claims settlement procedures against the public interest in encouraging the formation of employee benefit plans. The policy choices reflected in the inclusion of certain remedies and the exclusion of others under the federal scheme would be completely undermined if ERISA-plan participants and beneficiaries were free to obtain remedies under state law that Congress rejected in ERISA. "The six carefully integrated civil enforcement provisions found in § 502(a) of the statute as finally enacted ... provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly."

Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 54, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) (quoting Mass. Mut. Life Ins. Co. v. Russell , 473 U.S. 134, 146, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985) ).

In addition to the limited remedies available in § 1132(a), § 1144(a) (also referred to as § 514) states that ERISA "shall supersede any and all State laws insofar as they may ... relate to any employee benefit plan." This explicit preemption provision "is conspicuous for its breadth," FMC Corp. v. Holliday , 498 U.S. 52, 58, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990), and "indicates Congress's intent to establish the regulation of employee welfare benefit plans as exclusively a federal concern[,]" Gobeille v. Liberty Mut. Ins. Co. , ––– U.S. ––––, 136 S.Ct. 936, 944, 194 L.Ed.2d 20 (2016) (quotation marks omitted). Accordingly, "any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive ... is ... [expressly] pre-empted" and subject to dismissal. Davila , 542 U.S. at 209, 124 S.Ct. 2488 (suggesting § 1144(a) draws its meaning in part from § 1132(a)'s comprehensive scheme). Conversely, any cause of action that could be brought under § 1132(a) may be amended to become an ERISA claim. "The difference in treatment stems from the fact that completely preempted claims ‘fall within the scope’ of ERISA's civil-enforcement regime and expressly preempted claims interfere with that regime." Loffredo v. Daimler AG , 500 F. App'x 491, 501 (6th Cir. 2012) (Moore, J., concurring) (citation omitted).

Since ERISA's enactment, courts have been struggling to identify claims that "relate to" ERISA-regulated employee benefit plans and are therefore preempted. Pilot Life Ins. , 481 U.S. at 44, 47–48, 107 S.Ct. 1549 (holding common law tortious breach of contract, breach of fiduciary duties, and fraud in the inducement claims preempted by § 1144 ).

[T]he Supreme Court has identified at least three instances where a state law can be said to have a "connection with" or "reference to" employee benefit plans, when it (1) "mandate[s] employee benefit structures or their administration;" (2) binds employers or plan administrators to particular choices or precludes uniform administrative practice, thereby functioning as a regulation of an ER

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